MyDD :: Peterson yields on Farm Bill amendment process

Peterson yields on Farm Bill amendment process

by Sally Jo Sorensen, Sun May 27, 2007 at 08:15:35 PM EST

Farm Stead Sally Jo Sorensen is a writer and researcher who lives in rural Minnesota. She blogs as Ollie Ox at Bluestem Prairie.

Although the National Farmers Union and a coalition of 63 nationwide groups had asked Ag Subcommittee on Livestock, Dairy, and Poultry chair Leonard Boswell to add language from the Competitive and Fair Agricultural Markets Act of 2007 (H.R. 2135) to the mark-up of the livestock title of the 2007 Farm Bill, their hopes were dashed Thursday.

Boswell submitted, then withdrew, the amendment.

Boswell's subcommittee's mark-up echoed a meeting earlier in the week by the Subcommittee on Conservation, Credit, Energy, and Research. Groups hoping that an amendment restoring funding for the Conservation Security Program to the conservation title were disappointed. With Thursday's markup, progressive and grassroot efforts for meaningful reform of the Farm Bill remain stalled.

Much of the initial disappointment on Tuesday can be laid at the feet of House Ag chair Collin Peterson, who had announced on Monday--one day before the conservation subcommittee markup hearing--that he had allocated all available reserves and that any amendments made within the subcommittees would have to be budget neutral.

By Thursday, the Minnesota Blue Dog Democrat changed his mind.

According to the Des Moines Register Cash Crop Blog:

But on Thursday, Peterson announced a new plan: The subcommittees can go ahead and approve spending increases now and lawmakers will figure out a way to pay for them later.

What happened? As Dan Owens reported here on Thursday morning, Peterson's strategy for the subcommittee mark-ups had further raised the possibility of having farm policy written on the House floor. Ag committee members and their staffers signaled their dismay at the sudden announcement of the restrictions in press reports. In a statement to the state's ag committee, fellow Minnesotan Tim Walz (MN-01) issued a statement saying that he would ask the committee as a whole to restore CSP funding.

Phil Brasher's report in the DMR's Cash Crop blog did not speculate which conservation amendments withdrawn under Peterson's earlier edict might be brought back to the full committee.

Other political factors led to Thursday's markup action. Boswell's failure to include competition reform stems from lack of support for the measure in the subcommittee. What amendments did get through--an aid program for veal producers facing foreign competition and language that required voluntar arbitration in the event of a contract dispute between farmers and processors--passed along strict party lines.

Peter Shinn of Brownfield Ag News reported that the voluntary arbitration language that protects the rights of producers "passed only because Subcommittee ranking Republican Robin Hayes was otherwise occupied and didn't object."

Family farmers and their allies seek competition reform measures such as The Competitive and Fair Agricultural Markets Act of 2007 because of the growing concentration of agricultural markets. University of Missouri researchers Mary Hendrickson and William Heffernan found increased concentation in all agricultural sectors, with the notable exception of ethanol, within the past two decades. Tom Philpott at Grist magazine provides an up-close and personal account of how the concentration of food processing into the hands of a few giant companies affects consumers.

Iowa Farmer Union president Chris Petersen spelled out the consequences of consolidation for Iowans in a May 19 op-ed piece for the Des Moines Register praising Boswell's proposed legislation:

In 1987, Iowa had 253 hog-buying stations. In 2005, that number had dwindled to 44. More than half the hogs fed in Iowa now are grown on contract. Many of these farmers are locked into take-it-or-leave-it, non-negotiable production contracts. Many of the contracts include binding arbitration clauses so farmers cannot sue companies that cut off their contracts with no notice. In many regions, there are only a few buyers, or even just one buyer, for livestock.

When Congressman Boswell held hearings in mid-April on livestock competition, witnesses testified about unjust retaliation by poultry processors, price-manipulation risks in livestock markets and the failure of the USDA to enforce existing laws.

The companion bill in the Senate, S. 622, is sponsored by Iowa Senator and Senate Ag Committee Chair Tom Harkin.

Learn more about the legislation at the Sustainable Agriculture Coalition/MWSAWG's Farm Bill Action Center. Short and sweet version is condensed in a recent action alert.

A daily round-up of Farm Bill coverage can be found at Farm Policy.com. Keith Good summarized this week's work on the farm bill markup's here. Good notes the withdrawal in subcommittee of an amendment to extend Milk Income Loss Contracts, which have been a relief to small and mid-saized dairy producers. In a blood for milk exchange, the measure was inserted to the war supplemental bill.

Tags: Farm Bill, Collin Peterson, Len Boswell (all tags)

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Re: Peterson yields on Farm Bill amendment process (none / 0)

Thank you for this report. So overall, are you so far disappointed with the farm bill or are you cautiously optimistic?

by adamterando on Sun May 27, 2007 at 08:30:14 PM EST

Re: Peterson yields on Farm Bill amendment process (none / 0)

As of today, I am mildly disappointed with the farm bill. Quite frankly, it was pretty much known that Peterson would be more conservative that Harkin, and we have yet to see Harkin's proposal for the farm bill. So the only real substance we have to go on right now is the work of Peterson's committee.

Despite the general awareness of Peterson's conservatism, the lack of progressive reform in the first week of committee farm bill work is still surprising. He screwed over the conservation title, rearranged the research title in such a way that nobody can figure out what it is, and generally just moved some money from one place to another on everything else.

The broader point is that Peterson has pretty much refused to recognize that a fundamental shift in agricultural policy is needed. That shift would include market competition reforms and increased funding for conservation, as well as money for programs that can create a real future in rural America- i.e. small business development. It would also include effective limits on the subsidies received by farmers- a crucial first step towards a sustainable agriculture policy.

But we're kind of in the "wait and see" mode. The rest of the House bill will come out in the next couple of weeks, and the Senate will get going soon as well. And when the House bill reaches the full committee, many of the losses already sustained could be reversed. Here's hoping for the best.

Dan Owens works for the Center for Rural Affairs. Read more at the Blog for Rural America.

by Dan Owens on Sun May 27, 2007 at 11:44:29 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

Thanks Dan,

I'm still unclear on what
"market competition reforms" means. Could you or someone else in the know elaborate? I assume that doesn't mean going back to freedom to farm (and go broke) act.

Is there an effort to expand counter-cyclical payments to other crops such as vegetables and fruits that are more beneficial to our health?

Are there any noises about bringing back the idea of the national dairy compact (with regional markets)? It still amazes me just how much difference there is between the dairy industry in PA where they have a strong milk marketing board that allows small farmers to make a decent living with a small herd and states like Illinois that have no such program and where consolidation is rampant. Yes milk is a $1 more per gallon in PA, but I think the benefits in terms of stewardship of the land, and a better society with a strong contingent of small farmers more than makes up for the decreased economic "efficiency".

by adamterando on Mon May 28, 2007 at 12:01:40 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

Usually, when farm activists refer to "competition reform", they're talking about the inequal relationship between producers and processors. In this case I'm referring market reforms mostly in the livestock industry. For an in-depth look, you can visit the Institure for Agriculture and Trade Policy's farm bill website, where they have a great paper on competition issues (Page 8 in particular). http://www.agobservatory.org/library.cfm ?refid=98445

You can also read the testimony of John Crabtree, who works at the Center for Rural Affairs, here:
http://www.cfra.org/CompetitionTestimony

A short example of something we want to see is a ban on meatpackers owning livestock. Put simply, packers (Smithfield, Tyson, etc) own livestock so they can kill their own when market prices are high and buy from farmers when market prices are low. Obviously, this practice greatly exacerbates the market power of the packer, especially in areas where there the packer may well be the only buyer of livestock.

Sally discussed some of the legislation that is pushing many of these changes in her post above.

Obviously, there is a great deal of market concentration in agricultural processing. There are a couple of things that make the livestock industry unique and a focus of our efforts.

First, there is already a law that is supposed to regulate livestock markets- The Packers and Stockyards Act (of 1921!). However, USDA has quite simply refused to enforce many aspects of that law. In fact, until 1971 or so, packer ownership of livestock.was banned under the PSA. The Nixon administration changed the "regulatory interpretation" of the law. The legislation proposed for the farm bill would really require USDA to enforce the law and clarify various parts of the law.

Second, at a more basic level, market manipulation by livestock processors threatens the fundamental nature of small, diversified family farming operations. Livestock is one of the original forms of "value-added" agriculture, and a few hogs or dairy cows have kept many a farm afloat through rough times. With the exception of cow-calf ranching operations, livestock requires relatively small amounts of land. Obviously land costs are one of the biggest barriers to entering farming. So livestock can play a very important role in getting farmers started as well as managing risk for existing operations. That doesn't work, though, if you don't have functioning livestock markets.

And then there's the whole diversified farming aspect of using manure to fertilize crops and crops to feed livestock- an environmental holy grail that has been destroyed by CAFOs and the consolidation of processors who only want to buy huge numbers of animals under long term contracts.

Anyway, that's my rant on that.

There is not any talk of extending countercyclicals to fruits and vegetables. The fruit and vegetable producer do want more money in this farm bill (and will likely get it), but they have so far resisted the idea of receiving direct checks from the government. Their "asks" are in the areas of research, export promotion, and increased purchasing of fruits and vegetables through government programs (i.e. school lunches). They don't really want the "welfare farmer" image that is currently attached to many grain farmers, so they are going for more indirect subsidies.

The dairy program is nuts. I've tried to understand it, and do a little bit, but overall it is still something of an enigma for me. What came out of the House subcommittee is a dairy program that gets rid of the $9.90 support price and replaces that with support prices on end products- cheese, etc. I don't really fully understand how that would impact the program or small producers.

The most interesting thing I've heard is that California may be willing to come under the federal milk marketing system, which would be a huge shift. They did get MILC (countercyclical) in the Iraq supplemental, so that is good news for the dairy people. A national dairy compact with regional markets is a very remote possibility. It doesn't look like the Northeast Dairy Compact is coming back anytime soon, and even Leahy has admitted that.

Dan Owens works for the Center for Rural Affairs. Read more at the Blog for Rural America.

by Dan Owens on Mon May 28, 2007 at 03:20:25 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

Thanks Dan.

What effect would the market reforms have on the Tyson pig operations in NC (i.e. they've completely devastated any independent pig operations)?

I would really like to get some kind of compact going again for dairy. The benefits to small farmers are immense. When you look at the average herd size in Vermont versus California or Louisiana there's no contest as to which is able to better sustain small family farms.

I feel that's too bad about the counter-cyclical payments because if you reduced some of the risk in farming I think you'd attract a lot more new farmers into going organic and away from the big industrial operations to feed pigs or make corn syrup.

I like that they're trying to get it into school lunches though. I think that should be a requirement that kids eat fresh fruits and vegetables two times a day in school. And those foods should be local when available. And the Ag. Dept. should pick up most of the tab. That'd be the only way a huge percentage of kids in most places in this country get ANY fresh fruits and vegetables in their diets.

by adamterando on Mon May 28, 2007 at 05:14:13 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

Now that they've bought Premium Standard Farms, I think Smithfield controls something like 90% of the hog slaughter capacity in North Carolina. Nothing is going to change that overnight. However, you'll never change that structure as long as packers are allowed to use their market dominance in an unfair manner.

Further, it would be hoped that an office of special counsel, if established, would require Smithfield to divest some of its North Carolina assets. A long shot, though.

Reducing the risk in fruit and vegetable production is an interesting idea. F and V growers have been pretty good at securing ad hoc disaster payment in lieu of a permanent program like countercyclicals. However, that clearly only benefits existing growers- the bank isn't going to lend you money to start your operation with the expectation you'll get a disaster payment if your crop is wiped out.

A better approach may be to help minimize the risk through beginning farmer loan guarantees and technical assistance. That is something we're pushing in the farm bill, and I think it may be more effective in terms of encouraging beginners. However, if the goal is simply to stimulate the production of f and v, then a countercyclical could work. You would have to fight a lot of battles to get there, though.

The dairy compact is a very tough issue. Basically, you would absolutely have to have everyone participate or it simply doesn't work. And it would be very hard to get the largest dairies to support such a plan. They already feel that they are being discriminated against and that they are the lowest-cost producers, which means they should be able to sell their milk anywhere they wish.

In general, I think dairy products enjoyed somewhat of a privileged status when compared with grains, primarily because you can't store dairy for an indefinite period of time. That is changing. Ultra high pasteurization and other technologies make dairy last a very long time, and allow the big guys to ship enormous distances.

Again, I can't say I understand the dairy program all that well, but it looks to me like they are going through a lot of what the grain farmers went through a few decades ago. But if anybody has an alternate viewpoint, I'd love to hear it.

Dan Owens works for the Center for Rural Affairs. Read more at the Blog for Rural America.

by Dan Owens on Mon May 28, 2007 at 09:13:26 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

"Again, I can't say I understand the dairy program all that well, but it looks to me like they are going through a lot of what the grain farmers went through a few decades ago. But if anybody has an alternate viewpoint, I'd love to hear it."

I think that's probably right. My dad is a dairy inspector in Illinois (and he used to be a grain farmer and cattle farmer in Illinois). The dairy's are getting bigger and bigger and the smaller guys are getting squeezed out (and my dad's territory seems to get larger and larger, but that's also because of state budget cutbacks, but that's another story). What's left are going to be some very well off individuals, but there's not going to be a lot of them. We actually have a new dairy in my old neighborhood. And it has 3,000 head of cows. Like my dad said, it'd be nice if there were 30 new farms with 100 head each, but you take what you can get nowadays with new farms I guess.

I need to learn more about what they do in PA because it seems to work pretty well. You don't see too many farms with more than 100-200 head of cattle and the farm population seems pretty stable compared to where I come from.

I do think it will be a tough fight to really strengthen agriculture in this country to make it something that young people can get into again. But in order to do that I think we need to educate people as why farms are important. Because if the argument devolves into one where the sole purpose of agriculture is to produce food, then small family farmers are definitely going to be a thing of the past.

by adamterando on Mon May 28, 2007 at 09:34:18 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

"However, if the goal is simply to stimulate the production of f and v, then a countercyclical could work. You would have to fight a lot of battles to get there, though."

To me that is the goal. We should stimulate a reduction in the amount of corn syrup produced (I guess that will mean even more corn going to ethanol or feed, but that's ok) and an increase in F and V. If we're serious about reducing obesity in this country, I think that's a good place to start.

If I were in charge of such an effort, I would set it up as a way to increase producers choices. Right now they're locked-in to only a few choices of what to plant if they want to reduce their risk in this way. So why not offer them more choices?

Oh, and everyone would be actually, truly,100%, no exceptions, required to finally get crop insurance or you're out of luck come disaster time.

by adamterando on Mon May 28, 2007 at 09:40:27 PM EST
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Re: Peterson yields on Farm Bill amendment process (none / 0)

"Because if the argument devolves into one where the sole purpose of agriculture is to produce food, then small family farmers are definitely going to be a thing of the past."

Very well put. I'm pretty much in agreement with that.

"Oh, and everyone would be actually, truly,100%, no exceptions, required to finally get crop insurance or you're out of luck come disaster time."

I can tell you 99% of farmers agree with that one.

Dan Owens works for the Center for Rural Affairs. Read more at the Blog for Rural America.

by Dan Owens on Tue May 29, 2007 at 12:44:12 PM EST
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