FarmPolicy

June 26, 2019

Climate Issues; Federal Debt; Crop Insurance; and Dairy Issues

Climate Issues: Less Momentum for Cap and Trade?

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Sen. Lisa Murkowski (R-Alaska) is confirming that she probably won’t offer an amendment to debt ceiling legislation this week that would block EPA from regulating greenhouse gas emissions.

“Murkowski has been mulling another path to thwart EPA: introducing a formal ‘resolution of disapproval’ under the rarely used Congressional Review Act that allows Congress to overturn agency rules.

“‘At this point in time, my inclination is to proceed with the resolution of disapproval. I think that that is a more clear path forward,’ she said at a GOP press conference Wednesday morning.”

Mr. Geman indicated that, “Sen. Mary Landrieu (D-La.) told reporters Wednesday that she’s working with Murkowski on proposals to prevent EPA from regulating the heat-trapping emissions under its current Clean Air Act powers.

“Murkowski’s efforts face major hurdles to clearing Congress and becoming law, but could provide a political signal about support for EPA rules if they garner significant Democratic support.”

A related news release issued yesterday by the American Farm Bureau Federation (AFBF) stated that, “[AFBF] supports legislative efforts by Sen. Lisa Murkowski (R-Alaska) to stop an Environmental Protection Agency proposal to regulate carbon dioxide and other greenhouse gases under the Clean Air Act.

“In a letter to Murkowski that was sent to all senators, AFBF President Bob Stallman said the EPA proposal is ill-timed because climate discussions held in Copenhagen last month did not produce a ‘meaningful international agreement that puts all nations on a level playing field with respect to carbon emissions.’”

And in a separate update posted yesterday at The Hill’s Energy and Environment Blog, Ben Geman reported that, “Sen. Lindsey Graham (R-S.C.) said he plans to meet with U.S. Chamber of Commerce officials later on Wednesday to discuss energy and climate change as Graham continues efforts to craft a bipartisan plan.

“Graham – who is working with Sen. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) – wants to merge expanded oil and nuclear power production with some kind of limits on greenhouse gas emissions.

He argues that only a mix of energy production and greenhouse gas measures can achieve 60 votes.”

In a related article, Philip Brasher reported yesterday at The Des Moines Register Online that, “With a sweeping climate bill stalled in the Senate, attention could turn to a smaller measure that would boost usage of renewable electricity, a potential boost to Iowa’s wind industry.

“The bill, passed by a Senate committee in June, would require that utilities increase their use of renewable power by up to 15 percent by 2021 and make it easier to build the interstate transmission lines needed for wind projects. The bill also includes provisions to increase the energy efficiency of buildings and appliances.”

Meanwhile, Reuters news reported yesterday that, “The top Republican in the Senate, Mitch McConnell, said on Wednesday that there was barely any support in that chamber for passing cap and trade legislation that aims to control global warming.

“‘I would say there is minimal enthusiasm, and that’s putting it mildly, for cap and trade,’ McConnell said when asked by a reporter whether the initiative was dead for this year.”

Similarly, Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Salvaging a global warming bill apparently isn’t the first item on the Democratic agenda.

“Senate Democrats did not discuss climate and energy legislation when they huddled Wednesday to map out plans in the wake of Republican Senator-elect Scott Brown’s stunning victory in Massachusetts, Majority Whip Richard Durbin (D-Ill.) said.

“‘It didn’t come up during the course of the lunch,’ Durbin said after the weekly caucus meeting in the Capitol. ‘[Majority Leader] Harry Reid will have to schedule it. I suggest you ask him.’”

Dan Balz and Paul Kane reported in today’s Washington Post that, “A day after their embarrassing loss in Massachusetts, splintered Democrats pledged to refocus their attention on jobs and the economy, and to draw sharper contrasts with Republicans, as they scramble to find a strategy to quell the populist anger that threatens the party’s standing in the November elections.”

And Darren Samuelsohn of ClimateWire reported yesterday at The New York Times Online that, “An already tough climb to pass comprehensive climate and energy legislation in the Senate just got a bit tougher with Republican Scott Brown’s upset victory yesterday in Massachusetts.

“Brown’s win takes a guaranteed ‘yes’ vote off the board for advocates of setting up a mandatory cap on greenhouse gas emissions. It also could serve as a warning shot for moderate senators nervous about voting for a sweeping new government program headed into their own tough re-election campaigns.”

Yesterday’s article noted that, “Andrew Wheeler, former staff director to Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.), questioned how Obama could try to push global warming legislation given that Democrats just lost a Senate seat in a blue-state stronghold.

“‘Moderate Democrats were already turning away from cap and trade, and they will be even more cautious about such programs this year,’ Wheeler said.

For instance, [Blanche Lincoln (D-Arkansas)], the Senate Agriculture Committee chairwoman, is in a tough re-election fight and has not publicly announced her plans for a markup of climate issues under her jurisdiction. And Sen. Byron Dorgan (D-N.D.), who has lobbied for a year to take up an energy-only bill rather than combining it with cap and trade, earlier this month announced his retirement at the end of the year.”

Naftali Bendavid and Corey Boles
provided this succinct overview regarding cap and trade in an article from today’s Wall Street Journal: “Sen. Joseph Lieberman (I., Conn.), who usually votes with the Democrats, said the election loss shouldn’t shift priorities. ‘It doesn’t mean that we’re not going to do climate change or financial regulatory reform; it speaks to how we’re going to do it,’ Mr. Lieberman said.”

Climate Issues: Agricultural Perspectives

DTN Ag Policy Editor Chris Clayton reported yesterday that, “With the potential of higher production costs and shift in crop acreage, the National Corn Growers Association [NCGA] shifted its position Wednesday to oppose the House climate legislation that passed last June.”

Mr. Clayton explained that, “NCGA changed its position on climate legislation after a new study showed that under a cap-and-trade regime created by the House climate bill, H.R. 2454, corn farmers could face higher production costs over time, acreage shifts because of carbon credits and marginal potential income for farmers who can practice continuous no-till production.”

Yesterday’s DTN article noted that, “NCGA remains neutral on legislation in the Senate to continue talks and ideally improve on the House bill. Still, NCGA President Darrin Ihnen said farmers are leery of how cap-and-trade could work and whether such a program would do more economic harm than good.”

An audio replay of a conference call regarding the NCGA announcement from yesterday is available here.

A news release issued yesterday by the National Farmers Union stated that, “National Farmers Union (NFU) President Roger Johnson, in association with the 25x’25 Initiative and the University of Tennessee, addressed more than 50 House and Senate Agriculture and Environment and Public Works Committee staff; Leadership; committee staff members; and individual member office staff on the economic impact climate change policy decisions will have on the agriculture and forestry sectors.

“‘America’s farmers and ranchers can and want to be part of the solution to global climate change,’ said Johnson. ‘Voluntary offsets will provide environmental and economic benefits.’”

Climate Issues: International Perspectives

Stephen Power reported yesterday at the Washington Wire Blog (The Wall Street Journal) that, “Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change, told reporters that Brown’s victory ‘is not going to cause a landslide in the politics of the U.S. on the question of climate change’ and that the world is still counting on President Barack Obama’s administration to deliver on its promises to curb U.S. emissions of heat-trapping gases.

“‘I think there’s a broad consensus that the economic crisis represents an opportunity to create green jobs,’ de Boer said. He acknowledged ‘grave concerns’ in the U.S. about energy prices and expressed uncertainty over whether the U.S. would seek to curb emissions through new legislation or through regulations set by the Environmental Protection Agency. But he added that ‘whatever route is taken, the president of the United States committed to a 17% emissions reduction’ by 2020, during last month’s U.N. climate-change summit in Copenhagen, Denmark.

“‘It is those statements to which the international community will hold the government of the United States accountable,’ de Boer added.”

John M. Broder and Elisabeth Rosenthal reported in today’s New York Times that, “Just a month after world leaders fashioned a tentative and nonbinding agreement at the climate change summit meeting in Copenhagen, the deal already appears at risk of coming undone, the top United Nations climate official warned on Wednesday.

Facing a Jan. 31 deadline, major countries have yet to submit their plans for reducing emissions of climate-altering gases, one of the major provisions of the agreement, according to Yvo de Boer, the Dutch official who is executive secretary of the United Nations Framework Convention on Climate Change, which organized the climate meeting.

Fewer than two dozen countries have even submitted letters saying they agree to the terms of the three-page accord. And there has been virtually no progress on spelling out the terms of nearly $30 billion in short-term financial assistance promised to those countries expected to be hardest hit by climate change. Still unresolved are such basic questions as who will donate how much, where the money will go and who will oversee the spending.”

Federal Debt

Lori Montgomery reported in today’s Washington Post that, “Senate Democrats proposed Wednesday to increase the nation’s debt limit by a record $1.9 trillion, but were scrambling to line up the votes for the increase, which would authorize the Treasury to borrow enough money to cover the government’s bills through the rest of the year.

The proposed increase would raise the legal cap on borrowing to $14.3 trillion, which would increase the nation’s accumulated debt to about the size of the overall U.S. economy.”

Today’s Post article added that, “Democratic efforts to raise the cap have been further complicated by dissension in their own ranks. On Tuesday, the White House and congressional Democrats reached a tentative agreement to have Obama appoint a bipartisan budget commission to chart a path to fiscal solvency, an agreement designed to appease more than a dozen moderate Democrats in the Senate, who are otherwise threatening to vote against the debt limit increase.

“But that deal has yet to be sealed. The leader of the moderate faction, Senate Budget Committee Chairman Kent Conrad (D-N.D.), said he was still waiting for written assurances that Congress would give the commission’s recommendations an up or down vote by the end of this year. ‘Without a credible commission, there’s not going to be a vote on a long-term extension of the debt,’ Conrad said.”

Crop Insurance

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “USDA is in the midst of renegotiating its Standard Reinsurance Agreement with the crop insurance industry and now is starting to get some push back over a USDA proposal that would reduce the industry’s administrative and operating reimbursements, and premium subsidies by $4 billion over the next five years.”

The DTN update added that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., and Committee Ranking Member Saxby Chambliss, R-Ga., along with 24 other senators sent a letter to USDA’s Risk Management Agency on Wednesday asking the department to ‘refrain from making deep cuts to the federal crop insurance program,’ citing that a vibrant crop-insurance industry is vital to the agricultural economy.

“Congress negotiated to reduce the projected costs of crop insurance by $5.6 billion from 2008-2017, the senators noted in their letter. That cut in the farm bill should be factored into USDA’s work on the reinsurance agreement, the senators stated. ‘Even though your agency was authorized in the farm bill to consider alternative reimbursement mechanisms in the SRA and the companies expected to face some revenue reduction from the process, the depth of these proposed cuts came as quite a shock, and combined with the cuts from the farm bill could force some companies out of business.’

Senators stated they are worried about the ability to serve farmers, as well as possible job losses that could occur with potential funding cuts.”

Mr. Clayton explained that, “As the senators sent out their letter, a Washington public-relations firm acting on behalf of the crop-insurance industry also sent out a news release as the crop-insurance industry offered a counter-proposal to USDA. There are effectively 15 companies impacted by the contract talks.

“‘These are pretty dramatic cuts based on little or no supporting research and data,’ said Bob Parkerson, President of National Crop Insurance Services. ‘The industry supports thinking about change, but it has to make sense for the Government, industry and producers.’

“USDA wants to have an agreement in place by April. So it’s a major debate with billions of dollars on the line for crop insurers, taxpayers and farmers.”

Philip Brasher reported yesterday at the GreenFields Blog that, “The USDA argues that the [crop insurance] industry’s rising profits are unwarranted when compared to the rest of the insurance industry. A study done for the USDA (and disputed by the crop insurance companies) found that those firms had been earning a rate of return of as much as 28 percent in recent years and about twice what would be considered reasonable for the insurance business. Payments to the crop insurance industry have doubled from $1.8 billion to $3.6 billion over the past three years as commodity prices have risen.

The USDA has not said what it will do with the money it would cut from the industry, but some critics suspect the administration wants to use the savings to bolster child nutrition programs, including school lunches.”

Meanwhile, an update posted yesterday at AgricultureOnline stated that, “Reductions in U.S. crop insurance premiums have resulted in significant farmer and taxpayer savings in 2009, according to data from the pilot Risk Management Agency Biotechology Endorsement program.

“U.S. corn farmers participating in the program are estimated to have saved more than $50 million in premiums, and savings to taxpayers are estimated at more than $75 million in 2009, according to a report from Monsanto Company.

“The Biotechnology Endorsement pilot program lowers crop insurance premiums for irrigated and non-irrigated corn producers who plant qualifying hybrids. Monsanto Company was the innovator of the pilot Biotech Yield Endorsement program, which received Federal Crop Insurance Corporation approval in 2007 for the 2008 crop year.”

Dairy Issues

Earlier this week, the USDA’s National Agricultural Statistics Service released its Milk Production report, which noted in part that, “Milk production in the 23 major States during December totaled 14.6 billion pounds, down 0.8 percent from December 2008. November revised production at 14.0 billion pounds, was down 0.8 percent from November 2008.” (Related graph available here).

And Bob Meyer reported yesterday at Brownfield that, “The monthly Livestock, Dairy and Poultry Outlook from USDA on Wednesday a mixed bag for dairy. The Outlook Board says moderating feed costs and higher milk prices will lead to an end to the decline in milk production although rebounding exports and stronger domestic use should push prices higher throughout the year. The nation’s dairy herd is expected to average just below 9 million head this year compared to 9.2 million cows in 2009. Production per cow is projected to increase 1.9 percent this year thanks in part to the lower-quality cows having been culled throughout 2009. However, the report notes that ‘while the worst of the economic contraction is over, many producers are not in a financial position to consider herd expansion at this time.’”

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Dairy leaders agree that the current dairy program did not provide a safety net for farmers when prices plummeted in 2009, but they are struggling to reach a consensus on a new program that farmers could support when the next farm bill comes up in 2012, according to presentations at the International Dairy Foods Association Dairy Forum here [Phoenix] on Monday and Tuesday.

At the core of the problem is increased volatility in both dairy prices and input prices in a globalized economy. Dairy exports and milk prices soared in 2008, but both came tumbling down in 2009. Meanwhile, continuing foreign demand for corn and soybeans, and for corn for ethanol have made feed prices more volatile.”

And in other news regarding animal agriculture, Philip Brasher reported yesterday at the GreenFields Blog (The Des Moines Register) that, “Lawmakers who want to curb the use of antibiotics in hog and other livestock are urging Agriculture Secretary to take some steps to address the issue. Among those measures: Boost monitoring for resistant bacteria and write rules for labels that would allow meat to be promoted as ‘raised without antibiotics.’

“The three lawmakers, led by Rep. Louis Slaughter, D-N.Y., are sponsoring legislation that would sharply restrict the on-farm use of antibiotics, but that bill doesn’t appear to be going anywhere for now. In a letter dated Jan. 15 to Vilsack, the lawmakers press their concerns that overuse of antibiotics in livestock is leading to a rise in drug-resistant bacteria that are a threat to human health:

“‘Antibiotics are the miracle drugs of the 20th century, yet overuse leads to development of resistant bacteria. With simple, common sense and inexpensive improvements to animal husbandry practices, it would not be necessary to give animals routine and large volumes of antibiotics.’”

Keith Good

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