Food and Farm Policy

June 2008

In 2007, Congress started working on a new "farm bill" which determines not only farm policy, but also policy for nutrition programs (e.g. food stamps), conservation of land and water, food aid, trade, and rural development. Congress passed a new bill in June 2008 that will set farm and food policy for the next 5 years.

What Happened in Congress

NETWORK's Position and Advocacy

Background Information

Organizations Advocating for Food and Farm Policies

NETWORK's Food & Farm Bill Workshop

 

NETWORK’s Vision and Values

NETWORK envisions food and farm policies that ensure:

• Healthy food for all families
• Conservation of our land, water and air
• Vibrant rural communities
• Fairness for U.S. and global farmers.

Our vision comes from principles of Catholic social teaching, which call us to:

• Care for people who are poor and vulnerable
• Be good stewards of God’s creation
• Promote the common good
• Be in solidarity with our neighbors around the world.

Our faith also calls us to participate in the social and political decisions that affect our lives. We believe that Member of Congress need to listen to people of faith who believe that food and farm policies must be based on values of fairness, care for people who are poor, care for the earth, and the common good of local and global communities.

 

What Happened in Congress

June 20, 2008

The debate on the farm bill was often contentious, mostly about how to pay for new programs in the bill, and whether or not there should be significant reform of farm subsides. The House passed H.R. 2419, the "Farm, Nutrition and Bioenergy Act" on July 27, 2007, by a vote of 231-191. The Senate passed an amended bill on December 14, 2007 by a vote of 79-14. Five months of negotiating followed, trying to get a compromise version of the bill that everyone could accept.

Finally, the House passed the conference report for the farm bill, now called the "Food, Conservation and Energy Act of 2008" by a vote of 318-106 on May 14, 2008. The Senate passed it by a vote of 81-15 on May 15, 2008.

President Bush vetoed the bill on May 21, saying that "this bill lacks program reform and fiscal discipline. It continues subsidies for the wealthy . . . is inconsistent with our objectives in international trade negotiations . . . would needlessly expand the size and scope of government."

That same week, Congress voted to override the president's veto, 316-108 in the House and 82-13 in the Senate, so the bill became law in spite of the president's objection.

Oops . . .

Someone discovered that the bill that was vetoed by the president was missing an entire section - Title III on trade. It was unclear whether the bill that Congress voted into law (by overriding the veto) was intact. So Congress decided to vote on the same bill again, giving it a new number to try to avoid more confusion. The House passed the "new" "Food Conservation and Energy Act" H.R. 6124, on May 22 by a vote of 306-110, and the Senate followed on June 5, by a vote of 77-15. They sent the bill to President Bush again, this time making sure that all sections were included.

President Bush vetoed the bill, again, on June 18, and that same day Congress voted to override the veto, again, 317-109 in the House and 80-14 in the Senate. So the new farm bill became law that day. It should be about 5 years before Congress has to vote on another farm bill.

 

NETWORK's Position and Advocacy

NETWORK members have advocated for just farm and food policy for the past year, and we have seen benefits from that advocacy. But NETWORK did not take a position either for or against the conference report for the farm bill because there were some good things in the bill, but some things that still needed to be improved.

We are pleased with the nutrition section of the bill, which improves rules and funding for food stamps and other nutrition programs.

• The minimum benefit and the standard deduction for the food stamp program (now called the “Supplemental Nutrition Assistance Program”) have both been increased and indexed for inflation. New deductions are allowed from income that determines eligibility: child care expenses, retirement accounts, and approved education accounts.

• The Emergency Food Assistance Program (TEFAP) is increased to $250 million per year and indexed for inflation.

We are disappointed that there is no significant reform of the commodity subsidies that give unfair advantage to large landowners at the expense of small farmers in the U.S. and around the world.

NETWORK understands that compromise is necessary in the political environment, but we feel that the farm bill unnecessarily sets up a conflict between domestic food programs and sustainable global agriculture policy. We have worked for farm bill reform with other faith groups who are concerned about global trade-distorting subsidies that hurt farmers in developing countries who cannot compete with U.S. farm policy. While we are pleased with the improvements to the food stamp program, we cannot fully support a farm bill that unjustly subsidizes wealthy U.S. farmers.  

Although we find once again that it is very hard to change entrenched systems based largely on money and politics, we are pleased with the unprecedented momentum for reform that resulted from the collaborative efforts of religious, environmental, and family farm groups.

A Few More Words about Farm Subsidies

There are many different types of subsidies that fall into three general categories: trade-distorting (based on market price), non-trade distorting (e.g. direct payments, based on historical production), and conservation payments. Most of the subsidies are structured to favor large farms, because the more farmland you have, the more money you can get. Most of the subsidies go to producers of certain crops: corn, wheat, soy, rice, and cotton. There is relatively little support for fruit and vegetable growers and organic farms.

NETWORK does not advocate elimination of farm supports, we advocate fair supports for all farmers. The groups we work with who are concerned about global trade and development want to phase out trade-distorting subsidies and replace them with some other kind of safety net. Most people would also like to phase out direct payments, which are paid whether you grow anything or not. We advocated for caps on the amount an individual farmer can get and limiting payments to farmers who make under a certain amount of income. These would be steps to target payments to those who really need them.

There were amendments last year that had alternatives to make farm supports more fair. The Lugar-Lautenberg amendment in the Senate and the Kind-Flake amendment in the House would have transitioned the current trade-distorting commodity subsidy system to one of risk management accounts and revenue insurance. This would provide a safety net that would include more farmers, not just certain commodity (corn, soy, wheat, rice & cotton) farmers, and would also be more fair to global farmers. There were other amendments that would have limited direct payment subsidies. NETWORK supported these alternatives, but the majority of Congress did not.

The final conference bill has some minor adjustments to direct payment subsidies, and it does contain language that specifically prevents deceased farmers from receiving payments (!) but the bill still allows a married couple with as much as $1.5 million in annual farm income, after expenses, and $1 million in non farm income to qualify for subsidies.

The bill would do nothing to reduce trade-distorting subsidies that hurt farmers and rural communities in developing nations.

 

The Senate Vote

NETWORK supported two amendments to the farm bill in the Senate:

1. The Lugar-Lautenberg Farm Ranch Equity Stewardship and Health (FRESH) amendment would have provided a more equitable safety net for all U.S. farmers by phasing out commodity payments and providing a crop revenue-based insurance program for all farmers, not just growers of certain commodities (e.g. corn, soy, wheat, rice, cotton). This would also bring our farm policy into compliance with international trade rules and therefore be more fair to farmers in developing countries. And it would have produced several billion dollars in savings to invest in other pressing needs such as nutirtion and conservation programs.

The Senate rejected the Lugar-Lautenberg amendment by a vote of 37-58 on December 11, 1007. Find out how senators voted at http://capwiz.com/networklobby/vote.xc/?votenum=417&chamber=S&congress=1101&voteid=10674636&state=US

2. The Dorgan-Grassley Payment Limitation amendment would have limited annual commodity subsidy payment to $250,000 per individual. farmers. It would have closed loopholes and set specific limits for the various types of subsidy payments, and required individuals to be actively engaged in farming to receive payments. Savings would be invested in nutrition, conservation, beginning farmer and rural development programs.

NETWORK believed that the Grassley-Dorgan amendment represented the least the Senate could do to reform the inequitable farm subsidy system. NETWORK and other advocates worked hard to pass this amendment, and a majority of senators did vote for the amendment. But, due to a political deal between Senate leadership and a few senators from farm states, 60 votes were required to pass the amendment. So in the end, the Senate rejected the Dorgan-Grassley amendment by a vote of 56-43 on December 13, 2007. Find out how your senators voted at http://capwiz.com/networklobby/vote.xc/?votenum=424&chamber=S&congress=1101&voteid=10674676&state=US#summary

The House Vote

NETWORK supported an alternative “Fairness in Farm and Food Policy” amendment, sponsored by Rep. Ron Kind (D-WI) and Rep. Jeff Flake (R-AZ) which would have reduced subsidy payments to large producers and provided a more equitable safety net for farmers. The House rejected the amendment by a vote of 117-309 on July 26, 2007. This reform amendment was seen as too radical for most representatives, including House leadership.

The House passed the “Farm, Nutrition, and Bioenergy Act”, HR 2419, by a vote of 231-191 on July 27, 2007. This bill has some good provisions for nutrition programs and rural development, but NETWORK is disappointed that there was very little reform of farm subsidy payments. The current subsidy payment structure favors large agribusiness, does not help most family farmers, and harms farmers in developing countries.

 

Background Information

Sources

Why a Farm Bill?

Congress first enacted the system of price supports, subsidy payments and supply controls that we recognize as the farm bill with one of the earliest pieces of New Deal legislation in 1933.

Farm income and commodity price support policies are at the heart of every farm bill, but recent iterations have typically included titles on agricultural trade and foreign food aid, conservation and environment, domestic food assistance (primarily food stamps), and rural development.

The most recent comprehensive law governing farm support passed in 2002, and its provisions will expire in 2007.

What’s in the Farm Bill?

• Nutritional Assistance—The farm bill usually includes funding the for the food stamp program, nutrition assistance block grants to states and some territories, the Food Distribution Program on Indian Reservations (FDPIR), the Emergency Food Assistance Program (TEFAP), the Commodity Supplemental Food Program (CSFP), Community Food Projects, and some rules governing the provision of federally acquired food commodities to domestic feeding programs such as school meal programs. The 2002 bill created a Seniors Farmers’ Market Nutrition program, a fruit and vegetable pilot program for schools, a program to increase domestic consumption of fresh fruit and vegetables, and provisions to encourage schools to purchase locally produced foods.

• Price supports—These are concentrated on “food grains” such as wheat and rice, “feed grains” such as corn, barley and oats, “oilseeds” such as soybeans and canola, and “upland cotton.” Other crops, including peanuts, wool, mohair, honey, chickpeas and dry beans, are eligible for some assistance, but not direct price support.

• Supply controls and import quotas—These apply to milk and sugar in the current bill, and they act to maintain prices for these commodities above what the market might otherwise dictate. Given the cost to maintain the programs and the World Trade Organization (WTO) rules for fair trade, these are at risk in the new bill. However, past efforts to significantly alter or phase out these programs have not been successful.

• Green Payments--The 2002 farm bill included a Conservation Security Program aimed at encouraging integrated whole-farm planning and rewarding producers who conserve resources across their entire operation. Tight requirements and relatively low financial incentives have combined to limit participation in this program.

• Trade and Export Promotion—Export credit guarantees for commercial agricultural sales, export subsidies for grains and dairy products, and funding for promotion of U.S. farm products in overseas markets.

What’s In Play for 2007?

• Since the passage of the last farm bill, the federal budget deficit has increased significantly, reducing the funds available to support all federal programs, including agricultural support.

• Commodity prices have increased since 2002, reducing the amount of funds needed for direct crop subsidies.

• The World Trade Organization (WTO) has ruled that certain aspects of U.S. support to cotton farmers are illegal subsidies and must be removed. This development may cause legislators to question the effect of every new U.S. farm policy proposal on trade commitments to the WTO.

• Payment limits—In 2005, 6.2% of the farms receiving payments got 36% of the payments. Over $5.7 billion went to farms with annual sales over $500,000. Congress will be under some pressure to reduce the outflow of money to these larger farms and to address concerns that these subsidies are contributing to the absorption of smaller family farms by larger corporate operations.

• Green Payments—Replacing some existing subsidies with environmentally focused incentives may be a more attractive option in this farm bill than in previous bills because farm supports that are focused on conservation and environmental improvement are viewed more favorably under WTO rules.

• Energy—Current interest in renewable energy is likely to spark debate on incentives for producing biofuels such as ethanol.

• Export Promotion—These face a real bang-for-the-buck challenge in this round of farm bill debate. They are increasingly limited, due to international trade agreements, and legislators may be less likely to commit funds to a program that may cause more harm in terms of international trade protests than good in terms of benefits to American agriculture.

• Rural Development —The bulk of rural development funding in past farm bills has focused on crop subsidies that improve the lot of farmers living in rural areas as the key to improving rural economies--a sort of rural trickle-down concept. But there is growing support for the concept that farmers actually depend on a healthier and more diverse rural economy as a predecessor to the success of the farm. Several development issues may be in play for 2007, such as developing new sources of economic growth for rural areas, stemming rural population out-migration, and conservation and environmental restoration as rural employment opportunities.

Sources

Congressional Research Service, “Food Stamps and Nutrition Programs in the 2002 Farm Bill,” Order Code RL33690, available online from the National Agricultural Law Center at the University of Arkansas School of Law Website, http://www.nationalaglawcenter.org/assets/crs/RL33690.pdf.

Congressional Research Service, “Previewing a 2007 Farm Bill,” Order Code RL33037, available online from the National Agricultural Law Center at the University of Arkansas School of Law Website, http://www.nationalaglawcenter.org/assets/crs/RL33037.pdf.

Senator Tom Harkin’s Summary of the 2002 Farm Bill http://harkin.senate.gov/agriculture/farm-bill-summary.cfm

Take the Food Stamp Challenge on Catholic Charities USA’s Web site: http://povertyinamerica.typepad.com/campaign/hunger/index.html

To learn more about international food aid, go to: http://donate.crs.org/site/DocServer/Final_Farm_Bill_Backgrounder.pdf?docID=1541&AddInterest=1101&JServSessionIdr009=3dt13vqg78.app13a

U.S. Department of Agriculture www.usda.gov

Organizations advocating for improved food and farm policies:

Oxfam America’s Farm Bill Campaign www.oxfamamerica.org/whatwedo/campaigns/agriculture

Bread for the World www.bread.org

National Catholic Rural Life Coalition www.ncrlc.com

Farm & Food Policy Project www.farmandfoodproject.org

Sustainable Agriculture Coalition www.sustainableagriculturecoalition.org

National Family Farm Coalition www.nffc.net

National Campaign for Sustainable Agriculture www.agmatters.net

NETWORK, A National Catholic Social Justice Lobby
www.networklobby.org/issues/alsoofinterest/FarmBill.htm
NETWORK's Messages for U.S. Food and Farm Policy
NETWORK's "Farm Subsidies 101"

Religious Working Group on the Farm Bill
Religious Working Group Principles for the Farm Bill
Also see: http://www.politico.com/news/stories/0507/3892.html

Rural Coalition ruralco.org/action/policycenter/farmbill.html

Food Research and Action Center www.frac.org

Environmental Working Group – database on subsidies www.ewg.org/farm/

Public Health Action on the Farm Bill http://www.publichealthaction.org/