RECENT NEWS
Reuters  Apr 6  Comment 
U.S. Senator for Kansas Jerry Moran said he assumes the Trump Administration would try to use U.S. farm bill legislation, which helps farmers withstand economic slumps, to shield the sector in a growing U.S.-China trade dispute.
Biomass Magazine  Mar 7  Comment 
On March 6, a group of more than 200 companies and trade associations sent a letter to House and Senate Agricultural Committee leaders urging them to reauthorize and fund energy title programs in the next Farm Bill.
Biomass Magazine  Mar 5  Comment 
The Farm Bill Energy Title programs represent one-tenth of a percent of the overall bill’s cost. Yet, they have such a huge impact on rural economies—diversifying crops, sustaining and creating jobs, new industries and supporting new...
Benzinga  Dec 26  Comment 
A farm bill is likely to move in the first quarter of 2018, according to Rep. Collin Peterson, a Minnesota Democrat and ranking member of the House Agriculture Committee, and a spokesperson for the committee's chairman. The proposals include...
Biomass Magazine  Dec 15  Comment 
On Dec. 13, the House Agriculture Committee launched a landing page for the 2018 Farm Bill that is designed to provide updates and information related to development of the legislation. The committee is also launching a Farm Bill video series.
Biomass Magazine  Oct 25  Comment 
The Biotechnology Innovation Organization and 66 renewable chemical producers recently asked the House and Senate Committees on Agriculture to reauthorize the Farm Bill’s Biorefinery, Renewable Chemical, and Biobased Manufacturing Assistance...
Biomass Magazine  Oct 2  Comment 
On Sept. 28, the U.S. Senate Committee on Agriculture, Nutrition, and Forestry held a hearing on the 2018 Farm Bill focused on rural development and energy programs. The committee has now held nine hearings this year focused on Farm Bill development.
Biomass Magazine  Sep 15  Comment 
On Sept. 7, Sen. Al Franken, D-Minn., introduced a package of legislation he hopes will serve as the basis for a new energy section of the next Farm Bill. The legislation increases investments in popular energy programs.
MedPage Today  Aug 11  Comment 
(MedPage Today) -- News and commentary from the endocrinology world
Biomass Magazine  Aug 10  Comment 
In late July, Rep. Andy Biggs, R-Ariz., introduced legislation that aims to repeal bioenergy programs contained under Title IX of the 2014 Farm Bill. A total of 10 programs, including the Rural Energy for America Program, would be eliminated.




 
TOP CONTRIBUTORS

The Farm Security and Rural Investment Act of 2002 is wide-reaching legislation touching farming, energy, forestry, and nutrition, among other industries. Over 90% of the funding for the Farm Bill, as its otherwise called, goes towards subsidization of U.S. farmers, and it heavily favors five grains in particular: corn, wheat, cotton, rice and oilseed (i.e., soybeans). This bill expires this year and if its 2002 passage is any indication, the renewal and specific focuses of the 2007 Farm Bill will be highly contentious.

Farmers Better Off

Farmers have experienced growing financial stability over the years. Corn, soybean, wheat and rice all returned significantly higher returns per acre in 2007 year to date than in 2006. Cotton, on the other hand, remained relatively flat. Corn in particular nearly tripled in returns per acre ($120 vs almost $350), while rice, soybeans and wheat saw increases around 50%. In addition, farms have the lowest debt levels since 1960 with a 12% debt to asset ratio. Debt ratios peaked at 22% in 1985 and remained around 15% through the early 2000s.

Total assistance from the U.S. government averaged approximately $17 billion per year from 2002-2006.

  • 43% of all farms received government payments in 2005.
  • Subsidies accounted for about 11% of gross revenue and 39% of net income for farms receiving payments in 2005.
  • The largest 10% of farms (by gross revenue) received nearly 60% percent of all subsidies in 2005.

Source: USDA

International Challenges

The Farm Bill legislation has truly global effects, as subsidies can profoundly affect the price of commodities traded on worldwide markets. And if the bill was contentious in Washington, D.C., it may be even more so on the international stage. The legislation gives U.S. growers such pricing advantages, the World Trade Organization (WTO) responded in 2004 by ruling the Farm Bill's cotton subsidies illegal on the grounds of "dumping," or selling below cost. Similar challenges to corn, wheat, rice and/or soy may have far-reaching consequences for commodity growers in the U.S., especially if the country makes concessions to lower subsidies in order to gain negotiation leverage at the Doha Round, the WTO's important forum for global free trade discussions.

Companies Positively Affected by Current Farm Subsidies

  • Commodity farmers such as Archer Daniels Midland (corn growers) benefit from currently existing subsidies, which are counter-cyclical--meaning that growers are buffered from downturns in commodity markets
  • Seed and pesticide companies such as Monsanto and Syngenta experience higher levels of demand as more farmers are financially able to grow key commodities
  • Farming machinery companies such as John Deere also benefit from subsidies due to increased demand from commodity growers
  • Processed food companies such as Sara Lee, Coca Cola, Pepsi and Kraft Foods pay lower effective costs for key inputs in food manufacturing (e.g., corn syrup, wheat flour) as a significant portion of commodity growers' revenue and profit comes from the government.

Companies Negatively Affected by Current Farm Subsidies

  • International grain growers become less competitive than domestic growers in the U.S. because government subsidies in effect lower prices to customers
  • Organic food growers such as SunOpta suffer from subsidies of corn, wheat, cotton, rice and oilseed because fruits and vegetables become relatively more expensive compared to processed foods, and competition for farming land increases
  • Health and organic food retailers such as Whole Foods and even Wal*Mart, which entered the organic foods market in 2006, are negatively affected as fruit and vegetable prices are relatively higher to consumers than food products which heavily utilize by-products of corn, soybeans and wheat.
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