What the Farm Bill Means to Arizona

What the Farm Bill Means to Arizona
Arizona Farm Bureau President Stefanie Smallhouse speaking at the joint event hosted by the United Food Bank in Mesa to talk about the importance of the Farm Bill.

Individuals and families own more than 98% of U.S. farms and produce about 86% of America’s food and fiber. But farming and ranching aren’t easy, the risks are high, and every time a family farm goes out of business the overall aggregate of its impact eventually reverberates throughout farm and ranch country. The purpose of the Farm Bill is to help mitigate these risks while also providing much-needed nutrition assistance to millions of Americans in need.

But, what do we really know about the Farm Bill, and what does it mean to Arizona, to you and me?

At a joint event hosted by the United Food Bank in Mesa, the Arizona Farm Bureau and the Association of Arizona Food Banks joined forces to report how important the passage of a Farm Bill in 2018 is to all Americans. And while the U.S. House of Representatives had failed to pass its version of the bill (H.R. 2) on May 18, it’s anticipated that the House will take it up again later this month.

Meanwhile, the Senate Agriculture Committee is scheduled to mark up their version of the bill this week.

“America’s farmers and ranchers are facing an economic storm across the countryside,” said American Farm Bureau President Zippy Duvall, “so the release of the Senate Farm Bill is a crucial step to move the very important farm bill process forward. Farm income is at a decade low. Farm debt is on the rise and international markets for our farm goods are in jeopardy. The Senate Agriculture Committee, led by Chairman Pat Roberts and Ranking Member Debbie Stabenow, have worked hard to address those economic challenges and assemble a bipartisan bill that provides the clarity, policy certainty, and vital risk protection tools that our farmers need now more than ever. It’s important that the Senate bill strikes a balance that will help set the overall congressional tone for getting the farm bill done this year.”

A Brief History

Originally passed as the “Agricultural Adjustment Act of 1933,” the Farm Bill was created to address impacts of the Great Depression on agricultural commodity prices and production. The bill’s original focus on controlling the supply of agricultural goods has evolved into creating a market-driven safety net responding to market forces, rather than driving market forces. In 1973, the Nutrition Title was added to the Farm Bill, further creating a holistic approach to food security, not just economic support.

Plus, and often notably overlooked by its critics, the bill encourages conservation and wise land management to help ensure continued sustainability.

The Commodity Programs

While most think of the Farm Bill and think “crop subsidy,” modern commodity programs are far more nuanced than that. In fact, most who truly understand the Farm Bill do not consider it a “price supports” or “subsidies” type bill anymore. Instead, there are several core commodity programs in which a farmer can elect to participate.

First, there are the crop support programs themselves. The Agriculture Risk Coverage (ARC) program: provides loss coverage based on county-wide revenues. When the price of a covered commodity is less than the federally pre-determined reference price, a producer becomes eligible for a payment equal to the difference between the two. Similarly, the Price Loss Coverage (PLC) provides loss coverage based on nation-wide revenues. This payment is issued when the effective price (national average loan rate or market year average price) is lower than the pre-determined reference price. Growers may elect to participate in only one of these programs for the life of the Farm Bill.

Other commodity programs include loan options for beginning, small, and underserved farmers, disaster relief programs, and much more. Regarding Arizona and commodity programs, the best way to understand the ground-level management of the programs is to assess the amount of commodity payments issued to our producers. In 2016, commodity payments to Arizona farmers under these programs totaled:

·         $69,071 in ARC and PLC program payments

·         $8,412,066 in Cotton Ginning Cost Share payments

·         $46,095,230 in commodity loans, using crops as collateral

Crop Insurance

Another option available to farmers through the Farm Bill is affordable crop insurance. The USDA and American Farm Bureau highlight that crop insurance subsidizes insurance premiums to make crop insurance accessible for all farmers regardless of what they grow or how big their operations may be. In 2015, 68% of all eligible acres (1 million acres) in Arizona were insured under the crop insurance program: Pasture, Rangeland, and Forest Programs paid out $2 million in indemnities for 563,000 acres. For crops, insurance policies provided $14 million in indemnities.

Conservation Programs

Conservation programs also make up a significant portion of Farm Bill spending. For example, the Environmental Quality Incentives Program (or EQIP) allots financial resources and support to plan land improvements designed to improve soil and water health, wildlife habitat, and the success of agricultural operations. In 2015 alone, Arizona producers received $13.2 million in EQIP payments to implement long-lasting land improvement projects.

Although not widely used in Arizona, the Conservation Reserve Program is another Farm Bill program that preserves land nationwide. In exchange for a yearly rental payment, landowners take environmentally sensitive land out of production for a prescribed period, typically 10 to 15 years.

Why Do Farmers Need a Farm Bill?

Why you might ask, do farmers need the Farm Bill? Since 2013, net farm income has declined by 52%. Translated into dollars, that’s about $64 million. But even beyond the decline in net farm income is the fact that every nation must be able to feed itself.

“This is not a Farm Bill,” says Arizona Farm Bureau President Stefanie Smallhouse, “It’s a national Food Security Bill.”

A rancher with her husband in Pima County, Smallhouse went on to say, “Much to the benefit of all American consumers, there have not been food shortages in this country since the first Farm Bill was passed in the recovery effort to bring the U.S. back from that dark time in our history known as the Great Depression. And not only does agriculture feed and clothe us, it also employs us: the food and agriculture sector supports more than 21 million U.S. jobs, including 138,000 full and part-time jobs right here in Arizona.”

From Farm to the Food Bank

The Farm Bill covers more than just agricultural production, however. It also addresses the significant problem of food insecurity in our country. Arizona consistently has a higher food insecurity rate (14.9%) than the national average (12.9%). The good news is that the latest data show Arizona’s rate is declining, from 17.1% in 2014. Through government programs and charitable support, we are making progress but often the struggles of working families to put food on the table goes unnoticed.

The Association of Arizona Food Banks; its five-member food banks; network of more than 1,000 food pantries, community centers, and other direct-service partner agencies work to not only supply those in need with emergency food from charitable means, but also to raise awareness of hunger in Arizona, which affects more than 1 million people. Through partnerships with many Arizona farmers and ranchers, the food bank network receives countless donations of fresh produce that can be distributed to those in need.

The nutrition programs in the Farm Bill are an obvious critical part of the modern-day bill. The Supplemental Nutrition Assistance Program (SNAP) is the most significant and effective program addressing food insecurity that is governed within the Farm Bill.  SNAP provides not only support to purchase food at grocery stores and other certified retailers, but also offers nutrition education and employment and training services. SNAP supports the purchase of locally-grown fruits and vegetables through the Food Insecurity Nutrition Incentive program. The average monthly SNAP benefits in Arizona is $117, which averages to $1.30 per person per meal. It’s hard to imagine being able to buy a meal today for $1.30, but this supplemental support for low-wage workers, senior citizens, and people with disabilities can mean the difference between eating and going hungry. The SNAP program is also responsive. As the economy improves and unemployment declines, SNAP enrollment declines too.

But SNAP is not the only program to support children, seniors, and working families struggling with food insecurity. The Emergency Food Assistance Program (TEFAP), also regulated through the Farm Bill, provides commodities to food banks nationwide. In Arizona, nearly 20% of the food distributed at food banks comes from TEFAP. Other commodity programs include the Food Distribution Program on Indian Reservations (FDPIR) and the Commodity Supplemental Food Program (CSFP), which helps nearly 20,000 Arizona seniors each month.

The graphic below shows the specific funding for the nutrition programs in Arizona.

Changes to SNAP eligibility with regards to work compliance have been heightened in H.R. 2, and this has generated some of the most vigorous debate in Congress. SNAP has always had work requirements because everyone -- including people facing hunger, anti-hunger advocates, and policymakers on both sides of the aisle – believe in the dignity of work and support people’s ability to provide for themselves. Some of the proposed changes, however, could create hardships for those struggling to find work or working in low-wage or limited-hour jobs as the program cuts off support much quicker than under current law and imposes much harsher sanctions.

AAFB’s Recommendations to Support Working Families

The Association of Arizona Food Banks has encouraged lawmakers to rethink the House Farm Bill (H.R. 2) in its current form to focus any discussion of work on sustainable employment and self-sufficiency.

Additionally, changes to SNAP should be data-driven, meaning they should wait for the assessments of SNAP education and training pilots, expected in 2020.

Finally, Arizona should maintain state discretion to administer SNAP. Waivers to certain federal regulations like eligibility limits and required work participants should be maintained. Local control is necessary to best understand our culture and environment.

Next Steps

Both Farm Bureau and food banks alike agree that a strong, bipartisan Farm Bill is the best pathway to improve food security. We encourage our lawmakers to work together for solutions that help both growers and the people they feed every day. 

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