Lurching Toward Farm Bill Conference? If so, what are the Big Issues?
September 11th, 2013
The House is expecting to vote on Majority Leader Eric Cantor’s proposal to pass a nutrition title-only farm bill that would cut the SNAP (food stamp) program by approximately $40 billion over the coming decade and provide incentives for states to reduce the food stamp rolls among working age adults.
The House GOP caucus is currently in the process of counting votes to determine if the bill can pass. The expectation is that not a single Democrat will vote for the bill. It is not yet clear whether the votes are there to pass it on a strictly partisan basis.
It is widely assumed that once the nutrition-only bill is, one way or the other, out of the way that the House will appoint conferees and go to conference with the Senate to try to come up with a final farm bill. Earlier this week, NSAC again encouraged Congress to get busy on a final, comprehensive, reform-oriented bill.
If the House does pass the Cantor proposal, it is not yet clear whether they would choose to go to conference with that bill, or with the farm-only farm bill that the House passed in July. Or perhaps take an additional action to join the two separate bills back into a full, comprehensive food and farm bill.
If the experience of the past two years of twists and turns and detours on the farm bill is any guide, the only sure thing to say at this point is stay tuned. But with the chances of a House-Senate conference increasing, we want to take this opportunity to remind readers about some of the big issues at stake.
Obviously the food stamp issue will loom large. If the House passes the Cantor measure, the House proposed cut to food stamps will be 10 times larger than the Senate-passed measure. The House Agriculture Committee’s bill was already five times larger, so the Cantor strategy is to double down on those cuts and that huge difference with the Senate.
Should conference move toward a final food stamp cut below $10 billion and without the new incentives to move low-income young and middle aged adults out of the program, the big question will be whether that type of conference report – the only type that will get substantial Democratic support and the only type that will not trigger a Presidential veto – come back to the House floor and be passed. On the answer to that question, more than any other, rests the fate of a new farm bill.
The Other Big Issues
But clearly there a plenty of big issues for conference outside of the nutrition title, including farm program reform, competition policy for livestock markets, conservation, and funding for a whole host of farm bill programs that address rural jobs, renewable energy, local and regional food systems, organic agriculture, agricultural research, and beginning, minority, and veteran farmers.
To begin with our bottom line assessment: Between the two bills, the ingredients exist to put together not a great bill, but a decent bill that we would support. But by the same token, the ingredients exist to put together a terrible bill, one that we would oppose. Or to put it another way, conference is everything, and a great deal is at stake. Here is a snapshot summary of some of the big items.
Farm Program Reform
Both the House and Senate bills include identical commodity program payment limitation reform provisions. These provisions, pressed by NSAC and championed by Senator Chuck Grassley (R-IA) and Representative Jeff Fortenberry (R-NE), would limit annual commodity payments per farm to a maximum of $50,000 and would limit benefits to working farmers actively engaged in the labor and management of the farm plus not more than one additional farm manager. Under current law, the annual limit is $105,000 and there is no effective limit on the number of partners or investors in a farm who can draw payments. This provision has overwhelming support in the full House and Senate, and as identical provisions, should not be a matter to debate in conference. Nonetheless, mega farms and their supporters will try to press their case to undue this historic reform, a move we hope all parties to the conference reject.
There are a large number of commodity program issues that differ in the House and Senate bills. These will consume perhaps the largest amount of conference time to work out. Many reflect basic philosophical differences and thus are difficult to resolve. While these debates are very important, it is beyond the scope of this quick review to go into detail here.
The new farm bill, if it happens, will represent a continued and accelerated diminution of the relative importance of the commodity programs to the crop and revenue insurance programs. Depending on the outcome of conference, the crop and revenue insurance programs will be projected to cost the taxpayer about $9.5 billion to $10 billion a year over the next decade, while the commodity programs will be projected at about $5 billion to $5.5 billion a year.
There are three major differences between the Senate and House versions of the bill on insurance subsidies:
- First, the Senate but not the House bill would modestly reduce the taxpayer subsidy for farmers and farm investors who are millionaires.
- Second, the Senate but not the House bill would restore the quid pro quo that in accepting the large taxpayer subsidy, farmers must agree to protect soil from excessive erosion and not drain wetlands and put them into production.
- Third, the Senate bill but not the House bill would somewhat reduce insurance subsidy incentives for landowners throughout the country who plow up and destroy grasslands and native prairie and put them in crop cultivation.
In our view, all of these Senate provisions are essential ingredients to a decent, supportable bill.
There are also some similarities and some differences between the bills on making insurance more accessible to diversified, currently underserved producers. Insurance subsidies flow in large part to monoculture agriculture for the same crops that benefit from commodity programs. Both bills include a NSAC-championed provision to direct USDA to create a new whole farm revenue insurance product for diversified agriculture. Both bills also restore USDA authority to conduct research and development on new types of policies, with a priority on underserved crops and regions.
The Senate, but not the House, however, also includes provisions to improve insurance options for organic farmers and to expand public-private partnerships to develop new products for underserved producers. If insurance is to be the primary farm safety net mechanism of the future, it is vital that the conference bill include all of the provisions that take these important initial steps to level the playing field.
Fair Competition and Contract Reform
The House bill, but not the Senate bill, contains a provision that would essentially put USDA out of the business of protecting marketplace fairness. The House provision is truly breathtaking in its breadth, providing the highly concentrated and politically powerful multinational meat packing industry with its entire wish list.
The measure would repeal all of the fair competition provisions Congress included on a bipartisan basis in the 2008 Farm bill. It would repeal nearly all rules that USDA promulgated in response to the 2008 Farm Bill. And it would prohibit USDA from ever doing anything similar to the 2008 statute or resulting regulations.
This sweeping language would prohibit USDA from enforcing the Packers and Stockyards Act to prevent discriminatory and deceptive practices or to prevent unreasonable price preferences or sweetheart deals. It would prohibit USDA from regulating livestock and poultry contracts to ensure fairness, and to protect farmers from retaliation should they contact Members of Congress or others about the terms of their contracts.
In short, it would emasculate the Packers and Stockyards Act and put USDA substantially out of the business of protecting the rights of farmers and ranchers in poultry and livestock markets. Needless to say, it our view that this provision, in whole or in part, must not be included in the final conference bill. The Senate should just say no to this kind of radical corporate capture extremism.
At a time of accelerating pressures on the landscape and the natural resources that are our long-term food security, both bills would unfortunately make major cuts to the farm conservation program budget. The Senate bill would cut funding by $3.5 billion ($5.6 billion when counting the effects of sequestration) and the House bill would cut funding by $4.8 billion (or $6.9 billion inclusive of sequestration).
When doing the math, the House bill cuts conservation by a greater percentage than it cuts farm subsidies, while the reverse is true of the Senate bill. We are urging that the final bill include no less than the Senate level of funding overall.
Beyond the overall cuts, there are stark differences between the House and Senate bills on funding levels for the two big working lands conservation programs. The Conservation Stewardship Program provides incentives for advanced farm management practices that benefit the environment, while the Environmental Quality Incentives Program (EQIP) is predominantly used for cost-sharing irrigation equipment, livestock waste lagoons, and other farm structures and equipment. The House cuts the two programs by $4.8 billion compared to just $3.5 billion in the Senate bill. We are urging adoption of the Senate number.
The Senate bill disproportionally cuts CSP relative to EQIP, with a 14% cut to CSP and a 9% to EQIP. Bad as that is, the House version is worse. The House bill cuts CSP by 21% while cutting EQIP by just 4%. We are urging that the conferees reject both proposals and make the cuts strictly proportional.
Both the House and Senate bills include a reformulated Regional Conservation Partnership Program to encourage special conservation projects targeted to particular farmers and resource concerns. The Senate bill designated more funding for these partnerships, a decision we support. Both bills include a provision that will make it more difficult for farm groups and state and local NGOs to participate in the program, a problem we hope is rectified in the final bill.
The Stranded Programs
Both the House and Senate bills renew mandatory funding for a variety of important farm bill programs in the conservation, rural development, and horticulture, research, and energy titles of the bill. This is the good news. The bad news is that when Congress extended the old farm bill for an additional year after failing to enact the new farm bill on time last year, it left these programs without funding for 2013. It is essential that the new farm bill include these stranded programs at robust funding levels.
There are four stranded programs for which the House bill provides the better funding level. The House bill would provide $20 million a year for the Beginning Farmer and Rancher Development Program, $20 million a year for the Organic Agriculture Research and Extension Initiative, $30 million a year for the Farmers Market and Local Food Promotion Program, and an average of $60 million a year for the Specialty Crop Research Initiative.
There is one stranded programs for which the Senate bill provides the better funding level — the Senate bill would provide $12.5 million a year for the Value-Added Producer Grants program — and four additional stranded programs for which only the Senate bill provides any funding. Only the Senate bill would fund the Rural Microentrepreneur Assistance Program ($3 million per year), the Rural Energy for America Program ($68 million per year), the Organic Certification Cost-Share Program ($11.5 million per year), and the Organic Production and Market Data Initiatives ($5 million).
Both bills would fund the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers Program at $10 million a year.
We are urging conferees to choose the higher funding level in each case, and, in the case of the Value-Added, Rural Microentrepreneur, and Socially Disadvantaged Farmers and Ranchers programs, to find additional funds to bring those accounts up to more appropriate levels than in either bill currently.
To Be Determined
There are many, many other differences between the two bills that must be settled during conference, including many dealing with NSAC priorities. But we hope the shorter list above provides readers with a good sense of what some of the larger looming issues will be if and when a farm bill conference gets going, and therefore also a good sense of why it is we say that the ingredients are in place for a decent farm bill or a terrible farm bill. Clearly, in our view, there is a whole lot riding on the conference committee, should it be allowed to begin deliberations after the House food stamp floor showdown next week.
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