Farm Director KC Sheperd caught up with OSU Ag Economics Professor, Dr. Amy Hagerman, to talk about the 2024 Farm Bill’s progression and what its completion might mean to Oklahomans.
Dr. Hagerman said that due to a rapid progression of the Farm Bill this past May, people were optimistic about the Farm Bill’s imminent passage to legislation as it approached the markup in the Ag House Committee.
“Now, here we are in August. It’s pretty late to get a Farm Bill done this year when we don’t have text from the Senate yet. Which means that the Conference Committee can’t come together to reconcile the two bills before it goes out for full floor votes so the President can sign it,” Dr. Hagerman explained.
She said that the Farm Bill didn’t experience any major changes. For the most part, it experienced an evolution to better fit the modern economy. “We’ve only had a few revolutionary farm bills, where we really change up programs. For example, the 2018 Farm Bill which was the end of those direct payments whenever the ARC and PLC programs came into play, or some farm bills from the early two thousands that really changed crop insurance. Back in the 1980s and 90s, crop insurance wasn’t the risk management tool that it is today. Those farm bills really shook things up.
“This one is more about making the programs work better for current market conditions. One example of that would be base acres. There is a proposal to add new base. Base hasn’t really been revisited since it was established based on production data from the 1980s. So the opportunity, especially for new and beginning producers, to add base on farms that they purchased that were under-based, is really a great opportunity.”
Dr. Hagerman explained that the Senate Ag Committee’s first priority is rural development, which encompasses rural healthcare, telemedicine, broadband, and interestingly, childcare. “I think that is a really thoughtful priority to have for us in Oklahoma where we do have some limitations in terms of childcare options in various parts of the state.”
Conservation is the second priority. “This is one of those real points of contention between the House version of the bill, which is primarily Republican-led, and the Senate version of the bill, which is primarily Democratic-led,” she said. “We will have to wait to see how that conservation text actually comes out of the Conference Committee because right now both the Senate and House bills would like to make some of the Inflation Reduction Act conservation funding part of the permanent baseline of the Farm Bill. In Oklahoma, we are huge users of conservation programs because we have a lot of conservation challenges.”
She detailed that there is also some real difference in the authorities of the Secretary of Agriculture, especially around the CCC funds and around the Thrifty Food Plan, which is the underlying calculation of the supplemental nutrition assistance program.
Dr. Hagerman attempted to relate potential items of the two versions to their effect on Oklahomans saying that the base would be beneficial. “Our land use has changed a lot in this state. If you go back to the 1980s and the amount of wheat, peanut, and oat acres we had then, versus the wide diversity of crops that we have in the state, now. Our base doesn’t match our harvested acres very well anymore.
“I have asked various parties what they plan to do about unassigned base acres. As an example, we have quite a bit of unassigned base in Oklahoma that came out of the reallocation around seed cotton in 2018. The feeling is that it would all get folded in and you would be able to apply those base acres again.”
Dr. Hagerman also feels that the suggested increase in reference prices would be valuable to Oklahomans as well as farmers nationwide. “Cost of production won’t reduce as quickly as grain prices are reducing, so that gap is worrisome in the next few years. That is where I would really like to see this farm bill move forward more quickly.”
Recently, Livestock Risk Protection has seen an 8,000% increase in Oklahoma, and as expected, more producers are using it than ever before. Hagerman has also observed a marked increase in crop insurance companies’ advertising LRP in their campaigns.
“We are in a really uncertain time with respect to cattle prices, and we need to really think about how we can use the LRP programs to help protect our cost, especially given how expensive cattle are as an input,” she said. “If you remember when in 2020, they made some technical changes to LRP that made it a lot more usable for producers.
“Also, has we see more agents carrying that policy, there is more information about it, more surety about how it will work, and it’s easier to find someone who is using it. It is still far below our total number of cattle in the state, so there is a lot more potential growth ahead in that program.”
On the subject of crop insurance, Dr. Hagerman related a research project conducted in Southwest Oklahoma alongside producers and county extension offices in the area. The research measured the impact that crop insurance has on communities impacted by drought. “Producers are such critical parts of communities, so when they hurt financially because of drought or other major disasters, their communities hurt, too,” she said.
The research found that crop insurance offsets about 65% of the economic impact on the local community. “So that money does trickle out into the community and has some multiplier effects as opposed to just going directly to the producer,” she related. “When we consider rural development, thinking outside of direct development programs is good as well because agriculture is a major industry in many of our counties.”
Going forward, Dr. Hagerman and her team at Oklahoma State University will continue to run analyses to see how climate-smart ag can benefit Oklahomans, reference prices, and base acres. “We are really trying to bring some of that good OSU research into this farm bill discussion,” she concluded.
