The Hagstrom Report

Agriculture News As It Happens


Reaction to USDA programs that have expired


The Milk Income Loss Contract Program, which compensates dairy producers when domestic milk prices fall below a specified level, expired on September 30. Dairy producers, but not processors, have reached agreement on a new dairy program in the Senate-passed and House Agriculture Committee-passed farm bill.

“Since milk check payments run 30 days behind the delivery of milk, dairy farmers will notice the suspension of these payments with the November milk checks,” John Blanchfield of the American Bankers Association told Reuters on Friday.

“Congress has to got to do something in November,” said Jackie Klippenstein, vice president of industry and legislative affairs for Dairy Farmers of America, told Reuters.

“The farm bill provided a measure of hope. The fact that Congress went home without addressing it has really deflated a lot of folks out there who are struggling.”

The National Milk Producers Federation, whose members have been split on the MILC program, did not mention that program in a statement today but noted dairy farmers “lost a safety net” when the 2008 act expired, and said the House should pass a farm bill when it returns.

“We strongly encourage our dairy farmer members to visit with their members of Congress during the pre-election recess to determine a path forward for the 2012 farm bill soon after the elections,” National Milk President and CEO Jerry Kozak said.

“We need a full, five-year bill to be passed in the House, sent to a conference committee, and approved before the end of the year.”

Foreign market development

Mandatory funding for five foreign market development programs administered by the USDA’s Foreign Agricultural Service expired with the farm bill.

FAS will supervise existing already-funded commitments from previous fiscal years.

FAS solicited applications for the 2013 fiscal year last spring, but cannot award those funds unless authorization of the program is renewed, a USDA official told The Hagstrom Report today.

The programs affected:
Market Access Program (MAP), formerly the Market Promotion Program, which uses funds from the Commodity Credit Corporation to help U.S. producers, exporters, private companies, and other trade organizations finance promotional activities for U.S. agricultural products. The MAP encourages the development, maintenance, and expansion of commercial export markets for agricultural commodities. Activities financed include consumer promotions, market research, technical assistance, and trade servicing.

Foreign Market Development Program (FMD), also known as the cooperator program, which is used by commodity groups to develop, maintain, and expand long-term export markets for U.S. agricultural products.

“Many farmers, ranchers and agribusiness or agricultural processors benefit from the Foreign Market Development Program,” the agriculture coalition said in its news release. “Since 31 percent of our gross farm income comes from exports which also make a positive contribution to our nation’s trade balance, trade promotion is an important part of our safety net. Other countries will most certainly take advantage of the fact that the program is rendered inoperable and will do what they can to steal our markets — and everyone knows, the hardest market to get is the one you lost.”

Technical Assistance for Specialty Crops (TRASC), which addresses technical barriers to the export of U.S. specialty crops by providing funding to U.S. organizations for activities such as seminars and workshops, study tours, field surveys, pest and disease research, and pre-clearance programs. Eligible crops include all cultivated plants and their products produced in the United States with the exception of wheat, feed grains, oilseeds, cotton, rice, peanuts, sugar, and tobacco.

Emerging Markets Program (EMP), which provides funding for technical assistance to promote exports of U.S. agricultural commodities and products to emerging markets in all geographic regions, consistent with U.S. foreign policy.

Quality Samples Program (QSP), which helped U.S. agricultural trade organizations provide small samples of their agricultural products to potential importers in emerging markets overseas.

The expiration of the farm bill does not, however, affect the loan guarantees USDA makes for foreign purchases of U.S. agricultural products because those programs are permanently authorized under the Agricultural Trade Act of 1978.

Food aid

Authorization to acquire food under Food for Progress ends on December 31, but the authorization to use Commodity Credit Corporation funds for shipping ended with the 2008 farm bill.

“USDA should be able to review and approve proposals until the end of the year, but they are reviewing how they may be able to ship them,” said Ellen Levinson of the Alliance for Global Food Security. “They will also need OMB approval before they can proceed.”

The continuing resolution included appropriations for most foreign aid programs, PL 480 Title II and the McGovern-Dole for Education program to continue at the fiscal year 2012 levels through March 27, Levinson added.

Authorization for the Local and Regional Food Aid Procurements Projects also ended in fiscal year 2012, a USDA official noted.

Food safety

The continuing resolution funds meat and poultry inspection programs through March 27, but a USDA official noted that the expiration of the farm bill would affect certain food safety grant programs.


About 6.5 million acres rotate out of the Conservation Reserve Program this year, the agriculture coalition noted. “While current contracts are protected, no new signup will be allowed for CRP or the Conservation Reserve Enhancement Program, the Wetlands Reserve Program or the Grasslands Reserve Program.

The National Sustainable Agriculture Coalition noted that the working lands conservation programs — Conservation Stewardship Program, Environmental Quality Incentives Program, Wildlife Habitat Incentives Program, and Agricultural Management Assistance Program and the Farmland Protection Program — had their legal authorities extended through 2014 by the Agricultural Appropriations Act for Fiscal Year (FY) 2012.

But NSAC also noted that the continuing resolution that is funding the government “has the effect of limiting CSP funding to just the amount necessary to pay for existing contracts but not enough to pay for any new ones.”

Agricultural research

Agriculture Undersecretary for Research, Education and Economics Catherine Woteki said today that the expiration of the farm bill had affected five research programs and the division’s advisory board.

“Until the food, farms and jobs act is passed, we are without authorization” to hold any advisory meetings, Woteki said.

The grants programs that had been authorized in 2008 with mandatory money but do not have funding:
  • Organic Research and Extension Initiative
  • Specialty Crop Research Initiative
  • Beginning Farmer and Rancher Development Program
  • Biodiesel Fuel Education Program
  • Biomass Research and Development Initiative

Innovation programs

The National Sustainable Agriculture Coalition listed 11 programs that lost authorization, but that it considers “the most innovative and forward-looking programs the farm bill has to offer:”
  • Beginning Farmer and Rancher Development Program
  • Conservation Reserve Program — Transition Incentive Program
  • Farmers Market Promotion Program
  • National Organic Certification Cost Share Program
  • Organic Agriculture Research and Extension Initiative
  • Organic Production and Market Data Initiatives
  • Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers
  • Rural Energy for America Program (REAP)
  • Rural Micro-entrepreneur Assistance Program
  • Specialty Crop Research Initiative
  • Value-Added Producer Grants (VAPG)

"The Senior Farmers Market Nutrition Program and the Specialty Crop Block Grant Program have a strong continuing funding baseline but will now lack the authority to make use of it, so effectively they, too, will come to a halt until a new bill or an extension of the existing bill becomes law,” NSAC said.