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Policy

As the 115th Congress convenes for 2018, many changes are being discussed on Capitol Hill. During end of the year, a Farm Foundation Forum was held in Washington, D.C. that discussed expected changes for the 2018 Farm Bill.

Agricultural organizations nationwide urged farmers and ranchers to begin thinking about the 2018 Farm Bill and expressing their preferences.

“It’s not too soon to start talking about this Farm Bill, and we encourage producers to be active in the policy making process this winter,” said American Farm Bureau (AFBF) Lobbyist Mary Kay Thatcher.

Background

“When I talk to farmers, many of them say, ‘Why don’t we rename the Farm Bill so people know what it’s about. It’s not a farm bill as much as it’s a food bill,’” commented Thatcher.

In the 2014 Farm Bill, 77 percent of the bill cost was in the form of nutrition programs.

“It’s primarily the Supplemental Nutrition Assistance Program (SNAP), which was formerly called food stamps. However, it also includes funding for the Emergency Food Assistance Program, the Senior's Farmers’ Markets Program and the U.S. Department of Agriculture Snack Program for children,” explained Thatcher.

The 2014 bill’s second largest component was crop insurance, which is 10 percent of the bill.

“It’s been a very successful program, insuring almost 90 percent of all of the eligible cropland nationwide,” she said.

Other spending categories of the bill include conservation, commodities and other programs.

Friend of ag

The well-recognized face in agriculture of Chuck Conner was present during the Farm Foundation Forum in November.

Conner has served the agricultural industry in many facets including the agricultural committee at Capitol Hill, Corn Refiners, in the George W. Bush Administration and the U.S. Department of Agriculture as the Deputy Agriculture Secretary.

“He really was the point for ag policy in the Bush Administration. Since then, he’s been with the National Council of Farmer Cooperatives,” said Agri-Pulse Senior Editor Philip Brasher

The Washington, D.C. veteran gave considerable insight at the Forum as to the direction that the 2018 Farm Bill will most likely go.

“Chuck had some very strong opinions about what’s going to happen with the Farm Bill, and I think for a lot of our listeners who like the current Farm Bill with some tweaks here and there for commodities would probably like what he had to say,” continued Brasher.

Expected changes

According to Agri-Pulse Associate Editor Spencer Chase, Conner commented that the 2018 Farm Bill will not be an extension of the current policy.

“Chuck was adamant that there will be another farm bill and that an extension of the current policy that we’re working under right now would not suffice in the long term,” commented Chase.

The new bill will most likely address problem areas, including commodities, such as cotton and the Dairy Margin Protection Program.

Brasher explained that Conner described the plans for the new Farm Bill as “farmer friendly” and “pro-farmer.”

“He was emphatic that not only would there be a farm bill, but it would be a farm bill that farmers would like,” said Brasher.

Special interest groups most likely will not be effective in making significant changes to U.S. farm policy.

“Chuck made clear that the Environmental Working Group and Heritage Foundation, both of which would like to see some major changes in farm policy, were not going to be successful,” emphasized Brasher.

Looking ahead

Agricultural organizations, such as AFBF, are actively working to lobby for issues most relevant to their members for the 2018 Farm Bill, as well as to provide resources on current topics for the bill.

“Farm Bureau has put together a working group of AFBF staff and 16 staff from state Farm Bureaus to provide some opinion papers and to encourage farmers to be involved in the policy development process,” said Thatcher.

“If producers go to the website fb.or/farmbillworkinggroup, they’ll find almost 50 opinion papers dealing with many issues, as well as a survey and other resources,” she concluded.

Agri-Pulse plans to launch an in-depth editorial series in February for interested individuals titled “The Seven Things You Should Know Before You Write the Next Farm Bill.” It can be found at agri-pulse.com.

Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Late in April, the Wyoming Department of Agriculture (WDA) announced proposed changes to the state’s food safety rules, some of which have met with opposition.

“There is a lot of misinformation out there about these rules,” says  WDA Director Jason Fearneyhough. “We want to make sure that people have the right information.”

Fearneyhough explains that every few years, the WDA goes through a rule changing process to amend and update food safety rules. Changes this year have been made to chapters one through 12, 14 and 15.

“Chapters one through 12 are amended in response to revisions to the Food & Drug Administration 2009 Food Code which provides the latest scientific information on food safety,” says the Department. “The revisions in Chapter 14 reflect additional changes in areas of the Code of Federal Regulations regarding food safety. Chapter 15 is added in response to small egg producers desiring to sell their eggs to licensed and inspected food establishments.”

Amendments to raw milk consumption and sales of leafy greens and egg rules have caused concern.

“It has not been legal to sell shares in a milk cow in Wyoming for decades,” says Fearneyhough of raw milk rules. “We have not changed any rule to allow for that. It also isn’t legal to sell raw milk.”

However, he notes that they sought to clarify rules regarding serving raw milk.

“The rule clearly didn’t allow for that to happen in certain instances,” Fearneyhough mentions. “We want to make sure that in the proposed rule, you will be able to provide the milk from your own cow to your family, non-paying guests and employees of your farm or ranch.”

Those operations selling greens cut into small pieces would be subject to inspection. The definition of cut leafy greens does not apply to greens that are cut from the field and sold.

“Greens cut from the field are a raw agricultural commodity which means any food in its raw or natural state by definition in the Wyoming Food, Drug and Cosmetic Safety Act,” explains Linda Stratton, the assistant manager in consumer health services for the state. “These products do not apply as a cut leafy green.”

“Once you start handling the product, there is more potential for it to be contaminated,” says Stratton. “Cut, leafy greens are potentially hazardous.” 

Rules concerning the sale of eggs were identified as a point of concern for people fearing they would be unable to sell their product without inspection.

However, these rules apply to producers wishing to sell their products in licensed and inspected food establishments, and Fearneyhough adds, “We built our rules to reflect federal rules.”

“Restaurants have to have eggs from an approved source, so the rules were driven by the producers requesting to have the opportunity to sell to licensed establishments,” she says. “These changes were poultry industry driven.”

Producers wishing to sell ungraded eggs still have the ability to do so.

An overview of the rules was provided to the Joint Ag committee in early May, and the proper notices were issued concerning the comment period. 

The comment period will be extended 30 days, and public meetings will be held regarding the proposed changes. Information about the upcoming public meetings will be announced at a later date. 

The proposed changes can be viewed at wyagric.state.wy.us in the News Room section. Saige Albert is editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Denver, Colo. – “It’s hard to attack the issue if we can’t define it,” says Extension Economist David Anderson of Texas A&M University speaking of the cost of regulations. “What is excess regulation?”
    With the increasing number of regulations, looking at the effect of policies and laws is important to the survival of the agriculture industry, but Anderson says it isn’t a black-and-white subject, and research on the subject is lacking.
Why regulate?
    Regulations in the agriculture industry range from farm programs, risk management, conservation and environment issues to international trade, marketing, credit and food safety, among others.
    “Either industry asks for some of the regulations, there is established bureaucratic interest in a regulation or one or more segments of society see a need for regulation,” says Anderson. “Regulations are enforced by the market structure we have and some groups of consumers.”
Cumulative effects
    “As economists, we are seeing the cumulative effects of very small regulations build up over time,” he notes. “We are getting to a critical mass of regulations and forces.”
    He adds that while ideas may seem good, regulations build up and become burdensome, forcing producers out of business. The industry may be approaching a tipping point where the cost of regulations exceed business viability, so looking at the cost of regulation is important, says Anderson. However, quantifying that number is difficult.
    “Paperwork, hassle and time are difficult to quantify. How do you value your time, particularly as a producer?” asks Anderson. “Is that an expense or do you have to work harder for what is left over at the end of the year? In essence, do you accept a lower rate of return because you are spending more time doing the paperwork?”
    He further questions whether items such as environmental compliance cost should be listed on financial statements.        “Who bears the costs of new regulations, and who gets the benefits?” he continues. “One of our concerns is that production pays all the costs, and someone else gets the other benefits, if there are any.”
    “I’m guilty of forgetting that there are benefits,” Anderson comments.
    He also adds that determining if the benefits exist or if they outweigh costs is a gray area.
    The unintended impacts of various policies and regulations create economic impacts as well.
    “In terms of regulations, it is very difficult to reap the benefits unless there is demand growth from consumers, particular on those types of regulations that are of consumer interest,” Anderson says. “There really isn’t a good set of research on what the costs of regulation really are, how they affect the industry and if we see benefits.”
    Anderson spoke at the Small Ruminants Committee meeting at the National Institute for Animal Agriculture conference in late March of this year. Saige Albert is editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

According to Nebraska cattle rancher and attorney Scott Peterson, tax reform legislation proposed in Congress may have serious consequences for cattle producers.

Peterson discussed critical elements of the legislation in the June 6 edition of the National Cattlemen’s Beef Association Beltway Beef podcast.

Cash accounting

One concern for farmers and ranchers is the proposed removal of cash accounting. “Cattle producers use cash accounting basically to justify their income to their expenses on a year-to-year basis,” said Peterson.

He explained that agricultural producers typically use accrual accounting with their businesses.

“In accrual accounting, we don’t get to recognize the income until the inventory is dealt with, and we do that over time,” he commented. “We use it because we get to immediately expense items in the time in which we actually paid for them.”

Peterson noted the method allows producers to recognize income appropriately.

“It’s utilized in almost all agricultural businesses just because it’s a better mechanism, so we can actually show the expenses when they occur,” Peterson continued. “It allows us to continue to operate and income average over time.”

Loan rates

If producers weren’t able to use cash accounting, Peterson explained they would be required to carry notably higher loan rates.

“Right now, as we have a capital-intensive business, our loan rates are very high,” he said.

Removing the ability to use cash accounting would make it so producers are unable to make deductions over time, said Peterson.

“Not only would we have to borrow money to buy equipment, fertilizer, cattle and those things, we would have to borrow additional money to cover the tax cost of what would be a false tax cost,” he commented.

Young producers

In today’s current markets, it is extremely challenging for young producers to get started in the cattle industry, added Peterson.

“It is very difficult because of the capital-intensive nature of the business,” he commented.

Peterson explained that the cost of land and interest on the land is a large portion of startup costs.

“The cost of that land and the cost of interest on that land is significant. So, to start a ranch today, to buy cattle and buy land will cost at least $5 million just to survive,” he stressed.

Peterson noted, “That’s buying enough land so we could run between 200 and 400 head of cattle.”

Interest deductions

“One of the things we’re concerned with in the House blueprint is removing interest deductions,” said Peterson.

He explained that interest deductions are actual business expenses for producers, due to the capital intensiveness in the agricultural industry.

“For instance, when we look at the feedlots, for every animal that comes in, producers pay interest on their purchase cost, and they pay interest on their feed throughout the process,” he commented.

Peterson continued, “When we do a closeout at a feedlot, there’s an actual interest cost on every animal, and that’s a real business expense for our producers.”

Major impacts

According to Peterson, interest deductions have a large impact on young farmers and ranchers since a significant part of their purchases is land.

“When we look at the interest deductions on land costs, over 50 percent of the land cost is interest in those first few years of production,” he said.

Peterson continued, “If we get rid of that interest expense, we’ve basically put young producers in a bankruptcy situation because that business expense is real to them.”

He explained that interest expense is deducted from the young producer’s Schedule F before even reaching their 1040.

Peterson stressed that, if deductibility of interest was removed, it would have a significant negative impact on cattle producers.

“People would go broke because they’ve previously been losing money on cattle for the past 1.5 years, and that interest deduction is a real expense that comes off,” Peterson commented.

He concluded, “Those people have a tax rate right now of zero because of all of the losses. That’s just another negative to their balance sheet if they’re not able to deduct the actual expense.”

Emilee Gibb is editor of Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Cheyenne – The Environmental Protection Agency’s (EPA) regulations continue to increase, and as they increase they continue to overlap into an industry traditionally regulated only by the USDA – agriculture.
Cheyenne attorney Kara Brighton, of the firm Hageman and Brighton, spoke on the topic at the 2011 Wyoming Water and Natural Resources Law conference held in Cheyenne April 7-8.
“Agriculture has typically been fairly exempt from EPA regulations, as it’s pretty expensive to regulate because there are so many small farms, and there’s also the competing interest of sustainable production and whether we should regulate agriculture the same way we regulate other industries,” explained Brighton in her introduction.
As the EPA promulgates rules to carry out statutes enacted by Congress, Brighton said there are a few Congressional options to deal with those rules, should Congress not agree with the final result.
“Through the Congressional Review Act they can amend current law, introduce new legislation or prevent funding,” she said. “The act is a procedure for Congress to nullify any regulation within 60 days.”
The act takes a joint resolution from Congress, the President can veto it, and the two-thirds overriding majority process applies.
“If the joint resolution is passed and effective, the rule is void and nullified, and it cannot go into law, nor can the agency reintroduce it at a later time,” said Brighton. “Because it’s such a strong remedy, in my research I could only find where it’s been used once, in 2001 when the Department of Labor passed an ergonomics rule.”
The second option for Congress is to amend the law the agency is trying to pass the rule to enforce. However, Brighton said it’s difficult to find majorities for such an action, as many of the environmental laws that affect agriculture do not originate in the ag committees of the House and Senate.
“There was an attempt in the last Congress to amend the Clean Air Act to revoke some of the powers of the EPA in regulating greenhouse gases, and that failed,” she noted.
Congress can also introduce new legislation to specifically limit the authority of an agency, such as Senator Barrasso’s recent bill to restrict the EPA’s ability to regulate greenhouse gases.
“That bill has failed, and it’s difficult to do that, in terms of stopping or stripping authority,” said Brighton. “Where this has been effective is in at least delaying the authority. A House and Senate bill delayed the EPA’s stationary source permitting for two years. It didn’t strip the authority, but it put it off for a couple years.”
“The most popular way for Congress to limit agency action once it’s occurred is to prevent funding by amending the agency’s appropriations bill for that year,” she stated. “An example is restricting EPA funds for certain climate change regulatory activities that affect agriculture.”
Regarding how the EPA is attempting to implement regulations that would negatively affect the U.S. agriculture industry, Brighton says the areas include air, water, energy and chemicals.
“In 2008, Congress passed the Consolidated Appropriations Act, and in that act they required the EPA to develop and publish a final rule to require mandatory reporting of greenhouse gas emissions above appropriate thresholds for all economic sectors, including agriculture,” explained Brighton. “The EPA did propose a rule Oct. 30, 2009, and the reporting requirements will start this year and will include 10,000 facilities and 42 sources. That includes suppliers of fossil fuels, manufacturers of vehicles, power plants and other industrial sources. Reporting is required if they emit more than 25,000 tons of carbon dioxide, or the equivalent of five other greenhouse gases, including methane and nitrous oxide.”
She said it’s the methane and nitrous oxide that make the rule a concern for agriculture.
“Because of those two, manure management systems are included in the rule – that means feedlots,” said Brighton, noting the threshold would affect 107 livestock facilities nationwide.
“Congress stepped in, and they restricted funding to EPA in the 2010 appropriations bill relating to reporting for manure management facilities. The EPA still has no funding source to require those livestock facilities to report under that rule,” she added.
The second way EPA is regulating agriculture related to air quality is the Tailoring Rule, or the “Cow Tax.”
“On June 30, 2010 they issued rules to reduce emissions, and under Title 5 of those rules they’re required to regulate anything emitting over 75,000 tons of greenhouse gas, which brings in 13,000 facilities in the U.S. The other six million small businesses and farms are exempt at this point, but in 2013 the EPA wants to go another layer into those,” said Brighton.
The EPA’s 2010 appropriations bill prohibited the agency from using funds to implement the Title 5 program on livestock production.
The next EPA effort focuses on reducing emissions from gasoline and diesel stationary engines. Brighton said that affects ag producers mostly through irrigation systems. After litigation from both sides of the issue, the EPA has said the rule doesn’t apply to any engine less than 300 horsepower, but that the federal government will require operators to conduct proper management practices, such as changing the oil, but Brighton said she’s not sure how they’ll check on that.
The EPA is also addressing confined animal feeding operations (CAFOs) through the Clean Water Act, a subject which has also gone through litigation. In May 2010 the agency settled with the environmentalists, saying they would issue guidance to CAFO owners on how to report under the Clean Water Act, and that they would complete an inventory record of all CAFOs in the U.S. and make that available as a public record.
On the agriculture industry side of the litigation, the court agreed the Clean Water Act only allows facilities that actually discharge to seek a permit, rather than including everyone who might propose to, but doesn’t actually, discharge.
“That narrowed the authority of the EPA to oversee the Clean Water Act and CAFOs,” said Brighton of the case.
Concerning the Renewable Fuel Standard, Brighton said that’s where agriculture has seen a lot of pressure.
“By 2011 we were required to have 13.95 billion gallons of biofuel in the national gasoline system, and that goes up to 36 billion by 2022,” she said.
“The unintended consequences of the ethanol and biofuel push are that it’s put pressure on limited ag resources and has raised the prices of commodities that compete for cropland,” she explained. “We’re seeing increased demand for corn for livestock and the fuel market, which, among other things, is expanding cultivation on marginal lands, like CRP lands coming back into production for corn to meet ethanol requirements.”
“Those competing interests are increasing the environmental impact from agriculture in some areas because it’s doing these things in other areas to meet other environmental regulations,” she said.
In addition, the EPA is also reaching into pesticide application regulation near water through the Clean Water Act.
“Pesticide application has historically been regulated by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) under USDA. In 2006 the EPA said FIFRA is sufficient to regulate any discharges or applications of pesticides as it relates to water of the United States. In January 2009 the court disagreed, and said if there are applications of pesticides near waters of the U.S., there must be a permit,” stated Brighton. “There are two things there that are open for hours of debate – ‘near’ and ‘waters of the U.S.’”
In February 2010 the Supreme Court declined to hear the case, and the EPA immediately requested a two-year extension on the permits, which expired April 9, 2011. Immediately before expiration the EPA was granted another extension through October.
In the meantime, Wyoming’s Department of Environmental Quality has drafted a permit system, although Brighton said that, because the EPA has not issued their draft permit, the states are not sure what theirs should look like.
“There is a bill in Congress to strip EPA of the authority to regulate pesticide application, and to limit that authority to the USDA under FIFRA,” said Brighton. “That bill is not moving at this point, so we’ll see what happens. If we can’t get the legislation we need to clarify the regulatory authority, then EPA will take over a huge amount of jurisdiction related to pesticide application.”
Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..