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Farm bill impasse adds to trade, agricultural appeals in Iowa US House races

Congress' inability to pass a farm bill is cropping up in some Iowa races for seats in the U.S. House of Representatives, giving Democratic candidates fertile ground on which to challenge Republican incumbents in competitive races.

For much of 2018, rural Iowans have braced for the impact of Chinese tariffs on soybeans, corn and other key agricultural exports as President Donald Trump led a broader trade war. Many also fretted about maintaining their access to Canada and Mexico — two large consumers of U.S. farm products — and are still figuring out how they will fare under the proposed United States-Mexico-Canada Agreement.

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Now, two weeks after the Agricultural Act of 2014 expired without a replacement, challengers in House races are framing it as the latest blow to those who work in agriculture. In an Oct. 2 statement, three Democratic candidates for House seats asked their rivals — all incumbent Republican U.S. representatives — to push for a new farm bill before the Nov. 6 election.

Farmers need the legislation "to make long-term plans and investments," the three Democrats wrote.

Despite weeks of negotiation, committee leaders have made little progress reconciling House and Senate versions of the bill. Striking a deal and getting Congress to sign off appears unlikely in the short term, with many members of Congress campaigning in their districts and states.

The lack of agreement on a farm bill is a "bigger part of something that's bothering voters in Iowa," David Andersen, a professor of political science at Iowa State University, said of the farm bill in an interview with S&P Global Market Intelligence.

"Farmers in particular are nervous about the lack of stability" on the policy front, Andersen said.

2 districts in play

Voters concerned about the farm bill and trade could help determine winners in at least two competitive Iowa House districts.

In the Hawkeye State's 1st district, U.S. Rep. Rodney Blum, R-Iowa, is facing a challenge from Democratic state legislator Abby Finkenauer. As of Oct. 12, The Cook Political Report indicated that the district was leaning toward Finkenauer.

In Iowa's 3rd district, U.S. Rep. David Young, R-Iowa, is seeking another term against Democratic candidate and businesswoman Cindy Axne. The race was a toss-up as of Oct. 12, according to The Cook Political Report.

Both Finkenauer and Axne questioned their rivals about the farm bill in Congress at October debates. Blum and Young highlighted their support for proposed work requirements for the Supplemental Nutrition Assistance Program, which receives more than three-quarters of the farm bill's appropriations. Both acknowledged that the change remains an obstacle to passing the entire farm bill, including provisions that directly support farmers.

Agriculture is a major business for Iowa and its two most competitive House districts. Commodity traders Archer Daniels Midland Co. and Bunge Ltd. have operations in the state.

In 2016, Iowa sent $10.89 billion worth of agricultural goods abroad, including $3.24 billion in soybeans and $2 billion in pork, according to the U.S. Department of Agriculture's Economic Research Service.

Among all states, Iowa was the top producer of both commodities in 2016, according to the USDA.

Iowa's 1st district ranked fourth among the 435 U.S. House districts for hog and pig production by dollar value, according to the USDA's 2012 Census of Agriculture. The district was also 12th in acres devoted to soybean production.

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The average farm in both the 1st and 3rd districts received just under $11,000 in government funding in 2012, including payments authorized by the farm bill, according to the Census of Agriculture. Those average payments were among the highest in the Upper Midwest, though the average farm in several southern and western congressional districts received more.

Functioning without a full farm bill is not new for farmers and agricultural groups. Many programs funded by the bill, such as those providing crop insurance, automatically receive funding for months even without a new law.

But others, including 39 smaller initiatives with missions ranging from promoting U.S. goods abroad to securing local farmers markets, lack that protection. While the programs are accustomed to saving money to maintain operations after a farm bill expiration, many could shut down if Congress does not pass a new bill before the new session begins in January.

Finding foreign markets for farms

Among those programs at risk is one that helped Iowa farmers secure a new market for soybeans.

For the 2018 fiscal year, the Foreign Market Development Program, or FMD, distributed $26.5 million to trade associations to promote U.S. agricultural commodities internationally.

Although a small fraction of the last farm bill's total appropriations, the program paved the way for more soybean exports to Taiwan, David Miller, director of research and commodity services at the Iowa Farm Bureau, told S&P Global Market Intelligence in an interview.

In early October, Taiwanese vegetable oil makers signed an agreement to buy up to 144 million bushels of soybeans, worth about $1.56 billion, from Iowa sources by mid-2019. The purchase agreement helped diversify Iowa's export markets months after mainland China instituted a 25% tariff on U.S. soybeans, the Iowa Soybean Association said in a statement after the signing.

Finding similar opportunities would be difficult without a fully funded FMD, Miller said.

"Is it of concern as we're scraping to find new markets in the absence of China? Absolutely," he said. "There's a huge gap in demand right now given the actions of the Chinese government."

Congress could pass a new farm bill or a resolution to secure funding based on 2014 levels during a lame-duck session between the November election and the swearing in of a new Congress in January, Michael Dolch, director of public affairs at the Iowa Soybean Association, said in an interview.

"It's not lost on any of those candidates how important agriculture is, especially the trade piece," he said.