Washington Report

President Obama plans to sign the $956 billion farm bill, the Agriculture Act of 2014, into law today at Michigan State University. In his remarks today in East Lansing, Michigan, he will announce a new “Made in Rural America” initiative that White House officials said was intended to help rural businesses market their goods abroad. Michigan, is the home state of the Senate Agriculture Chairwoman Debbie Stabenow (D).

Lawmakers passed the sprawling legislation this week after four years of bitter arguments.  The Agricultural Act of 2014 passed the House by a vote of 251-166 and the Senate by a vote of 68 to 32.   The measure reauthorizes for five years commodity support, conservation, international food aid, nutrition assistance, farm credit, energy and much more.   Current law expired September 30, 2013. The new legislation will run through 2018.  The legislation will cost $956 billion over 10 years, saving about $16.6 billion in that timeframe.  A summary of those provisions important to the chicken industry are as follows:

Title I – Commodity

• Direct payments for the commodity support programs will be capped at $125,000 per person and $250,000 per couple and would let USDA decide who qualifies as being “actively engaged” in farm operations to qualify for additional subsidies.
•  Crop Insurance:  Beginning in crop year 2015, farmers would be able to purchase additional insurance under a new Supplemental Coverage Option that would cover part of a farmer’s deductible from his underlying crop insurance policy.  Coverage would be triggered only if losses exceeded 14 percent of normal levels.  The government would subsidize 65 percent of premiums.  Eligibility for insurance premium subsidies would be tied to compliance with highly erodible land and wetland conservation requirements.

Title II – Conservation

• The total acreage enrolled in the Conservation Reserve Program (CRP) will be 27.5 million in FY 2014 and drop to 24 million in fiscal 2018; the fiscal 2013 maximum enrollment level was 32 million.  The CRP pays farmers and other producers to remove sensitive lands from agricultural production and plant species that improve environmental health, water quality and prevent soil erosion.
•  The Environmental Quality Incentives Program (EQIP) is authorized at funding levels of: $1.35 billion in FY2014; 1.6 billion in FY2015; 1l65 billion in FY 2016, and 1.75 in FY 2018.  The bill updates EQIP to include soil health, invasive species management and air quality, and is used to determine payments to participating farmers.  The payment caps for EQIP contracts is $450,000 per person or entity for all contract entered into from FY 2014 through FY2018.

Title III – Trade

• H.R. 2642 authorizes the Secretary of Agriculture to establish the position of Under Secretary of Agriculture for Foreign Agricultural Services.  The bill requires the Secretary, in consultation with the House and Senate Agriculture Committees and House and Senate Appropriations Committees to propose a plan for reorganization of the trade functions of USDA, including the establishment of an Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs. The Secretary is required to report on the plan 180 days after the farm bill’s enactment. Within one year of submission of the report, the Secretary is required to implement the reorganization plan including establishment of the Under Secretary position.
•  The bill authorizes CCC funding of $200 million annually for the Market Access Program (MAP), which finances promotional activities for both generic and branded U.S. agricultural products. The bill also retains CCC funding for the Foreign Market Development Program (FMDP) at $34.5 million and is a program for generic commodities.

 Title IV – Nutrition

• The Supplemental Nutrition Assistance Program, formally known as food stamps will be reauthorized for five years through 2018 and funded at $82.2 billion over 10 years.  Changes to the nutrition title would reduce total spending over 10 years by $8 billion.

 Title IX – Energy

• The Rural Energy for America Program (REAP) is funded at $50 million each year through FY 2018. The program provides funding to help rural businesses and farmers conduct energy audits, install renewable energy technology or make energy efficiency improvements on their property.  The bill also provides funding for the Bioenergy Program for Advanced Biofuels at $15 million and $20 million per year for the Biomass Research and Development Initiative.

 Title XII – Miscellaneous

• The Conference Report does not include language on the Grain Inspection Packers and Stockyards Act (GIPSA). An amendment was passed in the House (Conaway-Costa) that would have made permanent the fixes that were sought by the livestock and poultry industries, but was not taken up in farm bill negotiations.  Specifically the amendment would have barred GIPSA from implementing or further establishing rules that went beyond the Congressional Intent of the 2008 farm bill.
• Language on Country of Origin Labeling (COOL) was not included in the conference report sought by livestock and poultry producers.  The language would have repealed meat-labeling requirements that could lead to retaliation from Canada and Mexico.  The conference report would require USDA, acting through its Office of the Chief Economist, to complete an economic assessment of the department’s final COOL rule.
• An amendment by Rep. Steve King (R-IA) that restated the Interstate Commerce Code particularly relating to California’s banning of eggs not produced in the same way California produces their eggs was not taken up during farm bill negotiations.  This, too, was an amendment that was passed in the House and not included in the Senate bill.
•  The conference report would leave in place a catfish inspection program created by the 2008 farm bill. The catfish inspection program was moved to USDA from FDA in the 2008 farm bill, but the program has yet to be up and running.
• The National Poultry Improvement Plan, which requires USDA to continue to administer the Avian Influence surveillance program, was included in the conference report.
• Four provisions in this title are directed at the Environmental Protection Agency (EPA). The first provision requires a regulatory review and economic impact statement from USDA on EPA proposals that significantly impact agricultural entities; the second amends EPA’s spill prevention, control, and countermeasure rule; the third prohibits EPA from disclosing producer information; and the last provides EPA permit exemptions for certain silviculture activities.
• The legislation includes a provision that requires OMB to prepare and report to Congress an interagency cross-cut budget on federal and state activities on restoring the Chesapeake Bay. The provision also directs EPA to develop a plan to provide technical and financial assistance to Chesapeake Bay states in carrying out watershed restoration.