FarmPolicy

May 30, 2017

Climate Change Bill Passes Committee; Biofuels- House Hearings; Animal Agriculture; and Crop Insurance

Climate Change Bill Passes Committee

David A. Fahrenthold reported in today’s Washington Post that, “A bill to create the first national limit on greenhouse-gas emissions was approved by a House committee yesterday after a week of late-night debates that cemented the shift of climate change from rhetorical jousting to a subject of serious, if messy, Washington policymaking.

“The legislation would create a cap-and-trade system: Over the next decades, power plants, oil refineries and manufacturers would be required to obtain allowances for the pollution they emit. Those who need more or less could turn to a Wall-Street-like market in the allowances.

“The 33 to 25 vote was a major victory for House Democrats, who had softened and jury-rigged the bill to reassure manufacturers and utilities — and members of their own party from the South and Midwest — that they would not suffer greatly.”

The Post article added that, “The vote gives this bill more momentum than any previous legislation to reduce greenhouse gases, but it faces hurdles. In the House, Rep. Collin C. Peterson (D-Minn.) has said he wants to take up the bill in his Agriculture Committee, seeking to change rules for those who raise corn for ethanol. The Senate has shot down previous cap-and-trade plans.”

John M. Broder reported on this development in today’s New York Times and added that, “With progress on this legislation and his own executive actions, Mr. Obama is assembling the pieces of a credible American package to take to Copenhagen later this year as United Nations negotiators gather for talks on a new global warming treaty.

“But the energy legislation passed on Thursday still faces a tortuous path through several more House committees before it can be brought up for a vote later this year. In the Senate, leaders say they lack the votes to pass the bill as it is now written.”

“Much more is to come as the bill, known as the American Clean Energy and Security Act, is taken up by the Ways and Means Committee and, possibly, House panels on agriculture, transportation and natural resources,” today’s Times article said.

Ian Talley and Stephen Power indicated in today’s Wall Street Journal that, “The measure, sponsored by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.), still faces significant hurdles, particularly in the Senate, where a similar proposal failed last year. But the committee’s action gives the measure a major boost in both chambers of Congress, because the panel is among the largest and most ideologically and geographically diverse in Congress, with members from Rust Belt, oil patch, farm and coastal states.”

And Jared Allen reported yesterday at The Hill Online that, “And Waxman still faces a monumental challenge from as many as 28 Democrats on the Agriculture Committee, who have decided to stand with their chairman, Rep. Collin Peterson (D-Minn.) and vote against the bill on the floor if significant changes affecting the agriculture industry aren’t addressed.”

Lisa Lerer explained yesterday at Politico.com that, “The Obama administration strongly backs the legislation and has lobbied for the bill both in public statements and private meetings. The White House would like to make progress on climate change legislation before December, when the president heads to international climate negotiations in Copenhagen.

“But passage is still far from assured. On Wednesday, the powerful chairmen of the House Ways and Means and Agriculture committees expressed concerns about the legislation. Waxman is also competing for floor time with the Democrats’ other legislative priorities like passing housing-related measures and spending bills.
The bill will face an even steeper climb in the Senate, where it needs 60 votes overcome a filibuster.”

More specifically with respect to agriculture, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “A group of 23 farm organizations had sent letters to members of Congress and the House Energy and Commerce Committee by Thursday, stating they could not support the committee’s climate bill, but those letters prove to be merely a bump in the road as the committee approved the legislation Thursday evening.”

Yesterday’s DTN article added that, “The bill has created some sparks between Waxman’s committee and House Agriculture Committee Chairman Collin Peterson, D-Minn., who has complained that the bill does little for agriculture and must be referred to his committee for changes. Ag groups had mapped out how farmers and ranchers could help with carbon offsets and sequestration, but Waxman and his staff chose not to add agricultural offsets to the bill. The House Parliamentarian will have to determine which committees will need to also consider the bill before it would go to the House floor for a full debate.”

Interestingly, Rep. Zack Space (D-Ohio) offered a very detailed amendment during the Waxman-Markey markup yesterday that sought to add language outlining specific types of agricultural activities and practices associated with carbon sequestration- or as the amendment stated: “With respect to domestic offset project types.”

However, after a discussion regarding Rep. Space’s amendment, audio available here (MP3-5:32), Rep. Space withdrew the amendment from consideration. The clip audio clip includes comments from Reps. Space, Chairman Waxman, Lee Terry (R-Neb.), Ranking Member Joe Barton (R-Tex.) and Greg Walden (R-Oregon).

And Allison Winter reported yesterday at the New York Times Online that, “House Agriculture Committee members, angry over how major energy and climate legislation could affect farmers and ranchers, are eyeing options to alter the bill when it passes through their committee next month.

“The agriculture panel could create some of the most formidable opposition to the compromise brokered by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), as the proposal to regulate greenhouse gas emissions makes its way to a vote on the House floor sometime this summer.

“Democrats and Republicans on the Agriculture Committee have a long list of grievances against the bill, and leaders of the panel are looking for ways to alter the legislation or slow it down before a full House vote. They want to see more offsets for farmers, a greater role for the Agriculture Department and changes in the bill’s requirements for renewable fuels.”

Ms. Winter noted that, “It is not clear what portions of the bill the Agriculture Committee will be allowed to weigh in on, and Waxman and other House leaders — who have spent months in negotiation over the package — presumably want to advance it with few changes. Peterson said yesterday that he is awaiting instruction from the House parliamentarian before he decides how his committee will handle the legislation.

But even if the Agriculture Committee’s official jurisdiction is limited, the fiery chairman said he would consider going beyond his panel’s reach to try to alter the legislation.”

And yesterday’s article pointed out that; “[Rep. Tim Holden of Pennsylvania, the ag panel’s No. 2 Democrat] said the committee would like to include changes similar to those in an amendment on renewables that failed in the Energy and Commerce Committee earlier this week. The amendment (pdf) from Rep. Greg Walden (R-Ore.) would create a renewable biomass definition far more permissive than the underlying bill by allowing materials from national forests to meet the renewable standard and also eases limits on materials from private lands.”

[Note: Related FarmPolicy.com coverage and audio on the Walden amendment issue is available here].

“Farm state lawmakers are also opposed to avenues for U.S. EPA to consider greenhouse gas emissions from ‘indirect’ land-use changes spurred by biofuels production. The lawmakers say these measurements are based on unproven models that paint in unfair picture of corn ethanol’s emissions. An amendment on indirect land use was rejected by the Energy and Commerce panel [Wednesday] night.”

Biofuels- House Hearings- Agriculture Committee

Reuters writer Charles Abbott reported yesterday that, “The U.S. biofuels industry would be hamstrung if government regulators choose to use unfair and untested formulas that hold it responsible for greenhouse gases from crops overseas, ethanol groups said on Thursday.

U.S. and California environmental regulators included indirect land use change overseas in formulas that measure greenhouse gases from biofuels in comparison to emissions from petroleum. The formulas would determine what qualifies as a low-carbon fuel in California or an advanced biofuel in the U.S. market.

“‘It should be obvious to everyone but a few misguided advocates that ILUC (indirect land use change) is not ready for prime time,’ Tom Buis of Growth Energy, a pro-ethanol trade group, told a House Agriculture Committee hearing.”

Bloomberg writer Alan Bjerga reported yesterday that, “The EPA’s proposed plan to gauge greenhouse-gas emissions would deter new fuels made from crop wastes, wood or other sources, Carlos Riva, the chief executive officer of Verenium Corp., told lawmakers. By weakening corn-based ethanol companies, the rules could hurt their attempts to develop new fuels, Riva said. The standards are also based on shaky science, he said.”

DTN’s Chris Clayton reported yesterday that, “Ethanol groups made their case to members of Congress Thursday to get rid of land-use provisions in the Renewable Fuels Standard debate, but it was akin to preaching to the choir. Another committee with direct oversight voted down a similar proposal to strip land-use provisions from the RFS on Wednesday evening.”

Mr. Clayton indicated that, “There is a battle going on in the hallways of Congress between the House Agriculture Committee and House Energy and Commerce Committee over the role of agriculture in the climate bill and the challenges of indirect land use provisions.

“Peterson has said he will not support a climate bill without numerous changes, and he wants the climate bill referred to his committee. He also has indicated the 28 Democrats on the House Agriculture Committee may not support the climate bill unless this land use issue is resolved.”

Yesterday’s DTN article explained that, “At the World Agricultural Forum in St Louis this week, C. Boyden Gray, a former U.S. ambassador to the European Union and a White House Council during the George H.W. Bush administration, told attendees privately that the indirect land use provision originally started as a protectionist measure in the EU when he worked there. It was designed by the canola industry in Europe to block palm oil imports for biodiesel. That it has been twisted into a science-based measure of indirect land use effects is quite an irony, he said.

On the podium, Gray lambasted the notion that renewable fuels are responsible for deforestation. ‘If you want to save the rain forest, save the rain forest,’ he said, don’t do it with indirect penalties on Northern Hemisphere agricultural crops. Gray said 70 to 80 percent of the land cleared in Indonesia was used for tropical lumber and then was abandoned.”

At his blog yesterday, Mr. Clayton pointed to a Reuters news article which reported that, “A law expected to be approved by Brazil’s Congress granting 1.2 million people and numerous companies titles to a huge chunk of the Amazon rain forest could provoke a new wave of land-grabbing and deforestation, conservationists warn.”

The Reuters article added that, “The bill, which was approved by the lower house of Congress last week but requires approval in the Senate, would grant more than 1.2 million people land titles totaling nearly 100 million hectares (247 million acres), an area almost the size of France and Spain.”

Mr. Clayton noted that, “247 million acres. That’s more than the U.S. corn crop, soybean crop and wheat crop combined. Go ahead and throw in cotton too.”

Biofuels- House Hearings- House Small Business Subcommittee on Regulations and Healthcare

Also yesterday, The House Small Business Subcommittee on Regulations and Healthcare heard testimony from the Environmental Protection Agency (EPA) and United States Department of Agriculture (USDA) on outstanding regulatory issues impacting the domestic biofuels industry.

The witness list and opening statements from this hearing can be viewed here; while video excerpts from yesterday’s hearing can be watched here.

Animal Agriculture

The Associated Press reported earlier this week that, “The Ohio farm lobby and the Humane Society of the United States are girding for a fight over the confinement of farm animals, with the Washington-based society saying it is confident voters will side with animals and farmers saying the group’s real goal is to reduce consumption of animal products.

“The Humane Society met with Ohio Farm Bureau Federation leaders, the Ohio Cattlemen’s Association, the Ohio Pork Producers Council and the Ohio Poultry Association in February to deliver this message: Ohio farmers must agree to change their animal husbandry practices or have the practices changed for them via the ballot box.”

The AP article added that, “The farm bureau has served notice that it is not going to roll over.

“‘They make what sound like simple demands regarding animals when in reality their true goal is to give animals status equal to humans,’ said Jack Fisher, executive vice president of the Ohio Farm Bureau Federation.

“The federation sounded a fundraising alarm on its Web site last week. And in its newsletter, the organization asks if the Humane Society is making an honest attempt to improve animal care, ‘or is it part of a broader effort to disrupt livestock farms, artificially drive up the cost of animal products and restrict consumer choice?’”

Meanwhile, Mike Hughlett reported yesterday at the Chicago Tribune Online that, “Seeking to buy eggs produced in a potentially more humane way, Oak Brook-based McDonald’s Corp. Thursday announced it will undertake a large-scale study involving tens of thousands of hens.

“But the Humane Society of the United States said the study will likely delay any significant move by McDonald’s into the U.S. ‘cage-free’ egg market – an animal welfare step some of its rivals have taken.”

Mr. Hughlett added that, “Most eggs produced in the U.S. come from chickens housed in so-called ‘battery cages’: pens shared by several birds, each of which gets just less than 70 square inches of living space.

“While the egg industry has voluntarily increased cage space in recent years, some animal welfare groups have continued to criticize the battery system for cramped conditions. In a referendum last November, California voters outlawed battery cages.”

Crop Insurance

In a blog update from last week, Sara Wyant, the editor of the Agri-Pulse newsletter, provided an interesting look at some issues associated with crop insurance and referred to some comments that Secretary Vilsack made on May 13 during an agricultural appropriations subcommittee hearing.

In part, Ms. Wyant noted that, “The Secretary said that, while in the past it was hard to get farmers to sign up for crop insurance, today farmers often have to sign up as a condition of qualifying for bank loans or disaster relief ‘so there’s now more of a mandate.’ Vilsack said the result is that private companies ‘have seen a huge increase in their market. . . so they are making a tremendous amount of money, billions of dollars. . . There is a tremendous amount of profit. . . We just think that this needs to be a fairer deal for taxpayers.’

“Hmmm…Why would lenders require crop insurance? Perhaps because farmers who pay for crop insurance policies, many of which are now based on expected revenue, have a valuable risk management tool that allows them to market a crop prior to harvest and actually repay their lenders. It also makes farmers less likely to go begging to Congress for annual disaster assistance or to rely on the new so-called ‘permanent’ disaster program.”

Ms. Wyant added that, “Yes, companies received a lot of money for farmers last year but it was because they were insuring crops that, because of last year’s run-up in commodity prices, were worth billions of dollars. And in places like Iowa, where my family farms, the crop insurance industry paid almost $1.1 billion to the farmers for their losses, according to the most recent summary of business data released by USDA’s Risk Management Agency (RMA).

“So what type of situation would these companies be in if they charged less and then had to pay for losses on all of the crops they insured at those higher levels? Probably not too eager to stay in the crop insurance business. At present, there are only 16 firms approved by RMA under their Standard Reinsurance Agreement.”

Keith Good

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