Your Congressman and Senators are scheduled to vote—probably Wednesday, maybe Thursday—on the “Food, Conservation, and Energy Act of 2008” which will guide farm policy thru 2012. If a legislative aid called your cell phone and asked for your recommendation on how to vote, what would you say? Oh, you don’t know what is in the proposed Farm Bill? Well, you will if you read on…..

The Members of the Congress won’t be getting much of a chance to learn the details of the legislation, which is 1,500 to 2,000 pages thick. So, the authors of the legislation have provided a 423 page summary. And if that is a bit weighty, here is a quick version with the highlights of interest to most Cornbelt farmers.

Commodity programs:
• Direct payments will be made at current rates, unless participants sign up for the average crop revenue program, but the option to collect advance direct payments terminates with the start of the 2012 crop year.
• The counter cyclical payment program is continued, and rebalances target prices for wheat, grain sorghum, barley, oats, soybeans and other oilseeds effective for the 2010 crop year; and eliminates partial counter-cyclical payments beginning with the 2011 crop year.
• An optional revenue-based counter-cyclical program (ACRE) begins with the 2009 crop year for participants who forego 20% of direct payments and 30% of loan rates, but have to remain in the program for the balance of the Farm Bill.
• Participants in ACRE will be eligible for state-based coverage with a revenue guarantee equal to 90 percent of the 5-year state average yield per planted acre (excluding the years with the highest and lowest yields) times the 2-year national average price for the covered commodity.
• If the actual State revenue (yield per planted acre times the national price) is less than the revenue guarantee, and if the producers suffer a loss on their farm, then they will receive an ACRE payment equal to the difference between the State revenue guarantee and the actual revenue for the crop year up to 25 percent of the revenue guarantee. ACRE revenue payments are made on 85 percent of the acreage planted or considered planted to the covered commodity. For years 2009 to 2011, payments are limited to 83.3% of planted acreage.

Planting flexibility:
• Base acres are limited to program crops, except for specific acreage in a pilot program that will allow fruits or vegetables for processing. IL: 9,000; IN: 9,000; IA: 1,000; MI: 9,000; MN: 34,000; OH: 4,000; & WI: 9,000.

Marketing loan:
• Marketing loans are available with rules continued from the 2002 program, unless one participates in the average crop revenue program.
• 2008-2009 Loan rates are: Wheat-$2.75, corn-$1.95, soybeans-$5.00
• 2010-2012 Loan rates are: Wheat-$2.94, corn=$1.95, soybeans-$5.00
• Loan deficiency payments will be available under general terms of the current program, but the rate will be determined on the date beneficial interest was lost.

Payment limitations:
• Non farm participants may not collect farm program payments if they have an adjusted gross income exceeding $500,000 from non farm sources.
• Farm participants may not collect farm program payments if they have an adjusted gross income exceeding $750,000 from farm sources.
• Conservation payments may be collected by participants with non farm income up to $1,000,000.
• Direct payments and average crop revenue payments are capped at $40,000 and counter cyclical payments at $65,000.

Conservation:
• The CRP is extended through 2012 with a 32 mil. acre cap, with CRP land subject to special conservation and wildlife initiatives determined by regional priorities.
• CRP land will be allowed to be removed from the program if ownership change involves a beginning, socially disadvantaged, limited resource farmer.
• The Conservation Security Program will remain in effect for existing contracts with a $2.3 bil. fund to promote conservation initiatives on working lands.

Credit:
• FSA farm ownership loans will be capped at $300,000, with encouragement to seek commercial credit.
• The credit and conservation titles are linked with a 75% guarantee by the USDA on loans for conservation improvements.
• The New Farmer Individual Development Accounts Program will match the savings of beginning farmers to hasten their ability to accumulate enough financial resources to buy farmland or other capital items.

Energy:
• Accelerate the commercialization of the production of advanced biofuels, which are produced from biomass products. Provide loan guarantees to refineries to upgrade their technology.
• Programs will be created and funded to promote alternative sources of energy for rural America such as livestock manure.
• Over $1 bil. for biomass energy research.

Organic agriculture:
• $220 million in funding for research for specialty crops working with state departments of agriculture.

Livestock:
• Enhance the Livestock Mandatory Reporting Act to be more readily understood by participants in the market.
• Creates new provisions for the Country of Origin Labeling Act, clarifying some nebulous regulations, and restates the 2002 law for compliance.
• Addresses numerous issues in contract production with regard to arbitration, long term financing, and litigation.

Crop Insurance:
• CAT fees will rise to $300 per crop per county.
• To create new crop insurance products, the USDA will finance the research and development cost incurred by crop insurance companies.
• Prohibits insurance coverage for the first 4 years on crops that are planted for the first time on non-cropland.

Miscellaneous:
• USDA is prohibited from closing an FSA office within 1 year of the implementation of the ACT, and the office must have at least 3 staff members.

Summary:
Farm policy for the next five years will be set within hours, and most farm organizations have signed on to the proposal, saying no one is totally happy with the plant, and that indicates significant compromises over commodity policy, conservation , energy, and many other issues.