A New Farm Bill: The Work is Not Finished

Jake Caldwell examines the strengths and weaknesses of the Farm Bill as it enters markup this week in the Senate.

As the Senate Agriculture Committee prepares to markup the 2007 Farm Bill this week, preliminary reports indicate several positive advances in the areas of renewable energy and conservation. Nonetheless, much work remains to be done to fulfill the Farm Bill’s promise to improve the competitiveness of our nation’s agricultural producers and reform the current subsidy system, so as to reward a greater number of farmers from more regions of the country. The Senate should not shrink from this important task.

The United States has traditionally had a strong commitment to supporting U.S. agriculture by investing in innovation and the development of new agricultural markets. The reauthorization of the Farm Bill provides Congress with the opportunity and the responsibility to reinvigorate and adapt our nation’s support for our farmers to meet the challenges of the future.

There is still time in the process for Congress to shape the 2007 Farm Bill so that it most effectively rewards the hard work of a broader cross-section of farmers, helps improve our energy security, and combats global warming by encouraging renewable energy and the next generation of sustainably produced biofuels.

Senate Agriculture Committee Chairman Tom Harkin (D-IA) and the Senate Agriculture and Senate Finance Committees have done a commendable job so far preparing for the next generation of cellulosic biofuels—liquid fuels sustainably produced from energy crops such as switchgrass and agricultural wastes such as corn stalks and rice hulls. The Senate bill increases funding for farmers growing new biofuel feedstocks in a sustainable manner. It also provides significant provisions for increasing research and development by bolstering financial incentives for new cellulosic biofuel refineries and increasing funding that would allow biorefineries to purchase and transport diverse biofuel feedstocks.

The Energy Title of the Senate Farm Bill also provides for the use of transparent certification and labeling criteria to encourage sustainable production of biofuels through the innovative “Voluntary Renewable Biomass Certification Program.” An investment in advanced biofuels must be accompanied by enhanced environmental safeguards and incentives for biofuel producers to conserve land and water resources, maximize lifecycle greenhouse gas emission reductions and the low carbon characteristics of fuels, and grow energy crops in a sustainable manner.

The Senate’s certification program is a voluntary, market-based mechanism that can be implemented in a short timeframe. The inclusion of the low-cost certification program in the 2007 Farm Bill will expand and improve our nation’s farm and energy policy and it deserves our support.

The Senate Farm Bill also shows promising signs in its commitment to conservation by providing funding to extend existing programs and the creation of a new “Comprehensive Stewardship Program” to help build on the progress achieved by the Conservation Security Program and its efforts to reward farmers for conservation activities on working lands. These conservation initiatives  also deserve support.

But there is still much work to be done if the Senate Agriculture Committee wants to bring a bill to the Senate floor that is as strong as possible for agriculture, the environment, the economy, national security, and sustainable energy. At a minimum, we need to commit to:

  • Promoting Sustainable Biofuel Production. The Farm Bill’s investment in advanced biofuels must be accompanied by enhanced environmental safeguards. This means incentives for biofuel producers to protect our nation’s land, air, and water quality and reduce greenhouse gas emissions with low carbon performance-based advanced fuels. The primary goals of land currently enrolled in Farm Bill conservation programs should not be compromised for the sake of biofuel production. Biofuel crops can be produced in a sustainable manner. The use of transparent certification and labeling criteria to encourage sustainable production of biofuels, such as the “Voluntary Renewable Biomass Certification Program,” should therefore be implemented immediately. And farmers must have a central role in this effort.
  • Payment Cap Limitations. The 2007 Farm Bill does not address subsidy reform in a meaningful manner. Changes in the subsidy system could enhance the safety net for U.S. farmers while imposing limits on the subsidies that encourage trade distortions and overproduction. This would mean enacting stricter payment limitations to ensure that assistance goes to actual producers and limiting payment limits to $250,000 per farm rather than the current $360,000 per farm. Eliminating the so-called “Three Entity Rule” that has allowed some land investors to reap more than their fair share of income support would also go along way toward making subsidies fairer.
  • Opening New Markets. Our farmers compete in a global economy and the international dimensions of the Farm Bill must not be neglected. The 2007 Farm Bill should contribute to reductions in global poverty, neutralize bitter trade disputes, and open new markets overseas to sell U.S. products grown here at home. Our agriculture, energy, and trade policies must evolve toward new realities to give our farmers a plan for the future and provide our trade negotiators with the flexibility to bring home the best deal possible. Our current farm policy and subsidy system is being challenged as a violation of international trade rules by Brazil, Canada, and several other nations. Instead of defending ourselves against endless trade disputes, Congress should be proactively advocating for a farm policy that strengthens U.S. agriculture, encourages exports to new markets and new customers, and ensures trade liberalization, development, and poverty reduction move forward simultaneously.

The Senate Agriculture Committee, under major fiscal constraints, has made improvements to the renewable energy and conservation components of our nation’s farm policy. If fully funded and implemented, these initiatives could dramatically expand the value-added products our farmers produce and provide for improved stewardship of our nation’s land and water quality.

Yet the Senate still has a lot of work to do when it comes to bringing our subsidy system more in line with our international commitments and the realities of modern U.S. agriculture through payment limitation efforts.

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