FarmPolicy

April 24, 2019

Farm Bill Negotiations Continue; Doha

David Rogers, writing on Monday evening at Politico.com, reported that, “Invoking Speaker Nancy Pelosi by name, House farm bill negotiators Monday all but ruled out any chance of accepting a $2.5 billion package of agriculture-related tax cuts senators want to grease the way for final passage.

“House Ways and Means Committee Charles Rangel (D-N.Y.) carried the message to a meeting with Senate negotiators, and House Agriculture Committee Chairman Collin Peterson (D-Minn.) underscored the point again later after conferring with Pelosi.

“‘We’re doing what we can, the speaker’s engaged,’ Peterson said. ‘But she’s pretty hard over that there aren’t going to be any tax cuts in this bill. I don’t think the Senate has figured that out yet.’”

Mr. Rogers added that, “Rangel said later that that House Minority Leader John Boehner (R-Ohio) shared Pelosi’s position, and he saw no reason to hide the fact from senators. ‘Why waste a couple of days talking about something?’ Rangel asked.

“But the New York Democrat said he was fully prepared to do what he could to facilitate the remainder of the farm bill, including coming up with additional revenues to offset new disaster aid, a second priority for Senate Finance Committee Chairman Max Baucus (D-Mont).”

DTN Political Correspondent Jerry Hagstrom reported Tuesday morning (link requires subscription) that, “House and Senate farm bill conferees formally agreed on a core bill that would include a $4 billion disaster aid package late Monday and House Ways and Means Committee Chairman Charles Rangel, D-N.Y., agreed to find offsets to pay for the disaster aid and the rest of the $10 billion the conferees want to spend over 10 years above the $597 billion farm bill baseline.

“But Rangel also said he does not have authority from House Speaker Nancy Pelosi, D-N.Y., to raise taxes to offset an additional $2.5 billion in agricultural tax breaks that are included in the Senate-passed bill.”

The DTN article added that, “Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, who chairs the conference, said lawmakers would reconvene at 9:30 a.m. Tuesday and continue in marathon sessions until the bill is finished. House Agriculture Chairman Collin Peterson, D-Minn., said he would participate in those conferences, but warned Harkin that until the exact offsets are agreed to, it will be difficult to get conferees to finalize titles of the bill. An extension of the 2002 farm bill expires Friday, and Congress is under pressure to come close to finalizing the bill by the middle of the week so congressional leaders and President Bush will agree to a short-term extension to finish the bill.”

Also Tuesday, a Reuters news item (posted at DTN, link requires subscription) reported that, “There will be no long-term extension of the 2002 farm law despite White House backing, said the chairmen of the House and Senate Agriculture committees on Tuesday, three days before the deadline to agree on a new law.

“Progress on the new law has been slowed by disputes over how to pay for a $10 billion spending increase and whether to keep or drop a $2.5 billion agricultural tax package. Leaders of the House and Senate tax committees met separately on the issues.

“The White House says if Congress cannot agree on a new farm law by Friday, it should extend the outmoded 2002 law for at least one year. The No. 2 Agriculture Department official says there could be a veto of the new law if it raises taxes.”

The Reuters article noted that, “‘There isn’t going to be a long-term extension. I’m against it,’ said Collin Peterson, Minnesota Democrat, the House Agriculture chairman. ‘That is not an acceptable outcome.’

“His Senate counterpart, Democrat Tom Harkin of Iowa, also opposed a long-term extension – ‘I agree with you, Mr. Chairman.’ But he said an extension of a few days will be needed to finish work.”

“Negotiators spent more than an hour in discussing the tax package. Senators insisted they needed some, if not all, of the tax items and representatives said there was no room for a tax increase,” the Reuters article said.

A complete replay of Tuesday’s Conference gathering, which lasted about 90 minutes, can be viewed here.

A FarmPolicy.com audio podcast summary of some of Tuesday’s Farm Bill activity, including portions of the Senate-House Conference Committee meeting, is available here (MP3-10:24).

The audio recap (MP3) includes comments from Rep. Jerry Moran (R-Kansas) (comments made on the AgriTalk Radio program), Sen. Charles Grassley (R-Iowa) (comments made at a press briefing with reporters), House Agriculture Committee Chairman Collin Peterson (D-Minn.), House Agriculture Committee Ranking Member Bob Goodlatte (R-Virginia) and Sen. Kent Conrad (D-N.D.)

Peter Shinn reported Tuesday at Brownfield that, “Options are narrowing for lawmakers as they get down to the final days before the current extension of the 2002 farm bill expires before April 18th. The time crunch raises pressure on the tax writers charged with working out a deal to fund the new farm bill, and raises the specter of a new farm law that won’t spend more money than authorized by last year’s Congressional Budget Office (CBO) baseline for farm programs.

“During the third official meeting of the House-Senate Farm Bill Conference Tuesday morning, House Ways and Means Committee Chairman Charlie Rangel of Harlem and Senate Finance Committee Chairman Max Baucus of Montana agreed to meet later in the day, first with each other, then with their respective committees’ ranking Republican members. The goal remains the same as it has been for months, to resolve the continuing conflict over how to fund the next farm bill.

“The current stumbling block appears to be a $2.5 billion package of ag related tax cuts included in the Senate version of the farm bill. And during the House-Senate Farm Bill Conference Committee meeting Tuesday morning, passions on those tax provisions ran high. Senate Finance Committee ranking Republican Chuck Grassley has championed the tax cuts and argued they clearly belong in the farm bill.”

And Congressional Quarterly reported Tuesday that, “With the House out of session Friday, the day the existing law lapses, negotiators will have to decide Wednesday whether they can reach agreement on a new five-year bill or should seek another extension.

“Conferees say they need only a little more time to hammer out a deal for President Bush’s signature, but major disputes over funding for the package remain to be resolved by leaders of the House Ways and Means Committee and Senate Finance Committee.

“It’s likely that negotiators will meet into the weekend, Harkin said.

“If staff members from the two chambers cannot work out differences on various sections between now and then, Harkin said conferees will vote on each unresolved provision.”

Amanda Paulson reported in Tuesday at The Christian Science Monitor Online that, “‘The single most important thing that hungry Americans and food banks need right now is a farm bill,’ says Maura Daly, vice president of government relations for America’s Second Harvest. Describing a ‘perfect storm’ of spikes in food prices, decreasing food donations, and skyrocketing energy and health care costs, she says a simple extension of the 2002 bill would be unacceptable.

“The Senate and House actually agree on a lot. Each has passed a farm bill that increases support for conservation, food programs, and ‘specialty crops’ like fruits and vegetables, while leaving the central commodities portion largely unchanged, sticking with the same system of subsidies and payments to farmers despite an unusually strong call for major reforms this time around.

“The bigger issue is not what’s in the bill but how to pay for it. Pay-as-you-go rules mean that Congress has to find offsets for any additional spending it wants – over the $280 billion ‘baseline’ projected if current policies continued.”

The Monitor article noted that, “In addition, a few programs have become points of contention: The Senate wants $2.5 billion in tax credits for things like biofuels, conservation, and depreciation in the value of racehorses – an add-on that the House is balking at. The House proposed a bill that would include about $6 billion in new funding, but left off a $4 billion permanent disaster program that Sen. Max Baucus (D) of Montana, chair of the Finance Committee, has said is nonnegotiable.”

Chris Clayton noted on Tuesday at the DTN Ag Policy Blog that, “As the farm bill approaches April 18, there also are grumblings that the White House also might not support another short-term extension. This needs to get out in the open quickly because lawmakers in both parties, in both chambers, have acknowledged the bill isn’t going to be done by Friday, but there could be agreement on the major issues. It would just come down to getting staff to prepare the bills and move them through final debate. That could occur as early as next week.

“For those of you who think the bill is taking too long, remember in 2002 the farm-bill conferees came to official terms with each other on April 25. The bill was not voted out of Congress until the first week of May.”

And a Senate Agriculture Committee press release from Tuesday stated that, “Senator Tom Harkin (D-IA), Chairman of the Senate Committee on Agriculture, Nutrition and Forestry and the Senate-House conference committee on the farm bill, today announced that the committee had approved three major titles of the bill: credit, research and trade. Staff for committee members continues to work through a few remaining issues in each title, which are expected to be resolved.

“‘The farm bill conference committee continues to work toward completion of this farm bill,’ said Harkin. ‘The adoption of these three titles moves toward our overall goal of passing a strong, national bill. These are critical investments that will bring funding and good policy for agriculture research, international food aid and support for beginning farmers to meet needs in agriculture and the changing economy.’”

Meanwhile, Carolyn Lochhead reported in Tuesday’s San Francisco Chronicle that, “Congress is currently negotiating a new $286 billion farm bill that would largely continue about $5 billion a year in automatic payments sent to grain farmers based on their growing history, regardless of market prices. Negotiators are trying to raise spending as much as $10 billion for the farm bill to preserve those payments. One idea under consideration is to raise $6 billion by requiring stockbrokers to report their customers’ cost-basis in stocks that they sell, although some lawmakers want to use that revenue for other things, such as aid to homeowners.”

Ms. Lochhead also noted that the Environmental Working Group released additional information regarding federal farm payments on Monday, complete details regarding this new data are available here.

And Greg Hitt reported in today’s Wall Street Journal that, “House Speaker Nancy Pelosi is clashing with the Senate over a proposal to add $2.5 billion in tax breaks to a big farm bill nearing completion on Capitol Hill.

“The proposal includes provisions encouraging investment in biofuels and wind energy, help for retired and disabled farmers, and a faster tax write-off for owners of race horses, among other things. It has backing from Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and Iowa Sen. Charles Grassley, the senior Republican on the committee.

“Rather than add tax cuts, Rep. Pelosi is insisting instead that the bill steer more money to food assistance for the poor. In a recent closed-door meeting with Sen. Baucus, she said she couldn’t be ‘responsible for taking food from babies,’ according to people familiar with the exchange. In the meeting, Sen. Baucus reminded Rep. Pelosi that the Senate already is supporting big increases in nutrition assistance.”

Mr. Hitt explained that, “A spokeswoman for Sen. Baucus defended the proposed tax breaks, saying they are ‘important to America’s farming families, important for our country’s energy future, important for conservation and important to passage of the farm bill.’

“Rep. Pelosi, a California Democrat, says the $2.5 billion the Senate wants to devote to tax cuts could be put to better use, such as nutrition. She says tax cuts are hard to justify as part of the farm bill, especially with farm income growing because of high commodity prices. A Pelosi spokesman said the Senate’s insistence on tax cuts ‘will make it more difficult to come to agreement.’”

The Journal article also noted that, “Farther down the road, more conflict looms with the White House, which has so far been on the sidelines of the farm debate.”

Doha

The Associated Press reported on Tuesday that, “Trade officials are hoping for a breakthrough meeting on the Doha round of global commerce talks next month, while admitting that the timetable for reaching a deal this year is tight.

“Ministers have penciled the week of May 19-23 into their agendas for high-level talks at the headquarters of the World Trade Organization in Geneva, according to several trade official contacted Tuesday by The Associated Press. They spoke on condition of anonymity because no dates have been officially confirmed.”

The AP article added that, “But Crawford Falconer, who chairs the WTO’s farm talks, cautioned Tuesday that new differences had emerged among a key group of countries. The U.S., the EU, Australia, Brazil, Canada and Japan were supposed to present a joint proposal on cuts to agricultural tariffs to the rest of the membership this week.

“‘There’s obviously a disagreement about what it was they thought they had agreed to among themselves,’ Falconer told reporters after suspending the meeting until Friday.”

The article added that, “Concerns about the rising cost of staple foods around the world have also begun to creep into the talks, affecting the carefully balanced equations drawn up for tariffs and subsidies.

“Falconer said a deal would likely not impact on food prices in the near future.

“‘I can’t see how you could imagine that what we’re doing would create any short term consequences within the next 12-month period,’ he said. ‘Regrettable as that may be.’”

Reuters writer Jonathan Lynn reported on Tuesday that, “A breakthrough in agriculture talks at the World Trade Organisation (WTO) proved elusive on Tuesday as one fragile deal threatened to unravel and problems flared up in other areas.

“Trade diplomats, speaking a day after parallel talks in industrial goods revealed continuing wide disagreement over the size of tariff cuts, said the differences could make it hard to bring in ministers next month to clinch an overall deal.”

Mr. Lynn indicated that, “The impact of soaring food prices also came up on Tuesday, with the G-33 group of developing food importers, the G-10 group of rich food importers and Japan criticising some exporters for urging cuts in import tariffs while restricting exports through duties and other measures, participants in the meeting said.

“Record food prices have prompted several countries to limit exports, with for example Argentina imposing a tax on soy exports and India, China, Egypt and Vietnam banning all or certain types of rice.”

Meanwhile, Reuters writer Missy Ryan reported this morning that, “The United States will continue to press for less restrictive rules on food aid in world trade talks, despite push-back from the trading partners like the European Union, officials said on Tuesday.

“‘There are still some issues on the table, but I think we’re winning,’ Dale Skoric, a food aid policy adviser at the U.S. Agency for International Development, said about discussions on food aid in the World Trade Organization’s Doha round.

“As Doha negotiators seek to end a stubborn impasse in coming weeks, food aid again takes a backseat to the more visible, contentious issues of the talks, such as import tariffs, farm subsidies, and special breaks for developing countries.”

Ms. Ryan explained that, “Mark Manis, a senior trade adviser at the U.S. Agriculture Department, who has been taking part in negotiations is Geneva, said a good number of food aid issues have already been wrapped up in the Doha talks.

“But disagreement remains on other issues that are a priority for the United states, Manis said at an annual U.S. government food aid conference in Kansas City, Missouri.

“Washington and Brussels, for example, have taken divergent paths on food aid, and have found themselves at odds in the Doha talks on a number of points.

“Brussels, which donates mostly cash, rather than crops, and others like Canada had wanted to see the United States follow suit, but had not been unsuccessful, Manis said.”

“One of the most divisive issues that remains revolves around a practice called monetization, common in the United States, in which aid groups receive government crop donations and sell them in poor nations to fund community development projects,” the article said.

***

Steven Erlanger reported in today’s New York Times that, “Major agricultural countries must urgently change their policies to avoid a social explosion from rising food prices, a panel of United Nations experts warned Tuesday, adding their voices to new concerns about the proper balance between saving the environment and feeding the poor.

“‘Modern agriculture will have to change radically if the international community wants to cope with growing populations and climate change, while avoiding social fragmentation and irreversible deterioration of the environment,’ said Salvatore Arico, a biodiversity specialist with the United Nations Educational, Scientific and Cultural Organization, or Unesco, summarizing the report by about 400 experts.

The report tries to provide a comprehensive view on how to produce food that is less dependent on fossil fuels; favors locally available resources, natural fertilizers and traditional seeds; and tries to preserve the soil and water supply.”

***

Maura Reynolds and Jerry Hirsch reported in today’s Los Angeles Times that, “Soaring food and fuel costs caused wholesale prices to rise much faster than expected last month, raising the possibility of more sticker shock for consumers and more inflationary pressure for the nation’s economy.

“The producer price index jumped 1.1% in March from February — nearly triple the 0.4% increase that analysts expected, the Labor Department reported Tuesday. Over the last 12 months, the index was up 6.9%, led by a 20% leap in energy prices and a 5.8% increase for food.”

The L.A. Times article stated that, “The run-up in energy prices reflects a continuing ascent in the price of crude oil, which topped $114 a barrel in futures trading Tuesday…Rising food prices, meanwhile, can be traced straight back to the farm.”

Keith Good

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