Archives for the 'Fair Competition' Category
Farmers Seek Justice in the Heartland
Wednesday, March 17th, 2010
We are thrilled to feature this blog post written by Kristina Hubbard, board member of NSAC member group, the Alternative Energy Resources Organization (AERO). Kiki attended the first in a series of hearings sponsored by the USDA and Department of Justice about concentration in the agriculture industry. Kiki is the author of a recent report, Out of Hand: Farmers Face the Consequences of a Consolidated Seed Industry.
“We’ve waited a long time for justice in the heartland.”
- Wes Shoemyer, Missouri Farmer and State Senator
Last Friday approximately 800 people gathered in Ankeny, Iowa, for the first in a series of workshops hosted by the Departments of Justice (DOJ) and Agriculture (USDA) on competition in agriculture. The meeting followed an outpouring of 15,000 public comments on the topic. (It’s an open docket, so there’s still time to weigh in by emailing agriculturalworkshops@usdoj.gov.)
U.S. Attorney General Eric Holder delivered opening remarks for the “milestone event,” saying, “I don’t use milestone lightly. Not once have our Departments of Justice and Agriculture come together to discuss regulatory issues in this industry.” He encouraged the audience “to be as frank as you can be, understanding that we’re going to be receptive to that dialogue.” This remark was followed by someone in the audience yelling, “When?”
There’s truth in this outburst, of course. The workshops are long overdue — as Tom Vilsack admitted in his opening remarks — and the forum wasn’t designed for farmer input. Of the hundreds of people in attendance for the public dialogue, many of them farmers who have waited decades for a serious examination of consolidation, only a handful were given an opportunity to speak.
Attorney General Eric Holder and Secretary of Agriculture Tom Vilsack at USDA-DOJ hearing in Ankeny, IA, March 12, 2010. Photo credit: Organic Seed Alliance
Knowing that would be the case, a coalition of food and farm groups arranged a town hall meeting the night before to provide farmers another opportunity to speak. Dozens of farmers, ranchers, and other advocates took to the podium with thunderous calls to “bust up big ag.” Garry Klicker, a farmer from Bloomfield, Iowa, asked, “If we can’t get justice from the Department of Justice, where are we going to get it?”
North Dakota farmer Todd Leake told the crowd, “The crops that we grow are the basis of our civilization. If anything belongs in the public domain it is the crops we grow for food.”
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The workshop that followed the next day was filled with panel discussions stacked with players who mostly support policies and technologies that don’t jive with the values of family farmers and ranchers committed to sustainable agriculture and vibrant rural communities. But there were some discussion points made by a handful of quality panelists worth noting:
Farmer Panel: Farmer Presentation of Issues
Two farmers, Jim Foster and Eric Nelson, provided good overviews of the problems at hand. Foster is an independent hog producer from Missouri who talked about packer ownership of animals, the need for limits on farm payments, and the unfair advantage given to farmers with huge contracts as opposed to smaller farms.
Eric Nelson, a grain and cattle farmer in Iowa, used to work in the seed industry and spoke to some of the most pressing concerns surrounding it, including biotechnology firms’ misuse of Technology Stewardship agreements; the reduction of conventional corn research (saying this puts future yields at risk for all farmers); and skyrocketing seed costs. He said the benefits of biotechnology traits on the market are overstated, that they’ve been released “with ill effects,” and research funded by the largest seed companies is “rather self-serving.” He said we can’t allow monopolies, and that germplasm needs to be back in the public domain to spur competition. He ended by stating that the long-term impacts of patents on living things need to be re-examined.
Panel I: How Have Technological Developments and Structural Changes Affected the Competitive Dynamics of the Seed Industry?
Neil Harl, Emeritus Professor of Economics at Iowa State University, laid out how patents differ from the Plant Variety Protection Act and limit choice for farmers. He said the U.S. didn’t handle the biotechnology era well through public policy, and called for regulatory action. “I’ve concluded that this is about regulatory action, industry should be involved, but I think it really has to come eventually where we have the enforcement of government,” Harl said. He believes steps should also be taken to increase public spending to encourage conventional crop development and feed germplasm back into the system. He sees little hope for this unless public funds are increased.
Kristina Hubbard (left), Harvey Howington, and Matthew Dillon attended the first in a series of DOJ-USDA hearings on concentration. Photo credit: Organic Seed Alliance
The rest of the panel was very supportive of current patent law and argued it was necessary for innovation, especially Monsanto’s Jim Tobin. Diana Moss with the American Antitrust Institute argued for generic biotechnology traits, which led to a conversation about the expiration of Monsanto’s Roundup Ready soybean patent in 2014. It became clear that the discussion (and the DOJ investigation) needs to be broader than squabbles among the largest firms fighting for access to competitors’ traits.
Panel II: Trends Panel Exploring Contracting Issues, Marketplace Transparency and Buyer Power
Mary Hendrickson, extension associate professor of Rural Sociology at the University of Missouri, talked about social values, like autonomy, and farmers’ ability to plant what they choose. Later she spoke to our disappearing infrastructure for local markets and the challenges farmers face at the local level.
Chuck Wirtz, an independent hog producer in Iowa, lamented, “It used to be about a love affair with farming. But two of my kids aren’t coming back to the farm.” He spoke about the need for price discovery in a live hog arena. Patrick Woodall with Food & Water Watch followed by saying a concentrated marketplace is making it difficult for farmers to encourage their kids to come back to the family farm. “It’s harder now for farmers to make it in a marketplace with very few buyers and to make ends meet,” said Woodall.
Panel III: Agriculture Enforcement and Cooperation at the Federal and State Levels
Montana Attorney General Steve Bullock kicked off the panel by calling for greater market transparency as consolidation in our markets has noticeably worsened. He sees bright spots on the horizon, however, such as the DOJ’s opposition to the JBS merger last year. Another bright spot, he said, was that this workshop is being held at all. “It’s not just about rural life and hanging onto a nostalgic view of rural life,” Bullock said. “It’s just practical. We depend on a competitive marketplace. In Montana, we don’t have corn, soybeans, or a lot of hogs, but the economic health of our one million Montanans is inextricably tied to agriculture.”
Bullock took the lead on a multi-state comment letter on competition in agriculture leading up to this workshop that garnered support from 16 state attorneys general. He said competition concerns in agriculture are complex because it’s not just about antitrust laws but intellectual property laws as well. “I’ve heard from farmers and ranchers in my home state that this is a long time coming. Hopefully this workshop presents an opportunity and promise of commitment.”
* * *
The agenda provided farmers a microphone at the end of the day after the crowd dwindled and most elected officials and agency representatives had left. Nonetheless, their words were powerful. Topics ranged from ethical behavior as provided by the Ten Commandments to the importance of policies that support healthy soil and healthy people. A number of farmers conveyed their disapproval of patents on plants. Harvey Howington, a rice grower from Arkansas, said it best: “Utility patents are a failed experiment.”
I left Iowa feeling disappointed yet hopeful. I’m disappointed that the seed industry was such a small part of the discussion, since there isn’t a workshop devoted to this topic as there is livestock, dairy and poultry, and seed industry concentration is only getting worse. But this meeting is truly historic and important players said some encouraging things that we need to hold them accountable to. U.S. Assistant Attorney General for Antitrust Christine Varney, for example, spoke to problems with patents: “Patents have been used in the past to create or extend monopolies,” she said. “We will be looking closely at any attempts to do so via abuse of the patent laws.” This statement drew loud applause, and made me hopeful.
My conflicting feelings following the event reflect the situation we as a sustainable agriculture community are in: We understand there’s an opportunity to take advantage of renewed scrutiny over antitrust law enforcement and related competition issues, yet our skepticism of the agencies’ ability to deliver leave some people feeling defeated. Matthew Dillon with the Organic Seed Alliance says this hopelessness is one of the most dangerous traits that impacts the well-being of our agricultural systems.
I’m humble to the fact that challenges loom large, but hopelessness won’t change anything. We have to believe that this workshop (and the ones to follow) support our efforts to push for an intellectual property regime that works for farmers; to hold our government accountable as a referee in regulating big agriculture and enforcing antitrust law; and to instill fairness and choice in our agricultural industries. Future generations of farmers and ranchers are depending on it.
The national trends and statistics might not always offer proof, but change is happening whether we see it or not. Our work is paying off. On Friday, I only had to look at the people in the crowd to realize that we are surrounded by champions for justice who are concentrating a different kind of power.
USDA Adds Pork to Existing Poultry Loan Rules Aimed at Preventing Contract Abuse
Tuesday, March 16th, 2010
On Thursday, March 11, USDA announced that Farm Service Agency (FSA) farm loan policies already in place for contract poultry production will be extended to contract pork operations as well.
The aim of the guidance is to try to put an end to the practice of FSA financing new hog or poultry operations in cases where the integrators who own the animals have terminated or declined to renew contracts with current producers and instead look for new operators as a cost cutting measure.
Those new operators have then been eligible for FSA farm ownership and operating loans, providing taxpayer support for the shady business practice of leaving an existing producer with a pile of debt and no animals while seeking out new replacement operators. These bait and switch moves often put contract farmers out of business, stimulate oversupply and lower prices farmers receive, or both. If the original operators had FSA loans on their expensive animal-raising facilities, the shift also puts the taxpayer at risk of losses on the original loan.
The guidance includes new stipulations that, if government loans are sought, production contracts must be for a minimum period of three years, termination of contracts must be based on “for cause” criteria only, contracts must require that producers be given specific reasons for any contract cancellation, and contract provisions must be present to give FSA assurances that the producer will be able to generate income with which to cash flow and repay the loan.
The poultry guidance, issued last spring, can be found here. The new pork guidance is not yet online, though we are told by FSA it will be very similar to the poultry guidance.
In addition to the new guidance, USDA also announced that FSA soon will be issuing an Advanced Notice of Rulemaking seeking public comment on the prevalence of these types of abusive contracting situations and the best way for USDA to address loan making to contract operations in the long term.
The USDA release also noted that its Grain Inspection, Packers and Stockyards Administration will continue to investigate allegations from producers of contract abuse under its Packers and Stockyards Act authority to prohibit unfair, deceptive and discriminatory practices.
Grant Opportunity: Community Outreach and Assistance for Risk Management
Monday, March 1st, 2010
Today’s federal register announced the availability of $2.5 million in grants for the Risk Management Agency’s (RMA) Community Outreach and Assistance Partnership Program and $1.1 million for Commodity Partnerships for Small Agricultural Risk Management Education Sessions.
The Community Outreach and Assistance Partnership Program targets limited resource, socially disadvantaged and other traditionally underserved producers with training, informational opportunities and assistance to understand risk management tools including crop insurance and forward contracts, as well as broader risk management topics such as crop and enterprise diversification, conservation planning, new and value-added markets, debt reduction, and asset building strategies.
In 2010 the Risk Management Agency (RMA) has expanded the scope of risk management projects it will fund to include Farm to School, Food Safety and addressing Food Deserts (areas underserved by food retailers) with products from small farmers and ranchers.
The awards are unique in that recipients work closely with the Risk Management Agency (RMA) to deliver outreach and assistance in their geographical area.
Applications are due by April 15, 2010 and awards will be made by September 30, 2010.
Read the full RFA here. To apply, complete the full application packet, available online and mail to the address listed in the RFA, or visit Grants.gov to apply online (as of 4pm EST 3/1/10 the application is still not listed in Grants.gov). If you want to use grants.gov register as soon as possible as the process can take several weeks and do not submit your application online at the last minute as the system has been known to crash.
For further information, contact:
- Jacquea Howard-Brock, Outreach Specialist, 202-690-1518, jacquea.howard-brock@rma.usda.gov
- Michelle Wert, Management and Program Analyst, 202-690-1687, michelle.wert@rma.usda.gov
- Ron Brown, Outreach Specialist, 919-875-4896, ron.brown@rma.usda.gov; or
- Rudy Perez, Outreach Specialist, 530-792-5875, cell:202-230-1606, rudy.perez@rma.usda.gov
Opportunity for Farmers to Speak About Justice to Power
Thursday, February 25th, 2010
The U.S. Department of Justice and USDA have announced the agenda for the first in a series of 5 workshops intended to give these agencies and the public in-depth information about the increasing concentration and decreasing competition in the agricultural sector. The workshop will be held March 12 in Ankeny, Iowa. Attendance at all the workshops is free and open to the public. The agenda and other information on this workshop are posted on the Department of Justice website, along with information on the next four workshops.
Farmers are caught in the middle of concentration in the agriculture sector. Increasingly fewer corporations control both the purchase and processing of livestock, poultry and other agricultural products and the supply to farmers of agricultural inputs. At the morning session of the Iowa workshop, farmers will have the opportunity to tell USDA Secretary Tom Vilsack and U.S. Assistant Attorney General Christine Varney about the decreasing ability for farmers to contract on fair terms with processors, to buy seed and other inputs at a reasonable price, and to get access to markets and a reasonable price for their products. Iowa Senators Tom Harkin and Chuck Grassley are tentatively scheduled to participate in the morning session, along with Iowa state officials. Both Senators support stronger protections for farmers and ranchers in federal laws that regulate livestock and poultry markets. The farmers participating in this morning roundtable session will be named in a future announcement.
The afternoon panel on competition in the seed industry will include a representative from the Monsanto Company, which is rapidly buying up much of the world’s seed resources, and a representative from the American Antitrust Institute, which recently released a detailed report on Monsanto’s dominance. Another afternoon panel on agricultural trends includes Professor Mary Hendrickson from the University of Missouri, who has conducted long-term research on consolidation of firms in livestock and poultry sectors and in the retail food sector.
The Obama Administration announced last August that it was concerned about the impacts of the concentration of power in the agricultural sector on food costs, the effect of agricultural regulatory statutes or other applicable laws and programs on competition, issues relating to patent and intellectual property affecting agricultural marketing or production, and the impact on farmers of market practices such as price spreads, forward contracts, packer ownership of livestock before slaughter, market transparency, and increasing retailer concentration.
NSAC supported comprehensive reform in the 2008 Farm Bill of the Packers and Stockyards Act and the Agricultural Fair Practices Act, the laws that govern market relations in the agricultural sector. A new Livestock Title in the Farm Bill included a few important reforms, which are described in our NSAC Grassroots Guide to the 2008 Farm Bill, but other reforms, which will be examined in depth at the upcoming workshops, were left on the table.
The 2008 Farm Bill also directed USDA to issue an important proposed rulemaking on unfair market preferences and on agricultural contract reforms. The proposed rule will be issued for public comment by USDA in the near future, probably fairly soon after the March 12 hearing in Iowa. NSAC will be alerting readers to the publication of that rule and will provide analysis and possible talking points for public comment.
Pigford: One step closer to closure?
Friday, February 19th, 2010
On Thursday USDA and the Justice Department announced a $1.25 billion settlement agreement in a class action brought by African American farmers on outstanding discrimination claims, which were not covered by the 1999 consent agreement in the case Pigford v. Glickman (Pigford I). Under the Pigford I consent agreement, USDA paid 16,000 farmers about $1 billion to settle their claims.
The federal court hearing the case for the outstanding claims (Pigford II) must approve the settlement agreement. In addition, and Congress will need to appropriate $1.15 billion to add to the $100 million provided in the 2008 Farm Bill. The Obama Administration’s FY2010 budget request included $1.15 billion to settle the case but the funds were not appropriated and it is not clear where the money will come from now. Under the agreement, the farmer plaintiffs in Pigford II will not have to go through a judicial process to have the merits of their claims determined but rather through a simpler administrative process. The Justice Department estimates that some 70,000 farmer plaintiffs will be eligible for redress of their claims.
Latino producers brought a similar class action against USDA alleging discrimination but in late 2009 the Supreme Court rejected their class action status, requiring that each farmer would have to bring an individual claim. Woman farmers and ranchers have also filed complaints of discrimination in lending against USDA and both groups will probably consider this settlement an opportunity to find redress for their similar grievances. Rep. Rosa DeLauro (D-CT), an advocate for woman farmers and Chair of the House Agriculture Appropriations Subcommittee said “In addition to addressing discrimination cases against black farmers, I strongly urge the USDA to work toward settling discrimination claims brought forward by women, Hispanic, and other minority farmers. These groups have also suffered great hardships as a result of decades-long discrimination by USDA and it is critical that their perseverance and hard work in overcoming a hostile environment receive some recognition.”
For more information on the Pigford settlement, see the website of our allies at the Federation of Southern Cooperatives.
A Sustainable Outlook?
Friday, February 19th, 2010
By Ariane Lotti
USDA’s Agricultural Outlook Forum is one of the last places where I would expect to hear Wendell Berry quoted, but that’s exactly how Fedele Bauccio, CEO of Bon Appetit Management Company, ended his presentation on the 2010 forum’s distinguished panel about how the company is addressing topics from the “veil of silence” around unfair farm-worker practices to the need to fix Confined Animal Feeding Operations for the health of communities and the environment.
That distinguished panel — which included Walter Robb of Whole Foods Market and Richard Schnieders formerly of Sysco Corporation — discussed other issues that normally have a home at sustainable farmer conferences like PASA and EcoFarm, including support for scale-appropriate solutions to food safety, life cycle and whole systems analyses, and a food system that strengthens the “ag of the middle.” It was Schneider who noted that, “If a farmer cannot feed his family, buy insurance, and put his kids through college, then agriculture is not sustainable,” making direct reference to how difficult it is for the average U.S. farmer to earn a livelihood from the land.
Before the industry could declare mutiny, USDA made sure that the opening plenary presented the 2010 agriculture economic and trade outlooks — which, for 2010, predict a rebound from the recession and increases in farm sales and exports — and reaffirmed President Obama’s export goals and commitment to addressing trade barriers. But it was Secretary Vilsack who captured what would be USDA’s approach to the day’s discussions around sustainable agriculture (this year’s theme) — you can have your cake and eat it, too, and have your other cake and eat it, too.
Outlining a strategy to create a vibrant rural economy, Vilsack listed a mix of activities that have been reflected in the Department’s policies to date: expand domestic markets through local and regional food systems, and expand foreign markets through biotechnology production and promotion abroad. Vilsack further stressed the role of energy production in economic development, and discussed ways to generate off-farm income that, Vilsack said, enables farmers to keep the farm. This suite of approaches exemplifies the policy of coexistence, one the Department uses to explicitly define how it handles simultaneous promotion of biotechnology and trade as well as organic agriculture and regional food systems.
That coexistence, however, has limits. Speaking to a crowded room at one of the forum’s two “Organics & Sustainability Track” panels, NSAC’s Policy Director, Ferd Hoefner, applauded the Department’s Know Your Farmer, Know Your Food initiative, but ultimately stated that local and regional food system development will fall far short of its sustainability potential if the context within which these systems are built does not change. Changing that context — what we call the “structure of agriculture” — includes reforming farm subsidies and crop insurance, creating competitive markets, re-orienting agricultural research, and lifting restrictions on planting flexibility.
The day ended with NIFA Director and USDA Chief Scientist Beachy trying to make peace between the disparate views of agriculture presented throughout the day. Saying that no one will disagree with the principles listed in statutory definition of sustainable agriculture, Beachy suggested that disagreements over sustainability exist because the debate is focused on defining practices instead of measuring outcomes on sustainability’s multiple dimensions. (Outcomes, it should be noted, are the result of the application of farming systems that are in turn based on sets of practices, and the Department has a mixed history of helping to develop and support systems and practices that concentrate ownership and market power, degrade environmental resources, and divest from rural communities. It is precisely those policy choices that need to change, rather than be papered over.)
At the end of the “Sustainability & the Food System” panel, a 57-year-old conventional corn farmer from Iowa stood up and expressed amazement at the direction USDA was taking. He wasn’t sure if he was prepared, and he cited real education needs around sustainable agriculture. But, to the “High Fructose Corn Syrup lady” — who had raised a question earlier about USDA taking action on the link between obesity and high fructose corn syrup — he said, “I would love to buy you a drink.”
And USDA Deputy Secretary Merrigan closed by saying that if nothing else, we all wanted to talk about ag.
NSAC’s 2010 Policy Priorities
Monday, February 15th, 2010
Each year, the NSAC membership engages in a set of discussions within NSAC’s four policy issue committees and then at our annual face-to-face meeting in January about the coming year’s policy priorities. The NSAC Policy Council, made up of formally represented members, makes the final decision about the slate of issues the coalition will together advocate for.
As our membership grows in size (we’re 80 organizations strong!) so does our diversity and power. Our priorities reflect long-standing work on conservation, rural development, and research, as well as emerging issues that are increasing important to sustainable agriculture.
The following are NSAC’s 2010 priorities categorized by issue committee. To learn more about each of the committees, click on the header of each section.
Conservation, Energy and Environment
- Conservation Stewardship Program
- Organic Conversion Assistance & Organic Systems Conservation Program Integration
- Farm Bill Conservation Program Implementation & Funding
- Agriculture Issues in Climate Change Legislation
- Funding for Conservation Technical Assistance
Farming Opportunities and Fair Competition
- Beginning and Socially Disadvantaged Farmer Outreach and Training Grant Programs & Conservation Programs
- Livestock Competition and Contract Agriculture Reform Rulemakings and Public Hearings
- Funding for Beginning Farmer and Rancher Individual Development Accounts (IDAs) & Direct Farm Ownership and Operating Loans
Marketing, Food Systems, and Rural Development
- Agriculture, Food Systems, and Rural Economic Development Grant and Loan Programs
- Food Safety Legislation
- Farm to School Legislation and Funding in the Child Nutrition Act Reauthorization
- Funding for Value-Added Producer Grants, Rural Micro-entrepreneur Assistance Program, and Regional Rural Innovation Initiative
Research, Education, and Extension
- Agriculture & Food Research Initiative (AFRI) – Sustainable Food, Agriculture & Rural Development Considerations
- Sustainable Agriculture Research and Education (SARE) Program
- Funding for SARE, Organic Research, and Antibiotic Resistance Research
Updated Farm Bill Programs and Grants Page
Friday, January 22nd, 2010
By Jess Daniel, NSAC
Introducing… an updated “quick-guide” to federal programs and grants for farmers, ranchers, food entrepreneurs, and the researchers, educators and community groups who serve them.
This chart is a one-stop shop for links to the relevant USDA program websites (where they exist), brief descriptions of programs, and important dates and deadlines.
Check it out here.
At our recent winter meeting in Santa Fe, member groups and staff kicked off the discussion of NSAC’s strategy going into the 2012 Farm Bill. While legislative efforts make up a large part of NSAC’s work, we also recognize the importance of making sure that programs we fight for are funded, implemented, and ultimately used by the farmers, ranchers, and other producers who we ultimately serve.
New Mexico ranchers share their experiences in a farmer listening session at the recent NSAC Winter Meeting in Santa Fe.
We hope this chart is a small contribution towards this end. It will continue to be updated as RFAs are announced.Take a look.
Avalos Addresses Family Farm Issues at NSAC Annual Meeting
Friday, January 15th, 2010
At the annual meeting of the National Sustainable Agriculture Coalition (NSAC) in Santa Fe this week, USDA Under Secretary for Marketing and Regulatory Programs, Edward Avalos told the gathered delegates of his desire for USDA to listen to and serve the needs of small and mid-sized farms, including through buy local campaigns, value-added agricultural development, and collaborative food safety group training.
Under Secretary Edward Avalos addresses NSAC members
Under Secretary Avalos also spoke to advancing USDA’s Know Your Farmer, Know Your Food initiative to foster sustainable, local and regional food systems and to issuing strong livestock market competition rules to give family farms and ranches fair and equitable prices and market access.
In response to questions from NSAC delegates, Avalos indicated he would have the agency look into advancing sustainable livestock meat label claim standards, making organic data collection a regular part of the baseline activities and budget at the Agricultural Marketing Service, and ensuring that the Farmers Market Promotion Program funds the full range of direct marketing options for farmers.
At the meeting, NSAC delegates from 60 member organizations voted to approve its 2010 federal policy priorities, including directed work on the Conservation Stewardship Program, beginning and minority farmer programs, sustainability research within the National Institute for Food and Agriculture, and rural development programs to create jobs and strengthen emerging local and regional food systems.
NSAC Winter Meeting session in Santa Fe, NM
In addition, NSAC members agreed to continue efforts to win a fully funded Farm to School initiative within the upcoming reauthorization of the Child Nutrition Act, to ensure that pending food safety legislation does not put small and mid-sized farms at a disadvantage nor place unnecessary barriers on local and regional food systems, and to help pass strong climate change legislation that highlights sustainable and organic climate-friendly farming systems.
The delegates reiterated their dismay over the recent decision by the White House and USDA to renege on the President’s campaign promise to close farm subsidy loopholes and called for it to be overturned. Despite that disastrous Obama Administration decision for crop agriculture, members were heartened by the Under Secretary’s promise that another set of Farm Bill rules — for fair competition and contract agriculture reform in livestock and poultry markets — would be strong reform measures. Those rules are expected to be released in February for public comment.
Obama Administration Caves on Agriculture Reform
Wednesday, January 6th, 2010
With the arrival of a new year, NSAC is transitioning its Weekly Update into a blog with regular postings about sustainable agriculture and food policy and politics. We will continue to provide the information normally included in the Weekly Update about Congress, the U.S. Department of Agriculture, and other goings-on in the sustainable agriculture and food policy world, but we will also include more analysis, stories, and general musings about the crazy realm of federal agriculture policy. We, of course, welcome comments and discussion. The Weekly Update will continue, but as a digest of weekly blog posts.
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After nearly a full year of a two-faced agenda for agriculture — on the one hand, support for the development of local, regional, and sustainable and organic food systems and on the other, support for a big-ag, biotech export-oriented agriculture — the Obama Administration delivered its verdict today on farm subsidy reform: megafarms win and family farmers lose.
In tomorrow’s Federal Register, USDA will publish final regulations concerning the limits on farm subsidy payments and the “actively engaged in farming” rules that determine who is eligible for subsidies. The final rule is available on the Public Inspection List today.
The verdict betrays President Obama’s number-one agriculture campaign pledge and keeps intact the farm subsidy loopholes that allow mega farms to get around the limits established by the 2008 Farm Bill by subdividing their operations into multiple paper corporations. The existence of this loophole has allowed hundreds of thousands and even millions of taxpayer dollars to go to single farming operations, underwriting the growth in farm size, the demise of mid-scale family farms, and the subsequent decline of rural communities, while driving up land values that make it difficult for a new generation of farmers to buy land.
One of the strongest steps that the Obama Administration could have taken to reform agriculture and farm subsidies would have been to make good on the campaign promise and close the “active management” loophole. Both the U.S. Government Accountability Office (GAO) and the USDA Commission on the Application of Payment Limitations for Agriculture named the “actively engaged in farming” rules and more specifically the “active management” loophole as a key feature of current policy that leads to frequent abuse and weakens the integrity of the programs. In addition, GAO identified and illustrated associated schemes and devices used by unscrupulous subsidy beneficiaries to channel government payments through non-farming entities back to themselves. All of this is left intact by the new final rule.
Additionally, a full 73% of the over 5,000 public comments received on the rule specifically recommended that the active personal management loophole be closed, in keeping with the Obama campaign pledge. A significant portion of the remainder of the public comments were also pro-reform without mentioning the specific remedy.
A fulfillment of the campaign promise and a solid step forward on agriculture reform would have been to “limit payments to active farmers who work the land, plus landlords who rent to active farmers” — a statement taken directly from Obama’s campaign platform. Instead, the Administration has decided to continue to allow large landowners to reap otherwise illegally large six and seven figure annual payments by creating “paper farms” and ficticious farmers through which to funnel additional payments. By another name it is government-sanctioned and taxpayer-financed fraud.
As Obama’s USDA settles in and is forced to choose between taking concrete steps to advance a more sustainable agricultural system or the destructive status quo — between loving one son and the other — it’s becoming clearer that it loves the destructive son best.