Farm Service Agency announces program updates

January 30th, 2013 Other News

WASHINGTON — The USDA’s Farm Service Agency reminds producers that the American Taxpayer Relief Act of 2012 extended the authorization of the Food, Conservation, and Energy Act of 2008 (the 2008 farm bill) for many Commodity Credit Corporation commodity, disaster and conservation programs through 2013.
FSA administers these programs.

Programs

The extended programs include, among others: the Direct and Counter-Cyclical Payment Program, the Average Crop Revenue Election Program, and the Milk Income Loss Contract Program.
FSA is preparing the following actions: FSA will begin sign-ups for DCP and ACRE for the 2013 crops Feb. 19.
The DCP sign-up period will end Aug. 2; the ACRE sign-up period will end June 3.
Unchanged. The 2013 DCP and ACRE program provisions are unchanged from 2012, except all eligible participants in 2013 may choose to enroll in either DCP or ACRE for the 2013 crop year.
This means eligible producers who were enrolled in ACRE in 2012 may elect to enroll in DCP in 2013 or may re-enroll in ACRE in 2013 (and vice versa).
All dairy producers’ MILC contracts are automatically extended to Sept. 30. Eligible producers therefore do not need to re-enroll in MILC.
Specific details regarding certain modifications to MILC will be released soon.

Details

FSA will provide producers with information on program requirements, updates and signups as the information becomes available. Any additional details will be posted on FSA’s website.
For more information about the programs and loans administered by FSA, visit any FSA county office or www.fsa.usda.gov.

USDA to start MILC payments Feb. 5

January 30th, 2013 Other News

WASHINGTON — The USDA’s Farm Service Agency will issue payments to dairy farmers enrolled in the Milk Income Loss Contract (MILC) program for the September 2012 marketings, beginning Feb. 5.

The 2008 farm bill extension continues the MILC program through Sept. 30, 2013.

The formula

MILC payments are triggered when the Boston Class I milk price falls below $16.94 per hundredweight, after adjustment for the cost of dairy feed rations. MILC payments are calculated each month using the latest milk price and feed cost.

As announced by FSA Jan. 22, all dairy producers’ MILC contracts are automatically extended to Sept. 30, 2013, so eligible producers do not need to re-enroll in MILC.
MILC operations with approved contracts will continue to receive monthly payments, if available.

The payment rate for September 2012 is approximately 59 cents per hundredweight. The payment rate for October 2012 marketings is approximately 2 cents per hundredweight. The payment rate for November 2012 marketings is zero.

Will need new form

Before the October MILC payment can be issued, dairy farmers must complete a new Average Adjusted Gross Income (AGI) form for 2013.

The new form, CCC-933 Average Adjusted Gross Income (AGI) Certification and Consent to Disclosure of Tax Information, must complete by producers before they can receive payments for a variety of programs administered by FSA and USDA’s Natural Resources Conservation Service.

Producers may obtain CCC-933 at their local USDA Service Center or online at www.fsa.usda.gov/ccc933.

Dairy operations may select a production start month other than October 2012. Producers who want to select a production start month other than October 2012 must visit their local FSA office between Feb. 1 and Feb. 28, 2013, also known as a relief period.

For more information on MILC, contact a local FSA county office.

Visionary genius, short-sighted fools

January 24th, 2013 Alan Guebert

Last October, several University of Illinois alums sent a letter “to encourage [me] to … join [them] by making a contribution to a scholarship fund that has a personal meaning to you.”

College cost

What, I toss a pebble-sized check into the Big U’s pond and that “C” in Math 111 nearly 40 years ago morphs into a “B”? No, but the numbers meant to motivate me became a pebble in my shoe.

“When we were freshmen,” my contemporaries wrote, “our in-state tuition was just $248 a semester” because “(a)t that time, the State provided 49 percent of funding to [the university].”

“Over the years,” however, “the University has had to rely on raising tuition to offset the declining level of state support, now only 12 percent.”
Increasing cost. Illinois’ choice to virtually abandon its public universities means students pick up most of the tuition tab today. It’s huge: one semester at U of I’s ag college now costs $7,090, or 28.5 times what I paid as a fresh-off-the-farm kid in August 1973.

Take that $14,180 annual tuition, add in books, bacon and, ah, liquids, and a year there now approaches $30k.

States play the same shrinking role in their public universities’ ag research budgets. A generation ago, most spent generously on their Land Grant universities and ag experiment stations, a nationally-integrated system of research and education that was founded, hand-in-glove, with the Department of Agriculture in 1862.

Funding cuts

Today, however, the funding level is embarrassing small. For example, 30 years ago two-thirds of all funding for the University of California’s Ag Experiment Station came from the state; today California pays but 15 percent.
That’s shameful for the nation’s biggest ag state — and it’s pretty much the norm for every state nationwide.

Overall federal spending for U.S. ag research and development, while not falling, has stagnated in the last decade even as private ag research funding has exploded.
According to a Dec. 2012 report from the President’s Council of Advisors on Science and Technology, the feds spent $3.8 billion on ag research in 2009 while industry spent a staggering $8.7 billion.

Private R&D is important, certainly, the report rightly notes, but the bulk of the money is “dedicated to commodity and high-value crop production… specifically to the development of improved seeds and crop protection chemicals for the most lucrative global markets…”

In fact, “In 2011, the six largest multinational companies with significant agriculture focus invested nearly $6 billion globally in R&D for these two product categories” out of $14 billion spent on all American-sourced ag R&D.

Finding solutions

That rich, narrow focus leaves an ever-shrinking pool of available dollars for public institutions like Land Grant Universities to address an ever-expanding list of new problems facing farmers and ranchers, worries the White House report.
 Some of these “new challenges” include the need to boost the efficiency of shrinking water supplies while “reducing [ag’s] environmental footprint.”

Other basic R&D is needed to address “challenges” not even mentioned in the report like small farm ecology, perennial plant development and rural infrastructure, key elements to efficient, effective food production 10, 20 and 30 years from now.
“But… these challenges,” explains the report, “… require a strong public commitment to agricultural research, one that fosters a culture of innovation and excellence to address some of the greatest threats to U.S. long-term prosperity and security.”

How much?

The report recommends another $700 million in federal spending, or an 18 percent increase in today’s federal ag research budget.
And, yeah, that’s a lot of money but it’s a pittance to help secure the future of the $2.25 trillion enterprise owned and operated by today’s farmers and ranchers.

In fact, it’s just 12 percent of what the expanded federal crop insurance program would have cost if Big Ag’s 2012 Farm Bill had passed.

Ag assurance

So, what do you want, fatter crop insurance subsidies for one Farm Bill cycle or ag assurance for, maybe, another 150 years?
To Abraham Lincoln, a visionary genius, the answer was simple. It still is.
(The Farm and Food File is published weekly in more than 70 newspapers in North America. Contact Alan Guebert at www.farmandfoodfile.com.)
© 2013 ag comm

1.24 FSA Andy

January 24th, 2013 FSA Andy

Hi Again,

Well here we are almost to the end of January already. We’ve had some snow, freezing temperatures, rain and even a few 50 degree days. Amazing how fast things can change in our day-to-day lives.

People like to make New Year’s resolutions and by now they are either seeing a change in their life, or they have survived the failure. I personally do not make resolutions; change seems to come to each of us if we choose it or not. But, when I do decide a change is in order, I like to see the results now!

That is not the way it is with the Farm Service Agency. We are lucky enough to have a farm bill in place. Yes, it may be an extension, it may be temporary, but it is there and ready to be implemented.

With so much detail and so many variables, it may take awhile to actually see the results, but the changes are coming.

As each of the FSA offices across the United States receives the new forms, the new deadlines and the new program details, the employees in the local offices will get in touch of the producers they serve and share the information.

Until that time, we still offer Commodity Loans. I know with the price of grain, producers don’t always take advantage of these low interest, short-term loans. But, if you have grain that you own sitting in storage, this is a great way to increase your cash flow. The loan rate varies from county to county, so you will need to check with your local office, but the loan note is nine months long with a low interest rate for January of 1.125%. These loans are very simple to obtain and maintain. Please contact your local office for additional information!

That’s all for now,

FSA Andy

American Farm Bureau delegates want risk management in farm bill

January 17th, 2013 Other News

NASHVILLE, Tenn. — Voting delegates to the American Farm Bureau Federation’s 94th annual meeting in Nashville earlier this month voiced support for a bipartisan, reform-minded farm bill, crafted around a broad, flexible, crop-insurance-based program, including risk-management protection for peanuts, rice, forage and specialty crops.

“We will push hard, in cooperation with our congressional and administration allies, for a five-year farm bill that provides our farmers certainty and extends much-needed risk management tools across more acres and more crops,” said AFBF President Bob Stallman, a rice and cattle producer from Texas.

Delegates said AFBF would not only support a farm bill with a strong safety net and risk management programs to protect farmers from catastrophes, but they also would work for programs that provide emergency assistance for livestock and tree producers not covered by federal crop insurance programs.

Delegates reaffirmed policy supporting changes to the dairy safety net, consistent with the margin insurance programs included in versions of the farm bill approved by the House and Senate ag committees.

No raw milk support

On another dairy issue, delegates approved a new policy that states only pasteurized milk and milk products should be sold for human consumption.

Other key issues

On national fiscal policy, delegates reaffirmed the importance of a sound budget process with a priority on spending restraints rather than tax increases.

Delegates also voted to support streamlining or replacement of the H-2A seasonal and temporary agricultural worker program in addition to allowing experienced, undocumented agricultural workers to adjust to legal status.

Biotechnology

Recognizing the important role played by agricultural biotechnology and rapid developments in the industry, delegates expressed continued support of a private-sector, industry accord to govern how biotech traits are managed when patents expire.

They also reiterated support for the continued implementation of an industry solution that promotes investment and marketability of new technologies.

Delegates voted to support greater flexibility within the National School Lunch and Breakfast Programs. Specifically, they voted to oppose mandatory limits on calories and serving sizes for lean meats, protein-rich foods and dairy products.

The policies approved at the annual meeting will guide the nation’s largest general farm organization in its legislative and regulatory efforts throughout 2013.

Leadership vote

The delegates newly elected three state Farm Bureau presidents to the AFBF board of directors: Richard Bonanno of Massachusetts (Northeast Region), Jimmy Parnell of Alabama (Southern Region) and Don Shawcroft of Colorado (Western Region).

Fourteen other state Farm Bureau presidents were re-elected to represent their regions on the AFBF board of directors: Midwest Region: Craig Hill of Iowa, Kevin Paap of Minnesota, Don Villwock of Indiana and Wayne Wood of Michigan. Southern Region: Ronnie Anderson of Louisiana, Kenneth Dierschke of Texas, Zippy Duvall of Georgia, Mike Spradling of Oklahoma, Lacy Upchurch of Tennessee and Larry Wooten of North Carolina. Northeast Region: Dean Norton of New York and Carl Shaffer of Pennsylvania. Western Region: Perry Livingston of Wyoming and Paul Wenger of California.

Zach Hunnicutt, a crop farmer from Nebraska, was elected the new chairman of the AFBF Young Farmers & Ranchers Committee, which also makes him a member of the AFBF board of directors during his one-year term.

Terry Gilbert of Kentucky was re-elected to serve a two-year term as chair of the AFB Women’s Leadership Committee and on the AFBF board of directors.

Two ways to write a letter

January 17th, 2013 Alan Guebert

There are ways to write a letter and then there are ways to write a letter. One way includes pleasantries, ideas, even artful persuasion. Another features anger, bile and bricks.

These differences were on display recently when two members of Congress wrote and sent letters of withering dissent. One, from Collin Petersen, the ranking member on the House Agriculture Committee, to Speaker of the House John Boehner, was a two-page kettle of steaming contempt.

The other, from Sen. Bernie Sanders, I-VT, to the editors of the Wall Street Journal, was a tablespoon of honey-coated sarcasm.

Not happy

Peterson, the 12-term Blue Dog Democrat from western Minnesota, sent his Jan. 3 letter to Boehner while still smarting from two weeks of shady, “fiscal cliff” maneuvering that left the nation without a 2012 farm bill.

Three years before, Peterson noted, Boehner had offered “noble words” on how he would operate the House of Representatives: “‘(O)penly, honestly and respectfully.’”

Those words “turned into empty promises,” because “the Republican leadership was nothing but a stumbling block” for Ag Committee chairman Frank Lucas, R., Okla., to get the completed, bipartisan farm bill to the House floor.

Worse, Peterson wrote, when the “fiscal cliff” bill was being negotiated, the same leaders “drafted alternatives in the Speaker’s and Majority Leader’s offices, bypassing both the Chairman [Lucas] and members of the Agriculture Committee and making a mockery of regular order,” the usual method to move legislation through the House.

And, warned Peterson, once a number-crunching CPA, don’t dare explain that move by saying “the votes were not there to pass the bill” because “(t)hat is patently false.”

Closing

He finished with a three-point flourish. First, he asked House bosses for “a written commitment” to bring any new farm bill to the floor if the Ag Committee delivers one. Second, House leaders need not worry about “finding the votes” to pass a farm bill; that “would fall” to Lucas, Boehner’s GOP colleague, him and committee members.

But, and third, Peterson concluded, “I see no reason why the House Agriculture Committee should undertake the fool’s errand to craft another long-term bill if the Republican leadership refuses to give any assurances that our bipartisan work will be considered.”

Most House Ag Committee members, Repubs and Dems, agree with Peterson’s assessment of Boehner’s role in the 2012 farm bill belly flop. None of his ag colleagues, however, chose to join him in his pasting of the Speaker, the gatekeeper to all legislative action and every member’s career.

Complaint

Sen. Sanders’ note to the Journal — that objected to the paper’s endless opposition to wind subsidies — was a masterpiece of complaint: clever, direct, deadly.

The just re-elected Independent from the kingdom of Vermont opened by admitting he had “been trying to figure out what principle underlies [the paper's] opposition to encouraging the development of clean, renewable energy … “Are you really worried about budget deficits?” he asked, quoting the editorial’s words to the editorialists.

Gee, why then “While railing again modest incentives for wind energy, you say nothing of the more than $113 billion in federal subsidies that will go to fossil-fuel industries over the next 10 years”?

It’s not like big oil needs the help, he needles. After all, oil’s five biggest firms “made a combined profit of $1 trillion over the last decade.” And, oh, “While you’re at it, how about taking on the massive corporate welfare” of the last 65 years “for the nuclear-power industry,” Sanders suggests; it has received “more than $95 billion (in 2011 dollars) in federal research and development support.”

Need he mention coal and “their single-bid, sweetheart leases to mine federal lands without paying fair value in royalties to the U.S.,” too?

So, concludes Sanders, stop whining about tiny-by-comparison subsidies for alternative energy ideas like “wind, solar, geothermal, biomass and other sustainable energy sources” that “could help us avoid planetary calamity.”

Respond

Which letter will have greater impact? Neither — if you don’t follow-up with one or two of your own.

Pennsylvania Farm Show: Officials meet to discuss policy

January 11th, 2013 Kristy Foster Seachrist
HARRISBURG, Pa. — The farm bill and dairy policy was on the minds of government officials at the annual government luncheon held Jan. 10 during the 97th annual Pennsylvania Farm Show.
 
Pa. Gov. Tom Corbett told the crowd that one thing Pennsylvania farmers can be thankful for was the legislature working to exempt farmland from the state inheritance tax.

Estate tax

Corbett said it was common for the next generation of farm families to be forced into selling farmland in order to pay the estate tax in the past. Now that doesn’t have to happen.
 
Corbett said not only has the legislature passed the exemption, but there is legislation designed to teach accountants and others how to claim the exemption.
 

Transportation legislation

Another movement forward is legislation that makes it easier for farmers to move equipment by truck from farm to farm, or even to the shop for repairs. Legislation passed in 2012 increases how far farmers can travel without worrying about breaking the law.
 
“These bills can keep farmers doing what they do best– farming,” said Corbett.
 
Corbett also talked about what he plans to include in the new budget. He cautioned, though, that it is up to the state legislature on whether or not it is included in it.
 
He told the crowd of 500 that he hopes to maintain $2 million in funding to county fairs, funding for veterinary research and agriculture research at Penn State University.
 

Federal level

U.S. Sen. Robert Casey Jr. also spoke during the event about what is happening on the federal level.
 
Casey spoke about how important it is that work get started on a new farm bill. He said he doesn’t feel that it has to start at the beginning with negotiations, but the process has to begin again.
 
He said that farmers need to gain margin protection and ensure there is a strong and balanced dairy policy.
 
Casey said farmers have turned into gamblers.
 
“If you want to play the markets, go play the markets. But if you want to be a farmer, then allow them to be farmers,” Casey said.


2012 farm bill: Cliff walking in clodhoppers

January 10th, 2013 Alan Guebert

In an almost endless stream of post-vote analyses Jan. 2, Capitol Hill pundits focused mostly on who the political winners and losers were in the Christmas-to-New Year’s Grinch-vs.-Grinch brawl to “save” the nation from a “fiscal cliff.” </p><p>That’s to be expected because it’s a lot more fun to read about sandbox fights between 7-year-olds than reason-driven debates between well-educated adults. Lost in the holiday ugliness, however, was the failure of Congress to pass a 2012 farm bill. </p><p><h3>Dairy cliff</h3></p><p> Sure, America was saved from the “dairy cliff” but you and I should not have been on any cliff to begin with. We were placed there by politicians playing a can’t-win game of I-win, you-lose politics. How this played out for farmers and ranchers is both informative and instructive. </p><p>Farm bills used to be simple; not so in 2012. When the House Ag Committee, the historic leader in farm bill writing, blew through 2011 without action, its counterpart, the Senate Ag Committee, took over. To its members’ credit, a “reform” farm bill — that contained little real reform — passed the Senate in a bipartisan 64-35 late-June vote. </p><p><h3>Cotton vs. soybeans</h3></p><p> That vote, however, held trouble. Four Senate Republican Ag Committee members were among the 35 nays. Southerners all, they preferred a bill titled more toward rice and cotton than the currently-favored corn and soybeans. </p><p>That geographic split was — is — common in farm bills. What was uncommon about these four, however, was that one was — is — Kentucky’s Mitch McConnell, the Senate’s Republican leader. A few eyebrows were raised when the party’s boss voted against a clearly bipartisan farm bill. </p><p>House Ag Committee members completed their bill in late July. It, too, packed trouble despite a commanding 35-11 bipartisan committee vote. That trouble became evident when Speaker of the House John Boehner slipped the Committee’s bill into his suit jacket and went home. He later returned; the bill never did. </p><p><h3>Farm bill</h3></p><p>Boehner’s refusal to bring the farm bill to the floor for an up-or-down vote has been explained several ways. The most common is that the bill’s $16.5 billion cut in 10-year food stamp spending wasn’t enough for his many in party’s tea drinking wing so he simply sat on the bill while waiting for a better path for it to pass. </p><p>The explanation has merit. After all, cutting $16.5 billion out of more than $750 billion of food assistance spending in the coming decade hardly seems like any cut. </p><p><h3>Dairy reforms</h3></p><p> Another explanation is that the bill’s dairy reforms, also contained in the Senate bill, rankled Boehner. No one knows if this son of greater Cincinnati understands dairy policy — it’d be news if he did — but everyone on Capitol Hill knows that dairy processors hated the changes. Boehner, in turn, took to calling the pending dairy policy “socialism” and “Soviet-style central planning.” </p><p>Boehner and McConnell’s differences with each bill would hardly be noteworthy if not for the key role each would play in the fiscal cliff talks. </p><p><h3>Big deal foiled</h3></p><p> Boehner’s hard effort to meet White House demands stumbled when he went back to his Republican caucus to take their temperature on a nearly-completed “big deal” the week before Christmas. He got his head handed to him when GOP tea party members held their hard line against any new taxes. </p><p>Poetically, perhaps, most of those no-new-tax House members were the very same rural and Ag Committee members who earlier had demanded a vote on a farm bill. Speaker Boehner had denied them because he thought it far-too-rich. Now they denied him. </p><p>Cotton and rice price protection. That put the burden of negotiating any fiscal cliff deal on Senate Republican leader McConnell. Recall he had voted openly, almost happily, against the Senate farm bill in June because it lacked cotton and rice price protection. </p><p>With that same bill as the working model for any fiscal cliff-farm bill-New Year’s deal and McConnell as the chief GOP negotiator, no 2012 farm bill was the likely outcome and, to no one’s surprise, no 2012 farm bill it now is. </p><p>Why any of this is surprise, however, is, well, a surprise. When the bottom line to any Congressional deal must include a political I-win, you-lose score, you and I will always lose because we’re not politicians. We’re just Americans.</p><p>

FSA seeking county committee advisers

January 10th, 2013 Other News

Hello again!

Happy New Year! Whew, it seems like our “cliff diving” trip has been canceled. I, for one, am very happy about that — I am not real impressed with rocky heights with only a flimsy rope to catch me if I fall.

The good news is, a farm bill extension now looms in front of us. It seems like most things will look pretty familiar, with a few modifications here and there. Soon the information will start rolling into the office to be processed and sent out to local farmers.

Election

We recently held our elections for the Local County Committee. The committee’s first priority is to treat every farmer fairly. To ensure this happens, a diverse committee system, which is representative of our diverse agricultural community, is essential.

Therefore, if the three to five elected members do not represent any minority groups in the county or area, an adviser must be appointed. A committee adviser needs to be active in the farming community and willing to serve on the committee for a one-year term. FSA County Committee advisers are a valued voice for under-represented groups and socially disadvantaged farmers and ranchers.

County committee members, and their county executive directors, actively reach out to producer groups who are under-represented on county committees.

Criteria

Eligibility requirements for COC adviser nominees include: be actively participating in farming or ranching in the county or area; be willing and available to serve as an adviser, if appointed; and indicate in writing their willingness to serve.

Duties and responsibilities of COC advisers include: attend each COC meeting, including executive sessions; participate in all deliberations; increase awareness of and participation in FSA activities, including elections, by eligible voters to ensure socially disadvantaged group problems and viewpoints are understood and considered in FSA actions; help to develop interest and incentives in socially disadvantaged group members for considering FSA work as a career; active soliciting candidates from socially disadvantaged groups for nomination during the election process; and the ability to perform special duties at COC s request. Interested individuals should contact their local FSA office for more information.

That’s all for now,

FSA Andy

Taxpayer Relief Act of 2012: What does it mean to Ohio farmers?

January 4th, 2013 Other News

By David Marrison, OSU Extension associate professor & Chris Bruynis, OSU Extension assistant professor

See what farm groups are saying about the bill here.

WASHINGTON, D.C. — Congress worked overtime over the New Year’s Holiday to pass the American Taxpayer Relief Act of 2012 and it was signed into law by President Obama Jan. 2.

There are many provisions which are allowing members of the agricultural community to breathe a sigh of relief as they head into 2013 and some provisions, such as the farm bill, will cause much debate in the upcoming months.

Farm bill extended and no cows went over the cliff

The Taxpayer Relief Act includes a nine-month partial farm bill extension. With consumers up in arms over milk prices rising to $7 to $8 per gallon because the milk subsidy program would revert back to an antiquated parity-based price support formula that was implemented in 1949 and would have increased milk prices to close to $40 per hundredweight, more than double the current milk price.

This extension of the current subsidy program through Dec. 31 will keep milk prices stable. Basically, Congress kicked the can down the road on the farm bill and making any corrections to the milk pricing system.

This extension also extends $5 billion worth of government subsidies for commodities such as corn and soybeans. Other programs including conservation, organic growing, fruit and vegetable, and beginning farmer and rancher programs were also extended but at lower funded levels.

It should be noted that the direct payments were targeted for elimination during the farm bill discussions this past year. The Senate passed a farm bill extension in June but the House never voted on its own version, leading to a stalemate which ended with the partial extension.

Congress will now have until Oct. 1 when the new fiscal year begins to pass a more typical five-year extension. Many expect the key components of last year’s farm bill proposals — an end to direct payments, new crop insurance programs and cuts in nutrition initiatives — to be included in the new legislation. At any rate, it will make for an interesting farm bill negotiation in 2013.

The bill also extends supplemental disaster assistance programs by amending the federal crop insurance act to include 2013. This raises questions for which answers are not known at this time.

The first is the option for farmers wanting to exit from the average crop revenue protection program (ACRE). Since the original rule was farm signed into ACRE must stay enrolled in ACRE, does this extension force farmers to stay enrolled through 2013? Also the supplemental revenue assistance payments (SURE) status is unclear at this time for 2012 and 2013.

Individual and capital tax rates

The bill permanently retains the 10 percent, 15 percent, 25 percent, 28 percent, and 33 percent income tax brackets. The 35 percent tax bracket ends at $400,000 for single filers and $450,000 married filing jointly. Above this threshold, there’s a new 39.6 percent tax bracket.

Likewise the bill permanently retains the zero percent and 15 percent tax rates on qualified dividends and long-term capital gains, and adds a new 20 percent tax rate that would apply to taxpayers who fall within the new 39.6 percent tax bracket. Which capital gains tax rate will apply depends on what tax bracket a person is in.

The new capital gains tax rates for 2013 and future years will be zero percent applies to capital gains income if a person is in the 10 percent and 15 percent tax brackets, 15 percent applies to capital gains income if a person is in the 25 percent, 28 percent, 33 percent, or 35 percent tax brackets 20 percent applies to capital gain income if a person is in the 39.6 percent tax bracket.

Federal Estate Tax

This legislation permanently maintains the federal exemption for gifts and estates estate tax exemption at $5 million instead of dropping to $1 million. This amount will also be indexed for inflation and includes the transfer of the unused exemption of a deceased spouse to the surviving spouse. It should be noted that this legislation included the word “permanent.” This is significant as many fiscal agreements made by Congress since 2001 have contained a phase out date. The top rate to tax amounts in excess has increased from 35 percent to 40 percent.

But for many this was an acceptable compromise since it was scheduled to drop to $1 million with the excess taxed at 55 percent in 2013. This portion of the legislation should allow many farm families to sleep easier as they make plans to transition their farm businesses to future generations.

Section 179 Increased & Extended

Internal Revenue Code Section 179 allows farms and other businesses to write off small amounts of annual investments in capital assets, such as machinery, in the year of purchase in lieu of depreciating the investment over a number of years.

The 179 deduction was reverted (increased) back to the old 2010/2011 level of $500,000 for 2012 and 2013. This is a huge incentive given that up until this legislation was passed the 2012 limit was $139,000 and it would have dropped to $25,000 in 2013. Since this bill was not passed until the final hours, the increase to $500,000 for 2012 will most likely not help farmers unless they had purchased equipment in excess of $139,000 and had planned on just putting it on a regular deprecation schedule. It should be noted that this deduction will revert back to $25,000 beginning in 2014. However, as always, time will tell.

Bonus Depreciation Extended

This legislation also extended the special 50 percent special depreciation allowance, also known as bonus depreciation, through the end of 2013. The bonus depreciation provision generally enables businesses to deduct half the cost of qualifying property in the year it is placed in service. Bonus Depreciation is now scheduled to be eliminated for the 2014 tax year.

Payroll Taxes

In 2011, Congress had lowered the FICA payroll tax rate from 6.2 percent to 4.2 percent to put more money in the pockets of Americans. This adjustment expired at the end of 2012. This will result in a payroll tax increase for workers. For example, a farm employee earning $30,000 a year will take home $50 less per month.

Conservation Easement Donations. The special break for conservation easement donations was extended through 2013.

Want to learn more? The complete American Taxpayer Relief Act of 2012 can be accessed at http://www.govtrack.us/congress/bills/112/hr8/text.

Expired farm bill extended, but farm groups question the benefit

January 2nd, 2013 Chris Kick


(Updated Jan. 2. Updates being made.)

See what a couple Ohio State University Extension experts are saying about the bill.

WASHINGTON, D.C. — We will have a farm bill for 2013 — at least through September.

In a Jan. 1 vote to prevent the nation from going over the so-called fiscal cliff that would have increased taxes on the middle class, Congress also approved a nine-month extension of the 2008 farm bill, which expired the end of September.

The legislation was titled House Resolution 8, “The American Taxpayer Relief Act.”

The farm bill extension, though, is about as divisive as the process that led to its creation and passage. It does not include a new dairy safety net program many producers insisted was necessary, including the nation’s largest milk lobby organization — the National Milk Producers Federation.

“The Senate’s vote earlier today (Jan. 1) on a nine-month extension of current farm policy is a devastating blow to the nation’s dairy farmers,” said Jerry Kozak, president of NMPF, in a statement to media. “After months of inaction, the plan that passed overnight as part of the fiscal cliff package amounts to shoving farmers over the dairy cliff without providing any safety net below.”

Dairy farmers across the country had united behind the Dairy Security Act provisions in the original farm bills that had already been approved by the full Senate, and by the House Agriculture Committee.

NMPF said “it’s little more than a New Year’s Day, hair-of-the-dog stab at temporarily putting off decisions that should have been made in 2012 about how to move farm policy forward, not offer more of the same.”

Halting taxes

U.S. Sen. Debbie Stabenow, Chairwoman of the Senate Agriculture Committee, said progress has been made, but not enough.

“It is critically important that the U.S. Senate has come together to prevent tax increases on middle class families and small businesses, extend unemployment benefits for those struggling to find a job, and end tax breaks for millionaires our country can no longer afford,” she said in a statement to media. “This agreement accomplishes that, providing certainty for families and businesses and allowing our economic recovery to continue.

However, she said she is “deeply concerned” about “an incomplete farm bill extension that ends funding for important parts of the bill, including disaster assistance, while continuing costly taxpayer subsidies that were ended in the farm bill passed by the Senate.

She promised that the Senate Ag Committee will “once again begin work in the new year to enact a new Farm Bill that works for our farmers and rural communities as well as American taxpayers.”

The National Farmers Union called the bill “ineffective.”

“Once again, Congress has left rural America out in the cold,” said NFU President Roger Johnson. “An extension represents a short sighted, temporary fix that ultimately provides inadequate solutions that will leave our farmers and ranchers crippled by uncertainty.”

Some good, for now

The American Farm Bureau Federation said the fiscal cliff package “injected a good dose of certainty into our nation’s tax policy,” calling it a “major achievement.”

AFBF said the measure restored the $5 million exemption level for the estate tax, which was in danger of falling to just $1 million. On the minus side, the top estate tax rate increased from 35 percent to 40 percent. Permanent capital gains tax provisions that retain lower rates was a positive point, as was the inclusion of enhanced expensing provisions for businesses.

But the organization called the extension of the 2008 farm bill “little more than a stop-gap measure.”

“We are glad that a measure is in place for most of this year, but we are disappointed that Congress was unable or unwilling to roll a comprehensive five-year farm bill proposal into the fiscal cliff package. Now, it will be up to the new 113th Congress to put a new farm bill in place, and we will continue to insist on the kind of reforms that were included in the proposals approved by the Senate and the House Agriculture Committee during the 112th Congress.”

(Dec. 31, 2012)

WASHINGTON, D.C. — With just hours left in the year, and three months after the 2008 Farm Bill expired, Congressional leaders are considering an extension of the same legislation.

House Ag Committee Chairman Frank Lucas has proposed a one-year extension, with support from Ranking Member Collin Peterson and the Senate Agriculture Committee.

“Clearly, it is no longer possible to enact a five-year farm bill in this Congress,” Lucas said in a statement to media. “Given this reality, the responsible thing to do — and the course of action I have long encouraged if a five-year bill was not possible — is to extend the 2008 legislation for one year. This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions.”

It’s unclear if or when the House may vote on the resolution. Republican House Speaker John Boehner’s voicemail was full at presstime, and an email to his press secretary seeking a statement was unreturned.

The “new” farm bill seemed to have been on track throughout most of 2012, with Senate passage of a bill in June, and a similar bill passed in July by the House Agriculture Committee. But the bill would go no further — stalling in the House with no votes taken.

What they’re saying

The delays have drawn criticism from Democrats — who say the inaction by the House will hurt both the economy, and the food supply.

“The House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension,” Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said in a statement to media.

Stabenow said the extension has the potential to stop milk prices from spiking — a concern addressed by U.S. Secretary of Agriculture Tom Vilsack, who appeared on CNN’s State of the Union and warned that milk prices could revert back to a 1949 statute that would see prices double.

“It is critical that we pass a five-year Farm Bill that gives farmers and ranchers the certainty they need to plan for the future,” Stabenow said. “If a new Farm Bill doesn’t pass this Congress we’ll soon hold another mark-up and just keep working until one is enacted next year.”

U.S. Sen. Sherrod Brown blamed the House for refusing to consider the bill, saying important reforms in the Senate-passed bill will now “go down the drain.”

He added, “at this late hour, ensuring farmers have the certainty necessary to continue providing American consumers with a safe and affordable food supply is vital — and extending the current farm bill for nine months is the best way to do this.”

Farm organizations

National Farmers Union President Roger Johnson said the organization “is deeply disappointed in the dysfunction of Congress. The members’ inaction leaves significant uncertainty for farmers and ranchers trying to plan for the 2013 planting season without knowing the coming year’s policies.”

Johnson said farmers across the nation have spoken “time and time again” that they want a new five-year farm bill. His organization held a joint rally with Ohio Farm Bureau Federation in the fall, to help bring about a new bill.

Johnson said some of the programs in “peril” include renewable energy and conservation programs, livestock disaster assistance, beginning farmer and rancher programs, and much of the farm safety net, including dairy programs.

If it comes down to extending the current bill, he said Congress “should do so by fully extending all 2008 programs, such as the disaster, energy and beginning farmers and ranchers programs.”

The Ohio Corn and Wheat Growers Association said Congress should make a New Year’s resolution of getting a comprehensive, five-year bill done early in 2013.

Director Tadd Nicholson said a “short-term Band-Aid” is better than no action, but falls short of what farmers truly need.

“Versions of the farm bill considered by the House and Senate for months would have saved at least $23 billion in the federal budget, including significant fiscally responsible reforms initiated by grain farmers,” Nicholson said. “Instead of taking that savings, Congress allowed the farm bill to get caught up in Washington politics and postponed their work for another day.”

The American Farm Bureau Federation has not released an opinion on the proposed extension, according to Tracy Taylor Grondine, media relations director.

Related coverage:

2013 ag outlook meeting includes farm bill discussion (Dec. 4, 2012)

Election’s over, now what about farm bill? (Nov. 13, 2012)

Farm bill likely to stall (Sept. 18, 2012)

Top ag stories of 2012

December 27th, 2012 Other News

Drought

Corn and soybean yields were not the only crops affected by the 2012 drought. Everything from hay and apple crops to Christmas trees had reduced crops. The dry conditions stretched from Illinois through Ohio. Isolated rainfall had the biggest impact on yields across Ohio. Many farmers in the western portion of Ohio reported not having a harvest in some fields and some reported yielding less than a quarter of what they usually produce. Pennsylvania reported a reduced rainfall but not as bad as other Midwestern states.

FSA/ARS offices closing

USDA Secretary Tom Vilsack made the closure of five Ohio FSA offices official May 29. The county offices confirmed for closure in Ohio are: Carroll, Clark, Meigs, Montgomery and Perry counties. After the Carroll County FSA office closed, producers and landowners had to travel to Tuscarawas County office in New Philadelphia to complete paperwork or talk to an FSA employee.

Mercer County land owners/ODNR

Farmers whose land was legally taken by the Ohio Department of Natural Resources were assured in December 2012 that the compensation process will speed up. The Ohio Supreme Court determined ODNR was in contempt on an order to carry out the appraisals and appropriations, and ordered swift action within the coming months. Land owners have battled flooding in that county since the widening of a spillway along Grand Lake St. Marys in 1997.

Utica and Marcellus shale

story is the biggest in 2012 and may be the biggest story of many lives. As of the end of 2012, there were 469 horizontal permits issued for Utica shale wells and a total of 193 wells drilled, according to the Ohio Department of Natural Resources. In Pennsylvania, the numbers are also growing. According to the Pennsylvania Department of Environmental Protection, there were 4,020 wells permitted. Gulfport reported Nov. 28 the results of the Shugert well in Belmont County, which tested at an average sustained 18-hour rate of 28.5 million cubic feet per day of natural gas, 300 barrels of condensate per day, and 2,907 barrels of natural gas liquids per day assuming full ethane recovery and a natural gas shrink of 10 percent — or 7,482 barrels of oil equivalent per day.

Presidential election

Presidential incumbent Barack Obama and Republican challenger Mitt Romney differed on their tax policy, budgetary plans and social values, but it was Obama who won the campaign and his second term as president. Both candidates were supporters of the Renewable Fuels Standard, a controversial EPA policy that requires a minimum amount of corn be blended into ethanol. Inauguration day is planned for Jan. 21.

Climate change

One of the hottest summers on record, along with a record drought and a record mild winter for 2011-2012, caused many producers to ask if these unusual weather events might be related to climate change. The topic of climate change had arguably cooled off since the 2008 and 2009 talks of “cap and trade,” but made a strong return this year due to the abnormal weather patterns. Farmers and researchers remain divided over their beliefs on climate change and how we should respond, but there is growing belief that the climate is changing.

New farm bill

We might have a new farm bill before 2013, and we might not. That was the message in the community all year and into fall, after Congress failed to vote on either the Senate or House version of the bill. The Senate version was approved by the full Senate in June, and the House version was passed by the House Ag Committee in July.

Earthquake water disposal wells

Investigators from the Ohio Department of Natural Resources confirmed that injection well fluid along a weakened geologic fault triggered the 12 earthquakes that occurred in the Youngstown area between March 2011 and January 2012. After investigating all available geological formation and well activity data, ODNR regulators and geologists found fluid from the Northstar 1 Class II disposal well intersected an unmapped fault in a near-failure state of stress, causing movement along that fault. Geologists believe induced seismic activity is extremely rare, but it can occur with the confluence of a series of specific circumstances, as seen in the Mahoning Valley.

Ohio beef referendum

The Ohio Cattlemen’s Association asked producers to approve an additional $1 per head for the state beef checkoff, but the measure failed to gain enough support. The final vote showed 47 percent of producers voted in favor of the increase, with 53 percent against.

Farm Kings

A Butler County, Pa., family with 10 children took over the small screen on the GAC cable TV station this fall. The new reality TV show is about the King family and their farm, Freedom Farms in Valencia, Pa. The siblings range in age from 13 to 29, and each have their own identity and involvement in the farm. The cable station just announced the show, Farm Kings, will return for a second season.

Ohio State names McPheron dean

Ohio State University named Bruce McPheron its new vice president for agricultural administration and dean of the College of Food, Agricultural and Environmental Sciences Aug. 16. McPheron, a native of Ohio and one-time 4-H agent in Clermont County, Ohio, returned to the Buckeye State from Penn State University, where he served as dean of the College of Agricultural Sciences. He started his new appointment Nov. 1. He succeeds Bobby Moser, who has served as dean and vice president since 1991, and announced his retirement in September 2011.

Scorched calf

Ed and Tammy Sabol of Lisbon, Ohio, couldn’t believe their eyes when they found one of their heifer calves badly burned in September, apparently set on fire. And neither could their neighbors and Farm and Dairy readers, many who offered reward money for the arrest of the ones who did this. The reward has topped $12,000 and is being organized by the Canfield Auto Spa car wash. To make an offer, contact them at 330-702-9393.

Crop insurance: ‘Just insane’

December 20th, 2012 Alan Guebert

Neither the outcome of the federal election nor the fast-approaching budget “fiscal cliff” bothered any of the 250 gawkers and bidders at a 1,170-acre land rental auction Nov. 10 in Thurman, Iowa.

That’s right, an auction where the right to crop one family’s five parcels of Fremont County, Iowa, the absolute southwest corner of the state, went on the block that Saturday at the appropriately-named Skyline Sportsman Club.

Minutes later, every notion about local land values had surpassed any skyline — nearby Omaha’s, the more distant Des Moines’ and even that of super-tall Chicago.

Average $548/acre. The winning bids were: — Tract One, 196 acres, all tillable, $545 per acre; — Tract Two, an all-tillable 158 acres, $470 an acre; — Tract Three, 296 acres, all tillable, $520 per acre; — Tract Four, 104 acres, all tillable, $485 per acre and — Tract Five, 417 acres, all tillable with some grain storage, $615 per acre.

As stunning as those prices are — an average $548 per acre — the terms of the rental deal are even more stunning.

According to Jim Hughes, whose firm, Jim Hughes Real Estate in Glenwood, Iowa, brokered the deal, the land was rented for two years only. Cash rent terms for 2013 are 25 percent of the day of auction, the remainder on March 1, 2013. For 2014, 25 percent is due Jan. 1, 2014; the balance on March 1, 2014.

In short, you pay, then pray, then plant.

Hughes describes the renters as “local farmers who are willing to risk grain prices and weather on a two-year, $550-an-acre rental deal rather than a 30-year, $12,000-an-acre purchase deal.”

Well, mostly.

Many ingredients go into the rocket fuel that pushes land values and rents to the moon: commodity prices, aggressive local farmers, excess machinery capacity, cheap labor, low interest rates, federal farm program benefits.

Enter crop insurance

A new, major ingredient, however, is federal crop insurance, the heavily subsidized program that delivers an ironclad guarantee on locked-in revenue regardless of weather, commodity prices and federal farm payments.

(In 2012, 62-cents of every $1 in federal crop insurance premium were paid by taxpayers.)

“Oh, crop insurance played a definite role in the prices,” reckons Hughes. “It’s the best thing that ever happened to farmers.”

Risk? What risk? Bruce Babcock, professor of economics at Iowa State University and a faculty member of ISU’s Center for Agricultural and Rural Development, agrees.

“If you can lock in 85 percent of your expected revenue” — the level permitted under current federal crop insurance programs — “you’ve taken virtually all the risk out farming,” he says.

And it will get better. Part, if not all, of the remaining 15 percent of crop revenue presently not insured under the federal program is almost certain to be covered if and when Congress finally approves a 2012 farm bill.

Both the Senate and House versions raise subsidized coverage over 90 percent.

That’s an unbelievable move, opines Babcock, at a time when there is a bipartisan call in Congress for all Americans to assume “more risk” — take cuts in federal programs like food assistance, retire at an older age, pay more taxes — in the marketplace in order to cut federal spending.

But when it comes to the farm bill, Congress is proposing to “ratchet down market risk” — raise the level of subsidized crop insurance — “while doubling down on the cost of these programs rising?” he asks.

“This is just insane.”

Bottom line. Babcock is exactly right: How can farmers and farm groups ask taxpayers to underwrite an expansion of an already highly-subsidized revenue insurance program that guarantees farm income and higher land values but does not — cannot — guarantee food production or conservation compliance?

Farmers better come up with an answer quickly because the question will be asked.

Santa, if you can’t bring a combine or a farm bill, how ’bout some hay?

December 13th, 2012 Alan Guebert

You, my friend, are one tough customer for Santa. I mean, like many, the Fat Man knows food, but he doesn’t know farming.

As such, he gets lost in the jargon when trying to pick the perfect gift for you and your farming and ranching pals.

For example, just last week Old Kris texted to ask if I thought you wanted “something big” for Christmas. He suggested a completed farm bill with either direct payments or 95 percent crop insurance coverage.

Yep, that’s what he asked

It’s not mystery why: The man spends his long nights warmed by the glow of his computer screen, not a warm fire. He reads. Everything. The Times, the Journal, Successful Farming. He follows several food blogs and (just between you and me) never misses Page Six of the Post.

Anyway, I nixed the farm bill idea; he couldn’t have pulled that fried chestnut from the Yule fire anyhow.

So I texted back: No 2 FB. K 2 Case IH A-F 9230 w/40 flex draper. Hey, if you’re going big, go big.

“No go, Don Draper,” came his near-instant reply.

Well, well, Santa isn’t so well read that he knew the difference between a combine that does everything and a fictional Madison Avenue hired man who can’t do anything.

9230 combine w/40′ 2162 draper header, I texted.

Two seconds later, my phone beeped: “3R 2 SC: no combines.”

I dialed 1-800-MY SANTA.

“Sorry,” Santa offered after a ho or two, “but Rudolph” — duh, 3R: Rudolf the Red-nosed Reindeer — “said the combine was too red. I’m thinking something lighter, greener, like the climate change agreement discussed in Doha two weeks ago.”

Oh boy

Santa was wearing his natural fleece long johns again.

“You know,” the Bearded One went on, “a climate deal will keep the Corn Belt in the Corn Belt, the deserts in the desert and polar bears on the Poles. Besides, without snow, I look like just another fat man in a tight suit with too many pets.”

You’re talking truth, Big Guy, but Doha? That’s where diplomats go to hold funerals for global treaties, not finalize ‘em. I mean — HELLO! — the WTO’s latest trade talks started in Doha… in 2001… and no one has seen ‘em since.

“Fair point,” Santa acknowledged, but I could hear his brain cells jingle.

“Hey, what about a Facebook page for every farmer and rancher? I mean, they operate GPS, juggle millions in cash flow and market commodities in a global market so how hard could Facebook be?” he wondered.

Sigh

“Did you just sigh?” SC asked. “Look, according to the latest Social Media Report, Americans spent 121 billion minutes on social media in July. That’s 230,060 years, according to the report, ‘posting, liking and tweeting’ in just one month!

“Do you want to bet that only four of those minutes were burned by American farmers and ranchers?” he asked in a rising voice. “Come on, it’s time for change!”

Whoa, there, Kris My Man; change? Who do you think farmers and ranchers are — Episcopalians? Sure, social media is probably bigger than television and radio combined, but I’m guessin’ most ranchers would more appreciate a round bale or two of quality hay right now and just about every farmer is prayin’ for mild, wet winter.

“Hmm, hay. That’s good,” came the calm reply. “I’ll see what’s in the barn.”

And a warm, wet January from the Rockies to Maryland? Or, failing that, maybe three or four weeks of dry, hot weather in Brazil and Argentina next month?

Silence

OK, maybe just a brief dry spell in Brazil?

“This is Christmas,” admonished Santa, “I’ll leave that job for the guy in charge of Halloween. I’ll see what I can to about a wet winter here, though.”

That’d be big.

“I said no combines.”

K.

Lame ducks holding up the farm bill

December 6th, 2012 Alan Guebert

On the face of it, few things carry a more apt name than today’s “lame duck” Congress. Indeed, how lame is it that after two years of raw partisanship and paralyzing inactivity, we believe two legislative bodies that haven’t agreed on what day it is since 2010 will — what — reform taxes, pass a 2013 budget, complete a 2012 farm bill and “save” Medicare and Social Security all in the next 30 days?

This Congress? The one with 39 House members fired by voters in 2012 and 22 others who wanted out so badly they didn’t even stand re-election, let alone 12 senators currently looking for both lobbying jobs and book publishers?

On second thought, maybe the truly lame ducks are us, because we believe this dysfunctional Congress can complete in one month the work it couldn’t do in two years.

Poor odds

What’s not lame is the galacticly long odds that any “fiscal cliff” package will be wrapped up by Dec. 31. In fact, most on Capitol Hill put the odds at intergalacticly long.

The best proof that either bet is right is November. Half of the eight weeks between Election Day and New Year’s Eve have passed with little to no discussions between any of the key players on any aspect of this massive task.

The Washington Post noticed this silence over Thanksgiving. In a Nov. 23 story outlining where the post-election power lies in the Senate, the newspaper noted that Sen. Patty Murray, D-WA, “has been arguing that missing the deadline for a deal — going over the cliff — could actually make getting a deal easier.”

Murray’s view is important. Since she replaces retiring Kent Conrad, D-ND, as chairman of the Senate Budget Committee in January, any “fiscal cliff” deal must go through her. If she believes a post-Jan. 1 deal is better — mostly because of Democratic gains in both the Senate and the House Nov. 6 — then a post-Jan. 1 deal becomes more likely.

Amid this cliff-watching, the Senate-passed farm bill still naps in the House. Talk of any Dec. 31 “grand bargain” often includes a line or two on how the farm bill could be part of the package.

Hopeful

That chatter, though, is more hopeful than accurate. Since farm bill discussions began two years ago, Speaker of the House John Boehner has promised “regular order” for any vote on an updated ag law.

That means members can offer amendments to the farm bill, a process loaded with time-burning talk and roll call votes. Moreover, the Boehner promise guarantees a farm bill debate would burn four days of the preciously short December House calendar.

The Speaker can abandon his regular order promise but the move likely would be challenged by his caucus’s tea party members who believe several farm bill programs — direct payments and fast-growing food assistance to name just two — need a haircut.

As such, an intra-party squabble is something Boehner can ill-afford, especially if a “fiscal cliff” deal comes to the House some time in December.

Problems

The flip side of that coin, a House-approved farm bill, presents its own problems. The biggest, again, would be time needed for a House-Senate conference to iron out differences between the two bills before a final version heads back to each chamber for a conclusive vote.

The odds of this happening lengthen every day that passes without White House or Congressional action. One agreement between the White House and Congress could, however, deliver a farm bill, a tax reform bill, a federal deficit reduction plan and a blueprint to solidify key American — and heavily rural — programs like Medicare and Social Security: agree to move the Dec. 31 deadline to, say, Sept. 1, 2013.

Lame, sure. But we’re dealing with ducks here. And there, too.

2013 ag outlook includes farm bill, food price issues

December 4th, 2012 Chris Kick

COLUMBUS — Ag economists and farm policy experts drew some final conclusions about 2012, and cast some insight into the new year during the Ag Policy and Outlook Conference, held Dec. 3 at the Nationwide and Ohio Farm Bureau 4-H Center in Columbus.

The meeting has historically been regarded as the Dean’s preview, sponsored by Ohio State University’s dean of the College of Food, Agricultural and Environmental Sciences. And it was the newly appointed dean, Bruce McPheron, who got the program started.

McPheron is an Ohio native and earned his undergraduate degree from Ohio State. He previously served as dean of the College of Ag Sciences at Penn State.

“We are the most important industry in the world because there is not a person in this world who does not wake up in the morning aspiring to shake our hand,” McPheron said. “In fact they (consumers) want to shake our hand three times a day if they can.”

Food availability and affordability were dominant topics throughout the day, as experts weighed in on everything from population growth to food riots, and what farmers can expect in 2013.

Farm bill

Ohio State Farm Policy expert Carl Zulauf weighed in on a policy that could both help farmers and consumers, and one he hopes will be resolved by the end of this year: the new farm bill.

“I honestly believe we will get it done this year, but there is a distinct possibility we won’t get it done,” he said.

Similar versions of the bill have been approved by the full Senate, as well as the House Agriculture committee, but the bill has yet to be considered by the full House, which in September declared a vote would not happen until after November elections.

Zulauf also is a farmer, and stands to gain or lose depending on the actions taken. As a professor, he has tracked the progress closely and believes a bill could be approved fairly soon, if Congress cooperates.

“I’m struck by how similar (House and Senate) these bills are,” he said. “These are really conferenceable farm bills in a variety of different ways, if Congress has the will to do it.”

As Zulauf pointed out, both bills eliminate direct payments, retain marketing loans, make risk management the safety net’s central focus, make individual crop insurance the central safety net program, and add a county insurance supplemental coverage option.

What’s different?

The major differences, he said, are the size of cuts to nutrition programs. The Senate version provides for a $4 billion cut over 10 years, compared to $16 billion in the House version.

The bills also differ on whether the Farm Service Agency should administer a farm level risk management program, and whether the multiple-year risk management program should focus on price (House version) or revenue (Senate version), and have benchmarks that are fixed (House) or change with market conditions (Senate).

Zulauf said he feels the most important changes in the farm safety net are the supplemental coverage option, and the Dairy Production Margin Protection Program.

The supplemental coverage option, or SCO, allows a farm to buy county insurance as an “add-up” to its individual farm coverage. Coverage can be bought up to 90 percent.

Zulauf said crop insurance is both a risk management program, and also a payment program somewhat similar to a direct payment. If a farmer pays for crop insurance over enough years, there is an expectation that he will receive more in payments than he pays in premiums.

“It can be looked at as a strategic investment,” Zulauf said.

Food prices

Ian Sheldon, Andersons Professor of International Trade at OSU, discussed the ways country governments respond to high food prices. He noted that many developing countries respond by enacting their own trade policies and the release of public stock, which collectively with other countries, actually increases the price of food.

Instead, he said countries should avoid direct market invention, and should instead use targeted safety nets like food stamps and cash transfers.

He showed a graph of major political unrest the past eight years, which appears to correlate strongly with the high price of food. When enough countries develop their own trade policies, it actually sends food prices higher, he explained, and adds to the issue of world food price instability.

The daylong event featured a wide variety of ag topics for the new year. Some of the information will appear in upcoming editions of Farm and Dairy.

Grange leader: Elected officials need to be more fiscally responsible

November 30th, 2012 Other News

BOISE, Idaho — National Grange President Ed Luttrell outlined “four fundamental truths” he says elected officials need to follow to move America away from the “fiscal cliff.”

He issued his challenge during his annual address Nov. 13 at the National Grange convention in Boise, Idaho.

Luttrell’s four truths for policymakers include: living within our means, which is necessary for the nation to prosper; free markets work best to find solutions and provide the best services; Congress should do away with publicly funded pension programs for elected officials, programs that encourage people to become career politicians; and economic markets hate instability, especially created by continuously fluctuating taxes and regulation.

Fiscal responsibility

The Grange leader said Congress needs to get to work immediately to initiate measures of fiscal responsibility.

“It is long past time for our elected officials to wake up, to realize their fiscal responsibility to every American, especially our children and grandchildren,” Luttrell said.

He said the nation will “begin its journey back to fiscal health and prosperity” when politicians make decisions based on these truths.

Eye on regulation

Fiscal health also requires scrutiny of expanded regulation, Luttrell said, noting the “increase of economically significant regulations, on top of massive regulations already in place, is larger than the GDP of many countries.”

Luttrell said the Grange supports “necessary regulations needed to provide reasonable safety and peace of mind to American workers, families and inventors. However, we opposed any regulation that seeks a zero tolerance of risk.”

Luttrell also said the farm bill needs to be passed during the lame duck session.

“Agriculture should never become a partisan football, as every American depends on agriculture.”

Luttrell expressed the need for a farm bill, as well as continued safety testing for genetically modified crops but no need to label GMO products.

Agricultural awareness

Luttrell said much of the tension between consumers and producers, including the need for both large and small producers and the concept and practice of genetically modified foods, is the lack of education related to agriculture.

“In order to spread the truth of agriculture, the Grange continues to call for wide-scale basic agriculture education at the primary levels and in post-secondary education related to agriculture production, research and policy,” Luttrell said.

Luttrell said research is critical in regards to the safety and efficacy of genetically modified organisms, but labeling of such would be “misleading” and would falsely imply “differences where none exist.”

Other issues

Luttrell said the Grange opposes reductions of Postal Service to rural America and in a related rural access issue, said the Grange continues to support the expansion of broadband into rural areas.

Because rural customers rely so heavily on mail delivery, Luttrell said it is imperative that Congress work to save the USPS by either eliminating the prepayment requirement for future employee retirement health benefits or by releasing USPS from Congressional oversight so they may make decisions based on market conditions.

Luttrell stressed the need for equitable access through rural broadband and noted that the Grange will work with legislators to ensure Universal Service Funds be used to bring that broadband to homes and businesses in rural America.

Election’s over, now what about farm bill?

November 13th, 2012 Chris Kick

SALEM, Ohio — Last week’s ballots weren’t even tallied before the conversation switched to the fate of the next farm bill.

The current bill stalled in the House in October, even though the Senate version passed with bipartisan support in June and the House Ag Committee approved its measure in July.

“The election is over so it’s time to get to work,” said House Agriculture Committee Ranking Member Collin C. Peterson, D-Minn., in a statement to media. “I’m optimistic that, if given the chance, we have the votes to pass a five-year farm bill.”

He expects a vote could happen any day, and encourages swift action.

“There is no good reason not to vote on the bill when we return [Nov. 13], before Thanksgiving,” he said. “This will give us the time we need to work out our differences with the Senate and get a new five-year farm bill signed into law by the end of the year.”

Calls to House Speaker John Boehner’s office were unreturned at presstime.

Boehner, R-Ohio, said in September the House would not vote on the bill until after the elections.

“When we get back after the election, we will consult with our members and develop a pathway forward,” he said, adding “it is too early to determine right now what kind of mood members are going to be in and what kind of opinions they are going to have.”

Two directions

Carl Zulauf, farm policy expert with Ohio State University, said he sees two likely scenarios.

One is for the House to consider passing the current bill and confer it with the Senate, before the end of the lame duck session, or before Christmas.

The second option is an extension of the farm bill that expired Sept. 30. Zulauf said it would likely be for a one-year period, but could differ.

A big factor could be the debate over “fiscal cliff,” a term that defines several laws, which, if unchanged are expected to cause an increase in taxes due to the expiration of Bush-era tax cuts, and a decrease in government spending.

Zulauf said Congress can take quick action on the bill, if it wants.

“I learned a long time ago Congress can move relatively fast,” he said. “In fact, it can surprise you how fast it can move if the will is there to do it.”

But he’s still not sure whether it will most likely be a long-term bill, or a temporary deal.

“I’ve always believed that there are times when you just have to be on the Hill,” he said, adding this is one of those.

The American Farm Bureau Federation issued a statement congratulating President Barack Obama on his re-election, saying, “we (farmers and ranchers) cannot wait until 2013 for the action to start. Serious work on the farm bill, the fiscal cliff and critical tax policy fixes all must start during the lame duck session of the 112th Congress.”

(Reporter Chris Kick can be reached at 330-403-9477, or at ckick@farmanddairy.com.)

Nov. 20 deadline for disaster assistance program

November 1st, 2012 FSA Andy

Hello again!

As I sit and go through my notes of column topics, my focus is becoming narrower. The lack of a new farm bill, or at least an extension of the old farm bill, has limited the availability of some FSA programs.

One example is the Conservation Reserve Program. While existing contracts are being funded, FSA is not accepting new enrollments. With other programs, however, FSA is proceeding with “business as usual.

One of the “business as usual” programs is the Noninsured Disaster Assistance Program. The NAP program provides disaster loss protection for crops that do not have crop insurance coverage in the county.

Deadline

November 20 is an important deadline for producers who want to obtain NAP coverage on perennial crops for the 2013 crop year. Most perennial and orchard crops, including apples, asparagus, blueberries, caneberries, cherries, chestnuts, forage (hay and pasture), grapes, nectarines, peaches, pears, plums, strawberries, honey and maple sap must have a completed application by this deadline to be covered in the upcoming year.

Crops including forage sorghum, oats, potatoes, soybeans (in counties where xrop insurance is not available), sunflowers, and all spring-planted specialty crops grown for food have a purchase deadline of March 13.

Fees

FSA will keep the same fee schedule it had in 2012. Each crop will have a $250 administrative fee, with a limit of $750 per county. For producers with NAP crops reported in different FSA offices, a separate fee will need paid in each if you wish to insure all crops. There is also an $1875 total producer limit in fees.

NAP coverage follows very closely with the Federal Crop Insurance process. Applicants report past year production to establish an Actual Production History. This APH is used to determine the expected production and production guarantee for the upcoming year.

NAP coverage provides coverage of 50 percent of the unit’s APH at 55 percent of an average market price for the specific commodity established by the FSA state committee. Producers with NAP coverage in 2012 are reminded to file timely notices of loss.

Claims

Losses are to be filed on Form CCC-576 in the local FSA office within 15 days of crop damage from natural disaster or 15 days from when the loss becomes apparent. FSA will then assign an adjuster so the loss can be appraised and production counted before the crop is put to another use, abandoned or destroyed.

Contact your local FSA office for more information about obtaining coverage for your NAP crops for 2013, or to file a notice of loss for 2012.

That’s all for now!

FSA Andy

Election 2012: Presidential candidates’ ag policy positions

October 30th, 2012 Chris Kick

SALEM, Ohio — The issues surrounding farm policy and food production went almost unmentioned during the three presidential debates. But both candidates do have specific plans for what they say will best serve the American farmer, as well as consumers.

Here is a look at where the candidates stand on key farm issues, as well as other issues facing rural America. The responses are edited from questionnaires issued by American Farm Bureau Federation and United Fresh Produce Association.

Energy

Obama: Supports a broad approach to energy independence. Says U.S. biofuel production is “at its highest level in history” and that last year, rural America produced enough renewable fuels like ethanol and biodiesel to meet 8 percent of our needs, helping to increase energy independence to the highest level in 20 years.

He said the level of ethanol that can be blended into gasoline is increasing, and credited the Renewable Fuel Standard for helping to boost biodiesel production to nearly 1 billion gallons in 2011.

Romney: While also promoting energy independence, he encourages energy partnerships with Canada and Mexico. He said our domestic energy resources can create millions of jobs, while boosting businesses that supply the energy industry, as well as providing a more affordable energy and feedstock for agricultural businesses and manufacturers. He said the nation’s energy resources can be a “long-term competitive advantage” for agriculture.

The increased production of biofuels is an important part of his plan to achieve energy independence. Supports the Renewable Fuel Standard to support “increased market penetration and competition” and eliminating barriers to the electrical grid, fuel system and vehicle fleet.

Environment

Obama: Says farmers “are some of the best stewards of our environment” and that the ag economy can grow while also protecting the environment. On the matter of water quality and EPA regulations, he says his administration will not apply standards to waters that have not historically been protected. And all existing exemptions for ag discharges and waters will stay in place. Says there can be teamwork in safeguarding the waters “Americans rely on every day for drinking, swimming, and fishing, and those that support farming and economic growth.”

Romney: Says government oversight is “crucial” to protecting the environment, but statutes and regulations that were designed to protect public health and the environment “have instead” been used by environmentalists as tools to “disrupt” economic activity and the “enjoyment of our nation’s environment altogether.”

He faults the EPA and Obama for “embarking on the most far-reaching regulatory scheme” in American history, adding that “laws should promote a rational approach to regulation” that takes cost into account.

Farm policy

Obama: Like Romney, supports risk management tools to help protect farmers’ investments. Says he has increased the availability of crop insurance and emergency disaster assistance to help more than 590,000 farmers and ranchers after natural disasters and crop loss. As farmers cope with the drought of 2012, he says his administration is expanding access to low-interest loans, encouraging insurance companies to extend payment deadlines and opening new lands for livestock farmers to graze their livestock.

Says there needs to be a farm bill passed this year with “adequate” protection for farmers. Supports an extended disaster assistance program and maintaining a “strong” crop insurance program.

Says instead of making farmers pay more for crop insurance, the government should cut subsidies to crop insurance companies and make better decisions with conservation funding.

Romney: Supports passage of a “strong farm bill” that provides the “appropriate” risk management tools that will work for farmers and ranchers across the country. In the nearterm, plans to enact disaster relief for those not traditionally covered by crop insurance, to help farmers cope with the 2012 drought.

Says on the issue of subsidies, must remember American farmers compete with other countries who also subsidize their farmers, “so we must be careful” not to put our own farmers at a competitive disadvantage.

Additionally, warns against conditions that would cause Americans to become dependent on foreign nations for food, “the way we do with energy.” He said that ultimately, “it is everyone’s interest to achieve a level playing field” for American farmers to compete.

Farm labor and immigrant labor

Obama: Says “we must design a system that provides legal channels for U.S. employers to hire needed foreign workers.” Says the system must protect the wages of U.S. workers and only be used when U.S. workers are unavailable. Supports the AgJOBS Act, which allows farmers to hire workers and provide a “path to citizenship” for those same workers.

Also is setting up a new office on farm worker opportunities at the U.S. Department of Agriculture, the first of its kind.

Romney: Says he “understands” and “appreciates” the role that foreign temporary workers play in agriculture. Also says the current system for issuing visas to temporary, seasonal workers “is broken.” Says it takes too long for visas to be approved, with nearly half of such visas not processed on time in 2006 and 2007.

Says he will make the system “functional” for both employers and employees, while speeding up the application process. Supports a legal immigration system that provides a “lawful alternative” to workers who would otherwise enter illegally.

Also vows not to propose “heavy-handed” regulations that would limit opportunities for youth to be involved in agriculture.

Taxes

Obama: Says the tax code has become “increasingly complicated and unfair.” Many tax incentives serve important purposes, but that altogether, the tax expenditures in the law are “inefficient, unfair, duplicative, or even unnecessary.”

Calls for comprehensive tax reform by extending the middle class tax cuts for the 98 percent of Americans making less than $250,000 for another year. At the same time, asks the wealthiest to pay “their fair share.” Remains opposed to extension of tax cuts for those with household incomes above $250,000 a year.

On estate taxes, his proposal would return the top tax rate on estates to 45 percent and reinstate the $7 million per-couple estate tax exemption. Also, would return capital gains taxes to the rates they were when Bill Clinton was president, while calling for the permanent elimination of capital gains taxes on key small business investments.

Romney: Calls for tax reform that lowers tax rates, broadens the base, achieves revenue neutrality and maintains the “progressivity” of the tax code.

Says this will help jump-start an economic recovery that will help create 12 million jobs in his first term in office. Regarding the estate and capital gains taxes, he says he will eliminate the estate tax while also maintaining the current 15 percent capital gains rate for wealthier Americans, while totally eliminating capital gains, dividend and interest taxes for those who earn less than $200,000 a year.

He says these lower rates will help farmers keep more of what they earn, while helping the middle-class save tax-free for long-term costs like college tuition and retirement, and to enjoy the “freedom that accompanies financial security.”

Trade

Obama: Notes that last year, American farm income reached a record high with a record number of agricultural exports and a record agriculture trade surplus that means more of our products are being sold in markets around the world.

He signed three historic trade agreements with Panama, Columbia and South Korea that will help increase exports by $2.3 billion — supporting nearly 20,000 American jobs. And he is working to expand local and regional food markets, noting that farmers markets expanded 53 percent in number since 2008.

Romney: Says ag trade is “incredibly” important to our economy and job creation. Warns against “ineffective” trade policy that lingers in bureaucracy and does not advance our economic interests.

Says he will work to promote multilateral trade agreements and reverse the course of the Obama Administration, which Romney says has only enacted three trade agreements — all initiated in the Bush Administration.

Says he will work with Congress to gain Trade Promotion Authority in order to complete trade agreements. Will also encourage the World Trade Organization to reassert itself in order to “resolve” and “restrict” non-science based trade restrictions.

Food safety

Obama: Says major reforms were necessary when he took office, due to the high frequency of foodborne illnesses.

Created the Food Safety Working Group to help look at ways to improve food safety, and passed the “most comprehensive reform of our nation’s food safety laws” in decades, increasing Food and Drug Administration authority.

Continues to develop ways to work with the food industry and increase the traceability of contaminated foods.

Romney: Says American farmers and producers, especially the produce industry, have a long history of taking responsibility for food safety and that preventive practices “are the best tools” to reduce food-borne illnesses, while also being the most cost-effective option.

Says preventive practices are best developed by the growers, handlers, processors and others involved with the supply chain. Says the FDA must “collaborate” with the industry, along with state agencies and colleges, to develop food safety guidelines.