TAKE ACTION!

Conservation Stewardship Program Sign Up — August 10 through September 30: Agriculture Deputy Secretary Kathleen Merrigan has announced the first farmer sign up period for the new Conservation Stewardship Program (CSP).   The CSP will make payments to farmers for maintaining existing conservation practices and for adopting additional practices on cropland, grassland, improved pasture, rangeland and non-industrial private forestland.  Payment will also be made for adopting resource conserving crop rotations.   Please distribute this NSAC alert throughout your networks and stay tuned to the NSAC website for further updates and sign up developments.

NSAC members, the National Center for Appropriate Technology (NCAT) and the Center for Rural Affairs are providing sign up assistance to farmers.   The Center for Rural Affairs is offering a Farm Bill Helpline to answer questions and provide assistance on the CSP.  Call (402) 687-2100 and ask for the Helpline.   The National Center for Appropriate Technology is also offering phone assistance. Call 1-800 346-9140 (English) or 1-800-411-3222 (Spanish).  A wealth of information will also be posted by NCAT on the ATTRA website.

LAST WEEK

Senate Passes Agriculture Appropriations Bill: On Tuesday, August 4 the Senate approved the $23.7 billion agricultural spending bill for 2010 by a vote of 80-17. This action just prior to the August recess opens up the possibility the bill will go to conference with the House in September and maybe, just maybe pass as a normal, stand alone bill by or not too long after the start of the fiscal year on October 1 for the first time in many years. After repeated omnibus bills becoming law months after the start of the fiscal year, final action early this fall would be a welcome relief.

The big winners in the bill are the Women Infants and Children (WIC) feeding program, food safety, international food aid, and rural rental housing. Over 90 percent of total increased funding in the bill goes for those items.

Food and Drug Administration spending would increase by 15 percent to $2.35 billion. (Note: The food safety bill recently passed by the House envisions an additional $1-plus billion in appropriations each year for just the food side of FDA within a few years, raising a serious question of whether such a big jump in funding allocations is possible.)

As we have reported previously, the Senate bill did well by several NSAC rural development program priorities, with significant increases for Value-Added Producer Grants, Rural Microenterprise, and Rural Coop Development Grants. The Senate bill also includes considerably more funding for the Rural Energy for America Program (REAP) than the House bill.

Also on the plus side, unlike last year’s Senate bill, the reductions to farm bill mandatory programs were kept to a minimum and, since they match the House bill, should settle the matter for this year’s bill. This action means Congress has for the most part rejected the Obama Administration’s attempt to cut farm bill conservation spending for 2010, limiting the damage to just the Environmental Quality Incentives Program. EQIP has been consistently scaled back in the appropriations bill for many years.

Another plus, also reflected in the House bill, is an increase in the value of the WIC program’s new fruit and vegetable vouchers to between eight and twelve dollars per voucher. The Institute of Medicine recommended these levels when it first proposed the improved food package two years ago but budget constraints until now had forced lower benefit levels. The opportunity to increase the fruit and vegetable benefit value this year was a result of lower-than-expected food price inflation and a generous contingency fund included in the stimulus bill, a provision promoted by NSAC.

In the mixed-bag category, funding for competitive grant research and extension programs went up by large amounts (Agriculture and Food Research Initiative, tiny amounts (Sustainable Agriculture Research and Education), or not at all (Organic Transitions), revealing perhaps a disturbing bias against the very alternative agricultural systems that are becoming so important to both farmers and consumers alike rather than a commitment to lift competitive grants funding in an equitable, comprehensive manner. In contrast to the Senate bill, the House bill includes a significant increase for Organic Transitions, no increase for SARE, and a modest increase for AFRI. Since the funding levels for these three programs are all different in the two bills, they will be an item open for debate when House and Senate negotiators meet later this year, at which point we hope there will be an equitable outcome.

On the downside, no funding was provided in the bill for the Beginning Farmer and Rancher Individual Development Accounts (IDA) program or the USDA Office of Advocacy and Outreach and its beginning farmer and minority farmer policy coordination and outreach functions.

Several important things happened on the Senate floor. With respect to the Office of Advocacy and Outreach, Senators Feingold (D-WI) engaged in a colloquy with Agricultural Appropriations Chairman Kohl (D-WI) and Agriculture Chairman Harkin (D-IA) to establish both an intent to see the new office funded in the final bill to emerge from conference with the House and to ensure that USDA places the office directly under the Secretary, as prescribed by the 2008 Farm Bill, with equal funding for its small and beginning farmer and minority farmer and farmworker functions.

Senator Tester (D-MT) successfully amended the bill on the floor to cut the funding request for the National Animal Identification System in half. The $14.6 million requested by the Administration was completely eliminated in the House version of the bill.

The Senate also passed a provision sponsored by Senator Sanders (I-VT) to provide $350 million above the spending limit for the overall bill as emergency funding to boost dairy price supports. This funding to have the government buy up excess supply is over and above the $243 million recently announced as an administrative action by USDA. The new additional funding, if approved in the conference committee, will be available should dairy prices not turn around later this year.

As is typical, the Senate named as conferees the entire agriculture subcommittee as well as the full committee chair and ranking member.

Mandatory Funding Footnote: The focus of the annual appropriations debate is over the roughly $23 billion currently available for the agriculture spending bill. However, the bill also provides snapshot updates on mandatory spending for farm bill programs, and all of the big programs are rising. Commodity Credit Corporation expenditures for commodity and conservation programs are projected to shoot up $2.8 billion to $13.9 billion as a result of low commodity prices for several major commodities. Crop insurance subsidies are also rising as more farms are using revenue insurance products and are expected to reach a record $7.5 billion in 2010 after just surpassing the $5 billion mark for the first time in 2008. Also escalating is the supplemental nutrition assistance (food stamps) program, expected to rise by over $7 billion to a record high $56.1 billion in 2010, with a record caseload of some 34 million Americans.

THIS WEEK

Congressional Recess…And No Weekly Update: Both houses of Congress are now on their August recess until just after Labor Day. NSAC will also be taking a break from the Weekly Update for two weeks. We will issue a month of August catch-up issue on Monday, August 31. We wish all our readers the very best during these dog days of summer!

USDA NEWS

Conservation Stewardship Program Sign-Up Starts August 10: On Thursday, August 6, USDA announced the 2009 sign-up period for the new Conservation Stewardship Program (CSP) will run from August 10 through the end of the fiscal year on September 30. A week earlier USDA published an interim final rule for the program.

NSAC issued a press release stressing in particular that farmers interested in the program only need fill out a simple application expressing their intent to participate in the program by the September 30 cut-off date. They will have the entire month of October, after the start of the new fiscal year, to complete the more detailed Conservation Measurement Tool which will be used to determine eligibility, ranking, and payments. Ranking will be done by USDA in November, after which site visits will take place for those accepted into the program, followed by development of the conservation plan and CSP contract. More information is available in the CSP alert above in the Take Action section.

Nearly 12.8 million acres is available for the program for this initial 2009 sign-up, to be followed immediately by the second iteration of 12.8 million in 2010 which producers not enrolled in the inaugural 2009 class can sign up for this winter. Due to the fact this initial 2009 sign-up is happening so late, both the class of 2009 and the class of 2010 will begin implementing contract terms in 2010, with the first payments to be made in October 2010, meaning that as many as 25 million will be enrolled in the program in the coming year.

Several NSAC organizations have issued press releases in response to the roll out of the new CSP, including for instance the Michael Fields Agriculture Institute and Land Stewardship Project. More releases are to follow, as well as a variety field days and workshops to publicize the program and provide educational assistance. The press is beginning to respond — read a good Des Moines Register story on the new CSP here.

NSAC will be issuing a Farmers Guide to the New CSP by early September, and will be offering an analysis of the interim final rule and talking points for the public comment in early September for the public comment period ending September 28.

NOC Secures Stringent Audit and Greater Oversight of Organic Program: On Thursday, August 6, the National Organic Coalition (NOC) announced that USDA’s National Organic Program (NOP) will be subject to audit and oversight by the National Institute of Standards and Technology (NIST). In a letter to NOC, Deputy Secretary Merrigan indicated that NOP has applied to NIST’s National Voluntary Conformity Assessment Systems Evaluation program, which will offer NOP recognition of it accreditation function if NOP complies with established criteria. This is a long-awaited for move that fulfills regulatory requirements for third-party review of NOP and which may result in significant modifications to its accreditation processes. In her letter, Merrigan wrote, “We understand the value of this step as we continue working to strengthen the integrity of the NOP and to build the organic community’s trust in the program.” This breakthrough was the subject of a Washington Post article on August 8.

USDA-DOJ Competition Workshops Announced: On Wednesday, August 5, USDA and the Department of Justice announced they will be holding joint workshops to explore competition and anti-trust issues in agriculture, including monopsony, vertical integration, intellectual property and patents, packer ownership of livestock, and retail concentration. Witnesses are invited to provide examples of anticompetitive behavior.

The workshops are to begin in early 2010 and will be held at locations around the country as well as in Washington, D.C. though dates and specific locations have not yet been announced.

According to Assistant Attorney General Christine Varney, “For the first time ever, farmers, ranchers, consumer groups, agribusinesses and the federal government will openly discuss legal and economic issues associated with competition in the agriculture industry.” You can read the remarks of Deputy Assistant Attorney General Philip Weiser to the Organization for Competitive Markets meeting last week in St. Louis here.

Written comments will be due to DOJ by December 31, 2009 and must be submitted in both paper and electronic form. Details of the agendas, schedules, and related information will be available at www.usdoj.gov/atr.

On a more immediate note, proposed regulations responding to the 2008 Farm Bill directive to develop rules for the long-standing prohibition against undue price preference in livestock markets and to implement a variety of contract agriculture reforms are expected to be issued for public comment in the coming month or two, with final rules to be issued late this year or early next year.

Farm Credit Rule Published: On Friday, August 7, USDA’s Farm Service Agency published a proposed rule in the Federal Register to implement several 2008 Farm Bill credit title provisions. One of them implements a provision backed by NSAC to firm up the FSA policy goal of graduating farmers from government loans to private commercial loans. NSAC proposed the measure as a preferred alternative to arbitrary term limits on direct government borrowing, though Congress unfortunately lifted term limits only on guaranteed loans and not on direct loans.

The proposed rule adds a new paragraph in the introductory section of the farm credit regulations to articulate the graduation goal and also provides greater detail about the agency’s responsibility to work in concert with the borrower to assess training and supervisory needs. NSAC is supportive of the proposal.

The proposed rule also implements a farm bill provision extending homestead protection repurchase rights to the immediate extended family of socially disadvantaged farmers. It also includes a proposal on how to implement a farm bill-driven moratorium on loan acceleration or foreclosure for farmers with an accepted discrimination claim against USDA.

Rural Tour Continues: Secretary of Agriculture Tom Vilsack’s Rural Tour continues through September but some of the dates have been changed. If you have any questions, you may email ruraltour@oc.usda.gov or call USDA at 877-85-RURAL; 877-85-78725. Be sure to check out the website http://www.ruraltour.gov/ and share your thoughts and ideas about the tour and rural America. Or attend one of the events if it is in your area. The remaining dates and sites include:

• August 12 – Bethel, Alaska
• August 17 – Hamlet, North Carolina
• August 19 – Des Moines, Iowa
• August 21 – Kansas City, Missouri
• August 25-27 – California (details forthcoming on location and specific date)
• August 31 – Zanesville, Ohio
• September 28 – Scottsbluff, Nebraska
• September 30 – Las Cruces, New Mexico

USDA Rural Development Names State Directors: USDA continues to announce political appointments to head up USDA state rural development offices. A complete list of the State Directors named to date with their phone numbers and a bio as provided by USDA is available on the NSAC website at https://sustainableagriculture.net/.

State Inspected Meat Interstate Commerce Rule Making Progress: We understand that USDA has sent a draft proposed rule on the interstate shipment of state-inspected meat to the Office of Management and Budget (OMB) for review this past week, putting it in line to be published for public comment sometime soon. Reforming the rules governing the interstate shipment of meat and poultry products was an NSAC priority in the 2008 Farm Bill as an important step for those family farmers and ranchers reliant on the more than 2,000 state-inspected, small and very small, family-owned businesses that provide them processing services.

Robinson Named Head of Small and Disadvantaged Business Utilization: Congratulations to Quinton Robinson, formerly on staff with the Rural Coalition, on being named as the new Director of USDA’s Office of Small and Disadvantaged Business Utilization. In addition to his work with the Coalition, Robinson has also spent 13 years as a congressional staffer, including a stint as assistant counsel with the House Agriculture Committee. We wish him well in his new position!

EPA NEWS

EPA Releases Peer Review of Biofuels Rules: On Friday, August 7, the EPA released a 500-page independent peer review of their measurement of ethanol’s climate impact. The EPA life cycle analysis of renewable fuels including corn ethanol has sparked a great deal of controversy when it was released in May and led to a successful push by House Agriculture Committee Chair Collin Peterson (D-MN) as part of the House-passed climate change bill to prohibit EPA from including indirect land use change in its calculations.

Both Peterson and environmental groups claim the peer review backs their opposing positions on the matter. Clearly, the peer review will not be the last word on the matter.

The controversy had its start in the 2007 Energy Act which mandated the expansion of biofuels to 36 billion gallons annually by 2022 but stipulated that biofuels must produce lower lifecycle greenhouse gas emissions than gasoline. According to EPA’s analysis, corn ethanol did not pass this test when indirect land use change is taken into account.

DULY NOTED

NSAC Annual Summer Meeting a Success! On August 2-4, NSAC staff and member organization representatives convened in Lawrence, Kansas for a productive and fun summer meeting.  The meeting facilitators, Brad Redlin of the Izaak Walton League and Scott Marlow of RAFI-USA, led participants through a series of discussions surrounding NSAC’s policy priorities.  During breakout sessions on Monday, participants discussed and developed action plans for each of NSAC’s four issue committees.  On Tuesday, members began big-picture strategizing for the 2012 Farm Bill.

On Monday afternoon, participants took a break from the planning sessions to visit MJ Ranch, a local enterprise that raises 100% grass-fed beef.  The farm tour was followed by a picnic at a nearby park catered by Local Burger, a “fast food” restaurant in downtown Lawrence that features organic, local, and sustainable fare.  Many thanks to the Kansas Rural Center for hosting a wonderful meeting!

National Small Farm Conference Approaching: The 5th National Small Farm Conference, entitled “Roadmap to Success for Small Farmers and Ranchers,” will take place September 15-17 in Springfield, Illinois.  The event features numerous short courses, discussion sessions, and exhibits designed to foster collaboration between stakeholders in the small farm community.  The conference is hosted by the University of Illinois Extension in partnership with the USDA’s Cooperative State Research, Education, and Extension Service (CSREES).  Visit the conference web site for the full agenda and for registration information.  Be sure to register by August 25th to receive the early bird rate!

ERS Releases Data on Procurement and Contracting by Organic Handlers: On Friday, August 7, the Economic Research Service announced a database containing results from the 2004 and 2007 Nationwide Surveys of Organic Manufacturers, Processors, and Distributors. Data on nine commodity groups and 45 commodities, 1,013 procurement facilities, and contracts from 620 facilities are available. To access the database, click here.

Farm Economic Data Trio: This past week, USDA’s National Agricultural Statistics Service (NASS) released its annual farm production expenditures survey which indicates production expenses rose 8.3 percent from 2007 to 2008 to $307 billion, including a 27 percent increase in fertilizer prices.

Also last week, USDA’s Economic Research Service (ERS) released its first calculation of 2008 net farm income, which it estimates at $87.3 billion, up from $71.1 billion in 2007 and considerably above the 10-year average of $60 billion. ERS will be issuing the first 2009 estimate at the end of August which will reflect lower prices for many commodities as well as reduced energy and fertilizer costs.

Rounding out the economic news from last week was another NASS report indicating that farm real estate values fell for the first time since the farm crisis of the 1980s. Land prices fell 3.2 percent since 2008 to an average of $2,100 an acre, the first dip since 1987. On the other hand, cash rents for cropland, lagging the other economic news by a year, increased this year by $4.50 an acre to an average of $90 an acre. Farmland prices have been in a sustained boom for most of the past decade.