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This summary highlights and compares major provisions in the
U.S. House of Representatives (House) and Senate versions of
the Farm Bill that may be of particular interest to food
companies and retailers. As they left town for the
President's Day recess, the Senate offered the House an
outline of spending that is reportedly $12.3 billion over the
current baseline. In a meeting today, February 19, 2008, with
agricultural groups, House Agriculture Committee Chairman
Collin Peterson said he believes a compromise will be reached
with the Senate during the current recess so that House and
Senate conferees can carve up the pie when they return to
Washington, D.C. early next week. Currently, House and Senate
staff are conducting meetings to iron out the differences
between the two versions in advance of the return of the
conferees. Hanging over the conference committee is a sustained
veto threat by the White House, based on unhappiness with
funding increases, how those increases will be paid for, and
Congress's refusal to adopt reforms supported by the
White House. Time is running out for a compromise, with the
current Farm Bill extended only until March 15, 2008. If a new
bill has not been passed or the current bill not extended, farm
programs would revert to permanent law under the Agricultural
Adjustment Act of 1949 ('49 Act). Operating under the
'49 Act would increase payments for some commodities
while excluding payments for many other commodities that have
farm program benefits granted subsequent to the passage of the
'49 Act.
The major Farm Bill provisions outlined in this alert
are:
- Country of origin labeling (COOL)
- Commodity programs
- Trade
- Nutrition
- Horticulture, specialty crops, and organic
agriculture
- Miscellaneous provisions
Country of Origin Labeling (COOL)
Before House passage of its version of the Farm Bill,
stakeholders reached a compromise on COOL. The compromise held
during consideration of the Senate version of the bill, with
only one modification: the Senate added chicken and macadamia
nuts to the list of covered commodities. Implementation of the
original COOL provision for meat, which was contained in the
2002 Farm Bill, has been delayed by a provision in an
appropriations bill, but it is now due to go into effect by
September 30, 2008.
Under the compromise that would replace the original COOL, a
retailer of beef, lamb, pork, and goat may designate the
product as having a United States (U.S.) country of origin if
the commodity is derived from an animal that was exclusively
born, raised, and slaughtered in the United States, or was born
and raised in Alaska or Hawaii and transported for a period of
not more than 60 days through Canada to the United States and
then slaughtered in the United States. For multiple countries
of origin, a retailer may designate the country of origin of
the commodity as all of the countries in which the animal may
have been born, raised, or slaughtered. If the commodity is
from a foreign country, a retailer would be required to
designate a country other than the United States as the country
of origin.
No changes were made to the labeling requirements for fish,
which went into effect in 2005 and remain in effect today. In
the case of farm-raised fish, it must be hatched, raised,
harvested, and processed in the United States to be labeled as
U.S. product. For wild fish, it must be harvested in the United
States, a territory of the United States, in a state, or by a
vessel that is registered in the United States or is documented
under chapter 121 of title 46 of the U.S. Code, and must be
processed in the United States, a territory, or a state,
including the waters of a state.
The penalty and audit provisions were modified in both the
House and Senate versions in a manner that would shift some of
the burdens of recordkeeping and potential liability from
retailers to suppliers. Also, the maximum penalty for
violations would be reduced from $10,000 to $1,000 per
violation.
House
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Senate
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The House Farm Bill implements mandatory COOL for
beef, lamb, pork, and goat, and establishes three
labeling options for these commodities:
- U.S. Country of Origin: The animal must be born,
raised, and slaughtered in the United States
- A Mixed Origin meat label is required for animals
that were not exclusively born, raised, and
slaughtered in the United States
- The Imported Meat label is required for animals
from foreign countries
Ground meat products are required to be labeled with
a narrative list of countries from which the products
could be derived, but does not require the label to
specify the percentage of product from the respective
countries. Verification of country of origin may be
established through existing documentation, e.g.,
normal business records, animal health papers, import
or customs documents, or producer affidavits.
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The Senate language is similar to the House but adds
chicken and macadamia nuts as covered commodities
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Commodities
House
|
Senate
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- Maintains direct payment program
- Extends the subsidy programs authorized in the
2002 Farm Bill with minor changes
- Increases target prices for wheat, barley, oats,
oilseeds, and soybeans, which increases
producers' opportunity to receive
counter-cyclical payments when prices are low
- Increases loan rates for several crops that
reflect changes in the market for these products
- Rebalances loan rates on wheat, barley, oats,
oilseed, small chickpeas, and graded wool
- Establishes separate loan rates for long-grain
and medium/short-grain rice and for feed and malt
barley
- Extends the Milk Income Loss Contract Program
until 2012
- Supports the price of cheddar cheese, butter, and
nonfat dry milk by government purchase of such
products
- Authorizes the Dairy Forward Pricing Program to
allow milk producers and cooperatives to voluntarily
enter into forward contracts with milk handlers
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- Maintains direct payment program
- Replaces traditional payment rates, recourse
loans, with a state-level revenue program (Average
Crop Revenue) for covered commodities and peanuts
with a $15/acre direct payment regardless of
crop
- Expanded planting flexibility provisions for
fruits and vegetables for processing with temporary
reduction in payment acres
- No change in the marketing loan program through
2012 except for Average Crop Revenue participants,
who would have recourse loans that would be repaid in
full
- Extends the Milk Income Loss Contract program
through 2012, but raises the payment rate to 45
percent of the difference between $16.94 and the
monthly market price (when lower); also increases per
farm payment cap to 4.15 million pounds of annual
production
- Continues Peanut provisions
- Authorizes the Dairy Forward Pricing Program to
allow milk producers and cooperatives to voluntarily
enter into forward contracts with milk handlers
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Trade
House
|
Senate
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- Reauthorizes the Food for Peace, Food for
Progress, and McGovern-Dole programs that provide
food assistance around the world
- Increases funding for the Market Access Program
by $125 million over five years
- Extends the Foreign Market Development Program,
which works to expand U.S. export opportunities
- Provides $38 million for the Technical Assistance
for Specialty Crops Program, which helps U.S.
organizations address sanitary, phytosanitary, and
other technical barriers that inhibit exports to
certain countries
- Increases ability of the Agency for International
Development to pre-position food around the world to
get food aid delivered faster during catastrophes and
refugee situation
- Reauthorizes the Dairy Export Incentive
Program
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- Reauthorizes the Food for Peace, Food for
Progress, and McGovern-Dole programs that provide
food assistance around the world
- Reauthorizes Market Access Program
- Reauthorizes Foreign Market Development Program
that cost shares federal funding of export market
development of mainly generic commodities
- Reauthorizes Emerging Markets Program
- Authorizes new pilot program for local purchase
of emergency food aid at a level of $25 million per
year
- Reauthorizes Dairy Export Incentive Program
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Nutrition
House
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Senate
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- Extends and funds The Emergency Food Assistance
Program (TEFAP), which provides commodities and other
assistance to states and helps stock food banks and
homeless shelters. Expands funding for the program
each year from $140 million in 2008 to $250 million
in 2012.
- Extends the Commodity Supplemental Food Program
(CSFP) that helps many low-income elderly individuals
who need additional assistance or are reluctant to
apply for food stamps.
- Expands the authority of the Senior
Farmer's Market Nutrition Program, which
provides senior citizens with vouchers to buy fresh
produce at markets and roadside stands.
- Increases funding to $406 million for the U.S.
Department of Defense Fresh Fruit and Vegetable
Program (DOD Fresh), which provides a greater variety
of fresh produce to schools.
- Continues and expands the United States
Department of Agriculture (USDA) Snack Program, which
helps schools provide healthy snacks to students
during after-school activities and expands the
program to all 50 states, providing $350 million over
five years for the program.
- Authorizes $5 million per year for a fund to
purchase native and locally grown food.
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- Increases mandatory funding level for The
Emergency Food Assistance Program to $250 million a
year
- Makes most nutrition program authorities
(including authorizations for appropriations)
permanent
- Increases standard deduction of food stamp
benefits to $140 and indexes it annually for overall
inflation; removes limits on dependent-care expense
deductions; adds an income disregard for
combat-related military pay; and increases the
minimum benefit as in the House bill
- Food stamp asset eligibility standards increases
the dollar limits on liquid assts to $3500/$4500 and
indexes them annually, for overall inflation;
disregards all tax-recognized retirement
plans/savings and postsecondary education savings as
in the House bill
- Replaces the current DOD Fresh with a new free
fresh fruit and vegetable program funded at $225
million, indexed annually for inflation
- New fresh fruit and vegetable programs would be
available in state-selected elementary schools in all
states (and at least 100 schools on Indian
reservations)
- Lengthens the eligibility period for Able-bodied
Adults Without Dependents to six months out of every
36 months
- Provides $10 million a year in additional
mandatory funding for the Senior Farmers'
Market Nutrition Program; provides $5 million in
mandatory funding for projects to expand the use of
food stamp electronic benefit transfer cards in
farmers' markets
- Provides $50 million in mandatory funding for
pilot projects to evaluate methods of promoting
health and nutrition through the Food Stamp
program
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Horticulture, Specialty Crops, and Organic
Agriculture
House
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Senate
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- Funds the Specialty Crop Block Grant Program,
providing $365 million in mandatory funding. The
block grants are provided to states to support
projects in research, marketing, education, pest and
disease management, production, and food safety.
- Provides new funding to support organic
farmers.
- Provides $3 million in mandatory funds for
organic marketing data collection and
publication.
- Continues the National Organic Certification
Cost-Share Program, which defrays the costs that
producers and handlers incur when seeking organic
certification.
- Doubles the amount of USDA purchases of fruits
and vegetables for schools, using Section 32
funds.
- Helps fruit and vegetable producers address food
safety, pest, and disease management issues by
providing $200 million in mandatory funding for pest
and disease detection and control.
- Directs USDA to develop assessments of pest and
disease threats and to establish priorities for
combating them.
- Provides funding for new programs for cooperation
between federal and state governments to provide for
early detection and surveillance of plant pests and
diseases.
- Establishes audit-based certification systems for
USDA, states, and growers to address plant pest
infestations.
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- Provides $270 million in mandatory funding over
five years to expand the program of block grants to
states for specialty crop projects
- $5 million for organic data collection to help
provide better price and yield information for
organically-grown crops
- $24 million in new money for technical assistance
to address export barriers for specialty crops
- Authorizes USDA to carry out a food safety
education program about practices and methods that
reduce microbial pathogens and cross contamination of
fresh produce
- Specifies that in addition to specialty crop
purchases required in the 2002 Farm Bill, the
Secretary shall purchase fruits, vegetables, and nuts
using Section 32 funds
- $30 million in mandatory funds to support the
Farmer Marketing Assistance Program and creates a new
grant program ($7 million) to improve access of foods
to underserved communities and to improve farmer
access to competitive processing and distribution
systems, called the Healthy Food Enterprise
Development Center
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Miscellaneous Provisions
House
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Senate
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- Directs the Secretary of Agriculture to develop
rules and regulations related to arbitration between
producers and processors, with enforcement by the
Grain Inspection, Packers, and Stockyards
Administration
- Allows states with meat inspections programs that
are identical to the federal regulations to ship meat
and poultry products across state lines
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- Requires that any contract arbitration clause be
voluntary; gives producers new rights to terminate a
contract early; and allows a producer to discuss
contract provisions with additional parties
- Alters some provisions for swine and pork in the
Mandatory Livestock Price Reporting Program
- Prohibits FDA from issuing a final risk
assessment and lifting the voluntary moratorium on
foods from cloned animals until completion of newly
mandated studies on the safety and on the market
impacts of introducing products from cloned
animals
- Establishes a Congressional Bipartisan Food
Safety Commission required to study and make
recommendations for modernizing food safety programs,
including organizational and resource requirements
that emphasize prevention and are based on risk
assessment and best-available science
- Supplements the current federal-state cooperative
inspection program with a new provision whereby
state-inspected plants with 25 or fewer employees
could opt into a new program that subjects them to
federally directed inspection using state employees,
and thus interstate shipping
- Requires USDA to establish "reportable food
registries" where establishments must report
events involving meat and poultry and products that
pose probable health risks
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general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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