The Farm, Food, and National Security Act of 2024 includes several significant changes aimed at supporting the agricultural sector:

1. Increased Statutory Reference Prices: The bill proposes a 10-20% increase in statutory reference prices for all covered commodities. This change is designed to provide a more stable financial foundation for farmers by ensuring they receive fair prices for their products.

2. Enhanced Crop Insurance Subsidies: The legislation includes provisions to raise subsidies for crop insurance, helping farmers manage risks associated with adverse weather conditions and market volatility.

3. Voluntary Update of Base Acres: Farmers will have the option to voluntarily update their base acres, which can better reflect current agricultural production and improve the alignment of support programs with actual farming practices.

4. Higher Marketing Loan Rates: The bill increases marketing loan rates for most commodities, offering better financial terms for farmers during the marketing of their crops.

5. Dairy Program Improvements: The legislation makes several improvements to dairy programs and pricing structures to support the dairy industry.

Controversial Provisions

Several provisions in the bill have sparked debate:

1. Cost-Neutral Thrifty Food Plan Updates: One of the most contentious elements of the bill is the requirement for future updates to the USDA’s Thrifty Food Plan to be cost-neutral. While this provision aims to save $27 billion, it has faced opposition due to concerns about potential cuts to SNAP benefits.

2. Climate Guidelines and Commodity Credit Corporation Spending: The bill removes climate guidelines for Inflation Reduction Act conservation funding and restricts USDA’s spending authority under the Commodity Credit Corporation, reallocating funds to increase commodity program payments and crop insurance subsidies.

Implications for Southeastern Farmers

The passage of the Farm, Food, and National Security Act of 2024 is likely to have several implications for farmers in the Southeastern United States:

1. Enhanced Financial Stability: The increase in statutory reference prices and marketing loan rates is expected to enhance financial stability for Southeastern farmers. By ensuring fair prices for commodities, farmers can achieve more predictable income streams, which can lead to increased investments in farming operations and potentially higher land values.

2. Improved Risk Management: The raised crop insurance subsidies will provide Southeastern farmers with better tools to manage risks associated with unpredictable weather patterns, pests, and market fluctuations. This improvement in risk management can lead to more resilient farming operations and a reduction in financial stress for farmers.

3. Operational Adjustments: The voluntary update of base acres allows farmers to better align their operations with current production realities. This flexibility can help Southeastern farmers optimize their use of land and resources, leading to more efficient and profitable farming practices.

4. Impact on Nutritional Assistance Programs: The cost-neutral requirement for updates to the Thrifty Food Plan may result in reduced funding for SNAP benefits, which could affect food security for low-income families in the Southeast. Farmers who rely on local markets and food assistance programs may see changes in demand for their products.

5. Environmental and Conservation Considerations: The removal of climate guidelines for conservation funding and restrictions on USDA’s spending authority under the Commodity Credit Corporation could impact conservation efforts in the Southeast. Farmers may need to adapt their practices to align with the new funding priorities, potentially affecting long-term sustainability initiatives.

The Census of Agriculture, conducted every five years by the USDA’s National Agricultural Statistics Service (NASS), provides a comprehensive overview of U.S. farms and ranches. The latest census data for Kentucky shows:

• Market Value of Production: $8 billion, up nearly 40% from 2017.
  • Livestock and poultry: $4.2 billion
  • Crops: $3.8 billion
• Net Cash Farm Income: $2.4 billion, a 56% increase from 2017.

• Top Commodities:
  • Poultry and eggs: $1.79 billion, up 36%
  • Corn: $1.46 billion, up 76%
  • Soybeans: $1.38 billion, up 48%
  • Cattle: $1.08 billion, up 8%
  • Equine: $736 million, up 58%
  • Wheat: $262 million, up 133%
  • Milk: $233 million, up 40%
  • Tobacco: $225 million, down 36%
  • Hogs and pigs: $207 million, up 61%

• Regulatory Adjustments: Agribusinesses, particularly those in the livestock, meat, and poultry sectors, will need to adjust their business practices to align with the new rule. This might involve reassessing contractual agreements, pricing strategies, and market participation to ensure compliance with the clarified definitions of unfair practices.

• Legal Challenges: As highlighted by the National Cattlemen’s Beef Association (NCBA), the rule could lead to an increase in litigation. Businesses may face legal challenges concerning innovations or differentiation strategies in the market, which the rule might interpret as potentially unfair practices. This could lead to a more litigious environment, increasing legal costs and requiring more robust legal defenses and strategies.

• Market Dynamics: The rule aims to standardize pricing mechanisms by curbing practices deemed as unfair competition. This could lead to a more homogeneous market where product differentiation is minimized. For businesses that rely on premium branding or specialized products, this could potentially reduce competitive advantages and impact profitability.

• Compliance Costs: Implementing the changes required by the new rule could involve significant costs. Businesses may need to invest in new compliance systems, training for staff, and consultancy fees to navigate the regulatory changes. These costs could impact overall financial performance and competitiveness.

• Impact on Small vs. Large Producers: The effects of the rule might vary depending on the size and structure of the business. Small producers might benefit from a more level playing field, while larger corporations could find that their ability to leverage economies of scale and market influence is diminished.

• Strategic Opportunities: Despite the potential challenges, the rule could also open new opportunities for businesses that adapt quickly and effectively. Companies that can navigate the new regulatory landscape efficiently may find new market niches or lead in establishing fair trade practices, enhancing their reputation and market share.

The initiative, backed by Georgia Agriculture Commissioner Tyler Harper, addresses the current WOAH policy that does not distinguish between different types of poultry. Under the existing definition, the detection of HPAI in any poultry, including non-commercial or backyard birds, can trigger international trade bans affecting all poultry products from the region. This policy has led to severe financial repercussions for U.S. poultry producers, with Georgia’s industry alone facing potential annual losses of up to $300 million due to these indiscriminate trade restrictions.

1. Regulatory Predictability and Stability:
   • Before Ruling: Agribusinesses could rely on stable regulatory interpretations, which helped in long-term planning and compliance strategies.
   • After Ruling: Increased uncertainty in regulatory interpretations as courts no longer defer to agency expertise. This may lead to more frequent changes in interpretations as different judicial decisions may contradict previous agency guidelines.
2. Increased Legal Challenges:
   • Agribusinesses may face an increased burden of navigating through potentially more frequent litigation as parties challenge the interpretations of agencies directly in the courts without the buffer of Chevron deference.
3. Agency Response and Adaptation:
   • Agencies might need to be more precise in their rule-making processes, leading to clearer regulations that reduce ambiguity but also limit flexibility in responding to changing industry conditions and scientific advancements.

In drought conditions, several factors need to be considered when appraising farm properties:

• Reduced Crop Yields: Drought significantly lowers crop production, which can affect land value as the income potential of the farm diminishes.
• Water Resources: Farms with access to reliable water sources, such as well-supported irrigation systems or rights to water bodies, may hold their value better than those reliant on natural rainfall.
• Soil Health: Extended dry periods can degrade soil quality and fertility, impacting the land’s agricultural potential and thus its appraisal value.
• Infrastructure Resilience: The condition and efficiency of irrigation systems and other farm infrastructure become crucial in maintaining crop and livestock health, influencing the overall valuation.
• Market Access and Flexibility: Farms with diversified crops or those able to quickly shift production to less water-dependent crops might be appraised more favorably.