The 2008 Farm Bill

I must admit that I have been avoiding the 2008 Farm Bill like the plague. The floor-passed Senate version is 1,876 pages long (it can be viewed on the Internet at http://agriculture.senate.gov/). The complexity of the various provisions requires a law degree to decipher. It is no wonder that it takes our representatives more than a year to come up with a bill that can be passed by both houses of Congress and that would be acceptable to signature by the President. That hasn’t happened yet, but we are finally getting close. Hopefully, there will be a Farm Bill by the end of March.

Most people think of the Farm Bill as providing for price supports to farmers. Such provisions remain a part of the bill but only a small part. The price supports are designed to influence planted acres of various crops in order to provide adequate income to farmers while maintaining “cheap” food prices to the consumer and some level of food security for our nation. Most consumers think of crop price supports as “welfare” for farmers. They usually don’t realize that they are designed to allow market forces to maintain a “cheap” food supply for our country.

Over the years many sections have been added to the farm bill. Some of these sections regulate agricultural markets. Others are oriented more toward conservation practices. Each of these sections has grown with each successive farm bill until they are now quite large. Some of the newest sections in the farm bill are related to energy.

The Energy Independence and Security Act of 2007 had a profound impact on the 2008 Farm Bill. It raised the standard for the production of renewable fuels to 9 billion gallons for this year and gradually increases the standard so that by 2022, the U.S. should be producing 36 billion gallons of renewable fuels. In 2022, the amount of renewable fuels should include advanced bio-fuels, such as cellulosic ethanol, in the amount of 21 billion gallons. The balance of that will likely remain corn-based ethanol.

Decades ago Congress created the Commodity Credit Corporation (CCC) within the Department of Agriculture. The CCC was created and given authority to take money directly from the U.S. Treasury for farm programs. This measure was authorized to provide security of income to farmers so that they were not dependent on annual budget appropriations for funding of mandated farm programs. This provision makes the 2008 Farm Bill attractive to legislators as a means of funding their pet bio-fuels projects without the necessity of going through the normal appropriations process. The result is that the Farm Bill has become a political football.

Further complicating the passage of a Farm Bill is the fact that this is a Presidential election year. Each of the political parties sees the bill as a way to potentially manipulate support for their party’s candidate. Because the bill has grown to include so many features and provisions, the potential political leverage has grown to include almost all interest groups. Agriculture generally, and farmers in particular, have effectively lost their ability to have much influence on the process because of the broad range of issues now included.

Some of the new provisions that are related to energy are: 1) The renewable energy and energy efficiency improvements program, 2) Biomass research and development, 3) The Bio-energy program which makes incentive payments to bio-energy producers, 4) The Biomass energy reserve program, 5) Forest bio-energy research and 6) The Sun grant program which focuses on solar power. All of these programs are designed to meet the mandates of the Energy Independence and Security Act of 2007 through the use of the CCC as a funding mechanism so that the programs do not require line-item funding through the appropriations bill.

Hopefully, we will eventually see a Farm Bill passed that will continue to provide a safety net for our nation’s food supply system. If we are to continue to benefit as a nation from a “cheap” and abundant food supply, we must have a strong farm bill. Let your Congressmen know your feelings.