Farm and advocacy groups are hard at work this holiday week doing some heavy reading - the House version of the 2012 Farm Bill. Wading into the deep waters on this bill offers a look at the programs being offered. In announcing the bill, House Ag Committee Chair Frank Lucas, R-Okla., reports the bill is reform-minded and fiscally responsible policy. And Ranking Member Collin Peterson, D-Minn., is happy his Dairy Security Act is part of the bill.
Groups are poring over the bill looking for differences and similarities to the Senate version, which passed two weeks ago. The key savings offered in the House version - $35 billion in mandatory funding - is significantly higher than the Senate version. Perhaps the most contentious savings is the $16 billion in the Supplemental Nutrition Assistance Program, which is well above the Senate's $4.5 billion cut.
The House does end direct payments, countercyclical payments, the Average Crop Revenue Election program and the Supplemental Revenue Assistance Payments. These are replaced with new reforms.
The House is offering a choice in risk management tools.
Price Loss Coverage addresses deep, multi-year declines, a risk that Southern farmers say isn't covered by the Senate's Agriculture Risk Coverage program. PLC would complement crop insurance, which is a single-year payout program in case of disaster. PLC uses modern yields and an index of blow cost of production prices to establish a market-oriented, price-based risk management tool for producers, the Committee says.
This provision is similar to an amendment offered by Sen. Saxby Chambliss, R-Ga., during deliberation of the Senate farm bill that would provide a base payout in case of a significant disaster over more than one year. It sets a reference price for key crops based on production costs and would provide payment based on a number of factors. For example, the reference price for wheat is $5.50 per bushel, for corn it is $3.70 per bushel, for soybeans $8.40, for peanuts $535 per ton. Essentially the aim is to provide enough coverage to keep a farm in business until times improve.
The other program - Revenue Loss Coverage - is similar to the Senate's ARC program. It requires a producer to experience at least a 15% loss, "helping to ensure that all risk is not removed from farming and that no growers are guaranteed profits." RLC offers coverage based in county-wide losses to ensure that a government program is not set up to duplicate, for free, what farmers should pay for under crop insurance.
Cotton growers are ineligible for PLC or RLC, but can purchase an area-wide, group-risk crop insurance policy, known as STAX. This provision is included in the Senate version of the bill.
The House is also reauthorizing Supplemental Agriculture Disaster Assistance for livestock producers. Essentially all programs aimed at helping livestock, bee, fish and tree producers, in times of major loss are reauthorized in this bill.
The House measure includes payments, a contentious issue, but one that saw some success in the Senate. In the House version, there will be a limit on payments for covered commodities - excluding peanuts. Under the House version of the bill, the current limit for one or more covered commodities is set at $125,000. Peanuts get a separate $125,000 limit. Essentially, if you're a corn, soybeans and peanut farmer your farm's limit would be $250,000 - $125,000 for the corn and soybeans and the added $125,000 for peanuts.
But there's more, the measure also includes a limit on the amount of adjusted gross income a farmer can have to receive payments. The farmer or legal entity will not be eligible to receive any benefit during a crop, fiscal or program year if the average adjusted gross income of the person, or legal entity, exceeds $950,000. That is the average adjusted gross income over three years.
The savings touted - $16 billion - is coming from a range of efforts, many aimed at folks who "game" the system or those that have been eligible and will no longer be. For example, traditional college students would not be eligible for SNAP under the new bill; though students enrolled in vocational and technical programs, trade studies, remedial course work and basic literacy remain eligible.
The bill would eliminate state performance bonuses for administering SNAP, which the Committee says would save nearly a $500 million without impacting SNAP recipient benefits. The bill would also eliminate SNAP payments to lottery winners, a measure the Senate has already approved.
Many of the House moves are aimed at tightening up on the program. Currently more than 40 million people receive SNAP benefits. The touted savings, which are nearly four times higher than the Senate version of the farm bill would have to be worked out in the conference committee after the House measure passes.
Like the Senate measure the House is tightening up on programs, streamlining payments and generally managing conservation in a more efficient way. The House version ratchets the number of programs down to 13 from 23, which the Committee claims is a $6 billion savings.
The Conservation Reserve Program is being "focused" with a gradual reduction of acres in the program. Eventually the program would include just 25 million acres, down from the current 32 million acres. The Committee says this move would save nearly $4 billion. There would be more flexibility for haying and grazing on CRP ground - a hot issue in 2012 with the increasing lack of forage during an expanding drought. The bill would preserve 2 million acres for working grassland contracts.
The House would maintain current Environmental Quality Incentives Program funding. The EQIP cost share program helps producers meet the needs of new regulations, but the Wildlife Habitat Incentives Program will be rolled into EQIP.
The Conservation Security Program continues, with enrollment limited to 9 million acres per year. This tightening of conservation programs and management will require further study, but Senate moves along similar lines have been greeted positively by a range of groups.
In announcing the farm bill, one provision highlighted by the Committee provides regulatory relief. Essentially, the Committee is rolling H.R. 872 - the Reducing Regulatory Burdens Act - into this version of the Farm Bill. That measured passed the House in 2011 by a 292-130 margin, and was written in response to a court decision - called "erroneous" in the Committee summary document - that allowed the U.S. Environmental Protection Agency to require permits for crop protection product use under the Clean Water Act. It's a contentious issue.
The provision in the House version of the Farm Bill includes a number of other provisions including limits on EPA in cancelling pesticide registrations based on Biological Opinions of the National Marine Fisheries Service or the U.S. Fish and Wildlife Service until independent scientific review is conducted. There are lawsuits pushing EPA to cancel registrations based on the Biological Opinions.
The measure would also streamline biotech regulation which, in essence, reiterates that the sole and exclusive authority of the Ag Secretary to regulate biotech products under the Plant Protection Act is limited to evaluate to plant pest risk, while authorizing the conduct of a targeted and transparent environmental review. Procedural lawsuits have slowed the approval process, this bill would push the tech through.
And this regulatory burdens reduction effort would also reauthorize the Pesticide Registration Improvement Act. It would be the third reauthorization of the Act and represents a multi-year effort to enhance the pesticide approval process. It involves manufacturers, non-governmental organizations and EPA in the process.