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Risk Management and Other Provisions - Farm Security & Rural Investment Act of 2002. 2002 Farm Bill Education Conference Kansas City, Missouri May 20-21, 2002 Jim Novak Auburn University. Risk Management and Other Provisions. All of commodity title could be considered to be risk management.

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Risk Management and Other Provisions - Farm Security & Rural Investment Act of 2002

2002 Farm Bill Education Conference

Kansas City, Missouri

May 20-21, 2002

Jim Novak

Auburn University


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Risk Management and Other Provisions Investment Act of 2002

  • All of commodity title could be considered to be risk management.

    • Question is:

      • Risk reducing or

      • Risk increasing?

    • Only time will tell.


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Risk Management and Other Provisions Investment Act of 2002

  • Bill contains language about risk in a number of places

  • Also contains specifics on crop insurance and disaster assistance.


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Risk Management and Other Provisions Investment Act of 2002

  • CROP INSURANCE

    • Adds Sweetpotatoes

    • AGR pilot extended to 2004

      • 8 counties in California and 8 counties in Pennsylvania to be added.

    • Sense of Congress extend pilot CRC to pecans in Georgia.

    • And insurance coverage to continuous wheat in Kansas.


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Risk Management and Other Provisions Investment Act of 2002

  • Insurance Report on Specialty Crops Required

    • Not later than 180 days after enactment report by Sec. Ag to House and Senate Ag Committees progress on R&D in insurance for specialty crops and

    • increasing use of “risk management products” by small and moderate underserved farms.


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Risk Management and Other Provisions Investment Act of 2002

  • Disaster Assistance

    • Sea Oats and Sea Grass as NAP crop?

    • Livestock Assistance

      • Includes dairy and other livestock to cover livestock mortality, feed assistance, compensation for “sudden increase in costs” other as appropriate.

      • May not use CCC money.

      • Funds authorized as necessary.


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Risk Management and Other Provisions Investment Act of 2002

  • Disaster Assistance

    • Market Loss Assistance for Apples

      • Payment quantity equal to lesser of 2000 crop or 5 million pounds of apples.

      • No payment limit or income eligibility limit.

      • $94 million authorized payment ASAP.


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Risk Management and Other Provisions Investment Act of 2002

  • Disaster Assistance

    • Market Loss Assistance for Onions

      • Orange County NY only, $10 million of CCC money for losses during 1 or more years 1996-2000 crop years.


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Risk Management and Other Provisions Investment Act of 2002

  • Disaster Assistance

    • Commercial Fisheries Failure emergency disaster assistance for the commercial fishery failure.

    • Study on adequacy of federal disaster indemnification resulting from failure of the Secretary of Interior to honor contract for the Central Valley Project Improvement Act.


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Risk Management and Other Provisions Investment Act of 2002

  • Orchard Tree Assistance

    • Assistance to those who lost trees (tree, bush, vine) from natural disaster.

    • Must harvest perennial crop from tree.

    • Reimbursement

      • 75% of cost of replanting in excess of 15% mortality (adjusted for normal mortality).

      • May not exceed $75,000 per person or equivalent value of seedlings.

      • Not to exceed 500 acres.


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Risk Management and Other Provisions Investment Act of 2002

  • Title IX - Energy

    • Federal agencies required to procure biobased products.

    • Biobased “products will be purchased to the maximum extent possible.”

      • Energy from bio-mass including ag crops and animals waste.

      • Energy from renewable sources, wind, solar, biomass or geothermal or hydrogen produced from water or biomass


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Risk Management and Other Provisions Investment Act of 2002

  • Bio-Based Preference

    • Each federal agency required to have specs for bio-based products within one year.

    • Optional, allows some wiggle room to opt out.

    • Labeling for bio-based products.

    • Office of Federal Procurement Policy coordinated program.

    • Preference in contracting goes to item with highest % bio-based product.


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Risk Management and Other Provisions Investment Act of 2002

  • BIO Refinery Grants

    • Grants to defray cost of development and construction of bio-refineries.

    • Farmers, national lab, institutions of higher ed, state or local agency, tribe, consortium.

    • Gov’t cost not to exceed 30% of cost.


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Risk Management and Other Provisions Investment Act of 2002

  • Bio-Diesel Educ. Program

    • Grant to educate public and gov’t about the benefits of bio diesel.

    • $1 million/year.


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Risk Management and Other Provisions Investment Act of 2002

  • Energy Audit and Renewable Energy Audits Grant

    • Cost share gov’t pays 75%.

  • Renewable Energy Purchase Grants

    • Loan and Loan guarantees for farmers to purchase renewable energy systems or to make energy efficiency improvements.

    • Grant not to exceed 25% of cost.

    • Grant and Loan not to exceed 50% of cost of system.

    • Gotta be cost effective.


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Risk Management and Other Provisions Investment Act of 2002

  • Hydrogen Cells and Fuel Cells

    • Sec. Ag. to work with Sec. Energy to disseminate info.

  • Biomass Research and Development.

    • CCC gives $5M 2002; $14M 2003-2007;

    • Additional authorized $49M 2002-2007.

  • CSREES Carbon Sequestration.

    • Such sums as are necessary.


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Risk Management and Other Provisions Investment Act of 2002

  • Bio-Energy Program

    • Payments to eligible producers to encourage increased purchase of eligible commodities for purpose of expanding production of bio-energy and supporting new production capacity for bioenergy.

    • Contract required

      • Producers < 65K gallons reimbursed 1 feedstock unit for every 2.5 feedstock units of commodity used for increased production

      • Producers 65K or more gallons 1 feedstock unit for every 3.5 feedstock units.

      • No farmer gets more than 5% of total funds

      • Proration allowed

      • Total authorized $150M/yr. 2003-06; $0 in 2007


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Risk Management and Other Provisions Investment Act of 2002

  • RESEARCH/EXTENSION TITLE

    • Reauthorizes variety of programs including research and extension LG activity.

      • University research

      • Extension

      • Ag policy centers


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Risk Management and Other Provisions Investment Act of 2002

  • RESEARCH/EXTENSION TITLE

    • IFAFS - $620 million to 2006

      • $200 million/year thereafter

    • Section 7208

      • (30) Revenue and Insurance Tools Research and Extension grants.

      • (34) Agricultural Marketing grants.

    • Section 7220 Termination of Sched A. Civil Service.


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Risk Management and Other Provisions Investment Act of 2002

  • RESEARCH/EXTENSION TITLE

    • Section 7405 Beginning Farmers and Ranchers Development Program

      • Farming < 10 years

      • Training, Education, Outreach and Technical Assistance

      • Matching funds equal to 25% of the grant (cash or in-kind)


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Risk Management and Other Provisions Investment Act of 2002

  • RESEARCH/EXTENSION TITLE

    • Section 7405 Beginning Farmers and Ranchers Development Program

      • Sec Ag. Est. education teams to develop curricula and conduct education programs for beginning farmers.

        • Land acquisition

        • Entrepeneurship

        • Financial management training

        • Whole Farm Planning

        • Risk Management Education

        • etc.


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Risk Management and Other Provisions Investment Act of 2002

  • RESEARCH/EXTENSION TITLE

    • 7406 Statement about doubling funding for ag research..sense of congress.


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • Confidentiality in Livestock Contracts

      • Affirms right to discuss terms of a contract..livestock or poultry producer can discuss confidential marketing contract agreement with…Fed or state agency; legal advisor; lender; accountant; executive or manager of the farm; landlord; or member of immediate family.


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • Fed to purchase $200 million in fruits, vegetables, specialty crops for school lunch act.


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • Farmer’s Market Promotion Program

      • Aid farmer’s markets, roadside stands, community supported ag producers and direct producer to consumer market opps.

      • Eligible entities include ag coops; local gov’t; non profit orgs; public benefit corp; economic development corp; regional farmer’s market authority or others as designated.

      • Development of Farmer’s Markets - “The Secretary shall …(3) establish a training program to train cooperative extension service employees in the development of direct marketing techniques.


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • 100% Organic producers exempt from marketing assessment.

    • Organic certification assistance cost share program to help farmers get certified as organic producers.

      • Gov’t pays 75% up to $500


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • Public education on bio-tech food within a year.

    • FAPRI - $6 million/year 2003-07.

    • Irradiation labeling?

    • 7 month extension of Chapter 12


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Risk Management and Other Provisions Investment Act of 2002

  • MISCELLANEOUS

    • Country of origin labeling.

      • Not to impact restaurants or processed product.

    • Study on impact of updating yields further.

    • Report on impact of farm program payments especially on tenants and ag economies of farming areas.

    • Study on impact of tobacco settlement.


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Risk Management and Other Provisions Investment Act of 2002

  • Question about tobacco program. Tobacco will be handled under separate legislation. Being negotiated as we speak.

  • Contact Will Snell of U. Ky for further updates on tobacco negotiation.


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Risk Management and Other Provisions Investment Act of 2002

  • Other Questions and Comments


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