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Karen Gefvert Director of Governmental Relations Wisconsin Farm Bureau Federation

Karen Gefvert Director of Governmental Relations Wisconsin Farm Bureau Federation. National Agricultural Issues. Farm Bill Water Resources Reform Development Act ( WRRDA ) Immigration Reform. Farm Bill. “Agricultural Act of 2014” - 3 years in the making. Senate 68-32 Johnson – No

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Karen Gefvert Director of Governmental Relations Wisconsin Farm Bureau Federation

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  1. Karen GefvertDirector of Governmental RelationsWisconsin Farm Bureau Federation

  2. National Agricultural Issues • Farm Bill • Water Resources Reform Development Act (WRRDA) • Immigration Reform

  3. Farm Bill “Agricultural Act of 2014” - 3 years in the making • Senate 68-32 • Johnson – No • Baldwin - Yes • House 251-166 • Ryan – Yes • Pocan – No • Kind – No • Moore – No • Sensenbrenner – No • Petri – Yes • Duffy – Yes • Ribble - Yes

  4. Farm Bill • $954.4 Billion over 10 years • 79% is Supplemental Nutrition Assistance Program (SNAP) • $23 Billion in cuts • $8 Billion from SNAP • $15 Billion from Agriculture

  5. What’s in the Farm Bill? FY2014-2023 Total Spending = $954.4 Billion

  6. Farm Bill • Eliminates Direct Payments • Repeals or consolidates almost 100 programs • Significant dairy reform • Strengthens crop insurance • Price Loss Coverage (PLC) • Ag Risk Coverage (ARC) • Stacked Income Protection Plan (STAX) • Supplemental Coverage Option (SCO)

  7. Farm Bill • Livestock Disaster Assistance • Livestock Indemnity Program • Livestock Forage Disaster Program • Payment Limits • Eligibility rules tightened (AGI) • Research & Specialty Crop Research • Cherry, Potato & Cranberry • Organic research, certification & data collection

  8. Farm Bill – Crop Insurance • Price Loss Coverage (PLC) • Payment to producer when the market price is below a fixed reference price for covered crops • Agricultural Risk Protection (ARC) • Provides a payment when either • A farm’s revenue from ALL crops OR • The County’s revenue for a crop is below 86% of a predetermined benchmark level of revenue

  9. Agriculture Risk Coverage (Individual Election) For ARC Benchmark Revenue Based On 5-Year Olympic Average County Yields/National MYA Prices (or Ref. Price) Whole Farm Program Producer Loss 14% Loss Coverage between 86% and 76% of revenue benchmark. ARC (65% Base Acres) Crop Insurance Stand-Alone (66% for 75% RP) Crop Insurance Premium Revenue based plan (paid out on base acres)

  10. Agriculture Risk Coverage (Area Election) For ARC Benchmark Revenue Based On 5-Year Olympic Average County Yields/National MYA Prices (or Ref. Price) Individual Crop Program Producer Loss 14% Loss Coverage between 86% and 76% of revenue benchmark. ARC (85% Base Acres) Crop Insurance Stand-Alone (66% for 75% RP) Crop Insurance Premium Revenue based plan (paid out on base acres)

  11. Farm Bill – Crop Insurance • Stacked Income Protection Plan (STAX) – COTTON ONLY • Supplemental Coverage Option (SCO) • Not available for crops enrolled in ARC or STAX • Option to purchase area coverage with an underlying individual policy or plan of insurance • Allows indemnities to be equal to a part of the deductible on the underlying policy or plan of insurance

  12. SCO Maximum premium cost is 35% of the value of the crop Producer Loss 14% Area Revenue Loss Required Before SCO Payment Occur SCO coverage (county) from 86% expected revenue to underlying insurance policy SCO Stand Alone SCO Stand-Alone (65%) Crop Insurance Premium Crop Insurance Stand-Alone (66% for 75% RP)

  13. Farm Bill – Crop Insurance • Crop Insurance in America • http://www.cropinsuranceinamerica.org/ • Learn About Crop Insurance • Just the Facts

  14. Dairy Program • Must be established by Sept. 1, 2014 • Program ends Dec. 31, 2018 • Voluntary • Margin Protection Program • No supply management

  15. Dairy Program • Calculation of Average Feed Cost and Actual Dairy Production Margins • National monthly feed costs will be calculated based on the following: • Corn – monthly Agricultural Prices report • Soybean meal – Market News – Monthly Soybean Meal Price Report • Alfalfa hay – Agricultural Prices report • Actual Dairy Production Margin Calculation • Shall be calculated on a consecutive 2 month period • Subtract the 2 month Average Feed Cost from the 2 month All-Milk Price

  16. Dairy Program • Participation in Program • All dairies are eligible • Multi-producer dairy operations will be considered a single dairy • Single producer who operates multiple dairies will be considered multiple dairies • Administrative fee of $100 charged to all participating dairies • Participation in Margin Protection Program OR Livestock Gross Margin for Dairy

  17. Dairy Program • Production History • Calculate production history = highest annual milk marketings of the dairy during any one of the 2011, 2012, 2013 calendar years • Adjustment to the production history will be done on an annual basis to reflect any increase in the national average milk production • New Dairies – in operation less than one year • Extrapolate to a yearly amount the volume of actual milk marketings for the months in operation OR • Estimate based on the herd size relative to the national rolling herd average

  18. Dairy Program • Margin Protection Payments • Payments are based on a consecutive 2 month period • Dairies shall determine their margin coverage level annually • Coverage levels are: • $4.00, $4.50, $5.00, $5.50, $6.00, $6.50, $7.00, $7.50, $8.00 • Percentage of coverage • 5% increments, starting at 25%, not to exceed 90% of the production history of the dairy

  19. Dairy Program • Payment threshold • A payment will be issued when, for a 2 consecutive month period, the Average Actual Dairy Production Margin < the coverage level selected by the dairy • Margin Protection Payment Calculation • Coverage level – Average Actual Dairy Production Margin (2 months) THEN • X by Coverage Percentage AND • X by the production history of the dairy divided by 6

  20. Dairy Program • Example: • Coverage Level = $6.00 • Average Actual Dairy Production Margin = $4.50 • Coverage Percentage = 60% • Production History = 20,000 cwt (20,000/6 = 3,333) • $6.00 - $4.50 = $1.50 x .60 = .90 x 3,333 = $3,000.00

  21. Dairy Program • Premiums for Margin Protection Program • The first #4 M will be calculated at a separate coverage level than anything in excess of #4 M. • Calculation of Premiums (paid annually) • Special Rule – for the first #4 M of milk produced, the premium will be reduced by 25% for years 2014 & 2015

  22. Dairy Program

  23. Dairy Program

  24. Dairy Program • Calculation of Premiums (paid annually) • Coverage Percentage x Production History x Premium per hundred weight of milk for coverage level selected

  25. Dairy Program • Example: • Coverage Percentage = 60% • Production History = 20,000 cwt • Premium per hundred weight selected = $0.04125 OR $0.055 • .60 x 20,000 x 0.04125 = $495 (Years 2014 & 2015 = 25% reduced rate) • .60 x 20,000 x 0.055 = $660 (Year 2016 and later)

  26. Dairy Program • Payment of Premium • There will be at least more than one method for dairies to pay the premiums

  27. Water Resources Reform Development Act • Legislative package that addresses: • Operational costs • Capital expenditures • Major rehabilitation for inland waterways and harbors • Importance: Farmers need a consistent transportation mechanism for inputs and outputs for their farming operations • Our infrastructure of waterways and ports are funded through two different trust funds: • Inland Waterways Trust Fund • Harbor Maintenance Trust Fund

  28. Water Resources Reform Development Act Senate 83-14 House 417-3 Ryan – Yes Pocan – Yes Kind – Yes Moore – Yes Sensenbrenner – Yes Petri – Yes Duffy – Yes Ribble - Yes • Johnson – No • Baldwin – Yes Status: Bills are in conference committee and likely to be passed in early 2014

  29. Water Resources Reform Development Act • Inland Waterways Trust Fund (IWTF) • Major rehabilitation projects on locks and dams • Cost-sharing between the fund and the federal government on a 50/50 basis • Operations and maintenance costs for inland waterways are paid for exclusively by the federal government • Currently a $0.20 per gallon tax on commercial barge fuel • $85 million annually for the IWTF • Federal assistance • $90 million • $175 million annual budget • $380 million is what is actually needed • $205 million annual deficit

  30. Water Resources Reform Development Act • Proposal by some agricultural organizations • Increasing the current barge fuel tax by 6- to 9-cents • In exchange, full funding from the federal government for project costs on all dams and rehabilitation that are currently cost shared with the IWTF • Average rehabilitation costs are about $50 million per lock and the estimated cost to replace the present system of locks throughout the country is over $125 billion

  31. Water Resources Reform Development Act • Our lock and dam system was designed to last 50 years, but is approaching 80-years-old • The current capacity of most locks is approximately half the size needed to meet the typical 15-barge towing capacity • Typical 15-barge tows (1200’) have to be broken in two to fit into the 600’ lock system currently in place • Time and efficiency are lost

  32. Water Resources Reform Development Act • Harbor Maintenance Trust Fund (HMTF) • Funded by taxes on the value of imports and domestic cargo that arrive in federally-maintained U.S. ports • Funds are used for dredging and dredged material disposal, jetties and breakwaters construction and maintenance • Collection of funds far exceeds what is spent • Surplus in the fund has historically been funneled to fill gaps in the federal government's general fund • Only 55 percent of the funds collected are actually used on harbor maintenance

  33. Water Resources Reform Development Act • The U.S. lock and dam system is severely outdated and in need of repair • Agriculture relies on the waterways system in order to economically transport agricultural inputs and outputs • It is crucial for farmers to have access to this major transportation thoroughfare and to ensure that it is modernized to be more efficient and reliable

  34. Immigration Reform • Senate • Comprehensive Package • House • Smaller pieces • Administrative delays in current H2A program led to: • Arrival of labor 22 days after needed • Loss of $320 million

  35. Immigration Reform • Senate • Blue Card Program • For experienced farm workers already in the country • Provides an option to work towards green card • Guest Worker Visa Program • Replaces current H2A program • Allows entrance to non-experienced farm labor through a 3 year visa as an agricultural worker • They can be hired on a contract or at-will basis • Labor Cap • Annual limit of just over 12,000 for 3 years

  36. Immigration Reform • House • Border Security & Interior Enforcement • Entry-Exit Visa Tracking System • Employment Verification and Workplace Enforcement • Reforms to the Legal Immigration System • Youth • Currently Individuals Living Outside the Rule of Law

  37. Wisconsin Farm Bureau Federation • http://wfbf.com/legislation-regulations/issue-backgrounders/ • Farm Bill, WRRDA & Immigration Reform

  38. Questions?

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