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Path to the 2012 Farm Bill: Draft House Farm Bill Drilldown

July 6th, 2012

On July 5, House Agriculture Committee Chairman Lucas (R-OK) and Ranking Member Peterson (D-MN) released their draft farm bill ahead of the House Agriculture Committee’s farm bill markup scheduled for next week beginning Wednesday, July 11.  The bill generates $35 billion in savings by cutting over $16 billion from nutrition programs and more than $6 billion from conservation programs, while increasing crop insurance subsidies and decreasing commodity subsidies for a net farm safety subsidy savings of over $14 billion.

In an earlier post, we provide some of the highlights of the new House proposal.  In this post, we are providing our readers with a more detailed list of specific provisions following the same outline:

• Commodities and Risk Management
• Conservation and Energy
• Local Food and Rural Development
• Organic Agriculture
• Beginning and Socially Disadvantaged Farmers and Ranchers
• Research, Education, and Extension

Commodities and Risk Management

• Direct payments:  Repealed.
• Commodity payment limits:  Significantly increases the per farm commodity subsidy cap to $125,000 ($250,000 for married couples) from $50,000 ($100,000 for married couples) in the Senate bill.
• Subsidy eligibility loopholes:  Remain intact.
• Conservation compliance:  Not included.
• Limits on crop insurance premium subsidies:  Not included.
• Whole Farm Diversified Risk Management Insurance Plan:  Included but with a $1 million liability limit ($1.5 million in the Senate bill), which will unnecessarily decrease its applicability.
• Organic crop insurance provisions:  See Organic Agriculture below.

Conservation and Energy

• Conservation Title:  Funding cut by roughly $6.06 billion (compared to $6.37 billion in Senate bill).

Conservation Stewardship Program (CSP)

• CSP:  Limits CSP enrollment to 9 million acres a year rather than the Senate’s 10.3 million acres a year, or the current 12.8 million acres a year.  This is a 30 percent reduction in CSP acreage per year, for a program that even at today’s level can only enroll 50 percent of the farmers and ranchers who apply each year.  Funding cut by more than $1.1 billion, or more 6 percent over the Senate bill’s 10 percent cut.

Beginning and Socially Disadvantaged Farmers and Ranchers

• Conservation Reserve Program – Transitions Incentive Program (TIP):  Funded at only $25 million over 5 years, which is the same as the 2008 Farm Bill, and is an amount that ran out in just 18 months (Senate bill provides a more reasonable $50 million).
• Conservation set asides for beginning and socially disadvantaged farmers:  Maintained within both EQIP and CSP (same as Senate bill).
• Advance cost-share payments for beginning and socially disadvantaged farmers and ranchers:  Increased to 50 percent from the current level of 30 percent (the Senate bill maintains current level), a positive improvement.

Conservation Reserve Program (CRP)

• CRP:  Phase down to 25 million acre cap, with quicker phase down than in Senate bill, plus the addition of an “early out” option for whole field CRP parcels in their second five years of 10 year contract.
• Expiring acres:  Allows producers to enroll expiring CRP acres in CSP during the final year of their CRP contract, so long as payments are not duplicated — a positive change not duplicated in the Senate bill.

Environmental Quality Incentives Program (EQIP)

• EQIP:  No cuts to EQIP per se, but repeals the Wildlife Habitat Incentives Program (WHIP) — now wrapped into EQIP — resulting in a combined EQIP/WHIP funding cut of 3 percent, versus 10 percent in the Senate bill.
• Wildlife Habitat Incentives Program (WHIP):  As in the Senate bill, the House bill wraps WHIP into EQIP, but House draft unfortunately sets a ceiling on wildlife practices within EQIP at 5 percent of total funding versus 5 percent being a floor in the Senate bill.
• EQIP payment limitation:  Increased from $300,000 to $450,000.  It is most often concentrated animal feeding operations (CAFOs) or large scale irrigation projects that apply for larger contracts that approach the payment limitation, with limited or even negative environmental consequences.
• EQIP Organic Initiative:  See below in Organic Agriculture.

Regional Conservation Partnership Program (RCPP)

• Substance and funding:  The substance is largely the same as Senate bill for this targeted conservation option through local partnerships, but funding is set at 6 percent instead of 8 percent of funding for CSP, EQIP, and the Agricultural Conservation Easement Program.
• Nutrient management:  The House bill unfortunately removes nutrient management language that was included in the Senate bill.

Renewable Energy

• The House bill provides no mandatory money for the Energy Title programs (the Senate bill provides $800 million).

Local Food and Rural Development

Nutrition Title

• EBT equipment and implementation:  The Secretary of Agriculture may exempt farmers markets from being required to cover 100% of the costs for EBT equipment and implementation (same as Senate bill).
• EBT pilot program:  Authorizes an EBT pilot program for developing technology to accept SNAP benefits using mobile (smartphone) technology (same as Senate bill).
• DoD Fresh:  Helpfully authorizes a 5-state pilot program to explore alternatives to the DoD Fresh program for procurement of fresh fruits and vegetables (not in Senate bill).
• Community Food Projects (CFP):  Funded at $15 million per year mandatory ($5 million more than the Senate bill and $10 million more than current funding).
• Senior Farmers Market Nutrition Program (SFMNP):  Expanded to include not only seniors but also low-income families, and dropping Senior from the title (not in Senate bill);  funded at $20.6 million per year mandatory (same as Senate bill).

Rural Development Title

• Rural Development Title:  $50 million total in mandatory funding for the whole Title (all for Value-Added Producer Grants) versus $115 million in the Senate bill.
• Value-Added Producer Grants (VAPG):  $50 million total mandatory, to remain available until expended, and $40 million per year discretionary (same as Senate bill).
• Rural Microentrepreneur Assistance Program (RMAP):  No mandatory funding ($15 million total in Senate bill); $20 million per year discretionary (same as Senate bill).
• Business and Industry Guaranteed Loan Program:  The local and regional food set-aside, currently not less than 5%, is unnecessarily capped at 7% (not in Senate bill).
• Rural Business Opportunity Grants (RBOG):  Reauthorized with $15 million per year discretionary.
• Rural Business Enterprise Grants (RBEG):  Not reauthorized but not repealed.  (The Senate bill combines RBOG and RBEG into one program called Rural Business Development Grants with $65 million per year discretionary.)
• National Sustainable Agriculture Information Service (ATTRA):  Not reauthorized but not repealed.
• Local and regional food provisions recommended in the Local Farms, Food, and Jobs Act:  Not included.

Horticulture Title

• Farmers Market Promotion Program (FMPP):  Expanded to include not only direct producer-to-consumer marketing but also “scaled up” local food marketing, and thus renamed the Farmers Market and Local Food Promotion Program (FMLFPP).  Funded annually at $20 million mandatory and $10 million discretionary ($20 million mandatory and $20 million discretionary in the Senate bill).  Administration capped at an unworkable 3% (10% in the Senate bill) and the Senate bill’s priorities for under-served communities, small and medium-sized farms, and capacity building are unfortunately removed.
• Study on Local Food Production and Program Evaluation:  Included in the Senate bill, not included in the House bill.
• Specialty Crop Block Grants (SCBG):  $70 million per year mandatory, with a directive to the Secretary of Agriculture to develop guidance on multistate projects with a total set-aside of $15 million over five years (same as Senate bill).

Organic Agriculture

• National Organic Certification Cost Share program (NOCCSP):  Repealed.
• Organic Agriculture Research and Extension Initiative:  See Research, Education, and Extension below.
• Organic Production and Market Data Initiatives:  $5 million in mandatory funding over the life of the bill, with an authorization for appropriations of $5 million annually (same as Senate).  Does not include improved coordination language.
• Organic crop insurance provisions:  No improvements for organic farmers included, unlike Senate bill.
• EQIP Organic Initiative:  Maintains lower and unfair organic payment limit and does not include the streamlining and no-cost improvements.
• National Organic Program:  Authorized at $11 million per year, includes $5 million in mandatory funding for a technology upgrade, and includes new enforcement language that is different from the Senate language.
• Biotechnology Regulations:  Amends the Plant Protection Act to weaken the review process for biotechnology product petitions seeking “non-regulated” status with USDA.  Greatly limits the scope of the environmental assessment of a petition.  Requires USDA to submit a report to Congress on actions to reduce the red tape on biotechnology development, examine exemptions for biotech products from regulation, and develop a national policy for low-level presence of biotech material in crops.

Beginning and Socially Disadvantaged Farmers and Ranchers

• Beginning Farmer and Rancher Development Program (BFRDP):  $10 million per year, an almost 50 percent cut from current levels (Senate bill provides $17 million per year).  Other changes include a new 5 percent set aside for projects that benefit veteran farmers, excluding the important category of “land linking” projects from the list of grant priorities, and inappropriately increasing the matching funds requirement from 25 to 50 percent for any project that is state-specific.
• Individual Development Accounts (IDA):  Reauthorized as in the Senate bill, but provided no mandatory money in either bill.
• Other credit provisions:  Several very positive credit provisions aimed at helping beginning and socially disadvantaged farmers were included in the House bill, including modifications to the Down Payment Loan Program, Conservation Loans, and Direct Farm Ownership Loans.
• Conservation provisions: See Conservation and Energy above.
• Crop insurance provisions:  A 10 percent reduction in crop insurance premiums for beginning farmers during their first 5 years farming (same as Senate bill).  This provision is unfortunately not structured in a way that would be most advantageous to beginning farmers.
• 2501 Outreach and Technical Assistance for Socially Disadvantaged Farmers:  $10 million per year, which is almost a 50 percent cut from current levels (Senate bill provides even less, $5 million per year).  Veteran farmers and ranchers are added to this program, as they were in the Senate bill.

Research, Education, and Extension

• Organic Agriculture Research and Extension Initiative (OREI):  $16 million per year, with an authorization for $25 million in appropriations (same as Senate level).  This is a decrease from current annual funding levels of $20 million.  There is also a new priority on farm financial management, commonly known as “bench-marking.”
• Specialty Crop Research Initiative (SCRI):  Funded at levels similar to the Senate, averaging $50 million per year after 2017 when the program achieves permanent baseline.  There are also modifications to the peer review process, which incorporate the input of specialty crop industry representatives.
• Agriculture and Food Research Initiative (AFRI):  Reauthorized through 2017 with a few changes to research priorities, including new priorities on “plant-based foods that are sources of nutrients of major concern,” and the effectiveness, cost, and benefits of conservation practices that improve water quality, but sadly no improvements to public plant and animal breeding and cultivar development.
• Beginning Farmer and Rancher Development Program (BFRDP):  See Beginning and Socially Disadvantaged Farmers and Ranchers above.
• Local Food Study:  See Local Food and Rural Development above.
• Budget Reporting Requirement:  The same very impractical language is included as was in the Senate bill, which requires USDA to submit more detailed information on research priorities, RFA publication dates when submitting their annual budget request to Congress.  The penalty for not complying with this requirement is the ability of Congress to withhold both appropriated and mandatory research funds.
• Matching Funds Requirements:  There is a new misguided across-the-board 1:1 matching requirement for all competitive grants programs that involve applied research or extension that are either commodity or state specific.  This provision would likely impact most competitively awarded extension projects, which are very often state-specific, and some integrated projects, including projects funded under BFRDP, Organic Transitions Integrated Research Program, and the Sustainable Agriculture Research and Education Program.
• Repeals:  Several programs are repealed, including the research on viability of small and mid-sized dairy, livestock, and poultry operations, and antibiotic resistant bacteria.

2012 Farm Bill, Beginning Farmers, Clean Water Act, Commodity, Crop Insurance & Credit Programs, Conservation / Land Stewardship, Conservation, Energy & Environment, EPA, Farm Bill, Farm Credit, Farm Program Reform, Farm to School, Food Safety, Genetic Engineering, Local & Regional Food Systems, Local Food and Marketing, Minority Farmers, Nutrition Programs, Organic Agriculture, Renewable Energy / Climate Change, Research and Extension, Risk Management, Rural Development, Specialty Crops | Comments

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