October 1, 2007

3 Min Read
Inside the 2007 Farm Bill

The 2007 Farm Bill—the Farm, Nutrition, and Bio-energy Act of 2007 (HR2419)—was passed by the House of Representatives on July 27 and, as of this writing, is in debate in the Senate. Under the House bill, farmers who produce title commodity ingredients will continue to receive direct payment at the same level earmarked in the current law. The bill also provides farmers participating in commodity programs with a choice between traditional price protection and new, market-oriented revenue coverage payments.

However, many in the industry disagree with current price supports and hope to diminish the influence of government price support on which crops are produced domestically, as well as on price and supply. “Rather than take this opportunity to pass a truly reform-minded piece of legislation, the bill approved by the House Agriculture Committee last week would actually increase food and commodity price distortions,” says Cal Dooley, president and CEO, Grocery Manufacturers Association (GMA), Washington, D.C.

The bill also allows for modest increases in funding for organic agriculture: mandatory funding of $22 million for USDA’s national certification cost-share program; and an additional $3 million in mandatory funds for organic marketing data collection and publication. Organic supporters are hoping for a bigger share of the pie in the Senate version. “Increased research and education funding does have important effects on producer productivity, product quality and economic viability,” says Mark Lipson, policy program director, Organic Farming Research Foundation, Santa Cruz, CA.

The bill provides loan guarantees for biorefineries and biofuel production plants, but many producers argue these changes will not dramatically affect food prices. In a speech to the Tennessee Farm Bureau Federation, Columbia, Secretary of Agriculture Mike Johanns stated the “increase in the price of energy to ship that food can have as much, or more, of a profound impact on the price of that food than the corn you feed to the animal.”

However, as biofuels take up a greater share of crop space, federal policy and funding support will need to evolve to fit these new needs. It appears biofuels may become more important in the Senate version of the bill. Sen. Tom Harkin (D-IA), chairman of the Senate Committee on Agriculture, Nutrition and Forestry, released a statement saying, “I am hopeful the Senate can do a better job to fund investments in conservation that will allow us to grow crops that represent the next generation of energy production, like cellulose.”

Ashley Kleckner is account executive at Ketchum, New York, in the Food & Nutrition Practice. She has a degree in mass communications from UC Berkeley. You can reach her at [email protected].

Commodities That Qualify for Farm Bill Support

Commodity Title: corn, wheat, soybeans and other oilseeds (including sunflower seed, rapeseed, canola, sesame seed and others), rice, cotton, sugar, peanuts, grain sorghum, barley, oats, wool, mohair, honey, dry peas, lentils, small chickpeas and dairy products.

Loan Commodity: wheat, corn, grain sorghum, feed barley, malt barley oat, upland cotton, extra long staple cotton, long grain rice, medium grain rice, short grain rice, soybeans, peanuts, other oilseeds, wool, mohair, honey, dry peas, lentils and small chickpea.

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