Discussions begin on 2018 Farm Bill and Margin Protection Program

/ Scott

The National Milk Producers Federation (NMPF) was invited to testify to Congress in late July during a hearing on the 2018 Farm Bill.

NMPF said Congress must revise the dairy safety net program established in the 2014 Farm Bill to provide farmers with effective risk management protection that will increase participation in the program.

NMPF said that while the dairy Margin Protection Program (MPP) remains the right program for the dairy industry, “the changes Congress made to the MPP when writing the last Farm Bill rendered it ineffective when dairy farmers needed it the most.”

In calendar year 2015, dairy farmers paid more than $70 million into the MPP and received payments totaling just $730,000.

In 2016, those figures were $20 million and $13 million.

NMPF said farmers found that the program was not helpful during two years that were particularly detrimental to the dairy industry. As a result, many of them have become disenchanted with the program, and participation has dwindled.

In making the case for improving the MPP, NMPF detailed a list of proposed changes NMPF and its members had developed to improve it. The MPP is designed to help farmers insure against either low milk prices or high feed costs, but the determination of the feed price used in the margin calculation is problematic.

During the farm bill process, NMPF’s original proposed feed formula, though considered accurate, was cut by 10 percent to address other budget concerns. Based on the government profit made on the program, concerns about budget that led to the 10-percent cut were misplaced, NMPF explained.

NMPF said it is also important to expand dairy farmers’ access to additional risk management tools like the Livestock Gross Margin for Dairy Cattle (LGM) program and similar programs that could be offered by USDA.

“Making the [MPP] program more attractive for dairy farmers is vital to ensuring participation in the program, and the safety of America’s dairy industry.”

NMPF also touched on several other policy challenges affecting U.S. dairy farmers, including immigration and labor shortages, and the vitality of U.S. dairy trade as NAFTA renegotiations begin.

Statewide ag organizations challenge new permit requirement by Ecology

/ Scott

Washington State Dairy Federation and Washington Farm Bureau filed a joint appeal in February that challenges the recent Concentrated Animal Feeding Operation permits issued by the Department of Ecology.

Ecology has approved a state-only permit to address groundwater and a combined state-federal permit to address groundwater and surface water.

The permits went into effect in early March and are still available to dairy farmers who wish to apply for coverage. The intent of the appeal is to address elements that make the permits burdensome and unaffordable for most dairies.

“The requirements of the permits will make it harder to manage dairy nutrients,” said Dairy Federation Executive Director Dan Wood. “The intent is to set guidelines for environmental protection, but the requirements of the permits will make it harder to do that.”

Dairy farms are already regulated under the state Dairy Nutrient Management Act, and each dairy has one or more lagoons for holding nutrients (dairy manure) until the appropriate time to spread the nutrients as fertilizer.

The federal Natural Resource Conservation Service provides standards for dairy lagoon construction and maintenance. Most dairy lagoons are lined with clay, and some are lined with synthetic material.

“Dairy nutrients are a highly-valued natural fertilizer used to grow crops on dairies as well as on adjoining farms,” said Washington Farm Bureau Chief Executive Officer John Stuhlmiller. “Dairy is the state’s second-largest agricultural commodity and is extremely important to our state economy. It’s important to note that the nutrients from dairy operations are important to a lot of other farmers across the state, especially those growing organic crops. It’s a dependable supply of natural, healthy fertilizer.”

The appeal states the permits “impose management constraints that are contrary to the water quality protections the CAFO Permits seek to obtain, impose restrictions on the operations of dairy farms that would decrease rather than increase water quality protection, will cause WSDF members to suffer economic loss with no or no meaningful corresponding protection of water quality, and include terms that are unachievable because the CAFO Permits are divorced from the reality of Washington’s annual crop harvest, rainfall, and manure applications.”

“The permits failed to take into account some key farm management practices,” noted Stuhlmiller. “They require fall soil sampling after crop harvest but no later than October 1. A lot of farms haven’t even started their crop harvest by then, making it virtually impossible to comply with the demands of the permits.”

Stuhlmiller also noted that the testing requirements and nutrient application limitations are particularly counter-productive for Eastern Washington, where many fields see two harvests in the course of a year.

“There are a number of management restrictions that will result in less-productive crops, less uptake of the nutrients by the plants, and a need for bigger lagoons,” said Wood. “The regulations in the permits will work against good management practices.”

The appeal also notes that the Economic Impact Analysis “underestimates the actual impacts on small businesses posed by costs of complying with the CAFO Permits. First, the EIA underestimated the costs of soil sampling and the impact on permittees from the delay for planting winter crops. The EIA also fails to recognize any economic impacts from the loss of land caused, for example, by the 100- or 35- foot land buffers” required by one of the permits.

The appeal requests that certain aspects of the permits be reviewed and revised to be consistent with state and federal laws and agency-prescribed practices that already regulate the use of livestock nutrients.

The appeal is expected to be heard by the state Pollution Control Hearings Board in early December.

2017 Legislative Session Recap

/ Scott

After a regular 105-day session followed by three 30-day special sessions, the Legislature called it quits for 2017 (so far). These special sessions come as no surprise, as over the past several years the divided Legislature has typically needed special sessions to resolve its business. However, 2017 set a record for the number of days the Legislature was in session.

During the regular session, lawmakers agreed on a bipartisan 2017-19 transportation budget. They reached agreement on the biennial operating budget hours before a June 30th deadline, averting a state government shutdown. Included in that budget package was an education funding plan designed to meet the Supreme Court’s McCleary mandate primarily through a state levy swap. A reduction of the B&O tax rate on manufacturers that was included in the budget deal was subsequently vetoed by Gov. Jay Inslee, instilling further acrimony into an already bitterly divided and opaque budget process. Continue reading →

Immigration reform ideas again floated in DC

/ Scott

Proposed H-2A Expansion

The House Appropriations Committee recently approved an amendment containing a proposal to allow farm employers to use the H-2A visa program to hire foreign workers, regardless of whether those employees are engaged in temporary or seasonal work. Congressman Dan Newhouse sponsored the proposal so that dairy farmers can more readily use the H-2A visa program to fill their need for year-round workers.

For more information, click here for the news release from National Milk.

If you are interested in finding out what the political opposition is saying, check out this post.

New Ag Guest Worker Bill

On a related note, the House Judiciary Immigration Subcommittee held a hearing [https://judiciary.house.gov/hearing/agricultural-guestworkers-meeting-growing-needs-american-agriculture/] recently on agricultural guest workers. Judiciary chairman Bob Goodlatte (R-Va.) is expected to introduce his ag immigration reform bill soon. According to reports, the Agricultural Guestworker Act will replace the H-2A system with a new H-2C system. The program would be administered by USDA and would serve the more diverse needs of dairy, food processing, and other year-round operations. Visas for existing and incoming workers would be up to 36 months long, and workers would have more portability and flexibility through working under contract or at will.

We will know more about the details of the proposal once a draft of it is released. Meanwhile, here is a link to Chairman Goodlatte’s statement about the bill.

RAISE Act

Finally, the President Trump, flanked by Sens. Tom Cotton (R-Ark.) and David Perdue (R-Ga.) at a White House ceremony, announced new legislation to reduce legal immigration to the United States. The Reforming American Immigration for a Strong Economy (RAISE) Act would reduce by 50 percent the number of people who can receive legal permanent resident status and would require English-language proficiency.

Proponents say the bill would move the United States to a “merit-based” immigration system and away from the current model, which is largely based on family ties.

Critics are concerned that curbing legal immigration will harm U.S. economic growth.

For more information on the RAISE Act, read this article.