President Clinton signed the Federal Agriculture Improvement and Reform (FAIR) Act of 1996 into law on April 4, 1996. The bill modernizes and takes recognition of the fact that since the last time Federal commodity programs were addressed in a farm bill (1990) or in reconciliation (1993), major changes in world trade policy, domestic budget policy, and commodity producer opinion required a redirection of Federal commodity policy.
The FAIR Act saves $10 billion over the next 7 years from the 1995 February Congressional Budget Office (CBO) baseline. Admittedly, reducing Federal spending by that amount will impact farmers. However, some economists predict that a balanced budget will lead to a 1.5 percent reduction in interest rates. Agriculture as a major user of credit has over $140 billion borrowed in terms of long term and short debt would benefit from such a result. If interest rates decline by 1.5 percent, a balanced budget could lead to an interest rate savings for U.S. agricultural producers exceeding $15 billion over the next 7 years. More importantly the bill puts the $44 billion projected to be spent on farm programs to use as a positive force for change and transition.
Following 19 hearings on federal farm program policy by the Subcommittee on General Farm Commodities and the full Committee on Agriculture, the call from throughout the United States was clear: agricultural producers wanted more planting flexibility, more certainty with respect to Federal assistance, and less federal regulatory burden.
The combination of these factors led to the following conclusions: (1) the U.S. production agriculture industry needed to become more market-oriented, both domestically and internationally; (2) the industry could not become more market-oriented with a continued federal involvement that simply extended the current supply-management policies of the past; and (3) the required budget cuts would not provide adequate funding levels to allow the existing federal programs to function properly in a post-GATT and NAFTA world-oriented market. Analyzing these conclusions in conjunction with a review of the current federal commodity price support and production adjustment programs resulted in several observations about agricultural policy.
First, current federal farm programs are based on the 60 year old New Deal principle of utilizing supply management in order to raise commodity prices and farm income. When the Federal farm programs were first created, the government relied on a system of quotas and allotments to control supply. However, over the last 20 years the primary justification for the programs has been that producers receive federal assistance in return for setting aside (idling productive farmland). That assistance was largely in the form of deficiency payments to compensate producers for market prices or loan levels that fell below a Congressionally mandated target price for their production. Additionally, when federal commodity programs were set up, world markets were not a major factor in determining agricultural policy. This approach, while perhaps appropriate in the 1930's, ignores the realities of a post-GATT and NAFTA world.
Second, the old programs no longer achieved their original goals and have collapsed as an effective way to deliver assistance to producers. Worldwide agricultural competition usurps foreign markets when the United States reduces production. With respect to wheat, for example, world demand, when combined with the United States' supply control approach of idling acreage (including acreage idled under the Conservation Reserve Program), has tightened U.S. supplies so much that there have been no set-asides for five years and there are not expected to be any in the foreseeable future, which eliminates the supply management policy justification for the past policy.
For the last ten years, congressional farm policy actions have been driven by budget reductions. The 1995 debate re-affirmed the federal budget as the driving force for agricultural program policy. Modifications made to the original farm programs since their inception have revolved around two main goals: further restricting supply in order to alleviate the overproduction which the programs encourage; and decreasing federal expenditures by limiting the amount of production which is covered by federal subsidies. These two factors have combined in a way which has made current federal commodity programs less effective, both as a means of increasing farm income and as a means to manage production, with each successive modification. There have been several recent situations where producers, who received an advance deficiency payment based on USDA estimated low prices, have had a poor harvest and were required to repay the advance because the nation-wide effect of the poor harvest was to drive up the market price of the commodity beyond the point at which current programs make a payment. This has placed many producers in a difficult position. Even though prices were high, their income is down because they have no crop to market and the government assistance they had previously received must be paid back.
Government outlays under the 1990 Farm Bill were the highest when prices were lowest (and hence when harvests were the best). This has had the effect of encouraging production based on potential government benefits, not on market prices. This incentive, when combined with the government's authority to idle acreage (which is the only means that past programs contained for limiting budget outlays) resulted in a situation in which producers had an incentive to produce the maximum amount of commodities while the government restricted the acres planted. This encouraged the over-use of fertilizers and pesticides in order to get the most production from the acres the government allowed the farmer to plant that year. This environmentally-questionable incentive created by past programs resulted in Congress placing ever more burdensome bureaucratic controls on producers over the last ten years in order to minimize environmental damage by requiring conservation compliance plans, compliance with wetlands protection provisions, and compliance with many other land-use statutes. It would be hard to imagine a program which created more inconsistent incentives than the past commodity programs.
Added on top of the regulatory burdens which have resulted from the counter-productive environmental incentives of past programs are the additional regulatory burdens created by Congress over the past twenty years which attempt to target program benefits to small producers. These so-called payment limitation provisions have: (1) resulted in substantial paperwork requirements for producers whose operations do not actually approach the payment limit, (2) required a substantial amount of government administrative resources, which has inhibited the government-wide goal of downsizing; and (3) been largely ineffective as a means of ensuring that benefits are targeted to small producers because of the loopholes in the existing structure.
Third, preserving the old federal farm program structure with the required budget cuts would have left producers with an ineffective and counter productive agricultural policy. The resulting system would have been an emasculated remnant of an out-of-date 1930's-era program which no longer served the people it was originally intended to benefit. While further modifications of the 1990 Farm bill commodity programs might have accomplished required budget savings, ten years of budget cuts had changed the fundamental nature of past farm programs to the extent they have inhibited farm production and producer earning potential.
Retaining the 1990 farm bill policy would have been a mistake when other methods can achieve the goals of providing U.S. producers with increased planting flexibility and less regulatory burden while at the same time allowing for greater earnings from the marketplace and reducing the budgetary exposure to the federal government.
The Federal Agriculture and Improvement Reform Act of 1996 (FAIR) replaces the traditional farm programs with a program that is commonly called the Freedom to Farm ("FFA") . Freedom to Farm replaces the commodity price support and production adjustment programs with a seven-year market transition contract payment for eligible owners and operators and a nonrecourse marketing assistance loan program for eligible producers. Contract participants will receive seven annual market transition payments in exchange for maintaining compliance with their respective conservation plans and applicable wetlands protection provisions. Producers utilizing the marketing assistance loan will get the benefit of a nonrecourse marketing loan at harvest time so that they will not have to sell commodities at a time when market prices are historically low in order to maintain a positive cash flow. Additionally, contract payments are limited to $40,000 per person.
From a GATT perspective, the termination of the commodity price support programs and replacing them with transition payments will make U.S. commodities immediately more competitive on the world market by removing the distorting effect that the old programs inflicted on markets. This is significant because, at the current time, world commodity supplies are relatively tight and estimates indicate that, at best, this situation will remain for quite some time.
With respect to domestic farm policy, FFA accomplishes several goals. First, it fosters a significant deregulation by freeing producers up to farm for the market and not the government program. By removing government production controls on land use, FFA effectively eliminates the number one complaint of producers about the programs: bureaucratic red tape and government interference. Complaints about endless waits at the county office should end. Hassles over field sizes and whether the right crop was planted to the correct amount of acres should be a thing of the past. People concerned about the environment will be pleased that the government no longer forces the planting of surplus crops and monoculture agriculture. Producers who want to introduce a rotation on their farm for agronomic reasons should be free to do so without the restrictions in current programs.
Second, the Freedom to Farm Act provides U.S. producers with a guaranteed payment for the next seven years, because it establishes a contract between the federal government and the producer. When compared to the alternative of further modifying past programs, it results in the optimum producer net income over the next seven years and protects the producer from further budget cuts should there be further budget reconciliation bills in the future. The guarantee of a fixed (albeit declining) payment for seven years will provide the predictability that producers have wanted and will provide certainty to lenders as a basis for extending credit to production agriculture.
FFA insures that whatever government financial assistance is available will be delivered, regardless of the circumstances, because the producer signs a contract with the federal government for the next seven years. Just as producers will need to look to the market for planting and marketing signals, FFA will require producers to manage their finances to compensate for price swings. It may be true that when prices are high, producers will receive a full market transition payment under FFA but it is equally true that if prices decline, farmers will receive no more than the fixed market transition payment. That means the individual producer must manage all income, both market and government, to account for weather and price fluctuations.
Third, FFA encourages market orientation. Producers can plant or idle all their acres at their discretion, with a significant reduction in the restrictions on what can be planted. Producers will have to make commodity planting decisions in response to commodity markets instead of decisions based on deficiency payment rates and crop acreage bases. Decoupling federal payments from production (a process which began in 1985 when payment yields were frozen) will end any pressure from the government in choosing crops to plant. Under FFA, all production incentives should come from the marketplace and not government programs. Additionally, as long as producers maintain compliance with their applicable conservation plans, they are free to choose to plant no crop at all, which will benefit soil and water quality in marginal areas, as well as benefitting wildlife.
Fourth, FFA recognizes that the benefits from current programs have, to some extent, been incorporated into the value of agricultural land. By abolishing the link between production and benefits, but doing so in a manner which provides a seven-year transition period, the economic distortions caused by past programs can be removed in a manner that causes the least amount of disruption and harm to rural America. For that reason the FFA contract payment has been aptly named as a market transition payment.
FFA is also good policy for the future of production agriculture in the United States. The most severe critics of farm programs, including the New York Times, the Washington Post, the Economist, and a host of regional newspapers, have hailed FFA as the most significant reform in agricultural policy since the New Deal in the 1930's. Congressional critics that have urged reform of the farm programs have also indicated that FFA embodies the type of reform necessary to transition agriculture into a market-oriented industry. Nearly every agricultural economist who has commented on FFA supported its structure and its probable effect on producers and the agricultural sector.
The reforms accomplished by the FAIR Act of 1996 will help transition U.S. agricultural producers into a new era of a market-oriented Federal farm policy while simultaneously providing fixed, declining payments over seven years in order to minimize the economic distortions resulting from the change away from the New Deal Era Federal farm programs.
Contact: Gary Mitchell (202) 225-2171 Taken together it is the greenest farm bill ever. And
we do it without new mandates, regulations, requirements
and red-tape. It makes the federal government a partner
with producers in addressing environmental challenges,
rather than an adversary. It is voluntary and
incentive-based. Most importantly, it works!
Contact: Tom Hemmer (202) 225-3329
It is essential to American agriculture to have protection from trade embargoes that have a detrimental effect on agricultural producers. Embargoes cede world market share to our competitors. For example, the 1973 United States soybean embargo shifted the soybean market and, in fact, created soybean export competition in Brazil and Argentina. These countries took the soybean market away from the United States. Also, the 1979 embargo devastated agricultural exports, and the United States was no longer considered to be a reliable supplier of commodities. Embargoes permanently shift markets.
Therefore, the 1996 Farm Bill required the Secretary of Agriculture to take specific action in the case of unilateral embargoes.
Eligible producers and owners (those who had participated or had certified acreage in the wheat, feed grains, cotton and rice programs in any one of the past five years) can enter into seven-year market transition contracts. As announced by USDA, sign-up for the new program will begin on May 20 and extend through July 12 (contract acreage coming out of a Conservation Reserve Program contract may be enrolled for the remaining seven years). A 50 percent advance payment will be available to producers within 30 days of sign-up with the remainder of the 1996 payment due by September 30, 1996. Payments in subsequent years will be made on or before September 30, with farmers having the option of receiving half of their annual payment on either December 15 or January 15.
With the exception of fruits and vegetables, any commodity may be grown on contract acreage. Non-contract acres have no restrictions. There are three categories of exceptions to the fruit and vegetable prohibition. First, fruits and vegetables can be grown as a second crop, without any payment reduction, in any region of the country where there is a history of double-cropping fruits and vegetables with contract commodities. Second, fruits and vegetables can be grown on any farm with a history of fruit or vegetable production, provided that there is an acre-for-acre payment reduction for that year for each acre of fruit or vegetable grown. Third, any producer with a history of planting a specific fruit or vegetable can grow such fruit or vegetable on contract acreage, not to exceed the producer's 1991-95 average planting of the fruit or vegetable, provided that there is an acre-for-acre payment reduction for that year for each acre of fruit or vegetable grown. Finally, a producer, at any time, may permanently reduce the number of acres under contract to achieve greater planting flexibility.
As announced by USDA, the estimated contract
payments under the production flexibility contracts are as
follows (based on cents/bushel unless otherwise noted);
multiply this by (farm program payment yield times 85
percent of contract acreage) to get estimated payment;
payments for farms with more than one kind of contract
commodity are simply the sum of each individual contract
commodity):
| Commodity | Wheat | Corn | Grain Sorghum | Barley | Oats | Upland-Cotton(›/lb) | Rice ($/cwt) |
|---|---|---|---|---|---|---|---|
| 1996 | 87.0* | 24.0 | 31.0 | 32.0* | 3.0* | 9.06* | 2.78 |
| 1997 | 61.0 | 46.0* | 50.0* | 25.0 | 3.0 | 7.40 | 2.74 |
| 1998 | 65.0 | 36.0 | 42.0 | 26.0 | 3.0 | 7.87 | 2.94 |
| 1999 | 63.0 | 35.0 | 40.0 | 24.0 | 3.0 | 7.60 | 2.85 |
| 2000 | 57.0 | 32.0 | 37.0 | 22.0 | 3.0 | 6.96 | 2.61 |
| 2001 | 46.0 | 26.0 | 30.0 | 18.0 | 2.0 | 5.64 | 2.11 |
| 2002 | 45.0 | 25.0 | 29.0 | 17.0 | 2.0 | 5.47 | 2.04 |
* Unearned 1995 advance deficiency payments will be automatically deducted from these payments if you have not yet repaid. These unearned 1995 advance payments are: wheat: $0.35/bu.; corn: $0.20/bu.; grain sorghum: $0.195/bu.; barley: $0.20/bu.; oats: $0.05/bu.; upland cotton: 1.85 cents/lb.; Not applicable to rice. Note: these estimated payments are based on 100% participation--to the extent that not everyone participates in the production flexibility contracts, payments will be higher.
The 1996 Farm Bill continues the nonrecourse loan program (now called "marketing assistance loans") with one major change: capping the loan rates. For the next seven years, the maximum loan rates are: Rice: $6.50/cwt, Upland Cotton: $0.5192/lb, Wheat: $2.58/bu, Corn: $1.89/bu, Soybeans: $5.26/bu, ELS Cotton: $0.7965/lb. The marketing loan provisions remain, which allow farmers to repay loans at the market price when it is below the loan rate. The Secretary retains authority to make downward adjustments to wheat, feed grains and oilseeds loan rates based on specified stocks-to-use criteria, but minimum rates are established for rice at $6.50/cwt, cotton at $0.50/lb and soybeans at $4.92/bu. The Farmer-Owned Reserve and the 8-month cotton loan extension are not in effect for the next seven years.
The payment limitation for production flexibility contracts is $40,000, under the same "person" rules that have been in effect in the past. The $75,000 per person limit applicable to marketing loan gains and loan deficiency payments has not been changed. With respect to the 1996 wheat, barley, oats, and cotton payments and the 1997 corn and grain sorghum payments, the $40,000 limit does not apply to the portion of these payments that are comprised of unearned 1995 advance deficiency payments (see footnote to estimated payment table, above).
Contact: Lance Kotschwar (202) 225-5944The United States is the third largest peanut producer, after India and China, and has often been a leading world exporter to major markets in Canada, Japan and the European Union. U.S. production averages 4 billion pounds. Production for the 1995/1996 marketing year is forecast at 3.478 billion pounds. Roughly, 50% of the crop is used for food, 20% crushed for oil, 20% exported, and 10% toward seed and residual uses.
Approximately, 62% of peanut production occurs in the Southeast (Georgia, Alabama, Florida); 22% in the Southwest (Texas and Oklahoma); and 15% in the Virginia-North Carolina Region. Peanut production generates an average of $1.2 billion in cash receipts each year for the U.S. farm sector.
A nonrecourse loan is available to growers for quota and additional peanuts. Loan peanuts are pledged as collateral and the loan must be repaid with interest or the peanuts are forfeited as payment. The government has no recourse but to accept forfeiture as full satisfaction for the loan obligation. In cases where the government has assumed ownership of peanuts, the crop is crushed into oil at a loss to the government.
The 1995 loan rate was established at $678 per ton for quota peanuts and $132 for additional peanuts. Under a provision of previous law referred to as the price support escalator, the loan rate was able to increase based on cost of production but was never able to decrease if cost of production decreased. The 1996 farm bill eliminated the escalator provision and reduced to loan rate for the first time since 1959 to $610 per ton.
In an effort to encourage producers to market their crop commercially as opposed to selling their crop to the government, new provisions were adopted to withdraw price support for one year from any producer who sells to the government for two consecutive years if they had a written offer from a handler at quota support price.
The National Poundage Quota (NPQ) controls U.S. peanut production by restricting the amount of peanuts that are able to be sold at the higher quota support price. Quota peanuts must be used for domestic edible use. Additional peanuts which receive the lower $132 loan rate must be exported or crushed into oil.
Quota minimum - The NPQ is established each year by USDA at a level equal to domestic food, seed and farm use but not less than 1.35 million tons. The 1996 farm bill provisions eliminate this mandatory minimum quota level allowing USDA to set supply equal to demand. CBO scored this provision as the major cost savings provision of the reform package. On April 17, 1996, USDA established the 1996 quota at 1.1 million tons.
Quota Eligibility - Quota is established for peanut operations previously holding quota and that produced peanuts for sale in at least two of the three preceding crop years if a State's quota was increased. Beginning with crop year 1998, quota will not be available to municipalities, public entities, airport authorities, refuges or to out-of state quota holders who are not producers.
Undermarketings - Previously, producers who do not market all of their quota in one year were able to carry forward unused quota and apply it to their future quota allocation through the undermarketing provisions of the program. The undermarketing provisions of the program are eliminated.
Sale, Lease, Transfer - Previous law required that quota could be sold, leased or transferred only within the county. New provisions will allow a certain percentage of quota each year to be sold or leased across county lines. The aggregate amount of quota that can be sold or leased out of a county is capped at 40% over seven years. The allocations are as follows: 15% for the 1996 crop, 25% for the 1997 crop, 30% for the 1998 crop, 35% for the 1999 crop, and 40% for the 2000 and subsequent crops.
Producers and processors currently pay a percentage of the loan rate for each pound of peanuts marketed in the U.S. The rate is: 1.15% for the 1996 crop and 1.2% for 1997-2002 crops. The percentage is split equally between growers and shellers for the 1994-1996 crops. Growers will contribute a higher share of the assessment (.65%) for the 1997-2002 crops. This assessment which generates approximately $12 million each year is allocated toward reduction of the federal deficit.
The peanut program has been responsible for increasing federal budget costs. Fiscal year 1995 costs were $120 million. To assure that the peanut program will operate at no cost to the government new provisions were adopted to require an increased assessment on producers to cover any program costs that are not absorbed through cross compliance measures or through the budget deficit assessment.
Contact: Stacy Carey (202) 225-4652The United States is the 5th largest sugar producer in the world but depends on imports to meet domestic needs. U.S. sugarcane production occurs in Florida, Louisiana, Hawaii and Texas. U.S. beet production occurs in 14 states. 65% of U.S. sugarbeet production occurs in Minnesota, Idaho, California and North Dakota.
U.S. production is estimated at 7.4 million tons for fiscal year 1995/96. Of this total amount, beet production accounts for 54.7% or 4.1 million tons. Cane production accounts for 45.3% or 3.39 million tons. U.S. consumption is forecast at 9.4 million tons for fiscal year 1995/96.
U.S. sugar imports averaged 1.6 million tons between 1990-1995. The minimum required import level under GATT is 1.25 million tons. The 1996 tariff rate quota for raw cane sugar was increased in April 1996, to 2.23 million short tons.
A nonrecourse loan is available to growers at .18 cents for sugarcane and .23 cents for sugarbeets. In the case of default on sugar pledged as collateral, the government has no recourse but to accept the collateral as full satisfaction for the loan obligation. Forfeitures are rare but have occurred in the past three years. In the case of forfeitures, the government typically takes ownership of the sugar and attempts to sell it to cover any losses.
Under the new farm bill provisions, the nonrecourse loan is replaced with a recourse loan as long as imports are less than 1.5 million short tons. Producers and processors instead of the federal government bear the loan risk under a recourse loan system. If U.S. sugar imports exceed 1.5 million short tons nonrecourse loans are triggered and all previous recourse loans will convert to nonrecourse loans. A new penalty has been implemented on all forfeited sugar at a rate of 1 cent per pound in order to protect against forfeiture of sugar to the federal government.
Under the 1990 Bill, marketing allotments restricted the amount of domestic sugar that could be produced in the United States. Marketing allotments were most recently implemented in fiscal years 1993 and 1995. The 1996 Farm Bill eliminates this government intrusion into the sugar industry. Full domestic sugar production will occur without government constraint.
Processors currently pay 1.1% of the raw cane loan rate and 1.1794% of the refined beet sugar loan rate on each pound of sugar sold in each fiscal year. This assessment is allocated toward the federal deficit. New farm bill provisions increase the assessment to 1.35% for cane and 1.47425% for beet sugar which will contribute $8-9 million each year toward deficit reduction. The sugar program will generate a total savings of $288 million toward the deficit through the year 2002.
Contact: Stacy Carey (202) 225-4652Recent farm bills that cover multiple years, actually suspend 1949 permanent law that dealt with farm policy. The 1949 Act established commodity price supports based upon the concept of parity which is a period of farm prosperity 1910-1914, when farmers enjoyed a period of high prices and relatively prosperous times.
However, the 1949 Act relied upon a system of strict supply controls such as quotas and marketing allotments, which over time have not been updated by USDA and no longer reflect current yields and farms. And some commodities voted out their supply control mechanisms in producer referendums.
Farm groups have long argued that the mere thought of returning to the 1949 Act is so onerous in terms of policy and cost that this has driven Congress to adopt past "temporary" farm bills suspending the 1949 Act. As the budget has become more important in farm policy, the Congressional Budget Office has refused to project the cost of returning to permanent law.
This year retaining authority for permanent farm law, took on a higher priority for some in Congress, because the Freedom to Farm bill, was a transition bill. The question quickly became a transition to what in the year 2003? Some policy makers felt that the retention of the permanent law was necessary to force Congress to write a new farm bill in the year 2003.
However, the strength of this pressure on Congress was called into question this year after a farm group brought suit in an attempt to force the Secretary to implement the 1949 Act. The courts refused to force the Secretary to implement the 1949 Act even though it was March and the winter wheat planting was already completed and spring planting was underway!
Contact: Gary Mitchell (202) 225-2171During the past year, many questions have been raised about the appropriate role of the federal government with respect to agricultural policy. America's farmers have heard all kinds of rhetoric coming from Washington about the future implications of the Federal Agriculture Improvement and Reform ("FAIR") Act (commonly referred to as "Freedom to Farm"): some people complained that it would "remove the safety net"; others complained that an AMTA payment would be welfare; many people wanted to keep the old farm program structure with its target prices and deficiency payments, but many of these same people were in favor of forgiving 1995 advance deficiency payments. However, everyone agreed that farmers needed more flexibility so they could better utilize the growing global marketplace as the appropriate place to get most of their revenue. One thing is clear: the old commodity programs have outlived their usefulness, and America's farmers deserve federal agricultural policy that reflects the realities of today's world, where research and global trade are more important than ever before.
Title I of the 1996 FAIR Act creates a Commission on 21st Century Production Agriculture to advise Congress: generally on the situation faced by American farmers at home and abroad; and specifically on what type of Federal involvement in American agriculture is appropriate after the 7-year FAIR Act is completed.
The Commission is designed to give Congress the information it needs in order to determine the overall effectiveness of the FAIR Act and to determine what specific federal legislation is appropriate afterwards. It will be made up of 11 people: 4 appointed by the House; 4 by the Senate; and 3 by the President. Three Commission members must be directly involved in production agriculture, and the rest must have knowledge or experience in agricultural production, marketing, finance, or trade.
By June 1, 1998, the Commission will make a comprehensive "look back" report to Congress. This report will: (1) gauge the initial effectiveness of the FAIR Act; (2) assess the food security situation in the U.S. with respect to trade, consumer prices, international competitiveness, and adequate supplies; (3) assess the changes in agricultural land values and producers' incomes; (4) assess the amount of regulatory relief provided to farmers, focusing on cost/benefit analysis; (5) assess farmers' taxation, focusing on capital gains, estate taxes, and average tax loads; and (6) assess the effects of trade embargoes and trade agreements on agricultural producers. This report will give Congress a good summary of the real world situation faced by farmers, as well as an indication of how well the FAIR Act is working.
By January 1, 2001, the Commission will make a "look forward" report to Congress. This report will outline the changes in the U.S. farming sector since the first report was made, and it will make specific legislative recommendations regarding the appropriate role of the federal government in American farming's future.
The Commission will provide future Congresses with the information based on the real factors being faced by America's farmers, rather than political rhetoric from Washington. This will allow future Congresses to make good decisions about effective federal agricultural policy--policy that will ensure America's farmers continue to lead the world in agricultural productivity and competitiveness, and that Americans remain the best-fed people in the world.
Contact: Lance Kotschwar (202) 225-5944The 1996 Farm Bill, for the first time in the 66-year history of the U.S. Department of Agriculture's ("USDA") Commodity Credit Corporation ("CCC"), put some limitations on USDA's ability to use CCC funds for additional discretionary spending.
Since its creation in 1933, CCC has been USDA's primary tool to administer farm programs. Regardless of whether the particular activity has been deficiency payments, acreage quotas, supply management, commodity purchases, acreage idling, building storage facilities, or getting rid of government-owned surpluses, USDA has consistently been directed by Congress to utilize the CCC to carry out federal farm legislation.
The main benefit of having CCC to administer previous farm programs has been the authority of CCC to borrow money: CCC has authority to borrow up to $30 billion dollars in order to cover farm program costs, and Congress appropriates the money afterwards. Under the 1996 Farm Bill, the amount of money to be spent on commodity programs is fixed.
However, CCC also has authority to purchase personal property which, when combined with the authority to borrow money, has led both USDA and previous Congresses to use CCC over the years to make literally hundreds of millions of dollars worth of purchases for computers and other administrative equipment, mainly without any Congressional oversight regarding how well the money is being spent. It has also allowed USDA to shift a variety of personnel costs into the category of "program administration" in order to use CCC funds for costs that should properly be part of USDA's annual appropriation for its salaries and expenses.
The 1996 Farm Bill changed all this. From now on, CCC has no independent authority to purchase personal property. Over the next seven years, there is a cap on the amount of CCC money that can be spent on things (like computers and other information technology) that are not specifically authorized by Congress. Finally, USDA is required to issue quarterly reports to Congress that detail the use of CCC funds for things other than farm programs. These changes make good fiscal sense: since farmers are being told by Congress that they will have to settle for fixed, declining payments, it is only appropriate that USDA be treated the same way.
Contact: Lance Kotschwar (202) 225-5944The greatest uproar caused by Congress's reform of the Federal Crop Insurance Act came when producers found out they were required to pay a fee for crop insurance they did not want or did not need. This administrative fee required to be paid by all parties with an interest -- no matter how small -- in an insurable crop could add up to substantial sums. Many of these cases came to the attention of Members. The FAIR Act changed this unworkable and burdensome feature of crop insurance reform as well as emphasizing crop insurance should be sold everywhere possible by the private insurance industry.
But Congress also realized that farmers needed more sound assistance in managing the risks of farming and ranching. An independent Office of Risk Management also was established to provide more coordination at the federal level for multi-peril crop insurance, including underwriting new crop revenue insurance as well as giving timely and usable answers to farmers concerning the use of futures, options and risk management savings accounts.
In addition, the Secretary is required to carry out the NAP using the Farm Service Agency. Changes to NAP should make the program more beneficial to producers whose crops are not insured by FCIC under a multi-peril insurance policy.
Contact: David Ebersole (202) 225-2342Congress maintains its commitment to providing international food aid by extending authority for Food for Peace agreements through FY 2002. Modifications are made to allow private entities to carry out programs and allow administrative funding for intergovernmental organizations. In addition to wheat, the Food Security Commodity Reserve allows rice, corn, and sorghum -- grains which may be better suited to local diets -- to be held in reserve.
A stronger emphasis is placed on high value and value-added exports in the GSM-102 and GSM-103 Export Credit Guarantee programs. By allowing goods with up to 10% foreign content to be eligible for guarantees, processed products with spices and other components that are sometimes of foreign origin may be exported. "Supplier credits" allow guarantees to be made directly to buyers, as well as through commercial banks and governments. This will better accommodate the privatization of food importing in many developing countries.
In order to meet budget requirements, EEP expenditures are capped at $350 million in 1996; $250 million in 1997; $500 million in 1998; $550 million in 1999; $579 million in 2000 and $478 million in 2001 and 2002. For the years 2000-2002, when world price uncertainties are highest, funding levels for EEP represent the maximum allowable expenditures under GATT.
Contact: Neil Moseman (202) 225-0171The conservation items in the 1996 Farm Bill are a mixture of incentives and regulatory relief items designed to give producers relief from unnecessary regulation and to provide tools to assist them in protecting the environment. Because of this the FAIR Act can be considered the most environmentally sensitive Farm Bill ever to pass the Congress.
Perhaps the most important conservation portion of the '96 Act are the market transition payments. The transition payments allow producers full flexibility on their land for the first time in decades. Producers will no longer be forced to continue to plant the same crop on the same land year after year. Instead flexibility will allow new rotations that should stop the practice of using the same chemicals on the land which had adverse consequences on the environment.
The Conservation Reserve Program is reauthorized at 36.4 million acres targeted at the most the environmentally sensitive land. Because USDA had been slow in issuing regulations to protect CRP the program was shrinking dramatically. The Conference Committee preserved CRP and better targeted eligible land to protect only the most environmentally sensitive acres. These changes will ensure the continued protection of millions of acres of topsoil and will enhance water quality in rural America. Additional flexibility was also added to the CRP. A producer can now take an early-out from the program on less environmentally sensitive acres to meet market conditions. A producer who takes the early-out option will be able to return to the program without prejudice in the future.
The FAIR Act also established a new program to protect water and soil resources. The Environmental Quality Incentives Program was established to provide cost-share and technical assistance to producers for water quality and soil protection. This program guarantees that approximately $1.2 billion will be spent over the next seven years to protect these resources. This money will be available to producers for a variety of practices, including animal waste facilities and other structural practices necessary to protect the environment. Producers can also receive technical assistance through this program to help them meet the goals of EQIP. This new program will replace several different programs currently providing benefits to producers (Agricultural Conservation Program, Colorado River Basin Salinity Control Program, The Great Plains Program, and the Water Quality Incentives Program).
The FAIR Act also provides much needed regulatory relief to producers from unnecessary requirements under Swampbuster and Sodbuster. Producers now have more flexibility under Sodbuster to experiment with new practices that reduce soil erosion but are more cost effective. It also requires that any conservation system USDA requires be economically and technically feasible. Finally, Sodbuster changes also expedited the procedure for granting variance requests. Under the FAIR Act USDA must respond to a variance request within 30 days or that request is automatically granted. The Conference Committee also made changes to Swampbuster that will bring more certainty to the program. The changes in the law exempt producers from Swampbuster if they had manipulated the land prior to 1986 and the Secretary determines wetland characteristics had returned due to lack of maintenance or lack of management. The Conference Report also expands mitigation opportunities for producers.
Producers will also have several new options available to them to protect the environment while maintaining their productivity. The Farmland Protection Program will allow producers to sell the development rights on their land to protect green space threatened by urban sprawl. This program has guaranteed funding of $35 million. The Wildlife Habitat Incentives Program will provide $50 million to private landowners to create or enhance wildlife habitat on their land. A new program is also established to provide technical assistance on private rangeland. This program will be run through NRCS and should put more trained professionals into the field to assist livestock producers manage their land. Finally, the FAIR Act also provides $200 million for restoration of the Everglades Ecosystem and authorizes another $100 million through the sale or swap of federal land for further restoration activities.
The Conference Committee also made the Wetland Reserve Program more flexible to allow producers to choose among a range of options to protect and restore wetlands. A producer no longer has to sell a permanent easement on his property to protect the environment. Instead he could choose to enter into a 30 year easement or merely accept cost-share money for restoration of a wetland with no easement attached. These options will make an already popular program more acceptable to producers.
The emergency timber salvage program was an attempt by Congress to improve the health of national forests and provide jobs to rural communities that have been suffering because of layer upon layer of environmental laws. The salvage amendment created a process to expedite sales of dead and dying trees, it did not eliminate environmental laws. Because there are ten times more dead and dying trees on public land than are harvested, the salvage amendment was an attempt to clear out these trees which are nothing more than fuel loads which contribute to forest fires. If the Clinton Administration had implemented the law correctly more of the $1 billion the federal government spends annually to fight forest fires could have been saved and taxpayers would have received even more revenue from federal assets that now rot and burn.
Despite the clarity in the law that Congress provided to the Clinton Administration, the timber salvage amendment to the recessions bill has not worked as well as anticipated. The salvage amendment was intended to streamline the process of removing dead and dying trees from our national forest lands. Instead of implementing the law in the expedited manner anticipated, the Clinton Administration took the opportunity to add a new layer of bureaucracy to continue business as usual.
By not implementing the salvage amendment correctly, some in the timber industry charge the Clinton Administration has put our national forests at risk. The Forest Service indicates that there are more than 18 billion board feet of dead and dying timber in our national forests and that 9.3 billion board feet are salvageable. However, in FY95 the Forest Service sold only 1.3 billion board feet of dead and dying timber, leaving the rest to burn in future fires or become infested with pests. Despite the economic and environmental gains to be made by selling this timber, the Administration's FY96 budget request indicates they only plan to sell 1.5 billion board feet of salvage this year.
Contact: Doug Benevento (202) 225-2342The Welfare Reform package vetoed by President Clinton contained the following provisions:
Federal Research and Promotion Programs, commonly referred to as check-off programs because they are funded by or checkoffs from commodity transactions, were first enacted in 1954, however the majority of these programs were created during the 1980's and 1990's. Authorization exists for 21 federal research and promotion programs including the three new programs for Canola, Kiwifruit and Popcorn. Approximately 14 programs are active in either organization or collection of funds.
Research and promotion programs are designed to assist various industries in increasing the sales through advertising, promotion, product research and market research. In the post-Uruguay Round trading environment of increased market access, reduced export subsidies and domestic price supports, research and promotion programs have become a more important tool for enhancing agricultural competitiveness.
New authority was also granted to USDA to implement nationwide research and promotion programs. This new provision will allow the Secretary of Agriculture to implement checkoff programs for growers, first handlers and others in the marketing chain, if appropriate, and importers, if assessed under the order. The Secretary of Agriculture is able develop a self-initiated proposed order or to initiate a proposal from an association of producers. The Secretary is required to publish the proposal for notice and comment. The Secretary may issue the order not later than 270 days after publication of the proposed order if there is significant interest. The order establishes a board to carry out the program. Under this new authority Congressional passage of commodity specific research and promotion programs is no longer required.
The farm bill also adopted provisions requiring an independent evaluation of the effectiveness of research and promotion programs to be paid for by the industry and made available to the public. Evaluations may include analysis of benefits, costs and the efficacy of research and promotion programs. USDA is also required to report to Congress on the administrative expenses of research and promotion programs.
The 1996 Farm Bill established a canola and rapeseed program, kiwifruit program and a popcorn program which authorizes the Secretary to issue orders for promotion programs upon the request of the industry.
Authorizes the Secretary to issue an order for a canola and rapeseed promotion program upon request of the industry. A Board of fifteen members is established with not more than four producer members of the Board from any one state. The Board may assess producers four cents per hundredweight of canola or rapeseed produced and marketed in a state. In order to achieve industry consensus for a national canola check-off program, states with an existing canola check-off requested and received, a credit of up to two cents per hundredweight. The Secretary shall conduct a referendum among producers during the period ending thirty months after the date the order was issued to determine whether the order should be continued.
Authorizes the Secretary to issue an order for a kiwifruit promotion program upon request of the industry. The order should be national in scope and not more than one order will be in effect at any one time. An eleven member kiwifruit board is established composed of six producers, four importers, and one member of the general public. Implementation of the order and rate of assessment is to be set by a two-thirds vote of a quorum of the Board. The Secretary shall conduct a referendum of kiwifruit producers and importers sixty days prior to effective date of the order and may conduct a periodic referendum at the end of a six-year period, at the request of the Board, or if not less than thirty percent of the kiwifruit producers and importers subject to assessment request a referendum. Any change in the order will be determined by a majority vote and will take effect at the end of the marketing year.
Authorizes the Secretary to issue an order for a popcorn promotion program upon request of the industry. A Popcorn Board is established that consists of between four and nine members that are selected by the Secretary and have terms of three years. The Board may raise or lower the rate of assessment annually up to a maximum of eight cents per hundredweight of popcorn. These assessments will be used to pay expenses incurred and to cover administrative costs incurred by the Secretary, but may not exceed fifteen percent of the annual revenues of the Board. If the administrative costs incurred by the Secretary exceed ten percent of the annual revenues of the Board, the Secretary will notify the House and Senate Agriculture Committees.
Sixty days prior to the effective date of the program, the Secretary will conduct a referendum among popcorn processors. The order only becomes effective if approved by a majority of the processors voting, who processed at least fifty-one percent of the popcorn certified. No sooner than three years after the effective date of the order, the Secretary may conduct a referendum at the request of thirty percent or more of the popcorn processors for continuation of the program.
Contact: Christin Bradshaw (202) 225-4953The economic conditions that resulted in passage of the Agricultural Credit Act of 1987 (P.L. 100-233- Jan. 6, 1988) have long since passed, and many in farm country and taxpayers around the country wonder why liberal credit policies are necessary for a sound farm economy. Billions of dollars in bad farm debt has been liquidated, and now, Congress has returned federal farm lending to standard credit market practices in the recently enacted 1996 farm bill.
Many of the provisions adopted by the Congress were in reaction to numerous, critical reports of the General Accounting Office (GAO) dating back to the late 1980's. As the GAO has been pointing out for some time, "lenient loan-making policies" have resulted in millions in losses to taxpayers. For example, the GAO cites its work during fiscal years 1989 and 1990 showing that the old Farmers Home Administration lent an additional $38 million to over 700 borrowers who had not repaid previous loans that had resulted in losses totaling $108 million. GAO says that almost half of those borrowers became delinquent again on their new USDA loans. The FAIR Act should bring some common sense and accountability back to USDA farm credit programs.
Currently, 40 percent of the $4 billion in loan principal and interest, or more than $1.6 billion, outstanding in the emergency lending program is not being repaid on the contracted schedule. That represents more than 26,000 borrowers. All direct farmer program lending -- to a clientele of about 120,000 borrowers owing the taxpayers more than $13 billion -- is about 25 percent behind schedule.
Whether or not such policies that tote up those kinds of numbers actually help farmers and ranchers is an argument for another day, but it is obvious they do nothing for taxpayers or the federal deficit.
Because the credit reforms of the 1996 farm bill were adopted in the midst of the spring planting -- and credit -- season, many farmers who had expected to receive annual operating loans for 1996 inadvertently became ineligible for operating or emergency disaster loans. To remedy this situation, the bill making supplemental appropriations for the remainder of the 1996 fiscal year (P.L. 104-134) contains legislation that allows USDA to continue to process loans to farmers who had applied for operating or emergency loans prior to April 5, 1996. These borrowers also could not be more than 90 days delinquent on other USDA loans in order to receive this benefit.
Contact: Dave Ebersole (202) 225-2342Agricultural Quarantine and Inspection (AQI) at ports of entry into the United States is carried out by USDA's Animal and Plant Health Inspection Service (APHIS). The current system raises funds for inspection services at ports of entry through user fees. These fees are collected in an account at the U.S. Treasury where they are then subject to the appropriations process. Unfortunately, all of the funds raised through fees placed on passengers and airline customers at ports of entry have not been made available through the appropriations process for inspection activities.
When this program was authorized by the 1990 Farm Bill (Section 2509), it was the intent of Congress to provide APHIS with all of the funds collected through the user fee account. A long term solution to the AQI funding problem is only fair and faithful to the original intent of the legislation.
AQI provides a critical first line of defense against the entry of diseases and pests which threaten U.S. agriculture. AQI activities require very little funding when compared to the vast amounts of money required to combat an outbreak.
In 1990, legislation was passed authorizing user fees for agricultural quarantine inspection (AQI) activities, including inspections of aircraft, vessels, trucks, railcars, and airline passenger baggage arriving in the United States from foreign countries. When this authority was originally proposed by the Department of Agriculture's (USDA) Animal and Plant Health Inspection Service (APHIS), the method of collection was specified in the draft legislation. The method chosen was for the airlines to collect the fees through the passenger ticketing process. The fees would then be deposited into a dedicated U.S. Treasury account from which the Department of Agriculture would be reimbursed on a quarterly basis. This method was consistent with the collection processes of the U.S. Customs Service and the Immigration and Naturalization Service. In the original proposal, the fees were not subject to the appropriation process in which Congress authorizes a certain level of annual spending for each activity. However, as the bill was developed in Congress as part of the 1990 Farm Bill, language was added making expenditure of the fee subject to the appropriation process. This means that no funds can be expended without Congress establishing an authorized level of spending. This was done because the congressional budget process apparently will not credit budget savings that are achieved through the assessment of user fees unless the fees are subject to appropriation. In other words, it was the only way the Agriculture Committee could ensure that the savings would be reflected in their budget process.
Unfortunately, this method of collection and disbursement has created some problems. The process of requesting quarterly disbursements from the Treasury is cumbersome, and the request for disbursement does not guarantee that the funds will be provided. It would be more practical to have the fees collected directly by USDA and subject to direct-expenditure by USDA, without going through the process of requesting reimbursement from the Treasury every quarter.
An additional problem that was not foreseen when the legislation was passed is the fact that the AQI program remains subject to staff-year limitations even though passengers and airlines are now paying for the service. Staff year ceilings are set by the Office of Management and Budget (OMB), and because this process is separate from the budget process, the staff ceilings are not always consistent with the budget. This means that, in any given year, AQI may have adequate funding but inadequate staff levels or adequate staff but inadequate funding. Authorizing direct expenditure of user fees that are collected and exempting the activity from staff-year limitations would greatly enhance APHIS's exclusion activities and better ensure that the resources available for AQI activities reflect actual levels of international travel and trade. There is some reluctance to exempt these activities from staff year limitations because it is perceived as a "backloaded cost." In other words, the staff years may not cost APHIS anything now because they are paid through user fees, but in the future additional staff years will be a drain on retirement systems.
For several years, APHIS has proposed legislation to authorize direct collection and expenditure of the fund and to exempt user fee-funded AQI activities from staff-year limitations. However, Federal law requires that Federal programs "pay as they go." The so-called "Paygo" law requires that, for every new expenditure, there be a new source of revenue or a change elsewhere in the budget to offset the expenditure. or a change in an existing law that switches the budget mechanism from appropriated funding to direct expenditure--which is what APHIS was proposing to do--requiring new offsetting revenue. Since APHIS would not be establishing new user fees to offset the direct expenditure, it appears on paper that it would be creating a new expenditure without identifying a new source of revenue to offset the expenditure.
However, in fact, the new revenue source was created in 1990 when our user fee legislation was passed. Because of the conflict with the "Paygo" law, APHIS has not been able to put this proposal forward. Both the Administration and Congress have tried to alleviate APHIS's difficulties by authorizing appropriations language that allows them to exceed the appropriated amount by up to 20 percent as long as there is money in the account. APHIS has been able to get the 20 percent waiver because it has not been "scored" in the congressional budget process in the past; however, in future years, the Congressional Budget Office (CBO) has stated that it will score the amount up to 20 percent, which means it is likely to be eliminated entirely. Moreover, the 20 percent is not automatically provided to the Agency, but has to go through an apportionment process, which can take significant amounts of time. Thus, by the time the funds are apportioned, APHIS must use the funds to pay overtime costs rather than hire additional staff help.
In addition to the relief from the 20 percent waiver, OMB has approved language in APHIS's fiscal 1996 budget request to Congress that allows direct expenditure from the user fee account in the Treasury. Without permanent relief from arbitrary staff-year ceilings and the current spending mechanism, the AQI program will continue to see potentially serious staffing problems at many U.S. ports of entry.
Contact: Bryce Quick (202) 225-2171Consumers in the United States spend less of their available income, about 11 percent, on food than virtually anywhere in the world. The value of their food dollar is further enhanced by the fact that it buys the safest, highest quality and most abundant array or products to be found anywhere.
While the 1993 E.coli outbreak focused new attention on meat and poultry inspection, in every instance proper food handling techniques, which are well understood, would have prevented illness. Food handlers and consumers have an important role to play in food safety, but there is room for improvement in our meat inspection system.
Within the existing inspection system, new technologies have been approved, such as steam pasteurization, organic acid rinses and steam vacuum, which have proven extremely efficacious in reducing microbial contamination. In every case these technologies were developed as a result of private industry seeking improvements in their production processes. The Food Safety Inspection Service should encourage the use of these new approaches by streamlining the process it uses to consider petitions for these intervention methods.
There is also a need for increased use of a technology that has been around for some time. Hazard Analysis and Critical Control Points is a 30 year old technology developed by NASA and the Pillsbury Company to integrate the elimination of food safety hazards into food processing techniques. After 20 months of development, the Administration proposed a regulation incorporated HACCP on February 3, 1996. It is anticipated that this regulation will be finalized sometime early this summer.
While microbial testing has an important role in achieving food safety, it must be used properly to achieve that goal. This is why it would be ill advised to include an end product microbial standard in the regulation for raw product. An end product standard would cause consumers to pay much higher costs for meat and poultry products without receiving a corresponding benefit.
Texas A&M estimates that such a standard would reduce farm revenue by $680 million per year and increase industry costs by more than that amount. They also estimate that government costs would increase by $6.9 billion. These additional costs will be passed on to consumers and taxpayers without a comparable benefit in terms of food safety.
A microbial end product standard creates unrealistic expectations for consumers without serving any food safety goal. Bacteria continue to multiply even if present in levels below any arbitrary government standard, so consumers may receive a meat product considerably changed from when it was tested. Also, individuals have different vulnerabilities to various foodborne threats. A standard which protects one person may not protect another. Consumers might fall victim to a false sense of security implied by a microbial end product standard.
Another potential pitfall is a regulation that simply layers a new HACCP inspection system on top of the existing inspection system. Since all of the additional costs of the meat and poultry inspection system are passed on to consumers and livestock producers, each element of the regulatory system results in cost effective improvement in food safety. For this reason, we need one system that works, not two that interfere with each other.
Contact: Pete Thomson (202) 225-2171Endangered Species reform proposals currently before the Congress make the following improvements to the ESA:
The current Endangered Species Act (ESA) celebrates its 23rd birthday this year. Like many other conservation laws, it has become outdated and outmoded by advances in science and technology. Numerous scientific experts have acknowledged that there are some species that should not be listed and some species that simply cannot be saved. The current Act simply fails to do a good job of protecting species. The current system: utilizes a top down bureaucracy approach which creates excessive regulation; restricts land use and discourages real species protection; ignores technology that could help promote species conservation; is lawsuit driven; and utilizes a specie by specie approach that is disastrous for biodiversity.
Contact: Bryce Quick (202) 225-2171Wetlands regulation had become the premier private property issue when President Clinton announced his Administration's wetlands policy in the summer of 1993. Things have not gotten any better: for example, in the 26 pages of policy pronouncements discussing the scope of regulated activities under the Clean Water Act and swampbuster statutes, the White House writes, "The Administration has issued a final regulation, and is asking Congress to take corresponding legislative action [emphasis added], to close these regulatory loopholes by clarifying the types of activities that involve discharges of dredged or fill material subject to Section 404 review."
Although swampbuster provisions contained in agricultural law have stung a few farmers and ranchers who have lost farm program benefits through regulated activities on their farms, the bite of the Clean Water Act is its potential for criminal prosecutions and stiff money penalties. The wetland portions of the Clean Water Amendments were designed specifically to address these frustrations of farmers and ranchers while conserving true wetlands.
Under the terms of H.R. 961, the Secretary of Agriculture would be assigned the role of delineating all wetlands on agricultural and associated nonagricultural lands under the terms of delineation spelled out in the bill. Lands exempted from the Food Security Act of 1985, as amended, would be exempt under the Clean Water Act Section 404 permitting procedures.
Finally, Section 319 of the Clean Water Act is amended to provide further funding and more flexibility and federal government accountability in meeting the Nation's goals of reducing nonpoint source water pollution. Rather than requiring timelines and guidelines that are overly strict and unrealistic the bill has water quality standards that may be attained with reasonable progress over a sustained period of time. But overall standards should be met within a 15-year time period.
Contact: David Ebersole (202) 225-2342Pesticides are necessary tools that when used in a responsible manner contribute significantly to protecting the health, property, environment and economic well-being of the American public. However, we must recognize that any chemical at a high enough level of exposure can pose a risk to human health or the environment.
It is this dual nature of pesticides that require us to have a policy which includes a science based analysis of both the risks and benefits inherent in a particular pest control methodology. HR 1627 represents just such a policy proposal.
With over 240 cosponsors in the House (Senate companion, S 1166 has over 30 cosponsors), HR 1627 represents a comprehensive package of reforms to the federal food safety statutes governing the manufacture, regulation, and use of pesticides. A primary focus of the legislation is reform of the outdated Delaney Clause.
During the late 1950's, when scientists were able to detect chemical residues in a parts per ten thousand or per hundred thousand range, the Delaney Clause was amended to the Federal Food, Drug and Cosmetic Act. The Delaney Clause allows no amount of possibly carcinogenic additives that concentrate during the processing of food -- no matter how small the concentration or how minimal the risk -- to be present. Over the past 40 years scientific analysis has significantly improved, enabling scientists to detect chemical residues in parts per trillion and quadrillion.
Pesticide manufacturers and the EPA have agreed that scientific analyses have proven that such minute concentrations pose a negligible risk, and therefore do not pose an adverse risk to the public, a fact that the current Administration has testified to during Congressional hearings and in public statements.. Unfortunately, the courts have ruled that the Delaney Clause is absolute in its zero tolerance wording, and until Congress changes the law, new products that are known to be safer than those currently in use, will be banned simply because they can be shown to be carcinogenic at extremely high doses.
In addition, HR 1627 also:
* streamlines cancellation procedures so that
dangerous
chemicals
can be removed from
use more quickly, and preserves a rational, scientific
consideration
of
pesticide benefits.
* reforms the registration/review of agricultural
minor use,
antimicrobial and public health
minor use pesticides to enable EPA to expedite the
regulatory process.
* requires EPA, USDA and FDA to work in concert
to
develop the
necessary dietary data
that will assist EPA in ensuring that pesticide regulatory
decisions
adequately protect infants
and children.
* streamlines the registration process of pest
control
products
that reduce risks, address
lost minor uses, etc.
The National Academy of Sciences and the U.S. Surgeon General have stressed the value of a balanced diet including plentiful fruits, vegetables and other agricultural products in controlling heart disease and preventing cancer, not to mention living a healthy life. By reforming FFDCA's outdated Delaney Clause, and improving FIFRA's ability to regulate pesticides and their uses, HR 1627 provides a common sense answer to ensuring consumer access to a healthy, affordable food supply.
Just as important, it provides a rational counter to those who seek to eliminate all pest control tools, threatening consumer's access to these items. By reducing the availability and raising the price of food, an outdated pesticide policy undermines the health and welfare of all Americans, and will prove especially injurious to low income families who can least afford the higher cost to their diets.
Contact: Dale Moore (202) 225-2171Most discussions about the future of meat and poultry inspection policy result in two conclusions. First, that the role of science in food safety policy making should be enhanced. Also, most observers caution against doing anything that might hinder the development of an improved meat & poultry inspection system.
The Safe Meat and Poultry Inspection Panel was conceived during the 103rd Congress and established in the Federal Agriculture Improvement and Reform Act of 1996. The Panel will provide the Secretary of Agriculture with sound scientific counsel, entirely outside the current bureaucratic and political structure at USDA. It should be clearly understood the panel has no authority to regulate or impede policy in any way. Its members will be appointed by the Secretary and will serve as an advisory body - nothing more, nothing less.
Some have complained that this panel will be too expensive, and might slow the regulatory process. The bill language specifically addresses these concerns by instructing the Secretary to operate this panel in a "thrifty" manner. The panel can conduct business by phone, fax and E-mail. Unlike the advisory panels that the agency currently has, but never uses, this panel requires no staff, no travel, no lodging, and no meeting space.
In addition, the statutory language requires that if the panel chooses to comment on any formal regulatory proposal, that it do so within the public notice and comment period. This provision specifically precludes the panel from slowing the process.
Advisory committees are not a new idea, the Food and Drug Administration has dozens of them. The USDA currently has a National Advisory Committee on Microbiological Criteria in Foods. Unfortunately, this committee has met only 3 times in the last 4 years. Inexplicably, the committee was not even given a courtesy copy of the massive HACCP/Pathogen Reduction regulation currently in final review at the Department.
There is another advisory committee provided for by law referred to as the Meat and Poultry Committee. It was designed to give advice on the coordination between state and federal inspection systems. This committee hasn't met since 1994 and presently has no charter and no members.
The Safe Meat and Poultry Inspection Panel was designed to address this apparent disregard for scientific debate of food safety policy. Though appointed by the Secretary, the Panel will set their own agenda. And, while the Panel cannot impede policy making in any way, the Food Safety Inspection Service cannot ignore this scientific counsel. The views of the Panel will be published in the Federal Register and the scientific discussion will be moved forward by a requirement that the Secretary respond within 90 days.
Contact: Pete Thomson (202) 225-2171Precision Agriculture combines three elements, location, data and variable input application. Location is provided by a Global Positioning System, or GPS. This allows the farmer to know exactly where on his field he is at any given time. (levels of accuracy vary, depending on the system, within 3-5 square meters is fairly standard) The data consists of any and all information compiled about a given field, yield rates, soil quality, pest problems, etc. This data is collected and collated on a digitized map. The data and map are usually stored in a portable computer. Then, using the GPS in conjunction with the field map to know what the particular characteristics of the field below are, variable rate applicators are used as the tractor traverses the field. Thus, each three to five square meter section of a field is being given the optimal level of inputs, for the maximum return.
The economic benefits to the farmer are both direct and indirect. On the farm he will know where the addition of various inputs will increase his yield, and where any additional inputs are wasted. Not only does this allow the farmer to use his inputs most efficiently, but it reduces excess inputs that would otherwise have run off into the surrounding environment. In the world market place, he will benefit by having an increased competitive advantage over his foreign counterparts.
In addition to the domestic environmental benefits, Precision Agriculture also addresses global environmental concerns. By increasing the agricultural productivity and profitability of environmentally sound lands, like those found in North America, it greatly reduces the economic incentive to farm environmentally fragile grounds in less developed countries, i.e. rain forests. This will become increasingly essential as global population growth and increasing consumption strain current production limits.
The costs of applying this technology to a given farm vary greatly. The farmer can either purchase the technology outright, or pursue a variety of rental or leasing options. To buy a complete, basic system would cost roughly $11,000. As with personal computers, the costs of this technology are coming down, while the capabilities are increasing. Additionally, it is possible to spend vastly different amounts of money, depending on the level of precision and amount of data desired and/or needed. A farmer should not be worried about getting "in" too early for fear of his investment being rendered worthless in 10 years by new innovations. Though new and better equipment will undoubtedly come along, t