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With help from Meredith Lee Hill
QUICK FIX
— The bill to fund the Agriculture Department and Food and Drug Administration still appears dead in the water, even after the House Freedom Caucus backed down from its most severe demands for cuts.
— EXCLUSIVE: The Government Accountability Office waded into the debate over crop insurance subsidies, giving ammunition to those seeking to reform the program.
— A group of bipartisan lawmakers wrote in opposition to USDA’s final rule allowing imports of Paraguayan beef.
— Anti-hunger groups are pushing Congress to pass the Delivering for Rural Seniors Act in the farm bill.
HAPPY MONDAY, DEC 4. I’m your host, Garrett Downs. Send your hot tips to @_garrettdowns and [email protected], and follow us at @Morning_Ag.
Driving the day
AG-FDA (STILL) IN SHAMBLES: Centrist and farm-state Republicans remain opposed to the House Ag-FDA spending bill, and they’re skeptical a new bill will address their concerns after the ultra-conservative House Freedom Caucus walked back demands for steep spending cuts.
Freedom Caucus Chair Scott Perry (R-Pa.) last week said the group would now agree to spending caps in the debt limit deal brokered by President Joe Biden and then-Speaker Kevin McCarthy (R-Calif.). The move came after months of the Freedom Caucus demanding the House undercut that deal, and GOP House appropriators spent months writing bills to do so that often failed on the floor, like the Ag-FDA bill.
Aggies still skeptical: Despite Perry’s about-face, House Ag members are taking a wait-and-see approach. Rep. Zach Nunn (R-Iowa), who voted against the original bill, insisted ag funding cannot be cut.
“We’re not going to balance the budget by cutting America’s farmers,” Nunn said. “Those guys need to take some time and really think about what they’re doing here.”
Abortion still the big issue: Rep. Marc Molinaro, a vulnerable New York Republican who led the charge against the original bill due to the mifepristone ban, was unequivocal that a bill with that ban is unacceptable.
“Mifepristone is an unnecessary component of that bill and frankly should be removed,” Molinaro said. “As far as the top line, I’d want to see how they apply it. … Could I live by the agreement that I voted for, [the Fiscal Responsibility Act]? Certainly. But mifepristone is a non-starter.”
What it means: It remains to be seen whether House appropriators will return to the drawing board on the Ag-FDA bill. The bill’s author, Rep. Andy Harris (R-Md.), has suggested the chamber should abandon the bill and head straight into conference with the Senate.
And though the Freedom Caucus backed down on their demands for steep spending cuts, it still doesn’t solve the logjam over mifepristone. Enough Republicans oppose the mifepristone rider to kill the bill for a second time. But stripping it out could jeopardize support from anti-abortion Republicans, leaving House negotiators with few options.
Tick tock: Both chambers need to agree on an Ag-FDA bill by Jan. 19 to avoid a partial government shutdown.
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FARM BILL BATTLES
EXCLUSIVE — CROP INSURANCE BATTLE: The Government Accountability Office is recommending lawmakers reduce or recalibrate crop insurance subsidies for private insurers and the largest farms as a way to save taxpayer money, wading into the long-running policy fight that is poised to again be a flashpoint in the next farm bill, Meredith and your host report.
Details: Crop insurance is a widely popular safety net program for farmers that is designed to cover financial losses in the case of some natural disasters or market upheaval. But reform advocates have long contended the program’s subsidy system disproportionately benefits larger farms and a small number of private insurance companies, by financially incentivizing insurers to focus on bigger and more expensive policies, which makes it harder for smaller farmers to gain access to the critical safety net the program provides.
The government subsidizes about 60 percent of crop insurance premiums, regardless of the farmer’s income, unlike other USDA programs that set income caps on federal aid.
Report findings: In a new report, shared exclusively with POLITICO, the GAO found reducing premium subsidy rates for the highest-income policyholders by 15 percentage points (from 62 percent to 47 percent) in 2022 could have saved the federal government about $15 million.
Key takeaways from the report:
— In 2022, about 1 percent of policyholders accounted for 22 percent of the federal crop insurance program’s premium subsidy dollars, with an average premium subsidy of $464,900 per policyholder, according to the report.
— According to the report, the federal crop insurance program cost taxpayers $17.3 billion in 2022, with $3.7 billion going to private insurance companies to provide crop insurance products — largely based on a percentage of the policies they write. A disproportionate amount of those subsidies went toward insurers writing policies for larger farms, with larger policies.
— Bigger policies comprised about 2 percent, or 29,822, of 1.2 million policies while accounting for 36 percent, or $759 million, of the total $2.1 billion in administrative and operating cost subsidies for private insurers, according to the report. Setting the rate of return for companies closer to the current market rate could also save billions over the next decade, according to GAO.
Fuel to the fire: Sens. Cory Booker (D-N.J.) and Kirsten Gillibrand (D-N.Y.) requested the report, which is sure to add urgency to the fight to rein in crop insurance subsidies. Booker said it shows “a shocking proportion” of funding intended to support writing crop insurance policies for all farmers “are being eaten up by companies and agents who write policies for the very largest farms.”
Retiring Rep. Earl Blumenauer (D-Ore.), who has introduced the AFFIRM Act to reform crop insurance subsidies, believes that there’s room for “a much different conversation” about farm subsidies this farm bill season, given strains on oversubscribed USDA conservation programs and the ongoing push among many House Republicans to slash federal spending. Blumenauer recently teamed up with Freedom Caucus member Rep. Ralph Norman (R-S.C.) to introduce a bill to require USDA to disclose information about who is receiving subsidies.
Skeptics: As we’ve reported, House Ag Chair G.T. Thompson (R-Pa.) has said he’s searching for funds to make crop insurance even more affordable and is opposed to reducing subsidies for high-earners.
“That’s not right. Because the larger the farm, probably, the higher the risk,” Thompson said. “I’m interested in reforms, but those go the wrong direction.”
Trade
LAWMAKERS OPPOSE BEEF IMPORTS: A bipartisan group of lawmakers wrote to Ag Secretary Tom Vilsack in opposition to USDA’s final rule allowing beef imports from Paraguay, arguing the risk of foot-and-mouth disease is too great.
The lawmakers say USDA “has not met the criteria to remove prohibitions on importing beef from Paraguay.” Instead, they allege the department “relied on outdated site visits, irrelevant inspections, and inadequate data to overcome these prohibitions” in lifting the ban on Paraguay.
Who’s on it: Twenty-one lawmakers signed onto the letter, which was led by House Ag members Tracey Mann (R-Kan.) and Jim Costa (D-Calif.).
Context: USDA in November finalized a rule that would allow beef imports from Paraguay under certain conditions. The agency said it decided to partially allow imports after a risk assessment, so long as foot-and-mouth disease has not been diagnosed in the exporting region in the past 12 months, the meat comes from premises where FMD has not been present during the lifetime of any of the animals, and the animals were inspected before and after death.
Food
FIRST IN MA — RINGING THE BELL: More than 60 anti-hunger groups are urging the leaders of the congressional ag committees to include the Delivering for Rural Seniors Act in the farm bill.
Order up: The bill would create a pilot program to allow the Commodity Supplemental Food Program to support the home delivery of food boxes for seniors. In a letter, the groups say seniors dealing with food insecurity are often less able to make the trip to their local food bank. States that have already tried delivery have found upticks in participation, but not every state has the means to implement it, the groups add.
“The Delivering for Rural Seniors Act gives Congress and USDA an opportunity to support and quantitatively assess the impact of home delivery on the CSFP participation rates,” the groups write. “This pilot has the potential to expand access to nutritious food for thousands of seniors during a time when households are still facing economic pressure due to inflation and other factors.”
Row Crops
— Food groups are swarming COP28 as agriculture receives more scrutiny at the event than ever before, via Inside Climate News.
— The Federal Trade Commission issued its annual report on ethanol market consolidation.
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