The Farm Bill: You mean we don’t have to use mule plows anymore?!

Having recently studied the bill process, it seemed necessary to review a piece of legislation currently being debated. Lately, grist has been focusing on the farm bill; something that will surely impact Colorado residents. One issue addressed was the provisions for beginning farmers and ranchers. Because of currently rising demands for local and organic foods, there has been a call for an increase in farmers and ranchers. Like many areas where something is needed however, the provisions for new farmers are slim and the current farm bill will do very little to help them start. Grist appropriately encourages the reader throughout “Count Down to the 2008 Farm Bill” to call one’s congressman and advocate certain adjustments that will ensure the healthy future of the agricultural business.
In defense for their proposal to help newer farmers, one argument states that the age of the average farmer is increasing. Over one fourth of the current farmers are over 65 while fewer than 4 percent are under 35. Similar to the Social Security issue of having only two current tax payers to support each beneficiary, the farm business is also seeing a lack of younger generation farmers who can continue to harvest crops that match their grandfather’s production rates. Another concern with aging farmers is the issue of the inheritance of farm land. Of an estimated 400 million acres of agricultural land, about one-third will soon be passed on or sold. If the farm bill does not give provisions for younger starting farmers, it is likely that few will want to try.
Another issue the bill faces is the need to resolve, through conference committee meetings, differences that have been created in the House and Senate. Some issues, like the currently well incorporated aspect of higher loan limits, and higher cost share rates for newer farmers must be maintained in the bill. Both the House and Senate have agreed upon these provisions, but it is important that they are not sacrificed in the final stages. A difference of fifteen million in mandatory funding exists between the two Houses, of which the Senate has proposed the higher amount. It was suggested that the committee accept the Senate’s wording because it creates a stronger ability to enforce, but the House’s lower price should be substituted in order to decrease the cost of the proposal. Another area that the Senate perhaps wished to make the program too costly dealt with the Individual Development Account Program. The Senate included it in their bill, but wished to allocate ten million every year for it, while the House did not include the program at all. The best solution includes the program, but would only ask for five million per year in order to fund it. Although the Senate’s over spending would provide further funding, such a costly bill could be difficult to hold up in a conference committee or with the president. Just as a side note, it will be interesting to see whether or not Congress will attempt to pass the bill with Bush or a new president. Many of the candidates have spoken positively about a greener America and might be more open to the bill, however it is also important to implicate the bill as soon as possible. While the House did not pass the Development Account Program, the Senate did not see a need to pass incentives for owners of Conservation Reserve Program land to rent/sell to newer farmers and ranchers using sustainable methods. These incentives would aid beginning farms and would also promote an increase in sustainable farming. In regard to the direct farm operating loans and direct ownership loans that are needed to maintain and run farms, the Senate agreed to raise both by several hundred million while the House opted to keep current levels. With an increase in demand for ethanol and other farm products, the costs for continuing a farm have increase, and there is a clear need to adopt the Senate’s means of paying for the increased costs.
Also a concern, aside from the newer farmer’s ability to fund and maintain their farms, is the issue of a fair market. Currently, there are few companies that control the national food supply. Because of this, farmers must negotiate with corporate companies that can force farmers to sell for less. In passing the farm bill, grist suggests that the near monopoly on food sales will give way to a fair competitive selling of goods. One example of the impact of corporate control comes in the sale of hogs. Due to a one percent increase in hogs sold, packers were able to force the price per head down by fifteen dollars (a fifteen dollar gap between their prices and free market prices resulting in unfair competitive pricing) this drop in price resulted in a net loss of about $75,000 for an average producer with five thousand hogs. Aside from pricing, there also exists a monopolizing type problem with the creation of contracts. Companies that control half or more of the production in one area are able to bind producers with contracts because of their control. Producers are forced to agree to the contracts because they are unable to compete with the production of large companies and must join them to stay in business. This issue, already prevalent in the pork, seed, and broiler chicken markets is currently spreading into the hog, tobacco, and specialty crops and grains markets as well. An express concern with the contract is brought up in regards to the taking of the farmer’s constitutional rights. For dispute resolutions, the farmers are not granted a trial by jury, but are forced by contract to use another forum where they retain few rights and must pay an amount that most starting farmers are unable or unwilling to pay. Because of this, many disputable issues go unchallenged. Similar to the civil rights movement when blacks were given the right to vote, but had to pay poll taxes that many could not afford, the farmers have been given the ability to dispute, but few of them have enough money to do so; especially in disputes which are ongoing or deal with multiple issues.
The House and Senate have also passed different forms of the bill dealing with fair and competitive markets, and again, these differences must be resolved in the conference committee; sometimes adopting House policy, but predominantly grist calls for an adoption of Senate policy. The Senate bill, unlike the House bill, contains necessary provisions under the Livestock Title. These provisions include, “ban on packer ownership of livestock, a requirement that USDA write regulations defining "unreasonable preference or advantage" to reduce price discrimination against small and medium-sized producers, an expanded Packers and Stockyards Act enforcement authority to all types of poultry, and a variety of contract grower protections, including investment protections and the right to discuss contract terms with business associates and other producers; makes it unlawful under the Agricultural Fair Practices Act for any firm to refuse to deal with a producer for belonging to a producer association or cooperative, requires good faith bargaining with producer associations, and provides legal remedies for producers injured by a handler; creates Special Counsel for Agricultural Competition within USDA to coordinate investigations and prosecutions under the Packers and Stockyards Act.” Essentially, the Senate’s bill protects small businesses from being disadvantaged in the markets, the corporate contracts, and other legal entities of the farming industry such as injury compensation. Also dealing with the legal aspect, the Senates bill prohibited mandatory arbitration clauses in contracts. In doing this, both parties in a dispute have the opportunity to use a fair court system unless they both agree to opt for arbitration. A minor detail accepted by both the Senate and the House is the country of origin labeling (COOL), but the House did not include poultry under COOL. Although a minor detail, it is still amusing to know that the writers of the farm bill included a section that they could acronym into the word “cool”.
Because of a rapidly rising demand for organically grown food, it is crucial in the bill to include means for farmers and ranchers to transition into organic production as easily as possible. The transition into organic, if supported by the bill, could potentially raise farm revenue, improve environmental impact, and result in a better quality of food.
Because the process of organic farming is a new one, it is necessary to utilize appropriate amounts of funding in order to research methods. This funding however, provided usually by USDA-REE expenditures, has remained below 1.5% of the total USDA REE spending when the retail market share of organic foods is at 3.5% and quickly rising. Even though the organic demand is increasing, an incentive for farmers to convert, it takes three years and extensive initial costs to fully convert to an organic program. Because of this, less than one percent of cropland and pasture has been certified organic. This, and a lack of expertise, is making organic transitions difficult and, for the time being, it is driving up the prices of organic foods at our local grocery stores. Another obstacle standing in the way of converts, is the five percent surcharge that is demanded in order to receive insurance. And even with this extra expenditure, the reimbursement that an organic farmer receives if their crop is unsuccessful is lower than the usual premium for organic products. Another extra expenditure is the cost of yearly organic certification that can amount to $20,000 every year.
Within the two sections of Congress, different policy details regarding organic conversion, research, and crop insurance provisions have been passed. Due to a need to increase research, it is necessary to use the Senate’s version that raised funding levels for the Organic Farming Research and Extension Initiative to $16 million. The House agreed that there should be an increase in research funding, but only allocated five million; not enough to promote an industry that can keep up with the increasing demand for organic goods. In another area of funding, both bills created the Organic Conversion Assistance Program, but the House failed to require mandatory funding, instead choosing to simply require fifty percent of funding to be used for technical assistance. The best solution is to use the Senate’s mandatory funding program (the Environmental Quality Incentives Program) with the House’s provision of using at least one half of that funding for technical assistance. In response to the five percent surcharge that organic farmers must pay for to receive insurance, as well as the lower rate of reimbursement, the Senate prohibited the five percent charge except in cases where a crop-by-crop basis warranted such a charge. The Senate also, through the USDA, provided for reimbursement equal to the regular organic producer rate that is received for any crop losses. The House gave a solution to neither of the extra expenditure problems that organic growers have, instead opting to perform studies on the issues before taking action. These studies are unreasonable and would only prolong needed aid to organic producers. Another area in which the Senate provided for a greater increase in funding than the House was in the reauthorization of the Organic Production and Marketing Data Collection Program. The Senate proposed a two million more in spending to fund this program. Because the Senate was predominately the bigger spender with this bill, it is unlikely that they will be able to pass all of their proposed spending plans, but if they are able to convince the House members that more spending will result in a better organic industry, it could help to at least increase the compromising prices in the conference committee.
With the recent ethanol boom, there has been an increase in both ecological stress and use of farm land for corn growth. Farmers have a significant impact on the environment and through the proposed Conservation Security Program; they could become a positive one. The program, which gives rewards based upon positive environmental impact, would give farmers the incentive and means to use sustainability practices as a source of financial support. One strong argument for an incentive to increase sustainability comes from the EPA findings that showed over forty percent of lakes and river mileage to be polluted by pathogens, sediment, and other agricultural nutrients. The CSP is different from past attempts that started as far back as the Dust Bowl, in that it gives rewards not only for meeting requirements, but also for anything that is considered to have substantially exceeded requirements. In the past, farmers did the minimum to meet requirements, not able to afford extensive environmental plans. Now, if conditions permit, they are willing to exceed minimum limits, knowing they will be compensated for their work. The CSP was initially very successful, however the original nine billion allotted for it has been cut down by 4.3 billion, and only 500 million has been made available. Because of this, the program has been limited to a few watersheds. This is a perfect example of one more way that a bill can be killed, even if it is passed.
Once again, the Senate and House bills were passed with fairly similar details, but drastically opposing funding provisions. The Senate suggested over one billion in funding as well as an increase in acreage enrollment into the program, while the House proposed a five billion dollar cut and no new enrollments until 2012. It is unclear to me how the House plans to cut five billion from a program that has already been reduced from nine billion to 4.7, but considering their intentions of essentially killing the bill, I suppose the proposal makes sense. Both the House and Senate agreed to restore the program to a national scale and include a new ranking system to determine which contracts to accept. They also agreed to improve features of the program in order to ensure a prolonged effort to positively impact the environment. Some changed features include the consolidating of stewardship payments, and creating a universal five year contract length. Aside from the agreement that the program should be restored, there are few similarities. The Senate proposes including the CSP with the Quality Incentives Program under a general umbrella program to be named the Comprehensive Stewardship Incentives Program. These wordy titles are a good reminder of the euphemistic titles that bills must take on in order to succeed. For the adoption of resource-conserving crop rotations, the House developed a ranking system and the Senate gave payments, but neither part of Congress incorporated both elements that are need to ensure the adoption of these crop rotations. With almost all of the provisions, the House and Senate either disagree completely or forgot to incorporate all of the necessary elements.
The final step of the organic foods production process is also in need of federal aid and could benefit from a change in policy. Farmers are asking for direct market and value-added enterprise opportunities as well as a limit or complete riddance of policy that prohibits the interstate sale of meat that came from state-inspected producers. Such policies will not only serve to benefit the farmers, but also the consumers who will be given access to a greater amount of better quality food. Recently, the farm value share of money spent on conventional supply chains decrease by thirty six cents while an informal study by the Sustainable Agriculture Coalition found that farmers selling more directly to consumers and farmers who are members of cooperatives/alliances were able to retain seventy five percent of every “food dollar” spent on the market. It is important for the new bill to provide the means for farmers to achieve the more direct selling circumstance in which overbearing supply chains are significantly reduced. One area making the ability to increase farm to consumer marketing comes from the Farmers’ Marker Promotion Program. In 2007, about sixteen million in applications for funding of farmers’ markets were submitted, but only one million federal dollars (subsequently twenty three of the 326 applications) were awarded. On the national market scale, the rules and restrictions currently in place for meat processing plants have resulted in a decline of smaller producers who are unable to compete with national meat corporations. Because the state and national meat inspections are different, meat plants that are only state inspected have been unable to sell and ship across state lines. Many smaller farmers are hurt by this policy because they are only able to afford the state inspections and can not compete with larger companies that are able to annually fund a federal inspection.
Differences in House and Senate bills have arisen that affect the marketing opportunities that producers will receive. The VAPG program, successful in the past as a booster for farm income and grants, has been cut from forty to thirty million by the House, and the Senate has neglected to provide any type of mandatory funding. If the program, already proved to have been a success, does not receive the continued funding of forty million, the impact of the program will be mitigated to an extent that will affect other areas of the farming budget. In regards to the Farmers Market Promotion Program, both the House and Senate awarded thirty five million in mandatory funding, but the Senate’s version was the better one in that it allotted five million of that mandatory funding to be spent on the Electronic Benefits Technology which provides access to local food in the case of food assistance program participants. In order to help the smaller meat producers, an agreement to allow interstate meat commerce was reached for plants that employ fewer than twenty six workers. The Senate bill goes beyond the House version in its provisions for federal oversight of state plants as well as a shared cost plan for the inspections and testing of state plants. The oversight and sharing of costs will make it easier for smaller producers to gain the right to engage in interstate trade that will in turn allow them to stay competitive in the meat market.
Aside from Grist’s point of view, I thought it would be prudent to research what our Colorado Senators have said about the bill. I was able to find Wayne Allard’s statement on “The Farm bill and Cockfighting”. It is unclear to me how exactly cockfighting made its way into and stayed on the farm bill, and it is also unclear why our Senator feels a need to address the president upon the matter, but perhaps Colorado has a problem with underground cockfighting. Who knew? Allard first thanks the president and tells how important such legislation can be to Colorado in a true Robert’s Rules manner, and then proceeds to mentions why he is giving the address. He speaks of his roles upon the House Agricultural Committee, the Senate Agricultural Committee, as well as in the drafting group for the Farm Bill, and he is of course, “happy to have twice had the opportunity to be a part of it.” Allard informs the president that he specifically wishes to speak upon the substitute bill provided by Senators Cochran and Roberts. In regards to the substitute bill, Allard discusses the maintenance of crop insurance programs; asks for, and emphasizes the importance of reasonable funding amounts; details his take on the Farmland Protection Program; discusses conservation and trade agreements; overviews the research involved with the bill; and asks for the creation of an advisory committee. I believe some of the changes the substitute bill proposes are legitimate; however, the incompleteness of the bill in some areas leaves too much of the cost burden to farmers. Esthetically it is pleasing, but in reality it would be impractical. Not to mention the additional time that it would take to send an entirely new substitute bill through the process once again, and having already discussed the farming issues, the committees would most likely amend the bill until it resembled the current bill anyway.