How will farm bill impact A.L. area?

Published 10:15 am Thursday, May 29, 2008

Congress sent the Food, Conservation and Energy Act of 2008 — also known as the farm bill — to the White House May 20, which President Bush promptly vetoed. Within two days Congress overrode the veto with a U.S. House of Representatives vote of 316 to 108 and a U.S. Senate vote of 82 to 13.

With this monumental override, Congress showed the country that a farm bill and all its parts are important. After much discussion, pieces were upgraded and included that will affect farmers in Freeborn County.

“I think they made some changes in the right direction,” said Freeborn County Farm Service Agency County Executive Director Dan Root.

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Key pieces affecting local farmers include extending the safety net, the counter-cyclical program, the Average Crop Revenue Election and the Conservation Reserve Program.

The Commodity Title of the farm bill maintains, with minor changes, programs in the 2002 farm bill and preserves the nonrecourse marketing loan program. The latter allows farmers to borrow money against their stored crops at a lower interest rate.

The safety nets in place, Root said, are positive for farmers in southern Minnesota and northern Iowa. The programs fit the corn and soybean operations abundant in the area.

The continued price-based, counter-cyclical program provides assistance to farmers when prices decline. Root said this program has “new wrinkles” that will help out the farmer.

Prices are producing record profits, but at the same time there are record high costs of production and planting. Root said farmers will do all right this year, but down the road they won’t make much more money than farmers were just a few years ago.

“That’s a reflection back on why this farm bill is important, why these safety nets are important,” he said.

The president’s veto was based on insufficient cuts to the commodity safety net, but legislators fought to keep that in the bill.

The new Average Crop Revenue Election will begin in 2009 and offer a state-based revenue guarantee based on a five-year state average yield and a two-year national average price.

“I think that might work fairly well as safety net for corn and soybean farmers in southern Minnesota,” Root said.

A popular program in Freeborn County is the Conservation Reserve Program. In the new farm bill, 32 million acres across the country can be enrolled in the program from 2010 to 2012. Retired landowners participating in the program can modify the contract if land is being transferred to a smaller farmer.

Essentially the Conservation Reserve Program pays rent to set aside environmentally sensitive ground, Root said, and the updated soil rental rates will allow more land to be set aside.

Even though there aren’t many dairy farmers left in Freeborn County, the updated Milk Income Loss Contract Program will help the dairy farmers still remaining. The payment rate was increased to 45 percent from the current 34 percent, according to information from Sen. Norm Coleman’s office.

Farmer disaster assistance was written into the 2008 farm bill, helping farmers whose crop was lost due to extreme conditions such as drought or flood.

Even though it is called the farm bill, more than two-thirds of the funds go to food aid. Root said “a small portion actually goes to farmers.”

“It’s not really a farm bill anymore,” said Clayton Petersen, who works as a consultant to farmers. “They get stuck with all this other junk in it.”

Petersen said anything with slight connection to farming is thrown in, and in an election year no one wants to be on record for voting against a farm bill.

“In an election year it bloats way beyond what it should,” he said, adding the reason the farm bill didn’t pass last year was because of all the added pieces.

One part affecting Freeborn County that isn’t directly related to farmers are the renewable energy incentives. Overall, $1 billion will be available to fund programs involving renewable energy and new technologies within the field.

More than $300 million in loan guarantees were made for biorefineries producing advanced biofuels.

“We need to be expanding our renewable resources,” said Poet Glenville ethanol plant General Manager Rick Mummert.

Corn is an excellent first step in the right direction, he said, but people need to realize it’s only a step. With cellulosic ethanol, wind energy and diesel advancements, other sources will make up the answer.

Where would Freeborn County be without the rural farmers, Root asked. If the area lost the farmers, the county would suffer. And the farm bill supports the farmers.

“I think it’s a cheap price to pay as a taxpayer to ensure rural America survives.

“For the corn and soybean growers in northern Iowa and southern Minnesota … this bill works pretty well for them,” Root said.

On the Web:

For details on the Food, Conservation and Energy Act of 2008 visit the U.S. House of Representatives Agriculture Committee Web site: