News Update
Jan. 23, 2009

COOL on Hold, Obama to Review

President Barack Obama’s administration ordered all federal agencies Jan. 21 to freeze new or pending regulations of the Bush administration until the current administration approves them — including the mandatory country-of-origin labeling (COOL) law.

According to Meatingplace.com, White House Chief of Staff Rahm Emanuel issued a memorandum to all federal agencies that, among other things, directs them to consider extending for 60 days the effective date of regulations that have been published but have not yet taken effect. This will allow the new administration to review “questions of law and policy raised by those regulations.” In such a case, a notice-and-comment period of 30 days would be reopened.

Published Jan. 15 in the Federal Register, the final COOL law is slated to take effect March 16. However, the memo indicates Obama is asking agency heads to use discretion.

American Meat Institute (AMI) spokesman Dave Ray told Meatingplace, “… it’s not certain what will happen with COOL.”

According to Meatingplace.com, other regulations the Obama administration might review include a rule proposed by the Animal and Plant Health Inspection Service (APHIS) regarding an official numbering system for the National Animal Identification System (NAIS) initiative, which was published Jan. 13. New provisions in the 2008 Farm Bill also hang in the balance. The disposition of the Food and Drug Administration (FDA) new guidance on genetically engineered animals also is unclear.

Mexico Resumes Imports from Remaining Exporter

Mexico has resumed imports from an Indiana meat exporter — the last of 30 U.S. facilities the country originally banned in December from exporting meat. According to Meatingplace.com, the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) reported this week the Menone, Ind.-based Vin-Lee-Ron Meats Inc. is now again certified to export product to Mexico.

However, the U.S. and Mexico continue to negotiate terms of a plan by Mexico to limit the use of combo bins and instead require packages with capacities of no more than 110 pounds (lb.) each.

A USDA Foreign Agricultural Service spokesman told Meatingplace on Jan. 22 that Mexico has relaxed its original proposal and is now proposing to ban only the shipping of frozen meat in combo bins. Mexico now will accept combo packaging for fresh and chilled meat products and non-frozen mechanically deboned meat, the source noted.

2008 U.S. Farm Bill Enhances Beginning Farmer Provisions

People who want to get into farming are getting a boost from the 2008 U.S. Farm Bill. With the leadership of Sen. Tom Harkin from Iowa and Rep. Collin Peterson from Minnesota, many of the beginning farmer provisions of the 2002 Farm Bill programs were expanded in the new farm bill and some new ones were added.

“Government programs play a major role in assisting young people who wish to pursue a farming career. In addition to the 2008 Farm Bill changes, the state of Iowa also has developed programs that have proven to be valuable tools,” said Dave Baker, Beginning Farmer Center farm transition specialist. “The Center monitors existing and new programs that can be a part of farm families succession plans. Several basic programs at the national level will give more opportunities to beginning farmers.”

Baker highlights some of the programs included in the 2008 U.S. Farm Bill that will affect beginning farmers, ranchers and socially disadvantaged farmers and ranchers. He notes that this is not a complete listing of the bill’s provisions.

Farm ownership and operating loan amounts change. Basic programs administered by the Farm Service Agency (FSA) provide direct and guaranteed farm ownership and operating loans for farmers and ranchers. In the new farm bill, larger percentages of the direct and guaranteed ownership and operation loans are reserved for beginning farmers and ranchers and for socially disadvantaged farmers and ranchers. The purpose of reserving funds for these borrowers is to target government credit programs to those most in need of credit assistance; to ensure that socially disadvantaged and beginning farmers and ranchers can obtain access to credit; and to help change the structure of agriculture by helping to reverse the aging of American agriculture and loss of minority land ownership.

The 2008 U.S. Farm Bill sets aside 75% of direct farm ownership loans (increased from 70%), 40% of guaranteed loans (increased from 25%) and 50% of the direct operating loans (increased from 35%) for beginning farmers.

The Beginning Farmer and Rancher Development Program will provide $15 million of competitive grants each year for education, Extension and outreach initiatives to help young people prepare for a future in agriculture.

The Down-Payment Loan Program addresses the significant cash flow requirements of most new farm operations. It matches the resources of the FSA with a beginning or socially disadvantaged farmer and a commercial lender or private seller to enable beginning, minority and women farmers to make a down payment on a farm or ranch. These loans have attractive 20-year terms at 4% lower than regular FSA direct farm ownership loans, but no less than 1.5%.

The state of Iowa has first-time farmer or aggie bond programs that provide tax benefits to contract sellers and lower interest loans to be used in combination with FSA loans. If beginning or disadvantaged farmers are unable to make the required 5% down payment they have two options: a participation loan and an FSA direct farm ownership loan for 100% of the loan with 40-year financing.

The Beginning and Socially Disadvantaged Farmer and Rancher Land Contract Program “pilot” guarantee program has become reauthorized and nationwide through the 2008 bill. It was designed to encourage retiring landowners to sell to beginning or socially disadvantaged farmers and ranchers through private contracts. There are two guarantee options associated with this program: prompt payment guarantee of three amortized annual installments, or 90% principal loan value guarantee in effect for 10 years.

The Conservation Reserve Program (CRP) Transition Option is designed to facilitate the transition of land to beginning and socially disadvantaged farmers and ranchers for the purpose of returning the land to production using sustainable grazing or crop production methods. To encourage this program, CRP contract holders can receive two extra years of rent payments for leasing or selling that land to a beginning or socially disadvantaged farmer. The National Organic Certification Cost Share Program can be used in conjunction with the CRP option to defray the costs, up to $750 per year, of organic certification for producers and handlers of organic produce.

The original 2002 Conservation Security Program has been restructured and renamed the Conservation Stewardship Program (CSP), incorporating many changes. One of the changes affecting new entries into organic production will be the requirement that the USDA provide appropriate outreach and technical assistance to organic famers and ranchers so that they will participate in CSP.

For complete details on the 2008 Farm Bill, contact the local FSA office or visit www.fsa.usda.gov.

— Release provided by ISU Extension.

Consumers to See Some Credit Card Relief

Despite making payments on time, many consumers have seen their credit card interest rates increase. Fortunately, new regulations announced recently by the Federal Reserve will provide some relief to consumers who carry a balance, according to Eileen St. Pierre, Oklahoma State University (OSU) Cooperative Extension personal finance specialist.

“When consumers get into credit card debt and credit card companies raise interest rates, these companies make it harder for consumers to pay off the debt,” St. Pierre said. “The new regulations announced by the Federal Reserve do not go into effect until July 2010, but they will have a positive impact on consumers.”

Currently, credit card companies can raise interest rates with little notice and for reasons that are not directly related to the consumer. In addition, the new, higher rate is applied to debt already accrued. Under the new regulations credit card companies can still raise rates, but the new, higher rate would apply only to new charges on the account.

Some consumers have different interest rates on different portions of their credit card balances. For instance, the interest rate on purchases may be 9.9%, but a cash advance could carry an interest rate of 19.9%. In the past, credit card companies have been allowed to apply a consumer’s payment only to the lower interest rate debt. This prolongs the amount of time it will take a consumer to pay off the debt at the higher rate.

“While these new regulations will save consumers some money, it’s important for them to realize how they got into credit card debt in the first place. They need to start making changes in their financial behavior so they do not rely so heavily on credit in order to make it from paycheck to paycheck,” St. Pierre said.

St. Pierre said it is important for consumers to make a budget and stick to it. Also, establish a savings account. Determine an amount to put in each month and treat that deposit like a bill. Make that payment, along with all other financial obligations, before splurging on something that is not in the budget.

“I also would suggest staying away from department store cards,” she said. “They typically have a higher interest rate and hidden fees. In addition, when making credit card payments, try to pay more than the minimum amount. This will help knock out debt faster, as long as you don’t charge more. Also, work on building a better credit rating so you will quality for better interest rates.”

To help consumers really get a feel for how long it will take to pay off credit card debt, St. Pierre suggests visiting www.powerpay.org as a financial tool. This debt management system was developed by Utah State University Extension.

Although participants must register at the site, the service is free. To use it, simply key in information such as the amount of debt on a credit card, the interest rate and the minimum monthly payment. Power Pay will then show consumers exactly how long it will take to pay off existing debt by making minimum payments. It also will calculate the time it will take to get out of debt by adding extra money to monthly payments.

“The idea behind Power Pay is that once you have paid off one debt you roll that payment into another debt so it can be paid off even faster,” she said. “Power Pay will calculate which debt is in your best interest to pay off first.”

Consumers who get an income tax refund, a bonus at work or other “found” money are encouraged to use those funds to help pay off debt.

St. Pierre said you could take 10% of the extra cash and do something fun, but use the majority of it to pay off debt or fund a savings account.

“Although the financial crunch has been devastating to many families, the silver lining may be the realization of how important it is to live within your means and start living simpler,” she said.

— Release provided by OSU Extension.

— compiled by Crystal Albers, associate editor, Angus Productions Inc.