2013 farm bill   uof mn 10-10-13
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2013 farm bill uof mn 10-10-13

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Presentation on farm policy and implications for the 2014 Farm Bill.

Presentation on farm policy and implications for the 2014 Farm Bill.

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2013 farm bill   uof mn 10-10-13 2013 farm bill uof mn 10-10-13 Presentation Transcript

  • Brad Redlin October 10, 2013 2012 Farm Bill: Context and Policies
  • 1. Federal Farm Policy 2. Conservation Policy in Context 3. Production Policy in Context 4. 2012 Farm Bill 2012 Farm Bill: Context and Policies
  •  Title I Commodity Programs  Title II Conservation  Title III Trade  Title IV Nutrition Programs  Title V Credit  Title VI Rural Development  Title VII Research  Title VIII Forestry  Title IX Energy  Title X Horticulture and Organic Agriculture  Title XI Livestock  Title XII Crop Insurance and Disaster Assistance  Title XIII Commodity Futures  Title XIV Miscellaneous  Title XV Tax Provisions 2008  Farm Bill reauthorized every 5 years--or will revert to 1949 law.
  •  There are 3 means for delivering $ to agriculture via Farm Bill.  Commodity Subsidies, Conservation Programs, Crop Insurance. 2008-2012
  • USDA Nutrition - Spending: ►72% SNAP (food stamps). ►Non-Farm Bill: National School Lunch Program; Women, Infants and Children (WIC); Child and Adult Care Food Program; School Breakfast Program.
  • 1. Federal Farm Policy 2. Conservation Policy in Context 3. Production Policy in Context 4. 2012 Farm Bill 2012 Farm Bill: Context and Policies
  •  Conservation Title contains a suite of programs.  Programs meet different goals and utilize different methods.  2012 Farm Bill baseline WRP, GRP, other: $0
  •  Land values, cash rents are consistently climbing.  Conservation rental payments, easement purchases facing less land at greater expense.
  •  Title II cut by more than $6 billion in pending House & Senate Farm Bills Farm Bill Prog. 2003 Approps 2004 Approps 2005 Approps 2006 Approps 2007 Approps 2008 Approps 2009 Approps 2010 Approps 2011 Approps 2012 Approps 2013 Approps CSP Entitle. status revoked Entitle. status restored Cut $80 million Cut $72 million Cut $113 million -- -- -- Cut $39 million Cut $75 million Cut $63.8 million EQIP Cut $5 million Cut $25 million Cut $183 million Cut $183 million Cut $253 million Cut $270 million Cut $270 million Cut $270 million Cut $350 million Cut $350 million Cut $431 million FRPP -- Cut $13 million Cut $13 million Cut $26 million Cut $23 million -- -- -- -- Cut $50 million Cut $11.6 million GRP -- -- -- Out of money Out of money Out of money -- -- -- Cut $30 million Cut $1.86 million WHIP -- Cut $18 million Cut $38 million Cut $42 million Cut $42 million -- -- -- -- Cut $35 million Cut $16.2 million WRP Cut $5 million Cut $68 million Cut $142 million Cut $160 million Cut $160 million -- -- -- Cut $119 million Cut $200 million Cut $33.5 million  Conservation investment is declining
  • Without USDA Conservation: ►450 million tons of topsoil lost every year. ►170,000 miles of unprotected streams. ►48 million more tons of carbon dioxide. ►40 million fewer acres of wildlife habitat. ►2.2 million fewer ducks.
  • The Conservation Compliance Covenant Highly Erodible Land (HEL) Compliance, Sodbuster, Wetland Conservation (Swampbuster)  Public provides financial support via USDA payments.  Recipients protect soil and wetlands for the public.  Penalties are reduction or loss of farm program payments for draining existing wetlands or not maintaining soil protections. Ducks Unlimited photo NRCS photoNRCS photo
  •  Swampbuster/WC: IA - NRCS photo ND - Ducks Unlimited photo
  •  HEL Compliance: Ducks Unlimited photo
  • • Sodbuster no deterrent • Payments, insurance are incentive to convert • Grassland conversion counties netted double insurance benefits of other counties
  • Ducks Unlimited photo Ducks Unlimited photo Sodsaver • Proposed Sodsaver provision: Land without a cropping history ineligible for Farm Bill supports. • Final Farm Bill: Applies to crop insurance subsidies and linked disaster payments; ineligibility limited to Prairie Pothole National Priority Area at the election of ea. Governor (IA, MN, SD, ND, MT)
  • 1. Federal Farm Policy 2. Conservation Policy in Context 3. Production Policy in Context 4. 2012 Farm Bill 2012 Farm Bill: Context and Policies
  • CCP CYs 2010-12 Wheat $4.17/bu Corn $2.63/bu Grain sorghum $2.63/bu Barley $2.63/bu Oats $1.79/bu Upland cotton $0.7125/lb Long-grain rice $10.50/cwt Medium-grain rice $10.50/cwt Peanuts $495/ton Soybeans $6.00/bu Other oilseeds $12.68/cwt Loan Rate CYs 2010-12 Wheat $2.94/bu Corn $1.95/bu Grain sorghum $1.95/bu Barley $1.95/bu Oats $1.39/bu Long-grain rice $6.50/cwt Medium- grain rice $6.50/cwt Soybeans $5.00/bu Other oilseeds $10.09/cwt Upland cotton $0.52/lb ELS cotton $0.7977/lb Peanuts $355/ton  Commodity production supports paid on floor & target prices… and at a standard rate de-coupled from production. Direct Payment rate Wheat $0.52/bu Corn $0.28/bu Grain sorghum $0.35/bu Barley $0.24/bu Oats $0.024/bu Upland cotton $0.0667/lb Long-grain rice $2.35/cwt Soybeans $0.44/bu
  • Direct and Countercyclical Payment Program - planting provisions -  DCP paid on registered “base” for program crops…but prohibits and penalizes fruit, vegetables, and tree nuts.
  •  Commodity prices... …have been... ...doing well.
  •  Consistently strong commodity prices preclude price-based programs’ subsidy payments.  The Direct Payment Program dominant among all commodity subsidies.  DPs facing serious scrutiny; Production ag organizations have proposed eliminating and investing savings in Crop Insurance.
  •  Federal Crop Insurance is subsidized for producers and insurance companies.  National average is 62% of premium is paid by subsidy, often even higher.  Crop Insurance exempted from compliance in 1996 Farm Bill.
  •  Participation in Crop insurance is high across major commodities.  Premiums and indemnities have been growing rapidly. Source: FAPRI
  •  The type of insurance has also undergone a change. Source: FAPRI
  • 1. Federal Farm Policy 2. Conservation Policy in Context 3. Production Policy in Context 4. 2012 Farm Bill 2012 Farm Bill: Context and Policies
  •  52 percent of total U.S. land is in agricultural use.  Urban land use is 2.6 percent.
  •  „12 Farm Bill baseline showed shift to insurance.
  •  Subsidized risk reduction, without compliance checks and balances, can incent unintended consequences:  Producers “leave” the farm program to avoid compliance.  Producers may take risks with land or practices.
  •  Commodity program crop prices are high: production subsidies largely absent, Crop Insurance is dominant.  Federal deficits are driving budget cuts; Conservation programs are continually being cut; jobs/economy driving federal policy  High crop prices and revenue guarantees can encourage risk-taking (short term) and resource damage (long term). The 2012 Farm Bill Convergence:
  •  Farm numbers and sizes have changed, but not the acreage.
  •  Majority of rural counties in U.S. are losing population.
  •  Protecting and enhancing natural amenities—pleasant landscapes, outdoor recreation, community life— draws population and economic vitality.  Natural amenities are highly correlated with population and employment growth—they even shape agriculture. The number of farms has increased in counties with high levels of natural amenities. -USDA USDA photo USDA photo USDA photo 2012 Farm Bill Goal? Prioritize Conservation
  •  Require conservation compliance for crop insurance premium subsidies; Sodsaver provision.  Maintain unique purposes of conservation programs; make permanent baseline funding (as enjoyed by Commodity & Insurance Titles). Achieving Conservation in 2012 Farm Bill: Ducks Unlimited photo
  • S. 954, Agriculture Reform, Food and Jobs Act of 2013 H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013 • Direct payments are eliminated. • Marketing loan rates do not change. • Base Acres: Continues to make payments based on 85% of historical planting, or base acreage. • Adjusted Gross Income cap: $750,000 Adverse Market Payments (AMP) • Payment rates 55% of 5yr oly-avg (no cotton; peanuts/rice set $) Agriculture Risk Coverage (ARC) • Revenue-based, price/yield 5yr oly-avgs, trigger 12% below benchmark Supplemental Coverage Option • Insurance add-on, trigger between policy and SCO deductible levels • 65% premium pd Stacked Income Protection Plan (STAX) • Cotton-only insurance product, cnty revenue • 80% premium pd • Direct payments are eliminated’ except cotton 2-yr extension at 70%, 60% • Marketing loan rates do not change. • Planted Acres: bill pays on 85% of planted acreage. • Adjusted Gross Income cap: $950,000 Price Loss Coverage (PLC) • Barley, $4.95 per bushel • Corn, $3.70 per bushel • Grain sorghum, $3.95 per bushel • Peanuts, $535 per ton • Rice, $14 cwt • Soybeans, $8.40 per bushel • Wheat, $5.50 per bushel Revenue Loss Coverage (RLC) • Revenue-based, price/yield 5yr oly-avgs, trigger 15% below benchmark Supplemental Coverage Option • Insurance add-on, trigger between policy and SCO deductible levels • 65% premium pd Stacked Income Protection Plan (STAX) • Cotton-only insurance product, cnty revenue • 80% premium pd
  • www.iwla.org/farmbill Stewardship, Prosperity, and Fairness The Izaak Walton League of America‟s values-based vision of agriculture for all of America Brad Redlin brad.redlin@state.mn.us 651.270.0564 2012 Farm Bill: Context and Policies www.sustainableagriculture.net NSAC’s vision of agriculture is one where a safe, nutritious, ample, and affordable food supply is produced by a legion of family farmers who make a decent living pursuing their trade, while protecting the environment, and contributing to the strength and stability of their communities.