January 25, 2020

Legislative Issues- Ag Economy; EPA Pesticide Issue; Climate Issues; Biofuels; and CFTC

Legislative Issues: Jobs Bill- Tax Credit, Ag Disaster Aid

Reuters news reported yesterday that, “Revival of the $1 a gallon biodiesel tax credit would be part of a jobs and tax bill in the U.S. Senate, according to a draft that circulated on Capitol Hill on Thursday.

“According to the draft, the $1 a gallon biodiesel tax credit, which expired at the end of 2009, would be extended through 2010.”

Yesterday’s article indicated that, “The draft also included a $1.5 billion in disaster aid for farmers and would allow a five-year depreciation schedule for agricultural equipment.

“Senate Majority Leader Harry Reid said on Wednesday that he was preparing a package of jobless benefits, state aid and tax breaks that the Senate could take up next week.”

The Reuters item added that, “Agriculture Committee chairman Blanche Lincoln said this week that she was working to keep disaster aid in the jobs bill. Heavy fall rains in the U.S. South damaged rice and cotton crops last fall and drove up harvest costs. Some rice growers say they cannot afford to plant a new crop without disaster relief.

“The draft calls for payments to cotton, grains and soybean growers if they lost at least 5 percent of a crop and are in counties that were declared as disaster areas by the Agriculture Department.”

In a related article, the “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “In an interesting bit of congressional insider byplay, House Ag Committee Chairman Collin Peterson, D-Minn., openly disagreed with Senate Ag Chairman Blanche Lincoln, D-Ark., regarding the agriculture disaster aid program she is sponsoring. His concern focuses on the program’s triggers for payment eligibility.

“Under Lincoln’s proposal, whenever they lose more than 5 percent of their crop to natural disasters cotton, grain and soybean growers would be eligible for a payment equal to 90 percent of their annual ‘direct payment’ subsidy — a program that would cost about $1.1 billion annually. Aid also would go to cottonseed handlers and to livestock, fish, fruit and vegetable producers.

Peterson thinks that such a program would be far too generous, and he would incorporate a much higher eligibility threshold. ‘That doesn’t fly. That’s asking for trouble,’ Peterson told a rice industry conference where he followed Lincoln on the program.”

Yesterday’s DTN update noted that, “He said he has been ‘working hard about disaster assistance’ and pointed out that ‘stop-gap’ disaster bills in the past commonly required a one-third loss before producers could be paid. He said, ‘I think there’s going to have to be a higher loss’ trigger this time and that lawmakers will work on the issue.

“The Lincoln proposal has a way to go. She tried without success to convince Senate Majority Leader Harry Reid, D-Nev., to include the aid language in the Senate jobs measure that was approved Wednesday. And the House has not yet even considered the proposal. Being able to deliver additional producer support appears to be very important to Lincoln, who faces a tough race (she is considered by Republicans as one of the most vulnerable Senators facing voters this fall).

“At the same time, Peterson’s comments suggest congressional support for her proposal is not that strong, a fact that could weaken the odds of it being added to any Senate jobs bill, observers suggest.”

Nonetheless, the DTN item did note that, “[I]t is not impossible that support for Lincoln’s proposal will get a second look for reasons not directly related to Arkansas politics. Some agricultural supporters have been worried for some time that recent commodity prices — even though they are considered low by many producers, especially relative to 2008 — are reducing safety net payments, and thereby reducing the baseline that will be used to define the starting point for the 2012 debate.”

Legislative Issues: Farm Bill- Hearings

A news release issued yesterday by Rep. Lynn Jenkins (R- Kansas) stated that, “Congresswoman Lynn Jenkins sent a letter to Chairman of the House Agriculture Committee Collin Peterson (D-Minn.) and Ranking Member Frank Lucas (R-Ok.) inviting them to hold a farm bill field hearing in her district in Kansas.

“‘The agriculture industry is vital to the economy in my district, and a strong, predictable farm bill is critical to my constituents,’ Jenkins said. ‘After learning that Chairman Peterson intends to start discussions for the next farm bill this year, I invited him and Ranking Member Lucas to hold a field hearing in Eastern Kansas.’”

In other developments regarding some conservation aspects of the Farm Bill, Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Landowners with acreage idled under the Conservation Reserve Program could be hearing soon from a wildlife group’s biologists. They’ll be urging the landowners to keep at least some of their property enrolled in the program.

“A memorandum of understanding that Agriculture Secretary Tom Vilsack will sign with Pheasants Forever in Des Moines Saturday allows PF’s biologists access to landowner data in USDA offices. The MOU is an updated, expanded version of separate agreements the group has had with USDA’s Farm Service Agency and Natural Resources Conservation Services. The group is required to keep the information private.

“‘It allows us to target potential people that we should be talking to,’ said Dave Nomsen, the group’s vice president of government relations.”

Interestingly, a daily radio news item from USDA yesterday rhetorically asked, “Will land that came out of the Conservation Reserve last fall end up as planted cropland this spring?” The brief audio report was titled, “Expired CRP Land Unlikely to End up as Crop Acres This Year.”

Recall that last week, USDA Chief Economist Joe Glauber noted that, “Less land is expected to be planted to the major field crops in 2010 as prices continue to ease from their record levels in 2008…Total planted area for the 8 major crops (wheat, corn, barley, oats, sorghum, soybeans, upland cotton, and rice) is expected to decline to 247.3 million acres, down 1.6 million from 2009” [related graph].

Agricultural Economy

A summary of fourth quarter credit conditions from 2009 was posted recently at the Federal Reserve Bank of Minneapolis Online; in part, the summary noted that, “A wet fall increased crop drying costs and delayed harvests. Profits and capital spending fell slightly for ag customers, according to lenders responding to the Minneapolis Fed’s fourth-quarter (January) agricultural credit conditions survey. More farmers and ranchers delayed repayment and extended loans. Lenders have bountiful funds, but loan demand was flat and collateral requirements increased. Land prices and cash rents were relatively stable during the quarter. Interest rates on loans did not change much from the third quarter. The outlook for the first quarter of 2010 is subdued. Farm income, capital expenditures and household spending are expected to fall.”

Meanwhile, USDA’s National Agricultural Statistics Service released its Chickens and Eggs 2009 Summary yesterday; the report indicated that, “The total value of all chickens on December 1, 2009 was $1.50 billion, down 1 percent from December 1, 2008. The average value decreased from $3.39 per bird on December 1, 2008, to $3.34 per bird on December 1, 2009…Layer numbers during 2009 averaged 337 million, down 1 percent from the year earlier. The annual average production per layer on hand in 2009 was 268 eggs, up 1 percent from 2008.”

In a related article, Reuters news reported yesterday that, “Russian and U.S. officials are set to meet next week in Moscow to talk about how to resolve a trade spat that has shut U.S. poultry out of its top export market, the U.S. Agriculture Department said on Thursday.

“Top USDA trade official Jim Miller and Assistant U.S. Trade Representative Jim Murphy will travel to Moscow next week to ‘work to reopen access for U.S. poultry,’ a USDA spokeswoman said.”

EPA Pesticide Issue

Gabriel Nelson of Greenwire reported earlier this week at The New York Times Online that, “In its first set of orders since returning from a monthlong recess, the Supreme Court declined yesterday to consider three separate industry challenges to federal environmental regulations.

Environmentalists hailed the court’s decision not to review a year-old ruling requiring farmers to secure Clean Water Act approval for the use of pesticides already permitted under the Federal Insecticide, Fungicide and Rodenticide Act. U.S. EPA is now reviewing the National Pollutant Discharge Elimination System to devise a permitting system that complies with the ruling.

“While the agency had claimed that FIFRA approval incorporated compliance with the Clean Water Act, the 6th U.S. Circuit Court of Appeals ruled last year that the government was obligated to ensure that farmers using pesticides were subject to both regulations. The appeals court agreed to stay the decision for two years, until April 2011, while EPA revises its permitting process.”

The article noted that, “But agriculture groups and conservatives criticized the Supreme Court’s decision not to review the circuit court decision in National Cotton Council v. EPA, saying it would create redundant bureaucracy and hamper agricultural production by forcing farmers to decide between not applying pesticides and risking legal and enforcement actions for discharging without a permit.”

This development was discussed on Tuesday on the AgriTalk Radio Program with Mike Adams. After a brief explanation of the judicial development, Mike Adams discussed the issue with Nebraska GOP Senator Mike Johanns. Sen. Johanns indicated that this development, and executive branch action associated with the case, has served to further increase producer concerns with EPA actions and the Agency’s impact on production agriculture.

To listen to a portion of Tuesday’s AgriTalk program, which included some comments from Sen. Johanns, just click here (MP3-4:13). For more background on this case, see this FarmPolicy update from last April.

Climate Issues

Reuters writers Tom Doggett and Richard Cowan reported yesterday that, “The U.S. Senate is unlikely to pass a comprehensive climate change bill to reduce greenhouse gas emissions this year, according to a Reuters survey of 12 key Democrat and Republican Senators who could hold the swing votes.

“While the Obama administration and a bipartisan core of senators still hope there is life for a climate change bill that would put a price on carbon emissions and help reinvigorate ailing international talks, the senators interviewed by Reuters this week were much more pessimistic.

“The survey underscores that global warming — a scientific finding still hotly disputed by many Americans — could end up being set aside by politicians focusing on issues that hold more appeal to voters ahead of congressional elections in November.”

However, Washington Post writers Juliet Eilperin and Steven Mufson reported on Wednesday at the Post Carbon Blog that, “Senate Majority Harry Reid (D-Nev.) has instructed Sen. John Kerry (D-Mass.) to produce a revamped climate bill as soon as possible, according to sources, a task Kerry intends to accomplish within two weeks.

“The marching orders could represent the best chance advocates will get to pass a climate and energy bill before the November elections. Kerry has been working with Sens. Lindsey Graham (R-S.C.) and Joseph I. Lieberman (I-Conn.) on drafting a measure that could attract bipartisan support, but it remains unclear what combination of policies would draw enough votes to win passage.”

And a ClimateWire article from yesterday indicated that the executive branch was not providing clear legislative direction with respect to a climate bill: “A speech by President Obama to top CEOs yesterday left some climate experts and energy industry lobbyists searching for stronger clues about White House policy preferences as members of the Senate struggle to come up with a fresh proposal for cutting greenhouse gas emissions.

“‘If we decide now that we’re putting a price on this pollution in a few years, it will give businesses the certainty of knowing they have time to plan and transition,’ Obama told corporate executives at a Business Roundtable meeting in Washington.

“The president has repeated this argument for putting a price on heat-trapping carbon emissions in recent public speeches. Still, many are reading the tea leaves carefully for specific White House policy and political prescriptions that would set Congress on a path to secure passage of legislation this year.”

Meanwhile, Robin Bravender of Greenwire reported yesterday at The New York Times Online that, “U.S. EPA will need increased funding for climate programs in future years as the agency moves forward on efforts to curb greenhouse gas emissions, Administrator Lisa Jackson said [Wednesday].

“‘I would expect that the needs would continue to grow as we move into a world — either through legislation, hopefully through legislation, but possibly also with regulation — of increasing activity on climate change,’ Jackson told the House Interior and Environment Appropriations Subcommittee.”

And with respect to possible EPA regulation, Amy Harder reported yesterday at the National Journal Online that, “EPA is expected to announce in April its finalized ‘tailoring rule’ regulating greenhouse gas emissions of stationary sources. The forthcoming regulations have prompted two separate efforts by Sens. John (Jay) Rockefeller, D-W.Va., and Lisa Murkowski, R-Alaska, to rein in the agency’s regulatory power. Rockefeller’s plan would temporarily delay EPA’s regulations over stationary sources, while Murkowski’s would effectively veto EPA’s ‘endangerment finding’ that gives the agency authority to regulate emissions.

While on the Hill this week to testify about the agency’s budget, EPA Administrator Lisa Jackson has spent much of her time seeking to allay concerns about the regulations.”

In related news, Juliet Eilperin reported yesterday at the Post Carbon Blog that, “Administration officials are pointing out some of the consequences if Sen. Lisa Murkowski (R-Alaska) is successful in blocking the Environmental Protection Agency from regulating greenhouse gases under the Clean Air Act.

The National Highway Traffic Safety Administration has sent a letter to Sen. Dianne Feinstein’s (D-Calif.) office suggesting Murkowski’s resolution aimed at the EPA could complicate its efforts to impose stricter fuel-economy standards on cars and light trucks. In the Feb. 19 letter, the agency’s chief counsel O. Kevin Vincent explains that because NHTSA’s Corporate Average Fuel Economy (CAFE) standard is tied to the EPA’s greenhouse-gas rule for motor vehicles, it would be problematic if Murkowski’s resolution stopped EPA from moving ahead.”

And from an international perspective, at a Foreign Relations Committee hearing on Wednesday regarding the FY 2011 international affairs budget, Sen. John Kerry (D-Mass.) noted that, “‘I am pleased to see that this budget includes a 38% increase in funding to address international climate change, especially in the wake of Copenhagen,’ said Chairman Kerry. ‘While much has been said about what wasn’t accomplished at Copenhagen, far too little has been said about what was.’”

The AP reported yesterday that, “Industrialized and developing countries are not likely to reach a treaty this year on cutting greenhouse gas emissions, which have sparked fears of weather-related disasters, the U.N. climate chief said Thursday.”

And Jeffrey Ball and Keith Johnson reported in today’s Wall Street Journal that, “In the next few days, the world’s leading authority on global warming plans to roll out a strategy to tackle a tough problem: restoring its own bruised reputation.

“A months-long crisis at the Intergovernmental Panel on Climate Change has upended the world’s perception of global warming, after hacked emails and other disclosures revealed deep divisions among scientists working with the United Nation-sponsored group. That has raised questions about the panel’s objectivity in assessing one of today’s most hotly debated scientific fields.”


A news release Wednesday from Rep. Leonard Boswell (D-Iowa) stated that, “Today, Congressman Leonard Boswell reintroduced the Renewable Fuel Pipeline Act of 2010 to boost our homegrown energy industry by improving the infrastructure for moving ethanol from the Midwest to the rest of the country.

“H.R. 4674 amends the loan guarantee program under the Energy Policy Act of 2005 to specifically qualify a renewable fuel pipeline as an eligible project, along with increasing the loan guarantee rate to 80 percent. The reintroduced legislation has been streamlined to help it more easily pass through committee and reach consideration on the House floor.

“‘The Renewable Fuel Pipeline Act is an important piece of legislation to Iowa’s local communities and economies that have come to rely on the biofuels industry,’ Boswell said. ‘The construction of a pipeline to move ethanol out of the Midwest and to the coasts will create nearly 80,000 jobs while contributing $6.6 billion to the U.S. economy.’”

A related news release from Growth Energy yesterday noted in part that, “‘Growth Energy recognizes that U.S. renewable fuels is still an emerging industry, and we need to invest in the national infrastructure necessary to deliver ethanol and other biofuels to markets,’ Tom Buis, CEO of Growth Energy, said. ‘An ethanol pipeline — built privately with federal loan guarantees — will help assure that U.S. consumers will have choices at the pump that include domestic, renewable ethanol.’”


Reuters writer Christopher Doering reported yesterday that, “The U.S. Congress is likely to pass a regulatory reform bill in 2010 that would include giving the top U.S. futures watchdog greater authority to regulate over-the-counter swaps, a commissioner at the Commodity Futures Trading Commission said on Thursday.

“More transparency and rules for the unregulated U.S. over-the-counter derivatives markets — valued at some $300 trillion — are vital to creating a more stable financial system, said Scott O’Malia, who was confirmed as a CFTC commissioner last October.”

Keith Good

Comments are closed.