Although the energy goals mentioned during his recent State of the Union address were laudable, President Obama must now turn attention to the improvement of our nation’s electric transmission system. Upgrading and expanding clean energy transmission will create jobs, spur new industries, and lead to a more-sustainable future for rural America.

The input of folks in Nebraska and across the nation made a strong contribution to the State Department’s decision. “We received comments on a wide range of issues including the proposed project’s impact on jobs, pipeline safety, health concerns, the societal impact of the project, the oil extraction in Canada, and the proposed route through the Sandhills area of Nebraska, which was one of the most common issues raised,” said the State Department. This conclusion was developed after a “transparent, thorough and rigorous review of TransCanada’s application.”

Perhaps indicating concern over the State Department’s handling of the project, last week President Obama expressed his thoughts on Keystone XL’s route in an interview with Omaha station KETV: “They’ll be giving me a report over the next several months, and, you know, my general attitude is, what is best for the American people?” said Obama, “We need to make sure that we have energy security...but there’s a way of doing that and still making sure that the health and safety of the American people and folks in Nebraska are protected, and that’s how I’ll be measuring these recommendations when they come to me.

A delay in the decision-making process allows the State Department to properly consider alternatives to TransCanada’s preferred route while also providing relief to Nebraska representatives concerned with the legal fallout of any rerouting legislation passed.

This development would not have taken place if not for the concern of individuals and groups who attended meetings, submitted comments, and rallied against an intimidating foreign corporation. You should be proud.

The Center for Rural Affairs would like to thank everyone for their hard work. Each letter, call, statement and message made a difference. Though the battle is far from over, this is a win for our citizens, our environment, and for the institution of democracy.

This figure highlights the trend of growth in the renewable energy sector of the American economy.  Currently, 35% of all architects, engineers, and contractors are employed in the renewable energy field, and this number is expected to increase to 45% for all design and construction jobs by just 2014.

Manufacturing is another segment being bolstered by renewable energy, claiming 26% of all clean energy jobs.

 “Clean” energy, or “green energy” are terms which are not always uniformly defined.  Generally, it refers to those who develop and implement technology in the solar, wind, fuel cell, geothermal, smart grid, and biofuel industry.  It can often times be used to reference only renewable energy, while other times can reference industries that focus of fossil fuel efficiency, such as hybrid vehicles.  No matter the definition used, it is a growing industry.

This industry’s workers are well-paid, too.  The median wage for all clean energy jobs is 13% higher than the median wage for U.S. jobs across the board.  This higher level of pay transcends education and location, applying to each and every worker at all levels.

Much of the job improvement in the green economy comes from various subsidies, bonds, grants, loans, and tax deductions that help nourish the high start-up costs of many green energy undertakings (projects). This is a model the United States has consistently used to bolster new energy endeavors, such as coal, oil, and natural gas.

But behind this support lies a strong, palpable demand for energy efficiency and renewable resources which continues to grow.  Think of the extra costs as being worth it in terms of both job creation, conservation of natural resources, national security and environmental protection, particularly clean air.

Given the progressive and innovative nature of green energy, some projects will inevitably fail.  One of these cases is Solyndra, a solar panel company that had its once-bright future collapse due to its inability to stay competitive in its market.  Solyndra failed because international solar panel companies could produce the same good more efficiently at lower costs.  Many of the contracts Solyndra, and by association the Department of Energy, relied upon were cancelled for this reason.

While disappointing, this is the nature of capitalism. This experience shows that clean energy companies are assuming a healthy role in the free market. Trial and error will inevitably lead to an improved product and a resilient industry, putting the United States in a better position to capitalize on a demand for green energy moving forward.

Normal 0 false false false EN-US X-NONE X-NONE

                           TESTIMONY IN OPPOSITION TO TRANSCANADA KEYSTONE PIPELINE XL

                                                                          September 27, 2011

Thank you for the opportunity to give testimony.  My name is Alvin Guenther.  I am a retired Nebraska educator.  My 35 year educational career was at both the secondary and community college level.  My teaching endorsements were in economics, business finance and accounting.  I am currently living on the family farm/ranch raising Hereford/angus crossbred cattle.  I come before you today in opposition to the TransCanada Keystone Pipeline.

My study of economics and subsequent thorough understanding of opportunity cost associated with a decision have become my driving force for this testimony.  Please understand that opportunity cost is the highest value of the other alternatives given up in order to enjoy a particular good or service.

I was privileged to have the opportunity to reside for seven years in north central Nebraska during my teaching career.  That was the period of time where we destroyed acres of native Sandhills grasslands to install center pivot irrigation.  We also saw water from Merritt Reservoir being diverted to the central Nebraska region for agriculture purposes.  Ladies and gentlemen, the Ogallala aquifer is and has been contaminated for over forty years.

Liquid nitrogen was pumped from 1500 gallon fiber glass Snyder tanks through injector meters directly into the water and sprayed upon the cropland to leach through the sandy soil directly into the underground water supply. Phosphates, manganese, magnesium, herbicides, and insecticides and various other chemicals were likewise injector metered into the center pivot systems.  NH3 was injected directly into surface water through what we called dribblers .  This surface water flowed from Merritt reservoir to the croplands via canals.  This activity was financed heavily through the Production Credit Association and Prudential Life Insurance Company.

This activity continued for almost the entire decade of the seventies coming to an abrupt end in the early 80’s.  The activity occurred because investors and landowners saw a short term profit with little knowledge of the long term effects of their action.  All they saw were enormous profits.  I am often reminded of the occasion of Jesus Christ’s crucifixion where he called to his Father to please forgive them for they do not know what they are doing.

What was the opportunity cost of this short sighted activity?  Today, forty years later communities in southern Nebraska are still experiencing over ten parts per million of nitrate poisoning in their well water, costing them tens of thousands of dollars to either deepen their wells, dig new ones or find new well fields.  Lakes and ponds are constantly being declared off limits to swimming and other water activities due to phosphates and its association with blue green algae.  Additionally, many of the center pivot locations are now enrolled in the Conservation Reserve Program costing the American tax payer billions of dollars annually.  I hate to venture into the realm of Atrazine and its carcinogenic impact upon our long term health care costs.  We are already aware of the long term health care costs associated with corn and cardiovascular illnesses and its  long term health care costs.

Now, forty years later we are once again looking at short term profits, tax revenue, jobs and the often advertised good life with no long term guarantees.  There is a great possibility that the jobs advertised as associated with the pipeline construction will not be filled with Nebraska residents.  There is a great possibility that the refined fuels associated with this pipeline will never get to our markets because they are being sold the highest bidder.  There is a great possibility that damage to the ecosystem of the Sandhills will never be totally healed and the United States and Nebraska tax paying citizens will once again be asked to bear the long term costs. All this while a foreign company enjoys great profits.

Regrettably, I have not travelled the Nebraska Sandhills in recent years.  My memory of the hills vividly recalls the waving grasses, the smells and the silence of the area.  However, I also recall the tangled frames of the center pivots resting in the corners of quarter sections.  Pivot systems abandoned when corn prices plummeted and profits diminished.  Quarter sections now in Conservation Reserve Program or sprouting annual forbs, and weed trees forever scouring the beautiful ecosystem of our Nebraska Sandhills.  All this now an opportunity cost of the quick profit of the time.

Yet, in our insatiable desire for short term profit and insatiable desire to fulfill our immediate needs we argue that we must drill baby drill. While this short term mentality is costing us billions in the long term, current representatives in Washington are signing onto legislation to remove regulations protecting us and the opportunity cost of our short term actions.  This all to maximize the profits in the short term with little or no attention to the opportunity cost in the long term

I stated earlier that opportunity costs represent the highest valued alternative given up.  This highest valued alternative may consist of the desire to seek out and develop other sources of energy.  Seeking short term profits and seeking to fulfill our insatiable desire for energy may be a disincentive to pursue development of wind, solar, hydrogen or nuclear power as a cleaner, more reasonable source of energy.  Remember, the loss of a highly valued asset or valued effort may create incentives to look at alternatives.  After all, remember Apollo 13 was safely landed incorporating a cardboard box, paper clip and duct tape

The President of the Nebraska State Chamber of Commerce recently stated that if a corporation knows the rules they will follow them.  I take exception to that statement.   A September 14, 2011, Omaha World Herald article enumerated the shortcuts taken by BP, Halliburton, and Transocean leading to the devastating oil spill in the Gulf.  An August 23, 2011 Omaha World Herald article identified numerous violations committed by Nebraska feedlots and other agricultural enterprises.  We of course are all aware of Erin Brockovich and her stand on the environment and deadly toxins

The pursuit of a project that boast of new jobs in a time of high unemployment, a project that boasts of a decrease in our dependency of foreign oil in a time of high energy cost, a project that boasts of new monies for schools and local budgets at a time when legislators are pursuing budget reductions, a project that boast of new consumer demand at a time when consumer demand is at an all time low at best becomes a suspicious project.  These boast combined with the large sums of monies spent for lobbying, advertising, and bullying behavior with threats of eminent domain multiply that suspicion ten fold.  If TransCanada wishes to convince me of the value of this project, don’t talk to me about how great you are, talk to me about long term opportunity costs of the project.

Yesterday Nebraska students, organizational representatives, geologists, ranchers, farmers, and a few Center for Rural Affairs board members testified at a hearing held by the State Department in Lincoln.
 

They discussed jobs, water, cattle and cranes and urged the State Department to take a second look at the proposed tar sands pipeline that would transport the substance through the Nebaraska Sandhills and over a section of the Ogallala Aquifer. Last month the Center for Rural Affairs joined the Save our Sandhills Coalition, which advocates for re-routing the pipeline out of the Sandhills and the aquifer.

The good news? Take your pick, but this is only the beginning. If you're a Nebraskan full of "vim and vigor" then you'll have another chance to weigh in. Tomorrow's hearing in Atkinson is expected to just as energized, if not more. Make the trip and make a difference.

Thursday, September 29

4:30 - 10:00 pm

1000 North Main Street Atkinson, NE - West Holt High School

Non-Nebraskans turned out big-time too, in the form of union members there to argue that the Keystone XL Pipeline creates jobs. We can expect them in Atkinson as well. Many of them didn’t even realize the pipeline was used for tar sands, thinking they were there to support natural gas.  I talked with a young female union member who argued that Nebraska desperately needs the jobs that pipeline construction will create. Our conversation was cut-short when I had to wrangle my squirmy ten-month old who seemed intent on crawling into the lap of a rancher who was preparing his testimony.

The predictable and contentious jobs vs. the environment arguments were trumped by Nebraska League of Women Voter’s President Linda Duckworth’s testimony: “If the pipeline is even longer then perhaps, even more jobs, though short-term, will be created.”

Well said, Linda.

And perhaps if we take the long-view and look instead at creating long-term jobs and wealth in rural Nebraska through renewable energy construction, we’ll all win.

The Keystone XL Pipeline debate has struck hard in the state of Nebraska, causing a division in opinion amongst experts. John Stansbury, an Environmental engineering Phd., feels the pipeline poses significant danger to Nebraska’s Ogallala Aquifer, which supplies the majority of the state’s water. Jim Goeke, a UNL hydrologist who has studied the aquifer for many years, feels strongly that the aquifer would be safe.


Stansbury paints a gravely different situation than that claimed by Transcanada as the two have had dueling reports.  A strong gap in statistics exists between the two parties. While Transcanada predicts approximately  11 significant spills over 50 years, Stansbury predicts 91 spills over 50 years.  Given recent history, this number could be even greater; Transcanada’s first pipeline has already had 12 spills in 12 months.

Jim Goeke, fellow professor and hydrologist at UNL, maintains a different standpoint from Stansberry regarding potential aquifer contamination.  The aquifer’s west to east flow, Goeke claims, would confine all potential spillages within areas east of the pipeline, only 25% of the aquifer.  Geoke maintains that the majority of the proposed pipeline would lay ten to 100 feet above the aquifer, and questions whether any oil spillage would be able to infiltrate the water supply at all.

Leading researchers in the field disagree.  Should not a consensus be reached amongst scientists before action is taken to ensure safety?  One does not have to travel far - the Gulf Coast - to witness the real effects of an oil spill on both the environment and economy of a region.

Don’t forget to attend this week’s State Department hearings. Use this opportunity to tell federal officials that you don’t support tar sands oil. Let them know that you don’t approve of oil leaks in Nebraska. Show them you will protect our state, that you will stand up for the sandhills.

Lincoln, NE--Pershing Center
Tuesday, Sept 27
12-3:30pm, 4-8pm
226 Centennial Mall South

Atkinson, NE--West Holt High School
Thursday, Sept 29
4:30-10pm
1000 North Main Street
 

The president joined Secretary Vilsack and about 20 participants in a roundtable discussion on agriculture and innovation. I seized the opportunity to speak to the president about the importance of capping the big federal farm payments that subsidize mega farms to drive small and mid size farms out of business. I said capping those payments would strengthen family farms and create budget savings – savings which could be used to protect investments in the future of rural America through small business development, beginning farmer programs, rural community development and conservation.

The president recalled that in 2008 “A presidential candidate went around this state (Iowa) saying that very thing –Barack Obama.” He pointed out that Congress had not included the payment cap in the last farm bill and urged us to help by speaking out to Congress. I urged him to put a proposal on the table to move the issue onto the agenda in Washington.

For roughly 20 minutes, the president participated in that workshop. He also sat in on at least one other workshop on small business development.

Secretary Vilsack asked probing questions in the roughly 90 minute workshop. He asked for ideas to encourage sale of land to beginning farmers and ways to foster rural entrepreneurship. I shared proposals that would provide tax break breaks for selling land to beginning farmers and talked about the Rural Microenterprise Investment Tax Credit introduced last Congress by Representatives Ron Kind and Wally Herger. I also advocated for the Rural Microentrepreneur Assistance Program, which was created by the last farm bill. Secretary Vilsack helped win funding for the program, which provides loans, training and business planning assistance to small rural businesses.

Recently, President Obama issued an executive order creating the White House Rural Council. According to the official press release, the council "will coordinate programs across government to encourage public-private partnerships to promote further economic prosperity and quality of life in rural communities nationwide."

Over at Daily Younder, there's some healthy skepticism. What will the council do, especially since they're not hiring new staff? How do they plan to better coordinate government programs? All fair queestions. They write:

During the phone press conference, Vilsack and Salazar talked almost entirely about what the administration had already done. The two cabinet officers promoted money spent to extend Internet broadband and funding that has been put into dams, tribal communities, renewable energy, housing, etc.

Vilsack did mention that cabinet officials would go out across the nation to “listen.” The administration has had several of these "listening tours" in rural America - one about rules governing livestock markets and one by officials with the Appalachian Regional Commission.

One reporter asked if this council was the first sign of the Obama re-election campaign in rural communities. Vilsack and Salazar said that it was not.

We at the Center for Rural Affairs are excited about the prospect of the White House focusing some attention on rural communities. We hope they involve rural communities in a meaningful way, and in addition to listening, we hope they take action on the issues and ideas that they hear from rural residents. 

As we learn more about the details of the listening tour, you can be sure we'll let you know!

What do you think the Rural Council should do?

See part one, part two and part three of their exchange. I hope to have more thoughts on the overall exchange later, but I want to start by highlighting this key element.

While Klein refers several times to "rural subsidies" and quizzes Vilsack on what justifies subsidizing rural people, Klein doesn't explain what he means by "rural subsidies." Vilsack doesn't challenge him to unpack it either. That results in a huge gap in the conversation -- a critical gap.

If by "rural subsidies" Klein means farm commodity subsidies, that should be isolated and taken head on. Klein is right to question and challenge the current structure of farm commodity subsidies. They provide unlimited benefit to the largest farm operators. This drives consolidation of farms. Fewer farmers means fewer people in rural America. This approach is not good for rural America, and rural America most certainly has been losing people for decades as a direct result, contrary to Klein's claim.

But farm commodity subsidies should not be characterized as "rural subsides." Their benefit accrues to only a small portion of the rural population. A 2007 report from the Center for Rural Affairs, Over Subsidizing and Under Investing, shows how badly skewed USDA investment is toward very large farm operators and away from investing in programs that build a future for all of rural America.

The report found that the USDA spent nearly twice as much to subsidize just the 20 largest farms in each of 13 leading farm states examined as it invested in rural-development programs to create economic opportunity for the 3 million people living in 1,400 towns in the 20 most-struggling rural counties in the same 13 states.

All other rural development programs (rural broadband, rural small business, value added market development, etc.) account for literally only a fraction of one percent of all farm bill spending.

The Center for Rural Affairs is proposing a modest investment of $100 million per year in rural development in the next farm bill. That would be a several fold increase over current investment in non-farm rural development and would still represent less than one-half of one percent of farm spending allocated by the farm bill and one-sixth of one percent of total funding allocated by the farm bill.

Rural areas receive additional benefit from other health and human service programs, but not because they are rural. I suspect these are not the benefits Klein is arguing against.

If, in fact, Klein means farm program subsidies when he says "rural subsidies", he should use more precisie langauage in the future and should also seek to understand the scope and effect of such subsidies on rural communities, the population of rural America and their future.

In closing for the evening, I'll also just note that there is an entire department dedicated to urban development and countless other ways that federal policy has fostered and subsidized many of the things to be loved about urban America.

Brian Depew, Assitant Director

At the Center, we want to be able to address this need for increased transmission of wind energy in a way that considers the voices of those who will be affected by new lines. That's why we are in the process of developing a set of Clean Energy Transmission Principles that will shape our transmission policy position to reflect stakeholders’ broad range of priorities and concerns.

We would like to hear from farmers, landowners, and communities who will be affected by future clean energy transmission. The following principles should function as a starting point from which we can begin conversations and approach transmission policy in a way that promotes fairness and ownership. We welcome questions and comments regarding how these principles can best address the interests of all stakeholders as clean energy projects move forward.

Send comments to Alyssa Charney, alyssac@cfra.org or 402.687.2103 x1022.

Here at the Center we’ve been thinking a lot about what wind energy projects in the region will mean for rural communities. Wind energy presents an opportunity for local farmers, landowners, and communities to have a stake in the creation of projects that promote economic development and sustainable solutions. Such a notion of direct involvement is important and it’s where ownership comes in. At every size of wind energy production, there are opportunities for local ownership. I’ll start with small-scale energy.

If a single landowner wants to setup a wind turbine on their own land and has the space, capital, and permit to do so, they can become an owner. And if individuals don’t want to or aren’t able to enter the ownership front alone, they can take advantage of Community Based Energy Development, or C-BED, which promotes the local economic and environmental benefits that come from renewable energy facilities. This happens when community members become joint owners of these facilities.

In the case of wind in Nebraska, the passage of The Rural Community Based Development Act (LB 629) in 2007 authorized the creation of C-BED in the state, allowing local property owners and communities to develop wind energy projects. This was a significant advancement, because Nebraska remains the only state in the country with 100% public power, meaning that by state law public power suppliers are required to provide reliable energy at the lowest cost, which so far has mostly translated into coal powered plants.

C-BED presents a way for wind energy projects that would otherwise be too expensive to be developed within the system of public power. It enables partnerships between landowners, farmers, and communities with equity investors who are exempt from sales and use tax, and can therefore return substantial income to communities. These returns continue over time, and thus ownership is not just about one-time compensation.

In addition to individual and community-based ownership, we want to emphasize the importance of state policy that will benefit employees as well as landowners who live in areas that new transmission lines will cross. They too should be able to earn an ownership stake in project developments. Extending ownership to these two groups isn’t about compensating for anticipated hardships but rather extending the network of stakeholders who will help shape the future of wind energy projects in the region.

That is why we have proposed state policy in Nebraska to establish employee ownership plans for people who work in maintenance and operation of large wind developments. Our proposal means that employees at wind energy facilities would be provided with an allocation of ownership interests. A tax incentive would encourage developers to set this plan up, and ownership stock would increase over time for employees, thus linking employees to the success of wind energy projects.

Local community benefits don’t have to end with the employees who work at wind energy facilities. Benefits should also extend to the landowners whose property will be crossed by transmission lines. New transmission lines will be needed for wind energy projects, and we want to involve landowners directly in this policy. That's why we are working to shape our clean energy transmission principles so they reflect the concerns of rural landowners and communities. Stock ownership in transmission lines is one way to extend benefits and increase involvement as wind energy projects develop.

Stepping back and examining these different ownership models helps us to consider what ownership really means. Ownership brings together landowners, employees, and communities, and it is a core component of the Center’s mission: “We value widespread ownership and control of small businesses, farms, and ranches by those who work them.”

A piece by Majorie Kelly and Shanna Ratner, A Different Kind of Ownership Society, does an excellent job in highlighting the reasons why we believe ownership is so important. They write:

“Questions about who owns the wealth-producing infrastructure of an economy, who controls it, and whose interests it serves are among the largest issues any society can face, and critical to creating shared prosperity. Local and shared ownership, key tools for keeping wealth local, help to form the girders of a framework that can unite a community wealth movement as a social counterpart to the sustainability revolution.”

Kelly and Ratner go on to discuss the particular importance of ownership within rural communities. Rural communities worry that they will suffer the negative consequences without gaining the lasting benefits of renewable energy projects. These are valid concerns. We want to address these concerns with continued involvement from landowners and communities throughout the planning process. And we believe that direct ownership can help to engage and empower rural communities even further into the future.

Ownership can carry a negative connotation when natural resources are in the picture, but it doesn’t have to. Our idea of ownership is about empowerment, collaboration, and local control. We recognize the value of ownership within rural communities and how it is linked to sharing our resources and their widespread benefits.

This is what a food desert looks like in rural America.

The term “food desert” has gained a lot of attention in the media in the last several years (much to the chagrin of people who like deserts and don’t appreciate the negative connotation). I’ve also heard “food vacuum” and “area of low food access”, but nothing gives the mental picture of what it’s like to live in a place with no food like “food desert.” 

When most people hear “food desert,” they think of places like West Oakland, Detroit, or inner-city Chicago. Personally, I think of places like Harrison, a Nebraska town of 279 people. A resident of Harrison called me for help several months ago because the owners of their local grocery store have gotten sick and need to sell or shut down. If they close, it’s a 50 mile drive to the next nearest grocery store. I’ve had conversations with members of Native American nations who talk about driving 110 miles through a mountain pass to get to their nearest town. 

The paradox of our unhealthy food system is that many rural towns lack healthy food access, even as the food we eat is grown in rural places. To put it simply, our current food system is failing the very communities that grow our food.

I consider myself very lucky when it comes to food. I have land on which I can grow vegetables and raise animals, and time to tend them. There’s a grocery store in my town, and I have a good job that allows me to afford to buy what I can’t grow or process myself. I do have an “out of town grocery list” for exotic staples -- wasabi, coconut milk, organic anything -- but I can certainly live without those things if I needed to.

So how is it possible that people in farm country have a hard time finding food? In short, it’s complicated. 

Here are a few of the factors:

• Poverty -- Brazilian Catholic Archbishop Dom Helder Camara once said, “When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.” Poverty is a factor nobody wants to talk about. When Midwestern towns had lots of manufacturing jobs, towns of 1,000 could support two or three stores, some of which stayed open 24 hours for customers on second and third shift. Now that those jobs have gone overseas and unemployment is at 10%, a lot of people can’t afford food.
   
• Race -- Poverty and race are closely linked. In the two Indian Reservations directly north of where I live, there might be one run-down grocery store, and I wouldn’t be surprised if predominantly white rural towns have more food access than towns with predominantly people of color. This 2006 study came to that conclusion in Washington, DC.: White neighborhoods averaged a grocery store for 11,900 residents, and black neighborhoods averaged one grocery store for 70,000 residents.
   
• Geography The closer a rural community is to a city or a big box store, the less likely it’ll be able to support its own grocery store. People are too tempted to shop elsewhere.
   
• Community support Closely linked to geography, if everyone in your town supports the local grocery store (or hardware store, restaurant or bar), it will survive.

I could go on: Mental illness, lack of entrepreneurs, social stigma, illiteracy, the loss of knowledge of how to grow food -- all play into a lack of food access for rural communities. 

Food banks and other emergency food assistance do exist, and their task is to address the immediate hunger at hand. But they’re not easy to access even in the rural areas that have them. One of our local food pantries requires two forms of ID to prove you live in the region it serves -- I shudder to think that they might turn a homeless person away. And after the holidays, many food banks find their shelves almost bare.

How depressing. What’s a small town to do?

There are lots of ideas out there, from the Rural Grocery Initiative at Kansas State University to federal resources laid out on the Center for Rural Affairs page on rural food access to news stories and inspiring videos about a 17-year-old who saved the grocery store in Truman, MN. 

Rural communities need entrepreneurial skills to start and run a successful business. They also need young and energetic farmers willing to grow food and teach others how to do the same. 

Do you have those skills? Are you willing to help? Share any additional ideas you have in the comments!

The Food Safety Modernization Act (also known as S. 510) passed through Congress on December 21 after months of political wrangling. The to improve various agencies’ abilities to prevent, detect and respond to food safety problems, and is largely a response to the many large food recalls, from beef to spinach to eggs, that have plagued our food system in the past few years. 

Included within the act is the Tester-Hagan amendment, which was negotiated between consumer groups and sustainable agriculture organizations. The amendment gives a choice to very small farms, very small food processing facilities, and farms who market directly to consumers - they can either comply with state regulations or with modified federal regulations that are appropriate to the scale of their farm. It exempts from recordkeeping and hazard analysis requirements farmers who sell directly to consumers and have less than $500,000 in annual sales. 

There are a number of summaries to what the bill includes (here and here), and I found this series on Grist’s Food Fight particularly informative when trying to look at the various angles of the food safety issue.  Though it was written before the law was passed, they cover important questions such as whether we have afood safety crisis, whether the law will better protect us from contaminated food, whether the law willharm small farms, if the Food & Drug Administration (FDA) will have too much or not enough power, and whether the Tester-Hagan amendment will put more kids at risk. 

So what does this mean for rural Americans? The law does not, as some Internet campaigns have suggested, ban backyard gardens or end all small farms. The hope, of course, is that the law will mean that the food we buy at the grocery store or that kids eat at school will be free of the most dangerous pathogens. Some farmers and processing facilities will have to keep good records, register their businesses with FDA, and submit to an inspection every few years.  It gives FDA the power to issue mandatory food recalls in the event that a company refuses to recall its unsafe products voluntarily, something that they haven’t been allowed to do in the past.

It’s a difficult task to balance protection of public health with that of small farmers, and we’ll see how well this law does once implemented.  If nothing else, having more FDA personnel on the ground to inspect food facilities should help to avoid future outbreaks. 

The estate tax is another of the issues that Congress took up, this one within the Tax Relief Act. This tax is collected from persons who inherit wealth from someone who has died. The estate tax was repealed for one year starting January 1, 2010 and was set to return in 2011 at the rates set in 2002 - 55% on the largest estates and an exemption for the first $1 million inherited for an individual ($2 million for married couples). 

According to the Journal of Accountancy, the following changes will take effect for the years 2010 to 2012:

The estate tax rate is set at 35% for two years (through 2012) and the estate tax exemption is $5 million (adjusted for inflation after 2011). For estates of decedents dying in 2010, an election will be available either to be subject to the reinstated estate tax or to be subject to the modified carryover basis rule. The election between the reinstated estate tax and the modified carryover basis rule is made by the estate, not the beneficiaries, who would be subject to tax under the carryover basis rule.

Back in September before the estate tax provision was passed, Chuck Hassebrook wrote the following about the estate tax:

Some are pushing for raising the exemption to $10 million for couples ($5 million per spouse) and dropping the tax rate on the largest estates to 35 percent. Others would repeal the tax entirely on farmland. 

Each of these proposals is overly generous to wealthy heirs and puts farmers, ranchers and small business people who must earn their way at a competitive disadvantage. The overwhelming majority of family farms and businesses would be hurt, not helped.

Farming and business are competitive. The heir of a tax-free $10 million estate has a huge advantage in competing for land and business over those who stand to receive modest or no inheritance. The estate tax helps level the playing field between those whose success is based on being born into the right family and those who must earn success through hard work, brains and determination.

Exempting big estates is a move away from the concept at the core of America’s founding – that opportunity should be based on what we do, rather than who we are. America represented a rejection of feudal Europe, where land was tightly held by the wealthy elite through inheritance, and opportunity was scant to those of modest origins.

 So how does this tax provision affect rural communities? Well, from an objective standpoint, it means that if you inherit more than $5 million worth of an estate in 2011, you’ll have to pay a tax at the rate of 35%, and people who inherited that much in 2010 will be able to choose which of two ways they pay. 

It also means that family-sized farms and businesses will be exempt from the tax.

The Center for Rural Affairs values fairness. We have always advocated for a level playing field for rural Americans and against policies that hurt family farms, ranches and businesses. If the estate tax holiday had been extended, it would give a big advantage to those who have inherited land compared to those who did not come from farming families. Likewise, if farmland were exempt from the estate tax, we would see a rush to snatch up land, driving up prices and driving out young or beginning farmers getting started. 

Having more farmers on the land and more families living and working in small towns strengthens our vision for rural America. The estate tax insures that an average-income family can still make a living and share in the prosperity that they helped to create. 

If these last few days of the Congressional session have shown us anything, it’s that compromise and action are still possible in Washington, DC. We hope that trend continues in 2011 and that more policies pass that keep small towns thriving.