05.14.08

Vermont Highlights of 2008 Farm Bill

Renewal & Expansion Of MILC Program;
More Funds For Lake Champlain Cleanup;
Expanded Help For Vermont’s Anti-Hunger Efforts;
Another Big Boost For Vermont’s Organic Sector
 

DAIRY

Senator Leahy led a bipartisan coalition in working for several months to secure renewal of and improvements to the basic safety net for dairy farmers, the Milk Income Loss Contract (MILC) program.  In the end the MILC program received one of the largest funding boosts of any commodity in the Farm Bill.  In addition to the difficult achievement of extending the MILC Program for five years, Leahy and his allies succeeded in including provisions that will expand the MILC program in three important ways: 

1.  Feed Cost Adjuster – For the first time in nearly a decade the $16.94 per hundredweight MILC target price will increase when feed costs increase.  The new Leahy-authored feed cost adjuster will increase the MILC target price any time the composite monthly price of feed (corn, soybeans and alfalfa hay) rises above $7.35 per hundredweight.  For the month of April, for example, the new MILC target price would be $19.13 per hundredweight.

2.  Payment RateIn 2002 when the MILC program was established, whenever the federal minimum price for fluid milk in Boston fell below $16.94 per hundredweight, participating dairy farmers were eligible for payments on 45 percent of the difference.  In the Fiscal Year 2006 Omnibus Reconciliation Bill, the payment rate was reduced to 34 percent in order to make it possible to extend the program until the Farm Bill could be rewritten in 2008.  The 2008 Farm Bill will restore the original 45 percent payment rate for the MILC program. 

3.  Eligibility Increase – Currently producers are eligible to receive MILC payments on 2.4 million pounds of production per year (approximately 125 cows).  The 2008 Farm Bill will increase the eligibility to 2.985 million pounds per year (approximately 165 cows).  Of Vermont’s approximately 1100 dairies that average about 120 cows per operation, more than 85 percent of Vermont’s farms now would be fully eligible for MILC payments under the Farm Bill.  

  • Dairy Product Price Support – The 2008 Farm Bill establishes individual product prices for cheddar cheese, butter, and nonfat dry milk. 
  • Commodities -- The bill extends the current farm safety net through the 2012 crop year, retaining current base acres and establishing base acres for newly eligible crops.  Target prices for crops are rebalanced and direct payments are maintained.
  • Average Crop Revenue -- A new Average Crop Revenue option is added for farmers, including fixed payment rates, recourse loans, and a state-level revenue program for covered commodities and peanuts.

 

COMMODITY PROGRAM REFORM 

The 2008 Farm Bill takes significant strides in reforming who is eligible to receive commodity program payments.  First the bill tightens the adjusted gross income eligibility test by setting new standards for farm commodity and disaster program benefit eligibility.  To receive farm program benefits, an individual’s non-farm income may not exceed $500,000.  If farm income exceeds $750,000, an individual will no longer be eligible to receive direct payments.  In addition, this Farm Bill also increases transparency and accountability through the creation of a new direct attribution rule which will link farm program payments directly to individuals, rather than to corporations and partnerships.  Finally, the three-entity rule, which previously enabled a farmer effectively to receive twice the enacted payment limit, has been eliminated.

 

CONSERVATION/LAKE CHAMPLAIN CLEANUP

Agricultural conservation, responsible stewardship and environmental quality are important to Vermont’s farmers and communities and were high priorities for Senator Leahy in writing the 2008 Farm Bill.  Several years ago as chairman the Agriculture Committee, Leahy crafted and enacted the first “Green Farm Bills” which forged partnerships between farmers and environmental goals, and since then the Farm Bill has become the most significant ongoing nationwide funding source for conservation and environmental quality efforts such as the cleanup of Lake Champlain.  Several of Leahy’s conservation initiatives began as pilot programs in Vermont, proved themselves, and since then have expanded nationwide.  Much of the available funding in the 2008 Farm Bill for Vermont will be directed to addressing the water quality challenges in the Lake Champlain Basin.  This crucial cleanup funding will be added to the more than $100 million Senator Leahy has already secured in Lake Champlain cleanup funds. 

Environmental Quality Incentive Program (EQIP) -- A program created by Senator Leahy in the 1996 Farm Bill, EQIP has quickly become a major factor in the ongoing efforts to clean up Lake Champlain.  Phosphorus levels are one of the foremost challenges in the Lake’s restoration, and EQIP helps producers implement new practices that reduce the phosphorus loading in the Lake and its tributaries.  With an increase in funding of $3.4 billion over ten years, the program will continue to help producers comply with the State of Vermont’s water quality regulations and assist dairies in implementing environmentally beneficial changes in their operations. 

Farmland Protection Program (FPP) -- The highly successful and popular Farmland Protection Program was created by Senator Leahy in the 1996 Farm Bill and grew out of Vermont’s “Farms for the Future” program.  Preserving Vermont's agricultural lands helps to combat urban sprawl and keep Vermont farms viable.  Funding for FPP will be increased by more than $700 million over the life of the Farm Bill, allowing FPP to provide matching funds to help purchase development rights to keep productive Vermont farms in agricultural uses.  Total FPP enrollment in Vermont since inception of the program is 50,000 acres.

  • $15 Million Small State Minimum – The Leahy “Regional Equity” provision he sponsored in the 2002 Farm Bill will be increased from $12 million to $15 million a year per state.  This Leahy effort helps bring more Farm Bill resources to Vermont and other Northeastern states.  This Leahy provision requires that Vermont and each state receive an allocation of at least $15 million a year in the following working-lands conservation programs: EQIP, FPP, Grassland Reserve Program, and the Wildlife Habitat Incentive Program.  This small state minimum guarantees that states like Vermont will receive the necessary program funding to better help farmers in their stewardship of the land.
  • Agricultural Management Assistance (AMA) – A program especially important to Vermont, AMA provides $15 million a year in mandatory funding to agricultural producers to voluntarily address issues such as water management, water quality and erosion control, by incorporating conservation into their farming operations.
  • Public Access – The bill will create a new $50 million grant program for states that run programs to encourage owners of private land to allow public access for wildlife-related recreation such as hunting, fishing and birding.

ORGANICS

As the father of the national organic standards and labeling program and author of the 1990 Organic Foods Production Act, Senator Leahy remains organic agriculture’s leading champion and has again made the further development of organic agriculture a top priority in the Farm Bill.  Vermont has taken a strong leadership role in transiting to organic agriculture and now leads in the nation on a per capita basis in organic farm conversions – now with more than 500 organic operations; more than 200 are dairies.  In Vermont and elsewhere across the country, organic agriculture also is beginning to create major new export opportunities for U.S. farm products.   

  • Organic Certification Cost Share – The 2008 Farm Bill provides $22 million in guaranteed funding for a national organic certification cost share program to assist producers of agricultural products in obtaining certification under the National Organic Program established by Leahy under the Organic Foods Production Act of 1990.  Each producer will be eligible for a reimbursement of up to 75 percent of the costs of certification, not to exceed $750 annually.  Last year Vermont producers received $165,000 under this Leahy-led effort to assist organic certification.
  • Organic Conversion Assistance -- The 2008 Farm Bill will expand eligibility of the Environmental Qualities Incentives Program (EQIP – see above) to directly assist producers by defraying the substantial costs of implementing conservation practices when transiting to organic production.  During the required three-year conversion process, producers – especially smaller farms -- often struggle to complete the conversion to organic production.  This new initiative will offer producers up to $20,000 per year for up to four years of financial assistance to help in the conversion to organic production.    
  • Organic Data Collection -- The Farm Bill will provide $5 million in mandatory funds to ensure that data on the production and marketing of organic agricultural products is included in USDA’s collection of data about agricultural production and marketing.  This mandate and these funds are vital in establishing adequate crop insurance coverage for organic crops in the future.
  • Organic Research -- The Farm Bill makes a major commitment for the first time to funding research in organic agriculture.  The bill provides $78 million in new mandatory funds for organic agriculture research and extension, to enhance the ability of organic producers and processors to grow and market organic food, feed and fiber.
  • Organic Crop Insurance Reform – The bill will bar USDA from charging unnecessary and unwarranted premium surcharges on organic crop insurance policies.


NUTRITION

The nutrition title of the Farm Bill, like the Senate’s earlier version, contains crucial anti-hunger efforts such as strengthening the Food Stamp Program and The Emergency Food Assistance Program.  Senator Leahy has long been a leader on these programs, which offer a vital safety net to millions of Americans and thousands of Vermonters.  In recent months the number of Vermonters receiving Food Stamps has risen to a 15-year high, with more than 53,000 individuals receiving Food Stamp help.  The new funding for the Food Stamp program in the Farm Bill will mean that as many as 23,000 Vermonters will receive as much as $1.5 million in new food assistance each year.  The bill includes initiatives to encourage better health and nutrition for children and seniors and to support self-sufficiency and food security in low-income communities.  It also includes a new program authored by Leahy that will assist low-income people by helping food banks acquire perishable food that would otherwise be wasted. 

  • Strengthening Food Purchasing Power of Low-Income Vermonters -- When calculating the Food Stamp help an individual or family receives, the rules of the program allow a standard deduction for the cost of such items as housing, utilities and transportation.  A decade ago, the standard deduction was frozen at $134, a move that has caused significant erosion in the purchasing power of Food Stamps, as costs for these items have risen and benefits have not kept pace.  The 2008 Farm Bill increases the standard deduction from $134 to $144 and indexes it to inflation, ending the erosion of benefits and increasing Food Stamp assistance for 20,000 Vermont families.
  • Working Families with Childcare Expenses -- Food Stamp rules allow households to deduct up to $175 per month for the cost of childcare, but this deduction has not been adjusted in more than a decade and now covers only about a quarter of the monthly cost of childcare in the United States.  To better support working families, the 2008 Farm Bill will eliminate the existing cap on the deductibility of childcare expenses.  As many as 1000 Vermont families are expected to benefit from this provision.
  • Food Stamp Asset Reform -- Despite broad agreement about the importance of family savings, the Food Stamp “asset test” has remained largely unchanged since implemented in 1977 and fails to exempt tax-preferred savings accounts from the current asset limit.  To encourage savings among low-income families, the 2008 Farm Bill will increase the current asset limit to keep pace with inflation and exempts tax-preferred education and retirement accounts from counting against the asset limit. 
  • Minimum Benefit – When calculating the monthly benefit for a Food Stamp recipient, if the amount they are eligible for is less than $10 they are guaranteed the minimum benefit.  Seniors and individuals with disabilities make up a significant portion of households that receive the minimum benefit, which for more than 30 years has remained at $10.  For the more than 3000 Vermonters who receive the minimum benefit, the 2008 Farm Bill will increase the level to $14 a month and index it to keep pace with increases in the cost of food.
  • The Emergency Food Assistance Program (TEFAP) -- TEFAP provides commodity food products to food banks across the country, which then distribute those products to food pantries and other community food providers.  The Farm Bill will provide more than $1.2 billion in mandatory commodity purchases for distribution through food banks.  This will nearly double the commodity purchasing clout the Farm Bill will offer to the Vermont Foodbank, with an additional $1 million through the first five years of the bill -- enough to provide 770,000 additional meals for low-income Vermonters through the food bank and local food shelves. 
  • Fruit and Vegetable Program -- To promote child health and nutrition, the Farm Bill expands the Fresh Fruit and Vegetable Program to include every state in the country, targeting those benefits to low-income children.  The proposed funding level would ensure that Vermont receives at least $2.25 million a year to assist in providing free fresh fruits and vegetables to children at school.
  • Senior Farmers Markets and Community Food Projects -- Funding for two programs fathered by Senator Leahy -- the Senior Farmers Market Program (which provides vouchers for WIC recipients and low-income seniors to use at farmers markets), and Community Food Projects, (which promote self-sufficiency and food security in low-income communities) – are increased by $5 million annually in assured funding in the Farm Bill.  In Vermont, Community Food Project grants have supported the farm-to-school projects which increase access to fresh, healthy, local Vermont foods. 
  • Rural Food Bank Infrastructure Grant Program – After consultations with the Vermont Foodbank about the amount of food -- especially perishable items -- that could be donated to charity but instead are wasted, Senator Leahy proposed the creation of a new targeted grant initiative.  This new program in the Farm Bill will provide grants to assist emergency food organizations in acquiring some of the 96 billion pounds of food that are wasted each year.  For example, the Vermont Foodbank typically cannot afford to receive donated produce from west of the Mississippi due to the high cost of transportation.  This means that substantial amounts of fresh produce available from Western specialty crop states are lost to low-income Vermonters during the winter months when local sources are not available.  By tapping the new Leahy program, the Vermont Foodbank will be able to provide fresh produce and healthy food products at no cost to low-income households and individuals who otherwise could not afford these nutritious foods.  

ENERGY/RENEWABLE ENERGY 

  • Rural Energy for America Program -- Funded in the Farm Bill at $250 million, this program (previously called Section 9006 -- the Renewable Energy Systems and Energy Efficiency Improvements Program) offers grants and loan guarantees to agricultural producers and rural small businesses to help with purchasing renewable energy systems and to make energy efficiency improvements.  The program will also fund energy audits and will provide technical assistance to farmers to help them become more energy efficient and to use renewable energy technology and resources on the farm.  Since the 2002 Farm Bill, this program has helped to fund the building of several energy efficiency projects in Vermont, as well as a number of anaerobic digester projects in Vermont.
  • Manure-to-Energy Facilities -- Vermont is at the forefront of demonstrating that power derived from manure is quickly evolving from an alternative-fuel experiment to a promising new industry, bolstered by high oil costs and by new laws that restrict harmful gas emissions and require the use of renewable energy.  The new Farm Bill will generate new opportunities to focus on building and evaluating on-farm and community-based animal manure-to-energy facilities, such as methane digesters.  This effort will help Vermont create more homegrown energy while also reducing the potentially negative impacts on water and air quality.
  • Biomass Crop Assistance Program -- The Farm Bill provides mandatory funding to initiate dedicated biomass crop production through incentive payments to farmers to cover production, harvesting, transport and storage costs for advanced biofuels.  Biomass technologies are some of the innovative alternative energy sources that could be used in Vermont that both minimize greenhouse emissions, while reducing the nation’s dependence on foreign oil.
  • Energy Audit and Renewable Energy Development Assistance -- This is a new program to help communities assess their energy systems and formulate strategies for improvements.  By helping to hold down energy costs, this initiative will help Vermont move toward a cleaner and more sustainable energy future.  This program builds upon Vermont’s existing work as the nation's first statewide provider of energy efficiency services.
  • Regional Biomass Crop Research Experiments -- The bill creates a regional crop research program of side-by-side bioenergy crop experiments at regionally dispersed land-grant universities and is funded at $50 million a year.  The crop experiments are to include all appropriate biomass species, including woody biomass species that will help establish best-management practices that could be used in Vermont for growing bioenergy crops.
  • Community Wood Energy -- The Farm Bill creates a new Community Wood Energy Program that is a perfect fit for Vermont, offering competitive, cost-share grants for communities to supply public buildings with energy from sustainably harvested wood.

SPECIALTY CROPS

Vermont is the nation’s largest producer of maple syrup and a major Northeast producer of apples, potatoes, eggs, honey, vegetables, Christmas trees and greenhouse nursery products.

  • Specialty Crop Block Grants -- The 2008 Farm Bill includes $466 million in new mandatory funds to make block grants to Vermont and other states to support specialty crop production, marketing and development. 

 

FORESTRY 

  • Community Forest and Open Space Conservation Program -- While chairman of the Agriculture Committee, Leahy created the first Forestry Title in a Farm Bill and has crafted several forestry initiatives in the years since then.  The latest is Leahy’s new Community Forest and Open Space Conservation Program in the new Farm Bill, which will provide matching funds to help local governments or nonprofit groups acquire town forests.  In Vermont, where private forests are threatened by sprawl and fragmentation, this new Leahy program will help to conserve forestlands that are economically, culturally and environmentally important to their communities.  Lands acquired through this program will also provide much-needed public access for recreational activities, including hunting, fishing and hiking.
  • Combat Illegal Logging -- The 2008 Farm Bill includes an aggressive effort to halt environmental damage from illegal timber harvests in the Amazon, Congo Basin and Siberia, and to protect U.S. manufacturers who are struggling to compete with these cheaper foreign-wood products.  Senator Leahy is a cosponsor of S.1930, the Combat Illegal Logging Act of 2008, which is modeled on an earlier Leahy initiative and which, in turn, the final Farm Bill language was modeled after.  The legislation expands the Lacey Act -- which regulates trade in fish, wildlife and a limited subset of plants -- to prohibit the import, sale or trade in illegally harvested wood and wood products, and it is supported by a broad coalition of environmental and timber industry groups.
  • National Forest Priorities -- The 2008 Farm Bill will establish national priorities to guide federal and state efforts in private forest conservation, including: conserving and maintaining working forest landscapes for multiple uses; protecting forests from threats to forests and with forest health; and enhancing public benefits from private forests.
  • Comprehensive Statewide Forest Planning -- The comprehensive statewide forest planning program established in the Farm Bill will provide Vermont with both financial and technical assistance to develop and implement a new statewide forest resource assessment and plan, which will identify critical forest resources, incorporate existing Vermont forestry plans, and identify how Vermont’s plans connect with larger regional forestry needs.
  • Green Mountain National Forest -- The 2008 Farm Bill also includes a small boundary adjustment for the Green Mountain National Forest that will allow the Forest Service to better manage all of the lands they oversee in Vermont.

RESEARCH

The nation’s investments in agricultural research, extension, and education have not kept pace with the challenges Vermont and the nation face in agriculture.  Several new provisions will breathe new life into the research system at USDA.

  • Organic Research -- The organic agriculture sector is fast approaching $20 billion in annual sales and continues to grow at approximately 20 percent every year.  Yet funding at USDA for research on organic production issues lags far behind conventional crop research.  The 2008 Farm Bill dedicates $78 million in new mandatory research funds for organic agriculture at USDA.
  • Coordinated Research -- The bill will formalize the coordination between USDA’s in-house research agency -- the Agricultural Research Service -- and the newly created National Institute of Food and Agriculture, to facilitate more efficient use of resources.
  • Improvements in Research -- This research title also offers the first step in building a robust research, extension and education system that is responsive to stakeholders, that ensures that funding goes to areas of greatest need, and that emphas the best science to help keep U.S. producers competitive, rural communities productive, and consumers healthy.

RURAL DEVELOPMENT

  • Priority for Vermont -- The authorization for Rural Economic Partnership Zone (REAP) designations, such as Vermont’s Northeast Kingdom, is extended through the life of the Farm Bill.  This designation offers the Northeast Kingdom access to additional federal funding for business development, job creation, housing, water and sewer infrastructure projects from USDA Rural Development, and adds priority points to applications for funding from many other federal agencies.  Since 2001, more than $31 million dollars from Farm Bill programs have been directed to the Northeast Kingdom; most of those investments have come from funds specifically set aside for the REAP Zone.
  • Broadband -- In too many of Vermont’s rural communities, access to adequate broadband coverage is still unavailable.  The 2008 Farm Bill reforms the USDA broadband access program to ensure the funds available will be employed to provide new broadband development in serving rural communities in Vermont and other states.  This program will provide loans and loan guarantees to allow rural consumers to receive high-speed, high-quality broadband services.  
  • Value Added Market Development Grants – In recognition of the importance of enabling producers to capture more of the value of their commodities, this bill provides $15 million per fiscal year through 2012 for value-added initiative grants.  This will increase participation in the program by allowing broader standards of eligibility so agricultural producer groups and business ventures largely owned by producers can compete for grants designed to develop value-added products or markets.  The provision also encourages grants to be used to assist in the development of agricultural-based renewable energy sources.
  • Water and Wastewater Grants -- The 2008 Farm Bill provides $120 million in mandatory funds to address the backlog of pending wastewater grants currently held in each state.  Vermont applications for water and waste water grants and loans still pending at the end of this fiscal year will be eligible for these funds.
  • Grants to Broadcasting Systems -- The Grants to Broadcasting Systems program authorizes grants to statewide private nonprofit public television systems whose coverage areas are predominantly rural, for the purpose of demonstrating the effectiveness of providing information on agriculture and other issues of importance to farmers and rural residents.  Eligibility for the program is limited to four public broadcasting systems: Vermont, Alaska, Maine and North Dakota.  The 2008 Farm Bill reauthorizes the program through 2012.

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