Risk Management and Other Provisions Farm Security

1
Risk Management and Other Provisions - Farm
Security Rural Investment Act of 2002
2002 Farm Bill Education Conference Kansas City,
Missouri May 20-21, 2002 Jim Novak Auburn
University
2
Risk Management and Other Provisions

• All of commodity title could be considered to be
  risk management.
• Question is
• Risk reducing or
• Risk increasing?
• Only time will tell.

3
Risk Management and Other Provisions

• Bill contains language about risk in a number of
  places
• Also contains specifics on crop insurance and
  disaster assistance.

4
Risk Management and Other Provisions

• CROP INSURANCE
• Adds Sweetpotatoes
• AGR pilot extended to 2004
• 8 counties in California and 8 counties in
  Pennsylvania to be added.
• Sense of Congress extend pilot CRC to pecans in
  Georgia.
• And insurance coverage to continuous wheat in
  Kansas.

5
Risk Management and Other Provisions

• Insurance Report on Specialty Crops Required
• Not later than 180 days after enactment report by
  Sec. Ag to House and Senate Ag Committees
  progress on RD in insurance for specialty crops
  and
• increasing use of risk management products by
  small and moderate underserved farms.

6
Risk Management and Other Provisions

• Disaster Assistance
• Sea Oats and Sea Grass as NAP crop?
• Livestock Assistance
• Includes dairy and other livestock to cover
  livestock mortality, feed assistance,
  compensation for sudden increase in costs other
  as appropriate.
• May not use CCC money.
• Funds authorized as necessary.

7
Risk Management and Other Provisions

• Disaster Assistance
• Market Loss Assistance for Apples
• Payment quantity equal to lesser of 2000 crop or
  5 million pounds of apples.
• No payment limit or income eligibility limit.
• 94 million authorized payment ASAP.

8
Risk Management and Other Provisions

• Disaster Assistance
• Market Loss Assistance for Onions
• Orange County NY only, 10 million of CCC money
  for losses during 1 or more years 1996-2000 crop
  years.

9
Risk Management and Other Provisions

• Disaster Assistance
• Commercial Fisheries Failure emergency disaster
  assistance for the commercial fishery failure.
• Study on adequacy of federal disaster
  indemnification resulting from failure of the
  Secretary of Interior to honor contract for the
  Central Valley Project Improvement Act.

10
Risk Management and Other Provisions

• Orchard Tree Assistance
• Assistance to those who lost trees (tree, bush,
  vine) from natural disaster.
• Must harvest perennial crop from tree.
• Reimbursement
• 75 of cost of replanting in excess of 15
  mortality (adjusted for normal mortality).
• May not exceed 75,000 per person or equivalent
  value of seedlings.
• Not to exceed 500 acres.

11
Risk Management and Other Provisions

• Title IX - Energy
• Federal agencies required to procure biobased
  products.
• Biobased products will be purchased to the
  maximum extent possible.
• Energy from bio-mass including ag crops and
  animals waste.
• Energy from renewable sources, wind, solar,
  biomass or geothermal or hydrogen produced from
  water or biomass

12
Risk Management and Other Provisions

• Bio-Based Preference
• Each federal agency required to have specs for
  bio-based products within one year.
• Optional, allows some wiggle room to opt out.
• Labeling for bio-based products.
• Office of Federal Procurement Policy coordinated
  program.
• Preference in contracting goes to item with
  highest bio-based product.

13
Risk Management and Other Provisions

• BIO Refinery Grants
• Grants to defray cost of development and
  construction of bio-refineries.
• Farmers, national lab, institutions of higher ed,
  state or local agency, tribe, consortium.
• Govt cost not to exceed 30 of cost.

14
Risk Management and Other Provisions

• Bio-Diesel Educ. Program
• Grant to educate public and govt about the
  benefits of bio diesel.
• 1 million/year.

15
Risk Management and Other Provisions

• Energy Audit and Renewable Energy Audits Grant
• Cost share govt pays 75.
• Renewable Energy Purchase Grants
• Loan and Loan guarantees for farmers to purchase
  renewable energy systems or to make energy
  efficiency improvements.
• Grant not to exceed 25 of cost.
• Grant and Loan not to exceed 50 of cost of
  system.
• Gotta be cost effective.

16
Risk Management and Other Provisions

• Hydrogen Cells and Fuel Cells
• Sec. Ag. to work with Sec. Energy to disseminate
  info.
• Biomass Research and Development.
• CCC gives 5M 2002 14M 2003-2007
• Additional authorized 49M 2002-2007.
• CSREES Carbon Sequestration.
• Such sums as are necessary.

17
Risk Management and Other Provisions

• Bio-Energy Program
• Payments to eligible producers to encourage
  increased purchase of eligible commodities for
  purpose of expanding production of bio-energy and
  supporting new production capacity for bioenergy.
• Contract required
• Producers lt 65K gallons reimbursed 1 feedstock
  unit for every 2.5 feedstock units of commodity
  used for increased production
• Producers 65K or more gallons 1 feedstock unit
  for every 3.5 feedstock units.
• No farmer gets more than 5 of total funds
• Proration allowed
• Total authorized 150M/yr. 2003-06 0 in 2007

18
Risk Management and Other Provisions

• RESEARCH/EXTENSION TITLE
• Reauthorizes variety of programs including
  research and extension LG activity.
• University research
• Extension
• Ag policy centers

19
Risk Management and Other Provisions

• RESEARCH/EXTENSION TITLE
• IFAFS - 620 million to 2006
• 200 million/year thereafter
• Section 7208
• (30) Revenue and Insurance Tools Research and
  Extension grants.
• (34) Agricultural Marketing grants.
• Section 7220 Termination of Sched A. Civil
  Service.

20
Risk Management and Other Provisions

• RESEARCH/EXTENSION TITLE
• Section 7405 Beginning Farmers and Ranchers
  Development Program
• Farming lt 10 years
• Training, Education, Outreach and Technical
  Assistance
• Matching funds equal to 25 of the grant (cash or
  in-kind)

21
Risk Management and Other Provisions

• RESEARCH/EXTENSION TITLE
• Section 7405 Beginning Farmers and Ranchers
  Development Program
• Sec Ag. Est. education teams to develop curricula
  and conduct education programs for beginning
  farmers.
• Land acquisition
• Entrepeneurship
• Financial management training
• Whole Farm Planning
• Risk Management Education
• etc.

22
Risk Management and Other Provisions

• RESEARCH/EXTENSION TITLE
• 7406 Statement about doubling funding for ag
  research..sense of congress.

23
Risk Management and Other Provisions

• MISCELLANEOUS
• Confidentiality in Livestock Contracts
• Affirms right to discuss terms of a
  contract..livestock or poultry producer can
  discuss confidential marketing contract agreement
  withFed or state agency legal advisor lender
  accountant executive or manager of the farm
  landlord or member of immediate family.

24
Risk Management and Other Provisions

• MISCELLANEOUS
• Fed to purchase 200 million in fruits,
  vegetables, specialty crops for school lunch act.

25
Risk Management and Other Provisions

• MISCELLANEOUS
• Farmers Market Promotion Program
• Aid farmers markets, roadside stands, community
  supported ag producers and direct producer to
  consumer market opps.
• Eligible entities include ag coops local govt
  non profit orgs public benefit corp economic
  development corp regional farmers market
  authority or others as designated.
• Development of Farmers Markets - The Secretary
  shall (3) establish a training program to train
  cooperative extension service employees in the
  development of direct marketing techniques.

26
Risk Management and Other Provisions

• MISCELLANEOUS
• 100 Organic producers exempt from marketing
  assessment.
• Organic certification assistance cost share
  program to help farmers get certified as organic
  producers.
• Govt pays 75 up to 500

27
Risk Management and Other Provisions

• MISCELLANEOUS
• Public education on bio-tech food within a year.
• FAPRI - 6 million/year 2003-07.
• Irradiation labeling?
• 7 month extension of Chapter 12

28
Risk Management and Other Provisions

• MISCELLANEOUS
• Country of origin labeling.
• Not to impact restaurants or processed product.
• Study on impact of updating yields further.
• Report on impact of farm program payments
  especially on tenants and ag economies of farming
  areas.
• Study on impact of tobacco settlement.

29
Risk Management and Other Provisions

• Question about tobacco program. Tobacco will be
  handled under separate legislation. Being
  negotiated as we speak.
• Contact Will Snell of U. Ky for further updates
  on tobacco negotiation.

30
Risk Management and Other Provisions

• Other Questions and Comments