Path to the 2012 Farm Bill: Draft House Farm Bill Highlights
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 this post we provide some of the highlights for the following key areas, while in a separate second post we provide a list of detailed points 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
- Environmental Regulations
The draft House bill, like the Senate-passed bill, would eliminate commodity title direct payments made every year without regard to farm prices, revenue, or income. Beyond that basic long overdue change, the draft House bill contains very little in the way of reform and actually moves backwards in some areas.
Rather than the per farm commodity subsidy payment cap of $50,000 ($100,000 for married couples) in the Senate bill, and in even sharper contrast to the existing $40,000 cap ($80,000 married) on direct payments, the House proposal jumps all the way to $125,000 ($250,000 for married couples), an incredibly high limitation with no historical precedent.
But that is not the end of the story. The House proposal also leaves current law loopholes in place that allow mega farms and wealthy non-farm investors to blow right past those nominal limits and collect many multiples of the payment cap. The Senate bill in reform-minded contrast closes the loopholes.
The Senate bill does a very poor job of limiting per farm insurance premium subsidies, but at least includes a provision added during floor debate that reduces the subsidy rate for wealthy farmers and investors with very high adjusted incomes. The draft House bill does not include even that very modest reform. The House proposal also does not link receipt of crop insurance subsidies to protection of soil and wetlands, a provision also included in the Senate farm bill via a floor amendment.
The House bill would provide commodity producers with two basic options, a shallow loss revenue protection option similar, though less lucrative, than that offered by the Senate bill; and a more traditional price-based counter cyclical type payment, triggered whenever commodity prices fall below high price triggers established in the House bill. Some of the House changes to the shallow loss revenue option would be fiscally-prudent improvements to the Senate-passed version, but the additional price-based option moves in exactly the opposite direction. The fiscal overhang of both the House and Senate bills is large – if commodity prices were to tumble sometime in the next decade, the purported savings in both bills could completely disappear.
The bill cuts the Conservation Title funding by roughly $6.06 billion. While this is somewhat less than the $6.37 billion cut contained in the Senate-passed bill, the cut to the Conservation Stewardship Program (CSP) is increased by more than $1.1 billion, or 6 percent, over the Senate level. The Senate bill reduces funding for the Environmental Quality Incentives Program (EQIP) and CSP by close to the same amount – roughly 10 percent. The draft House bill does not cut EQIP, and therefore doubles down on the CSP cut, proposing to limit 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.
Adding insult to injury, the draft House proposal would also increase the EQIP payment limitation by 150% percent to $450,000, at the behest of the CAFO industrial dairy and livestock sector. So while funding for EQIP would be higher under the House bill than the Senate, the money available for most farmers could be about the same as large factory farms walk away with even more of the total funding. Meanwhile, like its Senate counterpart, the House proposal would limit organic farmers, and only organic farmers, to $80,000.
The Senate bill funds renewable energy programs at $800 million, the result of a widely supported amendment passed during Senate Committee markup. The draft House bill, in contrast, provides no funding for the energy title.
Nearly all of the existing local food programs in the Nutrition and Horticulture Titles remain intact and are similarly funded relative to the Senate bill. The draft House bill adds a pilot program for fresh fruits and vegetable procurement at schools that is not in the Senate bill, though it does not include the local food study for crucial data collection that is part of the Senate bill. Community Food Grant funding is doubled in the House proposal to $10 million, versus $5 million in the Senate bill and current funding. However, the House bill does not provide any funding for a new incentive program for SNAP recipients to shop at farmers markets that is included in the Senate bill.
Within the rural development programs, the House bill does not include a single local and regional food provision of the many recommended in the Local Farms, Food, and Jobs Act. On the funding side of rural development, there is only $50 million total in mandatory funding for the whole Title (all for Value-Added Producer Grants) versus $115 million (including $50 million for VAPG) in the Senate bill. No funding is provided in the draft House proposal for the innovative, job-creating Rural Microentrepreneur Assistance Program or to reduce the backlog in water and sewer grants to very small rural communities.
Overall, the House bill is a mixed bag for organic agriculture. In a clear attack on the organic sector, the bill defunds and repeals the National Organic Certification Cost Share program. As mentioned above, the House proposal also fails to reform the EQIP Organic Initiative. On the other hand, the bill does match the Senate in renewing funding for organic research at a reduction from current levels and does provide renewed funding for the Organic Production and Market Data Initiative. The bill does not address any of the barriers that organic farmers face when trying to access crop insurance.
Beginning farmers fared relatively well in the House draft bill, however, the biggest disappointment by far is the dramatic 50 percent cut in funding for USDA’s only beginning farmer training program. Several provisions from the Beginning Farmer and Rancher Opportunity Act were included in the draft bill, including policy changes in the credit and conservation titles. Funding for programs aimed at socially disadvantaged farmers was higher than levels provided in the Senate, although still represents a 50 percent cut in annual funding.
The House-passed bill maintains funding for several important research programs related to specialty crops and organic agriculture, similar to levels that were included in the Senate-passed bill. However, the bill falls short in providing adequate resources to beginning farmers, local food, and other sustainable agriculture priorities, including developing public cultivars to ensure farmers have access to diverse seeds and breeds. The House proposal would repeal a research authorization to investigate antibiotic resistance, a truly short-sighted bury-your-head-in-the-sand repeal to address a major public health challenge. The research title also imposes several potentially harmful requirements, including a new across the board 1 to 1 matching funds requirement for competitive grants program for applied research and extension.
Moving far beyond the normal confines of a farm bill, the House proposal also ventures into biotechnology, Clean Water Act, and pesticide registration. The draft bill would amend the Plant Protection Act to weaken the review process for biotechnology product petitions seeking “non-regulated” status with USDA. It would attempt to reverse a court decision re-affirming EPA’s authority to regulate pesticide pollution under the Clean Water Act. It would also stop EPA from basing modifying pesticide registrations on the opinions of the National Marine Fisheries Services or the U.S. Fish and Wildlife Service. The Senate bill steered clear of extraneous anti-environmental regulatory provisions that will be poison pills to getting a farm bill done this year, but the House proposal decided nonetheless to go down that road.
To read more details about how programs and provisions fared in the bill, read our drilldown post.