The past year was one of lost opportunities in Congressional action on what was to be the 2007 Federal farm bill. Going into 2007, an unusual set of forces from both the left and the right had proposed a series of reforms in crop commodity subsidies and conservation programs. The stage was set for the kind of new directions that occurred with the 1985 farm bill, when agricultural producer and environmental groups agreed to continuation of commodity subsidies in return for major new conservation provisions and programs.
The House of Representatives passed its version of a new farm bill in July, but it was not until December that the Senate passed its version. Conference Committee deliberations to resolve differences in the two bills are expected to begin soon. However, unless the President’s threat of veto forces Congress to make major changes, resulting legislation is likely to fall far short of hopes expressed in most of the progressive reform agendas.
Failures and modest successes in the farm and food policy process to date, as we enter the Conference Committee stage, can be grouped in three areas: (1) commodity subsidies; (2) agri-environmental programs; and (3) healthy food initiatives.
Commodity subsidies unreformed and unchecked
The price and income support programs tied directly or indirectly to the crop commodities farmers grow have gone through various transformations since they were introduced during the 1930s as part of Franklin Roosevelt’s New Deal. At the time, these programs represented a progressive agenda. These programs originally were intended to raise farm prices and incomes from Depression levels and to provide greater income stability. The goal was to maintain a nation of moderate-sized family farms, in keeping with the “Jeffersonian” agrarian vision.
In the beginning, the price and income support measures—together with other New Deal programs—did have some positive effect, and they helped cushion some of the effects of falling market prices after World War II. Over time, however, especially with the rapid advance of mechanization and adoption of more chemical inputs from the 1960s and 1970s onward, the commodity subsidies increasingly served to increase land values and encourage growth in farm size. There have been various attempts over time to cap payments and change the forms of the subsidies, but reforms have done little to curb the concentration of payments on the largest farms. So-called ‘decoupling’ reforms in 1996 were made to somewhat reduce ‘market distortions’, but the 2002 farm bill partially reversed directions and restored some of the ‘distorting’ features.
By early 2007, numerous policy institutes and NGOs had released farm and food policy reform agendas. Broadly speaking, the various organizations can be grouped under two headings (see Thomas Dobbs, "Competing Visions of U.S. Agriculture"). Those representing a global competitiveness vision called for reforms that would lower price supports and further ‘decouple’ income supports from commodity production, to make American agriculture more competitive in international markets and reduce some of the obstacles to progress in the Doha Round of World Trade Organization (WTO) negotiations.
Organizations representing a sustainable agriculture vision called for reforms that would enhance agriculture’s ecological sustainability and concentrate support on small and moderate-sized farms. This latter vision is largely consistent with the European Union’s idea of a ‘multifunctional agriculture’, in which agriculture’s purpose is not just to produce food, fiber, and energy, but also to produce environmental and social goods in rural areas—such as pleasing landscapes, clean water, wildlife habitats, and rural employment opportunities. The sustainable agriculture vision also places much greater emphasis on healthy food and humane treatment of farm animals than does the global competitiveness vision.
In spite of these quite different visions of American agriculture, there was a considerable degree of commonality in reform proposals for the crop commodity subsidies. Organizations representing both visions generally emphasized a drastic scaling back of commodity subsidies. Some of the sustainable agriculture groups would like to retain ‘decoupled’ subsidies for small and moderate-sized farms, but they generally favored shifting most of the commodity subsidy funds to conservation programs (or broader ‘agri-environmental’ programs) and to rural development programs (that support the ‘social’ aspects of agriculture’s multifunctionality).
What was the outcome of House and Senate actions in 2007? Very little in terms of commodity subsidy reform!
Both the House and the Senate bills were largely written within their respective Agriculture Committees, as is the usual case. The House Committee, Chaired by Collin Peterson (D-MN) was extremely conservative, retaining virtually all of the commodity subsidies and allowing no meaningful caps on payments to large farms. A fundamental reform amendment offered by Ron Kind (D-WI) and Jeff Flake (R-AZ) failed on the House floor.
Although Tom Harkin (D-IA), Chair of the Senate Agriculture Committee, seemed more open to some commodity subsidy reform proposals, the Senate bill that eventually passed in December leaves the commodity payment structure largely intact. A major reform proposal by Richard Lugar (R-IN) and Frank Lautenberg (D-NJ) failed on the Senate Floor, as did a proposal by Byron Dorgan (D-ND) and Charles Grassley (R-IA) to curb payments to the largest farms.
New optional schemes to protect farm revenues are included in both House and Senate versions of the farm bill (see Carl Zulauf, Ohio State University, “Comparison: Average Crop Revenue (ACR) Variable Payment Program with Revenue Counter-Cyclical Program (RCCP)”). In contrast, most of the existing commodity subsidy programs emphasize price or yield protection alone. The House and Senate versions have significantly different features, and it remains to be seen what, if any, form of new revenue protection survives in the Conference Committee. Although participation in the proposed schemes would be optional, some observers feel that adoption of a comprehensive revenue protection program now could lead to more significant reform down the road. Revenue protection might eventually displace many or all of the other commodity subsidies.
My own view is that revenue protection, though representing a conceptual improvement over a number of other forms of commodity subsidy, does not represent the kind of radical reform that is really needed.
Key issues remain on agri-environmental programs
The major transfer of funds from commodity programs to agri-environmental programs advocated by those with a sustainable agriculture vision did not occur in either the House or the Senate versions of the new farm bill. There were some partial victories for those with this vision, however, especially in the Senate. The Conference Committee faces some key issues in resolving differences between House and Senate bills, especially regarding funding for the Conservation Security Program (CSP).
The CSP, the agri-environmental program in the U.S. that comes closest to resembling some of the ‘multifunctionality’ agri-environmental schemes in European Union member states, was authorized in the 2002 farm bill. Implementation was long delayed, however, and for lack of adequate funds, the CSP has never been carried out at the scale or in the form that Congressional sponsors originally intended. Although $9 billion was authorized for the CSP for the period 2002-2011, only enough funds had been made available to enroll about 20,000 farmers nationwide through 2007 (obligating over $2 billion in long-term contracts).
Instead of addressing the untapped potential of the CSP by increasing its funding and making it available to farmers nationwide, the House bill cut another nearly $5 billion from the program and delays any new enrollments until 2012. The Senate bill, however, restores over $1 billion of the over $4 billion cut from the program since 2002. With funding and other changes in the Senate bill, approximately 80 million acres could be enrolled in the CSP by 2013. Up to now, only 16 million acres have been enrolled.
Both House and Senate bills contain some structural reforms of the CSP that the Washington D.C.-based Sustainable Agriculture Coalition believes would strengthen the program (see Aimee Witteman, Jan. 16, 2008 Gristmill article on the Conservation Security Program). The Senate bill also proposes to closely coordinate the CSP with the Environmental Quality Incentives Program (EQIP) by including both programs in a new Comprehensive Stewardship Incentives Program.
EQIP has been around longer than the CSP, and it is much better funded. Unfortunately, the 2002 farm bill altered EQIP to allow cost-share funding for manure storage facilities of large Confined Animal Feeding Operations (CAFOs). An individual CAFO can now receive up to $450,000 in EQIP cost-share to help it comply with environmental regulations. Sustainable agriculture groups rightly view this as a subsidy to large-scale, industrial agriculture. In debates leading up to the 2002 legislation, they unsuccessfully fought the change that allowed CAFO participation in EQIP cost-share. They tried in 2007 to get this provision rescinded in the new farm bill, but both House and Senate bills allow continued CAFO participation.
Although differences remain to be resolved, both House and Senate bills embody some policy and funding gains for organic agriculture (see Aimee Witteman, Jan. 15, 2008 Gristmill article on Organic Production and Research; and Organic Farming Research Foundation’s Jan. 16, 2008 Farm Bill Update). Most significantly, both bills contain provisions for a new national organic conversion assistance program, patterned at least in part after the kinds of programs that are common in Western Europe. The House bill authorizes a new program, but does not provide mandatory funding. In the Senate bill, funding and implementation would come under EQIP. Also, funding would be strengthened in both House and Senate bills for organic certification cost-share and for organic agriculture research and extension, though the Senate version is considerably more generous with respect to the research and extension funding.
Some gains were achieved in other agri-environmental programs, as well, including a restoration of funds for the Wetlands Reserve Program in both House and Senate bills.
Toward ‘healthier’ food?
An integral part of the sustainable agriculture vision is a transformation to production and consumption of ‘healthier’ food in this country. This has various dimensions, including production and consumption of more organic food, more fruits and vegetables in people’s diets, more food marketed and consumed ‘locally’, and a shift to consumption of products from animals grown more ‘naturally’.
Gains in a number of these areas occur in both House and Senate bills (see summary charts by Farm and Food Policy Project and Sustainable Agriculture Coalition). I have already mentioned organic agriculture, which has both environmental and health dimensions.
Another example is increased funding in both bills for the Farmers Market Promotion Program ($35 million mandatory over five years in the House and $30 million in the Senate). Also, both bills amend the Rural Business and Industry Loan Program to give greater emphasis to food enterprises serving ‘local’ markets. The Fresh Fruit and Vegetable Snack Program would be expanded under both bills to serve more schools throughout the country.
Various other healthy food programs—such as the Community Food grant program—are reauthorized in both bills, some of them with increased funding. The Senate and House bills often differ, however, in the amounts of funding authorized and how much funding, if any, is mandatory.
The ‘glass is half full’ if we consider the positive, incremental changes in the House and Senate bills emphasizing healthier food. It is ‘half empty’, however, if we recognize that the preponderance of spending (not including the food stamp program) continues to be for commodity program (including crop insurance and disaster) subsidies, rather than for agri-environmental and healthy food programs.
What progressive elements of farm and food policy can be salvaged?
The chances of radical reform of farm and food policy taking place in a new bill this year appear very slim. The Bush Administration has threatened to veto a bill that contains some of the current provisions in House and Senate bills, so it is possible that there may be no new bill at all this year. Provisions of the 2002 farm bill might simply be extended for a year or two if the House and Senate cannot agree on key provisions or if the President should actually veto a bill that is forwarded to him.
Ironically, prospects for a somewhat more progressive policy outcome might actually be enhanced by the President’s veto threat. The White House and U.S. Department of Agriculture (USDA) objections are based on certain tax mechanisms Congress proposes to use to fund parts of the new farm bill and on Congress’s failure to reform the commodity subsidy structure. USDA officials want to see further ‘decoupling’ of subsidies from commodity production, in part because of objections raised by other countries in WTO disputes. The USDA also has urged tighter payment limitations than appear in either the House or Senate bills.
If the President’s threat were to cause the Conference Committee to reduce and transform some portions of the commodity subsidy program, it could free up funds to expand agri-environmental programs. Agri-environmental payments receive far less criticism in WTO negotiations than do the commodity payments. The Bush Administration is not known for progressive agendas, especially in environmental areas. In this case, however, its push for reductions in commodity subsidies conceivably could result in net gains for agri-environmental and healthy food programs in a new farm bill.
Those citizens who want a more progressive set of farm and food policies should urge Congress in the coming weeks to do the following:
- Reduce and further ‘decouple’ commodity program payments.
- Enact lower payment caps on the commodity subsidies.
- Restore as much money as possible to the Conservation Security Program (at least as much as in the Senate bill).
- With funds freed up by reducing commodity subsidies, make sufficient funding ‘mandatory’ for most of the other promising agri-environmental and healthy food programs.