On July 27, 2007, the House passed H.R. 2419, the Farm, Nutrition, and Bioenergy Act of 2007. The rule incorporates a managers' amendment, which makes funding permanent for the McGovern/Dole International Food for Education and Child Nutrition Program; increases funding for conservation (Grasslands Reserve Program); and closes a tax loophole, involving foreign corporations taking advantage of international tax havens to escape U.S. taxes, similar to reforms proposed in the President's FY 2008 budget.
Farm Program Reforms to Focus on Farmers Who Need the Help
The bill imposes the first-ever limit that prevents affluent farmers who don't need assistance from receiving farm subsidy benefits, and offers complete transparency so the public knows taxpayer dollars are getting to the family farmers who need them.
The Farm Bill denies all farm program payments (commodity and conservation) to farmers with average adjusted gross income over $1 million, with no exception. It also denies farm payments to those with adjusted gross income of $500,000 to $1 million- unless two-thirds of income is agricultural-related. Under current law, those with income up to $2.5 million can receive payments, and those with more than 75 percent of agriculture income can still receive payments despite the cap.
The measure also closes a loophole (three-entity rule) that for decades has allowed some to collect up to double the farm payment limits by collecting cash on more than one business entity. It also cuts federal payment rates to crop insurance companies that are making record profits due to higher crop prices. These serious reforms will save more than half a billion dollars.
A Fairer Farm System
Not only does the Farm Bill include fiscal reforms, it also improves the commodity programs by making them more diverse and fairer to farmers all across the country. The bill provides farmers in commodity programs with a choice between traditional price protection and new market-oriented revenue coverage payments to ensure protection against significant crop losses for the first time, as recommended by the President. It rebalances loan rates and target prices among commodities, achieving greater regional equity and expands access of socially disadvantaged farmers and ranchers. It increases direct payments from $40,000 to $60,000, and extends the dairy support program, as well as the MILC program.
The bill guarantees a historic $1.5 billion in funding for fruit and vegetable programs, which have not received traditional Farm Bill benefits for nutrition, research, pest management and trade promotion programs.
Conservation: Protecting Open Spaces and Water Quality
The bill improves funding and access to conservation programs that take environmentally sensitive land out of farming and encourage environmentally friendly practices on working farmland. The measure adds $4.3 billion more to preserve farm and ranchland, improve water quality and quantity, and enhance soil conservation, air quality, and wildlife habitat on working lands. It seeks to reach out to segments of agriculture that have been underserved, including specialty crop producers and beginning and minority farmers and ranchers. It creates a program to help areas deal with drinking water and water quality issues on a cooperative basis.
Nutrition for Healthier Eating and Helping Families in Need
To fight hunger in America, the Farm Bill expands nutrition programs that help 35 million low-income families providing an additional $4 billion over the next five years. For the Food Stamp program, which keeps 26 million of the nation's poorest from going hungry, the bill increases the minimum benefit for the first time in 30 years and indexes the benefit amount to inflation. Other Food Stamp changes eliminate the current cap on childcare costs, provide incentives for families save for retirement or education, and makes sure that the families of soldiers in combat are not penalized under the Food Stamp program, as the President proposed. These critical Food Stamp provisions will prevent real benefit cuts for more than 13 million people by 2012.
The bill also nearly doubles the funding for the Emergency Food Assistance Program, so that food banks, soup kitchens, and other emergency feeding sites have needed resource, and expands the Fresh Fruit and Vegetable Snack Program to all 50 states. It also makes funding permanent for the McGovern/Dole Program, which promotes education, child development, and food security for the world's poorest children - donating U.S. farm products and other aid for school feeding and maternal and child nutrition projects.
Farmers Securing America's Energy Future
The Farm Bill takes critical steps to expand renewable fuel production needed to encourage American energy independence and protect our environment. The measure boosts renewable energy programs by 600 percent, providing $2 billion in loan guarantees for the development of refineries that process renewable fuels, a key step toward bringing more renewable fuels to market in America and $1.5 billion for production incentives for ethanol and biodiesel made from agricultural, forest, and waste plant materials.
Strengthening Rural Communities and Economy
The Farm Bill also includes key provisions that invest in rural communities, including economic development programs and access to broadband telecommunication services to bridge the digital divide in rural, underserved areas. It also addresses the health care, emergency, and first responder needs of rural areas, as well as creating new markets and rebuilding rural infrastructure.
Stronger Food Safety through Consumer Information/Mandatory Meat Labeling (COOL)
The bill makes strides for consumers, through critical mandatory food labeling of our meat supply after six years of Republican delays. As of Sept. 30, 2008, beef, pork, lamb and goat from animals born, raised and slaughtered in the United States will be labeled 'Product of the U.S.' Recent food scares, about peanut butter and lettuce, have made Americans more interested in knowing where their food comes from.
Fully Paid For by Closing Tax Loophole
This legislation would crack down on non-U.S. based multinational corporations that are employing a tax haven in order to dodge American taxes. These corporations evade U.S. taxes by routing payments to subsidiaries in countries where we have a tax treaty before they send the funds along to the actual parent corporation in the tax haven country. The United States has entered into bilateral tax treaties with many foreign countries -- reducing U.S. tax withholding for foreign persons from the treaty country -- to prevent double taxation of income earned by residents of the treaty countries. So funneling funds through a subsidiary in a tax treaty country would enable the corporation to avoid U.S. taxes.
- No U.S.-based companies would be affected and most foreign multinationals would generally not be affected because they are organized in countries with which we have an income tax treaty.
- The Administration identified this issue as tax abuse five years ago and Republicans have supported similar proposals, including former Ways and Means Committee Chairman Bill Thomas in 2003.
- This proposal will level the competitive field for American companies that play by the rules.
The measures include royalty provisions from H.R. 6, to require companies, which have not paid oil and gas royalties to the federal government as a result of 1998 and 1999 leases, to pay their fair share in order to be eligible for new federal leases for drilling. The 1998 and 1999 mistake by the Interior Department in the issuance of oil and gas leases for drilling in the Gulf of Mexico effectively exempted these companies from paying any royalties, costing taxpayers as much as $10 billion over the life of the leases.