FarmPolicy

June 26, 2019

Jobs Bill; Crop Insurance- SURE; Competition Issues; Climate Issues; and Trade

Jobs Bill- Biodiesel, Ag Disaster Payments

Ben Pershing reported in today’s Washington Post that, “The Senate approved a $140 billion package of tax breaks and aid to the unemployed Wednesday, the most substantial effort by the chamber to boost the nation’s economy since it passed the stimulus bill last year.

Six Republicans joined 56 Democrats to pass the measure, 62 to 36. The package faces an uncertain future in the House, where Democrats have taken a markedly different approach to the ‘jobs agenda,’ as current efforts to pass jobs legislation are known, than have their Senate colleagues.”

Dan Looker provided more detail with respect to the Senate action; he reported yesterday at Agriculture Online that, “More than 2 months after it expired, the Senate restored the $1 a gallon biodiesel tax credit when it passed the American Workers, State, and Business Relief Act of 2010 Wednesday.

“The package of tax breaks, some of which expired as long ago as last June, still has to be reconciled with differences in a similar bill already passed by the House of Representatives.

“Senator Blanche Lincoln (D-AR), a supporter of the bill, told Agriculture Online that she’s communicated the urgency of getting the bill passed to representatives in the House. She hopes the House acts soon and the law will be signed by the President before Congress goes on its spring recess later this month, she said.”

A news release issued yesterday by the American Soybean Association (ASA) indicated that, “The [ASA] today applauds Senate passage of H.R. 4213, the American Workers, State and Business Relief Act, which includes retroactive extension of the vital biodiesel tax credit. With passage of H.R. 4213, the U.S. House and U.S. Senate must now reconcile the differences between the two versions of the bill approved by the respective chambers. H.R. 4213, as approved by the U.S. House in December 2009, also provides for a one year retroactive extension of the biodiesel tax incentive.

“‘Congress should move to quickly to seek agreement on a final bill that can be passed and signed into law as soon as possible,’ said ASA President Rob Joslin, a soybean producer from Sidney, Ohio. ‘ASA urges Congress to enact a retroactive extension of the biodiesel tax credit as soon as possible.’”

An article posted yesterday at DTN (link requires subscription) explained that, “The [jobs] bill also includes a $1.5 billion disaster aid package for the 2009 crop year that was pushed by Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark. Farmers would be eligible if they suffered a crop disaster or are located in counties declared disaster areas that had at least one crop suffer a 5 percent yield or quality loss due to the disaster, the bill states. Payments would equal up to 90 percent of the farmers’ direct payments for 2009.

“Producers who did not have crop insurance would still be eligible for the disaster aid, but would be required to buy crop insurance in 2010.

“Beyond direct payments to commodity producers, the bill also includes $300 million to help farmers who suffered losses of specialty crops such as fruits and vegetables.”

A news release issued yesterday by Senate Ag Committee Chairman Blanche Lincoln (D-Ark.) stated that, “In Arkansas, agriculture provides more than 270,000 jobs and contributes more than $9 billion each year to the state’s economy.

“‘Farmers need certainty to make planning decisions for the planting season. While previous efforts to pass disaster assistance have taken nearly 3 years, this package is based on bipartisan legislation I introduced just over 3 months ago. As the legislative process continues, I will work closely with my colleagues in Congress to ensure producers will receive this relief in a timely manner,’ Lincoln said.

“The legislation would provide an estimated $1.1 billion in supplemental payments to producers who suffered crop losses in counties declared ‘primary’ disaster areas by USDA.”

Crop Insurance- SURE

In a related article regarding crop insurance, Ron Smith reported yesterday at the Southwest Farm Press Online that, “Hill County, Texas, farmer Albert Sulak admits that about 10 years ago he was a bit skeptical about the value of crop insurance.

“‘I thought about insuring my vehicles, my house and I knew I needed health insurance,’ he said. He decided to try crop insurance and still was not impressed for two or three years. ‘I didn’t need it,’ Sulak said, during the Blackland Income Growth (BIG) conference in Waco. ‘Then I had two or three dry years.’”

The article stated that, “And last spring made a believer out of him. ‘We had a late freeze that hurt our wheat crop. Crop insurance kept some of us in business after that loss. With the expenses involved in making a crop these days, we need crop insurance.’

“Jason Johnson, Texas AgriLife Extension economist-management, said records prove the point. ‘In the past 15 years of Texas crop insurance history and loss ratios, only four years did Texas farmers pay more for insurance than they got out of it. Variable weather patterns in Texas make crop insurance valuable.’”

And in news regarding the Supplemental Revenue Assistance Payments (SURE) Program, Marcia Zarley Taylor noted on Tuesday at the DTN Minding Ag’s Business Blog that, “Even the government computers that run critical air traffic control systems are antiques of the digital age. So it’s no surprise that Farm Service Agency computer snafus are short circuiting during the debut of SURE, the government’s new permanent disaster program that is based on calculations of whole farm revenue.

“The aid is no chicken feed: Growers may collect payments worth $50 to $100 per acre in parts of Iowa for their 2008 revenue ‘disaster,’ some land grant economists estimate, but it won’t be without pain, suffering and long delays at FSA offices.

“‘This is such a mess that it is indescribable and it is going to get worse before better,’ one county FSA director e-mailed an Iowa grower last week. He warned it might take more than three weeks just to get an appointment to run the revenue calculations for his farm.”

The update added that, “In general, SURE is a whole farm revenue insurance guarantee for crop producers–the first time Congress designed a disaster program on total farm revenues rather than yield losses. It requires FSA offices to collect insurance records from the Risk Management Agency, even though the two USDA agency computers don’t talk the same language. What’s more it’s collecting data on a lot of specialty crops that fell under the radar in the past.

“Is SURE too complex to administer? [FSA Administrator Jonathan Coppess ] said no. ‘You need RMA and FSA to communicate better. We’ve got employees out there doing calculations on a spreadsheet,’ he said. ‘It’s a hard slog to do it.’”

In related activity regarding farm program implementation and USDA IT issues, a news release issued yesterday by the House Agriculture Committee stated that, “Today, Congressman Joe Baca, Chairman of the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, and Forestry, held a hearing on the status of information technology systems at the United States Department of Agriculture.

“The Subcommittee heard testimony from the USDA’s Chief Information Officer and from the USDA Farm Service Agency’s Administrator, as well as from agriculture organizations interested in improving USDA’s IT systems.”

Opening statements from the witnesses at yesterday’s hearing can be viewed here.

The issue of SURE design and implementation came up briefly in yesterday’s Subcommittee hearing when Rep. Baca asked National Farmers Union (NFU) President Roger Johnson if FSA technical variables were considered when formulating the SURE program.

To listen to this exchange on the SURE issue from yesterday’s hearing, just click here (MP3-2:21).

An NFU news release from yesterday noted in part that, “‘In today’s competitive global marketplace, American farmers are being asked to produce more food, fiber and fuel with greater precision and efficiency, and they are answering the call by investing in new technological systems,’ said Johnson. ‘As the primary agency tasked with providing support and assistance to farmers, it is only logical that USDA would do the same.’

The current system is outdated, unstable and is not cost-effective in the delivery of farm programs. The Appropriations Committee has been in search of a means to pay for the necessary upgrades for several years, yet is still unable to guarantee the funding will be available at the end of the appropriations process. The USDA Farm Service Agency computer system remains unstable which has resulted in service disruption to producers.”

An article posted recently at the Southeast Farm Press Online by Shawn Wade of the Plains Cotton Growers, indicated that, “Two months into the Supplemental Revenue Assistance Payments Program (SURE) sign up period, it appears most of the program’s implementation kinks are finally on their way to being ironed out by the USDA Farm Service Agency.

“For farmers on the Texas High Plains, and elsewhere, who have gone through the sign up process and not yet received their payment, the wait may be close to an end. This includes, apparently, producers who have been unable to sign up for the program due to issues involving peanuts as well as those who purchased pasture and rangeland insurance.”

The article noted that, “According to USDA officials in Washington, some $100 million in SURE payments have already gone out and more are on the way. They indicate that over the next few weeks producers should see more SURE payments being delivered.

“FSA officials explained that as they fine tune the many processes needed to deal with the significant amount of data required to deliver the program, it has sometimes been necessary for FSA staff to rework previously completed applications to verify that initial preliminary benefit calculations were accurate or, if necessary, substitute revised crop insurance yield or coverage information. USDA expects SURE payments to begin ramping up over the next few weeks.”

Competition Issues

Dan Piller reported yesterday at the Green Fields Blog (The Des Moines Register) that, “U.S. Attorney General Eric Holder will join Secretary of Agriculture Tom Vilsack at the first joint ‘workshop’ on competition in agriculture Friday in Ankeny.”

Meanwhile, Chris Clayton noted yesterday at the DTN Ag Policy Blog that, “Sen. Saxby Chambliss, R-Ga., ranking member of the Senate Agriculture Committee, and Sen. Pat Roberts, R-Kan., another senior member of the committee, wrote a joint letter Wednesday asking Secretary of Agriculture Tom Vilsack and Attorney General Eric Holder to essentially do no harm as the Obama administration embarks on a series of hearings this year on agricultural competition issues. The first hearing is scheduled Friday in Ankeny, Iowa, and will be an all-day affair with several panels involving competition issues in crops and livestock.

While Chambliss and Roberts are questioning the process, Iowa Sens. Tom Harkin, a Democrat, and Charles Grassley, a Republican, have applauded the competition efforts and are both scheduled to be at the Friday hearing.”

And in a tangential issue, at yesterday’s House Subcommittee hearing on USDA IT issues, House Ag Committee Chairman Collin Peterson inquired about a Farm Bill provision to put prices of some livestock sales on the Internet in real time on a daily basis. Chairman Peterson noted that there are issues “swirling around” on concentration in livestock and asked about an update on implementing this program. To listen to this exchange, just click here (MP3-4:07).

Climate Issues

Jennifer Bendery reported today at Roll Call Online that, “On Tuesday, Obama summoned a bipartisan group of Senators to the White House to revive discussions on climate change legislation.”

Today’s article added that, “White House Press Secretary Robert Gibbs said Monday that Obama called the immigration and climate change meetings this week because they are issues that he still wants to advance this year.

“‘The president wants to get an update from bipartisan lawmakers in the House and Senate on a series of proposals and get an idea of where those are,’ Gibbs said. He said it is ‘certainly possible’ to take on controversial cap-and-trade legislation this year.”

However, Ben Geman and Sam Youngman reported yesterday at The Hill Online that, “President Barack Obama stepped gingerly into the Capitol Hill climate-change fight Tuesday, but an all-out White House push does not appear to be in the offing this year as other legislative priorities and the sagging economy command the president’s political capital.”

The article stated that, “While Gibbs said Obama ‘strongly believes that we need to get something done’ on energy legislation, he seemed reluctant to embrace the idea that the president would take the lead on the issue.”

Meanwhile, Bloomberg writers Catherine Dodge and Kim Chipman reported yesterday that, “Senator John Kerry said a bipartisan group of lawmakers achieved a ‘great deal of consensus’ on energy policy at the White House yesterday, and he’s moving ‘rapidly’ to introduce legislation on the subject.”

“Kerry said Obama made it clear there needs to be a price on carbon, the substance linked by scientists to global warming, to create jobs and make the U.S. more energy independent,” the Bloomberg article noted.

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Sen. Carl Levin (D-Mich.) has provided Sen. John Kerry (D-Mass.) a wish list of items for climate change legislation that includes a lengthy delay before greenhouse gas limits are imposed on industrial facilities.

“Levin is a pivotal voice on climate policy. His state includes Detroit automakers and other manufacturing interests that fear the costs of climate legislation and its effects on their competitiveness.”

And Amy Harder reported yesterday at the National Journal Online that, “Sen. Byron Dorgan may become the first co-sponsor of legislation that would impose a two-year delay on EPA emissions regulation.”

Dorgan, who is retiring after this year, reiterated his prediction that Congress will not pass a climate change bill this year and said the Senate should focus on the energy-only bill the Energy and Natural Resources Committee approved last spring.”

Darren Samuelsohn of Greenwire reported yesterday at The New York Times Online that, “At the White House, Obama implored 14 Democrats and Republicans to reach consensus before the end of this year on a bill that puts a first-ever price on carbon emissions, rather than settle for the energy-only approach favored by some moderates.

“Back on Capitol Hill, the three senators at the center of the legislative effort presented their broad ideas to some of the country’s largest trade associations, including the U.S. Chamber of Commerce, American Petroleum Institute and the American Farm Bureau.”

The potential impacts for agriculture resulting from regulation under the Clean Air Act continues to be the subject of debate, an update from earlier this week at The Wonk Room Blog included opinion on the issue.

Trade

Ian Swanson reported yesterday at The Hill Online that, “Mexican tariffs on U.S. french fries are no small potatoes.

Export of frozen french fries and other frozen potato products to Mexico dropped in value by 50 percent from April to December 2009 after Mexico imposed a 20 percent tariff on frozen potatoes and other U.S. exports.”

The article explained that, “Mexico hit the U.S. with tariffs on a variety of manufactured and agricultural products after Congress voted to end funding for a pilot program that allowed Mexican long-haul trucks to travel freely through the U.S.”

Meena Thiruvengadam and Henry J. Pulizzi reported yesterday at The Wall Street Journal Online that, “The Obama Administration’s top trade negotiator Tuesday said the U.S. was working quickly to resolve a damaging trade spat with Mexico, one of several obstacles to the president’s goal of doubling U.S. exports within five years.

“‘We understand the sense of urgency,’ said U.S. Trade Representative Ron Kirk after a speech at the National Press Club [transcript, video].

He didn’t specify what measures the White House was taking to resolve the Mexico issue.”

Reuters news reported earlier this week that, “The top U.S. trade official expressed doubt on Tuesday that negotiators could reach a deal this year in long-running world trade talks despite a goal set by President Barack Obama and other leaders.

But in remarks at the National Press Club, U.S. Trade Representative Ron Kirk also said he did not believe countries should give up efforts to finish the eight-year-old round.”

Meanwhile, Reuters writer Jonathan Lynn reported yesterday that, “Most members of the World Trade Organization are years behind in providing data about farm subsidies, essential to see whether they are sticking to agreements, an internal WTO document shows.

“The document, prepared by the WTO secretariat for a meeting on Wednesday of its agriculture committee, which monitors adherence to agreements, shows that 81 of 153 members have so far not provided data for 2004 or earlier.”

A separate Reuters article from yesterday reported that, “The United States must comply with a World Trade Organization ruling on U.S. cotton subsidies to uphold international law and order, President Luiz Inacio Lula da Silva said on Wednesday.

“Brazil detailed on Monday a list of 102 U.S. goods that will be subject to import tariffs within 30 days unless both countries can reach an agreement to settle a long-standing dispute over U.S. cotton aid considered illegal by the WTO.”

A more complete analysis of current U.S. trade issues was posted yesterday at The New York Times Online, “U.S. Nears a Crossroads on Trade;” and Lauren Etter reported in today’s Wall Street Journal that, “U.S. dairy farmers are pleading for protection from their counterparts in New Zealand as President Barack Obama’s trade negotiators begin talks on a regional agreement in Australia next week.

“New Zealand accounts for nearly a quarter of global dairy exports, according to Rabobank International, a large agricultural lender. U.S. dairy farmers are concerned that increased trade with the region could result in New Zealand flooding the U.S. with cheap dairy products such as cheese and milk powder that could depress prices for U.S. producers. Logistics and cost make it unlikely New Zealand would ship fluid milk to the U.S.”

Keith Good

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