May 23, 2012

Contact:  Juli Obudzinski, 202-547-5754

NSAC Comments on Proposed USDA Microloan Program

Washington, DC – Today, Agriculture Secretary Tom Vilsack announced a proposed rule for a new microloan program that would be part of the suite of credit options available to farmers through the Farm Service Agency (FSA).  The new program would allow FSA to make smaller loans, with a principal balance of up to $35,000, and would streamline the application process to require less paperwork for farmers.

“NSAC applauds the Department of Agriculture for being responsive to the needs of small and beginning farmers who have faced significant hurdles in obtaining loans through federal credit programs,” said Juli Obudzinski, Policy Associate with the National Sustainable Agriculture Coalition.  “This new program is a step in the right direction for the next generation of farmers who often are looking for smaller loans when they’re first getting started in agriculture.”

A modified version of this microloan program that includes a specific priority on beginning farmers is included in the Beginning Farmer and Rancher Opportunity Act (H.R.3236, S.1850), which NSAC and partners such as the National Young Farmers’ Coalition have been gathering support for across the country.  Although the microloan program announced today is not exclusively targeted at young or beginning farmers, the program will be incredibly helpful in allowing these groups to access federal credit and obtain loans to help them start their farming operations.

“Capital is the number one need of young and beginning farmers in the United States,” said Lindsey Lusher Shute of the National Young Farmers’ Coalition. “USDA microloans will fuel new farm businesses and a new generation of family farmers.”

In addition to credit needs, there are several other incredibly important issues for beginning farmers that are currently on the table as the Senate and House take up the 2012 Farm Bill, many of which are included in the Beginning Farmer and Rancher Opportunity Act.  NSAC will monitore the new microloan program throughout the rulemaking process to ensure it meets the needs of beginning farmers and will continue to advocate for programs that serve the next generation of farmers and ranchers as the farm bill process moves forward.

The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.

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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 improvements in the bill for local food systems and rural development, though there is still work to be done to ensure the final bill fully captures the economic opportunities to be gained in these areas of our nation’s agriculture and food policy.

What follows is a breakdown of provisions offered last week that were (and were not) included in the Farm Bill that emerged out of the Senate Committee markup.  A previous blog post on local food and rural development summarizes the provisions as presented in the original draft bill that was released on Friday, April 20.  We will not repeat that information here, but refer interested readers back to the earlier post.  This post focuses on changes adopted immediately before or in the Committee markup.

Nutrition Title

Two amendments were filed that could have bolstered opportunities for schools and other institutions to procure food from local farmers and ranchers.  The first was filed by Sen. Brown (D-OH), the Senate lead sponsor of the Local Farms, Food, and Jobs Act (S. 1773).  The second was filed by Sens. Casey (D-PA) and Leahy (D-VT).  Ultimately, neither of these amendments were offered during markup.  NSAC will continue to pursue Farm to School provisions during the Senate floor process and on the House side.

Thanks to an amendment offered by Sen. Leahy and passed out of committee, the bill now includes a provision that would make it easier for SNAP recipients to participate in Community Supported Agriculture (CSA) programs.  NSAC supports this provision and will advocate for it to remain in the final Farm Bill.

Chairwoman Stabenow (D-MI) championed a new program, with a total of $100 million in  mandatory funding over five years, to encourage purchases of fruits and vegetables by SNAP consumers at retail outlets, including farmers markets.  The grants are modeled after the successful work of Fair Food Network’s Double Up Food Bucks program.

Also noteworthy is the addition of the Healthy Food Financing Initiative (HFFI) – it was not in the original bill presented on April 20 but was included in the revised version on April 25 and included in the bill voted out of committee.  The initiative, which aims to improve access to healthy food in low-income communities, is authorized to receive up to $125 million (no time period is provided for) in discretionary funding through the annual appropriations process.

Rural Development Title

As our earlier post noted, the original bill did not include any mandatory funding for the Rural Development Title.  Unfortunately, despite the efforts of Sen. Brown and others, this sobering fact did not change during the markup process.  The Value-Added Producer Grant (VAPG) program and the Rural Microentrepreneur Assistance Program (RMAP) remain without any mandatory funding.

Brown did offer an amendment to put $25 million each into these two programs plus $100 million to fund water and wastewater projects.  He withdrew the amendment when it was not clear whether $150 million in mandatory funding was still available, given the changes made to the overall bill during markup, above the net $23 billion savings figure the Committee agreed to save over the next decade relative to current law.  Chairwoman Stabenow indicated her support for the Brown amendment, which will re-emerge in some form when the bill comes to the Senate floor.

No-cost policy changes proposed in the Local Farms, Food and Jobs Act to strengthen and improve a variety of rural development programs were not included in the Senate Committee bill.  The same holds true for the research and extension title.

We are thrilled to report the bill approved by the Appropriations Committee endorsed the Administration’s proposal to fund for the first time the Sustainable Agriculture Federal-State Matching Grant Program as a new component of the Sustainable Agriculture Research and Education (SARE) program.  Combined, the Committee bill provides for $22.7 million for SARE, including $3.5 million for the matching grant initiative.  The latter was authorized by Congress, along with the rest of SARE, back in 1990, but to date it has never received an appropriation.  The Committee’s proposed funding level represents a long overdue 18 percent increase in funding.

We are also glad the Committee endorsed the Administration’s proposal to increase spending for the Value-Added Producer Grants program by $1 million to $15 million.  This is still $5 million less than the long-term funding level for the program and $25 million less than the 2002 Farm Bill provided for the program, but at least a modest step back in the right direction.

In the conservation part of the bill, we are delighted the Committee chose to reject the Administration’s proposal to cut a portion of farm bill mandatory funding for the Conservation Stewardship Program (CSP).  We strongly oppose backdoor efforts in the appropriations bill to reduce mandatory farm bill funding for conservation and applaud the Committee for keeping CSP funding intact.

The Committee bill also steered clear of cuts to the Farmland Protection Program, the Wetlands Reserve Program, and several other conservation programs.  However, they did propose to cut $350 million out of the farm bill mandatory funding level of $1.75 billion for the Environmental Quality Incentives Program, the same amount as in FY 11 and FY 12.  Also cut was farm bill funding for the Wildlife Habitat Incentives Program, down $12 million from the farm bill level of $85 million, a smaller cut than made in the FY 12 appropriations act.

We are also pleased to report the Senate Committee did not include the legislative rider from the FY 12 appropriations act that acts to prevent USDA from doing its job to ensure fair competition in the livestock and poultry marketplace.

The Committee also:

• includes a big bump up for the Agriculture and Food Research Initiative, a quasi-competitive research, education and extension grants program, from $264 million currently to $298 million, a 13 percent increase;
• keeps direct and guaranteed farm ownership and operating loan funds constant at FY 12 levels; NSAC has requested an increase for direct farm ownership loans targeted to beginning farmers and ranchers;
• allows $3 million in remaining 2008 Farm Bill funding for the Rural Microentrepreneur Assistance Program to be spent in 2013; we had advocated for additional discretionary funding but none was granted; and
• maintains level funding or very modest increases for a variety of other programs we follow closely including ATTRA, Organic Transitions Research, IPM Regional Centers, Office of Advocacy and Outreach, Local and Regional Food Enterprise Loan Guarantees, State Mediation Grants, Conservation Operations including Technical Assistance, and others.

For more details, see the NSAC Appropriations Chart on our website, which is now up-to-date with Senate Committee action.

For general details on the bill refer to the Committee’s summary.

To read about the big conflict between House and Senate spending levels for 2013, read our earlier post.

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.

Rural Development Subcommittee Chairman Tim Johnson (R-IL) opened the hearing by acknowledging the tight budget situation and the vast number of programs geared towards rural communities.  “It is, in part, the sheer number of programs which makes it difficult to gauge the effectiveness of current policy,” he said.

Ranking member Jim Costa (D-CA) followed, stressing the importance of USDA defining rural.  According to Costa, 98 communities, or 80% of the local loan portfolio, in California will no longer be considered rural unless rural definitions are revised.

Costa later went on to applaud the Value Added Producer Grant Program (VAPG) and suggested giving priority to collaborative projects within the program.

Charles Conner, President and CEO of the National Council of Farmer Cooperatives, stressed the need to streamline both programs and application processes.  He noted that VAPG was one such program that capitalized on group efforts by allowing cooperatives to access “new business opportunities that would go unexplored.”  In his testimony, Conner recommended that USDA “keep the VAPG Program viable and available to farmer co-ops, and streamline other rural development programs.”

Tri-County Council for Western Maryland Executive Director Leanne Mazer testified on behalf of the National Association of Development Organizations (NADO).   She, too, advocated for infrastructure development, as well as streamlining of policies, application processes, and reporting methods.  Mazer pointed out that in her opinion the more flexible programs such as the Rural Business Enterprise Grant Program (RBEG) and Rural Business Opportunity Grant Program (RBOG) had been hit the hardest by budget cuts.

Commissioner of Brookings County, South Dakota, Donald Larson stressed the importance of  the same lending programs– RBEG and RBOG–as well as the Rural Microentrepreneur Assistance Program (RMAP) for increasing capital in rural economies.  Larson echoed the need for rural development programs such as VAPG and sited the Beginning Farmer and Rancher Opportunity Act (BFROA) as “a model…for the kind of initiatives necessary to invest in the next generation of American producers.”  He noted that the Local Foods, Farms, and Jobs Act  provides “important policy suggestions for the Farm Bill” that promote local and regional agriculture.

April 26, 2012

Contact:  Ferd Hoefner, 202-547-5754

NSAC Comments on Senate Farm Bill Markup and Passage

Washington, DC – The Senate Agriculture Committee voted a new farm bill out of committee today by a vote of 16-5.  The committee bill saves $23 billion over the next ten years according to budget estimates.

The committee bill includes historic reforms to commodity subsidies.  In addition to replacing automatic direct payments with a shallow loss revenue-based payment, the bill limits payments to not more than one farm manager per farm operation.  Under current law, mega farms collect multiple payments worth millions of dollars through passive investors and landowners who are counted as farm managers.

“We applaud the Senate Agriculture Committee for including common sense rules to commodity payments and ending years of abuse by closing program loopholes,” said Ferd Hoefner, Policy Director for the National Sustainable Agriculture Coalition.  “Thanks to Senator Grassley’s (R-IA) tireless leadership, the Committee was able to make sure that hardworking farmers – not mega farms and absentee investors – are the key beneficiaries of farm programs.”

The Committee also enacted a nationwide “Sodsaver” provision to protect native grass and prairie lands.  The provision reduces crop insurance premium subsidies and tightens program rules in a manner that will reduce the taxpayer-funded incentive to destroy important grassland resources.

“By agreeing to a nationwide ‘Sodsaver’ provision championed by Senators Thune (R-SD), Brown (D-OH), and Johanns (R-NE), the Senate Agriculture Committee made sure that taxpayer dollars are not subsidizing the destruction of native grass and prairie lands,” said Hoefner.  “These lands are diminishing at a rapid rate and protecting them provides ranching opportunities and economic, environmental, and recreational benefits to rural communities.”

While the Committee made progress on these commodity and crop insurance issues, there are several outstanding gaps in the proposed changes to the farm safety net.

“By failing to place limitations on crop insurance subsidies and to re-attach soil erosion and wetland conservation requirements to crop insurance programs, the Committee has failed to do the full reform that is needed.  We intend to continue to press these issues as the bill moves forward,” continued Hoefner.

The Committee also made progress on critical programs that underpin economic growth.

“The leadership of Chairwoman Stabenow (D-MI) and Senators Brown (D-OH), Leahy (D-VT), Harkin (D-IA), and Casey (D-PA) ensured that programs that spur economic growth in rural communities built on gains from the 2008 Farm Bill,” noted Hoefner.  “The Committee reauthorized critical local food and organic programs, such as the Farmers’ Market and Local Food Promotion Program and National Organic Certification Cost Share.”

Despite progress, there were glaring shortfalls and omissions in the Committee’s draft.

“Sens. Harkin (D-IA), Johanns (R-NE), Casey (D-PA), and Nelson (D-NE) championed various beginning farmer provisions, but the bill lacks a cohesive strategy to assist the next generation of American farmers,” said Hoefner.  “Most noticeably, the Committee failed to provide adequate funding for the Beginning Farmer and Rancher Development Program, thus limiting critical resources that new farmers need to succeed.”

The Committee did not fund the rural development title, nor did it make needed improvements in farm to school programs.  It also limited the funding for programs targeted to socially disadvantaged farmers and ranchers.

“We regret the Committee’s decision to limit funding for minority farmers in the new bill, and will work to see that funding restored,” said Hoefner.  “We also echo Sen. Brown’s (D-OH) concluding statements: without a strong investment in rural development programs we will miss the opportunity to truly make this bill a jobs bill,” said Hoefner.

“Overall, the bill released out of Committee is an improvement over last year’s draft bill,” said Hoefner, “but there is a still a ways to go to produce a bill that expands opportunities for family farmers to produce good food, sustain the environment, and contribute to vibrant communities.  We look forward to working with the Committee and the full Senate to ensure further progress toward that end.”

The National Sustainable Agriculture Coalition is a grassroots alliance that advocates for federal policy reform supporting the long-term social, economic, and environmental sustainability of agriculture, natural resources, and rural communities.

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Today, the House Appropriations Committee set its own discretionary spending allocations, but rather than abide by the spending caps agreed to by both the House and Senate in last year’s Budget Control Act, it lowered them an additional $19 billion.

On the Senate side, the allocation allows the Senate Agriculture Appropriations Subcommittee to provide discretionary funding of $20.785 billion for USDA and FDA programs.

The House allocation, as it passed today, caps House Agriculture Appropriations Subcommittee discretionary spending on USDA and FDA programs at $19.4 billion, roughly $1.4 billion below the Senate level.  (The House Democrats put forth an unsuccessful amendment to peg the agricultural allocation at $21.1 billion).

To put this $1.4 billion in perspective, the entire discretionary spending appropriation in FY 2012 for the Food Safety Inspection Service was $1 billion.  The difference is also more than all discretionary spending for the Animal and Plant Health Inspection Service and over half of all rural development spending in FY 2012.

As the House and Senate move forward with their respective agriculture appropriations bills, they will be moving on very different paths.

The Senate Appropriations Committee is scheduled to mark up its agriculture appropriations bill tomorrow morning.  We do not know much about the Chairman’s mark, which has yet to be released; however, funding levels for most programs are expected to be very close to if not the same as last year’s levels.

On the House side, the future of the agriculture funding bill is much less clear.  The House Agriculture Appropriations Subcommittee has yet to set a date to mark up its bill.  An allocation this low complicates matters, making it extremely difficult for the members of the Subcommittee to do their work.  Moreover, President Obama has said that he will veto any spending bill that does not conform to the levels set out in the Budget Control Act.

More likely than not, the House’s unwillingness to abide by the agreement struck in 2011 will lead to a rancorous and drawn out fight over vastly different spending bills come the end of the fiscal year.  We hope that, instead, the two chambers are able to reconcile their bills in conference at the Budget Control Act level and pass something that supports and enhances rather than undermines important rural development, research, conservation, and beginning farmer programs.

Stay tuned for a detailed analysis of the FY 2013 Senate Agriculture Appropriations Bill after it is released tomorrow.

We worked last fall with Sen. Sherrod Brown (D-OH) and Rep. Chellie Pingree (D-ME-1) and many other members of Congress to develop the Local Farms, Food, and Jobs Act.

We are both pleased and disappointed with how the local food bill compares to the Senate’s draft Farm Bill, which makes some steps in the right direction but also missed the mark on vital funding needs as well as no-cost policy tweaks with enormous prospective impact for our economy.

The Good

• The Crop Insurance Titles adds a directive to USDA to create a Whole Farm Diversified Risk Management Insurance product for diversified operations, including specialty crops and mixed grain/livestock and dairy operations.
• The Farmers Market Promotion Program (FMPP) is renamed the Farmers Market and Local Food Promotion Program, thus serving not only direct producer-to-consumer marketing channels but also “scaled up” local food sales to retailers and institutions.  The program receives $20 million in annual mandatory funding, double the current level in light of the new expanded program purpose.  The Local Farms, Food and Jobs Act calls for $30 million a year, a level we will continue to advocate for.
• Funding for Community Food Projects receives an increase of $5 million a year for the next 5 years, above its permanent funding of $5 million a year.
• Appropriate Technology Transfer for Rural Areas (ATTRA), which provides research-based information on sustainable agriculture, remains intact with $5 million in annual discretionary funding.
• Funding for national organic certification cost-share fares well.  Click here to read our analysis of organic agriculture in the bill.

The Half-Baked

• The bill levels the playing field between wireless and wired vendors by requiring all retailers to fund their own SNAP Electronic Benefit Transfer (EBT, formerly food stamps) equipment, with a discretionary exemption for farmers markets.  NSAC advocates to expand this exemption beyond just farmers markets to all direct producer-to-consumer marketing outlets.  The bill also establishes a pilot program for mobile technology to accept EBT at farmers markets and other direct marketing outlets, however the pilot does not include the development of technology that can accept other nutrition assistance program benefits, which would further expand access to fresh, local foods for low-income Americans.
• The Rural Development Title’s Business and Industry Direct and Guaranteed Loans includes the Local Farms, Food, and Jobs Act provision for publishing information on and outreach for the program’s set-aside for Local and Regional Food Enterprises loans.  However, none of the proposed food enterprise program improvements were included in the draft bill.  We hope this will be rectified in markup this week and as the farm bill process continues.
• The Rural Business Enterprise Grants (RBEG) and Rural Business opportunity Grants (RBOG) are combined into a single program called Rural Business Development Grants.  NSAC advocates for authority for developing local food enterprises in these programs and in the Community Facilities (CF) program, though none of these no-cost policy changes are included.  We hope these will be added as the bill moves forward.
• Most of the needed policy changes to the Rural Microentrepreneur Assistance Program are included in the draft bill, which is good news.  However, the program receives no mandatory funding, a disappointing loss after the 2008 Farm Bill funded the program.  Hopefully funding will be added as the Senate considers the new farm bill.
• The Horticulture Title creates a study on local food production and program evaluation, which is critically important.  Unfortunately, the study receives no mandatory funding.
• The Specialty Crop Block Grant Program (SCBGP) receives a mandatory funding increase from $55 million to $70 million per year, however none of the Local Farms, Food and Jobs Act’s no-cost local food policy asks were included.  In particular, we support an allocation of program funding for locally marketed specialty crops.

The Ugly

• Organic crop insurance does not fare well at all.  Click here to read our analysis of organic agriculture in the bill.
• The bill leaves out several no-cost policy provisions to expand Farm to School, which benefit both American schoolchildren and our nation’s agricultural producers by ensuring more local foods are served in cafeterias.
• The Senior Farmers Market Nutrition Program, already receiving less funding that there is demand, does not receive an increase in its mandatory allocation.
• The Credit Title does not address the specific needs nor enhance lending opportunities for producers selling in local and regional markets.
• No funding was provided for the Rural Development Title.  NSAC advocates for a Rural Community Prosperity Fund with mandatory funding to drive economic growth in rural communities.
• Value-Added Producer Grants (VAPG) receives no mandatory funding, despite the program’s proven track record of creating jobs and stimulating the economy.  Click here to read about VAPG and beginning farmers and ranchers.
• The bill does not include a proposal called “Local and Regional Food Enterprise Facilitation,” which would authorize Extension to provide training and technical assistance in the neediest parts of the country in order to develop economically-viable local food businesses.
• The Agriculture and Food Research Initiative (AFRI) is untouched in the bill, thus leaving out chances to shore up research on local food.  Click here to read more about research in the bill.

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 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.