House Passes Agriculture Credit Act of 2009
March 19th, 2010
This week, the U.S. House of Representatives passed the Agricultural Credit Act of 2009, approved for consideration earlier this month by the House Agriculture Committee.
The Agricultural Credit Act of 2009 (H.R. 3509) would reauthorize funding for the USDA’s State Agricultural Mediation Program, which administers grants for certified state agricultural mediation programs. These programs help agricultural producers, lenders and various USDA agencies resolve disputes outside of the traditional process of litigation, appeals, bankruptcy, and foreclosure.
“Like most of the country, the agriculture sector is currently experiencing increased financial stress, which has created a greater need for the service of the agriculture mediator program. This program provides our farmers and ranchers with a voluntary and low cost service to mediate disputes that may arise between their creditors, or to address adverse decisions with USDA,” said Agriculture Committee Ranking Member Frank Lucas (R-OK), who was an original co-sponsor of the act. Agriculture Committee Chairman Collin Peterson (D-MN) is the lead sponsor of H.R. 3509, which has attracted bipartisan support.
State agricultural mediation programs offer many benefits, including providing a confidential forum for addressing disputes, building strong working relationships between participants, and streamlining the decision making process. The Coalition of Agriculture Mediation Programs (CAMP) offers a useful summary of additional benefits, components and background information for these programs.
Organic Standards Board Meeting Announced
March 19th, 2010
The National Organic Standards Board (NOSB) will be holding its next meeting in Woodland, CA, from April 26 to 29. The NOSB was established by the Organic Foods Production Act of 1990 and is charged with making recommendations on allowed and prohibited substances in organic production and handling, assisting in the development of standards for substances, and advising the Secretary of Agriculture on implementation of the Act.
In addition to concluding and continuing its reviews of a number of substances, the NOSB will be considering recommendations on production standards for plants in containers and enclosures, on the use of inerts (ingredients that are not intended to affect a target pest, but are added to enhance the treatment) due to their recent reassessment by the Environmental Protection Agency, on clarifying the definitions of the National List, and on revisions to the NOSB Policy and Procedures Manual.
The meeting is open to the public, and written comments on proposed recommendations and requests to make oral presentations much be received by April 12. For more details about the meeting and proposed recommendations, download the Federal Register notice by clicking here.
Antibiotic Use Facing Growing Scrutiny by FDA, Congress
March 17th, 2010
The widespread use of antibiotics in livestock production, and the growing problem of antibiotic resistance, is a topic of increasing interest among policymakers. After delving into the topic less than a week before at the Atlantic Food Summit, FDA Commissioner Margaret Hamburg returned to the antibiotics question again during the House Agricultural Appropriations Subcommittee hearing on March 10, 2010.
Rep. Tom Latham (R, IA) pressed Hamburg about the FDA’s position on use of antibiotics in animals. Hogs outnumber humans six to one in Latham’s district, which is also home to one of the nation’s largest animal antibiotic manufacturers, Fort Dodge laboratories. Latham referred to a July 24, 2009 New York Times editorial and asked, “Is it the FDA’s intention to entirely ban antibiotics in livestock?”
Hamburg responded that the FDA had no intention of an outright ban on antibiotic use for treatment or prevention of disease in animals, but she questioned the use of antibiotics as a growth promoter in animal feed. Hamburg noted that antibiotic resistance was a “one of the foremost health concerns in the nation,” and that action was needed to preserve the effectiveness of major antibiotics for humans and animals. Latham interrupted to ask, “is there any science that says there’s a connection?” Hamburg assured him that there was, and promised to provide that information. The Keep Antibiotics Working website features a growing list of scientific studies on antibiotic resistance.
Latham went on to question Hamburg about whether the FDA intended to take action on its own with regard to animal antibiotics, or whether the agency would wait for a signal from Congress. Hamburg did not rule out the possibility of pursuing “regulatory pathways” to address the issue, but emphasized that any action by the FDA would be based on sound science and taken in consultation with industry and experts.
In 2009, Rep. Louise Slaughter (D, NY) introduced legislation known as the “Preservation of Antibiotics for Medical Treatment” (PAMTA) Act, HR 1549. Hamburg mentioned that legislation during the hearing last week, but said, “the Administration has no position on that bill. We have a somewhat different view of the issue than that piece of legislation.”
One of the solutions that has sometimes been proposed for curbing the use of antibiotics in livestock is to require that an animal be assessed by a veterinarian before antibiotics can be administered, similar to requiring humans to obtain a prescription for antibiotics from a doctor. Rep. Jo Ann Emerson (R, MO) noted that such a requirement could prove challenging in some areas of the country. “I’ve got a very rural district, with perhaps 1 vet and 100,000 animals,” Emerson said. She cautioned Hamburg that requiring an animal to be seen by a vet before being treated with antibiotics “puts us in a hard position.”
For more information on solutions to the problem of antibiotic resistance, go to the wise antibiotics page of the Food and Agriculture Program of the Union of Concerned Scientists, an NSAC member organization.
Lincoln Introduces Child Nutrition Bill for Markup
March 17th, 2010
This morning, Senate Agriculture Committee Chair Blanche Lincoln (D-AR) unveiled her “markup vehicle” for Child Nutrition Act reauthorization and scheduled Committee markup of her draft bill for next Wednesday, March 24. The proposal is titled “Healthy, Hunger-Free Kids Act of 2010.”
Farm to School would receive just $25 million in the current Lincoln draft. However, moves are underway to try to increase the amount to $50 million to match the $50 million proposed in Senator Leahy’s Growing Farm to School Programs Act (S. 3123), also released today.
Lincoln’s bill also increases the reimbursement rate schools receive for providing meals, includes new initiatives to increase enrollment of eligible low-income children, and expands afterschool feeding programs.
Overall, the proposed bill would increase spending on school meal programs by $4.5 billion over the next 10 years, or a bit less than half of what the President proposed in the budget he released in February. The Obama proposal asked for an increase of $1 billion a year, or $10 billion over 10 years, but did not suggest a way to offset those costs
The Lincoln proposal addresses the question of the offset by proposing a cut in farm bill conservation spending for the Environmental Quality Incentives Program (EQIP) by about $2.3 billion over 10 years, which would pay for half the cost of the proposed increase in school meal programs. That cut, if passed and if combined with a cut to EQIP spending in future annual agriculture appropriations bills of a similar magnitude to the one made in recent years, would put EQIP on level funding track rather than the increased funding track it would otherwise be on under the terms of the 2008 Farm Bill.
The other two “offsets” in the Lincoln package are roughly billion dollar cuts over 10 years to the SNAP Education program and a technical change to the bonus commodity program.
Three bill summaries and the full bill text are available under “Current Legislation” on the Senate Agriculture Committee website. NSAC will continue to follow the development of the markup process and will post information about farm to school funding, EQIP conservation funding, and related issues as it becomes available in the coming week or during the Committee mark-up a week from today.
Farm to School Bill Introduced in Senate
March 17th, 2010
Senator Patrick Leahy (D-VT) today introduced the Growing Farm to School Programs Act (S. 3123), a popular proposal to authorize $50 million to USDA to provide start-up funds to communities across the country linking farmers and ranchers to the school lunch program. Senator Leahy’s bill is designed to improve the quality of school lunches while also stimulating local and regional small and medium-sized farms and food systems.
The bill has already been cosponsored by13 senators, including seven members of the Senate Agriculture Committee: Senators Arlen Specter (D-PA), Richard Durbin (D-IL), Michael Bennet (D-CO), Sherrod Brown (D-OH), Robert Casey (D-PA), Kirsten Gillibrand (D-NY), Tom Harkin (D-IA), Amy Klobuchar (D-MN), Patty Murray (D-WA), Bernie Sanders (D-VT), Charles Schumer (D-NY), Jeanne Shaheen (D-NH), and Tom Udall (D-NM).
NSAC strongly supports this legislation and is encouraging Senators to join as co-sponsors. The companion bill in the House of Representatives is Rep. Holt’s Farm to School Improvements Act of 2010 (HR 4710).
Farm to school programs have emerged in communities nationwide over the past ten years but their growth has been hampered by the lack of consistent, national funding and support.
“Connecting farms to schools makes sense in so many ways, from economic to nutrition. The school lunch program is a sizable buyer in every community. There is no need to start from scratch….This bill is a catalyst to forge these connections and let them flourish,” said Senator Leahy in a press release today.
The Growing Farm to School Programs Act builds on work that Senators Leahy and Specter began in 2004 encouraging farm to school programs through a provision they wrote, which was included in the 2004 Child Nutrition Act reauthorization.
NSAC will continue to follow the progress of farm to school bills in the House and Senate and work to have mandatory funding for the programs included in the final Child Nutrition reauthorization approved by both Houses.
Farmers Seek Justice in the Heartland
March 17th, 2010
We are thrilled to feature this blog post written by Kristina Hubbard, board member of NSAC member group, the Alternative Energy Resources Organization (AERO). Kiki attended the first in a series of hearings sponsored by the USDA and Department of Justice about concentration in the agriculture industry. Kiki is the author of a recent report, Out of Hand: Farmers Face the Consequences of a Consolidated Seed Industry.
“We’ve waited a long time for justice in the heartland.”
- Wes Shoemyer, Missouri Farmer and State Senator
Last Friday approximately 800 people gathered in Ankeny, Iowa, for the first in a series of workshops hosted by the Departments of Justice (DOJ) and Agriculture (USDA) on competition in agriculture. The meeting followed an outpouring of 15,000 public comments on the topic. (It’s an open docket, so there’s still time to weigh in by emailing agriculturalworkshops@usdoj.gov.)
U.S. Attorney General Eric Holder delivered opening remarks for the “milestone event,” saying, “I don’t use milestone lightly. Not once have our Departments of Justice and Agriculture come together to discuss regulatory issues in this industry.” He encouraged the audience “to be as frank as you can be, understanding that we’re going to be receptive to that dialogue.” This remark was followed by someone in the audience yelling, “When?”
There’s truth in this outburst, of course. The workshops are long overdue — as Tom Vilsack admitted in his opening remarks — and the forum wasn’t designed for farmer input. Of the hundreds of people in attendance for the public dialogue, many of them farmers who have waited decades for a serious examination of consolidation, only a handful were given an opportunity to speak.
Attorney General Eric Holder and Secretary of Agriculture Tom Vilsack at USDA-DOJ hearing in Ankeny, IA, March 12, 2010. Photo credit: Organic Seed Alliance
Knowing that would be the case, a coalition of food and farm groups arranged a town hall meeting the night before to provide farmers another opportunity to speak. Dozens of farmers, ranchers, and other advocates took to the podium with thunderous calls to “bust up big ag.” Garry Klicker, a farmer from Bloomfield, Iowa, asked, “If we can’t get justice from the Department of Justice, where are we going to get it?”
North Dakota farmer Todd Leake told the crowd, “The crops that we grow are the basis of our civilization. If anything belongs in the public domain it is the crops we grow for food.”
* * *
The workshop that followed the next day was filled with panel discussions stacked with players who mostly support policies and technologies that don’t jive with the values of family farmers and ranchers committed to sustainable agriculture and vibrant rural communities. But there were some discussion points made by a handful of quality panelists worth noting:
Farmer Panel: Farmer Presentation of Issues
Two farmers, Jim Foster and Eric Nelson, provided good overviews of the problems at hand. Foster is an independent hog producer from Missouri who talked about packer ownership of animals, the need for limits on farm payments, and the unfair advantage given to farmers with huge contracts as opposed to smaller farms.
Eric Nelson, a grain and cattle farmer in Iowa, used to work in the seed industry and spoke to some of the most pressing concerns surrounding it, including biotechnology firms’ misuse of Technology Stewardship agreements; the reduction of conventional corn research (saying this puts future yields at risk for all farmers); and skyrocketing seed costs. He said the benefits of biotechnology traits on the market are overstated, that they’ve been released “with ill effects,” and research funded by the largest seed companies is “rather self-serving.” He said we can’t allow monopolies, and that germplasm needs to be back in the public domain to spur competition. He ended by stating that the long-term impacts of patents on living things need to be re-examined.
Panel I: How Have Technological Developments and Structural Changes Affected the Competitive Dynamics of the Seed Industry?
Neil Harl, Emeritus Professor of Economics at Iowa State University, laid out how patents differ from the Plant Variety Protection Act and limit choice for farmers. He said the U.S. didn’t handle the biotechnology era well through public policy, and called for regulatory action. “I’ve concluded that this is about regulatory action, industry should be involved, but I think it really has to come eventually where we have the enforcement of government,” Harl said. He believes steps should also be taken to increase public spending to encourage conventional crop development and feed germplasm back into the system. He sees little hope for this unless public funds are increased.
Kristina Hubbard (left), Harvey Howington, and Matthew Dillon attended the first in a series of DOJ-USDA hearings on concentration. Photo credit: Organic Seed Alliance
The rest of the panel was very supportive of current patent law and argued it was necessary for innovation, especially Monsanto’s Jim Tobin. Diana Moss with the American Antitrust Institute argued for generic biotechnology traits, which led to a conversation about the expiration of Monsanto’s Roundup Ready soybean patent in 2014. It became clear that the discussion (and the DOJ investigation) needs to be broader than squabbles among the largest firms fighting for access to competitors’ traits.
Panel II: Trends Panel Exploring Contracting Issues, Marketplace Transparency and Buyer Power
Mary Hendrickson, extension associate professor of Rural Sociology at the University of Missouri, talked about social values, like autonomy, and farmers’ ability to plant what they choose. Later she spoke to our disappearing infrastructure for local markets and the challenges farmers face at the local level.
Chuck Wirtz, an independent hog producer in Iowa, lamented, “It used to be about a love affair with farming. But two of my kids aren’t coming back to the farm.” He spoke about the need for price discovery in a live hog arena. Patrick Woodall with Food & Water Watch followed by saying a concentrated marketplace is making it difficult for farmers to encourage their kids to come back to the family farm. “It’s harder now for farmers to make it in a marketplace with very few buyers and to make ends meet,” said Woodall.
Panel III: Agriculture Enforcement and Cooperation at the Federal and State Levels
Montana Attorney General Steve Bullock kicked off the panel by calling for greater market transparency as consolidation in our markets has noticeably worsened. He sees bright spots on the horizon, however, such as the DOJ’s opposition to the JBS merger last year. Another bright spot, he said, was that this workshop is being held at all. “It’s not just about rural life and hanging onto a nostalgic view of rural life,” Bullock said. “It’s just practical. We depend on a competitive marketplace. In Montana, we don’t have corn, soybeans, or a lot of hogs, but the economic health of our one million Montanans is inextricably tied to agriculture.”
Bullock took the lead on a multi-state comment letter on competition in agriculture leading up to this workshop that garnered support from 16 state attorneys general. He said competition concerns in agriculture are complex because it’s not just about antitrust laws but intellectual property laws as well. “I’ve heard from farmers and ranchers in my home state that this is a long time coming. Hopefully this workshop presents an opportunity and promise of commitment.”
* * *
The agenda provided farmers a microphone at the end of the day after the crowd dwindled and most elected officials and agency representatives had left. Nonetheless, their words were powerful. Topics ranged from ethical behavior as provided by the Ten Commandments to the importance of policies that support healthy soil and healthy people. A number of farmers conveyed their disapproval of patents on plants. Harvey Howington, a rice grower from Arkansas, said it best: “Utility patents are a failed experiment.”
I left Iowa feeling disappointed yet hopeful. I’m disappointed that the seed industry was such a small part of the discussion, since there isn’t a workshop devoted to this topic as there is livestock, dairy and poultry, and seed industry concentration is only getting worse. But this meeting is truly historic and important players said some encouraging things that we need to hold them accountable to. U.S. Assistant Attorney General for Antitrust Christine Varney, for example, spoke to problems with patents: “Patents have been used in the past to create or extend monopolies,” she said. “We will be looking closely at any attempts to do so via abuse of the patent laws.” This statement drew loud applause, and made me hopeful.
My conflicting feelings following the event reflect the situation we as a sustainable agriculture community are in: We understand there’s an opportunity to take advantage of renewed scrutiny over antitrust law enforcement and related competition issues, yet our skepticism of the agencies’ ability to deliver leave some people feeling defeated. Matthew Dillon with the Organic Seed Alliance says this hopelessness is one of the most dangerous traits that impacts the well-being of our agricultural systems.
I’m humble to the fact that challenges loom large, but hopelessness won’t change anything. We have to believe that this workshop (and the ones to follow) support our efforts to push for an intellectual property regime that works for farmers; to hold our government accountable as a referee in regulating big agriculture and enforcing antitrust law; and to instill fairness and choice in our agricultural industries. Future generations of farmers and ranchers are depending on it.
The national trends and statistics might not always offer proof, but change is happening whether we see it or not. Our work is paying off. On Friday, I only had to look at the people in the crowd to realize that we are surrounded by champions for justice who are concentrating a different kind of power.
USDA Adds Pork to Existing Poultry Loan Rules Aimed at Preventing Contract Abuse
March 16th, 2010
On Thursday, March 11, USDA announced that Farm Service Agency (FSA) farm loan policies already in place for contract poultry production will be extended to contract pork operations as well.
The aim of the guidance is to try to put an end to the practice of FSA financing new hog or poultry operations in cases where the integrators who own the animals have terminated or declined to renew contracts with current producers and instead look for new operators as a cost cutting measure.
Those new operators have then been eligible for FSA farm ownership and operating loans, providing taxpayer support for the shady business practice of leaving an existing producer with a pile of debt and no animals while seeking out new replacement operators. These bait and switch moves often put contract farmers out of business, stimulate oversupply and lower prices farmers receive, or both. If the original operators had FSA loans on their expensive animal-raising facilities, the shift also puts the taxpayer at risk of losses on the original loan.
The guidance includes new stipulations that, if government loans are sought, production contracts must be for a minimum period of three years, termination of contracts must be based on “for cause” criteria only, contracts must require that producers be given specific reasons for any contract cancellation, and contract provisions must be present to give FSA assurances that the producer will be able to generate income with which to cash flow and repay the loan.
The poultry guidance, issued last spring, can be found here. The new pork guidance is not yet online, though we are told by FSA it will be very similar to the poultry guidance.
In addition to the new guidance, USDA also announced that FSA soon will be issuing an Advanced Notice of Rulemaking seeking public comment on the prevalence of these types of abusive contracting situations and the best way for USDA to address loan making to contract operations in the long term.
The USDA release also noted that its Grain Inspection, Packers and Stockyards Administration will continue to investigate allegations from producers of contract abuse under its Packers and Stockyards Act authority to prohibit unfair, deceptive and discriminatory practices.
Organic Initiative Sign-up Extended in Certain States
March 15th, 2010
The cut-off date for the 2010 Organic Initiative sign-up was last Friday, March 12, in most states. At least eight states, however, have extended the 2010 sign-up period. These include:
- Colorado: April 16, 2010
- Illinois: March 26, 2010
- Louisiana: March 26, 2010
- Missouri: March 19, 2010
- Nebraska: April 1, 2010
- Nevada: March 19, 2010
- Ohio: March 19, 2010
- Rhode Island: April 2, 2010
The Organic Initiative is administered by USDA’s Natural Resources Conservation Service and provides funds to organic and transitioning farmers to implement conservation practices consistent with National Organic Program practice standards. The provision in the 2008 Farm Bill that created this initiative was a response to the growing recognition that organic systems provide conservation benefits, including improved soil quality, water quality, wildlife habitat, and biodiversity.
For more information about the Organic Initiative, visit our Organic Initiative information page.
If you have state-specific questions, get in touch with your state NRCS organic point-person.
10 Days of Sustainable Ag Advocacy: An Intern’s Perspective
March 15th, 2010
by Kara Slaughter, Michael Fields Agricultural Institute
“With reference to individual or national welfare, agriculture is of primary importance.” -George Washington
So reads one of the three quotations at the top of the stone edifice at the U.S. Department of Agriculture headquarters in Washington, D.C. Part of what prompted me to quit my “real job” in January and become a policy intern with the Michael Fields Agricultural Institute is the belief that if a nation can get our nation’s food system right, then other positive outcomes – environmental, social, political, economic – will follow. So it has been a privilege for me to spend two weeks of my internship shadowing and learning from the NSAC staff, who are working to hold onto past gains and bring about new reforms to the nation’s agricultural policies. Here are some of the lessons I learned:
Day 1: when pounding the pavement for sustainable agriculture, wear comfortable shoes.
One of my first tasks in D.C. was to hand-deliver a copy of a Climate Change sign-on letter to the offices of every U.S. Senator. Yup, that’s 100 offices, spread over 3 buildings. The task took about three and a half hours. Since the Anthrax scare in 2001, all mail to Congressional offices goes through a lengthy screening process that can delay delivery for weeks, so getting information in the hands of decision-makers in a timely fashion actually requires hand-delivery. NSAC itself disseminates several sign-on letters similar to the ones I delivered each year, and also delivers similar letters for member organizations who do not have any other contact “on the ground” in DC. “Next time we’ll have you deliver letters to the House side,” Ferd said. I stop worrying about letting my gym membership lapse.
Day 3: If you’re not at the table, you’re on the menu.
It is appropriations season in Washington, and that means Senate and House office buildings are teeming with delegations from all over the country, all asking for the same thing: money. I see groups of veterans, teachers, television broadcasters, defense contractors, bicycle commuting enthusiasts, and potato growers, all angling for their piece of the federal pie. Joining the chorus on Wednesday, March 3 was a delegation of beginning farmers and ranchers, organized by NSAC to make the case for NSAC member organizations’ appropriations priorities to their Senators and Representatives. March 9th and 10th, NSAC organized another grassroots fly-in to address the food safety legislation currently pending before the Senate. I’m gathering that these fly-ins are a big deal in Washington. It seems that even in today’s world of technology, sending a powerful message in Washington still requires a personal touch.
The second quotation at the USDA reads: “No other human occupation opens so wide a field for the profitable and agreeable combination of labor with cultivated thought as agriculture.” -Abraham Lincoln
Day 4: There’s no such thing as a free lunch (at least if you’re a political appointee.)
I attend The Atlantic Food Summit, hosted by Atlantic Monthly magazine. The purpose of Atlantic forums such as this one is to foster informed discussion on pertinent policy issues. I am tickled by this only-in-Washington disclaimer on the registration page: “This educational event is intended for career federal employees and not for political appointees because lunch will be served for program participants. If you are a political appointee, STOP NOW – do not continue with the registration process.”
To read my more substantive observations about the Food Forum, click here.
Day 10: Seize the teachable moment.
I tag along with policy associate Ariane Lotti to her meeting with Senator Byron Dorgan’s legislative assistant for agriculture. The purpose of the visit is to advocate for NSAC’s appropriations priorities, and to ask for Senator Dorgan to sign on to a Dear Colleague letter encouraging colleges to vote for those appropriation levels. Ariane does a lot of educating during the meeting – Dorgan’s LA is not familiar with the Beginning Farmer-Rancher Individual Development Account or the Value-Added Producer Grant, and so Ariane fills him in on the benefits of these programs. I start to see how much legislative staffers, who are responsible for huge swaths of work, rely on lobbyists to educate them about programs that are important to people in the home district. I’m glad that this staffer is getting his information from NSAC.
“The Husbandman that laboreth must be first partaker of the fruits.” -St. Paul
This third quotation on the USDA headquarters building, which comes from Paul’s second letter to Timothy, is part of a longer passage that touches on notions of fairness and playing by the rules. I find this quotation the most thought-provoking of the three. What would our agricultural policy look like if farmers demanded the first share? For the last few weeks I’ve been toting around a flier from the National Farmer’s Union that shows the farmer’s share of the food dollar for a variety of familiar products. A farmer’s earnings from a $3.49 pound of boneless ham? 48 cents. The farmer’s share of a head of lettuce, retailing for $1.79? 25 cents. From a $2.99 loaf of bread? Ten cents.
A lot of NSAC organizations around the country are providing direct support to farmers who make the courageous decision to break out of the old model and start doing things differently. I’m struck by the fact that Paul did not say, “you must give the one who labors the first fruits.” To say it this way would suggest that the fruits belonged to someone else, and needed to be given back to the person doing the laboring. But no – Paul puts the onus on the farmer to keep what is rightfully his or hers. I hear Paul’s words as a call to action for farmers, to stand up and be counted, and to not give away what they have worked so hard to produce. I’ve seen farmers doing just that this week –participating on NSAC committees, making calls to their elected representatives, taking time away from work and family to fly in to Washington. As always, the harvest is plentiful, but the laborers are few. If you haven’t already done so, you can sign up for NSAC’s weekly roundup and action alerts here.
FDA Commissioner Hamburg Fields Questions About Food Safety Fees
March 12th, 2010
At a hearing on March 10, members of the House Agricultural Appropriations Subcommittee had high praise for the FDA’s stepped-up food safety enforcement efforts during Commissioner Margaret Hamburg’s tenure. Inspection efforts will undoubtedly increase even further if Congress moves forward with pending food safety legislation. Hamburg thanked the House members for their passage of food safety legislation, and said she hoped that the Senate would follow suit without delay.
Although the Senate version is similar to the House version in some respects, the bills diverge with regard to who should foot the bill for stepped-up inspection efforts. To help pay for inspections, the House measure imposes a flat tax on all food processing facilities, including hundreds of thousands of farms that either minimally process their crops to prepare them for market or that engage in value-added activities. An identical $500 per facility per year tax in the House bill would apply regardless of the size of the operation. The farmer selling a few thousand dollars worth of product to the local coop would thus pay the same as a large multinational corporation with millions in sales.
The Senate bill, in contrast, does not rely on new taxes except for fees to repay the government for costs in food safety corrective actions.
At the House Subcommittee hearing, Chair Rosa DeLauro (D, CT) pressed Commissioner Hamburg to fight for the fee structure set forth in the House’s version of the bill. DeLauro noted that the House version raises $220 million in “user fees” while the Senate version raises only $65 million. Said DeLauro, “we shouldn’t proceed to major food safety reform and then doom it to failure” because of inadequate funding.
Any funding not provided for by the user fee or tax would have to be provided for via appropriations from DeLauro’s Subcommittee. Even in the House-passed food safety bill, however, the majority of the new costs resulting from the proposed new law would come from appropriations because the fee is only big enough to cover a fraction of the cost of the legislation.
NSAC is opposed to the highly regressive flat tax in the House bill, which is designed to hit small farms and small local processors hard while allowing food industry giants to sail through relatively unscathed.
We would support the no-fee Senate approach over the House regressive flat tax if in fact those are the only two choices. NSAC would, however, support a fair, well-designed tax that was progressive, with exemptions for small producers and processors and three or four graduated levels above the exempt level. In other words, if the tax were based on the time-honored “ability to pay” principle, and included a basic exemption level below which it did not apply at all, it might be acceptable.
NSAC will continue to continue to oppose a flat tax and will work for either no fee, as in the Senate bill, or a reasonable, progressive fee structure. The Senate bill is expected to go to the floor for a vote between Easter and Memorial Day. After that it will need to be reconciled with the already passed House bill. To stay informed of NSAC’s work, sign up for our weekly roundup and action alerts.