The Food, Conservation, and Energy Act of 2008 (2008 Farm Act)
includes a five-fold increase in mandatory funding for organic
programs over funds mandated in the previous legislation, and
authorizes additional funding for many new and existing programs.
Most of the mandatory funds go to two existing organic
programs--the organic research program and cost-share assistance
program to help growers and handlers with organic certification
costs. The legislation includes new organic provisions on credit,
trade, and crop insurance. Organic provisions are also included in
the Conservation Title for the first time, and are aimed at helping
producers with the transition to organic farming systems.
Organic Provisions
A new title--Horticulture and Organic Agriculture--is introduced
in the 2008 Act, and five other titles (Conservation, Trade,
Credit, Research, and Crop Insurance) now include organic
provisions.
Conservation Title (II)
- The Organic Transition Support provision makes
conservation practices related to organic production and transition
eligible for Environmental Quality Incentives Program (EQIP)
payments, subject to a $20,000 annual limit and an $80,000 cap over
a 6-year period.
- Technical Assistance on Organic
Conservation Practices will be developed to ensure that
conservation practices and resource mitigation measures designed
specifically for organic farming systems are available and are
reflected in USDA's conservation practice standards. Technical
assistance will be made available for implementing conservation
practices for specialty crops and organic and precision
agriculture.
- An Organic Certification Cross-Link is
established to provide producers a way to initiate organic
certification while participating in the Conservation Stewardship
Program (CStP). Technical assistance and outreach on organic
farming systems will also be developed, and the CStP program
specifications that are developed will be appropriate for organic
producers.
- The Organic Transition Incentives for Beginning
Farmers provision, under the Conservation Reserve Program
(CRP), provides special treatment of CRP land transitioning from
retiring farmers or ranchers to beginning or socially disadvantaged
farmers or ranchers. Most noteworthy, beginning 1 year prior to the
CRP contract termination date, a new farmer or rancher would be
allowed to make land improvements and begin the organic
certification process.
Trade Title (III)
- A Market Access Program (MAP) Amendment on Organic
Products explicitly includes commodities that are
organically produced in this program. MAP was created in the
Agricultural Trade Act of 1978 to provide cost-share funding to
expand markets for U.S. agricultural products through technical
assistance, market research, and promotion of U.S. value-added
products. Participating organizations include nonprofit
agricultural organizations, regional trade groups, and U.S. private
companies.
Credit Title (V)
- An Organic Credit Provision under the
Conservation Loan and Loan Guarantee Program gives priority to
qualified beginning farmers, ranchers, socially disadvantaged
farmers or ranchers, owners or tenants who use the loans to convert
to sustainable or organic agricultural production systems, and
producers who use the loans to build conservation structures or
establish conservation practices.
Research Title (VII)
- Mandatory Commodity Credit Corporation (CCC) funding for
theOrganic Agriculture Research and Extension Initiative has
increased from $15 million over the life of the previous 2002
legislation, to $78 million for FY 2009-12. An additional $25
million annually for FY 2009-12 is authorized, subject to
appropriations. Two new priorities have also been added to the
purpose of this initiative: (1) to study conservation and
environmental outcomes of organic practices, and (2) to develop new
and improved seed varieties for use in organic production
systems.
Horticulture and Organic Agriculture Title (X)
- This title increases mandatory funding for the National
Organic Certification Cost-Share Program to $22 million in
FY 2008, up from $5 million in FY 2002, to remain available until
expended. Maximum Federal cost share remains at 75 percent, but the
cap increases to $750/operation. State and Federal recordkeeping
requirements are added, and the Secretary is required to submit an
annual report to Congress describing State expenditures.
- First-time mandatory CCC funding, set at $5 million, is
included for expanded Organic Production and Marketing Data
Collection, to be available until expended over 5 years.
An additional $5 million/year is authorized (subject to annual
appropriations) for organic production and data. The purposes of
these provisions are to collect and distribute prices of
organically produced agricultural products, and to conduct
surveys/analysis and publish reports relating to organic
production, handling, distribution, retail, and trend studies
(including consumer purchasing patterns). The Secretary is to
submit a progress report on implementation of this initiative.
- Support for the National Organic Programis included for the
first time in the 2008 Farm Act, which authorizes $5 million in
funding in FY 2008 (up from $2.6 million) for USDA's program that
regulates organic standards and certification. Authorized funding
increases to $11 million by FY 2012.
Crop Insurance Title (XII)
- An Organic Crop Insurance Provision is
included in the 2008 Farm Act requiring the Federal Crop Insurance
Corporation (FCIC) to study ways to improve organic production
coverage. Unless studies document "significant, consistent, and
systemic variations in loss history between organic and non-organic
crops," the FCIC is required to eliminate or reduce the premium
surcharge for organic production. These studies are also required
to include the development of procedures to offer additional price
election that reflects the actual prices received for organic
crops.
Economic Implications
U.S. organic producers have been challenged in recent years to
keep up with the fast-growing demand for organic products. The Farm
Act significantly expands support for existing organic research and
regulatory programs, and provides new incentives for producers
wishing to convert to organic production systems. Greater Federal
support could mean more organic farms and production in the U.S. as
consumer demand continues to swell.
Meeting the Challenges of Organic Agriculture
Numerous challenges--such as limited research and education on
organic farming systems, inadequate information on marketing and
prices, and limited access to Federal programs--have slowed
adoption of organic farming systems. The 2008 Act addresses many of
these obstacles with new funding and provisions.
The 2008 Act includes provisions to increase access for organic
producers to Federal credit, trade, and crop insurance programs and
bolsters funding for research on organic agriculture, economic data
collection, and producer subsidies for certification fees. Most
certifiers structure their fee schedules on a sliding scale, with
fees increasing as the organic operation's size--usually measured
by gross sales or acres operated--increases. The new legislation
raises the payment cap to $750 per operation, enough to cover a
substantial portion of the certification fees for smaller
operations. New economic data will target high-priority issues in
the organic sector, including expanded organic price reporting for
produce. USDA already publishes organic price reports, but coverage
for produce has been incomplete because of the large number of
fruit and vegetable crops grown in the U.S.
New provisions are also included in the 2008 Act to assist
farmers during the 3 years it typically takes to convert to organic
production. USDA organic regulations require documentation of a
3-year transition period, during which land must be managed under
approved practices, before crop or pasture acreage can be certified
as organic and qualify for organic price premiums. New provisions
in the Conservation Title make conservation practices related to
organic production and transition eligible for payments under the
Environmental Quality Incentives Program (EQIP), subject to a
$20,000 annual limit and an $80,000 cap over a 6-year period.
Although a few States had offered transition payments under EQIP in
the past, their payment rates were low, and most States did not
offer this option.
The 2008 Act also includes provisions to increase the
availability of technical assistance on organic production. Many
nongovernmental organizations--such as the Midwest Organic &
Sustainable Education Service, Ecological Farming Association, and
Carolina Farm Stewardship Association--have developed expertise
over the last several decades in delivering organic educational and
technical assistance. These groups may play an instrumental role in
helping State and Federal agencies increase the level of technical
assistance on organic agriculture.
New Research to Examine the Environmental Benefits of Organic
Farming
Mandatory funds for research on organic farming and marketing
increase five-fold over levels mandated in the 2002 Act, and
account for nearly three-quarters of the total mandatory organic
funds in the 2008 Act. The Organic Agriculture Research and
Extension Initiative was launched in 2002 with $15 million in
mandatory funds, and the number of high-quality research
applications for this competitive grant program has substantially
exceeded program funding.
One new purpose of this initiative is to develop new and
improved seed varieties for use in organic production systems.
Interest in organic seed variety development was heightened after
USDA banned the use of seeds treated with fungicides and the use of
genetically modified organisms, including genetically modified
seeds, when national organic standards were implemented in October
2002 (see
2007 National Organic Research Agenda--Soils, Pests, Livestock,
Genetics: Outcomes from the Scientific Congress on Organic
Agricultural Research (SCOAR)
).
The other new purpose is to study the conservation and
environmental outcomes of organic practices. The underlying
principles of organic agriculture revolve around land stewardship,
and USDA's regulatory standards define organic production as a
system that responds "to site-specific conditions by integrating
cultural, biological, and mechanical practices that foster cycling
of resources, promote ecological balance, and conserve
biodiversity" (see
National Organic Program; Final Rule, 7 CFR Part 205).
Experimental trials have found enhanced soil fertility, higher
biodiversity, lower energy use, and increased retention of carbon
and nitrogen in organic plots compared with conventional plots. The
potential of organic farming to capture atmospheric carbon and
store it in the soil was specifically mentioned in the conference
report of the 2008 Act as an example of research that needs
support.
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complete 2008 Farm Act side-by-side.