Funding Bill: What did Congress Include for Agriculture?

December 22, 2024

After a week of drama surrounding the details, the Senate voted 85 to 11 early Saturday morning to pass a spending bill to avoid federal government shutdown. President Joe Biden signed it into law.

A few hours earlier, the House of Representatives voted overwhelmingly to approve a short-term funding bill for the government that includes close to $31 billion in aid for farmers to deal with natural disasters and economic challenges.

The bill would fund the federal government to operate through mid-March. The legislation also includes more than $100 billion in disaster aid and $10 billion in economic aid to farmers, as well as extension of the farm bill through Sept. 30, 2025. Overall, farmers have nearly $31 billion in aid spelled out in the package.

WHAT DROPPED FROM BILL

Dropped from the bill was a provision that would have allowed year-round sales of E15.

Also cut was President-elect Donald Trump's demand that lawmakers remove the debt limit for his first few years in office. Trump's demands complicated the initial compromise bill that House GOP leaders released earlier in the week. On Thursday night, a funding bill that waived the debt limit until 2027 was defeated on the floor as 38 Republicans joined all but two Democrats in rejecting the bill.

DISASTER AID DETAILS

The bill provides $20.78 billion to help producers with disaster losses during the past two years.

The disaster funds would cover losses from an array of natural disasters in 2023 and 2024 -- droughts, wildfires, hurricanes, floods, derechos, excessive heat, tornados, winter storms, freeze events and excessive moisture.

Among those funds, $2 billion is set aside for livestock producers impacted by losses in 2023-24 due to drought, wildfires and floods. Assistance could go to the states as block grants and direct compensation to producers.

The bill also increases payments and losses covered under the Noninsured Crop Disaster Assistance Program (NAP).

ECONOMIC AID DETAILS

The bill provides $10 billion in economic assistance through a formula laid out in the bill. The legislation creates one-time payments to producers based on 100% of planted acres and 50% of prevented-planting acres for the 2024 crop year. The bill requires USDA to issue those checks within 90 days after the bill becomes law.

The payment rates are not final and are subject to USDA discretion, but estimates from House and Senate Agriculture committee staff break down as follows for major crops:

-- Corn, $43.80 per acre

-- Soybeans, $30.61 per acre

-- Wheat, $31.80 per acre

-- Seed Cotton, $84.70 per acre

-- Sorghum, $41.85 per acre

-- Rice (L/M), $71.37 per acre

-- Peanuts, $76.30 per acre

-- Barley, $21.76 per acre

Those payments would be subject to $125,000 payment limits that could increase to $250,000 for producers who receive 75% or more of their gross income from farming.

ONE-YEAR FARM BILL EXTENSION

The bill provides an extension of the current farm bill through Sept. 30, 2025. The House and Senate Agriculture committees will again be on the clock to try to pass a new farm bill -- two years behind schedule.

The extension prevents permanent law from going into effect on Jan. 1, 2025. The "dairy cliff" is often mentioned as the biggest issue with permanent law. Under the law, USDA would be required to buy dairy products to help boost prices to the mandated levels of 117% higher than the current all-milk price. At current prices, around $20.38 per cwt, the mandated price for milk would jump to more than $44.22 per cwt. This would effectively drive private buyers of milk out of the market.

Among the key provisions cut from the larger bill, however, was the provision to allow year-round 15% ethanol blends. Ethanol groups had praised the inclusion in the earlier bill. It's unclear why it was dropped. Each percentage point of higher ethanol blend nationally equates to about 1.4 billion gallons.

Currently, E15 has now been approved for eight Midwestern states that petitioned EPA for the waiver.

Source: DTN