2012 farm bill, updated 1 22-13

Donn TeskeKansas Farmers Union

The 2012 2013Farm Bill

The Farm Bill

Franklin RooseveltThe Agricultural Adjustment Act

Commonly credited as the original Farm Program, 1933

Evolution of the Farm Program

•Parity, (market safety net)•Market distorting•Market non-distorting (1996 Freedom to Farm) (Direct Payments) (welfare?)•Market safety net•Crop insurance

Tom BuisNational FU President

Stepped down to serve as CEO of Growth Energy

Federal Spending on Farm Safety Net

Source: Congressional Budget Office

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Farm Safety Net Spending 2011-2020

Total: $150.2 billion

Crop Insurance$82.8

Direct Payments$49.1

Counter-Cyclical

Payments; $5.5

ACRE; $3.2

Marketing Loan Benefits; $1.7 Dairy/Specialty Crops; $3.7

Export Programs, $3.5 Disaster; $0.8

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Senator Stabenow of Michigan

Congressman Frank Lucas Oklahoma

Make-up of the Ag Committee

•Lot of new faces•Every farm bill the committee structure is getting more urban•Many of the traditional, powerful

rural politicians are gone

Last second Farm Bill extensionTied to the Fiscal Cliff Bill

Mitch McConnell

Pat Roberts

The extension really wasn’t so much an “extension” as a rewrite of the Farm Bill with

no debate

• Extended to the end of September• Preserved Direct Payments• Dairy pretty well got screwed

• Livestock indemnity payments gone, not funded• Livestock forage disaster program gone, not funded• Livestock emergency assistance gone, not funded

• Crop disaster gone.•Beginning Farmer Program gone. (Extended but not funded)

•REAP program in USDA Rural Development gone. (Extended but not

funded)•Conservation Security program (CSP)

gone, not funded.•Grassland Reserve Program (GRP)

gone.•Wetlands Reserve Program (WRP)

gone.•McGovern-Dole International Food

Program, gone.

A couple of “okay” things in the extension

•Crop Insurance still there•With the Direct Payments still fully

funded the budget baseline is protected for the next round of

negotiations on the farm bill

Senator Thad CochranNew Ranking member of the Senate Ag Committee

The fight is on!!!!!!

Effects of Farm Bill ExpirationExpiring ProvisionsDirect and Countercyclical PaymentsNew sign-ups for Conservation Reserve Program (CRP) and Wetlands Reserve Program (WRP)Grassland Reserve Program (GRP)Rural Energy for America ProgramValue-Added Product Development Grants ProgramMilk Income Loss Contract (MILC)All 2008 Farm Bill Disaster Programs

Continuing ProvisionsCrop InsuranceSupplemental Nutrition Assistance Program (SNAP)Noninsured Crop Disaster Assistance (NAP)Agricultural Management Assistance (AMA)Emergency Conservation ProgramResource Conservation and Development (RC&D) ProgramFresh Fruit and Vegetable Program

Effects of Farm Bill ExpirationMore Expiring ProvisionsBeginning Farmer and Rancher DevelopmentOrganic Agriculture Research and Extension InitiativesLocal and Regional Food Aid Procurement ProjectsFarmers’ Market Promotion ProgramSpecialty Crop Research Initiative …and many more

EXPIRED

Parity index

Why hasn’t the Farm Bill passed?• Republican leadership of the House hasn’t allowed

the bill to be voted on– Speaker Boehner has never supported a Farm Bill– Ranking Member Peterson says there are enough votes

• Disagreement over depth of cuts to nutrition– Senate SNAP cuts = $4 billion– House Ag Committee SNAP cuts = $16 billion– “Ryan Budget” SNAP cuts = $134 billion

Farm Bill Spending Comparisons to 2013-2022 Baseline

Senate HouseCommodity Programs -$19,428 -$23,584Crop Insurance $5,036 $9,524Conservation -$6,374 -$6,062Nutrition -$4,000 -$16,075Energy $780 $0Rural Development $115 $105Research $681 $546Other $50 $482Total -$23,140 -$35,064

Differences between Farm BillsSenate Farm Bill (S. 3240) House Farm Bill (H.R. 6083)Saves $23 billion Saves $35 billionIncludes farm-level revenue coverage option (ARC)

Does not include farm level option

Does not include much protection against long-term price collapse

Includes reasonable levels of protection against long-term price collapse (PLC)

Tightens payment limits Doesn’t change payment limits

Funding levels & the safety net

Differences between Farm BillsSenate Farm Bill (S. 3240) House Farm Bill (H.R. 6083)Cuts $6.3 billion from conservation title

Cuts $6 billion from conservation title

Includes sodsaver provision Doesn’t include sodsaverTies conservation compliance to crop insurance eligibility

No conservation compliance restrictions for crop insurance

Allows funding for REAP Prohibits funding for REAPProvides $780 million in mandatory funding for energy

Doesn’t provide any mandatory funding for energy programs

Energy & conservation

In both farm bills…• Direct and countercyclical payments, ACRE, and

SURE are eliminated• Crop insurance becomes the largest of the farm

safety net programs• Conservation programs are restructured and

strengthened for effective delivery• Dairy programs shift to margin insurance and weak

supply management• The sugar program is extended

Price Protection in Existing Law and House Bill

Existing Target Prices

House PLC Target Prices

Wheat (bu.) $4.17 $5.50Corn (bu.) $2.63 $3.70Grain sorghum (bu.) $2.63 $3.95Barley (bu.) $2.63 $4.95Oats (bu.) $1.79 $2.40Upland Cotton (lb.) $0.7125 STAXRice, med & lg (cwt.) $10.50 $14.00Soybeans (bu.) $6.00 $8.40Other oilseeds (cwt.) $12.68 $20.15Dry peas (cwt.) $8.32 $11.00Lentils (cwt.) $12.81 $19.97Peanuts (ton) $495 $535

Payment amount = Target price X 85% of total acres planted to crop (30% for prevented plant) X existing CCP yield or 90% of 2008-2012 avg. yield/planted acre

An Alternative Safety Net

• Farmer-Owned Reserves

– includes a combination of farmer-owned reserves, increased loan rates, set-asides, the elimination of direct payments, and reduced reliance on other government payment instruments.

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South Korea Free Trade Agreement

65 / 35

Just asuggestion

From the ETC group

HB 2575 Immigrant ID bill. This is a weird one, it will allow illegal immigrants living here for 5 years, or employed by a multi-state company, to legally work in Kansas and to apply for a Kansas driver’s license. I think it is commendable that the state is finally recognizing this very large hidden part of our society but am disappointed that it intentionally does not make this a step toward citizenship. Long time opponents, corporate Ag and social welfare groups, are allied in support of this bill. Labor unions are opposed.

Beginning Farmer Workshop: January 26, 2013Nelson’s Landing Restaurant - Leonardville, KS

9 AM – Welcome & Introductions9:15 AM – Donn Teske, KFU President and former farmer financial adviser

10 AM – Char Henton & Becky O’Donnell, KS Ag Mediation Service10:45 AM – Barb Depew, Kansas Farm-To-School Program11:15 AM – Rhonda Janke, K-State Sustainable Agriculture

12 PM – Lunch by Nelson’s Landing Restaurant

1 PM – Charlie Griffin – Kansas Rural Family Helpline1:30 PM – Bernard Irvine – agricultural law including farm leases/terminations, fencing and boundary

disputes,regulatory issues, business/succession planning and secured transactions

2:15 PM – Chuck Otte – Geary County agricultural extension agent

3-5 PM – Producer PanelDarrell Parks of Manhattan, sustainable pasture pork

Ed Reznicek of Goff, Kansas Organic Producers general manager

Jason Schmidt and Herb Bartel of Hillsboro, organic farming and grazing partnership

Warren Sutton of Norway, green bean growerDan Kuhn of Courtland, “Depot Market” growing and

marketing wholesale and retail produceDale Strickler of Jamestown, grazing specialist

Robert Nutsch of Norway, produce growing on less than one acre

Norm Oeding of Hillsboro, organic farm managerChris Janssen of Scandia, high tunnel produce grower

Food Hubs / Food Co-ops

April 6th, 2013Hiawatha Kansas

How Local Family Farms can feed our communities

A good wife brings balance to your life!