Path to the 2012 Farm Bill: Senate Draft Farm Bill – Beginning Farmer Drilldown
April 23rd, 2012
Overall, while beginning farmers did not fair too poorly in the Senate draft farm bill that was released by the Senate Agriculture Committee last week, they were certainly far from being the highlight of this legislative package.
There were some small wins for beginning farmers in the draft conservation and credit titles, which included provisions contained in the Beginning Farmer and Rancher Opportunity Act. The research and rural development titles, on the other hand, were for the most part, major disappointments for those just starting out in farming. Hopefully improvements will be made in Senate Committee markup of the bill this week.
There were quite a few highlights for beginning farmers in the draft farm bill, including the reauthorization of the highly popular Transitions Incentives Program within the Conservation Reserve Program that promotes sale of land coming out of the land retirement program to beginning farmers and ranchers. The program was maintained and provided with level funding of $25 million in funding over five years. Unfortunately, due to the anticipated number of acres coming back into production and the high demand for this program, this funding will likely run out within the next few years. The $25 million provided by the last farm bill was utilized in just 18 months. Hopefully the program will be given additional dollars as the farm bill during markup this week in the Senate Agriculture Committee.
On the credit front, the draft bill increased the value of land that can be financed under the Down Payment Loan Program to $667,000, a help in areas with very high land prices, and gives the Secretary discretion to determine how much years of managerial experience is required for a beginning farmer to qualify for a direct farm ownership loan. The conservation loan program was modified to require applicants to be not larger than a family farm and to be unable to obtain credit from private lenders. However, the beginning farmer guarantee amount is still lower than other federal loan programs.
We consider it a partial win that the Beginning Farmer and Rancher Individual Development Accounts program was reauthorized, even though it was not provided any mandatory funding. Many programs that have never received any funding through annual appropriations were allowed to expire. However, the big task to get this innovative new farm start-up program off the ground is to find farm bill funding for it as the farm bill process moves forward.
Two other credit provisions from the Beginning Farmer and Rancher Opportunity Act that were not included in the draft farm bill include a young and beginning farmer microloan program and a directive to coordinate the borrower training program required by borrowers of FSA loans with the financial training programs funded through the Beginning Farmer and Rancher Development Program. FSA is currently in the process of creating a microloan program, although it is not specifically targeted at beginning farmers nor is it specifically authorized by law. Hopefully a microloan program authorization will be added to the bill during markup this week.
On the conservation front, the draft bill maintains the higher cost-share rate and advance payment option for beginners in the Environmental Quality Incentives Program (EQIP), and the set-asides for beginning and socially disadvantaged farmers in EQIP and Conservation Stewardship Program. However, the proposal to increase the advance payment level to 50 percent has not yet been included, nor has the proposal to increase the size of the set-aside to bring it a bit closer to a fair share for beginning farmers.
The biggest disappointment for beginning farmers in the draft bill is the lack of adequate funding provided for the Beginning Farmer and Rancher Development Program (BFRDP). Total funding was decreased by $25 million, which cuts annual funding in nearly in half from $19 to $10 million. This comes at a time when this program is in the most need of funding to scale up its impact and reverse the aging of America’s farmers. On a positive note, the program includes a new priority on military veterans, and attempts to increase matching requirements and eliminate key program priorities were turned back.
Perhaps one of the most surprising defeats of the draft farm bill is the defunding of the 2501 Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers program. In the 2008 Farm Bill, both the 2501 program and BFRDP received $75 million in mandatory funding, and while BFRDP at least received some funding in the draft farm bill, their was no funding provided for outreach and training for minority and limited resource farmers, aside from an authorization for annual appropriations. This is a real slap in the face to the nation’s minority farmers.
Another big funding loss came to the Value-Added Producer Grant program which received zero dollars in farm bill funding (down from $15 million in last farm bill and $40 million per year in 2002 Farm Bill). Additionally, while the priority on project that benefit beginning farmers is still maintained, but the critical fix recommended in the Beginning Farmer and Rancher Opportunity Act to encourage farm coops and businesses to include beginning farmers without mandating that they be 100 percent comprised of beginning farmers has so far not been addressed. Hopefully that will be fixed in markup this week.
In the conservation title, the Farm and Ranch Land Protection Program was consolidated into a conservation easement program and renamed the Agricultural Land Easements Program, and although most of the program structure remains in place, there are no specific priorities on easements or land transfers made to beginning farmers, as called for in the Beginning Farmer and Rancher Opportunity Act.