WASHINGTON (May 8, 2008) – Members of the U.S. House-Senate Farm Bill Conference Committee today moved one step closer to approving a farm bill. Principal negotiators announced they have reached an agreement on the new farm bill.

“This is a good farm bill,” NFU President Tom Buis said. “Conferees were challenged to write a new farm bill under the pressure of competing demands and a reduced budget. They produced a good, fully paid for, bill that will benefit all Americans.”

A permanent disaster assistance program, a top NFU farm bill priority will be included in the bill.

“We know a disaster is going to happen, each year, in some area of the country,” Buis said. “It only makes sense to have a program in place to confront the challenges presented by Mother Nature.”

The farm bill will make record investments in nutrition, conservation, specialty crop, renewable energy and rural development programs. Lawmakers were able to make these increases in spending while keeping the current farm bill’s strong safety in tact.

“While it is referred to as the farm bill, a majority of the bill’s spending is for nutrition programs to aid those less fortunate. As a farmer, I find it appalling that anyone goes to bed hungry. The farm bill’s nutrition programs will ensure that doesn’t happen,” Buis said.

Mandatory country of origin labeling (COOL) and interstate shipment of state inspected meat will also become law. NFU played a pivotal role in reaching a compromise on both measures. The bill also includes improvements to the dairy safety net and a strong competition title.

Despite broad, bipartisan, Congressional support for the farm bill, the president has repeatedly threatened to veto the legislation. Buis called on President Bush to sign the farm bill into law when it arrives on his desk.

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“With inputs continuing to soar, producers need to market their commodities, yet have been pushed out of the traditional market intended to serve as a risk management tool,” Buis said. “I urge the CFTC to take swift action to inject transparency into the marketplace.

Buis urged the commission to place a moratorium on any new commodity training index until the investigation is completed. He said the CFTC needs to look at the role and impact of over the counter (OTC) trading and swaps are having on markets.

“Without a full understanding of these trades or their impact, it is impossible to say that manipulation of the commodity markets is not occurring,” Buis said.

Buis said NFU opposes any increases in the speculative positions limit, which was proposed by CFTC in 2007. He added that the CFTC needs to recognize that speculators have different interests than farmers and other traditional, commercial users of the exchanges.

The CFTC held a roundtable meeting on April 22 to gather information on whether the futures markets are adequately and appropriately performing their risk management and price discovery roles. At the time, Buis said rural America is headed for a train wreck if these challenges are not appropriately addressed.

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Read Letter

The groups thanked the committee for recognizing the role agriculture can play in helping the United States address climate change, through storing carbon on agricultural lands as well as capturing greenhouse gases on livestock facilities. Carbon sequestration projects on agricultural lands are the easiest and most readily available means of reducing greenhouse gas emissions on a meaningful scale.

National Farmers Union President Tom Buis pointed to the Farmers Union Carbon Credit program as a step in the right direction. The voluntary program has enrolled 3.6 million acres across the country since October 2006.

“There are no better stewards of the land than those involved in agriculture,” Buis said. “Farmers and ranchers are eager to play a vital role in reducing greenhouse gas emissions and protecting our environment for future generations.”

The coalition urged the committee to consider the following:
Provide USDA implementation authority over the agriculture offset allowance program – utilize the positive track record of county offices to work with farmers participating in the offset program.
Eliminate artificial cap on use of domestic offset allowances –at a minimum, the cap on domestic offsets should be raised significantly to ensure all domestic offset projects on agricultural lands qualify.
Recognize early actors – recognize those that have taken previous steps to reduce greenhouse gas emissions.
Stackable credits – do not exclude projects participating in a greenhouse gas offset market from also participating in other markets for environmental services.

“We look forward to working with the Senate to craft a bill that maximizes carbon sequestration from agricultural lands,” Buis said.

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Read Letter

“It is good to see the president take the necessary steps to ensure that no one goes without food. As a farmer and a national farm leader, I find it appalling that anyone goes to bed hungry. America’s farmers, and farmers around the world, have the capacity to produce the food we need. In fact, most years we produce surpluses.

“Food prices are going up, especially for our nation and world’s poorest citizens, as the result of skyrocketing energy costs. There is no doubt this is an emergency.

“There are geographical, political and distribution problems that make it challenging to deliver food to many. I applaud the president and Congress for being willing to step in and help.

“Also, it is important for Congress to pass and the president to sign the new farm bill. The bill includes $400 billion over 10 years that will help our nation’s less fortunate through food assistance and nutrition programs.”

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“With the average food item traveling more than 1500 miles before reaching the final consumer, it is no wonder that food costs are increasing when, looking back over the past seven years, gasoline prices have increased 198 percent,” Buis said.

In testimony before the U.S. Congressional Joint Economic Committee Buis said, “The more significant reasons for retail food price increases are $120 per barrel of oil, the declining value of the American dollar, increased demand from developing countries, world-wide weather related production shortages and speculation in the commodity markets.”

Buis characterized efforts to reduce the current renewable fuels standard (RFS) as the single biggest mistake we could make in reducing energy and food costs. “Reducing ethanol consumption would result in higher gasoline prices for consumers and disrupt our efforts to develop cellulosic ethanol in the future. Current ethanol production is lowering the price of gasoline at the pump by 50 cents per gallon,” he said.

Buis offered the committee a number of solutions:

• Halt deposits to the Strategic Petroleum Reserve;
• Support for the farm bill’s $400 billion for domestic and international nutrition programs;
• Establish an International Humanitarian Food Reserve; and
• Impose an excessive profits tax on oil companies’ record profits.

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Read Testimony

The demand for corn, to make ethanol, has been wrongly blamed for increasing food prices.

In a letter to Perry, Buis said off farm costs, including marketing, processing, wholesaling, distribution and retailing account for 80 cents of every food dollar spent in the United States, just 20 cents goes to the farmer. Furthermore, because farmers don’t set their own price, they are unable to pass on increased costs from high priced inputs like fuel and fertilizer.

U.S. Department of Agriculture (USDA) economists have cited a number of factors – increased demand for agricultural commodities, increased income in developing countries, rising petroleum costs, limited stocks and skyrocketing input costs – that have led to volatile commodity markets.

“It is no wonder that food costs are increasing when in the last seven years, gasoline prices have increased 198 percent, diesel fuel has increased almost 250 percent and crude oil has increased 453 percent,” Buis said.

NFU has urged the president to halt deposits to the Strategic Petroleum Reserve (SPR), which currently holds more than $80 billion worth of oil. “This action would result in a much more profound positive economic impact for consumers than waving the RFS,” Buis said.

Buis urged Perry to look into the billions of dollars in tax breaks given to oil companies, who at the same time are reporting record profits. “Instead of slashing ethanol use by 50 percent, maybe we impose an excessive profits tax on big oil and use those revenues to help consumers with their food bills; and livestock producers with higher feed costs as a result of oil prices,” he said.

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Read Letter

“This is good news for rural America. With spring upon us it was imperative that conferees complete negotiations and get a bill passed. Friday’s announcement will set the course for completing and enacting a new farm bill in the coming weeks.

“The agreement framework looks to benefit all Americans, with record investments in conservation, specialty crops, and nutrition programs all in the face of a significantly reduced budget.  Also included are a strong competition title and improved dairy safety net. Family farmers and ranchers will benefit from the continued safety net to protect them during bad times and consumers will, after countless delays, enjoy country of origin labeling (COOL).

“In addition to COOL, the farm bill framework agreement supports many of NFU’s farm bill priorities. A permanent disaster program, which will give producers the assurance they need when devastated by Mother Nature and interstate shipment of state inspected meat, that will allow producers to market their products across state lines.

“I am hopeful that when the farm bill conference committee meets again they will be in agreement and send the bill on. I urge members of Congress and the president to act quickly and sign a new farm bill into law.”

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“There’s something wrong,” Buis said. “I have doubts whether the CFTC is the place to rectify the problem – it may warrant congressional intervention. When regulators say a problem doesn’t exist, despite the fact farmers cannot market their commodities that sounds an alarm.

“Input costs have soared and without the marketing tools to protect against price volatility, farmers are more vulnerable than ever. For anyone to suggest otherwise is out of touch with what is really occurring throughout rural America. For decades we’ve been told to use risk management tools to protect ourselves, yet when those tools become unavailable action is warranted.

“The public is all too aware of the recent credit crisis on Wall Street. We don’t want a lack of oversight and regulation to lead to a similar crisis in rural America,” Buis said.

Buis called upon the House and Senate Agriculture Committees and the other relevant congressional committees to take action.

NFU first raised these marketing concerns in a March 18 letter to the CFTC and others. Click here to read the letter.

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NFU President Tom Buis made the following statement.

“While I am pleased to see the House-Senate Conference Committee finally begin the process that will result in a new farm bill, I am disappointed by the latest House proposal outlined at today’s meeting.

“The House proposal provides zero funding for a permanent disaster program which, in my opinion, is the only significant improvement in the commodity title of either bill. Farmers and ranchers are facing unprecedented increases in production costs, thus their financial risks are greater than ever.

“With a reduced crop, producers will not be able to offset these increased costs in the marketplace. It does not matter what the price of the commodity is if you have nothing to sell.

“I would urge the Senate to reject this latest offer from the House. It is vitally important that Congress pass a good farm bill, not just a farm bill for the sake of passing a new bill.”

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The energy legislation, passed by an 88-8 vote, was based off of legislation introduced last week by Sens. Maria Cantwell, D-Wash., and John Ensign, R-Nev.

“I commend the Senate for moving quickly to extend critical energy tax incentives, including the renewable energy production tax credit, which is currently set to expire on December 31,” NFU President Tom Buis said.

“Securing a one year extension is critical to ensuring continued expansion of the wind industry as we find ways to more permanently foster renewable energy development,” Buis said.

On February 27, the House passed the Renewable Energy and Energy Conservation Tax Act of 2008 that included a three year extension of the PTC.

“I hope that the Senate and House can quickly agree on a final energy tax package that can be sent to the President,” Buis said. “Rural America is primed to help our nation solve its energy problems. Enacting this legislation soon is critical to ensuring that continued development occurs.”

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