Sen. Thune hopeful for a 2024 farm bill

Lori Walsh:

You are listening to In the Moment on South Dakota Public Broadcasting. I'm your host, Lori Walsh. Well, Congress faces a new push for a new farm bill. U.S. Senator John Thune is on the Ag committee. Last year, you might remember Congress extended the deadline to pass that new Farm Bill. Well now the extension goes till September 2024. But that doesn't mean that farmers or senators want it to take that long. So Senator Thune, welcome. Thanks for being here. Appreciate your time.

Sen. John Thune:

Thanks Lori. Always nice to be with you. Thank you.

Lori Walsh:

Now, you said last year that one of your goals was to get a new farm bill on the President's desk in the first quarter. I'm wondering what that's looking like now the calendar has turned.

Sen. John Thune:

I'm still hopeful. I think there seems to be a growing interest in working out the differences that exist and part of it has to come down, it really does come down honestly to where the money goes and how you allocate what is a finite amount of resources and different titles of the Farm Bill. And there's been some disagreement about that between the Democrats on the committee and the Republicans in both the House and the Senate. But the House looks like they're moving forward. My sense is in conversations with the chair of the Senate Ag Committee and the ranking Republican, both I think, want to see us move fairly quickly this year. So I'm hoping again, whether it's first quarter or not remains to be seen, but at a minimum we need to get a multi-year reauthorization done.

And we've had extensions in the past. And obviously it gets you by, but it's not ideal. You want to get the new bill in place.

Lori Walsh:

Who loses with an extension? Are there things that are not being funded or people who are suffering, for lack of a better word, with the delays?

Sen. John Thune:

Well, what we had to do is there are always some anomalies and so we did have to fix a few things when we did the extension, fund programs that aren't automatically re-upped for funding. And so we did take care of a few of those things, but for the most part, it maintains the safety net programs and a lot of the other titles in the Farm Bill in terms of funding levels. But it doesn't provide the certainty and the predictability that farmers as they make planting decisions would like to have. So they're basically operating on old news, old policy, and they're okay with that. They would rather have that, I think, than a Farm Bill that doesn't address the things they want addressed in a new Farm Bill, but it doesn't give them the certainty that they need.

Lori Walsh:

New programs take time to implement as well.

Sen. John Thune:

They do, and then you've got to get the staff and trained and up to speed. There's a number of things in the commodity title of the Farm Bill we're trying to change, including an increase in reference prices, perhaps some tweaks to the crop insurance program. But by and large, at least I think people, most of the farm groups, commodity groups were okay with an extension, just prefer a permanent reauthorization. So it's really, it does come down to I think resolving these differences over how to find funding, allocate resources among the different titles in the bill.

There's some thinking that we can find ways, there was a $250 billion plus up that happened without congressional authority in the SNAP program, that there might be some ways we can find some savings there that we can implement other places. And then there was another 20 billion in money in the Inflation Reduction Act that was set aside for quote conservation programs, mostly climate stuff, but we think there's some dollars there that could also be moved and there seems to be more of an openness to doing that than there was previously.

Lori Walsh:

Let's go back to the first thing you mentioned, which was reference prices for commodities. The criticism is always that helps large farms only the commodity price. There's not smaller family farms, not people who are making honey or apples or what have you. Tell me a little bit about how you think about what needs to happen with commodity reference prices.

Sen. John Thune:

Well, I mean the two major programs in the Commodity Title Bill, the ARC program, which is Agricultural Risk Coverage program or the PLC, the Price Loss Coverage programs are the two that farmers can select. They have optionality there. They basically pick one or the other. And in this part of the world we have people who pick ARC, although PLC has become more popular, in the southern part of the US it's mostly the PLC program. But the reference prices are what happens when, they are triggers basically when prices get down to a certain level to where there's no margin there, a reference price kicks in and a producer will get a loan deficiency payment essentially. And so those haven't been changed since the last Farm Bill and a lots happened since the last Farm Bill in terms of prices and what's happening in markets globally. So there's been a big push among all the commodity groups.

To your point about the large farmers and small farmers, it doesn't really, both small and large farmers, obviously large farmers just by scale would benefit from that. But small farmers too also want to have that additional safety net protection. The crop insurance program is really good and they pay into it. They pay premiums, partially it's subsidized by the federal government, but it's a way in which they can provide a floor basically when they have a bad year either with production or weather. But the additional protection that comes with these other safety net programs, with ARC and PLC gives them an additional layer level, if you will, when prices really do drop below a certain level. And so there's a real interest in most of the commodity groups, including those in the northern plains were corn, wheat, soybeans, and rice, cotton and those types of crops, peanuts in the southern areas of the country as well.

Lori Walsh:

The South Dakota Farm Bureau said last year, "Do no harm to crop insurance." That's their concern. That was a real priority for them. But is there room for reform in crop insurance because it's not covering it. We still need payouts during certain emergencies of course. Is there room for negotiation or reform about crop insurance that would still keep the safety net for South Dakota farmers where they want it to be?

Sen. John Thune:

I think so. I mean, I go back to when I first got involved in this, this is my fifth Farm Bill, but in the first one, there wasn't a really good crop insurance program that was effective and that worked for producers. And so typically what happened when you had a really bad year, a drought or something like that, which kind of decimated yields, farmers would come in, farm organizations come into Congress and say, "We want an ad hoc disaster program, emergency disaster program to be funded by the Congress." And we did a number of those when I was in Congress. But with the improvements that have been made in crop insurance and the way the program works and the way that pays out, now you have less of that than you used to. So the crop insurance has become the cornerstone of the commodity title safety net, in terms of the programs in title one of the bill. And we've tweaked it several times over the years and it hasn't obviously operate perfectly. And there are always, every Farm Bill is an opportunity to tweak it further.

The one thing I think could be done this year to crop insurance is to help a young farmers, beginning farmers to kind of buy into it. And so there's some conversations around how can we incentivize for, it's so hard for younger farmers to start because the barriers to entry are so high, land prices and everything else. If you don't inherit it, there's no, if you're just trying to get into the business today, it's really, really hard. And so we're looking in all these different areas at how we can tweak some of these programs to make them more usable and hopefully more workable for beginning farmers.

Lori Walsh:

A percentage that crop insurance is taking, that title is increased in the last decade, like 70% or something, that's not an exact number, but it has seen a lot of increase. Are you okay with it continually taking more and more out or taking a bigger slice of the pie?

Sen. John Thune:

I think again, as we look at these programs, it's hard to look at them in isolation. You kind of have to look at the way that there's, there's interaction between different titles in the Farm Bill and the different programs within even the commodity title of the Farm Bill, but you don't want any of these programs to become sort of budget busters. And so you try and figure out ways to make them work more efficiently.

The increases, I think are largely a function of when claims get filed because of circumstances, economic circumstances, there are more claims paid, more payouts and that sort of thing. But part of it too, you can tweak that a couple different ways. One is you could increase the premium amount and that's the amount that the producer pays as a percentage of the total coverage, which again, is partially offset or paid for by the federal government. And I think from time to time you need to take a look at those things, but that's a significant increase. Sometimes that happens again simply because there are, you've got weather related events that perhaps were unusual in that particular time period.

Lori Walsh:

Yeah. You mentioned conservation and a lot of people feel that farmers are not being recognized or incentivized to do the work of carbon capture, to do the conservation work that they have to do, that we need to have a bigger awareness of how that's really happening and bigger incentives. Talk a little bit about that balance between the reality of the fiscal reality that we're in right now, especially post-pandemic, and the climate reality that we're in. How do you have those conversations?

Sen. John Thune:

Well, I always think that it's always better if you can, to incentivize the kind of behaviors you're hoping to achieve instead of doing it in the form of mandates or through the heavy hand of regulation. And I think a lot of the Conservation Title Programs are designed to incentivize people to do the right things. And so the CRP program obviously is that, and you want to make sure that the payment levels are sufficient. So a farmer, if they make a decision about putting land into native grasses, for example, that it actually works for them economically to do that. So you've got to get those contract rates at a level that provides a necessary incentive.

And then we've tried to, through the conservation title, there are also ways in which you can incentivize farmers, and crop insurance plays into this too, because there are either crop insurance if they decide all of a sudden I'm going to take advantage of crop insurance or some Commodity Title Program and I'm just going to plant this field that hasn't been plowed up before, or at least in the recent past hasn't been plowed up, there are some ways, some, I guess incentives and penalties I guess you could say, in how we've designed those programs to encourage the right decisions with respect to certain ground that really shouldn't be plowed up. Marginal, fragile ground shouldn't have been plowed up in the first place. And in the SHIP program that we got into, the last Farm Bill, which hasn't been utilized as well as we'd like, was a voluntary program was designed to get, again, incentivize some of that type activity.

On the carbon capture side of it there I think, there will be in the future, and I don't know if this Farm Bill will reflect a lot of that, but there's going to be clearly a conversation about if farmers are capturing carbon through their agricultural practices, how are they compensated for that and what is the appropriate? And nobody really at this point has enough data around this or research around it to determine what the value of what they're doing is and how they ought to be paid for it. But I think that's going to happen.

Lori Walsh:

You also mentioned SNAP, which I think most people have an understanding of the balance that it plays in negotiations, but then also the largest amount of money of a Farm Bill goes towards to the nutrition program. More rural Americans are using SNAP now than urban Americans. Has food security become a rural issue and does that change the dynamics of your negotiations?

Sen. John Thune:

I think that there's always, depending on where the beneficiaries are of certain titles of the Farm Bill, it affects where the votes are for sure. The politics is determined by, in many cases, how the resources get allocated. Typically, SNAP programs have been more utilized in the east and the west coast and the more urban populated areas of the country. And that's traditionally how we've been able to get votes from that part of the country for Farm Bills. There's always been a conversation about splitting-

Lori Walsh:

So you've seen my question because as that shifts.

Sen. John Thune:

Yeah, well that's right. And that'll probably affect how people view the lens through which they look at these issues as a political matter as well. Yeah, no question about it.

Lori Walsh:

All right. Any final thoughts that you have about the appropriations coming in, getting back to work in January, funding the government, moving that forward?

Sen. John Thune:

It's going to be a battle, I think. Trying to get a normal appropriations process will be hard, but one way or the other, we had to fund the government. The level is the question and Fiscal Responsibility Act that passed last year has some triggers in it. If you haven't funded all the various appropriation bills by, I want to say April one of this next year, then there are these sort of cuts that kick in. And I think that could happen. And there are some who would like to see that happen.

There are some who would like to see a year-long continuing resolution, which funds the government at last year's level. That has serious implications in a lot of ways. But probably the biggest one would be in the national security realm. I mean, if you have to fund at a static level national security in terms of all the requirements we're seeing around the world and the needs to make sure that we're responding appropriately, I think that would be a big problem. But there are folks again who are in that school of thought too.

I'm a big believer that we ought to try and do these bills individually. That's the way that it was designed to happen. We have 12 appropriation bills and we ought to move them across the floor, open them up to amendment, have an open process, and try and get in conference with the House and follow the way that the manner in which we're supposed to deal with these issues rather than letting it all pile up at the end of the year and then trying to do what they call an omnibus spending bill, which combines them all into one and typically, unfortunately is written in the two leader's office without a lot of input from other senators or house members or just doing an extension, a continuing resolution which funds at last year levels. And that's not a responsible way to fund the government. And if I'm ever in a position to have a control over what that looks like, we're going to be passing appropriation bills, I think the old-fashioned way.

Lori Walsh:

All right. I know there's some school children who are waiting for you to arrive, so we'll thank you for your time. Thanks for stopping by, Senator.

Sen. John Thune:

Good to be with you. Thanks you Lori.