Currently browsing posts about: Farm-bill

When I taught a course on the farm bill some years ago, students were stunned by how crop insurance works.  They wondered how they could break into that business.

Sixteen insurance companies write policies for farmers.  The federal government pays 62% of the premiums to the tune of about $8 billion per year.  Farmers pay 38%.

The lucky insurance companies make out like bandits under this system—an average rate of return of 24.8%.  The Government Accountability Office, no surprise, thinks this exceeds market rates and needs to be readjusted.

Farmers need crop insurance, no question.

But in the wake of Hurricane Irma, we learned that farmers who grow fruits, vegetables, and nuts—in USDA jargon, “specialty crops”—feel that they cannot afford it.

Historically, the program has covered corn, soybean, and other large-scale commodities—about 85% of such acres are covered.

But crop insurance now covers 73% of fruit and tree nut acreage but only 32% percent of vegetable crops, accounting for 8% of premiums.

According to a Risk Management report on specialty crops, insurance covers virtually all of Florida’s sugarcane, cotton, and citrus, but only about half of fresh tomatoes, sweet corn, and bell peppers, and none of fresh beans.

Obviously, plenty is wrong with the crop insurance program.  Will the 2018 farm bill do anything to fix it?

According to Politico Pro Agriculture, Secretary Sonny Perdue told reporters that the he favors restructuring the program but that the crop insurance program should not promise farmers profitability.

What about profitability for the crop insurers?  The GAO recommends reducing this industry’s profits to market rates.  That should leave plenty of money to help specialty crop farmers.

When the Administration’s released its “America First” budget, Senator Debbie Stabenow (Dem-MI) issued two Infographics

The first is on effects on the 2018 farm bill. 

The second is how the proposed budget will affect rural America.

Stabenow is the ranking member of the Senate Agricultural Committee.

Her Infographics are easy to read and worth a look.  They take vast amounts of complicated material and boil it down to key facts.  Their conclusions:

• This budget leaves America’s small towns and rural communities behind.
• This budget would make a 5-year farm bill impossible to pass.

I hope she is right about the second one.

Let’s all give thanks to Philip Brasher who is writing a series of articles on the 2018 farm bill for Agri-Pulse.

If you are curious—and brave enough—to dive into this incredibly important but overwhelmingly detailed and phenomenally politicized piece of legislation (my take on the farm bill is here) , here is the place to start.

He’s done three so far:

• Lesson #1: Every farm bill is unique – the last one was a doozy
• Lesson #2: The Farm Bill ‘Math’ is complicated and ever-changing
• Lesson #3: Regional divides make writing a farm bill more of a gamble

More to come.  Don’t miss them.

In the meantime, just to get you started on the politics, literally hundreds of farm groups signed a letter to Congress urging it not to cut farm programs.

The undersigned organizations, representing America’s agriculture, nutrition, conservation, rural development, finance, forestry, energy, trade, local government, plant/animal health, agricultural sciences and veterinary medicine, labor, outdoor recreation, equipment manufacturing, cooperatives, hunters, anglers and crop insurance sectors, strongly urge you to reject calls for additional cuts to policies within the jurisdiction of the Senate Committee on Agriculture, Nutrition and Forestry or the House Committee on Agriculture.

During consideration of the 2014 Farm Bill, the Agriculture Committees made the difficult choices necessary to deliver a bipartisan bill. Budget cuts made in that bill should be recognized as Agriculture’s contribution to deficit reduction. We know the committees will once again face challenging budgetary and policy choices in the development of the 2018 Farm Bill. That is why it is so important you ensure the committee process for the farm bill can proceed with some budget flexibility.

I’ll be following this as best I can.  Stay tuned.

The Environmental Working Group and Food Policy Action are trying to get a head start on the upcoming Farm Bill.  Their new initiative: Plate of the Union.

This has four objectives:

• Stop taxpayer subsidies going to Big Ag polluters – instead, invest in healthier farms.

• Protect and improve vital anti-hunger programs.

• Increase federal investments in organic agriculture.

• Expand federal programs to revitalize land and reduce food waste.

These are critically important goals.  Everyone who cares about food needs to understand the farm bill and what it does.

But how to achieve them?

I’d like to know the action plan.  Stay tuned.

Politico’s magazine, The Agenda, has an entire issue on food.  The lead  piece is The Great FLOTUS Food Fight and there are other interesting pieces too: The U.S. food safety system, a survey of food experts, a video of kids talking about their school lunches, and a Q&A with Tom Vilsack.

But also scroll around to find my contribution, The Farm Bill Drove Me Insane.

It starts:

In fall 2011, in an act of what can be described only as hubris, I had the bright idea of teaching a course on the farm bill.

For nearly 25 years, I had been writing and teaching about food politics and policy at New York University, and I knew that the farm bill dictated not only agricultural policy, but also such things as international food aid and feeding the hungry in America. It had to be one of the most important laws affecting food systems—if you care about such matters, likely the most important. With the 2008 farm bill up for renewal, I wanted to know more about it, and professor that I am, I thought: What better way to learn something than to teach it?

Big mistake.

Read more here.

A colleague and reader who recently took over a small food business wanted to continue to make it possible for people enrolled in SNAP—the Supplemental Nutrition Assistance Program, a.k.a. Food Stamps—to buy his products.

The business had already followed the steps needed to become an authorized SNAP retailer and had been accepting Electronic Benefit Transfers (EBT cards) for a couple of years.

His new ownership required him to start over.  He filed the application with the USDA last April.  As he explained last week:

About six months later now, after repeated follow-up and efforts to move it along and resubmitted paperwork and things not mailed back, we’re finally learning that our accounts were approved for use in August. Probably the 8th person we spoke to since starting was able to tell this to us nonchalantly today. Everyone prior has had *virtually* no idea what’s going on or good answers for us other than “start over” or “I’ll have someone call you.”

Six months to set up EBT, surely among the largest transaction types in the country (in terms of the funding body and the process). The USDA & FNS must be woefully understaffed….

So our EBT accounts were finally approved and activated. What’s fascinating then is the number of companies that reach out to tell us (paraphrasing) that “due to recent changes in the Farm Bill, retailers are no longer able to get free processing equipment from the USDA so call us today to get low-cost equipment and a low-cost monthly flat-fee for your EBT processing needs.”

Obviously our bi-cameral, newly monocular Congress will only care about fraud with respect to EBT. So any responses to bureaucratic inefficiency will not likely result in reform, only reduction.

Alas, he is right about that.  Although Congress, in passing the Agricultural Act of 2014 (a.k.a. the Farm Bill), did not make the deep cuts in SNAP that many Republicans wanted, it did make some mean-spirited changes.

For example:

Section 4002: The Secretary shall require participating retail food stores to pay 100% of the costs of acquiring, and arrange for the implementation of, electronic benefit point-of-sale equipment and supplies, including related services (exceptions: farmers’ markets, nonprofit food coops, etc).  So yes, my reader’s small business has to pay for this.

Here’a another example:

Section 4018: Prohibiting Government-Sponsored Recruitment Activities.  No funds authorized shall be used by the Secretary for:

• Recruitment activities designed to persuade an individual to apply for SNAP benefits
• TV, radio, or billboard ads designed to promote benefits and enrollment
• Agreements with foreign governments designed to promote benefits and enrollment
• Compensating persons who conduct outreach activities relating to SNAP participation or who recruit others to do so.

It’s possible that the long delay in USDA approval of his EBT accounts could be due to staff incompetence, but it’s clear that Congress does not want anything done to promote SNAP or make it work well for anyone involved in the system.

Let’s hope the USDA is better about approving the eligibility of recipients.

As of August 2014, 46.5 million Americans received SNAP benefits at an average of $124 per month.   The USDA needs to do a better job of serving them and the retailers they buy from.

Section 7606 of the 2014 Farm Bill says that notwithstanding the Controlled Substances Act, The Safe and Drug-Free Schools and Communities Act, and other laws that govern the cultivation of marijuana, it is now OK for state agriculture departments and universities to grow “industrial” hemp for research purposes.

Industrial hemp, the Farm Bill says, means “the plant Cannabis sativa L…with a delta-9 tetrahydrocannabinol [THC] concentration of not more than 0.3 percent on a dry weight basis.”

To put this in context: the average THC potency of domestically grown recreational hemp  (a.k.a. marijuana) is about 6 percent, but can go much higher.

With so little THC in industrial hemp, why would anyone want to bother with it?   Textiles of course, but also medical purposes and dietary supplements.

Even a little THC, apparently, goes a long way.

The New York Times reports that companies are growing industrial hemp to make hemp oil as a treatment for epilepsy.

On the legalities of hemp oil, The Times explains that the

Drug Enforcement Administration is offering few clues, insisting in public statements that while it is willing to allow marijuana sales in states that have legalized the drug, it might step in if growers try to sell beyond state borders…Any chemical that comes from the plant is still a controlled substance…When we get into hemp, it gets a little squishy, but it still is illegal.

Squishy?  Growing and using industrial or recreational hemp is illegal in America except in states that have made hemp legal or quasi-legal.

For example, New York State recently passed a hemp bill that would set up pilot programs for the production of industrial hemp.

At least one company is growing hemp in Colorado for use in dietary supplements.   At a trade show last year, it displayed US Hemp Oil promoted for its content of CBD—cannabidiol, a non-narcotic fraction of the hemp plant.

The company insists that CBD is a legal ingredient of dietary supplements.

Hemp, it argues, is a vegetable:

The pure oil is considered GRAS [generally recognized as safe]. Under the United States Uniform Tariff Code they tax and code hemp as a vegetable. I don’t know anything that’s a vegetable that isn’t GRAS. When we import it, it is always considered a vegetable, so that’s what we use in our declaratory actions…in March of last year Canadian company Abattis announced plans to bring a CBD-infused kombucha drink to market.

However and whether CBD works for medical purposes, everyone expects industrial hemp to be a huge cash crop for its textile and health food uses.

This is especially a boon for Kentucky, and it’s no coincidence that Kentucky Republican Senator Mitch McConnell spearheaded the hemp provision through the Farm Bill.

The boon-for-Kentucky Website provides a long list of potential applications for industrial hemp, ranging from textiles to cosmetics to auto parts.

Proponents of CBD provide an even longer list of diseases for which industrial hemp’s CBD is a treatment option.  There isn’t much research on the physiological effects of CBD.  This makes industrial hemp perfect as a dietary supplements.  It might do something.  That’s all you need for supplement marketing.

The legal battles will be fun to watch.  Stay tuned.

In the meantime, there is hemp cereal—organic of course.  Enjoy!

I was surprised to read in yesterday’s New York Times that the farm bill was full of goodies for fruits, vegetables, and organics.

While traditional commodities subsidies were cut by more than 30 percent to $23 billion over 10 years, funding for fruits and vegetables and organic programs increased by more than 50 percent over the same period, to about $3 billion.

I took a quick look at the cost accounting.  Giving these program listings the benefit of the doubt:

Even stretching the items like this, it’s $2 billion over ten years, not 3.   $2 billion is good; $3 would be better.

What am I missing here?

This morning, Politico Pro Agriculture summarized what states are doing to promote local food production:

Arizona: HB 2233 would create a task force to develop recommendations for how the state can improve the quality and nutrition of food sold in state facilities, including suggestions for promoting locally grown food: http://1.usa.gov/1qniAzl

Hawaii: HB 1184 seeks to set a state-wide food sustainability standard to be achieved by 2025 that would increase the availability of locally grown and produced foods to reduce the state’s reliance on imports. The standard would be set at a level double the cash farm receipts that are produced in 2015: http://1.usa.gov/1oDB9LL

HR 82 and its senate companion SCR 6 calls on the state departments of agriculture and education to develop a farm-to-school program that would provide locally grown produce to public school salad bars: http://1.usa.gov/1h4Yq6v

SB 524 similarly seeks to create an agricultural development and food security program under an existing economic development statute that would seek to increase demand for and access to locally grow foods through promotional campaigns and improving infrastructure, among other things: http://1.usa.gov/1fiiYWP

Iowa: H2426 seeks to promote small farmers through a new financial assistance program, a marketing program, a revolving grant program and a property tax exemption for farmers who sell their products to state facilities or schools. The measure also calls for state facilities, when cost effective, to purchase from local farmers: http://bit.ly/1hYHJMg

Kansas: SB 380 aims to create a local food and farm task force to develop funding and policy recommendations for supporting and expanding local food production. The task force would be required to issue a report to the legislature by the beginning of the 2016 legislative session: http://bit.ly/1fP9Lv9

New Jersey: SR 44 calls on state and local government entities to purchase locally made food and products: http://bit.ly/1dG8XX4

Michigan: HB 4487 would amend an economic development statute to include the creation and funding of programs to promote local agriculture: http://1.usa.gov/1oDBkH5

Mississippi: HB 1556 would provide a state income tax credit to grocers that amounts to 25 percent of the cost of purchasing locally grown and produced products starting in 2014: http://bit.ly/OaTaWq

Missouri: HB 2088 would create a “Farm-to-School Program” within the department of agriculture to help facilitate the use of locally grown produce in school meal programs through a website and database that would link farmers and schools. The bill, which was introduced March 5, sets up a task force that is charged with developing recommendations for the program: http://on.mo.gov/1fij1SA

New Jersey: SR 44 calls on state and local government entities to purchase locally made food and products: http://bit.ly/1dG8XX4

Rhode Island: H7494 would create a task force for developing recommendations on how to improve the nutrition of food sold at state facilities, including promoting locally grown products: http://bit.ly/1fwAA0W

Lest we forget, the Center for Responsive Politics produced these statistics on farm bill lobbying:

• 325. Number of companies and organizations registered as lobbyists in 2013 to work on the Senate’s farm bill through the end of October 2013 — the fifth-most of any legislation
• 111.5 million.  Amount “agribusiness” spent on lobbying in the same period, more than even the defense industry and labor unions.
• 93 million.  Amount companies and individuals in agriculture made about in campaign donations during the 2012 presidential campaign.

If we want the next farm bill to promote fruits and vegetables (a.k.a. specialty crops), we need to start working on it right now.