FarmPolicy

February 22, 2020

EU Commissioner Mariann Fischer Boel Wraps Up Washington Visit

Categories: Doha / Trade /EU /Farm Bill

EU Commissioner for Agriculture and Rural Development Mariann Fischer Boel was in Washington, D.C. last week where she met with a variety of U.S. officials and discussed U.S. farm policy and the Doha Round of W.T.O. trade talks.

Commissioner Fischer Boel also delivered a speech on Friday (“EU Agriculture in a Globalised World”) at an event hosted by the Carnegie Endowment for International Peace.

For additional details on the Commissioner’s visit, see this update, which has been posted at the German Marshall Fund’s Trade & Development webpage.

-Keith

Farm Bill Proposals: Sugar

Categories: Ethanol /Farm Bill

I. Farm Bill
II. Renewable Energy

I. Farm Bill

Bill Tomson, writing in today’s Wall Street Journal, reported that, “Sugar farmers could see their shares of the U.S. market cut back to make way for imports if the Bush administration gets its way, a move that has riled farmers and some U.S. lawmakers.

“The Agriculture Department, in preparing for the possibility of large influxes of sugar from Mexico, wants the ability to curtail domestic production by modifying its complex price-support system.

“‘In essence, what they’re saying is ‘Give us the authority to tell U.S. producers to grow less so that we can import more,’’ said Phillip Hayes, spokesman for the American Sugar Alliance.”

“Harvested wheat is loaded onto a truck near Neche, N.D. The farm bill currently under consideration has received accolades and criticism from some surprising quarters.” (Picture and quote from today’s Christian Science Monitor).

The Journal article explained that, “For years, the government has maintained tight control of imports with a tariff-rate quota program that assigns amounts of the sweetener that foreign countries are allowed to supply to the U.S. Beginning next year, the U.S. will completely open its border to Mexican sugar, and USDA officials said they want to avoid having to buy up any surpluses on the market. Reducing domestic producers’ share of the U.S. market was the method they chose.

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World Agricultural Supply and Demand Estimates

Categories: Farm Bill

I. W.A.S.D.E.
II. Farm Bill Editorials

I. W.A.S.D.E.

Yesterday, the World Agricultural Outlook Board released their latest World Agricultural Supply and Demand Estimates (W.A.S.D.E.) report.

With respect to coarse grains, the report noted that, “U.S. supply, use, and stocks projections for 2006/07 corn, barley, and oats are unchanged this month. Corn exports are unchanged this month despite stronger competition from South America supplies as Mexico corn imports are increased,” and the report added that the corn season-average farm price is unchanged this month at $3.00 to $3.40 per bushel.

The W.A.S.D.E. report stated that, “Global 2006/07 coarse grain production is raised 4.8 million tons this month on improved prospects for corn crops in South America. Corn production for Argentina is raised 2 million tons to 21 million. Brazil corn production is raised 4 million tons to 46 million. Both increases are based on good growing season weather as reflected in recent area and yield indications. Supportive weather and higher prices also favor increased area for second-crop corn in Brazil.”

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EU Commissioner Mariann Fischer Boel in Washington

I. EU Commissioner Mariann Fischer Boel in Washington- Trade Issues
II. Biofuels

I. EU Commissioner Mariann Fischer Boel in Washington- Trade Issues

The Associated Press reported yesterday that, “The European Union agriculture commissioner discussed with lawmakers Thursday proposals to trim U.S. farm subsidies and prospects for a fresh round of global trade talks.

“Mariann Fischer Boel met with members of the agriculture committees in the Senate and the House of Representatives ahead of talks Friday with U.S. Trade Representative Susan Schwab.”

EU Commissioner for Agriculture and Rural Development- Mariann Fischer Boel- is in Washington, D.C. this week discussing the 2007 Farm Bill and other issues.

The A.P. story indicated that, “Fischer Boel asked about the proposed U.S. farm bill and whether she expects Congress to extend special ‘fast-track’ trade promotion authority for President George W. Bush, according to her spokesman Michael Mann.”

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Doha Talks Moving

Categories: Doha / Trade /EU

Additional news regarding the Doha round of W.T.O. trade talks is now available at the German Marshall Fund’s Trade & Development webpage. For complete details, just click here.

-Keith

A Conversation with U.S. Representative Adrian Smith (R-NE, 3rd)

I. Conversation With Congressman Adrian Smith
II. Johanns Before Senate Ag Committee
III. Farm Bill, Trade Issues, Ethanol

I. Conversation With Congressman Adrian Smith

Yesterday afternoon I spoke with U.S. Rep. Adrian Smith of Nebraska. We covered a variety of issues with respect to U.S. farm policy and the 2007 Farm Bill, including trade, the budget, renewable energy and payment limits.

The theme of my interview focused on how high market prices are impacting the agricultural debate in 2007.

Congressman Smith serves on the House Agriculture Committee, as well as the House Budget Committee and represents one of the largest agricultural districts in the country.

In the U.S., his district ranks first in the value of sales of grains and oilseeds, second in total value of agricultural product sold, and first in cattle and calve inventory. In 2005, Nebraska’s third district was the largest recipient of federal farm subsidy payments.

To listen to our conversation, which lasts about 8 and half minutes, just click on this Ag Policy Soup webpage. Ag Policy Soup is the podcast home of FarmPolicy.com.

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Focus on Renewable Energy

I. Ethanol
II. Farm Bill

I. Ethanol

Jonathan Fahey, writing in the February 12 edition of Forbes magazine, reported that, “This is what moonshine does to people. Ethanol was making investors giddy last year when oil prices were high, corn prices were low and ethanol producers like Archer Daniels Midland and small farmer cooperatives were reaping huge profits distilling corn mash into fuel.

“It created a corn rush. Money from Wall Street to Australia started pouring into ethanol distillery construction all over the U.S. heartland. Seventy-five distilleries are under construction, on top of the 111 now operating. ‘Everybody thought they could become the new Saudi oil barons of Champaign, Illinois,’ says Daniel Basse, president of AgResource, a Chicago agricultural research and forecasting outfit.

“Instead ethanol makers may be headed for the soup kitchen. Amid the frenzy, corn prices spiked, ethanol prices collapsed and yet more ethanol supply is coming online. Basse predicts the ethanol makers that were coining money last year are on track to start losing money by the end of this year.”

Forbes Magazine recently noted that the spread between the price of corn and the price of ethanol has been in sharp decline. According to this Forbes graphic, “The fat margin between the cost of corn and the price of ethanol has thinned out. Bad for the industry.”

However, Mr. Fahey hastened to add that, “Unless, of course, the industry gets yet another boost from the federal government, a distinct possibility. Ethanol has achieved hallowed status in the battle to reduce the U.S.’ dependence on imported oil (not to mention the battle for votes in Iowa). The federal government already supports ethanol with a tax subsidy equivalent to 51 cents per gallon of ethanol. That comes to $3 billion a year. Also helping the business are environmental mandates (depending on where it is sold, some gasoline must contain up to 10% ethanol as an antismog measure) and energy independence mandates (national use of ethanol must meet certain minimums by various deadlines).”

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Agriculture Budget Proposed

Categories: Budget /Ethanol /Farm Bill

I. Bush Administration’s Budget Proposals
A. Background
B. Technical Detail
C. News Coverage
II. “The Price of Corn”

I. Bush Administration’s Budget Proposals
A. Background

David Rogers, writing in today’s Wall Street Journal, reported that, “Faced for the first time with a Democratic majority in Congress, President Bush put a little of everything in his 2008 budget: high spending, assumptions that the government will collect still-higher revenues, and the promise of a modest surplus in five years, even if his tax cuts remain intact.

“But no amount of optimism is expected to head off what is likely to be a continuing series of conflicts in coming months between the White House and lawmakers on priorities ranging from urban housing to farm subsidies and defense spending to investments in child health care and education.”

Mr. Rogers noted that, “Agriculture spending will be another source of conflict. As part of the farm-bill debate this year, the administration is seeking greater investments in renewable fuel, but farm-state lawmakers complain that the budget doesn’t provide adequate resources. Senate Agriculture Committee Chairman Tom Harkin (D., Iowa) said yesterday that while the administration’s farm plan has ‘solid suggestions,’ the budget figures ‘would deny the necessary funding to reach critical objectives in energy, conservation and rural-economic-development initiatives.’ The proposed budget also cuts $360 million in 2008 from two conservation programs that have been a priority for the chairman.”

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Doha Developments

Categories: Doha / Trade

Additional news regarding the Doha round of W.T.O. trade talks is now available at the German Marshall Fund’s Trade & Development webpage. For complete details, just click here.

-Keith

Focus on the U.S. Agricultural Economy

I. Farm Bill Proposal Reaction
II. Agricultural Economy

I. Farm Bill Proposal Reaction

Reaction to the Bush administration’s 2007 Farm Bill proposal continues to percolate.

Alan Beattie reported in today’s Financial Times that, “After a few days’ reflection, the conclusion seems to be that the bill went in a constructive direction but took only a few steps. It also most probably went only part way to achieving one of the aims of Mike Johanns, agriculture secretary – to make American farm subsidies immune to fresh litigation at the World Trade Organisation.

“The administration heralded the proposed bill as one that directed subsidies away from the traditional ‘commodity group’ recipients including rice, corn, cotton and wheat and towards conservation and rural development programmes. But as far as Doha was concerned, as one experienced agricultural policymaker in Washington put it: ‘There is less to this than meets the eye’”.

“The headline totals were compatible with, but did not go beyond, the cut in annual allowable trade-distorting farm subsidies from around $22bn to around $17bn (€13bn, £8.6bn) that the Bush administration has already informally offered in the Doha round.”

Corn Planting

N.A.S.S. Will Release Corn Planting Projections in March

Angela Hall, writing on Saturday at the Leader-Post Online (Canada), reported that, “A proposal for the 2007 United States farm bill promises less of the price-based subsidies that are seen as trade-distorting but it’s not enough to create a level playing field for Canadian producers, say some agriculture groups and analysts.”

The article added that, “Canadian Agriculture Minister Chuck Strahl has also indicated this week’s U.S. farm bill proposals are going in the right direction but don’t go far enough.”

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U.S.D.A. Proposal- More International Feed Back

I. U.S.D.A. Proposal- More International Feed Back
II. U.S.D.A. Continues to “Report Back” to Producers
III. Budget Issues

I. U.S.D.A. Proposal- More International Feed Back

Geoff Elliott, writing in today’s edition of The Australian, reported that, “Collin Peterson unwraps his burger. ‘Do you mind? It’s the only chance I’ve got to have lunch.’ It’s after 3pm and Peterson, 62, is in his office in the US Congress and while he’s clearly busy it doesn’t suit a man who prefers the pace of rural life in western Minnesota. His broad frame, weather-lined face and a voice slow and resonating belies that.”

Secretary Johanns discussing the Bush administration’s 2007 Farm Bill proposal yesterday at the Cattle Industry Annual Convention in Nashville (Photo by Chuck Zimmerman of AgWired.com).

Mr. Elliott continued, noting that, “But the Democrats’ electoral success in November ensured the party took back both houses at the start of this year and Peterson’s position as one of his party’s leading policy advocates on agriculture has allowed him to take the reins of the House of Representatives agricultural committee as chairman.

“And for Australian farmers that’s bad news. This is not a bloke who speaks the language of trade liberalisation and farm subsidy cuts – he says the US is tired of leading the globalisation push and he wants to protect American farmers from unfair competition.”

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Cool International Reception to U.S.D.A.’s Latest Farm Policy Proposals

Categories: Doha / Trade /EU /Farm Bill

Greg Hitt reported in yesterday’s Wall Street Journal that, “The Bush administration proposed to make U.S. farm programs more market-oriented, unveiling a package of changes that could give new momentum to the stalled Doha Round of global trade talks, but may face big hurdles on Capitol Hill.”

Mr. Hitt stated that, “U.S. Trade Representative Susan Schwab said ‘the Doha Round is not going to write the farm bill.’ Ms. Schwab, who has been shuttling around Europe trying to revive the talks, said the changes outlined yesterday should send ‘a signal to our trading partners that we care about farm reforms.’”

After unveiling the administration’s 2007 Farm Bill proposals on Wednesday, Secretary Johanns has been “reporting back” to producers on how the executive branch hopes to change some aspects of U.S. farm policy.

Also yesterday, Washington Post writers Dan Morgan and Gilbert M. Gaul reported that, “Debate on the new legislation comes at a time of major changes in agriculture. Booming demand from new ethanol plants has pushed corn prices to near-record levels. At the same time, U.S. trade partners are threatening retaliation unless the United States curbs crop subsidies that are said to promote overproduction here and low prices for farmers abroad.”

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D.D.A. Post Davos

Categories: Doha / Trade /EU

Additional news regarding the Doha round of W.T.O. trade talks has been posted at the German Marshall Fund’s Trade & Development webpage, for complete details, just click here.

-Keith

Reaction To U.S.D.A.’s Farm Bill Proposal

Categories: Farm Bill

To listen to an audio summary of the Administration’s Farm Bill proposals, which includes analysis from Mary Kay Thatcher of the American Farm Bureau Federation, and Scott Faber of Environmental Defense, see this Ag Policy Soup segment from yesterday. The presentation lasts about 10 minutes.

Yesterday, U.S. Secretary of Agriculture Mike Johanns presented the Bush administration’s 2007 Farm Bill proposals. For complete details on the presentation and changes that the executive branch will be working towards, see this U.S.D.A. webpage.

Martha Angle, writing in yesterday’s Congressional Quarterly Midday Email, provided this summary of some of the points contained in the new plan, “The Bush administration today unveiled its $87 billion farm bill proposal, which would bar wealthy agribusiness operations from getting farm subsidies.

“Farming operations that make more than $200,000 in adjusted gross income a year would not be eligible for subsidies under the proposal, said Agriculture Secretary Mike Johanns. The plan could save the government $1.5 billion over the next 10 years.

“Currently, farming operations that bring in less than $2.5 million in adjusted gross income can receive payments. The new rules would exclude about 80,000 farms.

“Saving money is a major theme of USDA’s proposal for reauthorization of the 2002 farm law. Overall, the administration says its measure would save $10 billion compared with the $98 billion spent under the 2002 law.

“Johanns said USDA also wants to make the next farm bill more equitable and move toward compliance with international trade rules. ‘These proposals will distribute resources more equitably,’ he said. ‘They are better able to withstand challenge, and these proposals transition toward market-based programs.’”

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