2012 Farm Bill: 15 Key Points You Need To Know

Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, has spearheaded a 2012 Farm Bill that is drawing praise throughout the agriculture industry, including from organizations such as the American Soybean Association (“this legislation will serve the needs not only of soybean farmers, but of the entire farming community”) and the National Corn Growers Association (“We greatly appreciate a well-crafted 2012 farm bill”).

On April 26, the Senate Agriculture Committee passed their version of the 2012 Farm Bill by a vote of 16-5, and now the initiative goes before the House of Representatives, where hearings are scheduled to be held through May 18. The bill as it is currently composed eliminates and streamlines numerous federal programs while saving taxpayers a reported $23.7 billion.

Here are 15 key points of the 2012 Farm Bill that are on the table:

  1. Restricting Subsidy Payment Programs – The Farm Bill would repeal longstanding Direct Payments, Counter-Cyclical Payments (CCPs), and both the Average Crop Revenue Election (ACRE) and the Supplemental Revenue Assistance Payments (SURE) Programs, effective at the end of the 2012 crop year, creating $15 billion in deficit savings. Growers with an adjusted gross income (AGI) of more than $750,000 will also be ineligible for payments from Title I Farm Bill programs, ending government subsidy of millionaire farmers.
  2. Conservation Programs – If passed, 23 existing conservation programs will be consolidated into four “fundamental program functions,” reportedly saving taxpayers $6 billion. The Conservation Reserve Program (CRP) is also being refocused, as the bill would lower the program’s acreage cap through a multi-year step-down, from 32 million acres to 25 million acres. The program also continues the funding of the Transition Incentives Program, which allows retiring growers to transfer land while still receiving CRP payments for the final two years of their contracts. Easement programs will also be simplified, as all conservation easement programs will be combined under the Agricultural Conservation Easement Program, focusing on long-term land protection.
  3. Trade – With a significant trade surplus in agriculture, eliminating trade barriers is one of the primary focuses of the bill. The proposed Export Credit Guarantee Program helps ensure the availability of credit to finance the exports of U.S. agriculture to countries where financing may otherwise not be available. Also, in response to the Brazil WTO case, current levels of guarantees are reduced from $5.5 billion to $4.5 billion.
  4. International Food Aid Programs – The bill takes a proactive stance on world hunger, pledging more Title II funds to bring food aid commodities to at-risk regions, such as the Horn of Africa, before food shortages strike. The Farmer to Farmer program, which will see a small increase in funding within Title II, sends accomplished American growers to areas in developing countries that need technical training.
  5. Nutrition Assistance Programs – Several segments of the bill are aimed at “cracking down on fraud and abuse while strengthening efforts to get food assistance to those most in need.” Under the bill, the Department of Agriculture will receive additional funds to prevent trafficking of food assistance benefits. Lottery winners will no longer be eligible to receive food assistance, while college students food assistance eligibility will be limited to those participating in technical and vocational education programs (such as ESL and basic adult literacy programs) at primarily two-year colleges. The bill also bans retail food outlets from participating in Nutrition Assistance Programs if their sales of items like liquor and tobacco are higher than 45% of the store’s total sales.
  6. Encouraging Healthy Choices – Healthy Food Initiatives are a notable portion of the bill with additional funding to programs focusing on senior citizens gaining access to fresher, healthier foods, increased federal funding for local food banks, fresh foods for schools and service institutions and grants that encourage community food projects and healthy food choices.
  7. Helping New Growers – With the average age of the American grower eclipsing the 60-year mark, a shortage of new, youthful growers is threatening the long-term economic success of agriculture. This Farm Bill intends to remedy that situation by green-lighting loans and matching-fund programs for beginning growers, while also reauthorizing all Farm Service Agency loan levels through 2017. Cost incentives for beginning growers in crop insurance are also offered and will be discussed later.
  8. Infrastructure Improvement – With precision agriculture practices proven to increase yields while limiting input costs and use, the bill would authorize the USDA’s Broadband Program, established in response to the American Recovery and Reinvestment Act of 2009, to begin providing grants and loans for the expansion of broadband service in rural areas isolated from significant population centers.
  9. Protecting Water Resources – Legislative initiatives protecting fresh water resources are all the rage these days, and the Farm Bill sets out to ensure agriculture will always have access to its most prolific crop input. The Water, Waste Disposal, and Wastewater Facility Grants and Loan programs provide grants, loans or loan guarantees for projects that support the development, storage, treatment, purification or distribution of water. The Farm Bill sets out to refocus this program by prioritizing funding for rural communities with populations less than 5,500. The bill also authorizes the Rural Water and Wastewater Circuit Rider Program to receive $25 million annually in funding.
  10. Community Development – The bill places an emphasis on strategic economic and community development by prioritizing applications submitted for funds through Rural Development that support localized approaches to economic and community development. The bill also authorizes making up to 3% of funds provided through the Community Facilities Loan and Grant Program available to applicants for technical assistance in rural communities. Funding is also established to provide competitive grants to national non-profit organizations that provide growers with information related to the reduction of input costs, conservation best practices and expansion of markets through the use of sustainable farming.
  11. Research & Development – A large emphasis is placed on continuing critical research initiatives while also establishing new foundations to support and fund cutting-edge research. Leading the way in that regard is a new non-profit entity that would be created by the bill, the Foundation for Food and Agricultural Research. This organization would leverage private funding (matched by federal funds) to support agricultural research, fostering continued advancement in the industry. The bill also authorizes research activities at 1862, 1890, and 1994 land-grant institutions while reauthorizing funding for University Extension service activities. Financial transparency and reducing duplication is also addressed, as the bill would require the Department of Agriculture to provide more detailed figures regarding expected research expenditures.
  12. Energy – The Agriculture Reform, Food and Jobs Act of 2012 continues programs that develop new opportunities in bio-based manufacturing, advanced biofuels and renewable energy while helping reduce growers dependence on foreign oil. By streamlining the Rural Energy for America (REAP) program application process for growers applying for funds for small- to medium-sized projects, the bill hopes to continue helping producers lower their energy bills by installing renewable and energy efficient systems. Under the expanded Biomass Crop Assistance Program (BCAP), growers in BCAP project areas may contract with the Department of Agriculture to receive biomass crop establishment payments up to 50% of costs, plus annual payments to compensate for lost opportunity costs until crops are established.
  13. Specialty Crops and Organics – With reported sales of specialty crops now topping nearly $65 billion annually, making them an increasingly critical part of the U.S. farm economy for revenue and job creation, the bill stresses expanding this sector. An initiative providing competitive grants to improve and expand farmers markets and other direct producer-to-consumer market opportunities, the Farmers Market and Local Food Promotion Program continues expanding under the bill. The National Organic Program and the Organic Research and Extension Initiative are both reauthorized for funding, and the bill directs the Secretary of Agriculture to “assess the feasibility of creating an organic promotion program.” The National Clean Plant Network and the Pest and Disease Management and Disaster Prevention Program will be consolidated under the bill as well.
  14. Crop InsuranceWeather concerns are weighing heavily on growers of late, and with crop insurance indemnities to farmers and ranchers exceeding a record $11 billion this year, the 2012 Farm Bill pledges to strengthen and improve coverage for all commodities and crops without making budget cuts to crop insurance. By creating the Supplemental Coverage Option, growers can purchase additional coverage on an area yield and loss basis. This option establishes a “trigger” on coverage offered only if losses exceed 21% for growers enrolled in ARC and 10% for all others. The bill would also expand crop insurance coverage for fruit and vegetable growers, provide stand-alone revenue protection coverage for cotton and peanut producers and grant beginning farmers a 10 percentage point discount for all crop insurance premiums.
  15. Miscellaneous – The bill covers such a broad range of issues that not all of the initiatives fit neatly within one of the aforementioned categories. From authorizing grants to minority and socially disadvantaged growers, to assisting agricultural employers and farmworkers in an array of areas, the 2012 Farm Bill is a diversified, prolific piece of legislation. And, as Sen. Ben Nelson (D‐NE), member of the Senate Committee on Agriculture, recently stated, “I can’t think of anything more important to get done than to get this farm bill done.”

Unfortunately, that might not be as simple as it sounds, as the bill could face a daunting journey to agreement. The legislation reportedly faces considerable opposition in the House, where the Republican majority is pressing for more extensive cuts to food assisstance programs. Meanwhile, southern senators say the shift from direct payments to a system based on crop insurance and a new federal risk management program discriminates against Southern crops, particularly rice and peanuts.

Topics:

Leave a Reply

3 comments on “2012 Farm Bill: 15 Key Points You Need To Know

  1. The crop insurance component of the farm bill needs to be changed. The Crop insurance lobby is powerfull , because this component ensures mega farms can be guaranteed a profit. The insurance needs a limit. It is also wasting money, paying agents more in commissions than almaost any other type of insurance. While it sounds good , be carefull of what we think is a benefit to us. If you want that 10,000 acre plus farm taking away your rented land – This crop insurance program enables that , as they can get very leveraged , be marginally profitable per acre , and get financed due to the guaranty !

  2. It is my beleif that the farming community should be the same as any other business. Why should the Government take care of Farmers. If they can't make it on tbeir own, sell out and let someone else try to make a living. In my business we didn't have any help, if we couldn't make it, sell out! Sure farmers have a large investment, they should realize that before entering that business!

Legislation Stories
LegislationUSDA: Quick Implementation Of Disaster Assistance Programs A ‘Top Priority’
July 9, 2014
USDA has processed 106,000 payments to farmers in 40 states across the country who suffered livestock and grazing losses between Oct. 2011 and passage of the 2014 Farm Bill. Read More
LegislationTFI Praises White House For Signing WRRDA Into Law
June 11, 2014
The bill streamlines U.S. Army Corps of Engineers projects, prioritizes authorized waterway improvements and provides needed adjustments to the Inland Waterways Trust Fund. Read More
LegislationAg Policy: Plenty Of Fertilizer Issues Ahead
January 2, 2014
From West Fertilizer to the Chesapeake Bay, fertilizer producers and dealers are keeping an eye on several Beltway developments in 2014. Read More
LegislationLack Of Farm Bill Leaves Farmers Facing Uncertainty In 2014
December 13, 2013
With just a few legislative working days remaining in 2013, the likelihood of a new farm bill is waning, leaving farmers in limbo once again. Read More
Top 100 Articles
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer Warehouse
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
CropLife 100Wilbur-Ellis Move To Colorado Complete
January 20, 2015
Wilbur-Ellis Co. announces the opening of its new Agribusiness Division location in the Denver, CO, Metro Area. The new facility will host key personnel as the company shifts the base of its Agribusiness operations from California to Colorado. Read More
CropLife 100United Suppliers, McGregor Co., Five Others To Form Aligned Ag Distributors
January 20, 2015
These companies will continue to operate as independently owned and operated businesses, however, their crop protection divisions will now be formally aligned under the umbrella of Aligned Ag Distributors. Read More
CropLife 100Bozeman Named SEEDWAY Chief Operating Officer
January 16, 2015
He succeeds Donald Wertman, who will retire at the end of August 2015 after 40 years with the GROWMARK subsidiary. Read More
CropLife 100Wilbur-Ellis’ Craig Bair Honored For Safety Contributions To Ag Aviation
January 14, 2015
The William O. Marsh Safety Award recognizes significant achievements in safety, safety education or an outstanding operational safety program. Read More
Latest News
FertilizerThe Fertilizer Institute President Jahn Testifies Befor…
January 28, 2015
The committee hearing, "Freight Rail Transportation: Enhancing Safety, Efficiency, and Commerce," looked at challenges facing our nation's freight rail network created by higher demand, rules and regulations and infrastructure needs. Read More
HerbicidesPurdue University Acquires Technology For Herbicide Mol…
January 28, 2015
Protea's LAESI DP-1000 Instrument System will be used in Purdue's College of Agriculture, the Department of Botany and Plant Pathology, for the molecular imaging of herbicide active ingredients and other related compounds to optimize herbicide applications and improve weed management.  Read More
FertilizerH.J. Baker Hires New Crop Peformance Marketing Manager
January 27, 2015
As Marketing Manager for the Crop Performance division, Usman Khalid will work out of H.J. Baker’s global headquarters in Westport, CT, and will drive new initiatives for the division. Read More
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
Exclusive state-of-the art Stueve Construction designed “Vista View” Elevated Control Room.
Eric Sfiligoj2015 Agricultural Market Read: Mixed
January 26, 2015
The agricultural market could look radically different this year, profit-wise, depending upon which segment you do business in. Read More
Edward Chell Biosafe
Crop InputsBioSafe Systems Names Ed Chell California Territory Man…
January 26, 2015
BioSafe Systems has announced the recent addition of Ed Chell as California Territory Manager for the agrichemical division, supporting the crop protection, water treatment and food safety business segments. Read More
InsecticidesBayer CropScience Introduces Sivanto Insecticide
January 26, 2015
Sivanto precisely targets key damaging pests at multiple insect life stages to prevent damage to plants and help minimize the spread of diseases from insect carriers. Read More
ManagementRetail Collaboration, Communicating Agriculture’s Good …
January 23, 2015
Editors Paul Schrimpf and Eric Sfiligoj discuss the recent creation of Aligned Ag Distributors, and the US Farmers and Ranchers Read More
FertilizerOSU Expert: Toledo Water Crisis A Turning Point For Ohi…
January 23, 2015
The August 2014 water crisis in Toledo, OH, impacted Ohioans’ views of Lake Erie algae problems by increasing the attribution of blame of algae growth on agriculture. Read More
FertilizerH.J. Baker Launching TIGER XP
January 22, 2015
Tiger-Sul introduces this next generation sulphur-bentonite product with a proprietary activator – ensuring farmers have a well-balanced nutrient replacement program. Read More
Crop InputsH.J. Baker Expands China Sales Force
January 21, 2015
Global Agricultural firm H.J. Baker announced that sales veteran Shi Dongshen has joined their Shanghai office in China. This newest hire follows the recent opening of their Lianyungang Sulphur Bentonite Plant. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer …
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
Matt Hopkins5 Bold Predictions For Ag Retail In 2015
January 21, 2015
This past year was filled with ups and downs for the nation’s top ag retailers, but what will 2015 have in store? Read More
SoftwareDeere Launches App Center
January 20, 2015
The John Deere App Center provides users the ability to search and find apps most useful to their business or operations. Read More
Crop InputsNew Syngenta Herbicide Approved In Soybeans, Sunflowers
January 20, 2015
Syngenta will sell BroadAxe XC herbicide in 2015 for use on soybeans, sunflowers and dry peas Read More
CropLife 100Wilbur-Ellis Move To Colorado Complete
January 20, 2015
Wilbur-Ellis Co. announces the opening of its new Agribusiness Division location in the Denver, CO, Metro Area. The new facility will host key personnel as the company shifts the base of its Agribusiness operations from California to Colorado. Read More
Crop InputsNovozymes Sales Figures Up For 2014
January 20, 2015
Novozymes announces its sales growth in 2014 was in line with expectations as sales grew by 7% compared with 2013. Read More
CropLife 100United Suppliers, McGregor Co., Five Others To Form Ali…
January 20, 2015
These companies will continue to operate as independently owned and operated businesses, however, their crop protection divisions will now be formally aligned under the umbrella of Aligned Ag Distributors. Read More