FARM BILL 1.01

An Introduction and Brief History of the Farm Bill
January 2011
Ed Yowell and Fern Gale Estrow


The United States, for better and worse, has a long history in farm and food policy. During the 19th century we sought to fulfill our “Manifest Destiny,” the supposed pre-ordained right to expand our dominion, often by transferring Native American land to white American homesteaders, and we established land grant colleges, furthering American agricultural science and technology. During the 20th century, American policy was manifested in federal programs, the Agricultural Adjustment Act of 1933, supporting farmers with the establishment of farm price and income supports, and the Food Stamp Act of 1964, creating the Food Stamp Program, now known as the Supplemental Nutrition Assistance Program (SNAP).

From a farm and food perspective, American policy, perhaps at its best, fought poverty and malnutrition and made food security part of the national agenda. And, perhaps at its worst, it distorted food costs, creating “cheap” food by displacing the true cost of production, and overlooked the health impacts and socio-economic implications of its programs.

THE FARM BILL IS A MANY TITLED THING

“Farm Bills,” the succession of roughly pentennial, or five year, federal food and agriculture acts, have been with us for well more than half a century, from the first, in 1933, through the last, the 2008 Food, Conservation, and Energy Act. And now, we are at the threshold of the 2012 Farm Bill.

The starting point of the 2012 Farm Bill will be its predecessor, the aforementioned 2008 Act, which included 15 Titles, or sections, covering, by Title, and including five year estimated costs:

Title I: Commodity Programs, including commodity crop price support (for wheat, corn, barley, grain sorghum, oats, upland cotton, rice, soybeans and other oilseeds, and peanuts) and income support programs - $41.6 billion;
Title II: Conservation, providing for farmland preservation, with special consideration to beginning, limited-resourced, and socially disadvantaged producers, specialty crop producers, and producers transitioning to organic methods - $24.1 billion;
Title III: Trade, covering food aid, export market development, and export credit guarantee programs e.g. the McGovern-Dole International Food for Education and Child Nutrition Program and the Market Access Program (MAP) - $1.9 billion;
Title IV: Nutrition, providing primarily for the  Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) - $188.9 billion;
Title V: Credit, providing for the two government-related farm lenders, the USDA Farm Service Agency (FSA) and the Farm Credit System (FCS) - ($1.4 billion);
Title VI: Rural Development, supporting rural development through loan and grant programs for economic and infrastructure development, including broadband and telecommunications infrastructure - $.2 billion;
Title VII: Research, providing for the administration of research, extension, and economic analysis programs - $.03 billion;  
Title VIII: Forestry, providing assistance to local entities engaged in protecting and restoring forests - $40 million;
Title IX: Energy, promoting bio-fuels and cellulosic ethanol production - $.6 billion;
Title X: Horticulture and Organic Agriculture, providing grants to state departments of agriculture for U.S specialty crop research, marketing, and promotion, expansion of farmers’ markets, transitioning farmers to organic production, and cooperative federal-state pest and disease detection programs - $.4 billion:
Title XI: Livestock, supporting livestock and poultry marketing and competition and contracted producer rights, stockyard and packing reporting and tracking requirements, and country of origin retailing requirements and providing for state-inspected meat to enter inter-state commerce - $1 million;
Title XII: Crop Insurance and Disaster Assistance, providing for crop insurance and farm disaster assistance - $21.9 billion;
Title XIII: Commodity Futures, providing for the Commodity Futures Trading Commission (CFTC) - no cost;
Title XIV: Miscellaneous, affecting research, energy, and rural development and providing assistance to socially disadvantaged and limited-resourced producers - $6.4 billion;
Title XV: Trade and Tax Provisions, containing trade and tax provisions and providing for supplemental Agricultural Disaster Assistance - $3.8 billion.   

The five year cost of the 2008 Farm Bill was estimated to be $284 billion. The bulk of the multi-billion dollar cost was dedicated to two Titles; first, Nutrition, primarily SNAP, commonly referred to as Food Stamps, at $188.9 billion and second, Commodity Programs, of crop price and income supports, at $41.6 billion. The next two most costly Titles were Conservation, at $24.1 billion, and, Crop Insurance and Disaster Assistance Programs, at $21.9 billion. While the five year cost of the 2008 Farm Bill was estimated to be slightly less than its predecessor, the 2002 Farm Bill, several Titles increased in cost, namely Conservation, Trade, Nutrition, Rural Development, Research, and Energy.    

TIME AND TITLES; COMMODITY PROGRAMS, THE FOOD STAMP PROGRAM, AND LOCAL FOOD INITIATIVES


Federal farm and food policy from 1933 to 2008 evolved continuously, generally becoming more extensive in scope and effect, reflecting changes in agriculture and changing perceptions of social need and strategic and political focus. The most significant changes in successive Farm Bills have been in the Commodity Programs Title and the Nutrition Title, primarily the Food Stamp Program. But other significant changes have occurred as well, particularly in the form of local and healthy food initiatives contained in the 2008 Farm Bill.      

Commodity Programs

During the Great Depression, rural poverty was far worse than non-rural poverty, and non-rural hunger was profound. The 1933 Farm Bill, the Agricultural Adjustment Act, a part of President Franklin Delano Roosevelt’s New Deal, established commodity-specific price and income support programs to assist farmers economically and to help get more food to the hungry, non-rural poor. Since that time, these supports have been the core of agricultural policy in the United States. The system of supports complemented structure of American farming at the time—small, labor intensive, diversified farms selling products domestically, often locally and regionally. The 1936 Farm Bill, the Soil Conservation and Domestic Allotment Act, linked commodity programs and soil conservation. The following Farm Bills, of 1949, 1954, and 1956, continued to rely on price supports and supply controls.

After the Great Depression and World War II, according to a USDA report, American farming changed in a number of ways: 

  • from 1950 to 2000, the number of Americans engaged in agriculture decreased from about ten percent of the workforce to less than two percent and more farmers maintained off-farm jobs to supplement farm income;
  • between 1950 and 2000, the number of non-metropolitan counties in which agriculture was an important economic factor decreased from being significant in most states to being significant in just a few states;
  • between 1950 and 2002, the number of farms in the United States decreased by more than 50 percent while the average size of those farms increased by more that 50 percent;
  • between 1945 and 2002, the average number of crop types produced on those fewer, larger farms decreased, on average, from about five to just about one; and
  • between 1948 and 1999, mono-cropping, mechanization, and the increased use of chemical fertilizers and pesticides increased American farm productivity by about 1.9 percent annually.

American agriculture was becoming increasingly industrial in scale. With the new scale came new problems: environmental, health, economic, and social. And, they were not the same problems addressed by the Agricultural Adjustment Act of 1933.   

During the 1950s, spurred by the high farm productivity associated with conventional mono-cropping and the cost of the Commodity Programs, the national farm policy debate focused on the need to continue price supports and supply controls. The Food and Agriculture Act of 1965 was the result of compromise. It retained elements of supply control while relying on a combination of reduced price supports and newly devised income supports. The 1970, 1973, and 1977 Farm Bills continued this compromise.

Federal policy at the time was becoming increasingly market oriented, and global markets became attractive. The 1985 Food Security Act and the 1990 Food, Agriculture, Conservation, and Trade Act, encouraged marketing commodities rather than adding them to government-held surpluses, and added flexibility in planting decisions. Supply controls ended in the 1996 Federal Agriculture Improvement and Reform Act. (With the 1996 bill, farmers were no longer required to idle land to qualify for subsidies.) The 2002 Farm Security and Rural Development Act introduced counter-cyclical payments triggered when commodity crop prices fall below target levels.

As subsidized commodities are produced in greater quantity and as foreign agricultural interests seek to sell their products in the United States, American farmers are increasingly participating in a global market. As of 2009, the USDA estimates that American agricultural exports were worth about $100 billion per year.

The Food Stamp Program

Late during the Great Depression in 1939, the first food stamp program, another program of the New Deal, was implemented by the federal government to help address hunger and rural poverty.  People on “relief” could buy “orange stamps” to purchase any food items they chose. And, for each dollar spent on orange stamps, each participant received supplemental “blue stamps,” worth $.50, that could be used to purchase surplus food items designated by the government. While the program ended in 1943 with the nation’s return to relative prosperity as a result of World War II, it set a precedent for the Food Stamp Program that would follow almost a quarter century later.

In 1961, a federal pilot Food Stamp Program was initiated in targeted counties and cities by the Executive Order of President John F. Kennedy pursuant to previous legislation. With President Lyndon B. Johnson’s Great Society came the Food Stamp Act of 1964. This Act made the Food Stamp Program permanent and expanded it to 40 counties and three cities in 22 states. In 1974, the Food Stamp Program was extended to every jurisdiction in the United States and it joined the commodity and other programs in the 1977 Farm Bill, the Food and Agriculture Act, codifying for subsequent omnibus Farm Bills the political relationship between food commodity supports and food distribution supports. It was at this time, in 1977, that the population of potentially eligible individuals was expanded, the Food Stamp purchase requirement was ended, and significant barriers to participation were removed.

During the early 1980s, the reach of the Food Stamp Program was cut back effectively by the implementation of new eligibility requirements. However, by the late 1980s, requirements were modified again to enlarge the potentially eligible population.  

In 1996, the Personal Responsibility and Work Opportunities Reconciliation Act (aka “welfare reform”), signed by President Bill Clinton, restricted Food Stamp eligibility. As a result of the new eligibility provisions and a strong economy, Food Stamp participation decreased significantly. It was in this 1996 Act that Electronic Benefits Transfer was mandated to replace traditional Food Stamps.

According to the USDA, about 500,000 individuals participated in the Food Stamp Program in 1965. This number increased to 14,000,000 in 1974, when the program became national in scope. By 1994, the Food Stamp participation rate reached 28 million, 75 percent of the eligible population. Presently, about 40 million individuals participate in the Food Stamp Program, which is about 65 percent of the potentially eligible population.

Local and Healthy Food Initiatives      

The 2008 Farm Bill, the Food, Conservation, and Energy Act, was notable in its response to the increased awareness of Americans about the provenience of their food as well as the environmental costs, inequities, and health impacts of our food system. Below are local and healthy food initiatives included in various Titles, with estimated costs:

Title II:  Conservation
Local Preferences in School Food Purchases, becoming an allowable factor in school food purchasing decisions made by local school districts participating in the federal school lunch program - no cost,
Organic Conversion, Technical, and Education Assistance, allowing organic practices and conversion to organic practices under conservation programs, and  
Farm and Ranch Protection Program, providing funds to help purchase development rights to keep productive farm and ranch land in agricultural uses - $743 million;                     
Title IV: Nutrition
Healthy Food Enterprise Development, providing outreach, technical assistance, and feasibility study grants to support the creation of enterprises engaging in the distribution and marketing of healthful and locally produced foods in underserved (aka food desert) urban, rural, and tribal communities - $3 million,
Fresh Fruit and Vegetable Snack Program, encouraging, and allowing local preference in, the purchase of fresh fruit and vegetable snacks by local school districts participating in the federal school lunch program - $500 million,
Senior Farmers Market Nutrition Program, providing for low-income senior citizens to purchase food at farmer markets, farm stands, and through CSAs - $20.6 million (annually), and
Community Food Projects, providing one-time, 50 percent grants to community-based organizations to develop innovative initiatives addressing hunger, nutrition, and food access, such as directly connecting low-income people and local farmers - $5 million (mandatory funding, over ten years);
Title VI: Rural Development
Value-added Agricultural Market Development, providing program grants to producers and food co-ops to support local food value-chains - $15 million,
Local Food Enterprise Financing, providing USDA backed loans to entities engaged in local food distribution and marketing - no cost, and
Rural Micro-enterprise Assistance Program, assisting rural entrepreneurs in establishing small businesses - $15 million (over four years);
Title VII: Research
A “Food Desert” Study, identifying the incidence of “food deserts” and strategies to reduce their incidence - $.5 million; and
Title X: Horticulture and Organic Agriculture
Farmers’ Market Promotion Program, providing grants to develop farmers’ markets and encourage Food Stamp usage at farmers’ markets - $33 million.


NEXT MONTH AND BEYOND


Next Month, Farm Bill 1.02 will examine the players and their roles in the creation of the 2012 Farm Bill including; the composition of the new 112th Congress, the bi-partisan Deficit Commission recommendations regarding agriculture, Congress dealing with the effects of World Trade Organization sanctions and federal budget and baseline math, and Americans and our agricultural and food evolution. During 2011, as the Farm Bill debate develops, we will focus on the issues, programs, funding, and players that will affect American farm and food policy through 2017.


Sources:
“The Farm Bill; Past, Present, and Future - What We Need to Know and Why,” Fern Gale Estrow, MS, RD, CDN & Mary Pat Raimondi, MS, RD. 2006.
United States Department of Agriculture, Washington D.C. http://www.usda.gov/
“A Short History of SNAP,” USDA, http://www.fns.usda.gov/snap/rules/Legislation/about.htm
“The 20th Century Transformation of U.S. Agriculture and Farm Policy,” Carolyn Dimitri, Anne Effland, and Neilson Conklin, USDA Economic Research Service. June 20, 2005.
“What is the Farm Bill?” Renee Johnson, Congressional Research Service. May 6, 2010.