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‘Regional Issues: South’
Drought, labor shortages are southern concerns | 4 July 30, 2012 Vol. 91
Congressional report shows harm to family businesses | 6
‘Membership’ State FBs achieve quota, reach Navigator status | 7
Congress getting closer to PNTR for Russia July may be winding down, but momentum for passage of permanent normal trade relations is on the rise. Last week, the House Ways and Means Committee passed the same Russia PNTR language approved earlier in the month by the Senate Finance Committee, which leaves full House and Senate passage as the final steps before the measure is sent to the president for his signature.
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States granted motions to intervene in Mississippi River Basin case Eleven states have been granted their motions to intervene in a lawsuit brought by several environmental groups against EPA. The involvement of so many state governments will be helpful in defeating the claims of the plaintiffs who want to force the EPA to set federal numeric nutrient limits on phosphorous and nitrogen in those states. The resolution of the lawsuit, Gulf Restoration Network, et al. v.
Jackson, et al., could be significant for farmers, municipalities and others throughout the 31-state basin. Numeric nutrient standards could lead to more costly and stringent limits on nutrient runoff to waters that ultimately contribute to the Mississippi River. The 11 states were granted intervenor status in two motions, one for Louisiana and another covering the following 10 states: Alabama, Arkansas, Iowa, Kansas,
Kentucky, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. As intervenors, the states will now be involved in the case proceedings. The American Farm Bureau Federation, along with 15 state Farm Bureau organizations and dozens of other national and regional agricultural groups, have also intervened in the lawBasin Continued on Page 3
Drought fuels calls for new farm bill House leaders and Agriculture Committee staff members last week reportedly were working on a plan to address expiring farm programs and lapsed agricultural disaster programs before leaving Washington for the month-long August recess. The House leadership has resisted calls to bring the farm bill (H.R. 6083), passed by the House Agriculture Committee and supported by Farm Bureau, to the floor for a vote. However, that was before the worst drought in more than half a century gripped much of the nation, choking off crop yields, drying up pastures and stock ponds, and threatening to drive up feed and food prices. As they prepare to visit their home states and districts, members could face criticism for not getting the farm bill done and leaving livestock producers in particular high and dry. Republican leaders now indicate they would support a oneyear extension of current farm law and already-expired disaster assistance programs for livestock producers. The extension could be passed as early as this week. The American Farm Bureau Federation is continuing to push for Congress to pass a five-year farm bill this year. Major provisions of the 2008 farm bill will expire Sept. 30. “Passing on the opportunity to complete a farm bill now will make it even more difficult next year as we would have to restart the process with a new Congress and, most likely, an even tighter budget situation,” explained Dale Moore, AFBF farm policy specialist. “Farmers and ranchers need to know what farm programs will be over the longer term in order to make their plans and obtain financing. Kicking the can down the road just means more uncertainty for folks who are already dealing with a lot of volatility and unexpected challenges like this drought.” Rep. Collin Peterson (D-Minn.), House Agriculture Committee ranking minority member, pre-
photo by katie sawyer
No. 14 fbnews.org
DROUGHT AND HIGH TEMPERATURES take their toll on a cornfield in Kansas. This year’s drought is estimated to be the worst in at least 50 years. fers to rewrite farm policy this year; however, he reportedly has said he would go along with the one-year extension if Republican leaders agree that it would serve as the basis for a House-Senate conference on the 2012 farm bill. Sen. Debbie Stabenow (DMich.), Senate Agriculture Committee chair, on the Senate floor last week, said she also would be open to the extension, but that just passing an extension would jeopardize deficit reduction of $23 billion, new risk manage-
ment tools for farmers and necessary reforms to farm programs. “I think that would be a disaster,” she said. While it’s too early to know the real impacts of the drought on the food supply and prices, feed prices already are affected, says AFBF President Bob Stallman. He said the drought “underscores the importance of completing action on the 2012 farm bill” to provide farmers and ranchers with better Drought Continued on Page 3
July 30, 2012
President, American Farm Bureau Federation
Stop the Flood of Regulation Burdensome and unnecessary regulations are always a point of contention for farmers and ranchers, especially when we are being flooded with what seem to be never-ending, nonsensical rules. In keeping with the ebb and flow of bureaucracy, the Environmental Protection Agency and Army Corps of Engineers are planning an upheaval of the Clean Water Act (CWA) that would add more ... you guessed it ... rules and regulations to farms and ranches. That’s why the American Farm Bureau Federation is leading the way to stop EPA and the Corps from literally regulating every drop of water on private landowners’ property. Through a nationwide grassroots campaign, we are engaging Farm Bureau members to “Stop the Flood of Regulation.” A $30,000 ditch For some time, the EPA and Corps have been trying to remove the word “navigable” from the Clean Water Act through what is called a “Guidance Document.” This would change the very meaning of the CWA to allow for such frivolous action as regulating a roadside ditch
that holds water for only a few hours after a 4-inch rain. The Guidance Document should be used to explain processes and policies of existing laws and regulations—not to expand or change the scope of current law. Importantly, a Guidance Document does not go through the rigors of the regulatory process that serve to protect the rights of the regulated community. EPA’s and the Corps’ action to improperly use the Guidance Document to remove “navigable” bypasses congressional intent and ignores Supreme Court precedent. For the past 10 years, Congress has voted specifically and repeatedly to keep the term “navigable” in the CWA. We believe this Guidance Document is not only bad policy but is being implemented through a regulatory sleight of hand. Farmers, ranchers and private landowners need to preserve the authority the CWA has granted states and localities for nearly 40 years and stop the deluge of regulations and permitting requirements that will likely result if the Guidance Document is finalized. The two agencies are piling on regulatory burdens with little regard for the costs to landowners. These
costs could be upward of $30,000 with increased permit requirements and reduced nutrient applications. They are very real and have direct impacts on the farm. Engagement v. regulation It’s important that every Farm Bureau member become engaged in pushing Congress and the administration to block the Guidance Document before the end of this Congress. There are many ways to get involved. Visit the FBAct Insider page (www.fbactinsider. org) to learn more. For those who are social media savvy, follow the campaign on Twitter (http://twitter.com/StopTheFlood) and post pictures of your soon-to-be regulated ditches and puddles using the #stoptheflood hashtag, or “Like” the Stop the Flood of Regulation Facebook page (http://www.facebook.com/ StopTheFlood), post your pictures and comments and get updates on the campaign. It’s time to show Congress how the Guidance Document could cost farmers, ranchers and private property owners tens of thousands of dollars. It’s time to “Stop the Flood of Regulation.”
IFYE prepares exchangees to experience the world This is the fifth in a series of articles about the International Four-H Youth Exchange program. Since its founding in 1948, the International Four-H Youth Exchange (IFYE) program has helped thousands of young people from across the United States, Africa, Asia, Europe, Latin America and the South Pacific learn about life in other lands. The IFYE program is an in-depth learning experience in which 4-H alumni and other young adults live with host families in other countries to increase global awareness, develop independent study interests and improve language skills. Programs vary from country to country, with some emphasizing an agricultural work experience, volunteering at an adult training center or working with a local youth development program similar to 4-H. All have living with a family and learning about the culture as the key component. In our ongoing series of articles you have read about the experiences of young people from other countries and a little about the program in general. In this article, we
break down one of the details of the program—orientation. Outbound (U.S. participants going abroad) and inbound (participants from other countries) delegates get to meet other exchangees and learn what to expect before being sent to their host states and countries. The program’s orientation helps participants understand and appreciate people’s differences and similarities based on culture, country and other factors. The orientation includes cultural immersion experiences, helps participants develop a global perspective and improves participants’ knowledge of 4-H and other programs for young adults in the states they represent. IFYEs to and from the United States begin their cross-cultural experience and become acquainted with people from other countries through the orientation program. The program reinforces their understanding and commit-
Don Lipton, Executive Director, Public Relations Lynne Finnerty, Editor Erin Anthony, Assistant Editor Phyllis Brown, Assistant Editor Sarah Bittner, Contributing Writer
IFYE Continued on Page 6
July 30, 2012 Vol. 91
International Four-H Youth Exchange participants from around the world gather for orientation before traveling around the U.S. The orientation prepares inbound and outbound delegates for experiencing other cultures.
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July 30, 2012
D.C. fiddles while the Midwest burns By Bill Bruins Nero played the fiddle while Rome burned. This phrase has come to epitomize occupying oneself with unimportant matters and neglecting priorities during a crisis. It’s an old story with a painfully real message for the present day. Instead of passing a U.S. farm bill, lawmakers in Washington, D.C., are consumed by election year politicking and posturing. Meanwhile the worst drought in decades is gripping the throat of the nation’s breadbasket. Quite literally, D.C. is fiddling while the Midwest burns. The great equalizer It wasn’t so long ago that some pundits were questioning if Congress should even bother writing another U.S. farm bill. They pointed out that prices for most farm commodities were strong. Another spring had arrived early in the Midwest and a record-sized corn crop was being planted. Agriculture was a bright spot in an otherwise dreary economy. The federal government was (and remains) awash in red ink. Why not
just do away with the farm bill entirely? There were several problems with this line of thinking. First off, 84 percent of farm bill funding goes to feed over 40 million Americans through food assistance programs. Also, it’s because of the farm bill that Americans enjoy a healthy and stable food supply and spend just 10 percent of their disposable incomes on food. That’s the lowest percentage in the world. It seems every bill with any chance of passing must have the word “jobs” in it. Well, more than 16 million Americans work in agriculture, and the last time I checked, exports and renewable energy were worthy priorities, too. Protection of our water and sensitive lands also come from the environmental conservation programs found in the farm bill. With farm income at record levels, it seems some thought there was no need for any sort of safety net. It was as if strong exports and technological advances had taken all the risk out of farming. Then along came this summer’s drought and potential crop yield losses of epic proportions.
Sometimes Mother Nature feels the need to grab us by the ear and remind us who is really in charge. She’s doing just that and agriculture’s ear is beginning to bruise. Farmers who entered this growing season with the highest of expectations are now questioning if they will have adequate feed supplies to last them through the winter. That’s just one of many responsibilities that individual farmers accept on their farms. Beyond the farm gate, they need assurances from their lenders that several generations of net worth will not be wiped out by one disastrous growing season. We could also use some kind of assurance from the same politicians who always say they want to help their constituents and the economy. Right now farmers need to know what disaster assistance programs will be in place, which crop insurance programs will be offered and how dairy policy reform will affect our dairies. We need action from Congress and not their hot air; Lord knows we’ve had enough of Mother Nature’s hot air to deal with this summer. This drought has proven to be a
great equalizer. Any talk of no longer needing a farm bill should have shriveled with this summer’s sizzling temps. Final thought Last winter, Farm Bureau reminded Congress that farm bills are written for the bad years, as well as the good ones. Well, Congress, the Midwest’s fortunes have quickly reversed from good to bad. How long will you fiddle while our family farms, food supply and agricultural economy burn?
Bill Bruins is a dairy farmer from Fond du Lac County, Wis. He has served as the Wisconsin Farm Bureau Federation president since 2003.
Drought fuels calls for Congress to pass the farm bill Continued from page 1 risk management tools and restore expired disaster provisions. USDA has designated 1,369 counties in 31 states as disaster areas, making farmers in those areas eligible for low-interest loans, and it has opened acreage set aside through the Conserva-
tion Reserve Program (CRP) to emergency haying and grazing. Vilsack on July 23 announced additional steps to assist farmers and ranchers, including opening more land in conservation programs to emergency haying and grazing and encouraging crop insurance companies not to charge
interest on unpaid crop insurance premiums for an extra 30 days, to Nov. 1, 2012, for spring crops. AFBF expressed appreciation for USDA’s actions; however, it said, farmers and ranchers in parts of the country may need expedited help because of grazing prohibitions, which could prevent grazing
until the nutritional value of grazing plants has been diminished by the drought. A record 54 percent of pasture and rangeland is in poor or very poor condition, according to AFBF, and some farmers and ranchers already have begun to liquidate their livestock herds.
States granted motions to intervene in Mississippi River Basin case Continued from page 1 suit and are parties to the case. Under the Clean Water Act, states may use either “narrative” or “numeric” standards as a method for determining water quality. Most states in the Mississippi River Basin use narrative standards, such as “no nutrients at levels that cause a harmful imbalance of aquatic populations.” However, if this lawsuit is successful, EPA would be forced to override existing state narrative standards with federal water quality standards and to express those standards as specific numeric limits on nutrients. “Setting appropriate numeric nutrient standards is a complex and difficult scientific undertaking and EPA has proven it is not up to the task,” said AFBF President Bob Stallman. “Farmers have no reason to believe that EPA could establish scientifically defensible standards for any one state, much less for 40 percent of the U.S. land mass.” According to AFBF, there are limited circumstances under which the Clean Water Act allows EPA to step in the place of a state government to establish federal water quality standards. The organization intervened in the lawsuit to clarify those limitations to
the federal District Court in Louisiana, where the case is being heard. “Farmers and their state governments in the Mississippi River Basin have worked successfully for years to minimize nutrient runoff and will continue to do so,” said
Stallman. “But we oppose a topdown, one-size-fits-all approach.” The following state Farm Bureaus intervened in the lawsuit: Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, Oklahoma, South Da-
kota, Tennessee and Wyoming. Several of the plaintiff groups previously petitioned the EPA to set numeric standards in the Mississippi River Basin; EPA denied the petition last year. The lawsuit stems from the denial of the petition.
State immigration laws worsen farm labor shortage Months before anything was legally required of them, Alabama farmers were feeling the effects of what many consider the toughest state immigration law in the country. Much of the Alabama statute, which, among other things, requires police to do immigration status checks during traffic stops, took effect Sept. 1, 2011. Also part of the law, as of this April, all Alabama employers, including farmers, have to use the federal E-Verify system, which compares an employee’s information to Social Security and immigration records and confirms citizenship. Before any part of the law went into effect, late last summer unpicked produce was rotting in many Alabama fields as growers reported their workers were leaving in droves because they were afraid of being harassed or they had family members who were undocumented. Similarly, E-Verify became mandatory in Georgia as part of another stringent state immigration law that went into effect last year. Like growers in Alabama, Georgia farmers say the law has driven their workers away. “The migrant workers are
scared, a lot of them packed up last year and left, and we just can’t find labor to do what we need done,” said Georgia peanut farmer David Raley. Lee Webster, Burke County Farm Bureau president, pointed out that it’s not only farmers who are suffering from the law. “It has devastated the smaller town economies because they’re not able to get the workforce to get their crops out of the field,” he said.
In 2011, the state lent a hand by connecting willing probationers with farmers who needed help in their fields. This year, the state is again stepping in, this time pairing one grower up with nine transitional center prisoners who are harvesting and packing the Vidalias. Both North Carolina and South Carolina have made E-Verify mandatory, although South Carolina exempts agricultural workers and North Carolina makes exceptions for those who employ 25 or fewer
A University of Georgia report from last fall warned that the state’s economy stood to lose $391 million and more than 3,000 jobs last year because of the farm labor shortages. Another study, conducted by UGA’s Center of Agribusiness and Economic Development, showed that 18 Vidalia farms lost approximately $16 million and 835 jobs because there were too few people to work the fields and packing operations.
employees or those who hire workers only seasonally, which is defined as 90 days or less in a period of 12 consecutive months. Despite the agriculture exemptions this patchwork of state immigration laws may provide, Larry Wooten, North Carolina Farm Bureau president, and thousands of other farmers and ranchers maintain that immigration is a federal issue and must be addressed by Congress. “Agriculture needs labor,” Woo-
ten said. “Labor is crucial, especially in a state like North Carolina. The whole issue of immigration brings in the whole discussion of immigration policy in the United States. This issue of immigration is clearly a federal issue. Certainly we need comprehensive work done in Washington.” Kristi Boswell, American Farm Bureau Federation labor specialist, echoed Wooten’s call for action on Capitol Hill. “State-by-state immigration policies cause hardship to both farmers and immigrant farm laborers. Even workers with all their paperwork in order are hesitant to stick around due to the heightened scrutiny, which in turn causes shortages for farmers,” Boswell said. “The potential for E-Verify to be made mandatory nationwide finally forces congressional lawmakers to look at this issue seriously and develop an agricultural guest worker program that addresses farmers’ unique needs across the country.” With mandatory E-Verify in place without a workable solution to agriculture’s labor shortage, agriculture faces estimated production losses of $5 billion to $9 billion per year, Boswell warned.
For Arkansas, drought is more of the same, only worse With more of the nation in a drought than not and huge Midwestern grain crops threatened, the 2012 drought is big news across the country. For parts of the South, however, it’s nothing new. Texas’ and Oklahoma’s drought last year already was one for the record books and caused livestock producers to flood the market by liquidating herds they could no longer feed. The weather there is
still dry, but things are a bit better. This year, the extreme drought has moved north and east. Every southern and southwestern state has some degree of drought this year. In Arkansas, the entire state is in a drought, according to the National Drought Mitigation Center. The center of the state is in the D4 or exceptional drought category, the worst drought level. USDA has declared the entire state a disaster area. “We had dry conditions last year,” explained western Arkansas poultry and beef cattle producer Gene Pharr. “But not nearly as bad as this year. We were kind of on the edge of drought last year.” In fact, farmers and ranchers in western Arkansas who provided hay to neighboring Oklahomans and Texans last year are now getting hay from those states, according to Rich Hillman, a rice and soybean farmer in Carlisle, Ark., and vice president of the Arkansas Farm Bureau Federation. “The livestock industry in western Arkansas has no pasture,” Hillman said. Sale barns are full, with producers selling off their herds. Pharr hopes to hold on to his cattle. “It just depends if I can buy
enough hay to get them through the winter,” he said. He typically wouldn’t feed hay until November or December. Now that he has run out of pasture, bought hay is already on his cattle’s menu. He also is coping with the cost of using “city water” for the cattle and more electricity to run evaporative cooling to keep the animals comfortable. Pharr raises poultry under contract with an integrator that owns the chickens and the feed, so he doesn’t bear the higher cost of feed for the birds. However, he fears feed prices will cause integrators to put fewer birds in farmers’ chicken houses, slashing the pounds they produce and hurting their bottom line. Hillman says farmers in his area, east of Little Rock, are working with less than half an inch of rain in the last 75 days, on average. The norm is an average of eight inches a day. One acre of rice needs about 30 inches of water for the growing season. About a third of that usually comes from Mother Nature. Almost all of it this year has come from groundwater or surface water that Hillman has had
to pump. He has six reservoirs; three are dry and the other three are dangerously low, he said. His irrigation expense, normally about $100 an acre, will exceed $150 an acre this year, he estimates. Usually feed and fertilizer are Hillman’s big ticket items. This year, those costs will be dwarfed by the energy costs to pump water to his fields. Hillman’s rice is about two weeks from harvest, and in his field scouting he’s seen signs of trouble. High temperatures, especially at night, cause rice kernels to break and turn chalky during milling. That results in a major price reduction when farmers take their rice to the mill. “That could be an additional ding to our margin that a lot of us are fearful of,” he said. Hillman and other rice farmers routinely rotate their rice with either corn or soybeans. In a normal year, he said, he would use about two-thirds of his irrigation water on the rice crop and the other third on his soybeans. This year, he has had to use more of the water that would go for the soybeans to keep the rice growing. “Our yield on soybeans is going to be affected also,” he said.
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Catfish farmers face shifting tides of imports, costs A shortage of catfish to meet consumer demand last year gave catfish farmers their first profitable year in a long time. It also came with a downside. According to an Auburn University-Mississippi State University (MSU) report, the shortage caused many seafood buyers to buy lower-priced imported catfish or turn to alternative fish species to meet their needs, exacerbating foreign competition that has sunk the U.S. catfish industry’s fortunes for the last decade. The price paid by processors to catfish farmers averaged $1.18 per pound in 2011, after averaging just 78 cents a pound for the previous four years. The price continued to rise through early 2012, reaching $1.25 per pound in January. Now, catfish prices are starting to take another dive, just as the cost of feed is about to go up due to this year’s drought. The latest national price average reported by USDA in May was $1.04 per pound. For some farmers, the recent price recovery is too little, too late. Wanda Hill, a catfish producer near Belzoni, Miss., the self-styled catfish capital of the world, estimates about half of the catfish farmers who were in business five to 10 years ago have gotten out, and she’s about to join them. “The price is going down again, but the price of feed and fuel isn’t going down,” Hill said. “We’re slowly phasing out,” she added, a process that takes time because of having to find someone to buy the inventory of fish. Hill says she and her son, Wayne, who farms with her and serves on Mississippi Farm Bureau’s aquaculture committee, have dried up about half of their pond acreage. She says ponds all across the Mississippi Delta that used to be filled with fish now have grass, trees, soybeans and other crops growing in them. Nationally, U.S. pond acres devoted to catfish production have plummeted from the 2002 high of almost 197,000 acres to last year’s approximately 90,000 acres. Catfish is the sixth-most consumed fish or seafood product in the U.S. and, actually, consumption is increasing. The U.S. catfish industry is based mainly in the Southeast with its warm climate, flat topography, clay soils good for holding water and vast network of rivers and other freshwater sources. Mississippi is the leading catfish producing state. The industry grew from the 1960s through
the 90s. However, as more American consumers got hooked on eating catfish, overseas producers ramped up and started angling for their share of the market. Imports have grown from 20 percent of catfish sold in the U.S. in 2005 to a whopping 76 percent in 2011. “The southeast Asian aquaculture industry grew tremendously during the early to mid2000s,” explained Butch Wilson, president of Catfish Farmers of America (CFA). Leading the pack is Vietnamese aquaculture, he said, which produces and exports a catfishlike fish marketed in the U.S. as basa or swai. “This product is grown and sold at a fraction of the cost of domestic seafood products,” Wilson said, and the lower price appealed to consumers as the economy floundered. What those consumers may not realize, he said, is that there’s a lack of government regulation and oversight in Vietnam, and fish are grown there in polluted waters, with large amounts of chemicals and antibiotics used to offset the unhealthy growing conditions. “Most, and sometimes all, of the chemicals and antibiotics used in Vietnamese aquaculture are illegal for use in food products in the United States,” Wilson said. U.S. farm-raised catfish are raised in freshwater ponds and fed high-quality grain, made up mostly of soybean meal, but also sometimes a little corn or rice. The price of that feed has skyrocketed since 2001. Last year, the catfish industry saw feed price peaks never seen before, according to the Auburn-MSU report. Even with the higher quality of U.S. farmraised catfish, most consumers are lured by the low price of Asian imports, laments catfish farmer Hill.
“People are just looking at the price, not the product,” she said. “It’s a lack of education. People don’t realize what they’re eating.” Only about 2 percent of imported catfish is inspected. The U.S. catfish industry has worked to change that. The 2008 farm bill shifted inspection of catfish from the Food and Drug Administration (FDA) to USDA’s Food Safety and Inspection Service (FSIS) and required the agency to establish an aggressive catfish inspection program. After years of inaction, the department finally issued regulations for the program last year, but it still isn’t finalized. At the urging of fish importers, according to Wilson, the Senate-passed farm bill included an amendment to repeal the USDA catfish inspection program. The farm bill passed by the House Agriculture Committee would retain the program. As the farm bill moves forward, Wilson says, CFA will continue to support FSIS inspection of catfish, “which will strengthen food safety for American consumers.” “Our domestic catfish industry would also be covered and inspected at 100 percent,” he emphasized, “just like imported catfish and catfish-like species. This is about protecting consumers and ensuring a safe seafood supply.” The industry is also supporting a farm bill provision instructing USDA’s Risk Management Agency to explore the possibility of creating a margin insurance program for catfish farmers, to help protect them from volatility in feed costs and market prices. Consumers who want safe, quality catfish should look for the U.S. farm-raised label, according to CFA. National country-of-origin labeling regulations cover fish sold in grocery stores. Also, legislators in Alabama, Arkansas, Louisiana, Mississippi and Tennessee have passed similar country-of-origin labeling requirements for restaurants serving catfish and other seafood, also requiring labels and menus to indicate whether the fish was grown or caught. “The greatest asset to the U.S. farm-raised catfish industry is an educated consumer,” Wilson said. “That’s why we’ve worked so hard over the years to explain the difference between our product and the imported catfish and catfish-like species grown in China and Vietnam. Our research has shown that, given the choice, Americans prefer domestic catfish.”
July 30, 2012
Despite votes, little progress made on taxes In this final stretch before congressional lawmakers begin their month-long recess on Aug. 6, the House leadership says it’s planning a vote on the Job Protection and Recession Prevention Act of 2012 (H.R. 8), which would extend for one year numerous tax cuts passed in 2001 and 2003, as well as the current estate tax exemption of $5 million per person and the 35 percent top rate. In addition, the bill would provide for 2012 and 2013 a patch for the alternative minimum tax. The House’s expected vote follows Senate action on two bills showcasing the tax-related campaign positions of the Republican and Democratic parties. Last week, the Senate passed Majority Leader Harry Reid’s (D-Nev.) Middle Class Tax Cut Act (S. 3412), which would extend the 2001-2003 tax cuts for individuals making less than $200,000 and couples making less than $250,000. The bill, which Farm Bureau opposed, does not address the estate tax. Unless Congress acts, in 2013, the estate tax exemption will revert from the current $5 million per person to $1 million per person and the top rate will increase from the current 35 percent to 55 percent. Also,
the spousal transfer provision that allows surviving spouses to claim the unused exemption of their deceased spouse will be lost. “A $1 million exemption is not high enough to protect a typical farm or ranch able to support a family from estate taxes and, when coupled with a top rate of 55 percent, will make it especially difficult for farm and ranch businesses to transition from one generation to the next,” American Farm Bureau Federation President Bob Stallman wrote to senators before their vote. The bill’s provisions on capital gains are also a problem for growers, particularly for those looking to get started and those who want to upgrade or expand their farms and ranches, Stallman said. The measure extends through 2013 the 15 percent tax rate for dividend and capital gains income for couples making less than $250,000. The rate will increase to 20 percent for other taxpayers. “Extending lower rates for taxpayers making under $250,000 annually does not mitigate the damage since the sale of farm assets tends to produce a one-time income surge likely to push a farmer or rancher over the threshold,” Stallman explained. The Senate rejected the Republican alterna-
tive offered by Sen. Orrin Hatch (R-Utah), the Tax Hike Prevention Act of 2012 (S. 3423). The bill, which had the backing of farmers and ranchers, extends the 2001-2003 tax cuts for all taxpayers for one year and contains instructions for passing fundamental tax reform. It also keeps the $5 million estate tax exemption and 35 percent top rate in place for another year. Stallman said the Tax Hike Prevention Act of 2012 would temporarily extend relief for all Americans and put Congress on a path toward fundamental reform. House leaders said they will not take up the Senate-passed tax bill, which means it will likely go no further as tax legislation has to originate in the House. “We’re nearly down to the wire, with only 13 legislative days to go between Congress’ return from the August recess and the election,” said Pat Wolff, AFBF tax specialist. “Last month showed us how very far apart the Republican-led House and the Democrat-controlled Senate are on tax issues. It’s not impossible, but it will be a heck of a hike to reach middle ground.” Lawmakers are expected to act on tax legislation after the election.
JEC report shows economic harm of estate taxes A new report from the Joint Economic Committee details the threat posed by estate taxes to family businesses and the economy as a whole. The JEC is a bipartisan committee composed of members from the House and Senate. However, the report, “Costs and Consequences of the Federal Estate Tax,” was issued by the Republicans on the committee. According to the report, there are extensive costs associated with the estate tax in terms of the dissolution of family businesses, slower growth of capital stock and a loss of output and income over time. This can be particularly hard on farm families, who own 98 percent of the nation’s 2.2 million farms. “With the average age of a farmer being 58 years old, the estate tax creates even a further barrier on young farmers and ranchers to take up the profession at a time when farming is already difficult to enter,” said American Farm Bureau
Federation President Bob Stallman. In addition, the report shows that the estate tax impedes economic growth because it discourages savings and capital accumulation. Gaining access to capital is vital to farms and rural economies. In 2010, land alone accounted for approximately 85 percent of total farm assets. Currently, in some parts of the country, land values have increased well over $10,000 per acre. Further, land values from 2010 to 2011 increased on average 25 percent and have greatly expanded the number of farms and ranches that now top the estate tax $5 million exemption. Especially holding true for farmers and ranchers, the report also found that the estate tax is a significant hindrance to entrepreneurial activity since many family businesses lack sufficient liquid assets to pay estate tax liabilities. In 2010, liquid assets in agriculture comprised only 12
“There are extensive costs associated with the estate tax in terms of the dissolution of family businesses, slower growth of the capital stock, and the resulting loss of output and income over time.”—Joint Economic Committee (Republicans) report
• Individuals, family partnerships and family corporations own 98 percent of our nation’s approximately 2.2 million farms.
• The estate tax creates another barrier for aspiring young farmers and ranch ers at a time when farming is already difficult to enter.
“The estate tax is a significant hindrance to entrepreneurial activity because many family businesses lack sufficient liquid assets to pay estate tax liabilities.”—Joint Economic Committee (Republicans) report
• In 2010, liquid assets in agriculture comprised only 12 percent of total assets.
Hard assets, including land and buildings, comprised 88 percent of total assets.
• Real estate accounted for approximately 85 percent of farm assets in 2010.
percent of total assets whereas hard assets (including land and buildings) comprised 88 percent of total assets. Alone, real estate accounted for approximately 85 percent of farm assets in 2010. “When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners are forced to sell illiquid assets, such as land, buildings or equipment to keep their businesses operating,” said Stallman. “With 85 percent of farm and ranch assets illiquid, producers have few options when it comes to generating cash to pay the estate tax.” In a press conference during which the report was released, Rep. Kevin Brady (R-Texas) pointed out the estate tax’s many weaknesses. “It fails to generate sufficient revenue,” he said. “It fails to redistribute income or boost the economy. And it fails to meet any basic standard of fairness. Both our economy and federal tax revenues would grow faster if the estate tax was simply abolished.” Fourth-generation Missouri beef cattle rancher Glen Cope, who lives and works alongside his wife, parents, brother and sister-in-law on the same land his great-grandparents settled in 1911, also participated in the press conference.
Cope described his family’s near-miss with death tax disaster when his grandmother passed away in 2009, when the exemption was $3.5 million, significantly higher than the $1 million exemption that will be in effect next year unless Congress acts. “If she had passed away when the exemption was only $1 million, that would have been devastating to our livelihood because only roughly 10 percent of the farm would have been exempt,” he said. “We would have been forced to sell land, livestock, hay and equipment to pay this tax.” Cope, chair of the AFBF Young Farmers & Ranchers Committee, also noted that the uncertainty in the tax’s future exemptions and rates can make it very difficult to prepare to pay for it. AFBF supports permanent elimination of the estate tax. Until this can be accomplished, Farm Bureau supports extending the current $5 million exemption. Without congressional action, in 2013, the estate tax exemption will shrink to $1 million per person with no spousal transfer, and the top rate will increase to 55 percent, striking a blow to farmers and ranchers trying to transition from one generation to the next.
IFYE orientation programs Continued from page 2 ment to IFYE program objectives, expectations and procedures. The exchangees clarify their goals for the experience and share them with other participants and program leaders as they prepare for safe international travel, practice skills for living in another culture and discuss ways to share their experiences once they return home. They also get to experience some of the local culture in the area where the orientation is held. By the time they embark on their travels, the IFYEs are well
prepared to serve as ambassadors for their country, experience other cultures and make the most of their trip abroad. IFYE participants learn a lot before they even go on the trip. They are sent around the world or across the U.S. well-prepared for the different life experiences and cultures they will encounter. If you or someone you know is interested in IFYE and would like more information, please contact Alan Lambert, president of the IFYE Alumni Association of the USA, at firstname.lastname@example.org.
July 30, 2012
State FB Links
State quota, Navigator status As of July 16, 2012 Quota states Alaska: 340 member families Louisiana: 148,406 member families Mississippi: 199,502 member families Navigator states Montana: 16,896 member families Pennsylvania: 54,725 member families
California Farm Bureau sues over solar project
Hawaii governor signs several new laws to help farmers
Illinois Farm Bureau planning Meet the Buyers events
FB backs West Virginia farmer in suit against EPA
The California Farm Bureau Federation is suing Fresno County for permitting a 90-acre solar plant on agricultural land. A hearing for the case is set for Oct. 19. The case is the first legal showdown between the agricultural community and the solar industry in Fresno County. The solar project at issue is planned for prime farmland. Last summer, the Fresno County Board of Supervisors agreed to free the project from the Williamson Act, the state law that commits land to farming. Fearing other projects will be released from farming commitments, CFBF officials decided to file suit against the county. A handful of solar projects have been approved in Fresno County recently and 30 await approval. A new California state law requires a third of California’s power needs to be generated from renewable sources by 2020. The new energy proposals in rural San Joaquin Valley have left many fearful farmland will be taken away for these projects. “Our state’s farmers and ranchers support renewable energy, but we’d like to see energy-production facilities placed on marginal or less-productive farmland so we can preserve the best soils for growing food,” said Megan Alpers of CFBF.
Hawaii Gov. Neil Abercrombie recently signed a number of bills into law that will benefit Hawaiian farmers. Act 113 authorizes agricultural-based commercial operations in agricultural districts, which will increase farmers’ ability to sell their products and promote food sustainability for the islands. The state legislature worked with the Hawaii Farm Bureau Federation on Act 114, which intends to promote and support diversified agriculture by exempting certain nonresidential agricultural buildings that are on commercial farms from county building permit requirements. “Streamlining agricultural building construction will encourage current and prospective farmers on Maui and the other islands to grow their operations and thereby reduce Hawaii’s dependence on imported food and increase the sustainability of Hawaii’s farms,” said Warren Watanabe, executive director of the Maui County Farm Bureau. Additionally, Gov. Abercrombie signed into law several other agriculture-related measures including making agricultural theft a felony and appropriating money for agricultural inspectors to prevent invasive species and to reimburse livestock producers for feed costs.
The Illinois Farm Bureau and the University of Illinois Extension are planning Meet the Buyers events for farmers in Northern and Central Illinois to explore new markets in late summer and fall. First on the schedule will be a Northern Illinois multi-county event on Aug. 28 in the Highland Community College Conference Center in Freeport, Ill. The hosts include area county Farm Bureaus, ILFB and the U of I Extension. “Meet the Buyers meetings have proven to be popular venues for farmers who want to make contact with the decision makers with grocery store chains and stores, foodservice distributors, health food stores and restaurants,” said Cynthia Haskins, ILFB manager of business development and compliance. Additionally, a special chef-farmer networking reception will take place in the afternoon of the Aug. 28 event. “There are a number of local restaurants that are already connecting with local growers and others are exploring the possibility of using local produce. We are excited to bring several of them together to meet local producers,” said Margaret Larson, director with U of I Extension for JoDaviess, Stephenson and Winnebago counties.
Lois Alt, a West Virginia poultry grower and Farm Bureau member, has sued the Environmental Protection Agency after it ordered her to obtain a Clean Water Act discharge permit. The American Farm Bureau Federation and West Virginia Farm Bureau filed a motion to intervene on the side of Alt in the lawsuit concerning EPA’s authority to regulate poultry and livestock farms under CWA. Alt sued EPA in June after the agency ordered her to obtain a National Pollutant Discharge Elimination System discharge permit. EPA’s order threatens Alt with $37,500 in daily fines for stormwater that may come into contact with dust, feathers or dander deposited on the ground outside of poultry house ventilation fans, or small amounts of manure that may be present in the farmyard as a result of normal poultry farming operations. EPA also seeks separate fines if Alt fails to apply for an NPDES permit for the alleged “discharge” of stormwater from her farmyard. “Lois Alt runs an exemplary operation and has even won awards for the environmental stewardship she practices on her farm,” said American Farm Bureau Federation President Bob Stallman. “Her efforts to defend herself and her family farm against an illegal EPA order are commendable.”
Chevy Confidence program boosts members’ savings Until Sept. 4, 2012, Farm Bureau members buying Chevy vehicles can boost their savings. In addition to the GM Private Offer incentive that already saves members in 40 states $500 on the lease or purchase of most Chevrolet, Buick and GMC vehicles, Chevy’s Total Confidence Pricing program will provide discounts off the original manufacturer’s suggested retail price of any new Chevrolet. Customers with questions about the Chevrolet Confidence program can contact Chevy Sales Support at 1-800-950-CHEV, or visit www.chevyconfidence.com. The GM Private Offer, a benefit of Farm Bureau membership in 40 states, applies to Chevrolet, Buick and GMC vehicles, with the exception of the Chevrolet Volt. The program isn’t available in all states. Farm Bureau members should check with their state Farm Bureau to determine eligibility.
July 30, 2012
State Farm Bureau annual meeting dates • Alabama
• New Mexico
• New York Dec. 4-6 Albany
• Rhode Island
Nov. 27-30 Grand Rapids
• North Carolina
• South Carolina
• North Dakota
• South Dakota
• West Virginia
• New Hampshire
• New Jersey
Dec. 2-4 Montgomery Nov. 10 Anchorage Nov. 7-9 Litchfield Park Nov. 28-30 Hot Springs Dec. 1-5 Pasadena
Nov. 15-18 Denver Nov. 16 Waterbury Nov. 26 Dover
Oct. 24-26 Ponte Vedra Beach Dec. 2-4 Jekyll Island
Oct. 30-Nov. 1 Honolulu Dec. 4-6 Boise Dec. 1-4 Chicago
Nov. 29-30 Pittsfield
Nov. 29-Dec. 1 Bloomington
Dec. 6-8 Indianapolis Dec. 4-5 Des Moines Dec. 4-5 Manhattan Dec. 5-8 Louisville
June 28-July 1 New Orleans Nov. 12 Auburn
Dec. 1-3 Jackson
Dec. 1-4 Osage Beach Nov. 11-14 Billings Dec. 3-4 Kearney
Nov. 15-17 Albuquerque
Dec. 2-4 Greensboro Nov. 16-17 Fargo
Nov. 28-30 Columbus Nov. 9-11 Oklahoma City Dec. 4-6 Salem
Nov. 12-14 Hershey
Nov. 15 Charlestown
Nov. 29-Dec. 1 Myrtle Beach Nov. 16-18 Spearfish Dec. 2-4 Franklin Dec. 1-3 Waco
Nov. 2-3 Killington Nov. 27-29 Chantilly Nov. 12-15 Yakima Nov. 9-11 Sutton
Nov. 30-Dec. 3 Wisconsin Dells Nov. 15-17 Laramie
Nov. 15-16 Layton
Nov. 8-10 Carson City Nov. 2-3 Portsmouth
Dec. 2-4 Ocean City
Nov. 12-13 Princeton
Congress getting closer to PNTR for Russia Continued from page 1 The question remains though, whether Congress can get the bill finalized before it begins its August recess. With Russia set to become a member of the World Trade Organization on Aug. 22, time is of the essence. In a letter to the House Ways and Means Committee just before its vote, American Farm Bureau Federation President Bob Stallman explained why PNTR for Russia is so important to U.S. growers. “PNTR ensures that the U.S. benefits from Russia’s accession to the World Trade Organization and remains competitive in the market,” Stallman wrote. “U.S farmers and ranchers will have more certain and predictable market access as a result of Russia’s commitment to not raise tariffs on any products above the negotiated rates and to apply international food safety standards in a uniform and transparent manner.” Under its WTO accession agreement, immediately upon joining, Russia will reduce tariff rates and domestic farm subsidies, as well as eliminate export subsidies. It will make additional tariff reductions over time. Russia also has agreed to follow globally-accepted scientific standards on food safety and health issues and limit trade disruptions. Senate Finance Committee Chairman Max Baucus (D-Mont.) emphasized how much is at stake if Congress fails to pass PNTR for Russia by August. “There is no time to waste; America risks being left behind,” Baucus said. “If we miss that deadline [of Russia’s WTO accession], American farmers, ranchers, workers and businesses will lose
out to the other 154 members of the WTO that already have PNTR with Russia. American workers will lose the jobs created to China, Canada and Europe when Russia, the world’s seventh largest economy, joins the WTO and opens its market to the world.” Wayne Wood, Michigan Farm Bureau president, in June told the House Ways and Means Committee that exports of U.S. farm goods to Russia are likely to increase substantially following congressional approval of PNTR and the country’s accession to the WTO. U.S. sales of beef, poultry, pork, apples, cheeses, soybeans and soybean products are all expected to grow due to improved market access. Russia’s commitment to adhering to WTO provisions on sanitary and phytosanitary (SPS) measures in particular will benefit U.S. farmers and ranchers because this will limit the country’s ability to impose arbitrary measures that have impeded trade in the past. Wood noted that a focus of Russia’s WTO accession negotiations was ensuring that the country would pass and implement laws and resolutions requiring its government agencies to follow international SPS standards. And if Russia fails to live up to its end of the bargain, there will be a forum to address these shortcomings. “Russia’s compliance with its obligations, including those on tariffs and non-tariff measures, will be enforceable through use of WTO dispute settlement procedures,” Wood noted. In closing, Wood emphasized the high stakes PNTR for Russia represents for U.S. farmers and ranchers.
“Our competitors for the Russian market will have the full benefit of Russia’s accession agreement commitments when Russia becomes a full WTO member. American agriculture must not
lose market opportunities to other countries due to inaction,” he said. Approval of PNTR with Russia is Farm Bureau’s top trade priority with Congress in 2012.