Ag Secretary outlines timetable for farm bill implementation
Implementing a new farm bill won’t be easy and certainly won’t be cheap. But Agriculture Secretary Tom Vilsack is starting to “set the table” for growers to make informed decisions about farm bill options for the 2015 crop year.
He delivered his first glimpse of the timeline for farm implementation at the annual Commodity Classics last week. Over 7,000 people, representing the American Soybean Association, the National Corn Growers Association, the National Association of Wheat Growers and the National Sorghum Producers and agribusiness leaders attended the conference.
Vilsack said USDA has been busy prioritizing farm bill decisions that have to be made and determining whether or not they will require formal rulemaking or simply a notification in the Federal Register or guidance before being reviewed by USDA’s Office of General Council and the Office of Budget and Policy. If it’s a rule, it must then be reviewed by the White House Office of Management of Budget. His desire is to not create a “funnel” where so many decisions get clogged at any one point in the process.
He said the department will soon be dispersing the $3 million that Congress provided in the farm bill for training materials. And $100 million was allocated for USDA to help with implementation.
For the commodity title, the secretary hopes to publicize options for both Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) this fall. After the harvests, growers will be able to update yields and reallocate base information.
“We will allow you to update your production history and reallocate base acres with the hope that, by the end of 2014 or early 2015, you will be able to make your decisions” regarding commodity program options, he told farmers in the audience.
That timetable could be problematic for wheat producers, because decision-making also involves new crop insurance choices, like the Supplemental Coverage Option (SCO) that may not be ready in time for growers to make a decision on ARC or PLC in combination with SCO before fall planting.
The SCO provides supplemental coverage which mimics the producer’s individual insurance program choice, covering a portion of the deductible using a county-level measure of yield or revenue, according to a University of Illinois analysis. But the program will only be available to farmers who select PLC.
Vilsack said an exception on farm program signup would be made for wheat growers so that they could initially select PLC with SCO, but then reverse that decision and select ARC without penalty- as long as they made the final determination before their acreage reporting date on Nov. 15.
“You can’t have both ARC coverage and supplemental coverage option. You will have to choose,” Vilsack said. “So we want to make sure that you at least have some time to re-evaluate the decision you may have made,” Vilsack explained.
“SCO requires us to have enough data to make determinations from an actuarial standpoint,” Vilsack said, while noting that his agency has already been looking at each county to see whether there are sufficient farms and enough historical data to make decisions.
On cotton’s new Stacked Income Protection Program, or STAX, Vilsack said all production should be covered in the 2015 crop year. This summer, USDA’s Risk Management Agency will provide information about which counties will be covered. For 2014, cotton producers will be eligible for transition payments, based on a portion of the direct payment they had been receiving.
Vilsack also said:
• By April 15 livestock and other disaster assistance programs should be ready for producer applications.
• By this spring or early summer, USDA plans to implement Market Assistance Loan programs as well as dairy, crop insurance and sugar programs.
• Regarding credit programs, where the interest rate on farm ownership loans can be reduced from about 5 percent to 2.5 percent, “we will institute that very quickly.”
• By the end of the year, USDA plans to institute the beginning farmer provisions in the farm bill and to improve and upgrade the microloan program.
• The NRCS is already taking applications for conservation programs under the Environmental Quality Incentives Program and that producers should be notified around May 17 whether or not their application has been accepted, with obligations beginning June 1. Conservation Stewardship Program applications are being accepted and notification are expected around June 1, with obligations by late July or early August. USDA is already accepting applications under the Wetland Reserve Easement program and applications for the Ag Land Easement program will probably be accepted around May.
• For organic cost-share funds, the USDA will begin allocating those until they are expended because “we realize….folks are anxious to have those resources.”
• Provisions in the new farm bill which provide discounted crop insurance policies to beginning farmers and ranchers should be available for spring crops in 2015. And new peanut revenue policies are subject to board approval but should be in place for 2015.
Vilsack provided few specifics about new “actively engaged” rules for farm program participation – a controversial issue that lawmakers basically sent to the department for resolution.
“We also know that we have got a responsibility of looking at and examining the definition of actively engaged. We expect and anticipate that whatever definition will be applied, it will be in the form of a proposed rule which hopefully will be done sometime by the end of the calendar year to explain our view of actively engaged. It is quite restrictive based on the law but there is some work that USDA needs to do.”
On another subject, Vilsack said members of the biofuel industry are being asked to join the department’s first-ever biofuel trade mission to China later this year, led by USDA Undersecretary Michael Scuse.
“We think it is not just an opportunity here domestically to use biofuel, we think the world is ready for American biofuel,” Vilsack emphasized.
Last month, the Renewable Fuels Association reported that U.S. ethanol exports surged to 82.4 million gallons in November, with large volumes finding their way into new or emerging markets such as China and India.
“It’s not going to happen overnight, but we can begin educating others,” Vilsack said, about potential customers in countries like China, India and Japan, while citing the potential of biofuels to reduce greenhouse gas emissions. Vilsack suggested there was additional potential to promote biofuels through USDA’s Market Access Program and other government programs.
“There are a lot of things we can do with our cooperators, not only at USDA but with the Commerce and State Departments,” he added during a press conference after his speech.