Gearing up for the New Farm Bill
June 19, 2006
What does the U.S. dry bean industry want to see included, excluded, or changed in the next farm bill? Leaders of the U.S. Dry Bean Council took a first step toward answering that question in a farm policy paper recently prepared by the USDBCs Government Affairs/Ag Issues Committee.
Wisconsin grower and USDBC president Cindy Brown stresses the farm bill information paper is intended to be a starting point for discussions within our industry and not an ending point.
Brown says there is currently some talk in Congress of extending the current Farm Bill, in part to see what happens from the ongoing World Trade Organization talks. It is far from certain, however, that an extension will come to pass, she says. What is certain is that eventually a new farm bill will be drafted. Your participation and feedback will help ensure that the U.S. dry bean industry interests are protected when that time comes.
Growers, processors, and others in the Northarvest region are encouraged to review the following, and then offer feedback and input to help the USDBC move forward.
U.S. Dry Bean Council Farm Bill Information Paper (drafted Spring, 2006)
Industry background: Edible dry beans are grown for commercial use in about 20 states. More than 20 different classes of dry beans are grown, including pinto beans, black beans, kidney beans, Great Northern beans, lima beans, navy beans and red beans. In 2005 production was about 1.23 million metric tons of all classes of dry beans, having a value of approximately $740 million.
Dry beans are becoming more widely recognized as a nutritious, healthy food. In fact, it is one of the few foods with a dietary guidance message that a diet including beans may help reduce the risk of heart disease and certain cancers. Further, dry beans are currently the only commodity listed twice on the new USDA Food Pyramid, in both the meat group (high protein) and also within the vegetable group. Dry beans have also been found to contain high levels of anti-oxidants, and can aid in the fight against obesity and diabetes due to a low glycemic index.
Dry beans in the farm bill: U.S. dry bean growers have not participated financially, i.e. received support payments, in previous farm bills. Dry bean growers have been proud to proclaim that dry beans receive no subsidies. At the same time, the one common provision of the subsidized price support programs that helped the traditional bean grower was that program crop growers were not allowed to plant non-program crops (such as dry beans) on program acres, and still receive a payment. This provision (fruit and vegetable planting prohibition) basically prohibited a grower from receiving a farm subsidy when planting dry beans (or other specialty crops) on their corn, soybean, or other crop base.
WTO ruling: Several years ago, Brazil instituted an action in the World Trade Organization against the U.S. cotton program as being trade distorting and in violation of WTO agreements. In the WTOs recent ruling for Brazil, it reasoned that the U.S. program restriction on the planting of fruit and vegetable crops on cotton program acres is trade distorting, and in violation of the WTO established rules. By penalizing growers who plant specialty crops (like dry beans) on program crop acres, that penalty influences plantings and increases production of program crops.
Due to this ruling, and despite well intentioned and vigorous efforts to maintain the restriction, there is a great likelihood that the current restricted planting provision applied to program crops (fruit and vegetable planting prohibition) will be eliminated in the next farm bill. If eliminated, this will allow program crop producers to continue receiving their direct payments, even if they plant specialty crops on program acres. At the same time, this will leave the traditional grower (those with a dry bean or specialty crop history) left to compete with no direct payment.
Other affected crops: As with dry beans, there are many other specialty crops primarily categorized as fruit and vegetable crops that would be affected by this potential rule. The one major difference between dry beans and most other specialty crops are the barriers to entry. Most specialty crops need high levels of investment: equipment to plant, maintain and harvest that crop along with the technical expertise, marketing and labor. For dry beans, that is not the case there are few barriers of entry compared to other specialty crops. Anyone with the equipment to plant and harvest grains, such as soybeans or corn, can use that same equipment to produce a dry bean crop.
USDBC position: USDBCs historical position is to see that nothing is included in a new farm bill that negatively affects dry beans. This position has endorsed the planting restriction and opposed establishment of a support program and payment to growers of dry beans. While we expect this to remain the initial position of USDBC, due to possible agreement in the current Doha WTO negations and/or to the Brazil cotton case ruling, this may not be obtainable. In the event that planting restrictions are eliminated, should USDBC have a fallback position? Should the fallback position treat all growers equally regardless of whether they have historical acreage, and if so how can that best be accomplished? Should all dry bean growers be eligible for a payment/reimbursement per acre, whether they are non traditional growers with only a corn or soybean base, or traditional growers who have a dry bean history?
Comments requested on key issues: USDBCs Ag Issues Committee would like to receive feedback on these issues so that they can be thoroughly discussed, and a definitive position(s) be adopted by no later than the upcoming summer meeting. The committee would like comments on:
" Maintaining the position of retaining present planting restrictions;
" Maintaining opposition to any type of program participationeven direct payments;
" Adopting a fallback position for dry bean growers;
" Seeking some type of direct payments for fruit and vegetable growers for example, a suggestion that such payments may be equal to a percentage of all present direct payments, that is proportional to the value of fruit and vegetables compared to the value of all commodities, with payments being based on a growers historical base acreage;
" Seeking some type of a conservation practice payment for beans that is not tied to other payments, and encourages growing beans as a positive conservation practice, i.e. legume in a crop rotation.
" Maintaining traditional support for indirect benefits for the bean industry, i.e. block grants, research, export promotion, enhanced crop insurance, etc. note these benefit traditional growers (those with a history) as well as any new dry bean growers, including those planting dry beans on program base acres who obtain a direct payment.
" Other recommendations?
Conclusion: We want to minimize any negative impact and enhance the position of dry bean growers from the new farm bill. While we do not want to limit any grower from planting dry beans, we do need to ensure that all growers of dry beans, traditional and non-traditional, receive equal benefits in future farm fill or other legislation.
What do you think? Contacts for your ideas and suggestions:
" Mark Myrdal, Edinburg, N.D., USDBC and NBGA board member, 701-993-8243, email@example.com.
" Alan Juliuson, Hope, N.D., USDBC and NBGA board member, Cell: 701-840-0316, firstname.lastname@example.org.
" Tim Courneya, USDBC board member, NBGA executive director, 218-334-6351, email@example.com.
" Dennis Engelhard, USDBC government affairs/ag issues committee chair, 989-977-1482, firstname.lastname@example.org.
" Cynthia A. Brown, USDBC president, 715-664-8342, email@example.com.
" Randy Duckworth, USDBC executive Director, 360-277-0112, firstname.lastname@example.org.