The 2018 Farm Bill Has Expired: What Does That Mean?
On September 30, 2024, the 2018 Farm Bill expired, again. This is not unique. Last September, the bill also expired, and Congress enacted a one-year extension on November 19, 2023.
Background
The 2018 Farm Bill (Agricultural Improvement Act of 2018) was signed into law on December 20, 2018, after the 2014 farm bill expired on September 30, 2018. It made few significant changes to the status quo. Within the Commodities Title, the bill reauthorized the programs of Price Loss Coverage (PLC), Agriculture Risk Coverage County (ARC-co), and Agriculture Risk Coverage Individual (ARC-i). It also instituted the Dairy Margin Coverage (DMC) program. The bill continued standard conservation programs, such as the environmental quality incentives program (EQIP) and the conservation stewardship program (CSP). It also expanded the number of acres eligible for the conservation reserve program (CRP). The bill made several small changes to the crop insurance program, but largely left the substance of the program untouched. Finally, the bill reauthorized nutrition programs (such as the Supplemental Nutrition Assistance Program (SNAP)), responsible for more than 75 percent of the bill’s cost.
Consequences of the Expiration
The farm bill, which is passed for a five-year period at a time, is massive. At best, its regularly scheduled expiration ensures that Congress reconsiders key food and agricultural policy every five years or so. At worst, its expiration leads to uncertainty and difficulty for agricultural producers and others that rely on its programs.
As well explained in Expiration of the 2018 Farm Bill and Extension for 2024 (CRS Report), the September 30, 2024, expiration means different things for different programs. In general, current commodity programs are authorized for commodities harvested in 2024. As such, these programs are not generally impacted until 2025. Without a new farm bill or another extension, however, commodities harvested in 2025 (starting with milk, which is daily harvested) will be governed by permanent law. This law dates to the 1930s and 40s. Congress has never ended this permanent law. Instead, every farm bill suspends these permanent provisions and substitutes modern provisions. Without a farm bill, archaic permanent law would control.
As the CRS report explains, “Permanent law provides support based on a parity price from the 1910-1914 period that does not recognize productivity gains and technological advances in agriculture.” (CRS Report, p. 6). For example, under permanent law, the USDA would be required to purchase dairy products in an amount sufficient to raise demand such that prices would rise to levels specified in the ancient law. According to the CRS report, this price is more than twice as high as the current market price. (CRS Report, p. 6).
Unlike commodity programs, the Federal Crop Insurance Act authorizes and funds the crop insurance program permanently. As such, the crop insurance program does not expire.
Conservation programs are more complicated. Funding authority for most programs would generally expire with the expiration of the farm bill. The 2022 Inflation Reduction Act, however, authorized funding for a number of conservation programs, such as EQIP and CSP. This means these programs will continue, although only new contracts authorized by the IRA provisions can be signed absent a new farm bill or an extension. For example, the CRP program was not funded by IRA. As such, the expiration of the 2018 farm bill prevents FSA from authorizing any new CRP contracts or contract revisions until new legislation is passed. Contracts in place before October 1, 2024, are not impacted. Producers will continue to receive their contract payments.
Most nutrition programs, including SNAP, continue beyond the September 30 farm bill expiration, although future appropriations must be passed to ensure that benefits are funded into 2025.
The farm bill authorizes and funds many other programs not discussed here. Some of those programs lost authorization and/or funding after September 2024. These include some animal health programs and programs assisting beginning farmers.
What’s Ahead?
With the election just around the corner, it seems clear that no new farm bill will be passed before that time. It is expected (based upon past expirations), however, that Congress will pass something before year end to avert the reinstitution of permanent law or the pending risk to nutrition program funding. The future of a new farm bill, however, remains uncertain. As many 2025 crop year decisions will soon be made, farmers, lenders, and others are hoping for some clarity soon.
We will keep you updated.