Home Farm Policy Menu Inside The Beltway -- '99

On August 2, the Senate Agriculture Committee unanimously voted out a bill requiring large beef and pork packers to report on all livestock sales. The bill's separate beef and pork sections are patterned on earlier negotiations between the meat industry and the National Cattlemen's Beef Association and the National Pork Producers Council.

Easy passage of the bill represents a dramatic turnaround from a year ago when both the trade associations and industry united to defeat price reporting requirements. When the bill reaches the Senate floor in September, Senator Bob Kerrey (D-NE) will introduce an amendment to prohibit packer ownership of cattle and hogs. Senators Chuck Grassley (R-IA) and Pat Roberts (R-KS) are expected to seek amendments to the Kerrey amendment to exempt producer owned plants, coops, and perhaps others. Senator Daschle may offer an amendment that would clarify the Packers & Stockyards prohibition of under price preferences/price discrimination, as is currently the case with mega-producers.

Senators need to know we support for amendments that include the following:

• A ban on packer ownership of livestock.
• Limits on the contracts (captive supplies) that are driving much of the expansion of industrial operations.
• A tougher prohibition of price discrimination by packers against smaller, more sustainable producers.

An emergency farm spending bill (see story below) will be finalized in September. Pending is a $7.6 billion plan passed by the Senate consisting entirely of additional AMTA and other commodity program payments. The final price tag will grow as disaster related aid is added. SAC/MSAWG and others have been trying to add modest funding to the bill to pay for conservation benefits as well as long-term solutions to the farm crisis.

After Labor Day, Congress will attempt to finish consideration of the emergency bill and send it to the White House. Hence, now is the time to get calls in to members of Congress (particularly but not limited to members of the Agriculture Appropriations Subcommittees) urging that $200 million be added to fund the Conservation Farm Option and $150 million for emergency farm retooling grants.

The CFO money would fund pilot projects around the country to help farmers transition to economically and environmentally sustainable farm production systems, while the retooling grants would greatly enhance the capacity of the sustainable agriculture research and education (SARE), marketing, and rural business programs to assist farmers adopt alternative production and marketing systems. If you need a more complete action alert or need more information, please contact Dave Butcher, Margaret Krome, or the National Campaign or SAC office.

Before leaving town for August recess, the Senate acted on an emergency farm aid supplemental appropriations in conjunction with S. 1233, the FY2000 agricultural appropriations bill (see story below). After a long series of votes against different aid packages in the $9-$11 billion range offered by Democrats, the final supplemental price tag, on an amendment offered by Chairman Thad Cochran (R-MS), came to $7.6 billion.

The bulk of the proposal ($5.54 billion) effectively doubles the 1999 AMTA payment amount for commodity program participants. In addition, there is $470 million for soybean growers, $400 million for additional crop insurance premium subsidies for 2000, $328 million for tobacco producers, $325 million for dairy, beef and hog producers, $200 million for the cotton export program, and $134 million for fruit and vegetable growers.
In addition, the Cochran package would double the size of the nominal payment limitation for Loan Deficiency Payments (LDPs) from $75,000 to $150,000 per farm operation, further concentrating payments to the largest farms and making it quite likely that we will see the return of $1 million-plus payments to mega-operations.

Earlier, farm state Democrats failed in efforts to boost AMTA and other commodity program payments even more, add funding for disaster aid, farm loans, export subsidies, land diversion, conservation, and rural development, and mandate price reporting requirements. Farm state Democrats also attempted to shift part of the increase in commodity benefits from AMTA payments to LDP payments, arguing that LDPs were appropriately targeted to actual operators and actual production rather than to landlords and historic production.

Republicans countered that this would go back on the planting flexibility created by the 1996 farm bill. A bipartisan compromise $8.8 billion amendment by Senators Grassley (R-IA) and Kent Conrad (D-ND) would have stuck with increased AMTA payments, but also included disaster aid and mandatory price reporting. It failed by just two votes, setting the stage for adoption of the Cochran proposal.

Creating a "theater of the absurd" atmosphere, Senate Agriculture Committee Chair Richard Lugar (R-IN) held three days of hearings on the emergency farm crisis bill at the same time it was being considered on the floor. Earlier, Lugar had threatened to cancel the hearings if Senators went ahead and tried to debate it on the floor. However, after the leadership of his own party abandoned him, Lugar went ahead with the hearings anyway, urging a reasoned and moderate approach.

The only highlight of the hearings was Secretary of Agriculture Dan Glickman's adamant refusal to specify a request for emergency funding on behalf of the Clinton Administration. This sets up a repeat of last year's scenario where the Administration comes in late in the process to trump the already passed Republican package by offering a bigger dollar sign.

In a surprise move, however, Vice President Gore has also called for the emergency farm aid package to be offset with savings elsewhere in the budget or with the budget surplus. The farm aid package would gobble up most of the surplus, estimated at just $14 billion for FY 2000. This announcement reverses the Administration's position on last year's $6 billion supplemental and may give a boost to House deficit hawks to oppose the farm aid if not offset.

The emergency bill now goes to a conference committee along with the regular appropriations bill. The conferees will be the full membership of the House and Senate Agriculture Appropriations subcommittees. The House bill contains no emergency farm aid, so those provisions will be open for negotiation again in conference.

One certainty is that disaster aid -- to respond to the drought in the mid-Atlantic states and other weather-related emergencies -- will be added in conference. Some House conferees may also push for conservation incentives to be added to the package.

As was the case last year, all the attention to the emergency farm aid supplemental (see above) nearly obscured the action on the underlying appropriations bill to fund all USDA programs for FY 2000. Nonetheless, several items bear brief mention. First, no funding was added to the meager levels for the farm ownership and operating loan programs in either the regular or emergency bills. Unless this is reversed in conference, loan availability would be reduced by almost half next year.

Second, an effort by Senator Robb (D-VA) to increase funding for the Outreach and Technical Assistance Program for Socially Disadvantaged Farmers from $3 million to $10 million was not successful. On the other hand, Chairman Cochran did amend the Rural Cooperative Development Grant program to reserve 25% of the funding for coops that assist small minority producers.

Third, funding for the National Research Initiative competitive grants program was decreased from $119.3 million to $114.1 million through a series of amendments to fund special earmarked projects for MI, WV, FL, NV, AL, CO, NC, and WI. Fourth, Senator Richard Durbin (D-IL) sponsored a "sense of Congress" motion urging the Administration to request funding for FY 2001 to implement the US Action Plan on Food Security.

Finally, Senators Daschle, Harkin, and Wellstone passed a $2 million increase for Packers and Stockyards Act enforcement, with the offset coming from the Economic Research Service budget.

The major items on the SAC/MSAWG agenda for conference on the regular bill will be to bring the direct credit programs up to the 1999 levels, secure the higher funding levels in the Senate bill for rural coop development grants, rural business enterprise grants, and the Wetlands Reserve Program, and secure the higher funding levels in the House bill for state mediation grants and the outreach program for minority farmers.

In another major sidebar to the appropriations bill, the Senate debated the future of the dairy program. Two major issues are at stake -- the reform of the federal milk marketing order system mandated by the 1996 farm bill and the future of regional dairy "compacts." Milk producers have just finished voting on USDA's reform proposal to consolidate the milk marketing orders and to reduce the price differentials between the Midwest and other regions of the country. A majority of Congress outside of the Midwest delegations opposes the USDA plan, preferring the status quo. Spurned by USDA, they are attempting to secure their desired outcome legislatively.

The 1996 farm bill also allowed the New England states to raise prices internally through a dairy compact, but only through this year. Northeast and Southern delegations are now trying to renew that authority, add New York, Ohio, and the middle Atlantic states to the New England compact, and provide new authority for a Southern compact consisting of all the southern states plus Kansas and Missouri.

Wisconsin's two Senators successfully fought off a move by Vermont's duo to pass these two measures when a vote to break off their threatened filibuster failed 53-47, with 60 votes needed to stop debate. Later, however, Senators Rick Santorum (R-PA) and Charles Schumer (D-NY) reintroduced the amendment, not to vote on it then, but to enter it into the record so it could be revisited in the conference committee on the appropriations bill.

It is unclear whether the Midwest will prevail in conference committee. On the key Senate vote, 5 appropriations subcommittee members plus the full committee chair and ranking member voted to end the filibuster, while 6 voted against, making the Senate conference position up for grabs. The House subcommittee has close to 9 votes for the compacts and retaining lower prices for Midwest dairy producers, 1 against, and several unknown, but also full committee ranking member Dave Obey (D-WI) leading the charge against. Veterans of this seemingly unending regional dairy war are calling the final outcome a toss-up.

Our July Washington Report detailed House subcommittee action on crop insurance reform. As we predicted, the subcommittee bill came in way over budget -- by $3 billion! Rather than $1.5 billion more per year in crop insurance subsidies ($6 billion more over 4 years), the bill scored at $9 billion. Therefore, before the full committee could vote on the bill, some of the more generous features had to be lopped off. However, in the traditional gamesmanship of congressional budgeting, the bill approved by full committee on August 3 (HR 2559) is "backloaded" with increased costs included that won't fully kick in until after the first four years.

The savings to squeeze the bill into the $6 billion set aside for crop insurance in the budget earlier this year were gained by:

• cutting the subsidy rates for the higher coverage levels
• changing the multiyear disaster provision from excluding 1 year in every 5 from production history to recording disaster years at 60% of the local transition yield whenever the actual yield is lower than this level
• cutting funding for the livestock pilot program from $55 million per year to $20 million for 2001, $30 million for 2002, $40 million for 2003, and $55 million for 2004
• reducing the reimbursement rate to insurance companies for administrative and operating costs from 24.5% to 24%.

Representative David Minge (D-MN), responding favorably to several recommendations included in a letter to the Committee from several MSAWG and Campaign groups, pushed an amendment to place a payment limitation on payouts on catastrophic coverage. Under the Minge provision, payments on these policies, which are 100% subsidized and cost the producer just a $60 administrative fee per year, would be limited to $300,000. Payments of more than $1 million have been made on CAT policies in the past. In addition, the Minge amendment would have improved coverage for beginning farmers by enhancing their production histories. Unfortunately, the amendment was defeated.

Minge was successful, however, in amending the crop insurance statute to specifically include "scientifically sound sustainable and organic farming practices" as "good farming practices" required in order to be able to collect indemnity payments. This was also a recommendation in our letter to the Committee.

During committee consideration, ranking Democrat Charlie Stenholm (D-TX) proposed redirecting $550 million from crop insurance subsidies to a new supplemental income program that would kick in whenever commodity prices fell below 85% of the previous 5-year national average price. The amendment failed by voice vote.

The bill will move to the House floor in September. Another attempt at a payment limitation or beginning farmer amendment may be made at that time. Conservation compliance may also become an issue on the House floor.

The situation in the Senate is less clear. Senator Lugar's proposal -- a very different proposal from any of the other ones introduced -- has yet to be introduced as a bill, and the Committee has yet to announce when it will mark-up a bill. We hope to be able to secure a provision for a national pilot project for whole farm revenue coverage during Senate Committee action, if and when it occurs.

On August 2, EPA took its first dramatic action under the new authority provided to it under the Food Quality Protection Act of 1996, banning the use of the organophosphate methyl parathion, and restricting the use of azinphos methyl, on all fruit and some vegetables (but not on cotton, wheat, or corn) effective starting next spring. Effective the following year, worker protection measures must also be in place. In announcing the restrictions, EPA cited the FQPA's special protection provisions to guard children's health.

FQPA requires EPA to re-examine a third of pesticide tolerances by August 3, 1999, starting with those considered high risk, but the agency is lagging far behind schedule. In making the methyl parathion announcement, EPA indicated it would finish the review of the 37 other organophosphates by the end of 2000 and start and finish the review of atrazine, aldicarb, and carbofuran by mid-2001. Also on August 2, the Natural Resources Defense Council announced it is filing a lawsuit against EPA in US District Court in Northern California, asking the court to put EPA on a quicker, stricter schedule for reviewing high risk pesticides, as required by the law. On the other hand, the American Crop Protection Association accused EPA of acting with haste using incomplete data, their constant refrain to nearly every contemplated pesticide regulatory action.

Wasting no time, the House Agriculture Committee held a hearing on August 3 with members from both parties blasting EPA for moving too quickly. The hearing served in part to build support for HR 1592, a bill introduced by Rep. Richard Pombo (R-CA) to force the agency to issue formal rules for public comment on all of its science policies used in the review of pesticide tolerances, issue rules for exposure assessments, and issue guidelines on data requirements. A companion bill was introduced in the Senate by Senator Chuck Hagel (R-NE) on July 29. The bills are part of an effort by industry to slow down and reverse the new FQPA requirements

On August 6, the EPA issued its draft "Guidance Manual and Example NPDES Permit for Concentrated Animal Feeding Operations," a key action item of the Unified National Strategy for Animal Feeding Operations (UNSAFO) issued by USDA and EPA in March. [Federal Register for March 9, 1999, or on the Web at http://www.epa.gov/owm/finafost.htm.]

The new guidance is intended to accelerate the issuance of regulatory permits for large CAFOs. It will work in tandem with yet-to-be-released guidance from USDA on development of Comprehensive Nutrient Management Plans (CNMPs), another key ingredient of the UNSAFO. The CNMP would be incorporated into the permits as special conditions.

As this office has been predicting for quite some time, USDA will make many of the most important substantive decisions of the Unified Strategy through NRCS technical guidance. This magnifies the importance of the substantial changes we have already sucessfully won in the preparation of NRCS's nutrient management policy and increases the importance of getting NRCS to respond to our many continuing questions and concerns. A meeting is scheduled later this month with NRCS officials to try to get our concerns addressed.

The Feedlot Work Group of the Clean Water Network harshly criticized the new EPA guidance for handing too much discretion to the states and too much authority to USDA. If each state sets different standards, the desired "level playing field" will not be achieved. Working through NRCS procedures, designed for voluntary technical assistance rather than regulation, could make the outcome even more disparate and difficult to enforce.

EPA is taking public comment on its model permit guidance until October 6th. We will be issuing a short summary of the guidance and a set of "talking points" in September to help organizations and individuals compose comments to submit to EPA. We will do the same when USDA issues the CNMP guidance, expected in late September.

The North Central Region of the Sustainable Agriculture Research and Education (SARE) program issued a call for pre-proposals for year 2000 projects. Deadline for pre-proposals is September 10, 1999. Two of the North Central priority areas for 2000 stand out.

First, "Small- and Moderate-sized Marketing Systems," which seeks proposals on improving local and regional marketing arrangements, improved infrastructure for sustainable ag products, policy development, as well as identifying and overcoming farmer/rancher barriers to marketing.

Second, "Impact of Farm Policy at the Local, State or Federal Level on Sustainable Agriculture Implementation in the NCR," solicits proposals that delve into how policy decisions at all levels can or do affect sustainable agriculture, and develop innovative policy ideas.

Copies of the call for pre-proposals are available from NC SARE in Lincoln, Nebraska at (402) 472-7081 or on the web at http://www.sare.org/ncrsare at the "Call for Proposals" link.

At long last, the rules for State Technical Committees have been finalized (see Federal Register, August 3, 1999, starting at page 41999) -- just 20 months after the comment period ended on the proposed rule! However, some of the recommendations we submitted on the proposed rule, while agreed to in principle, are not included in the rule but will instead be in a guidance document still in the drafting process.

A checklist of comments we submitted and the agency respone in the final rule follows:

• List the duties of the STC in the rule -- done
  
  
• Restore the CRP to the list of STC duties -- done
  
  
• Add the CFO, Farmland Protection Program, and Debt for Nature to STC duties -- added FPP
  
  
• Add evaluation of new practices and systems to list of duties -- done
  
  
• Require response in writing from State Conservationist on all STC recommendations within 3days of final decision -- to be included in guidance document
  
  
• Require written denial and rationale if request to serve on STC is rejected -- not accepted
  
  
• Include STC subcommittee authority in the rule itself -- done
  
  
• Allow subcommittees to have members who are not full STC members -- rejected, but public attendance encouraged
  
  
• Require written agendas and minutes of meetings and recommendations -- to be included in guidance document
  
  
• Require at least 3 STC meetings a year, unless waiver approved by Chief -- rejected
  
  
• Require at least 14 day rather than 7 day notice of meetings -- done
  
  
• Maintain a STC mailing list for distributing meeting notices and minutes -- to be included in guidance document.

The American Bankers Association (ABA) released a new report on August 4 entitled "Positioning Agriculture and Rural America for the 21st Century." It calls for substantial funding increases for government guarantees of farm loans, reducing the FSA cash flow requirement from 110% to 100%, and elimination of the FSA loan graduation requirements. They back whole farm revenue and cost of production insurance, but also support abandoning actuarial soundness for crop insurance. The ABA also calls on Congress to increase the CRP from 36 to at least 40 million acres to increase supply control. The bankers criticize the Farm Credit System for serving only larger, well- established farm families with strong financial positions and abandoning small and beginning farmers. They call on Congress to allow USDA to guarantee state "aggie bond" loans to beginning farmers and suggest that universities and agencies reshape educational efforts for young farmers and rural entrepreneurs. The report is available from the ABA on the web at http://www.aba.com or by phone at 800- 338-0626.

The U.S. Geological Survey has released a report summarizing its findings on the effects of nutrients and pesticides on water quality in 20 of the country's largest river basins. The report concludes that the widespread occurrence of nutrients and pesticides in the nation's waters, often in complex mixtures, raises concerns about impacts on human health and risks to aquatic life. The report, "The Quality of Our Nation's Waters--Nutrients and Pesticides," is available on the web at http://water.usgs.gov/pubs/circ/circ1225/ or in printed form (single copies of the report are free) from: Branch of Information Services, P.O. Box 25286, Denver, CO 80225, or by fax request to: 303-202-4693. Please specify USGS report C-1225.

Also available is a new report "Review of Phosphorous Control Measures in the United States and Their Effects on Water Quality," USGS Water Resources Investigations Report 99-4007. The report is available on the Web at http://wwwrvares.er.usgs. gov/nawqa/nutrient.html or hard copies of the report are available at the phone numbers and address above.

USDA's Economic Research Service (ERS) released a new report "Green Technologies for a More Sustainable Agriculture," with analysis of sustainability issues in the context of four different "green" technologies: Integrated Pest Management, conservation tillage, enhanced nutrient management, and precision ag. Copies are available on the web at http://www.econ.ag.gov or by mail by calling (800) 999-6779.

In a July 26, 1999 report, the General Accounting Office concludes that Federal agencies will hand over approximately $114 million in FY1999 to operators of large-scale, intensive livestock operations in order to help them deal with the mess they generate. The report assesses federal financial and technical assistance to livestock producers for nutrient and waste management, most of it through the Environmental Quality Incentives Program (EQIP). The report also reviews current practices in use for management of animal wastes. Copies of the report "Animal Agriculture: Waste Management Practices" (GAO/RCED-99-205) are available on the web as a PDF file at http://www.gao.gov/new.items/rc992 05.pdf or by phone at (202) 512-6000.

The Environmental Working Group's latest report on atrazine in Midwest tap water, "Into the Mouths of Babes: Bottle-fed Infants at Risk from Atrazine in Tap Water," reviews the results of water testing throughout the region from 1993 to 1998. The report gives particular emphasis to findings that impact on children's health, noting that children in 138 communities could exceed the acceptable lifetime dose (as defined by federal law) of atrazine by age five. Copies of the report are available on the web at http://www.ewg.org or in hard copy for $20 + $3 shipping & handling at (202) 667-6982.

A panel brought together by the National Research Council to study the effects of long term exposure to environmental contaminants, including some pesticides, on endocrine function issued a report that calls existing data inconclusive, and called for more research. The panel determined that high dosages of these chemicals have harmful effects, but left open the question of exposure at lower, background levels. Copies of the report are available through the National Academy Press on the web at http://www.nationalacademies.org or by mail at 2101 Constitution Ave. NW, Washington D.C. 20418

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Home Farm Policy Menu Inside The Beltway -- August '99 (II)