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Senate Passes 2007 Farm Bill

Thune's Provisions and Amendments Make Bill Better for South Dakota

December 14, 2007

Washington, D.C. —  The United States Senate today passed the 2007 Farm Bill (H.R. 2419) by a vote of 79 to 14, after weeks of stalled debate. Senator John Thune, a member of the Senate Agriculture Committee, was instrumental in shaping the bill which outlines our nation's agriculture policy through 2012.

"The 2007 Farm Bill is a winner for South Dakota. Our state's economy is built around agriculture, and this bill will help strengthen family farms and ranches and rural communities," said Thune. "This bill builds on the successful 2002 Farm Bill and makes great strides in advancing renewable fuels production."

The Senate Agriculture committee has held 29 full committee hearings on the Farm Bill reauthorization. Earlier this year, Senator Thune hosted an Energy Subcommittee field hearing in Brookings, SD to explore the possibility of expanding cellulosic ethanol production. Following the field hearing in Brookings, Senator Thune successfully worked to include a comprehensive biofuels provision in the Farm Bill Energy Title to jumpstart cellulosic ethanol production. Thune also Chaired the Ag Posse, a group of Senators who are not members of the Senate Ag Committee, but who represent states with agricultural interests. The Ag Posse provided these Senators the chance to meet informally with Senate Republican Agriculture Committee members to discuss the 2007 Farm Bill, and related issues.

"We have a tremendous obligation, through the Farm Bill, to every American farmer and rancher to responsibly provide assistance when and where it is needed in an efficient and timely manner. This bill preserves a proven direct and counter-cyclical payment safety net, an expanded Conservation Title, and an Energy Title that will move Rural America into efficient alternative fuel production.

"This bill also continues our great strides in ethanol development, both in corn-based ethanol and cellulosic ethanol. I am proud of our work to secure $25 million in mandatory funding for the Sun Grant Initiative and the inclusion of the Biofuels Innovation Program to encourage growing energy dedicated crops and incentivizing nearly 60 million gallons of cellulosic ethanol."

Another important component of this Farm Bill includes a permanent disaster program. This program would provide $5 billion in timely assistance to both crop and livestock producers when losses occur due to natural disasters. Senator Thune has fought tirelessly for ad hoc disaster programs for the past several years and recognizes the importance of including a permanent disaster program in the Farm Bill. Eligibility for assistance under the Disaster Title requires that a producer participate in crop insurance, which will strengthen the crop insurance program and encourage producers to better manage their risk. The House did not include a permanent disaster program in its version of the 2007 Farm Bill.

"Today, the Senate acted to end the politics of ad hoc disaster programs. South Dakota's farm and ranch families should not have to wait for several years for assistance when disaster strikes," said Thune.

Senator Thune's Farm Bill Priorities Retained in Final Senate-Passed Bill:

Biofuels Innovation Program
This Thune provision in the Farm Bill Energy Title would provide a cost-share payment and per-acre rental payment to producers who have committed to growing energy-dedicated crops for a local biorefinery. This program would also provide a per-ton payment to farmers for collecting, storing, and transporting biomass (such as corn cobs) to cellulosic ethanol plants. In total, this program will provide almost $160 million in mandatory funding to producers to jumpstart the cellulosic ethanol industry. The per-ton payment alone would incentivize almost 60 million gallons of cellulosic ethanol production.

The Senate bill includes a continuation of the 39.2 million acre Conservation Reserve Program (CRP) acreage cap that Senator Thune fought for when he helped draft the 2002 Farm Bill. Several of Senator Thune's recommendations to strengthen and reauthorize the Wetlands Reserve Program and Grasslands Reserve Program were included in the Conservation Title. Overall, the Senate-passed bill includes an additional $1.3 billion for conservation programs.

Loan Deficiency Payments (LDPs)
Senator Thune preserved a critical component of the Farm Bill family farm safety net. A Thune amendment, passed in the Agriculture Committee, removed a potentially harmful requirement in the Committee's bill that would negatively affect all grain producers by requiring that they sell their crop at the time of claiming an LDP, which provides a payment to producers in times of low commodity prices.

E10 Blend Wall Resolution
Senator Thune's "Sense of the Senate" Resolution in the Farm Bill describes the importance of intermediate blends of ethanol in non-flex fuel vehicles. More importantly, it directs the Federal Government to approve higher blends of ethanol fuel within one year of the successful completion of all necessary parts studies. This resolution also directs the U.S. Department of Agriculture to conduct a study on the rural economic impacts of the E10 blend wall and of increasing the demand for ethanol in general. This study would examine the impact on rural economic activity and job creation if the demand for ethanol is constrained to the E10 blend market and E85 infrastructure and transportation infrastructure continues to expand at current pace.

Sun Grant Initiative
The Agriculture Committee's bill includes $25 million in mandatory funding for the Sun Grant Initiative, which is coordinated by South Dakota State University. Thune has been working with members of the Senate Agriculture Committee to underscore the important renewable fuels research taking place at South Dakota State University and other Land Grant Universities across the country. This provision would provide much needed mandatory funding for the Sun Grant Initiative, while reauthorizing this program through the life of the Farm Bill. Under the Senate 2007 Farm Bill, the Sun Grant Initiative would also be authorized for annual appropriations up to $70 million per year through 2012. The House-passed bill does not include any mandatory funding for the Sun Grant Initiative.

Stronger Sodsaver Provision
Senator Thune was successful in including a common-sense sodsaver provision in the final Farm Bill. This provision would not allow crop insurance and Noninsured Crop Disaster Assistance Program (NAP) coverage for crops planted on native sod converted to cropland. Between 2002 and 2005, almost 300,000 acres of native sod in South Dakota were converted from native grassland to cropland. The House-passed Farm Bill has a weaker sodsaver provision that only eliminates crop insurance eligibility for four years on native sod after it is converted to cropland.

Stronger Mandatory Country of Origin Labeling (COOL) Language
Senator Thune requested that the House-passed COOL language be strengthened to clarify that all categories of red meat are required to be labeled. At Senator Thune's request, the Agriculture Committee corrected a potentially fatal flaw to the House-passed COOL provisions that will make implementing mandatory COOL clear, concise, and beyond legal challenge.

Tighter Payment Limitations
The Agriculture Committee-reported Farm Bill contains significant reform to the payment limitations imposed upon participants in commodity programs. Senator Thune fought for the tighter restrictions in the Committee - which reduce the current payment cap of $360,000 to $100,000 for each individual. This bill also eliminates the "three entity rule" and provides for direct attribution, which means payments would be tracked on a per-person or individual basis.

Farm Service Agency (FSA) Office Closure
Thune's provision would prevent the closing of "Critical Access FSA County Offices." Critical Access FSA County Offices are defined as county FSA offices that were proposed for closure during Calendar Year 2007. Critical Access FSA County Offices would remain open for the life of the 2007 Farm Bill (five years) unless Congress approves of the closures. The House-passed Farm Bill includes a 1-year moratorium on all FSA office closures with the exception of those offices with zero employees.

Native American Nutrition Tribal Assistance
This Thune provision in the Farm Bill would authorize $5 million per year, for the life of the 2007 Farm Bill, for the purchase and distribution of traditional, locally-grown food produced by Native American farmers, ranchers and producers.

Expanded Tribal Access to Fresh Fruits and Vegetables Program
The bill expands the successful Fresh Fruits and Vegetables program to a minimum of 100 Indian Tribal Organizations across the country, thanks to a Thune provision that passed in the Agriculture Committee. Although the House-passed bill expanded the Fresh Fruits and Vegetables Program nationwide, it did not expand access to Indian Reservations. Under the 2002 Farm Bill, Pine Ridge Indian Reservation was chosen as one of three reservations to participate in the pilot program. The Senate-passed bill would expand this program to over 100 Indian Reservations nationwide.

Open Fields Legislation
In May, Senator Thune joined a bipartisan group of Senators in cosponsoring the Open Fields Act. For the first time ever, federal mandatory funding ($20 million per year) will be available to expand the already successful walk-in program in South Dakota and in other states. South Dakota landowners voluntarily enroll more than 1 million acres of privately owned land in South Dakota's program every year. Included in the Senate Farm Bill Open Fields language is a provision Senator Thune championed which will give states like South Dakota that publicize their access areas a priority for the $20 million in federal funding.

Many provisions of the 2002 Farm Bill expired on September 30th. It is very likely a three-month extension of expiring 2002 Farm Bill programs will be passed to allow time for the Conference Committee to work out the differences between the House and Senate bills and send a final farm bill to the President for his approval.