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Agricultural Act of 2014

Through the main provisions of the Agricultural Act of 2014, Congress reshaped the structure of farm commodity support by eliminating direct payments, expanded crop insurance coverage, consolidated conservation programs, reauthorized and revised nutrition assistance, and extended authority to appropriate funds for many of the USDA’s discretionary programs through fiscal year 2018.[1]

The former direct payments were transitioned to a risk-management approach to provide support for farmers during a time of need and address market volatility. In addition, the new law strengthened crop insurance for weather disasters.[2] There are 12 titles to the 2014 Farm Bill: Commodity, Conservation, Trade, Nutrition, Credit, Rural Development, Research, Forestry, Energy, Horticulture, Crop Insurance, and Miscellaneous; each one will be reviewed briefly. The projected spending on all 12 titles for 2014 through 2018 are as follows: 80% allocated to Nutrition, 8% allocated for Crop Insurance, 6% allocated for Conservation, 5% allocated for Commodity, and 1% for the remaining programs.[3]

Title I, Commodity, established price loss coverage and agriculture risk coverage. It also provides loans and disaster assistance and continues dairy program supports (except for the discontinued Dairy Product Price Support Program). This section continued the sugar program unchanged. Under this program the USDA is directed to maintain market prices above loan rates by limiting the amount of sugar produced from sugar beets and sugarcane that is sold on the U.S. market, while simultaneously restricting imports under a quota, among other requirements. The outcome of this program is that U.S. sugar prices remain higher than world prices and higher than they would be within the United States without the sugar program.[4] This is one of the primary drivers behind companies switching to high fructose corn syrup as a sweetener.

The most important change under the Commodity title is that Congress repealed direct payments to producers and landowners that were based on historical production of covered commodity crops. Covered commodities include wheat, corn, grain sorghum, barley, oats, upland cotton, long grain rice, medium and short grain rice, pulse crops, soybeans, and other oilseeds.[5] Pulse crops include dry peas, lentils, small chickpeas, and large chickpeas.[6] “Other oil seeds” include sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, and any oilseed designated by the Secretary of Agriculture.[7] The elimination of direct payments was considered a success of the 2014 Farm Bill, because predecessor Bills had provided these payments regardless of farmers’ needs.[2]

Under the Agricultural Act of 2014, farmers were required to choose between two new programs that will remain in place through the 2018 crop year: Price Loss Coverage and Agricultural Risk Coverage. If famers do not make a selection, they shall be deemed to have elected price loss coverage for all covered commodities through the 2018 crop year.[9] Under price loss coverage, payments are provided to producers of covered commodities on a commodity-by-commodity basis when market prices fall below a pre-established reference price.[10] Agricultural risk coverage requires the selection of county or individual coverage; county coverage can be selected for certain crops (and producers may use price loss coverage for the others), while an individual coverage selection must apply to all crops. Agricultural risk coverage is determined for each crop year if the actual crop revenue (for a county or for an individual producer) is less than the agriculture risk coverage guarantee determined for that crop year.[11] There are several formulas involved in calculating payments that take into consideration national market prices and other financial realities.

Title II, Conservation, retained and consolidated the agricultural conservation programs, such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program, to encourage conservation and address regional issues.[1] [13],35 Animal Feeding Operations (AFOs), which are operations where animals are kept and raised in confined situations—and where feed, manure, urine, dead animals, and production processes may all be found within close proximity to one another—are permitted to apply for funds under the EQIP.[14] They reportedly receive a great deal of funding from this program.[15]

Title III, Trade, maintained investments in international market development and reauthorized international food aid programs.[1] The largest of these programs is Food for Peace, a program operated by the United States Agency for International Development (USAID), which is a government agency that works to end poverty and assist democratic societies.[17] Food for Peace provides emergency food and development assistance to those affected by conflict and natural disasters to address food insecurity.[18]

Title IV, Nutrition, is by far the largest portion of the Farm Bill and provides nutrition assistance through several programs including the Supplemental Nutrition Assistance Program (SNAP), the Emergency Food Assistance Program, Commodity Supplemental Food Program, and the Senior Farmers’ Market Nutrition Program, among others. Through this Title, Congress required the USDA to administer a pilot project where at least five states that participate in the Fresh Fruit and Vegetable Program, which provides fresh fruit and vegetables to low-income children at school, offer frozen, canned, and dried fruits and vegetables. Congress additionally authorized the USDA to enter into reprocessing agreements with private companies that process commodity foods for donation and distribution to the USDA’s nutrition programs.[19]

There were several substantive changes to SNAP in the 2014 Farm Bill. The one that received the most attention was a readjustment in the way benefits were calculated in some states. Fifteen states and the District of Columbia tied SNAP benefits to a streamlined system for determining utility payments that resulted in an increased amount of SNAP benefits for certain house- holds.[20] The Agricultural Act of 2014 ceased this process, resulting in reduced benefits for about 850,000 households (or 4 percent of beneficiaries[21]) by approximately $90 per household per month.[22] Another change included the passage of the “Food Insecurity Nutrition Incentive,” which provides “incentive grants” for projects that incentivize SNAP participants to buy fruits and vegetables. This title also required the USDA and state agencies to enter into cooperative agreements to carry out pilot programs that could develop and test methods to increase employment and training programs and services to raise the number of working SNAP recipients. The goal of these efforts is to increase the income of the registrants in order to reduce the reliance on SNAP.[23]

Congress also adjusted requirements for SNAP retailers in the Nutrition Title. Among other changes, Congress required SNAP retailers to pay for their own Electronic Benefit Transfer equipment, with the exception of farmers’ markets and nonprofit vendors. This went into effect immediately upon passage of the Farm Bill. Another change for retailers was an increase in the minimum staple food inventory necessary to qualify as a SNAP retailer, discussed further below in the section on SNAP.

The Credit and Rural Development titles (Titles V and VI, respectively) guide the USDA in its credit and rural development activities, with the latter including funding for various programs intended to assist rural populations by supporting rural business development and growth, as well as water infrastructure.[13] Another statute permanently establishes the USDA as a backup lender for farmers and ranchers.[19] Pursuant to the Research title, Title VII, the USDA conducts agricultural research and provides support for cooperative research, extension, and education programs in the states.[19] The Forestry title, Title VIII, provides the USDA with the authority to address forestry restoration and care for the national forestry system; other statutes provide permanent authority for other forestry assistance programs.[19] Under the Energy title, Title IX, Congress extended funds for the USDA to research, develop, and produce biofuels, including fuel derived from renewable biomass other than corn kernel starch (i.e., ethanol, which was formerly the primary focus for biofuels) and renewable energy sources (e.g., wind, solar).[19]

The Horticulture title, Title X, expanded programs and funding assistance supporting farming operations in the certified organic and specialty crop sectors.[19] Organic farming uses methods to preserve the environment and avoid certain materials. For example, in order to earn the USDA organic seal, food producers must not use irradiation, sewage sludge, synthetic fertilizers, prohibited pesticides, and genetically modified organisms.[30] The Farm Bill provides annual funding to reimburse organic farmers for the cost of organic certification if their products are certified to be sold or labeled as “organic” or “100% organic.”[31] This title also increases support for pest and disease management.

Specialty crops are defined as “fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops (including floriculture).”[32] The Horticulture title established Specialty Crop Block Grants,[33] which authorized the USDA to provide historic support to state and territorial departments of agriculture for projects designed to benefit specialty crop farmers. The USDA suggested these grants could be used for research and development, education, expanded access to specialty crops in underserved communities, or developing school and community gardens and farm-to-school programs, among other pertinent measures.[34] The Horticulture title also supports producer-to-consumer market opportunities and local food promotion programs by providing funding for domestic farmers’ markets, roadside stands, community supported agriculture programs, agritourism activities, and local and regional food business enterprises.[19]

Title XI, Crop Insurance, provides coverage for losses related to natural disasters. It functions in addition to other permanent insurance authorized through another statute. This title increased and expanded crop insurance to specialty crops, livestock, sorghum, alfalfa and peanuts. It also requires the USDA to conduct research on such insurance and farm revenues.[19]

The final title, Title XII, is called Miscellaneous.[19] This title contains a multitude of diverse parts.[38] For example, there is a section on livestock, livestock safety, and strengthening and enhancing the production and marketing of sheep. Title XII also directs the USDA to award a grant to a university to establish a policy research center to be known as the “Socially Disadvantaged Farmers and Ranchers Policy Research Center.” It also directs the USDA to make competitive grants to states, tribal governments, and research institutions to promote the domestic maple syrup industry. In this Title, Congress directed the USDA to work with the Food and Drug Administration to determine whether a federal standard identity for honey is necessary; this requirement has an interesting history that is discussed in Box 4.1. Title XII also requires the USDA to conduct an economic analysis of the final rule published by the Department of Agriculture requiring “Mandatory Country of Origin Labeling of Beef, Pork, Lamb, Chicken, Goat Meat, Wild and Farm-raised Fish and Shellfish, Perishable Agricultural Commodities, Peanuts, Pecans, Ginseng and Macadamia Nuts.”

BOX 4.1

Citizens’ Petition Makes it into the Farm Bill

The Food and Drug Administration (FDA) is responsible for developing a standard of identity for commodities such as honey. On March 3, 2006, trade organizations that represent businesses engaged in the production, import, export, packaging, and marketing of honey submitted a citizens' petition to the FDA requesting that the agency adopt a standard definition for honey. Honey is one of three products infamous for being adulterated.8 (The other two are olive oil and juice.) The petitioners suggested that their proposed standard would “promote honesty and fair dealing” in the best interest of both the consumer and the honey industry.

In August 2006, the FDA responded by stating that it lacked the resources to respond substantively to the petition.b In October 2011, the FDA formally denied the petition, stating that it did not find the suggested standard of honey appropriate for adoption.cd

The Agricultural Act of 2014 specifically states that the Secretary of Agriculture “shall submit to the Commissioner of Food and Drugs a report describing how an appropriate Federal standard for the identity of honey would be in the interest of consumers, the honey industry, and United States agriculture.”8 In the Miscellaneous Title, Title XII, Congress directed the Secretary to “take into consideration the March 2006, Standard of Identity citizens' petition filed with the Food and Drug Administration” in the preparation of the Honey Report.

In an action unrelated to the Farm Bill, the FDA issued draft guidance in April 2014 explaining the agency's current thinking on the topic of honey labeling and a standard of identify for honey.f The FDA explained that current regulations addressing misbranding and adulteration address the concerns espoused in the citizens' petition with respect to honey and it provided guidance on its current regulations for the honey industry. The USDA did not collaborate with the FDA on this guidance documents

Section 10012 of the Agricultural Act of 2014 required the Agricultural Marketing Service (AMS) branch of the USDA to issue a report for the Secretary to send to the FDA Commissioner on the standard of identity for honey. In August 2014, AMS issued a Notice in the Federal Register requesting comments on how a federal standard for the identity of honey would benefit consumers, the honey industry, and United States agriculture and specifically consider the 2006 citizen's petition.11 The comment period was extended into October 2014i and the agency is reviewing the comments.

aCatherine Zuckerman. Food Fraud: Labels on What We Eat Often Mislead.

National Geographic. July 12, 2013. http://news.nationalgeographic.com/ news/2013/07/130712-food-fraud-science-economic-adulteration-seafood-honey-juice/

bhttp://www.regulations.gov/contentStreamer?objectId=09000064816ac176&disposition=attac

hment&contentType=pdf

0http://www.regulations.gov/contentStreamer?objectId=09000064816ac177&disposition=attac

hment&contentType=pdf

dhttp://www.fda.gov/food/guidanceregulation/guidancedocumentsregulatoryinformation/

labelingnutrition/ucm389501.htm#_ftn1

e113 P.L. 79, Sec. 10012. REPORT ON HONEY.

fFood and Drug Administration. Draft Guidance for Industry: Proper Labeling of Honey and Honey Products. April 2014. http://www.fda.gov/food/guidanceregulation/ guidancedocumentsregulatoryinformation/labelingnutrition/ucm389501.htm

gPersonal communication between the author and the USDA, July 1, 2014. hFederal Register. Notices. 2014;79(161): 49279-49280. ihttp://www.regulations.gov/#!docketDetail;D=AMS-FV-14-0025

The USDA considers this a consumer information requirement, rather than a food safety or traceability necessity, and it is discussed further in Chapter 6, Food Labeling.[39]

  • [1] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf
  • [2] U.S. Senate Committee on Agriculture, Nutrition & Forestry. http://www.ag.senate.gov/newsroom/press/release/farm-bill-ends-direct-payment-subsidies
  • [3] http://www.ers.usda.gov/agricultural-act-of-2014-highlights-and-implications.aspx#. U7GMkECuCi0
  • [4] http://www.ers.usda.gov/topics/crops/sugar-sweeteners/background.aspx#.U7GcRECuCi0
  • [5] 7 USCS § 8702(4), (9).
  • [6] 7 USCS § 8702(14).
  • [7] 7 USCS § 8702(10).
  • [8] U.S. Senate Committee on Agriculture, Nutrition & Forestry. http://www.ag.senate.gov/newsroom/press/release/farm-bill-ends-direct-payment-subsidies
  • [9] 113 P.L. 79, Sec. 1115(c).
  • [10] http://www.ers.usda.gov/agricultural-act-of-2014-highlights-and-implications/crop-com-modity-programs.aspx#.U7FY3oCuCio
  • [11] 113 P.L. 79, Sec. 1117.
  • [12] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf
  • [13] United States Department of Agriculture. 2014 Farm Bill Highlights. www.usda.gov/docu-ments/usda-2014-farm-bill-highlights.pdf
  • [14] United States Department of Agriculture. Environmental Quality Incentives Program.http://www.nrcs.usda.gov/wps/portal/nrcs/main/ct/programs/financial/eqip/
  • [15] National Sustainable Agriculture Coalition. NSAC’s Blog. 2014 Farm Bill DrillDown: Conservation—Working Lands Programs. February 10, 2014. http://sustainableagriculture.net/blog/2014-farm-bill-working-lands/
  • [16] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf
  • [17] http://www.usaid.gov/who-we-are
  • [18] http://www.usaid.gov/who-we-are/organization/bureaus/bureau-democracy-conflict-and-humanitarian-assistance/office-food
  • [19] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [20] NCSL. “Heat and Eat” and SNAP Changes in the 2014 Farm Bill 4/16/2014 http://www.ncsl.org/research/human-services/-heat-and-eat-and-snap-changes-in-the-2014-farm-bill.aspx
  • [21] Niraj Chokshi. Why the food stamp cuts in the farm bill affect only a third of states.Washington Post. February 5, 2014.
  • [22] CBO. Letter to Honorable Frank D. Lucas. September 16, 2013
  • [23] 113 P.L. 79, Sec. 4022
  • [24] United States Department of Agriculture. 2014 Farm Bill Highlights. www.usda.gov/docu-ments/usda-2014-farm-bill-highlights.pdf
  • [25] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [26] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [27] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [28] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [29] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [30] United States Department of Agriculture National Organic Program. http://www.ams.usda.gov/AMSv1.0/NOPO rganic Standard s
  • [31] 113 P.L. 79, Sec. 10004
  • [32] United States Department of Agriculture. Specialty Crop Block Grant Program. http://www. ams.usda.gov/AMSv1.0/SCBGP
  • [33] 113 P.L. 79, Sec. 10010
  • [34] United States Department of Agriculture. USDA Announces Specialty Crop Block GrantProgram—Historic Farm Bill Support Available through State Departments of Agriculture. PressRelease. April 17, 2014. http://www.usda.gov/wps/portal/usda/usdahome?contentidonly=true&contentid=2014/o4/oo64.xml
  • [35] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [36] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [37] Ralph M. Chite. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. CongressionalResearch Service. February 12, 2014. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf .
  • [38] 113 P.L. 79, Section 12101
  • [39] http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/food-labeling/country-of-origin-labeling-for-meat-and-chicken/country-of-origin-labeling-for-meat-and-chicken
 
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