Farm Bill ’07: House bill provides more options, equity for organic dairy farmers

“Promising” is often not the word used to describe the Farm Bill process. Frustrating, maybe. Controversial, frequently. Disappointing, sometimes. But promising? Seldom!

Those dairy farmers, however, who are engaged in, curious about, transitioning to or simply wanting future production options can be a little more optimistic about this year’s Farm Bill debate.

Although organic agriculture still works hard for funding, full acceptance and equal treatment at the negotiating table, growing demand for organic food is no longer being ignored by lawmakers.

With an average annual growth rate of nearly 15 to 20 percent a year since 1997, organic is recognized as one of the fastest-growing sectors in U.S. agriculture. According to the Organic Trade Association’s (OTA’s) 2007 Manufacturer’s Survey, consumers spent $16.7 billion on organic food in 2006, representing nearly 3 percent of total U.S. retail food sales. Although seemingly small, the growth is significant in a market where the “penetration rate” has increased from less than 1 percent in 1997.

Advances geared to help dairy farmers
A quick review of the House of Representatives’ version of the Farm Bill (H.R. 2419), which passed on July 27 with a 231–191 vote, shows that organic agriculture is gaining ground as a more accepted form of production agriculture.

For those who like to count such things, the word “organic” is mentioned at least 85 times in the House bill affecting significant areas of influence, including conservation, research and market data, risk management/crop insurance and the Environmental Quality Incentives Program (EQIP). These organic “inclusions” represent more than $300 million in additional funding; that is “a good thing” for dairy farmers – organic and conventional, alike – who seek agricultural production, business and marketplace options.

Although the Senate’s version of the Farm Bill has yet to be crafted, the U.S. organic dairy industry is hopeful that it will contain similar aspects as the House bill:

1. Building equity in valued research and market data
When it comes right down to it, Farm Bill discussions are all about equity.

The organic industry is focused on obtaining its fair share of research and educational funding for organic foods and farming through USDA Research and Education and Economics. In terms of overall consumer food sales, organic accounted for nearly 3 percent, yet USDA data for FY 2007 shows that only about 1.5 percent of the total research and education budget was spent on organic.

H.R. 2419 helps organic agriculture make some headway by authorizing $3 million in mandatory funding for the USDA to develop a process that annually aggregates production, pricing and market data for organic commodities. This type of information, which already is available for non-organic agricultural commodities, is not currently available to organic farmers.

Over the five-year period, the bill also amends the Organic Agriculture Research and Extension Initiative to authorize $125 million to fund organic research. The bill calls for $25 million in annual, mandatory funding to be allotted for fiscal years 2009 to 2012 and an additional $25 million for the period spanning 2008 through 2012.

2. Sharing the costs for transitioning farmers
The House version of the Farm Bill also contains various programs designed to ease a dairy farmer’s transition from conventional to organic production. Although the funds aren’t enough, they are important first steps for organic agriculture.

• The most significant initiative authorizes $50 million in funding to help farmers cover the costs related to organic conversion and provides technical support and education. This program would assist transitioning farmers with $25 per pasture acre and $50 per crop acre up to $10,000 per year.

• Under the National Organic Certification Cost Share Program, the House bill also mandates $22 million to assist farmers who are transitioning to organic status, in covering their costs associated with organic certification.

3. Rewards for conservation and sustainable practices
Because of its ability to minimize impacts on soil, air and water quality, organic agriculture provides unique opportunities to increase sustainable business practices, protect the environment and preserve natural resources. H.R. 2419 recognizes this in several ways:

• In the Conservation Reserve Program (CRP), when a contract is modified to facilitate the transfer of CRP land from a retiring or retired owner to a covered farmer or rancher, that “covered” farmer or rancher can begin the organic certification process (as authorized under the Organic Farming Protection Act or OFPA) one year before the CRP contract expires.

• The bill also extends the Conservation Security Program (CSP) through 2017. In evaluating a farmer’s applications to enroll in CSP, the Secretary of Agriculture must consider the “multiple benefits of conservation-based farming systems,” including organic production certified under the OFPA.

• In amendments to the Environmental Quality Incentive Program (EQIP), the bill identifies “organic transition” as a goal to be promoted as compatible with “environmental quality.” This is an important change. The amended EQIP language states that practices which are eligible for cost-share payments include farmers who receive organic certification. In essence, the bill treats certifying organic farmers equally with farmers implementing new structural practices that improve the environment. (Like all farmers, organic farmers who implement conservation-based land management practices can qualify for EQIP funding.)

• EQIP Conservation Innovation Grants, which are specifically targeted to serve organic and specialty crop farmers, are new. The bill provides $5 million per year for “grants to support effective outreach and innovative proposals for outreach and to serve organic producers and producers of specialty crops.”

4. Equity in crop insurance
Perhaps one of the most needed amendments in the House bill directs the Federal Crop Insurance Corporation (FCIC) to provide for research that would, ultimately, improve and create equity in insurance coverage for organic crops.

Since 2001, organic farmers have been eligible for many of the same crop insurance policies as non-organic farmers. Under this system, organic farmers have paid a 5 percent premium surcharge to help in managing risk associated with crop loss, but the program only allowed them to insure their crops based on non-organic commodity values. This system did not compensate organic farmers for the typically higher values for certified organic crops.

H.R. 2419 calls for a study to compare non-organic versus organic crop damage and values. If the study finds no significant, consistent or systemic variations in the risk and loss experience between methods of crop production, the FCIC would reduce or eliminate the current 5 percent premium surcharge that organic farmers must pay.

The study also would determine the procedure to offer organic farmers an opportunity to carry insurance that more fairly compensates them with prices commensurate with the value of their organic crops.

Realistic wins that will help dairy farmers
Overall, the changes reflected in the House version of the 2007 Farm Bill are somewhat conservative but helpful to dairy farmers.

The Senate soon will begin drafting its version of the Farm Bill.

Organic dairy farmers hope that the primary initiatives (research, data collection, technical assistance, and conversion and certification assistance) will find a place in the final legislation. They may not seem like much, but these inclusions represent “forward movement” – something that is critically important to a segment of agriculture that has fought so hard to provide U.S. farmers with production alternatives.

As with all farm policy discussions, the overarching issue is funding. Like all farm bill debates, agriculture and food production battle the age-old conflicts of an administration that seeks to shore up federal budgets and food programs that seem to claim an ever-growing portion of the total cost of the Farm Bill.

Those realities aside, a “glass half- full” attitude is building in the organic community as legislators expand farm policy to embrace language, incentives and opportunities that recognize organic as a real and viable member of mainstream agriculture. In the end, maybe “acceptance” as a credible, science-based production alternative for today’s farmers is the greatest promise of all. PD

—Submitted by Horizon Organic