Agricultural Economics Department

 

Date of this Version

June 2008

Comments

Published in Policy Issues, June 2008. Copyright ©1999–2008 POLICY ISSUES. Used by permission.

Abstract

Several months past due, the Food, Conservation and Energy Act (FCEA) of 2008 (P.L. 110-246) is now law. Reform, budget, and national and international politics were central issues fueling a debate that resulted in this new bill. Whether this new Farm Bill will ultimately succeed in providing an adequate farm and food safety net and whether it is a “good” or “bad” bill depends on one’s perspective. As to cost, the Congressional Budget Office (CBO) scores the bill at $307 billion for a 5–year period (2008–2012), with 68% going to nutrition, 11% to commodity programs, 8% of estimated expenditures to conservation programs, and 13% to the rest of the bill. Highlights of the 2008 FCEA:

1. New titles added to the bill include Horticulture and Organic Agriculture; Livestock; Commodity Futures; and, Crop Insurance and Disaster Assistance.

2. Commodity programs were reauthorized but with reductions in payment limits, some commodity program payment rate changes, inclusion of a new revenue program, crop insurance reform, and a new permanent disaster assistance program.

3. More funds will go to conservation programs with substantial growth in the renamed Conservation Security Program (CSP), Environmental Quality Incentives Program (EQIP), Farm and Ranch Protection Program (FRPP), Grasslands Reserve Program (GRP), and Wetlands Reserve Program (WRP).

4. Country of Origin Labeling (COOL) will be fully implemented September 2008 with additional commodities and revised labeling, record–keeping, and compliance rules.

5. More than two–thirds of the act’s funds go to nutrition programs, with more funding for food stamps, food banks, locally–produced food, and school and seniors’ food programs.

6. Energy provisions include more support for cellulosic ethanol and less for grain ethanol, with a new sugar–for–bioenergy program.

7. Funding for agricultural Research and Extension activities are made more competitive, with increased opportunities for the private sector and nonland grant colleges of Agriculture to pursue scarce Federal dollars.

8. The Cooperative State Research, Education and Extension Service (CSREES) is to be reorganized with the creation of a new National Institute of Food and Agriculture (NIFA).

Supporters say that the new bill continues to provide a safety net to producers. Benefits cited for the bill are that it allows for maintenance of a domestic safe, varied, and affordable food and fiber supply and stimulates investment in both agriculture and other U.S. economic sectors. The current bill is also said to bring reform by reducing distribution of tax dollars to wealthy producers, ascribing payments to individuals, and providing additional food security to consumers who are in need.