Thursday, December 20th, President Donald Trump signed the 2018 Agriculture Improvement Act (“2018 Farm Bill” or “AIA”) into law (Public Law No. 115-334). In his speech, President Trump praised farmers and ranchers, the lawmakers who champion the cause of agriculture in Congress and the legislation for keeping key programs like crop insurance available for American farmers. USDA Secretary Sonny Perdue released the following statement, “The passage of the 2018 Farm Bill is good news because it provides a strong safety net for farmers and ranchers, who need the dependability and certainty this legislation affords. This Farm Bill will help producers make decisions about the future, while also investing in important agricultural research and supporting trade programs to bolster exports.” This Farm Bill received the most votes of any farm bill in history (Senate: 87-13; House 369-47).
As the 2018 Farm Bill was under development, there was a unified voice among the commodity and other farm groups as well as crop insurance companies and agents: “Do No Harm to Crop Insurance.” As a permanently funded program, the fate of the program was not dependent on the passage of a farm bill yet with each farm bill there are attempts by some to cut the program or impose new limits on its participants.
Congress heeded the ag community’s mantra regarding crop insurance. The AIA maintains the existing structure of crop insurance, allowing for private sector delivery in coordination with the Risk Management Agency (RMA). The AIA also rejects misguided proposals to apply means tests or payment limitations, invests in expanding options for underserved commodities and producers and expands the premium discount for new and beginning farmers to assist in getting their farms and ranches up and running. Below are some key highlights of the Crop Insurance Title of the 2018 Farm Bill that can be used in discussions with agents and policyholders (the implementation of these changes by RMA is yet to come):
Insurance for forage and grazing: Crops that can be both grazed and mechanically harvested—like winter wheat—are now eligible for separate policies on each intended use to provide livestock producers and pasture owners with additional insurance options.
Research and development priorities: RMA is instructed to focus research and development activities on improving insurance for crops affected by hurricanes and tropical storms, farms that utilize more efficient irrigation systems, losses in crop quality, grain sorghum, different irrigation practices for rice, citrus, hops, greenhouse products, and high-risk, highly-productive Batture land (land between a river at low-water stage and river bank or levee).
Whole Farm Revenue Protection (WFRP): WFRP discounts for beginning farmers and ranchers are expanded to 10 years (from five years in current law). The conference report also requires the Federal Crop Insurance Corporation (FCIC) Board to review modifications to improve the effectiveness of WFRP policies, including reducing paperwork burdens on producers and agents; removing caps on nursery and livestock production; allowing waivers to expand operations; and using alternative record keeping like geospatial imaging to document planting and production history.
NOTE: The Farm Bill does not mandate these changes.
Rebating: The conference report reaffirms that rebating is strictly prohibited, whether in the form of discounts, incentives, or other inducements, ensuring fair treatment for all producers. The conference report commends RMA for taking the rebating prohibition seriously and carrying out the prohibition in a manner that is consistent with Congressional intent and current law. Grandfathered rebating activity is strictly limited to the current list of entities in the current list of states.
Hemp: The conference report makes hemp eligible for crop insurance and directs the FCIC Board to streamline the process for developing hemp policies.
Crop insurance education grants: The conference report streamlines crop insurance education grants, primarily by requiring they be delivered through the National Institute of Food and Agriculture (NIFA).
- Increases CAT policy fee from $300/crop/county to $655/crop/county.
- Requires each RMA Regional Office to designate a Specialty Crop Liaison.
- Cover cropping is deemed a good farming practice if the cover crop is terminated in accordance with guidelines prescribed by the Secretary or exceptions to these guidelines.
- Establishes an underserved producer category that includes members of an Indian tribe, beginning farmers and ranchers, veteran farmers and ranchers, and socially disadvantaged farmers and ranchers.
- Authorizes multi-county enterprise units (MCEUs)
- Codifies RMA’s authority to provide a 10% cup on APHs, along with the authority to provide other adjustments to APH.
- Provides that native sod that has been tilled for production of an insurable crop after December 20, 2018 is subject to a reduction of crop insurance benefits for not more than four years during the first 10 years after tillage and during each year where a crop is insured.
- Requires use of NASS data to detect disparities and anomalies that indicate fraud, waste, and abuse.
- Requires continuing education for agents and loss adjustors.
- Modifies reimbursement requirements for policy submissions under section 508(h) by, among other things, basing reimbursement on reasonable costs.
The House Agriculture Committee has provided three summaries of the final conference report if you would like additional details on the remainder of the 2018 Farm Bill:
- HR 2 Conference Report Highlights (one page)
- 2018 Farm Bill Conference Report Highlights (nine pages)
- HR 2 Conference Report Summary (23 pages)
For those interested in the full legislative history, it may be found here: www.congress.gov/bill/115th-congress/house-bill/2.
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