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  News Desk[Back to News Desk Main]The Farm Bill...What it is and why it's importantThe Farm Bill affects all Americans to some extent. It governs our federal farm, food and conservation policy. Renewed every five years, this broad legislation affects the availability of food stamps for low-income families, rural economic development, efforts to conserve our rivers and forests, agricultural research and food safety investments. It also supplies governmental support to the people who grow and harvest our nation’s food supply. Federal farm policy began in the United States during the Great Depression and Dust Bowl of the 1930’s, when 20 percent of all Americans were involved in farming. Now less than 2 percent can call themselves farmers. The current Farm Bill expired in September 2007. Congress spent the preceding months deciding what programs to revise, eliminate or create. The full house of Representatives and Senate must vote to approve the reforms in every bill. Here’s an outline of this legislation, huge in scope but still little known by most Americans. The 2002 Farm Bill covered 10 different areas, called “titles.”
The largest single component of the Farm Bill is the food stamp program, which costs around $32 billion and benefits over 26 million low-income people a year. In 2005, a family of four could receive a maximum of $499 for specific foods based on a nutritious food plan. Other programs covered in the Food and Nutrition Title included food distribution on Indian reservations, the Emergency Food Assistance program and some support of fresh fruits and vegetables for schools. Total expenditures: $44 billion annually. At $12 billion, commodity programs account for 15 percent of the total Farm Bill. In 2003 500,000 farmers (a quarter of America’s 2 million farmers and ranchers) received some form of commodity support to cushion the adverse effects of weather, pests, and market fluctuations. Wheat, corn, rice, cotton and soybeans generate most of the payouts. These are designed to make up the difference between market price and a target price or loan deficiency payments, guaranteeing a minimum price to farmers. Because the top 10 percent of the farmers receiving commodities get 75 percent of all payments, the program has come under criticism. Most payments go to the largest farms because commodity subsidies are tied to production, not the income or assets of the farm household. Conservation programs benefit both farmers and outdoor enthusiasts. Four programs under this title account for the bulk of conservation spending, which benefits about 15 percent of all farms. The Conservation Reserve Program (CRP) provides farmers incentives to move fragile lands out of production into long-term conservation. CRP covers over 35 million acres (8 percent of all cropland) and pays farmers about $2 billion annually. The Environmental Quality Incentives Program (EQIP) provides farmers financial and technical help to adopt environmentally sound farming practices. About $1 billion a year is spent on conservation of water, soil and wildlife habitats. The Wetland Reserve Program (WRP) helps preserve wetlands that have been used for agriculture. Conservation Security (CSP) provides payments for expanded conservation management to those farmers already implementing such practices. WRP and CSP account for about $510 million annually. The 2002 Farm Bill also covered federal programs designed to manage our nation’s forests plus programs to control pests and invasive species. Equipment and technical assistance went to states and volunteer fire departments under Title 8. Rural development under Title 6 provided assistance to nonfarm families living in rural America. Today, less than 10 percent of the U.S. rural population lives on a farm and less than 7 percent work on a farm. In 2005 programs under this title supplied more than 73,000 jobs, provided electricity to 195,000 new consumers and improved both electrical service and water treatment systems. The United States is the world’s largest exporter of agricultural goods, shipping about 20 percent of its total production. Title 3 programs help expand the markets for U.S. agricultural products. The USDA also partners with other agencies to promote biofuels, renewable energy research and incentives for bioenergy production under Title 9. Title 5 programs supply loans to those farmers wishing to begin business or expand production who are unable to qualify for a traditional bank loan. Title 7 funds agricultural research, land-grant colleges of agriculture and agricultural extension.
2007 Farm Bill Proposals
By the time you read this, the 2007 Farm Bill will have been voted on by the House and Senate. At this time, some of the major proposals include the following:
Commodity Past commodity payments have been criticized for over-compensating farmers with high production while under-compensated those who experienced crop loss. New proposals factor in crop yield when determining payments. The new proposal also sets an income limit of $200,000 to receive commodity payments, down from the old AGI limit of $2.5 million.
Conservation The CRP program is slated to retain the current acreage limit while the Wetlands Reserve Program would increase from 2.3 million to 3.5 million acres. The 2007 proposal puts an emphasis on water enhancement, including an additional $4.2 billion for the EQIP program.
Energy The 2007 Farm Bill proposes an increase of $1.6 billion in renewable energy funding to provide for bioenergy research, small alternative energy projects and loan guarantees for cellulosic ethanol projects in rural areas.
Rural development The proposed 2007 plan includes $1.6 billion in guaranteed loans to rehabilitate 1,200 Rural Critical Access Hospitals.
Nutrition Fruit and vegetable producers stand to get $5 billion in supports from the 2007 bill. Another billion would fund research targeted to specialty crops, with $3.2 billion earmarked for nutrition programs like school lunches.
Trade An increase of $250 million has been proposed to support partnerships between the USDA and non-profit domestic agricultural trade associations to share the costs of overseas marketing. Whatever its final form, the 2007 Farm Bill will allocate many billions of your tax dollars in an industry that has long depended on federal assistance. The Farm Bill may not sound exciting. But its influence on American agriculture, land use and related commerce – and its reach into the American home – can hardly be overestimated!
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