PowerPoint Presentation

Karen GefvertDirector of Governmental RelationsWisconsin Farm Bureau Federation1National Agricultural IssuesFarm BillWater Resources Reform Development Act (WRRDA)Immigration Reform2Farm BillSenate 68-32Johnson NoBaldwin - YesHouse 251-166Ryan YesPocan NoKind NoMoore NoSensenbrenner NoPetri YesDuffy YesRibble - YesAgricultural Act of 2014 - 3 years in the making

3Farm Bill$954.4 Billion over 10 years79% is Supplemental Nutrition Assistance Program (SNAP)$23 Billion in cuts$8 Billion from SNAP$15 Billion from Agriculture4

Whats in the Farm Bill? FY2014-2023Total Spending = $954.4 Billion5Farm BillEliminates Direct PaymentsRepeals or consolidates almost 100 programsSignificant dairy reformStrengthens crop insurancePrice Loss Coverage (PLC)Ag Risk Coverage (ARC)Stacked Income Protection Plan (STAX)Supplemental Coverage Option (SCO)6Farm BillLivestock Disaster AssistanceLivestock Indemnity ProgramLivestock Forage Disaster ProgramPayment LimitsEligibility rules tightened (AGI)Research & Specialty Crop ResearchCherry, Potato & CranberryOrganic research, certification & data collection7Farm Bill Crop InsurancePrice Loss Coverage (PLC)Payment to producer when the market price is below a fixed reference price for covered cropsAgricultural Risk Protection (ARC)Provides a payment when either A farms revenue from ALL crops ORThe Countys revenue for a crop is below 86% of a predetermined benchmark level of revenue8Agriculture Risk Coverage (Individual Election)Producer LossCrop Insurance Stand-Alone (66% for 75% RP)Crop Insurance PremiumFor ARC Benchmark Revenue Based On 5-Year Olympic Average County Yields/National MYA Prices (or Ref. Price)14% Loss Coverage between 86% and 76% of revenue benchmark.ARC (65% Base Acres)Revenue based plan (paid out on base acres)Whole Farm Program9Agriculture Risk Coverage (Area Election)Producer LossCrop Insurance Stand-Alone (66% for 75% RP)Crop Insurance PremiumFor ARC Benchmark Revenue Based On 5-Year Olympic Average County Yields/National MYA Prices (or Ref. Price)14% Loss Coverage between 86% and 76% of revenue benchmark.ARC (85% Base Acres)Revenue based plan (paid out on base acres)Individual Crop Program10Farm Bill Crop InsuranceStacked Income Protection Plan (STAX) COTTON ONLYSupplemental Coverage Option (SCO)Not available for crops enrolled in ARC or STAXOption to purchase area coverage with an underlying individual policy or plan of insuranceAllows indemnities to be equal to a part of the deductible on the underlying policy or plan of insurance

11SCOProducer LossCrop Insurance Stand-Alone (66% for 75% RP)Crop Insurance Premium14% Area Revenue Loss Required Before SCO Payment OccurMaximum premium cost is 35% of the value of the cropSCO coverage (county) from 86% expected revenue to underlying insurance policy SCO Stand-Alone (65%)SCO Stand Alone12Farm Bill Crop InsuranceCrop Insurance in Americahttp://www.cropinsuranceinamerica.org/Learn About Crop InsuranceJust the Facts13Dairy ProgramMust be established by Sept. 1, 2014Program ends Dec. 31, 2018VoluntaryMargin Protection ProgramNo supply management14Dairy ProgramCalculation of Average Feed Cost and Actual Dairy Production MarginsNational monthly feed costs will be calculated based on the following:Corn monthly Agricultural Prices reportSoybean meal Market News Monthly Soybean Meal Price ReportAlfalfa hay Agricultural Prices reportActual Dairy Production Margin CalculationShall be calculated on a consecutive 2 month periodSubtract the 2 month Average Feed Cost from the 2 month All-Milk Price

15Dairy ProgramParticipation in ProgramAll dairies are eligibleMulti-producer dairy operations will be considered a single dairySingle producer who operates multiple dairies will be considered multiple dairiesAdministrative fee of $100 charged to all participating dairiesParticipation in Margin Protection Program OR Livestock Gross Margin for Dairy

16Dairy ProgramProduction History Calculate production history = highest annual milk marketings of the dairy during any one of the 2011, 2012, 2013 calendar yearsAdjustment to the production history will be done on an annual basis to reflect any increase in the national average milk productionNew Dairies in operation less than one yearExtrapolate to a yearly amount the volume of actual milk marketings for the months in operation OREstimate based on the herd size relative to the national rolling herd average

17Dairy ProgramMargin Protection PaymentsPayments are based on a consecutive 2 month periodDairies shall determine their margin coverage level annuallyCoverage levels are:$4.00, $4.50, $5.00, $5.50, $6.00, $6.50, $7.00, $7.50, $8.00Percentage of coverage5% increments, starting at 25%, not to exceed 90% of the production history of the dairy18Dairy ProgramPayment thresholdA payment will be issued when, for a 2 consecutive month period, the Average Actual Dairy Production Margin < the coverage level selected by the dairy Margin Protection Payment CalculationCoverage level Average Actual Dairy Production Margin (2 months) THENX by Coverage Percentage ANDX by the production history of the dairy divided by 619Example: Coverage Level = $6.00Average Actual Dairy Production Margin = $4.50Coverage Percentage = 60%Production History = 20,000 cwt (20,000/6 = 3,333)$6.00 - $4.50 = $1.50 x .60 = .90 x 3,333 = $3,000.00Dairy Program20Dairy ProgramPremiums for Margin Protection ProgramThe first #4 M will be calculated at a separate coverage level than anything in excess of #4 M.Calculation of Premiums (paid annually)Special Rule for the first #4 M of milk produced, the premium will be reduced by 25% for years 2014 & 2015

21Dairy Program Premium Rates for the first 4 million pounds of milk producedCoverage LevelF.B.20142015$4.000FREEFREEFREE$4.500$0.010$0.00750$0.00750$5.000$0.025$0.01875$0.01875$5.500$0.040$0.03000$0.03000$6.000$0.055$0.04125$0.04125$6.500$0.090$0.06750$0.06750$7.000$0.217$0.16275$0.16275$7.500$0.300$0.22500$0.22500$8.000$0.475$0.47500$0.47500*25% reduced premium rate22Dairy ProgramPremium Rates above 4 million pounds of milk producedCoverage LevelF.B.$4.000FREE$4.500$0.020$5.000$0.040$5.500$0.100$6.000$0.155$6.500$0.290$7.000$0.830$7.500$1.060$8.000$1.36023Dairy ProgramCalculation of Premiums (paid annually)Coverage Percentage x Production History x Premium per hundred weight of milk for coverage level selected

24Dairy ProgramExample:Coverage Percentage = 60%Production History = 20,000 cwtPremium per hundred weight selected = $0.04125 OR $0.055.60 x 20,000 x 0.04125 = $495 (Years 2014 & 2015 = 25% reduced rate).60 x 20,000 x 0.055 = $660 (Year 2016 and later)25Dairy ProgramPayment of Premium There will be at least more than one method for dairies to pay the premiums

26Water Resources Reform Development ActLegislative package that addresses:Operational costsCapital expenditures Major rehabilitation for inland waterways and harbors Importance: Farmers need a consistent transportation mechanism for inputs and outputs for their farming operationsOur infrastructure of waterways and ports are funded through two different trust funds: Inland Waterways Trust Fund Harbor Maintenance Trust Fund 27Water Resources Reform Development ActSenate 83-14Johnson NoBaldwin Yes

House 417-3Ryan YesPocan YesKind YesMoore YesSensenbrenner YesPetri YesDuffy YesRibble - YesStatus: Bills are in conference committee and likely to be passed in early 2014

28Water Resources Reform Development ActInland Waterways Trust Fund (IWTF) Major rehabilitation projects on locks and dams Cost-sharing between the fund and the federal government on a 50/50 basis Operations and maintenance costs for inland waterways are paid for exclusively by the federal government Currently a $0.20 per gallon tax on commercial barge fuel $85 million annually for the IWTF Federal assistance $90 million$175 million annual budget $380 million is what is actually needed$205 million annual deficit

29Water Resources Reform Development ActProposal by some agricultural organizations Increasing the current barge fuel tax by 6- to 9-cents In exchange, full funding from the federal government for project costs on all dams and rehabilitation that are currently cost shared with the IWTF Average rehabilitation costs are about $50 million per lock and the estimated cost to replace the present system of locks throughout the country is over $125 billion30Water Resources Reform Development ActOur lock and dam system was designed to last 50 years, but is approaching 80-years-old The current capacity of most locks is approximately half the size needed to meet the typical 15-barge towing capacity Typical 15-barge tows (1200) have to be broken in two to fit into the 600 lock system currently in placeTime and efficiency are lost

31Water Resources Reform Development ActHarbor Maintenance Trust Fund (HMTF) Funded by taxes on the value of imports and domestic cargo that arrive in federally-maintainedU.S. portsFunds are used for dredging and dredged material disposal, jetties and breakwaters construction and maintenanceCollection of funds far exceeds what is spent Surplus in the fund has historically been funneled to fill gaps in the federal government's general fundOnly 55 percent of the funds collected are actually used on harbor maintenance

32Water Resources Reform Development ActThe U.S. lock and dam system is severely outdated and in need of repair Agriculture relies on the waterways system in order to economically transport agricultural inputs and outputs It is crucial for farmers to have access to this major transportation thoroughfare and to ensure that it is modernized to be more efficient and reliable

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34Immigration ReformSenateComprehensive PackageHouseSmaller pieces

Administrative delays in current H2A program led to:Arrival of labor 22 days after neededLoss of $320 million 35Immigration ReformSenate Blue Card ProgramFor experienced farm workers already in the countryProvides an option to work towards green cardGuest Worker Visa ProgramReplaces current H2A programAllows entrance to non-experienced farm labor through a 3 year visa as an agricultural workerThey can be hired on a contract or at-will basisLabor CapAnnual limit of just over 12,000 for 3 years36Immigration ReformHouseBorder Security & Interior EnforcementEntry-Exit Visa Tracking SystemEmployment Verification and Workplace EnforcementReforms to the Legal Immigration SystemYouthCurrently Individuals Living Outside the Rule of Law37Wisconsin Farm Bureau Federationhttp://wfbf.com/legislation-regulations/issue-backgrounders/Farm Bill, WRRDA & Immigration Reform38Questions?