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Farm Bill Passes Hurdle
But May Face Veto

Jim Prevor’s Perishable Pundit, December 18, 2007

The produce trade associations have been singing the praises of the new Farm Bill just passed by the United States Senate. United Fresh put it this way:

United Fresh Produce Association commends the U.S. Senate for passing the Food, Energy & Security Act of 2007, the Senate’s version of the Farm Bill, which includes unprecedented advances in funding and policy priorities for the fruit and vegetable industry.

“Today’s action by the U.S. Senate represents another victory in recognizing the importance of specialty crops in national farm policy,” said United Fresh Senior Vice President of Public Policy Robert Guenther. “This Farm Bill bolsters the competitive standing of our industry in today’s global marketplace, and helps launch the next generation of children on a lifetime of healthier eating. We strongly encourage quick action by Congress to appoint a conference committee so differences between the House and Senate versions of the Farm Bill can be worked out in an efficient and fair manner,” Guenther said.

United Fresh, serving as the secretariat, has helped spearhead the Specialty Crop Farm Bill Alliance, a coalition of more than 100 specialty crop organizations which was instrumental in generating Congressional support to advance produce industry priorities. The Alliance and United Fresh have worked closely with Senate Majority Leader Reid (R-NV) and his leadership team, Senate Minority Leader McConnell (R-KY), Agriculture Committee Chairman Harkin (D-IA) and Ranking Member Chambliss (R-GA), and key allies including Senators Stabenow (D-MI), Conrad (D-ND) and Crapo (R-ID) who have been outstanding advocates on behalf of the nation’s specialty crop producers.

Fruit and Vegetable Industry Priorities Included in the Senate Farm Bill:

  • Expansion of the USDA Fruit & Vegetable Snack Program to more than 4.5 million schoolchildren across all 50 states. This program will be a cornerstone of public health efforts to help children develop a life-long healthier lifestyle through consumption of fresh fruits and vegetables.
  • Expansion of Specialty Crop Competitiveness projects focused on regional and local priorities for specialty crop producers. These projects have been successful in improving food safety, investing in infrastructure, enhancing market opportunities and supporting research aimed at specific industry needs.
  • Investment in prevention and mitigation protocols to combat invasive plant pests and diseases, which cost the economy millions of dollars per year and threaten the future of many fruit and vegetable commodities.
  • Enhanced critical trade assistance and market promotion tools that will grow international markets for specialty crops.
  • Significant new investment in research to improve the safety, quality, affordability and access to fresh fruits and vegetables.

United Fresh and the Specialty Crop Farm Bill Alliance will continue to work with House and Senate leadership as the Farm Bill now advances to conference.

PMA explained the event like this:

After months of negotiations, today the U.S. Senate passed by a vote of 79 to 14 its version of the 2007 Farm Bill. The legislation contains numerous provisions for the fruit and vegetable industry, including:

  • Expansion of the USDA Fruit & Vegetable Snack Program to all 50 states.
  • Greater investment in research to improve the taste and quality of foods.
  • Expansion of the “State Specialty Crop Competitiveness” projects which are focused on regional and local priorities for specialty crop producers. These projects have been successful with improving food safety, increasing the consumption of home-grown specialty crops, and supporting research aimed at combating pests and diseases.
  • Enhanced critical trade assistance and market promotion tools that will grow international markets for specialty crops.

The next step in this legislation’s process is the appointment of a conference committee, which will work through the differences between the House Farm Bill and Senate Farm Bill.

Throughout the Farm Bill negotiations, PMA has been an active member of the Specialty Crop Farm Bill Alliance, a group of 120 organizations focused on a single goal of ensuring specialty crops, including fresh fruits and vegetables, are included.

PMA will continue to monitor the 2007 Farm Bill and keep its members informed of new developments. PMA also thanks all members who took time to write their elected officials via the PMA Advocacy Action Center and made our industry’s case for inclusion in this historic legislation.

Even the Organic Trade Association is pleased:

In a 79 to 14 vote, the U.S. Senate today approved its version of the Farm Bill that included funding and direction for key organic priorities, according to Caren Wilcox, executive director of the Organic Trade Association (OTA).

“The Senate Farm Bill includes important steps to help strengthen the safety net for organic producers and manufacturers,” Wilcox said. “These measures include funding for organic research, data collection, and transition to organic production, as well as eliminating the crop insurance premium for organic producers.” Currently, organic producers must pay a 5% surcharge for crop insurance; yet, in times of loss, the producers receive not the usually higher organic crop price, but the lower conventional price.

The Senate version of the Farm Bill:

  • recognizes that increased funding is essential for the National Organic Program at the U.S. Department of Agriculture at the full authorized level;
  • includes $5 million for organic data collection to help provide better price and yield information for organically-grown crops;
  • includes $22 million in new money for certification cost share to aid organic farmers;
  • bars USDA from charging a premium surcharge on organic crop insurance, unless validated by loss history on a crop-by-crop basis;
  • adds organic production as an eligible activity in the Environmental Quality Incentives Program;
  • adds to the Soil and Water Conservation Protection Loans a priority for those converting to organic farming practices and adds conversion to organic production as an eligible loan purpose;
  • provides $80 million over the life of the bill for organic agriculture research and extension, and
  • includes a sense of the Senate resolution that funding for organic research should be commensurate with organic agriculture’s share of the market, currently about 3 percent.

“We in the organic community appreciate all the support we have received for our priorities in the Senate. Thank you to Chairman Harkin, Senator Leahy, who led efforts to create a national organic program, and Senator Chambliss. With their leadership and interest, organic agriculture and processing will have access to the many federal programs typically reserved for non-organic production and processing.” Wilcox said.

But the celebrations may be premature. The bill first must get through a conference committee that will operate under the threat of a veto by President Bush:

Acting Agriculture Secretary Charles Conner issued a statement after the vote calling the legislation “fundamentally flawed.”

“Unless the House and Senate can come together and craft a measure that contains real reform, we are no closer to a good farm bill than we were before today’s passage,” he said.

A White House statement issued after the vote reiterated that Bush’s advisers would recommend that he veto the bill.

The Senate and House also differ on how to pay for it all. The House voted to impose new taxes on certain multinational companies with U.S. subsidiaries that Democrats said were trying to dodge U.S. taxes. Republicans derided it as a tax hike.

In the Senate, [Max] Baucus [Democrat from Montana] found $3.7 billion to help pay the bill’s cost with a crackdown on tax shelters.

We appreciate that the produce industry is only trying to balance the bill, getting support for the produce industry at some infinitesimal percentage of what program crops have long gotten. As a country, though, we need to look at our dysfunctional spending habits.

Why are we increasing taxes on anyone to provide farm subsidies at a time of farm prosperity? How is it possible that with ethanol use pushing corn prices to the highest level in decades that we are passing a bill to send billions in subsidies to corn producers? The Washington Post ran a piece entitled, Corn Farms Prosper, but Subsidies Still Flow:

Corn farmer Jim Handsaker has found a slew of ways to ride the heartland boom in biofuels that is reshaping the economy of rural Iowa.

He sold some of his 2006 crop this year for more than $4 a bushel, the highest price in a decade. His stake in two nearby ethanol plants brought in several thousand dollars more in dividends. Meanwhile, soaring farmland prices have pushed the value of the 400 acres he owns to around $2 million.

Even so, come October he will get a subsidy check from the government, part of a $1.6 billion installment that the U.S. Department of Agriculture will send to corn farmers.

Those annual automatic payments to Handsaker and thousands of other prospering corn growers have long been controversial. But coming at a time when taxpayers are already subsidizing the ethanol industry to the tune of $3 billion a year, the double-barreled support system for those who grow corn and those who turn it into fuel has begun to draw fire in Congress.

“Federal farm subsidies are already narrowly focused on certain crops and are excessive,” said Sen. Richard G. Lugar (R-Ind.), a farmer and former chairman of the Senate agriculture committee. “They become ridiculous given the exploding possibilities to grow crops for biofuels production.”

So far, Congress has shown little inclination to adjust the subsidies to account for the new energy-driven rural economy.

A House-passed farm bill would give corn growers $10.5 billion over the next five years, even if prices stay high. These “direct payments,” a kind of annual allowance, are set by formula and go out automatically, regardless of prices, profits, yields or weather.

There are many good things in the bill that the industry has worked hard for, but most industry members are taxpayers as well as beneficiaries of industry programs. We can’t stand by and just accept a deal where everybody drops opposition to the bill as long as they get a share of the federal till.

Taxing middle class people to give money to “farmers” — many not even farmers, just owners of farm land — with net worths well in the millions is disgusting, and the industry should not condone it.

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