NSAC's Blog
NSAC’s 2023 Farm Bill Platform: Leveling the Playing Field
December 15, 2022
Editor’s Note: This is the third post in our series covering key pillars of NSAC’s 2023 Farm Bill Platform. The series begins here. You can read the platform and take action to endorse it here.
For decades, the farm bill’s farm safety net has had the same goal: to provide farmers some degree of protection against unpredictable disasters or sudden price declines, allowing them to stay in business for another year while providing for family living expenses. Yet, as it currently stands, the farm safety net serves as an open-ended entitlement subsidy that encourages land price inflation, soil-depleting farming practices and systems, farm consolidation, and declining farming opportunities.
Rosie Burroughs, advocate and farmer at Burroughs Family Farm in Denair, California put it plainly when she told us: “When we lose small farmers because of consolidation they will not come back. We will lose them forever.”
The 2023 Farm Bill should put an end to this harm by adopting responsible reforms, bolstering access to capital for beginning and underserved producers with limited assets, and strengthening antitrust enforcement and fair competition through market transparency. To restore competition and build a responsible farm safety net, NSAC calls on Congress to write a farm bill that invests in programs and policies that:
- Expand access to crop insurance to serve all types of farmers based on their unique risk management needs;
- Actively promote conservation within crop insurance by eliminating barriers to sustainable and organic farming practices and linking premium subsidies to stewardship practices that protect our land, water and health;
- Reform the structure of the crop insurance program so that it no longer provides unlimited subsidies that fuel farm consolidation, long-term unsustainable farming practices, or unduly influence farmers’ planting and production decisions;
- Scale up credit options in order to appropriately accommodate farmers at multiple points in their careers and to address the needs of a diverse range of operations, including diversified and direct-to-consumer farm businesses; and
- Adopt policies to strengthen antitrust enforcement, promote fair competition through market transparency, and modernize the Packers and Stockyards Act.
NSAC’s 2023 Farm Bill Platform advances recommendations that would level the playing field for small and mid-sized farms by supporting beginning farmers’ access to land and capital; fixing the flawed farm safety net and improving access for diversified farmers; and addressing corporate consolidation and restoring fair competition.
Support beginning farmers’ access to land and capital
High barriers to entry still make farming and ranching one of the hardest careers to pursue. Significant hurdles, including access to affordable farmland, high upfront startup costs, and saturation of markets, discourage many from pursuing or being successful starting and growing a farm business. Over the last decade, farmland prices have doubled nationwide and risen far higher in areas with pressure from real estate development and commodity subsidies. Additionally, millions of acres of farmland across the U.S. are set to change hands over the next ten years – during the course of our next farm bill.
Rarely do beginning and underserved farmers have the cash to purchase equipment, inputs, and land outright. That is why access to credit is critical for farmers, particularly those just beginning careers in agriculture as well as socially disadvantaged farmers and ranchers who have traditionally been underserved or discriminated against. Credit allows farmers to acquire the land and supplies they need and get a crop in the ground before the fruits of that labor are available.
Unfortunately, it is precisely those new loan applicants with the greatest on-farm resilience and the best environmental outcomes who are the least likely to be approved or, if approved, to have the most expensive and difficult loan terms. Congress must take steps in the next farm bill to bolster access to capital for beginning, small to mid-sized, and diversified producers and to facilitate the transfer of skills, knowledge, and land between current and future generations of family farmers. The 2023 Farm Bill offers many opportunities to address this challenge. NSAC’s 2023 Farm Bill Platform calls on Congress to:
- Invest in vehicles to facilitate transition of farmland between retiring and beginning farmers and prevent land loss in communities of color.
- Improve Farm Service Agency accountability by reforming existing programs and lending services to better serve and build trust with underserved farmers and ranchers.
- Increase capital access through the creation of new lending programs to meet specific, unmet needs. This includes authorizing a multi-year developmental loan which would allow extended payment terms of three to 10 years.
- Provide scale-appropriate financial assistance through a microgrant program for beginning and socially disadvantaged farmers and ranchers.
- Require Farm Credit System institutions to fulfill its responsibility as a government-sponsored enterprise and grant 15 percent of annual profit (which totaled $6.8 billion in 2021) to support underserved producers and food system enterprises.
- Authorize new models for lending which prioritize systems-level, on farm resilience. This includes a Sustainable Agriculture Investment Fund to invest in sustainable production systems and allow deduction of conservation investments from the face-value of the loan.
Fix the flawed farm safety net and improve access for diversified farmers
A farm safety net backed by the federal government is a prudent and necessary means to help protect American producers from the many risks inherent in agricultural production. However, the modern federal crop insurance program uses taxpayer dollars to disproportionately support crop insurance companies and the largest, wealthiest commodity farms while under-serving small and midsize farms, diversified operations, and beginning and socially disadvantaged farmers. It encourages industrial farming practices that erode soil health and leaves conventional farms particularly vulnerable to extreme weather events and market shifts. Further, limitless subsidies and benefits for established farmers are known to increase land prices and rent, barring underserved or aspiring producers from farming. The way we design and subsidize federal crop insurance should not pick winners and losers.
A 2022 NSAC report projects billions in taxpayer savings over 10 years if reasonable caps are instituted on federal subsidies paid to farmers who purchase crop insurance. These proposals would on average impact fewer than 3 percent of the country’s largest farms, saving up to $20 billion and leveling the playing field for family farmers. Savings in federal expenditures can be reallocated to improve the delivery of federal crop insurance and other high priority farm bill programs, reduce burdens on taxpayers, or reduce the federal budget deficit.
NSAC’s 2023 Farm Bill Platform recommends improvements to crop insurance so it can serve the diversity of American agriculture, promote natural resource stewardship, and level the playing field for family farmers through the responsible use of public funds. Specifically, the 2023 Farm Bill should:
- Improve access to the safety net for small and mid-sized, beginning, organic, and specialty crop producers by expanding insurance options and further streamlining the Whole-Farm Revenue Protection program;
- Direct the Risk Management Agency (RMA) to provide continued education to insurance agents about agronomic practices and coverage for nonconventional producers;
- Reform barriers to conservation practice adoption perpetuated by insurance rules, including the RMA definition of Good Farming Practices and cover crop termination guidelines;
- Encourage farmers to voluntarily adopt and implement a soil health plan approved by the Natural Resource Conservation Service (NRCS) by 2028 to receive full crop insurance premium discounts;
- Establish a secure data service to collect, link, and analyze data on conservation practices so this information can be integrated into crop insurance actuarial tables, as proposed in the Agriculture Innovation Act of 2021; and
- Level the playing field for family farms by ensuring efficient use of public funds. This includes establishing an annual per farm cap or Adjusted Gross Income (AGI) limit on crop insurance premium subsidies that would impact just three percent of the largest farms and save billions of taxpayer dollars over 10 years.
Address corporate consolidation and restore fair competition
The food and agriculture industry has become highly concentrated over the past 50 years. To illustrate, just four corporations are responsible for 65 percent of sales in the global agrochemicals market, 50 percent of the seed market, and 45 percent of farm equipment sales. In the United States, just four companies represent 73 percent of beef processing, 67 percent of pork processing, 54 percent of chicken processing, and 45 percent of the retail grocery market. Economists agree that an industry is no longer competitive when the market share of the top four companies is 40 percent or higher, and that ceiling has been clearly exceeded across the agriculture industry.
This concentration hurts farmers, consumers, and rural communities while returning maximum profits to multinational corporations. It inflates the prices that farmers must pay for inputs, drives down commodity prices, and restricts the ability of farmers and ranchers to compete in the marketplace to the point where farmers today receive on average less than 15 cents of every dollar that consumers spend on food. The next farm bill should seek to reverse this trend through policies to strengthen antitrust enforcement and promote fair competition through market transparency.
NSAC’s 2023 Farm Bill Platform calls on Congress to address corporate consolidation and restore fair competition by:
- Supporting and reaffirming the ongoing USDA rulemaking process to modernize the Packers and Stockyards Act (PSA) to give a fair shake to livestock and poultry growers;
- Creating an Office of the Special Investigator for Competition Matters in the USDA Packers and Stockyards Division, which oversees PSA implementation;
- Providing market transparency and consumer agency through restoration of mandatory country-of-origin labeling on all beef and requiring manufacturers of agricultural equipment to make the same tools, parts, and documentation available to owners and independent repair providers; and
- Upholding the intent of antitrust laws by prohibiting and reversing anticompetitive mergers in the food and agriculture industry, or at least imposing a moratorium on large agribusiness mergers.
For more details on these policy proposals, we invite you to read our 2023 Farm Bill Platform.
Categories: Beginning and Minority Farmers, Carousel, Commodity, Crop Insurance & Credit Programs, Farm Bill