Stabenow Farm Bill: Hefty Additional Spending Beyond $1.51 Trillion Baseline
Big increases for Democratic priorities of conservation and nutrition

Senate farm bill priorities are expected to exceed the $1.51 trillion farm bill baseline by $20 billion and possibly more.

Details: While the Congressional Budget Office (CBO) has still not released scoring for either the proposed House or Senate farm bill proposals, talks with veteran farm bill analysts signal around $13 billion to $14 billion in budget authority becomes available in fiscal year (FY) 2025 and FY 2026 that can be moved into the IRA. It is assumed that spending is moved into the farm bill baseline for the Senate’s climate-smart guardrail programs with an offset. Then they propose as much as $13 billion in other conservation spending in CRP and ACEP. The grand total is up to $27 billion in new mandatory conservation spending on top of a baseline of $60 billion, with some amount, $14 billion or so, offset by IRA unobligated balances.

     Bottom line: It appears the $5 billion Stabenow promised for the safety net via a pledge from Senate Majority Leader Chuck Schumer (D-N.Y.) is mostly spent elsewhere as detailed below. (Of note: Republican sources on the Senate Finance Committee say they do not know details about the $5 billion Schumer promised and they were given no opportunity to suggest programs for that funding.)

Big Senate farm bill tilt to conservation and nutrition. Veteran farm bill analysts say Stabenow’s proposals (which are not yet in legislative language form and thus no CBO scoring) signal:

Republican farm-state lawmakers and farmers are also anxious about a Senate proposal that would make reduction of greenhouse gas emissions and building soil carbon a goal of the Regional Conservation Partnership Program, or RCPP, which pays groups of farmers to address environmental challenges together, and use RCPP grants to support efforts to convert concentrated animal feeding operations to “climate friendly” operations, such as managed grazing.

Paul Neiffer who writes the Farm CPA Report (link), today reviewed one Stabenow proposal that he says will not achieve her objective “and even penalizes the farmers they are trying to help.”

     In Sec. 1104 dealing with payment acres, the following wording is used:

     “Restricts commodity program payments from being made on land owned by an individual or legal entity for which the average Adjusted Gross Income (AGI) exceeds $700,000 to discourage further investor purchases, which would restrict, for the first time, wealthy investors and absentee landlords from benefitting from farm safety net programs intended to support the active farmers that are taking the risk and producing the crops.”

     Neiffer says: “This appears to indicate that if any person owns farmland and their AGI is over $700,000, then no payments are allowed. A farmer who is cash renting the ground and their AGI is under $700,000 would be prevented from receiving any payment solely due to the landowner’s AGI being over $700,000. It seems that the Democrats want to punish the landowner for having high AGI, but the reality is that the farmer is being punished. The farmer whose AGI is under $700,000 and would normally know that they will receive a payment from FSA for farming this ground and is willing to pay a little extra currently has a little bit of an advantage over a farmer who is over the AGI or payment limit.”

     Neiffer continues: “Wealthy investors and absentee landlords already get no direct benefit from farm program payments if their AGI is over $900,000. This would reduce that limit from $900,000 to $700,000. Also, technically the limit would be $1.4 million in community property states and in separate property states, the higher income spouse would simply gift the land to the lower income spouse to get under the limit.”

     If this rule is passed and works the way Neiffer thinks it will work, “the farmer with low AGI will now be at a disadvantage in trying to cash rent this ground. The farmer with higher AGI or over the payment limit will now be in better position to cash rent the ground.”

     Neiffer’s bottom line: “The Democrat Senate proposal appears to want to help the ‘farmer with dirt under their fingernails’ (farmer with lower AGI), when in fact, they will penalize that farmer. This is the law of unintended consequences, and it will not work the way they desire. Now we may be wrong about the meaning of this proposal but based on a literal reading of the summary and conversations we had, we think this is what they want. If this were to pass it would only penalize ‘active farmers that are taking the risk and producing the crops.’ We hope they reconsider before they penalize the farmers they are trying to help.”

     Bottom line: This is complicated stuff, but these issues ARE complicated and need airing out to get a full and true understanding of where all the farm bill projected spending may be provided, including some major policy differences between the Senate and House farm bill proposals.