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The Farm Bill – a mixed bag for millers

May 21, 2008

Washington, D.C. – May 21, 2008 – The North American Millers’ Association sees a mix of opportunities and missed opportunities for agriculture and the milling industry in the Farm Bill passed by the House and Senate.

Nutrition Title – New opportunity for grain-based foods
The Nutrition Title includes a new section calling for the purchase of whole grains and whole grain products for use in the school lunch and breakfast programs. $4 million is provided in fiscal year 2009. The purpose of this new program is to encourage greater awareness and interest in the number and variety of whole grain products available to school children.

Trade Title – Predictable and stable food aid budget
Congress continues and preserves its strong commitment to the government’s international humanitarian food aid program embodied in the P.L. 480, Title II program. NAMA and the agricultural commodity coalition, of which we are a member, did oppose language proposed by the Administration to divert $300 million per year from the Title II program for Local and Regional Purchases (LRP) of food in developing countries, in case of emergencies. The Farm Bill does authorize $60 million from the Commodity Credit Corporation to conduct a 4 year pilot study of LRP, but does not take funding from current food aid levels. However, when U.S. dollars are used to buy food locally, that further drives up local prices and puts food out of reach for additional hungry, at-risk people. NAMA believes without using U.S. food products as the base for U.S. food aid programs, the constituency will be lost and both appropriations in the U.S. agriculture budget and authorizations will be jeopardized.

Commodity, Conservation & Research Titles
NAMA believes that with crop prices at historically high levels, it was the perfect opportunity to pass a Farm Bill that achieved major farm policy reform. We are disappointed with several missed opportunities.

Reduce market distortions
Support programs in the last Farm Bill encouraged production of certain crops at the expense of food grain production, and U.S. food grain stocks are now at the lowest levels in more than half a century. NAMA had hoped the new Farm Bill would ‘rebalance’ all the programs so farmers would make planting decisions based on market demands. Unfortunately, the new farm bill merely extends those distorting programs.

Improve grain production
Research: The reorganization of USDA research agencies mandated in the Farm Bill adds an additional layer of bureaucracy and greater uncertainty for funding of NAMA priority areas. Corn and soybean yields have been climbing because of genetic advances discovered through research. However, wheat and oat yields are flat. Wheat and oat research have historically been nearly all federally funded, at a combined total of about $50 million annually. Compare that with private corn research efforts where multiple companies each invest more than one million dollars every day.

CRP: With a relatively small reduction in the Conservation Reserve Program (CRP), the Farm Bill will ensure the continued enrollment of sustainable, non-environmentally sensitive acres in the program at a time when the U.S. desperately needs acres to respond to multiple demands. Landowners with CRP acres should be able to opt out of the program without penalty to pursue whatever the current market conditions may reflect.

NAMA is the trade association representing 49 companies that operate 170 wheat, oat and corn mills in 38 states and Canada. Their collective production capacity exceeds 160 million pounds of product each day, more than 95 percent of the total industry production.

CONTACT: Terri Long, Director of Communications
202.484.2200, ext.11
[email protected]

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