January 31, 2014
At the start of this long and twisted farm bill reauthorization process, NSAC released an ambitious farm bill platform with the goal of expanding opportunities for family farmers to produce good food, sustain the environment, and contribute to vibrant communities. Reflecting input from sustainable and organic farmers, rural and urban communities, and food entrepreneurs, the platform contained proposals that fell into two overarching categories: fund and grow innovative sustainable farm and food programs that build an alternative food system, and reform farm subsidies to level the playing field and make much-needed systemic transformation in our farm policy.
The final farm bill released earlier this week and currently making its way through Congress and to the President is somewhat of a mixed bag for sustainable food and farming systems. The bill invests over $1.2 billion over the next five years in the innovative programs for beginning farmers, local food, organic agriculture, rural development, and specialty crops that were left in the dust for the past year. The bill also reconnects crop insurance subsidies to basic conservation requirements, and rejects a series of harmful fair competition, environmental, and commerce riders. Despite these highlights, the bill fails to reform farm commodity and crop insurance subsidies and continues the regime of uncapped, unlimited payments.
Below we provide an overview of what is in the bill. Starting next week, we will provide more detailed analyses on each of these areas in a series of issue “drilldown” posts.
For the first time since 1996, new wetland and soil conservation rules (known as “conservation compliance“) will apply to any farmer who receives crop insurance premium subsidies. The bill also includes a Sodsaver provision to limit crop insurance and commodity subsidies on native grassland that is broken out for crop production. The provision covers six northern Plains states but incongruously leaves out the southern Plains Dust Bowl states.
Sadly, the bill cuts Conservation Title funding by roughly $4 billion over ten years. Accounting for upcoming automatic budget cuts knows as “sequestration,” this number grows to $6.1 billion. This is the first time a farm bill decreases funding for conservation since conservation funding first became a farm bill issue in 1985.
As expected, the Wetlands Reserve Program, Grassland Reserve Program, and Farm and Ranch Land Protection Program are consolidated under a single umbrella to be called the Agricultural Conservation Easement Program and, more importantly, are provided with permanent funding. Similarly, the Cooperative Conservation Partnership Initiative, Chesapeake Bay Watershed Initiative, and Agriculture Water Enhancement Program are consolidated into the Regional Conservation Partnership Initiative to continue investments in targeted conservation projects in specific localities and regions.
The bill limits enrollment in the Conservation Stewardship Program (CSP) to 10 million new acres per year, a cut of 2.8 million acres, or 22 percent, per year. This unwise cut will reduce conservation acreage by 28 million acres over the coming decade. The bill cuts funding for the Environmental Quality Incentives Program (EQIP) just slightly, but increases the program’s payment limitation by 150 percent to $450,000, a move made at the behest of the CAFO industrial dairy and livestock sector that will result in less EQIP funding for all other farmers. Meanwhile, the bill maintains a separate and blatantly discriminatory payment limit of $80,000 for producers participating in the EQIP Organic Initiative.
The bill provides $879 million in new money for renewable energy programs, including $435 million and permanent funding for the Rural Energy for America Program (REAP). Fortunately, the final bill also prohibits USDA from using REAP to fund blender pumps at gas stations.
Without a doubt, the most disappointing aspect of the final farm bill is its egregious failure to retain the historic reforms to commodity program subsidies that were incorporated into both bills by significant bipartisan majorities in both chambers of Congress. The final bill increases the most relevant of the payment limits by 150 percent above the House and Senate-passed levels. But that is not the worst of it. Even this shockingly high limit is meaningless because the bill continues to allow individuals to receive multiple times the limit by claiming additional payments for “active personal management,” a standard that has been shown to be difficult to enforce and riddled with abuse.
The final bill does direct USDA to define “active personal management,” but USDA already tried that in 2010, and those rules did not place any meaningful limitations on who should be eligible to receive taxpayer-financed payments. Whether the Obama Administration, given a second chance, gets it right this time will bear close watching.
We are also disappointed that the final bill did not retain the amendment introduced by Senators Durbin (D-IL) and Coburn (R-OK) that would have modestly reduced crop insurance subsidies for millionaire farmers. Not only was this provision removed in the final bill, but also the final bill omitted a basic reporting requirement that would have directed USDA to publish information on crop insurance subsidies. This means taxpayers will continue to cover the majority of the cost of crop insurance premiums, even for millionaires, and continue to be kept in the dark regarding who benefits from these subsidies.
Local and regional food systems and healthy food access received a large boost in the bill, with increased funding for several programs and creation of some new programs. The bill triples funding to $30 million per year for the Farmers Market and Local Food Promotion Program, and expands the program to allow grants to both direct-to-consumer projects and projects supporting local and regional food enterprises through processing, aggregation, distribution, storage, and marketing.
The bill also nearly doubled funding for Community Food Projects, and creates a new Food Insecurity Nutrition Incentive grant program for organizations administering farmers markets and grocery store programs that encourage increased fruit and vegetables consumption by SNAP (food stamp) recipients.
Additionally, several provisions ease the purchase of fresh and local produce for SNAP recipients by allowing them to use their benefits to participate in Community Supported Agriculture (CSAs) ventures, and by providing farmers markets and other direct-to-consumer marketing outlets with equipment that can accept SNAP benefits. The bill also includes pilot projects for improving online and wireless technologies used in purchases made with EBT.
The bill authorizes a scaled-back farm to school pilot program, a step in the right direction but one that falls way short of the two House provisions derived from the Local Farms, Food, and Jobs Act which would have created stronger farm-to-school pilots for the USDA Foods program and Department of Defense Fresh program. The program is an eight-state pilot to provide fresh fruits and vegetables to schools and allow a geographic preference in procurement.
The final bill also directs USDA to develop and implement a new nationwide Whole Farm Diversified Risk Management Insurance product to provide revenue insurance for highly diversified farms of all kinds, including specialty crop farms, integrated grain-livestock farms, organic farms, and farms geared to local markets. These farms have largely been left out of the federal crop insurance system, which historically has been oriented to large scale monoculture commodity operations.
On the whole, the final bill is a win for beginning farmers, but unfortunately takes a step backward in providing services and resources for historically underserved and minority farmers.
The bill reauthorizes the Beginning Farmer and Rancher Development Program and provides $100 million for new farmer training programs, including a new focus on military veterans. Much to our disappointment, however, the set-aside for projects that benefit socially disadvantaged farmers and farmworkers was significantly reduced.
There is also a new Microloan program authorized in the final bill that would allow USDA to work with third party intermediary lenders to provide microloans and financial training to beginning farmers. The final bill also provides $33 million for the Conservation Reserve Program – Transition Incentives Program to incentivize retiring landowners to rent or sell their expiring CRP land to new or minority farmers. The final bill also increases the advance payment that a beginning or socially disadvantaged farmer can receive from EQIP and creates a new focus on ensuring the viability of the next generation of farmers within USDA’s new agricultural conservation easement programs.
Perhaps the biggest disappointment in this arena is the significant reduction in funding for the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers. This program, funded at $20 million per year in the last farm bill, was provided only half that amount in this year’s bill – despite the new farm bill’s expansion of the program to also provide outreach to military veteran farmers as well.
Overall, organic agriculture did well in the bill. The National Organic Certification Cost-Share Program is now funded at $11.5 million annually, up from just over $5 million annually, to offset the costs of annual certification for organic farmers and handlers. The bill renews funding for the Organic Agriculture Research and Extension Initiative at the previous $20 million per year level, and for the Organic Production and Market Data Initiatives at $5 million over five years, the same as in the previous farm bill. The National Organic Program also receives $5 million for technology upgrades.
Apart from funding, the bill improves crop insurance for organic producers by requiring USDA to publish the complete set of organic price elections by 2015. The bill also includes a provision to exempt organic producers from having to pay into conventional checkoffs, and to allow the organic sector as a whole to establish a checkoff program if so desired.
Undoubtedly, the biggest highlight from the Research Title is the infusion of $600 million in mandatory research dollars to support specialty crops, organic agriculture, and beginning farmers. These programs have all been stranded without funding since 2012, and have underpinned the growth of these sectors over the past decade. The specialty crop research program, though not the others, received not only increased funding but also permanent funding.
Unfortunately, the new farm bill will continue to make it harder for non-profit research organizations to successfully compete for federal research dollars. The bill will require NGOs and private research institutions to provide 100% match on all competitive research grants, while exempting higher capacity public universities. The bill also retains a discriminatory provision to prohibit federal and state agencies, private labs, and NGOs from even applying for certain competitive grants. This is part of a worrisome trend of land grant universities and colleges trying to exclude others, including those who have historically been among its leading champions and stakeholders, from receiving research and extension grants.
The bill also establishes a new Foundation for Food and Agriculture Research, designed to supplement USDA’s basic and applied research by fostering public-private partnerships. The farm bill provides the new FFAR with $200 million of seed money.
The farm bill is the major legislation for rural economic and community development. Rural development did not fare well in terms of funding, getting just two one hundredths of one percent of total farm bill funding. On the bright side, though, two of our priority programs did receive funding. The Value-Added Producer Grant program will receive approximately $12. 5 million annually to assist farmers develop new markets for high quality products that meet a growing consumer demand for farm identity-preserved local and regional food. The Rural Microentrepreneur Assistance Program will have $3 million a year to provide training, technical assistance, and microloans to very small rural businesses. This is not nearly the levels these job-creating program need and deserve, so hopefully they will also receive substantial annual appropriations in addition to their farm bill funding.
In a great win for livestock and poultry growers, and despite powerful meat industry interests’ backing, the final bill does not include a provision that would have severely restricted USDA’s ability to ensure market competition and fair contracts for livestock and poultry producers. This is a significant victory, although the fight will continue during annual appropriations, where legislative riders have been used to prohibit USDA from completing much-needed rules to protect farmers and ranchers from unjust bargaining and contracting tactics used by multinational meatpacking companies.
The bill does not include the “King Amendment,” which would have prohibited states from imposing standards on agricultural manufacturing or production that are stricter than those imposed by other states or by the federal government, if the agricultural products were meant for out-of-state sale.
The House version of the farm bill included several anti-environmental riders aimed at undermining parts of the Clean Water Act and Endangered Species Act. Fortunately, these riders were also not included in the final bill. Instead, the final bill requires USDA to report on how it intends to manage the risks that pesticides pose to threatened and endangered species.
The bill includes some directives to the Food and Drug Administration (FDA) as it works to finalize its regulations on produce safety. In its final produce safety regulations, FDA must include an analysis of the scientific information used to support the requirements in the rule and an analysis of the economic impact of the rule. FDA must also include a plan to evaluate the impact of the final rule on farms and ranches, and develop a process to address business concerns, which includes a reporting requirement to Congress.
Further Analysis Coming
Over the next two weeks, we will be providing more detailed analyses of different parts of the 2014 Farm Bill. Stay tuned!
Categories: Beginning and Minority Farmers, Commodity, Crop Insurance & Credit Programs, Competition & Anti-trust, Conservation, Energy & Environment, Farm Bill, Food Safety, Local & Regional Food Systems, Nutrition & Food Access, Organic, Research, Education & Extension, Rural Development