A new Farm Bill is coming this year, and it promises to impact the retail industry

When it comes to food and agriculture legislation, not all bills are created equal. The Farm Bill is the big kahuna, the top dog, the Bruce Springsteen, governing many of the sector’s policies and programs. So as the 2018 iteration of the bill is put out to pasture this year (read: it expires), stakeholders are pushing their agendas for the 2023 edition.

Matthew McKenna, former senior advisor to USDA Secretary Tom Vilsack during President Obama’s second term, told Retail Brew the bill, typically renewed every five years, is a “muscle network of funding,” for the USDA.

• It’s an omnibus bill, meaning it covers a lot of different topics. The bill is divided into 12 Titles, which include commodity programs, conservation, trade, nutrition programs (like SNAP), rural development, forestry, energy, and horticulture.
• It directly impacts farmers and ranchers, rural communities, and low-income families, which then impacts CPG brands, retailers, and consumers.

The bill is a bit “unusual” in that the USDA is very dependent on it for funding, and that it follows a calendar different from presidential administrations, McKenna noted. “That bipartisan nature, and that five-year calendar, I think, allows Congress to focus on policy issues a little bit more independent, sometimes, of politics, which is unusual for them,” he said.

• The new makeup of the House of Representatives, which has a slight Republican majority, could also change things, he added.

House Agriculture Committee Chair G.T. Thompson, R-Pa., said earlier this month that it’s “crunch time” for the bill, so let’s get into what you need to know.

History lesson: There have been 18 farm bills, with the first signed in 1933. That one, called the Agricultural Adjustment Act, came during the New Deal era, and was signed into law by President Franklin Delano Roosevelt with the aim to cut down crop surplus, therefore raising crop value.

• The 1973 Farm Bill was the first including SNAP, with nutritional programs now making up the bulk of the bill’s spending, while the 2008 bill added horticulture, supporting specialty crops and organic foods.
• While 2012 was intended to be a Farm Bill year, political infighting stalled the signing of a new bill until 2014. Without its passage, consumers were threatened with the possibility of milk prices rising to about $6–$8 dollars a gallon as farm policy would potentially revert back to a 1949 law. That luckily didn’t happen, as the 2008 bill was ultimately extended.

The most recent farm bill, The Agriculture Improvement Act of 2018, accounted for $428 billion, about three-quarters of which was allocated to nutrition programs.

• It preserved SNAP benefits and eligibility, rejecting proposed cuts. It also required nationwide implementation of SNAP benefits for online purchasing once pilot programs, established in the 2014 Farm Bill, were implemented.
• The bill also removed hemp from the definition of marijuana in the Controlled Substances Act, allowing the growth of hemp for commercial use, building upon the 2014 edition’s support for hemp research pilot programs.

Sowing seeds: The budget as laid out in the 2023 version might be different, following the passage of bills like the American Rescue Plan and the Inflation Reduction Act, noted McKenna, who currently serves as executive in residence of the Rural Opportunity Initiative at Georgetown University.

The “themes” from the latter two bills—like increasing competition to lower food costs and increasing who can qualify for government programs—will likely carry over into this year’s farm bill, McKenna noted. “It’s important to consolidate those one-off opportunities, so to speak, with the ongoing responsibilities under the Farm Bill.”

Work on the 19th bill officially began last year with a hearing on April 29, “hearing from farmers and others impacted by the Farm Bill about how we can strengthen this important legislation, grow our economy, and build a stronger food supply chain,” said Senator Debbie Stabenow, D-Mich., chair of the Senate Committee on Agriculture, Nutrition, and Forestry.

For the retail industry, issues of food and beverage, hemp, and nutritional assistance will be important to watch.

• With nutrition taking up the bulk of the bill’s spending, lawmakers have historically looked at cutting SNAP funding as a way to reduce total spending. House Agriculture Committee ranking member David Scott said he aims to “defend and protect” SNAP this year.
• The organic agriculture industry has a few priorities as well, like improving organic standards and the organic label and giving $$ and support to farmers to transition to organic farming.
• After the 2018 bill moved the hemp industry forward, industry stakeholders are pushing for the 2023 bill to regulate CBD as a dietary supplement, which would grow retail opportunities for these products (though this regulation may come even sooner).

And that’s just a snapshot—stay tuned as we dig deeper into the Farm Bill agendas that could impact retail.