Food, Conservation, and Energy Act of 2008 & Economic Stimulus: Summary of Key Provisions

1. Food, Conservation, andEnergy Act of 2008 & Economic Stimulus:Summary of Key Provisions Larry D. Sanders Department of Agricultural Economics Oklahoma State University Spring 2009

2. XIV. Miscellaneous XII. Crop Insurance & Disaster Assistance* XV. Trade & Tax* XIII. Commodity Futures* XI. Livestock* I. Commodity Programs X. Horticulture & Organic* II. Conservation FCEA-08 (PL 110-246) (HR 6124) Congress overrides Veto (twice) III. Trade IX. Energy IV. Nutrition VI. Rural Development VII. Research V. Credit VIII. Forestry 2

3. FCEA 08 Budget & Spending Baseline nearly $60 billion less than 2002 farm bill FCEA Projected Spending 2008-2012 ($307 Billion)

4. Net Farm Income & Direct Government Payments (1991-2009p) $ Billion FSRIA 2002 FCEA 09 $71.2 $59.8 $11.4 b. 4

5. Commodity & Crop Insurance Provisions • DCP (Direct & Counter-cyclical Payment Program: manage risk of chronic low market prices • Crop Insurance: manage production risk • SURE (Supplemental Revenue Assistance): manage whole farm losses due to adverse weatherand associated with the deductible part of crop insurance • ACRE (Average Crop Revenue Election): manage risk of decline in revenue 5

6. USDA will establish technical guidelines for measuring environmental service benefits (carbon markets) Conservation Reserve Program (CRP): Wetlands Reserve Program (WRP) Conservation Stewardship Program (CSP) Environmental Quality Incentive Program (EQIP) Conservation

7. Horticulture and Organic Agriculture • Increased nutrition assistance at farmers’ markets • Market news activities by USDA • Increased specialty crop block grants to states • Specialty Crops = Fruits, vegetables, tree nuts, dried fruits, nursery crops, floriculture.

8. Livestock • Required livestock reporting (price & volume) • Implement COOL • Increases rights of contract growers • Approves interstate shipment of state-inspected meat if standards are equal to federal

9. Crop Insurance and Disaster Assistance • Reduce cost of crop insurance to govt • Supplemental Agricultural Disaster Assistance Trust Fund • SUpplementalREvenue Program (SURE) • Livestock Forage Disaster Program (LFP) • Livestock Indemnity Program (LIP) • Tree Assistance Program (TAP) • Emergency Assistance Program for livestock, honey bees, and farm-raised fish • SURE Amended by H. R. 6849 (P.L. 110-398) 10/13/08; Further Amended by H. R. 1 (P. L. 111-5) 2/17/09

10. Credit Provisions • Beginning Farmer/Rancher Farm Ownership loans (higher limits) • Conservation Loan/Loan Guarantee Programs (priority based) • Down Payment Loan Program (adds Socially Disadvantaged producers) • Operating Loans (higher limits) • Farmer Individual Development Account Pilot

11. Energy • NOTE: Key Bio-energy provisions for RFS are found in the Energy Independence and Security Act of 2007, not in Farm Bill • Note: “advanced biofuel” is fuel derived from renewable biomass other than corn kernel starch (cellulose, sugar, waste, biodiesel, biogas, butanol, etc.) • Note: “renewable energy” is energy derived from wind, solar, renewable biomass, ocean, geothermal or hydroelectric source, hydrogen from renewable biomass or water • Shift in support from grain to cellulosic bio-fuels • $1 billion in funding for renewable energy • Biomass R&D continued • Bio-refinery aid • Bio-energy Program 2009-12 • Sugar for ethanol use • Ethanol blending tax credit reduced

12. Rural Development • Supports local ag markets • Supports water/wastewater grants/loans • Expands rural broadband service • Creates rural microentrepreneur program • Reauthorizes rural business investment co. program • Expands farm labor housing program

13. Nutrition Provisions • SNAP – the new name for the Food Stamp Program: “Supplemental Nutrition Assistance Program” • Raises the Minimum Standard Deduction and indexes it • Increases minimum $10 benefit to 8% of max benefit

14. Economic Stimulus: American Recovery and Reinvestment Act http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

15. General Provisions of the Act • Funds available for obligation until Sept. 30, 2010 • Infrastructure projects, priority for 50% of the funds to go to projects that can be initiated with 120 days of the passage of the Act (Feb 16, 2009) • Cannot be used for gaming, aquariums, zoos, golf courses, or swimming pools • Buy American-all repairs to public buildings, i.e., iron, steel, manufactured goods must be purchased in US, unless those items are not available in US, or if using US items will increase the cost more that 25% • Prevailing wages must be paid

16. http://www.ok.gov/recovery/

17. Economic Meltdown will likely lead to Federal Budget Reconciliation… (artwork: Ingram Pinn)

18. The Economy, Politics and Perception Source: US Bureau of Economic Analysis, 2009 (www.bea.gov) http://zfacts.com/p/318.html

19. Economic Meltdown Fallout: Where we’re headed • Interest rate uncertainty • Higher underwriting standards for all forms of credit • Cross-currents of interest rates, energy prices, value of dollar, inflation, and unemployment make economic outlook and tax revenues very uncertain • Mid-late 2009: Federal stimulus hoping to improve domestic economy; larger Federal budget deficit & debt • Global economic recovery rate uncertain • 2009 and beyond: A renewed debate on financial & lending regulation – national and state; deflation?Inflation?

20. Contact Information: AGEC Policy Team • Larry Sanders • 405.744.9834 • larry.sanders@okstate.edu • Mike Dicks • 405.744.6555 • Jody Campiche • 405.744.9834

21. Agriculture, Rural Development, FDA, and related agencies 1. Funds for facilities to pay for deferred • NRCS- $290 million for watershed and flood and $50 million for Watershed Rehabilitation • Rural Housing Service – Rural Housing Insurance • Rural Community Facilities Program Account - $130 million for direct loans and grants for community facilities • Rural Business Cooperative Service - $150 million for loans and grants (very important one also…this is RBED & RBOG monies) • Rural Utility Service- $1.380 billion for rural water & waste disposal program for loans and grants for rural water, waste water, and waste disposal. • Distance Learning, Telemedicine and Broadband Program - $2.5 billion for broadband grants and loan guarantees • Food and Nutrition Programs – ($100 million for school lunch and $100 million for the WIC program and $150 million for community assistance) • Transition assistance available to agricultural producers under disaster assistance/crop insurance act

22. Title II – Dept. of Commerce, Justice, Science, and Related • $150 million w/$50 million for use under economic adjustments under Public Works & Development Act • $4.7 billion for broadband technology • National Institute of Standards & Technology- $220 million for scientific and technical research and services and $180 million for construction on research facilities • National Oceanic and Atmospheric Administration (NOAA) - $830 million for operations, research, acquisition, and facilities • Department of Justice – includes $2 billion for state and local law enforcement assistance, and $1 billion for community oriented policing services • National Science Foundation - $2.5 billion for research and related, with $300 million for major research instrumentation, $200 million for academic research facilities modernization, $100 million for education and human resources, $400 million for major research equipment and facilities construction. • TITLE IV – ENERGY AND WATER DEVELOPMENT • Dept. of Defense-Army Corps of Engineers- $25 million for investigations, $2billion for construction, and $375 million for Mississippi River tributaries. • Department of the Interior-Bureau of Reclamation, Water & Related Resources, $1 billion for water reclamation and reuse projects with $125 million for water projects, and $60 million for rural water projects or water intake and treatment facilities.

23. 3. Department of Energy-Energy Efficiency & Renewable Energy-$16.8 billion, with $3.2 billion for energy efficiency & conservation block grants, and $5 billion for weatherization assistance with $3.1 billion for Part D, Title III of energy policy and $2 billion for grants for manufacturing of advanced batteries and $4.5 billion for electricity and energy and $3.4 billion for Fossil Energy Research & Development, plus $6 billion for guaranteed loans; increases weatherization limits per home from $2,500 to $6,500 per dwelling. • Small Business Administration - $15 million for surety bond guarantees, $6 million for guaranteed loans, and $630 million for guarantees with $255 million for loan subsidies and modifications to loans. • SBA-Economic Stimulus programs small business-90% guarantees for qualifying small business with $3 million guaranty limit • SBA- Investment in Smaller Enterprises – 100% guarantees up to $35,000 with 100% guarantee and interest fully subsidized for period repayment, 5 year loans with repaying not to begin until 12 months after final loan disbursement • FEMA-funds for state/local programs, firefighter assistance, disaster assistance, direct loan program, and emergency food & shelter.

24. Bureau of Indian Affairs- $40 million for housing & workforce, $10 million for Indian guaranteed loan program, & $450 million for repair of roads, schools, detention centers and construction. • EPA-State and Tribal Assistance grants-mostly allocation to the states.  • Department of Agriculture-Forest Service-$250 million for hazardous fuel reduction, forest health, hazard mitigation on private lands with $50 million that can be used for wood to energy grants • DHS-$85 million for Indian Health Services, Telehealth, and infrastructure, and $415 million for Indian Health Facilities. • National Foundation on the Arts & Humanities-National Endowment for the Arts-$50 million for grants to create jobs in the non-profit sector, but 40% goes to the states • Department of Labor-Community service employment for Older Americans-$120 million for existing grantees. • Health and Human Services--$20 million transferred to National Institute of Standards & Technology (DOC) to advance health care infrastructure • Department of Transportation - $1.5 billion for discretionary grants to state and local governments, also applies to freight and rail transportation projects

25. FAA-may possibly contain funds for airport improvements • HUD/Community Development Funds-contains sections on public housing, Native American Block Grants, CDBG, HOME