Senate Agriculture Committee Passes Farm Bill -- Roberts Amend Approved
10/25/07

It finally happened – the Senate Agriculture Committee favorably reported 2007 Farm Bill reauthorization legislation!  The Committee reconvened this morning at 9:15 a.m. to resume their markup. Yesterday’s markup covered Titles I, II, III, and began consideration of amendments to Title IV.  This morning, the Committee started with Title IV, and went through the remaining titles.  The bill was approved by voice vote early afternoon.

The Roberts amendment to the ACR program that we described in our email last night was brought up as the last amendment today and was approved by voice vote.  The amendment had several changes made to it, including reducing the A&O cut from three points to two. Other changes included revisions allowing producers a one-time option to enroll in the program in any of the years 2010, 2011, or 2012; maintaining the $60,000 payment limit for counter-cyclical payments set in the ACR program; setting the payment level at 85 percent base acres instead of the 100 percent level set in the ACR program; and de-linking the crop insurance program from the ACR program.

The next step in Farm Bill reauthorization is Senate Floor consideration, which is expected to occur next week.  We will be analyzing the Committee-reported bill and will discuss in the next update the overall crop insurance situation as well as the Farm Bill big picture as the process moves to the Senate Floor and then to Conference.  As always, we will continue to closely monitor the process and be actively involved in areas affecting crop insurance agents.

The debate and consideration of the Roberts amendment is detailed below, followed by an overall description of today’s mark up proceedings. Click here for the text of the Roberts amendment adopted by the Committee.

Roberts Amendment to Title I
Senator Roberts opened by stated that the ACR program is an innovative step, but these options may come with serious, unintended consequences.  He stressed that his amendment does not endanger the work that has already been done to establish the ACR program, and that this amendment will not be a “dagger” to program, as alleged by the media. Instead, the amendment seeks to address some of the negative effects of the ACR program.  

Senator Roberts asked USDA if many crop insurance policies on corn were already being re-rated, resulting in decreased costs for producers.  USDA confirmed that they had established actuarially sound target rates, and were at or below those rates in a vast majority of the states.  Senator Roberts then questioned the necessity of including re-rated premiums in the ACR program proposal if it is currently being done.  

Senator Roberts discussed certain aspects of the amendment that were in flux, depending on the CBO scores.  The amendment was currently drafted to allow for a one-time option to enroll in 2010, but the intent is to allow for a one-time option for 2010, 2011, or 2012.  Senator Roberts believes this change will directly affect the crop insurance A&O offset, and allow the cut to be reduced to a two point deduction instead of three.

Senator Harkin inquired to USDA as to if the crop insurance program and the ACR program remain linked, would premiums be reduced for ACR participants.  USDA confirmed that they would.  Senator Harkin also asked how the re-rating of premiums would affect ACR program participants and non-participants.  USDA stressed that if corn producers drop out of the crop insurance program, it would have little or no implication for participants in other parts of the country.
 
Senator Nelson asked if USDA currently consults outside actuaries when engaging in the re-rating process.  USDA confirmed that they do hire consulting actuaries for certain components of the program, but not for all of the aspects.  USDA does have their own actuaries on staff.
 
Senator Conrad asked USDA to confirm that there will be little insurance cross-subsidization from one crop area of the country to another, which USDA confirmed.  However, Senator Conrad stressed that when you look at the damage to the entire crop insurance program as a whole, the program will create a greater loss.  He stated that the CBO score estimates a reduction around $6 billion in the crop insurance program, which is a significant reduction for an industry that is estimated at $26 billion.
 
Senator Conrad also queried USDA as to if the Roberts amendment would reduce the complexity of the ACR program.  USDA said that de-linking the ACR payments with crop insurance payments and only allowing a one-time enrollment option would significantly lessen the implementation burden on USDA.  However, no matter the direction the Committee decides to take, USDA will commit to administering the program.
 
Senator Brown stated that there appears to be a strong aversion to “taking on” the crop insurance industry.  He stated that there is no intent to inflict harm to the industry, but the crop insurance companies will receive more subsidies from the government than any other program in Title I, and that the companies are reaping record profits.  Senator Brown stated that everyone should make a contribution, including the crop insurance industry.
 
Senator Conrad challenged Senator Brown’s assertion, stating that prior to inclusion of the ACR program in the legislation, there were significant cuts to the crop insurance industry, in the billions of dollars.  He stressed that no one can say the crop insurance industry is not willing to make a contribution.
 
When the Committee reconvened after a short break, Senator Roberts had obtained the necessary CBO scores and presented the Committee with a revised amendment including the above mentioned language allowing producers a one-time option to enroll in the program in any of the years 2010, 2011, or 2012.  The amendment would also maintain the $60,000 payment limit for counter-cyclical payments set in the ACR program; set the payment level at 85 percent base acres instead of the 100 percent level set in the ACR program; de-link the crop insurance program from the ACR program; and reduces A&O reduction to two points instead of three.
 
Senator Harkin stated that pending the outcome of another CBO score, he would like to institute an $18 fixed payment instead of $15 and/or raise the payment level from 85 percent of base acres to 100 percent.
 
Senator Conrad stressed that any potential savings from the Roberts amendment, after the changes Senator Harkin suggested, should be applied to Senator Lugar’s amendment on TEFAP.
 
Senator Chambliss expressed concerns with increasing direct payments to $18 and agreed that any savings should be applied to the Lugar amendment.
 
Senator Roberts also expressed concerns with increasing direct payments and stated that he would prefer changing the 85 percent of acreage limit to 100 percent.
 
Senator Baucus urged the Committee to thoroughly think through the entire ACR concept, both with and without Senator Roberts’ changes.  He expressed concerns with many issues, and stated that the concept came about rather quickly.  Senator Baucus stressed that there are many unknowns at this stage and that the Committee should expect numerous amendments on the Floor on this issue.
 
Senator Roberts stated that the idea has been discussed with numerous people, including industry groups, Committee Members, and state and federal governments.  Senator Roberts applauded Senators Harkin and Brown for developing the ACR program, but stated that it needs to be a workable program for all producers from all regions.
 
Senator Thune stated that he is pleased with the Roberts amendment, as it corrects problems that were created for the crop insurance program.  He agrees with the principle of the one-time option and supports setting the acreage level at 85 percent.
 
Senator Brown stated that the most important thing is to have a workable ACR program, and that while he does not support the one-time option or the elimination of the discount on crop insurance premiums, he is willing to support the amendment as a whole.
 
Senator Harkin assured the Committee Members that Committee staff would meet after CBO scores for the revised amendment were available and deal with the acreage percentage change accordingly.  He also stressed that any additional savings would be applied to the Lugar amendment.
 
The amendment was approved by a voice vote.
 

Overview of Today’s Mark Up Proceedings  


Title IV (cont’d.)


Casey Amendment

Senator Casey stated that he plans to offer an amendment on the Floor regarding a public health approach to food stamp benefit education.
 
Casey Amendment

Senator Casey stated that he plans to offer an amendment during Floor consideration that would allow the elderly to participate in the Rural Summer Food Service Program.  
 
Title V

Grassley Amendment

Senator Grassley offered and then withdrew an amendment to raise the mandatory money for the Pigford program for minority farmer discrimination claims from $100 million to $200 million.  Senator Grassley stated that unfortunately he did not have an offset for the money, but that the issue was extremely important and necessary to open the courtroom door for those farmers subject to discrimination.  
 
Senator Harkin stated his appreciation for Senator Grassley’s advocacy in this area, and pointed out that the Mark contained an additional authorization of funds, should they be determined necessary.
 
Other Senators stated their support for the issue, but expressed that the $100 million figure was the best available estimate of needed funding.  
 
After securing a commitment from Senator Harkin to work with him as they moved to the Floor, Senator Grassley withdrew the amendment.  
 
Vote Change


Senator Chambliss inserted for the record a correction of Senator McConnell’s proxy vote yesterday on the Senator Lugar TEFAP amendment.  The vote was changed from nay to aye.  This did not affect the outcome of the amendment.  


Title VI

Nelson Amendment

Senator Nelson offered an amendment increasing the funding from $40 million over four years to $250 million over five years for the Rural Micro-enterprise Development program.
 
Senator Harkin expressed support for the program, and stated that he would have directed more funds to the program if they were available.  
 
Senator Nelson withdrew the amendment for lack of an offset with a commitment to discuss options for funding.  The amendment will be offered either during Floor consideration or will be contained in the Manager’s Amendment for the Floor.
 
Casey Amendment

Senator Casey offered an amendment prohibiting the use of eminent domain for the procurement of private property in use for agricultural production or under conservation easements. In Pennsylvania and other states, counties have been designated by the Department of Energy for use in the National Interest Electric Transmission Corridor.  Senator Casey has advocated for local and state groups to have this authority.
 
Numerous Senators raised objections to the amendment, citing jurisdictional issues with the Energy Committee and national security issues.  The current law was vigorously debated and agreed to in the Energy Policy Act of 2005 (EPA).  The EPA contains language granting states the right to make the line-sighting decision – with federal government intervention if the state does not act within a year – if the issue is of national implications.
 
Senator Thune discussed a letter from numerous associations in opposition to the amendment, citing the current law as a carefully crafted provision of the Energy Policy Act of 2005 addressing persistent grid problems.
 
The amendment failed by voice vote.
 
Title VII

No amendments.
 
Title VIII

No amendments.
 
Title IX

No amendments.  
 
Rule Adoption
At this point, Senator Conrad introduced a motion to adopt a deadline for submission of amendments. After consultation with Senator Chambliss, Senator Harkin agreed and the Committee adopted by unanimous consent the rule stating that any amendment not noticed to Senators Harkin or Chambliss or staff by 11:00 a.m. would be ruled out of order.  
 
Title X

Brown-Stabenow Amendment

Senator Brown, for himself and Senator Stabenow, offered and withdrew and amendment on mandatory country of origin labeling (mCOOL) for processed food products.  Senator Brown cited concerns with food safety, the need for more inspections of imported food, consumer product safety issues, and stated the need for standardized labeling procedures for processed food products, clearly marking “Made in the USA” when applicable.  
 
Senator Harkin pointed out that processed foods that are packaged already have label and identification requirements, but Senator Brown replied that the ingredients of the products need to have mCOOL also.  
 
Senator Chambliss state that he sympathized with consumers, and their need to know information regarding products they purchase, but explained the difficulty for some products with multiple ingredients or cross-border circumstances, such as salads or livestock products.  
 
Senator Harkin stated that he would be more than willing to hold hearings on this issue in the future, but would be after the first of next year due to scheduling concerns. In addition, Harkin has been notified that this issue will be included in a Floor amendment on food safety.
 
Title XI

Casey Amendment
Senator Casey raised the issue that APHIS border inspectors are currently under the authority of the Department of Homeland Security (DHS) rather than USDA.  Senator Casey asserted that the inspectors should be transferred from DHS back to USDA.
 
Senator Harkin stated that while the APHIS inspectors work for DHS, they are paid by USDA.  Senator Harkin mentioned a recent conversation with Secretary Chertoff over the issue of re-transfer, which the Secretary objected to.  He also raised jurisdictional concerns.
 
Senator Chambliss stated that this is a very complex issue, and the transfer of inspectors was done in 2002 because it was thought to be the right action, and many believe it remains that way.  There are obvious problems with the border inspection system, and a better job can be done, but USDA and DHS are aware of this and are working together to address this issue.  Senator Chambliss also pointed out a provision in Title XI that also addresses this issue.  
 
Senator Stabenow cited a GAO report stating that fewer inspections are being made by fewer inspectors. She expressed support for USDA management of the inspectors, saying that USDA and specifically APHIS have the experience and professionalism necessary.
 
Senator Chambliss stated that it is necessary to consult with USDA and DHS, as well as the leadership of the Homeland Security Committee, Senators Lieberman (D-CT) and Collins (R-ME). The Agriculture Committee will work to resolve this issue correctly, if not before Floor, then at least before Conference.
 
Revisiting Title I and Title IV

After reaching the end of the bill, amendments were offered on Titles previously considered.  


Stabenow Amendment to Title I

Senator Stabenow offered an amendment to modify the Title I definition of specialty crops.  The amendment language would codify the definition of specialty crops agreed to by Congress in 2004.  The language would remove the term “aquaculture” from the specialty crop definition in Title I of the Chairman’s Mark.
 
She cited concerns that now that specialty crops have federal financial support, other types of agriculture production, such as aquaculture, would inappropriately attempt to qualify for assistance.  Aquaculture has other programs available for its use with the National Marine Aquaculture Initiative administered by NOAA, as well as other assistance in the Farm Bill reauthorization legislation.  
 
Senator Lincoln applauded Senator Stabenow’s efforts on behalf of specialty crops, but expressed concern that aquaculture would be denied a seat at the table.  
 
Senator Conrad felt that opening up specialty crop payments to other types of agriculture would not have beneficial consequences, and urged support for Senator Stabenow’s amendment.  
 
Senator Crapo urged support for Senator Stabenow’s amendment, contingent on ensuring that the amendment does not affect the other aquaculture language in the legislation.  
 
Senator Chambliss asked that the amendment include “turfgrass,” which is currently in the specialty crop definition, and Senator Harkin asked the same regarding “herbal crops.”
 
The Amendment was approved by voice vote.  
 
Coleman Amendment to Title IV

Senator Coleman offered and withdrew an amendment increasing the TEFAP funding authorization form $150 million to $200 million.  However, he did not have an offset, but stated that he would like to work with the Chairman to procure funding for this as they move to Floor consideration. Due to the recent dramatic decrease in bonus commodity buys, food banks and homeless shelters are having a difficult time coming up with the necessary.  Bonus commodity purchases have decreased from $240 million in FY 2004 to $150 million in FY 2005 to less than $100 million in FY 2006.  
 
Senator Harkin stated that this is an issue that needs to be addressed, and that he will work to find an offset prior to Floor consideration.   When the Committee-reported bill is scored, there may be money available.  This issue will be very high on the list if that is the case.
 
Senator Conrad stated that the current score of the bill at that time was $40 million below the baseline.  
 
Senator Klobuchar suggested inserting payment limits and income limits for conservation payments, as was contained in her amendment offered yesterday, which would save considerable amounts of money to fund important provisions like this.
 
Conclusion
After the Coleman amendment was considered, debate on the Roberts amendment ensued.  The description is posted above.  After the Roberts amendment was approved, Senator Chambliss then moved that the Committee adopt the Chairman’s Mark as amended.  The legislation was adopted by voice vote, and the bill was reported out of Committee favorably.