Ohio Farmers Union says bill outcomes will be unbalanced and too costly

COLUMBUS – The Ohio Farmers Union today called on U.S. Sen. Rob Portman to vote ‘no’ on the major tax bill pending in the upper body of Congress.

Sen. Sherrod Brown is signaling he will be a ‘no’ vote on the bill as currently constituted and told CNN on Wednesday, “If you want to cut taxes on the middle class, cut taxes on the middle class.”

“While the stated intentions of this bill are tax reductions for the middle class, it’s poor design and $1.5 trillion price tag will have far reaching and negative unintended consequences,” said OFU President Joe Logan.

Logan said the bill’s estimated trillion-dollar plus addition to U.S. deficit spending over the next several years will trigger a cascade of cuts from Medicare to USDA programs like Agriculture Risk Coverage and Price Loss Coverage.

“Existing federal budget ‘pay-go’ rules would require the elimination of virtually all discretionary spending, including many farm programs due to this tax bill’s cost,” Logan said.

According to the Congressional Joint Committee on Taxation and Congressional Budget Office – both non-partisan – by 2027 people earning between $40,000 to $50,000 will be paying a combined $5.3 billion more annually in taxes as compared to today. The same sources report million dollar earners will be paying $5.8 billion less 10 years from now.

“This bill is not fair to the middle class and hardworking people like family farmers,” Logan said. “While tax treatments that benefit the wealthy and corporate America don’t sunset under this bill, anything of substance that benefits working people does.”

“It’s my hope Sen. Portman will build on the ‘moderate’ label he has cultivated and vote against this bill. There is very little here that will ultimately move the needle in the right direction for rural Ohio – or the overwhelming majority of his constituents,” Logan said.

Farmers and ranchers take home just 11.4 cents from every dollar that consumers spend on their Thanksgiving dinner meals, according to the annual Thanksgiving edition of the National Farmers Union (NFU) Farmer’s Share publication. The popular Thanksgiving Farmer’s Share compares the retail food price of traditional holiday dinner items to the amount the farmer receives for each item they grow or raise.

The Thanksgiving Farmers’ Share can be viewed and downloaded here.

“This holiday season, it’s important for us to take time to recognize and thank the family farmers and ranchers who provide our Thanksgiving meals,” said Rob Larew, NFU’s Senior Vice President for Public Policy and Communications. “If you don’t live on a farm or work in agriculture, you probably don’t realize the tremendous difference between the price you pay for food at the grocery store and the prices farmers end up receiving for these products. While consumer holiday food costs have declined recently, incomes for American farm and ranch families have dropped precipitously. We’re in the midst of the worst farm economic downturn in 30-40 years, and we’re hopeful these numbers can help illustrate that fact to the general public.”

On average, farmers receive 17.4 cents of every food dollar consumers spend, while more than 80 percent of food costs cover marketing, processing, wholesaling, distribution and retailing. For the 15 items NFU tracks for the Thanksgiving version, farmers received just 11.4 cents of the retail food dollar.

Turkey growers, who raise the staple Thanksgiving dish, receive just 5 cents per pound retailing at $1.69. Wheat farmers averaged a meager 6 cents on 12 dinner rolls that retail for $3.49. And dairy producers received only $1.47 from a $4.49 gallon of fat free milk.

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Ohio Editors Note: This release is from National Farmers Union. Just last week at an annual Ohio agricultural outlook event in Columbus, ag economists noted that farm income in Ohio is down 40 percent since 2012 and predicted sub $4 corn for the immediate future. (Roughly half the price from six years ago.) ARC and PLC, mentioned below, are the primary farm safety net programs currently used by Ohio farmers to help manage the unique risks inherent in farming.

The bill before the U.S. House of Representatives passed Thursday afternoon. A separate bill is pending in the U.S. Senate.

Congressional Tax Plans Jeopardize the Farm Safety Net, CBO Analysis Says
 
WASHINGTON – Amidst the steepest drop in farm profitability in a generation, U.S. Congressional leadership is proposing tax reform legislation that would jeopardize all funding for farm bill commodity safety net programs.
 
The two tax bills being considered in both the U.S. Senate and the U.S. House of Representatives would add $1.5 trillion to the federal deficit. According to new Congressional Budget Office analysis of the bills, that $1.5 trillion deficit increase would need to be offset by eliminating all funding for vital farm programs such as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC), among other mandatory federal spending programs.
 
“If Congress passes legislation that increases the deficit, they will subsequently be forced to cut federal spending. In the case of the tax bill, current law could require 100 percent sequestration of all commodity program payments and other farm bill programs,” said National Farmers Union President Roger Johnson. “Tax cuts for the highest income brackets should absolutely not come at the expense of programs that protect our nation’s family farmers and ranchers.”
 
The House and Senate budget resolution that was passed earlier this year paves the way for tax cuts that would increase the U.S. federal deficit by $1.5 trillion over ten years. Statutory pay-as-you-go (PAYGO) rules require that increases in deficit spending be offset by reduced spending across non-exempt mandatory programs. The government would be required to cut such programs by $150 billion per year in accordance with PAYGO.
 
The total available pool of funding across all non-exempt mandatory programs amounts to, in CBO’s estimation, “only between $85 billion to $90 billion,” meaning that all impacted mandatory spending programs other than Medicare, including the Commodity Credit Corporation (CCC), would be entirely stripped of funding.
 
The CCC is the second largest non-exempt mandatory program, after Medicare. It funds dairy and other farm program payments, including ARC and PLC, both of which are critical for keeping family farmers and ranchers in business during times of economic uncertainty. Discretionary spending and a number of mandatory programs, including Social Security, the Supplemental Nutrition Assistance Program (SNAP), federal crop insurance, and the Conservation Reserve Program (CRP), are exempt from PAYGO.
 
“Farmers Union has long opposed using budget sequestration to reduce the federal deficit, especially through cuts to agricultural programs,” added Johnson. “This proposal asks farmers and ranchers to trade any possible tax benefits for the elimination of farm safety net payments, like ARC and PLC. That would be a disastrous trade. NFU continues to advocate for a simplified, progressive tax code that does not risk programs vital to the livelihoods and well-being of American family farmers and ranchers.”

Ohio and National Farmers Union joined a coalition of 82 farm, rural and consumers groups today in sending a letter to President Donald Trump urging him to implement the Farmer Fair Practices Rules via executive order. The rules would provide the most basic of protections to American family farmers and ranchers who are enduring unfair and abusive practices as a result of extremely consolidated agricultural marketplaces.

Massive consolidation in the meatpacking industry over the past forty years placed just four companies in control of 85 percent of the beef market, 74 percent of the pork market and more than half of the poultry market. In that time, 90 percent of hog farmers and 41 percent of cattle producers have gone out of business, and 71 percent of poultry growers now live below the federal poverty level.

“Family farmers and ranchers, simply put, have virtually no market power any more,” said NFU President Roger Johnson. “Multinational and foreign meatpackers control our market prices and are dictating much of what happens on our farms and ranches. We’re urging the President to take the first step in addressing the most abusive and unfair practices that happen as a result of our highly concentrated markets. He can do that by implementing the Farmer Fair Practices Rules.”

Last month, the U.S. Department of Agriculture (USDA) withdrew two of the three Farmer Fair Practices rules, effectively siding with multinational meatpackers in their market dominance over family farmers. In their request to President Trump, the farm groups offered the administration an avenue to reverse this action.

“You, Mr. President, have the opportunity to make the difference in the future of rural America and preserve America’s family farmers and ranchers,” the groups wrote.

The Farmer Fair Practices Rules are a necessary clarification of the Packers and Stockyards Act, which was passed to ensure competition and integrity in livestock and poultry markets. The rules were first proposed in 2016, but they are the product of law written into the 2008 Farm Bill, hundreds of field hearings conducted by the USDA, and six years of rulemaking.

The groups contend in their letter to the President that the USDA erred in its assertion that the purpose of the Packers and Stockyards Act does not include protecting individual farmers from unfair, predatory and retaliatory practices. “The original intent of the P&S Act of 1921 was to protect individual producers against the heavy hand of large corporations,” they wrote.

The groups also note that the USDA decision ignores all previous administrations’ interpretation of the intent and purpose of P&S Act and that it releases “the abusive market power of foreign corporations and foreign countries onto family farmers and consumers alike.”

“We call on you, by executive order, to do what others have failed to do and are unwilling to do: return justice to the marketplace,” the groups wrote to Trump. “We remain hopeful you and your administration can take these rules across the finish line on behalf of America’s family farmers, our rural communities and consumers.”

The U.S. Department of Agriculture has announced it would be terminating the Farmer Fair Practices Rule on Competitive Injury, a rule that would have provided the most basic of protections to American family farmers and ranchers as they endure increasingly concentrated markets and unfair treatment from multinational meatpackers.

National Farmers Union (NFU) President Roger Johnson issued the following statement in response to the announcement:

“It is deeply disappointing that USDA did not side with family farmers in the long-contested debate over rules for the Packers and Stockyards Act. The Farmer Fair Practices Rules offered a basic, yet important first step to addressing the unfair practice that family farmers and ranchers face in the extremely consolidated meatpacking industries.

“The withdrawal of the competitive injury rule is unjustified, given the long-held, plain language interpretation by the Department that growers do not need to prove harm to the entire industry when seeking relief from poultry companies for unfair contract practices. It is particularly egregious given the abuses that poultry growers face in the vertically integrated marketplace.

“With this decision, USDA has given the green light to the few multinational meatpackers that dominate the market to discriminate against family farmers. As the administration has signaled its intent to side with the meat and poultry giants, NFU will pursue congressional action that addresses competition issues and protects family farmers and ranchers.”