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Climate Issues; Biofuels; Food Security; Farm Bill; Crop Insurance; Animal Agriculture; Trade; and CFTC Issues

Climate Issues

Jim Snyder reported yesterday at The Hill Online that, “Senate Republicans on Tuesday seized on errors in a United Nations climate change report and the recent ‘Climategate’ e-mail controversy to press the administration to drop its push to regulate greenhouse gas emissions.

“Democrats, meanwhile, countered that the overwhelming evidence suggested human activity was causing global warming and compared climate change skeptics to people in the 1930s who refused to believe Nazism was a threat.” (Note: To listen to an audio clip from Sen. Bernie Sanders (I-Vermont), who made the 1930s reference, just click here (MP3-1:38)).

“The debate, which took place at a Senate Environment and Public Works (EPW) Committee hearing that was scheduled to review the Environmental Protection Agency’s 2011 budget, will likely do little to build consensus around climate change legislation or an effort at the Environmental Protection Agency (EPA) to regulate heat-trapping gases.”

The Hill article indicated that, “Committee Republicans focused on three areas to combat the push to regulate greenhouse gases: a series of what they called ‘gaffes’ in the Intergovernmental Panel on Climate Change (IPCC) report that they contend undermine the panel’s credibility; ‘Climategate’ e-mails hacked from a leading British research institution that seem to suggest climate scientists sought to suppress dissenting views; and a statement by a leading climate scientist that there had been no ‘statistically significant’ warming in the last 15 years.

“Sen. James Inhofe (R-Okla.), who seven years ago famously called global warming the ‘greatest hoax ever perpetrated on the American people,’ declared that the recent record proves he was right. Climate scientists have ‘cooked the books,’ Inhofe said.”

(Note: A related news release from yesterday stated that, “The Minority Staff of the Senate Committee on Environment and Public Works released a report today titled, ‘Consensus’ Exposed: The CRU Controversy.’ The report covers the controversy surrounding emails and documents released from the University of East Anglia’s Climatic Research Unit (CRU). It examines the extent to which those emails and documents affect the scientific work of the UN’s IPCC, and how revelations of the IPCC’s flawed science impacts the EPA’s endangerment finding for greenhouse gases.” And Keith Johnson reported yesterday at The Wall Street Journal Online that, “The Nobel-prize-winning Intergovernmental Panel on Climate Change faces new challenges following a call for an investigation of its conduct and for its chairman to resign amid continuing criticism of the scientific basis of its reports. Republican Sen. John Barrasso of Wyoming called on Thursday for the independent investigation and for Dr. Rajendra Pachauri, head of the Geneva-based panel, to resign.”)

Mr. Snyder stated in his article from yesterday that, “Inhofe also repeatedly referred to a statement from Phil Jones, director of the East Anglia Climate Research Unit, the research institution that was hacked. Jones told the BBC that there had been no statistically significant warming over the past 15 years.” (To listen to an extended exchange between Sen. Inhofe and Administrator Lisa Jackson from yesterday’s hearing, which includes this reference, as well as other comments about the EPA’s authority to regulate greenhouse gas emissions, just click here (MP3-7:12)).

Yesterday’s Hill article also indicated that, “The fight over EPA is important because climate legislation is uncertain in the Senate, including a bill passed by a deeply divided EPW Committee last fall.

“Inhofe insisted a cap-and-trade bill could not pass the full Senate. He said there were only 20 votes of support, far from the 60 necessary to end a filibuster.

That would leave the EPA to act on its own — which Sen. Kit Bond (R-Mo.) referred to as a ‘backdoor’ effort to ‘circumvent’ the stalled Senate climate bill.” (To listen to this and additional remarks, which are noted below, by Sen. Bond from yesterday’s hearing, just click here (MP3-3:12)).

Bloomberg writer Daniel Whitten and Simon Lomax reported yesterday that, “A plan by Lisa Jackson, head of the U.S. Environmental Protection Agency, to push back the effective date of rules to limit greenhouse gas emissions to next year merely delays ‘job killing’ until after elections, a Senate Republican said.

“The criticism by Senator Kit Bond of Missouri echoed views of several Senate Republicans one day after Jackson wrote a letter to eight Senate Democrats saying the rules won’t take effect this year. Bond and others told Jackson at an Environment and Public Works Committee hearing today that the agency shouldn’t be able to use the Clean Air Act to limit greenhouse gases.

The delay in regulating greenhouse gases from industrial sources ‘might be seen as a cynical ploy to delay the job killing until after the fall elections,’ Bond said at the hearing. He said Congress, not the EPA, should develop any climate policy.”

The Bloomberg article added that, “Senator Lisa Murkowski, an Alaska Republican, had promised to bring legislation to the floor aimed at stopping the agency from regulating greenhouse gases.

“Jackson’s latest announcement doesn’t address Murkowski’s ‘underlying concerns,’ Robert Dillon, a spokesman for the Alaska lawmaker, said in a telephone interview.

“Republicans at the hearing, including James Inhofe of Oklahoma and John Barrasso of Wyoming, also rejected Jackson’s approach. Democrats on the committee including Tom Udall of New Mexico and Barbara Boxer of California, who chairs the committee, supported Jackson.”

Dow Jones reported yesterday (article posted at DTN, link requires subscription) that, “The EPA chief portrayed her decision to delay the start of rules to 2011 as responding to lawmakers ‘of my own party’ who fear that EPA rules will damage their local economies. The biggest threat is from Sen. Jay Rockefeller (D., W.Va.), who last week lobbed a hardball at the EPA when he led a group of Democrats in urging the agency to suspend planed regulations of greenhouse-gas emissions from power plants and other stationary sources. Many of those facilities use coal, a big source of revenue for West Virginia.

The Obama administration’s outreach appeared to pay off on Tuesday, when Rockefeller told reporters that he would not support an amendment from Sen. Lisa Murkowski (R., Alaska) who is seeking to block the EPA from regulating greenhouse-gas emissions. The Republican lawmaker has lined up her own supporters for the amendment, which could force Senators to cast an uncomfortable vote on a controversial issue in an election year.

“Rockefeller said that he couldn’t support the amendment because it ‘obliterates all EPA’s functions,’ especially the agency’s plans to regulate greenhouse-gas emissions from motor vehicles. The amendment would overturn an EPA finding that greenhouse gases pose a danger to public health and welfare. That could undercut a carefully crafted deal on motor vehicle emissions, since ‘the actual rules are predicated on the finding of endangerment,’ the EPA’s Jackson warned the Senate Environment and Public Works Committee on Tuesday. The motor vehicle rules are to be finalized next month and will take effect beginning with cars made for the 2011 model year.”

Meanwhile, Reuters writers Richard Cowan and Timothy Gardner reported yesterday that, “Senator John Kerry said a bipartisan climate change bill would emerge soon in the U.S. Senate, contradicting what he called the ‘conventional wisdom’ that the legislation was dead this election year.”

The Reuters article added that, “On Monday, Senator Max Baucus, who chairs the Senate Finance Committee with oversight over parts of the climate bill, told Reuters he did not sense any momentum for passage of legislation this year and gave no hint his panel would work on it any time soon.”

From an international perspective, the AP reported yesterday that, “The United Nations says formal negotiations on an international treaty to control global warming will resume in Bonn in April, four months after the failed climate change summit in Copenhagen.

“U.N. climate chief Yvo de Boer said Tuesday the negotiating schedule is being intensified in order to secure a global climate deal at the end of the year. After the Bonn meeting April 9-11, more talks are scheduled there for May 31-June 11.”

However, Reuters news reported yesterday that, “Emission cuts pledges made by 60 countries will not be enough to keep the average global temperature rise at 2 degrees Celsius or less, modeling released on Tuesday by the United Nations says.”

Biofuels

A news release issued by Cornell University earlier this month stated that, “A recent EPA announcement that corn-based ethanol achieves a 21 percent greenhouse gas reduction compared to gasoline is based on false accounting assumptions and could actually lead to more fossil fuel consumption, according to Cornell University economists whose research will be released in March in the journal Applied Economics Perspectives and Policy.” (See complete article here, “The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy, and Agricultural Policy.”)

“Harry de Gorter and David R. Just, professors of Applied Economics and Management at Cornell, note that the EPA’s calculations assume, for example, that every gallon of ethanol produced will result in a gallon of gasoline that will not be burned.

‘It’s just a flawed concept. It makes no sense,’ Just said. ‘Most of that ‘saved’ gasoline will likely be burned somewhere else with potentially dirtier technology, such as China.’”

The news release added that, “The pair also criticizes the subsidy and mandate program. ‘By having both an ethanol subsidy and a mandate for its consumption, the government will increase global fuel supply, and the subsidy will actually subsidize oil consumption,’ de Gorter explained. ‘A more effective policy would have a mandate alone and get rid of taxpayer funded subsidies.’”

Chris Clayton reported yesterday at DTN that, “President Barack Obama will continue championing biofuels as a job creator, said Secretary of Agriculture Tom Vilsack when he spoke to members of the Governors’ Biofuels Coalition on Monday. Vilsack is hopeful for a positive decision on higher ethanol blends soon.

“Vilsack said he spent part of Monday afternoon at a meeting with the president talking about the effects of the recession on rural America. Coupled with expansions in broadband access, Vilsack said biofuels can provide more opportunities in rural parts of the country.”

Mr. Clayton added that, “Vilsack said criticism of corn-based ethanol is misplaced. Increases in production of corn are not slowing down. There is more corn being exported and enough to meet the demands of feed and fuel, he said. ‘There is more than enough to do everything we need to do.’”

Food Security- Biotechnology

Philip Brasher reported yesterday at The Des Moines Register Online that, “Biotech crops are hot in Brazil, but the real action in coming years could be in China, according to a group that tracks the technology.

“Brazilian farmers quadrupled their plantings of genetically modified corn last year to move into second place behind the United States in biotech plantings, according to an annual survey by the International Service for the Acquisition of Agri-Biotech Applications.

“But the group said China, now ranked No. 6, is poised to increase its production of the crops significantly after the government late in 2009 approved the use of genetically engineered varieties of rice and corn, known in most of the world as maize.”

Mr. Brasher stated that, “China’s action will likely spur other developing countries to approve the commercial production of similar crops, the report said.”

Clive Cookson reported yesterday at The Financial Times Online that, “Genetically modified crops continued to spread across the world last year, according to the most comprehensive annual survey of GM planting.

In 2009 the area of biotech crops increased by 7 per cent to 134m hectares (330m acres) in 25 countries, the International Service for the Acquisition of Agri-biotech Applications said on Tuesday. Fourteen million farmers worldwide grew at least some GM crops.”

Meanwhile, Geeta Anand reported on Monday at The Wall Street Journal Online that, “India has been providing farmers with heavily subsidized fertilizer for more than three decades. The overuse of one type—urea—is so degrading the soil that yields on some crops are falling and import levels are rising. So are food prices, which jumped 19% last year. The country now produces less rice per hectare than its far poorer neighbors: Pakistan, Sri Lanka and Bangladesh.

Agriculture’s decline is emerging as one of the hottest political issues in the world’s biggest democracy.

“On Thursday, Prime Minister Manmohan Singh’s cabinet announced that India would adopt a new subsidy program in April, hoping to replenish the soil by giving farmers incentives to use a better mix of nutrients. But in a major compromise, the government left in place the old subsidy on urea—meaning farmers will still have a big incentive to use too much of it.”

Farm Bill

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., spoke to the USA Rice Federation Tuesday morning and began by explaining why he is beginning to talk about the 2012 farm bill so early. It’s pretty simple: the threat of budget reconciliation and the looming threat of the federal deficit will come back to bite farm programs. A plan for 2012 and defining reforms on their own terms may help reduce the cuts to agriculture.

“‘I’m worried about what is going to happen next year after the elections, no matter who wins the election,’ Peterson said.

“In trying to cut the $1.3 trillion budget deficit, everything will be on the table, Peterson told rice growers. That ranges from Social Security to Medicare and Medicaid, on down to farm-program spending. There’s no way Congress will deal with the three big entitlement programs and leave USDA’s budget harmless.

“‘I just don’t see how we can keep running along and running these deficits up,’ he said.”

Crop Insurance

The “Washington Insider” section of DTN noted in part yesterday (link requires subscription) that, “One of USDA’s most important programs provides a broad range of insurance coverage for farmers. The program is carried out by USDA with on-ground operations by private firms through a massive agreement with the crop insurance industry, the Standard Reinsurance Agreement.”

“A first draft of the proposed agreement was released last December, and a new draft reflecting changes discussed earlier by RMA and the participating crop insurance companies came earlier this month. USDA says the second draft continues to provide companies with relatively stable administrative and operating (A&O) subsidies per policy for seven major commodities and that is intended to facilitate insurance company planning.”

Yesterday’s DTN item stated that, “USDA is proposing cuts in the program of $800 million a year over ten years and is receiving criticism as a result. ‘We all realize the cost has to come down some, the question is how much?’ Murphy asked and pointed out that, as a result of the current reinsurance agreement, ‘… competition in this program has come down to who can pay the best agent commissions, when it should be focused on the basis of service.’

Murphy admitted negotiations might last longer than originally planned, but welcomed ‘continued discussions and ideas to make the program better.’

“In the current highly political pre-election atmosphere surrounding all budget issues, Agriculture Secretary Tom Vilsack appears to be finding precious little support for USDA’s proposals. In spite of the 2008 Act’s authorization of the renegotiations, Agriculture Committee Chairman Collin Peterson, D-Minn., told the press he has personally spoken to the secretary about the proposed funding cuts in the first draft of the SRA and believes USDA has ‘gone way overboard and need to back off.’ And, Peterson added ominously, ‘This is not what I intended.’

“One of Peterson’s main reasons for opposing the cuts is that, ‘… if this happens, it comes out of the baseline (funding) and that will have an impact on the next farm bill.’”

Animal Agriculture

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “With the help of two Iowa Democrats, congressional aides on both side of Capitol Hill got briefings from livestock groups and the meatpacking industry on farms’ use of antibiotics. Sen. Tom Harkin and Rep. Leonard Boswell cosponsored the briefings. About 40 to 50 staff members attended each of the sessions, according to Dave Warner of the National Pork Producers Council.

“An Iowa producer and veterinarian, Craig Rowles of Carroll, was among the briefers. ‘We use antibiotics judiciously and responsibly to protect the health of our herds and to produce safe pork,’ he said in a press release put out by the organizations. ‘We know that a ban on antibiotics, like the one in Denmark, will have adverse affects on our pigs, will raise the cost of production and will not provide a benefit to public health.’”

A news release issued yesterday by Rep. Boswell stated that, “‘I understand that there are some in Congress who have concerns about how the use of antibiotics in livestock to produce safe, healthy food products can impact antibiotic resistance in humans,’ said Boswell, who recently traveled to Denmark to speak with farmers about how a ban on the use of therapeutic antibiotics has impacted their livestock industry. ‘However, I know farmers and trust that when they spend money to treat and grow their pigs and cattle they are doing so responsibly and with the interests of the consumers in mind.’

Boswell testified in front of the House Rules Committee against the Preservation of Antibiotics for Medical Treatment Act last year and in favor of slowing down to make sure that before Congress passes an outright ban on the use of non-therapeutic antibiotics that they do some research first.

Trade

Reuters news reported on Monday that, “The U.S. Agriculture Department continues to review sugar supply and demand forecasts to evaluate food industry requests to boost sugar imports, a top official said Monday.

“Sugar supplies in the United States are currently adequate, but there is much uncertainty in forecasts for the rest of the year, said Jim Miller, undersecretary charged with trade policy, in remarks prepared for the International Sweeteners Colloquium in Miami.

“‘We are carefully watching the global market for sugar due to the significant tightening of supplies throughout the world,’ Miller said.”

A news release issued yesterday by the House Ag Committee stated that, “Today, House Agriculture Committee Chairman Collin C. Peterson of Minnesota introduced legislation to expand U.S. agriculture exports to Cuba. This bipartisan bill, H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, is co-sponsored by 30 other Members of Congress, including Representatives Jerry Moran of Kansas, Rosa L. DeLauro of Connecticut, and Jo Ann Emerson of Missouri.

“‘Helping feed Cuba is good for the U.S. economy and for the Cuban people. This bill increases the ability of our farmers to sell their products to Cuba just like they do with our other trading partners,’ Chairman Peterson said.”

A related news release from the National Farmers Union yesterday indicated that, “Today National Farmers Union (NFU) President Roger Johnson expressed his support of the Travel Restriction Reform and Export Enhancement Act (H.R. 4645), sponsored by House Agriculture Committee Chairman Collin Peterson and co-sponsored by 30 other Members of Congress, including Representatives Jerry Moran of Kansas, Rosa L. DeLauro of Connecticut, and Jo Ann Emerson of Missouri.

“‘NFU commends Chairman Peterson’s leadership on this bill,’ said Johnson. ‘NFU has always been supportive of legislation allowing U.S. agricultural exports to Cuba.’”

CFTC Issues

Reuters news reported yesterday that, “The Senate Agriculture Committee will unveil a draft bill to increase oversight of over-the-counter derivatives in the next couple of weeks, said its chairman Blanche Lincoln on Tuesday.

“Lincoln’s committee has oversight over the Commodity Futures Trading Commission, regulator of U.S. futures markets. She said her committee is working closely with the Senate Banking committee, which is working on a broad package of financial regulatory reforms in the wake of the global economic crisis.”

The article stated that, “The Senate Banking Committee is expected to release a new draft of its bipartisan bill this week.

“Analysts expect a regulatory reform bill could move to the Senate floor for a vote in late March or April. Lawmakers would then need to iron out differences between the Senate and House version, approved in December, before sending it to the White House.”

And, the Reuters writers noted that, “Democrats are pushing for results on financial regulatory reform ahead of November midterm congressional elections to capitalize on voter anger against Wall Street.

“‘If we don’t get this done, then I have lost all faith in Congress,’ said House Agriculture Committee Chairman Collin Peterson, on the sidelines of the rice conference.

“‘We should have done this before everything else,’ Peterson told reporters, mentioning health care and climate change initiatives that have been divisive.”

Keith Good