9.1 Preamble

Agriculture, including the wide variety of industries involved in farm inputs and outputs, constitutes one of the largest sectors of the U.S. economy. The agriculture industry is notable for maintaining a consistent positive balance of trade. Governors believe that this position should be enhanced to enable producers to take advantage of new international market opportunities in light of new trade agreements. Environmental stewardship and rural development also should be prominent in farm policy, with an increased emphasis on coordinating the myriad federal programs and requirements. Urbanization of the country has led to misunderstandings and misperceptions about farming and agriculture. Agricultural policy must emphasize the importance of agriculture supporting consumer education and outreach programs and rebuild the national understanding of the multiple benefits a strong agricultural economy provides to the entire nation. Governors recommend that Congress establish pilot programs to explore innovative policy options for future consideration. Congress must also afford states greater flexibility and an increased role in the allocation of federal grant monies to accommodate state priorities. This new strengthened state-federal partnership is critical to the more efficient and effective delivery of programs and will be crucial to a thriving farm economy. When considering changes to the nation’s farm policy, Governors make the following recommendations.

9.2 Commodity Programs

Governors support federal farm policy that offers a long-term, effective safety net for farmers and promotes value-added agriculture, agricultural diversification, natural resource protection, and rural development. Governors believe the primary goal of commodity programs should be to provide economic stability for producers while considering market realities, resource sustainability, and food and fuel security and safety. Should the current World Trade Organization (WTO) negotiations result in a change of funding for commodity programs, Governors recommend that the funding continue to be used to support trade compliant agriculture initiatives, such as in conservation, energy, and rural development programs.

Governors support a comprehensive agricultural policy that incorporates the most efficient means of accomplishing established goals. Governors endorse farm support programs that foster a rural America that includes family-based productive capacity and that are consistent with resource conservation goals.

Congress should provide appropriate mechanisms to protect family farmers and ranchers. These programs must ensure the survival of efficiently run independent family farms within the diversity of American agriculture. These important commitments can be met by developing a commodity policy that maintains an adequate and workable safety net for producers, while proactively addressing new demand-creating opportunities.

Furthermore, Governors believe that a federal commodity program should provide:

• increased planting flexibility, including easing restrictions on planting fruits and vegetables on program acres;
• countercyclical support that falls within WTO guidelines, to help farmers weather the broad price swings common in the global marketplace; and
• opportunities for new farmers to plan for their future on the farm.

With respect to dairy programs, Governors urge a review of the impact of the Federal Milk Marketing Order. The current system is complex and should be modified to reflect changes in technology and costs. Governors also recommend that Congress give states flexibility to enhance farm profitability. Such authority should not be intended to permit states to erect trade barriers.

9.3 Natural Resources Conservation and Stewardship

Governors believe that conservation programs have been of significant value to farmers, ranchers, many communities, tribes, the nation, wildlife, and the environment. Because agricultural landscapes such as grasslands, regenerating forest, and managed forests have become important wildlife habitats, Governors support innovative, voluntary programs that offer targeted incentives to address natural resources stewardship. National farm policy must provide greater incentives for landowners to employ best conservation practices on all of their lands—including working lands. We must work in partnership with private landowners to preserve and protect our national assets for future generations while maximizing their lands’ productivity today.

Governors support a number of conservation programs administered by the U.S. Department of Agriculture (USDA) that are of significant value to the nation, including the Conservation Security Program (CSP), Conservation Reserve Program (CRP), Wetlands Reserve Program (WRP), Grassland Reserve Program (GRP), Wildlife Habitat Incentive Program (WHIP), and Environmental Quality Incentives Program (EQIP).

Governors support increased participation and payments under the conservation title of the farm bill to benefit all watershed programs and flood prevention operations, water quality, conservation operations, and resource conservation and development. By responding to this recommendation, Congress is encouraging environmental programs, allowing equal opportunity, and achieving national participation in conservation and stewardship.

All USDA conservation programs should be voluntary, and coordinated and implemented through partnerships among USDA, tribes, state, territorial, and commonwealth governments, political subdivisions, or agencies. Properly coordinated conservation programs should allow farmers and ranchers to develop a resource management plan while providing a streamlined application and administrative process to reduce paperwork and redundancy. This integrated approach must maintain a focus on environmentally sensitive lands, such as prior-converted wetlands, existing wetlands, riparian zones, biologically important grasslands, highly erodible cropland, and areas sensitive to water contamination. Program priorities should be set by the states, with program funds targeted to farmers and ranchers for projects that provide natural resource benefits, including threatened or endangered species and water quality. States must be full partners in the development and implementation of these important programs to ensure the fair and equitable distribution of funds, which are targeted to areas of highest priority in the states. In addition, as states ramp up their involvement with USDA programs (like CRP State Acres for Wildlife Enhancement), they will need support for positions partially or entirely dedicated to this cooperative role with the federal government.

In addition, State Technical Committees are responsible for providing recommendations to USDA on conservation programs administered by the Natural Resources Conservation Service (NRCS). Governors believe the State Technical Committees have improved coordination among local, state, territorial, commonwealth, tribal, and federal programs, including USDA programs, and the inclusion of the Conservation Reserve Program administered by the USDA Farm Service Agency (FSA) should be ensured.

Due to the “one-size-fits-all” approach and over-enrollment in popular conservation programs, many farmers and ranchers cannot fully participate. To begin addressing these gaps, Congress should provide conservation block grants to states that include acreage allocations as a supplement to existing conservation programs, as Governors are uniquely suited to understand the specific needs of their states. The flexibility of a block grant program would allow Governors, state departments of agriculture, state environmental protection agencies, and state conservation agencies to work closely with their agricultural communities to address threats to natural resources; assist landowners in complying with state and federal environmental laws; make beneficial, cost-effective changes to cropping systems including legume plantings for soil restoration; and implement other practices or obtain other services beneficial to the public.

Regarding EQIP and WHIP, Congress should fully fund and allow funds to be available until expended. Allowing more time to obligate the appropriations and enhancing the funding would give states greater flexibility to adjust eligibility criteria and approved practices to better target areas that reflect local circumstances. Provided that existing beneficiaries of these programs are not affected, the programs also should be expanded to support the implementation of alternative manure or treatment technologies and conversion to organic-agriculture incentive payments.

Also, Governors support the reauthorization of the Conservation Security Program in a manner that ensures that all practices are accountable and truly provide benefits to the public. Governors further request the opportunity for meaningful consultation with USDA prior to implementation.

Governors also believe that USDA should be directed to approve, in a more timely manner, state-submitted Conservation Reserve Enhancement Programs (CREP), which are designed to focus federal and state resources on environmentally sensitive lands. The CREP cap on the acres per state should be raised—at the request of a state—to allow more effective targeting of multiple resource concerns. In addition, there needs to be more flexibility in CREPs for states to address natural resources concerns they have identified has high-priority. USDA also should give farmers in each state the option of permanent easements for conservation. The choice to offer permanent easements should be made by the USDA on a state-by-state basis in consultation with each state’s technical committee (STC). Permanent easement contracts should have provisions for termination or release through buyback or suspension in the case of emergency (such as food shortage) or dire individual landowner hardship as defined and approved individually by the subject state’s STC. Congress also should look to fund other programs that would benefit from leveraged state and federal conservation dollars.

Farm and ranch land that is the basis of a healthy local economy, provides critical environmental benefits, or is of exceptional value for food production should be protected from conversion to nonagricultural uses. Governors recommend that the Farm and Ranchland Protection Program (FRPP) authorize federal grants to states and state-approved local jurisdictions. These funds would enhance the implementation of the Farmland Protection Policy Act across all federal departments and agencies.

Finally, technical assistance is the most important mechanism for delivering natural resource and conservation programs. The conservation programs in the farm bill must be designed with support and funding to ensure timely and adequate technical assistance.

9.4 Market Promotion and Trade

Passage of free trade agreements and the ongoing negotiations of the World Trade Organization promise expanded trade opportunities for the agriculture industry. Timely and effective marketing and development programs must be supported and modified to meet the new demands and changes in the domestic and international markets. Governors recommend the following principles to guide those efforts.

• The role of the states and USDA in market promotion must be clarified to ensure complementary work and reduce duplication of effort.
• Along with commodity crops, emphasis should be placed on expanding the marketing of high-value and processed agricultural products and building a strong food processing base.
• Domestic and foreign marketing programs should be better connected.
• Application and reporting processes should be streamlined for export promotion programs.
• Biotechnology has created tremendous benefits and opportunities for agriculture and promises even more. Governors support development of agricultural biotechnology and recognize its role in providing safe, environmentally sound, nutritious, and affordable products to U.S. consumers and a growing global population. A process must be established to identify and assess the scientific, consumer, or political barriers that inhibit the marketing of these products so the barriers can be addressed appropriately.
• Results-driven, long-term, sales-oriented programs should be encouraged.
• State agriculture agencies should be authorized on behalf of USDA to certify shipments.
• The Animal and Plant Health Inspection Service (APHIS) and Food Safety and Inspection Service should be better integrated into export efforts and enhance food and agriculture security.
• The United States Trade Representative, with consultation from the states, should negotiate new and expand existing trade agreements in an effort to achieve greater economic security and prosperity through the global marketplace for America’s farmers and ranchers.
• Market development and expansion impediments should be quickly identified and addressed to ensure farmers and agribusinesses of all sizes have opportunities to enter new markets

With respect to program funding, Governors recommend the following.

• Funding for the Export Enhancement Program (EEP) should be maintained at maximum WTO levels, and USDA should be allowed to shift funds from EEP to the Market Access Program and Foreign Market Development Program to stimulate and expand the country’s value-added market share.
• Support for market enhancement programs, such as USDA’s Market Access Program, should be provided to assist farmers, cooperatives, and small companies in accessing the international market.
• The federal government should provide resources and technical assistance to state programs targeted at supporting small farm marketing, at small farm product access to local markets, and at consumer education and outreach programs.
• Block grants should be established to ensure farmers and agribusinesses have opportunities to enter new markets.
• Agricultural export credit guarantee programs should include shorter term (i.e., less than one year) credit guarantees.
• Support for state market development and promotion and for regional marketing associations should be increased to the extent allowed under international agreements.
• The commitment to public plant and animal science research for development of new uses of agricultural products should be continued.

9.5 Nutrition

Hunger continues to be a problem for millions of Americans, despite ongoing government programs and private efforts. Governors believe that changes are needed to improve the Food Stamp and child nutrition programs, and support nutrition programs targeted toward elderly populations. Good nutrition requires education in order to encourage responsible eating habits. Governors urge the federal government to allow the states increased flexibility in developing and implementing pilot programs to encourage healthy choices in food purchases within the Food Stamp Program and support the options for food stamp reform outlined in NGA policy HHS-12, Food Stamps.

Governors continue to support existing USDA programs that fund state efforts to link local farms with local school lunch programs. USDA should continue to direct resources into these programs and work to identify and address regulatory barriers to the enhancement of these “Farm to Cafeteria” programs. Also, Governors support the recommendations regarding healthy schools as outlined in ECW-2, Education Reform.

9.6 Rural Development

Legislation should launch a national rural development policy that clearly defines rural and economic development initiatives and goals, including more effective targeting of federal resources through greater reliance on states, increased flexibility for states in using federal programs, and improved coordination between federal programs and state services. One important goal should be a stable source of credit that meets the needs of a new generation of producers and rural communities working to diversify their economies.

Specifically, the federal government should do the following.

• Consolidate today’s individual federal rural development programs, which are administered by numerous federal agencies, into fewer, more flexible programs to provide states with development grants, loans, research grants, and technology transfer support for rural development. States can more effectively direct funds to priority needs that vary across the country, but that represent the best use of scarce public resources.
• Coordinate with state programs.
• Continue support for the National Rural Development Partnership, which today boasts more than 39 state rural development councils. This state-federal partnership can help to more effectively target both state and federal resources.
• Permit states to utilize regional partnerships in the use of federal rural development programs. Federal programs should permit flexibility for “cross-border” uses and joint strategic planning when states so choose.
• Federal rural development programs exist in more than one federal agency. Consequently, the secretary of the U.S. Department of Agriculture needs to be given authority to ensure that all federal efforts can be coordinated at the state level. The National Rural Development Partnership is an important step toward coordination, but USDA needs greater authority as a lead agency to enforce this coordination to promote greater efficiency.
• The beginning farmers’ loan program should be expanded and the Guaranteed Loan Program’s qualification requirements and loan limits should be reviewed to meet critical needs for credit at reasonable rates. In addition, the Internal Revenue Service’s prohibition on intra-family transfers of farm assets under the beginning farmers’ agricultural bond program should be eliminated.
• Create additional credit opportunities to allow independent family farmers to form cooperatives for investment in value-added processing opportunities so individual producers have the ability to reap a greater portion of the economic benefits from the raw commodities they raise.
• Support the importance of the Rural Development Agencies, particularly the Rural Utilities Service, in providing funding to water and waste disposal sectors. Further, innovative technology and management and alternative industry development in the areas of water management and wastewater, new product technology (including desalination), and utilization should be encouraged.

9.7 Research and Development

Because sound scientific research and technology transfer are the foundation for the continued success of American agriculture, Governors support renewed efforts to strengthen agricultural research and extension programs and urge USDA to maintain an emphasis on its technology transfer mission to farmers. Specifically, Governors support the identification, promotion, and expansion of research and development to help identify commercially-viable and commercialize value-added products, including renewable energy, in agriculture. Governors also urge that support be maintained for land-grant universities and agriculture experiment stations.

9.8 Forestry

Governors support the current programs that were authorized under the forestry title of the 2002 farm bill, which have been effective in the areas of community and landowner assistance, forestry incentives, and fire protection. However, more can be done to improve stewardship of private forest lands. Sufficient funding must be appropriated in order to effectively implement these landowner assistance programs. Forest conservation program funds should not be diverted to fight forest fires; a reliable source of funding should be identified for fire protection.

9.9 Alternative Fuels and Renewable Energy

As Congress starts deliberations on a new farm bill, Governors support a strong energy title that provides technical and financial assistance to expanded use of farm and forest biomass for renewable energy production in an effort to pursue national energy independence. Governors recognize that local production of renewable biomass energy benefits the national economy and national and regional energy security, and provides a stimulus to the rural economy by supporting high quality construction, operation, management, marketing, and support jobs. Activities in alternative fuels and renewable energy must be undertaken in such a manner as to not contradict natural resource goals. Also, Governors support the federal tax credit for ethanol and biodiesel. However, the tax credit should be expanded to include and assist the production of other bio-based fuels.

9.10 Miscellaneous

9.10.1 Crop Insurance and Disaster Assistance. Governors support privately delivered federal crop insurance, but they are concerned that crop insurance must be based on all relevant data and actuarially sound. Governors also support a substantial increase in incentives at each level of insurance coverage with an emphasis on higher levels of coverage, the creation of revenue protection coverage, the development of more insurance options for noncovered farm commodities, and better rewards for low-risk producers and producers that maintain a long-term relationship with crop insurance. Governors urge the federal government to conduct a thorough review of the crop insurance system in consultation with farmers and state officials to ensure that it is sound, effective, and workable, and provides adequate oversight of product insurers. In addition, USDA should work with Governors to increase the participation of farmers in the crop insurance program.

Governors are concerned that the survival of farmers and ranchers is periodically threatened by such factors as extreme price fluctuations, natural disasters, and instability in international markets. In times of farm crisis, Congress and the President should work together in supporting U.S. farmers and ranchers and rural communities to create a more predictable and permanent farm support policy in addressing crisis situations. Assistance should be available only to farmers and ranchers currently engaged in production agriculture and better targeted to the neediest. Also, for crops for which insurance is available, participation in federal crop insurance should be a prerequisite for receiving crop disaster assistance. In addition, Congress needs to address the lack of assistance available to businesses impacted or affected by adverse weather conditions.

9.10.2 Food Security. The agriculture and food sectors are among the Department of Homeland Security’s (DHS) Critical Infrastructure Sectors, requiring heightened attention and protection from threats, whether intentionally introduced or naturally occurring. Governors understand this threat and believe it is vitally important that USDA and DHS significantly increase emphasis on agriculture security, and work closely with states and other nations to enhance preparedness nationwide and globally.

Agriculture security incorporates all aspects of preparedness for, response to, and recovery from incidents affecting the entire food supply chain, from animal and crop production sites through the consumer. Examples of activities and issues that fall under the agriculture security umbrella include improving security at key facilities, bolstering surveillance for animal and crop disease, tracing food products, coordinating public communication, and perhaps most importantly supporting and designing recovery programs for those individuals and businesses affected by food and agriculture sector emergencies.

Officials within all levels of government respond to food and agriculture sector emergencies and disasters. However, state and local agencies are usually the first responders and, in the case of an animal disease outbreak, first responders are typically private practice and state veterinarians. These vital first responders must have proper response and personal protection training. State and local agencies responsible for agriculture security must be given the support and resources they need to effectively plan, prepare for, prevent, and recover from an emergency. However, to date, very little funding has been appropriated for state and local agriculture security purposes and preparedness.

Furthermore, state agencies responsible for agriculture security are among those being asked by DHS to comply with an increasing number of informational requests and planning protocols, yet no additional federal resources have been made available to support these activities. Governors urge the federal government to provide the resources necessary to address the safety of our nation’s food supply and the integrity of the agricultural economy.

States understand that plant and animal diseases do not recognize borders, which is why it is critically important for all levels of government and the private sector to plan, train, and exercise common protocols on an inter- and intra-regional basis. Governors urge the federal government to support state efforts to work collaboratively on animal and crop disease preparedness.

Sufficient laboratory and scientific research capacity are cornerstones of agriculture security. This capacity is essential to tracing potential foodborne illness outbreaks, detecting food contamination and infectious animal diseases, and determining whether food incidents are related. Therefore, the federal government must ensure that state and regional laboratory capacity is sufficient and data from food/agriculture, public health, and veterinary diagnostic laboratories are coordinated and utilized. In addition, the federal government should coordinate the continued development and implementation of rapid and accurate diagnostic testing methods.

Agriculture security is an issue of national security because it has global implications, including trade. Food products move throughout international commerce daily. Raw and processed food items, as well as live animals, routinely come into the United States from around the world. It is critical that these products and animals undergo sufficient surveillance and inspection to ensure food safety. While the federal government should take the lead responsibility for this effort, by partnering with state and local governments, federal agencies can increase surveillance and inspection activities, including border and post-entry checks. Governors also strongly urge DHS and USDA to work with other nations to develop agreements for the implementation of tracking and identification systems so that food and live animals may be traced as they move across international borders.

9.10.3 Animal Identification. Rapid response to any food safety or animal disease outbreak is critical. A critical tool in this early response is the ability to trace the food or animal to its source, and to trace the dispersal of these items throughout the country. Governors encourage continued funding for ongoing development and implementation of the National Animal Identification System to facilitate the tracing of animals in the event of a contagious disease outbreak. Governors recognize this traceability is important to protecting the U.S. livestock-related economy and recognize that the health and safety-related data collected must be immediately accessible by state agriculture officials.

9.10.4 State Inspection Programs. Governors strongly urge that farm policy allow all food products, including dairy, meat, and poultry, to be shipped interstate if they have been approved by a state inspection program meeting federal standards. This will allow small business owners to enjoy the same market benefits enjoyed by large corporations.

9.10.5 Pesticides. Modifications to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) should preserve and maintain the current balanced cooperative partnership between the U.S. Environmental Protection Agency (EPA) and the states in the administration and enforcement of FIFRA. Any expanded or additional requirements delegated to the states should be readily attainable by the states and accompanied by sufficient funding.

Governors urge EPA to implement the 1996 Food Quality Protection Act (FQPA) by relying on sound science, with the interests and needs of farmers and consumers in mind. EPA and USDA should work together to assess actual farmer pesticide use and exposure data when conducting tolerance risk assessments. Reliance on default assumption, though sometimes necessary and appropriate, may vastly overestimate actual pesticide use and should be minimized whenever possible. Alternative pest management tools also should be reviewed prior to pesticide cancellation. EPA should be required to fulfill its obligations under FQPA.

Specialty crops, including many fruit, vegetable, nursery stock, and horticultural products, contribute more than $30 billion to the farm-level agricultural economy. Because sales from minor use pesticides do not pay for the high cost of generating the data required by EPA, for economic reasons, pesticide manufacturers are voluntarily dropping smaller volume minor use products scheduled for re-registration under the compressed schedule of FIFRA and deferring registering new products for uses for specialty crops. However, as pesticide products are eliminated, the economic feasibility of producing crops greatly diminishes. The specialty crop pesticide issue should be resolved by correcting this unintended consequence of the re-registration process established in the 1988 pesticide legislation.

A competitive disadvantage exists because U.S. farmers cannot purchase certain legal pesticides at similar prices as farmers and ranchers in our neighboring countries. This increases costs for American farmers even though they are using the same product as their foreign competitors. Thus, Governors urge Congress and the federal government to work with companies and foreign nations to develop similar pricing for comparable pesticide products to minimize or eliminate this unfair situation.

9.10.6 Insect and Disease Emergency Eradication Programs. The federal Plant Protection Act and the Animal Health Protection Act clearly assign USDA the responsibility “to prevent the introduction, spread, and establishment of plant pests, noxious weeds, and pests and disease of livestock.” Governors oppose efforts to establish a cost-share program for Animal and Plant Health Emergency Programs. Imposing a cost-share rule on states and other cooperative parties shifts to the states the federal government’s responsibility for emergency pest and animal disease outbreaks, while likely causing significant and costly delays during the earliest stages of an outbreak.

9.10.7 Livestock Market Price Reporting. Governors believe there is a need to continue a framework for a nationwide system to report the prices paid by meatpackers to producers and would encourage Congress to reauthorize the Livestock Mandatory Reporting Act.

Time limited (effective Annual Meeting 2008–Annual Meeting 2010).
Adopted Annual Meeting 1989; revised Winter Meeting 1990; reaffirmed Winter Meeting 1994; revised Winter Meeting 1995, Annual Meeting 1996, Winter Meeting 1997, Annual Meeting 1998, Annual Meeting 1999, Winter Meeting 2000, Annual Meeting 2001, Winter Meeting 2002, Winter Meeting 2004, Winter Meeting 2006, Annual Meeting 2006, and Annual Meeting 2008 (formerly Policy G-10).