Work on the new farm bill has begun in earnest with release of a proposal from agriculture leaders in the House of Representatives.
House Agriculture Committee Chair Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) on Friday released their "discussion draft" of what is being called the Federal Agriculture Reform and Risk Management (FARRM) Act of 2013.
In releasing the bill, which has bipartisan support, they said it would cut spending, reduce the size of government and make commonsense reforms to policy.
"It’s a responsible and balanced bill that addresses Americans’ concerns about federal spending, and reforms farm and nutrition policy to improve efficiency and accountability," Lucas said.
The bill was scheduled to advance to his committee this week in preparation for full House consideration this summer.
The discussion draft sets Congress on a path to finally completing a five-year farm bill Peterson said. Congress failed to pass a five-year policy reform package last year, opting instead for a nine-month extension of the old measure.
"It closely resembles the bipartisan bill passed by the Agriculture Committee last summer, including a commonsense commodity title that will work for all producers, much-needed reforms to dairy programs and continued support for the sugar program," he added.
The proposal also builds on the investments the 2008 Farm Bill made to fruits and vegetables, farmers markets and local food systems.
"While I do believe that there are more responsible ways to reform nutrition programs, the bottom line is that this is the first step in the process and it is past time to pass a five-year farm bill," Peterson said.
National Farmers Union (NFU) President Roger Johnson said Friday that he was pleased to see the House Committee on Agriculture taking action on this important piece of legislation.
Johnson was especially pleased to see that target price protection was included in the bill - especially target prices that are balanced and set at a meaningful level.
"The inclusion of stronger protection against long-term price collapse for all commodities in all regions is also a step in the right direction and the strong support for crop insurance is also a positive element for U.S. family farmers and ranchers for when natural disasters strike," he added.
But Johnson said NFU was "deeply disappointed" that the energy title of the bill has no mandatory funding for programs that "are critical to our country’s energy independence and ending our reliance on foreign oil."
The bill includes language to "study" Country-of-Origin labeling (COOL) for meat. Johnson called that "disheartening and unnecessary" since the World Trade Organization has already ruled that the law is in compliance with our trade obligations.
He said he was alarmed by the "unwarranted attempt to strip consumers of their right to know where their meat comes from."
The organization was encouraging the House to consider a more moderate approach to its plan for reducing funding for programs that help people who are "food insecure" in this country, Johnson said. "Just as farm safety net programs are important for farmers facing hardship, nutrition programs provide critical assistance to consumers in difficult times."
Johnson said it is encouraging to see some momentum on the farm bill since the existing extension expires on September 30.
FARRM ACT KEYS
According to Lucas and Peterson:
• The bill will save nearly $40 billion in mandatory funds, including the immediate sequestration of $6 billion;
• FARRM repeals or consolidates more than 100 programs;
• The bill would eliminate direct payments, which farmers received regardless of market conditions. It was widely predicted that direct payments would disappear in farm bill discussions last year, but the extension now in effect preserved them;
• The draft bill streamlines and reforms commodity policy, saving nearly $14 billion while also giving producers a choice in how best to manage risk;
• It includes the first reforms to the Supplemental Nutrition Assistance Program (SNAP) since the Welfare Reform Act of 1996, saving more than $20 billion;
• The bill would consolidate 23 conservation programs into 13, improving program delivery to producers and saving more than $6 billion;
• It also builds on previous investments to fruit and vegetable production, farmers markets and local food systems.
According to Lucas and Peterson, the bill includes several regulatory relief measures to help mitigate the burdens that farmers, ranchers, and rural communities face.
The House Agriculture Committee was scheduled to consider the legislation during a meeting on May 15.
Jerry Kozak, President and CEO of the National Milk Producers Federation said he was pleased that the House leaders’ proposed farm bill contains dairy program reform provisions based on the Dairy Security Act - the same provisions that were included in last year’s bill that the committee approved.
The DSA provisions, he said, update the badly frayed dairy safety net, and enjoy strong support among dairy farmers nationwide.
"The DSA provides the right combination of effective risk management for dairy farmers while minimizing program costs to the taxpayer," Kozak said.
"An alternative to the DSA provisions, expected to be offered by Reps. Goodlatte and Scott, is unfortunately not fiscally responsible and could return us to the bad old days of huge price-depressing dairy surpluses," Kozak said.
The expected Goodlatte-Scott amendment would "guarantee cheap milk for processors while dulling market signals to farmers" through margin insurance payments.
Kozak fears that if that provision went into the farm bill and then milk prices fell sharply or feed costs soar – both common occurrences in recent years – government costs of the dairy program could spiral out of control.
A day earlier, on May 9, the Senate Agriculture Committee released its version of a farm bill, also containing the DSA provisions. The dairy title remains largely as it was in the farm and food bill that passed the Senate last June.
Kozak commended the efforts of Chair Debbie Stabenow (D-MI) and Ranking Member Thad Cochran (R-MS) for their efforts to pass the DSA into law.
"The NMPF is part of a coalition of more than 50 state and national farm groups that have been working since 2009 on replacing outdated dairy programs that don’t work, with a new safety net that reflects the realities of dairy farming in the 21st century," Kozak said.
Dairy farmers throughout the United States support the proposal that both Agriculture Committees will be reviewing next week, he said.
Wisconsin’s Dairy Business Association (DBA) takes the opposite view of the dairy title in the farm bill. Their members continue to oppose the supply management provision called the Dairy Market Stabilization Program (DMSP) outlined in the Dairy Security Act.
Laurie Fischer, DBA’s Executive Director said that several members of the Wisconsin delegation – Reps. Sensenbrenner and Duffy - are now on record opposing the DMSP portion of the potential farm bill.
The group’s members oppose that part of the program because it would reduce farmer’s milk checks during times of poor margins, meaning farmers would either have to get paid less (or not at all) for the portion of their milk production over their existing base or they would have to discard part of their milk production.
"Penalizing milk production in certain states to manage overproduction in others is an unfair and inappropriate approach," Fischer said. "We believe margin insurance on its own represents the best policy to manage our milk production and markets today and in the future."
The DBA has written to House and Senate Agriculture Committee leaders, urging them to support margin insurance for dairy farmers without tying it to a supply management program.
They said they are opposed to the Dairy Security Act’s expansion of government intervention into dairy markets, artificially increasing prices and the costs of dairy products for consumers.
"As an organization comprised of both dairy producers and processors, we are in a unique position to explain why the Dairy Freedom Act (the Goodlatte-Scott Amendment) is the best option for all of us in the dairy industry," wrote DBA president and Jerry Meissner in the association’s letter to Congressional leaders.
Meissner is the owner of Norm-E-Lane, Inc., a 2,000-cow operation near Chili.
"As producers and processors in Wisconsin, America’s second-largest dairy-producing state, we can tell you why the supply management program included in the Dairy Security Act would be the worst thing for our growing industry," he added.
Several recent analyses found that both the Dairy Freedom Act and DSA are "effective in providing catastrophic risk insurance" for stable and growing dairy farms.
The key difference between the two proposals is that the Dairy Security Act contains the supply management provision called the Dairy Market Stabilization Program (DMSP), while Goodlatte-Scott does not.
"The DMSP adds even more government intrusion into an already highly regulated dairy industry," the letter continues, "and would impose new and costly regulations on the nation’s dairy processors.
Among other requirements, processors would be forced to keep extensive production records for each dairy farmer, to withhold payments from those farmers when the program kicks in and to remit the revenues to USDA.
The DBA letter notes that dropping the supply management program and adopting the Goodlatte-Scott dairy provisions would represent a true compromise "that is broadly supported and won’t stand in the way of moving the 2013 Farm Bill forward."
Members of the DBA recently met with House Speaker John Boehner in his Capitol office to convey their opposition to the supply management provisions in the proposed farm bill.