Farm Bill Digest #7, Posted September 26th, 2007

This is a special edition of the National Campaign's Farm Bill Digest as the 2008 Farm Bill debate moves forward in the Senate. The Senate Finance Committee is expected to take up a Farm Bill — Tax Bill as early as October 3rd and the Senate Agriculture Committee will begin its markup shortly thereafter.

The Farm Bill Digest tracks developments around our Farm Bill Priorities. You can read the full set of our priorities at: http://www.sustainableagriculture.net/farm_bill_priorities.php

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In this issue of the Digest:

• Senate Farm Bill Moves Forward
  The Senate is poised to mark up two farm bills; one in the Senate Finance Committee and the other in the Senate Agriculture Committee.
• Biomass Production Incentives
  Senator Harkin's draft Farm Bill proposal includes producer incentives for the production of cellulosic biomass.
• A Commodity Title for Everyone?
  The shape of Harkin's Commodity Title is still very much under discussion with the final deals yet to be struck.
• A Little Floor Action
  Amendments to restore open and competitive livestock markets and farm subsidy payment limitations are likely in the Senate Agriculture Committee markup or on the Senate Floor.
• A Comprehensive Working Lands Conservation Program
  Harkin's staff unveiled the new Comprehensive Stewardship Incentives program in a Capitol Hill briefing last week.

FARM BILL DIGEST #7
SPECIAL EDITION

Senate Farm Bill Moves Forward

Trying to pin a date on when the Senate will begin to mark up its version of the 2008 Farm Bill is the stuff that great office pools are made of. Confounding the odds is the fact that the Senate is poised to mark up TWO Farm Bills. One will be marked up by the Senate Agriculture Committee and the other will come out of the Senate Finance Committee. The Chairs of both committees have said they want to complete their markup before the Columbus Day recess which begins on October 5 but it seems improbable that two committees with 8 overlapping members can complete markup and a final vote by then.

Chairman Baucus (Finance) intends to mark up a "Farm Bill - Tax Bill" to provide $8 to $10 billion in much needed new money above the baseline funding levels set in the budget for the 2008 Farm Bill. As of this writing, Baucus's proposal has not yet been released though it is expected to contain a permanent disaster program at a cost $5 billion and several provisions that convert conservation and other farm program cash payments into tax credits. Participants in the Wetlands Reserve Program, Grassland Reserve Program and the Federal Farm and Ranchland Protection Program which funds conservation easements would have the option of taking tax credits instead of cash payments. Tax credits would also be available for farmers growing alternative crops for the production of biodiesel and cellulosic biofuels. Baucus also plans to propose rural development tax credit bonds –bond holders would receive tax credits rather than interest – to fund things like rural electric, telemedicine and rural broadband.

While freeing up additional money for the Farm Bill has piqued the interest of almost everybody the notion of doing it via tax credits hasn't generated a lot of enthusiasm. Tax credits are of most benefit to those with high incomes. This is not the way to go about expanding the participation of beginning and socially disadvantaged farmers and ranchers in conservation or biomass production incentive programs. And agriculture related tax credits and other tax goodies particularly those tied to land have a way of attracting non-farm capital to agriculture which can drive up land prices – beyond the reach of beginning and working farmers.

The biggest problem with Baucus's proposal isn't simply the tool he uses; the biggest problem is that it raises too paltry a sum to allow the Senate Agriculture Committee to adequately fund our priorities for the 2008 Farm Bill. The National Campaign, the Sustainable Agriculture Coalition and others have been urging phone calls and faxes to Finance Committee members asking them to pass a Farm Bill Tax Bill that provides at least $10 billion in spending offsets (real money) to provide new funding for conservation, rural development, renewable energy and other sustainable agriculture priorities. Calls are needed NOW to Finance Committee members in MT, WV, ND, NM, MA, AR, OR, NY, MI, WA, CO, IA, UT, MS, ME, AZ, KY, ID, KS, and NV. For phone numbers and names of staff aids go to the full alert [MS Word document].

Chairman Harkin (Agriculture Committee) has been circulating drafts of his Farm Bill proposal for some time now and several of the Titles are summarized elsewhere in this Digest. Generally, it includes most of the sustainable agriculture community's agenda and is our best hope for a reform minded 2008 Farm Bill. The Sustainable Agriculture Coalition, the National Campaign and many others have been urging phone calls and faxes to Senate Agriculture Committee members urging them to support the Harkin Farm Bill proposal. Calls are needed NOW to Senate Agriculture Committee members in VT, ND, MT, AR, MI, NE, CO, OH, PA, MN, IN, MS, KY, KS, SC, ID, SD and IA. Download the full alert with staff names and phone numbers [MS Word document].

Harkin's proposals on organic agriculture, renewable energy, working lands conservation, rural development, beginning and socially disadvantaged farmers and ranchers, open and competitive livestock markets all bear the unmistakable fingerprints of the sustainable agriculture community. The funding levels for many of our programs and priorities, however, are often [bracketed] meaning that the funding source has yet to be identified. It's crucial that the Finance committee identify adequate new resources to fund these priorities. If you are in a Finance State please call today.

Biomass Production Incentives

The current draft of Chairman Harkin's Energy Title includes a Bioenergy Crop Transition Assistance Program to spur the production of a variety of biomass energy crops. Producers within a bioenergy supply region of an existing or proposed biomass conversion facility will be eligible for incentive payments under a contract for up to five years for the production of cellulose crops which are not Title I commodities. In funding projects, USDA must give priority to projects that have the highest probable benefit to wildlife, air, soil, and water quality improvement resulting from the transition to biomass crop production; include the participation of beginning and socially disadvantaged farmers and ranchers; and include local ownership of the bioenergy facility.

This program and other programs that support on-farm energy efficiency and on-farm and renewable energy production, however, won't happen unless the Finance Committee provides the necessary resources.

A Commodity Title for Everybody?

The shape of Harkin's Commodity Title is still very much under discussion with the final deals yet to be struck. Some form of a permanent disaster program is one of the elements under discussion. Also under discussion are several forms of revenue insurance. A summary of an early Harkin draft leaked a few weeks ago would have shifted countercyclical payments from a target price based payment to a revenue based payment designed to support producers in the event of either price or production shortfalls on a national level. Another more comprehensive revenue insurance proposal has been put forth by Senators Durbin of Illinois and Brown of Ohio that would be tied to state level revenue losses. The House Farm Bill gives producers the option of choosing a target price based countercyclical payment or a national revenue based payment.

An increase in target prices for some crops also appears to be on the table along with some revenue raising changes to direct payments. Harkin's staff has floated a proposal that would either cut direct payments outright or reduce them incrementally as and if market prices increased (very un-Doha). The savings could be shifted to nutrition, conservation and other unfunded priorities.

A Little Floor Action

There are several good prospects for bills to be introduced either as amendments in the full Senate Agriculture Committee or on the Senate floor. There are two bills aimed at prohibiting packers from using "captive supplies" to manipulate cash market prices. Captive supplies include livestock which is owned and fed by the packer as well as livestock purchased under forward contracts (contracts which call for delivery more than 7 days after the contract is entered into.) S 1017, the Captive Supply Reform Act introduced by Senators Enzi, Dorgan, Grassley, Thomas and Conrad would require all forward contracts to include a firm base price established on the day the contract is entered into.

S 305 is a bill to amend the Packers and Stockyards Act of 1921 to make it unlawful for a packer to own, feed, or control livestock intended for slaughter. S 305 was introduced by Senators Grassley, Dorgan, Enzi and Harkin. The Farm Bill passed out of the House Agriculture Committee does nothing to restore open and competitive livestock markets. The Senate is our best hope. The Campaign's Competition Committee has an alert circulating asking everyone to call their Senators urging them to sign a Dear Colleague letter from Senators McCaskill and Enzi calling for a Livestock Title that addresses these and other needed reforms. Download the full alert [MS Word document].

The third likely candidate for committee or floor amendment is a farm subsidy payment limitation provision likely to resemble a bill introduced by Senators Dorgan (D-ND) and Grassley (R-IA) called the Rural America Preservation Act of 2007 (S 1486). The bill would place an effective cap on farm subsidy payments of $250,000. Megafarms would no longer be able to skirt the caps by forming up to three separate farming entities to receive payments. The limits are to be applied per person and all payments received through entities will be traced back to the individual and counted against the limit. Payments are to be attributed to the person exercising primary control over the operation. The Bill would also do a better job of targeting payments to working farmers by providing additional definition to the "actively engaged in farming." The Bill would require that the producer be personally involved on a regular, substantial and continuous basis by providing direct supervision of farming activities AND labor and on-site services to the farming operation.

Calls and faxes from constituents urging Senators to support or oppose amendments in committee or on the Senate floor can have an enormous impact. Please sign up for the Farm Bill Action Alert list today so you can stay tuned. You can sign up here.

A Comprehensive Working Lands Conservation Program

Senator Harkin's staff unveiled a new Comprehensive Stewardship Incentives Program (CSIP) at a Capitol Hill briefing last week for farm and environmental groups. The new CSIP unifies the current Environmental Quality Incentives Program (EQIP) and the Conservation Security Program (CSP) into one comprehensive working lands conservation program.

The Environmental Quality provisions provide cost share and incentive payments for the adoption of conservation practices and projects with a payment cap of $240,000.

The Stewardship provisions, much like the current CSP program, provide enhancement payments for farmers that are already addressing at least one priority resource of concern on their farms and have a plan to address all others up to a standard established by NRCS by the end of the five year contract. The Stewardship provisions would restore a portion of the funds that had been cut from the CSP. Both programs will be available on a nationwide basis with a continuous sign up.

© 2007-2008 National Campaign for Sustainable Agriculture.