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The Center’s report highlights how SACI funds could be distributed. Jon Bailey, Center research director and lead author says, “There are no detailed proposal regulations at this point. Based on wording of the initiative and statements by the administration, this report outlines a likely result.”

The SACI proposal shows a complete lack of understanding of how things actually work in rural America. The qualifying criteria – low-income, poverty, job loss, and unemployment – will not apply to most rural municipalities and counties.

While many rural municipalities and counties would qualify under low- income and poverty criterion, most lose out on the unemployment test. We simply don’t have enough people not working to be eligible. People either find work or leave for the city. Great Plains and Midwest states lead the nation in the number of people holding more than one job.

Rural areas also have few large employers, thus they rarely experience large layoffs. Job loss in rural areas is more subtle – one person at a time leaves because of a lack of economic opportunity. So the SACI job loss criteria would not apply to most rural municipalities and counties either.

“SACI is the wrong idea for economic and community development in most of rural America,” according to Bailey. “Unemployment and job loss are not the real issues facing most rural communities – low incomes, low-paying jobs, and aging infrastructure are. Any federal investment in rural America must recognize the real issues facing rural people and rural places.”

What might this proposal strengthen? Perhaps it could unite rural areas in a common cause to defend funding sources critical to their survival. As Congress begins to make decisions on the FY2006 budget, all rural people need to make their voices heard. The future of our communities depends on it.

The four-page report is part of the Center’s Rural Action Brief series. It is available on the Center’s website, www.cfra.org. Members of our Rural Action Network receive it by email.

Contact: Jon Bailey, jonb@cfra.org for more information or to request the Rural Action Brief series.

Payment Limit Fight Still On

Contrary to some press accounts, the fight for farm program payment limitations in the 2006 federal budget is not lost.

Here is what happened. In mid April the Associated Press reported that, “The Bush administration threw in the towel on the president’s proposal,” based on statements by Agriculture Secretary Johanns that he was willing to working with Congress on alternative budget-cutting proposals.

One day later, USDA denied that it was backing down. The president was standing behind his proposal, but was willing to work with Congress in considering alternatives.

Most important, Iowa Senator Chuck Grassley is not backing down on payment limitations. He and the bipartisan cosponsors of the Rural America Preservation Act are continuing to fight for payment caps. The outcome will still be decided by individual members of Congress responding to their constituents. It is a critical time to speak out.

Contact: Chuck Hassebrook, chuckh@cfra.org  or 402.687.2103 x 1018.

Borrowing Community Development Ideas from Canadian Friends
A Canadian county built a coalition of local citizens which became the heart of a sustainable community development network

In this column, we have discussed community development models that work and others with high failure rates. The models share comparable features, yet each provides uniqueness to the overall picture.

This month we present a community development model developed by our neighbors to the north. In the small Canadian county of Wellington, a community coalition created “Wellington Free Space”.

Formed with participation from social service organizations, community groups, businesses, private citizens, and the public sector, the Free Space model eventually spawned the idea for a Sustainable Community Development Network.

What made the Wellington Free Space model successful? A study found 13 key ingredients. Communities in this model must:

1. Begin with a philosophy of community participation, not infrastructure development.
2. Avoid duplication.
3. Start building infrastructure with as much input as possible from stakeholders, but not drag out the development process.
4. Start from the bottom up rather than “large” government initiated top-down efforts.
5. Build an energetic multisector steering committee with the task of building a viable coalition, not an infrastructure.
6. Use local expertise.
7. Take a business-like approach.
8. Insist upon multicultural community ownership.
9. Ensure that there is community management.
10. Whenever possible, use students and young people.
11. Aim for equitable access.
12. Train volunteers to train others.
13. Share resources and lessons with other communities and networks.

The uniqueness of this model comes from an insistence to provide the community development piece from the community itself. They also insist that the effort be treated like a business endeavor, and that you build your coalition like a business.

The “bottom-up” approach also shows a willingness to create internally, which has a higher sustainability rate than “top-down” approaches.

Contact: Michael L. Holton, michaellh@cfra.org for more information on community revitalization.

Corporate Farming Notes
New research on water quality and CAFOs; packer ownership ban re-introduced in Senate

>> A report by the Iowa Policy Project, “Concentrating on Clean Water: The Challenge of Concentrated Animal Feeding Operations” summarizes the scientific literature on water quality issues due to Confined Animal Feeding Operations (CAFOs). The research found that large-scale CAFOs create numerous costs for society. These include water contamination that also leads to health problems, lower quality of life, declining property values, and declining revenue for small rural businesses.

The report offers policy goals and recommendations for Iowa. They really should be applied in any state and as part of our national policy. The goals and recommendations:

• Enhance economic viability and health of livestock producers, particularly those with moderately-sized, diversified operations.
• Strengthen the economic and social well-being of rural communities.
• Respond to the increasing demand from domestic and global consumers for safer, healthier meat options.
• Restore and protect water quality, soil health, and the general environment. 

>> On April 15, 2005, Senators Ken Salazar (D-CO) and Chuck Grassley (R-IA) introduced a bill that will ban packer ownership of livestock. The bill, S. 1818, is being co-sponsored by Senators Dorgan (D-ND), Dayton (D-MN), Enzi (R-WY), Harkin (D-IA), Johnson (D-SD), and Thune (R-SD).

The Senate version of the 2002 farm bill contained a ban on packer ownership of livestock but was stripped during conference committee when it met fierce opposition from the Agriculture Committee leadership in the U.S. House of Representatives.

S.1818 would ban packers from owning, feeding, or controlling livestock for more than seven days before slaughter. This would create a level playing field that would allow independent livestock producers access to fair and open markets. With over 80 percent of the market controlled by four meatpackers, the time for this legislation to become reality is long overdue.

Contact: Traci Bruckner, tracib@cfra.org for more information. You can view the CAFO report at www.iowapolicyproject.org 

Conservation Security Program Sign-up Will End this Month
Six-step eligibility process outlined below. Interested farmers and ranchers can get help through our CSP Hotline, 402.687.2100

The Conservation Security Program’s (CSP) second sign-up is underway and will come to a close on May 27, 2005. CSP is a voluntary conservation program administered by the U.S. Department of Agriculture’s Natural Resources Conservation Service (NRCS).

Authorized by the 2002 farm bill, CSP encourages and rewards farmers and ranchers who have implemented conservation practices and farming systems to protect natural resources. The program offers financial payments and technical assistance to farmers for maintaining and increasing conservation activities.

Determining Eligibility
NRCS has adopted a watershed approach for enrollment in CSP due to funding limitations placed on the program during past federal appropriations* (see end of article). A farmer or rancher must have at least 50 percent of his or her operation in an eligible watershed to qualify. To determine watershed eligibility, contact your NRCS office or visit their website at http://www.nrcs.usda.gov/programs/csp/2005_CSP_WS/index.html 

Once watershed eligibility is determined, applicants must meet a number of requirements:

• Comply with highly erodible land and wetland conservation provisions.
• Meet adjusted gross income requirements.
• Demonstrate control of rented land for the life of the contract period.
• Share in profit and risk of production of crops or livestock.
• Complete a benchmark condition inventory for the entire agricultural operation or portion of operation being enrolled.
• Supply information, as required by NRCS, to determine eligibility for the program.

A self-assessment workbook is available through NRCS or on their website, http://www.nrcs.usda.gov/programs/csp/pdf_files/CSP_SelfAssess_Workbook_F.pdf  

Land Requirements
Eligible land for CSP includes private agricultural land or non-industrial forest land that is a minor part of the agriculture operation; agricultural land that is Tribal, allotted, or Indian trust land; other incidental parcels (limited to up to 10 percent of contract acres) as determined by NRCS; or other land that will be improved by a conservation treatment or that is a natural resource concern, as determined by NRCS.

Any land enrolled in the Conservation Reserve Program, the Wetlands Reserve Program, or the Grassland Reserve Program is not eligible for CSP payments. In addition, any land used for crop production since May 13, 2002 is not eligible if that land was not planted or devoted to crop production for at least 4 of the 6 preceding years.

Tiers of Participation
The program has three progressive “tiers” or levels of participation. Tier I covers any eligible portion of the operation. The conservation plan must address at least soil and water quality concerns. Soil and water quality concerns must also be dealt with in Tier II, but for the entire farm. Tier III covers the entire farm, and all resource concerns must be addressed.

Sign-up for this year’s CSP began on March 28, 2005. The Center is hosting a hotline for farmers and ranchers seeking information about the program. If you have questions, comments, or concerns regarding the CSP and the sign-up process, please call 402.687.2100 and ask for the Conservation Hotline.

CSP Slush Fund Mentality
*As we have reported in other newsletter articles, CSP has been under continual attack, with certain members of Congress and the Administration treating the program like a slush fund.

We need to work hard to save the CSP from the same treatment this year. For information on how you can help, contact Traci Bruckner directly at 402.687.2103 x 1016 or tracib@cfra.org

“Livestock Friendly County” Program 
Is this a back door to surrendering local zoning control over agricultural decisions?

In 2003, the Nebraska Legislature adopted LB 754 and established the “Livestock Friendly County” program in the state. The program will allow any county in Nebraska to seek a special designation as a “Livestock Friendly County” from the Nebraska Department of Agriculture.

In 2004, the Nebraska Department of Agriculture promulgated regulations governing how counties may seek this designation and what they must do to be eligible. Under the law, any county may pass a resolution designating itself “livestock friendly” without going through the Nebraska Department of Agriculture program.

To date, no county in Nebraska has been awarded the designation as a “Livestock Friendly County.” However, at least a dozen counties are in the process of seeking the designation or have inquired about the program.

Beware Local Zoning Impacts
Residents of any county interested in or actively seeking this designation should be concerned about its impact on local zoning regulations. Most Nebraska counties have comprehensive zoning plans that govern aspects of livestock facility siting and operation. These plans exist for the control of land use in a county and to provide local control.

One of the concerns about the “Livestock Friendly County” program is that, to obtain state certification, a county must severely limit the local control that has been carefully crafted in county zoning plans. An example from the program regulations demonstrates this point. In its application, a county must include all zoning regulations, procedures, and permits to livestock feeding operations during the previous 24 months.

These items are then reviewed under guidelines that include whether restrictions on livestock operations are based on “scientifically justified environmental risk analysis,” whether decisions regarding zoning permits for feeding operations are clearly based on objective, science-based standards, and whether conditions required for livestock feeding operations (such as setbacks) are reasonable and justified.

Local Decisions Shift to State
For counties seeking the Livestock Friendly designation, the result is that local zoning regulations created by local elected officials and local citizens are reviewed by state officials, approved by state officials, and ultimately controlled by state officials.

Under Nebraska law, zoning ordinances must “promote health, safety … and the general welfare of the community.” These are uniquely local decisions – what promotes the “general welfare” in one community may not, or may not be necessary in another community.

As counties begin to seek the Livestock Friendly designation, they abdicate that decision making – the ability to make local “general welfare” decisions will no longer exist because zoning plans will now be subject to state-imposed, undefined standards of what is “scientific,” “reasonable,” or “justified.”

Citizen Right to Participate
As citizens, you are still afforded rights to participate in a county’s process in seeking the “Livestock Friendly County” designation. If your county is discussing the “Livestock Friendly County” program get educated, get involved, and participate in the process.

Contact: Jon Bailey, jonb@cfra.org or 402.687.2103 x 1013 for information.

Whole Foods Shareholders Applaud Policy to Label Genetically Engineered Foods

Prompted by a shareholder resolution, Whole Foods Market (NASDAQ: WFMI) announced in April a new policy of labeling its private label foods to indicate that they are not sourced from genetically engineered seed. The change was announced at the Whole Foods’ annual stockholder meeting in New York City.

In October 2001, Whole Foods and Wild Oats (NASDAQ: OATS) simultaneously announced their private label brands’ ingredients would be sourced exclusively from non-genetically engineered seed. This information has not been conveyed on product labels or packaging, however, where consumers are most likely to seek information about ingredients.

This prompted a group of Whole Foods shareholders to begin pressing for explicit product labels stating that genetically engineered foods were deliberately avoided. The Center for Rural Affairs, through our Granary Foundation endowment fund, was a member of the shareholder group filing the proposal.

Shareholder proponents were overwhelmingly positive in their reactions to the policy change. The Center released a statement that read, “It’s our hope this will bring new opportunities to family farmers in niche markets for non-GMO crops. We applaud Whole Foods for taking another step to provide opportunities for America’s family farmers.”

Contact: Gerard Ras, 402.687.2103 x 1003 or gerardr@cfra.org for details.

Minnesota Town Hall Meeting Topics Vary

In mid March, small business owners, farmers, dairymen and women, and others met with Wally Sparby of Congressman Collin Peterson’s staff in Crookston and Thief River Falls, Minnesota. Kim Leval, senior policy analyst with the Center, arranged the meetings.

Farmers voiced concerns about how consolidation, rising costs of production (especially fuel and fertilizer), untargeted agricultural subsidies, unfair trade agreements, and soaring land prices are pushing farmers and ranchers off the land. These trends also make it difficult for beginning farmers and ranchers to enter farming.

Leval talked about Minnesota’s Farm Beginnings Program, sponsored by the Land Stewardship Project. It includes mentoring; seminars on low-cost, sustainable production methods for farm or ranch start up; field days; resource materials; and zero-interest livestock loans for qualified beginning farmers. Find out more from Amy Bacigalupo, 320.269.2105 or amyb@landstewardshipproject.org 

Support for programs the Center has championed was expressed at the town hall meetings – improved access to capital for young people to enter farming, and programs that assist farmers and businesses to enter new markets, add value to products, and maintain and expand their businesses. The group also voiced their concerns about health care and social security.

When the issue of targeting farm subsidies came up, Sparby said that Congressman Peterson’s stance is not to re-open or reduce the Farm Bill, but to keep it as is. Peterson is the ranking minority member on the House Agriculture Committee, a powerful decision-making position. A bill to cap farm program payments is still under consideration in Congress (see article at top).

Contact: Kim Leval, kimleval@qwest.net or 541.687.1490 for more information.

Study Examines Rising Fuel Price Impact on Iowa’s Farmers

A new study by the Leopold Center, Rising Energy Prices and Iowa Farmers looks at the likely impact of fuel price increases on agricultural production. Assuming a fuel cost increase of 25 percent, variable costs for corn production went up by 10 percent and total costs by 5-6 percent. The projected 25 percent fuel price increase had a slightly lower impact on soybean production: variable costs rose by 6 percent and total costs by 2 percent.

If fuel prices increased by 50 percent, variable costs of production for corn and soybeans would rise 18 and 10 percent, respectively, and fixed costs would rise 10 and 4 percent, respectively. Report authors were Leopold Center associate director Mike Duffy and ISU Extension economist Darnel Smith.

The paper with the full analysis is posted on the Leopold Center website, http://www.leopold.iastate.edu/pubs/staff/files/energy_impact0405.pdf  

Essay: Three Reasons to Reform, Not Repeal, the Estate Tax 
Proposed reforms to raise the estate tax exemption would allow family farms and small businesses to pass between generations

The U.S. House of Representatives has voted to permanently repeal the estate tax. If the Senate goes along, it will be bad for family farms and ranches, bad for America, and bad for democracy.

There are three compelling reasons to reform – but retain – the estate tax.

First, the estate tax provides some semblance of a “level playing field.” It is critical to the sons and daughters of family farmers and ranchers who want to get into the business for themselves, but have to compete with wealthy heirs for land and markets.

Talent and ambition is no match for the economic power and advantage of a $20 million inheritance at a land auction. With no estate tax, competition will increasingly be based on station of birth, rather than working hard and smart.

Many family farmers and business people are concerned that estate taxes will make it harder for the next generation to continue the family business. But alternative proposals to exempt $2 million per person ($4 million per family) would exempt the estates of the overwhelming majority of family farms and rural small businesses.

Second, when wealth concentrates American is weakened. There is a natural tendency for wealth to concentrate. The richest 1 percent of Americans now control over one-third of the nation’s wealth – a 50 percent increase over their share in 1976. These are the very families that pay the lion’s share of estate taxes. Removing the estate tax will only accelerate wealth concentration.

History warns us of the dangers of concentrated wealth. As wealth concentrates, power concentrates. Average families begin to feel they have no stake, which ultimately leads to collapse. It has happened repeatedly. But it need not happen in America if we take steps to prevent it. The estate tax is a critical preventative measure.

Finally, we should tax the largest estates because it is one of the fairest ways to raise revenue. The federal government is running record deficits. The Social Security Trust Fund is building insufficient funds to meet its future obligations. The president has proposed deep cuts in rural development programs, farm programs for family-size farms, and conservation programs to balance the budget.

Is this really the time to grant a $70 billion per year tax break to the nation’s wealthiest families? The alternative proposal to raise the exemption would address the concerns of family-size farms and ranches and most rural small business. But it would save two-thirds of estate tax revenue to pay the nation’s bills, invest in its priorities, and constrain ballooning deficits.

That is a far better solution than giving a windfall to the rich and passing the bill to our children and grandchildren.

Agree or disagree? Send your opinions or comments to Chuck Hassebrook, chuckh@cfra.org 

Editor: Marie Powell