FarmPolicy

October 22, 2014

Climate Change; EPA Issue; Global Food Security; Soybeans; Food Stamps (SNAP); and CFTC Issues

Climate Change

Jared Allen reported yesterday at The Hill Online that, “Speaker Nancy Pelosi (D-Calif.) has quickly taken charge of moving climate change legislation through the House, which will be one of the toughest challenges of her political career.

“Earlier this year, Pelosi said she was not involved in the day-to-day happenings on the controversial bill. But now that it has cleared the Energy and Commerce Committee, Pelosi is on a mission to get the climate change bill — her flagship issue — to the House floor.

Pelosi told reporters Tuesday afternoon that she had just held meetings with Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Agriculture Committee Chairman Collin Peterson (D-Minn.) and informed them that their panels would be allowed to have markups on the cap-and-trade bill crafted by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.).”

The Hill article added that, “An additional six committees that have at least some jurisdiction over the bill apparently decided — or were told — that they did not need to hold their own markups.”

Mr. Allen explained that, “Peterson has no such competing top priorities, but he and the other 27 Democrats on his panel have serious problems with provisions in the bill — some of which his committee doesn’t even have jurisdiction over. Peterson has warned the measure will need to be significantly revamped if Democratic leaders are looking to attract even one Democratic vote on his committee.”

Meanwhile, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “With Congress back in session, farm groups wrote Tuesday to House leaders to ask them to improve the climate change bill that ‘maximizes the participation of farmers and ranchers, while minimizing the economic burden in the climate change equation.’”

“Since HR 2454 was passed by the House Energy and Commerce Committee last month, agricultural groups have strongly criticized it for the lack of any role for farmers and ranchers in the cap-and-trade system created in the legislation to reduce greenhouse gas emissions. The bill establishes as much as 2 billion tons in carbon offsets, but doesn’t have provisions for farmland or forestry to play a role in those offsets.

“Though the bill now doesn’t address it, farm groups are pushing to create an agricultural offset program that is unlimited, recognizes ‘early actor’ farmers and ranchers who have already implemented carbon-capture practices, and ensure any program with ag offsets be under the thumb of USDA, rather than the Environmental Protection Agency.”

Yesterday’s DTN article noted that, “The letter was signed by the NFU [National Farmers Union], American Farmland Trust, National Corn Growers Association and National Association of wheat Growers.

“In their letter, the agricultural groups again stated that USDA should be granted control over administration of any carbon offset programs for agriculture and forestry, rather than have such programs managed by the EPA. Any carbon program for agriculture should also recognize ‘early actors’ who have worked to reduce greenhouse-gas emissions or sequester carbon.”

Mr. Clayton reported that, “The 25X25 Alliance, an agricultural group that promotes renewable energy, detailed in a separate release a list of proposed amendments to the climate bill. Among the key recommendations from 25X25 is a proposal that all carbon offsets be treated as fungible, or capable of being swapped or substituted with other offsets or greenhouse-gas allowances. Sequestration offsets should also have a specific contract life of 50 years.”

And the Associated Press reported on Monday that, “Negotiators from 181 countries began work on the first draft of a new global warming treaty Monday, calling it a good beginning despite complaints it was unbalanced and incomplete.

“Delegates have been brainstorming and arguing over principles for 18 months.

“The draft includes conflicting proposals pointing to tough negotiations ahead. Among dozens of unresolved issues was whether developing economies must commit to control their greenhouse gas emissions and whether their commitments would be legally binding or voluntary.”

EPA Issue

Philip Brasher reported yesterday at The Green Fields Blog (The Des Moines Register) that, “Could visiting a farm change the EPA’s mind when it comes to regulating biofuels? Sen. Charles Grassley [R-Iowa] intends to try. In remarks on the Senate floor, he said today that he’s inviting several top agency officials to visit a farm in Iowa, including Administrator Lisa Jackson. Grassley says he wants to instill some ‘common-sense thinking’ at the agency. In addition to Jackson, Grassley says he’s extending an invitation to Margo Oge, who heads the EPA’s transportation office. Oge acknowledged at a recent congressional hearing that she hadn’t been on a U.S. farm.”

Mr. Brasher quoted Sen. Grassley as saying, “I don’t think the people at the EPA get the big picture. And, I’m pretty sure they don’t understand how American agriculture works.

“While the EPA’s actions have a significant impact on the rural economy and the agriculture industry, it’s clear that the EPA has a lack of understanding of American agriculture.

“I know this is the case regarding the indirect land use issue. Margo Oge, the director of the office in charge of this rule, admitted during a committee hearing in the House of Representatives last month that she’s never been on a farm in the U.S.”

Sen. Grassley also spoke about the idea of having EPA officials to his farm in Iowa in his weekly tele-news conference yesterday with agricultural reporters.

Global Food Security

Rod Smith reported on Monday at FeedStuffs Online that, “One billion people — almost 20% of the world’s population — are hungry, and it’s more than that they miss a meal a day but that they are chronically malnourished.

“At the same time, the greatest growth period in the history of the world is underway, and 3 billion more people will be born in the next 40 years, increasing the world’s population to 9 billion people. Most of them will be born in the hungry parts of the world.

Accordingly, the pressure on the world’s economic and natural resources for food will become intense, and the private and public sectors must provide the leadership required to develop modern agricultural production systems for farmers in those parts of the world, especially in sub-Saharan Africa and Southeast Asia.

“That’s the view of the Humboldt Forum for Food & Agriculture, as explained by Dr. Philip Pardey, an agricultural economist at the University of Minnesota and a member of the forum.”

Mr. Smith indicated that, “It’s critical for private/public partnerships to create opportunities for commercial farming in sub-Saharan Africa and Southeast Asia and to provide farmers there with modern technologies to jump-start productivity, he said during an interview with Feedstuffs at his office in St. Paul, Minn.

“The consequences of not doing so ‘are unacceptable,’ he said.”

The FeedStuffs article stated that, “If cereal crop yields had not increased through hybrid vigor, achieving the cereal crop production that was produced in 2000 would have required the world to plow up an area the size of Western Europe, Pardey said. That would have had ‘a devastating impact’ on global biodiversity and natural resources, he noted.

“‘We need to make real-world choices’ that are driven by science rather than emotions, he said.”

Joel K. Bourne Jr. reported in the June edition of National Geographic Magazine that, “It is the simplest, most natural of acts, akin to breathing and walking upright. We sit down at the dinner table, pick up a fork, and take a juicy bite, oblivious to the double helping of global ramifications on our plate. Our beef comes from Iowa, fed by Nebraska corn. Our grapes come from Chile, our bananas from Honduras, our olive oil from Sicily, our apple juice—not from Washington State but all the way from China. Modern society has relieved us of the burden of growing, harvesting, even preparing our daily bread, in exchange for the burden of simply paying for it. Only when prices rise do we take notice. And the consequences of our inattention are profound.

Last year the skyrocketing cost of food was a wake-up call for the planet. Between 2005 and the summer of 2008, the price of wheat and corn tripled, and the price of rice climbed fivefold, spurring food riots in nearly two dozen countries and pushing 75 million more people into poverty. But unlike previous shocks driven by short-term food shortages, this price spike came in a year when the world’s farmers reaped a record grain crop. This time, the high prices were a symptom of a larger problem tugging at the strands of our worldwide food web, one that’s not going away anytime soon. Simply put: For most of the past decade, the world has been consuming more food than it has been producing. After years of drawing down stockpiles, in 2007 the world saw global carryover stocks fall to 61 days of global consumption, the second lowest on record.

“‘Agricultural productivity growth is only one to two percent a year,’ warned Joachim von Braun, director general of the International Food Policy Research Institute in Washington, D.C., at the height of the crisis. ‘This is too low to meet population growth and increased demand.’”

The National Georgraphic article stated that, “So what is a hot, crowded, and hungry world to do?

“That’s the question von Braun and his colleagues at the Consultative Group on International Agricultural Research are wrestling with right now. This is the group of world-renowned agricultural research centers that helped more than double the world’s average yields of corn, rice, and wheat between the mid-1950s and the mid-1990s, an achievement so staggering it was dubbed the green revolution. Yet with world population spiraling toward nine billion by mid-century, these experts now say we need a repeat performance, doubling current food production by 2030.

In other words, we need another green revolution. And we need it in half the time.”

Soybeans

Chris Flood reported yesterday at The Financial Times Online that, “Soyabean prices risk an explosive surge this summer as US stocks could be virtually exhausted before the arrival of the new crop in the autumn, due to production problems in Latin America and strong demand from China.

“The price of soyabeans in Chicago has surged 40 per cent since the start of March, with the benchmark CBOT July contract pushing above the key $12 a bushel to an eight-month high of $12.27 a bushel this week.”

Yesterday’s FT article noted that, “The US Department of Agriculture forecast the country’s soya stocks would drop to 130m bushels at the end of the current 2008-09 season, but private sector analysts such as Informa Economics, the US-based consultancy, warn that a decline below the psychologically significant level of 100m bushels appears increasingly likely.

The USDA projection means stocks will shrink to 4.3 per cent of annual consumption, the lowest level for more than 40 years, and suggests any further decline would make the supply situation precariously tight.”

Dan Piller reported yesterday at The Des Moines Register Online that, “Soybean futures surged above $12 per bushel for the first time in nine months Monday on the Chicago Board of Trade.

“The bump continues a price rally that also has kicked up the price of corn by about $1 per bushel and brightened the cash prospects for Iowa’s recently planted crops.”

Mr. Piller reported that, “If those prices hold, Iowa’s farmers could receive about $15 billion this year for the combined corn and soybean crop, about $3 billion more than they received for the 2008 crop, according to U.S. Department of Agriculture figures.

“The grain markets have rallied in recent weeks for several reasons. Corn and soybean crops in Brazil and Argentina missed expectations because of drought. The short soybean crop in South America caused a surge of new imports of U.S. soybeans by China, which already is the largest customer for the U.S. bean crop.”

Food Stamps (SNAP)

Bloomberg writer Alan Bjerga reported yesterday that, “A record 33.2 million people, almost one of every nine Americans, were receiving food stamps [SNAP] at the end of March as unemployment rose to the highest levels since 1983, according to the U.S. Department of Agriculture.

“It was the fourth straight month of record participation in the Supplemental Nutrition Assistance Program, according to department data. The total was 1.8 percent more than a month earlier and 19 percent higher than a year earlier, the USDA said. Total spending on the program was $3.8 billion in March, eclipsing the previous record of $3.7 billion in December.”

The Bloomberg article stated that, “‘It’s extremely likely the numbers will continue growing into the middle of next year’ as unemployment rates lag behind any economic recovery, said Jim Weill, president of the Food Research and Action Center, a Washington-based anti-hunger organization. ‘For all of the discussion of ‘green shoots’ in the economy, people around the country who are experiencing what’s happening know it’s tough out there.’”

CFTC Issues

Reuters writer Charles Abbott reported yesterday that, “The new chairman of the U.S. agency that oversees the futures markets said on Tuesday that comprehensive multi-market position limits on trading would curb excessive speculation and protect investors.

“Gary Gensler, who became head of the Commodity Futures Trading Commission a week ago, told a Senate Appropriations subcommittee that reform of U.S. financial regulators was urgent.

“‘The CFTC, along with the Obama administration and other financial regulators, is committed to working with Congress on broad regulatory reform,’ said Gensler. ‘This is particularly true for the markets that the CFTC currently regulates and the markets that may soon come under our regulation.’

“‘Specifically, we must urgently move to regulate the over-the-counter derivatives market and address excessive speculation through aggregated position limits.’”

Keith Good

Comments are closed.