The Farm Bill approved by the Senate Agriculture Committee included $800 million in new mandatory funding for Energy Title programs, none of whose current funding is extended beyond the 2008 Farm Bill.  The Senate found offsets for the Energy Title in an estimated $1.7 billion surplus in the draft Senate bill above the Senate Committee’s goal of a $23 billion cut to the Farm Bill budget.  That surplus was divided in the Senate markup between the $800 million energy amendment and an amendment to increase the payment acres for the proposed new shallow loss revenue protection payment program.

The House Agriculture Committee, however, is aiming for $33 or 34  billion in cuts to the Farm Bill budget rather than $23 billion, which will make it difficult to find additional Energy Title funding.

Highlights of the hearing included the testimony of Steve Reinford who operates the Reinford Farms Inc., a dairy farm in central Pennsylvania.  The Reinfords used funding from a Rural Energy for America Program (REAP) grant and state funding sources to construct an anaerobic digester to treat the dairy’s waste, initially to deal with odor problems.  Mr. Reinford was told that he would need to increase the dairy to 800 cows in order to have the digester function at a profit.  But when the digester was installed, he was approached by local Walmart stores to take food waste from their stores for the digester.  This waste stream significantly increased the energy output and income from the digester.  The additional waste from non-farm sources allowed the Reinfords to keep the dairy herd at about 500 cows.  Mr. Reinford noted in his testimony that in Germany many dairies with 100 cows also take food waste and other organic wastes and operate their digesters at a profit.  The Reinford digester provides energy for the Reinford home and dairy operation, as well as powering 80-100 homes.

Jerry Taylor, president of MFA Biodiesel Co., focused his testimony on the Biomass Crop Assistance Program (BCAP), which has provided funding for a project to raise hybrid Miscanthus giganteus as feedstock for a biomass energy project.  NSAC does have concerns about the use of Miscanthus in BCAP projects because of its potential to become invasive.  But we also found merit in recommendations for BCAP proposed by Mr. Taylor in his written testimony.  These recommendations include focusing on projects involving perennial crops.  He also agreed that BCAP funds should not be used for projects on land that has not been cultivated but should rather focus on projects that can improve marginal land with the establishment of a perennial crop or trees.

Mr. Taylor also recommended that BCAP be modified to provide funding for a long enough period to establish sufficient biomass production for a bioenergy facility to undertake investments in the facility, seed sources and equipment necessary to plant and harvest a new type of crop in a region.  He suggested that projects be guaranteed funding for at least three years.  In response, Rep. Reid Ribble (R-WI) raised the concern that business ventures dependent on subsidies might never transition to a competitive market and would return to Congress for continued funding.  Mr. Taylor pointed out the BCAP was structured to avoid that problem because the biomass facility did not receive the BCAP funding directly and would not be basing its product pricing on the subsidy.  Instead, a longer time course for the BCAP funding to farmers would encourage more farmers to produce the feedstock for the biomass facility, helping to ensure the success of the venture.

Senate 

Now that the Senate Agriculture Committee’s version of the farm bill – the Agricultural Reform, Food, and Jobs Act – has been passed out of committee, the bill heads to the Senate floor for consideration by the full Senate.  On Wednesday, Chairwoman Stabenow (D-MI) and Ranking Member Roberts (R-KS) held a press conference to reiterate their support for the committee-passed bill and emphasize their desire to have the bill go to the floor soon.

The timeline for floor action is not yet clear, although Chairwoman Stabenow indicated during the press conference that she is working closely with Majority Leader Reid (D-NV) to schedule floor time and that she is confident that it will happen in the next few weeks.  Based on current information — but quite subject to change — we estimate that the bill will go to the floor in June, most likely in mid-June.

One of the many factors influencing floor time is that the official Congressional Budget Office score (the official cost) for the bill voted out of committee has not yet been released.  During yesterday’s press conference, Chairwoman Stabenow said that the committee anticipates having the score “very soon.”  Without a score, the bill will not go to the floor.

Earlier this week, forty-four Senators sent a letter to Sen. Reid and Republican Leader McConnell (R-KY) in support of scheduling floor time for the farm bill, and Sen. Feinstein (D-CA) sent her own letter echoing that sentiment.  Both letters voice support for an open amendment process, which would allow for Senators to offer, debate, and vote on changes to the bill.

Senate offices are starting to consider amendments to offer during the Senate floor debate.  Certain amendments, like one to cap insurance subsidies, are taking shape.  NSAC is currently involved in discussions on a half dozen potential floor amendments.  As it becomes clearer which amendments will be offered, we will keep our readership posted.

House

As the Senate tries to find time to bring the farm bill to the floor, the House Agriculture Committee is working on its version of the bill in committee.  Chairman Lucas (R-OK) is finishing several weeks of hearings in Washington, DC, with two hearings on the commodity and crop insurance titles, and one on energy and forestry, closing out the series this week.

As the House Agriculture Committee works to put together a farm bill, Chairman Lucas has been clear about a number of starting points.  First, contrary to what was previously expected, the committee will not be starting from the Senate committee-passed bill, but rather than draft bill prepared last year for the ill-fated congressional Super Committee process.  The main sticking points have to do with the structure of the commodity and crop insurance titles in the Senate bill and the size of the cuts to the Supplemental Nutrition Assistance Program (SNAP or food stamps) program.  Both Chairman Lucas and Ranking Member Peterson (D-MN) have publicly criticized the Senate bill’s farm safety net for not being appropriate for all commodity crops, and for not being structured to protect farmers against several years of bad crop prices.  Chairman Lucas has also indicated that his bill will cut food stamp benefits more sharply than the Senate bill.

In terms of the policy in the rest of the bill, the House Chair is comparing what came out of the Senate committee-passed bill to the proposal crafted last fall for the failed Super Committee process, and determining what to support or remove.

The funding available for the House bill will be less than what the Senate Agriculture Committee used for its bill.  The Senate bill cuts approximately $23 billion from the currently-projected nearly $1 trillion farm bill spending level over the next decade, which is the amount that was proposed last fall for the failed Super Committee process.  The House Agriculture Committee is aiming to cut approximately $33 billion from current projected spending, mirroring the amount that the committee approved in April for the House budget reconciliation process and the size of the overall cut called for by the Obama Administration.

In an already challenging fiscal environment, the additional $10 billion in cuts that the House is trying to make through the farm bill means that there will be even less money available to fund a wide array of farm bill programs that expire this year if there is no renewed funding for them in the new farm bill.

Chairman Lucas has indicated that instead of having the full $33 billion in savings coming from SNAP as was the case with his budget reconciliation bill approved earlier by a strictly partisan vote, there will be a major cut to SNAP but also to other areas of the bill.  Where the committee will make cuts and how big those cuts will be to certain areas of the bill may largely determine the success or failure of the bill in committee and on the House floor.

Chairman Lucas has said that he would like to produce a bi-partisan bill — which he most certainly will have to do to pass a bill on the House floor.  Because of the influence of the tea party, there are Members of the House majority  who may very well vote against a bill if it doesn’t cut enough from SNAP or from farm subsidies.  There will also likely be Democrats in Committee and on the floor who vote against a bill that has any sigificant cut to SNAP.  If he wants to get a bill done, Chairman Lucas will have to find that sweet spot that may prove illsuive without very strong bipartisan consultation.

In terms of timing for markup in the House Agriculture Committee, our best guess at this point is that it will happen in mid- to late June.  Unlike the process in the House Agriculture Committee last farm bill where much of the work was done at the subcommittee level, there will not be subcommittee markups of different parts of the bill, and the bill will be considered solely in full committee.

The current farm bill expires on September 30 of this year.  If a new 2012 Farm Bill has not been signed into law by then, Congress will need to pass a temporary extension of the current farm bill.  While some previous farm bills have needed extensions, those extensions were largely uncontroversial and pro forma.  An extension during this presidential election campaign and in this highly charged Congress that has had trouble passing other basic measures will almost certainly prove to be controversial and difficult.

Thankfully, what is clear is that the Chairs and Ranking Members of the House and Senate agriculture committees want to get a full farm bill done this year.  While there are many unknowns in how that happens, the process is moving ahead in both chambers.

What is also clear is that June will potentially be a very busy and critical month for the 2012 Farm Bill.

If you care about the outcomes of the farm bill, sign-up to receive alerts on when to take action in support of a sustainable agriculture and food system!

The first hearing was held on Wednesday May 16 and included two panels, an economist panel and a farm and commodity group panel.  The second hearing was held on Thursday, May 17 and also heard from two panels that included additional producer groups and representatives from the crop insurance industry.

Producer groups invited to testify over these two days of hearing included representatives from American Farm Bureau, National Farmers Union, National Corn Growers Association, American Soybean Association, National Association of Wheat Growers, National Barley Growers Association, USA Dry Pea and Lentil Council, USA Rice Producer’s Group, Southwest Council of Agribusiness, National Cotton Council, Southern Peanut Farmers Federation, and National Sorghum Producers.

To see a complete list of witnesses from the four panels, please click here for day one or here for day two.

Members who participated over these two days of hearings include Subcommittee Chairman Conaway (R-TX-11), Ranking Member Boswell (D-IA-3), Committee Chairman Lucas (R-OK-3), Committee Ranking Member Peterson (D-MN-7), and at one point or another most of the members of the Subcommittee.

Target Prices Versus Revenue Coverage

The overarching theme that resonated throughout these hearings was that federal farm safety net programs need to be equitable across all regions of the country and need to recognize the diversity in American agriculture.  Not surprisingly, witnesses who testified on behalf of peanuts, sorghum, and rice expressed the most opposition to the new revenue-based “shallow loss” farm program established in the farm bill approved by the Senate Agriculture Committee.

The Senate Committee-passed bill replaces the current direct and counter-cyclical payment programs with a “shallow loss” program known as Agriculture Risk Coverage (ARC).  In contrast, rice, sorghum, and peanut associations and many of the Members of the House Subcommittee prefer to retain a much-modified version of the current counter-cyclical price-based program.  Like today’s counter-cyclical program, their preferred commodity program would pay farmers when prices are low, but with significantly higher government-set price protection levels and with the program re-coupled to actual production of the price-protected commodity.  This combination of revisions makes the program more trade-distorting, less market-oriented, and far more expensive than today’s counter-cyclical program.

Several Members and witnesses referred to the Senate approach pejoratively as a “one size fits all” proposal that provides a safety net only so long as commodity prices remain relatively high over a long period of time.  The concern is that if prices come down and stay down for a period of years, there will not be enough price and income protection in the more market-oriented Senate ARC approach.

The debate over the direction of the commodity subsidy system is likely to result in two different approaches in the House and Senate farm bills that will then have to be negotiated and compromised in a House-Senate conference committee later in the farm bill process.  While it is quite possible to include both programs and make them separate options  for producers to choose between, doing both within the farm bill budget constraints will necessarily mean both programs would offer less protection than would be afforded if there were a single, unified program.  Assuming the House Committee bill includes both options and assuming they stick with the same budget constraint as the Senate Committee did, the emerging House bill will present a preview of what such a dual program would look like.

Revenue Coverage Versus Crop Insurance

There was also concern among some Members and witnesses representing the crop insurance industry that the ARC proposal included in the Senate bill competes with the federal crop insurance program by offering similar coverage levels but at no cost to producers, which some contend might influence a producer’s decision in whether they purchase crop insurance, rely soley on the free Title I revenue-based program, or do both but choose lower insurance coverage options.

At least one economist testifying said in his view it was more likely that producers would do both – take the free revenue protection provided by ARC in the commodity title but also continue to choose high levels of revenue insurance protection, at highly subsidized rates, in the crop insurance title.

There is not yet a final budget scoring on the Senate Committee-passed bill, but when it does finally emerge it is expected to show at least a couple of billion dollar savings over the course of ten years based on farmers choosing somewhat lower revenue insurance coverage levels given the existence of the ARC shallow loss protection.  Given the over $90 billion the crop and revenue insurance program subsidies are expected to cost the taxpayers over the next ten years, however, a few billion dollars actually represents a fairly small displacement rate.

Payment Limits

Payment limits was a topic of much discussion throughout much of the hearing testimony and Member statements.  The Senate Committee-passed bill caps ARC payments at no more than $50,000 per farm per year, and also includes important new “actively engaged in farming” requirements that close existing loopholes that currently allow mega farms to collect many multiple times the legal payment limit.

When questioned specifically on the issue of placing payment limits on federally subsidized crop insurance premiums, it was unsurprising that the majority of farm and commodity groups, wanting to ensure continued access to unlimited subsidies for mega farms, testified in these hearings opposed to the Senate bill’s payment limits and requirements that recipients be actively engaged in farming to be eligible for the program.

Most of the witnesses also testified in opposition to any limits on crop and revenue insurance subsidies.  The Senate Committee bill, while adopting reform provisions on the commodity title side of the ledger, leaves the crop and revenue insurance side of the subsidy ledger wide open with no caps and no requirements as to who can receive the subsidies.  That inconsistency – putting caps on the smaller of the two subsides while leaving the larger subsidy wide open for abuse – will be the topic of a Senate floor amendment, and likely a House floor amendment as well.  As we have previously reported, Senators Coburn (R-OK) and Durbin (D-IL) have been vocal in their support for placing a limit on the amount of taxpayer subsidies that any one producer can receive.

Roger Johnson, head of the National Farmers Union, was the lone witness testifying in support of strict commodity and crop insurance payment limits.

Conservation Compliance

Another issue raised in the House hearings was whether or not conservation requirements should be tied to federally subsidized crop insurance premium subsidies.  To receive commodity subsidies or farm bill conservation payments, producers must comply with soil erosion prevention plans if they farm highly erodible land and must promise not to drain any wetlands on their property.  Under the original conservation provision passed by Congress as part of the 1985 Farm Bill these very basic requirements applied to the receipt of crop insurance subsidies as well, but that requirement was later removed as part of the 1996 Farm Bill.

When the panelists on the producer panel during both days of hearings were asked about this, the overwhelming response was in line with what we’ve been hearing from these groups throughout the farm bill debate – the fact that taxpayers pay for most of the farmers insurance premiums, to the tune of over $7 billion a year, does not entitle taxpayers to expect any quid pro quo with respect to conserving the natural resources.

Again, NFU was the exception, stating their sensible position in support of the “the reestablishment of compliance requirements for federal crop insurance eligibility so that all existing or new crop and revenue insurance or other risk management programs are subject to all conservation compliance provisions.”

Beginning Farmers

When talking about any farm program, it is easy to leave out how young and beginning farmers experience these programs differently than more established producers, and crop insurance and revenue-based commodity programs are certainly no exception.  Representative Walz (D-MN-1), who is one of the two lead sponsors of the Beginning Farmer and Rancher Opportunity Act, was one of the only members on the committee to press the panel specifically on how to address the barriers that new producers face when trying to access farm safety net programs.  A challenge with revenue-based programs is how to make it worthwhile for new producers to participate, since they lack an established production history, and therefore are protected at a lower rate than producers with an established revenue history.  Compounding the increased risk that new producers take on in the first few years when they are establishing their farming operation, most lenders either require that borrowers have crop insurance or if not still use this as an essential component in evaluating the risk of providing a loan to a new farmer.

Unfortunately, the panelists were generally unable to offer any suggestions or solutions for how to improve crop insurance programs for new producers, but did acknowledge that this continues to be an issue.

Provisions included in the Senate bill, based on an amendment by Senators Klobuchar (D-MN) and Baucus (D-MT), attempt to make it easier for beginners to be able to afford crop insurance by reducing the premiums charged for beginning farmers and improving their assigned yields.  NSAC is supportive of the intent of those Senate provisions but is encouraging Congress to further refine them as the farm bill process moves forward.

Diversified Operations

Although specialty crops are generally not included in most discussions on farm commodity programs, there were several points during these hearings where farm safety net issues related to diversified operations did come up.  Rep. Walz asked a pointed question of the producer panelists of whether or not there was room in this farm bill for planting flexibility and whole farm revenue insurance (which was included the Senate bill).  Although the specialty crop industry has been generally opposed to planting flexibility, Walz argued that it allows producers who want to diversify to respond to market signals and move some of their acres from commodities to fruits and vegetables.  Whole farm revenue insurance is another option that allows diversified producers of both commodity and non-commodity crops to participate in farm safety net program by providing revenue protection for a wide diversity of crops at the whole farm scale.

Roger Johnson was the only panelist to immediately respond on these issues, stating that whole farm revenue insurance is generally underappreciated in agriculture because we tend to think crop by crop.  In many parts of the country though, farmers plant a lot of different crops, and we need to allow farmers to plant what they think makes sense.

The NFU testimony also included another very sensible recommendation: “Crop insurance should be improved for organic producers, including ending the existing surcharge on organic policies and the full implementation of coverage levels based on organic prices.  Additionally, crop insurance products and risk management tools should be developed for specialty crop producers.”

Planting flexibility, whole farm revenue insurance, and improvements to organic crop insurance are included in the Local Farms, Food and Jobs Act.

To see a video of the hearings, or read witnesses written testimony, click here.

Taxpayers share the cost of crop and revenue insurance premiums with producers, with the taxpayer share of the premium ranging from 38 to 80 percent.  The nationwide average last year was 62 percent, with the farmer share averaging 38 percent.

In 2011 these subsidies cost the taxpayer $7.4 billion, and according to the Congressional Budget Office, under current law, the total cost to the taxpayer of the crop insurance program over the next decade, including both the premium subsidy as well as payments to the companies that sell crop insurance will be $90 billion.  The new farm bill recently reported out of the Senate Agriculture Committee increases that total cost slightly.

Senator Coburn earlier had requisitioned a U.S. Government Accountability Office report on insurance premiums that analyzed per farm subsidies and explored a scenario in which the subsidy would be capped at $40,000 per farm operation per year.  The GAO concluded, based on USDA data, that such a cap would save one billion dollars in a high premium year such as 2011.  It also found that such a cap would impact less than four percent of total crop insurance program participants, but those largest farming entities account for nearly a third of total premium subsidies.

The Coburn-Durbin letter states that “Large farms are better positioned than smaller farms to pay a higher share of premiums, according to GAO…. Moreover, the report found that not limiting premium subsidies for individual farmers and farm entities could be prohibitive for small and beginning farmers.  According to GAO’s findings, federal benefits like premium subsidies could contribute to an increase in land process, which make expanding or even entering the industry difficult for small and beginning farmers.”

The two Senators make clear in their letter that they support the federal crop insurance program, stating, “…it is critical to make good programs better to ensure they are performing as intended and are fiscally sound taxpayer investments.  Good programs should never be immune to oversight and improvement when needed.  Maintaining the integrity of crop insurance will help ensure it continues to serve as a primary safety net program for our nation’s farmers.”

NSAC’s farm bill platform contains a different variation on capping crop insurance subsidies, based on a graduated reduction in the amount of the premium subsidy as the per farm total volume of insured products increases.  We will await further details to emerge on the Coburn-Durbin effort, but will very likely support their effort to amend the program to improve its fiscal integrity and reduce its contribution to farm consolidation and economic concentration.

University of Illinois economist Gary Schnitkey recently offered some analysis and thoughts about the impact of the GAO recommendation, noting that the size of farm impacted by a dollar limit would vary by year depending on commodity prices and also vary by level of risk.  Generally speaking, in years with higher commodity prices the size of farm that hits the cap will be smaller than in years with lower commodity prices.  Schnitkey also concludes that the cap will hit high risk farms at a smaller number of acres than lower risk farms.

These are important observations, but not unreasonable outcomes from a public policy standpoint.  Nonetheless, there are a variety of ways to more finely tune subsidy limitation proposals that may yet receive consideration as the farm bill process moves forward.

NSAC Policy Associate Helen Dombalis and Farmer Jack Hedin

Earlier this week, the Union of Concerned Scientists (UCS) organized two Congressional briefings on the economic potential of local food systems and the programs and policies that are needed in the farm bill to realize this potential and to support this critically important agricultural sector.  The briefings were hosted by Senator Sherrod Brown (D-OH) and Congresswoman Chellie Pingree (D-ME-1), the lead sponsors of the Local Farms, Food, and Jobs Act (S. 1773, H.R. 3286).

For the past year, UCS has been working to shine a spotlight on the economic benefits of local and regional food systems.  Just as importantly, UCS focuses on how smart policies that support the expansion of local food systems can provide much-needed investments in rural communities, create jobs and support family farms, and help increase U.S. production of healthful food.

For example, the recent report Ensuring the Harvest found that if fruit and vegetable consumption increased to meet the USDA’s “MyPlate” dietary guidelines, local food sales could increase to as much as $14.5 billion a year and generate as many as 189,000 new jobs.

Over the course of two briefings, one each for the House and Senate, the panel of speakers delivered hard facts and figures on local food systems, real life experiences and knowledge, and the ins and outs of the Local Farms, Food, and Jobs Act (LFFJA).  The briefing was moderated by UCS’s Ricardo Salvador, Senior Scientist and Food & Environment Program Director.  The panel featured the following speakers:

Jeff O’Hara, Ph.D., Agricultural Economist, Union of Concerned Scientists
Dr. O’Hara is UCS’s leading researcher on the economics of local and regional food systems and is the author of two recent reports on local foods, Ensuring the Harvest and Market Forces.  Jeff’s presentation focused on the economic success of local and regional food systems in recent years as well as the potential for additional growth and job creation that could be aided by smart policies like those included in LFFJA.

Jack Hedin, Featherstone Farm, Rushford, Minnesota
Mr. Hedin is the owner of Featherstone Farm, a 250 acre diversified and certified organic farm located in southeast Minnesota.  The farm produces 50 varieties of fresh market fruits and vegetables for distribution to food stores, wholesalers, and Community Supported Agriculture (CSA) members throughout the region.  Jack is also an ally of NSAC and was recently in DC for a series of meetings with NSAC and House and Senate staffers.  During the briefing, Jack spoke directly to his on-farm experiences in Minnesota, the financial challenges posed to diversified and organic farmers like himself, and the need for improved credit and risk management tools to be included in the farm bill.  Specifically, Jack spoke about the need for a whole farm risk management insurance product, a provision in the farm bill recently reported out of the Senate Agriculture Committee.

Bernadine Prince, Co-Executive Director, FRESHFARM Markets; President – Board of Directors, Farmers Market Coalition
Ms. Prince is the co-founder and co-executive director of FRESHFARM Markets, which operates 11 producer-only farmers markets in the Washington metropolitan area with more than 110 farmers and producers from five states who farm more than 9,000 acres.  Bernadine is also the Board President for the Farmers Market Coalition, an NSAC member group which seeks to strengthen farmers markets’ capacity to serve farmers, consumers, and communities nationwide.  Bernadine’s briefing presentation focused on the incredible growth of farmers markets and the critical role that programs like the Farmers Market Promotion Program have played in the success and growth of local markets.

Helen Dombalis, Policy Associate, National Sustainable Agriculture Coalition
NSAC Policy Associate and lead advocate for local and regional farm and food policy, Helen delivered an overview of the key provisions, programs, and funding included in LFFJA as well a comparison to the draft farm bill that recently passed the Senate Agriculture Committee.  Click here for specific information on how local food policies and programs fared in the Senate bill.

Nearly 50 staff, members of the media, and outside stakeholders attended the two briefings.  In addition to the presentations, each briefing also featured a lively Q&A session with panelists.

For more information on UCS’s work on local food issues, recent reports, and priorities and the farm bill, please visit their website.

            Rep. Pingree and Russell Libby

Chairwoman Jean Schmidt (R-OH) opened the hearing by stating, “In order for us to reauthorize and craft responsible farm programs, it is our duty and responsibility to ensure that every dollar spent is a wise dollar spent.   Investing wisely in specialty crops and ensuring that nutrition programs are being administered effectively is critical at this time.”

Schmidt highlighted the Specialty Crop Research Initiative (SCRI) because it has no baseline funding going forward.  She cited SCRI as a “critical element” of specialty crops, and one that promotes health– “A diet with more specialty crops is more nutritious.”

Congresswoman Chellie Pingree (D-ME) echoed the interrelated nature of nutrition and specialty crops as both “important links in ensuring that all families have the option of putting fresh and good food on their tables.”  According to Pingree, thinking about how to link nutrition programs to farmers involves expanding local markets.

“When farmers sell to local markets, they get to keep a bigger share of the dollar.  It’s a win for farmers and it’s a win for our families,” said Pingree.

The first panel included five witnesses involved in production and packing of specialty crops.  As a whole, members of the panel stressed the importance of both SCRI and the Specialty Crop Block Grant Program (SCBPG) which fund food safety, education, research, and marketing efforts that advance the competitiveness of specialty crops.  Several witnesses, asked for changes or more funding for the program.  Jerry Lee, the Environmental Services Manager of Monrovia Growers, suggested the Committee “support your Senate counterparts’ efforts to expand funding for this program and allow the opportunity for multi-state proposals.”

Russell Libby, the Executive Director of Maine Organic Farmers and Gardeners Association, was the only one of the first panelists to discuss organic specialty crops.  Libby also referenced the Senate farm bill, asking the House to consider funding the National Organic Certification Cost Share at the level included in the Senate bill.  He warned that without the program “farmers here at home will opt not to certify, and organic companies will have to source from overseas instead of from American farmers to meet strong consumer demand.”

Libby also asked to expand organic production through a more efficient National Organic Program, through streamlined inclusion in programs such as the Environmental Quality Incentives Program and the Conservation Stewardship Program, and through the development of a workable organic crop insurance program.

During the question and answer portion of the hearing, Rep. Pingree inquired about  potential barriers to farmers, especially those concerning beginning and organic farmers and farmers selling into local markets.  Generally panelists agreed that farmers needed access to capital to aggregate product and scale up supply networks.

During his round of questioning, Rep. Jim McGovern (D-MA) pointed out that cutting nutrition assistance programs also meant cutting benefits for farmers.  Phil Blalock, the Executive Director of the National Association of Farmers Market Nutrition Programs, made a similar point in the second panel.  He discussed the role the Farmers Market Nutrition Program and the Senior Farmers Market Nutrition Program play in supporting agriculture, explaining that these programs “increase income to small family farmers by increasing use and awareness of farmers markets.”

See that photo below?  It’s of Mississippi farmers John and Ora Carpenter, meeting with Representative Alan Nunnelee’s office this spring here in Washington, DC.  The Carpenters shared stories about how their farm is an integral part of their community, and how federal programs have helped them expand their business and grow a diverse array of crops that they sell across the region.

That’s democracy in action – engaged citizens who care about their communities and their family-owned farm businesses speaking up for what matters in the 2012 Farm Bill.  And while not everyone can fly to DC to speak up in person, everyone can speak up!

The 2012 Farm Bill is marching onward – and Congress still needs to hear from you!  Just a few weeks ago, grassroots voices helped achieve some victories for sustainable agriculture in the Senate’s version of the bill, but our work is far from over.  Right now, the House is at work on its version, and it’s crucial that these legislators know what matters to you.

Will you take five minutes today to tell the House what you want to see in the farm bill?

Maybe it’s support for critical conservation programs that protect our natural resources, or for initiatives that will launch the next generation of farmers and ranchers.  Your thoughts – and your stories – matter.  Tell the House Agriculture Committee that you want a 2012 Farm Bill that expands opportunities for family farmers to produce good food, sustain the environment, and contribute to vibrant communities!

It takes just a few minutes to submit your comments, and we’ll get you started with a few ideas here.  Don’t delay – the deadline for comments is May 20.
Thank you for all that you do,

The National Sustainable Agriculture Coalition Grassroots Team

P.S.  In the meantime – have you signed on as a citizen endorser of Farming for the Future, our 2012 Food & Farm Bill platform?  Sign on today!

The panel of witnesses were chosen from both Chairman Fortenberry’s and Ranking Member Fudge’s home states of Nebraska and Ohio, along with a witness from Maryland.  The panel was comprised of a mix of bankers and producers, and included the following witnesses:

• Bob Frazee, Farm Credit Council (Maryland)
• Jeff Gerhard, Independent Community Bankers of America (Nebraska)
• Matthew Williams, American Bankers Association (Nebraska)
• Michael Walton, Tunnel Vision Hoops (Ohio)
• Justin Doerr, Beginning Farmer (Nebraska)

In his opening statement, Chairman Fortenberry stressed the importance of federal credit programs in meeting the needs of young and beginning farmers who often face difficulty obtaining commercial credit due to their lack of an established credit history.  He also mentioned that federal credit programs need to be receptive to the financial needs of producers who sell to local markets.

Ranking Member Fudge focused on the specific challenges that urban farmers face when trying to obtain credit through direct or guaranteed loan programs, and emphasized the unique perspective that these producers can bring to federal credit policies and programs.

Beginning Farmers

The specific credit needs of young and beginning farmers was a hot topic at today’s credit hearing, which is not all that surprising, given that the Chair of this subcommittee is also the leading Republican sponsor of the Beginning Farmer and Rancher Opportunity Act (H.R.3236).  The producer witness who was able to speak most directly to these issues was Justin D. Doerr – a beginning farmer and veteran from Plainview, Nebraska, who represented himself as well as  NSAC and NSAC member organization Center for Rural Affairs.

Doerr is a mixed crop and livestock farmer who rents land in Northeastern Nebraska.  He grows alfalfa, corn, and soybeans, and raises sheep, goats, and chickens.  In his testimony, Doerr told the story of the obstacles that he faced as a beginning farmer and military veteran, speaking to several programs included in the Beginning Farmer and Rancher Opportunity Act that address the credit and land access needs of new producers.

Chairman Fortenberry and beginning farmer witness, Justin D. Doerr

He spoke about his difficulty in finding affordable land to farm and his experience trying to use the Conservation Reserve Program Transition Incentives Program – a popular federal program that incentivizes retiring landowners to sell or rent their expiring CRP land to beginning farmers.  Since starting in 2010, demand for this program has grown tremendously and over 1,600 beginning farmers have used CRP TIP to access over 260,000 acres of farmland to begin or expand their farming operations.  Unfortunately, as of early this spring, all of the funding provided by the 2008 Farm Bill for this program has already been obligated, and thus, beginning farmers like Doerr, were unable to take advantage of this land access incentive program.  For this reason, NSAC is advocating for renewed but increased funding for this program in the 2012 Farm Bill.

In addition to access to land, which is often the first obstacle beginning farmers face, Doerr also discussed other challenges he faced that specifically deal with financing his farming operation.

With the price of farmland skyrocketing all across the country, two important programs that Doerr mentioned in his testimony are the Down Payment Loan Program and the Beginning Farmer and Rancher Individual Account (IDA) program.  Both of these farm bill credit programs are specifically targeted to helping beginning farmers and ranchers finance the purchase of farmland or accumulate savings to use towards a down payment or other operating expense.

One provision included in the Beginning Farmer and Rancher Opportunity Act that would help beginning farmers like Doerr finance the purchase of farmland, is to give priority to joint financing programs, like the Down Payment Loan Program, which leverage federal funding with the collateral of private lenders.  The IDA program is an innovative matched savings program that has been around since the 2008 Farm Bill, but despite annual funding requests by USDA, has unfortunately never received an annual appropriation and thus has not been available as a potential resource for young farmers.  NSAC will continue to advocate for mandatory funding for the IDA program as the House takes up the farm bill reauthorization.

Other beginning farmer programs that Doerr mentioned in his testimony included FSA microloans, whole farm risk management insurance, and beginning farmer and veteran training and agricultural rehabilitation programs.

Almost every other witness on this panel discussed the specific credit needs of beginning farmers as well.  Frazee, who testified on behalf of the Farm Credit Council, spoke about their “Start Right” program, which targets lending to young, beginning, and small producers, and Williams, who was representing the American Bankers Association, said that many borrowers that private banks lend to are young, beginning, and small farmers and how important federally guaranteed credit programs are in serving their needs.

Urban Farmers and Local Food

Rep. Fudge’s witness, Michael Walton, discussed the specific challenges that non-traditional borrowers, like urban farmers and those that provide for local markets, face when trying to obtain credit.  Walton is an urban farmer from Cleveland, Ohio who runs a hoop house design, fabrication, and installation company, and is involved in urban farming ventures that have transformed vacant city lots into thriving, urban food production sites all across the city.

Although the witness from MidAtlantic Farm Credit discussed a program they are creating to meet the credit needs of urban farmers in Baltimore, MD, the other commercial lenders on the panel acknowledged that there are major challenges to fit non-traditional borrowers like Walton into their loan “boxes.”  The panelist from the American Bankers Association suggested that we need to work on designing a program that works for these borrowers, and overcomes existing obstacles, such as lack of agricultural credit expertise among urban lenders.

Crop Insurance and Credit

Unsurprisingly, crop insurance also weaved its way into today’s credit hearing, and occupied much of the question and answer period.  All three lenders – FCS, ICBA, and ABA – said they did not as a general rule require borrowers to have crop insurance but they strongly encouraged it.  They also all spoke in favor of funding for federal loan guarantees and in favor of removing the statutory term limit on how many years a bank borrower could receive a loan with a federal guarantee.  Obviously, both federal expenditures – crop insurance subsidies and loan guarantees – firm up lenders’ bottom lines.

Along those same lines, the lenders spoke out against proposals to place a cap on the size of insurance premium subsidies any one farm could receive and against linking basic conservation requirements to protect the natural resource base on which food security depends to receipt of such subsidies.  It is always troubling, though not surprising, to see the Farm Credit System and the commercial banking sector opposing sound public policies such as entitlement reform, natural resource protection, and limits on federal guarantees on bank loans.

To see a video of the hearing or download copies of the witnessess’ written testimony, click here.

To see a video of Doerr and Fortenberry following the hearing, click here.

The Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, provides benefits to recipients through an Electronic Benefit Transfer (EBT) card.  With the transition from paper to electronic benefits in the mid-1990s, SNAP purchases at farmers markets declined due to a lack of equipment and technology to accept and process these electronic benefits.

The USDA funding, made available by Congress through the Fiscal Year 2012 agriculture appropriations bill, will work to reverse this trend and boost SNAP sales at local food outlets.  While there are over 7,100 farmers markets in the U.S., a mere 1,500 of these currently have the capacity to accept EBT.

On a press call, USDA Deputy Secretary Kathleen Merrigan explained that the philanthropic community and organizations like NSAC member Fair Food Network and NSAC partner Wholesome Wave are largely to thank for the available EBT technology at some markets.

In looking at the limited capacity to process EBT at farmers markets, Merrigan said that she asked herself “Why couldn’t it be all of them?”  USDA estimates that the $4 million will significantly expand this number, hopefully adding 4,000 additional markets to the list of those accepting EBT.

The funding will be distributed to States and weighted more heavily towards States lacking large numbers of EBT-capable markets.  It will then be up to the discretion of the States to administer the funding.

Later this year through a Federal Register notice USDA will announce a period during which the Agency will accept public comments on disbursements of these funds in future years.

NSAC strongly advocates for expanding EBT access at farmers markets and other direct producer-to-consumer marketing outlets such as community supported agriculture programs (CSAs) and farm stands.  Not only does ensuring EBT capability expand access to healthy, fresh food for low-income Americans but it also bolsters economic development.  When farmers sell directly to consumers, they are able to retain a larger share of the dollar that can then be reinvested in the local community.

The Local Farms, Food, and Jobs Act contains key EBT provisions aimed for inclusion in the final 2012 Farm Bill.  NSAC supports inclusion of all of the provisions of this bill in the 2012 Farm Bill.  We will be alerting members and readers to opportunities to work for this goal as the farm bill moves to the Senate floor and to the House Agriculture Committee, both of which may happen in June.

In 1985, Congress wisely decided that basic soil and wetland protections should be a requirement for any farm receiving any type of farm subsidies.  In 1996, crop insurance subsidies were delinked from conservation requirements intended to protect highly erodible land and conserve wetlands.

The argument at the time was that crop insurance was a small program in need of much greater participation, hence the fewer requirements the better.  Since then, however, the premium subsidy has grown from less than $900 million in 1995 to a $7.3 billion subsidy in 2011 that covers over 260 million acres of farmland, with a participation rate of 80 percent for the major commodity crops.  Clearly the arguments used in 1996 to delink the programs no longer hold.

The issue for the 2012 Farm Bill is quite simple – will taxpayers be told to shell out close to $100 billion in insurance subsidies over the next decade and not even have the assurance that environmental harm and harm to our future food security will be minimized in the process?  And will farmers, who in polls and surveys overwhelmingly support the highly erodible land and wetlands conservation provisions, be denied a level playing field in which a few bad actors can destroy wetlands or allow excessive soil erosion while still taking public subsidies?

So far, the answer of the Senate Agriculture Committee sadly has been yes.  They approved a farm bill that does not even contain minimal basic conservation requirements in return for massive insurance subsidies.  But this need not be the final answer.  The full Senate will take up the bill soon, quite possibly in June, and could vote to relink conservation with crop insurance subsidies.

In our 2012 Farm Bill platform, Farming for the Future, NSAC urges Congress to reestablish this crop insurance conservation compact, thus preserving our natural resources while improving the farm safety net.  NSAC has also proposed legislation to accomplish this common sense objective.

Over the past few weeks a spate of editorials in leading farm state newspapers have decried the Senate Committee’s approval of a Farm Bill that fails to relink crop insurance to conservation compliance:

• A Des Moines Register editorial is headlined “US Aid to Farms Should Have Strings.”  The editorial finds that the Senate bill contains a potential “environmental land mine” with the shift from direct cash subsidies to crop insurance delinked from conservation compliance.  It concludes that “ . . . it is not too much to ask that all farmers who benefit [from crop insurance subsidies] should be good stewards of the land.”

• A Minnesota Star Tribune editorial agreed, criticizing the Senate Committee bill for not requiring land stewardship practices as a condition for the premium subsidy.  The Star Tribune went a step further, opining that the crop insurance subsidy itself goes over the top, because the subsidy is available without regard to income and is not capped with a payment limit.  The editorial noted this arrangement artificially increases land values and raises barriers to beginning farmers and small farmers looking to buy or rent land.

• An editorial in the Lincoln, Nebraska Star Journal applauded the state’s Senators Mike Johanns and Ben Nelson for supporting a “Sodsaver” provision to help preserve native grasslands.  But it also criticized the Senate bill for falling to include requirements and enforcement measure to discourage farming on highly erodible land.  Without these restrictions, the editorial concludes that “ . . . the crop insurance program has the potential to turn into a boondoggle for taxpayers and a disaster for conservation.”

• The Sioux City Iowa Journal ran a guest editorial written by Brad Redlin, National Agricultural Program Director with the Izaak Walton League of America, and Jerry Peckumn, an Iowa farmer who is also board chairman of Iowa Rivers Revival.  They call for reestablishment of the existing and logical covenant between taxpayers and producers that is represented by the conservation compliance linkage to crop subsidies, including crop insurance.  This linkage can save taxpayer dollars, protect natural resources, and improve conservation outcomes.

Many others also support the position of these editorials that crop insurance subsidies should be relinked to highly erodible land and wetland conservation compliance requirements.  Earlier this year, four letters were delivered to the Agriculture Committees in support of relinking crop insurance to conservation — one from two former U.S. Secretaries of Agriculture, one from four former Chiefs of the Natural Resources Conservation Service, a third from 15 national conservation organizations including NSAC, and a fourth from 90 water groups including the American Water Works Association, National Association of Clean Water Agencies, Association of State Drinking Water Administrators, National Association of Water Companies.

For more information on this issue, see the NSAC fact sheet on conservation compliance and our summary of the Senate Farm Bill’s conservation and commodity and crop insurance provisions.