2007 Senate Agriculture Committee Farm Bill Proposal
For this newsletter we were hoping to report on the final Senate version of the 2007 farm bill. No such luck folks – business in the Senate with the farm bill has been like one of those on-again, off-again relationships. And as far as we know, the farm bill is off until sometime next year.
However, we can provide an update on how family farms and rural communities fared in the Senate Agriculture Committee bill, key amendments we expect, and information on where we’ll need the grassroots to shake things up again once the debate resumes. (Look for coverage of livestock provisions in our Corporate Farming Notes.)
Commodity Programs.
The Senate Agriculture Committee adopted sham payment limitation “reform” engineered by Senators Kent Conrad (D-ND) and Saxby Chambliss (R-GA).
They claim it tightened payment limitations. In fact, all it really did was cut the limit in half for unmarried farmers on two types of payments – direct payments made regardless of crop prices and countercyclical payments. Nothing else really changes. Married mega-farmers will receive the same big direct and countercyclical payments they get under current law.
Rather than continuing the phony limits on loan deficiency payments and marketing loan gains – the Senate just removed all limits on the payments. These payments are made when prices drop below the loan rates set by the farm bill. Current law technically limits the payments, but then provides a loophole called “generic certificates” to let everyone get unlimited payments.
Thus, the Senate Agriculture Committee farm bill continues multi-million dollar payments to the nation’s largest farms – a policy destroying family farming and rural communities.
Senators Byron Dorgan (D-ND) and Chuck Grassley (R-IA) will offer a payment limitation amendment when the farm bill comes before the full Senate. It would close loopholes and make the existing paper limits real limits – $40,000 on direct payments, $65,000 on countercyclical payments, and $150,000 on loan deficiency payments. We are very hopeful that it will pass when it is offered on the Senate floor.
The biggest change in the commodity section passed by the Senate Agriculture Committee is the inclusion of a new commodity program known as the “Average Crop Revenue” program. Producers would voluntarily choose between the new Crop Revenue Program and current commodity programs. The new program is designed to reduce risk in a time of relatively high crop prices.
Under the program, producers would receive an automatic $15 per acre payment and an additional payment if per acre revenue falls below the state average for crops covered. Many Midwestern senators are concerned, for example, that the regular farm program would provide no additional help if the corn price fell from $3.25 to $2.50 per bushel.
Except for this addition, the commodity provisions of the Senate committee farm bill are quite similar to those of the 2002 farm bill.
Conservation
The Senate Agriculture Committee bill includes a new and improved conservation program called the Comprehensive Stewardship Incentives, which will be the umbrella for two working lands conservation programs – the Environmental Quality Incentives Program and the Conservation Stewardship Program.
The new Conservation Stewardship Program will no longer be subject to the watershed enrollment approach that has been disastrous for the current program. The current Conservation Security Program was only implemented in a small fraction of the nation’s watersheds. The new program will be available for nationwide enrollment, with ranking criteria to determine eligibility.
Under this new program the Senate bill calls for adding $2 billion over the first five years, which will equate to adding 13.3 million acres each year for enrollment at a national average cost of $19 per acre. The program is set to reach 80 million acres by 2013. This will mean more land in conservation than we have previously seen. The new program also indicates the Secretary of Agriculture must establish a minimum contract value to ensure equity for small acreage farms.
Senator Tom Harkin (D-IA) had plans to cap payments under the Environmental Quality Incentives Program at $240,000, a move we believe was needed. However, Senator Pat Roberts (R-KS) introduced an amendment that passed in committee which raises the contract limit back up to $450,000.
The Cooperative Conservation Partnerships Initiative (called Partnerships and Cooperation in the Senate bill) was essentially dismantled and lost most of the meaningful provisions. These provisions would support farmers and ranchers who want to do special conservation projects to enhance natural resources and assist rural community development efforts by, for example, allowing public access on their land. As we have championed this provision, it was disappointing to see it taken apart.
However, not all hope is lost as we understand Senators Tom Harkin and Jeff Bingaman (D-NM) are working on an amendment to restore the intent of the program and the priority for projects which simultaneously address community development opportunities and environmental enhancement. We strongly support this amendment.
Beginning Farmer and Rancher Provisions
The Beginning Farmer and Rancher Development Program is authorized to provide the training, mentoring, marketing, business, and conservation planning beginning farmers need. But it was not funded, which means that it will only be implemented if Congress provides money in subsequent years through its annual appropriations process. However, the Dorgan-Grassley payment limitation amendment discussed above, if adopted, would provide $15 million annually for this program.
It would also provide $4 million per year to the Beginning Farmer and Rancher Individual Development Account Program, a new pilot program to promote matched savings accounts, the proceeds of which may be used by beginning farmers to buy land, buildings, equipment, or livestock. This program was created but not funded by the committee bill.
Rural Development
The farm bill passed by the Senate Agriculture Committee contains many of the Center for Rural Affairs’ priorities for rural development. Rural development has been badly under funded. Senate Agriculture Committee Chair Tom Harkin (D-IA) set out to remedy that in this farm bill.
The committee bill includes the Rural Microenterprise Assistance Program, a longtime Center for Rural Affairs’ priority. The program will provide grants to programs that offer loans, training, and technical assistance for rural microenterprises.
The bill provides $10 million annually for the program, a significant victory in a time of very tight budgets. The Dorgan-Grassley amendment would double funding for the program with savings from tighter payment limits. The House of Representatives-passed farm bill included the program as well, but did not provide funding. It would only be launched if the Congress later provided funding through its annual appropriations process.
The Value Added Producer Grants Program – a competitive grants program that provides assistance to producers to develop high value markets and process agriculture commodities – is included as well. In the past, many of the grants made by the program went to small start up cooperative and joint ventures by groups of farmers. In a significant step in the right direction, the Senate Agriculture Committee places a priority on grants to projects that benefit small and mid-size family farmers and ranchers.
Overall, the rural development title of the Senate Agriculture Committee farm bill is a positive step forward. It does not have the level of funding we would prefer for our priority programs, but it does contain over $400 million in overall mandatory funding for rural development, a substantial increase. In contrast, the House of Representatives farm bill contains a mere $30 million. We look forward to passage of the Dorgan-Grassley payment limitations amendment, which will provide even more resources to programs that will truly provide economic opportunity for rural America.
Final Thoughts
In recent months we asked you to act by calling and writing to your senators. The response has been phenomenal, with literally thousands of you acting nationwide. To those of you who have taken action to help improve the future of rural America, we say thank you. Your actions have moved the debate forward and are laying the foundation for future success.
For example, your actions have clearly moved senators’ votes from “no” to “yes” on the important reform issue of payment limitations. But nothing is set in stone until all the votes are cast on the floor and a final bill is passed and signed by the President. We rely on your voices to be there to fight for a better future for rural America, now and weeks or months from now.
The grassroots battle for farm bill reform will last longer than previously thought. That means your senators will likely need to hear from you again. They have a funny way of forgetting the will of the people, and need the occasional reminder.
When the farm bill does come to the Senate floor for debate, we expect the first issue debated will be the Dorgan-Grassley amendment to close farm payment limitation loopholes and invest the savings in the future of rural America. The vote on this piece of true reform in the Senate will be close, but those are the votes where grassroots pressure can make a decisive difference.
Unfortunate as it is, this is the messy, irritating, and ultimately necessary aspect of the democratic process. That process is neither easy nor swift. We will keep you updated as it moves through Congress.
Contact: Traci Bruckner, tracib@cfra.org or 402.687.2103 x 1016 for more information, and check our website, www.cfra.org.
However, we can provide an update on how family farms and rural communities fared in the Senate Agriculture Committee bill, key amendments we expect, and information on where we’ll need the grassroots to shake things up again once the debate resumes. (Look for coverage of livestock provisions in our Corporate Farming Notes.)
Commodity Programs.
The Senate Agriculture Committee adopted sham payment limitation “reform” engineered by Senators Kent Conrad (D-ND) and Saxby Chambliss (R-GA).
They claim it tightened payment limitations. In fact, all it really did was cut the limit in half for unmarried farmers on two types of payments – direct payments made regardless of crop prices and countercyclical payments. Nothing else really changes. Married mega-farmers will receive the same big direct and countercyclical payments they get under current law.
Rather than continuing the phony limits on loan deficiency payments and marketing loan gains – the Senate just removed all limits on the payments. These payments are made when prices drop below the loan rates set by the farm bill. Current law technically limits the payments, but then provides a loophole called “generic certificates” to let everyone get unlimited payments.
Thus, the Senate Agriculture Committee farm bill continues multi-million dollar payments to the nation’s largest farms – a policy destroying family farming and rural communities.
Senators Byron Dorgan (D-ND) and Chuck Grassley (R-IA) will offer a payment limitation amendment when the farm bill comes before the full Senate. It would close loopholes and make the existing paper limits real limits – $40,000 on direct payments, $65,000 on countercyclical payments, and $150,000 on loan deficiency payments. We are very hopeful that it will pass when it is offered on the Senate floor.
The biggest change in the commodity section passed by the Senate Agriculture Committee is the inclusion of a new commodity program known as the “Average Crop Revenue” program. Producers would voluntarily choose between the new Crop Revenue Program and current commodity programs. The new program is designed to reduce risk in a time of relatively high crop prices.
Under the program, producers would receive an automatic $15 per acre payment and an additional payment if per acre revenue falls below the state average for crops covered. Many Midwestern senators are concerned, for example, that the regular farm program would provide no additional help if the corn price fell from $3.25 to $2.50 per bushel.
Except for this addition, the commodity provisions of the Senate committee farm bill are quite similar to those of the 2002 farm bill.
Conservation
The Senate Agriculture Committee bill includes a new and improved conservation program called the Comprehensive Stewardship Incentives, which will be the umbrella for two working lands conservation programs – the Environmental Quality Incentives Program and the Conservation Stewardship Program.
The new Conservation Stewardship Program will no longer be subject to the watershed enrollment approach that has been disastrous for the current program. The current Conservation Security Program was only implemented in a small fraction of the nation’s watersheds. The new program will be available for nationwide enrollment, with ranking criteria to determine eligibility.
Under this new program the Senate bill calls for adding $2 billion over the first five years, which will equate to adding 13.3 million acres each year for enrollment at a national average cost of $19 per acre. The program is set to reach 80 million acres by 2013. This will mean more land in conservation than we have previously seen. The new program also indicates the Secretary of Agriculture must establish a minimum contract value to ensure equity for small acreage farms.
Senator Tom Harkin (D-IA) had plans to cap payments under the Environmental Quality Incentives Program at $240,000, a move we believe was needed. However, Senator Pat Roberts (R-KS) introduced an amendment that passed in committee which raises the contract limit back up to $450,000.
The Cooperative Conservation Partnerships Initiative (called Partnerships and Cooperation in the Senate bill) was essentially dismantled and lost most of the meaningful provisions. These provisions would support farmers and ranchers who want to do special conservation projects to enhance natural resources and assist rural community development efforts by, for example, allowing public access on their land. As we have championed this provision, it was disappointing to see it taken apart.
However, not all hope is lost as we understand Senators Tom Harkin and Jeff Bingaman (D-NM) are working on an amendment to restore the intent of the program and the priority for projects which simultaneously address community development opportunities and environmental enhancement. We strongly support this amendment.
Beginning Farmer and Rancher Provisions
The Beginning Farmer and Rancher Development Program is authorized to provide the training, mentoring, marketing, business, and conservation planning beginning farmers need. But it was not funded, which means that it will only be implemented if Congress provides money in subsequent years through its annual appropriations process. However, the Dorgan-Grassley payment limitation amendment discussed above, if adopted, would provide $15 million annually for this program.
It would also provide $4 million per year to the Beginning Farmer and Rancher Individual Development Account Program, a new pilot program to promote matched savings accounts, the proceeds of which may be used by beginning farmers to buy land, buildings, equipment, or livestock. This program was created but not funded by the committee bill.
Rural Development
The farm bill passed by the Senate Agriculture Committee contains many of the Center for Rural Affairs’ priorities for rural development. Rural development has been badly under funded. Senate Agriculture Committee Chair Tom Harkin (D-IA) set out to remedy that in this farm bill.
The committee bill includes the Rural Microenterprise Assistance Program, a longtime Center for Rural Affairs’ priority. The program will provide grants to programs that offer loans, training, and technical assistance for rural microenterprises.
The bill provides $10 million annually for the program, a significant victory in a time of very tight budgets. The Dorgan-Grassley amendment would double funding for the program with savings from tighter payment limits. The House of Representatives-passed farm bill included the program as well, but did not provide funding. It would only be launched if the Congress later provided funding through its annual appropriations process.
The Value Added Producer Grants Program – a competitive grants program that provides assistance to producers to develop high value markets and process agriculture commodities – is included as well. In the past, many of the grants made by the program went to small start up cooperative and joint ventures by groups of farmers. In a significant step in the right direction, the Senate Agriculture Committee places a priority on grants to projects that benefit small and mid-size family farmers and ranchers.
Overall, the rural development title of the Senate Agriculture Committee farm bill is a positive step forward. It does not have the level of funding we would prefer for our priority programs, but it does contain over $400 million in overall mandatory funding for rural development, a substantial increase. In contrast, the House of Representatives farm bill contains a mere $30 million. We look forward to passage of the Dorgan-Grassley payment limitations amendment, which will provide even more resources to programs that will truly provide economic opportunity for rural America.
Final Thoughts
In recent months we asked you to act by calling and writing to your senators. The response has been phenomenal, with literally thousands of you acting nationwide. To those of you who have taken action to help improve the future of rural America, we say thank you. Your actions have moved the debate forward and are laying the foundation for future success.
For example, your actions have clearly moved senators’ votes from “no” to “yes” on the important reform issue of payment limitations. But nothing is set in stone until all the votes are cast on the floor and a final bill is passed and signed by the President. We rely on your voices to be there to fight for a better future for rural America, now and weeks or months from now.
The grassroots battle for farm bill reform will last longer than previously thought. That means your senators will likely need to hear from you again. They have a funny way of forgetting the will of the people, and need the occasional reminder.
When the farm bill does come to the Senate floor for debate, we expect the first issue debated will be the Dorgan-Grassley amendment to close farm payment limitation loopholes and invest the savings in the future of rural America. The vote on this piece of true reform in the Senate will be close, but those are the votes where grassroots pressure can make a decisive difference.
Unfortunate as it is, this is the messy, irritating, and ultimately necessary aspect of the democratic process. That process is neither easy nor swift. We will keep you updated as it moves through Congress.
Contact: Traci Bruckner, tracib@cfra.org or 402.687.2103 x 1016 for more information, and check our website, www.cfra.org.
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