The bipartisan Farming Flexibility Act of 2007 (H.R. 1371 – Farm Flex), introduced today in the House of Representatives by Rep. Tammy Baldwin (D-Wis.), Rep. Mike Pence (R-Ind.), Rep. Timothy Walz (D-Minn.), and Rep. Ray LaHood (R-Ill.), restores options to Midwest farmers and food processors now penalized by planting restrictions in the 2002 Farm Bill.

Under the 2002 Farm Bill, farmers who plant one of the big five commodity crops: corn, soybeans, wheat, cotton, and rice, automatically receive “direct payments” for planting those crops. These payments are directly proportional to a farm’s base acres, which are a historical average of its planting history of a commodity.

Under the 2002 Farm Bill, a farmer is not obligated to grow the crop to receive a direct payment for that crop and may plant any crop except fruits and vegetables or no crop without losing these benefits.

This is called “planting flexibility,” the ability to receive direct payments for a base crop (e.g., corn), but to grow a different crop on those base acres (e.g., soybeans).

The “no fruits and vegetables” rule is a “planting restriction.”
Currently, farmers who choose to plant fruits and vegetables on their base acreage, are doubly penalized for doing so, in that 1) they will not receive the direct payments on those base acres on which they plant the fruits and vegetables, and 2) they must pay an additional financial penalty based on the market value of the fruits and vegetables they plant.

As a result, most producers cannot reduce their reliance on the farm commodity programs by rotating vegetable production onto their land and pursuing canning contracts. Consequently, processors have experienced inadequate supplies of fruits and vegetables for canning. Farm Flex removes the planting restriction on fruits and vegetables. While producers who choose to plant fruits and vegetables on base acres would not receive direct commodity payments for that acreage, neither would they have to pay an additional penalty. In addition, their historical record of base acreage would not change.

“Farm Flex is a long overdue correction that benefits both family farmers and food processors in the Midwest,” said Rep. Baldwin. “We can support and encourage family farming by expanding a farmer’s planting choices. We can maintain a robust economy by facilitating a cooperative relationship between producers and processors. We can do both by lifting the existing unnecessary limits and penalties.”

“The Farm Flex Act will provide Hoosier farmers freedom and flexibility to plant fruits and vegetables that they do not have under current law. Passage of this bill is vital to helping Indiana farmers stay competitive in the global marketplace as well as saving the taxpayers money,” said Rep. Pence.

“Not only will Farm Flex benefit producers who grow fruits and vegetables under contract by removing penalties for growing those crops, but it will also help reduce farm program payments for the acreage planted in fruits and vegetables,” said Rep. Walz. “This legislation is a win for the American taxpayers and a win for farmers who want to plant more diverse crops,” Walz said.

The Farm Flex bill, supported by a coalition of food processors and family farmers, is consistent with free market principles, improves World Trade Organization (WTO) compliance, and would actually result in significant cost savings for the federal government.

“We provide delicious vegetables – sweet corn, green beans, peas, and more to families year round,” said Jeff Griep, a spokesperson from Lakeside Foods, a processor employing 1700 people in Wisconsin and Minnesota. “These vegetables are grown on farms in Wisconsin and throughout the Midwest.

Without a change in these restrictions, our costs will keep going up, making it even more difficult to compete with imports,” Griep said.
“My family grows soybeans and corn, rotating the crops to nourish the land,” said Ray Utterback, a grower in Elwood, Ind. “We sell our vegetables to processors, who then provide canned and frozen vegetables to grocery stores around the country. Family farmers in Indiana and throughout the Midwest appreciate this commitment to helping us stay on our land.”
Farm Flex 2007 facts

Farm Flex would allow fruit and vegetable (FAV) production for processing on unsubsidized program acres without jeopardizing the farm’s base acreage (acres eligible for enrollment in future government farm programs).

No subsidy, saves money – Farm Flex would reduce the farm’s program payments for the acreage planted in FAVs. No farm program subsidy would be paid on Farm Flex FAV acreage. CBO has scored Farm Flex as a budget reduction.

Better protection for fresh – Farm Flex pertains only to FAVs under contract for processing. Farm Flex production would not enter fresh markets.

Farm Flex would increase protection of fresh markets from Midwest FAV production.

Limited impact – Current FAV rules and Farm Flex affect only
Midwest farms, where nearly all productive land is enrolled in a farm program, the double crop exemption is not relevant, and farm and producer histories are inadequate.

Farm Flex would help
WTO Compliance – Farm Flex would improve WTO compliance. FAV restrictions were a basis for the US loss of the WTO cotton case, as well as a pending action by Canada against the United States.

USDA has proposed complete elimination of FAV restrictions to improve WTO compliance and better protect U.S. farm exports from retaliatory tariffs.

Fight rising imports – Farm Flex would free American farmers to compete with canned food imports. Current FAV restrictions have helped canned food imports rise since the ’02 Farm Bill, despite a weakened U.S. dollar.

Desirable crop rotations – Farm Flex would relieve current FAV restrictions that curtail crop rotation opportunities, contrary to good agricultural practices.

Family farms – Current producer history production allowances are not transferable. Surviving spouses and children struggling to continue the family farm operation are denied FAV producer history. As FAV farmers with producer history retire or pass on, their producer history is lost.

•Most acres farmed by Midwest family farmers are rented. Fear of losing base acreage has caused many Midwest landlords to prohibit FAV production. The base acreage recalculation after the 2002 farm bill cut base acreage due to FAV production.

•FAV restrictions undermine the competitiveness of FAV processors, the market for Midwest family farm FAV production.

•Young farmers seeking diversification into FAV production are prevented from starting FAV production, even though FAV production acreage has been declining.

- Red Gold, Elwood, Ind.