Food, Conservation, and
Energy Act of 2008 &
Economic Stimulus:
Summary of Key
Provisions
Larry D. Sanders
Department of Agricultural
Economics
Oklahoma State University
Spring 2009
XII. Crop Insurance
& Disaster
Assistance*
XI. Livestock*
XIV. Miscellaneous
XIII. Commodity
Futures*
XV. Trade &
Tax*
I. Commodity
Programs
X. Horticulture
& Organic*
II. Conservation
Congress overrides
Veto (twice)
FCEA-08
(PL 110-246)
(HR 6124)
IX. Energy
VIII. Forestry
III. Trade
IV. Nutrition
VII. Research
VI. Rural
Development
V. Credit
2
2
FCEA 08 Budget & Spending
20,000
CBO Baseline Funds Available for
Commodity Programs
18,000
16,000
14,000
Billions
12,000
10,000
8,000
6,000
4,000
2,000
0
2006
FCEA Projected Spending
2008-2012 ($307 Billion)
2007
2008
2009
2010
2011
2012
Baseline nearly $60 billion
less than 2002 farm bill
3
Net Farm Income & Direct Government Payments
(1991-2009p)
$ Billion
FSRIA 2002
FCEA 09
100
90
80
70
60
50
40
30
20
10
0
$71.2
$59.8
net farm income
govt payments
2009p
2007
2005
2003
2001
1999
1997
1995
1993
1991
$11.4 b.
NFI-G
4
4
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
weather and associated
with the deductible part
of crop insurance
 ACRE (Average Crop
Revenue Election):
manage risk of decline in
revenue
5
Conservation
• 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)
6
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.
7
Livestock
•
•
•
•
Required livestock reporting (price & volume)
Implement COOL
Increases rights of contract growers
Approves interstate shipment of stateinspected meat if standards are equal to
federal
8
Crop Insurance and
Disaster Assistance
• Reduce cost of crop insurance to govt
• Supplemental Agricultural Disaster
Assistance Trust Fund
–
–
–
–
–
SUpplemental REvenue 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. 1115) 2/17/09
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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
10
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
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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
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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 $10 benefit to 8% of max
benefit
Economic Stimulus:
American Recovery and Reinvestment Act
http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
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General Provisions of the Act
• Funds available for obligation until Sept. 30, 2010
• Infrastructure projects, priority for 50% of the funds
to go to projects that can be initiated with 120 days
of the passage of the Act (Feb 16, 2009)
• Cannot be used for gaming, aquariums, zoos, golf
courses, or swimming pools
• Buy American-all repairs to public buildings, i.e.,
iron, steel, manufactured goods must be purchased
in US, unless those items are not available in US, or
if using US items will increase the cost more that
25%
• Prevailing wages must be paid
15
http://www.ok.gov/recovery/
Economic Meltdown will likely lead
to Federal Budget Reconciliation…
(artwork: Ingram Pinn)
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The Economy, Politics and Perception
US Budget Surplus/Deficit
($b.)
500
0
-50
-151
-225-177
-330
70 124
232 268
-157.8
-162
-374-413-331-314
-455
-500
-1000
-1400
-1500
-1800
2010p
2009p
2008e
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
-2000
Source: US Bureau of Economic Analysis,
2009 (www.bea.gov)
http://zfacts.com/p/318.html
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?
Contact Information:
AGEC Policy Team
• Larry Sanders
• 405.744.9834
• larry.sanders@okstate.edu
• Mike Dicks
• 405.744.6555
• Jody Campiche
• 405.744.9834
Agriculture, Rural Development, FDA, and related agencies
1. Funds for facilities to pay for deferred
2. NRCS- $290 million for watershed and flood and $50 million for
Watershed Rehabilitation
3. Rural Housing Service – Rural Housing Insurance
4. Rural Community Facilities Program Account - $130 million for direct
loans and grants for community facilities
5. Rural Business Cooperative Service - $150 million for loans and grants
(very important one also…this is RBED & RBOG monies)
6. Rural Utility Service- $1.380 billion for rural water & waste disposal
program for loans and grants for rural water, waste water, and waste
disposal.
7. Distance Learning, Telemedicine and Broadband Program - $2.5 billion
for broadband grants and loan guarantees
8. Food and Nutrition Programs – ($100 million for school lunch and $100
million for the WIC program and $150 million for community
assistance)
9. Transition assistance available to agricultural producers under disaster
assistance/crop insurance act
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• Title II – Dept. of Commerce, Justice, Science, and Related
1. $150 million w/$50 million for use under economic adjustments under Public
Works & Development Act
2. $4.7 billion for broadband technology
3. National Institute of Standards & Technology- $220 million for scientific and
technical research and services and $180 million for construction on research
facilities
4. National Oceanic and Atmospheric Administration (NOAA) - $830 million for
operations, research, acquisition, and facilities
5. Department of Justice – includes $2 billion for state and local law enforcement
assistance, and $1 billion for community oriented policing services
6. 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
1. Dept. of Defense-Army Corps of Engineers- $25 million for investigations,
$2billion for construction, and $375 million for Mississippi River tributaries.
2. 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.
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3.
4.
5.
6.
7.
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.
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8.
9.
10.
11.
12.
13.
14.
15.
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
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transportation projects
16. FAA-may possibly contain funds for airport improvements
17. HUD/Community Development Funds-contains sections on public
housing, Native American Block Grants, CDBG, HOME
25