A recent Congressional Research Service (CRS) report, “Farm Bill Proposals and Legislative Action in the 110th Congress” (March 22), provided an excellent overview of the important factors influencing the 2007 Farm Bill debate, as well as a summary and overview of “proposals by national organizations.”
On page two, the CRS set the stage for the Farm Bill discussion by explaining that, “Rapid increases in the futures market prices of corn and other commodities since the summer of 2006 have contributed to a lower March 2007 baseline for farm program spending. Projected spending for government commodity payments under current law is projected to be $42.4 billion for the FY2008-FY2013 period, which is about $30 billion lower than actual spending in the previous six years. Baseline estimates for mandatory conservation and food stamps program for the next six years are higher compared to the previous six years. Funding for mandatory conservation programs under current law is estimated at $26.5 billion and food and nutrition assistance is estimated at $225.8 billion for FY2008-FY2013.”
In addition, the report noted that, “The House and Senate are in the process of completing an FY2008 budget resolution, which will determine budget parameters for the 2007 farm bill. By April 2007, both chambers are expected to complete action on the resolution, which will likely include a specific multi-year allocation to the Agriculture Committees for the new farm bill. Once given the new allocation, the Agriculture Committees will craft changes in policy to fit the new farm bill within the budget allocation. The Senate version of the FY2008 budget resolution (S.Con.Res. 21) contains a $15 billion reserve fund for the farm bill (above baseline) but would require the spending to be offset with reductions in other federal spending” (pages 2 and 3).
Although not included in the CRS report, the House version of the FY2008 budget resolution contains a $20 billion reserve fund for the Farm Bill, which under pay-as-you-go spending rules, would also require offsets.
Beyond the importance of budget considerations, the CRS indicated on page three that, “Initially, agreement in the Doha Round of multilateral trade negotiations was expected to converge in 2007 with the expiration of the 2002 farm bill, well before the expiration of Trade Promotion Authority (TPA), which provides for expedited congressional consideration of trade agreements. Many policymakers wanted a Doha Round agreement so that the next farm bill could be made consistent with new farm trade rules. However, progress on the Doha Round negotiations stalled in 2006. Now many in Congress are seeking to write a new farm bill without regard to any future Doha Round agreement. Nevertheless, this backdrop of negotiations and the potential for litigation could potentially influence the choices U.S. lawmakers have in designing new farm policies. EU officials have publicly stated that changes to U.S. domestic support programs suggested by the Bush Administration’s farm bill proposal do not go far enough in meeting Doha Round objectives for farm trade policy reform.”
After documenting Congressional hearing activity, the CRS report focused on the Administration’s 2007 Farm Bill proposal, and noted that, “For all areas in the farm bill, the Administration requests $5 billion more than the 10-year Office of Management and Budget (OMB) baseline, according to its own estimates. Commodity programs would receive $4.5 billion less than the $74 billion 10-year baseline, and conservation would receive $7.8 billion more than the $49 billion baseline. CBO estimates that these proposals would increase spending by $9.9 billion for the FY2008-FY2017 period relative to CBO’s March 2007 baseline budget. This is twice the Administration’s $5.0 billion estimate over the same 10- year period” (page 6).
Beginning on page seven, the CRS report then provided a recap of the following 2007 Farm Bill proposals, or positions (click on link for proposal or position detail).
* National Association of State Departments of Agriculture (brief overview on page seven of CRS report).
* National Farmers Union (Ibid at page seven).
* American Farm Bureau Federation (page eight).
* American Farmland Trust (page eight).
* National Corn Growers Association (page eight).
* National Association of Wheat Growers (page nine).
* National Milk Producers Federation (page nine).
* Specialty Crop Farm Bill Alliance (page nine).
* National Association of Conservation Districts (page nine).
* Defenders of Wildlife (page 10).
* Center for Rural Affairs (page 11).
* 25 x 25 Renewable Energy Alliance (page 12).
* Renewable Fuels Association (page 12).
* Chicago Council on Global Affairs (page 12).
* Institute for Agriculture and Trade Policy (page 13).
* Oxfam America (page 13).
The report then highlighted Congressional action beginning on page 14, noting that, “In the House, two comprehensive legislative proposals have been introduced that seek broad-based changes to existing farm legislation.”
* H.R. 1551, Healthy Farms, Foods, and Fuels Act of 2007 (page 14-15). HR 1551- Legislative Recap. Related Bills- S. 919.
* Equitable Agriculture Today for a Healthy America Act (EAT Healthy
Act); [press release] (page 15). H.R. 1600- Legislative Recap.
UPDATED May 8, 2007
* The Farm, Nutrition, and Community Investment Act. H.R. 2144
UPDATED May 11, 2007
* The Food & Agriculture Risk Management for the 21st Century Act (FARM 21) – “Under this proposal, the current system of farm subsidies – counter-cyclical, loan deficiency, income loss, and direct payments – would gradually be transitioned to a more cost-effective and responsive system of farmer- held ‘risk management accounts’ (RMAs) and revenue insurance tools.”
Related Senate action: “New ag direction offered by Lugar and House colleagues.”
UPDATED May 17, 2007
Title: To amend conservation and biofuels programs of the Department of Agriculture to promote the compatible goals of economically viable agricultural production and reducing nutrient loads in the Chesapeake Bay and its tributaries by assisting agricultural producers to make beneficial, cost-effective changes to cropping systems, grazing management, and nutrient management associated with livestock and poultry production, crop production, bioenergy production, and other agricultural practices on agricultural land within the Chesapeake Bay watershed, and for other purposes.
Meanwhile, a news release from the House Ag Committee stated yesterday that, “Today the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a hearing to review proposals to amend the commodity provisions of the 2002 Farm Bill. Congressman Bob Etheridge of North Carolina is Chairman of the Subcommittee.
“‘Today we heard in detail from major commodity groups about what their members would like to see in the next Farm Bill and what they think of other proposals being offered,’ said Chairman Etheridge. ‘In general, the framework of the current farm safety net for program crops enjoys strong support in farm country. Given the declining budget baseline for farm programs, the Subcommittee will have to work in a bipartisan manner if we want to further build upon the strong fundamental structure of that is already in place.’”
The opening statements of all the witnesses are available here.
DTN reporter Chris Clayton noted in an article from yesterday that, “Lawmakers face a tight budget and must fit commodity programs in a framework of about $74 billion in spending or cut funds in other parts of the farm bill if they want more money for commodities. At the same time, many of the major program crop groups say they like the current farm programs — as long as there are changes made to increase the payments for their own commodities. That left the National Corn Growers Association out on an island, alone, with its plan to create a counter-cyclical program based on revenue.”
Mr. Clayton also included this summary in his article; “Some of the various proposals from groups include:
* The American Soybean Association [ASA] wants to raise the target price of soybeans above $5.80 a bushel. With a 44-cent per bushel direct payment, that means counter-cyclical payments are only paid when the price falls below $5.36 a bushel. The ASA wants the target price raised to $6.85 a bushel [related ASA press release].
* The National Association of Wheat Growers [NAWG] also wants a higher target price and increases to the direct payment program. The group wants to see the wheat prices increased to $1.19 a bushel and the target price increased to $5.29 a bushel [related NAWG press release].
* The National Cotton Council wants a ‘modest program’ that would pay U.S. mills some competitive assistance for every pound of cotton they consume.
* The National Corn Growers Association [NCGA] is seeking a revenue counter-cyclical program that would pay farmers when revenue falls below a county average, either due to lower yields or lower county prices. The plan would build on using crop insurance to cover much of the losses [related NCGA press release].
* The American Corn Growers Association is calling for the reestablishment of the non-recourse loan program to provide a floor price for the major, strategic commodities and ‘relieve the burden of tens of billions of dollars in subsidies from the shoulders of America’s taxpayers.’
* The USA Rice Federation wants to raise the loan rate for rice from an average of $6.50 per hundredweight to $7. The federation also wants to make sure all classes of rice, long grain, medium grain and short grain receive the same loan rate instead of three different classes. The rice group also wants to raise the target price from $10.50 per hundredweight to $11 for counter-cyclical programs.