Tuesday, October 8, 2013

Losing the farm

When I tell people I work for the Farm Service Agency, I either get a knowing nod like "oh you are one of those government employees" or I get a "what do you actually do?".

I've started leading off with working for the US Department of Agriculture because most people have actually heard of that that. We are a small agency within USDA that administers the farm subsidy, disaster and some insurance programs of the Farm Bill. The farm bill is made up of 15 different titles addressing different areas. The 15 titles or parts of the Farm Bill are, the ones that are bolded are the only ones that I directly work with through FSA.
  1. Commodity - provides income support to growers of select commodities
  2. Conservation - provides funding for farm environmental stewardship thought programs that improve management practices, retire less productive land and protect natural resources
  3. Agricultural Trade & Food Aid - funds US agriculture export and international food assistance programs and various WTO obligations
  4. Nutrition - covers domestic food, nutrition and commodity distribution programs such as food stamps and supplemental nutrition assistance as well as purchases of fresh fruit and vegetables in schools and expanded programs for farmers markets and urban gardens.
  5. Farm Credit - offers direct and guaranteed loan program to farmers via 2 government related farm lenders the USDA Farm Service Agency and the Farm Credit System.
  6. Rural Development - funds rural development loan and gran programs, the expansion of rural broadband, water infrastructure and promotes locally produced ag food products
  7. Research - supports agricultural research and extension programs, including bio security and response, biotechnology and organic production
  8. Forestry - fund USDA Forest Service programs that protects forests from threats, restore forests damaged by natural disasters and enhance public benefits from private forests.
  9. Energy - supports the development of bio fuels refineries and research; helps farmers, ranchers and rural small businesses purchase renewable energy systems
  10. Horticulture & Organic Agriculture - encourages the production and consumption of organic agriculture commodities
  11. Livestock - addresses livestock disease prevention and food safety concerns and enhances electronic mandatory livestock reporting
  12. Crop Insurance & Disaster Assistance - protects farmers from risks associated with adverse weather, weather related plant disease and insect infestation
  13. Commodity Futures - covers re-authorization of the Commodity Futures Trading Commission, an independent agency that regulates commodity futures trading in the US
  14. Miscellaneous - expands programs to assist limited resource and socially disadvantaged farmers and addresses rural development, agricultural labor supply and animal welfare.
  15. Trade & Taxes - introduces numerous tax provisions affection conservation and commodity program payments, timber investment, bio fuel production and agricultural income.
Officially called 2008 Food, Conservation and Energy Act and dubbed the Farm Bill, although a very small percentage of the total bill actually goes to farmers and ranchers. See the graph shows that a majority, nearly 80% of the $ goes to food/nutrition for the food stamp program. There are several of these representations floating around, all varying slightly in specific numbers, however the disproportionate amounts are generally the same.

Some folks don't like the idea of a Farm Bill as in subsidies to farmers or farmer welfare as some would call it. In the case of many of the folks that I work with, we are used as a last resort, the final safety net in times of disaster. Even the graph shows that the farmers and ranchers aren't living high on the hog government payments. The face of the farm part of the Farm Bill has evolved over the years, moving towards a risk management tool, a final safety net rather than direct subsidies.

Nearly all FSA programs require the farmer or rancher to carry insurance on their crops to be eligible for disaster payment assistance. For example, the biggest program that I administer is called Non-insurable Assistance Program (NAP). It is an insurance program for crops that are not covered by traditional crop insurance. Producers are required to pay a fee, an insurance premium, for coverage. If they lose more than 50% of their crop, they then qualify for payment of 55% on the difference of loss and 50%. In other words, if they lose 60% of their crop, their payment will equal 55% of 10% or a total 5.5% of expected income. Could you make it on 5.5% of your normal paycheck? Luckily, most farmers and ranchers have more than one type of crop to help absorb some of the risk of disaster, but in a climate of high input costs it makes it harder and harder to absorb losses of any size.

While subsidies may not be ideal, I think its important to realize that they are needed, in a safety net design. We need American agriculture to remain strong, through good times and bad times because we sure don't want to be dependent on other nations for our food supply. While some media would lead you to believe that all farmers and ranchers are getting rich on subsidies, I'm here to tell you don't believe all that you read. In fact yesterday I just heard on the news the following quotes 1) "We have the USDA who just makes payments to Archer Daniels Midland (ADM)" and 2) " The Department of Agriculture, why do we need them, farming just happens". Farming won't just "happen" without risk management options available to assist and protect farmers and ranchers during tough times.

And my final question to you...Would you rather your tax dollar go to subsidize a hardworking farmer or rancher, working to provide a safe, affordable food supply who has fallen on hard times through weather related disaster or would you rather your tax dollar go to a growing food stamp program.

With years of political uncertainty and fiscal uproar, the country as a whole and the agriculture world is facing looming deadlines. Current ag legislation expired September 30 and there isn't an appropriations (budgets, money) or a passable Farm Bill in sight to provide a safety net for American agriculture. The longer the government shutdown lingers on the more and more impact it will have on Americans.


  1. Love this! I think you did a great job explaining what you do and the importance of the programs! Thumbs up!


  2. This was an excellent post Jen!

  3. With your permission, would you mind if I copied and pasted part of this on my blog to share with everyone? I of course would give you credit for it, and add in my two cents, as a beginning farmer and how FSA helped us out :) Pretty please??

  4. Oh, and in our case, we had to go into several banks, get rejection letters from each of them, and yes, had to use FSA as a last resort. Believe me, that part isn't fun. But that's normal for beginning farmers wanting to borrow LOTS of money that don't have a farming history.

  5. Great explanation, Jen! So many people don't understand the safety net aspect and certainty for producers that the Farm Bill provided. I work with foreign trade promotion programs that utilize FMD/MAP funds from the Farm Bill. Without it, we wouldn't have anavenue to promote our Ag products to intrrnational customers that are vital to our industry.

  6. I work for Farm Credit - thanks for the plug! ;) FSA is a VERY important agency and I hope people come to understand that.
    I LOVE God Made a Farmer - thanks for sharing that.
    Have a great day!

  7. Quite well written, Jen! As someone with an agricultural background, I certainly don't understand the system as well as I should, and I learned a great deal from this post. Thanks for writing it. I hope you are back to work and able to help provide that safety net soon.