FarmPolicy

February 20, 2020

Farm Bill: Budget Concerns Persist

Categories: Budget /Ethanol /Farm Bill

I. Budget Concerns
II. Johanns Speech
III. Farm Bill Issues

I. Budget Concerns

Jerry Perkins reported in today’s Des Moines Register that, “High commodity prices will give authors of the next farm bill their stiffest challenge, the chairman of the House Agriculture Committee said Wednesday at the National Ethanol Conference.

“U.S. Rep. Collin Peterson, D-Minn., told the 2,000 attendees at the ethanol conference that projected spending in the 2007 farm bill would be about 45 percent less because of Congressional Budget Office projections for high corn, soybean and other crop prices.

“Those projections will guide how much money will be available for the next five-year farm bill.”

Mr. Perkins added that, “If crop prices are as high as projected, the cut in spending will amount to about $6 billion a year for 10 years, Peterson said in an interview after his speech.

“That makes it imperative to keep the so-called ‘safety net’ contained in the 2002 farm law as part of the next farm bill, Peterson said.

“The Bush administration’s farm bill proposal would cost taxpayers about $2 billion a year less than the current farm law, mainly because of the expected increase in crop prices. Spending on conservation programs would grow by $7.8 billion.

“Peterson said he wants to increase conservation spending and put up to $6 billion a year into research for renewable fuels, primarily cellulosic ethanol made from corn leaves and other plants.”

***

Forrest Laws, writing earlier this week at the Delta Farm Press webpage, reported that, “Years ago, I was covering a meeting in Greenwood or Greenville or Grenada or somewhere else in Mississippi when a farmer made a comment that struck me as funny.

“‘We don’t want people to understand too much about the farm bill,’ said the grower, who shall remain nameless to protect him from ribbing by his peers. ‘If they did, they probably would be upset.’

“I thought about his words while reading a press release, which the Sustainable Agriculture Coalition’s Ferd Hoefner wrote after Agriculture Secretary Mike Johanns outlined the Bush administration’s agricultural spending proposals for fiscal 2008.

“Hoefner, who has emerged as a spokesman for conservation and environmental groups on the next farm bill, was pointing out inconsistencies between the budget plan and the farm bill proposals Johanns announced on Jan. 31.

“He was asking if the increases in conservation programs contained in the farm bill proposals announced by Johanns would supersede the cuts in those same programs included in the administration’s budget plan. ‘Otherwise, instead of an increase in the budgets for working land conservation programs, the administration would actually be endorsing major cuts.’

“(In his comments on Jan. 31, the secretary proposed increasing funding for the Conservation Security Program and the Environmental Quality Incentives Program by a combined $475 million annually. The administration budget, meanwhile, proposes to cut $160 million from CSP and $270 million from EQIP.)”

II. Johanns Speech

Yesterday, U.S. Secretary of Agriculture Mike Johanns addressed the Washington International Trade Association in Washington, D.C.

According to a transcript of his remarks, Secretary Johanns noted that, “Now, I will tell you, we have been very pleased by the generally positive reaction our proposals have received so far, especially from Congress and members of the public. But I would have to say the international response is difficult to explain. Other countries seem to be underestimating the far-reaching nature of the reforms that we are putting forward. [Note: For more on the international response click here and here]

“In fact, we are recommending several very significant reforms to our current system of support payments for the commodity crops. We propose revising our marketing assistance loans to reduce what some have criticized as the market-distorting effects of the current loan program.”

Later, Sec. Johanns stated that, “This Administration is committed to supporting agriculture while continuing to reform policies that are no longer compatible with a competitive global marketplace. We believe both our conservation and direct payment programs will qualify for green box — or most favorable treatment — by the WTO in its system of categorizing agricultural support payments.”

After his prepared comments, Sec. Johanns took questions from the audience. In response to one of these questions, Sec. Johanns stated that, “I find it always so very, very interesting when the EU talks about domestic support, because they are the A-number-one champion in terms of the amount of money that they pour into agriculture that is trade-distorting, well beyond where we are at or any other country in the world.”

(The Secretary was apparently not referring to per capita farm payments).

III. Farm Bill Issues

Harry Cline, writing on Tuesday at the Western Farm Press webpage, provided more detail and perspective regarding the administration’s proposals that impact specialty crop producers.

Specifically, Mr. Cline reported that, “Modesto, Calif., was the last place Secretary of Agriculture Mike Johanns expected a standing-room-only crowd for the Bush administration’s traveling road show farm bill proposal unveiling.

“It was not the traditional cotton, rice, corn and wheat growers packing Harvest Hall at the Stanislaus County Ag Center. It was producers of almonds, grapes, walnuts, pistachios, citrus, strawberries, peaches, plums, nectarines and cherries hanging on every word the Midwest-raised secretary of agriculture had to say about the administration’s version of what it wants in a 2007 Farm Bill.

“It will be Congress who decides what the federal government’s farm policy will look like; however, for the first time in history specialty crops are a major part of an administration farm bill proposal.

“‘Never before have specialty crops had this kind of place in a farm bill in the history of farm bills dating back to the 1920s on the edge of Depression,’ said Johanns.

“Specialty crops were specifically earmarked for nearly $5 billion in spending in the proposed farm bill. However, the conservation and bio-energy titles of the proposal could have even greater positive impact on California and Arizona, well beyond the specific specialty crops provision.

“Overall, what Johanns detailed to producers and others in the heart of California’s San Joaquin Valley could impact Western agriculture, as no other farm bill has.”

Dave Russell of Brownfield reported yesterday that, “For the past two years, an Agriculture and Wildlife Working Group, a coalition made up of 16 hunting, fishing and conservation organizations have been at work putting together priorities and recommendations for the 2007 Farm Bill. Their report ‘Growing Conservation in the Farm Bill’ was released on Wednesday, February 21.

“During a telephone conference with reporters, Dave Nomsen with Pheasants Forever said that among the recommendations is reauthorization of the Conservation Reserve Program. ‘We feel it should be reauthorized, it should continue as the USDA’s flag ship conservation program and that it should authorized at a 45 million acre level,’ said Nomsen.

“And even with the growing biofuels industry, the group believes enrolling 45 million acres is possible. Julie Sibbing with the National Wildlife Federation pointed out that the working group’s joint policy statement says that they do not envision the use of any conservation lands at this time to grow biofuels. ‘We are also saying that biofuels can happen independent of CRP and does not have to happen on CRP at this time,’ Sibbing said.”

To listen to a Brownfield audio segment of the announcement of the new Farm Bill report, just click here (MP3- 13 minutes).

Meanwhile with respect to potential conflict over conservation and increased production, Tony Dean reported in yesterday’s Argus Leader (South Dakota) that, “The Bush Administration and the push for ethanol have teamed up to tank the Conservation Reserve Program (CRP) – at least for now – endangering a $153 million South Dakota industry.

“Conservation groups will put on their war paint in an effort to save the program which supports pheasants, ducks and countless other ground nesting birds. But the good guys could have an ace to play. Agriculture Secretary Mike Johanns dropped the bomb last week when he announced there would be no CRP sign-ups this year, which could mean as many as 3 million acres of wildlife habitat lost this year.

“Conservation groups agree Johann’s announcement could sound a death knell to wildlife, especially pheasants, and they are fighting mad about the decision.

“However, they need an ally, a strong one, one with a crack lobbying force to turn things around. That ally exists, if they will join the fray.

“The National Rifle Association is one of the most powerful groups in America, and they have a unique opportunity to serve America’s hunters if they’ll turn loose their troops to lobby the Congress and administration to save CRP.”

In a separate report discussing the potential of other sources of ethanol besides corn, Christie Smythe noted in yesterday’s Arizona Daily Star that, “As nationwide demand surges for ethanol, producers of the fuel are increasingly looking beyond corn for main ingredients.

“But much-touted alternatives, such as switchgrass and woodchips, are a long way from becoming the norm in ethanol production, according to speakers at industry panels held today at the JW Marriott Starr Pass Resort & Spa.

“Although ethanol can be produced from virtually any plant substance, more intensive chemical processes are required to make the fuel from fibrous materials like grass or wood than from starch materials like corn or sugar cane, according to conference speakers. Those processes have yet to become efficient, they said.”

The article indicated that, “Farmers are also a long way from being able to grow switchgrass or other so-called ‘energy crops’ en masse, said U.S. Rep. Collin Peterson, D-MN, chairman of the House Committee on Agriculture.

“‘There’s just a lot of issues with not only how do you grow these crops, but how do you get them into the system in an efficient way,’ Peterson said to a crowd at the resort. Peterson said the House Agriculture Committee hopes to include provisions for encouraging research into cellulosic ethanol production in the coming Farm Bill.”

And Bill Hord reported in today’s Omaha World-Herald that, “Nebraska hog farmers meeting here Wednesday adopted two resolutions urging research into the feeding of biofuel byproducts to hogs.

“Demand by the nation’s ethanol plants has reduced the nation’s surplus of corn and driven the price past $3.75 a bushel, compared with about $1.90 last year. The higher corn prices mean pork producers’ long run of profitable years is coming to an end.

“Distillers grain, a byproduct of ethanol production, is widely used to feed cattle, but not hogs.

“‘Beef can use 30 percent or greater dry distillers grain in their diets. Pork producers are still at 10 percent,’ said Larry Sitzman, executive director of the Nebraska Pork Producers.

“Sitzman said the U.S. Department of Agriculture has proposed $16 million in biofuels research in the next farm bill. ‘Right now, we need research into DDGs (dry distillers grains),’ he said.”

***

Yesterday’s DTN installment in their ongoing Farm Bill Lobbyists series focused on Bread for the World.

The DTN article reported that, “Most of the group’s work on previous farm bills has focused on the nutrition title, in particular the food-stamp program. This eighth installment of our series on farm bill lobbyists looks at Bread for the World’s plans for the 2007 farm bill debate.

“About 25 million people each month receive food stamps, [Jim McDonald, a Presbyterian minister from the Midwest who directs public policy for the anti-hunger, faith-based Bread for the World Institute] said, and some 40 percent of them are working poor. As a result of the group’s lobbying efforts during the past five to 10 years, there have been improvements in the program, including a reduction in waste, fraud and abuse.

“‘This year on the farm bill, we think that we need to take a broader approach to look at farm policy and actually connect farm policy to rural policy,’ he said. ‘We would almost call it the farm and rural development bill, if we could name it.’

“McDonald said the current subsidies in the commodity payments program are creating problems in rural areas both in the U.S. and internationally, putting poor farmers at a competitive disadvantage to larger producers.

“While Bread for the World has offered few policy specifics for the farm bill, McDonald said he and other lobbyists, including Oxfam America, are having discussions with other anti-hunger groups as well as conservation and rural-development groups.

“‘This is really a major piece of legislation,’ he said. ‘It really does shape our policies. Whether you live in an urban area or a suburban area, actually we’re all affected by the farm bill. Part of what we’re trying to do is to help people to recognize the importance of this bill and to think in new ways about how it could be strengthened and maybe improved to really serve the needs of people in rural areas.’

“There is a possibility that the overall budget directed to farm programs could be cut, as federal lawmakers look for ways to cut the national deficit.”

-Keith Good

Comments are closed.