FarmPolicy

April 25, 2017

Chairman Peterson Comments on Farm Bill

David Dodds reported earlier this week at the Grand Forks Herald (North Dakota) Online that, “Rep. Collin Peterson, D-Minn., told a roomful of farmers and other interested people Monday that he won’t support an extension of the current farm bill if Congress can’t finalize a new one.”

The article stated that, “‘We got our bill done on time like we said we would, and the Senate is doing what it does best – milling around,’ Peterson said.

“Peterson said he’s hopeful that the Senate will produce a bill in December, and differences with the House could be hammered out quickly in conference committee. He said about 80 percent of the issues could be resolved in January after a scheduled recess, and the rest could be worked out soon after.

“‘We could get this all done in January,’ Peterson said.

“If not, he said, some have brought up the possibility of a two-year extension of the current farm bill. But Peterson said an extension would quash 70 percent of the programs in the new bill that have to do with food stamps and nutrition.”

Later, the Grand Forks Herald article noted that, “At least one attempt by Senate Democrats to spur along a vote has failed. Peterson blamed the delay on Republicans who don’t want to be put in a position to defend a veto by the president.

“Peterson said he likely will have to negotiate directly with the White House to get a bill passed.”

And with respect to the change in leadership at USDA, the article indicated that, “Peterson said Ed Schafer, a good friend and former Republican governor of North Dakota, who is the Bush nominee to be the next secretary of agriculture, most likely will be a nonfactor in the farm bill negotiations. He said rumors are flying that Schafer’s confirmation will be held up until after a farm bill passes.”

The “Washington Insider” section of DTN stated yesterday (link requires subscription) that, “Word has been leaking from Senate Ag Committee staffers this week that the leadership is close to a deal to limit amendments and debate so the farm bill could be brought back on the floor, perhaps as early as next week. However, the future of the bill itself remains far from clear, congressional observers suggest.”

The update noted that, “In appraising the bill’s outlook, a key unknown is the strategy and approach being directed by the White House. The president has threatened to veto either bill now under consideration in the House and the Senate, and his threats have been sufficiently specific that most observers expect that he will follow through on his threat — if a bill is cleared by the Congress.”

“Not only is the situation complex, but it appears to present a dilemma for the White House. If Republicans do not agree to limit debate, they can — and, will — be tagged as anti-farm obstructionists by farm groups that support the committee bill. If they do agree to a deal, the Democrats appear ready and willing to pass a bill the administration is pledged to veto, also an unpopular political move among farm groups,” the DTN update said.

Concluding, the update noted that, “As a result, it seems unlikely that the Senate leadership will be able to agree on new rules of debate as quickly as some are suggesting. As long as the Republican leadership can find reasons to avoid an agreement, or has ‘poison pill’ amendments with some chance of succeeding to make the bill unacceptable to the Senate majority, it is likely to languish in its current limbo.

“Should Senate delays become unacceptably long, the majority will need to consider ways to make the bill at least modestly acceptable to the White House, either on the floor or in the House-Senate conference. And, in such an environment, significant changes in policy could emerge — an eventuality producers should watch and evaluate very carefully as they emerge, Washington Insider believes.”

***

In news regarding nutrition, the federal budget and food prices, Richard Wolf reported earlier this week at the USAToday Online that, “Half a million people could be cut from a nutrition program for low-income young children, pregnant women and recent mothers next year because prices and caseloads have risen since President Bush proposed his 2008 budget in February.

“The threatened cutback, outlined in a report to be issued this week by the liberal Center on Budget and Policy Priorities, is likely unless Congress and the White House agree to boost funding for the Women, Infants and Children (WIC) program.

“Bush has proposed spending $5.4 billion for the program next year, an increase of about $200 million, to serve 8.3 million people. The caseload, though, has increased to 8.5 million since his budget came out in February. Prices for products such as milk and cheese, which account for about 40% of WIC food costs, have soared. Because of that, the report says, the proposed spending level will cover fewer than 8 million people.”

Mr. Wolf added that, “The Department of Agriculture, which oversees the state-run program, has a $200 million contingency fund. But only $83 million remains, Greenstein says, and the report assumes it will be spent.

“Department spokeswoman Jean Daniel says a supplemental appropriation could be sought or clients could enroll in other food programs if the 2008 funds are not enough.

“‘We look at this very carefully on a regular basis so that we’re able to avert just these kinds of situations,’ Daniel says. ‘There are options.’

“The WIC program was created in 1974 to help low-income women and children up to age 5. It provides vouchers for specific nutritious foods, such as milk, cheese, juice, cereal and peanut butter, as well as screenings, referrals and education. While not an entitlement such as food stamps, its popularity among both Democrats and Republicans has ensured increased funding over the years. Eligibility is capped at 185% of the federal poverty level, or $38,200 for a family of four.”

Meanwhile, in a separate issue regarding nutrition, Rob Stein reported in today’s Washington Post on a topic that has been brought up in the 2007 Farm Bill debate: Obesity.

Mr. Stein indicated that, “The obesity epidemic that has been spreading for more than a quarter-century in the United States has leveled off among women and may have hit a plateau for men, as well, federal health officials reported yesterday.

“While the proportion of adults who are obese remains high at more than 30 percent, the rate in 2005 and 2006 was statistically unchanged from the last time government researchers took a national snapshot two years earlier.

“The findings confirm earlier indications that the increase in obesity among women had stalled and suggests that the same trend may have begun among men.

“‘This is encouraging,’ said Cynthia L. Ogden of the National Center for Health Statistics, which released the new data. ‘I think we can say that obesity in women is stabilizing, and I’m optimistic that we may be seeing a leveling off in men, as well.’”

Energy Bill & Biofuels

Congressional Quarterly
reported yesterday that, “House and Senate negotiators are poised to seal a deal on an energy bill that would strengthen fuel economy standards for the first time in three decades.

“The measure also would require billions of gallons of alternative fuels to be incorporated into gasoline over the next 13 years, according to staffers and draft language being circulated.

“The compromise, which is expected to land in the Office of the Legislative Counsel for drafting very soon, reconciles the major differences between separate versions of energy legislation that passed each chamber earlier this year.

“It would require the nation’s fleet of vehicles to meet a 35 miles-per-gallon fuel efficiency standard by 2020 and would mandate 20.5 billion gallons of ethanol and other biofuels to be in use by 2015.”

Steven Mufson reported in today’s Washington Post that, “Congressional negotiators are nearing agreement on the components of an energy bill that would boost fuel efficiency standards for vehicles and require vast increases in the use of biofuels, according to congressional aides and lobbyists.”

The Post article added that, “Efforts to pass energy legislation have been dragging on all year. But there was pressure to complete an agreement by yesterday or today because congressional leaders want to bring the bill to a vote when members return from recess next week, and a few days are needed to hammer out the exact language. Moreover, with oil prices at more than $90 a barrel, many lawmakers feel compelled to take some sort of action on energy.

“The two main and most likely features of the final bill are variations of what the Senate adopted. In addition to the 35 mile-per-gallon target for 2020, the Senate bill ramped up the requirement for gasoline makers to use ethanol and other biofuels, to at least 13 billion gallons by 2012 and 36 billion gallons by 2022.

“There has been one change in the biofuels measure. While the Senate bill required that at least 3 billion gallons of ‘advanced biofuels’ derived from sources other than corn be used starting in 2016, escalating to 21 billion gallons by 2022, new language would require that the first advanced biofuels be used in 2013. That might ease demand for corn, which has soared in price, and recognize that companies are making progress in using new feedstocks in pilot projects.”

In a related article on the issue of new feedstock use for ethanol, Scott Wente and Don Davis reported on Saturday at the In-Forum Online (North Dakota) that, “Yet also this year, the flourishing corn-based ethanol industry slowed down, the result of a flooded marketplace and growing concerns about the environmental impacts of ethanol production.

“Energy leaders say the downturn is a speed bump and they look ahead, proclaiming that Minnesota is on the verge of the next big home-grown energy development, known by the tongue-tangling term ‘cellulosic ethanol.’ On the verge, that is, if ‘verge’ is defined as a decade or more away.

“That is when experts say the country will see commercial production of cellulosic ethanol, which researchers predict could be made with wood, grasses, corn stalks and other plant material, leaving valuable corn kernels for livestock feed. Even garbage can be turned into ethanol.”

The authors noted that, “Cellulosic ethanol is the buzz in renewable energy, with pilot projects under way, and state and federal lawmakers pumping record levels of research funding into the area.

“Until there is large-scale production of cellulosic ethanol, existing and new plants in Minnesota’s corn belt will distill the corn-based ethanol the state helped make famous.

“‘You will continue to see corn and soybeans used for ethanol and biodiesel,’ Gov. Tim Pawlenty said. ‘The promise of cellulosic is still largely a promise.’

“Experts and agriculture political leaders say the next generation ethanol is seven to 15 years away from large scale, money-making production.”

Philip Brasher, writing in today’s Des Moines Register, noted that, “Congressional Democrats are negotiating a new energy bill that would require higher use of ethanol and biodiesel, ensuring a growing market for the two crop-derived fuels.”

Mr. Brasher added that, “Ethanol production is growing so fast that it will soon outstrip the nation’s mandate set in 2005 that requires 7.5 billion gallons of annual biofuel production by 2012. The biodiesel industry is being hammered by soaring soybean oil prices, which exceed the levels that producers can afford to pay, and those producers want a special usage mandate.

“‘We’re pleased with what we’re hearing as far as what the speculation is,’ Jon Doggett, a lobbyist for the National Corn Growers Association, said Wednesday. ‘We’re anxious to see what the final package will look like.’

“House Speaker Nancy Pelosi has said she would like to have a compromise energy bill on the House floor next week. She said the bill would ‘reduce our dependence on foreign fuels and promote energy efficiency.’”

DTN writer Chris Clayton reported yesterday (link requires subscription) that, “While members of Congress do a ‘point-counterpoint’ behind the scenes on potential energy legislation, agriculture finds itself divided as key livestock groups such as the National Cattlemen’s Beef Association find themselves more aligned with ethanol critics than supporters.

“NCBA has felt some heat because the group has raised questions about the expansion of ethanol and the impact on the market of subsidies such as the 51-cent blenders’ tax credit. Such rifts are getting more attention as Congress works to wrap up the energy bill.

“‘We have been called selfish and all kinds of names throughout this process for simply asking questions, which is a little bit frustrating,’ said Jay Truitt, a lobbyist for NCBA. ‘We just didn’t think people needed to keep stomping on the gas pedal to keep this industry going.’”

Doha

Reuters writer Doug Palmer reported yesterday that, “The U.S. Congress could quickly renew ‘fast track’ authority for the White House to finish world trade talks if there is a long-awaited breakthrough in those negotiations, an analyst said on Wednesday.

“Top Brazilian and Indian trade officials have recently complained the White House’s lack of trade promotion authority — also known as fast track trade legislation — was an impediment to finishing the 6-year-old world trade talks.

“That legislation, which expired in June, requires Congress to approve or reject trade agreements without making any changes. Since any trade deal is likely to contain some unpopular provisions, trade promotion authority is considered essential to prevent U.S. lawmakers from picking agreements apart.”

The Reuters article also stated that, “Ed Gresser, director of trade and global markets project at the Progressive Policy Institute, agreed that the White House’s lack of trade promotion authority was not a serious obstacle to countries reaching a world trade deal.

“But whether Congress would actually give President George W. Bush trade promotion authority could depend on the reaction of leading Democratic candidates for president, he said.

“‘If (a Doha breakthrough) happens, it will suddenly burst upon Congress and also upon the presidential candidates,’ who both have been paying little attention to the round, Gresser said.

“If the Democratic nomination race is still hotly contested, leading candidates might be reluctant to support renewing trade promotion authority out of fear of losing votes, he said.”


EU CAP “Health Check”

Reuters writer Jeremy Smith reported earlier this week that, “EU farm ministers gave a fairly warm welcome on Monday to a blueprint for reforming agriculture policy, focusing on ideas for making countries spend more on rural development and planned subsidy ceilings for large farms.

“Last week, EU Agriculture Commissioner Mariann Fischer Boel unveiled her so-called ‘health check’ of the Common Agriculture Policy (CAP), a lavish program that devours 40 percent of the EU budget.

“While the ministers were mostly encouraging in their initial reactions to the paper, several raised concerns about a proposal that would force them to channel increasingly more direct farm subsidies into projects designed for improving the countryside.”

The article noted that, “Discussions on the broad policy document will continue until March, providing the basis for Fischer Boel to draw up formal reform proposals in April or May. These would then be for ministers to negotiate and endorse by the end of 2008.”

Concluding, Mr. Smith pointed out that, “For many observers, the mere talk of health checks echoes language used by Fischer Boel’s predecessor Franz Fischler when he launched ideas for a so-called mid-term review in July 2002.

“That turned into a push for a full-scale policy overhaul, to the deep annoyance of France, by far the largest beneficiary of EU farm cash. CAP funding now amounts to around 44 billion euros ($65.4 billion) a year.

“‘While the health check is not a fundamental reform, it is nevertheless more than fine-tuning,’ Fischer Boel told the ministers, adding that she was ‘not rethinking the principles of the 2003 CAP reform.’”

Keith Good

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