Competitive Markets & Commodity Program Reform


Policy choices that privilege industrial agricultural production have hurt many small and mid-sized family farms: unfair and often uncompetitive markets have disproportionately impacted small and mid-sized independent livestock and poultry producers, and commodity program payments have helped to subsidize farm consolidation and have reduced farming opportunities for the next generation of producers.  Restoring fair competition to the marketplace, improving the rights of farmers who produce under contract with large companies, ensuring targeted commodity program payments, and increasing planting flexibility can help improve the viability of small and mid-size farms, and give sustainably-produced food and fiber the level playing field those products deserve.

For the first time ever, the 2008 Farm Bill contains a new Livestock and Poultry Fair Competition Title that is intended to give livestock producers and poultry growers fairer conditions in their market relationship with meat and poultry processors and packers.  While significantly scaled back from the original bills introduced to advance contract reform and fair competition, the final results are still substantial and a foundation to build on.

The new title of the farm bill also requires retailers at the point of sale to label selected food products with Mandatory Country of Origin Labeling information.

The 2008 Farm Bill did not include any sweeping commodity program reforms.  Some changes were made to Payment Limitations and Adjusted Gross Income Limitations, changes which on balance loosened payment limitations and tightened the adjusted gross income (AGI) test.  A requirement that USDA rewrite regulations that control what is currently the single largest loophole in current subsidy rules presented some  hope for reform.  Unfortunately, the loophole was left in place by the Obama Administration when the final rule was released in early 2010.

The 2008 Farm Bill essentially retains the Planting Flexibility for Fruits and Vegetables rules that prevent farmers from converting some or all of their farms to fruit or vegetable production while still maintaining “base acres” to qualify for commodity program benefits.  It does authorize a pilot program in seven states that allows farmers to grow some vegetables but only if they are under contract to a canning and processing company.

These and other reform issues are likely to remain at the forefront of the debate throughout this farm bill cycle and on into the future.