Sen. Chuck Grassley said today that he is preparing four amendments for consideration by the U.S. Senate during debate on the farm bill.
The first amendment Grassley said that he will pursue is legislation he drafted with Sen. Tim Johnson of South Dakota to prevent meat packers from assuming complete control of the meat supply by preventing packers from owning livestock. The amendment would make it unlawful for a packer to own, feed or control livestock intended for slaughter. It is similar to a bill introduced in the last Congress by Grassley, Johnson and former Sen. Bob Kerrey of Nebraska.
"Concentration is one of the biggest challenges facing the family farmer trying to compete in the global marketplace," Grassley said. "Remarkably, the farm bill reported out of the Agriculture Committee doesn't address this critical issue in any way. I've pushed for a lot more to be done to address the growing trend toward vertical integration in agriculture. The amendment I'll push with Sen. Johnson is a step in the right direction, and it's something that can be passed this year as part of a new farm bill."
The second Grassley amendment also addresses concentration within the industry by limiting mandatory arbitration agreements. The provision amends the Packers and Stockyards Act to prohibit mandatory arbitration clauses from being included in contracts between livestock producers and packers. Grassley said the amendment would allow farmers the opportunity to choose the best form of settlement when a dispute arises.
The third Grassley amendment would help livestock producers develop methane-recovery manure management systems. Grassley said the committee-passed farm bill makes manure management systems which were established to protect our environment eligible for funding through the "Environmental Quality Incentives Program," known as EQIP, but does not include an opportunity for the production of "green" electricity generated from hog and cattle waste. The Grassley amendment to make EQIP payments available to producers for cost-sharing on projects that involve the use of anaerobic digesters is based on a bill Grassley introduced earlier this year to create a start-up incentive and production tax credit for methane gas.
EQIP provides federal dollars for technical, educational and financial assistance to farmers and ranchers for soil, water and other natural resource issues. One goal of the program is aimed at improving farm manure management systems.
"This is a perfect example of how the agriculture and energy industries can come together to develop an environmentally friendly renewable resource. We need to think ahead and develop progressive sources of energy," Grassley said. "My initiative would expand the production of renewable energy while cleaning up the environment and helping farmers increase their income."
The fourth Grassley amendment would help farmers who were not included in the 1996 farm bill receive loan deficiency payments. The amendment will provide a one-year extension of a provision in the Agricultural Risk Protection Act of 2000 that furnished LDP's to farmers not participating in the 1996 farm bill. In Iowa, there are 6,200 farms that could be eligible to take advantage of these loan deficiency payments.
In addition to the amendments he plans to offer, Grassley said he remains "very concerned" about the fact that the farm bill reported by the Senate Agriculture Committee does not comply with our current trade agreements and obligations.
Last year, Iowa exported more than $3 billion worth of corn, soybeans, live animals and red meat. Every year, Iowa farmers export close to half of their soybeans and 20 percent of their corn production. If the ability to export is impeded, then commodity prices will plummet when an unexpected surplus is forced on the domestic marketplace.
In 1994, the United States joined its trading partners in the World Trade Organization to facilitate more open trade and to discipline domestic agricultural support programs. Worldwide, agricultural tariffs were reduced by an average of 36 percent over a six-year period, although agricultural tariffs are still considerably higher than tariffs on manufactured items, and need to be lowered further, along with other trade barriers to broader market access. The United States also agreed to reduce its own trade-distorting domestic support — what's known as "amber box" spending — by 20 percent to $19.1 billion a year.
The farm bill approved by the Senate Agriculture Committee could spend more than the United States is allowed under the Uruguay Round Agreement. Last week, FAPRI – Iowa State University and the University of Missouri's Food and Agricultural Policy Research Institute -- published a paper that said there was over a 30 percent likelihood that the committee-passed farm bill would violate U.S. trade commitments because it would increase amber box spending.
"If this happened, then U.S. trading partners could refuse to accept U.S. exports and the prices farmers get for their commodities would nosedive," Grassley said. "We have an obligation to pass a new farm bill that protects farmers by honoring our trade commitments."
Grassley criticized suggestions by some that a trigger be added to the farm bill that would allow the Secretary of Agriculture to suspend U.S. farm policy should an objection be raised by a trading partner about a lack of compliance. "To adopt such a short-sighted policy puts farmers at risk of ending up with no farm program. It's not the right way to do things, and we need to make sure there's a safety net that farmers can rely on put in place with this new farm bill."