Monday, May 20, 2013

The Farm Bill

     We hear the word "Farm Bill" in the news.  But what is it, and what does it mean?  We've heard the media say that it is "farmer welfare," and "farm supplements."  We've heard that American farmers are paid to not farm, that the government pays them for their crop.  What we don't hear is that over 2/3 of the farm bill doesn't deal with farming and conservation at all, but is for foodstamps.

     The Farm Bill should really be two different bills.  It should be the "Foodstamp Bill", and the "Farm Support and Land Conservation Bill.".  The provisions in our current Farm Bill are for wildly different purposes.

     On the pie chart at the right, you see that 69.40% of the 2008 Farm Bill provides for foodstamps.  This is the current Farm Bill which we are working under now.  The new 2013 Farm Bill is being negotiated by the Senate Agriculture Committee at this time.

     The official term for foodstamps is "Supplemental Nutrition Assistance Program," or SNAP.  Between 2002 and 2012, the number of participants in SNAP increased from 19.1 million to 44.7 million people, and the total program cost went from 16.3 billion to 74.6 billion dollars.  (Capital Press, 5/17/2013)

    But that's not what this article is about.  We're here to talk about the other 30.6%.

     Many of the foods grown in the US can be grown in other countries.  Examples are wheat, corn, soybeans, rice, among many, many others.  These crops are called commodities, and they are traded globally, with the price set not locally or even nationally, but on the world market.

     In our country, We, the People, demand that our food be safely grown, and that our farm laborers be paid fairly and treated fairly.  This increases our American farmers' cost to produce food.  At the same time, much of the food we eat can be grown in other countries, and those countries may not have the same safety and humane standard as we have, so the cost of production there is quite a bit less.

     For this reason, in the Commodities segment of the Farm Bill, we supplement our farmers when the commodity price falls below a certain, established price.  For example, say it costs the American Farmer $4.50 to produce a bushel of wheat, and that same bushel might cost $3.00 to be grown in South America or Egypt.  What if, due to the world economy and global trading, the price of that bushel falls to $3.75?  Our farmer is losing quite a lot, and still must use the more expensive, but safe chemicals.  He must still provide his employees with Worker's Compensation insurance, pay a fair wage, and provide a safe work environment.  The Farm Bill then kicks in and compensates him for that extra cost to produce that bushel of wheat.

      The next category deals with loss of crops.  A farmer has a "base yield" on his farm.  He registers each year's yield with his local USDA agency, and a 5 year average  of his yields is kept by them.   If, due to weather, (fire, wind or hail) his crop lost or is less than that base, The Farm Bill agrees to reimburse him for that loss.  This is Crop Insurance.  It should be noted that Federal Crop Insurance is not just handed out - each year a farmer pays a premium for this insurance in order to have the option to participate in it.

     The next category is Conservation.  Our farmers and ranchers are the ones who manage almost all of the privately and much of the publicly held land in our country.  There are numerous programs to assist farmers and ranchers in improving their operations, to make them more environmentally sound. An example of this is the Conservation Reserve Program (CRP).  In this, the farmer agrees to remove environmentally sensitive land from agricultural production, and plant species of plants and grasses that improve environmental health.  In exchange for this, the farmer is paid an annual rental payment for a 10-15 year period.

     Additional examples of conservation programs:
     -converting high-pressure sprinklers to low-pressure, using less water and power, and watering the crops more efficiently
    - planting trees and shrubs to form windbreaks which reduce erosion.  They also would provide habitat for birds and small animals
    - developing springs and water-ways to provide drinking water for livestock and wild animals and birds
    - protecting waterways from livestock
    - planting native grasses and plants in un-cultivated areas to provide habitat for animals

     The small category of Energy  deals with helping farmers and ranchers make their operations more energy efficient.  A few examples of the programs would be: updating irrigation systems, re-winding pumps so that they run more efficiently, upgrading equipment to be more fuel efficient, insulating shops and barns so that they use less electricity for lighting, heating and cooling.

     The category of Exports provides funding for international agriculture trade programs, and developing international access to American farm products.  One program is called Market Access Program (MAP) in which the USDA matches dollars for foreign market development.

     So now, you have a better understanding of the Farm Bill (or should I say the Foodstamp and Farm Support and Land Conservation Bill).   Also, hopefully you can better understand the media when you hear discussion about The Farm Bill.

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