Illinois Sustainable Agriculture
The Senate Agriculture Committee is moving fast! Having completed a series of committee hearings over the past couple months, last week Chairwoman Senator Debbie Stabenow released a draft 2012 Farm Bill.
The Senate Agriculture committee is set to debate and offer amendments to the legislation in a process called “mark-up” this Wednesday. The draft proposal released last week is a bit of a mixed bag when it comes to ISA’s local food, beginning farmers, and conservation priorities. We are hopeful that during the “mark-up” process we will see improvements relative to our priority areas. For a more in depth analysis from the National Sustainable Agriculture Coalition visit the following links organized by priority area:
In the U.S. House of Representatives things are a moving forward much more slowly and are being hampered by partisanship and general dysfunctionality. The House Agriculture Committee is finishing up field hearings and is set to begin D.C. committee hearings. However, the process is being overshadowed by a partisan budget reconciliation process that undermines previous bi-partisan work on putting together a new farm bill this year.
Whether or not the House is able to get their act together in time remains to be unseen. For more information on the House process and the upcoming hearing schedule click here.
The U.S. House Agriculture Committee is coming to Illinois. Chairman Frank Lucas announced today that there will be a series of hearings in March and April, one of which will be in Galesburg on March 23 at 9 a.m. at Carl Sandburg College.
These hearings follow recent U.S. Senate Agriculture Committee hearings held in Washington, D.C. The Senate hearing on Feb. 28 addressed conservation programs. That hearing is archived and can be viewed at http://www.agriculture.senate.gov/. Look for "Strengthening Conservation through the 2012 Farm Bill" for the video link.
This is the perfect time for ISA members to attend the hearing and let these Members of Congress learn from your personal experience what programs are working, what needs to be changed, tweaked or eliminated in the next Farm Bill.
We will update our website as we learn more details.
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Senate Democrats are calling on Congress to pass a farm bill that will help create jobs, support local farmers, and provide fresh produce for consumers. Senators Dave Koehler, Jacqueline Collins, Michael Frerichs, and Linda Holmes are sponsoring Senate Resolution 530 urging Congress to support and expand successful steps already implemented in Illinois to the nation.
The farm bill is a package of federal legislation enacted every five to seven years to set the general direction for America’s farm and food policy.
"Local food systems are good for farmers, good for customers, good for the economy, and good for the environment. When people buy locally-grown food, their money goes right back into the regional economy--not to some other state, and not overseas,” Koehler said. “They get to develop relationships with local farmers and learn where their food is really coming from. They also help out the environment by reducing shipping costs and making it easier for farmers to grow a variety of different crops."
Last year, the State Senate passed Senate Bill 840, also supported by Senators Koehler, Collins, Frerichs, and Holmes, which eased regulations allowing farmers to sell their products at farmers’ markets without having to comply with the same standards as large commercial companies, allowing small-scale farmers the ability to sell their food directly to consumers.
"As Chairman of the Senate's Committee on Agriculture and Conservation, I'm very aware of the growing demand for locally grown food in Illinois," said Frerichs. "I hope our representatives in Congress also recognize this demand, and strongly encourage them to pass an updated farm bill that addresses the issue of local and regional food systems in a real and substantive way."
The Senators are calling on Congress to make similar changes at a federal level that the Illinois General Assembly passed last year. If Congress were to relax these standards for small-scale farmers, local and regional foods could become more available for consumers in Illinois and around the country. By passing these new standards last year, Illinois farmers who were not large enough to abide by these regulations are now able to sell their local goods in local markets.
"This will create jobs by helping farmers in my district get their crops to buyers,” Senator Forby said. “We need more laws that help farmers sell their crops."
Last year, the State Senate also passed Senate Bill 1852, which created a Farmers’ Market Task Force to ensure standards were relaxed enough to allow farmers to sell their products without too many regulations , but also ensure that safety and sanitary conditions were maintained. These positive steps taken by Illinois need to be implemented at a federal level as well.
“The fact that all but a tiny percentage of the fruits, vegetables, and meats that Illinoisans eat are produced in other states or countries is an astonishing imbalance and presents us with an enormous opportunity,” Senator Collins said. “The legislation we passed was an important step forward that will continue to enable farmers in the state to produce and sell fresh food in their local communities.”
http://www.senatedem.ilga.gov/index.php/features/2449-senate-democrats-to-congress-pass-us-farm-bill-to-support-local-food-systems
Re-posted from the National Sustainable Agriculture Coalition's (NSAC) blog
In its “Path to the 2012 Farm Bill” series, NSAC gets into the details of the 2012 Farm Bill debate. This first post in the series discusses the major factors influencing the 2012 Farm Bill timing and process.
With the failure of the Super Committee process last fall, Agriculture Committee leaders now resume work on the 2012 Farm Bill through a more normal process that involves hearings, committee mark-ups, and a committee and floor amendment process. The current farm bill expires on September 30, 2012, and Congress must take action on farm policy by then if it wants to avoid reverting to 1949 farm law — the fallback permanent law for the farm bill. That action can come in the form of passing a stand-alone farm bill, attaching a farm bill proposal to another bill, or passing a short or long-term extension of current law either as a stand-alone measure or attached to something else. Significant political, budget, and committee factors will influence that choice as well as the timing of the farm bill process this year.
Political Factors
Election Year Politics
The political backdrop for everything that Congress does this year is the 2012 Presidential and Congressional elections. This affects the farm bill process in two main ways. First, the legislative calendar will be shorter to accommodate Congressional campaign schedules. That leaves less time for hearings, committee meetings, and floor debates and votes. Given the condensed Congressional schedule, the majority of the work on the 2012 Farm Bill, though not necessarily final votes, would have to be finished by summer for a new bill to be enacted in 2012.
Second, Congress is closely watching approval ratings. Just about every legislative effort in the first session of the 112th Congress entailed a knockdown, drag-out fight between the Republican-controlled House and the Democrat-controlled Senate and Oval Office. The long, partisan legislative battles have resulted in very low Congressional approval ratings. In this second session, Congressional leaders will be watching those ratings closely, and will be hesitant to engage in serious legislating unless there is notable pressure from the public.
Just because it’s an election year, however, does not mean that Congress can’t work on farm policy. Congress has previously passed a farm bill in an election year; the Food, Energy, and Conservation Act of 2008 was, in fact, passed in the presidential election year of 2008. But unlike the current situation, both the House and the Senate had already passed their versions of a farm bill in 2007. The work in 2008 was focused on reconciling the differences in the two bills through a conference committee and then passing the compromise.
While not a make-it-or-break-it factor, the Administration has indicated that it will not be releasing a comprehensive farm bill proposal this year, and that it will largely leave the farm bill reauthorization up to Congress. Any benefit that the farm bill would receive from being a Presidential priority — including media coverage, pressure on Congress to act, and discussion during the Presidential campaign — will, therefore, not occur.
Senate In Play
With several vulnerable Democratic seats and several retirements in the Senate, it is within the realm of possibility that Republicans will gain control of the Senate in the November election. This factor may motivate Senate Democrats to move forward with the farm bill.
The Democrats on the Senate Agriculture Committee up for reelection in 2012 are Chairwoman Stabenow (D-MI) and Senators Klobuchar (D-MN), Gillibrand (D-NY), Brown (D-OH), and Casey (D-PA). Senators Conrad (D-ND) and Nelson (D-NE) are retiring. Of the five incumbent Democrats on the Committee seeking reelection, none is in a tight race at the moment. If that changes, then the pressure to deliver a farm bill in the Senate could increase.
Budget Factors
There are more questions than answers about how budget factors will influence the farm bill process. What does seem almost certain is that the overall price tag of the 2012 Farm Bill will be lower than that of the 2008 Farm Bill. How much lower is anybody’s guess.
If All Else Were Equal
When Congress passed the 2008 Farm Bill, it provided mandatory funding for many of the programs on a permanent basis, funding that was counted (“scored” in budget terms) for a ten year period – 2008 through 2017. There were a number of programs, however, that it only provided mandatory funding for through 2012. The programs that run out of money after 2012 total about $4.5 billion (excluding farm disaster payments), so even if Congress weren’t required as it currently is under the Budget Control Act to cut spending on mandatory programs including agriculture, it would have to find an additional $4-5 billion to cover the cost of extending the farm bill at current spending levels.
Sequestration
Because Congress failed to come up with a bill through the Super Committee process to cut the deficit by $1.2 trillion over ten years, automatic budget cuts (“sequestration” in congressional parlance) will go into effect in January 2013 under the Budget Control Act passed in August 2011. Rough estimates from the Congressional Budget Office peg the cut to farm bill spending under sequestration at $15.6 billion. By law, the Supplemental Nutrition Assistance Program (SNAP) and the Conservation Reserve Program are exempt from sequestration cuts, so savings would come from other parts of the bill — most notably from the crop insurance subsidies, followed in terms of size of cut by the commodity program payments and then the conservation incentives.
If Congress does not amend the Budget Control Act — which mandates sequestration — and sequestration takes effect, and Congress has reauthorized a new farm bill by next January, then budget cuts could be made in the new farm bill that would supersede the automatic cuts. That is not to say that it must happen that way, only that it could. If it did, it would put Congress back in the driver’s seat in allocating the cuts, rather than the automatic pro rata cuts. It would also put Congress back in the driver’s seat with respect to the policies that would yield the budget savings, rather than punting those decisions to USDA and the White House as would be the case under sequestration.
If January 2013 arrives without a new farm bill (but presumably with some sort of temporary farm bill extension), and sequestration happens, then the Agriculture Committees may have the opportunity to re-shape the cuts through a 2013 Farm Bill, though only after the first-year cuts have already been made.
Between now and when the automatic cuts go into effect next January, Congress may pass a new deficit-reduction plan that avoids sequestration and enables another spending reduction mechanism — such as budget reconciliation, which would give Congressional committees power to determine how to cut spending within their jurisdictions. The primary motivation to pass a new plan would be avoid the automatic cuts to defense spending that are currently included in sequestration.
CHIMPing
The various farm bill scenarios are complex enough without also considering the annual agriculture appropriations bill. The connection between the farm bill and the appropriations bill is simple enough with respect to discretionary programs. The farm bill establishes the programs and the policies that undergird them, while the appropriations bill provides the funding to operate them. For farm bill mandatory spending, however, the farm bill establishes the programs, sets the policies, and the funding flows directly from the farm bill, without need for an appropriation.
Enter the CHIMPS. Not the animals, but “changes in mandatory program spending’ – a device sometimes used in appropriations bills to take money out of mandatory programs in order to reprogram the spending to bulk up discretionary ones. In the last two appropriations cycles, Congress has taken over a billion and a half dollars out of farm bill conservation coffers normally controlled by the Agriculture Committee and reprogrammed it to food safety, food assistance and other matters considered higher priorities by the Appropriations Committee.
Timing for this year’s appropriations bill is murky as well. Many observers believe that while there will be action in both the House and the Senate to put together this year’s appropriations bills, final action will not occur until well after the beginning of the new fiscal year on October 1 and after the November elections. If that prediction proves correct, then a “continuing resolution” of some sort will be necessary to extend current funding authorities into the new fiscal year. In recent years, even normally simple continuing resolutions have proved the source of great controversy and upheaval, though the pending election season may keep these theatrics in check.
Every Bill is an Opportunity to Cut Spending
There is currently a culture in Congress to use every debate on every bill as an opportunity to cut federal spending, especially in the House, where there is a strong Tea Party-influenced contingent. This adds an extra element of the unknown, especially in farm bill politics, because it creates the opportunity for unlikely alliances — think Tea-Party-meets-farm-subsidy-reform-advocates — to succeed.
It is very hard to look into a crystal ball and predict how the budget factors will play out. While it might seem to make sense to wait for budget action — either through sequestration or through another mechanism — before writing the next farm bill, the longer the Committees wait, the more chances there are for Congress to cut agriculture spending and for there to be less money available to fund a new farm bill.
Committee Dynamics
Senate Agriculture Committee
Senate Agriculture Committee Chairwoman Stabenow has been widely quoted as saying that the Senate farm bill process will build upon the proposal that the Chairs and Ranking Members pieced together for the failed Super Committee process. From what we know about that proposal, certain areas of the bill – such as the commodity title – were left in an unsatisfactory state last fall. The proposal also did not include important no-cost policy changes to several titles of the bill that are usually part of the farm bill reauthorization process. While the proposal did provide a budget framework for the farm bill, areas of unresolved differences mean that there is still a chunk of work to do before there is a full farm bill proposal for the Committees to consider.
Earlier this week, Chairwoman Stabenow announced four farm bill hearings for February and March – both signaling her commitment to getting a bill done this year and adding credence to the notion that the Senate will move before the House on farm bill.
House Agriculture Committee
While Chairwoman Stabenow has been vocal about her farm bill plans, House Agriculture Committee Chairman Lucas (R-OK) has been more reserved. Last year, Chairman Lucas held a series of farm bill hearings intended to educate the many freshmen and new-comers to his Committee about the issues and process involved in a farm bill reauthorization. He has not yet announced any farm bill hearings in 2012 and has not indicated recently whether the farm bill proposal prepared for the Super Committee will be his starting point.
Farm and Commodity Groups Meet
This week the major farm and commodity groups and associations met together to try to hammer out something closer to a unified position on the farm bill debate. By most accounts they did not succeed with respect to specifics, but they did issue a unity statement that emphasized the importance of moving the farm bill this year. The statement issued at the end of the meeting said, in part:
“Also confirmed is our common belief that Congress should pass and the President should sign a strong new farm bill into law this year. The law expires at the end of this year and producers – like all job creators – need certainty from Washington.”
At its own annual meeting in January, NSAC member organizations also supported an urgent call to Congress to pass the farm bill this year, without delay.
More to Follow
Stay tuned for our next post in this ongoing series, which will dive deeper into both the process and substance of the new farm bill.
Originally posted by the National Sustainable Agriculture Coalition
In part one of this post, we discuss what might be next for the ongoing congressional budget debate and in turn for the new farm bill. In part two we turn to details about what was in the short-lived and now dead 2011 Farm Bill deal.
What We Know About the Farm Bill that Did Not Happen – The Basic Outline
The basic cost-cutting outline of the farm bill deal did not change in gross terms from the time the Agriculture Committee leaders signaled to the Super Committee that they would aim to cut a net of $23 billion over the next decade. The final deal tracked the original numbers – a $15 billion net cut in commodity programs, a little over $6 billion net cut in conservation programs, and a $4 billion slice from the largest of all farm bill programs, the SNAP or food stamp program. About $2 billion was thereby freed up to help fund farm bill programs that lacked secured budget baseline after the current farm bill expires in 2012 and to fund new programs.
In round numbers, the combined commodity and crop insurance subsidy programs would therefore be cut by 10 percent, the conservation programs by 10 percent, and the food stamp program by a small fraction of one percent. The conservation cut, however, would be considerably larger if the “changes to farm bill mandatory spending programs” in the agricultural appropriations bills are added, bringing the total to 15 percent, and much more than that if the appropriations bill continues in the same direction as this year.
Based on the best information available to us, the following should be a fairly accurate summary of some key provisions in the new proposed farm bill. We stress, however, that without access to the bill itself or even an up-to-date detailed summary, we cannot be absolutely sure about each and every detail.
What We Know About the Farm Bill that Did Not Happen – Some Highlights
Local Food and Nutrition — The proposed bill adopted the policy provision contained in the Local Farms, Food, and Jobs Act (LFFJA) for a competitive grants program that combined direct marketing promotion (formerly Farmers Market Promotion Program) and scaling up of local food systems for larger scale retail and institutional markets. Called the Farmers Market and Local Food Promotion Program (FMLFPP), the proposed bill would have funded the program at $100 million in mandatory money over five years. The LFFJA advocates for $30 million a year, or $150 million over five years.
The Community Food Projects, a competitive grants program that aims to fight food insecurity by supporting the development of community-based food projects in low-income communities, would have received an increase in funding from $5 million a year to $10 million a year. The LFFJA also includes this policy provision.
The proposed bill would have created a new nutrition incentives program, called Hunger Free Communities Incentive Grants. Advocated for by the Fair Food Network, Wholesome Wave, and others, and modeled after already-existing state and regional examples, this new program was slated in the proposed bill to receive $100 million in mandatory funding over five years and would have incentivize purchases of fresh produce by SNAP participants at farmers markets and other direct marketing outlets.
Beginning Farmers — The Beginning Farmer and Rancher Development Program (BFRDP) provides grants to institutions and organizations that offer education, training and outreach to beginning farmers and ranchers. This program was slated to receive $50 million over the next five years, which is a significant decrease from its current mandatory funding levels of $75 million, and far less than the $125 million included in the Beginning Farmer and Rancher Opportunity Act and advocated by NSAC. However, BFRDP has no baseline after fiscal year 2012, so although funding is less than current levels, it nonetheless represented $50 million in new money over the next five years.
Organic Agriculture — The Organic Agriculture Research and Extension Initiative (OREI), which provides competitive grants to fund public research on organic production systems, was slated to receive renewed mandatory funding of $80 million over five years, with an authorization for an additional $25 million in annual appropriations. This is a slight increase in funding from its current mandatory funding of $78 million during the life of the 2008 Farm Bill. However, per year funding levels would have decreased slightly from $20 million to $16 million, since OREI was funded at lower levels in fiscal year 2008.
The Organic Data Initiative (ODI), which facilitates USDA data collection efforts for the organic sector, would have also received a renewed $5 million in mandatory funding, plus an authorization for annual appropriations, in the proposed bill.
The National Organic Program (NOP), which administers the USDA organic certification program, was slated to receive first-time ever $5 million in mandatory funding, plus authorization for appropriations up to $15 million per year.
Specialty Crops — The Specialty Crop Block Grant (SCBG) program provides grants annually to assist State Departments of Agriculture in enhancing the competitiveness of specialty crops (fruits, vegetables, tree nuts, and nursery crops). The program would have received an increase in mandatory funding from $55 million a year to $70 million a year. On the negative side, though, the policy provisions for this program contained in the Local Farms, Food, and Jobs Act (LFFJA) were not included. LFFJA includes set-asides of program funds for local and regional specialty crop market development and research and includes a more equitable division of program funds across the specialty crop sector.
The Specialty Crop Research Initiative (SCRI), which funds research on fruits, vegetables, and other non-commodity crops, was slated to receive renewed funding at $40 million per year, over ten years – a slight decrease from its current annual funding levels of $50 million. The SCRI has no baseline for funding beyond fiscal year 2012, so this would have represented $400 million in new money over the next ten years and ensured funding would be available for this program in the following farm bill.
Crop Insurance — The proposed bill’s crop insurance title included a provision in the Local Farms, Food, and Jobs Act (LFFJA) that would have authorized the Risk Management Agency (RMA) to develop a whole farm revenue insurance product for diversified operations, including specialty crops and mixed grain/livestock or dairy operations. As in the LFFJA, the proposed bill would have set the coverage level at 85 percent, provided a bonus for diversification, and classified costs necessary to get products to market (e.g. the cost of packing materials) as allowable costs. Unlike the LFFJA, in the proposed bill, RMA would have had the option of contracting out the development of the new product if it decided not to do it in-house.
The proposed bill would also have increased the incentive for private consulting firms to develop new risk management products for specialty crops, and would have returned to RMA the general authority to develop products in-house.
Renewable Energy — As far as we know, only one program within the Energy Title of the proposed bill was slated to receive renewed mandatory funding. The Rural Energy for America Program (REAP), which has been funded in the current farm bill cycle partly by mandatory funds and partly by appropriated funds, would have continued down that path, though with a very significant reduction in mandatory funds.
The mandatory funding for the controversial Biomass Crop Assistance Program (BCAP) would have been allowed to expire in the proposed bill, but the program would be authorized to receive up to $75 million in annual appropriations for projects and for collection, harvest, storage, and transportation.
What We Know About the Farm Bill that Did Not Happen – Conservation Title
If the proposed farm bill had become law, the total cut to the Conservation Title would be $6.3 billion over ten years. Roughly 60 percent of the cut to conservation ($3.8 billion) would come from the Conservation Reserve Program (CRP). The program’s total acreage cap would be ratcheted down over 3 years from its current level of 32 million acres to 25 million acres. To a significant degree, this reduction would track changes in CRP enrollment expected as a result of market forces, though with the declining cap the opportunity for new general sign-ups would be small.
Related to CRP, $25 million in renewed funding would have been retained for the CRP-Transition Incentives Program (CRP-TIP), which offers a special incentive of two years of extra CRP rental payments to owners of land that is currently in the CRP but returning to production, who rent or sell to beginning or socially disadvantaged farmers and ranchers who will use sustainable grazing practices, resource-conserving cropping systems, or transition to organic production. The bill would not have expanded CRP-TIP to cover intra-family deals under certain circumstances, as had been proposed in the Beginning Farmer and Rancher Opportunity Act (BFROA).
The proposed bill would have cut the Conservation Stewardship Program (CSP) by $2 billion, or approximately 10 percent. The average payment rate would have remained at $18 per acre, however the acreage cap would be reduced to 10.34 million acres a year from 12.769. The proposed farm bill also included a number of positive substantive changes to CSP beyond the numbers.
The proposed bill would have combined the Environmental Quality Incentives Program (EQIP) and the Wildlife Habitat Incentives Program (WHIP) into a single program and cut total funding by $1.865 billion, or approximately 10 percent. As has always been the case for EQIP, 60 percent of the consolidated program’s funding would go to livestock operations. The program would have also included a 5 percent set aside for wildlife in lieu of WHIP. The statutory language that led to creation of the EQIP Organic Initiative would not change. Both the Beginning Farmer and Rancher and Socially Disadvantaged Farmer and Rancher set asides within EQIP would have been retained at 5 percent. The advanced EQIP cost share for Beginning, Socially Disadvantaged, and Limited Resource Farmers and Ranchers would have also been retained at 30 percent, as opposed to 50 percent proposed by the Beginning Farmer and Rancher Opportunity Act.
The proposed bill would also have combined the Cooperative Conservation Partnership Initiative (CCPI), Agricultural Water Enhancement Program (AWEP), Chesapeake Bay Watershed Initiative (CBWI), and Great Lakes Restoration Initiative (GLRI) to create a single regional partnership program. While the CBWI and AWEP had a combined baseline of $1.1 billion through 2012, the new regional partnership program would have had a $1 billion baseline, equating to a $100 million or slightly less than 10 percent cut. Like the current CCPI, 6 percent of EQIP and CSP funds would be reserved for the regional partnership program. However, unlike the current CCPI statute, which splits funding authority between the states (90 percent) and national (10 percent), the new bill would have split the authority between national (50 percent), states (25 percent), and “critical areas” (25 percent), which would include the Chesapeake Bay, Puget Sound, Ogallala Aquifer, Red River, Great Lakes, Everglades and other areas determined by the Secretary. The regional partnership program would also have had an easement option through existing programs, such as the Conservation Reserve Enhancement Program (CREP).
On the easement side of the Title, three programs–the Wetlands Reserve Program (WRP), Grasslands Reserve Program (GRP), and Farm and Ranch Lands Protection Program (FRPP)–would have been combined into a single easement program with two branches. The first branch would combine FRPP and GRP into an ‘agricultural lands easement program.’ The second branch would consist of wetlands easement program very similar to the WRP. Nationally, the split between wetland easements and agricultural land easements would be 60/40, respectively; however, each state conservationist would be able to request an adjustment to that split to better reflect the needs of their state. Perhaps most importantly, the easement program would have had a 10-year baseline of $3.2 billion. The WRP and GRP have been funded one farm bill at a time, so while the funding available, especially for WRP, would be lower, the tradeoff was to create a permanent, more secure baseline.
The bill would have made no changes to the Agricultural Management Assistance (AMA) program. It would have funded the Voluntary Public Access (VPA) program at $30 million and the Watershed Rehabilitation Program at $150 million over the course of the farm bill. The VPA program and Water Rehabilitation Program previously had $50 million and $100 million, respectively, and both lack baseline funding after 2012 if not renewed.
Finally, under the proposal, all conservation programs would now be “no year funding” programs, which means that unused money in a given year does not revert back to the general treasury. Under current law, if a conservation contract is broken, for example, because a contract holder dies or just decides not to go through with a conservation project, that money must be sent back to the treasury. A significant amount of mandatory conservation money is lost from the Conservation Title through this process. Instead, under a situation like the one described above, the money would be retained within the Conservation Title.
What We Know About the Farm Bill that Did Not Happen – Some Lowlights
Commodity Payments – The commodity title of the proposed farm bill would have replaced direct payments (payments based on historical base acres and paid each year regardless of market price or farm income conditions) with a “grab bag” of commodity support options. Producers would be able to decide which program to enroll in.
One option included a farm-level shallow loss program to pay commodity crop producers when they experience small but long-term losses in revenue. Payments would cover losses between 13 and 25 percent, would be triggered by revenue circumstances at the individual farm level, and would be made on 60 percent of planted and prevented planted acres. It was expected that many corn, soy, and wheat producers would choose this option, though likely a considerably smaller percentage than if it were the only option available.
A second option was substantially higher target prices with ongoing receipt of counter cyclical payments when prices fall below the target, expected to be of most interest to rice, peanut, and sorghum producers, but perhaps many corn, soy, and especially wheat producers as well.
A third option was a special revenue insurance program for cotton (only) known as the Stacked Income Protection Plan or STAX. The movement of cotton’s share of commodity title funding to the crop insurance side of the ledger, via STAX, would have moved cotton out of adjusted gross income eligibility standards, payment limitations, and conservation requirements.
Due to the proposed termination of direct payments, saving nearly $5 billion a year, and to the relatively rosy projections of future commodity prices over the next decade, all of these commodity options could be put in the bill and estimated to result in a $15 billion savings over the next decade, or about $1.5 billion a year. If, however, a substantial price drop occurred outside the predicted range, the taxpayer exposure could be very high, easily wiping out any savings.
Payment Limits and Adjusted Gross Income (AGI) — The new payment limitation for the shallow-loss revenue program option and counter-cyclical program option would have been $210,000 for a married couple. This is significantly higher than the current $130,000 payment limit for counter-cyclical and revenue insurance payments. The new higher payment limit is the result of adding the current $80,000 payment limit for direct payments to the total. This outcome is baffling, given that direct payments were being proposed for elimination.
(Note: The proposal to the Super Committee from Senators Grassley (R-IA) and Johnson (D-SD), which had NSAC’s support, would have established a $100,000 per farm annual limit on revenue and counter-cyclical payments. In June, Grassley and Johnson introduced the Rural America Preservation Act of 2011 to lower the per farm cap on farm commodity program payments, simplify eligibility, and ensure that payments flow to working farmers. Visit our blog on the bill to read more about their effort to build a reasonable payment limit into the new farm bill.)
The proposed bill would have done nothing to close the biggest legal loophole that has been built into the support system over the last two decades, a loophole that allows individual farming interests to secure nearly unlimited taxpayer support. The loophole — allowing people to dodge the requirement to be “actively engaged in farming” to be eligible for support — allows mega farms to capture multiples of the nominal payment limit. These taxpayer-provided funds in turn can be used to bid land away from young, beginning farmers trying to get a start in farming. Unlimited payments over-inflate land values, increasing the land carrying costs for all farmers.
The proposed bill included no limit at all on marketing loan gains or loan deficiency payments, no limit at all on STAX subsidies, and no limit at all on highly subsidized crop insurance premiums. For each of those, the sky was the limit.
Finally, the adjusted gross income (AGI) limit for eligibility for commodity and conservation program payments was proposed to be $950,000, including both farm and non-farm adjusted income (generally multiplied times two if married). This is down $50,000 from the $1 million limit that was included in the FY 2012 agriculture appropriations bill that became law last week. The AGI test excludes from income all regular business expenses including the costs of renting or purchasing additional land or equipment; hence the AGI test encourages farm expansion by anyone who receives commodity subsidies and makes more than a million dollars a year, or a couple of million in the case of married persons.
For more information on payment limits, visit NSAC’s commodity program payment limitations and adjusted gross income limitations page.
Conservation Compliance — Despite the call of 56 national farmer and conservation organizations, including NSAC, to maintain and strengthen conservation compliance provisions in the farm bill, the bill would neither reattach conservation compliance to crop insurance nor establish a nationwide Sodsaver provision. Conservation compliance helps ensure that producers do not farm the most environmentally sensitive land, primarily highly erodible land and wetlands. In 1985, conservation compliance requirements have applied to commodity, crop insurance, and conservation program payments, but since 1996 it has not applied to receipt of crop insurance subsidies.
With direct payments gone, the proposed new farm bill would have only applied this minimum standard of environmental protection to counter-cyclical payments and the shallow-loss revenue insurance program. There would be no conservation compliance requirements for those who choose to receive STAX benefits or those who receive crop insurance subsidies only. NSAC has consistently advocated that crop insurance, which is the single largest farm subsidy, should be part of the same social contract that applies to commodity, credit, and conservation programs.
The agreement also did not include a nationwide “Sodsaver” provision. Sodsaver would have strengthened existing compliance rules by prohibiting all commodity and insurance subsidies on all native prairie and permanent grasslands and other remaining native land that does not have a cropping history if such land were to be cropped. In doing so, it would have protected prairie, critical habitat and biodiversity, reduced the cost of subsidy programs, and taken the pressure off of already over-subscribed conservation incentive programs. This Sodsaver provision was included in the last farm bill, but only as a voluntary pilot project that never got off the ground.
The bottomline is the proposed bill’s commodity and crop insurance titles would have encouraged and subsidized farm consolidation and diminish economic opportunity for young and beginning farmers. It would have created a “too big to fail” protection that could have left the taxpayer with a huge new exposure should the market tumble. Despite an ongoing economic crisis and need to spur rural job growth, the bill would have maximized payments and insurance subsidies to the nation’s largest farms while putting almost no money into rural economic development. There would have also been no improvements at all to the existing weak set of conservation conditions required as a condition of being eligible for production subsidies, and no re-linkage to crop insurance subsidies. These are all very major failings that need to be addressed when farm bill consideration resumes.
Rural Development –The Rural Development business programs did not fare well in the bill from a funding standpoint. The Value-Added Producer Grant (VAPG) program, which provides competitive grants to create or develop value-added producer-owned businesses, would have been the only rural development program to receive farm bill funding. The VAPG program, however, would have received only $15 million in mandatory funding over five years, a very nominal amount. This is the same amount of funding from the 2008 Farm Bill, which was used up entirely in the first year of that farm bill cycle. In LLFJA and the BFROA, NSAC is advocating for $30 million per year in mandatory funding for the program, which has a proven track record in boosting farm income and creating rural jobs. The proposed bill would have authorized up to $40 million a year in discretionary funding, the same as under current law, but current appropriations are at only 40 percent of that level and the pressure on appropriations bills from discretionary cuts already approved by Congress will grow each year.
The Rural Microenterprise Assistance Program (RMAP) provides entrepreneurs in rural areas with the skills necessary to establish new businesses and continue operation of existing rural microenterprises. While the 2008 Farm Bill included $15 million over four years in mandatory funding for the program, the proposed new bill would have included no mandatory funding for the program at all and authorized only $20 million a year in discretionary funds compared to $40 million a year last farm bill cycle.
Additionally, many of the policy proposals included in the Local Farms, Food, and Jobs Act (LFFJA) that would bolster “food hub” and value chain activities are not found in the new bill. For instance, the Business and Industry (B&I) Direct and Guaranteed Loan Program bolsters rural businesses and industries and includes a minimum five percent set-aside for local and regional food system activities including aggregation, storage, processing, distribution, and marketing. LFFJA proposes an increase of this set-aside to ten percent and makes other improvements; however, the proposed new bill did not adopt this proposal.
Local Food and Nutrition – The proposed new bill did not contain any of the EBT or school food provisions contained in the LFFJA. The LFFJA includes a leveling of the playing field so that direct marketing outlets such as farmers markets and CSAs can serve as SNAP vendors just as wired retail outlets do. The LFFJA’s school food provisions includes a “local food credit program” that would allow School Food Authorities to use up to 15 percent of their commodity dollars for making purchases of agricultural products from local and regional farmers and ranchers. Not only would this foster economic development but it would also bolster farm to school relationships. Additionally, while the proposed new bill would have maintained funding for the Department of Defense Fresh program, which gets produce into schools, the bill would not have allowed schools to use these dollars for their own purchases of more fresh, local food. On a positive note, the proposed new bill would have allowed USDA’s Agricultural Marketing Service to continue to pursue a pilot program that explores avenues for local sourcing in the program.
Organic Agriculture — The National Organic Certification Cost Share Program (NOCCSP), which assists producers in 34 states and handlers in all 50 states with the regulatory costs of entering into organic production, was left in tatters in the proposed new bill. It would have ended any farm bill mandatory funding for the program and placed a five-year benefit limit on each farmer if, as is unlikely, the program were to shift from the farm bill to the appropriations bill. The proposed bill would have allowed farmers in the 12 Northeastern states plus HI, NV, UT, and WY to receive mandatory funding from a different source for organic certification cost share. The result would have been an absurd situation where eligibility for a farm program benefit depended on which state one resides in. For comparison, imagine if corn program subsidies were available only in 16 out of 50 states – it would not have passed the smell test.
The proposed bill also did not include the provisions in the Local Farms, Food, and Jobs Act (LFFJA) regarding organic crop insurance. The LFFJA would eliminate the organic premium surcharge and would direct RMA to complete development of an organic price series to allow organic policies to pay out at the organic price.
Minority Farmers and Ranchers
The proposed bill left the Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers program (also known as “Section 2501” program) high and dry. The program received $75 million in mandatory funding under the current farm bill, but was left unfunded in the proposal.
Beginning Farmers and Ranchers
The Beginning Farmer and Rancher Individual Development Accounts (BFRIDA) Pilot Program also was not provided with farm bill funding under the proposal. The Beginning Farmer and Rancher Opportunity Act proposes to fund the innovative pilot program at $5 million a year in mandatory funding.
Many credit programs that are essential to helping beginning farmers start farming, would have been reauthorized, including the Conservation Loan Program, the Down Payment Loan Program, and funding set-asides for beginning farmers within the guaranteed farm ownership and direct operating loan funds. None of the important policy changes that are needed and are contemplated by the Beginning Farmer and Rancher Opportunity Act were included, however.
Research and Extension
While the proposed bill would have provided important renewed mandatory funding for the Specialty Crop Research Initiative, Organic Agriculture Research and Extension Initiative, and Beginning Farmer and Rancher Development Act, it contained no policy changes that we know of to other programs and offices with the research area.
Originally posted by the National Sustainable Agriculture Coalition
After missing their original November 1 deadline, the House and Senate Agriculture Committee leaders continued to work on hammering out a deal on what might have become the 2011 Farm Bill. Things really heated up late Thursday and early Friday, November 18, when the new farm bill deal appeared imminent. Friday came and went, however, with the bill drafters still waiting on a final budget scoring on the bill from the Congressional Budget Office, delaying its official unveiling.
The Agriculture Committee leaders intended to send the bill to the Joint Select Committee on Deficit Reduction (the “Super Committee”) for inclusion in the big government-wide deficit reduction bill. By this past weekend, though, it became clear the Super Committee would not succeed in producing a budget bill for consideration by the full House and Senate in December.
With the Super Committee process now dead, the Agriculture Committee leadership on Monday decided to simply scrap the deal they had nearly reached and issue no details, no summary, no budget score, and no bill. Instead, House Chair Frank Lucas (R-OK) and Senate Chair Debbie Stabenow (D-MI) issued a simple statement, saying:
“House and Senate Agriculture Committee leaders developed a bipartisan, bicameral proposal for the Joint Select Committee on Deficit Reduction that would save $23 billion. However, the Joint Select Committee’s failure to reach a deal on an overall deficit reduction package effectively ends this effort. We are pleased we were able to work in a bipartisan way with committee members and agriculture stakeholders to generate sound ideas to cut spending by tens of billions while maintaining key priorities to grow the country’s agriculture economy. We will continue the process of reauthorizing the farm bill in the coming months, and will do so with the same bipartisan spirit that has historically defined the work of our committees.”
(Note: One downside of the decision to not release even a summary of the proposed deal is that an out of date and not completely accurate summary of the bill was distributed fairly widely on Friday. While helpful to a degree, it has also served to confuse people where the summary does not match later reports about what is in the bill.)
This “part one” post will attempt to answer the question of what happens next, with the budget and with the farm bill. A “part two” post will then outline the basic contours of the 2011 Farm Bill that wasn’t, and detail some of the more hopeful elements and some of the least positive elements.
What Happens Next – Next Year’s Budget Issues
By law, the failure of the Super Committee to produce a bill cutting the accumulated deficit by at least $1.2 trillion (over 10 years) triggers automatic budget cuts (known in budget-speak as “sequestration”) of the same $1.2 trillion over 10 year amount, but not starting until January 2013. The threat of automatic cuts — divided half and half between defense spending and non-defense spending but excluding tax expenditures, major entitlement programs, and most programs targeted to low-income families and individuals — was originally intended as the threat hanging over the Super Committee that would force a deal. In the end, however, many on both the right and the left began to view the automatic cuts as the preferred option relative, on the right, to closing tax loopholes to increase revenue and, on the left, to cutting entitlement programs.
The one-year gap before sequestration takes effect gives Congress a year in which to try to avoid sequestration by coming up with an alternative to the Super Committee process for finding a trillion dollar plus combination of spending cuts or revenue increases. The fact that 2012 is a presidential election year would tend to weigh heavily against a revived budget deal. The termination of the Bush-era tax cuts at the end of 2012, however, provides a counterweight. There is some talk about a deal based on a reduction in the automatic cuts to the defense budget plus continuation of the Bush-era tax cuts except for the wealthy. Whether that or any other iteration of a mega-deal is possible in a politically charged year remains to be seen.
If sequestration is not avoided and in fact does trigger, it will have a significant impact on the farm bill. The Congressional Budget Office estimates that the farm bill’s share of the automatic cuts could be as high as $15.6 billion (the Office of Management and Budget has made the actual determination of the size of the cut, but the White House refuses to release those figures). While seemingly lower than the $23 billion in net savings in the 2011 Farm Bill deal that wasn’t, it is actually quite equivalent. That is because two programs within the farm bill are by law exempt from sequestration – SNAP (food stamps) and the Conservation Reserve Program (CRP). Within the $23 billion near-deal, those two programs accounted for $7.8 billion of the savings. With SNAP and CRP excluded, the sequestration route and the $23 billion savings route are about the same $15 billion plus in cuts.
Two important differences between an automatic farm bill cut and a non-automatic decision by Congress are worth noting. First, under automatic cuts, the biggest share of the $15 billion plus reduction would fall on Risk Management Agency-administered crop and revenue insurance since it has the biggest budget ($8 billion a year average). Under most regular farm bill scenarios, crop insurance is less likely to be cut. Second, with CRP exempt, the total cut to conservation programs would be lower under sequestration than it would have been under the near-deal on a 2011 Farm Bill.
What Happens Next – Immediate Budget Issues
More immediately, the lack of a Super Committee deal has removed a train from the legislative track on which several high cost freight cars were going to hitch a ride. Two relate to the President’s jobs bill. Extended unemployment benefits and the temporary reduction in payroll taxes both expire at the end of 2011. Also up for grabs is the annual, costly revision to the Alternative Minimum Tax (AMT) to avoid it from triggering at a level that would impact many middle-income households as well as the now regular annual adjustment to prevent government health care payments to doctors and hospitals from going down (sometimes referred to as the doc-fix). With just a month to go this year, these are big, costly items for which there is broad political support, but for which there will be major arguments about whether or not they must be paid for with reductions elsewhere in the budget and if so, where. On top of all that, Congress must still finish the majority of the FY 2012 appropriations bills. Expect a very contentious December!
What Happens Next – Farm Bill
There are many scenarios with respect to what might become of the next Farm Bill. The wildest one, and most unlikely of the lot, is that it would still happen in 2011, with the net cuts of $23 billion in the near-deal serving as an offset for a deal on unemployment benefits, payroll tax reductions, AMT adjustments, or the so-called doc-fix.
Scenarios for 2012 include two variations on taking it up early in 2012 and finishing it by summer, before nearly all attention focuses solely on the elections. Variation one would pick up where things left off, with the draft deal from last week serving as the initial draft that would then be open to amendment. Variation two would start the whole process over from scratch. And of course there would be combination approaches in which some pieces would start over, but others would start from where things left off.
Under either of those variations, there could be a continuation of the goal of cutting total farm bill spending by $23 billion over ten years, or that number could change. Also under either variation, there could be a return to more normal legislative process, with hearings, subcommittee and full committee markups, and floor amendments and floor votes, or there could be a continuation of a less open process, especially if there is a new deficit reduction budget deal that emerges in the meantime.
Another scenario for 2012 could be more of a wait and see approach, with the Agriculture Committees crafting a bill only after the dust settles on the mega-budget situation and deficit reduction targets are known or the situation with respect to automatic cuts in January 2013 changes or does not change. The problem with the wait and see approach is that, in an election year, they could run out of time to respond with a farm bill once the mega-deal on the budget comes into focus, if in fact it ever does.
At least four things tend to weigh toward a one-year extension of the existing farm bill and delay work on the new one until 2013. Two are budgetary and two are political.
First, the overall budget situation is confusing and without knowing how much to cut, the Agriculture Committees could start down the wrong path and turn out to be out of sync with a long-term deficit reduction deal. Second, if a reduced-cost farm bill is written and becomes law in 2012, but sequestration is allowed to move ahead as per current law, then the new farm bill would be cut a second time barely before the ink has dried on the actual farm bill. A 2013 Farm Bill, on the other hand, would have the advantage of being able to revise the shape of the automatic cuts before they go into effect permanently.
Third, it is an election year and legislative time will be short, with interruptions for primaries and campaigning. Fourth, for those Agriculture Committee Republicans who may assume their party will regain control of the Senate in the November election, there is also a strong incentive to wait a year.
There are also strong countervailing forces to the 2013 scenario. It is probably safe to say that at this particular point in time, no one really knows under which scenario the farm bill debate will play out. It may take time for the dust to settle and new strategies to emerge.