>>Continued from page 1

Environmental Quality Programs

The Environmental Quality Incentives Program (EQIP) was included in the 2002 Farm Bill to mitigate the environmental effects of agricultural operations by paying the costs of complying with the Clean Water Act, Clean Air Act and other regulations. Sixty percent was allocated to livestock confinement. However, other businesses are required to comply with all relevant laws as a cost of doing business, so these EQIP payments actually subsidize livestock confinement operations and other unsustainable farming practices.

EQIP has also been used to safeguard threatened habitats, so it should continue, but with caps to prevent the factory farms from being subsidized. Independent farmer organizations recommend a $50,000 maximum grant for any recipient.

The Conservation Security Program (CSP) and Wetlands Reserve Program (WRP) were added to the conservation section of the 2002 Farm Bill. They are cost-sharing programs that pay part of farmers’ costs for adopting new conservation practices or expanding practices they have been using on working land. Farms using practices that preserve soil, clean air and water, forestland and/or wildlife habitat would be eligible for some cost share assistance in the form of a matching grant and/or a guaranteed low interest loan. Two billion dollars was originally promised for this program, but Congress set an annual funding limit of only $10 million. Thus the Natural Resources and Conservation Service (NRCS) had to limit the program to farms in a few designated watersheds. Independent farmers want CSP and WRP reauthorized with mandatory funding at levels that allow any farmer anywhere in the country who uses NCRS-approved practices on working lands to participate.

The Conservation Reserve Program (CRP) has been in force many years. It pays farmers land-rent to take highly erodable soils and wetlands out of production to preserve them and to plant non-wetlands in grass as buffers to surface waterways. The CRP has done that quite effectively, but no new applications were accepted in 2005 and 2006. The Administration’s 2007 proposed Farm Bill would extend that moratorium on new applications until 2012. The result is that conservation measures are stagnated—limited to land already in the program—at a time when the global climate change crisis requires new and innovative conservation. CRP should be fully funded and allowed to accept new applications.

Supply Management

CRP was also supposed to help reduce commodity over-production by limiting crop-producing acreage. It has not been effective in doing that. Independent farmers recommend a USDA-monitored supply management program based on each producer’s production and market share history. Each farmer would have a quota for each crop with a target price. The supply management program would limit that crop’s initial market supply so that the effective demand price would be at least as high as the target price. Each producer would be allocated a quota s/he could sell at the target price or higher. A producer’s quota would be based on his/her market share of that crop in previous crop years. If any portion of a farm’s quota were sold below the target price, a loan deficiency payment could be used to make up the difference. However, with the market price at or above the target price, subsidy payments to producers, such as the direct and counter-cyclical payments discussed below, would not be necessary. Producers could then sell the excess above their quota at market prices, but that part of the commodity’s supply would not be eligible for subsidies. Independent farmer organizations have advocated for years for such a supply management program for all crops, dairy and livestock production, but supply management has not been discussed in negotiations for the 2007 Farm Bill and is not likely to be included.

 

Continued on page 3>>