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2006-2007 Policies for the Jurisdiction of the:
Agriculture and Rural Development Committee

Agriculture and Rural Development Standing Committee
NCSL Standing Committees Main Page
Staff Contacts

Policies:

2007 Farm Bill

The food and agriculture industry in the United States is not only key to the public health and welfare of this nation but is an important force in the economic, social and political fabric as well.  Farming and ranching are the foundations of our $1 trillion food and fiber business with nearly $60 billion in annual exports.  This vast industry is essential to the economic health of virtually every community.  It generates almost 15 percent of the total economic activity in the nation, as well as providing almost 18 percent of the country’s jobs.

Agriculture remains a core feature and industry in Rural America.  All levels of government must join together immediately in a comprehensive national effort to stem the tide of decline in rural communities.  This objective can be accomplished only by continued federal efforts to revitalize the agricultural, mining and forestry industries and by new initiatives to diversify the economies of these rural communities.  In seeking to achieve economic diversification, special focus must be placed upon the search for an effective strategy incorporating economic development, market diversification, venture capital, job training/retraining, intercity transportation, education, health and housing facilities, technical assistance and infrastructure components, at a minimum.

The US has agreed to dramatically reduce its levels of domestic support for particular crops, consistent with the obligations undertaken as part of this round of World Trade Organization talks.  The federal Farm Bill is set for congressional consideration and reauthorization prior to 2007.  At this juncture, the US has an opportunity to continue to support its agricultural dependent communities through a range of rural investment and direct payment programs which are consistent with the US commitments to free trade.  Congress, in approaching Farm Bill reauthorization, must remain mindful of US trade commitments and therefore design domestic support programs so as to eliminate trade distortions while maintaining a vibrant rural America, a strong agricultural sector, US food security, state sovereignty, and maximum state programmatic flexibility.  Congress must fully recognize the magnitude of the opportunity before it with this Farm Bill reauthorization to increase the economic prospects of rural communities while fulfilling commitments made by the US on agriculture at the World Trade Organization and thus advancing overall US trade negotiating objectives.

NCSL implores Congress to seize this important opportunity to lay the groundwork for increased rural prosperity by ensuring that the domestic supports found within the federal Farm Bill are designed to reach the broadest number of farm families and rural communities, and are fully funded.  NCSL believes the conservation programs and payments under the Farm Bill should be creatively maximized to the benefit of farm and rural communities; economic development initiatives; and soil, water, and wildlife conservation.  NCSL encourages Congress to carefully consider the rural development, energy, and research portions of the farm bill and the benefits of targeted investments in rural prosperity such as increased support for value added processing, all forms of on-farm energy production including bio-fuels, and strengthened linkages between land grant institutions and the communities they serve.

NCSL encourages Congress to consult regularly and meaningfully with state legislators and their national associations as the 2007 Farm Bill takes shape to ensure that state interests and programs are respected, maximized, and sustained.  NCSL looks forward to working with Congress, the U.S. Department of Agriculture, and state legislators to facilitate these consultations and to achieve our mutually shared goals.

July 2009

Agricultural Trade

(Joint with Economic Development, Trade and Cultural Affairs Committee)

America's farms and ranches currently export approximately 30 percent of their production.  These exports buttress the nation's balance of payments and are important to the well-being of the entire American economy.  Farm exports are essential to the financial health of American agriculture and to the economic development of American states.

However, the agriculture sector is no longer a net positive for America’s balance of payments and 2005 saw an historic change.  For the first time in over a century, Americans spent more on imported foods and spirits from abroad than farmers were able to sell overseas.  This change only underscores the importance of agriculture in trade negotiations and the need to open foreign markets to American agricultural products.

Trade Agreements

Protectionist trade practices and export subsidies of other countries often effectively limit American agricultural exports.  The United States and its trading partners therefore should seek agreements that reduce and eventually eliminate the reliance on protectionist trade policies and practices.

The National Conference of State Legislatures (NCSL) supports the federal government’s efforts to negotiate trade agreements that secure free and open access to overseas markets for American agricultural products.  In this connection, NCSL supports the President’s ability to negotiate trade agreements in accordance with the federalism and policy principles outlined in NCSL’s Presidential Trade Promotion Authority policy.

In negotiating new agreements, special attention should be placed on import quotas that thwart international trade opportunities.

Trade negotiations also should result in provisions that will speed resolution of cross-border disputes while respecting American values of due process and federalism.

The Doha Round of World Trade Organization negotiations has opened new discussions regarding agricultural trade and the trade-distorting effects of subsidies.  While talks are laborious and tenuous, NCSL supports the federal government’s efforts to work through these multilateral negotiations to open markets that are currently closed to U.S. products and to reduce the use of trade-distorting subsidies.  State legislators recognize that some U.S. trading partners view some current U.S. farm support programs as trade-distorting under WTO rules.  NCSL recognizes the importance of rural development supports while acknowledging the need to design such farm programs so that they do not conflict with WTO rules.  With this in mind, NCSL looks forward to an active engagement with congressional leaders, U.S. negotiators, and USDA officials regarding how these programs can be better designed to support rural prosperity while also complying with U.S. trade obligations. Further, NCSL encourages the Congress and the Administration to expand Trade Adjustment Assistance programs or efforts to convert farm supports to non-trade distorting support programs, such as environmental conservation, local food purchasing, conversion to biofuel crops, alternate crop conversion, or expansion of non-farm income generating opportunities in order to help America’s farm communities adapt, adjust to, and fully exploit new agricultural markets.

In addition to global negotiations under the WTO, NCSL supports bilateral and regional Free Trade Agreements (FTAs) that similarly open markets to American agricultural exports.

State legislators are nonetheless concerned that U.S. offers in these negotiations could unexpectedly and adversely affect state economies.  The federal government should notify the states of any potential impacts that U.S. subsidy reductions may have on regions, jobs, or tax bases.

While expanded international trade in agricultural products as a result of new trade agreements creates new opportunities for American exports and increased revenues, it also creates new burdens for both federal and state agriculture inspection and quarantine services.  NCSL calls upon the federal government to support training for inspection professionals and the development of new technologies to secure the health and safety of imported foods and agricultural products.

If any of our trading partners refuse to remove unnecessary trade barriers or persist in violations of international trade laws and agreements, the President should  restrict their imports of agricultural products or livestock into this country.  Similarly, NCSL supports the federal government’s decision to challenge some of our trading partners’ decisions regarding the importation of genetically modified foods.

Market Development

To enhance agricultural exports, Congress and the Administration should support an aggressive market development effort for agricultural products, including the use of export credits.  Emphasis should be placed on developing markets for high-value products.

In addition to traditional commodity sales programs, food aid can be a valuable tool in market development.  Current programs, however, should be redirected to encourage, rather than to discourage, the development of local food security in nations facing food shortages.  Surplus stocks of grain and other commodities should be used for distribution to less-developed nations.

Trade Embargoes

In order to recapture and maintain foreign markets, the United States must demonstrate that it is a reliable supplier.  To ensure that past mistakes in the use of foreign trade embargoes are not repeated, NCSL opposes any embargo of agricultural products, unless that embargo includes all trade with the target country.  NCSL supports the dissolution of the embargo on exports to Cuba for food products and medicine.

Trade Policy Development

The Secretary of Agriculture and other public officials representing agriculture should be included as full and equal partners in the formulation of United States policies affecting foreign trade.  USDA should in turn cooperate with state agricultural trade officials in a coordinated effort to promote agricultural exports.  State legislatures, both directly and through NCSL, should be consulted on the development of trade policies and kept abreast of evaluations of their efficacy and economic impact.  In particular, NCSL supports the appointment of one or more state legislators to the U.S. Trade Representative’s Agriculture Policy Advisory Committee (APAC).

Export Finance

Existing agricultural export finance programs and other financing institutions, such as the Export-Import Bank, should be bolstered to assist American producers in capturing foreign agriculture sales.

Grain Quality

The National Conference of State Legislatures urges the Congress to monitor closely the impact of the recent reforms in grain quality standards.  Additional legislative remedies should be considered if American farmers lose sales because of the sale of commodities which, although they meet legal standards, are nonetheless inferior in quality to foreign grain exports.

Further, NCSL encourages efforts to stem the costs of export grain inspection, while maintaining the integrity and quality of American exports.  Proposals for third party inspection, provided that USDA supervision of the inspection and weighing systems remains, and that states who currently do or wish to perform inspections retain their exclusive authority to do so, could benefit American producers.

Free Trade in Agricultural Products

The National Conference of State Legislatures urges the United States Department of Agriculture, the United States Department of Commerce, the United States Department of State, and the United States Trade Representative to take all measures necessary to open foreign markets to bulk and value-added agricultural commodities from the states.  Trade distorting policies must be eliminated so that American farmers may compete fairly in the world marketplace.  The federal government should work to lower these trade barriers, identify specific procedures for quick settlement to border disputes, and encourage international commerce in the area of agriculture.

July 2009

Animal Identification

The 2002 discovery of a single case of bovine spongiform encephalopathy (BSE) in a Canadian born cow within the borders of the United States has spurred debate on the establishment of a verifiable national animal identification program.  The National Conference of State Legislatures (NCSL) recognizes that such a program could be beneficial in helping maintain domestic and international consumer confidence in the safety of the United States meat supply.  NCSL also believes such a system, if properly implemented in cooperation with the Governments of the states and territories, could be an invaluable tool in helping control any future outbreak of infectious disease while serving as a important firewall against any attempted terrorist attack on the food production system in the United States.

            While there are many benefits to the implementation of such a system, the National Conference of State Legislatures also understands, as with most Federal programs, that “the devil is in the details.”  NCSL strongly believes that several issues must be addressed in any final system if it is to be of benefit to the country as a whole, if it is to be consistent with the principles of our federalist system and not an unfunded mandates on the states, and if it is not to be a financial burden to individual farmers and ranchers.  We believe that to reach this goal, the following must be discussed and addressed:

Any program must be designed and implemented in full consultation with state legislatures to ensure proper attention to public interest and financial considerations.

Any program must be designed and implemented in cooperation with the departments of agriculture of the states and territories.  USDA must work to insure that any animal identification system is compatible with the current inspection and enforcement systems of the state governments.  This program also must be largely, if not completely federally funded and not result in yet another unfunded mandate on the already strained budgets of the various states.

Any program must be designed and implemented with an eye toward the least possible cost to individual producers.  Recent increases in live animal prices have given farmers and ranchers the ability to replace equity lost over the last decade of low prices.  We do not need an additional layer of regulatory cost to be born solely by the meat producers of  the United States which could eliminate profits in favorable times and exacerbate loses in times of low prices.

Any program should encourage shared responsibility throughout the meat industry and should encourage full participation by all sections of the industry.

Producers and processors should be provided adequate liability and privacy protection.

An educational and outreach component should be established within the program in conjunction with state cooperative extensions services to help inform producers and consumers about the system.

International imports and exports must be included in the final identification system to provide adequate protections for both the security of the domestic food system and  to help ensure consumer confidence.  Identifying both live animals and processed product moving across international borders is essential if any system is to be seamless and successful.  Labeling of such product is necessary for trace back ability.

            NCSL applauds the actions taken by USDA to maintain consumer confidence, domestically and internationally, in the U.S. supply of meat.  We hope, however, that as we continue to consider further action on a national animal identification system, that a productive dialogue resulting in a workable, fully funded system is put in place and that the concerns of the states are fully addressed.  We look forward to working with the federal government to reach this goal.

July 2007

Beginner Farmer Programs

America's family farmers have recently experienced financial distress caused by low commodity prices, drought and a slowdown in world demand for agricultural exports. In many cases, adversity has been so severe that farmers have been forced out of agricultural production. Others have been discouraged from beginning farming. The National Conference of State Legislatures supports a state-federal partnership to confront these challenges, including the use of federal tax incentives to support state-based development and loan programs.

To improve opportunities for new entrants into the farming profession many states administer "beginner farmer" programs. These programs typically involve no direct appropriations, but instead apply a federal income tax exemption to loans made to first-time purchasers of farm land, agricultural equipment and livestock. The tax savings to banks participating in the programs provide an incentive to reduce the interest rates charged to qualifying farmers. Favorable terms not only improve credit access for beginner farmers but also facilitate the development of long-term relationships that benefit rural communities.

Despite the success of state beginner farmer programs, the federal Internal Revenue Code currently includes provisions that have limited their use. While the total amount of federal tax revenue associated with these programs is relatively small, they have effectively stymied beginner farmer programs in many states.

The National Conference of State Legislatures supports changes to the federal Internal Revenue code that reduce borrowing costs to qualifying farmers and strengthen state beginner farmer programs. For example in 1996, the agricultural bond program was expanded to allow state loan programs to finance beginner farmer purchases of agricultural property from grandparents, parents or siblings. The definition of first-time farmer was also revised, so someone may own as much as 30 pecent of their county median farm size and still be eligible for a beginner farmer loan.

NCSL supports building on these steps by exempting agricultural bonds from the federal volume cap placed on industrial revenue bonds in each state. Currently, agricultural bonds must compete with large industrial and housing projects in each state for the limited volume cap allocated by the federal government. As a result many states cannot meet the demand for agricultural bonds. Other states are prevented from offering them altogether because their state's volume cap is already allocated for other purposes. In addition to an exemption for agricultural bonds, NCSL supports raising the total volume of state bonding authority to free resources for beginner farmer programs if achieved in a manner consistent with a balanced federal budget.

NCSL recommends that the President and U.S. Congress amend the federal Internal Revenue Code to make the use of agricultural bonds more attractive to banks and other financial institutions. Specifically, these institutions should be able to deduct interest expense associated with their purchase of tax-exempt bonds that support beginner farmer programs. NCSL also recommends that the federal government permit deductibility for loans financed by issuers that are not necessarily small issuers as defined by the Internal Revenue Code, since many states use larger authorities to issue tax-exempt obligations for beginner farmer programs. NCSL believes that these measures would benefit beginner farmers by increasing the availability of agricultural bonds and competition between financial institutions

.July 2008

Crop Insurance

State legislatures and the federal government share the goal of a vibrant rural economy and preservation of the family farm.  In the past several years, weather events and weakness in the price of some agricultural commodities have beset the rural economy and magnified the need for producers to effectively manage risk.  Contract production, derivatives and crop insurance have provided producers with some protection and price stability.  However, these tools have not alleviated a reliance on federal ad hoc disaster programs.  By their nature, these programs are unpredictable and, at best, offer producers short-term relief from natural disasters and economic downturns.

In an increasingly competitive international marketplace, American producers must have access to a range of risk management tools.  Central to this goal, NCSL supports a state-federal partnership to develop a fair and affordable crop insurance program that complements other risk management tools available in the marketplace for all crops.  NCSL supports an efficient program that reduces reliance on ad hoc relief programs and promotes informed production and management decisions.  NCSL also supports federal efforts to encourage private-sector development of innovative risk management tools.  However, any plan for crop insurance must not adversely impact a state's ability to levy premium taxes, regulate the business of private insurance and set solvency standards for private crop insurers.

July 2008

Farm Credit Institutions

Secondary Market for Long-Term Loans
The Agricultural Credit Act of 1987 created a secondary market administered by the Federal Agricultural Mortgage Corporation (Farmer Mac) to provide more lending capacity for farm real estate and rural housing and more long term credit for farmers and ranchers.  The National Conference of State Legislatures urges the federal government to work with states to assure that the provisions of the law continue to be fully implemented.

July 2007

Intellectual Property Rights In Publicly-Funded Research

The first Morrill Act of 1862, the Hatch Act of 1887 and the Smith-Lever Act of 1914 created a system of Land Grant Universities and endowed the colleges with a three-part mission of teaching, research and extension.  The third component of the mission – extension – links the Land Grant Colleges’ programs to the needs of society at large through a service function that includes extending education and technology transfer to the public.  The Bayh-Dole Act of 1980, and amendments, dramatically altered intellectual property rights in publicly-funded research, allowing recipients of federal research funds to patent and license technologies and inventions arising from such research.

Mergers and concentration among agricultural suppliers have greatly diminished the number of farm input suppliers providing seed, chemicals and other products and services to producers.  Ownership and control of plant genetics, plant varieties and the agricultural research is rapidly being concentrated in the hands of a few, economically powerful firms.  The purpose and promise of agricultural research through the Land Grant Colleges, including research into genetics and biotechnology, is to create products of added value to producers and to ultimately enhance farm income.  Privatization of agricultural research has increasingly limited producer access to advanced genetics and the fruits of biotechnology to license and contract, creating a potential legal barrier to agricultural producers fully realizing the economic benefits of agricultural research.

Therefore, the National Conference of State Legislatures (NCSL) calls on Congress to review the Bayh-Dole Act of 1980 and subsequent amendments for its impact on encouraging concentration and vertical integration within the agricultural sector, and for its consistency with the mission and purpose of the Land Grant College system.  Further, Congress should increase federal support for agricultural research, and retain through grant and contract provisions greater portions of technology arising from such research within the public domain.  Congress should also affirm as objectives of the Land Grant Colleges’ agricultural research mission to achieve broad dissemination and producer access to crop technology, and preserve and enhance the income and economic opportunities of producers.

July 2009

National Agriculture Policy

The National Conference of State Legislatures (NCSL) believes that federal farm programs should continue to provide support to economically efficient farming operations.  The funding appropriate to agriculture should be targeted toward programs which promote the preservation of the basic family farm structure.  Legislation should also be enacted to limit agricultural business tax shelters for non-farm income.  NCSL urges Congress to review the existing payment limitations for individual farmers and program eligibility requirements to ensure that they meet this objective.  In addition, the Conference recommends that all federal agricultural adjustment payments, price-support program loans, payments and other benefits not related to soil conservation efforts be limited to citizens of this country or aliens lawfully admitted for permanent residence.

NCSL believes that broader national concerns must be addressed in order to provide stability to agriculture.  Monetary policies must be implemented which promote low interest rates and maintain dollar exchange rates which enhance the potential for sale of this nation's commodities in international markets.  The federal government must also maintain a stable financial network capable of supplying adequate amounts of affordable credit to the agricultural industry.  The government must also continue to search for innovative financing tools which enhance the ability of agricultural producers to manage risk and stabilize income.  In addition, any domestic farm program must work in conjunction with a strong, aggressive export program which protects and expands our export markets.

NCSL recognizes that decisions affecting American agriculture must reflect a working partnership of the federal government with the states in both the formulation and implementation of policy.  Both federal and state policies affect the preservation of the family farm, regulation of corporate farming, the availability of credit and resource conservation and development.  It will only be through the strengthened efforts of state legislatures in these areas, in cooperation with the federal government, that a sound national farm policy can be developed and maintained.

Marketing

The federal government should cooperate fully with states' efforts to supplement private sector marketing programs by providing comprehensive marketing, promotion and market development activities.  These should include, at a minimum, sustained commitments to the provision of data on market trends and consumer demands, technical assistance, financial assistance and public education campaigns.  An aggressive, enhanced marketing program, targeted to both foreign and domestic buyers, is indispensable to the creation and maintenance of a healthy agricultural sector.

Special emphasis must be placed upon the development of new markets through the creation of demand for new crops or products or additional sources of demand for existing commodities and products; the improvement of linkages between buyers and sellers; a shift toward the sale of processed, not raw, commodities and high value cash crops; and the identification and analysis of potential markets.  All parties, both public and private sector, must work together to develop effective strategies to exploit those opportunities fully and to maintain an ongoing ability to respond to changing consumer demands.

Competition

Family farmers ultimately derive their income from the agricultural marketplace.  These independent producers are in a challenging position in selling their product to large processors and in buying their inputs from large suppliers.  Today the position of the family farmer has become even weaker as consolidation in agribusiness and food retail has reached all-time highs.  Farmers have fewer buyers and suppliers than ever.  The result is an increasing loss of family farms and the smallest farm share of the consumer dollar in history.

The agricultural marketplace has degraded to the point where competition at the farm gate has nearly vanished.  The open market lacks adequate price information for producers to make marketing decisions.  At the same time that we focus on access to foreign markets, our farmers are being shut out of domestic markets.  Horizontal consolidation and vertical integration have caused a misallocation of resources where such consolidation fails to benefit the farmer or consumer.  Contractual relationships between farmers and processors or input suppliers must be fair and equitable for all parties involved.  As Congress considers methods to increase farmer income through government programs or otherwise, it must set rules to improve the competitive environment so that farmers are able to retain a greater portion of that income.

The National Conference of State Legislatures therefore calls on Congress to include a Competition Title in the next Farm Bill.  The basic purpose of a Competition Title should be to protect individual producers so as to promote the diverse ownership of the productive assets in agriculture.  The Competition Title should be based on fundamental principles to facilitate proper market operation including:  access to markets, fairness in dealing, freedom from conflict of interest, transparency/full information of market conditions, and vigorous price competition.  Three subsections of the Competition Title should include rules governing:  (1) the open market; (2) contractual relationships; and (3) the ability to bargain collectively.  These rules should apply to all agricultural commodities.

Natural Resource Conservation

Policies affecting agricultural production should encourage the conservation, not the depletion, of natural resources.  All federal government actions affecting these resources should be conducted in close cooperation and only after consultation with the states.  A strong commitment to conduct research, in the area of improved methods of natural resource conservation and protection, must be maintained.  State and local governments have repeatedly demonstrated their ability to best solve their own problems.  The federal government should work with state and local governments to develop agricultural land use policies, but should leave the responsibility for establishment of these policies to the state and local governments.  NCSL favors a block grant approach that gives states maximum flexibility.  Fundamentally, NCSL believes that states must be given a much stronger voice in ensuring that federal wetlands, endangered species, and land management policies respect the rights of local landowners and states.

Federal wetlands policy is currently in a state of confusion, as a result of overlapping responsibilities among multiple federal agencies with wetlands responsibilities.  Delineation of wetlands, instead, should be the clear responsibility of a single agency (such as the U.S. Department of Agriculture (USDA)) acting in consultation with other federal agencies, states and ultimately with state concurrence that the property rights of local farmers and ranchers have been protected.  Similarly, federal regulation to protect endangered species must be conducted with a greater emphasis on consultation with the states and the protection of private property rights and state prerogatives.  Unless there is substantial progress in protecting private property rights and state prerogatives, then procedures should be considered for states to opt out of federal wetlands and endangered species regulation.

In general, the federal government should delegate authority to states for the development, administration, and enforcement of wetlands protection and endangered species programs.  The national government, acting through USDA, should set broad national goals and standards for wetlands protection and preservation of endangered species, but states should have the flexibility to meet those goals in ways that ensure both the protection of the rights of its citizens and the protection of the health and vitality of the states' agricultural, forestry, and ranching economies.  The federal government, furthermore, should provide financial and technical assistance as incentives to encourage states to assume primacy over wetlands and endangered species programs.

Devolution of authority to states should also be a goal of federal land management policies.  Demonstration projects should be established to determine if state administration of national forests, grasslands, parks and other federal property will result in cost savings to taxpayers and greater sensitivity to the concerns of local citizens and property owners.  NCSL, moreover, encourages Congress and federal agencies to hold hearings and public meetings in order to hear the concerns of state and local officials and of ordinary citizens and property holders regarding the impact of federal landownership and regulation. 

Soil conservation remains one of the foremost government responsibilities to agriculture.  An ongoing education program must be maintained to make certain that producers are fully aware of the need for proper soil conservation practices and of the best methods to use in their implementation. To avoid an irreparable loss of valuable topsoil and siltation of our nation's rivers and streams, diligent efforts must be made by the federal government to ensure that proper soil conservation practices are adopted and that fragile, erodible land is kept out of production.

The National Conference of State Legislatures supports existing law which requires that each farm have and follow an approved soil and water conservation plan in order to obtain government assistance.  Benefits may be denied if that crop is grown in violation of this requirement.  Further, NCSL supports continued extension of the Conservation Reserve Program.

Research and Development
NCSL supports the state-federal partnership in agricultural research at state universities. A thorough review of all existing research and development programs must occur, with priority being given to those projects which identify new uses of agricultural commodities or their byproducts, increase their value in the marketplace or reduce the production costs.  This study should also examine the allocation of resources for applied as well as basic research.  Furthermore, funds must be made available to support research and development of innovative products.  Funds should also be used for dissemination of information about research discoveries both domestically and abroad.

NCSL urges the federal government to maintain a strong research program for the development of adequate, cost-effective and environmentally sound control measures to ensure the eradication of all insect and plant pests and animal diseases.  NCSL believes that this research and the implementation of all pest or disease eradication projects should be done in close cooperation with the states.

Success in agriculture requires increasingly sophisticated management skills and financial resources.  Using existing mechanisms and institutions, the federal government should work with the states in providing the basic training and retraining opportunities necessary for the successful operation of an agricultural enterprise and for the continuing adjustment of producers to changing conditions in agriculture.

July 2007

Marketing and Mergers

Changes in the national and global agricultural marketplace affect farmers dramatically.  Consolidation of agribusinesses and new marketing practices are but some of the marketplace elements that encourage and discourage farmers, sometimes creating a wealthy farm owner, sometimes destroying a family farm.  The National Conference of State Legislatures seeks a federal policy that will sustain a vibrant agricultural marketplace and strong farm economy while providing for competition and fair practices.

Agribusiness Vertical Integration and Marketing Practices

In recent years, agribusiness has sought closer ties with farm producers through contracting and vertical integration to increase efficiency and ensure steady supplies of commodities with specific attributes.  Farm producers are becoming more closely tied to agribusinesses that process and market food products by arrangements that coordinate the various stages of the food production and marketing system. 

            Direct marketing arrangements are rapidly replacing the traditional open market system for valuing and trading commodities.  While contract production arrangements may afford benefits to both producers and agricultural processors, loss of a competitive marketplace entails new risks for producers.  The experience of certain farm sectors within integrated systems also shows that producers can be vulnerable to exploitation and manipulation under contract arrangements, particularly when producers are wholly dependent on one or two integrators for contracting opportunities. 

            NCSL recommends that Congress review the Packers and Stockyards Act as a mechanism for addressing unfair practices that may occur under such arrangements, monitor activities in this area, and enact appropriate and timely legislation to safeguard the welfare of producers.

            Further, in light of the level of unprecedented concentration within the packing industry - a level even greater than that which prompted enactment of the Packers and Stockyards Act - vigorous and determined enforcement of anti-monopolistic practices of the major purchasers and processors of livestock, including discriminatory procurement practices, is vital to the prosperity of production agriculture.  The National Conference of State Legislatures urges Congress and USDA to strengthen and diligently enforce the provisions of the Packers and Stockyards Act in concert with the clear intent of the Act to curb monopolistic abuses in the concentrated meatpacking sector

Agribusiness Mergers

Despite the explicit prohibition of Section 7 of the federal Clayton Anti Trust Act (15 U.S.C. 18) against business mergers having the effect of lessening of competition or tending to create a monopoly, rapid consolidation among the nation’s leading agribusiness conglomerates continues unabated.  The past decade has witnessed previously unthinkable mergers and buyouts of competing agribusiness giants. 

            Recent mergers and proposed mergers are resulting in unprecedented consolidation in our national food production and processing system.  The combinations are a significant milestone in the relentless march toward integration and monopolization in the meatpacking sector and have posed a major test of the effectiveness of anti-trust law and its enforcement.  In September of 2000, the GAO found deficiencies in the ability of the Grain Inspection/Packers and Stockyards Administration (GIPSA) to police anticompetitive practices in the meat industry.  It also confirms growing fears that our nation’s food supply will ultimately be dominated by a handful of national and international food conglomerates.

            The National Conference of State Legislatures therefore calls upon Congress and the U.S. Department of Agriculture to closely scrutinize further mergers among the nation’s livestock slaughtering and production companies with a combined value of greater than $1 billion, to establish a bipartisan commission to study the effect of concentration and vertical integration in the livestock sector, and to recommend necessary changes in policy and authorities to preserve and enhance competition.

July 2007

National Calcium Initiative

Calcium deficiencies are an epidemic, costing billions per year every year.  Indeed, calcium deficient diets are found in all generations, races and genders.  The diseases now known to be associated with calcium deficient diets are osteoporosis, adult, childhood and pregnancy related hypertension (pre-eclampsia), obesity, colon cancer, PMS, post-partum depression, kidney stone formation and polycystic ovary disease.

The National Institute of Child Health and Human Development (NICHD) recognizes inadequate calcium consumption among children and adolescents to be an epidemic and a serious threat to their later health, growth, and development.  According to the Centers for Disease Control, over 66% of today's children cannot or will not get their recommended daily intake of calcium.  Bones grow and incorporate calcium most rapidly during the teen years, and establish approximately 90% of adult bone mass by age 17, but only 13% of teenage girls get the calcium necessary to build their bones to peak capacity.  Many children do not meet their needs for calcium but can receive calcium rich foods and beverages without changing their dietary habits.

Therefore, NCSL urges the federal government to work cooperatively with the states to increase calcium intake and reduce the incidence of calcium-deficient disease, by:

• Prioritizing education and awareness through the Cooperative Extension Service;
• Supporting programs that encourage and increase dairy consumption;
• Supporting purchasing preferences legislation of calcium-fortified foods and beverages over non-fortified products in all public institutions;
• Supporting the use of calcium supplements for the Americans that cannot or will not consume a normal daily calcium intake; and,
• Promoting research programs to assess childrens’ overall daily calcium intakes and in-school consumption patterns.

July 2007

Payments in Lieu of Taxes Program

(Joint policy with Budget and Revenue Committee)

The National Conference of State Legislatures recognizes the shared responsibility of states, counties and the federal government for the management of public lands.  Responsible and efficient land management necessitates a constructive partnership, particularly for those lands administered by the National Forest System.  These lands provide benefits in terms of fees, recreational opportunities and environmental diversity to all Americans.  At the same time, public lands create substantial costs in terms of infrastructure development and maintenance, much of which is borne by the counties and the states. These costs are particularly problematic for states with a large amount of federal acreage within their borders because federal land cannot be assessed to contribute to the state tax base.

The federal government recognized this problem in 1976 when it created the Payments in Lieu of Taxes (PILT) system, and in 1994 when Congress substantially increased its authorization. The PILT program gives counties a small payment per acre of federal land, which only partially offsets county costs of supporting federal lands in the county. In many cases, payments are inadequate to support the growth of recreation, travel and tourism on federal lands. Inadequate payments have strained some county budgets and undermined the intergovernmental partnership between counties, states and the federal government.

The National Conference of State Legislatures supports federal efforts to:

• reform the PILT program to create a more predictable, fair and flexible system that accurately reflects the fiscal effects of federal lands on state and local governments;
• provide full funding for the PILT program, provided that this goal is accomplished in a manner consistent with a balanced federal budget; and
• provide a more flexible payment system, NCSL supports authorization for the transfer of land of equivalent value from the federal government to counties in lieu of monetary payment. Clearly, such payments would only be appropriate in cases where the federal government, states and counties have been in close consultation and are in agreement on the terms of transfer.

July 2008

Rural Policy

The National Conference of State Legislatures (NCSL) asserts that all Americans deserve a quality of life consistent with our nation's status as the economic and political leader of the free world.  Our nation is composed of rural areas, small cities and towns, suburban, urban and core-city areas, and each of these areas must prosper if America is to remain strong.  Unfortunately, some rural areas lag behind their urban and suburban neighbors in income, educational attainment, and job opportunities.

            Rural policy analysts and practitioners are in general agreement that one of the greatest challenges faced by decision-makers interested in rural America is the fragmented and often unfocused rural policy framework of the federal government.  A number of public, private and philanthropic efforts- such as the revitalization of the bipartisan Congressional Rural Caucus, the state Legislative Agricultural Chairs Summit, and the state and local government associational collaborative - are emerging to better address the unique challenges and opportunities within rural America by building the new approaches necessary to assure the rural impacts of public policies are fully understood and considered during the legislative and administrative decision-making process.  A powerful, clearly articulated Presidential commitment to rural people could add significant gravitas to these emerging efforts.

A State-Federal Partnership

State and local governments are emerging as leaders in the movement to address rural issues through broad and integrated policies that ensure the vitality of rural America.  To maximize these efforts, however, NCSL believes a vibrant state-federal partnership to strengthen rural America is essential.  Therefore, NCSL encourages Congress and the Administration to support policies that:

Build community capacity by strengthening state and regional programs that provide planning and technical assistance to small-town and rural America.

Improve infrastructure by strengthening federal programs that support physical development, protect the environment and diversify rural economies.

Provide job opportunities in small-town and rural America by increasing federal investment in revolving loan funds for small business development, making Small Business Administration loan programs and Economic Development Administration grants more accessible for rural businesses, and expanding programs that encourage the export of agricultural and other rural products.

Improve rural living conditions by increasing residents' job skills, improving existing housing, encouraging homeownership, protecting the environment, providing human service programs for all ages, and assuring adequate health care for all rural citizens.

Assist communities in transition by providing federal technical assistance and financial aid to regions impacted by federal government policies that produce sudden and sever economic dislocation, base closures, natural disasters, emergencies, long term economic and population decline, and inordinate or unanticipated growth.

Support coordination of programs by encouraging collaboration among all federal, state, and local service providers.

Principles for Rural Policy

In promoting these goals, Congress and the Administration should recognize the following values as fundamental to achieving success:

Balanced and Sustainable Growth.  NCSL is committed to balanced growth and sustainable development in all parts of the U.S.  National policies should recognize and respect the special needs of rural, urban and suburban regions.  Because the U.S. is only as strong as all parts of the economy, strengthening rural communities must be a national priority.  Economic diversification and the opportunity for non-farm jobs enhance the ability of people to live and work in rural communities.  Residents of small towns and rural America understand the need for a balance between encouraging growth and preserving the quality of life.  Federal programs must continue to encourage development in areas of the country that have experienced persistent poverty.  However, national policies cannot focus on these areas to the exclusion of communities "on the edge" that may be improving or surviving but face the threat of renewed economic hardship if federal assistance ends.  Without a domestic strategy to halt the economic and population decline in many small towns and rural areas, communities will lose their economic vitality and experience accelerated deterioration.

Use of Existing Programs and Institutions.  Strengthening and reforming existing programs should take priority over the creation of new ones.  Existing programs should be updated and adequately funded to be more effective and efficient.  NCSL supports the concept of the National Rural Development Partnership, Secretary Thompson’s Initiative on Rural America, and other efforts to achieve better coordination and collaboration among federal agencies.  Federal agencies should coordinate and, where appropriate, consolidate their audit, environmental assessment and other reporting requirements to reduce paperwork and project costs while increasing program flexibility at the state level.  NCSL supports efforts to consolidate federal rural development and credit programs and provide states with greater flexibility in program administration.  Regional and state organizations are effective catalysts for rural development and should be eligible for all federal development programs.  NCSL supports changes to the non-entitlement Community Development Block Grant (CDBG) program to permit broader discretion in the use of CDBG funds.  NCSL also supports the Rural Strategic Investment Program and the innovative public-private and federal-state relationships it encourages.

Strategic Planning.  Federal funding for planning is essential for intelligent, coordinated sustainable development.  Priority should be given to the federal programs, including the Rural Strategic Investment Program, that helps build capacity in small-town and rural America by bringing together federal, state, local and private resources for economic development.

Infrastructure Development.  Public investment in infrastructure is an important catalyst for private investment.  An adequate physical infrastructure - including roads, bridges, water and wastewater treatment facilities, airports, hospitals, medical facilities, housing, and telecommunications systems - is essential for economic growth in small-town and rural America.  Only through modern infrastructure investments can rural communities overcome geographic barriers.

Job Creation and Small Business Assistance.  Community and economic development embraces a wide range of issues, from education, housing and health care, to infrastructure and social services.  These elements combine to establish the quality of life in a community.  NCSL believes jobs are the most critical element to quality of life.  While other components of community and economic development are necessary for community well-being, they mean little without quality jobs.  Agriculture and natural resource industries such as mining and forestry must be sustained as essential components of strong rural economies.  At the same time, a diversified economic base is the key to the prosperity of small-town and rural America.  Support of small businesses is particularly important, yet rural entrepreneurs have far less access to credit than their urban counterparts.  As a result, some of the most valuable lending institutions for small-town and rural areas are the locally-controlled revolving loan funds.  These business development loan funds have proven over time to be effective ways to bridge the gap between the need and availability of credit.

Rural, Urban, Suburban Collaboration.  As economic development and job creation go beyond U.S. borders, it is critically important for rural, urban and suburban collaboration to create and sustain our domestic economy.  There are many parts of this country where citizens lag behind national averages.  There is a national interest in creating jobs and improving living conditions throughout the U.S.  NCSL believes that state, regional, and local organizations play a leadership role in bringing together citizens, governments and nonprofit institutions to build an economy that will continue to be the strongest in the world.  Federal support of convenings to promote understanding and collaboration between rural, urban, and suburban policymakers and their communities is critical.

National Awareness.  NCSL supports the development of a White House Conference on Rural America, which would initiate a year-long national dialogue designed to assist the Administration and Congress in developing a common framework for addressing the challenge of a more integrative rural policy agenda and would raise the awareness of policymakers and the general public to the situation facing and assets offered by Rural America.  To coordinate such a dialogue and to see it through to substantive results, NCSL supports the appointment of a Special Assistant to the President for Rural Affairs, who would coordinate the Administration’s rural portfolio, provide liaison to the Council of Economic Advisors and Domestic Policy Council, coordinate rural leadership across federal departments through the Working Group for Rural Affairs, and serve as White House liaison for rural initiatives within Congress.  NCSL supports the designation of a senior-level rural policy position within the office of the secretary of each federal department, similar to the Undersecretary for Rural Development within USDA.  The establishment of a White House level Interdepartmental Working Group on Rural Affairs, chaired by the Special Assistant to the President for Rural Affairs, and comprised of these senior-level federal departmental personnel, including a representative of the Office of the U.S. Trade Representative.

The Federal Role in Rural Economic Development

All levels of government must join together immediately in a comprehensive national effort to stem the tide of decline in rural communities.  This objective can be accomplished only by continued federal efforts to revitalize the agricultural, mining and forestry industries and by new initiatives to diversify the economies of these rural communities.  In seeking to achieve economic diversification, special focus must be placed upon the search for an effective strategy incorporating economic development, market diversification, venture capital, job training/retraining, intercity transportation, education, health and housing facilities, technical assistance and infrastructure components, at a minimum.

            Consideration in the development and operation of any new programs must be given to the financial conditions in rural, sparsely populated areas, and the technical capability and living conditions of community residents.  Maximum flexibility should be given to enable state government officials to maximize program resources by tailoring them to the needs of individual areas and directing them to the areas of highest priority.  Whenever possible, federal agency service delivery points should be consolidated to facilitate easy utilization by rural residents.

            Furthermore, a critical review of new and existing federal programs must be conducted to determine if statutory or regulatory requirements are placing an unnecessary or costly compliance burden upon rural communities or are contributing to the decline in the quality of life in rural areas. Unjustified, unreimbursed mandates or program requirements should be promptly eliminated.

            The Extension Service and agricultural experiment stations are important components in the effort to restore economic vitality to rural America.  The National Conference of State Legislatures, therefore, urges Congress and the Administration to support adequate funding for these vital organizations. 

As governments accelerate their efforts to address these problems, mechanisms must be developed for ensuring effective coordination of federal, state and local rural development programs and priorities.  State legislators must be full and equal partners in all program development and implementation activities.  Furthermore, the sanctity of state programs must be maintained; the federal government must work with the states and local governments to ensure that its investment decisions support state and local development priorities.

            To facilitate the development of an effective rural economic development and diversification strategy, the National Conference of State Legislatures calls upon the federal government to join in the creation of:

• An agreement on roles and relationships among state and federal agencies and other participants;
• A mechanism for identifying opportunities for joint investments targeted to rural development concerns and priorities;
• A forum for dealing with interagency and intergovernmental obstacles to timely use of resources;
• A vehicle for conducting assessments of rural conditions and progress toward accomplishment of rural development goals; and
• A vehicle for conducting assessments of the impact of federal farm policy on rural communities.

Requests for the President

            The National Conference of State Legislatures urges the President to implement the following specific recommendations of the Congressional Rural Caucus, which are intended to create a more integrative rural policy framework for federal decision-making:

(1) The appointment of a Special Assistant to the President for Rural Affairs, who would coordinate the Administration’s rural portfolio, provide liaison to the Council of Economic Advisors and Domestic Policy Council, coordinate rural leadership across federal departments through the Working Group for Rural Affairs, and serve as White House liaison for rural initiatives within Congress.

(2) The designation of a senior-level rural policy position within the office of the secretary of each federal department, similar to the Undersecretary for Rural Development within USDA.

(3) The establishment of a White House level Interdepartmental Working Group on Rural Affairs, chaired by the Special Assistant to the President for Rural Affairs, and comprised of these senior-level federal departmental personnel, including a representative of the Office of the U.S. Trade Representative.

(4) Development of a White House Conference on Rural America, which would initiate a year-long national dialogue designed to assist the Administration and Congress in developing a common framework for addressing the challenge of a more integrative rural policy agenda.

(5) Specific and ongoing presidential leadership to build a more integrative rural policy framework.

Rural Strategic Investment Program

The 107^th Congress passed and the President signed into law the Farm Security and Rural Investment Act (the 2002 Farm Bill) that included authorization for $100 million in mandatory funds for the U.S. Department of Agriculture to implement the Rural Strategic Investment Program (RSIP).  A three-tiered program, RSIP establishes a National Board on Rural America, locally controlled Regional Investment Boards, and a White House conference on rural America.  The National Board on Rural America would be a 14-person body which is tasked with developing a national strategy on rural America and overseeing grants to Regional Investment Boards, on which representatives from county governments, regional development organizations, entrepreneurship organizations, community-based organizations, Native American tribes, state legislatures and the rural philanthropic community.  The National Board and the Regional Investment Boards represent an innovative and promising public-private partnership intended to focus on critical infrastructure, basic public services, economic diversification, access to market-based financing, development of public and private collaborations and the future human resource capacity issues for rural America.  The 2002 Farm Bill responds to NCSL’s long-standing call by authorizing a White House Conference on Rural America designed to bring together representatives of public and private organizations, members of Congress, and state and local elected officials for the purpose of developing policy recommendations on the unique challenges facing rural America. 

            Despite RSIP’s authorization and annual appropriations providing programmatic funding, Congress has never allowed the U.S. Department of Agriculture to implement RSIP.  NCSL encourages the Congress to fully fund RSIP and to allow USDA to use all administrative and operational funding necessary to implement the program.  NCSL fully supports the convening of the White House Conference foreseen in the 2002 Farm Bill and encourages the Congress and the Administration to realize this goal.

Rural Development Block Grants

NCSL supports efforts to consolidate federal rural development and credit programs and provide states with greater flexibility in program administration.  At the same time, there is a danger that a block grant approach, which fails to relieve states of regulations and mandates, could amount to a cost-shift to the states.  As the devolution of rural development programs continues to the states, this must be approached with caution to avoid unfunded or underfunded federal mandates.

            NCSL is committed to working with the federal government to develop carefully crafted programs and policies that promote and fund rural development while protecting rural America’s uniqueness.  States must play a critical role in this process and should guide implementation of these programs.

July 2007

Support State Regulation of Agricultural Biotechnology