What happens when the Farm Bill Expires?
This week, much of Congress’s attention is focused on a looming government shutdown. That shutdown could come as soon as October 1 without action from Congress to pass a stopgap funding measure to keep the government open. Not only is September 30 the deadline by which Congress must act to keep the government open. It is also the date the 2018 Farm Bill expires!
So what does that mean?
When Congress was in this situation during the last Farm Bill cycle in 2018, they also failed to meet the Sept 30th deadline and they let the Farm Bill lapse for several months while negotiations continued. The real deadline that Congress is focused on now is December 31, 2023. That’s when major market disruptions start to kick in if Congress fails to Act, including the ‘dairy cliff,’ when the USDA dairy program reverts to the 1940s law. This ‘dairy cliff’ will likely force action by Congress before December 31, 2023.
That action could take one of two forms. Congress could either pass a new bill in December or alternatively, they could extend the current Farm Bill for a year (or some other period of time).
What does an expired Farm Bill mean for the Organic Certification Cost Share Program?
The USDA Farm Service Agency (FSA) and some state Departments of Agriculture are currently accepting 2023 Organic Certification Cost Share Program applications – the deadline is October 31. The good news is that farmers who apply for the cost share program by October 31 can still receive reimbursements even after the 2018 Farm Bill expires. That is because FSA is allowed to expend current cost share funds after the September 30 deadline.
Typically, FSA announces the availability of cost share funding in April or May. So if Congress passes a Farm Bill before then with renewed funding, the 2024 Organic Certification Cost Share Program should be able to operate without interruption. But…
The Organic Certification Cost Share Program is at risk.
The cost share program is especially vulnerable in an environment where Congress decides to extend the current Farm Bill, because in the absence of a special provision, the cost share program would expire, leaving thousands of organic farmers with a huge net increase in their annual certification costs. This is because the Organic Certification Cost Share Program does not have ‘permanent baseline’ status - the requirement to achieve permanent baseline is $50 million in mandatory funding annually. Only those programs with permanent baseline are automatically included in a Farm Bill extension.
The cost share program is also vulnerable in the sense that Congress may fail to authorize the program with sufficient funding given the fiscal constraints of this Farm Bill. For this reason, NOC has issued a time sensitive action alert urging organic stakeholders to communicate with Members of Congress about the value of the cost share program.
NOC is also urging Members of Congress to support the Opportunities in Organic Act, which is focused on modernizing the Organic Certification Cost Share Program by increasing reimbursements to $1,500 per year and getting the cost share program to permanent baseline before the end of this next Farm Bill cycle.
What about OREI?
In contrast to the cost share program, in the 2018 Farm Bill we were able to get one key organic program, the Organic Agriculture Research and Extension Program (OREI), the flagship competitive grants research program at USDA, to a more sustainable place in terms of funding. Specifically, OREI now has what is called ‘permanent baseline,’ which means that even if Congress simply extends the Farm Bill for another year, OREI is assumed to be part of that extension at its current funding level, which is $50 million annually. It was a huge win for the organic community to get the OREI program to permanent baseline in the 2018 Farm Bill! NOC is calling on Congress to continue to invest in the resilience of U.S. agriculture and economic opportunity by increasing funding for organic research programs in the 2023 Farm Bill.