Farm Bill Digest #6, Posted August 20th, 2007
In this issue of the Digest:
The Senate Agriculture Committee is expected to take up the 2008 Farm Bill the third week in September. Here's a brief summary of some provisions likely to be in the Chairman's mark.
The House Farm Bill and several proposals pending in the Senate would provide financial incentives to producers of bioenergy crops.
Senator Harkin's Conservation title is expected to meld the Conservation Security Program and the Environmental Quality Incentive Program into one working lands conservation program.
Senate Markup
The Senate is expected to take up the 2008 Farm Bill the third week in September. While the Chairman's mark has not yet been released, drafts of it have been circulating among staff. Below is a brief summary of some items that didn't end up in the House Farm Bill but are likely to be in the Senate Farm Bill.
Harkin's mark is expected to contain major benefits for beginning farmers and ranchers including ramped up authorization levels for Farm Services Agency direct operating loans from $565 million to $850 million and from $205 million to $350 million for direct farm ownership loans. Seventy five percent of all direct farm operating loan funds and forty percent of all direct farm ownership loans are reserved for beginning farmers and ranchers. The mark is also expected to include a 15 State, 5 year pilot program for an Individual Development Accounts program to provide financial training and matched savings accounts for the purchase of farm assets for beginning farmers.
Harkin is also likely to include a Livestock Title with provisions intended to restore a measure of competition and contract fairness to livestock and poultry markets. The Livestock Title will include contract fairness provisions to ensure a producer's collective bargaining rights; a prohibition on mandatory arbitration provisions; and a good cause requirement for premature cancellation of a contract. There will also be some modest reforms to the Packers and Stockyards Act around undue pricing preferences, coverage of poultry and standards of proof for anti-competitive injury.
The Senate Mark is also likely to include mandatory funding for a Rural Entrepreneurs and Microenterprise Program at a $20 million level to support programs providing technical assistance and micro-credit to rural small businesses.
Biomass and the Farm Bill
The Farm, Nutrition and Bioenergy Act of 2007 (HR 2419) as passed by the House and several proposals pending in the Senate would provide financial incentives to producers of cellulosic biomass to help fuel the development of advanced biofuel production facilities. The House Farm Bill creates a small pilot program called the Biomass Energy Reserve (BER) to spur production of bioenergy crops. Eligible crops include any crop grown specifically for bioenergy production other than Title I commodities. Title I commodities are wheat, corn, barley, grain sorghum, oats, upland cotton, rice, peanuts, sugar, soybeans, sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed.
Selected Agriculture Innovation Centers or other eligible entities will help groups of producers to develop proposals for biomass energy reserve areas within a 50 mile radius of an existing or proposed bioenergy facility. Producers will receive establishment payments to cover the costs of seed and planting and annual rental payments for land devoted to energy crop production under a 5 year contract with USDA. Producers will also be expected to participate in the development of a best practices data base for biomass energy production. Ranking criteria for BER projects include: participation rates by beginning and socially disadvantaged farmers and ranchers; the potential to improve soil conservation; water quality and wildlife habitat; and the availability of ownership of the bioenergy facility by producers and local investors.
There are two bills competing for a place in the Senate Farm Bill. The Farm to Fuel Investment Act, (S 1403) introduced by Senator Klobuchar (D-MN) offers 3 year contracts to producers in bioenergy "cropsheds" encompassing an area within a 50 mile radius of an existing or proposed bioenergy facility. Eligible crops are perennial plants or annuals when included in a resource conserving crop rotation and, like the House Farm Bill, Title I commodity crops are excluded. The Klobuchar bill links to the Conservation Security Program by providing an enhancement payment for producers who incorporate two or more native perennial species in their plots. Senator Thune (R-SD) has also introduced a bill to establish a similar biofuels promotion program for producers within a Biofuels Innovation Program area located within a 70 mile radius of an existing or proposed biofuel facility.
Senators Coleman(R-MN) and Feingold (D-WI) have introduced a bill to amend the Energy Policy Act of 2005 to ensure an opportunity for ownership by local farmers and investors in any biorefinerey financed in whole or in part by a federal loan, loan guarantee or grant. The bill would require the biorefinerey to offer during a 60 day period to local investors an opportunity to invest or loan at least 40% of the non-federal capital needed by the facility. With the exception of cooperatives, no individual or entity will be allowed to invest more than 2.5%.
A New Conservation Security Program
Senator Harkin's Conservation Title is expected to meld the Conservation Security Program (CSP) and the Environmental Quality Incentive Program (EQIP) into one working lands conservation program called the Comprehensive Stewardship Incentives Program or CSIP. CSIP will streamline the application process for these programs, reduce paperwork requirements and better serve farmers in making the transition from EQIP to CSP.
The Environmental Quality provisions of CSIP, like EQIP will provide technical assistance, cost share and incentive payments to producers for making significant progress toward meeting resource concerns on their farms. Cost share of up to 75% is available or 90% for beginning or socially disadvantaged farmers and ranchers. Incentive payments are available for nutrient management planning as well as organic planning. Environmental Quality payments are capped at $240,000 over the 6 year life of the Farm Bill. Harkin provides annual, mandatory funding of $1.3 billion a year for Environmental Quality payments.
The Stewardship provisions of CSIP, like the CSP, reward farmers for meeting or exceeding specific resource indices or management standards set by NRCS in consultation with the State Technical Committees. Resources of concern under the new CSIP and to be considered by NRCS are soil, water, air, energy, biodiversity, fish and wildlife and pollinator habitat. CSIP offers one annual Stewardship Enhancement payment rather than Tiers and farmers must enroll the whole farm under a 5 year contract. Farmers already meeting high levels of stewardship are given an eligibility preference. Enhancement payments cover the costs of materials, installation, management, maintenance, as well as income forgone, as a result of adopting new conservation practices.
Both programs will be available nationwide. CSIP provides mandatory funding for Stewardship Enhancement payments and enrollment of up to 13.3 million acres per year.
© 2007-2008 National Campaign for Sustainable Agriculture.