Daily News Update, Dec. 21, 2007

Farm bill update

The U.S. Senate passed its Farm, Nutrition and Bioenergy Act of 2007 (H.R. 2419) late Friday, Dec. 14 by a vote of 79 to 14.

Like the version passed by the House of Representatives earlier this summer, the Senate bill contains some improvements for cattlemen, such as language which makes modest improvements to the country-of-origin labeling (COOL) law.

Additionally, provisions in both bills allow for interstate shipment of state-inspected meat and establish a permanent disaster assistance program.

Country-of-Origin Labeling:  Language in the Senate bill helps alleviate the paperwork burden on producers and also adds macadamia nuts, goat meat, and chicken to the list of covered commodities.

In its comments to USDA's Agricultural Marketing Service on the mandatory COOL law set to be implemented in September 2008, NCBA articulated that, as a mandatory law, COOL exempts too many products.

"While the current law is far from perfect, the compromise language in the farm bill is an improvement for cattle producers," says NCBA's Vice President of Government Affairs Jay Truitt.

Interstate shipping: Language in the Senate bill is being supported by consumer groups while still allowing for the movement of meat products across state lines from state-inspected facilities.

NCBA policy supports the provision as a way for state-regulated businesses to compete in interstate commerce.  "This will provide a great opportunity for cattle producers and small local businesses to market branded beef products to a wider audience," says Truitt.  "This action by Congress will help foster entrepreneurship and add new competition in the processing sector."

Disaster Assistance: A permanent disaster assistance program was created and funded in the Senate farm bill. This program would take the current Livestock Indemnity Program and Livestock Compensation Program and create a similar program that will operate on a permanent basis, as opposed to the current ad hoc system.

"Ranchers struggle with difficult management, movement and sale decisions in the midst of a disaster, and that situation is worsened by the uncertainty of whether or not Congress will be able to provide any meaningful assistance," says Truitt.

"NCBA supports programs that are permanent in nature as opposed to previous approaches of providing producers with assistance on an ad-hoc basis well after a catastrophic event."

Conservation Programs:  Funding for conservation programs was included in the Senate farm bill, but most of that funding is allocated to the Conservation Stewardship Program (formerly the Conservation Security Program) and the Wetlands Reserve Program.

In the House bill, the budget for the popular Environmental Quality Incentives Program (EQUIP) increased to $2 billion per year over the life of the bill. The House bill also broadens eligibility for EQUIP funds to include custom feeders and livestock markets.

NCBA will be urging conferees to consider a final conservation title that more closely resembles the House-passed version in this regard.

NCBA will also urge conferees to fix the Adjusted Gross Income (AGI) cap and payment limitations for conservation programs that exist in the House Farm Bill. This language would make many ranchers ineligible for Farm Bill conservation programs.

"The goals of voluntary conservation programs are compromised when artificial caps and limits are applied," says Truitt. "Cattlemen will urge the conference committee to exempt cost-share programs such as EQUIP from the AGI caps and payment limitations."

Tax Incentives for Conservation Easements: Included within the tax title of the Senate-passed farm bill is language that would permanently extend a beneficial tax incentive for donations of conservation easements. This provision permanently establishes tax credits for landowners who voluntarily put easements on their property.

"Along with our farm bill conservation programs, this legislation will help ranchers and other landowners implement and maintain long-term conservation projects on their land," says Truitt. "It will help private landowners keep agricultural lands in productive use, while protecting fish and wildlife habitats, and conserving our natural resources."

Cattle Producers' Voices Prevent Damaging Farm Bill Amendments: In good news for cattle producers, many harmful amendments aimed at manipulating the business environment for cattle producers, were either defeated or withdrawn from consideration during debate on the Senate farm bill.

• The Tester business justification amendment was defeated by a vote of 40-55. This amendment would have eliminated the ability for packers to use "business justification" as a rational for paying premiums to producers for value-added cattle.
   

• The Grassley amendment, which would subject producers to even more oversight and regulation by establishing a competition task force was considered non-germane to the farm bill and therefore was not allowed for consideration.
   

• The Enzi captive supply amendment, which would outlaw the ability for cattle producers to engage in confidential, one-on-one business deals with prospective buyers, was not among the listed amendments put forth for consideration.
   

• The Coburn amendment which would require that 66.66 percent of a producer's income come from the farm in order to participate in EQUIP was withdrawn from consideration.
   

• The Harkin competitive injury amendment would have based lawsuits under the Packers and Stockyards program on a matter of "fairness," which is not defined.  This amendment was not introduced.

"We were fortunate to have a lot of our cattle producers weigh in on these issues with their Senators, and it paid off," says Truitt. "We've cleared some hurdles, but we still have a great deal of work to do as the bill moves through conference."

Farm Bill Conference Discussions Expected in January:  While Congressional staff will be working on the Farm Bill after the first of year, conferees have yet to be named, and no further movement is expected until January. 

For cattlemen, NCBA's top focus will be to remove language in the Senate bill which bans the ownership of cattle by packers.  "NCBA policy supports a competitive, free-enterprise market," says Truitt.

"It is unfortunate that the Senate chose to include legislative language that puts the government–not the cattleman–in charge of how cattle are marketed. This provision must be removed so that the heavy hand of government does not interfere with a cattle producer's ability to provide the beef products that consumers want."