January 24, 2020

Budget Issues; Ag Economy; Climate Change; and Trade

Budget Issues: Hunger Report, Conservation

Lisa Lerer and Manu Raju reported on Friday at Politico that, “Democrats are racing to hash out the details of a jobs bill by a self-imposed Monday deadline — and working overtime to gain the Republican votes they’ll need to pass it.

“Democratic Sens. Chuck Schumer and Max Baucus spent Thursday in a flurry of delicate negotiations with Republican Sens. Chuck Grassley and Orrin Hatch , with aides going back and forth on the details of a tax-focused jobs bill.

“The bill has shifted from a sweeping piece of legislation to a smaller, bipartisan bill — loaded up with tax cuts to gain Republican support,” the Politico article said.

Meanwhile, DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “With people lining up at food banks for food and prices for some farm products low, a coalition of farm and anti-hunger groups is asking Congress to include an additional $253 million for commodity purchases for food banks in the jobs bill Congress is considering, or in another piece of legislation.

“At a Capitol Hill briefing Thursday, Feeding America, a network of 200 food banks around the country, released a report showing the recession has led to a dramatic increase in the number of people who are ‘food insecure,’ a sociological term that means they are worried about not having enough food each month. The reports showed the biggest increase in food insecurity is in the suburbs, which have generally been considered among the richer areas of the country, but have experienced an unusually high level of unemployment in this recession.”

Mr. Hagstrom added that, “The release of the report reinforced a letter that a coalition including the National Farmers Union, the National Pork Producers Council, the National Chicken Council and the National Milk Producers Federation and Feeding America sent on Jan. 29 to House and Senate agriculture appropriations leaders asking for an additional $253 million in funding for The Emergency Food Assistance Program (TEFAP), a USDA program that buys food and ships it to the states for use in food banks and other programs that directly provide food to hungry people.”

The Feeding America hunger report was also a topic of discussion on the AgriTalk Radio program last Tuesday.

In other spending developments, recall that the administration’s proposed FY 2011 agricultural budget summary stated that, “The Budget will accelerate the protection of our natural resources by strategically targeting funding to high priority program areas. This includes funding the Wetlands Reserve Program at a level to enable the restoration and protection of almost 200,000 additional acres of wetlands, providing over $1.2 billion for the Environmental Quality Incentives Program to help farmers comply with regulatory requirements and protect natural resources…”

An update posted on Friday at the National Sustainable Agriculture Coalition Blog indicated that, “In a February 5 letter to the House and Senate Agricultural Appropriations Subcommittees, farm, conservation and environmental groups urged Congress to reject President Obama’s proposed $1 billion-plus cut to mandatory farm conservation program funding.”

Friday’s update added that, “The funding placed on the chopping block by the President was agreed to and signed into law as part of the 2008 Farm Bill. In his 2011 budget, submitted to Congress on February 1, Obama proposes to use a backdoor mechanism to reverse the farm bill decision. The proposed budget chicanery would limit the ability of USDA to pay their conservation service employees if they implement a program beyond a reduced size and scope dictated in the White House proposal.

“The Obama proposal includes one-year cuts to the Environmental Quality Incentives Program, Wildlife Habitat Incentives Program, and Farm and Ranch Land Protection Program, and one year and multi-year cuts to the Conservation Stewardship Program, Wetlands Reserve Program, and Grasslands Reserve Program. The one year cuts exceed $500 million and the long-term cuts exceed $1 billion.”

In a more general look at agricultural spending and the budget, Carl Hulse reported in yesterday’s New York Times that, “While Senator Saxby Chambliss, Republican of Georgia, said he was all for slowing federal spending, he has no appetite for the substantial cuts in farm programs proposed in President Obama’s new budget.”

After noting budgetary positions of other GOP Senators, the article pointed out that, “The positions of these Republicans — and similar stances by dozens of other lawmakers of both parties — are a telling illustration of why it is so hard to control federal spending. Every federal program has a constituency, and even lawmakers who profess to be alarmed by rising deficits will go to the mat to preserve money that provides jobs and benefits to their constituents.”

Later, Mr. Hulse indicated that, “It is not only Republicans who are trying to have it both ways. Conservative and moderate Democrats who have pushed against deficit spending also quickly protested the cuts in NASA, military and farm spending. Among them was Senator Blanche Lincoln, an Arkansas Democrat who leads the Agriculture Committee.

“‘I am standing up for farmers and ranchers and all of rural America once again by opposing cuts that will harm the hardworking men and women who are the backbone of our rural economy,’ Ms. Lincoln said in a statement that accused the White House of unfairly focusing on farm communities. ‘While I, too, believe we must reduce the federal deficit, we must all share in this responsibility.’”

In some ways, the Times article was similar to a Wall Street Journal article from Thursday by Neil King Jr., which stated that, “[Sen. Kent Conrad (D-ND)] has become one of the Senate’s most vociferous deficit hawks, warning that the nation faces insolvency if it doesn’t boost revenues and trim obligations.

Like many in Congress, he is conflicted. He boasts a 23-year record of looking after North Dakota voters with ample farm subsidies, aid for drought-hit ranchers…”

The Journal article stated that, “Mr. Conrad’s career shows how hard it is to trim spending, even for those committed to beating down the deficit. Lawmakers from both parties routinely scramble to protect or increase funding for home-state projects. Not since 1965 has Congress approved a budget smaller than the prior year’s.”

An update posted on Friday at (Dothan, Alabama) indicated that, “In a proposal similar to one from last year, President Obama is trying to scale back the number of farms eligible for federal assistance.”

The link, which includes a video replay of a broadcast story on the budget (about two minutes), noted that, “Congressman Bobby Bright– who is also a member of the agriculture committee-, says Washington has a 5 year commitment to growers thanks to the farm bill.

“‘What we’ll have to do is go in there and sit down with the President and discuss with him the effects of what this will have on our farmers not just here but across the country. He will listen. He did last year and I hope he will again this year,’ said Bright, (D) Montgomery.”

Ag Economy- Peanuts

Last week, USDA’s Economic Research Service (ERS) released a report titled, “Peanut Outlook: Impacts of the 2008-09 Foodborne Illness Outbreak Linked to Salmonella in Peanuts.” An ERS summary of the paper stated that, “The 2009 foodborne illness outbreak linked to Salmonella in peanut products resulted in one of the largest food safety recalls ever in the United States. The source of the outbreak handled a small share of the U.S. peanut supply, but the scope of the recalls was magnified because the peanut products were used as ingredients in more than 3,900 products. Consumer purchases of peanut-containing products initially slowed during the recalls, but retail purchases soon returned to normal and peanut processing held steady. The recalls do not appear to have had a lasting impact on peanut demand and production.”

Ag Economy- Cotton

A news release issued on Friday by the National Cotton Council (NCC) stated that, “U.S. cotton producers intend to plant 10.1 million acres of cotton this spring, up more than 10 percent from 2009, according to the National Cotton Council’s 27th Annual Early Season Planting Intentions Survey. (see more details).”

A separate NCC release from Saturday indicated that, “Lingering effects and uncertainties for the general economy continue to present challenges for the U.S. cotton industry but data suggest the worst has been weathered and recent concerns are being replaced with prospects for recovery and growth, National Cotton Council Economist Dr. Gary Adams says.”

“A major reason for optimism, Adams said, is that after seven months of the 2009 marketing year, it is increasingly clear that global cotton stocks will see their first substantial decline since the 2002 marketing year, and the estimated stock reduction of 9.4 million bales would be the largest single-year drawdown since 1986. Projected 2009 global mill use of 114.6 million bales — 3.1 percent higher than 2008 — and ending stocks of 51.5 million bales would result in a global stocks-to-use ratio of 45 percent.”

Ag Economy- California Water Issues

Taryn Luntz of Greenwire reported on Friday at The New York Times Online that, “Partisan bickering resumed yesterday over water pumping restrictions in California’s Central Valley, as Republicans attacked a Democratic bill meant to shore up area farmers.

“The agriculture-heavy area has seen unemployment skyrocket to 40 percent in some parts as a three-year drought has forced farmers to fallow their fields. Local advocates also blame federal pumping restrictions that protect endangered fish but limit water deliveries to farmers.

“H.R. 4225, from Rep. Jim Costa (D-Calif.), would waive or lower required state and local matching funds for qualifying water projects, including ones that would bring more water to valley farmers through new pipelines that are not restricted by the federal rules.”

The article added that, “The bill ‘is not a silver bullet,’ Costa said, but would nonetheless provide a measure of relief by allowing helpful projects to move forward [related news release from Rep. Costa available here].

“But Republicans at the Water and Power Subcommittee hearing dismissed the measure as inadequate, railing against Democrats for rejecting proposals to waive the Endangered Species Act restrictions and immediately allow more water for farmers.

Democrats have asserted that waiving ESA is an inappropriate way to address the drought, pushing instead for conservation and recycling measures and for a comprehensive look at how California can better manage its water resources.”

Meanwhile, Bettina Boxall reported on Saturday at the Los Angeles Times Online that, “A federal judge has temporarily lifted pumping curbs designed to protect salmon migration in the Sacramento-San Joaquin River Delta, an action that allows the diversion of more winter storm flows to farms and cities in the south.

Friday’s ruling is the latest in a tortuous legal fight over Endangered Species Act protections that limit pumping from the troubled delta east of San Francisco, a source of water for 23 million Californians and millions of acres of farmland.”

Ag Economy- Animal Agriculture

A news release from late last week by the National Cattlemen’s Beef Association stated that, “Kansas State University’s (KSU) Michael Apley, a veterinary clinical pharmacologist, traveled to Capitol Hill yesterday with the National Cattlemen’s Beef Association (NCBA) to educate lawmakers and their staff about the use of antibiotics in the beef industry. Dr. Apley and NCBA met with Congresswoman Louise Slaughter (D-NY) and Congressman Leonard Boswell (D-IA) to discuss H.R. 1549, Rep. Slaughter’s bill to ban the use of antibiotics in livestock.

“‘We appreciate Congresswoman Slaughter taking the time to visit with us today. I’m encouraged by her willingness to sit down for an open discussion and that she has extended an offer for us to be involved in the discussions moving forward,’ said Apley. ‘As a veterinary clinical pharmacologist, I work to evaluate the benefits and risks of use of antibiotics in livestock. It’s extremely important that data-driven review and analysis be the guiding force behind every decision that affects the care of our animals and the safety of the food we eat.’”

Philip Brasher
reported in yesterday’s Des Moines Register that, “The vast majority of laying hens in the United States have been kept in cages since the 1960s and 1970s. It’s the cheapest, least labor-intensive way of producing eggs. It’s still the industry standard nationwide and in Iowa, by far the largest egg-producing state.

But the industry is under pressure on several fronts to change the way hens are kept.”

The Register article noted that, “California passed an initiative in 2008 that all livestock must have enough room to stretch their legs and wings and lie down;” and Mr. Brasher added that, “The egg industry is watching closely to see what kind of housing will be required in California when the new law takes effect in 2015.

“Paul Sauder, a major East Coast egg distributor who buys from Rosenberry’s farm, said that whatever type of housing is permitted in California will likely wind up as the industry standard, ‘the way of egg production in the United States,’ with cost implications for producers and consumers.”

Climate Change Issues

Senior White House Adviser David Axelrod was on C-SPAN’s Newsmakers yesterday and discussed a wide range of issues, including climate change (entire interview).

Gerald Seib of The Wall Street Journal asked Mr. Axelrod if cap and trade legislation on Capitol Hill was a “non-starter” at this juncture.

In response, Mr. Axelrod brought up the general issue of “energy” within the context of “a clean energy economy,” and noted that efforts to come up with an “overall energy bill” were ongoing.

To listen to this exchange from yesterday’s CSPAN program, just click here (MP3-1:31).

In a column released on Friday, Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) noted in part that, “As a senior member of the Senate Energy and Natural Resources Committee, I recently helped pass the American Clean Energy Leadership Act. This bipartisan energy bill is the common-sense solution we need. It will promote greater energy efficiency and grow the use and production of cleaner, renewable energy sources that will benefit our environment, create jobs and put us on the path toward energy independence.”

Sen. Lincoln added that, “Some in Washington want to focus only on cap and trade legislation. I believe we must first focus on a bipartisan energy proposal that will help boost our economy and help create jobs. While I support the goals of curbing greenhouse gases and advancing clean-energy technologies, I don’t support the belief that cap and trade and burdensome regulation from the federal government are the only way to achieve those goals. Heavy-handed EPA regulation, as well as the current cap and trade bills circulating in Congress, will cost us jobs and put us at an even greater competitive disadvantage to China, India and others.

The bipartisan clean energy legislation produced by the Senate Energy Committee will accomplish our shared goals in a practical way that will stimulate the economy, not stifle it.”

The Wall Street Journal editorial board indicated in an item posted yesterday at the Journal Online that, “The Obama Administration has been moving full-speed ahead on anticarbon regulation, never mind waiting for Congress to pass a bill. But now opposition is building among senior Democrats, with two powerful committee Chairmen introducing a bill last week to bar the Environmental Protection Agency from declaring that carbon is a dangerous pollutant.”

The editorial indicated that, “Missouri’s Ike Skelton and Minnesota’s Collin Peterson, the Chairmen of the House Armed Services and Agriculture Committees…[A]long with Missouri Republican Jo Ann Emerson,… [a]re pushing a two-page bill that would amend the Clean Air Act to restore Congress’s original intent and strip CO2 and other greenhouse gases from the statutory language.”

The Journal added that, “The Skelton-Peterson-Emerson bill follows a similar effort by North Dakota Democrat Earl Pomeroy, not to mention Alaska Republican Lisa Murkowski’s coming ‘disapproval resolution’ in the Senate that has the support of Democrats Mary Landrieu, Ben Nelson and Blanche Lincoln.”

Washington Post writer Juliet Eilperin reported on Friday at the Post Carbon Blog that, “Once seen as a moderate, Sen. Lisa Murkowski (R-Alaska) has become the Republican that environmentalists love to hate–ever since she introduced a resolution last month that would block the Environmental Protection Agency from regulating greenhouse gases.

But Murkowski has been quietly working on an alternative climate proposal, one that may stand a decent chance of attracting bipartisan support. In an interview Friday, McKie Campbell, GOP staff director on the Energy and Natural Resources Committee, shed some light on the senator’s strategy.

“‘We’re currently looking at a variety of options, including a net-zero carbon tax,’ Campbell said.”

Ms. Eilperin explained that, “Campbell didn’t disclose many details of the plan, which he emphasized is still being vetted by Murkowski and her staff. He said it would include provisions to ensure it had ‘environmental and economic integrity.’ That means there would be ways to assess the fact that it was a) cutting carbon emissions in line with the bill’s overall reduction target and b) raising the price of carbon without harming the overall economy.

In general, a net-zero carbon tax works like this: you put a price on carbon that raises the cost of fossil fuels such as coal, oil and natural gas (which in turn makes other goods and services such as electricity more expensive). To balance it out you cut some other federal tax, such as payroll taxes, so in the end, the average American is not suffering an economic hit, but has less of an incentive to consume fossil fuels.”


Ian Swanson reported yesterday at The Hill Online that, “The Obama administration is reaching out to business-friendly Democrats to win support for free-trade policies that divide the party.

“The effort is part of President Barack Obama’s push on trade that was launched with his State of the Union address. Obama said he wanted to double exports over the next five years as part of an effort to grow the U.S. economy.”

The Hill article stated that, “The administration’s move was reinforced by a speech this week by Commerce Secretary Gary Locke on increasing exports. Locke focused on programs that could help small businesses increase their exports, as well as trade missions led by his department. [Note: To listen to some comments on agricultural trade from Sec. Locke’s speech, just click here (MP3- 1:25)].

U.S. Trade Representative Ron Kirk met members of the business- friendly New Democrats Coalition on Thursday to discuss the trade agenda. The Democrats spoke to Kirk about pending trade deals with South Korea, Colombia and Panama that have stalled in the Democratic-led Congress, according to Rep. Adam Smith (D-Wash.).

Moving any of those deals will be difficult because of opposition in Obama’s own party.”

The Washington Post editorial board noted today that, “In recent days, it has sometimes looked as if the political logjam over trade might finally be about to break. In a State of the Union address centered on job creation, President Obama declared a National Export Initiative to double U.S. exports in five years. In support of this goal, he spoke encouragingly about ‘strengthening’ trade relations with South Korea, Panama and Colombia — each of which has a free-trade agreement (FTA) with the United States pending congressional approval. Could it be that the president was finally ready to take on labor unions and other Democratic interest groups that have been blocking them? The situation appeared even more hopeful on Wednesday: Treasury Secretary Timothy F. Geithner responded ‘absolutely’ when a member of Congress asked whether the administration wanted to get them through by year’s end.

Or so it seemed. Actually, the secretary had been misinterpreted because of some cross talk at the hearing, as his department quickly explained in a news release afterward. The Obama administration’s position remains what it was: It wants to adjust the deals, in cooperation with Capitol Hill, and ‘move forward’ with them, but there’s no deadline. And so, despite the promising talk, the future of the FTAs remains uncertain. Panama’s might still come to a vote this year, which would be good, but it is the smallest and least controversial of the three. A failure to pass the Colombia and Korea agreements would be bad news for American companies and American workers.”

The Post opinion item concluded by saying, “Are opponents of the FTA clinging to their arguments despite overwhelming contrary evidence? Is free trade with Colombia in the U.S. interest? And has the president indulged protectionists in Congress long enough? To all three questions, the answer is: ‘Absolutely.’”

Keith Good

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