Home Farm Policy Menu Inside The Beltway -- November '98

Back in February, it was hard to imagine how the Congressional leadership could misplay the magnificent hand they’d been dealt -- a wounded & bleeding White House, a budget in surplus, and opportunities to make political hay as far as the eye could see. Somehow, they managed to mess it up, failing to pass an annual budget resolution for the first time since Congress imposed that discipline on itself in 1974, letting the clock run out on 8 of the 13 annual appropriations bills, and generally leaving all sorts of high-profile legislation wrecked and burning by the side of the road. Still, you’ve got to admire a group of folks who’ve managed in just four years to achieve a level of simultaneous legislative tyranny and total, howling anarchy that it took Democratic congressional leaders nearly four decades to perfect.

As we reported in the last edition, the President vetoed the agriculture appropriations bill, primarily for containing insufficient funds for emergency farm relief. The Appropriators then wrapped agriculture spending into the huge omnibus appropriations bill that was the last major item to pass before Congress left town for the elections. You’ve no doubt have read by now that this massive catchall bill covered 8 of the 13 annual appropriations bills, a tax bill, and numerous legislative provisions. It weighed over 40 pounds and was so rushed the version voted on actually contained handwritten cross-outs and insertions! What a way to govern! You’ve heard that it’s against the rules to pass non-budget legislation on appropriations bills? You poor, simple child. The Approps Committee webpage even has a special category for “Major Legislation on 1999 Appropriations Bills.” As we go to press a week later, there is still no published version of the omnibus bill -- who knows what little hidden gems remain to be uncovered!

In the end, the emergency farm aid piece was bumped up from $4.2 billion in the vetoed bill to $5.9 billion, but the Midwest Democrats were unsuccessful in their attempt to raise the cap on loan rates and in their subsequent attempt to direct the additional funds to a payment to commodity program producers for current production. Instead, they settled for the extra cash going out as more Freedom to Farm (AMTA) payments. All the extra F2F money (a 50% bonus in total) is not subject to the payment limitation, so expect really big 6-figure (and maybe a few 7-figure) checks to the largest commodity operations.

Rep. David Obey (D-WI) successfully waged a last minute campaign for $200 million in income assistance payments for dairy producers. Also attached to the omnibus bill were the farm-related portions of the Republican tax cut package: removing the sunset on income averaging, accelerating the timeline for estate tax cuts, and new loss carryback rules. The schedule for full deductibility of self-employed health insurance costs was also accelerated.

In a major loss, the provision for mandatory price reporting on livestock sales, which had previously lost in a close vote in the conference preceding the veto, was knocked out of the final bill by the Republican farm leadership. The press had widely reported that a short term price reporting pilot initiative was included in the final bill, based on the verbal agreements reached by the handful of key players negotiating the contours of the final bill. In the intervening weekend, however, at the insistence of industry, the reporting language disappeared in favor of a USDA study and report on cattle pricing.

For part of the final week of top level negotiations it appeared some emergency conservation money might make it into the emergency package. In the end, however, the proposed $100 million wound up on the cutting room floor. On farm credit, the increased loan limit (to $700,000) for guaranteed loans remained in the final package, despite our efforts to knock it out. The related move by Sens. Coverdell & Cleland to radically scale back the family farm requirements for loans came back into play, but did not make it to the final cut of the bill. The change in the statute of limitations language to help minority farmers settle their claims against USDA was modified in the final bill to something much closer to the preferred version introduced by Senator Robb (D-VA).

The National Operations Committee for the Sustainable Agriculture Research and Education (SARE) program met in Baltimore for its biannual meeting on October 23. Ferd and Kathleen attended and passed on a few thoughts about funding and program opportunities. Below are a few miscellaneous highlights from the meeting, particularly with regard to SAN:

• Publications in progress include "Diversifying Agricultural Landscapes," a 12 page bulletin due out next month addressing alternative crops and natural diversity, "On-Farm Research," an 8 page bulletin for publication next year which will include tips on applying for SARE producer grants, and "Agricultural Marketing," a longer piece to deal with a wide range of niche marketing strategies also due out next year.
  
  
• The Committee approved a SAN reorganization plan including formation of a 12 member Steering Committee (one each from each SARE region, plus Extension, farmer, and NGO representatives) and a broader 25 member SAN Advisory Circle who will meet by email and web technology only. Nominations are welcome -- pass them on to Ferd, or direct to SAN.
  
  
• In response to a Small Farm Commission recommendation, SARE, with the USDA Office of Outreach and Office of Communications, set an ambitious goal of getting information on 12 key topics in sustainable agriculture to 50% of farmers and 75% of USDA field staff within 3 years.
  
  
• The Professional Development Program plans on developing "teacher guides" for SAN publications to widen their use in classrooms and training events.
  
  
• Based on the success of the 10-year SARE celebration in Austin, every other year a SARE region will hold a similar regional event to which others are invited, starting with the Western region in the year 2000.

For more information on the meeting, call Ferd.

(Report condensed from an account by Barbara Meister, who is helping to coordinate the “A Time To Act Campaign.”)

The USDA Commission on Small Farms met in Washington, DC October 6th through 8th for the first time since the release of the Time to Act report in January of this year. The purpose of the meeting was to receive a report from USDA officials on the progress of implementing the Commission's recommendations.

Secretary Glickman took the opportunity to announce the formation of a Small Farms Council, to be chaired by Deputy Secretary Rominger, and an office of Small Farms and Sustainable Development, headed by Adela Backiel, who is currently the Director of Sustainable Development. Two Deputy Director positions will be created, one for Small Farms and one for Sustainable Development. See http://www.usda.gov/news/releases/1998/10/0406 for more info.

It was evident that USDA has made concerted efforts to analyze the Commission recommendations, took steps to plan for implementation, and in some cases, completed implementation of the recommendations.

However, much work remains to make the necessary changes that will ultimately be measured by the viability of small and moderate-sized farms. To keep the department’s feet to the fire, the Commission made plans to return to D.C. in the spring for a second progress report.

The members of the Commission who are active in the A Time to Act Campaign met to develop plans for conducting media, outreach, and other activities to increase the public awareness of the Time to Act report and hold USDA accountable to implementation of the report. Stay tuned for more information and details about how you can become involved in the A Time to Act Campaign.

We expect to see final policy details shortly for the "Adjusted Gross Revenue" revenue insurance pilot projects. We will bring copies to the MSAWG meeting in Kansas City. We can relay a few tentative decisions:

• As noted in the previous issue, the 1999 pilots are in selected counties in Michigan, Florida, and New England.
  
  
• As expected, all commodities and the whole farm unit will be covered. Schedule F tax return information will be used to establish gross farm income. Five years of income and expense data will be used.
  
  
• Coverage levels will reward diversification. Participating farms with 8 or more crops will be covered at 80%, while others will be at 65% or 75%. Total revenue covered will be the adjusted gross income x coverage level x 75% payment rate.
  
  For example, a farm with a gross farm income of $150,000 with 8 or more crops would be covered for $150,000 x 80% x 75% = $90,000.
  
  
• To qualify, not more than 35% of annual gross farm income can be from livestock. Hence, crop farms with some livestock might qualify, but primary livestock operations would not. (Note: Livestock insurance coverage is not authorized by law; however, since these are pilots, they agreed to experiment with livestock but only on a limited basis.)
  
  
• Also to qualify, not more than 50% of gross farm income can be from commodity crops (wheat, barley, corn, sorghum, oats, soybeans, cotton and rice) or potatoes unless these crops are insured separately.

We have begun to discuss with the Risk Management Agency the possibility of increasing the number of states and counties designated as AGR pilots for 2000. This may be possible, but will require a good deal of spade work. We should also do everything we can to publicize the Michigan pilot area for 1999.

In response to poor prices and regional crop disasters, Secretary Glickman has been talking about maxing out the acreage in the Conservation Reserve Program from among the bids submitted during the current sign-up period (10/26 to 12/11). In round numbers, there are about 6 million of the total 36.4 million authorized CRP acres not in use currently, plus another 3.5 million acres with contracts expiring, leaving about 9.5 million acres available. Glickman has been widely quoted as saying he would like to completely fill the reserve and then come back to Congress next year and ask for more acres to be authorized.

This morphing of the CRP into a crisis response program is very troubling. It is also a dramatic policy change for USDA. Until now, they expected to maintain the reserve at about 28-30 million acres, a fact reflected in the budget and cost/benefit estimates for CRP. The Clinton Administration is on record in support of reserving at least 5.5 million CRP acres for partial field enrollments, including buffers, under the continuous sign-up and CRP "state enhancement" program. Glickman’s recent statements clearly jeopardize this commitment, which has been a major MSAWG priority.

We have long expected that as the number of acres with expiring contracts declines each year to relatively small levels, the "environmental benefits index" threshold for acceptable bids would go up. With limited supply, those seeking CRP contracts would have to offer top environmental benefit and/or bid low to get in. But if the Department really takes in over 9 million acres in one enrollment round, it seems very likely they will be settling for less environmental benefit simply for the sake of getting money out there as soon as possible to help ease the pain of the current farm crisis.

However, we’ve got to ask whether CRP is an appropriate tool for farm crisis response. As a production adjustment tool, its 10-15 year time frame is much too long for short term corrections. Also, a significant portion of the money goes to landlords and CRP investors, rather than current farm operators. Do we really want to say the solution to the crisis is retiring land and farmers from production? Surely there is a better way. To the extent that a large amount of the acreage accepted is concentrated in wheat country, there will be significant impacts on rural communities that see large percentages of local land taken from production. Last but not least, the idea that Congress will find the money to enlarge the CRP next year is anything but a sure bet.

Senators Pat Roberts (R-KS) and Larry Craig (R-ID) have written the Secretary urging him to fully enroll CRP immediately. We are currently working with a number of other Senate offices to try to get a different message to the Secretary before he make his choices in December and January.

With an audible sigh of relief to be talking about something other than the hash they’ve made of National Forest management in the Pacific Northwest (with ample assistance from Congress, to spread the credit around a bit), the USDA announced a pair of new Conservation Reserve Enhancement Program agreements, these with the states of Oregon and Washington.

Both target protection of stream and river banks using the Conservation Reserve Program, with the words “salmon restoration” becoming an anxious mantra at both of press announcements. The Oregon agreement includes an innovative bonus payment system for land owners who cooperate to enroll more than 50% of land along a five-mile stretch of stream bank.

The Oregon CREP also makes land under irrigation eligible at the higher rental rate that reflect its value versus dry land. In return for higher irrigated land payments, enrollees must execute agreements with the State of Oregon that agree to divert less surface water, leaving it in the stream or river.

USDA news releases and background sheets on the Oregon and Washington programs are available at http://www.usda.gov/news/releases/1998/.

Requests for “current thinking papers” made to AMS and the Domestic Policy Council of the White House by members of the National Organic Standards Board (NOSB) and others took an unexpected turn this month. Look for a Federal Register Notice and request for comment on certain aspects of the organic rule any time now!!!

In the midst of the debate on what USDA staff could and could not discuss during the rulemaking process, organic advocates asked USDA for what is known as current thinking papers so that National Organic Program (NOP) manager Keith Jones could present them to the NOSB for feedback at the Oct. 27-29 meeting. The idea of current thinking papers was that USDA could informally throw out a series of issues that the NOP is struggling with, get detailed feedback, and signal to the organic community the potential direction of USDA actions. The NOP drafted a list of 14-16 issues for current thinking papers.

USDA announced to the NOSB that they would write current thinking papers. Then the other shoe dropped. The USDA Office of General Counsel said that these current thinking papers must be published in the Federal Register for public comment. The Wallace Institute protested that informal conversations through the NOSB fully covered by open meeting laws could adequately provide the kind of feedback USDA seeks. They did not prevail and USDA is going forward. USDA did agree to bundle the issues to avoid 16 individual Federal Register Notices and separate comment periods.

On October 26, the USDA announced plans to release three papers in the October 28 Federal Register. The topics of these papers are: (1) paraciticide and antibiotic use in livestock; (2) livestock confinement; (3) revocation of producer certification. We also expected a combined paper on ecolableing and the labeling of synthetics in organic food, but it is not mentioned in the 10/26 press release. The issue papers will also be available on the NOP webpage at http://www.ams.usda.gov/nop. Comments on these three papers are due by December 14.

As reported above, the mandatory price reporting provision has been knocked out of the big omnibus spending bill that cleared Congress. In its place, the GOP ag leadership at the urging of the meat industry substituted yet another request for a report from USDA on the pricing situation.

In the meantime, the USDA continues to dance around this issue with lesser measures. The latest gavotte is an advance notice of proposed rulemaking for “A Prohibition on the Non-Reporting of Price as a Condition of the Purchase or Sale of Livestock” (USDA’s double negative language, not ours!), published in the Federal Register, Vol. 63, pp. 48450-51 (September 10, 1998).

This proposal would not establish mandatory price reporting, but would prohibit non-reporting as a condition of purchase or sale of livestock, as a violation of the Packers and Stockyards Act. Comments on this potential regulatory action must be received on or before December 9,1998 and should be sent to the Deputy Administrator, Packers and Stockyards Program, GIPSA, USDA, Stop 3641, 1400 Independence Avenue, SW Washington, D.C. 20250-3641.

Comments may also be sent by fax to (202) 205-3941 or by e-mail to PSP.GIPSA@USDA.GOV.

On September 22, USDA announced the 1998 recipients of Rural Coop Development Grants, a priority program in National Campaign’s annual appropriations work. The total appropriation of $1.7 million was divided among 13 grantees to help finance feasibility studies, business plans, market analysis and product development for new coops.

Grant recipients included Winrock International, Rocky Mountain Farmers Union, Coop Development Services Fund (WI), Coop Development Institute (MA), Intertribal Agriculture Council, Nebraska Community Foundation, and Kansas State, Ohio State, Central Michigan, and University of California.

The pending FY 99 appropriations bill would again fund the program for $1.7 million next year. For more information, contact USDA at 202-720-7558 or the National Coop Business Association at 202-638-6222.

• October '98
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Home Farm Policy Menu Inside The Beltway -- November '98