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Farm Bill Chat with Randy Fortenbery

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Contact Information:

For questions or comments, contact Randy Fortenbery by email at r.fortenbery@wsu.edu.


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Episode Transcription:

[ Music ]

Drew Lyon: Hello. And welcome to the WSU Wheat Beat Podcast. I’m your host, Drew Lyon. And I want to thank you for joining me as we explore the world of small grains production and research at Washington State University. We have weekly discussions with researchers from WSU and the USDA-ARS to provide you with insights into the latest research on wheat and barley production.

[ Music ]

Drew Lyon: My guest this week is Randy Fortenbery, Thomas B. Mick endowed chairman in the School of Economic Sciences here at WSU. Hi, Randy.

Randy Fortenbery: Hello, Drew.

Drew Lyon: So the current farm bill expires next year. What is the status of a replacement?

Randy Fortenbery: Well, there’s been discussion going on for months — since January, actually — on a replacement farm bill. Not a lot of progress has been made. There have been hearings held by the Senate and the House Ag. Committee over the summer with producers, agribusiness groups, both in D.C. and around the country. And I think early on there was optimism by the House anyway, they would have a bill out on the floor by August of this year. Has not happened, and at this point, I suspect it won’t happen before the end of the year. In fact, Paul Ryan, who’s from an agricultural — represents an agricultural sector in Wisconsin — has said his primary motivation for the end of the year is just tax reform. So he’s even not talking agriculture, despite his constituents being agri-business. So I suspect we won’t see anything before the end of the year. The most optimistic thing maybe is a bill out of the House Committee, probably nothing out of the Senate before the end of the year.

Drew Lyon: Okay. So what’s your sense of the current farm bill? Do you think most people see it as having been a success, or do you think you will see major changes in the new farm bill?

Randy Fortenbery: I think if you think broadly about sort of the provisions, especially crop insurance as the primary safety net, I think people are generally satisfied with that. At least most of the commodity groups, especially crop groups, seem to think that was a reasonable provision. There’s questions, though, about the actual application, what should it actually cost, what should be the cost share between producers and the government? The shallow loss portion, the ARC and the PLC — the price and the revenue coverage pieces from the government, though — I’m not sure people would say they’re a complete failure, but I think they think the prices were wrong. When we negotiated this farm bill, prices were quite high. And so often — and this happened in 1996 as well, when prices are high, we tend to believe that the government doesn’t need to provide as strong a safety net; the market’s taking care of people. Then when prices collapse, that attitude sort of changes. And so right now I think a lot of people are concerned that PLC and ARC aren’t providing the kind of support they would have hoped to have had when the bill was initially passed.

Drew Lyon: So do you think we might see some changes on that depending on what prices are doing when this is finally, you know, worked on?

Randy Fortenbery: Yeah. There are already several provisions out there. The corn growers — National Corn Growers, for example, have argued that ARC prices should be increased 5% over the current prices that are used in those revenue protections. Some people have argued that the PLC price guarantees — so for wheat that’s $5.50 a bushel. Price is below that, producers get a payment for the difference in the market price and that $5.50 price. They think that’s too low, given costs of production. Some groups, Farm Bureau I believe, has argued that we ought to have a longer yield average in ARC. So if we have one year with either a really large or a really small yield, it doesn’t drive the average that’s used to generate these revenue guarantees. So I think there’s a lot of interest in that. The biggest thing, really, is the lack of flexibility. So once you’ve signed up for a program choice you couldn’t change that over the life of the farm bill. And that program choice required you to decide something about what you thought prices were going to do going forward. Prices are a lot lower than anybody expected, I think when they signed up for the 2014 farm bill. So there’s a lot of interest in flexibility being able to move between program provisions at some different points over the life of the bill may be coming forward.

Drew Lyon: Okay. One of the arguments I think I’ve heard for a number of years or every time the farm bill comes up is there’s a segment out there who thinks the agricultural portion of the farm bill should be separated from things like SNAP, which is the Supplemental Nutrition and Assistance Program that offers food assistance to low-income families, many of whom happen to live in urban areas; do you think that’s likely to happen?

Randy Fortenbery: You hear that argument a lot. And some of it even comes from agricultural communities, but a lot of it comes from the non-ag community. But I think the politicians involved in trying to get this legislation through Congress would not support that. And the reason is they need an urban constituency to sign onto the bill, but it has no interest to urban constituents, it’s hard to get time on the floor, first of all, to get it even considered. And secondly, you don’t get their vote. So probably divorcing those two things would not be a success story in terms of trying to get a farm bill through Congress. That’s been argued for 20 years. Every time we’ve come back, we’ve kept them together, which has been important in providing this urban/rural coalition to actually get a farm bill passed.

Drew Lyon: Well, it certainly will be interesting to watch what happens in this current political climate. Hopefully, our guests will stay tuned and as this develops, perhaps we’ll ask you back to give us some ideas of what’s happening.

Randy Fortenbery: Okay. Well, hopefully we’ll know more in the future.

Drew Lyon: Thanks, Randy.

[ Music ]

Drew Lyon: Thanks for listening to the WSU Wheat Beat Podcast. If you have questions or us that you’d like to hear addressed on future episodes, please email me at drew.lyon@wsu.edu. You can find us online at smallgrains.wsu.edu. You can also find us on social media, on Facebook and Twitter at WSUSmallGrains. Subscribe to the show through iTunes or your favorite podcasting app. The WSU Wheat Beat podcast is a production of CAHNRS Communications and the College of Agricultural, Human, and Natural Resource Sciences at Washington State University. I’m Drew Lyon. We’ll see you next week.

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