December 21st, 2018
Farm Policy Update: The 2018 Farm Bill
After months of negotiation by House and Senate Agriculture Committee leadership and staff, the week of Dec. 10 was a whirlwind for the passage of the 2018 Farm Bill. The text of the conference report was released on Monday evening, followed closely by a vote of 87-13 in the Senate on Tuesday and a vote of 369-47 in the House on Wednesday. The bill was then signed into law on Thursday, Dec. 20.
During this Farm Bill cycle, American Farmland Trust’s focus has been on changes to key programs that deliver on its mission to protect farmland, promote environmentally sound farming practices, and keep farmers on the land.
This blog post compares AFT’s early priorities and recommendations to the conference committee to the final conference report of the 2018 Farm Bill. AFT priorities that are included in the bill are noted with a (✓), and items that are partially or not at all included are noted with a (—).
For past comparisons of AFT’s priorities to the House bill and Senate bill, click here and here.
Protect Farmland: Agricultural Conservation Easement Program
The Agricultural Conservation Easement Program, or ACEP, is a critically important voluntary federal conservation program implemented by the USDA Natural Resources Conservation Service that protects agricultural land and conserves wetlands. The ACEP-Agricultural Land Easement, ACEP-ALE, program cost-shares with state and local partners to purchase agricultural conservation easements from farmers, ranchers, and agricultural landowners. The program permanently protects land from sprawling development while keeping it in agricultural production. Importantly, it enables farmers and ranchers to reinvest the proceeds of the easement sale in their businesses, to transition land to the next generation, or to offset the costs of improved conservation practices.
Increase ACEP Funding ✓
AFT’s top priority for the 2018 Farm Bill was to increase the funding for ACEP to $500 million per year. While the $450 million level of funding does not quite reach this original goal, AFT is very appreciative of the additional $2 billion in funding that will come to ACEP over the next 10 years through the 2018 Farm Bill. Additionally, AFT recognizes that maintaining current definitions of eligible land (see Forestland Eligibility below) and increasing funding for other programs (see Regional Conservation Partnership Program Funding below) will also allow for additional farmland and ranchland protection in this Farm Bill.
Limit Forestland Eligibility ✓
AFT commends the conference report for continuing the intended use of ACEP-ALE by not including a waiver allowing 100 percent forested lands to be included in the program. This addition would have been duplicative of other forestland protection programs and would have created additional demand in an already oversubscribed program.
Clarify Certification ✓
Across the country, many state and local Purchase of Agricultural Conservation Easement programs and agricultural land trusts have decades of experience protecting farmland and ranchland in their communities. This bill strengthens the ability of these experienced entities to use their own deed terms to meet the needs of local producers once certified. It also includes a streamlined process through which experienced land trusts and state programs qualify for certification.
Remove ALE Plan ✓
This bill removes the requirement to have an ALE plan (a document meant to guide producer practices) from the permanent, legally-enforceable deed terms, avoiding future legal headaches as production practices on eased land change over time. The requirement instead reverts back to pre-2014 Farm Bill language requiring a conservation plan for highly erodible land, and the report language included with the bill encourages landowners to work with NRCS to undertake conservation planning.
Clarify Contingent Right of Enforcement ✓
The bill clarifies the Secretary’s contingent right of enforcement, assuring landowners they won’t undergo additional inspections by USDA if the easement holder is properly monitoring and enforcing the easement and reporting to USDA, unless the USDA has an articulable reason for doing an inspection.
Add Flexibility to Cash Match ✓
In many states and counties around the country, PACE programs serve as an invaluable resource and cash match for farmers seeking to use ACEP-ALE funds. However, in areas with no public program or limited funds for farmland protection, the removal of the cash match requirement in the bill means that farmers and ranchers who are willing to donate more of their easement value can move forward in permanently protecting their land through ACEP-ALE. Rather than requiring a specific amount of cash contribution, a combination of cash, landowner donation, easement costs (e.g. appraisal, survey, inspection, and title), and other sources as determined by the Secretary are allowed.
Waive Adjusted Gross Income Limitation ✓
The 2018 Farm Bill reverts to pre-2014 Farm Bill language allowing a waiver of the AGI limitation for projects of special environmental significance. This will allow for protection of farmland and ranchland based on its environmental benefits, rather than based on the situation of a landowner at a given moment in time. The bill also maintains the AGI limitation at $900,000 per year.
Authorize Buy-Protect-Sell ✓
By using buy-protect-sell, a land trust may step in to purchase a piece of property and protect it with an easement so that it can be sold to a farmer at its agricultural value. This is especially beneficial to next generation farmers, for whom access to affordable farmland is a key challenge. AFT is pleased to see this innovative practice included from the Senate bill in the final bill.
Allow Non-Agricultural Activities ✓
AFT supports the bill’s inclusion of non-agricultural activities, such as a bed-and-breakfast in an existing farm structure, that do not negatively impact the agricultural use of the land, as a means by which farmers and ranchers can take advantage of new income opportunities.
Allow Ecosystem Service Markets ✓
The option to participate in ecosystem markets—again, so long as this does not negatively impact the use of the land for active agriculture—is also a win-win for improving farm viability and the environment. This bill adds language that prevents the Secretary from limiting participation in an environmental service market so long as one of the purposes of the market is to bring about additional conservation benefits that are consistent with the purposes of the conservation program.
Clarify Mineral Development ✓
Under current law, mineral development is considered on a case-by-case basis. AFT supports the inclusion of a specific set of standards to allow mineral development on farmland with the protection of an approved restoration plan. These standards are especially important to enable easement purchases in areas where subsurface mineral rights are not owned by the farmer or rancher seeking to use ACEP-ALE.
Allow Easement Modifications ✓
Farming and ranching today looks different than it did in the past, and producers will continue to need to adapt their operations and practices to remain viable into the future. The 2018 Farm Bill differentiated standards for subordinating, modifying and exchanging, and terminating an easement that take into account the differing degrees of scrutiny needed for each type of change.
Promote Sound Farming Practices
Voluntary conservation programs are vitally important to farmers and ranchers who want to be good stewards of their land and of the shared natural resources we all enjoy. A full toolbox of well-funded conservation programs, which often leverage matching funds from farmers and ranchers themselves, is important to improve environmental outcomes and to avoid the need for more stringent regulations in the future.
Maintain Conservation Title Funding ✓
AFT applauds the 2018 Farm Bill for maintaining full Conservation Title funding for conservation programs despite the difficult fiscal environment.
Increase Regional Conservation Partnership Program Funding ✓
The Regional Conservation Partnership Program, RCPP, is an innovative, landscape-scale conservation program that brings many partners together to address targeted environmental issues. AFT is supportive of the $300 million of annual mandatory funding for RCPP in this bill. In addition, since the previous funding mechanism that took 7 percent from other conservation programs including ACEP is no longer included, this increase in funding could also lead to additional funding availability for farmland and ranchland protection.
Include Quantification of Outcomes in RCPP ✓
Importantly, the legislation makes changes to key sections of RCPP to improve the information that partners gather during their projects to show their effectiveness. The legislation now directs RCPP partners to quantify their projects’ environmental outcomes in their assessments; requires the Secretary to provide guidance to partners on how to quantify and report on environmental outcomes of their projects; and adds a requirement for the USDA to include the progress being made on quantifying and reporting of environmental outcomes to the report of the Secretary to Congress. Additionally, as a helpful first step towards quantifying outcomes as described above, this bill allows for the provision of some advance RCPP funding to establish a baseline of environmental quality from which to measure progress.
Retain Crop Insurance and Conservation Compliance Link ✓
Since the first Conservation Title in the 1985 Farm Bill, conservation compliance has tied payments from the USDA to basic requirements to protect fragile landscapes (highly erodible lands and wetlands). The 2014 Farm Bill re-linked these requirements to crop insurance premium subsidies, and AFT supports the continuation of that requirement in this legislation.
Simplify Application Process for RCCP ✓
AFT supports the directive for a simplified RCPP application process included in this legislation.
Authorize Report on Absent Landlords ✓
This bill directs the Secretary to complete a report on the effects of absentee landlords on land valuation, soil health, and the economic stability of rural communities. AFT has recognized the importance of engaging non-farming landlords, particularly women non-farming landowners, in its conservation work through its Women for the Land initiative, which includes a non-operator landowner survey to help policy-makers, natural resource agencies, and conservation groups understand how best to work with non-operating landowners to achieve effective resource conservation.
Streamline Conservation Practices and Crop Insurance —
Within the Crop Insurance title, this bill specifies that cover crop termination shall not impact insurability as long as it is carried out in a manner consistent with NRCS standards. The 2018 Farm Bill does not include language from the Senate Farm Bill that clarifies organic practices and conservation practices approved by the Natural Resources Conservation Service, or NRCS, shall be considered ‘good farming practices’ that do not require any additional consideration for insurability purposes. This bill also does not include language requiring coordination and improved management of already-collected USDA data to better understand the impacts of farm conservation practices on risk, yields, and profitability (while still protecting producer privacy and anonymity).
Keep Farmers on the Land
Since AFT’s founding in 1980, the average age of farmers has risen from 50 to 58. Meanwhile, the most recent Census of Agriculture in 2012 showed the number of beginning farmers decreased 20 percent compared to the five years before. The upcoming Farm Bill includes several important avenues for helping beginning farmers and ranchers access the land they need to start their operations, and to promote new markets to help them remain viable into the future.
Increase ACEP Funding ✓
See “Increase ACEP Funding” above.
Authorize Buy-Protect-Sell ✓
See “Authorize Buy-Protect-Sell” above.
Increase in USDA Loan Limitations ✓
The 2018 Farm Bill does increase the direct farm ownership loan limit from $300,000 to $600,000 to take into account the increased cost of purchasing farmland.
Authorize a Loan Prequalification Process —
This bill does not include the creation of a loan prequalification process so beginning farmers and ranchers can act quickly and confidently when they find a property that works for their business.
Increase Training Opportunities ✓
The Beginning Farmer and Rancher Development Program, or BFRDP, enables agricultural service providers to educate, train, and provide technical support to beginning farmers and ranchers on a variety of topics. AFT is very pleased to see the creation of the Farming Opportunities Training and Outreach Program as an umbrella for BFRDP and the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers and Veteran Farmer and Rancher Program. Together, these programs will receive $435 million in funding over 10 years and will have baseline as a starting point for funding in the next Farm Bill.
The bill also specifies that BFRDP may be used for “ innovative farm, ranch, and private, nonindustrial forest land transfer and succession strategies” and “technical assistance to help beginning farmers or ranchers acquire land from retiring farmers and ranchers.” Land access is one of the most cited barriers for next generation farmers and ranchers, making these important categories for training and technical support.
Authorize Farm Viability Grants —
This bill does not include a farm viability grant to assist organizations working with farmers and ranchers to further grow and improve their business models.
Increase Market Opportunities ✓
According to a 2016 study, farmers engaged in direct-to-consumer marketing were between six and 10 percentage points more likely to have surviving businesses than farmers who were not. The Farmers Market and Local Food Promotion Program, or FMLFPP, provides grants to organizations working to improve local food infrastructure such as farmers markets, regional food hubs, and value-added production enterprises. The 2018 Farm Bill creates an umbrella program for FMLFPP and the Value Added Producer Grants program called the Local Agriculture Market Program, which will receive $500 million over 10 years and also have baseline as a starting point for the next Farm Bill.
Establish a Commission on Farm Transitions ✓
AFT strongly supports the establishment of a Commission on Farm Transitions–Needs for 2050, as was included in the House bill. This 10-member Commission will study issues impacting the transition of agricultural operations including issues around infrastructure, credit, risk management, and training opportunities, and suggest strategies and incentives to address these issues.
Authorize a Report on Land Access ✓
AFT is also strongly supportive of the report on land access as was included in the Senate bill. The Secretary is directed to submit a report to Congress on barriers to entry for beginning farmers and ranchers seeking to acquire or access farmland, to consider the extent to which federal programs including ACEP are addressing those barriers, and to recommend regulatory, operational, or statutory changes that could improve beginning farmer land tenure and access.
Collect Data on Farmland Ownership ✓
The 2018 Farm Bill also directs the Secretary to collect and report on farmland ownership, tenure, transition, and entry of beginning and socially disadvantaged farmers and ranchers, as a regular follow-on to the Census of Agriculture.
Broaden Authority for State Agricultural Mediation Programs ✓
In forty states, certified agricultural mediation programs deliver mediation services that help producers, lenders, creditors, and other members of the agricultural community to resolve problems before they become more complicated and costly. AFT is pleased to see the reauthorization and expansion of the State Agricultural Mediation Programs to include lease issues (including land leases and equipment leases) and family farm transitions.
Establish Beginning Farmer and Youth Organization Outreach Coordinators ✓
This bill directs the Secretary of Agriculture to designate a National Beginning Farmer and Rancher Coordinator as well as a State Beginning Farmer and Rancher Coordinator for each state to manage outreach and technical assistance. The bill also provides for an Agricultural Youth Organization Coordinator to manage outreach to youth agricultural organizations and school-based agricultural education organizations.
Include Heirs Property Amendments ✓
The 2018 Farm Bill includes provisions to allow owners of heirs property to obtain a Farm Number in order to participate in federal programs, and the creation of a relending program for projects that assist heirs property owners in resolving ownership and succession.
Moving Forward
Overall, AFT is very supportive of the 2018 Farm Bill and thankful for the work of Senate and House Agriculture leadership to finalize the bill. Additionally, AFT appreciates the bipartisan nature of this bill and the input from agricultural, conservation, and nutrition groups that is evident in the final product. AFT looks forward to working with the Administration in its implementation of these beneficial changes.