Conservation Reserve Program

The Senate Agriculture Committee’s version of the farm bill cuts the Conservation Title by $6.37 billion over ten years.  Roughly 60 percent of the cut to conservation ($3.8 billion) comes from the Conservation Reserve Program (CRP).  The program’s total acreage cap is ratcheted down over five years from its current level of 32 million acres to 25 million acres.  To a significant degree, this reduction tracks changes in CRP enrollment expected as a result of market forces, though with the declining cap the opportunity for new general sign-ups would be relatively small.

Beyond reducing the acreage cap, the Senate bill makes a number of substantive changes to the program.

We are happy to report that funding for the CRP-Transition Incentives Program (CRP-TIP) for beginning farmers was doubled from $25 million in the underlying draft bill to $50 million over five years.  The increase came by way of an amendment by Sen. Mike Johanns (R-NE) that was accepted as part of the revised bill issued by Chairwoman Debbie Stabenow (D-MI) and Ranking Member Pat Roberts (R-KS) on April 25.  The program ran out of funds this year due to high demand and would have likely done so again in less than two years had funding been kept level at $25 million.  The push by Sen. Johanns brought it closer to what is needed over the five-year farm bill.

CRP-TIP offers a special incentive of two years of extra CRP rental payments to owners of land that is currently in the CRP but returning to production, who rent or sell to beginning or socially disadvantaged farmers and ranchers who will use sustainable grazing practices, resource-conserving cropping systems, or transition to organic production.  Unfortunately, the new Committee bill does not include measures to further strengthen the program that had been proposed in the Beginning Farmer and Rancher Opportunity Act (BFROA).

The Committee-approved bill adds grassland to the list of lands eligible for CRP enrollment, so long as the land is located in an area historically dominated by grass, is made up predominantly of plants suitable for grazing, and can provide habitat for ecologically significant animal and plant populations.  It reserves 1.5 million acres within the program for enrollment of such grasslands, and gives a priority for enrolling land with expiring CRP contracts.  NSAC advocated for a provision to encourage expired CRP acres to remain in grass-based agriculture under a long term or permanent grassland easement.  While the change in the bill does not accomplish this, it is a decent second best alternative to conserve environmentally sensitive CRP grasslands.

The Senate Committee bill also waives the 25 percent rental rate reduction for grazing livestock on CRP acres when the livestock are owned by beginning producers.  This provision was originally filed as an amendment by Senators Amy Klobuchar (D-MN), Mike Johanns (R-NE), and Max Baucus (D-MT) and was subsequently included in the revised draft bill issued by the Chair and Ranking Member on April 25.  NSAC does not have a position on this provision, though we do worry some about possible abuse.

Environmental Quality Incentives Program and Wildlife Habitat Incentives Program

The bill combines the Environmental Quality Incentives Program (EQIP) and the Wildlife Habitat Incentives Program (WHIP) into a single program and cuts total funding by $1.605 billion, or approximately 8.7 percent.  This cut is significantly smaller than the 10 percent cut included in the draft farm bill from last year.

As has always been the case for EQIP, 60 percent of the consolidated program’s funding goes to livestock operations, including but not limited to infrastructure expenditures for concentrated animal feeding operations (CAFOs).  The new merged program also includes a 5 percent set aside for wildlife in lieu of WHIP.

The statutory language that led to creation of the EQIP Organic Initiative did not change.  Attempts to improve program operation and coordination were turned back, as were efforts to equalize the payment limits applied to organic and non-organic producers.  Organic farmers are limited to $80,000 in EQIP payments over a five-year period, whereas all other farmers are entitled to up to $300,000 in the same time period.

Both the Beginning Farmer and Rancher and Socially Disadvantaged Farmer and Rancher set asides within EQIP and CSP are retained at five percent.  Efforts to increase the percentage to 10 percent were turned away, despite evidence that the set-asides have succeeding in helping to level the playing field for underserved segments of agriculture.

Within the 5 percent set-asides for socially disadvantaged farmers and ranchers, the Senate bill creates a new preference for farmers and ranchers who are veterans.  It also adds veteran farmers to the list of eligible applicants (along with beginning and socially disadvantaged farmers) who can receive an increased cost-share rate.  NSAC worked for the inclusion of the veteran farmer provisions and we applaud Senators Max Baucus (D-MT) and Mike Johanns (R-NE) for successfully spearheading the effort.

The advanced EQIP cost share for Beginning, Socially Disadvantaged, and Limited Resource Farmers and Ranchers is also retained at 30 percent, as opposed to 50 percent proposed by the Beginning Farmer and Rancher Opportunity Act.  Having the cash on hand to make the full expenditure in advance of receipt of the cost share is a significant barrier to participation by farmers with limited ability to pay.

The Senate bill makes two significant changes to the EQIP Conservation Innovation Grants (CIG) program.  First, the bill eliminates a special carve out for projects that address air quality concerns on agricultural operations.  Second, it establishes a new requirement that directs USDA to report to Congress on CIG project funding and results, and on efforts to integrate project findings into USDA’s conservation efforts.  This was an NSAC proposal, and we applaud Chairwoman Stabenow and Ranking Member Roberts for including it in the Senate bill.

Regional Conservation Partnership Initiative

Like the draft farm bill prepared for the super committee last year, the Senate bill combines the Cooperative Conservation Partnership Initiative (CCPI), Agricultural Water Enhancement Program (AWEP), Chesapeake Bay Watershed Initiative (CBWI), and Great Lakes Restoration Initiative (GLRI) to create a single regional partnership program.  The CCPI and its predecessor Partnerships and Cooperation Initiative were originally moved forward into the farm bill arena by NSAC.

While the CBWI and AWEP had a combined baseline of $1.1 billion through 2012, the new regional partnership program has a $1 billion baseline, equating to a $100 million or slightly less than 10 percent cut.  Like the current CCPI, 6 percent of EQIP and CSP funds are reserved for the regional partnership program.  However, unlike the current CCPI statute, which splits funding authority between the states (90 percent) and national (10 percent), the new bill splits the authority between national (50 percent), states (25 percent), and “critical areas” (25 percent).

Whereas the super committee draft specifically identified these critical areas, the new Senate Committee bill directs the Secretary to identify not more than eight such areas.  According to the legislative language, a critical area will: (1) include multiple states with significant agricultural production; (2) be covered by an existing regional, state, binational, or multistate agreement; (3) have water quality concerns; (4) have water quantity concerns; and, (5) be subject to regulatory requirements that could reduce the economic scope of agricultural operations within the area.

Unlike current law and the earlier draft of the farm bill, the Senate version of the bill explicitly lists nutrient management as an eligible activity under the program.  The language was filed as part of an amendment to be offered by Senator Sherrod Brown (D-OH) and was subsequently included in the April 25 revised draft bill.  This is an important, albeit relatively small, step toward more comprehensive nutrient management policy in the farm bill.  The regional partnership program also has an easement option through the Agricultural Conservation Easement Program, which is described below.

The new bill makes a significant step forward by strengthening the 2008 Farm Bill provision to allow for program rule flexibility with respect to local partnership programs.  The new provision, including by the Chair and Ranking Member, clarifies that only basic rules regarding appeals, payment limits, and conservation compliance are not able to be waived.  Other program rules can be modified if NRCS determines such changes would help fulfill the purposes of the partnership project.

Less clear is the status of funding for technical assistance under the program.  While it is clear NRCS may provide technical assistance to farmers under special partnership projects, in the case where the partners provide the assistance, it is not entirely clear whether any portion of the funding for such assistant may come from NRCS.  This issue if perhaps the key remaining issue for state and local farm and conservation organizations hoping to participate in this innovative program delivery mechanism.

Combined Easement Program

On the easement side of the Title, three programs – the Wetlands Reserve Program (WRP), Grasslands Reserve Program (GRP), and Farm and Ranch Lands Protection Program (FRPP) – are combined into a single easement program with two branches.  The first branch combines FRPP and GRP into an ‘agricultural lands easement program.’  The second branch consists of a wetlands easement program very similar to the WRP.

Nationally, no less than 40 percent of the program funding can go to the agricultural lands easement program.  While this does leave some room for USDA to increase that proportion, the split between wetland easements and agricultural land easements is expected to be 60/40, respectively, when the program is implemented.  Each state conservationist, though, can request an adjustment to better reflect the needs of their state.

The funding for the new combined easement program will now all be denominated in dollars rather than acres per year.  The program is provided with $3.2 billion over the next ten years and unlike the current WRP and GRP, the new funding is permanent funding rather than temporary.  This is a significant improvement, though the flip side is that the overall funding levels for all three underlying programs will be signficantly less than what it has been per year in the last farm bill cycle.

Within the agricultural land easement program, we are very happy to report that the purpose of the program now includes the promotion of agricultural viability for future generations.  This change was part of the Beginning Farmer and Rancher Opportunity Act and was pressed forward last week on an amendment by Sen. Pat Leahy (D-VT) that was accepted and included in the revised draft bill presented by the Chair and Ranking Member on April 25.

This is a big step forward toward ensuring that beginning farmers and ranchers are able to participate in the program and that the program itself aims to keep working farms in business over the long term.  We will continue to explore opportunities to include additional provisions to advance this important concept that were part of the Beginning Farmer and Rancher Opportunity Act as the farm bill process moves forward.

Other Changes to the Conservation Title

The bill does, however, decrease funding for the Voluntary Public Access (VPA) program by 20 percent to $40 million over five years.  While funding for VPA was reduced relative to the last farm bill, it was actually increased relative to the draft  bill released on April 20.

The Senate bill includes a new provision that requires USDA to promulgate a single initial application for participation in all USDA conservation programs.  This change was first proposed in an amendment filed by Senator Dick Lugar (R-IN) and is intended to help alleviate paperwork and redundancy for farmers and USDA.

Finally, the Senate bill creates a program to provide grants to states to purchase “terminal lakes” that are located on agricultural land and that are ineligible for enrollment in the Wetlands Reserve Program.  The new language includes eligibility restrictions relating to flooding depth, access for agricultural use, and cropping and grazing history.  The program includes a 50 percent state cost share.  The language authorizes Congress to appropriate $25 million to remain available until expended for land purchase grants.  It also provides $150 million in mandatory funding for the Department of the Interior’s Bureau of Reclamation to transfer water into some terminal lakes under certain conditions.

The Senate Agriculture Committee voted the Agriculture Reform, Food and Jobs Act — the proposed name for the 2012 Farm Bill — out of Committee on Thursday, April 26.  The markup and negotiations that immediately preceded the markup resulted in some significant improvements in the bill for beginning farmers, though the bill still needs to do more in this area in our view.

Last year, Sen. Tom Harkin (D-IA) along with Agriculture Committee members Sens. Leahy (D-VT), Kloubhar (D-MN), Casey (D-PA), Brown (D-OH) and nine off-Committee sponsors introduced the Beginning Farmer and Rancher Opportunity Act (S. 1850) as a template for provisions that should be included in the new Farm Bill.  An identical bill (H.R. 3236) was introduced at the same time in the House by Reps. Walz (D-MN) and Fortenberry (R-NE).

Here’s a title by title breakdown of what beginning farmer related provisions were (and were not) included in the Farm Bill that emerged out of the Senate Committee markup.  This post focuses on changes adopted since a week ago when the the draft farm bill bill was first presented by Chairwoman Stabenow (D-MI) and Ranking Member Roberts (R-KS).  A previous blog post on beginning farmers summarizes the provisions as presented in the original draft bill.

Conservation

The popular Transitions Incentive Program (see previous blog post for more details) was championed by Sen. Johanns (R-NE) and included in the manager’s amendment that was presented during committee markup with increased funding of $50 million over the life of the farm bill, rather than just the $25 million included in the bill presented for Committee conservation.  NSAC applauds the Senator for his leadership on this issue which addresses the common challenge of accessing land that many beginning farmers and rancher face when looking to farm.  It is not clear if $50 million will prove to be sufficient for the program over the next five years and it may well be a bit short, but the amendment definitely made it closer to the mark.

Another win for beginning farmers in the conservation title was Sen. Leahy’s addition of “promoting agricultural viability for future generations” to the purpose of the newly created Agricultural Land Easements Program, which consolidates the existing Farm and Ranch Land Protection Program (FRPP) with other conservation easement programs.  The farm viability provision is an important improvement to what is today the FRPP.  The amendment did not cover the full breadth of the proposal in the Beginning Farmer and Rancher Opportunity Act, but is an important step in the right direction.

The existing set-asides, higher cost-share rates, and the advance payment option within the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) were left intact, however the proposed increases in these provisions that were included in the Beginning Farmer and Rancher Opportunity Act, were not included.

Two other amendments that were included in the final bill were one that adds veteran farmers to the list of eligible applicants (along with beginning and socially disadvantaged farmers) who can receive an increased cost-share rate under EQIP and one that creates an exemption to allow beginning farmers and ranchers to graze on land enrolled in the Conservation Reserve Program.

Credit

There were no huge changes in the credit title from what was included in the bill prior to markup and the bill that was voted out of committee this week.  Of note, the Down Payment Loan Program maintained the higher value of land that can be financed that was included in the draft bill, as proposed and championed by Sen. Harkin.  This change will increase the utility of the down payment program in areas with high land costs.

The Beginning Farmer Individual Development Accounts program, for which NSAC has been advocating for funding since it creation in the last farm bill, was maintained but unfortunately still not funded.

One minor change included in the final committee bill changed loan eligibility criteria to require a farmer to have “participated in a farm operation” in order to receive a direct farm ownership loan, rather than having “operated” a farm to qualify.

Sadly, language included in the original draft bill presented to the Committee that restricted conservation loans to family-sized farms was stripped out of the final bill that is now headed to the Senate floor.

Finally, we were disappointed to see that despite efforts of key champions on the Committee, an authorization for a microloan program was not included in the final package.  On the bright side, USDA is currently in the process of creating a microloan program, although it is not specifically targeted at beginning farmers nor does it include any special features for young or beginning farmers, as is proposed in the Beginning Farmer and Rancher Opportunity Act.  NSAC will continue to work for an authorization in the farm bill, and also plans to comment on USDA’s forthcoming proposed rule for the new program.

For an overview of other credit programs that were included in the bill prior to mark-up, see our previous blog post.

Rural Development

On the rural development front, Sen. Casey won an amendment that clarifies the priority for beginning farmers within the Value-Added Producer Grant (VAPG) program into the final package.  The new provision requires that at least a quarter of the beneficiaries of a VAPG grant be beginning or socially disadvantaged producers in order to qualify for this priority.  This is a program implementation issue that NSAC has been working on for the past few years, and which has not been sufficiently addressed in the rulemaking process.  Hopefully, if this provision becomes law, more projects will be given priority and funded that benefit and create value-added entrepreneurial opportunities for beginning and socially disadvantaged farmers.

Unfortunately, the funding issue for VAPG has yet to be resolved as the farm bill makes its way to the Senate floor.  Sen. Brown commented during markup that without a strong investment in rural development programs, this bill cannot truly be considered a “jobs bill.”  While there is currently no funding for any rural development programs (other than energy title programs) in the bill as reported by Committee, Sen. Brown did offer and subsequently withdraw an amendment that would have provided some funding for VAPG as well as the Rural Microentrepreneur Assistance Program (RMAP).  There may well be an opportunity for the Brown amendment to be offered and accepted on the Senate floor.

Sen. Casey offered, spoke to the importance of, and then withdrew in light of opposition his amendment to give USDA clear guidance and flexibility to use rural development loan and grant programs to spur new agricultural enterprises that benefit beginning farmers.  This provision is included in the Beginning Farmer and Rancher Opportunity Act, but did not make it into the final package voted on by the Committee.

Research, Education, Extension

Perhaps the most disappointing outcome for beginning farmers of the current bill as it stands is the insufficient funding providing to fund new farmer training and education programs under the Beginning Farmer and Rancher Development Program (BFRDP).  In the bill as reported by the Committee, this program receives $50 million over the course of the farm bill (compared with $75 million included in the last farm bill), which cuts annual program funding almost in half – from $19 million to $10 million per year.  This will severely impact the number of grants that will be able to made under this program, and will decrease the number of new farmer training programs established, and ultimately the number of new farmers successfully entering farming each year.

Despite efforts to introduce an amendment that would create the offsets needed to provide adequate funding for this program, we were unable to secure additional funding for this program during markup.  NSAC will continue to press for $25 million a year for this program as the farm bill process moves forward.

Miscellaneous Title – Minority Farmers and Veterans

There were a few bright spots specifically for veteran beginning farmers hidden in the Miscellaneous Title.  Sen. Nelson (D-NE) championed a new provision that creates a veterans agricultural liaison position within USDA, who would be responsible for assisting returning military veterans in accessing federal programs, specifically new farming training and agricultural rehabilitation programs.  Additionally, this position would advocate on behalf of veterans within the Department.  This was part of the Beginning Farmer and Rancher Opportunity Act.

Sens. Baucus (D-MT) and Johanns pushed to include an emphasis on veterans within the Office of Advocacy and Outreach, and the 2501 Outreach and Technical Assistance for Socially Disadvantaged Farmer and Ranchers program.

NSAC was also pleased to see that $5 million a year in mandatory funding was provided in the final bill for the 2501 Outreach program, compared with zero dollars contained in the draft bill released before committee mark up.  Sen. Harkin, with support from Sens. Baucus and Johanns and others, was instrumental in pushing for this funding and we commend all who helped make it happen.

NSAC collaborated with several other groups that work on minority farmer issues on a letter addressed to the Senate Agriculture Committee urging $25 million a year in funding for both the 2501 program and the Beginning Farmer and Rancher Development Program.  As the farm bill progress proceeds in the Senate, NSAC will continue to work with beginning, minority, and veteran farmer champions in the Senate to renew critical funding for these two programs.

NSAC commends Chair Stabenow and Ranking Member Roberts for including some of the Beginning Farmer and Rancher Opportunity Act provisions in their mark and for working with the various members of the Committee who offered further amendments this week to assist beginning, socially disadvantaged, and veteran farmers and ranchers.

For more information on which provisions were included in the draft farm bill, see our previous blog post on beginning farmers.

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.

The Good

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.

The Half-baked

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.

The Ugly

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.

NSAC collaborated with the Rural Coalition and many other organizations on the letter.  The letter focuses on restoring funding for two key farm bill programs whose continued existence rests heavily on  Senate Agriculture Committee deliberations next week over what direct funding items will and will not be included in the next farm bill.

These two programs addressed in the letter are the:

• Beginning Farmer and Rancher Development Program, which provides grants to academic institutions and community based organizations to offer financial and credit training, mentoring, land-linking, and educational opportunities for new farmers.  This program was first authorized in the 2002 Farm Bill, but never received any funding until the last farm bill, when it was given $75 million in mandatory funding divided over a four year period.  In the draft farm bill proposal prepared for the Super Committee last fall, annual program funding for this program was cut nearly in half — from $19 million to $10 million per year.  The Beginning Farmer and Rancher Opportunity Act introduced last fall calls for the new farm bill to fund the program at $25 million a year.  The Senate Agriculture Committee will decide on a funding level next week when it marks up the 2012 Farm Bill.

• Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers (Section 2501) program, which provides grants to organizations and academic institutions who work directly with minority, limited resource, and tribal producers, as well as farmworkers.  The grants are used to conduct outreach to these groups on federal agricultural programs and provide technical assistance that will assist farmers in owning and operating farms.  This program was established in the 1990 Farm Bill, but suffered from meager appropriations until the 2008 Farm Bill provided it with $75 million in mandatory funding divided over a four year period.  The draft farm bill from the fall included no funding for this program.  The Senate Agriculture Committee will decide on a funding level for the next five years when it marks up the 2012 Farm Bill.

Both of these programs were provided mandatory farm bill dollars in the last farm bill, and moved together as a historic package of federal programs aimed specifically at providing the training, education, and technical assistance that new and historically underserved producers need to be successful in their farming careers.  Both programs have proved to be tremendously successful and popular, and will need to be scaled up in order to meet the increased need for new farmers to step in and continue farming our land as the current generation of farmers starts eying retirement options.

“With an aging farm population and a large segment of existing producers at or beyond retirement age, it is paramount to invest in those new entrepreneurs that will farm and ranch our nation’s land in the future,” the letter reads.  “It is also equally important to write a new farm bill that takes into account specific equity considerations by investing federal dollars into programs that support historically underserved groups and ensuring adequate access to federal training and technical assistance.”

This letter was delivered at a crucial time during the 2012 Farm Bill process with Senate committee action on the bill scheduled for next week.  The letter serves as a reminder to Senate Agriculture Committee Members to make policy and funding decisions with a “commitment to all of our nation’s farmers.”

Sign on to Support Beginning and Socially Disadvantaged Farmers!

If your organization has not yet signed onto this letter, you can do so by following this link: http://bit.ly/BFRDP2501SignOn.  We will be resubmitting this letter as the farm bill progresses in both the House and the Senate. If you’re an individual, you can sign on to endorse NSAC’s farm bill platform, Farming For the Future, by clicking here.

More Information

Read the full letter submitted to Senators Stabenow and Roberts.

Listen to a Public News Service story about minority farmers and the 2501 Program.

Learn more about the Senate’s path to the 2012 Farm Bill.

Learn more about the Beginning Farmer and Rancher Opportunity Act.

Process and Timeline

The next two weeks are critical weeks in the multi-step 2012 Farm Bill process.  The Chairwoman plans to release her draft – or mark – potentially as early as the end of next week.  Before she releases her mark, the Senators on the Agriculture Committee members will meet privately to view the draft and voice their priorities and concerns.  Depending on how that meeting goes, and whether there is general buy-in for the contours of the bill, a draft farm bill may be released as early as late next week.

Once the draft is released, Agriculture Committee members will meet to mark up and then vote on the bill.  The tentative date for mark up is April 25, but the date can easily change as members read what is in the draft and voice support for or opposition to parts of it.

Mark up may take several meetings over several days, or may happen in a shorter meeting.  During that time, members can raise and vote on amendments to the mark, thereby changing it.  Before it heads to the Senate floor, the draft bill must be passed by the Agriculture Committee.  Chairwoman Stabenow is still aiming to pass a bill out of the Agriculture Committee and to send the bill to the Senate floor for consideration before Memorial Day.  It is an ambitious timeline but a realistic one if full Senate is to vote on a farm bill before summer and peak election season.

Basic Framework

As we previously reported, we expect the Chairwoman’s mark to build upon the draft farm bill proposal intended for the Super Committee last fall.  Chairwoman Stabenow has said time and time again that that proposal serves as the foundation for this iteration of the farm bill.

In terms of funding, we expect that the overall number for the mark will mirror the number from the fall — $23 billion in net savings over ten years.  We also expect that the savings will come from cuts to areas of the bill in amounts similar to last fall’s proposal:  a $15 billion net cut in commodity programs, a little over $6 billion net cut in conservation programs, and a $4 billion slice from the Supplemental Nutrition Assistance Program, or food stamp program.  We also anticipate that the $2 billion that is freed up by these cuts will be put to the same use as it was in the fall — to help fund existing farm bill programs that lose funding after the current farm bill expires in 2012 and to fund new programs.

Given this general funding framework, staffers have been hesitant to fund programs that weren’t funded in the fall proposal (e.g., Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers, or “Section 2501″) or increase funding for successful programs that sustained a significant funding cut in last year’s draft bill (e.g., Beginning Farmer and Rancher Development Program).  It will take continued focused efforts to ensure that these funding issues are dealt with.

There were two big areas not settled nor included in the draft farm bill for the Super Committee:  the details of Title I and crop insurance, and the many no-cost policy changes and updates that a farm bill usually includes.   There are a number of competing farm revenue and crop insurance proposals, and staffers met this week to debate and defend proposals.  Given the strong regional differences in the commodity and crop insurance proposals, and how this was a big unsettled area in the fall proposal, if negotiations are delayed, it will likely be due to disagreements over this section of the bill.

On the crop insurance front, the Government Accountability Office this week released a report examining ways to cap the amount of insurance subsidies any one farm could receive in a given year.  While that issue has gained virtually no interest within the Agriculture Committee, it will almost certainly be an issue when the bill comes to the Senate floor.

The fall draft farm bill proposal did not include very many no-cost policy changes that are normally part of the once only every five year farm bill reauthorization.  These no-cost policy changes are often improvements to programs and provisions so that issues that have come up during program implementation can be addressed.  The mark will include some no-cost policy changes but at this point it appears unlikely to include the many policy and program improvements that are in our view needed since the last farm bill.

What about the House?

While the Senate is moving forward with producing a farm bill, the situation is more complicated in the House.  The House Agriculture Committee is planning to mark up its package of $33.2 billion in cuts to agriculture spending next week, as mandated by the House budget resolution.  The Committee has until April 27 to submit its proposed packaged of cuts to the Budget Committee.  Based on discussions with multiple congressional offices, it appears likely that the cuts will come from nutrition programs, setting the stage for a partisan fight over food stamps in the House.  House Agriculture Committee Chairman Lucas (R-OK) has indicated, however, that the $33.2 billion package of cuts will not be the Committee’s farm bill proposal.

It remains to be seen how the House Agriculture Committee writes a balanced, bipartisan farm bill after first agreeing to $33.2 billion in cuts to nutrition programs.  The Committee is planning to hold hearings on the farm bill in Washington, D.C., in May, although none has been scheduled.  It has long been clear that the Senate will write a farm bill before the House, and if the Senate does complete its bill over the next month, then the House could use that measure as a starting point.

Chairman Lucas has started talking publicly about extending the current farm bill, which expires on September 30.  In this particular Congress, however, the often routine practice of extending current policy has entailed significant fights, with the pressure to cut spending defining every effort to create new or extend existing policy.  So  passing an extension might not be much easier than passing a full farm bill.

NSAC’s view is that the full, real, multi-year farm bill should be passed this year.  If the action this year does nonetheless come to an extension, it is our view that the extension must retain funding for high priority marketing, rural development, agricultural research and extension programs, and beginning and minority farmer programs that are funded by the current, expiring farm bill.

Two weeks?!  What can I do?

Sign-on as a citizen endorser of NSAC’s 2012 Farm Bill platform and join us in fighting for a better farm bill!

These next two weeks are critical weeks in the fight for better farm and food policies, and it’s going to take all of us speaking out to create a better 2012 Farm Bill.

The program prioritizes educating producers of crops currently uninsured under Federal crop insurance, specialty crops, and underserved commodities, including livestock and forage.  It also prioritizes collaborative outreach and assistance programs for limited resource, socially disadvantaged, new and beginning and other traditionally under-served farmers and ranchers.

The minimum award for a cooperative partnership agreement is$20,000 and the maximum award is $99,999. The awards will be distributed on a competitive basis up to one year from the date of the award.

Projects must fall into one of the following Special Emphasis Topics:

• Insurance and Production: AGR and AGR-Lite insurance; Livestock Gross Margin Dairy; Pasture, Rangeland, Forage Rainfall and/or Vegetative Index; Common Crop Insurance Policy Basic Provisions (‘‘COMBO’’); Enterprise Units; Specialty Crops; Prevented Planting; or Other Existing Crop Insurance Programs; Irrigation; Erosion Control Measures; Good Farming Practices; Wildfire Management; Forest Management; and Range Management or other similar topics;
• Legal: Legal and Succession Planning or other similar topics;
• Marketing: Marketing Strategies; Farm Products Branding; Farmers Markets or other similar topics;
• Financial: Financial Tools and Planning; Farm Management Strategies; Farm Financial Benchmarking or other similar topics;
• Human: Farm Labor; Farm Safety; Food Safety, Risk Management Education

Projects must also demonstrate that education or training will target at least one of the following Producer Types:

• New and Beginning Farmers;
• Women Producers and Ranchers;
• Hispanic Producers and Ranchers;
• African American Producers and Ranchers;
• Native American Producers and Ranchers;
• Limited Resource Producers and Ranchers;
• Asian American and Pacific Islander Producers and Ranchers;
• Transitional Farmers and Ranchers;
• Senior Farmers and Ranchers;
• Small Acreage Producers;
• Specialty Crop Producers; or
• Military Veteran Producers and Ranchers.

Interested parties may submit applications online only via grants.gov.  The deadline is May 24, 2012.

This month, USDA’s Farm Service Agency (FSA) issued a final rule, effective May 18, 2012, for the Conservation Loan Program (CLP).  The CLP was included in the 2008 Farm Bill as a stand-alone program to provide guaranteed and direct loans to farmers and ranchers to implement conservation practices.  It has operated under an interim final rule since September 2010.

The conservation loan section of the farm bill was upgraded in the 2008 Farm Bill to provide more targeted funding for on-farm conservation improvements.   We support that intent, but believe the revised program has flaws and those flaws are unfortunately compounded by the new final rule.

Farmers and ranchers can get loans for conservation projects for authorized purposes through FSA’s direct and guaranteed Farm Ownership and Farm Operating Loan Programs, which include loans for activities to promote soil and water conservation and protection as one of many purposed.  These programs include eligibility requirements to ensure that the loans, which draw on or are backed by public funds, do not go to applicants who are able to obtain sufficient credit directly from commercial lenders or who are larger than family farms.

Unfortunately, the CLP does not include either of these eligibility safeguards.  In the final rule for the CLP, FSA refused to include even minimal safeguards to ensure that the CLP would be used to facilitate timely implementation of conservation practices that would be postponed due to lack of monetary resources.  Instead, FSA chose to adopt a streamlined application process for applicants with a debt to asset ratio of 40 percent or less, a net worth 3x the loan amount, and a FICO score of 700 or more.

With CLP loan limits of $300,000 on direct loans and $700,000 on combined direct and guaranteed loans, this streamlined option gives an advantage with lenders to those whose net worth exceeds $2.1 million.  FSA acknowledged that some CLP applicants will be ” . . .  very strong financially, with high debt service capacities and significantly more than adequate assets to secure the requested loan.”

The CLP statute does require that USDA give a priority to:

• Qualified beginning farmers and ranchers and socially disadvantaged farmer or ranchers;
• Owners or tenants who use the loans to convert to sustainable or organic production systems; and
• Producers who use loans to build conservation structures or establish conservation practices that comply with the Farm Bill’s conservation compliance requirements.

In the final rule, FSA acknowledges this priority but establishes no regulatory goal or process to ensure that the priority is honored. The agency does state in the rule’s preamble that it intends to target 35 percent of direct and guaranteed CLP loan funds to applicants who are included in the priority groups, with an additional 15 percent of the funds targeted to socially disadvantaged farmers and ranchers at the national level.  But no process is provided for this targeting.

In addition, the only criterion in the final rule for demonstrating that a farmer will use loan funds to establish a sustainable agriculture system is a conservation plan that states the applicant is “moving towards a sustainable production system.”  This vague statement of intent ignores the final rule’s own definition for a conservation plan that includes a schedule of operations and activities to solve resource problems at a conservation management system level.  FSA could have built on this definition to require that an applicant seeking priority for a sustainable agricultural production system should be able to demonstrate that major resource concerns on the farm will be addressed through implementation of the conservation plan.

NSAC Farm Bill Platform

In our platform for the next Farm Bill, NSAC continues to support direct and guaranteed conservation loans, if the CLP is amended to apply all of FSA’s traditional farm ownership and operating loan programs eligibility requirements, including the family-sized farm test and the no credit elsewhere test, to ensure that limited government financing is well targeted.

In addition, the guaranteed amount should be raised to 95 percent for beginning and socially disadvantaged farmers and ranchers, consistent with other loan programs.  A target participation rate for beginning farmers should apply to conservation loans as it does for all other loan programs.  Finally, the authorization for appropriations should continue to  specify amounts for direct loans and for guaranteed loans, consistent with the authorization for appropriations for all the other farm loan provisions.

These improvements to the conservation loan program are contained in the Beginning Farmer and Rancher Opportunity Act.  More information on this important marker bill for the 2012 Farm Bill can be found on our website.

The resolution abrogates the budget deal reached in August 2011 in two significant ways.  First, it reduces the level of funding for discretionary government programs by $19 billion below the agreement reached as part of last year’s Budget Control Act.  As a result, House appropriators will be writing their annual government funding bills at lower levels than their Senate counterparts, setting up another year-end government shutdown showdown much like the one last year the Budget Control Act was intended to overcome.  The one exception to that rule will be House defense appropriators, who will be writing a bill with more spending in it than the Budget Control Act would allow and thus at higher levels than their Senate counterparts.

Second, it proposes to rescind the automatic (sequestration) government funding cuts scheduled to kick in starting January 1, 2013.  These cuts are required under the Budget Control Act as a result of the failure of the congressional “Super Committee” process last year to come up with a plan to trim government programs, including mandatory and entitlement programs, by $1.2 trillion over the next decade.  The House resolution retracts the first year of those automatic cuts (but only the first year) and replaces them with instructions to several House committees, including the Agriculture Committee, to find an equal amount of savings from mandatory programs under their control.

House Agriculture Committee

The budget resolution triggers two Farm Bill actions by the House Agriculture Committee.  First, by April 27, the Agriculture Committee must produce a bill that cuts $33.2 billion from farm bill spending, including over $8 billion immediately in the first year.  This will be a wrenching affair.  There is no chance the Senate will do a similar bill, so the measure is doomed from the start.  Yet, the bill must be substantive, must be reported on time, and must include the specific policies required to reach the $33.2 billion savings.  Many observers expect this pre-farm bill episode to turn into a battle over SNAP (food stamp) benefits and to become a primarily partisan affair that will sour the atmosphere for actually producing a real farm bill later in the year.

Second, the budget resolution assumes ten-year farm bill cuts of $180 billion, including $30 billion in cuts to crop subsidy programs, $16 billion to conservation programs, and the balance to food stamp (equal to an approximately 17 percent cut to food stamps or about $90 a month for a family of four according to food stamp budget experts).

It is quite possible for the Agriculture Committee to return to its farm bill business later this year, after the dust has settled on the $33 billion reconciliation bill that is going nowhere but which they must attend to first.  If they can manage that pivot, they could quite conceivably produce a farm bill that cuts somewhere between $23 billion (the amount proposed in last year’s draft bipartisan farm bill prepared for the Super Committee) and the $33 billion due on April 27.  In fact, this week, Chairman Frank Lucas (R-OK) suggested a bill with cuts of about $30 billion.

If the House agrees to waive the budget resolution assumptions when proceeding to take up the farm bill, the Committee could thereby bypass the extreme $180 billion budget assumption from the budget resolution that just passed.  However, it clearly becomes a more difficult task in light of near unanimous Republican support for the $180 billion cut reflected in this week’s budget resolution.

The best case scenario for getting a farm bill this year, on schedule, would appear to be for the Senate Agriculture Committee to approve its version of the bill before Memorial Day (see below) and for the House Committee to take it in June or July, make its adjustments, and then try to get both houses to adopt its versions of the bill and go to a House-Senate conference either in the midst of a national election season or in the lame duck session after the elections are over.  This scenario, or any of several possible variations of it, is not an impossible scenario, but neither is it a particularly easy one.

If, as September approaches and the path forward to a five-year farm bill is not clear, Congress will need to turn hammering out a one-year extension of the current bill, with or without changes, and pass it before the current farm bill expires on September 30.  Chairman Lucas hinted this week that this might become the necessary path forward.

NSAC strongly supports doing a real, long-term farm bill this year, including renewed farm bill funding for conservation, beginning farmer, minority farmer, organic research, specialty crop research, farmers markets, organic cost share, and renewable energy programs that will otherwise expire.  If, however, an extension becomes necessary, we will urge that all programs be extended, including those mentioned above that will otherwise run out of money.

Senate Agriculture Committee

Unfazed by House budget politics, the Senate Agriculture Committee leaders intend to markup and vote on their version of the new farm bill in late April, and possibly into May.  Congress is at the start of a two week recess, and while they are out, agricultural staffers are meeting to go over each of the farm bill titles to discuss what should go in and what should come out.  When the Senators return mid-month, it is expected there will be several closed-door member meetings to start to hammer out deals.  If those go well, committee markup of the new farm bill could begin the last week of April.

The markup vehicle will be introduced by Chairwoman Debbie Stabenow (D-MI) at some point in advance of the markup.  It is expected in broad outline to be similar to the draft farm bill put together hurriedly last year in advance of expected Super Committee action that in the end never transpired.  It will likely include a net ten-year farm bill savings of $23 billion.  Unlike last year’s draft farm bill, however, the new version is expected to include more no-cost policy measures and very likely will also adjust mandatory funding levels for certain programs.

NSAC continue to advocate for inclusion of important policies and programs to assist beginning farmers, improve farm income through value-added and regional food system development, improve access to healthy food, increase investments in research to support sustainable farm and food systems, and fund and make working lands conservation programs work better for farmers and the environment.  On most of those fronts, it is still too early to tell how much progress is being made.  In nearly all cases, most of the reforms still hang in the balance.

The commodity program section of the farm bill is still very much a work in progress.  On Thursday, March 29, Senators Kent Conrad (D-ND), John Hoeven (R-ND), and Max Baucus (D-MT) introduced their preferred subsidy program, called the Revenue Loss Assistance Program (or RLAP), as part of their Revenue Loss Assistance and Crop Insurance Enhancement Act (S. 2261).  RLAP is another “shallow loss” payment proposal, but one oriented very much to the needs of more northern and western areas as compared to the Aggregate Risk and Revenue Management (ARRM) program introduced last year by Corn Belt Senators Sherrod Brown (D-OH), John Thune (R-SD), Dick Durbin (D-IL), and Richard Lugar (R-IN).

Those two, very different shallow loss proposals are in the mix with proposals from southern groups and Senators for higher target prices and thus larger and more regular counter-cyclical payments plus a proposal from the cotton industry for a highly lucrative crop insurance-plus program that would take cotton out of the commodity title altogether except for marketing loans.  If successful with their stand alone “STAX” proposal, cotton would achieve the unique status of having no payment caps and no conservation requirements whatsoever.

Payment caps will also be an issue regardless of what the underlying program choices of the Committee turn out to be.  For instance, the Rural America Preservation Act (RAPA) bill backed by several Committee members and supported by NSAC would cap total payments at not more than $100,000 in any one year, and cap marketing loan gains at not more than $150,000 in any one year.  The ARRM proposal, on the other hand, would cap payments at $130,000 and have place no limit on marketing loan gains.  The new RLAP proposal would go higher still, with payments capped at $210,000 and no limits on marketing loan gains.  Of those three proposals, only RAPA would close the loopholes which under current law and regulations allow mega farms to collect multiples of the payment cap regardless of the dollar limitation included in the farm bill.

Conservation obligations for receipt of taxpayer production subsidies also remain a hot topic.  This week two former Secretaries of Agriculture endorsed the NSAC proposal to attach conservation requirements to any new commodity program and to re-attach them to the receipt of crop insurance subsidies.  Under this proposal, all farmers could still purchase crop insurance, but to have the taxpayer pay the majority of the premium, the farmer would need to agree to stop excessive soil erosion and protect wetlands.  Crop insurance subsidies will cost the taxpayer $90 billion over the next decade.

Needless to say, we are concentrating on Senate Committee action for the coming month.  While the House budget reconciliation bill bears monitoring, it is unlikely to directly figure into the final farm bill deliberations, though indirectly it could very badly trouble the waters.  The Senate Committee action, on the other hand, will to a significant degree determine whether the effort to pass a farm bill this year is worth fighting for or not.  We will continue to keep readers appraised of developments and opportunities for engagement.

With a round of Senate Agriculture Committee hearings complete and House Agriculture Committee field hearings underway, Congress is currently working to write a new farm bill before the current one expires September 30, 2012.  The economic, environmental, and public health crises of our time demand decisive farm policy reform that will ensure a more sustainable future for American agriculture.  Adoption of the National Sustainable Agriculture Coalition’s 2012 Farm Bill platform will expand opportunities to produce good food, sustain the environment, and contribute to vibrant communities.

“Slow job recovery, a rapidly aging farm population, accelerating erosion and nutrient pollution, and atrophied regional food infrastructure can be viewed as a crisis or an opportunity,” said Susan Prolman, NSAC Executive Director.  “Done right, a new farm bill can be part of the solution, putting in place building blocks for a more sustainable future of thriving farms, healthy food, and strong communities.”

Farming for the Future spans nearly every title in the farm bill and reflects a comprehensive approach to farm policy reform that will –

• Create jobs and spur economic growth through food and farms.  Local and regional agriculture creates economic opportunities.  NSAC supports policy that will improve processing and distribution infrastructure for such agriculture and expand access to healthy food for consumers, including underserved communities.  A sustainable 2012 Farm Bill will also enable small business development and revitalize rural areas through investments in training, technical assistance, and microcredit for rural entrepreneurs.

• Invest in the future of American agriculture.  NSAC’s platform recognizes that agriculture is a growing sector of our nation’s economy, yet barriers make farming and ranching one of the hardest careers to pursue.  The 2012 Farm Bill should include policies that enable beginning and socially disadvantaged producers to access land, credit, and crop insurance; to launch and strengthen new farm businesses; and to receive appropriate training and mentoring will ensure that more people can start to farm and that the nation’s food supply remains viable.

• Enhance our natural resources and improve agricultural productivity.  As stewards of 40 percent of the landmass in the United States, American farmers and ranchers are important managers of our natural resources.  Farming for the Future supports funding and strengthening working lands conservation programs to help producers protect and rebuild soil, improve water and air quality, and reverse habitat loss while maintaining productive farms and ranches.  Nascent policy should modernize the farm safety net and protect the productivity of agricultural lands by ensuring that producers avoid environmentally harmful practices when they receive crop insurance subsidies.

• Drive innovation for tomorrow’s farmers and food entrepreneurs.  Investment in agriculture research is vital to continued productivity and innovation in diverse and expanding sectors of American agriculture.  A research policy that funds and strengthens successful programs for sustainable agriculture, organic farming systems, and specialty crops; addresses new research and data collection needs; and improves coordination on essential public plant and animal breeding efforts will foster the innovations that farmers and food businesses need to be successful.

NSAC supports renewal and reform of the farm bill in 2012, on schedule.  Congress will have to make tough choices to pass a farm bill that is forward-looking and fiscally responsible.  Our measure of success will be whether Congress invests in the future of farming – and adoption of the policies in the platform can help lead the way.

“Congress should not delay the adoption of a new farm and food bill.  It needs to do its job, this year, on time,” according to Prolman.  “The new bill, though, should be comprehensive and forward-looking, not a rush job that ignores the big issues in favor of short-term expediency.”

The full platform is available online.

A major takeaway from the summit was developing a joint sign on letter addressed to the leadership of the House and Senate Agriculture Committees, voicing support for getting a farm bill done this year and for new or renewed mandatory farm bill funding for some of the major programs that serve historically underserved segments of agriculture, including:

• Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers Program
• Beginning Farmer and Rancher Development Program
• Federally Recognized Tribal Extension Program
• Grants to Improve the Agricultural Labor Workforce Program
• Emergency Disaster Grants for Farmworkers Program

The letter also voiced strong support for farm bill programs that also need renewed mandatory funding in the 2012 Farm Bill and that are relied upon by beginning and minority farmers among other constituencies, including:

• Rural Micro-entrepreneur Assistance Program
• Value-Added Producer Grants
• National Organic Certification Cost Share Program
• Rural Energy for America Program
• Biomass Crop Assistance Program

The letter also affirmed continuing support for community food grants, local food systems infrastructure funding, healthy food incentives for SNAP recipients, and continued support for 1890 and 1994 Colleges and Universities and Hispanic Serving Institutions.

A total of 136 organizations, representing millions of farmers, ranchers, farmworkers, businesses and consumers throughout the country, signed onto the letter which was delivered to members of the Agriculture Committees on February 14th.  Among the organizations that signed onto the letter, were American Farmland Trust, Community Food Security Coalition, Farm Aid, Farmworker Association of Florida, Food and Water Watch, Intertribal Agriculture Council, National Family Farm Coalition, National Wildlife Foundation, , Rural Coalition/Coalicion Rural, National Latino Farmers and Ranchers Trade Association, National Women in Agriculture Association, National Young Farmers’ Coalition,  and many other groups working on these issues both at the national and local level.

To download a PDF copy of the letter, click here.