Editor’s Note: The third section of the March 10, 2010, FarmPolicy.com Report entitled “Disaster Payments, SURE, and Crop Insurance Issues” includes a quotation from an outside report that contains an inaccurate statement. The relevant quotation reads, in part, as follows:
“A major reason, according to USDA and academic studies, is that the private crop insurance companies set southern premiums relatively high…”
It is commonly known by individuals who are familiar with Federal crop insurance that crop insurance companies do not set premiums for any of the program’s policies. USDA determines all Federal crop insurance program premiums. This important program characteristic is a plain, simple and historical fact. However, for program clarification purposes, it would be helpful to report this fact.
Trade: Agriculture and Cuba- House Ag Committee Hearing
Derek Wallbank reported yesterday at the MinnPost.com that, “The latest effort to bridge the 90-mile gap from Key West to Cuba is being led here by a pair of Minnesota lawmakers who contend that easing restrictions on the island nation could mean millions for Minnesota’s agriculture industry.
“‘America’s current policies have failed to achieve their stated goal and instead they have hand-delivered an export market in our own backyard to the Brazilians, the Europeans and our other competitors around the world,’ said Rep. Collin Peterson. ‘It’s time we ask ourselves why we have in place policies that simply do not work and that only harm U.S. interests.’
“Peterson’s remarks came at the start of a House Agriculture Committee hearing he called to discuss his own legislation to lift the travel ban to Cuba and ease rules on agricultural exports to the island nation. Earlier today, Sen. Amy Klobuchar introduced a companion measure in the Senate. Both the House and Senate bills have Republican co-sponsors.
“‘The bill we have introduced would eliminate the requirement that our farmers have to go through a third country bank to do business in Cuba and would place agricultural exports to Cuba on the same terms for cash payment as other countries, requiring payment when the shipment changes hands,’ Peterson said. ‘It would also make it easier for U.S. citizens to travel to Cuba, allowing American agricultural producers to more easily conduct business with Cuba and boosting demand for U.S. products in Cuba.’”
At yesterday’s hearing, Rep. Jerry Moran (R-Kansas), a co-sponsor of the bill, provided an interesting historic and analytical background with respect to the issue of U.S. agricultural exports to Cuba. To listen to a portion of his comments from yesterday’s hearing, just click here (MP3-7:42).
Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “An effort is underway in Congress again to ease restrictions on trade with Cuba to boost U.S. farm exports, but farm-state lawmakers are split over whether it’s a good idea to allow Americans to more freely travel there. Farm groups argue that easing the embargo and promoting U.S. tourism in Cuba will improve America’s image there and undermine the Castro regime.
“Rep. Steve King, R-Ia., doesn’t buy it. He said at a House Agriculture Committee hearing Thursday that the United States should wait for the ‘biological solution,’ referring to the demise of the Castros.
“‘I want to wait out this biological solution,’ he said.”
Mr. Brasher added that, “The chairman of the committee, Rep. Collin Peterson, D-Minn., has introduced a bill, H.R. 4645, that would lift transaction restrictions on Cuban purchases of U.S. food and end limits on American travel there. The embargo means U.S. farmers are losing sales to competitors in Brazil and elsewhere, he said. He released letters from Human Rights Watch and the U.S. Conference of Catholic Bishops supporting the legislation. Having ‘more, rather than less, contact’ with Cubans will improve their lives, the bishops said.
“‘We’re just spiting ourselves not to take advantage of this market,’ said Iowa Democrat Leonard Boswell, who is co-sponsoring the bill.”
Yesterday’s update noted that, “Farm groups say that U.S. food exports to Cuba could double, given Cuban demand for pork, chicken, beans, rice and other commodities. Easing restrictions on transactions would boost Cuban purchases of dried distillers grains, a source of livestock feed that is a byproduct of ethanol production, the National Corn Growers Association said. Last year, Cuba bought $528 million in U.S. agricultural products.
“Previous efforts to ease the embargo have met strong resistance, and Republicans on the House committee are split over whether the restrictions on travel should be changed.”
In other trade developments, a news release issued yesterday by Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.) stated that, “Senators Blanche Lincoln, D-Ark., and Mike Johanns, R-Neb., today introduced a resolution pressing Japan to lift its partial ban on U.S. beef. Lincoln, Chairman of the Senate Agriculture Committee, and Johanns, a former Secretary of Agriculture, were joined by 17 bipartisan cosponsors. The resolution states Japan should immediately expand market access for U.S. beef products, and urges the Obama Administration to insist on increased market access from Japan.”
Meanwhile, Bloomberg writer Adriana Brasileiro reported earlier this week that, “Brazilian President Luiz Inacio Lula da Silva asked U.S. President Barack Obama to ‘quickly’ negotiate the end to a trade dispute over cotton subsidies that led him to raise tariffs on over 100 U.S. goods this week.
“Lula, during a speech in Cubatao, Sao Paulo, said that Brazil would not have taken retaliatory measures worth $829 million had the U.S. in 2008 signed an accord during the Doha round of global trade talks.
“‘If the US had been together with Brazil in the Doha round in 2008 we wouldn’t be fighting today,’ Lula said.”
And Reuters writer Doug Palmer reported on Wednesday that, “A Republican senator who held up action earlier this month on a bill to renew jobless benefits faced more criticism on Wednesday for blocking approval of President Barack Obama’s nominee to be U.S. ambassador to the World Trade Organization.
“Senator Jim Bunning, a Kentucky Republican, has delayed the Senate from approving Michael Punke to be ambassador to the WTO in Geneva. This has fueled criticism that the United States is not fully engaged in the Doha round of world trade talks, which have already dragged on for eight years.”
Trade- President Obama Sets Out Export Plan
Howard Schneider reported in today’s Washington Post that, “President Obama unveiled plans Thursday to double U.S. exports over the next five years in hopes of spurring job growth, an ambitious goal that may rekindle the battle over free-trade policy [transcript of remarks, video replay].
“The president acknowledged the formidable barriers to his goal: doubts in Congress over new free-trade agreements, misaligned currencies that make Chinese products cheaper on global markets, and continued weakness in global demand, all problems that could dwarf efforts to promote U.S. products and services abroad.”
Today’s Post article indicated that, “Obama also promised a fresh push on an issue that could prove divisive in the Democratic Party — pending free-trade agreements with South Korea, Panama, Colombia and a group of Pacific countries — as well as on the broader round of world trade talks in Doha, Qatar. The migration of U.S. manufacturing jobs overseas has stoked opposition to free-trade agreements, which some say have given developing economies access to U.S. consumers without offsetting benefits for American workers.
“‘Moving forward with leftover Bush-negotiated free trade agreements is a nonstarter with many members of Congress,’ Rep. Michael H. Michaud (D-Maine), chairman of the House Trade Working Group, said in a written statement.
“U.S. Trade Representative Ron Kirk, who met with Michaud and other members of Congress on Wednesday, said the administration was approaching the trade deals intent on seeing that they also create jobs.
“‘We don’t pick up everything as it was but will take a real strategic look at trade policy,’ Kirk said. The pending agreements with South Korea, Colombia and Panama, in particular, ‘have value, and when we are fighting for every job on the table, we need to get these right so we can reap the benefit.’”
Henry J. Pulizzi reported yesterday at The Wall Street Journal Online that, “Critics have complained that the White House hasn’t backed up its trade agenda with strong action, pointing to still-outstanding trade deals with South Korea, Colombia and Panama. Trade groups say finalizing those deals is a sure-fire way to create jobs and remain competitive globally. The U.S. Chamber of Commerce estimates that nearly 400,000 jobs could be lost of the Korea and Colombia deals aren’t implemented.
“The White House said Thursday that it is working to resolve outstanding issues on the agreements and will move them forward ‘at an appropriate time.’
“Many Democrats and labor groups oppose the deals, and the Korea or Colombia agreements aren’t expected to see Congressional action before the mid-term elections.”
In a statement yesterday regarding Pres. Obama’s speech, Iowa GOP Sen. Chuck Grassley indicated that, “I appreciate the President’s recent attention to trade. The United States has had trade agreements with Colombia, Panama, and South Korea pending for almost three years. The White House says it’ll bring those agreements forward ‘at an appropriate time.’ It would be hard to think of a more appropriate time than right now. Without exports, which support jobs, the economy would be in even worse shape than it is. The President’s new efforts might make some difference in helping U.S. businesses increase their exports, but nothing compares to opening new markets through reciprocal trade agreements.”
On a different trade issue, Reuters writer Doug Palmer reported yesterday that, “President Barack Obama, facing a revolt among Democrats to past trade agreements, aims to reshape the rules for international trade and shore up the U.S economic position in Asia with talks starting on Monday on a Pacific trade pact [the Trans-Pacific Partnership (TPP)]”
Mr. Palmer explained that, “Saddled with three unpopular trade agreements the Bush administration negotiated with Colombia, Panama and South Korea, Obama says the TPP will be a high-standard ‘21st century’ trade agreement with stronger protections for workers and the environment than previous pacts.
“That’s important to many Democrats in the House of Representative who think trade deals are to blame for millions of lost U.S. manufacturing jobs.”
Climate Change Issues
Yesterday’s Commodity News for Tomorrow newsletter, a complimentary daily commodity publication provided by the CME Group, reported that, “Alaska Republican Sen. Lisa Murkowski said Thursday she thinks it unlikely the U.S. Senate will pass a comprehensive climate bill this year.”
The update added that, “The Alaska senator was one of a half dozen Republicans the administration invited to its summit Tuesday to feel out the potential for creating consensus on a climate bill. The meeting included the President’s top energy and environment cabinet officials, the chairman of the Senate committees of jurisdiction on climate and the trio of lawmakers trying to draft a tri-partisan bill.
“Capitol Hill pundits say getting agreement on a highly controversial climate bill is already a very tough play, outside of consideration of the legislative calendar. One proposal that passed out of the environment committee and mirrored the House legislation has already been discarded. Sens. John Kerry (D., Mass.), Joe Lieberman (I., Conn.) and Lindsey Graham (R., S.C.) have so far failed to gather support from both sides of the aisle on a shifting set of proposals they’ve offered to colleagues, much less produce a summary on paper.
“The senators indicated that such text wasn’t likely until mid April, after the Easter break.”
Meanwhile, Ben Geman reported on Wednesday at The Hill’s Energy and Environment Blog that, “A mostly Republican group of 20 state and territorial governors is urging Congress to block EPA’s ability to regulate greenhouse gas emissions.
“A letter Wednesday from the governors – 18 Republicans and two Democrats – to House and Senate leaders alleges that planned EPA rules to limit heat-trapping emissions would harm their state economies.”
And a news release issued yesterday by the American Farm Bureau Federation noted that, “The American Farm Bureau Federation’s successful, six-month campaign to oppose cap-and-trade climate change legislation, ‘Don’t CAP Our Future,’ culminated Wednesday when farmer and rancher members from across the country presented key lawmakers some of the 100,000 grassroots calls-to-action gathered in opposition to the issue.
“‘Cap-and-trade provisions would create an energy shortage and ultimately reduce food production. That was the driving force behind the ‘Don’t CAP Our Future’ campaign,’ AFBF President Bob Stallman said at an event on Capitol Hill.
“Stallman, members of the AFBF Board and additional state Farm Bureau presidents and members, warmly thanked senators attending the event who have shown outstanding leadership in the battle against cap-and-trade legislation.”
The release stated that, “Sen. Jim Inhofe (R-Okla.) was recognized by Stallman for “leading the charge” against cap-and-trade legislation in the Senate. Stallman and other Farm Bureau leaders also expressed appreciation to other strong supporters of the effort, including Sen. Saxby Chambliss (R-Ga.), ranking member of the Senate Agriculture Committee, and Sen. John Thune (R-S.D.), Sen. Kit Bond (R-Mo.), Sen. Sam Brownback (R-Kan.), Sen. Tom Coburn (R-Okla.) and Sen. Robert Bennett (R-Utah).”
“Earlier this week, AFBF and several dozen other organizations sent a letter to the full Senate urging support for S.J. Res. 26, a resolution to disapprove the Environmental Protection Agency’s proposal to regulate greenhouse gas emissions under the Clean Air Act. Senators from ‘both sides of the aisle’ have said throughout the climate change debate that this issue should be decided by Congress rather than EPA, the letter noted. Last week, AFBF sent a letter of support for a companion House measure.”
And, a letter signed by multiple agricultural organizations that was sent to Rep. Ike Skelton (D-Missouri) and Rep. Joe Barton (R-Texas) earlier this week, stated in part that, “The agricultural organizations listed below support your introduction of resolutions of disapproval under the Congressional Review Act regarding the decision of the U.S. Environmental Protection Agency (EPA) to move forward on regulating carbon dioxide and other greenhouse gases under the Clean Air Act (CAA). Such regulatory actions will carry severe consequences for the U.S. economy, including America’s farmers and ranchers, through increased input costs and international market disparities.”
Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “White House press secretary Robert Gibbs on Thursday predicted that there will be ‘clamoring’ for energy legislation when the typical summer rise in gasoline prices gets underway.
“But Gibbs also signaled that energy legislation is not a top priority for the White House this year even though President Obama remains supportive of action.
“Gibbs said the biggest priorities after the health care debate wraps up are financial regulatory reform and addressing a recent Supreme Court ruling that knocked down restrictions on corporate political spending. He also noted tax credits for small business hiring and other jobs measures.”
The Hill update noted that, “Asked if Obama wants action on energy and immigration this year, Gibbs replied ‘absolutely,’ but then added:
“‘It’s got to be more than the President wants to get something done. The President is going to ask, as he did in the energy meeting and as he will when he meets with Schumer and Graham, to see what progress they’ve made in aligning their colleagues for the type of reform that all three support. That’s what’s going to be key to moving any of these issues forward.’”
Ag Competition Issues
DTN Ag Policy Editor Chris Clayton reported yesterday that, “Ray Gaesser will be one of the few lucky farmers who knows he will be able to share his thoughts on agricultural competition.
“Gaesser, a soybean and corn farmer from Corning, Iowa, will have a literal seat at the table Friday at a community college campus in Ankeny, Iowa. He’s attending the first of five national meetings between now and December that are being held by the U.S. Department of Agriculture and Department of Justice to examine the state of competition for farmers.
“To prepare for the workshops, DOJ and USDA asked for public comments and got more than 15,000 responses, so many that the Department of Justice has been unable to process and post all of them. In a statement describing the meeting, the DOJ said the workshops ‘will examine whether changes in the marketplace, including increased consolidation and vertical integration, have generated efficiencies, or whether they have led to increases in monopoly or monopsony power.’”
Mr. Clayton noted that, “Some of the biggest agribusinesses in the country are actually farmer owned, whether it entails cooperatives that provide inputs to farmers or buy their grain or dairy products. The cooperatives worry about the tone these meetings will take throughout the year.
“Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, wants to ensure the integrity of farmer-cooperative systems, especially after hearing concerns raised about cooperatives by Department of Justice Antitrust Chief Christine Varney at a Senate Judiciary Committee field hearing last fall. Varney, who will speak on Friday, said at the time that cooperatives may have outlived their usefulness.
“‘The paraphrased version of that is we interpret that to mean, in some cases, the co-ops have grown so large they are not serving their members’ interests, that sort of thing,’ Conner said. ‘Clearly, some negative comments against co-ops.’”
P.J. Huffstutter reported yesterday at the Los Angeles Times Online that, “The meetings are intended to allow producers, competitors and activists to air their concerns about the grain, poultry, dairy and livestock industries. The government is also trying to ferret out reasons for the sometimes vast gaps between what farmers are paid for producing food and the prices shoppers pay at the grocery store.
“Justice Department officials, who spoke on background because they said it was too early to comment about concerns raised at the meetings, said the workshops were a chance for the government to examine the changes the food sector had undergone in recent years.
“The push to hold such events, the officials said, was driven in part by President Obama’s concerns over how consolidation has affected industry competition.”
The article indicated that, “In recent years, the companies that develop seeds for farmers to sow in their fields have consolidated. Complaints about unfair competitive practices by the few giant firms left have soared. As a result, critics say, the effects of more costly seeds have rippled out to the nation’s dining tables.
“The farm community — which produces more than $80 billion annually in soybeans and corn — has been pressuring lawmakers to investigate why it’s costing them so much more to grow their crops. U.S. farmers spent about $17 billion on seeds last year, up 56% from 2006, the USDA said.
“Yet over the last decade, the number of independent seed companies in the U.S. has shrunk to fewer than 100 from more than 300, said Bill Wenzel, national director of the nonprofit Farmer to Farmer Campaign on Genetic Engineering, a network of 34 farm groups.”
Dan Looker provided additional background on today’s meeting in Iowa in an article posted yesterday at Agriculture Online, “All-star cast set to tackle ag competition in Iowa meeting.”
Philip Brasher reported on Wednesday at the Green Fields Blog (The Des Moines Register) that, “The head of the Food and Drug Administration says the agency is continuing to look at possible restrictions on the use of antibiotics in livestock but pledged to consult with producers. Margaret Hamburg told a House subcommittee today that antibiotic resistance is one of the nation’s ‘foremost public health concerns’ and there are clear linkages between the problem and the use of the drugs in farm animals.
“‘We are working closely with industry, listening to their concerns,’ Hamburg said in response to a question from Rep. Tom Latham, R-Ia. ‘We are not going to move forward and institute a policy that we have not been able to base on sound science and evidence.’
“She said the agency was looking at ‘regulatory pathways’ to restrict animal antibiotic use but did not elaborate.”