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.

Farm bill [almost] done

May 6th, 2008 Susan Crowell

SALEM, Ohio — House Ag Committee Chairman Collin Peterson feels like he’s playing a popular video arcade game: Key farm bill negotiators put out one fire, just to turn around and face another two flares.

“We have been playing Whack-a-Mole, if you understand that game, for the past number of weeks,” Peterson said May 2 during a teleconference. “You just get one thing solved and three other things pop up.”

After a six-hour marathon conference session that ended around 1 a.m. May 2, Peterson and other key Congressional leaders say the new farm bill is “almost done.”

What’s left

The sticky payment limitation issue wasn’t resolved last week, and was one of the things that triggered a two-week extension of the current farm bill through May 16.

There’s also ongoing discussions with the new Milk Income Loss Contract program; the dairy import assessment; and the big White House-placed hurdle with the sugar program.

Peterson said the sugar program would include a loan rate increase for the first time in 20 years; a way to lock in an allocation system; and a sugar-to-ethanol program, but “the White House doesn’t like any of this.” The House ag committee chairman added that no one on the Hill could pin down White House representatives on what exactly they don’t like about the changes.

Many Congressional negotiators and staffers worked over the past weekend, writing final language to move the bill to the floor this week.

“We have to get this right because this becomes law,” Peterson said. “We’re not going to give up now.”

Regional shift

The change in Congressional leadership from Republicans to Democrats created a geographic regional shift in the power brokers fashioning the farm bill.

Peterson, who represents Minnesota, was joined by Democratic regional allies Sen. Kent Conrad and Rep. Earl Pomeroy, both of North Dakota. Conrad sits on the Senate ag committee and Pomeroy sits on both the ag and Ways and Means committees in the House. The Senate ag leader, Tom Harkin, represents Iowa, and Senate Finance Committee chairman Max Baucus hails from Montana.

The change meant a not-so-subtle shift away from the southern interests of cotton, rice and peanuts, as seen in rebalancing adjustments in loan rates and target prices ($6.05 on beans, for example).

“They [southerners] made out like bandits in the ’02 bill,” Peterson said.

What’s in it?

The latest version of the farm bill also includes an optional market-based revenue countercyclical program.

It includes the Average Crop Revenue Election program modeled after legislation introduced by Sens. Dick Durbin, D-Ill., and Sherrod Brown, D-Ohio, last year. The program creates a state-level crop revenue protection program for producers to better manage their risk.

The bill also has a $3.7 billion permanent agriculture disaster aid program that allows price support protection and ready assistance in the event of a disaster.

The completed legislation will have to be approved by both the Senate and House before being sent to the White House, and the Congressional Budget Office has to score the latest farm bill package before it goes to the president’s desk.

Farm bill conference highlights:

Commodities Title:

– Includes a newly named Producer Income Protection title that continues basic features of the 2002 bill, and it gives producers a new option, beginning with the 2010 crop year, to choose to participate in a state-level revenue protection system. The Average Crop Revenue program offers producers options for managing risk of both yield and price declines.

Conservation Title:

– The new CSP, renamed Conservation Stewardship Program, provides incentives for adopting, improving and maintaining conservation practices on land in agricultural production. The program will enroll just under 13 million acres each year (starting in 2009) through 2017, for a total of nearly 115 million acres. An additional $1.1 billion was provided for CSP for a total of $12 billion over 10 years.

– This title shifts the focus in conservation in the direction of working land conservation. Funding that would not have been used in land retirement programs was redirected to programs that focus on reducing the environmental impact of agricultural production, like the Environmental Quality Incentives Program (EQIP) and CSP.

Energy Title:

– Increases biofuels production: The farm bill will accelerate commercialization of advanced biofuels, like cellulosic ethanol, by providing grants and loan guarantees to support these new biorefineries, and by increasing bioenergy research. It also expands the renewable energy and energy efficiency program adopted in the 2002 farm bill.

Livestock Title:

– The new farm bill includes the first-ever Livestock Title to provide basic protections for producers in livestock and poultry markets. Among the highlights:

– Provides producers the ability to decline to be bound by an arbitration clause in a livestock or poultry contract.

– Provides the compromise for country of origin labeling of meat, fruits and vegetables, peanuts, pecans and macadamia nuts.

– Improves oversight of USDA’s enforcement of the Packers and Stockyards Act be requiring the department to provide an annual compliance report detailing the number and length of time spent on investigations of potential violations of the act.

– Assist hog producers by authorizing a program for trichinae certification to promote trade and marketing of pork.

Nutrition Title:

– Ends benefit erosion caused by inflation; provides food assistance without requiring recipients to exhaust savings and retirement accounts; increases food assistance to households with high child care costs; authorizes $1.25 billion dollars in commodity purchases for food banks.

– $1 billion to improve child nutrition by expanding the Fresh Fruit and Vegetable Snack Program nationally.

Research Title:

– The Research Title provides $78 million in mandatory funds for the Organic Research and Extension Initiative; the Specialty Crop Research Initiative provides $230 million in mandatory funds for a new grants program to help meet the needs of producers and processors of specialty crops in the areas of mechanization, plant breeding, genetics, genomics, pests and diseases, and food safety.

Rural Development Title:

– $120 million in mandatory funds for the pending rural development loan and grant applications for rural water and wastewater assistance; the Value-Added Producer Grant Program gets $15 million to encourage independent producers to process their raw commodities into marketable goods; a Rural Microenterprise Assistance Program receives $15 million (the program provides assistance and small loans to beginning entrepreneurs to help start businesses in rural areas).

Fresh Fruits and Vegetables:

– Funding for The National Organic Certification Cost-Share Program has been increased from $5 million in the last farm bill, to $22 million. The farm bill also supports the Organic Data Collection Initiative, which provides USDA and organic producers with national production and market data to effectively market their products; allocates more than $400 million over the next 10 years for a new program to improve our pest and disease detection capabilities. The bill also provides $20 million for the National Clean Plant Network, which will strengthen our research to improve plant health and eradicate plant viruses.

– Expands the Farmers’ Market Promotion Program, by providing $33 million over the next five years.

Source: Senate Committee on Agriculture, Nutrition and Forestry

Farm bill politics are a train wreck

May 1st, 2008 Alan Guebert

In the long, glorious history of America, it’s unlikely that April 22, 2008, will be remembered as anything other than just another balmy, bureaucratic spring day in Washington, D.C.

Meetings met, talkers talked and, in typical Washington fashion, the day ended with little movement other than finger pointing.

Such were the outcomes of key meetings that day to address the still-not-completed 2007 farm bill and the growing disconnect between futures and cash commodity markets. How both eventually are resolved will affect every food producer and consumer.

Painful

The farm bill stalemate remains as painful to watch as a root canal is to endure. This House-vs.-Senate-vs.-White House-vs.-everyone marathon has lasted longer than last year’s baseball season and this year’s hockey season.

President Bush hoped to end it all April 22 by floating the Pontius Pilate-like compromise of simply extending the 2002 law for one year. Senate ag chief Tom Harkin, D-Iowa, summarily dismissed the idea prior to chairing another Senate-House conference committee to get the legislation moving.

And move — finally — it may.

Farm bill insiders say key Senate and House members hope to hammer out an agreement by April 25 (when the latest extension to the 2002 law expires) on how ag-only tax changes will be used to fund both a permanent disaster program and increased spending for food aid programs.

Poison

Even if they do succeed and the 15-month farm bill process finally concludes by mid-May, the resulting legislation will make a dandy poster child for Washington’s poisonous politics.

To take so long to update a law as vital to the national interest as food sullies every farm bill player as well as Congress and the White House. But reputation seems to matter little.

Petty, personal and party politics governs those elected to govern, not national interest.

Long-time political observer Kevin Phillips, in his just-published book Bad Money, astutely notes that Washington, once the nation’s “vital center,” is today its “venal center.”

For proof, look no further than the public approval ratings of Congress and the president: both register near 20 percent. You earn those low marks by meeting and yakking rather than thinking and acting.

The former was on display at the packed Commodity Futures Trading Commission hearing in Washington April 22 to discuss the ongoing breakdown between commodity futures markets and country cash markets.

Volatility

Today’s historically tight global grain stocks, a flood of wealthy, nontraditional players into futures markets, the disappearing dollar and the nation’s credit squeeze have combined to ignite an incendiary futures markets.

That never-before-seen volatility, in turn, has pushed country grain buyers to protect themselves by either offering farmers far cheaper 2008/2009 prices — widening the basis, the difference between cash and futures prices, to record levels — or leaving the forward pricing game altogether.

Either action places far greater risks, risks previously shared with futures speculators, onto farmers.

The Commodity Futures Trading Commission yakkers all agreed the price discovery and hedging links between today’s futures and cash markets are breaking, but all claimed their market role — regulators, specs, bankers, farmers, investors — wasn’t the cause. And maybe they’re right.

Disconnect

Perhaps the cause of today’s growing disconnect between futures and cash markets isn’t singular; maybe it’s a perfect storm of complex and complicating factors all arriving together.

Or maybe it’s just all our chickens — political inaction, unprecedented deregulation, monstrous trade, government and personal debt, a fast-falling dollar, a collapsing housing sector, dumb bankers, et. al. — finally coming home to roost.

Whatever it is, typical Washington dawdling, dickering and dithering aren’t options anymore because, as National Farmers Union President Tom Buis told the Commodity Futures Trading Commission meeting, “We’ve got a train wreck coming like we’ve never seen before.”

Will one more week yield a farm bill?

April 28th, 2008 Susan Crowell

WASHINGTON — Key farm bill negotiators hammered out the core farm bill April 25, using the $10 billion above baseline funding parameter.

That was after Congress and the president all approved another one-week extension of the farm bill, extending current law until May 2.

Specific details and funding still have to be worked out and are all subject to ratification by the full Senate-House conference committee, which was scheduled to meet Tuesday. April 29.

“The tentative agreement reached today maintains strong farm income security and a permanent disaster program,” said Sen. Tom Harkin, D-Iowa, chairman of the Senate Committee on Agriculture, Nutrition and Forestry.

Harkin said the Conservation Security Program, now the Conservation Stewardship Program, returns to the program “it was intended to be when first enacted in the 2002 farm bill,” and invests heavily in renewable energy.

The farm bill agreement will also lead to more fresh fruits and vegetables in elementary schools and stronger assistance to low-income Americans through federal nutrition programs, Harkin said.

Farm bill down to the wire

April 15th, 2008 Farm and Dairy Staff

WASHINGTON — Senate and House farm bill negotiators remained at loggerheads Friday, April 11, after Senate conference committee members countered the House’s package.

The House proposed $5.5 billion above a five-year $280 billion baseline and no tax increases to pay for the additional spending. The Senate responded with a proposal that would boost spending by $12.5 billion over 10 years and include a disaster program and “revenue raisers.”

The “baseline” is the amount of spending that would occur over the next five years to be covered by the new farm bill if current farm programs were just extended without any changes.

“I’m not focused on simply kicking the ball down the field with another short-term extension,” said Sen. Tom Harkin, D-Iowa, who is chairman of the Senate ag committee. “We need to chart the course, set the schedule, wrap up the bill.”

House names conferees

Earlier in the week, the House appointed 49 farm bill conference committee members, including, from the agriculture committee, Chairman Collin Peterson, D-Minn.; Tim Holden, D-Pa.; Mike McIntyre, D-N.C.; Bob Etheridge, D-N.C.; Leonard Boswell, D-Iowa, Joe Baca, D-Calif.; Dennis Cardoza, D-Calif.; David Scott, D-Ga.; Ranking Member Bob Goodlatte, R-Va.; Frank Lucas, R-Okla.; Jerry Moran, R-Kan.; Robin Hayes, R-N.C.; Marilyn Musgrave, R-Colo.; and Randy Neugebauer, R-Texas.

Thirty-five other House lawmakers from various committees of jurisdiction also were appointed to serve on the committee.

It also approved a motion to instruct House members of the farm bill conference committee to oppose raising taxes as a way to pay for the farm bill.

Clock’s ticking. The 2002 farm bill, which expired Sept. 30, 2007, and twice has been extended, is set to expire April 18.

Some insiders say if April 18 arrives with the farm bill still in limbo, odds increase dramatically that Congress will abandon efforts to write a new farm bill and will just extend the current farm bill for one or two years.

Stop ‘captive supplies’ in farm bill

April 10th, 2008 Farm and Dairy Staff

Guest Commentary

By George Chambers

BILLINGS, Mont. — My parents, wife and I are the fifth- and sixth-generation owners of 27 Cattle Co., in Carrollton, Ga. Our young son will hopefully become the seventh. This is not inevitable.

Unless we restore the opportunity for profitability in our cattle industry, our son will likely choose a different career. It is our generation’s responsibility to restore competition to our industry so the next generation will have an opportunity to profit within this, our industry of choice.

Hog and poultry producers already traveled the road cattle producers now travel. After consolidating into mega-plants, leaving producers with few marketing options, hog and poultry packers offered production contracts to some producers, allowing them to stay in business.

Hog producers

Hundreds of thousands of hog producers, who were not invited into a production contract or who refused to trade their independence for one, exited the hog industry. Since 1980, the number of U.S. hog operations shrank from 667,000 to only 67,000.

The number of U.S. cattle operations also shrank, falling by about 625,000.

However, there were more cattle producers when the exodus started, so despite losing 40 percent of our operations, 900,000 exist today. This number can sustain a competitive market, provided the industry takes steps to halt its decline.

What fuels this exodus of cattle operations is the machine that decimated the once independent hog and poultry industries — market control by the highly concentrated meatpacking sector.

Strategy

The packers’ strategy to capture control over the supply chain is simple and effective. Here’s how it works:

  • A few packers gain dominant control over meat slaughter (four packers now control 80 percent of cattle slaughter;
  • Packers restrict producer access to their slaughter plants by first slaughtering their own cattle, imported cattle and cattle committed to them long before slaughter, before even bidding on producer-owned cattle;
  • When producers complain about restricted market access, packers offer guaranteed access in return for commitments to deliver cattle without establishing a price, causing an increase in packer-controlled cattle, known as “captive supplies,” and a decrease in cattle sold in the open market;
  • Packers sit back and watch their circular strategy self-perpetuate, with more and more captive-supply cattle displacing producer-owned cattle.

Captive supplies

As captive supplies grow, the open market becomes too thin to function properly, and the value of slaughter-ready cattle falls, leading to a reduction in calf prices and prices for all classes of cattle.

This is good for packers, but signifies the beginning of the end for independent producers. This is why we must pass the prohibition on packer ownership of livestock in the 2007 farm bill. It will minimize the large packers’ ability to restrict producer access to the market and lower cattle prices.

I’ve had first-hand experience in not being able to timely market slaughter-ready cattle, even while packers complained of insufficient cattle supplies.

After 20 years of retaining ownership of my cattle, and in the wake of tight supplies, I shipped two loads of cattle to Iowa for feeding. When the cattle were slaughter ready, I put them on the show list and awaited bidding to begin.

No bids came. After two weeks, no bids came. But my feed bill kept growing.

After four weeks, I bit the bullet and shipped my cattle to an auction yard in Ohio. There, my Choice and Prime quality cattle, which yield graded 2 and 3, were purchased by one of the few remaining independent packers.

It’s time

It is time to limit the packers’ use of market-restricting and price-depressing captive supplies, particularly since JBS-Brazil is trying to further concentrate the packing industry.

Cattle producers and consumers should call Congress and urge passage of the prohibition on packer ownership of livestock in the 2007 farm bill. This will help restore competition and preserve the opportunity for independent cattle producers to remain independent.

(The author is R-CALF USA Region IX director representing Georgia, Alabama, Florida, North Carolina and South Carolina.)

Still no action on farm bill

March 20th, 2008 Susan Crowell

WASHINGTON — At a farm bill forum last September, when OSU ag economist Carl Zulauf said, “This is going to be an extremely difficult bill to conference,” he probably didn’t realize just how prophetic he would be.

Ohio Farm Bureau county presidents hitting Capitol Hill March 12-14 asked everyone they met about progress on the farm bill. What they heard were opinions and scenarios, but nothing definitive.

“I don’t believe they’re going to get a farm bill done any time soon,” Rep. John Boehner told the group.
Rep. Charlie Wilson said his opinion was the farm bill was “stuck.”

Sen. Sherrod Brown blamed the administration for the stalled bill. “The president needs to negotiate with us.”

But House ag committee chairman Collin Peterson, D-Minn., was more blunt: “We have to get this done by the Easter recess.”





Another extension. It didn’t happen

As it turns out, both the Senate and House agreed last week to another 30-day extension on the existing farm bill, putting the next big deadline at April 18.

Congress adjourned March 14 for its Easter recess and lawmakers won’t return until March 31, unless called back for a special session.

President Bush agreed to the extension, but repeated “any farm bill that includes a tax increase or does not include reform will be met with a veto.”

If no agreement is met by April 18, Bush said he will ask Congress to extend the 2002 farm bill for at least one year.

Changes daily

The farm bill progress changes daily, but here’s what Peterson told the Ohio farm group March 12: Expect a “baseline farm bill” — one with the same level of funding as the 2002 farm bill.

The farm bill process was bogged down by the Senate Finance Committee and the House Ways and Means Committee, charged with finding out how Congress would pay for the farm bill. House and Senate leadership told the committees to find $10 billion in additional funding for the bill, but at the same time, come up with $10 billion in cuts.

Peterson said it would be easier to forget the extra $10 billion and just use the baseline numbers to draft the bill.

“We don’t need all these other people mucking up our situation,” Peterson said.

Not optimistic

Ohio’s Boehner, who served on the House ag committee before being named House Republican Leader, said opening up the farm bill to the tax-writing committee was a mistake, one he doesn’t see being resolved any time soon.

With that hurdle, in addition to other House and Senate differences, Boehner said it could still be a long wait for the next farm bill.

“I can go down a long list of problem areas,” Boehner said. “To say I’m not optimistic is an understatement.”

Blaming Bush

House ag committee chairman Peterson also gave a glimpse as to how frustrated lawmakers are.

Negotiators almost had a bill Saturday, March 8, but it slipped away. Some leaders, including Speaker of the House Nancy Pelosi, D-Calif., wanted to throw in the towel and let the current extension expire, hoping “the Senate and the White House would come to their senses,” Peterson said.

“They’ve [Bush administration] just been stringing us out.”

Sen. Sherrod Brown also placed blame for the farm bill stall with the current administration.

“The president needs to negotiate with us,” Brown told the Ohioans, explaining that Bush has threatened to veto the farm bill, when he needs to be working out differences.

“We know we need to do a farm bill.”

The closer to the start of planting season we get, the higher the frustration of farmers and legislators. It’s little solace to hear this from Rep. John Boehner: “We do public policy and we do it in a political setting.”

At their opening day briefing, Ohio Farm Bureau President John Peterson told the county leaders to push their legislators on the farm bill. His message? Get it passed, and get it passed right.

It looks like neither wish will happen any time soon.

(Editor Susan Crowell can be reached at 800-837-3419 or at editor@farmanddairy.com.)

Will luck of Irish be with farm bill?

March 13th, 2008 Susan Crowell

I hope to bring you some answers next week.

The questions? What’s up with the farm bill? Why is it taking so long to finalize? Why is the president threatening to veto it? And why is an extension of the 2002 farm bill even being talked about?

I’m headed to Washington this week, which is excellent timing for all things farm bill-related. That’s because on March 15, the temporary, three-month extension of the current farm bill expires. Then, lawmakers must decide whether to revert back to the 1949 law, pass another short-term extension (an April 15 deadline is the date that’s being tossed around), or pass a longer-term extension. The longer extension could mean the new farm bill won’t see action until there’s a new person in the Oval Office.

(Of course, negotiators could reach a compromise before my plane even leaves the tarmac, so I’ll have answers before I even get to ask the questions.)

The House passed its farm bill last July; the Senate, in mid-December. Yet, the two bills still haven’t been reconciled in conference committee. What are you waiting for, guys?

Money.

It all comes down to what final funding is provided for the farm bill and where that money will come from. The conferees’ work was stalled until the Congressional Budget Office finalized its cost analysis of projected spending for all the farm bill proposals.

As of last week, the latest figure was $10 billion in new funding above the baseline, according to Sen. Tom Harkin, chairman of the Senate ag committee. Now, Harkin said, “we’re moving forward” within that funding framework, working with the Senate finance committee and the House Ways and Means committee, to figure out how to pay for it all. That has to happen before the conference committee can do its work. Stay tuned.

The good news is that agriculture is finally emerging as more than a food provider, and that makes the farm bill hot, hot, hot. In fact, as with the recent energy bill, I expect agriculture to find its way into more pieces of legislation.

Provisions in the final farm bill will give insight into the sense of the Congress. For example, there’s increased support for new and minority farmers on the discussion table. And there’s a lot of support for organic production, specifically payments to farmers during that initial three-year conversion transition window.

That interests OSU ag economist Carl Zulauf, who says he’s never seen this many provisions that deal with organic agriculture in past farm bills. “It’s a fascinating insight as to the thinking of Congress regarding the food and fiber sector,” he commented last month. And Zulauf calls the newer emphasis “a potential leading indicator of future legislation.”

But still we go back to money. Increases in these programs will likely mean cuts to others. The National Corn Growers Association was quick to blast the Congressional Budget Office projections that came out late last week because traditional commodity program spending is now at greater risk of cuts.

The old saying is that making legislation is like making sausage: No one should watch.

How true — but we expect lawmakers to roll up their sleeves and get busy.

Farm bill discussions are ‘ridiculous’

January 31st, 2008 Alan Guebert

Be it bird hunting in Minnesota or vote hunting on Capitol Hill, House Agriculture Committee Chairman Collin Peterson is seen as a straight shooter of both pheasants and fools.
Lately, he’s been drawin’ a bead on both.
On Jan. 19, the House ag chief, with Senate counterpart Tom Harkin of Iowa and Acting Secretary of Agriculture Chuck Conner seated nearby, blasted the glacial pace of 2007 farm bill talks while addressing the Pheasants Forever convention in St. Paul, Minn.
Ridiculous.“Ridiculous,” is how he publicly characterized the going-nowhere-discussions, tied in a knot by the Bush administration’s inflexible requirements that a final bill include a hard, $200,000 adjusted gross-income cap for farm program recipients and no new “taxes” to pay for the five-year legislation.
Both are nonstarters for Congressional farm bill talkers. The House and Senate, with widespread bipartisan support, passed their respective bills with neither Bush element present.
After the public gathering, the three farm bill musketeers met privately to search for common ground on which all could pause before, hopefully, moving forward. The result was nothing.
“We’re all still talking,” Peterson opined, “but we don’t seem to be making progress.”
Taking shots. Three days later, Peterson reloaded and took several more shots at the monolithic White House, this time through a teleconference with farm reporters and broadcasters.
“Look,” he related is his Minnesota monotone, “(the administration) tried to sell their farm bill around the country in more than 50 meetings” – a reference to former Secretary Mike Johanns’ two-years-long, coast-to-coast dog and pony farm bill shows – “and they couldn’t.”
Nor did it sell in Congress, Peterson continued, because when it was brought before “my committee, it got no votes.”
Key to the no-votes, no-go White House farm bill was the uniform lack of Southern Republican support in the ag committees. Those aren’t Peterson or Harkin’s chickens to herd; they are the White House’s and most long ago flew the Bush coop.
As such, “It’s going to take Republicans from farm country to bring the administration to some sensible accommodation” now, Peterson told reporters, because most are allied against the White House’s smaller income cap and flatter spending.
Veto power. Also, few Congressional Republicans see the administration’s oft-repeated threat to veto any final farm bill without these pillars as helpful.
Indeed, most are at a loss to even understand why the White House continues to make the threat when it flat knows its GOP buddies south of the Mason Dixon Line – some of its most powerful allies – view it as both unnecessary and foolish.
Peterson, however, is taking the threat seriously. If a compromise farm bill is not completed by mid-February, or a finished bill is vetoed by the president before the late-March Easter break, he noted, the entire effort stands a good chance of being dumped in favor of the Agriculture Act of 1949, the often-amended but yet-in-place underlying farm law.
That relic – with “commodity support provisions

Farm bill moves out of Senate

December 20th, 2007 Susan Crowell

WASHINGTON – The U.S. Senate voted 79-14 on Friday, Dec. 14, to pass its version of the 2007 farm bill.
Now it’s up to a House-Senate conference committee to work out the two bills’ differences and come up with something the White House will support.
Senate ag committee chairman Sen. Tom Harkin expects conference negotiations to be completed in January.
‘Flawed.’ The Bush administration was quick to blast the Senate’s proposal, saying it was filled with unfunded commitments and “budget smoke and mirrors.”
“This legislation is fundamentally flawed,” said Chuck Conner, acting U.S. secretary of agriculture. “The Senate-passed farm bill does not represent fiscal stewardship and lacks farm program reform.”
Unless the House and Senate can craft a measure with “substantial changes” that gains the Bush seal of approval, Conner said “we are no closer to a good farm bill than we were before today’s passage.”
Flip side. On the Democratic side of the aisle, Sherrod Brown, the first Ohioan to sit on the Senate ag committee in four decades, called the Food and Energy Security Act of 2007 “forward-looking” because it promotes next-generation biofuels and improves existing nutrition programs.
A Brown amendment to move $2 billion from the federal crop insurance program to other programs failed by a 32-63 vote.
Brown said the bill also shores up the country’s hunger safety net, the food stamp program, by indexing benefit levels to inflation. Funding to the nation’s food banks through the Emergency Food Assistance Program would also be increased in the Senate version, from $48 million annually to $140 million.
The farm bill’s nutrition title received the largest funding increase, totaling over $5 billion.
Total farm bill spending will make up only one-fourth of 1 percent of the entire federal budget, said Joe Logan, president of the Ohio Farmers Union.
“Within that fraction of a percent, nutrition programs consume two-thirds of the farm bill dollars,” Logan added. “Considering all the criticism of farm subsidies, this farm bill provides a lot of value for the American people.”
Amendment battle. Some groups blasted the Senate leadership for requiring 60 votes to pass amendments, rather than the simple majority.
“A clear majority of senators voted in favor of common-sense reforms, but the deck was stacked against them because the Senate leadership decided to require 60 votes for passage of reform amendments,” said Sara Hopper of Environmental Defense.
Falling four votes short of the necessary 60 was an amendment offered by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., that would have capped total annual farm payments to any individual or married couple at $250,000 per year. The current limit is $360,000.
A majority of senators also voted for an amendment offered by Sen. Amy Klobuchar, D-Minn., that would have imposed a reasonable means test on recipients of farm subsidies. The Klobuchar amendment would have barred any household with an adjusted gross income of $750,000 or more from receiving subsidies. The final vote was 48-47.
As the bill stands, it will limit payments to larger producers by implementing a rule to “directly attribute” payments to individuals and by eliminating the three entity rule, which allowed several family members to claim benefits.
The payment cap also covers conservation measures, including cost-share measures like the Environmental Quality Incentives Program, or EQIP.
Livestock groups lukewarm. The Senate-passed bill includes a livestock competition title, including a ban on packer ownership fought by the National Cattlemen’s Beef Association.
The ban “limits cattlemen’s ability to market their cattle in ways that provide the best return on their investment,” said NCBA’s Vice President of Government Affairs Jay Truitt. He added the cattle group will work to strip the packer ban language out of the conference committee’s final bill.
The National Pork Producers Council calls the Senate bill a “mixed bag” for the pork industry. Producers supported the changes to the country-of-origin labeling, and increases in investments in renewable energy, nutrition and conservation programs. But, like the cattlemen, pork producers are gearing up to fight the ban on packer ownership of hogs.
Neither group backs the establishment of an Office of Special Council to investigate and prosecute livestock competition issues, which is also included in the Senate bill.
(Editor Susan Crowell can be reached at 800-837-3419 or at editor@farmanddairy.com.)

Santa may bring a Senate farm bill

December 13th, 2007 Susan Crowell

WASHINGTON – The Senate reached an agreement late last week to consider 40 amendments – 20 from the Democrats and 20 from the Republicans – to its version of the farm bill.
The amendment issue had stalled the Senate measure, which still needs to be reconciled with the House version in conference committee before we can say we have a new farm bill.
What to add on. After a monthlong stalemate, due to what Sen. Tom Harkin called “procedural maneuvering,” debate on the amendments was set to continue this week.
Harkin, the Democratic chairman of the Senate ag committee, is hoping the discussion will close by the end of this week (Dec. 14) and move the bill to conference, although he admits it’s an optimistic timetable.
“With goodwill and a spirit of compromise, we can pass a good farm bill before the holidays.”
Payment limitations. One of the Senate amendments addresses federal farm payment limitations, and that’s sure to be a sticky subject. One Democratic amendment proffered by Ohio’s Sherrod Brown, Amy Klobuchar of Minnesota and Richard Durbin of Illinois would set limits at $750,000 for a full-time farmer and $250,000 for a part-time farmer.
The bill as it was reported out of the Senate ag committee includes a provision to reduce the income level for program eligibility by 70 percent over two years, from $2.5 billion down to $750,000.
The ag committee’s version says that by 2010, if income exceeds $750,000, the individual is not eligible for payments unless two-thirds of that individual’s income is from farming or forestry.
Saxby Chambliss, the ranking minority member of the Senate ag committee, is ready for the fight.
“This has always been a controversial issue in every farm bill, and this is my third farm bill,” Chambliss said.
“We made significant reforms in the 2002 farm bill to ensure with every precaution we could possibly take that payments going from Washington to any state in the union went to the pockets of farmers.”
“There were abuses,” he admitted. “There will always be abuses.”
Split personality bill. The new farm bill will carry a strong domestic energy element, in addition to its existing food and nutrition, and production agriculture support components.
“America’s agricultural policy is, in part, an energy policy because agriculture is looking at not only its input costs of energy, but its opportunity to produce energy,” said Sen. Larry Craig, D-Idaho.
Farmer “have a role to play in putting fuel in the fuel tank,” Craig said. “We ought to encourage that in every way.”
Also on front burner. At the same time that the farm bill is hot on Capitol Hill, so is a federal energy bill. The House passed its comprehensive energy bill Thursday, Dec. 6, but a Senate vote Dec. 7 failed to end debate and move its version to a vote, although it remains on the agenda for the week ending Dec. 14.
Farm lobbyists like the House energy bill, the Energy Independence and Security Act, which would increase the amount of renewable fuels that must be produced each year, beginning with 9 billion gallons in 2008 and increasing to 36 billion gallons by 2022.
The House bill sets the hotly contested Renewable Fuels Standard for grain-based ethanol at 15 billion gallons by 2015, and would reduce the 51-cent blender’s tax credit to 46 cents per gallon.
(Editor Susan Crowell can be reached at 800-837-3419 or at editor@farmanddairy.com.)

Sherrod Brown: Farm bill hung up in Senate

December 6th, 2007 Susan Crowell

LISBON, Ohio – The new farm bill was probably not on the minds of most participants at last week’s roundtable with U.S. Sen. Sherrod Brown in Columbiana County, but it topped Myron Wehr’s list.
The New Waterford area cash grain farmer hoped to voice his concerns about a range of farm bill-related issues, but only had time to speak out in favor of crop insurance and stronger animal identification efforts.
What he – and other business and agency leaders attending – heard back from Brown: The war in Iraq is draining money available for just about every domestic program.
The senator heard from 19 individuals representing the county’s schools, villages, businesses, public agencies and veterans.
Blocked by rules. Brown said after the meeting that the Senate’s version of the farm bill was held up last month by parliamentary procedure.
A cloture vote failed prior to the Thanksgiving recess. The motion would have allowed the bill to proceed in the Senate after almost two weeks on the floor without action.
Brown blamed Republican add-ons for the stalled bill. The Democrats wanted to stick to the farm bill, he said, while the Republicans wanted to add tax and immigration issues as amendments.
“There’s so much we want to do on agriculture,” Brown said. “I want to stick to that.”
Brown is the first senator from Ohio in 40 years to serve on the agriculture committee.
Nutrition emphasis. Brown championed domestic nutrition and food assistance programs within the farm bill, specifically by increasing food stamp programs and offering more access to fresh, locally grown foods.
Brown and others are pushing for savings from the proposed Average Crop Revenue program to be earmarked for nutrition assistance to low-income residents. The proponents say cost savings from the revenue program would let the U.S. raise the food stamp asset limit, increase the minimum food stamp benefit and also help food banks.
Pre-Christmas blizzard. Congress returned from its Thanksgiving break this week to face a flurry of important legislation.
In addition to the farm bill, the Senate has yet to act on an energy bill, and both the House and Senate need to finalize federal appropriations bills. A stopgap spending bill expires in mid-December.
Crop insurance. Whenever the Senate does get around to voting on its farm bill, Brown said crop insurance reform will be a big factor in swaying his vote. The current crop insurance program puts too much of the federal dollars into insurance companies’ pockets and not farmers’, the first-term Senator said.
“That money is not going to farmers and it’s not going to a safety net.”
A Brown amendment to revamp the insurance program, and specifically reduce the amount paid to crop insurance companies for program administration and operation, was part of the original Senate “chairman’s mark” of the farm bill, but was altered during debate.
Farmers are getting impatient to know what shape revenue payments and crop insurance will take under the new farm bill, as they look ahead to costs for the next crop year. Myron Wehr projects it will cost between $475 and $490 to produce an acre of corn in 2008, and that includes $35/acre for crop insurance. He wants to know – sooner, rather than later – if that input cost is going to increase.
“It [crop insurance cost] could go to $50 or $60 per acre,” Wehr said. “Then we get really close to the question: Can we afford it?”
As a victim of a recent fire in a machinery shed, Wehr knows the value of insurance and doesn’t want to answer that question with a ‘no.’
“We’ve got to have crop insurance to protect our investment.”
No timetable. No one’s quite sure when the Senate will resume its debate on the farm bill, or if it will vote before the end of December.
And even after it passes its bill, the Senate must marry its version with the House version in conference committee.
(Editor Susan Crowell can be reached at 800-837-3419 or at editor@farmanddairy.com.)

Farm bill ‘debates’ are deplorable

November 29th, 2007 Alan Guebert

Even by its Olympic standards for hyperbole and hypocrisy, the performance of the U.S. Senate during the fruitless, pre-Thanksgiving farm bill debate was breathtaking.
For a week, the nation watched and listened as 100 grown men and women, arguably the best-educated, most thoughtful leaders in America, bickered like kindergartners over rules on how to divvy up 286 billion crayons on the farm bill table.
The adult supervision of the affair was little better. From the White House, President Bush threatened to veto any farm bill that resembled either the Senate or House version.
Ironically, the president’s snarl, while aimed at the Democrats, hit his party’s aggies harder because they – especially the Southern planter class – were the ones who, with assistance from some pliant Dems on the ag committees, beat back meaningful payment limit reform, the White House’s chief farm bill goal.
Elections. The ferocity of the president’s attack left Senate Republican farm leader Saxby Chambliss little to do but take to the Senate floor to defend he and his colleagues’ “bipartisan” farm bill that had made “serious reforms.”
The Georgian, however, wasn’t looking to defend his farm bill handiwork so much as looking to next year’s election when Republicans must defend 22 of the 34 Senate seats in play.
With 10 of those seats in cotton and rice country, Southern Republicans are in need of some – any, really – legislative hide to nail to their campaign signs. A farm bill that protects today’s cotton, rice and sugar programs and lacks hard caps on program payments would do nicely.
Besides, Chambliss firmly hinted, Bush isn’t up for re-election; I am.
With politics being a two-way street where each party scraps over your money to fill the potholes on their side, Democrats played their part to blow up the floor debate. Their insistence on limiting the number of amendments offered to the bill during debate gave the Repubs the only stick they needed to beat back any movement forward during the days of dizzying tail-chasing.
Moving on. That move was necessary, of course, because without a limit, the Senate farm bill debate would have droned on and on over every topic other than agriculture. But the outcome of the amendment-limiting vote was pre-ordained; everyone knew it must fail, as it did, before anyone could move on.
And move on, after the two-week Thanksgiving break, they will. But without enough votes to break the Senate amendment deadlock – it takes 60 to invoke cloture; Dems got 55 on the Nov. 16 roll call vote – the push for passage in the inertia-laden Senate rests solely with the Democrats.
Key farm bill players like Democrat Kent Conrad spent Thanksgiving week urging his North Dakota farm and ranch constituents to telephone every farm and commodity organization they can think of “to put pressure on those who are slowing progress.”
Seven of “those” slowpokes are Republican members of Senate Ag Committee who sided with their party’s leader rather than their aggie colleagues on the failing cloture vote.
Three GOP committee members, John Thune, S.D., Charles Grassley, Iowa, and Norm Coleman, Minn., however, voted for the Democratic-sponsored shortcut.
Even if the public pressure works and the Senate approves the farm bill shortly after it returns – a massive “if,” given the bitter partisanship in that chamber – it must be meshed with a very different House farm bill before the entire, rancorous process begins again.
Placing bets. The smart money is betting a final House-Senate farm bill will not be done by Easter 2008, let alone Christmas 2007. Don’t ask me who those smarties are because I’d be hard-pressed to label anything about this farm bill fight as smart.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at agcomm@sbcglobal.net.)

Farm bill stalled in Senate

November 22nd, 2007 Andrea Zippay

SALEM, Ohio – Specifics of a new farm bill may drag into the new year, after Senate members left the legislation lifeless and went home for Thanksgiving recess Nov. 16.
That morning, by a vote of 55-42, the Senators failed to invoke cloture on the farm bill. The cloture motion, which required 60 votes to pass, would have allowed the bill to move in the Senate after almost two weeks on the floor without action.
Dragging on. Democratic Sen. Tom Harkin, chairman of the Senate ag committee, called the vote to block the bill “a deliberate and orchestrated attempt to derail the farm bill.”
“Indeed, the farm bill is just one car on a much longer train …. Between Republican filibusters here in the Senate, and President Bush’s barrage of vetoes and veto threats, they seem to be setting up a giant train wreck at the end of this session of Congress,” Harkin said.
Pointing fingers. Acting Secretary of Agriculture Chuck Conner chided legislators for the repeated delays, noting the administration unveiled its farm bill proposal nearly 11 months ago to allow time for changes, yet still deliver farm bill programming before farmers had to make decisions for the 2008 crop year.
Ranking Senate Republican Saxby Chambliss, R-Ga., blamed delays on Senate Majority Leader Harry Reid, who rejected multiple compromises from the Republicans and created days of lost opportunity.
The delays didn’t go unnoticed.
A joint letter drafted Nov. 13 by several farm and commodity groups, including the National Association of State Departments of Agriculture, American Farm Bureau and National Farmers Union, asked Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell to get moving on the farm bill.
The letter also urged senators from both sides of the aisle to compromise and work together, just as the organizations had.
“While each of our organizations may have differing opinions on policy provisions in the legislation, we agree it is critically important for the full Senate to approve a bill expeditiously so a conference committee can be appointed and a final bill approved before the end of the year,” they wrote.
Another approach. In the wake of gridlock in the Senate, House Ranking Member Bob Goodlatte, R-Va., and Rep. Jerry Moran, R-Kansas, introduced a bill Nov. 15 to extend current farm policy for one year.
Currently, 22 Republicans have signed on as co-sponsors of the new extension legislation.
“The Senate’s inability to move forward with their bill is starting to take a real, potentially devastating toll on American agriculture,” Goodlatte said.
“Without stable farm policy, our farmers and ranchers cannot make planning decisions, finalize land-lease contracts or negotiate lending agreements. This inaction is putting our producers between a rock and a hard place and that is unacceptable.”
He said the extension gives producers with “a little certainty” until a long-term farm bill is finished.
Feeling the pinch. Farmers and ranchers throughout the nation are already feeling the negative effects of the bill’s expiration and more severe consequences will soon be realized, Goodlatte and Moran said.
Without reauthorization, farm policy will revert to permanent statutes established in 1938 and 1949 laws, which are drastically different from current programs.
The permanent statues exclude many commodities, such as rice, soybeans and peanuts; set support prices much higher than current levels; and prevent new enrollment in various conservation programs.
Old ways. Permanent agriculture law established by the Agriculture Adjustment Act of 1938 and the Agriculture Act of 1949 are superseded by subsequent legislation, such as the 2002 farm bill, and remain dormant until the newer legislation expires.
(Reporter Andrea Zippay welcomes feedback by phone at 800-837-3419 or by e-mail at azippay@farmanddairy.com.)

No surprise: Farm bill disappointing

November 8th, 2007 Alan Guebert

If you tuned into the webcast debate of the Senate Ag Committee approving its long overdue 2007 farm bill Oct. 24 and 25, it was easy to see and hear why this Democratically-led Congress, despite its upset political triumphs of just a year ago, is now held in lower public esteem than scarred, war-torn President Bush.
For the best part of both days, Republican and Democratic farm senators alike yammered and foamed about “reform,” “the safest, cheapest food in the world” and “the backbone of our great nation.”
In the end, after most had pulled their stuck-out chins back into their sunken chests, the committee, without one dissenting vote, passed a 2007 farm law that more resembled a bucket of yesterday’s warmed-over hamburger than tomorrow’s needed meat.
Status quo. Status quo trumped reform; shamelessness trounced principle. Status quo is everywhere in the Senate farm bill.
Big ag received nearly everything they asked for: no hard caps on farm program payments; no cuts to the 7 percent of farmers who pocket 60 percent of the program money; more fat for an already fat crop insurance industry; no reform of environmental programs that continue to pay bad land and water stewards up to $450,000 to clean up the messes they make.
All were driven by the shameless quest of major farm groups to get a bigger share of baseline farm bill spending for themselves. That family fight was highlighted by the rift between the American Farm Bureau Federation and the National Corn Growers Association over the association’s push for an alternative farm program payment scheme called Average Crop Revenue.
Payments. Farm Bureau fought the alternative because it believed Average Crop Revenue would undermine the current crop insurance program and, sooner than later, shift direct farm program payments – money sent to farmers for, in truth, simply breathing – more to conservation, energy and rural development.
In the end, a watered-down version of Average Crop Revenue was included in the final bill so everyone could declare victory.
In short, the National Corn Growers Association got its complicated, alternative payment scheme; Farm Bureau “protected” the crop insurance industry (in which it is a huge player) as well as direct payments to its breathing members and the Senate committee got to use the word “reform” in its post-passage press releases even though fewer than 10 people in Washington could explain the Average Crop Revenue program that won’t begin until 2010.
Blame. Most of the blame for mish-mashes like this can be traced to the lack of leadership; in this case, the disappearance of Senate Majority Leader Harry Reid of Nevada.
Unlike negotiations that produced the House farm bill – where Speaker Nancy Pelosi stepped in to discipline Democratic aggies to get a bill done and done on time – Reid largely watched as numerous senators bypassed, undercut and generally mauled Ag Chairman Tom Harkin of Iowa.
Two of Harkin’s boldest muggers were Democratic colleagues Kent Conrad of North Dakota and Max Baucus of Montana.
The two, from their perches, respectively, as chairmen of the Senate Budget and Finance committees, all but dictated the broad outline of the farm bill to Harkin by tightly controlling, then earmarking, the money their committees gave him to work with.
The messiness of that process assures an even messier fight when Harkin brings his bill to the full Senate sometime after Nov. 4.
Passage. Upon passage (and it will pass, although it faces several amendments) a Senate-House conference committee must marry the two, broadly similar bills together before each chamber votes on the final version.
Little in that final bill, however, will be true reform because neither bill features reform now. And simply saying it’s so doesn’t make it so.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at agcomm@sbcglobal.net.)

Senate’s farm bill version on its way

November 1st, 2007 Other News

WASHINGTON – The Senate Agriculture, Nutrition and Forestry Committee approved its 2007 farm bill proposal Oct. 25 and, according to Chairman Tom Harkin, floor consideration of the bill could be as early as next week.
The bill, officially dubbed the Food and Energy Security Act of 2007, would provide $283 billion over five years for agricultural, energy and nutrition programs.
The Senate committee worked through the two-day markup of the farm bill with “spirited negotiations,” Harkin said.
Crop revenue. The commodities title continues basic features of the 2002 farm bill, including the current crop “three-legged stool” of marketing loan, direct payment and counter-cyclical program.
But, according to Mike Smith, analyst with the Council of State Governments, considerable time was spent debating the inclusion of the Average Crop Revenue program, an optional subsidy that would tie certain payments to farmers to state crop revenue targets.
Smith said several committee members voiced their concern that since the program would allow farmers to opt out of receiving direct payments in lieu of reduced crop insurance rates and smaller payments, the crop insurance rates for those farmers who do not opt out of the program would be significantly larger.
After significant debate, Chairman Harkin and Sen. Pat Roberts, R-Kansas, reached a compromise that would reduce the base acres on which farmers could collect payments and would require farmers opting into the new program to continue their participation for the life of the farm bill.
National Corn Growers Association President Ron Litterer expressed disappointment that the federal crop insurance integration was stripped from the revenue package.
“While we are pleased a revenue package is in the final bill reported out of committee, NCGA is deeply disappointed with this setback,” Litterer said. The amendment makes the revenue proposals a much less attractive option to growers.
Other features. As adopted by the committee, the farm bill contains language that would allow certain small state-inspected meat processors to sell meat and poultry across state lines.
The bill would also rename the Conservation Security Program to the Conservation Stewardship Program; and require 10-percent of conservation program funds to be used to assist beginning and socially disadvantaged farmers and ranchers.
The nutrition title updates and increases food stamp benefit levels and expands the Fresh Fruit and Vegetable Program to operate in every state.
The rural development title provides $400 million for funding a variety of programs that would help provide access to rural hospitals, improve water and wastewater facilities, expand access to broadband, and help to build rural businesses.
The bill’s energy title would provide $1.1 billion in investments in farm-based energy, including the establishment of a program to stimulate the production of perennial biomass crops.
The committee adopted several amendments, including an amendment by Sen. Bob Casey, D-Pa., that would require the USDA to determine the current cost of feed and fuel, and use those costs to make allowances for dairy farmers.
Reactions. National farm groups responded to the Senate committee’s initial proposal with mixed reactions.
The National Pork Producers Council, which prefers the House version, likes the funding of conservation programs like the Environmental Quality Incentives Program (EQIP), but dislikes the provision that would ban packer ownership of hogs and marketing contracts.
The National Farmers Union, on the other hand, touted the packer ban as a highlight of the measure and also applauded the language that would implement mandatory country-of-origin labeling for meats, fruits and vegetables.
The NFU’s priority for the farm bill was the inclusion of a permanent disaster program, according to farm group president Tom Buis, so members were happy to see the $5 billion disaster assistance program in the Senate version.
The American Farm Bureau Federation said the final proposal was a “significant improvement” over the bill the committee started with earlier in the week.
But, said President Bob Stallman, the Farm Bureau is still concerned that commodity title funding is being reduced in order to increase funding for other programs, such as conservation, nutrition and rural development.
What’s next? Following the Senate floor debate and vote, the Senate and the House versions must be reconciled in conference committee. Provisions of the 2002 farm bill will begin to expire in early 2008.

Farm bill revives New Zealand truth

October 25th, 2007 Alan Guebert

As sure as the rooster crows every morning, someone will crow every farm bill year on how New Zealand’s 1984 elimination of government farm programs has brought a never-ending dawn to Kiwi farmers.
This year’s rooster is Dean Kleckner, former president of the American Farm Bureau Federation and current chairman of Truth About Trade and Technology, an Iowa-based agbiz and trade booster club.
Cold turkey. In an Oct. 15 New York Times op-ed piece titled Today’s Harvest of Shame, Kleckner endorses New Zealand’s “cold turkey” break with farm subsidies as the path we should follow so the world – really the World Trade Organization – doesn’t see America “reversing course on a half-century of steadily expanding trade opportunities.”
After admitting he cashed American farm program checks for years, Kleckner said he discovered this gospel during a 1990s visit to New Zealand.
“On that trip and several later ones,” he offers, “I never met a farmer who wanted to go back to subsidies.”
He never met one, explain two New Zealand researchers in a detailed, 2003 report that examined their country’s break with farm programs because “only rarely are views sought of those farmers who were pushed off the land” despite the “considerable social distress generated” by the policy shift and today’s “lingering environmental costs.”
Background. Moreover, what Kleckner et. al. always overlook when advocating the New Zealand model, said Willie Smith and Hayden Montgomery of the University of Auckland, is the geographic and economic backdrop that led to subsidy abandonment.
First, New Zealand possesses the world’s greatest grass-based agriculture; hilly terrain, favorable climate and intensive management made it into a lamb, milk and beef exporter well before 1984.
Its target market was its mother, Great Britain. When England joined Europe’s Common Market in 1967, New Zealand’s milk and meat exports plummeted. It reacted with farm programs, subsidies, as it searched for ways to retool its ag.
The interlude was brief because, in 1984, a new Kiwi government pushed the entire nation – not just agriculture – into the global marketplace. The move brought the sky down on farmers.
By 1987, farmland prices had “collapsed by between 50 percent and 70 percent,” note the authors.
Adverse weather, and the lack of government disaster programs after 1984, compounded the mess. By the early 1990s, the washout was over.
Survivors. What was surprising, however, note the researchers, was who survived.

FARM SCIENCE REVIEW: Farm bill debate promises to be lively

September 13th, 2007 Other News

LONDON, Ohio – The 2007 farm bill will be a hot topic at Ohio State University’s Farm Science Review, with university agricultural economists gathering for a panel discussion to help farmers interpret the language of the bill as it nears passage in Congress.
The U.S. House of Representatives has passed its farm bill, and the Senate is expected to address the issue once Congress reconvenes in September.
Debate. Ohio State’s Department of Agricultural, Environmental, and Development Economics will host a farm bill debate from 10-11 a.m. Sept. 18 in the Tobin Building during Farm Science Review.
The purpose of the program is to discuss the highlights of the House farm bill, as well as provide insights on what to anticipate from the Senate.
The Tobin Building is located on Beef Street, across from the vice president’s tent.
Carl Zulauf, an agricultural economist, said Title I of the farm bill is shaping up to be the hot item of discussion.
“Title I, which covers farm commodity programs, has clearly been the most contentious part of the farm bill, which is not surprising,” said Zulauf, who will be participating in the review’s farm bill debate.
Main issues. He said the debate centers around three main issues: one issue is rebalancing loan rates and target prices to achieve greater equity among program crops.
Zulauf said the issue stems from the historical fact that some program crops received little government payments under the 2002 farm bill while others received substantial payments.
Payments from price support programs, principally the marketing loan and counter-cyclical programs, was less than 1 percent of the value of production for oats, soybean and wheat but over 10 percent of the value of production for corn, sorghum, rice and upland cotton.
“The House farm bill increases the marketing loan rates for barley, oats and wheat, as well as the target prices for barley, oats, soybean and wheat. It decreases the target price for cotton,” said Zulauf.
“The problem that policy makers face is that congressional budget rules limit the availability of new funds for Title 1 programs, and projected spending on Title 1 is limited because prices for most commodities are higher than current support rates.
“Thus, the increases in support rates have to come from decreases in other programs. It will be interesting to see if these changes remain in the final bill.”
Payment limits. The second issue is payment limits.
“There is widespread belief among actors in the farm bill who are not farmers that the current payment limits are too generous, or in some cases they have been abused, and thus should be curtailed,” said Zulauf.
“The House farm bill made many changes in the payment limit rules, but it is not clear what is the net impact of these changes because many of them offset one another.”
The third issue is the form of support – specifically, should the farm program attempt to protect farmers from low prices or from low revenue (yield times price).
“The farm bill passed by the House is providing farmers with a one-time option between traditional price protection and a revenue counter-cyclical program. The current price counter-cyclical program enables producers to receive a payment when the national price is below the target price,” said Zulauf.
Revenue programs. “Similarly, a revenue program establishes a revenue target and pays if revenue is less than the revenue target. I think revenue programs are better because gross revenue is more closely related to a producer’s financial risk since it includes both price and yield, not just price.”
Among its other provisions, the House farm bill authorizes up to $1.6 billion of spending for a variety of programs for the fruit and vegetable industry; requires retailers (not restaurants) to provide Country of Origin Labeling (COOL) for fresh meats, produce and peanuts by 2008; expands funding for the food stamp program and other feeding programs; expands funding and acreage caps for various conservation programs; and invests in a variety of programs for renewable energy.
The 2002 farm bill expires Sept. 30.

House approves farm bill

August 2nd, 2007 Other News

WASHINGTON, D.C. – The U.S. House of Representatives passed a new farm bill July 27 despite a White House veto threat and “no” votes from the majority of House ag committee Republicans.
Representatives approved the bill (H.R. 2419) by a 231-191 vote.
House divided. The ag committee Republicans were protesting what they described as a last-minute tax increase, included to fund new spending initiatives.
Likewise, the Bush administration has said the action by the Democratic leadership narrowed support for the farm bill and lessened its chances for success.
The controversial provision, authored by Rep. Lloyd Doggett of Texas, would provide an additional $4 billion to farm bill nutrition programs by a tax on foreign-owned companies operating within the U.S.
A farm bill first. Lawmakers supported $1.6 billion for specialty crop growers, a first for a farm bill, and provided an additional $4 billion for the food stamp program.
The House version continues the basic structure of most current farm programs, with some upward adjustments in loan rates and target prices. The bill also includes more funding for conservation, nutrition and renewable energy programs.
Most of the 31 amendments that were allowed to be debated on the floor were defeated or withdrawn.
Included. Highlights of the $286 billion, five-year House bill include: