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Farm Bill Amendment From Sen. Jeff Merkley Good News For Organic Farmers

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Organic farmer Chloe Diegel ties bunches of onions with her 15 month-old daughter Nina, in Martell, Neb., July 28, 2011. Diegel and her husband Alex McKiernan used a $5,000 loan to build their credit history for a farm that started in August 2009. The couple sells vegetables through a community-supported agriculture program that gives members more food for their dollar in good years, but spreads the risk out when times are rough. Their business, Robinette Farms, also serves farmers mar | AP

The $500 billion farm bill agreed upon by House and Senate negotiators this week holds good tidings for organic farmers, an increasingly prominent constituency long neglected by the federal government.

The draft bill contains several measures likely to benefit organic farms, including funding for research in organic agriculture and a federal program to market organic foods. (Keep your eyes peeled for "Got Organic?" billboards to pop up soon on a highway near you.)

The most significant change may be a provision that makes federal crop insurance more available (and generous) to organic farmers. Sen. Jeff Merkley (D.-Ore.) added the crop insurance measure to the farm bill in an amendment in June 2012.

Until 2001, organic farmers weren't even eligible for federal crop insurance, which reimburses farmers for crop losses due to natural causes. And they've faced further obstacles since being allowed to purchase insurance. Until recently, the U.S. Department of Agriculture charged organic farmers crop insurance premiums 5 percent higher than those for conventional farmers. The crop insurance program also calculated payouts to organic farmers for losses using the price of conventional crops -- even though organic crops are almost always worth two to three times more, according to USDA data.

Merkley's amendment changes all this, eliminating the 5 percent penalty for organic farm crop insurance premiums and mandating that proper prices be used for indemnity rates. Though USDA Secretary Tom Vilsack vowed last spring to get rid of the fee, Merkley's amendment commits the USDA to the change regardless of its leadership.

The amendment also provides the USDA with funding to establish appropriate price levels for insurance rates for organic farmers, and requires the department to use those prices when determining payouts. It even calls on the USDA to insure farmers who sell their produce locally (at farmers markets, for example) at the higher prices they can get at these venues.

The changes may spur organic agriculture to quicker growth. Though the industry has become increasingly prosperous over the last decade, with sales hitting $32 billion in 2013, organics remain a small part of the American agricultural industry.

Organic farmers have cited their disadvantages in the crop insurance market as a serious barrier to growth. Indeed, there's evidence that many organic farmers have responded to their disadvantages by refusing to insure their crops.

Data from the Union of Concerned Scientists and USDA show that in 2010, just 13 percent of all organic farmland was covered by federal crop insurance policies, compared with about 24 percent of conventional farmland.

Without insurance, organic farmers are exposed to sudden changes in weather and pests, driving up prices and decreasing yields.

On the other hand, the farm bill benefits conventional farmers far more than organic farmers.

"The support for organic farming in the farm bill is not commensurate with the economic importance of organic farming in this country," said Kari Hamerschlag, a food policy analyst at the Environmental Working Group. "For a $32 billion to get not much more than $150 million ... it's just way out of alignment. The industry still has a ways to go in terms of getting Congress to recognize how important the sector is for job development."

The bill still must be approved by the full House and Senate.

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