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Tuesday, December 28, 2010

Deregulating Genetically Engineered Alfalfa and Sugar Beets: Legal and Administrative Responses


Tadlock Cowan
Analyst in Natural Resources and Rural Development

Kristina Alexander
Legislative Attorney


Monsanto Corporation, the developer of herbicide-tolerant varieties of genetically engineered (GE) alfalfa and sugar beet (marketed under the name of Roundup Ready alfalfa and Roundup Ready sugar beet), petitioned USDA’s Animal and Plant Health Inspection Service (APHIS) for deregulation of the items. Deregulation of GE plants is the final step in the commercialization process. Monsanto filed a petition for deregulation of its GE alfalfa in 2004, and for sugar beets in 2005.

As part of the deregulation process, APHIS conducts an environmental review under the National Environmental Policy Act (NEPA) to determine whether any significant environmental impacts will result from deregulating the item. APHIS conducted a limited review, known as an environmental assessment (EA), of the GE plants to assess the impacts of growing them on a commercial scale. For both GE alfalfa and sugar beets, APHIS issued a “finding of no significant impacts” (FONSI), in June 2005 and March 2005, respectively.

Lawsuits subsequently challenged the adequacy of the EAs as the basis of the FONSI. The courts agreed that APHIS should have prepared an environmental impact statement (EIS) for both deregulation decisions. APHIS was directed by the court to complete an EIS on the effects of deregulating both of the GE varieties.

The court in the GE alfalfa case halted planting of the genetically modified seed after May 3, 2007, and nullified the deregulation. The injunction was appealed to the U.S. Supreme Court, which held that the injunction was too broad and that the court should have considered partial deregulation. The Supreme Court did not discuss the appropriateness of the environmental review.

The court in the GE sugar beet case did not formally prohibit planting sugar beet, but it voided APHIS’s deregulation decision in August 2010. This decision undoes the five-year-old approval of GE sugar beet, from which nearly half of U.S. sugar is derived. APHIS announced on September 1, 2010, that the agency is evaluating a request to partially deregulate GE sugar beets, which would permit planting and harvesting sugar beets under certain restrictions. APHIS issued four permits authorizing seedling production that would not allow flowering or transplanting without additional authorization. In December, a judge ordered those seedlings pulled from the ground, holding that APHIS had violated NEPA in issuing the permits. This ruling was put on hold by the Ninth Circuit.

APHIS anticipates that the draft EIS for sugar beet will be publicly available May 2011, and the final EIS in May 2012. A draft EIS for alfalfa was released to the public on December 14, 2009. The final EIS is scheduled for publication in fall 2010, when APHIS also will announce its decision on deregulating the GE alfalfa.

The cases of GE alfalfa and sugar beet highlight continuing policy questions about the adequacy of APHIS’s deregulation protocol, particularly regarding the environmental review process. In their suits against APHIS, plaintiff lawyers cited the EAs’ failure to assess the impact on non-GE alfalfa growers (particularly those who export to Japan, Korea, and Taiwan) and on producers of commercial table beet and chard seeds (species that can cross-pollinate with GE sugar beet). APHIS currently is in the process of issuing a final rule on its revision of regulations regarding the importation, interstate movement, and environmental release of GE organisms.



Date of Report: December 14, 2010
Number of Pages: 17
Order Number: R41395
Price: $29.95

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Monday, December 27, 2010

A New Farm Program Option: Average Crop Revenue Election (ACRE)


Dennis A. Shields
Specialist in Agricultural Policy

Farm commodity programs over the decades have focused on protecting farmers against declines in farm prices and not declines in revenue (price times production). Traditional programs for field crops provide benefits to producers when farm prices drop below specified levels. To help farmers manage their revenue risks, Congress included the Average Crop Revenue Election (ACRE) program in the Food, Conservation, and Energy Act of 2008 (P.L. 110-246) as a revenuebased program option for farmers who enroll in traditional farm commodity programs. Unlike revenue protection provided by some crop insurance products, ACRE is designed to protect against losses from multi-year price declines.

The ACRE program pays a farmer when two conditions are met: (1) state-level revenue for a crop falls below a guaranteed level, and (2) the farmer experiences an individual crop revenue loss. (Payments for each crop are calculated separately.) If farmers select ACRE, they forgo 20% of their direct payments under the Direct and Counter-cyclical Payment Program (DCP), and commodity loan rates under the Marketing Assistance Loan Program are reduced by 30%. Also, ACRE participants are not eligible for counter-cyclical program payments under DCP. When deciding to participate in ACRE, producers must consider the trade-off between reduced benefits under traditional programs and the expected increase in revenue risk protection and potential payments provided by ACRE.

Once a farm is enrolled in ACRE, the program applies to all eligible crops on that farm. A farmer who operates more than one farm may elect to enroll one or all of the farms in ACRE. Importantly, once a farm is enrolled in ACRE, it must remain in the program for subsequent crop years (the program covers crop years 2009 through 2012). For the 2009 crop year, approximately 8% of the total number of farms elected to participate in ACRE, representing nearly 13% of base acres (total program acreage). In November 2010, USDA began issuing approximately $420 million in 2009 ACRE payments for wheat, corn, barley, dry peas, grain sorghum, lentils, oats, peanuts, soybeans, and upland cotton, with about 70% of the total expected to be issued to wheat producers and 23% to corn producers.

In its March 2009 baseline, the Congressional Budget Office estimated that ACRE program payments will total $4.9 billion during FY2010-FY2014, with corn, soybeans, wheat, and sorghum accounting for nearly all of the total. These five-year figures compare with $22.1 billion for direct payments, $3.6 billion for counter-cyclical payments, and $0.8 billion for marketing loan program benefits. The estimates account for reduced traditional program payments for farmers who participate in ACRE.

In the next farm bill debate, Congress will likely be interested in the effectiveness and cost of ACRE, particularly how it reduces revenue risk for producers of program crops. Program effectiveness will likely be measured in part by whether payments in fact reach farmers who experience revenue losses, and to what extent ACRE complements crop insurance and other farm commodity programs. Some have suggested a county-based ACRE program might better address local needs, while others say such an option could adversely affect crop insurance participation.

Beyond the program itself, the introduction of ACRE to U.S. farm policy provides a unique opportunity for farmers to trade benefits in one program for those in another. In the next farm bill debate, policymakers may find different trade-offs with other agricultural programs or policy objectives. This may be particularly relevant as concerns about the federal deficit mount.



Date of Report: December 10, 2010
Number of Pages: 14
Order Number: R40422
Price: $29.95

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Actual Farm Bill Spending and Cost Estimates


Jim Monke
Specialist in Agricultural Policy

Renée Johnson
Specialist in Agricultural Policy


The 112th Congress likely will consider reauthorization of the 2008 farm bill (P.L. 110-246, Food, Conservation, and Energy Act of 2008) because much of the current law expires in 2012. The 2008 farm bill is the most recent omnibus farm bill and guides most federal farm and food policies. The omnibus nature of the farm bill—including diverse constituencies supporting farm subsidies, food stamps, conservation, bioenergy, and international food aid—helps generate interest across Congress to support passage. However, increasingly tight budgetary resources prompted both chambers to hold hearings in 2010 to hear how the 2008 law is working and what changes they want in the next bill. The Administration already has submitted budget proposals to reduce farm supports, an approach at odds with that of many farm sector advocates, who support the status quo.

When the 2008 farm bill was enacted, the Congressional Budget Office (CBO) estimated its total cost (i.e., baseline plus new funding outlays, using the March 2007 baseline) at $284 billion over five years (FY2008-FY2012) and $604 billion over 10 years (FY2008-FY2017). These costs reflect mandatory outlays that do not require appropriations action. Available information reflecting more recent CBO estimates for FY2010-FY2012 and actual expenditures for FY2008- FY2009 indicate that five-year spending on most major farm bill programs will likely be below that estimated by CBO in 2008, while spending for domestic food assistance programs almost certainly will be much greater than previously estimated.

More specifically, when the 2008 farm bill was enacted, CBO estimated that the five-year cost (FY2008-FY2012) for the major farm support programs—commodities, conservation, crop insurance, renewable energy, and exports—would be $83.3 billion, or an average of $16.7 billion per year. More current CBO projections, which include actual spending in FY2008 and FY2009 for these programs, show that spending for these programs is expected to total $86.7 billion (an average of $17.3 billion per year), or $3.4 billion above the five-year 2008 CBO estimate. Most of the difference between the 2008 estimate and more recent estimates, however, is attributable to higher than expected crop insurance spending ($6.7 billion above estimates in 2008), which is offset by lower than expected spending for farm commodity and farm conservation programs. Estimated spending for the Supplemental Nutrition Assistance Program or SNAP (food stamps) over the five-year period is significantly higher than originally projected in 2008 ($188.9 billion estimated in 2008, compared to the more current estimate of $314.3 billion), reflecting additional spending because of provisions in the American Recovery and Reinvestment Act (ARRA), higher food costs, and increasing program participation rates due to the recession.

Similar to the conditions during debate on the 2008 farm bill, the upcoming farm bill debate is likely to be driven in part by relatively large budget deficits and growing demands for fiscal constraint. As Congress moves toward considering reauthorization of the omnibus farm bill, questions about the cost of the farm bill and cost considerations among different farm bill programs will become more prominent. Among the types of questions frequently asked about farm bill spending are: What is the estimated cost of the current 2008 farm bill? How much more or less has actually been spent on the 2008 farm bill than was estimated at the time of enactment? What is the estimated cost of some of the major programs in the 2008 farm bill? This report begins to answer some of these questions and provides updated information on actual expenditures for some programs and baseline projections by CBO for spending under current law.



Date of Report: December 13, 2010
Number of Pages: 14
Order Number: R41195
Price: $29.95

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Thursday, December 23, 2010

Food Safety on the Farm: Federal Programs and Legislative Action


Renée Johnson
Specialist in Agricultural Policy

Foodborne illness-causing bacteria on farms can enter the food supply unless preventive measures are in place to reduce them, either prior to or after harvest. Also of potential risk to the food supply are pesticide residues, animal drugs, and certain naturally occurring contaminants.

There is interest in examining on-farm practices, given continued major outbreaks of foodborne illness involving both domestically produced and imported foods. An example is the case in April-July 2008, when more than 1,000 persons in more than 40 states and Canada were found to be infected with the same unusual strain of bacteria (Salmonella Saintpaul). Most recently, in May 2010, a large-scale recall of more than 550 million shell eggs has been linked to concerns about a nationwide increase in Salmonella Enteritidis (SE) infections.

Food safety experts agree that an effective, comprehensive food safety system should include consideration of potential hazards at the farm level. However, opinions differ on the need for more stringent, government-enforced safety standards for farms, as exist for processors and others in the food chain. This question and others, such as the potential cost of new interventions to producers, taxpayers, and consumers, are at issue as Congress debates food safety legislation.

The lead federal food safety agencies are the Food Safety and Inspection Service (FSIS) within the U.S. Department of Agriculture (USDA), which regulates major species of meat and poultry and some egg products, and the Food and Drug Administration (FDA) within the U.S. Department of Health and Human Services (HHS), which regulates virtually all other foods. Generally, these agencies’ regulatory oversight of foods begins after the farm gate, at slaughter establishments and food handling and manufacturing facilities. However, various activities of these and other federal agencies involved in assuring the safety of the food supply can, and do, have an impact on how farms and ranches raise food commodities.

In the 111
th Congress, comprehensive food safety legislation passed both the House (H.R. 2749) in July 2009 and the Senate (S. 510) in November 2010. The House-passed bill would require the establishment of new standards for the production of some fruits, vegetables, nuts, and fungi. Other provisions of H.R. 2749 that focus more broadly on food safety, such as requiring a new food tracing system and expanding authority for access to records, also could impact on-farm practices. Provisions in the Senate-passed bill, S. 510, which includes a section requiring produce safety standards, also would affect on-farm production.

As both of these bills progressed, Congress continued to modify provisions to address the potential effects of proposed food safety requirements on small farms and food processors, and also on organic, direct-to-market, and sustainable farming operations. For example, although the House Energy and Commerce Committee amended H.R. 2749 to address small-farm concerns, the version passed by the full House in June 2010 contained additional changes addressing agricultural interests. Similarly, the version of S. 510 reported by the Senate Health, Education, Labor, and Pensions Committee in December 2009 was further modified to address small-farm concerns as part of a substitute manager’s amendment agreed to by Senate leaders that was released in August 2010. Additional changes were made to address small farm concerns again in a second substitute amendment to S. 510 (S.Amdt. 4715) that was offered and passed off the floor in November 2010. Further action on the legislation remains pending for various procedural reasons. (For more details, see CRS Report R40443, Food Safety in the 111
th Congress: H.R. 2749 and S. 510.)


Date of Report: December 15, 2010
Number of Pages: 30
Order Number: RL34612
Price: $29.95

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Wednesday, December 22, 2010

What Is the “Farm Bill”?


Renée Johnson
Specialist in Agricultural Policy

Jim Monke
Specialist in Agricultural Policy


The 112th Congress likely will consider reauthorization of the 2008 farm bill (P.L. 110-246, Food, Conservation, and Energy Act of 2008) because much of the current law expires in 2012. Both chambers held hearings in 2010 to hear how the 2008 law is working and what changes farmers and other interest groups want in the next bill. The Administration and other deficit reduction task forces have submitted budget proposals to reduce farm supports, and these approaches are at odds with those of many farm sector advocates, who support the status quo.

The 2008 farm bill contained 15 titles covering support for commodity crops, horticulture and livestock, conservation, nutrition, trade and food aid, agricultural research, farm credit, rural development, energy, forestry, and other related programs. It also included tax-related provisions to offset some new spending initiatives in the rest of the bill. The bill succeeds the 2002 farm bill (P.L. 107-171) and guides most federal farm and food policies through FY2012. The farm bill undergoes review and reauthorization roughly every five years.



Date of Report: December 10, 2010
Number of Pages: 15
Order Number: RS22131
Price: $29.95

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