Regional reaction to final Farm Bill mixed

The long-awaited 2007 Farm Bill has finally become law and reaction to its provisions varies greatly depending on whom you ask.

After languishing for months on end, the $300 billion bill was passed by Congress and vetoed by President George Bush, who called it too generous to rich farmers. But wait: The bill that Bush vetoed had 34 missing pages. Congress restored them, the bill was again vetoed and finally the veto was overridden at the end of May.

Expected to govern federal agriculture-related policy for the next five years, it focuses most of its spending on nutrition programs with an additional $30 billion for farm soil conservation and other environmental programs.

But $40 billion will again be funneled to farmers through crop subsidy programs, with critics saying that the new bill continues to dole out taxpayer cash to growers who are doing well enough to succeed without the payments.

Landon Gates, director of public policy with the Colorado Farm Bureau, said his organization is happy to see the subsidy payments portion of the Farm Bill remain relatively untouched by Congress.

“Our policy opposes any type of cap or means testing for farm program payments,” he said. “We think anybody involved in farming should be eligible.”

The bill allows payments to a single farmer with annual farm income of up to $750,000, or up to $1.5 million for a farm couple. Individuals who make more than $500,000 or married couples who make more than $1 million jointly in non-farm income are ineligible for subsidy payments under the new bill.

Bush had encouraged lawmakers to prohibit subsidy payments to growers earning more than $200,000 as a response to growing criticism of the subsidy program’s largesse to rich producers.

Surprised by Congress

Michelle Perez, senior agriculture analyst for the Washington, D.C.-based Environmental Working Group, said her watchdog organization was surprised that Congress did little to reform the subsidy program, which was originally created to help new and struggling farmers.

“We were hopeful to the very end that this would finally be the Farm Bill reform we’ve been waiting for,” she said. “It seemed the whole country was ready and wanting reform but the subsidy lobby prevailed once again.”

Perez said the fact that 2008 is an election year also likely played a big part in the lack of real reform in the bill.

“To the extent that the proponents of the status quo continue to scare districts that are rural or in fear of changing parties, they’ve been able to make the case that supporting the status quo is the way to keep from changing those seats,” she said.

Steve Scott, a corn grower in Burlington, said many farmers understand criticism about rich farmers getting crop subsidy payments. “I think most farmers would believe the $1 million cap or the (current) means test is probably a little high for most people,” he said. “Obviously, nobody in Congress believed that.”

Of Colorado’s nine-member Congressional delegation, only Republican Reps. Doug Lamborn and Tom Tancredo voted against it.

While Scott said he wouldn’t oppose a means test for those growers earning a portion of their income from non-farm business, he doesn’t favor any income limit on those who earn their living strictly from farming.

“The millionaire deal does bother me somewhat, but if that person has worked his way up and it’s income just from farming, then godspeed,” he said.

Scott said farmers should have a special place in society that assures they will continue to take the risks that provide food to the nation.

Last 1 percent

“There’s only about 1 percent of us (farmers) left,” he said. “If you don’t take care of the producer, what is America and the rest of the world going to do?”

Mark Sponsler, director of Colorado Corn in Greeley, said he also sees the merit in subsidies being available to any grower who may need them. “(Farming’s) still a very risky proposition,” he said. “It takes about twice as much investment now than it did even a couple of years ago.”

At the same time, the U.S. Department of Agriculture recently estimated that net farm income will reach a record $92.3 billion in 2008 – a 56 percent increase over 2006. The average farm household income is now $89,434, which significantly exceeds the national average.

The main drivers in the farm income surge, according to USDA, have been a steady rise in exports and steep increases in crop prices, particularly corn.

One big change in the Farm Bill was in government policy directed toward the development of alternative biofuels. The bill reduces the amount of tax credit given to blenders of ethanol gasoline from 51 cents a gallon to 45 cents a gallon while providing a $1.01 tax credit for each gallon of cellulosic ethanol and $320 million in loan guarantees for refineries making cellulosic biofuels.

Cellulosic biofuel can be made from plant waste, wood chips, lawn clippings, switchgrass and other materials. But the technology is not yet in place to profitably produce cellulosic ethanol, which is considered the next step beyond corn ethanol.

Sponsler said even corn growers are behind the advancement of cellulosic ethanol because they can sell the stalks, leaves and cobs left over after the seed is removed.

“We see that strides for cellulosic ethanol are important and positive and we embrace it,” he said.

EWG’s Perez said her group also approves of the Farm Bill funding for cellulosic. “We think that’s a step in the right direction,” she said. “Increasing funding for cellulosic is a directionally correct policy move.”

Little local benefit

Unfortunately, that policy shift holds little or no benefit for local biofuel producers.

Jeff Probst, founder of Blue Sun Biodiesel in Golden, said the bill has “very limited implications as to what we’re doing. There’s nothing in there specifically that addresses biodiesel.”

Probst said he’s actually glad the bill does not attempt to insert government into the development of biodiesel. He said he’d rather see the government stay out of biofuel development and let the marketplace be where fuels will sink or swim on their own merits without government tax breaks and incentives.

Dan Sanders, owner of Front Range Energy LLC in Windsor, said he sees a Farm Bill that does little to encourage or expand the use of corn ethanol.

“I think it’s a little indifferent to the ethanol industry,´ said Sanders, who opened his ethanol-producing facility in 2006. “It’s helping cellulosic but in the end (the industry’s) going to be built by private money.”

Sanders said he did not get government assistance to set up his business and believes that cellulosic shouldn’t either. “Those projects have to stand on their own two feet or business people like me aren’t going to do them.”

Sanders noted that the 45-cent-per-gallon tax credit for ethanol production under the new Farm Bill won’t go to small producers like Front Range Energy but – as before – will continue to go to big oil companies who do most of the blending of ethanol with gasoline.

Sponsler notes the irony of oil companies continuing to get tax credits to make ethanol-blended gasoline when the same companies are raking in record profits.

“It’s frustrating that we’re providing money to an industry that’s already one of the most powerful and influential in the world,” he said. “And it’s hard to elbow our way into a market that’s controlled by the competition.”

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