Congress last week passed a five-year, $307 billion farm bill that includes the industry-supported Agricultural Chemicals Security Credit, and also provides additional funding for tank locks and additives to reduce the production of methamphetamine from anhydrous ammonia. Other hallmarks include a $10.3 billion increase (for a total of $209 billion) in spending on nutrition programs including food stamps, and increases for rural development and land conservation programs.
The bill, known as the Food, Conservation & Energy Act of 2008 Conference Report (H.R. 2419), was approved by a 318 to 106 vote in the House on May 14, and an 81 to 15 vote in the Senate on May 15. The margins are well above the two-thirds majority needed to override a threatened veto from President Bush, who criticized the bill as being too expensive and for failing to reform farm subsidy programs.
The New York Times reported that President Bush had sought an adjusted gross income limit of $200,000, above which farmers could not qualify for any subsidy payments, and had urged Congress to pass a one-year extension of the current farm bill instead of adopting costly new legislation. The bill approved by the House and Senate, however, states that individual farmers who get direct payments cannot earn more than $750,000 and have non-farm income of more than $500,000. For married couples, those figures double.
A White House spokesman last week reiterated President Bush’s promise to veto the bill, but House Agriculture Committee Chairman Collin Peterson (D-Minn.) said he expected the legislation to reach the president by May 20 and a veto override to be approved before Congress adjourns for a Memorial Day recess.
On the campaign trail, presumptive Republican nominee John McCain said he opposed the bill, calling it a “bloated piece of legislation” and favoring instead a program that offers “a reasonable level of assistance and risk management to farmers when they need America’s help.” Democratic candidate Barack Obama said he supported the bill on balance even though it was flawed, saying he favored stricter limits on payments to wealthy farmers and had previously backed a proposal that would have capped farm payments at $250,000 per year. Democrat Hillary Clinton has supported the farm bill without reservation.
The Agricultural Retailers Association issued a statement applauding the House and Senate for passing the bill, saying the legislation will continue to provide a safety net for America’s farmers while promoting bio-energy, conservation programs, and nutrition programs. “ARA is pleased that the bill includes many key policy priorities, including the ARA-initiated Agricultural Chemicals Security Credit that will provide a tax credit to agricultural retailers, distributors and other eligible agricultural businesses that improve security at their fertilizer and pesticide storage facilities,” said Jack Eberspacher, ARA president and CEO.
Specifically, the security tax credit provision will allow eligible agricultural business a tax credit equivalent to 30 percent of the total amount paid or incurred for implementing qualified security measures at their fertilizer and pesticide storage facilities. The provision provides for up to $100,000 in security tax credits per facility, with an overall company cap of $2 million per year. The tax credit will apply to security measures paid or incurred after the date of the enactment of the 2008 Farm Bill.
The legislation also includes measures to increase federal oversight authority to detect and prevent manipulation and limit speculation in U.S. electronic energy markets by increasing reporting requirements.