Reconciliation legislation approved by U.S. House panels
Key U.S. House committees advanced legislation this week which includes federal policy priorities the Minnesota Corn Growers Association (MCGA) has advocated for the last couple of years. This legislation will be included in the House GOP reconciliation package, which is a comprehensive package aimed at implementing several elements of President Trump’s domestic policy agenda.
MCGA has been banging the drum on the need for a Farm Bill reauthorization that would bolster the farm safety net, protect and enhance crop insurance, maintain voluntary conservation programs, and increase funding for export promotion programs. The U.S. House Agriculture Committee advanced legislation on a party line vote that includes several of those priorities. Specifically, the agriculture portion of the larger package will include agriculture investments through fiscal year 2031 covering:
- Strengthening the producer safety net by investing in modifications to the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) commodity programs that are more responsive to the current economic environment. Specific increases:
- Statutory reference price for corn from $3.70 to $4.10;
- ARC County coverage guarantee from 85% to 90% of the benchmark revenue;
- ARC County payment band to include 12.5% (currently 10%) of benchmark revenue;
- Marketing assistance loan for corn from $2.20 to $2.42; and
- Payment limitation for Title 1 commodity payments from $125,000 to $155,000 adjusted annually to account for inflation.
- Addressing the affordability of federal crop insurance coverage for producers. The language expands support for beginning and veteran farmers and ranchers and provides improvements to the Supplemental Coverage Option (SCO).
- Doubling mandatory funding for the Market Access Program (MAP) and Foreign Market Development (FMD) Program, which will develop new markets and promote U.S. goods, helping to boost U.S. agricultural exports.
- Increases mandatory funding for the Environmental Quality Incentives Program (EQIP), the Agriculture Conservation Easement Program (ACEP), and the Conservation Stewardship Program (CSP) and maintain voluntary adoption of conservation practices.
Although MCGA would prefer to see a full Farm Bill reauthorization process, the financial conditions in farm country cannot accommodate any further delay in bolstering the farm safety net. “Given the uncertainty for a full Farm Bill reauthorization process, we appreciate Chairman Thompson using the reconciliation package to advance critical tools to enhance the farm safety net for Minnesota corn farmers. We know this process will continue to play out over the next several months and MCGA will continue to advocate for our federal policy priorities on behalf of our members,” remarked Jim Kanten, MCGA President.
The U.S. House Ways & Means Committee advanced a bill out of committee earlier this week that includes several MCGA federal tax policy priorities. Specifically, the tax portion of the reconciliation package proposes to:
- Permanently extend key provisions from the Tax Cuts and Jobs Act of 2017, including the expanded estate and gift tax exemptions and the qualified business income deduction;
- Renews 100% bonus depreciation for five years;
- Permanently increases the Section 179 deduction from $1 million to $2.5 million; and
- Extends and modifies the clean fuel production tax credit, referred to as 45Z, until 2031. The tax credit can help the biofuels industry make inroads into the aviation sector and attract investment into opening new markets for corn.
“Farmers are facing uncertainty and economic pressure on several fronts. MCGA strongly supports making permanent several provisions from the 2017 Tax Cuts and Jobs Act to reduce uncertainty in estate planning and capital expenditures for Minnesota farm families.”
Reconciliation is a budgetary maneuver that only requires a simple majority to pass and has been a tool utilized when one party controls both legislative bodies and the White House. Speaker Johnson has indicated his intention is to pass the House reconciliation bill next week. Action will move to the Senate, where committees have a different set of budget instructions from leadership compared to the House. Both bodies will need to reconcile any differences before sending a bill to President Trump’s desk. This means the process will be playing out for the next few months and action by the House committees this week is only one step within a longer process.
