Farm bill clears House with bipartisan support

Feb 3, 2014

Despite some big organizations’ last minute effort to convince lawmakers to send the farm bill back for more discussions, the U.S. House of Representatives passed the heavily debated Agricultural Act of 2014 by a vote of 251-166 on Wednesday.

The bill, a compromise of House and Senate versions, is estimated to cut federal spending by $23 billion over 10 years compared to current law. It would cut crop subsidies by $8 billion, conservation by $7 billion and food stamps by $8 billion. The nearly $1 trillion farm bill cuts food stamps and ends a costly direct subsidy to farmers, while expanding government-backed crop insurance programs.

The Act, which failed the House last summer, passed with 162 Republican supporters and 89 Democrats. Sixty-three Republicans voted against the bill, as well as 103 Democrats.

The Senate is expected to vote this week on the legislation, which is more than a year overdue. The leaders of the House and Senate agriculture committees expect President Barack Obama will sign the bill.

Advocates and opponents alike spent last Monday and Tuesday inundating media outlets with the pros and cons of the Act and holding press conferences to share more detailed information.

On Tuesday morning, House Ag Committee Chair Frank Lucas (R-OK) and Senate Ag Committee Chair Debbie Stabenow (D-MI) held a teleconference to discuss the details, calling the measure “an amazing bill” especially considering the “environment we worked in.”

“Even though it took us two-and-a-half to three years, we have a really amazing bill here,” Lucas said.

Touting the end of the direct payment program in exchange for an insurance-type of program, Lucas was confident the Act “contributes major savings to deficit reduction, significant reforms to policy, and yet still provides a safety net not only for the production of American food and fiber, but also to ensure our fellow citizens have enough food to eat.”

According to Lucas, the bill improves the Supplemental Nutrition Assistance Program (SNAP) by closing loopholes left over from the last farm bill and provides a safety net for those who truly need it.

Despite the controversy over topics such as Country of Origin Labeling (COOL), dairy reform, and the Grain Inspection Packers and Stockyards Act (GIPSA), Stabenow said the bill “addressed the needs of every aspect of agriculture.”

Stabenow added that if the World Trade Organization rules against the latest U.S. COOL proposal, “then COOL will be suspended, changed or repealed.”

When asked about the National Cattlemen’s Beef Association’s (NCBA) opposition relating to the COOL rule, Lucas said, “On this day, at this time, the votes were just not there and we needed to get a farm bill done.”

The bill also deleted House language sponsored by Rep. Steve King (R-Iowa) to override state laws, such as in California and Oregon, that set animal welfare standards and block shipments from producers who do not follow their rules. According to Lucas and Stabenow, there was just too much opposition on this topic.

The bill boosts spending in crop insurance by $5.7 billion over 10 years mainly because cotton producers will get a new crop insurance program in lieu of most commodity programs. However, cotton producers also will get “transitional” Direct Payments for this year and 2015, according to DTN.

Under the bill, farmers must make a one-time choice for their commodity program. They will enroll either in a program for revenue protection that is based on yields and season-average prices or in a target-price program.

The Price Loss Coverage program uses target prices or “reference prices” set at $5.50 a bushel for wheat, $3.70 for corn and $8.40 for soybeans.

The Agriculture Risk Program offers revenue protection. Payments would kick in when crop revenue is less than 86 percent of the rolling five-year average, according to DTN. They would end when revenue falls below 76 percent of the average and crop insurance would cover those deeper losses.

But despite the apparent light at the end of the tunnel on the bill, other organizations are hoping to send it back to the drawing board before it hits the President’s desk.

NCBA, along with the National Association of Manufacturers and the National Pork Producers Council, also held a teleconference Tuesday. Announcing plans to do everything in their power to defeat the farm bill, the teleconference group agreed, “We will literally use all of our resources to kill this bill.”

“Unfortunately, there are producers that don’t understand the cost,” NCBA President Scott George said, adding that the farm bill was the best place to fix the legislation.

Prior to Wednesday’s vote, NCBA also sent out a press release. “We are calling on Congress to fix the mistakes they have made, mistakes that are costing cattlemen and women money every day. Mistakes like mandatory Country-of-Origin Labeling, which has already resulted in steep discounts to our producers and caused prejudice against our largest trading partners. This program was created without the consent of producers and has been a failure by every measure,” George said.

With retaliatory tariffs one of the largest concerns, NCBA also points out the growing concern of producer costs. “This farm bill is foundationally flawed and the livestock sector is standing shoulder-to-shoulder in opposition of a farm bill that will only serve to cause greater harm to rural America,” George said.

Outside of retaliation issues, National Pork Producers Council President Randy Spronk joined George on the press conference call, sharing concerns over the costs of COOL, not only to producers, but also to consumers.

According to George, the Office of Budget and Management estimates an implementation cost of $100 million for COOL.

“Those costs are being borne by the retailers and the processors and they will pass those costs right back down to the consumer, right back down to the producer,” George said. “So the producer is taking home less today than he could have been taking home if those costs were built in.”

Despite the groups’ opposition, relief that a bill was finally signed came in from all directions.

Sen. Heidi Heitkamp (D- ND), a member of the Senate Committee on Agriculture, said that getting the house to pass the legislation was a welcome development.

“This compromise bill reduces our deficit by more than $16.6 billion and gives North Dakota farmers and ranchers the certainty they deserve to continue feeding the world,” she said.

According to Heitkamp the bill will:

• Reauthorize Livestock Disaster Programs. Ranchers who experienced losses due to natural disasters will be able to recoup portions of their losses, backdated when the programs initially expired in October of 2011.

• Provide option for farm-level commodity program. Western states with large counties are not best served by county-level programs, because serious hardship for producers can be overlooked when losses are determined on a county-wide basis. For this reason, it is important that farmers have the opportunity to choose a farm level program that more effectively targets support where it is needed.

• Support farmers experiencing wet seasons. One of the greatest risks facing growers is wet conditions that prevent growers from planting their crops. For the commodity title to function as a risk mitigation tool that serves the needs of all regions of the country, it is important that any update to production history makes sure that acres prevented from planting are counted for participation in the farm program.

• Prevent the farm program from influencing planting decisions. Coupling planted acres with target prices may lead to incentives for growers to make planting decisions based on the payouts offered by a farm program.

• Improve the wetland mitigation process. The legislation creates a wetland mitigation bank to help farmers better manage excess water on their farms while at the same time providing improved habitats for water fowl.

• Enhance conservation technical assistance. A backlog at the U.S. Department of Agriculture (USDA) for wetland determinations is a source of frustration for many growers in North Dakota. The compromise includes a provision to allow USDA to determine funding amounts for technical assistance.

South Dakota Cattlemen’s Association (SDCA) President Cory Eich was also pleased with the progress.

“While the farm bill conference report is far from perfect for livestock producers, we are elated to see livestock disaster assistance programs funded through the life of the bill and also retroactively for 2012 and 2013 disasters. Many of our fellow livestock producers have faced serious challenges in the last couple of years and we hope much needed assistance will be forthcoming with the farm bill,” Eich said.

Eich, a cow-calf producer from Canova, SD, noted SDCA’s disappointment that the Conference Report doesn’t include language to “fix” concerns with COOL or GIPSA.

However, these concerns were ultimately outweighed by the inclusion of the livestock disaster assistance program and conservation incentives to maintain native prairies in the northern plains.

“While we continue to hope a trade war over COOL can be averted, conservation incentives and a disaster assistance safety net have long been farm bill priorities for SDCA. We are pleased to support the Conference Report and urge the House and Senate to move quickly for final passage of the farm bill,” Eich said.

NCBA credited National Farmers Union (NFU) as the largest ag organization in opposition of its stance against the farm bill. “NFU is the pressure,” George told reporters.

NFU was out early with a press release praising the House passage. President Roger Johnson said, “On behalf of the family farmers, ranchers, fishermen, rural residents and America’s consumers, I commend the House on passing the farm bill. The conference report is a true compromise and I am pleased to have certainty for all Americans.” — Traci Eatherton, WLJ Editor