The State of Agriculture
ROB MILLS
MAFG.NET
When Donald Trump entered the 2016 Presidential campaign, one of his first policy proposals was to put tax returns on postcards. It was an appeal to voters by a candidate who saw the anger the voting public felt towards the exploding federal budget and bureaucracy. His presence in office didn’t make a difference, the size of government continued to grow.
However, these days, there is at least one man in the District of Columbia who tries to inject some sense of financial sanity into a city that has embraced morbidly obese spending as the new normal.
“I am an economist for better or for worse. I do everything through the lens of how we are going to pay.” Those are the words of Dr. Justin Benavidez, Chief Economist of the U.S. House Committee on Agriculture. Benavidez was the keynote speaker of the 27th Annual Conservation Systems Cotton & Rice Conference was held in Jonesboro, Arkansas, in late January of this year. The conference is an annual event presented by MidAmerica Farm Publications & AgWiki.com.
Benavidez gave the luncheon keynote address. His appearance at the conference was sponsored by the U.S. Rice Producers Association, a Sponsor of the event for the past 25 years. He was introduced to the gathering by Mollie Buckler, the Chief Operating Officer of the U.S. Rice Producers Association.
Benavidez completed all his academic studies at Texas A&M University and then worked at the school before moving to Washington. His current project is the 2024 Farm Bill, a second attempt to pass a new five-year funding measure for American agriculture. The bill currently in place was passed in 2018 but was reauthorized for one year last September after Congress couldn’t agree on new legislation.
Benavidez spoke of the enormity of the Farm Bill, and how agriculture and the American farmer are back-burner players at the funding table in this process. “The proposed Farm Bill is 1.5 trillion over five years. That’s 1.5% of projected federal spending of 84 trillion dollars over the next decade. The ag producers slice of this pie is 7/10 of one percent,” he told his conference audience.
Benavidez continued by saying that SNAP benefits drive funding for the bill. The food assistance program is 82% of the spending in the legislation, which Benavidez says is causing funding issues for everyone else at the table. “We’ve had over 3,000 requests for programs from Republicans alone to be included in the bill,”, he said, adding that being a salesman is part of the process. “We have 200 House members who have never voted on a Farm Bill. We need to explain to them what is in the bill.” With all the duties that demand his attention, Benavidez concludes “ultimately, my job through all of this is to get the most bang for the buck.“
The challenge Benavidez faces is making the bill fit inside a federal budget that has Social Security, interest payments on the federal debt, Medicaid & Medicare as its priorities. All this in the shadow of an $34 trillion-dollar tab on the federal credit card, with countries such as Ukraine, Israel & Taiwan anxiously asking for nearly 100 billion dollars in military aid. With this being the first budget year that the interest on the federal debt has surpassed the size of the defense budget, it’s evident the United States is heading for a day of reckoning in its fiscal house.
Yet, during all this mayhem, the process continues. Benavidez talked about an average day at the office. “Farmers tell you they want more international access. Ad hoc spending makes this process at times a make it up as you go exercise. The CR’s we all deal with are a debacle. And then you have Federal accounting practices, which are downright weird. Throw in the third rail issues that can’t be touched,” Benavidez said with a subdued exasperation, “and yet we’re looking for a 4–6-week window to runway this thing into agreed-upon legislation,” he said.
In the language and ritual in which Washington speaks to itself, Farm Bill proponents & opposition are beginning to engage. Senator John Thune (R-SD) recently accused the Biden Administration of stalling the bill over climate & nutrition issues. Senator Debbie Stabenow (D-Mich), the Senate Agriculture Chair, has threatened to block the bill and willing to reauthorize the 2018 Farm Bill for another year, refusing to yield she says to Republican efforts to limit climate & SNAP subsidies.
Regardless of all the jockeying on both sides of the aisle, September 30th is D-Day on reauthorization. Even then, ag spending is dependent on the Continuing Resolution (CR) process, which always threatens to morph into a government shutdown.
Congress is attempting to make changes to the legislative model that would bring some method to the madness of creating a Farm Bill. THE REINS Act is a proposal before Congress to end the ability of a federal agency to implement policy without Congressional approval. As well, Benavidez reminded his listeners of a fundamental reality of the Farm Bill. Amid all the absurd spending undertaken by the Federal Government, this legislation pays for itself over time.
“Every dollar spent in the bill returns $24 in economic benefits to the nation,” he said. That income helps the Federal Government maintain a safety net for Title 1 programs, which protect farmers by creating a minimum standard of living for ag producers. All in all, creating the Farm Bill is an exercise in political heavy lifting. “It’s an expensive program to put together,” he admits, adding “the Title 1 safety net has to be increased in this bill, or it isn’t going to move.”
In a recent speech before the American Farm Bureau’s national convention, Secretary of Agriculture Tom Vilsack said the Biden Administration is committed to passing a new Farm Bill in 2024. The former Iowa Governor spoke of “a sacred responsibility” his department has towards the American farmer to ensure the Farm Bill safety net is in place. “Today’s farmer at times is dealing with a one-hundred-year flood, within 100 days of having just experienced a natural disaster. So, it’s important for us to continue to focus on crop insurance & risk management,” he said. Vilsack’s comments in part dealt with criticism of his department and the Biden Administration for their response to calamities ag producers have faced. (Benavidez stated ad hoc spending drives disaster aid)
He noted positive developments have led to more access to international markets that American producers have wanted, demonstrating what US farmers sell is in demand globally. That upbeat statistic still must compete with the political headaches he deals with daily. One number he lives with is bottom-line politics…. The daily “member math” count is the number of votes needed to pass the bill.
He spoke once again concerning the “fly by night” way of assembling the legislation, stating that “ad hoc support has become a very big part of the farm bill balance sheet. This approach to spending has grown in a major way in the past five years. Getting the math right in an environment like this is very difficult,” he concluded, adding he’ll begin work on the 2025 balance sheet soon.
As of press time, despite the calls on Capitol Hill to get the process moving, at this point, it’s anybody’s guess as to what will happen with the Farm Bill. However with the partisan atmosphere in Congress fueled by election year politics, some feel a second one-year reauthorization of the bill is a real possibility.
Regardless of what happens, people like Dr. Benavidez, honest brokers trying to make the numbers add up, will have to deal with the challenge of making policies in a dysfunctional political environment. Friends & adversaries both have said the U.S just can’t go on like this much longer.
Why not? Well, beyond the Farm Bill battle, there’s a nine-hundred-pound elephant that follows Uncle Sam wherever he goes. The potential of a debt bomb detonation. The federal budget has increased 40% in the last five years. At this rate, the federal debt will be hovering around 45 trillion dollars by 2035.
My Grandfather, who went broke a half dozen times during the Depression, once said, “it doesn’t matter how much you owe, just don’t miss a payment!”
Because if you do, chances are no one will lend you another penny. ∆
ROB MILLS: MAFG Contributing Writer