FarmPolicy

November 19, 2017

Climate Legislation; Harvest-Prices; Food Security; and Animal Agriculture

Climate Legislation

Reuters writer Richard Cowan reported on Saturday that, “All seven Republicans on the U.S. Senate Environment and Public Works Committee plan to boycott next week’s work session on a climate-change bill, an aide said on Saturday, in a move aimed at thwarting Democratic efforts to advance the controversial legislation quickly.

“‘Republicans will be forced not to show up’ at Tuesday’s work session, said Matt Dempsey, a spokesman for Republican senators on the environment panel.

“Under committee rules, at least two Republicans are needed for Chairwoman Barbara Boxer to hold the work sessions that would give senators an opportunity to amend the controversial legislation and then vote to approve it in the panel, which is controlled by President Barack Obama’s fellow Democrats.”

Mr. Cowan explained that, “But Republicans are demanding more detailed economic analysis of the bill by the U.S. Environmental Protection Agency — a task that could take more than a month — before agreeing to participate in the work sessions that are called ‘mark ups.’

“The seven Republicans have not indicated they ultimately would vote for the bill, which Boxer wants to move through her committee before December’s international climate-change summit in Copenhagen.

“Even with committee approval of the bill, the full Senate is not expected to vote on it this year. The legislation, as currently written, would have a hard time gaining the support of the 60 senators needed to pass major bills.”

However, Lisa Lerer reported on Saturday at Politico.com that, “Though all seven Republicans on the committee say they will boycott any mark-up hearing held next week, Chairman Barbara Boxer (D-Ca.) announced that she will proceed with the hearing on Tuesday, even if Republicans don’t attend.

“Republicans say that EPW rules prohibit Boxer from holding a mark-up without two Republicans present, but Democratic aides for Boxer and other members indicated that they had found a way around that rule.

“‘The Senator is going to use all the tools at her disposal,’ said one Boxer aide.”

The Politico article indicated that, “Democrats will need Republican votes to pass a bill to offset possible losses within their own party. Prominent moderate Democrats like Sens. Max Baucus, of Montana, Blanche Lincoln, of Arkansas, and Byron Dorgan, of North Dakota, have raised a long list of concerns about the bill. And at least some Democratic supporters expect them to lose the votes of Sens. Ben Nelson, of Nebraska, and Mary Landrieu, of Louisiana.

“Sen. Ben Nelson (D-Neb.) said on Friday that a cap and trade bill could not pass the Senate this Congress.

“‘I haven’t been able to sell that argument to my farmers, and I don’t think they’re going to buy it from anybody else,’ Nelson told CNBC on Friday.”

Jim Snyder reported on Saturday at The Hill Online that, “‘We are looking to go beyond general message themes of cap and trade to look at the bill itself,’ [Matt Dempsey, the committee’s minority spokesman for the Environment and Public Works Committee] said. ‘We’ve debate whether global warming is a national security issue. We want to examine the impacts on consumers, on the agriculture sector, on the bill’s specifics.’”

Darren Samuelson of ClimateWire reported on Friday at The New York Times Online that, “For her part, Boxer insisted that she would not back down from the markup, and she even opened the door to alternative approaches for moving the bill, including the use of Senate Rule 14 that allows the majority to discharge legislation out of a committee and bring it directly to the floor.”

“Partisan tension on the EPW Committee stretches back more than a decade, but recent battles between the two parties have been especially tense when it comes to debate over climate policy,” Mr. Samuelson noted.

Juliet Eilperin reported in today’s Washington Post that, “The climate-change bill that has been moving slowly through the Senate will face a stark political reality when it emerges for committee debate on Tuesday: With Democrats deeply divided on the issue, unless some Republican lawmakers risk the backlash for signing on to the legislation, there is almost no hope for passage.”

Ms. Eilperin pointed out that, “Sen. George V. Voinovich (Ohio), a member of the Environment and Public Works Committee who was initially seen as one of the few Republicans who might consider backing the majority, is helping lead the opposition.

“‘Why are we trying to jam down this legislation now?’ he asked during a hearing last week. ‘Wouldn’t it be smarter to take our time and do it right?’

“He wrote Environmental Protection Agency Administrator Lisa P. Jackson twice this summer to ask for a more detailed economic analysis of the House-passed climate legislation, and he has joined the other six Republicans on the committee in boycotting the climate bill’s markup, scheduled for Tuesday.”

Meanwhile, Bloomberg writers Daniel Whitten and Simon Lomax reported on Friday that, “The chiefs of Exelon Corp. and American Electric Power Co. said climate-change legislation in the Senate would shortchange companies of free pollution permits they would get under a version passed in the House.

“Both measures would use a cap-and-trade system of permits to limit emissions scientists say contribute to global warming. Most permits would be given away free initially to utilities and other polluters to ease the transition. The Senate version by Senator Barbara Boxer would carve out 15 percent of those allowances for other purposes, such as selling them to reduce the federal deficit.

“Michael Morris, chief executive officer of American Electric, the largest U.S. producer of energy from coal-fired plants, and John Rowe, CEO of Exelon, the biggest U.S. operator of nuclear-power plants, said Boxer’s plan would raise consumer power bills and drain support from the legislation.”

And Chris Clayton reported yesterday at DTN’s Ag Policy Blog that, “One area of focus related to agriculture and climate change will come after the United Nations meeting in Copenhagen, Denmark, but likely to generate a great deal of debate in coming years: How are carbon incentives or ‘subsidies’ going to be classified under the World Trade Organization?

Given that these incentives are going to be far more lucrative in developed countries, carbon incentives are going to a whole new area of fodder for possible WTO disputes and challenges in coming decades, said Tim Josling, a professor emeritus of agricultural policy at Stanford University.

“Josling spoke at a meeting on climate issues held Thursday by the International Policy Center and the International Center for Trade and Sustainable Development.”

Mr. Clayton added that, “Among the first major possible challenges would be likely for any government program involving a direct payment to a producer. Direct payments for carbon sequestration, for instance, would fit there. There are vagaries about the idea of a government certification program that would allow a producer to qualify for a payment on the open market, however. Selling offsets to a non-farm seller may not be a subsidy.

“There have been no rules spelled out regarding whether free allocation of greenhouse-gas emissions would qualify as a subsidy.

“Research on climate change could be considered a subsidy if the research is targeted to benefit a specific sector.

Classifying a subsidy may be the critical part. Are they ‘green box’ under WTO rules, meaning they are not trade distorting, but providing a public environmental benefit? Josling said farmers may need incentives to join a carbon program, so that would exclude such payments from being green box.

“‘So I personally think there are subsequent problems putting sequestration subsidies in the green box,’ he said.”

In an article posted on Friday at DTN (link requires subscription), Mr. Clayton reported that, “A former chairman of the World Trade Organization’s General Council cautioned a group of trade and agricultural experts Thursday against blending climate change issues into the current round of WTO negotiations.

“Reopening the Doha Round WTO talks to climate change ‘would be extremely dangerous,’ and counter productive, said Carlos Perez de Castillo, who served as chairman of the WTO General Council in 2003 and 2004. Castillo’s term included the Doha Round ministerial meetings in Cancun, Mexico. Some countries would become ‘suspicious’ if others pushed to add greenhouse-gas controls to the Doha agenda. Then it would lead to expanding the talks into other outstanding issues such as subsidies for biofuels, Castillo said.”

The AP reported yesterday that, “Negotiators from nearly 180 countries hope to nail down the outline of a plan to provide tens of billions of dollars a year to fight climate change, in their final round of talks before a decisive conference in Copenhagen next month.

The five-day meeting beginning Monday will resume work on the draft of an agreement to replace the 1997 Kyoto Protocol, the first international accord on controlling emissions of carbon dioxide and other climate-changing gases.

“They are charged with whittling down a thick draft document full of competing proposals, disputed wording and minority-backed options, and crafting a workable agreement that can be accepted by all 192 nations due to attend the Dec. 7-18 Copenhagen conference.”

Harvest-Prices

Joe Barrett reported in Saturday’s Wall Street Journal that, “Most years, Larry Thorndyke has his corn fully harvested by Halloween. This year, almost all of his 1,400 acres of corn are still in the field, exposing his farm to crop disease, bad weather and a potential financial nightmare.

“‘It’s getting scarier. The longer we go, the more mold keeps growing and the more ears fall off,’ said the 50-year-old farmer, taking a break from steering his combine over dark, wet dirt Thursday, his first full day of harvesting corn this season. ‘Every day you wait, you lose more money.’”

The Journal article stated that, “‘Most of the farmers’ income is still out there in the field,’ said Loyd Brown, president of Hertz Farm Management, a Nevada, Iowa, company that manages more than 1,800 farms with some 430,000 acres across the Midwest. ‘They’re anxious to get it harvested and anxious to know where they stand for the year.’”

Mr. Barrett indicated that, “Over the past two months, futures markets have added about 36% to the price of corn and 17% to the price of soybeans, in part due to the difficult harvest, said Joe Victor, vice president of marketing with Allendale Inc., a commodity-research advisory firm. Corn futures for December delivery closed Friday at $3.66 a bushel.”

Dan Piller reported on Friday at The Des Moines Register Online that, “This year, the pressure to get the corn and soybeans into bins is greater than it’s been in two generations. This is the latest corn harvest in 42 years.”

Leslie Reed reported in yesterday’s Omaha World Herald that, “One of the slowest corn and soybean harvests on record has Nebraska and Iowa farmers biting their nails, waiting for wet and wintry weather to abate so they can bring in what experts have predicted will be a record crop.

In Nebraska, only 15 percent of this year’s corn crop has been harvested, the slowest harvest on record since 1982.

In Iowa, only 12 percent has been harvested, which may be the slowest harvest since 1957 — though a state agricultural official says so much has changed in corn farming in the past 50 years that he’s uncomfortable comparing eras.”

On Friday, the USDA’s National Agricultural Statistics Service released its monthly Agricultural Prices report, which noted in part that, “The corn price, at $3.54 per bushel, is up 29 cents from last month but 83 cents below October 2008 [related graph]… The soybean price, at $9.74 per bushel, decreased 1 cent from September and 21 cents from October 2008 [related graph]… The October all wheat price, at $4.56 per bushel, is up 8 cents from September but $2.09 below October 2008 [related graph]…and… The October all milk price of $13.80 per cwt increased 90 cents from last month but is $4.00 lower than October 2008 [related graph].

Food Security

A news release issued last week by the Food and Agriculture Organization of the United Nations (FAO) stated that, “FAO has begun widespread consultations over the first ever international guidelines on governance of tenure to land and other natural resources such as water supplies, fisheries and forests.

“The consultations and negotiations, responding to requests from the international community and from governments, will take more than a year to complete.

“They will involve governments, the private sector, poor farmers, indigenous groups, local authorities, academia and independent experts and will be led by a secretariat based at FAO headquarters.”

The release added that, “Although most FAO member nations have rules to protect farmers and forest dwellers, as well as domestic and foreign investors, from being thrown off their land or having their land seized arbitrarily, laws are often ignored or badly enforced.

“‘Competition for land and other natural resources is increasing due to population and economic growth, foreign direct investment for large scale food production, demands for biofuels and urban and industrial expansion,’ said Alexander Müller, Assistant Director General of FAO’s Natural Resources Department.”

DTN Editor-in-Chief Urban C. Lehner noted on Friday that, “The tragedy of starvation and malnutrition burst into Jeff Simmons’ consciousness when he was working in Brazil. Like any expatriate learning a language, Simmons sought out opportunities to try out his tentative Portuguese on native Brazilians, including Joaquin, the gatekeeper of the compound where Simmons lived. One day, he found Joaquin at the gate with two children.

“‘You seem like a kind man,’ Joaquin said. ‘My children normally eat only every two days, but this time they haven’t eaten in five days. Can you help?’

Simmons, now the president of Elanco, the animal-health unit of Eli Lilly, not only helped Joaquin, he resolved to join the fight against Third World hunger more broadly. At the recent Des Moines meeting of the World Food Prize, an annual talkfest on solving starvation, Simmons delivered a paper titled ‘Technology’s Role in the 21st Century: Food Economics and Consumer Choice.’

“‘This problem is solvable,’ he told reporters — but not if the world follows Europe and blocks the advance of genetic engineering and other agricultural technologies.”

Mr. Lehner stated that, “Two other agribusiness chief executive officers, Pat Woertz of ADM and Ellen Kullman of DuPont, spoke at the meeting of the Global Hunger Initiative their companies plus John Deere and Monsanto have launched.

Like Simmons, they believe in the importance of increasing agricultural productivity in poor countries, but they stressed their willingness to work with activists to ensure that productivity-boosting technologies fit local conditions. ‘It’s not about inventing something here [in the U.S.] and exporting it,’ Kullman said. ‘It’s about understanding local needs and bringing what we have’ to bear on the problem.

“Both CEOs reached out to embrace critics who are suspicious of big-business’ motives for joining the hunger battle. ‘We’re open to dialogue,’ Woertz said. ‘I think diverse views are very helpful.’”

Friday’s update also indicated that, “Jeff Simmons’ paper pointed out that world population growth will require a doubling of food production by 2050, and only a small percentage of the increase can come from planting more acres. The U.N. Food and Agricultural Organization estimates 70 percent of the increase will have to come from using technology to make existing land more productive.

“‘Michelle Obama has a great model — having a garden in your yard is fine,’ Simmons said. ‘But there’s no way a back-yard model is going to feed the world.’”

On Thursday, the House Subcommittee on Africa and Global Health held a hearing entitled, “A Call to Action on Food Security: The Administration’s Global Strategy.”

CARE President and CEO Dr. Helene Gayle was one of the witnesses who testified at last week’s hearing, to listen to a portion of her comments regarding food security issues, just click on this FarmPolicy.com audio file (MP3- 6:52).

Animal Agriculture

Bloomberg writer Alan Bjerga reported on Friday that, “The U.S. Department of Agriculture is investigating allegations of animal abuse at Bushways Packing Inc., a Grand Isle, Vermont, beef plant.

“Agriculture Secretary Tom Vilsack said he has called on the USDA’s Inspector General to conduct a criminal probe of the alleged abuse captured on video by the Humane Society of the United States. The scenes depict apparent violations of USDA animal-handling regulations, Vilsack said today in an e-mailed statement.

“‘The deplorable scenes recorded in the video’ are ‘unequivocally unacceptable,’ he said. The plant is closed pending the investigation, USDA spokesman Justin DeJong said.”

Keith Good

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