FARGO, N.D. - The conference committee farm bill offers long-term certainty, but garnered mixed reactions from producers and agriculture industry officials in the Upper Midwest, some of whom lost on key points.
The House passed the 949-page bill Jan. 29 with a 251 to 166 vote, and a Senate vote is expected Feb. 4.
“Miracles do occur,” said House Agriculture Committee Chairman Frank Lucas, R-Okla., adding that he thinks his House committee and the conference committee had proceeded properly by working together and should be considered a model for the House in the future.
The bill - so far called simply the Agricultural Act of 2014 - offers cuts of $23 billion over 10 years, although skeptics wonder if that will materialize. The bill cuts the Supplemental Nutrition Assistance Program - food stamps - spending by $9 billion over 10 years, or 1 percent. That’s less than the $40 billion in cuts advocated by House Republicans and double what Senate Democrats had supported.
Politico said the bill restricts food stamps by requiring households in some states to show federal heating assistance of at least $20 to get increased food stamps.
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Farm groups and their leaders are generally cheered by strengthened crop insurance protection. Most fought in vain against tying it to conservation compliance. As long expected, the bill ends the annual $5 billion direct payments to farmers, which was paid regardless of crop production or crop values. Instead, farmers now will get shallow loss coverage with “look back” calculation periods of record-high commodity prices.
“Passing a strong, long-term farm bill is a top priority for us, so that our producers will have the confidence and tools they need to run their operations,” said Sen. John Hoeven, R-N.D., who had been one of the conferees. Also on the committee was Rep. Collin Peterson, D-Minn., ranking Democrat on the House Agriculture Committee, and a key player in the bill’s development.
Like the current bill, this one is slated to run for five years, although budgeting projections run 10 years.
Among the key elements of the bill:
Crop insurance: Despite criticisms, the bill strengthens crop insurance and allows farmers the “necessary safety net to keep a secure, affordable and healthy food supply,” said Bing Von Bergen, a Moccasin, Mont., wheat farmer and seedsman. Von Bergen is president of the National Association of Wheat Growers.
Similarly, the American Soybean Association said the bill offers “practical risk-management.”
The committee dropped language from the Senate version that would have cut federal crop insurance premium support by 15 points for recipients with adjusted gross incomes of more than $750,000. The federal government subsidizes about 62 percent of farmers’ crop insurance premiums, at a cost of about $9 billion, but smaller farmers get smaller subsidies.
The bill makes enterprise units permanent, which has been important for northern corn growers who have opted for this level of coverage for the past three years. It includes provisions that favor farmers who have adequate bushels but poor-quality corn that is discounted because of weather.
North Dakota Ag Commissioner Doug Goehring credited his fellow Republican, Hoeven, with making sure the conservation compliance and crop insurance provision was not retroactive. Hoeven included language to “encourage” U.S. Secretary of Agriculture Tom Vilsack to use an acre-for-acre ration for wetland mitigation and funding.
“Many farmers have expressed concerns about the conservation compliance being tied to crop insurance,” said Rep. Kevin Cramer, R-N.D. “Let me be clear on this - you can still buy crop insurance at full price without the federal subsidy, but the subsidy is 60-plus percent of the premium. So, risk-reward probably doesn’t make sense for most people.”
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A product of a needed compromise, Cramer said the crop insurance measure was a necessary evil for the overall bill to gain passage. He called the bill a victory for North Dakota agriculture.
Bob Wisness, North Dakota Grain Growers Association president from Arnegard, N.D., said he hadn’t been able to digest much of the fine print. His organization supported crop insurance covering shallow losses. The NDGGA’s “No. 1 concern” in the bill, however, was linking crop insurance with conservation compliance, Wisness said.
According to Politico, the bill will allow organic producers by 2015 to insure their crops through the Federal Crop Insurance Agency at prices tied to retail value. It allows for “split operations” in which farmers grow for both organic and conventional markets.
Livestock Indemnity Program: The renewed LIP program will cover 75 percent of market value for “excessive livestock losses due to adverse weather, including blizzards,” the South Dakota Farmers Union said. Market value would be determined the day before the death of the animals. It would be retroactive to 2012 and 2013 losses.
Jason Zahn, president of the North Dakota Stockmen’s Association, praised the LIP program. A trio of programs - the LIP, the Emergency Livestock, Honeybees and Farm-Raised Fish Assistance Program and the Livestock Forage Program - in the bill serve as needed safety nets. He said they’ll help ranchers affected by the infamous Oct. 4 blizzard that killed tens of thousands of cattle, sheep and horses in the region.
“The hundreds of producers who lost cattle may soon be offered relief and certainty going forward,” said Rep. Kristi Noem, R-S.D., who was on the conference committee.
Country of Origin Labeling: The National Farmers Union and others have promoted COOL as a way to allow consumers to know when they’re buying American-produced meats.
Also among those who applauded the provision was Rep. Tim Johnson, D-S.D.
The COOL provision prompted the National Cattlemen’s Beef Association to oppose the entire farm bill, saying it has already caused “steep discounts to our producers and caused prejudice against our largest trading partners.” National chicken and pork groups also opposed the provision. Other livestock groups, including the U.S. Cattlemen’s Association and R-Calf, want COOL to remain in place.
Doyle Johannes, president of the North Dakota Farm Bureau, said the inclusion is bad. “It sounds like Canada has the paperwork ready to go to the World Trade Organization with big sanctions on the U.S. because the WTO has ruled that provisions of COOL are not legal,” Johannes said. “This will have a major impact on North Dakota - especially on corn and sugar beets.”
The bill requires the U.S. Department of Agriculture to conduct an economic analysis of the bill’s effects within six months.
Dairy: Conferees dropped the Dairy Market Stabilization Program promoted by Peterson, dubbed supply management. The provision would have required farmers to cut production when prices fall below trigger levels. House Speaker John Boehner, R-Ohio, called it a “Soviet-style” program and it was dropped days before the final agreement.
Peterson said a key element in the new plan will allow USDA to buy dairy products for government feeding programs rather than just commodities, an idea that appealed to the International Dairy Food Association because it will mean buying the products of its members.
Joe Neaton is the Minnesota state president of the National Farmers Organization and said NFO was disappointed about losing dairy supply management.
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Farm supports: Tom Lilja, executive director of the North Dakota Corn Growers Association, said the bill allows producers to update base acres for 2009 to 2012. The last base update was in the 2002 farm bill.
“This will allow corn growers in the northern region who have been planting corn recently to have their bases more accurately reflect the current practices versus the practices of the 1990s,” Lilja said. “Fortunately, the conference committee did not include tying current-year plantings to payments so that farmers would plant for the payment and lead to surpluses and lower prices that were experienced in the 1980s.”
Sugar: The bill keeps current sugar policy, which mirrors versions passed in 2013 by both the House and Senate. The industry, including the American Sugarbeet Growers Association, said the provision gives the industry hope of “weathering the storm” of current pricing, which plummeted 50 percent from a year ago.
Biofuel blends: The new farm bill removes subsidies for biofuel blending pumps in rural areas. The provision could make it more difficult for gasoline blended with higher concentrations of ethanol to find its way to rural areas, where demand for the fuel is greatest.
That could make it more difficult for the U.S. to implement the renewable fuel standard, which has been a contentious issue since the U.S. Environmental Protection Agency proposed reducing it by 1.5 billion gallons, causing price decline concerns among corn growers.
Breaking no new ground
Goehring said the bill doesn’t break much new ground, but he’d been watching certain pieces of it. He was happy about increased funding for specialty crop block grants for research on crops such as flax, sunflowers, dry beans and lentils. Goehring liked the reauthorization of the federal Market Access Program and the Foreign Market Development program for supporting agricultural trade. He said the bill offers some important rural water management money, including about $500 million identified for flood protection-related projects in the Red River Valley.
Meanwhile, Matt Flikkema, president of the Montana Grain Growers Association, said his organization feels “very good about what’s been done.”
Doug Sombke, president of the South Dakota Farmers Union, praised the bill for covering “80 percent of National Farmers Union’s priorities.”
David Iverson, Astoria, S.D., chairman of the World Initiative for Soy in Human Health program, said he also supports the bill.
“It provides the risk management programs that will protect farmers in difficult times,” he said. “The bill also secures funding for many agriculture research programs and export programs. The importance of supporting our export markets is very critical, as over 50 percent of U.S. soybeans are exported.”
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Doyle Lentz, a Rolla, N.D. farmer and president of the North Dakota Barley Council, said securing a new farm bill has been a long, difficult process.
The legislation that passed the House is good for livestock producers, he said, and it contains funding for research to combat scab and other crop diseases.
But Lentz and several other farmers who talked with Agweek said USDA will face major challenges in implementing the farm bill after it’s approved. Given that, the farmers said, producers will still be dealing with uncertainty as they begin planting this spring.
Urbanites lend input
Some urban legislators in the region also weighed in on the bill. Rep. Betty McCollum, D-Minn., who serves on the House Appropriations Committee, said she voted in favor of the compromise version because the region’s agricultural economy is “critical to Minnesota’s economy.” She said the Republicans were wrong to have proposed deep cuts to the food stamp program.
Rep. Rosa Delaura, D-Conn., called the measure a reverse Robin Hood deal. “Instead of working to end hunger, this farm bill takes food from the plates of 1.7 million Americans,” she said. “Simultaneously, the negotiators have chosen, against the will of a majority of Congress, to re-open farm subsidy loopholes and strip out payment limits, so that millionaires and wealthy agribusinesses can continue to get handouts.
“Behind closed doors, negotiators more than doubled the annual cap on primary commodity payments, from $50,000 to $125,000. Then they reopened the loophole - closed by both the House of Representatives and the Senate - that allows large wealthy farmers to collect far more than the nominal payment limit. And they did this while cutting $8.5 billion from food stamps.”
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Editor’s note: Reuters contributed to this report.
