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The Future of Farm Policy

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As the House Agriculture Committee continues discussion this week on the future of U.S. farm policy in preparation for the 2007 Farm Bill, the timing is right for Congress to seize the initiative and make the investments needed to jumpstart and sustain a global agricultural economy driven by clean renewable energy, technological innovation, and fair and open markets at home and abroad.

Agriculture and the family farm are the foundation of strong and healthy rural communities and powerful engines of economic growth in every region of the United States. In a competitive and risk-filled global economy, American farmers are the most efficient, most productive, and most respected stewards of the land of any farmers in the world.

At the same time, the United States has a responsibility to reinvigorate the moribund WTO Doha round of multilateral trade negotiations with a proposal to strengthen U.S. agriculture and salvage what remains of the opportunities to make progress on development and global poverty reduction. At the farm gate and in international markets, American family farmers and small-scale farmers in the most vulnerable developing countries share a common goal and a mutual frustration: the incapacity of the global trading system to deliver open markets and a fair price for their products.

Farm-based renewable energy, and biofuels (liquid fuels derived from crops and agricultural wastes) in particular, may offer a way forward. Rising global demand for oil and concerns regarding the costs and consequences of global warming are contributing fresh momentum to enlisting agriculture as a partner in diversifying global sources of energy and promoting innovation.

Biofuels have shown tremendous potential to deliver a secure and stable supply of fuel to supplement our growing energy demands. We must move rapidly and deliberately toward the development of the next generation of advanced cellulosic biofuels derived from bulk plant matter (biomass such as corn stalks, wheat straw, and rice hulls) and dedicated energy crops grown in a sustainable manner. These must be major components of our future farm policy and the 2007 Farm Bill. Combined with improved fuel economy, vehicle technology, public transportation, and conservation, the next generation of advanced biofuels can make a key contribution in our efforts to lessen our dependence on fossil fuels, meaningfully reduce greenhouse gas emissions, and diversify our sources of energy.

The 2007 Farm Bill offers the United States a strategic opportunity to improve the competitiveness of our nation’s farmers. Congress should use the bill to expand the modern safety net to serve more farmers and reinvest commodity-based subsidies into green payments, which would encourage producers to grow dedicated energy crops such as switchgrass, miscanthus, and fast growing trees in a sustainable manner. Diversifying to include energy crops will improve agricultural prices by slowing the dumping of traditional agricultural commodities on global markets and the accompanying slide in prices. Improved prices will allow the United States, Europe, and Japan to meet the request of developing countries to improve their commitments to agricultural subsidy and tariff reform, thereby opening one avenue for progress in the WTO Doha round.

The establishment of farmer cooperative and locally-owned biorefineries and biofuel facilities must also be a priority of U.S. farm policy. As current biofuel production capacity expands rapidly, the private sector and government must redouble their efforts to grow market demand for biofuels, including putting cleaner fuels such as E85 in our fuel pumps and cleaner cars such as Flex-Fuel Vehicles (FFVs) on the road.

The private and public sector must act together now to strengthen our commitment to the next generation of advanced cellulosic biofuels, bolster long term demand with cleaner fuels and cleaner cars, and encourage greater investment in the research, development, and commercialization of new biofuel and biobased technologies. We must strengthen our commitment to rural communities by supporting such initiatives as:

Growing Clean Energy from Farm-based Renewable Energy and Biofuels: Establish mandatory financial incentives, direct green payments, and low-interest loans in the 2007 Farm Bill and other legislation. This will encourage farmers to grow dedicated energy crops such as switchgrass and other forms of biomass, and allow development of farmer cooperative and locally-owned biorefineries and biofuel facilities. Increase the amount of advanced cellulosic-based biofuels in the fuel supply to 5 billion gallons by 2015. Create tax incentives for expanding critical biofuel storage, transportation, and distribution infrastructure throughout the nation to ensure access to biofuels in the retail market and the creation of jobs for rural communities. These advanced biofuels have the potential to deliver a triple dividend to farmers in the form of payments for biofuel feedstock crops, carbon sequestration to combat global warming, and agricultural waste materials used as feedstocks.

Building a Strong Safety Net for American Farmers: Fully fund rural development grants and programs and enhance renewable energy and conservation programs with new funding in the 2007 Farm Bill. Encourage new investment in education at land grant universities and rural colleges to ensure a highly skilled rural workforce can lead U.S. agriculture in biotechnology and renewable energy. Enhance the safety net for U.S. farmers while possibly imposing limits on subsidies that encourage trade distortions and overproduction. Reinvest savings from deferred subsidy payments in rural America for the research, development, and deployment of biobased fuels and products. Create a permanent natural disaster program to ensure certain and consistent assistance throughout major disasters. Explore greater use of revenue insurance, adjustment assistance, and other risk management tools to protect farmers against volatile revenue streams.

Opening New Markets: Create new markets for American agricultural products through renewable energy, trade, and development. Advocate for a successful outcome to the WTO Doha round that strengthens U.S. agriculture, encourages exports to new markets, and ensures trade liberalization, development, and poverty reduction simultaneously.

As we look forward to the 2007 Farm Bill and other legislation, Congress and the private sector have an opportunity to enlist more farmers in renewable energy and conservation, strengthen the links between large and small producers at home and abroad, and reach out to our key trading partners to make progress on global trade negotiations. In so doing, we can mobilize greater investment in innovation and the development of exciting new markets to revitalize our historically strong commitment to the support of our farmers and rural communities.

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To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
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Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
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Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

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202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
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Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org