The Farm, Nutrition, and Bioenergy Act of 2007

Floor Speech

THE FARM, NUTRITION, AND BIOENERGY ACT OF 2007 -- (Senate - May 20, 2008)

Mr. SPECTER. Mr. President, I have sought recognition to discuss my reasons for voting for the conference report to H.R. 2419, The Farm, Nutrition, and Bioenergy Act of 2007. Also known as the 2007 farm bill, this legislation determines America's agriculture and domestic nutrition policy for the next 5 years. It has, received substantial criticism because of subsidies paid to farmers of five major commodities or crops: corn, cotton, rice, soybeans, and wheat. On April 29, 2008, President Bush called the legislation a ``massive, bloated farm bill'' and has said he would veto it. The bill has also drawn criticism from taxpayer advocacy groups.

The 2007 farm bill conference report scores at $307 billion over 5 years. However, this increase is fully off-set with customs users fees that are collected by the Border and Transportation Security Directorate--formerly the U.S. Customs Service--of the Department of Homeland Security for processing passengers, conveyances and merchandise entering the United States. The White House has agreed that this bill does not include any tax increase.

During my tenure in the U.S. Senate, I have fought hard for agriculture and nutrition programs in Pennsylvania. However, I do have concerns with direct payment subsidies for farmers where the amount is not based on the price of the commodity and, more importantly, with large, almost endless, payments to producers. In 2006, Riceland Foods, Inc. located in Stuttgart, AR, received $7,710,705 for rice, soybean, wheat, and corn production. In 2006, the top 10 recipients of direct subsidies for production of corn, cotton, rice, soybeans, and wheat were, in order of rank, Iowa, Illinois, Texas, Nebraska, Kansas, Minnesota, Arkansas, Indiana, North Dakota, and Missouri. Pennsylvania's agriculture producers are not the recipients of these large subsidies, as Pennsylvania is a major producer of milk, Christmas trees, and specialty crops, which include mushrooms, apples, and fruits and vegetables. My home State ranks No. 1 in the production of mushrooms, No. 4 in the production of apples and freestone peaches, and No. 5 in the production of milk and grapes in the U.S. Pennsylvania ranks 32 out of 50 in terms of Federal Government agricultural payments, despite the fact that agriculture is PA's No. 1 industry.

These large subsidies were a major concern when I voted against the 2002 farm bill conference report, even though the bill contained crucial programs for Pennsylvania, including the milk income loss contract, MILC, and conservation and nutrition programs. It would be my preference that we move toward a free market for agriculture.

While this legislation is not perfect, it is a much better alternative to an extension of the 2002 farm bill or the reversion to nonexpiring provisions of primarily the Agriculture Adjustment Act of 1938 and the Agriculture Act of 1949--permanent law. The 2002 farm bill did not include any reforms of program subsidies and the 1938 and 1949 laws are drastically different from current policy, inconsistent with current farming, marketing, and trade agreements, and would mandate higher subsidy rates and land controls.

I have reviewed the pending conference report to determine its benefits for the entire country, not just Pennsylvania where I have heard from many constituents and stakeholders expressing their support. This bill is not perfect, but it still moves America in the right direction. Our Nation, like Pennsylvania, will on the whole benefit from the 2007 farm bill. It makes key reforms to subsidy programs which I will discuss more in detail later. In addition, this legislation includes funding for domestic nutrition programs, conservation programs, programs to help rural America, and the milk income loss contract, MILC, program for America's dairy producers. For the first time, the farm bill would extend assistance to specialty crop producers through marketing and research programs.

This conference report includes significant subsidy reforms. Under current law, producers are not eligible for payments if their adjusted gross income, AGI, exceeds $2.5 million. In the final 2007 farm bill, a producers' nonfarm income may not exceed $500,000 in order to receive a payment. Further, a producers' farm income, or AGI, cannot exceed more than $750,000 in order to receive a payment. One key reform is the elimination of the so-called ``three-entity rule,'' which enabled a farmer to collect twice the maximum payment limit amount by setting up multiple businesses on the same farm. The White House was influential in this outcome, which I support. Although the final language did not attain more stringent reforms as preferred by the White House or the Dorgan/Grassley amendment to the 2007 farm bill, this AGI reform is a step in the right direction. I have been a consistent supporter of efforts to limit payments to the major program crop producers. Further, the measure includes Crop Insurance subsidy reform by reducing the administrative and operating--A&O--reimbursement provided to agents by 2.3 percentage points and increasing catastrophic--CAT--and non-insured assistance program--NAP--insurance fees.

The bill includes $209 billion for nutrition programs which is 68 percent of the entire cost of the bill. I have long supported nutrition programs, also known as domestic food assistance programs, which are crucial to help less fortunate Americans and those experiencing difficult times. They include the Food Stamp Program, The Emergency Food Assistance Program, TEFAP, the Commodity Supplemental Food Program, Community Food Projects, the Seniors Farmers' Market Nutrition Program, and fresh fruit and vegetable initiatives.

The Food Stamp Program helps 26 million low-income Americans buy healthy food each month. Its benefits have not been raised in 30 years and the conference report raises the minimum benefit from $10 to $14 per week, indexed for inflation. Further, the final 2007 farm bill also includes $1 billion to expand the Fresh Fruit and Vegetable Program--FFVP--nationwide to reach nearly 3 million low-income children. The FFVP allows schools to offer and promote free fresh fruits and vegetables during the day.

The conference report includes $25 billion for conservation programs to help America's farmers use environmentally friendly farming practices in order to allow farmers to till the soil and raise livestock, while still protecting the land. In Pennsylvania alone, about one-quarter of all acres is farmland. The Environmental Quality Incentives Program, the Wetlands Reserve Program, the Grassland Reserve Program, the Farm and Ranch Land Protection Program, and the Wildlife Habitat Incentives Program are all worthy initiatives that need improvement and funding. Beyond providing funding for national conservation programs, the bill has $438 million for conservation programs in the Chesapeake Bay Watershed which includes large sections of Pennsylvania.

Rural America, the backbone of our country, will benefit from this comprehensive legislation by reducing the backlog of unfunded pending rural development water and wastewater loan and grant applications. Also, broadband service will be expanded to rural America to allow access to those businesses, farms, and families in rural areas with no or very limited service. Further, a new rural microenterprise assistance program would be established for low and moderate income individuals to help develop the skills necessary to establish new small businesses in rural America. Lastly, the conference report provides $250 million in mandatory funding for grants and loan guarantees for renewable energy and energy efficiency systems for farmers, ranchers, and rural small businesses. One item of note is that reduction of the production tax credit for corn ethanol from 51 cents/gallon to 45 cents/gallon to reduce the incentive to shift corn production from feed to fuel in order to ensure that we are planting enough acres for other crops, including wheat and soybeans, for food.

Finally, our dairy producers will continue to have the safety-net they deserve with a much-needed modification. The 2007 farm bill conference report funds the MILC program that provides countercyclical payments to our dairy producers when the price of milk falls below a set trigger price. This trigger price, as modified, will be adjusted on a monthly basis depending on the changes in the costs of feed. Increasing input costs are straining our producers and this will ensure that the payment will compensate for the increasing costs incurred by the dairy farmer. Also, the payment rate will be increased back to 45 percent from 34 percent and the cap on milk production will increase from 2.4 million pounds to 2.98 million pounds per year. Since its inception in the 2002 farm bill, the MILC program has provided more than $220 million to Pennsylvania dairy farmers. I have been a strong supporter of a mechanism to ensure that dairy farmers receive a fair price for the milk they produce considering the increased input costs. The bill also includes provisions to make the dairy industry more transparent by requiring mandatory reporting of dairy commodities and establishing a Federal Milk Marketing Order Review Commission.

America's specialty crop producers which include most fruits and vegetables will get the assistance they need to market their products. The bill provides about $1.3 billion in mandatory funding for specialty crop block grants, technical assistance, and farmers' market promotion. This is the most ever set aside in a farm bill to assist these farmers who are left out of traditional Federal farm programs. The measure establishes the National Clean Plant Network consisting of centers across America to efficiently produce and distribute healthy planting stock of critical high-value new varieties of fruit trees and grapevines. These centers will be the first line of defense against devastating viruses, like the Plum Plox virus outbreak in Adams County, PA, in 1999. Also, both nursery and Christmas trees are included in the Tree Assistance Program which provides disaster relief for growers who lost their crops of trees due to natural disasters. Pennsylvania growers produce over 10 million trees every year.

The 2007 farm bill is good for America and good for Pennsylvania. Therefore, I support this crucial legislation.

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