August 22, 2007 | By: Laura Skillman
LEXINGTON, KY.

When Congress returns to session after Labor Day, completing the 2007 Farm Bill will be on the agenda. The U.S. House of Representatives has approved its version of the bill, but the Senate has yet to begin debate.

Unless the senators can quickly finalize their plan and reconcile any differences with the House proposal, it may be difficult for a new farm bill to be ready by the Sept. 30 deadline, said Will Snell, a farm policy specialist with the University of Kentucky College of Agriculture. If that occurs, a short extension of the 2002 Farm Bill is likely.

The farm bill, which expires every five years, is the country’s most comprehensive piece of agricultural legislation. Its effects reach beyond farmers to agribusinesses, rural communities and even consumers, outlining provisions on commodity programs, trade, conservation, credit, agricultural research, food stamps and marketing.

The House proposal likely will make Kentucky’s grain farmers happy because, after much talk of major reform within commodity programs, about the only change made was establishing tighter payment limitations, Snell said. 

Current as well as projected future high grain prices will likely result in farmers receiving income from the market versus the government in the coming years, but grain farmers still would like to retain a safety net when prices do begin to fall, he said. There is more concern this crop year that drought in many parts of the state will limit the bushels available for grain farmers to sell at good prices.

Under the 2002 farm bill, commodity payments excluded anyone who had an adjusted gross income exceeding $2.5 million, unless two-thirds of their income was from farming. The current House version would make individuals with a three-year adjusted gross income average of more than $1 million ineligible for program payments. Any individual with an adjusted gross income between $500,000 and $1 million would also be ineligible for program payments unless two-thirds of their income is from farming. Direct payments to individuals and entities are capped at $60,000 annually while countercyclical payments remain capped at $65,000. The House eliminated the three entity rule which allows farmers to collect payments on multiple farming entities and also eliminated all farm program checks totaling less than $25 per individual.

While the individual program payment caps might not affect many in Kentucky, these latter two components (elimination of the three entity rule and checks under $25) undoubtedly will have an effect on a significant number of farming operations, Snell said. 

The House bill renews most existing conservation programs with a 35 percent boost in funds. Conservation payments are limited to $60,000 for a single program or $125,000 for all conservation programs. It also provides additional funding for fruit and vegetable nutrition, research and promotion programs.

“This farm bill increases conservation and other items, such as more benefits for fruit and vegetable producers, which could benefit our livestock and horticulture producers,” Snell said. 

The House bill also expands funding and programs to support renewable fuels research and infrastructure. Country of Origin Labeling for fruits, vegetables and meat would become mandatory by Sept. 30, 2008.

For dairy producers, the safety net changes direct support of the price of cheddar cheese, butter and nonfat dry milk by government purchase of such products. It also extends the Milk Income Loss Contract Program until 2012. 

The House puts an additional $4 billion toward expanding food stamp benefits under the Secure Supplemental Nutrition Assistance Program. It also expands fruits and vegetables available for school lunches and snacks and for low-income households. 

In the area of rural development, it reauthorizes most existing rural infrastructure and economic development programs with additional emphasis and money earmarked for rural health care programs, broadband services and value-added marketing of agricultural products. 

When Congress reconvenes after the August recess, look for the Senate to devote even more attention to payment limitations, nutrition, rural development and conservation in their farm bill discussions, Snell said. Once the Senate completes its version, a conference committee will reconcile the two bills before approval. Therefore, expect changes to occur in the days ahead before the five-year farm bill is finalized.

Contact: 

Will Snell, 859-257-7288