Senate OKs Farm Bill That Renews MILC Program And Advances A Wide Range Of Other Vermont Priorities

WASHINGTON (Friday, Dec. 14) -- The U.S. Senate Friday passed a five-year Farm Bill that advances key Vermont agriculture, anti-hunger and environmental priorities, championed by Sen. Patrick Leahy (D-Vt.). The bill’s Vermont-related features include renewal and improvement of the MILC safety net program for dairy farmers; greater Vermont access to farmland conservation programs that have become integral to the cleanup of Lake Champlain; more support for food banks; and more funding to help farmers make the transition to the booming organic sector.

The bill goes next to a House-Senate conference committee that will negotiate between the separate bills passed by the Senate and the House to produce a final version. Leahy, the most senior member of the Senate Agriculture Committee, will be a leading conferee in those negotiations.

“So far, so good,” said Leahy. “We have cleared every hurdle, including a filibuster. Vermont’s priorities rank high in this bill, and in the negotiations ahead I will do all I can to keep it that way. Renewing and strengthening the MILC program is especially important to our state, and I’m especially pleased that this bill would expand full coverage to 90 percent of Vermont’s dairy farms. We need to keep the safety net in place so it will be there when farmers need it.”

Leahy said the improvements in the Farm Bill’s conservation programs will help limit phosphorus runoff into Vermont’s streams, rivers, and Lake Champlain. “These conservation programs, which partner with farmers, have become important building blocks for cleaning up the Lake,” he said.

Leahy, the father of the national organic standards and labeling program, noted that organic farming has become the fastest-growing sector of American agriculture and is especially robust in Vermont. “This bill is welcome news to farmers who want to make the costly transition to organics,” he said.

Below are Vermont highlights of the Farm Bill passed by the Senate:

Vermont Highlights
Senate’s 2007 Farm Bill

Extension & Expansion Of MILC Program
More Funds For Lake Champlain Cleanup
Another Boost For Vermont’s Organic Sector

DAIRY --

The 2007 Senate Farm Bill will extend the MILC (Milk Income Loss Contract) program for the life of the farm bill (2008-2012). In addition the program will be expanded in two important ways. Senator Leahy made this possible earlier this year by crafting and enacting the funding baseline for an extension of the MILC program, then followed through in including legislation to extend and expand the program in the Senate’s version of the Farm Bill.

1. Payment percentage – In 2002 when the MILC program was established, whenever the federal minimum price for fluid milk in Boston fell below $16.94 per hundred weight, participating dairy farmers were eligible for a payment on 45 percent of the difference. In the Fiscal Year 2006 Omnibus Reconciliation Bill, the payment rate was reduced to 34 percent in order to make it possible to extend the program until the Farm Bill could be rewritten in 2007. The 2007 Senate Farm Bill will restore the original 45 percent payment rate for the MILC program. (There is no comparable provision in the House-passed Farm Bill.)

2. Eligibility Increase – Currently producers are eligible to receive MILC payments on 2.4 million pounds of production per year (approximately 125 cows). The 2007 Senate Farm Bill will increase the eligibility to 4.15 million pounds per year (approximately 225 cows). Of Vermont’s approximately 1100 dairies that average about 120 cows per operation, nearly 90 percent of Vermont’s farms now would be fully eligible under the Senate Farm Bill. (No comparable provision in the House bill.)

§ Dairy Product Price Support – The 2007 Senate Farm bill establishes individual product prices for cheddar cheese, butter, and nonfat dry milk.

§ Commodities – The bill extends the current farm safety net through the 2012 crop year, retaining current base acres and establishing base acres for newly eligible crops. Target prices for crops are rebalanced and direct payments are maintained, as are fruit and vegetable planting restrictions.

§ Average Crop Revenue -- A new Average Crop Revenue option for farmers, including fixed payment rates, recourse loans, and a state-level revenue program for covered commodities and peanuts, is included in the Senate bill.

§ Payment Limitations – The bill reforms current payment limitations, including provisions to directly attribute payments to program beneficiaries, and it eliminates the controversial three-entity rule.

CONSERVATION/LAKE CHAMPLAIN CLEANUP --
Agricultural conservation, responsible stewardship and environmental quality are important to Vermont’s farmers and communities and continue to be high priorities for Senator Leahy in the 2007 Farm Bill. Several years ago as chairman the Agriculture Committee, Leahy forged the first “Green Farm Bill” which created partnerships between farmers and environmental goals, and since then the Farm Bill has become the most significant ongoing nationwide funding source for conservation and environmental quality efforts such as the cleanup of Lake Champlain. Several of Leahy’s conservation initiatives began as pilot programs in Vermont, proved themselves, and since then have expanded nationwide. Much of the available funding in the 2007 Senate Farm Bill for Vermont will be directed to addressing the water quality challenges in the Lake Champlain Basin. This crucial funding will be added to the more than $100 million Senator Leahy has already secured in Lake Champlain cleanup funds.

§ Environmental Quality Incentive Program (EQIP) – A program created by Senator Leahy in the 1996 Farm Bill, EQIP has quickly become a major factor in the ongoing efforts to clean up Lake Champlain. Phosphorus levels are one of the foremost challenges in the restoration of Lake Champlain, and EQIP helps producers implement new practices that reduce the phosphorus loading in the Lake and its tributaries. Funded in the Senate Farm Bill at more than $1.27 billion a year, the program will continue to help producers comply with the State of Vermont’s water quality regulations and assist dairies in implementing environmentally beneficial changes in their operations.

§ Farmland Protection Program (FPP) -- The highly successful and popular Farmland Protection Program was created by Senator Leahy in the 1996 Farm Bill and grew out of Vermont’s ‘Farms for the Future’ program. Preserving Vermont's agricultural lands helps to combat urban sprawl and keeps Vermont farms viable. Funded at $97 million a year in the Senate Farm Bill, FPP will provide matching funds to help purchase development rights to keep productive farms in agricultural uses. Total FPP enrollment in Vermont since inception of the program is 40,000 acres.

§ $15 Million Small State Minimum -- The ‘Regional Equity’ provision sponsored by Senator Leahy in the 2002 Farm Bill will be continued and increased from $12 million to $15 million a year per state. This Leahy effort helps bring more Farm Bill resources to Vermont and other Northeastern states. This Leahy provision requires that each state receive an allocation of at least $15 million a year in the following working-lands conservation programs: EQIP, FPP, Grassland Reserve Program, and the Wildlife Habitat Incentive Program. This small state minimum guarantees that states like Vermont will receive the necessary program funding to better help farmers in their stewardship of the land.

§ Agricultural Management Assistance (AMA) – An important program in Vermont, AMA provides $20 million a year in mandatory funding to agricultural producers to voluntarily address issues such as water management, water quality and erosion control, by incorporating conservation into their farming operations.

§ Public Access – The bill will create a new $20 million grant program for states that run programs to encourage owners of private land to allow public access for wildlife-related recreation such as hunting, fishing, and birding.

ORGANICS --
As the father of the national organic standards and labeling program and author of the 1990 Organic Foods Production Act, Senator Leahy has remained organic agriculture’s leading champion and has again made the further development of organic agriculture a top priority in the Senate’s Farm Bill. Vermont has taken a strong leadership role in transiting to organic agriculture and now leads in the nation on a per capita basis in organic farm conversions – now with more than 500 organic operations; more than 200 are dairies. In Vermont and elsewhere across the country, organic agriculture also is beginning to create major new export opportunities for U.S. farm products.

§ Organic Certification Cost Share – The 2007 Senate Farm Bill provides $22 million in guaranteed funding for a national organic certification cost share program to assist producers of agricultural products in obtaining certification under the National Organic Program established by Senator Leahy under the Organic Foods Production Act of 1990. Each producer will be eligible for a reimbursement of up to 75 percent of the costs of certification, not to exceed $750 annually. Last year Vermont producers received $165,000 under this Leahy-led effort to assist organic certification.

§ Organic Conversion Assistance – In addition to assisting with the costs of organic certification, the 2007 Farm Bill will expand eligibility of the Environmental Qualities Incentives Program (EQIP – see above) to directly assist producers defray the substantial costs of transiting to organic production. During a required three-year conversion process, producers often struggle to complete the conversion to organic production. This new initiative will offer producers up to $20,000 per year for up to four years of financial assistance to help in the conversion to organic production.

§ Organic Data Collection – The Senate Farm Bill will provide $5 million in mandatory funds to ensure that data on the production and marketing of organic agricultural products is included in USDA’s collection of data about agricultural production and marketing. This mandate and these funds are vital in establishing adequate crop insurance coverage for organic crops in the future.

§ Organic Research – The Senate Farm Bill makes a major commitment for the first time to funding research on organic agriculture. The bill provides $80 million in new mandatory funds for organic agriculture research and extension -- to enhance the ability of organic producers and processors to grow and market organic food, feed and fiber.

§ Organic Crop Insurance Reform – The bill will bar USDA from charging unnecessary and unwarranted premium surcharges on organic crop insurance policies.

NUTRITION --
The nutrition title of the Senate Farm Bill contains crucial anti-hunger programs such as the Food Stamp Program and The Emergency Food Assistance Program. Senator Leahy has long led on these programs, which extend an essential safety net to millions of Americans and thousands of Vermonters. During 2006, an average of more than 47,000 Vermonters received Food Stamps each month. The bill also includes initiatives to encourage better health and nutrition for children and seniors and to support self-sufficiency and food security in low-income communities.

§ Strengthening Food Purchasing Power of Low-Income Vermonters – When calculating the Food Stamp help an individual or family receives, the rules of the program allow a standard deduction for the cost of such items as housing, utilities and transportation. A decade ago, the standard deduction was frozen at $134, a move that has caused significant erosion in the purchasing power of Food Stamps as costs for these items have risen and benefits have not kept pace. The 2007 Senate Farm Bill increases the standard deduction from $134 to $140 and indexes it to inflation, ending the erosion of benefits and increasing Food Stamp assistance for the majority of participating families.

§ Working Families with Childcare Expenses -- Food Stamp rules allow households to deduct up to $175 per month for the cost of childcare, but this deduction has not been adjusted in more than a decade and now covers only about a quarter of the monthly cost of childcare in the United States. To better support working families, the 2007 Senate Farm Bill will eliminate the existing cap on the deductibility of childcare expenses.

§ Food Stamp Asset Reform -- Despite broad agreement about the importance of family savings, the Food Stamp ‘asset test’ has remained largely unchanged since established in 1977 and fails to exempt tax-preferred savings accounts from the current asset limit. To encourage savings among low-income families, the 2007 Farm Bill will increase the current asset limit to keep pace with inflation and exempts tax-preferred education and retirement accounts from counting against the asset limit.

§ The Emergency Food Assistance Program (TEFAP) -- TEFAP provides commodities for distribution to food banks across the country, which then distribute those commodities to community food providers. The Farm Bill will provide more than $460 million in mandatory commodity purchases for distribution through food banks.

§ Fruit and Vegetable Program -- To promote child health and nutrition, the Senate Farm Bill expands the Fresh Fruit and Vegetable Program to include every state in the country, targeting those benefits to low-income children. The proposed funding level would ensure that Vermont receives at least $2.25 million a year to assist in providing free fresh fruits and vegetables to children at school.

§ Senior Farmers Markets and Community Food Projects – Funding for two programs fathered by Senator Leahy -- the Senior Farmers Market Program (which provides vouchers for WIC recipients and low-income seniors to use at farmers markets), and Community Food Projects, (which promote self-sufficiency and food security in low-income communities) – is increased by $10 million annually in assured funding in the Senate Farm Bill. In Vermont, Community Food Project grants have supported the farm-to-school projects which increase access to fresh, healthy, local foods.

ENERGY/RENEWABLE ENERGY --

§ Rural Energy for America Program – Funded in the Senate Farm Bill at $260 million, this program (previously called Section 9006 -- the Renewable Energy Systems and Energy Efficiency Improvements Program) offers grants and loan guarantees to agricultural producers and rural small businesses to help with purchasing renewable energy systems and to make energy efficiency improvements. The program will also fund energy audits and will provide technical assistance to farmers to help them become more energy efficient and to use renewable energy technology and resources on the farm. Since the 2002 Farm bill, this program has helped to fund the building of several energy efficiency projects in Vermont, as well as a number of anaerobic digester projects in Vermont.

§ Manure to Energy Facilities – Vermont is at the forefront of demonstrating that power derived from manure is quickly evolving from an alternative-fuel experiment to a promising new industry, bolstered by high oil costs and by new laws that restrict harmful gas emissions and require the use of renewable energy. The Senate Farm Bill will create a new grant and loan guarantee initiative within the Rural Energy for America Program, focused solely on building and evaluating on-farm and community-based animal manure-to-energy facilities, such as methane digesters. Funded at more than $40 million in the bill, this effort will help Vermont create more homegrown energy while also reducing the potentially negative impacts on water and air quality.

§ Bioenergy Production -- The Senate Farm Bill provides $227 million to initiate dedicated biomass crop production through incentive payments to farmers to cover production, harvesting, transport and storage costs for advanced biofuels. Biomass technologies are some of the innovative alternative energy sources that could be used in Vermont that both minimize greenhouse emissions, while reducing the nation’s dependence on foreign oil.

§ Rural Energy Systems Renewal – This is a new program to help communities assess their energy systems and formulate strategies for improvements. By keeping energy costs low, this initiative will help Vermont move toward a cleaner, more sustainable energy future. This program builds upon Vermont’s existing work as the nation's first statewide provider of energy efficiency services.

§ Regional Bioenergy Crop Research – The bill creates a regional crop research program of side-by-side bioenergy crop experiments at 10 dispersed land-grant universities, funded at $45 million. The crop experiments are to include all appropriate biomass species, including woody biomass species that will help to establish best-management practices that could be used in Vermont for growing bioenergy crops.

§ Community Wood Energy – The Senate Farm Bill creates a new Community Wood Energy Program that is a perfect fit for Vermont, offering competitive, cost-share grants for communities to supply public buildings with energy from sustainably harvested wood.

SPECIALTY CROPS --

Vermont is the nation’s largest producer of maple syrup and a major Northeast producer of apples, potatoes, eggs, honey, vegetables, Christmas trees and greenhouse nursery products.

§ Specialty Crop Block Grants – The 2007 Senate Farm bill includes $365 million in new mandatory funds to make block grants to Vermont and other states to support specialty crop production, marketing and development.

FORESTRY --

§ Community Forest and Open Space Conservation Program – While chairman of the Agriculture Committee, Leahy created the first Forestry Title in a Farm Bill and has crafted several forestry initiatives in the years since then. The latest is Leahy’s new Community Forest and Open Space Conservation Program in the Senate’s Farm Bill, which will provide matching funds to help local governments or nonprofit groups acquire town forests. In Vermont, where private forests are threatened by sprawl and fragmentation, this new Leahy program will help to protect forestlands that are economically, culturally and environmentally important to their communities. Lands acquired through this program will also provide much-needed public access for recreational activities, including hunting and fishing.

§ National Forest Priorities – The 2007 Senate Farm Bill will establish national priorities to guide federal and state efforts in private forest conservation, including: conserving and maintaining working forest landscapes for multiple uses; protecting forests from threats to forests and with forest health; and enhancing public benefits from private forests.

§ Comprehensive Statewide Forest Planning -- The comprehensive statewide forest planning program established in the Senate Farm Bill will provide Vermont with both financial and technical assistance to develop and implement a new statewide forest resource assessment and plan, which will identify critical forest resources, incorporate existing Vermont forestry plans, and identify how our plans connect with larger regional forestry needs.

RESEARCH --

The nation’s investments in agricultural research, extension, and education have not kept pace with the challenges Vermont and the nation face in agriculture, and during this Farm Bill year, various proposals to breathe new life into the research system at USDA have been considered and incorporated into the Senate Farm Bill’s research title.

§ Organic Research – The organic agriculture sector is fast approaching $20 billion in annual sales and continues to grow at approximately 20 percent every year. Yet funding at USDA for research on organic production issues lags far behind conventional crop research. The 2007 Senate Farm Bill dedicates $80 million in new mandatory research funds for organic agriculture at USDA.

§ Coordinated Research -- The bill will formalize the coordination between USDA’s in-house research agency -- the Agricultural Research Service -- and the newly created National Institute of Food and Agriculture, to facilitate more efficient use of resources.

§ Improvements in Research -- This research title also offers the first step in building a robust research, extension and education system that is responsive to stakeholders, ensures that funding goes to areas of greatest need, and emphasizes the best science to keep U.S. producers competitive, rural communities productive, and consumers healthy.

RURAL DEVELOPMENT --

§ Priority for Vermont – The Rural Economic Partnership Zone (REAP) designation for Vermont’s Northeast Kingdom is extended through the life of the 2007 Senate Farm Bill. That designation offers the Northeast Kingdom access to additional federal funding for business development, job creation, housing, and water and sewer infrastructure projects from USDA Rural Development and adds priority points to applications for funding from many other federal agencies. Since 2001, more than $31 million dollars from Farm Bill programs have been directed to the Northeast Kingdom; most of those investments have come from funds specifically set aside for the REAP Zone.

§ Broadband – In too many of Vermont’s rural communities, access to adequate broadband coverage is still unavailable. The 2007 Senate Farm Bill reforms the USDA broadband access program to ensure the funds available will be employed to provide new broadband development. The bill will make $25 million available annually to provide loans and loan guarantees to allow rural consumers to receive high-speed, high-quality broadband services.

§ Value Added Market Development Grants – Knowing the importance of enabling producers to capture more of the value of their commodities, this bill provides $26 million per fiscal year through 2013 for value-added initiative grants. This will increase participation in the program by allowing broader standards of eligibility so agricultural producer groups and business ventures largely owned by producers can compete for grants designed to develop value-added products or markets. The provision also encourages grants to be used to assist in the development of agricultural-based renewable energy sources.

§ Water and Wastewater Grants – The 2007 Senate Farm Bill provides $135 million in mandatory funds to address the backlog of pending wastewater grants currently held in each state. Vermont applications for water and waste water grants and loans still pending at the end of this fiscal year will be eligible for these funds.

§ Grants to Broadcasting Systems – The Grants to Broadcasting Systems program authorizes grants to statewide private nonprofit public television systems, whose coverage areas are predominantly rural, for the purpose of demonstrating the effectiveness of providing information on agriculture and other issues of importance to farmers and rural residents. Eligibility for the program limited to four public broadcasting systems: Vermont, Alaska, Maine and North Dakota. The 2007 Senate Farm Bill reauthorizes the program through 2012 at $5 million for each fiscal year.

Source: Senator Patrick Leahy

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