FarmPolicy

June 26, 2019

Farm Bill; Trade Issues; Climate Developments; and Biofuels

Farm Bill

Reuters writer Charles Abbott reported yesterday that, “A Texas Democrat who used to be a leader of fiscal conservatives in the U.S. House of Representatives told big farm group on Monday that Congress members keen to cut federal spending will look at U.S. farm supports.

“‘All of us in agriculture recognize the fiscal challenge to come,’ said Charles Stenholm, a senior advisor at a Washington consulting firm who represented a west Texas district for 26 years. He spoke at a ‘break-out’ session at the American Farm Bureau Federation meeting.

“Stenholm, who is active in balanced-budget groups, declined to suggest specific areas to be targeted but said it could be hard to defend biofuel supports and grain subsidies. He said farm supports and crop insurance may need revisions to stretch funding.”

Mr. Abbott indicated that, “A year ago, Obama unsuccessfully proposed a $250,000-a-year limit on farm subsidies and a phase-out of the ‘direct payment’ subsidy to farmers with more than $500,000 a year in sales, together saving $1 billion a year. The White House also wanted to reduce crop insurance subsidies by $500 million a year.

“Rep. Collin Peterson of Minnesota, House Agriculture Committee chairman, plans to begin hearings early this year on an overhaul of U.S. farm policy due in 2012. The hearings will explore successes of the 2008 farm law and new ideas in farm policy.

“‘That is where the chairman is exactly right,’ said Stenholm. He said adaptations in farm programs will ‘be forced on us by the budget.’”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Farmers should begin preparing for further cuts in farm programs because of the growing federal budget deficits, a former congressman told members of the American Farm Bureau Federation on Monday.

“Former Rep. Charlie Stenholm, a Texas Democrat who served in Congress from 1979 to 2005, told farmers at the Farm Bureau annual meeting in Seattle that the federal budget challenges that likely will lead to farm-program cuts is one reason House Agriculture Committee Chairman Collin Peterson, D-Minn., is planning to hold farm-bill hearings this year for a possible bill at least three years away. Stenholm said Peterson is taking a ‘foresighted’ view of what’s to come.”

Yesterday’s DTN article noted that, “The Farm Bureau created a federal deficit task force last year that looked at the challenges, and the task force’s findings will likely lead to policy changes for the organization. AFBF President Bob Stallman pointed to the deficit concerns in his speech Sunday, but Stallman also pointed out that agriculture has taken budget cuts in recent years while other parts of federal spending increased. Stallman’s comments are a sign that AFBF likely will resist further cuts in farm programs.

Biofuels have changed the dynamics of farm policy, but both biofuel and farm programs will face potential budget cuts, Stenholm said. The Obama administration likely will recommend cuts to farm payments in its next budget proposal, but Congress rejected such cuts last year. Still, Stenholm said, such changes will occur. More pressure could be placed on agriculture budgets after congressional redistricting following this year’s Census.”

Trade Issues

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “American Farm Bureau President Bob Stallman Sunday praised the Obama administration for the tough stand it is taking on the Doha round of trade talks.

“U.S. Trade Representative Ron Kirk ‘has made a very excellent case in Geneva on what the U.S. position is,’ Stallman said at a news conference at the group’s annual meeting. Stallman said he was pleased that Kirk has told World Trade Organization and trade officials from other countries that a Doha agreement must reduce barriers to U.S. farm products if the United States is going to support it. ‘I am impressed with that,’ Stallman said.

“Other trade lobbyists have suggested that the Obama administration should provide more leadership to move the Doha round forward, but Stallman did not mention the leadership issue at the news conference or in his annual address to the membership.”

Also on the Doha issue, Reuters writer Matthias Williams reported yesterday that, “Key issues in the ongoing talks for a global trade deal have not been settled and it is too early to say whether the pact will be signed by the stated target of 2010, India’s chief negotiator in the Doha round said on Monday. Countries will have to agree on a formula for the deal by June 2010 at the latest in order to be in a position to sign an agreement by the end of the year, D.K. Mittal told Reuters. They are due to assess the progress of the talks again in March.”

The Reuters article pointed out that, “One sticking point is a demand from the United States for developing countries such as India and China to abolish tariffs entirely in some industrial sectors. Such cuts are voluntary in the Doha negotiations.

“The U.S. has said it cannot agree to a Doha deal unless big emerging economies do more to open their markets.

“‘The demand for sectorals coming from the U.S., that’s an issue,’ Mittal said. ‘No country is willing to accept that, including India,’ he said, adding, ‘nobody is willing to give more to any country at this stage.’”

On a separate trade issue, Reuters writer Sue Pleming reported over the weekend that, “U.S. Agriculture Secretary Tom Vilsack said on Saturday he hoped for ‘meaningful’ talks with Moscow next week over a ban on U.S. poultry, warning relations would be harmed if the issue were not resolved.

“Vilsack said a team of U.S. technical experts was due in Russia around January 17 to discuss this month’s ban on U.S. poultry imports because of Moscow’s concern over a commonly used chlorine treatment.”

In related news regarding the Russian poultry development, Sally Schuff reported on Friday at FeedStuffs Online that, “In an attempt to garner support for her highly controversial bill, the Preservation of Antibiotics for Medical Treatment Act (PAMTA), [Rep. Louise Slaughter (D., N.Y.)] implied that Russia — a country with laughable food safety standards and a history of silly but expensive trade barriers — had issued the U.S. a ‘wakeup call’ on food safety.

“Pointing to Russia’s ban on U.S. poultry treated with antibacterial, low-concentration chlorine and Russia’s zero-tolerance decree for antibiotic residues in U.S. pork, Slaughter said, ‘We can no longer continue to count on exporting livestock of dubious safety to other countries.’

She openly used the issue in an attempt to drum up support for PAMTA, which seeks to ban the non-therapeutic use of seven antibiotics in livestock production.”

Climate Developments

Reuters writer Charles Abbott reported on Sunday that, “The largest U.S. farm group will oppose aggressively ‘misguided’ climate legislation pending in Congress and fight animal rights activists, said American Farm Bureau Federation president Bob Stallman on Sunday.

In a speech opening the four-day AFBF convention, Stallman said American farmers and ranchers ‘must aggressively respond to extremists’ and ‘misguided, activist-driven regulation … The days of their elitist power grabs are over.’

“Stallman’s remarks held a sharper edge than usual for the 6 million-member AFBF, the largest U.S. farm group and often described as the most influential. Its convention opens a string of wintertime meetings where farm groups take positions on public issues.”

Mr. Abbott added that, “Vast amounts of farmland could become carbon-capturing woodlands under cap-and-trade, ‘eliminating about 130,000 farms and ranches,’ said Stallman. One federal analysis says 8 percent of crop and pasture land could be turned into trees by 2050 because trees would be more profitable than crops.”

Allison Winter of ClimateWire reported yesterday at The New York Times Online that, “The largest U.S. farm group will ‘aggressively’ fight back against any attempts to change the landscape of American agriculture — including the farm bill or animal rights campaigns, American Farm Bureau Federation Bob Stallman said yesterday.

“In a fiery speech that kicked off the powerful farm lobby’s four-day convention in Seattle, Stallman said farmers and ranchers must unite to respond to ‘misguided, activist-driven regulation.’”

Ms. Winter pointed out that, “The remarks were harsher than usual for Stallman, who leads the 6-million-member farm group. Representatives from Farm Bureau chapters across the country are in Seattle this week for the group’s annual conference. Members are likely to vote on resolutions declaiming cap-and-trade legislation, according to members of the organization.”

Yesterday’s article stated that, “Stallman said that the bill would ‘slash’ farmers’ ability to produce more food for a growing worldwide population. He estimated the bill would shift as many as 59 million acres of food production into forestry — equal to setting aside every acre of land used for crop and food production in California, Indiana, Kentucky, Mississippi, Nebraska, North Carolina, Pennsylvania and Tennessee.

“He called on farmers to be more aggressive in opposing the climate bill and any other attacks on agriculture, including characterizations of ‘factory farmer, industrial food and big ag.’ He cited advice Gen. George Patton gave during World War II: ‘Make your plans to fit the circumstances.’”

In other climate related developments, Washington Post writer Juliet Eilperin reported yesterday at the Post Carbon Blog that, “Post Carbon’s revelation Monday that two lobbyists helped craft language for an amendment that Sen. Lisa Murkowski (R-Alaska) planned to offer last fall has already sparked a call for an Senate ethics investigation.

“Murkowski’s spokesman Robert Dillon dismissed the request as ‘totally bogus.’

“Kert Davies, director of Greenpeace’s PolluterWatch, said in an interview he will ask the Senate Ethics Committee to investigate who asked Jeffrey R. Holmstead–who heads the Environmental Strategies Group at Bracewell & Guiliani–and Roger R. Martella Jr., a partner at Sidley Austin LLP, to advise Murkowski on an amendment that would have barred the Environmental Protection Agency from regulating carbon dioxide as a pollutant under the Clean Air Act.

“‘We will request the Senate Ethics Committee review in this tryst between dirty coal and Senator Murkowski,’ Davies said.”

Meanwhile, Jim Snyder, writing yesterday at The Hill’s Energy and Environment Blog, offered a different perspective on a separate variable that could complicate a potential Murkowski amendment regarding EPA’s endangerment finding.

Mr. Snyder explained that, “Environmental groups don’t much like Sen. Lisa Murkowski’s (R-Alaska) efforts to block the EPA from regulating carbon dioxide through an amendment to the debt ceiling bill. Some industry types aren’t wild about the idea either.”

The Hill item added that, “But there’s a potential parliamentary problem with Murkowski using debt ceiling legislation, which the Senate is expected to take up next week.

Democrats could then offer what’s known as a second degree amendment that could actually strengthen EPA’s hand.”

Mr. Snyder added that, “Here’s the deal: As EPA is writing greenhouse gas regs, it is also working on a ‘tailoring rule’ that would limit their impact to only large emitters. Without that change, the EPA regulations would apply to small businesses too, a regulatory and a political nightmare.

“The regulation would apply to entities that emit 25,000 tons or more of CO2 a year, which is a much higher floor than the other pollutants now regulated under the Clean Air Act. The change is necessary because companies release far more C02 than they do other gases like sulfur dioxide. 



The second degree amendment Democrats are considering would codify the tailoring rule, that is, give it a congressional stamp of approval. The amendment would likely be a winner in the Senate because what lawmaker wants to go on record opposing something designed to limit the regulatory burdens to mom-and-pop bakeries and the like? Very few.

Industry lobbyists don’t want the tailoring rule codified because it would make a court challenge to emissions regulations much tougher. Energy lobbyists now believe challenging the tailoring rule in court is one of the best legal options they have in trying to delay EPA action.”

The Hill update pointed out that, “Murkowski is also introducing a resolution through the Congressional Review Act, which allows Congress to block federal rules it doesn’t like. Resolutions under the CRA can’t be amended. They can be vetoed, which would likely happen if it reached President Barack Obama’s desk.”

Ben Geman, also writing yesterday at The Hill’s Energy and Environment Blog, reported that, “White House climate czar Carol Browner said Monday that last month’s Copenhagen climate summit was a significant step forward despite falling short of expectations.

“‘What was important is that you now have both China and India . . . agreeing it is time to do something, and that hadn’t happened previously, so we are very encouraged by the progress that happened in Copenhagen,’ Browner said in an online chat broadcast on the White House website.”

With respect to Copenhagen, Dow Jones writer Andrea Thomas reported yesterday that, “The fight against climate change and securing biodiversity is crucial to preventing costly environmental damage, German Chancellor Angela Merkel said Monday.

“‘Copenhagen hasn’t made us optimistic,’ Merkel said at an environmental event on biodiversity. ‘But we will go on. There is no alternative to it.’

Her comments come after the disappointing outcome of the United Nations-sponsored climate summit in December, which ended with a face-saving note and no agreement on binding targets on how to reduce greenhouse gas emissions.”

And Washington Times writers S.A. Miller and Stephen Dinan reported today that the domestic economy remains a broad theme that could increasingly impact other legislative priorities: “Lawmakers return to Washington on Tuesday for the stretch run to the 2010 midterm elections with all sides agreeing that job creation is Job One — the only problem is there’s little money to get it done.

“Though limited by record deficits, lawmakers are keen to spend money on creating jobs, even as they look to tackle health care, promote clean energy, write new regulations for Wall Street and plow through a host of leftover business, ranging from expiring tax cuts to renewing parts of the USA Patriot Act.”

The Washington Times article stated that, “Both chambers now must forge a compromise health care bill, but Democrats, who control both bodies, say they’re looking to pivot to the jobs agenda.”

Biofuels

Reuters writer Tom Doggett reported yesterday that, “U.S. and global oil demand will increase in 2010 and 2011, but the growth rate in petroleum consumption will not be as strong as in years past, according to advance details provided to Reuters on a U.S. government monthly energy supply and demand forecast.

“The Energy Information Administration’s forecast, which will be released on Tuesday, expects the U.S. economy to grow about 2 percent this year and close to 2.7 percent next year, resulting in rising oil demand.

“‘We’re not working off a double-dip recession in our forecast,’ said an EIA analyst familiar with the agency’s outlook who did not want to be identified.”

Bloomberg writers Iuri Dantas and Katia Cortes reported yesterday that, “Brazil cut the mandatory amount of ethanol mixed into gasoline to 20 percent from 25 percent after stocks fell, the government said today.

“The new ethanol requirement will take effect from Feb. 1 and last 90 days, the Agriculture Ministry said today in an e- mailed statement.

“Brazil decided to cut the ethanol level after stocks of the bio-fuel waned at the end of the sugar cane harvest. Ethanol prices rose to 67 cents per liter last week, the highest since at least July 2007, according to weekly prices tracked by Esalq.”

Recall that at the end of last month, Growth Energy issued a news release which stated in part that, “Noting that ethanol producers already help the nation’s environment by reducing tailpipe emissions and recycling carbon that is largely produced by fossil fuels, Growth Energy urged the Environmental Protection Agency to suspend a proposal to add an additional layer of regulation on ethanol plants until they could cooperatively design an oversight program specific to ethanol producers.”

An alternative perspective on this issue, titled, “We’re Clean, We’re Green, and We’d Like Our Ethanol Plant Emissions Exempted,” was posted yesterday at the AgMag Blog (The Environmental Working Group).

Keith Good

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