Dairy, commodity groups react to farm bill

April 27th, 2012 Chris Kick

Click here to see what lawmakers had to say about the bill.

WASHINGTON, DC — Dairy organizations had conflicting things to say about the most recent version of the farm bill, which was approved by the Senate Agriculture Committee April 26.

The Senate legislation includes a new, voluntary margin protection program endorsed by National Milk Producers Federation, to better safeguard farmers against “disastrously low margins” like those seen between 2007-2009.

“The Senate has taken a huge step in the right direction by including the dairy reforms modeled after NMPF’s Foundation for the Future program,” said Jerry Kozak, President and CEO of NMPF, in a statement to media. “We commend Senators (Debbie) Stabenow and (Pat) Roberts for their leadership and diligence in shepherding the farm bill past this point.”

Safety net

Kozak said the dairy title contains a better safety net for farmers in the form of the Dairy Production Margin Protection Program, which offers them a basic level of coverage against low margins, as well as a supplemental insurance plan offering higher levels of protection jointly funded by government and farmers.

Those who opt to enroll in the margin program will also be subject to the market stabilization program that asks them to reduce milk output when margins are poor.

The committee also approved two amendments to the dairy title of the farm bill: One that authorizes a review of the market stabilization program at the end of the five-year farm bill lifespan; and a second that extends the Milk Income Loss Contract Program (MILC) program through June 2013, at a reduced rate, so there is a safety net in place while the U.S. Department of Agriculture implements the new dairy margin insurance program.

DFA support

“By including provisions of the Dairy Security Act in the (bill), the committee has taken an important first step in truly reforming the dairy safety net, providing producers the tools they need to remain competitive in the global market and facilitate the industry’s growth and long-term sustainability,” said Dairy Farmers of America Senior Vice President John Wilson.

“Since the devastating dairy economy crash of 2009, dairy farmers, industry organizations and cooperatives —including DFA — have worked to develop a new system that better protects the interests of producers in a highly volatile industry,” he continued. “The dairy provisions included in the (bill) provide producers options to protect their margins and the ability to strengthen exports, both of which will be instrumental in maintaining the vitality of the U.S. dairy industry.

The National Farmers Union said it welcomes the adjustments made to the new Agriculture Risk Coverage program, which will allow farmers to choose a coverage plan that allows them to best manage their risk. Additionally, the temporary extension of the Supplemental Revenue Assistance (SURE) program to cover disaster-level losses suffered during the 2012 crop year and of the MILC will provide “needed protection during the transition period” as the next farm bill is implemented.

But NFU President Roger Johnson expressed concern “that the legislation does not do enough to protect farmers and ranchers against long-term price collapses. A program such as the Market-Driven Inventory System (MDIS) would help protect against such collapses and should be implemented in the final bill,” Johnson said.

International Dairy Foods Association praised the margin insurance program for giving farmers “the ability to manage price volatility” without including a supply management policy that “discourages investments by dairy food companies and takes away opportunities for dairy farmers to expand production. ”

IDFA argues against the dairy market stabilization program, saying it will “raise consumer prices, hurt exports, cost thousands of new jobs and stifle investments in new facilities.”

Soybeans

American Soybean Association President Steve Wellman said “ASA is encouraged that the bill includes a revenue-based risk management program that is equitable between crops, and will partially offset losses incurred at either the farm level or the county level.

“Other key features of the bill include its consolidation of multiple conservation programs, targeting of conservation funding toward conservation measures on working lands versus land retirement, authorization and funding for the new Foundation for Food and Agriculture, full funding of the Foreign Market Development Program (Cooperator) and Market Access Program (MAP), and mandatory funding for ASA’s two Energy Title priorities, the Biobased Market Program and the Biodiesel Education Program.”

The policy director for the National Sustainable Agriculture Coalition, Fred Hoefner, said “the committee was able to make sure that hardworking farmers — not mega farms and absentee investors (who do not farm) — are the key beneficiaries of farm programs.”

The Sustainable Ag Coalition also praised the Sodsaver provision, which protects native grass and prairie lands. The provision reduces crop insurance premium subsidies and tightens program rules in a manner that will reduce the “taxpayer-funded incentive to destroy important grassland resources,” according to the coalition.

“These lands are diminishing at a rapid rate and protecting them provides ranching opportunities and economic, environmental, and recreational benefits to rural communities,” Hoefner said.

Local foods

The coalition also praised the committee for reauthorizing local food and organic programs, such as the farmers’ market and local food promotion program, and National Organic Certification Cost Share.”

The coalition criticized the committee for failing to provide “adequate funding for the beginning farmer and rancher development programs,” minorities and limiting resources for new farmers, and for not making “needed improvements” in farm to school programs.

Produce

Robert Guenther, senior vice president of public policy for United Fresh, said the committee “has confirmed what our members have been saying for quite a long time: Investments in fruit and vegetable producers translate into a healthy industry — from field to table — while creating job opportunities and improved nutrition for consumers.

The following provisions are for produce farmers

• Funding of $150 million annually for the Fresh Fruit and Vegetable program; annual funding at $50 million per year for DoD Fresh program to provide fresh fruits and vegetables to schools and service institutions.

• Investment of $70 million annually for the Specialty Crop Block Grant program. The Specialty Crop Research Initiative was funded at $25 million per year ramping up to $50 million by 2017.

• Increased funding of $60 million in 2013 up to $65 million 2017 for pest and disease management programs. The Market Access Program ($200 million per year) and Technical Assistance for Specialty Crops ($9 million per year) were fully funded.

• Hunger-Free Communities Grant Program for fruit and vegetable SNAP incentives was funded at $100 million over 5 years. Farmers Market and Local Food Promotion Program was funded at $100 million over five years.

Farm bill clears Senate Ag Committee with bipartisan support

April 27th, 2012 Chris Kick

Click here to see what commodity leaders had to say.

WASHINGTON, D.C. — The farm bill is on its way to the full Senate, following a bipartisan vote April 26 in the Senate Committee on Agriculture, Nutrition and Forestry.

Authored by Committee Chairwoman Sen. Debbie Stabenow, D-Mich., and Ranking Member Sen. Pat Roberts, R-Kan., the bill reforms food and agricultural policy by eliminating direct payments and emphasizing the need to strengthen risk management tools for farmers.

Properly called the Agriculture Reform, Food and Jobs Act of 2012, the bill would reduce the deficit by $23 billion by eliminating unnecessary subsidies, consolidating programs to end duplication, and cracking down on food assistance abuse.

“The Agriculture Reform, Food and Jobs Act of 2012 will save taxpayers billions of dollars while promising a safe and healthy national food supply,” Stabenow said in a released statement. “By eliminating duplication, and streamlining and consolidating programs, we were able to continue investing in initiatives that help farmers and small businesses create jobs.

“We’ve worked hard to put together the best bill possible,” said Roberts. “We’ve cut deficit spending while at the same time strengthened and preserved programs important to agriculture and rural America.”

U.S. Sen. Sherrod Brown, D-Ohio, said the bill overhauls the farm safety net, bolsters rural economic development and ensures access to healthy and affordable food. He is chairman of the Subcommittee on Nutrition, Specialty Crops, Food and Agricultural Research.

Brown called the bill “the most sweeping reform to agriculture policy in nearly 20 years,” adding that it “promotes Ohio agriculture, protects critical nutrition programs, promotes conservation,” and invests in farm-based renewable energy.

Highlights:

Here is an overview of what the bill would do.

• Eliminates direct payments. Farmers will no longer be paid for crops they are not growing, will not be paid for acres that are not actually planted, and will not receive support absent a drop in price or yields.

• Consolidates two remaining farm programs into one, and will give farmers the ability to tailor risk management coverage — meaning better protection against real risks beyond a farmer’s control.

• Strengthens crop insurance and expands access so farmers are not wiped out by a few days of bad weather.

Consolidates and Streamlines Programs:

• By ending duplication and consolidating programs, the bill eliminates dozens of programs under the Agriculture Committee’s jurisdiction.

• The bill consolidates 23 existing conservation programs into 13 programs, while maintaining the existing tools farmers and landowners need to protect and conserve land, water and wildlife.

Improves Program Integrity and Accountability:

• Increases accountability in the Supplemental Nutrition Assistance Program (SNAP) by stopping lottery winners from continuing to receive assistance; ending misuse by college students; cracking down on retailers and recipients engaged in benefit trafficking; increasing requirements to prevent liquor and tobacco stores from becoming retailers; eliminating gaps in standards that result in overpayment of benefits; and maintaining benefits for families in need.

Grows America’s Agricultural Economy:

• Expanding export opportunities and helping farmers develop new markets for their goods, and investing in research to help commercialize new agricultural innovations.

• Growing bio-based manufacturing (businesses producing goods in America from raw agricultural products grown in America) by allowing bio-manufacturers to participate in existing U.S. Department of Agriculture loan programs, expanding the BioPreferred labeling initiative, and strengthening a procurement preference so the U.S. government will select bio-based products when purchasing needed goods.

• Spurring advancements in bio-energy production, supporting advanced biomass energy production such as cellulosic ethanol and pellets from woody biomass for power.

• Helping family farmers sell locally by increasing support for farmers’ markets and spurring the creation of food hubs to connect farmers to schools and other community-based consumers.

• Extending rural development initiatives to help rural communities upgrade infrastructure and create an environment for small businesses to grow.

Moving forward

Bob Stallman, president of American Farm Bureau Federation, said the bill “is not perfect, but it is a suitable policy vehicle with sold framework on which to make further improvements. “Certainly, having a bill in place this year is in the best interests of all farmers.”

National Farmers Union President Roger Johnson said the bill will mean good things for jobs and farm-produced energy.

“This represents progress toward providing a fiscally responsible farm safety net directed to family farmers and ranchers,” he said in a statement. “The bill’s investment in rural America will create jobs and opportunities for farmers to continue providing energy and conservation benefits to all Americans.”

Ohio grain symposium addresses water quality, farm bill

December 16th, 2011 Chris Kick

(Noe: The details of the early-bird market forecast will be reported in a separate article)

WILMINGTON, Ohio — With nearly 20 percent of the corn crop still in the fields and some soybeans still standing here and there, the third annual Ohio Grain Farmers Symposium was marked by a soggy year for all major crops.

Tadd Nicholson, interim director of the Ohio Corn and Wheat Growers Association, said some farmers were likely working on the farm the day of the conference, Dec. 15, or recovering from late-night and early morning harvesting when the ground was most likely to be frozen.

But, he said the bulk of farmers who usually attend the conference were able to make it — about 200 registrants total — on a day that saw even more rain, along with wind and higher than normal temperatures.

Water actually was an important part of the discussion, as experts gave an update on Ohio’s progress toward managing water quality and controlling nutrient runoff. Other topics were the new farm bill and the early bird market report for 2012, in which Ohio State University Ag Economist Matt Roberts gave one of the first predictions at where grain prices are headed.

Water quality

Matt Beal of the Ohio Department of Agriculture gave a brief update of the state’s joint effort with ODA, Ohio Department of Natural Resources and Ohio EPA to hash out new recommendations to better control the amount of sedimentation and dissolved phosphorous entering waterways.

The ag department is basing its recommendations on the increasingly popular “4-Rs” concept — applying the right among of fertilizer at the right rate, at the right time, and with the right placement. The concept is backed by The Fertilizer Institute and the past week became a part of NRCS’ National Nutrient Standard.

Beal said the ag department understands farmers are using best management practices and many other favorable practices to control runoff and nutrient loading, but more is needed, including more research to help determine the exact cause for the contaminants getting into the water.

“It can be a little tricky to figure out how to (resolve) the issue when you really don’t understand what’s causing it to begin with,” he said.

The work group for Ohio includes university researchers and soil and water scientists, who are researching some of these same questions.

Some farmers asked about other sources of nutrient pollution, such as municipality sewer systems and landscape and residential fertilizer use.

Big issue

Other state work groups, including the Ohio EPA, currently are assessing the contribution from non-ag sources. Beal said the state’s phosphorous task force is in the process of updating to a second phase, and is evaluating phosphorus in Lake Erie from farm and on-farm sources.

“There are a lot of complicating factors,” said Greg LeBarge, an ag natural resources expert with OSU Extension. LeBarge led a breakout session on water quality management with George Derringer, of NRCS.

In addition to farm pollution, they suspect a faulty Detroit sewer plant may have contributed to some of the phosphorous levels in Lake Erie.

The farm bill

Joe Shultz, an Ohio native now serving as senior economist to the U.S. Senate ag committee, said the farm bill needs finished sooner, not later, and faces increasing pressure from budget cuts.

“The federal budget has sucked up all the oxygen in Washington D.C,” Shultz said, taking farm policy funds along with it.

He said congressional ag leaders made $23 billion in cuts over 10-year period, good for about 2 percent of the overall $1.2 trillion congress is trying to save — or about the same percentage ag represents in the overall federal budget.

Although the so-called Super Committee failed to settle many budget issues this fall, Shultz praised the work of Senate and House ag leaders, for their bipartisan and bicameral support of the ag budget.

“This is what gives me hope for agriculture and what we should all be proud of,” he said.

In addition to overall funding cuts, Shultz said the new farm bill is making a significant shift from “fixed income support payments,” toward more crop insurance subsidies and risk management tools.

He said the markets are extremely volatile, referencing this past year and the record rain fall and low yields.

“We have to realize we are rapidly moving toward a system where crop insurance is going to be the foundation of farm safety,” he said.

Need new bill

Shultz was asked about extending the 2008 farm bill, but he said that would put the country’s farmers in worse condition, and would rely on outdated terms and conditions that would do more harm in the long-run.

Instead, he hopes work on the farm bill will wrap up this spring, before the political and presidential elections go into full-swing.

“We need to move forward now,” he said. “It only gets worse; it doesn’t get better.”

Yield contest awards were not presented during this year’s symposium, due to harvest delays and late announcement of current-year winners.

This is not your father’s farm bill

December 6th, 2011 Susan Crowell

“You’re going to have a fundamental change with this farm bill.” Period.

Adam Sharp, Ohio Farm Bureau Federation vice president for public policy, told the farm group members Dec. 1 to get ready for change in the next year’s farm bill, and to kiss direct payments goodbye.

Direct payments no longer have public support and, some would argue, public justification.

(Some would argue further to ditch all farm programs — but 75 percent of the programs funded by the U.S. farm bill are nutrition programs, like school lunch and school breakfast programs, food stamps, or Women, Infants and Children, or WIC, so that move would have unintended consequences outside the farm world.)

Of course, we’ve heard it before. “… the Federal Agriculture Improvement and Reform Act of 1996 became law on April 4, 1996, significantly changing U.S. agricultural policy.” But this time around, the change may be real, as Sharp explained, because of the deficit spending/federal budget world we live in.

Of the items funded in the current farm bill, 37 baseline programs’ funding won’t be extended at the end of fiscal year 2012. So if you (and lawmakers) want to keep a program like the National Organic Certification Cost Share, SURE (Supplemental Agriculture Disaster Program), or the Wetlands Reserve Program, you’ll have to find new money for them.

If there’s only so much money for the farm bill programs, and the nutrition title gets the biggest, non-negotiable share of the pie, the rest of the pie may get divided differently in this bill — funding shifted from one program to another, depending on priorities (or the loudest, or most connected, voice).

The biggest fundamental change will be from direct payments to risk management — a safety net. Yes, we had it in the 2007 farm bill with the ACRE program (Average Crop Revenue Election), but you could argue that it duplicates crop insurance program coverage. Expect more attention to the crop insurance program, and “add-ons” available to farmers as supplemental, or perhaps subsidized, crop insurance.

Ohio State ag economist Carl Zulauf compared 10 farm bill proposals this fall and found this: “All but one of the proposals had a shallow loss component, addressed multiple-year risk, were oriented to revenue, discussed the need for coordination of the program with crop insurance, had an individual crop orientation, and required a loss for a farm to receive payments.”

Get ready to hear more about a “shallow loss” program, which basically means the government would compensate farmers for relatively small losses. For example, if a farmer shoulders 5 percent of income loss, a free shallow loss program could cover the next 20-25 percent, and then crop insurance kicks in to cover losses below 30 percent.

Not really sure if I like the sound of that. Yes, it limits risk, but does it prop up poor managers, too? Would that encourage more risky farm practices? In October, the American Farm Bureau recommended that a shallow loss coverage should not exceed 85 percent. That I can live with.

Perhaps the wisest comment I’ve read, related to the new farm bill, came from Purdue University ag economist Otto Doering, who was actually rephrasing colleague Lyle Schertz observations from the 1996 farm bill process. “We have a tendency in the U.S. to socialize losses and privatize gains,” Doering told the House Committee on Agriculture in May, 2010. “Today, we can no longer afford to do this.”

“The other side of the coin is that if we actually believe in markets, more of the private gains will have to cover losses.”

Fate of 2012 farm bill remains mystery

November 22nd, 2011 Farm and Dairy Staff

WASHINGTON — The future of 2012 farm bill is unknown, after the Joint Select Committee on Deficit Reduction, often called the super committee, failed to reach a compromise Nov. 21. Read the rest of this entry »

Farm bill proposals mark ‘evolutionary change’ in safety net

November 9th, 2011 Other News

WASHINGTON — After analyzing 10 major proposals circulating for the 2012 farm bill as of the first week of October 2011, an Ohio State University farm policy expert said the proposals reflect a striking commonality in the philosophical changes underlying the debate over federal farm programs.

“I’m not saying there aren’t differences, but if you look at the proposals in their entirety, there is a large amount of overlap,” said Carl Zulauf, a professor with the Department of Agricultural, Environmental and Development Economics and the Ohio Agricultural Research and Development Center.

“If you focus on the differences, you miss what is a striking amount of similarities in the direction of policy change.”

Zulauf evaluated 10 farm bill proposals, looking at those similarities and differences using information from the Congressional Research Service and documents publicly released by the proposal’s author.

Similarities

All but one of the proposals had a shallow loss component, addressed multiple-year risk, were oriented to revenue, discussed the need for coordination of the program with crop insurance, had an individual crop orientation and required a loss for a farm to receive payments.

Eight of the proposals had no fixed price or revenue benchmark; in other words, the benchmark changed with market conditions.

“As a group, the proposals represent a significant evolutionary change in the discussion of a risk management farm safety net — a step that began with the introduction of the Average Crop Revenue Election program in the 2008 farm bill,” he said.

What it is. The ACRE program was a concept rooted in Zulauf’s policy research at Ohio State, and advanced through the work of agricultural policy groups like the Ohio and National Corn Growers Associations, among others.

“As you look at the proposals as a group, you see what a significant departure these proposals are taking even relative to the debate over the 2008 farm bill,” Zulauf said.

“In that debate you heard the word shallow loss, but it wasn’t very common. There was a big debate over the ACRE program being a revenue program instead of a price program.”

He stressed the 2012 farm bill is far from written, and the differences among the proposals are important.

Difference

One of the key differences among the proposals is what Zulauf referred to as the “siting” of the revenue program — namely, should it be based at the farm level, at the country, at the crop reporting district or at the state level.

“Another disagreement, though not as large as with the geographical site of the program, is the delivery of the revenue program,” he explained. “Three of the proposals propose to deliver the program through crop insurance, while six would use another approach.”

He also said that seven of the ten proposals would do away with direct payments, and one of the proposals that would keep direct payments would reduce them by 50 percent.

Costs

While it might be easy to point to a tight federal budget as the key driver in the current farm bill debate, Zulauf said a narrow focus on cost ignores the importance of the underlying philosophical changes in the debate.

“Since at least the major changes in the 1996 farm bill, there has been a very intense discussion about what the objective of farm programs should be,” he said.

“I would never say costs are not an important factor in this debate, but there is a really substantive debate going on about what is an appropriate, fair safety net for U.S. agriculture in the 21st century.”

Read Zulauf’s complete analysis of the 10 major farm bill proposals at http://aede.osu.edu/assessment-and-comparison-farm-safety-net-proposals.

MU FAPRI updates agricultural baseline ahead of Farm Bill debates

September 7th, 2011 Other News

COLUMBIA, Mo. — Tight crop supplies and record farm prices dominate a midyear baseline update from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri.

“Drought, floods and changing economics raise the outlook for many agricultural commodities,” said Pat Westhoff, director, MU FAPRI.

Economic analysis

A new baseline update takes those changes into account, Westhoff said, but does not represent a full baseline report. The updated baseline will be used for independent economic analysis of farm, budget and biofuel policies. Wet conditions and floods delayed and prevented plantings across the Corn Belt and Northern Plains. Droughts across the south and other areas added to the factors changing the outlook.

In the FAPRI baseline, corn prices increase on average from $5.25 per bushel to $6.46 for the 2011-12 crop to be harvested this fall. Likewise, soybeans rise from a projected $11.25 this year to $13.53 per bushel for 2011-12.

August estimates

The baseline starts from the USDA August estimates of 2011 crop production. Those estimates showed below-trend yields for corn, soybeans and several other crops.

“Short crops contribute to higher feed costs, which pressure livestock and dairy producers and increase risks,” Westhoff said.

“Higher feed prices contributed to slower growth in livestock production, higher meat prices and a decline in domestic per capita meat consumption since 2007. “However, consumer demand improved for beef and pork, particularly in international markets. Poultry producers remain in a difficult situation,” he added. “If consumer demand improves as expected during the next couple of years, beef and pork producers should endure higher input costs without further downsizing of herds.”

Increasing meat prices

Consumers will see increasing meat prices into 2012, according to FAPRI. In the beef herd, FAPRI projects another half-million-head decline in cows to 30.4 million by the start of 2012. By 2016, cow numbers should increase to 31.5 million head.

Beef supplies remain low as the cow herd rebuilds. Beef production declines by a billion pounds between 2011 and 2014. That leads to stronger prices the next four years. Fed cattle go from an average of $112 per hundredweight in 2011 to $120 in 2015.

The baseline ends at 2016 with steers at $116 per hundred. A similar trend occurs in feeder steers, Missouri’s major livestock product, from $134 per hundredweight to $147 in 2014, dropping back only to $138 in 2016.

Prices are based on 600-650-pound steers at Oklahoma City. Dairy numbers remain steady at 9.1 million cows until dropping to 9 million in 2014. The average all-milk price, projected at $20.10 in 2011, eases to $19.47 by 2016.

“The update covers near-term outlook for a few commodities and goes out only five years instead of the 10-year annual baseline issued each winter. The update does not receive a full external review,” Westhoff said.

Farm Bill

FAPRI assumes that provisions of the 2008 farm bill will continue, even though many are scheduled to expire. However, the ethanol tax credit and tariff are assumed to expire as scheduled at the end of 2011.

The next baseline will be prepared in early 2012, starting internally before Thanksgiving.

Schumer hopes to tap into farm bill money to boost maple syrup sales

May 10th, 2011 Other News


By DARRIN YOUKER
Contributing Writer

SALEM, Ohio — With its abundance of maple trees, and proximity to markets, New York State could rival Vermont and Quebec in maple syrup output. But there are still barriers to growth, and a lack of historical production in some areas, that is causing the state to miss out on that potential.

In a recent study, Michael Farrell, director of Cornell University’s Uihlein Forest, a maple research farm in the Adirondack Mountains, found that New York State was vastly under-tapping its ample maple trees. The maple industry generates $12 million for New York, but could explode to $92 million if the state realized its full potential, Farrell said.

“There are some counties where there is an enormous potential of trees, but very little production,” Farrell said.

Grants on horizon?

Recently, New York’s U.S. Senator, Charles Schumer, introduced the Maple Tapping Access Program to encourage the further development of maple sugar production.

Schumer is planning on including the Maple TAP Act into the 2012 farm bill. The legislation would provide grants to states that create new programs for maple farmers to access trees on private land that are currently untapped.

The legislation would also allow for the creation of grants to states to support education and resources that sustains the maple-sugar industry.

Economic opportunity

In a prepared statement Schumer said he created the act because New York’s maple trees are significantly under tapped.

Part of the problem, the Senator said, is maple farmers cannot access some trees on private land.

Not cheap

Starting a maple sugar business from scratch can get expensive, Farrell said.

But, with the right funding and interest, New York could become an even larger player in the maple sugar industry, Farrell said.

For his economic impact study, Farrell looked at maple production in Clinton County, in Northern New York along the Vermont border. Based on those production numbers and the number of trees across the state, Farrell figured maple sugaring could become a $92 million industry.

There are close to 300 million maple trees in New York, but less than 2 million are tapped, he said.

“Eventually, New York could rival Vermont and Quebec,” he said. “Given the number of trees, we could dwarf them. We just don’t have as many people interested as they do.”

As well, New York has excellent proximity to major markets, Farrell said.

Places like western New York, and the Adirondack region, have a strong maple sugar industry, Farrell said. But the Catskills, and places in the Finger Lakes, hold a number of trees, but a smaller number of producers, he said.

“In some places, sugaring is not part of the culture anymore,” he said.

But, the growth in the industry is coming from individuals who do not have a traditional farming background, he said.

“The people getting into it are generally not farmers,” he said. “They come from a lot of different backgrounds.”

Gaining access

Perhaps the largest obstacle to the expansion of the sugar industry in New York is access to trees, said David Campbell, president of the New York Maple Producers Association and who operates a maple sugar house in Washington County.

A lot of large landowners decide to manage their wood lots for timber, rather than leasing for sugar production, believing it is a better investment, Campbell said.

But, the maple sugar lease often proves to be more profitable, he said.

Washington County, near the Vermont border, has a healthy sugar industry with about 100,000 taps, but there is still room for growth, Campbell said.

“I think we could double the production in the state,” he said. “There is a lot more syrup being consumed in the state than what is being produced.”

Cutting spending on new farm bill would make tiny dent in the deficit

January 14th, 2011 Other News

COLUMBIA, Mo. — As discussion develops on writing a 2012 farm bill and in reducing federal budget deficits, there may be talk of cutting farm subsidies.

“Defenders of current farm programs can point out that farm program spending is a tiny share of federal expenditures,” said Pat Westhoff, director of the Food and Agriculture Policy Research Institute

For comparison, look at the deficit for fiscal year 2010. It ended Sept. 30, 2010, and the federal budget deficit was $1.3 trillion. Most estimates show a budget deficit in excess of a trillion dollars again in the current fiscal year.

The net outlays in fiscal year 2010 for the USDA Commodity Credit Corporation totaled $11 billion. The Commodity Credit Corporation funds most farm commodity programs and the conservation reserve.

Adding in crop insurance, disaster programs and other conservation programs brings the farm-related spending to about $20 billion a year, Westhoff said.

Spending changes

For perspective, a trillion dollars is $1,000 billion. How did the budget get out of balance? In the preceding years the deficit ballooned from 2007 to 2009, and the individual income tax collection dropped to $249 billion and corporate tax collection dropped to $215 billion.

On the deficit side, spending on entitlements (Social Security, Medicare and Medicaid) payment increased to $220 billion. Defense spending increased to $109 billion. Non-defense discretionary spending went up to $88 billion. All other federal outlays, including the Troubled Asset Relief Program, increased spending by $274 billion.

The only component that did not contribute to the deficit was net interest paid on federal debt.

Much scrutiny

Even if USDA’s budget is not cut in 2011, farm program spending will be under a lot of scrutiny when the next farm bill is debated. Congress may begin to consider new farm legislation before many current farm programs are set to expire in 2012.

Westhoff points out some of the current spending projections from the Congressional Budget Office. The farm bill is usually written taking into account budgetary implications over the next 10 years.

The projections for the next decade under a simple extension of current farm programs could be: $63 billion for farm commodity programs, $76 billion for crop insurance and $64 billion on conservation.

Food programs are also part of the USDA budget. That includes, for the decade, $685 billion for Supplemental Nutrition Assistance Program formerly known as food stamps and $222 billion on child nutrition, including school lunches, but not counting Women, Infant, and Children programs.

“Each of these programs will have strong defenders, so it is far from obvious where cuts would be made, if the decision is made to reduce USDA spending,” Westhoff said.

Farm interest groups might point to cutting Supplemental Nutrition Assistance Program benefits, rather than farm programs.

Also expect farm groups to be unable to decide where to cut the various farm programs. Federal spending on the direct payment program, which makes fixed annual payments to producers, exceeds spending on all the other traditional commodity programs combined.

Direct payments

Already, some have said they could accept a cut in direct payments, if money was added to crop insurance and other risk management programs. However, some producers, cotton and rice, get more support from direct payments than from crop insurance.

“They are likely to oppose cuts to direct payments,” Westhoff said.

“The new Congress will face challenges and a learning curve in deciding where budget balancing efforts will be made. However, budget concerns will affect the debate for the next farm bill and other farm policy choices for years to come.”

Watch out for the three Bs in the 2010 Farm Bill

December 6th, 2010 Other News

WEST LAFAYETTE, Ind. — When the new Republican House majority takes up the 2012 farm bill, Purdue agricultural economist Roman Keeney says farmers should expect lawmakers to reduce spending by focusing on three major areas: Brazil, budget and baseline.

Brazil

In 2009, the World Trade Organization allowed Brazil to impose sanctions against the United States after ruling that U.S. cotton subsidies were illegal under the World Trade Organization framework. In April, the U.S struck a last minute deal to send $147.3 million dollars of annual support to Brazilian cotton production.

Sending $147.3 million dollars to Brazil is not a huge economic stress to the U.S., Keeney said, but it brings attention to agricultural spending at a time when the budget deficit is a major public concern.

Budget

The federal budget deficit significantly influenced the November elections.

“When you consider both the moderate impact of the recession on U.S. agriculture and the negative views of crop subsidies by those struggling to weather the economic downturn on the non-farm population and in other countries the U.S. trades with, it may be difficult for Congress to justify writing new farm legislation without reduced spending,” Keeney said.

In practice, price levels have been high enough that agricultural subsidy spending has been at a minimum the past three years. Annual direct payments that do not adjust with market conditions are the majority of subsidy spending, and that is where legislators will need to make cuts to generate budget savings in the farm bill.

“After 15 years of giving out these payments, political champions to keep the payments in their current form seem in short supply,” Keeney said.

“The irony of this is that the fixed direct payments made to producers are, by far, the most compatible with WTO parameters on allowable spending. So, we may have the WTO case with Brazil encouraging less spending on farm subsidies and the response being that we cut those favored by the WTO rules.”

Baseline

Legislative work in 2010 on the farm bill was aimed at locking in a baseline. Legislators thought farm bill spending had reached a minimum level and if the congressional committees moved ahead to write new legislation they could do so without further reducing the budget. The prospect seems less likely given the November elections.

“Agriculture has successfully avoided budget cuts in the past and was trying to do so this time by adopting the minimal baseline and moving quickly to get a new bill,” Keeney said.

“The changeover in the House means that work was probably for naught, and given the legislative priorities of the new Congress we are not likely to see new farm policy until after the 2012 election year.”

Chairman hears Pa. farmers’ worries, discusses goals for the 2012 farm bill

April 22nd, 2010 Other News

By CAROL ANN GREGG

MERCER, Pa. — Farmers took time out of their busy spring schedule to take advantage of having someone from Washington listen to their concerns.

Rep. Collin Peterson, chairman of the U.S. House of Representatives Agriculture Committee, spent time recently answering questions from northwestern Pennsylvania farmers. About 35 farmers attended the forum in the Leslie N. Firth Education Center.

“We are beginning to work on the next farm bill,” Peterson said. “The 2008 farm bill basically responded to the wishes of the farmers to not make any significant changes from the previous farm bill.

“We did add some things like specialty crops, that included vegetables and fruits and organic and an energy title,” he said. “The bill has proven to have shortcomings. The price supports didn’t meet the needs of farmers.”

Dairy

The different segments of the dairy industry have been meeting and trying to reach a consensus.

“We are using a new approach. I asked that they (different segments of agriculture) look at the money that is being spent. ‘If you were going to start over what would you do with this budget? How would you do it?’” Peterson said. “Many times we are only putting Band-Aids on the problem. The MILC (Milk Income Loss Contract) was some help for the dairy producers, but is was only a Band-Aid.

“There should be a safety net for people who are actually farming,” he said. “I want this bill to be completed and implemented by September 2012 so wheat and rice farmers can plant knowing what to expect. I want to have the bill marked up by the end of 2011 so we can get it to the Senate.”

Questions

The forum then turned to the concerns of area farmers. Brady Kadunce, president of Clarion, Venango, Forest Farm Bureau asked if the agriculture committee supported the reauthorization of the Clean Water Act.

Farm Bureau and other farm organizations are concerned that proposals to remove the word “navigable” from the language in the bill would greatly impact agriculture across the country.

“This legislation doesn’t have the votes to get it out of committee in the House, but the Senate is a different story,” Peterson said.

In the Senate there has been what they perceive as a compromise but it still would destroy the equity in farmland.

“How can you keep EPA in check?” asked beef producer Dick McElhaney from Beaver County. The Environmental Protection Agency regulates U.S. waters. EPA is also being asked to control greenhouse gases.

“Through a court case in Massachusetts, greenhouse gases are a public endangerment and EPA will be responsible for controlling greenhouse gases.” Peterson said. “Indirect land use is being included to show that greenhouse gases, that are produced by producing ethanol is the cause of destroying the Brazilian rain forest. The House is proposing a disapproval of EPA’s involvement.”

This action hasn’t been voted on yet.

ID system

Dave McElhaney, Beaver County beef producer, representing the Beef Quality Assurance program, asked about the mandatory identification system. Peterson supported the mandatory system but the outcry from western ranchers forced USDA to try a voluntary system that also didn’t work.

“We spent $136 million on trying to get some kind of system in place and never did. Only about 40 percent of the premises are identified. Canada got a mandatory I.D. in place in two years for $10 million dollars, said Peterson, noting that not having a system in place will hurt our export markets.

Bud Wills, Clarion County, representing the Pennsylvania Equine Council, asked about the return of humane slaughtering of horses. “Horses are part of agriculture. They are not pets,” Wills said.

“There are efforts being made to find a solution to the problem,” Peterson said. “This is another case of people not understanding what we (people in agriculture) do.”

ODOT rules

Farmers were also concerned about the new regulations being forced on the states by the U.S. Department of Transportation.

“The representative that is pushing this effort, Rep. Oberstar, is big on safety,” Peterson said.

Non-farmers don’t understand that farmers are only driving large trucks for maybe a month during harvest, he said.

Vonda Minner, dairy producer from Mercer County, asked why farmers who sell milk pay the hauling and for everything else the buyer of a product pays the shipping costs.

“I believe this originated with the co-ops then the private processors followed the co-op model,” Peterson said. “The agriculture committee is a bi-partisan committee. Both sides have to agree before things pass. All farms that make economic sense should be encouraged,” Peterson said in regard to large and small farm operations.

Bank loans

The new regulations on banks are impacting farmers who want to borrow. Because the value of the cows, machinery and the land has dropped, the equity in the farm is reduced, Peterson said. “Bankers in my state are asking 60 percent collateral before they will lend a farmer money.”

Cheryl Vanko, Warren County, representing the Farmers’ Union Milk Producers Association, asked that the milk pricing system be changed to reflect cost of production.

“The National Milk Producers Federation was in recently and is proposing keeping Class I fluid milk and putting all other current classes of milk in Class II. We (the dairy industry) have to come together as an industry.

“If dairy splits into two or three camps, you’re not going to like the outcome. NMPF said that all milk would be included this time — that includes California. The current pricing system is only for about 70 percent of the milk. Farmers need to protect and cover the price of production.”

Gratitude

John Courtney a beef, sheep and tree farmer from Mercer County, thanked Peterson for all the programs that are provided by the federal government, like cooperative extension, wildlife service and conservation agencies.

“Agriculture is a dynamic industry; we can’t stay the same or food will double in price or we will be importing our food which is a national security issue,” Peterson said. “We need to educate the public as to what we do. They really have no idea.”

GIPSA reviewing pork producer contracts for farm bill compliance

March 2nd, 2010 Other News

WASHINGTON– The Grain Inspection, Packers and Stockyards Administration is reviewing contracts involving pork producers to ensure their compliance with the requirements in the 2008 farm bill.

The 2008 farm bill established new conditions for swine contracts under the Packers and Stockyards Act. These requirements went into effect June 18, 2008.

The bill amended the Packers and Stockyard Act to require that swine contracts allow swine growers to cancel growing or production contracts for up to three days after signing, or any date specified in the contract or growing arrangement.

In addition, it includes a disclosure statement on the first page that clearly states whether additional large capital investments may be required of the grower during the term of the contract and allows growers to opt out of arbitration provisions before entering a contract.

The administration is increasing its audits of swine production contracts to ensure their compliance with the farm bill requirements. The agency is seeking civil penalties of up to $11,000 per violation when they find that swine contractors have not complied.

For additional information, contact Jay Johnson, Grain Inspection, from Packer and Stockyards Administration Midwestern Regional Office, at 515-323-2579.

Related Links:

  • Alan Guebert – And this little piggy squealed …
  • Alan Guebert – The GIPSA watchdog better bite
  • Farm bill amendment changes base acre provision for 2008 crop year

    November 7th, 2008 Farm and Dairy Staff

    WASHINGTON — Farmers with 10 or fewer base acres can now receive payments through the 2008 direct and counter-cyclical payment program.

    Changes, signed by President Bush on Oct. 13, allow some producers more flexibility in farming practices and create new sign-up opportunities with new deadlines for some farms.

    The amendments also apply to the new Supplemental Revenue Assistance (SURE) Program.

    Changes

    As originally enacted under the 2008 farm bill, direct and countercyclical payments could not be made with respect to farms with crop acreage bases of 10 acres or less. The new law changes that provision for the 2008 crop year.

    Related to this, producers on a farm with 10 acres or less of base may now enroll their farms in the 2008 DCP program until Nov. 26.

    This extension of the original Sept. 30 deadline only applies to producers who were previously excluded because of the minimum acreage requirement.

    USDA began issuing payments to producers on farms with 10 base acres or less who had already enrolled in the DCP program soon after the president signed the new law.

    Eligible producers may sign up at any USDA Farm Service Agency office or enroll online.

    Changes under SURE

    In the 2008 farm bill, producers seeking disaster benefits must generally have obtained crop insurance or coverage under the Non-insured crop disaster Assistance Program (NAP) for all crops on all farms.

    Under the new law, producers with crops that had 2009 crop insurance sales closing dates before Aug. 14 may pay a fee through Jan. 12, 2009, to participate in Supplemental Revenue Assistance Program, or SURE.

    The SURE program fee is equal to the fee for catastrophic coverage. Payment of the SURE program fee will not make the producer eligible for insurance coverage.

    Producers also have a new minimum loss threshold under SURE. To qualify for payments, there must be a production loss of at least 10 percent for at least one crop of economic significance on the farm.

    Under the SURE program, the new law provides that when a second crop is planted after the first crop was prevented from being planted, or if such first crop failed, the second planting will not count toward the SURE program guarantee or total farm revenue.

    This is true except in areas where double-cropping is a normal practice.

    Producers can contact their local FSA office for more information regarding SURE program implementation.

    Deadline changes

    The Non-insured crop disaster Assistance Program application closing dates for the 2009 crops have been extended to Dec. 1, 2008. This extension for 2009 NAP applies to those crops having an application closing date prior to Dec. 1, 2008.

    Congress fixes misinterpretation of farm bill base-acre provision

    September 30th, 2008 Farm and Dairy Staff

    WASHINGTON — The House of Representatives passed bipartisan legislation to suspend for the 2008 crop year a farm billprovision that required producers to have a minimum of 10 base-acres to receive program benefits.

    The House and Senate each passed by unanimous consent the Senate amendment to H.R. 6849, originally sponsored by Congressman Bob Etheridge of North Carolina, Chairman of the House Agriculture General Farm Commodities and Risk Management Subcommittee.

    Technical corrections

    H.R. 6849, as amended by the Senate, makes technical corrections to the permanent crop disaster program included in the 2008 farm bill.

    It also temporarily reverses the U.S. Department of Agriculture’s published notice regarding the farm bill’s 10 base-acre provision, which would have denied farm program benefits to hundreds of thousands of producers nationwide by refusing to allow for the aggregation of small base acreage.

    The House had already passed a version of H.R. 6849 on Sept. 24 which would have suspended the 10 base-acre provision for two years and was fully paid for under Congressional Paygo rules.

    The Senate amended the bill to provide just a one year fix.

    The bill will now be sent to the president for his signature.

    Is farm bill’s ACRE program for you?

    August 23rd, 2008 Farm and Dairy Staff

    COLUMBUS — Amid volatile markets, high crop prices and rising input costs, a different way of managing the revenue risk associated with producing field crops is being offered through the new farm bill.

    Beginning next year, farmers will have a choice of farm support programs: the current traditional suite of programs or a new suite of programs known as Average Crop Revenue (ACRE).

    Option to consider

    Carl Zulauf, an Ohio State University agricultural economist, said that learning ACRE will take some patience on the part of farmers but it offers an alternative that could be useful to them given their current on-farm situation.

    “I think ACRE is a very significant addition to farm policy particularly at this point in time because it is designed to help farmers manage the risk they now face,” said Zulauf.

    “When I talk to farmers I get this very conflicted statement from them: ‘I’m both excited and scared. I’m excited because I never thought I would be planting $6 or $7 corn, but I’m scared because of how much money I have tied up in input costs.’”

    Revenue program

    The traditional suite of farm support programs — marketing loan, price counter-cyclical and direct payments — are designed to help farmers with what has been the traditional farm income problem since the Great Depression, and that is chronic surplus capacity keeping prices chronically low over an extended period of time.

    “The traditional suite of farm programs assumes it knows we will have chronically high farm surpluses and low farm prices. If prices get low enough they trigger a payment,” said Zulauf.

    In contrast, ACRE is a revenue (price times yield) program, not a price program. ACRE does not presume what the market is going to be, it just follows the market.

    “If prices or yields decline dramatically, ACRE provides support given the market conditions we are in at the time,” said Zulauf.

    Manage risk differently

    Both ACRE and traditional programs are risk management programs, but they manage different kinds of risk.

    Traditional programs help manage the risk of chronic low prices. ACRE helps manage the risk of a decline in revenue over the short period of a few years.

    “Producers need to understand that they can’t look at ACRE through the same eyes they looked at traditional programs, and that will be a real challenge,” said Zulauf, who helped develop the ACRE program.

    Zulauf said that farmers shouldn’t look at ACRE as a program of certainty. “No one should go into ACRE thinking it’s going to pay more. That is something neither you nor anybody else can know.”

    “Only when you get to 2012 will you know if ACRE paid more than the traditional programs. ACRE is about managing the risk of revenue declines, not about receiving a certain payment.”

    Timing is everything

    When deciding whether or not to choose ACRE, the time path that prices take is critical.

    “If prices continue to go up, then payments under the traditional suite of programs will be greater than under ACRE. Why? Because you are giving up 20 percent of the direct payments and if prices keep going up, ACRE will never trigger a payment,” said Zulauf.

    “On the other hand, if prices drop substantively, ACRE payments are likely to be larger. ACRE provides you protection in particular to short, steep declines in revenue.”

    ACRE: What you need to know

    – Beginning in 2009, farmers can choose either the traditional suite of farm payment programs or ACRE. If ACRE is chosen, that program must be used throughout the life of the 2008 farm bill. For farmers who choose the traditional farm program, they can elect ACRE the following crop year. For example, farmers who use traditional farm programs in 2009 can choose ACRE for the 2010 through 2012 crop years.

    – ACRE cannot be elected for only one program crop. “If you choose ACRE for corn, you must also choose it for wheat and soybeans,” said Ohio State ag economist Carl Zulauf. But ACRE’s payment calculation is specific to an individual crop. “A farmer can receive a payment for corn, but not for soybeans.”

    – Like traditional farm support programs, ACRE offers direct payments, but only at 80 percent. “I think that the central question that every producer is going to have to answer is: Is this 20 percent reduction in direct payments more than compensated for by the improved management of risk that ACRE provides relative to the countercyclical program in today’s market of high and volatile prices?” Zulauf said.

    “Given the prices and cost of production that exist right now, ACRE provides a better risk management option than the price counter-cyclical program. It is unlikely that prices will stay below the price level at which payments will be made from the counter-cyclical program.”

    – ACRE is a put option on revenue, not on prices. This program establishes a put option on state revenue. The value at which the revenue put option is established, which is ACRE’s state revenue guarantee, equals the following calculation: 90 percent times the two-year moving average of U.S. market year price times the five-year Olympic moving average of state yield. “The use of moving averages of yield and price is why the ACRE revenue guarantee moves with the market,” said Zulauf.

    – Under ACRE, not only must the average state revenue per acre for the crop be less than the ACRE revenue guarantee, but the individual farm must have a loss for the crop as well. “Current programs do not require that an individual farmer experience a loss. Farmers can receive a counter-cyclical payment and still have record revenue. That’s not going to happen under ACRE,” said Zulauf.

    Ag economist puts farm bill into more user-friendly terms

    July 9th, 2008 Other News

    COLUMBUS — With more than 600 pages and 15 titles, grasping a firm understanding of the 2008 farm bill can be daunting. But Ohio State University agricultural economist Carl Zulauf has made things a bit easier.

    Zulauf has summarized the titles and accompanying provisions of the farm bill through a series of Web-based documents.

    The papers cover four major areas: farm income and risk management programs, provisions of the other titles, the Supplemental Agricultural Disaster Assistance program, and the ACRE (Average Crop Revenue Election) program.

    “These papers do not cover everything in the farm bill, but are meant to be a quick thumbnail sketch of major provisions that might be worth checking into and reading in the larger document,” said Zulauf.

    More than just ‘farm’ bill. Zulauf, who has been analyzing farm bills since 1980, said he is astounded by the breadth and depth of the current farm bill.

    “Farm bills, over time, have grown progressively larger and more comprehensive, and this one in particular is a wide-ranging omnibus bill,” said Zulauf. “It raises the question of whether or not it is appropriate to continue calling it the farm bill.”

    Emerging themes. The four documents were compiled to emphasize specific themes that Zulauf sees emerging from the new farm bill.

    For farm income support and risk management programs, the major theme is risk management and not payments to farmers.

    “There has been this long-standing debate in farm policy about whether the objective of farm programs is to help farmers manage risk or to increase farm income. Congress clearly lies in the camp of risk management with this farm bill,” said Zulauf.

    The ACRE program and the Supplemental Agricultural Disaster Assistance program are designed to help farmers manage different types of risk, he added.

    “This focus is consistent with the economic environment in which we currently find ourselves: high farm incomes, but with high farm price volatility.”

    Fruits and vegetables. Zulauf said another a significant change in the farm bill is the large number of programs dedicated to fruits and vegetables.

    The programs expand demand for fruits and vegetables, and address production-related concerns, said Zulauf.

    “If I’m not mistaken, the only large acreage crop that now does not receive support through some type of farm bill program is hay.”

    On the horizon. Zulauf said that one of the biggest additions to the new farm bill is the attention directed toward nutritional quality, as opposed to quantity of food, in feeding programs.

    Other provisions in the farm bill also receiving special attention from Zulauf include organic production, beginning farmers, socially disadvantaged farmers and limited-resource producers.

    “Provisions on these topics appear in several titles. Whenever I see that, it suggests that Congress is particularly concerned about these issues. It’s not just the amount of money being spent, but the number of provisions,” said Zulauf.

    “It alerts you that something bigger than an individual Congressional member’s concern exists, and it bears watching to see if this concern continues in future farm bills.”

    Conservation programs. The current farm bill is also paying special attention to farm conservation programs, said Zulauf.

    The Congressional Budget Office scores spending outlays for Title II farm conservation programs at 64 percent of the spending outlays for Title I farm programs, said Zulauf.

    That percent ratio illustrates the increasing role of farm conservation programs, a trend that began with the 1985 farm bill, he added.

    Congress overrides president’s farm bill veto

    May 23rd, 2008 Susan Crowell

    SALEM, Ohio — Both chambers of Congress have voted to override the presidential veto of the new farm bill, making all but one section of the Food, Conservation and Energy Act of 2008 the new law.

    The U.S. Senate voted 82 to 13 May 22 to override President Bush’s veto and the House voted 316 to 108 May 21.

    The only section of the farm bill left on the table is the trade title, which was inadvertently left out of the official copy of the farm bill that was sent to the president.

    House ag committee chairman Collin Peterson said May 22 that the House took action to correct the clerical error.

    The two votes mean most of the farm bill is now law, Peterson said, and the administration can being implementing the new programs and policies.

    Bush veto

    Congress sent the new farm bill to the president May 21, and he promptly vetoed the measure, just as he said he would, saying, “this bill lacks program reform and fiscal discipline.”

    But it was the wrong bill.

    A section was missing from the bill sent to the president, which means he did not veto the bill as approved by both the House and Senate.

    The House re-passed the conference report May 22, and the Senate will again vote on the measure after the Memorial Day recess.

    The trade title will have to be sent back to President Bush for review. If he vetoes this portion, too, additional House and Senate votes will need to be taken to override his action.

    Farm bill OKs state-inspected meat

    May 22nd, 2008 Susan Crowell

    The River Cafe is a restaurant located smack dab on the Ohio-Michigan line. The kitchen is in Ohio; the dining room is in Michigan.

    For more than 10 years, the family-run Tyler Meat Company in Toledo provided meat products to the River Cafe. But they had to give up the account because the Ohio meat plant — a state-inspected meat plant — could not ship its products across state lines. Since the meat was being consumed in the Michigan part of the restaurant, authorities told the restaurant it was not in compliance with the USDA.

    Ironically, Tyler Meat Company purchases 98 percent of its product from federally inspected operations and only 2 percent from state-inspected plants.

    Long battle

    The battle to lift the ban on interstate shipments of state-inspected meat and poultry has lasted for almost 30 years. Maybe longer.

    If Congress overrides the expected presidential veto of the farm bill, and the Food, Conservation and Energy Act becomes law, the battle will be over.

    It just didn’t make sense: Meat and poultry products from nearly 40 countries could be shipped and sold anywhere in the United States, but state-inspected products could not, even though the inspection programs had to be “at least equal” to the federal system. State-inspected venison, pheasant, rabbit and other meats could cross state lines, but beef, pork, lamb and goat could not.

    Under the Federal Meat Inspection Act, small plants could choose to be inspected by state, rather than federal, inspectors. But if they chose state inspection, they could not ship their products across state lines.

    Here in Ohio, the ban on interstate meat shipment affected about 176 state-inspected livestock slaughtering plants (1995 figures are the latest ones available), which handled about 17 percent of the total livestock slaughtered in the state. Only the state’s 19 federally inspected plants could ship across the state’s borders.

    And to compound the frustration, food safety standards have been the same for state and federal inspected establishments since 1996.

    Change is coming

    The good news is that under the new farm bill, plants with fewer than 25 employees in state meat or poultry inspection programs can get “federal inspection” from state inspectors, and use a USDA label on their products. To do so, plants have to agree to all federal inspection requirements.

    As we move toward more local branding, direct marketing and niche development, the ability of small meat companies to be able to ship across state lines will be a solid economic benefit and help build the local food chain. Food safety will not be compromised.

    Chalk one up — at long last — for the little guy.

    Small companies can’t, however, immediately jump into interstate meat shipment. This is the federal government, remember, and the USDA has up to 18 months to create the new rules and regs for this new program.

    That’s a long time. Let’s hope the USDA kicks the rule-making process into high gear.

    Congress agrees on farm bill, but president will veto

    May 13th, 2008 Susan Crowell

    SALEM, Ohio — U.S. Sen. Tom Harkin referred to the biblical story of Job during a May 8 teleconference announcing the finalization of the new $300 billion farm bill.

    Job had a lot of afflictions, Harkin explained, but through it all, he persevered.

    “Right now, I don’t think he’s got nothin’ on me,” Harkin said. “It’s been a bumpy ride, but we’ve all kept the faith.”

    Harkin and his House counterparts may need more of Job’s patience to get the bill signed into law, because shortly after the announcement on the Hill, U.S. Secretary of Agriculture Ed Schafer declared the president will veto the bill.

    Schafer said the legislation “lacks meaningful farm program reform and expands the size and scope of government.”

    “I have visited face to face with our president and he was direct and plain,” Schafer added. “The president will veto this bill.”

    Ready for fight

    When the bill heads to the floor this week (the bill was scheduled to reach both House and Senate floors on Wednesday, May 14), Harkin expects at least 79 votes in the Senate, more than any previous farm bill received.

    “Like any compromise bill resulting from hard bargaining among regional and other interests, this farm bill is far from perfect,” Harkin said. “But no piece of legislation is.

    “It includes significant reforms, as well as these major advances. It deserves the President’s signature.”

    Rep. Bob Goodlatte, R-Va., the ranking minority member of the House Agriculture Committee, said House votes on previous farm bills had more than the necessary two-thirds margin to override a White House veto.

    Opposite camps

    Congress thinks there is reform in the farm bill and the House and Senate leadership presented a united front to say so during last week’s news conference.

    Kent Conrad, D-N.D., was a key player in the conference committee negotiations. A member of the Senate ag committee, Conrad also chairs the Senate Budget Committee and serves on the Senate Finance Committee.

    He called the legislation the “most reform-minded bill” since the 1949 farm bill. He, like others, pointed to the payment limitation changes as proof. Nonfarmers will be limited to $500,000 in income, to be eligible for payments; farmers are limited to $750,000 in income, after which they will receive no direct payments.

    The bill defines who are farmers and nonfarmers.

    However, explained House ag committee chairman Collin Peterson, the income limitation does not include conservation payments. The nonfarm payment limit for conservation payments is $1 million; if two-thirds of an individual’s income is from farming, there is no limit for conservation payments.

    The payment limitations are projected to save $620 million over 10 years.

    The payment limitation was “real reform,” said Republican Saxby Chambliss, ranking minority member of the Senate ag committee. “We moved as far as we could to the administration’s request.”

    Sec. Schafer said the bill qualifies “more people for taxpayer support.”

    ACRE program

    The state-level revenue protection program will start next year. In it, a farmer will agree to give up 20 percent of direct payments and take a 30 percent cut in loan rates in exchange for a countercyclicdal support price.

    The state revenue guarantee on acres planted will be equal to 90 percent of the product of a state average yield factor times the national season average price for the previous two years for the commodity.

    A ‘food bill’

    Both Peterson and Harkin called the legislation a “food bill” not a “farm bill. In fact, the official name of the bill is “The Food, Conservation and Energy Act of 2008.”

    In this year’s bill, Peterson emphasized, 73.5 percent goes into food and nutrition programs — food stamps, food banks, school nutrition programs, for example — up from 66 percent in the last farm bill. Of the $300 billion in the farm bill, only between $36 billion and $40 billion goes to farm programs.

    Both the House and Senate ag leaders got fired up at the suggestion that biofuels, specifically ethanol, are triggering the global rise in food costs.

    “We know that ain’t so,” Harkin said, rattling off a list of other factors: lower production in Southeast Asia; higher income and demand for protein in China and India; the cheaper dollar and the “giant sucking sound taking our grain away”; increased input and energy prices; and higher harvesting, processing, shipping, packaging and energy costs.

    “Ethanol is nothing, compared to all that,” Harkin said.

    “What they’re saying, it just isn’t so!”

    Peterson said an unsuspecting public is getting “bogus and false information,” and a lot of money is being spent to “gin this up.”

    “One of the big problems is we sold food below the cost of production for 20 years, and now we have a big shock,” Peterson said. “If food had followed the cost of production, we wouldn’t have this big spike now.”

    End of the road

    Since January 2008, House and Senate conferees have been working to come to an agreement on the differences between the farm bills passed by each chamber. Budgetary problems plagued the conference process for months and only when resolved could members address policy issues.

    Some kind of action is needed by May 16, when the current two-week extension expires.

    (What’s your take on the new farm bill? Share your opinion on Farm and Dairy’s “Current Issues” message board.)

    (Provisions of the farm bill are listed below.)

    The Food, Conservation, and Energy Act of 2008

    Food Security

    – Nutrition programs increased by $10.361 billion with appropriate benefit increases that are indexed to the cost of living.

    – Assistance to food banks increased by $1.25 billion.

    – New funding boosts organic agriculture, fruit and vegetable programs, and local food networks.

    – Country-of-origin labeling for meat and produce made mandatory

    Renewable Energy

    – Provides $1.1 billion to fund programs in renewable energy technology investments in sources beyond feed grains.

    – Corn ethanol tax credit reduced and redirected to incentives for cellulosic ethanol.

    – Creates a loan guarantee program and a program to encourage and develop production of dedicated energy crops.

    – Bioenergy research increased and renewable energy programs expanded.

    Reforming Farm Programs

    – Farm program safety net modernized, with an updated adjusted gross income means test for commodity programs.

    – Farm and conservation program transparency increased, with direct attribution of payments and the ending of practices that result in multiple payment eligibility.

    – Crop insurance reformed to prevent windfall reimbursements to crop insurance companies.

    – Budgeted standing disaster assistance program for crops stricken by catastrophic natural disasters such as drought and flood.

    Environment

    – Conservation program spending increased by $7.9 billion.

    – Doubles funding for the Farm Protection Program.

    – Increases funding for the Environmental Quality Incentives Program and Conservation Stewardship Program.

    – Continues funding for Grassland Reserve and Wetlands Reserve programs.

    – Creates an Open Fields Program to encourage public access to private land for hunting and fishing as well as a Chesapeake Bay program to help restore and protect the Bay watershed.

    International Food Aid

    – Provides $60 million to purchase food overseas to feed people in need on top of the existing Food for Peace international aid program, along with an evaluation of this change and its effect on U.S. response times.

    – Reauthorizes the McGovern-Dole International Food for Education and Child Nutrition Program for infant, child, and school nutrition programs in underdeveloped countries and provides an infusion of $84 million in additional funding

    Source: House Agriculture Committee (Updated May 12, 2008)

    ‘Bloated’ farm bill on shaky ground

    May 8th, 2008 Alan Guebert

    Since 1981, when I picked up my first pen, paper and paycheck as a journalist, six farm bills have come and gone. With them came and went some giant elements in U.S. farm policy; elements like the Farmer Owned Reserve, planting set-asides, Kansas Sen. Bob Dole and longtime House Ag Committee boss Kike de la Garza.

    The writing of those six laws, however, was as easy as making oatmeal compared to the hemlock being brewed now with the seventh, and not-yet complete, 2007 farm bill.

    Framework

    Sure, Senate and House farm bill negotiators finally reached a spending “framework” April 25 that all say (hope is a more accurate) will lead to a finished bill by Mother’s Day.

    If so, it will arrive more out of exhaustion than exuberance because this farm bill fight has been the longest, nastiest slugfest over farm policy most well-callused Capitol Hill hands have seen.

    What started out as a reform effort has, in 16 long months, delivered mostly an agreement to stop disagreeing; a broad revision of the 2002 law written more in bad blood than stately ink.

    And it’s far from over.

    Since formalizing the framework April 25, Sen. Tom Harkin of Iowa, chairman of the bill’s conference committee, twice asked his Senate-House aggies to gather to bake, then slice, the final pie.

    Both times the meetings were canceled because, while everyone now agrees on the number of apples to put into it — about $280 billion over five years — no one wants to peel ‘em.

    Hints

    Privately, say both Repub and Dem Hill operators, Harkin and his staff are authors of much of this mush. Hints of slow staff work on the bill’s many titles and poor communications with other members began to surface last fall when the legislation’s Sept. 30 deadline quietly sank out of sight.

    Shortly thereafter, two of Harkin’s Senate ag colleagues, Montana’s Max Baucus and North Dakota’s Kent Conrad, took lead roles in shaping the bill.

    Together, as keepers of the Senate’s two money trees (Baucus is chair of the tax-collecting Finance Committee; Conrad chair of the tax-spending Budget Committee), did a lot of the lifting to get the farm bill to where it is today.

    But where it is now still doesn’t impress the White House.

    Bloated

    In an April 29 press conference, President Bush called the House-Senate framework “a massive, bloated farm bill that would do little to solve the problem” of rising food prices.

    He also repeated his call for hard caps on “subsidy payments to multimillionaire farmers,” a call unheeded by both Dems and Repubs of the conference committee.

    The most pregnant ag question in Washington now is not so much when will Congress complete the farm bill as much as if it does, than will the president veto it? And if he does — as he and his staff have repeatedly said they’d do since January — what’s next?

    Veto

    Absent a veto override, the answer to that question is the 1949 Act. Without a 2007 (now 2008 update) the 1949 law — with its outdated producer votes, planting allotments and $8 to $10 per gallon, supermarket milk prices — automatically becomes the law of the land.

    In short, the 1949 Act would be a costlier, functional disaster for farmers and consumers alike than simply extending the 2002 law. Ah, but the politics of a veto are attractive to the White House.

    The term-limited president has nothing to lose in canning a “bloated” farm bill and pinning the blame on the Dem-controlled Congress.

    Moreover, a veto could give Republican candidates a winning issue in November: Look, the do-nothing Dems can’t even write a farm bill.

    And, thus far, they can’t.