Farm Bill Supports Renewable Energy, Hemp, Organic Programs

by Rona Fried, Ph.D.

After nearly three years of deadlock, the House and Senate have agreed on a compromise Farm Bill. 

The House passed the bill this week and now the Agriculture Act of 2014 goes back to the Senate for a final vote – and is widely expected to pass.  

 

As you have likely heard, a major sticking point has been the Food Stamp program (SNAP), which costs about 80% of the total. The other 20% goes to agricultural subsidies, conservation programs, energy initiatives and other smaller programs.

Democrats and Republicans finally compromised on cuts to SNAP of $8.7 billion, or about 1% of the program – a far cry from the original House bill, which cut $39 billion from SNAP – but it still chips away at the program in time of great need. The bill also cuts $14.3 billion in farm subsidies over 10 years, resulting in a total $23 billion in federal deficit reductions. In all, the legislation costs $956 billion over the next 10 years.

Critics say the poorest people in America are paying for half the deficit cuts.

Subsidies

This bill makes one landmark change that the environmental community fought hard for: farmers and ranchers are eligible for subsidies only when they conserve their lands, such as wetlands, grasslands and erodable land. That’s critically important because about half the land in the contiguous US is crop, range or pasture land. Previous versions of the Farm Bill encouraged destroying these areas to plant more crops.

"Even though farm bill conservation programs account for just 7% of the bill’s overall funding, they encourage practices that lead to healthier lands and waters, and they are critical to a strong economy, healthy and productive rural lands, and vibrant communities," Mark Tercek, President of The Nature Conservancy and farmer Martin Barbre told The Hill.

Another change looks good on the surface but is pretty controversial. One of the biggest objections to past Farm Bills is that they subsidize millionaire farmers and the current bill doesn’t change this.

Although it finally eliminates the $4 billion a year "Direct Payments" program – long the poster child for wasteful agricultural subsidies – new programs continue to subsidize millionaire agribusiness owners that don’t need handouts.

 

“At a time of fiscal restraint, growing income inequality, and economic distress in rural communities, it is appalling for the new farm bill to continue uncapped, unlimited commodity and crop insurance subsidies for mega-farms,” says Ferd Hoefner, Policy Director for the National Sustainable Agriculture Coalition.  

Rather than giving direct cash subsidies to farmers at fixed rates – the status quo for 18 years – that $4 billion a year will be disbursed in new ways. Farmers will choose between an insurance program – where they get subsidies for crop losses – and one that pays them when market prices for crops drop below a certain level.

The program is a huge win for the insurance industry, because not only does the government subsidize more than 60% of farmers’ insurance premiums, it pays 15 insurers $1.3 billion to run the program.

"The bill fails to put any cap on how big a check an agribusiness can receive to help pay its insurance bill," notes US PIRG. "Because the program has no caps, 26 agribusinesses have received more than $1 million in a single year, while 80% get $5,000 on average, according to a study by Environmental Working Group. Instead of reining in this program and capping how much agribusinesses can receive, the bill would actually expand it."

Hemp Farming Makes It in the Bill

 

Amazingly, there’s an unexpected victory for hemp farming.

The legislation includes pilot research programs in 10 states to grow the crop. “This is big,” Eric Steenstra, president of Vote Hemp, told Associated Press. “We’ve been pushing for this a long time.”

The US is one of the fastest growing markets for hemp products, but instead of growing it here, we import it from China. Nine states have already removed barriers to growing hemp, but federal drug laws still bar cultivation.

That could be changing. Senate Minority Leader, Mitch McConnell (R-KY), who led this negotiation, pushed for it in the Farm Bill because he sees it as a boon for farmers in his state.  

 

Renewable Energy & Fuels

 

Also in the bill is $881 million that continues funding the Department of Agriculture’s (USDA) rural renewable energy and biofuels programs.

The Rural Energy for America Program (REAP) funds up to 25% of a renewable energy system (solar, wind, biogas) or energy efficiency upgrade and provides additional support through loan guarantees. 8,250 projects have been installed under the Obama administration. 
 
The Biorefinery Assistance Program supports young companies in getting their biofuel technologies off the ground. For the first time, the bill also supports bio-based chemicals as part of biorefinery and biomass assistance programs.

Both programs have been hanging by a thread because of funding cuts over the past few years and would have been terminated under the original House bill. 

Organic Agriculture

The big fight here is always about putting organic agriculture on a level playing field with conventional practices. The industry has always suffered from a huge imbalance of funding that stretches from research to on-farm assistance.

One area is striking: the bulk of support still goes to commodity crops that are energy and fertilizer intensive: wheat, rice, GMO soybeans, cotton and (the really big one) corn – instead of nutritious vegetables, which build healthy soil and foster biodiversity. Only 2% of US cropland grows fruits and vegetables compared to 59% for commodity crops, used mostly to produce meat, processed foods (ie, high fructose corn syrup) and biofuels such as ethanol, says the Union of Concerned Scientists..

The Organic Trade Association lauds the bill, however, because there’s more funding for the National Organic Program. It will be used to enforce organic standards, improve technology, and negotiate international trade agreements, as well as fund research on organic farming practices and provide financial assistance for small farms to afford organic certification.

Also for the first time, organic farmers, distributors, and marketers will have access to the same agriculture research and promotion programs that have always been helpful to conventional farmers.

The bill preserves vital, fairly recent programs that foster local agriculture, such as food hubs and farmers markets. It also protects Country of Origin labeling from meat industry attacks.

Beyond these programs, the Farm Bill doesn’t address agriculture’s vast carbon footprint, which is responsible for a third of US carbon emissions. The two big culprits are agricultural fertilizers and factory farms. 

Read the Washington Post editorial on the bill: