New Year, New Farm Bill


New Year, New Farm Bill
Posted January 2, 2019

The Senate and House of Representatives passed a new Farm Bill that was signed into law by the Oval Office just weeks before the 2019 ball drop, allowing for me to aptly name this article, “New Year, New Farm Bill.” In the spirit of a new Farm Bill, PCFMA has got you covered on the basics of this massive – and massively important – piece of legislation. In this first of two blog posts, you’ll read about the importance of the bill, its history, its price tag, and the bill's major programs. Check back on the blog next week for Part II, which gives a deeper look into the world of Farm Bill.

 

Why you should care

What’s for dinner tonight?: It’s the age-old question that everyone ponders, shortly after lunch. You think, a chuck roast with potatoes and vegetables seems like a cozy, hearty meal, perfect for winter nights. Meat is expensive, so you pick up your roast at the supermarket where it’s cheapest, grab a bag of chips for your road snack, and contemplate buying some new hemp napkins that are on sale (hey, hemp is hippie chic, right?). On the way home, you stop by the farmers’ market for fresh, local, and organic potatoes and carrots. To your delight, you find that your CalFresh (SNAP[1] or food stamps) benefits can be used at the farmers’ market.

Every food decision you made for dinner – from the hemp napkins to the use of food stamps at the farmers’ market – is influenced by the Farm Bill. The meat and chips are cheaper at the supermarket because of federal Farm Bill subsidies for meat, corn, and soy; you can use your food stamps at the farmers’ market because of Farm Bill clauses that incentivize using SNAP benefits for fruits and vegetables; and the new 2019-2023 Farm Bill has legalized industrial hemp at the national level, which means you might see more USA-made hemp products in the coming years. Beyond the tangible effects that you noticed while shopping – such as accessibility and price – the Farm Bill also helped shape the demography of your plate; in other words, if your dinner was produced by minority or beginning farmers in California, or by large-scale, monoculture-style farmers from the Mid-West. Other hidden aspects of your food, which are governed by the Farm Bill, are the conservation and environmental sustainability measures that dictate how crops are grown, and how farms interact with their neighbors and surrounding communities.

In a mere 807 pages, this comprehensive piece of legislation sets a trajectory for local, regional, and national food systems, and has a significant interplay with public health, social justice, and economic opportunities in the United States. The bill must be re-authorized by our legislative and executive branches every 5 years, making it a constantly-evolving piece of American food democracy. That’s significant, because the state of the food system in 2019 looks very different from the food system of the 1930s, when the Farm Bill was first made into law. At a rate of $100 billion per year, it is an important set of policies for every American to be aware of. As food author and activist, Wendell Berry, once said, “If you eat, you’re involved in agriculture.”

At present, the bill is categorized by 12 “titles,” within which are hundreds of programs dispersed among countless organizations for implementation. The titles cover commodity programs, crop insurance, horticulture, rural development, forestry, farmer credit, energy programs, conservation, nutrition, international trade, and agricultural research and extension.

It’s a lot to absorb, a lot to organize, and a lot to delegate, but the Farm Bill holds the power and potential to reform the food system, or to keep things at business-as-usual.

 


 

A different time

In its inception, the intent of the Farm Bill was to simultaneously address declining farm profits and rampant hunger during the Great Depression and Dust Bowl era. Consumers weren’t spending much money, and farmers had surpluses of seven main crops, known as “commodities.” The overproduction of these commodities – corn, wheat, cotton, rice, peanuts, tobacco, and milk – drove prices down to record lows. In an effort to stabilize crop prices, President Franklin D. Roosevelt’s Agricultural Adjustment Act of 1933 paid farmers to curb production of these commodity crops. The government also bought up the surplus that the farmers were unable to sell and the food was then redistributed to the needy. Congress added conservation measures to the bill, as a response to the devastation wrought from the Dust Bowl. These conservation efforts, subsidies for farmers, and nutrition assistance for the impoverished became three main pillars for all subsequent U.S. Farm Bills. During the earlier Farm Bill years, supply management was the name of the game, but these policies have given way to initiatives that tend to favor surplus production of commodities crops (more on that in Part II of this article series).

 

What's the price tag?

The Farm Bill has dramatically increased its budget over the years. The Food and Environment Reporting Network (FERN) found that, in today’s dollars, the most recent 2014 bill cost 14 times more than the first one. In fact, the term “Farm Bill” is somewhat misleading when examining where the money goes. 80% of the bill’s funds are allocated to nutrition programs, followed by 13% in federal subsidies for farmers (commodities and crop insurance), 6% for conservation, and 1% for the remaining titles. In dollar amount, these four main titles accounted for $483.8 billion (99%) in the 2014-2018 bill. The new Farm Bill has an anticipated expenditure of $867 billion over 10 years.


 

The Big Four – Four Farm Bill titles by highest expenditure

Commodities and Crop Insurance

The Farm Bill allocates financial support for a specific group of crops, known as commodities. As of the 2014 bill, when “covered commodities” are referenced, they refer to corn, feed grains, wheat, rice, soybeans, other oilseeds, peanuts, peas, and lentils. Some provisions in the commodity programs also distribute loans to cotton, wool, mohair, honey, and sugar producers. Fruits, vegetables, and nuts – referred to as “specialty crops” – are not included in the Commodities title.

Many commodities programs are administered by the Farm Service Agency. The financial assistance granted to covered commodities is often based on price or revenue targets for producers. Under the Price Loss Coverage (PLC) program, if market values for crops fall below pre-determined “reference points,” the PLC will step in to reimburse farmers for their loss. Through the Agriculture Risk Coverage (ARC) program, farmers are compensated for out-of-pocket loss when crop revenue declines.

These programs are separate from crop insurance, which has a title of its own but mainly serves commodities farmers as well. Crop insurance is a safety net administered by the USDA’s Risk Management Agency, meant to reimburse farmers when they’ve had poor yields, lost crops to natural disasters, or lost revenue from fluctuating commodity prices. Insurance disbursements typically cover individual commodity crops, but a newer insurance policy, called Whole-Farm Revenue Protection (WFRP) is meant to support small, diversified farms. The policy covers the entire farm, rather than one commodity crop.

Both commodities programs and crop insurance programs are funded by taxpayers. Taken together, the commodities and crop insurance titles are purported to account for $139 billion – or about 15% of total Farm Bill spending – over the next 10 years. The new 2019-2023 Farm Bill still contains some loopholes that allow for virtually unlimited subsidies and crop insurance payments for large-scale farms, while also expanding this coverage to include extended family members as subsidy recipients.

 

Nutrition

The Nutrition title houses the Supplemental Nutrition Assistance Program (SNAP), which is the largest program in the Farm Bill and provides food assistance to over 40 million Americans. Formerly known as food stamps, SNAP provides food assistance to eligible low-income individuals via Electronic Benefits Transfer cards that can be used at authorized food retailers. The Farm Bill also dictates eligibility requirements for SNAP recipients.

The Nutrition title houses the Food Distribution Program on Indian Reservations and the Emergency Food Assistance Program which provides food and support to food banks and food pantries. More recently, the Nutrition title provides federal funding via Food Insecurity Nutrition Incentive grants, which compensates organizations that are incentivizing SNAP recipients to use their benefits on fruits and vegetables. One example of this is the Market Match program at PCFMA, which provides up to $10 in matching funds – per day, per person – to spend on farmers’ market produce when SNAP recipients use their EBT cards at PCFMA farmers’ markets. The new Farm Bill renames this program to honor Gus Schumacher, a former USDA under-secretary who fought tirelessly for these types of programs – both in government and as a founder of the nonprofit Wholesome Wave – until his death in 2017.

 

Conservation/Environment:

Conservation programs cover a spectrum of environmental initiatives related to air, water, soil, and forest quality. Some of the larger programs under the Conservation title include the Conservation Reserve Program, the Environmental Quality Incentives Program, and the Conservation Stewardship Program. Through these conservation programs, there are incentives for better agricultural land management; technical assistance for farmers implementing conservation practices; and land retirement initiatives that incentivize farmers to convert some of their productive land to conservation.

This title also provides stipulations for farmers who are enrolled in programs under the Farm Service Agency and the National Resource Conservation Service, called Conservation Compliance. In the case of conservation compliance, “commodities” refers to any crop that is produced with annual tilling methods on “highly erodible land”. Conservation compliance penalizes producers who convert protected wetland to farmland, as well as producers who farm on highly erodible land without enacting conservation measures. In the 2014 Farm Bill, verbiage was added to the conservation measures which links crop insurance to conservation compliance, so that those who violate conservation laws may be ineligible for insurance premium subsidies.

 


 

Where do farmers’ markets fit into this legislation? And what are people saying about the new Farm Bill? Check back on the blog next week for Part II of New Year, New Farm Bill!

 

[1] SNAP is an acronym for the Supplemental Nutrition Assistance Program, a nationwide initiative which provides food aid to low income individuals via Electronic Benefits Cards (EBT).

 

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