Farm bill finally passed
Wednesday, February 12, 2014 7:18 AM
After nearly four years of wrangling in Washington, Congress passed a new farm bill last week. What will that mean for Houston County residents?
"Before we get the regulations in hand, it's difficult to talk about the details.... But direct payment subsidies are ending," Kevin Elton said.
Elton serves as Houston County director of the USDA's Farm Service Agency. He spoke last week on some important aspects of the recently-passed bill, even though it hadn't yet been signed into law.
According to the Environmental Working Group, a Washington-based non-profit which terms itself "farm program watchdogs," Houston County producers received a total of $70.2 million in corn subsidies from 1995-2012. Direct corn payments are listed at $12,653,470, while a second category, "estimated direct payments" totaled $3,853,731. Counter cyclical payments totaled $4,922,531.
"With those direct payments no longer coming, it's definitely going to impact the area," Elton said. "That was a lot of money coming into the county. The direct payments were guaranteed every year, no matter what the price did. That is no longer going to happen.
Federally-subsidized crop insurance - offered through private companies - will still be available to producers.
Even though the "official word" hadn't arrived yet, Elton said that the massive (959 page) document is reputed to include some disaster provisions to protect farmers.
"What the new program would be doing, would eliminate the automatic direct payments and just have a safety net if the price did go to a certain level. It would trigger some type of payment...a lot of farmers that don't have crop insurance would sign up for our program for some type of safety net. I don't know what the percentage of farmers in our county who have crop insurance is, but I don't think it's over 50 percent."
Nearly 80 percent of farm bill spending goes towards food programs such as SNAP (Supplemental Nutrition Assistance Program), commonly referred to as food stamps. Approximately 15 percent goes towards farm subsidies, while the other 5 percent funds conservation, rural development, renewable energy and a slew of other programs. Total yearly spending totals about $96 billion.
The new bill includes cuts to food stamps totaling $8.6 billion over 10 years, but additions to other nutrition programs bring that total reduction down to $8 billion. Other cuts to farm bill spending are projected to save even more, but estimates vary on just how much. Farmers will lose direct payments, but more federal dollars are going towards subsidized crop insurance.
"It may be six months or a year from now before we really know what all of the details are," University of Minnesota Extension educator Jerrold Tesmer said. "The biggest one I can think of is the way that crop insurance is going to be handled... My impression is that there's going to be no guaranteed payments, but there will be more crop loss type payments."
The Agriculture Act of 2014 addresses everything from $900 million for a slew of energy programs to $100 million for support to farmers and ranchers who are just starting out. Also included are measures to support milk producers. Without those, a reversion to a 1949 milk price policy was claimed to have the potential to double costs to consumers. Another provision was challenged at the World Trade Organization by Canadian and Mexican meat producers, but included anyway. That new requirement will add county of origin labeling on pork, chicken and beef. It will include where the animal was born, slaughtered and processed.
Sen. Amy Klobuchar (D-MN) helped to draft the farm bill. She released the following press release following the 68-32 vote in that chamber:
"As a member of the farm bill conference committee, I worked with Democrats and Republicans in both the House and Senate to shape a final bill that will give our farmers the certainty they need to grow and thrive. This bipartisan legislation will reduce the deficit, strengthen the crop insurance program, eliminate direct payments, boost conservation and keep nutrition programs strong for Minnesota families."
The Houston County Farm Bureau released this statement from Minnesota Farm Bureau Federation President Kevin Paap:
"It's been a tough road for the legislation," he said, "but we are pleased with the clear bipartisan vote that prevailed. We need the final bill signed into law by President Obama so farmers and ranchers can have the certainty they need to make business decisions over the next five years and to provide the U.S. Department of Agriculture time to begin implementation of the bill's provisions."