NSAC's Blog

Weekly Update – January 2, 2009

January 3, 2009


Payment Limitation Loophole Remains: Sadly, after vetoing the 2008 Farm Bill twice under the banner that it did not include enough reform to commodity programs, the Bush Administration punted on its opportunity to administratively enact real reform. As we reported in the December 19 version of the Weekly Update, USDA issued a press release announcing a major rulemaking on commodity programs on that Friday evening, just as we went to press. The interim final rule was finally unveiled this past Monday, after first appearing on the USDA website on Christmas Eve. While the new rule makes tiny improvements to the statutory requirement that commodity payment recipients be actively engaged in farming, it unfortunately leaves in place the primary loophole allowing individuals to count themselves as active farmers by doing no farm labor and contributing in any vague way to the “management” of a farm.

On Tuesday, Senator Chuck Grassley (R-IA) held a news conference in which he called on President-elect Obama and his nominee for USDA Secretary Tom Vilsack to complete the job of tightening up the rules now that the current Administration has failed to close the loophole. Grassley continues to call for a quantifiable test that measures what constitutes a significant contribution to the management of a farm.

Together with Senator Byron Dorgan (D-ND), he plans to re-introduce the Dorgan-Grassley payment limitation bill next week when Congress reconvenes. As it has in the past, that bill would define the actively engaged in farming standard as any combination of labor and management equal to at least 1,000 hours annually or 50 percent of the labor and management required for a person’s share of the operation, whichever is less. Current FSA regulations use the 1,000 hour test for labor, but have no clear standard for management. Both current law and the Dorgan-Grassley bill exempt crop share landlords from the actively engaged in farming requirement.

In nibbling around the edges of real reform, the new USDA rule requires all shareholders in a corporation to meet the ill-defined management test. Under the old rule, some shareholders were excluded from even that weak test. The new rule also says the contribution to management has to be “regular and substantial” and “documented” – but again, without any objective, quantifiable standard to measure against. Senator Grassley referred to the changes for stockholders as “much about nothing.”

As an interim final rule, the new requirements go into effect immediately, but are open for public comment until January 28. SAC will submit comments on behalf of its member organizations, while also pressing the new Obama team of USDA appointees who will be in charge of making turning the interim final rule into a final rule to complete the job of real reform. Obama’s agricultural platform specifically calls for reforming the actively engaged in farming rules.

Controversial Animal ID Requirement Withdrawn: In September, USDA’s Animal and Plant Health Inspection Service (APHIS) issued a directive requiring premises registration under the supposedly voluntary National Animal Identification System for any producer who participates in any federally regulated animal disease program. In a revised memo to its field staff issued on the Monday before Christmas, APHIS withdrew the controversial requirement and instead indicated it is considering a formal rulemaking to do what it tried to do via a simple administrative directive. Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) led the charge to get the directive retracted.


Stakeholder Input Sought for NIFA: On Friday, USDA’s Cooperative State Research, Education, and Extension Service (CSREES) issued a request for stakeholder input into the formation of its successor agency, the National Institute for Food and Agriculture (NIFA). The Federal Register notice says the agency intends to consider stakeholder input received in written comments in developing the proposed new agency for approval by USDA.

The 2008 Farm Bill requires the establishment of NIFA to replace CSREES no later than October 1, 2009. Back in October, USDA issued “guiding principles” that will govern the establishment of the new agency.

SAC’s Research and Extension Committee will consider whether to submit comments in the coming weeks. All public comments must be received by February 6, 2009.

Reminder – AFRI Program Announcement Now Available: The December 19 edition of the Weekly Update contained quite a few major breaking stories one of which we will repeat briefly here. A detailed program announcement reflecting what the eventual FY 2009 Request for Applications (RFA) for the Agriculture and Food Research Initiative (AFRI) — [the successor to the National Research Initiative and the Initiative for Future Agriculture and Food Systems] — will consist of was posted on the CSREES website on December 18. A planned upgrade of the grants.gov website has forced USDA to delay the release of the official RFA until late January 2009, but the program announcement has more than enough information to begin fashioning proposals.

Happily, many of the priorities SAC supported have been reflected in the program announcement to one degree or another, including:

– small and medium size farm prosperity, including economic and environmental integration of on-farm production and conservation systems, on and off-farm business activities including local and regional food systems, and farm entrepreneurship and farm transition/entry education (about $4.8 million available)

– managed ecosystems, including multifunctional farm production systems and biodiversity on working pasture and range land (about $5.3 million available)

– sustainable agroecosystems long term program, requesting “proof of concept” proposals for what would become a long-term (10 year), multi-farm, multi-farmer study focused on soil ecology and carbon sequestration (about $1 million available)

– a joint AFRI-EPA program on enhancing ecosystem services from working agricultural land (about $4.5 million available)

– reducing animal pharmaceuticals, antibiotics, and hormones in soil and water, as part of a larger $4.3 million Water and Watersheds program

– classical plant and animal breeding, as one aspect of larger programs in Plant Biology and Environmental Stress, Plant Genome, Genetics, and Breeding, Plant Breeding and Education, and Animal Genome, Genetics, and Breeding program


SupportVilsack.com Site Launching: A new website in support of the confirmation of former Iowa Governor Tom Vilsack to be the next Secretary of Agriculture is launching this weekend at www.supportvilsack.com with personal statements of support from, among others, Bob Scowcroft, Denise O’Brien, Gary Hirshberg, and Walter Robb.

ERS Details Million-Dollar Farms: On Monday, USDA’s Economic Research Service released a 47-page bulletin describing the 2 percent of all US farms with gross sales over $1 million a year that now account for 48 percent of the total sales value of US agricultural production. The large sales volume operations, which are particularly concentrated in dairy, livestock, and fruits and vegetables, slightly more than doubled their share of total agricultural receipts between 1982 and 2002. Relatively few million dollar farms specialize in grains and hence million dollar farms account for only 16 percent of government commodity payments, despite their 48 percent market share. Seven percent of million dollar farms and 21 percent of $5 million farms are nonfamily corporate farms. Million dollar farms represent 62 percent of all contract production and 63 percent of million dollar farms use production or marketing contracts. The report, entitled Million-Dollar Farms in the New Century, was written by Robert Hoppe, Penni Korb, and David Banker.

Categories: General Interest

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