New farm bill contains commodity-specific provisions

The new average crop revenue (ACR) option and a permanent disaster program may be attracting much of the attention, but the Food and Energy Security Act of 2007passed by the Senate Agriculture Committee has plenty of other features.

Although the bill has a strong Midwest flavor because two of its authors — Committee Chair Tom Harkin, D-Iowa, and Sen. Kent Conrad, D-N.D. — hail from the region, it contains provisions that could help Southern producers. (Georgia Sen. Saxby Chambliss is also getting author’s credit.)

But the legislation also cuts a broader swath than previous farm bills, ranging from higher loan rates and target prices for program crops to new funding for cellulosic ethanol to a higher asset limit for food stamp recipients.

“This bill builds on the success of the 2002 farm bill, but at the same time provides investments in new priorities, such as making our nation more energy independent,” said Conrad.

“This bill is really about making sure we have secure, domestic sources of food and energy. It provides resources so we can find our energy in the Midwest, instead of the Middle East. We put more resources into nutrition, conservation, and securing the safety net for our family farmers and ranchers.”

With the ag committee’s approval, the full Senate is expected to consider the bill this week (Nov. 5). If the Senate passes a bill, it will go to a House-Senate conference committee for reconciliation with the bill passed by the House in July.

The Senate Ag Committee bill:

• Creates a permanent disaster program for family farmers and ranchers.

• Increases loan rates and target prices for crops like wheat, barley, soybeans and oilseeds such as sunflowers and canola.

• Creates a new sugar-to-ethanol program and increases the beet sugar storage and sugar loan rates.

• Reforms payment limits by eliminating the triple-entity rule and requiring payments to be attributed to an actual person rather than a legal entity.

• Invests about $2.5 billion in tax credits, grants and loan guarantees, when joined with Finance Committee legislation, to develop the emerging biofuels industry and other renewable energy sources.

• Continues the Conservation Reserve Program, as well as fully funding the Wetlands Reserve Program and the Grassland Reserve Program.

• Expands the Fresh Fruit and Vegetable Program.

Cotton-specific provisions of the bill include:

• An effective safety net for cotton, based on a non-recourse marketing loan of 52 cents, counter-cyclical payments triggered off of a target price of 72.25 cents and a direct payment of 6.67 cents.

• Loan schedule premiums and discounts based on the four-year, moving average of the designated spot market regions, weighted by regional production.

• An economic adjustment program for textile manufacturers available from Aug. 1, 2008-July 31, 2013, at a rate of 4 cents per pound. The bill requires the assistance be used only for specific purposes, including modernization of facilities.

• Storage credits for the 2008-12 crops at the same rate and basis as for the 2006 crop.

• An extra-long-staple (ELS) loan rate at 79.77 cents. The bill also continues the ELS competitiveness program.

The bill institutes significant reforms in payment limits including elimination of limits on marketing loan gains and loan deficiency payments; maintaining the limit on direct payments at $40,000 and lowering the limit on counter-cyclical payments to $60,000.

The bill eliminates the three-entity rule and provides for the direct attribution of payments; provides for spouse eligibility and liberalizes spouse eligibility under certain circumstances; and phases in a reduction in the allowed income levels under Adjusted Gross Income (AGI) means test. It exempts those with 66.66 percent of income from farming, ranching or forestry operations.

Sens. Byron Dorgan, D-N.D. and Chuck Grassley, R-Iowa, announced they will offer an amendment to tighten payment limitations during the Senate’s consideration of the farm bill.

The amendment would place a “hard cap” of $250,000 on crop subsidies per farmer, a cut from the current $360,000. The payments would be tracked to an individual and would require 1,000 hours of labor or management by the recipients who do not provide land, equipment or capital for a farm.

“The farm program no longer works the way it was intended to work,” said Dorgan. “It was intended to help family farmers get through tough times. Today, too often, it helps giant corporate farms pad their balance sheets. We intend to change that. The way the farm program works today diverts needed resources away from family farmers.”

Following the Senate Ag Committee passage, Sen. Harkin’s staff issued a press release on the expansion of the Fresh Fruit and Vegetable Program that Harkin wrote into the 2002 farm bill.

Harkin said the increased investment will enable up to 4.5 million elementary students to have access to the program, more than a 20-fold increase from the 175,000 school children who attended participating schools in the 2006-07 school year.

“The farm bill is about food and nutrition and should be an opportunity to encourage healthy diets and promote health,” said Harkin. “With this historic expansion of the Fruit and Vegetable Program, not only do we make a tremendous investment in the health of our children, but we also expand the idea of what a farm bill can and should be.”

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