FarmPolicy

June 26, 2019

Climate Issues; Budget; Trade; Biofuels; School Nutrition Standards; and Ag Legislation Passes

Climate Issues: Compromise Bill by Senate Trio Taking Shape

Reuters writers Richard Cowan and Timothy Gardner reported yesterday that, “The Senate is close to wrapping up talks ahead of introducing a compromise climate change bill, said a top Democratic lawmaker who discussed ideas with industry groups on Wednesday.

“‘We’re planning to button up our efforts somewhere I hope next week,’ Senator John Kerry told reporters after meeting with a coalition that represents automakers, forestry and paper companies, Big Oil, steel, mining, electricity and others.

“Kerry is working with Republican Senator Lindsey Graham and independent Senator Joseph Lieberman on a bill to require U.S. industry to cut emissions of carbon dioxide and other greenhouse gases associated with global warming.”

The Reuters article stated that, “The three senators said on Wednesday the bill would pre-empt the EPA from regulating the gases, said a source with knowledge of the meeting.” The article added that, “The bill would also include a hard price collar that would keep carbon prices between $10 and $30 a ton. Any polluter emitting below 25,000 tons a year would not be regulated, the source said.”

However, Bloomberg writers Kim Chipman and Simon Lomax reported yesterday that, “Senate climate-change legislation won’t be introduced until at least next month and prospects for action depend on lawmakers’ ‘mood’ following the debate on health care, said Senator Lindsey Graham.

“‘It depends on what happens on health care and the mood around here,’ Graham, a South Carolina Republican, told reporters in Washington today. Graham is working with Senators John Kerry, a Massachusetts Democrat, and Joseph Lieberman, a Connecticut independent, to craft legislation.”

Yesterday’s article pointed out that, “Democratic senators are discussing an ‘energy only’ bill that lacks climate-change provisions such as an emissions- trading program, or cap-and-trade, Graham said. At a March 9 Washington news conference, Graham said he wouldn’t support ‘half-assed’ legislation.”

And Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “A few comments by the very liberal Sen. Bernie Sanders (I-Vt.) Thursday afternoon illustrate the tricky task before Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) as they try and cobble together a climate and energy bill.

“‘The difficulty that Senator Kerry or anybody has is we don’t have 60 votes to pass a strong global warming bill that moves away from fossil fuels and greenhouse gas emissions,’ Sanders told reporters in the Capitol. ‘It is a very conservative institution and we don’t have the votes.’

“‘The choice is, as I suspect Senator Kerry is wrestling with, is whether it is better to do something or nothing,’ he added.”

Mr. Geman noted that, “Sanders, like several colleagues, said he’s reserving judgment on the plan until he sees it.

But his remarks highlight the difficulty of crafting a measure that can attract industry and at least some GOP backing while holding on to liberals and environmentalists.”

And on the issue of an “energy only” bill, The Hill update stated that, “Of course what the big green groups don’t want to see is the Senate proceed with what’s been dubbed the ‘energy only’ option, which several centrist Democrats such as Sen. Byron Dorgan (D-N.D.) are seeking.

“Under that plan, the Senate would take up a package of energy provisions approved last June by the Senate Energy and Natural Resources Committee, but shelve efforts to impose limits on greenhouse gas emissions. Senate Democratic leadership appears open to this as a fallback if broader climate and energy legislation can’t gain traction.”

Climate Issues: Potential Ag Offsets?

Chris Clayton noted yesterday at the DTN Ag Policy Blog that, “Articles from Wednesday report the senators [Kerry, Graham, and Lieberman] briefed some business groups on the [climate legislative] proposal, which had eight separate titles to it: Refining, America’s Farmers, Consumer Refunds, Clean Energy Innovation, Coal, Natural Gas, Nuclear and Energy Independence.”

Mr. Clayton indicated that, “It’s been clear from the get-go that there would need to be agricultural offsets even if there were no cap-and-trade plan. ‘Don’t Cap Our Future’ may turn into ‘Don’t Cap Our Offsets.’ The Kerry-Lieberman-Graham bill sets a price collar for carbon offsets, in other words, a floor and a ceiling on the offsets. While details of the plan for specific sectors have not been released, it’s likely that the bill relies on the language drafted last fall by Sen. Debbie Stabenow, D-Mich., for the agricultural section in the bill. Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., is involved in child nutrition and derivatives legislation, and also has been resistant to climate legislation.”

(Note: A Politico article from January 13 by Lisa Lerer corroborates the theme of this proposition. That article stated, “It remains unclear, though, who will take the lead in negotiating the agriculture provisions. In the past, farm groups looked to Sen. Debbie Stabenow (D-Mich.), a member of the Senate Agriculture Committee, to advocate for farm offsets and to negotiate a greater role for the Agriculture Department…But Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark.) has said she intends to play a role in the debate. Climate advocates would prefer Stabenow take the lead, since Lincoln, who faces a tough reelection battle, has indicated that she has no desire to pass a cap-and-trade bill this year.”)

Yesterday’s DTN update added that, “Stabenow’s plan last fall called for the EPA administrator and the agriculture secretary to ‘establish a program to govern the creation of credits from emission reductions from uncapped domestic sources and sinks’ within one year of enactment of the bill. The draft also calls on EPA and USDA to jointly protect the integrity of the program, prioritize rulemaking for activities ‘that present the fewest technical challenges and greatest certainty of net atmospheric benefits’ and make sure that requirements between the two agencies are consistent.

“The Stabenow proposal also set USDA to ‘administer as the lead agency’ the role of creating a list of eligible methodologies that can be used to reduce emissions, approving petitions and verifying emission reductions under practices going back to Jan. 1, 2001.

“Stabenow’s bill also stated that ‘lifecycle greenhouse gas emissions associated with the production and use of biofuels, bioproducts and bioenergy are significantly lower than the emissions associated with the production and use of fossils.’”

A news release issued by Sen. Stabenow’s office last fall (November 4, 2009) stated that, “U.S. Senator Debbie Stabenow (D-MI) today announced the introduction of her legislation, the Clean Energy Partnerships Act. This bill will create partnerships among manufacturing, utilities, agriculture, and forestry to reduce costs now as we transition to a clean energy economy tomorrow. The legislation ‘offsets’ our use of fossil fuels by investing in practices like sustainable agriculture and forestry projects that capture and store carbon. Stabenow serves on the Senate Agriculture, Nutrition, and Forestry Committee as well as the Senate Energy and Natural Resources Committee and Senate Finance Committee.”

The release quoted Sen. Stabenow as saying, “It will encourage and reward conservation efforts by farmers and landowners…”

And in a related update regarding the Stabenow bill, which posted on her webpage, Sen. Stabenow noted that, “For example, we can change farming practices through more efficient application of fertilizer, the use of cover crops, or by utilizing tillage practices, called ‘no till farming.’ No-till farming reduces carbon emissions by leaving old plant matter buried underground. In contrast, conventional tilling moves old plant matter from last year’s crop from under the soil to the top of the soil, where it decomposes and releases carbon into the atmosphere.”

The update went on to say that, “Not only will an offsets program help store carbon, it will also result in cleaner water, more wildlife habitat, and reduced costs for business and agriculture. That’s why this legislation has the broad support of organizations and leaders in agriculture, forestry, conservation, utilities and manufacturing, including: National Milk Producers Federation, National Farmers Union, National Corn Growers Association and the National Cattlemen’s Beef Association.”

Interestingly, as the Senate trio (Kerry, Graham, and Lieberman) work on a compromise solution on the climate issue, Amy Harder reported yesterday at the National Journal Online that, “European Union Climate Action Commissioner Connie Hedegaard said today that meetings with top White House officials have left her without much hope a climate and energy bill will pass this year.

“‘The feeling I got yesterday was that, well, not too many want to bet on the timing and what could be the outcome,’ Hedegaard said of her discussions this week with energy czar Carol Browner, climate envoy Todd Stern and EPA Administrator Lisa Jackson. She also met with several lawmakers, including Rep. Edward Markey, D-Mass.

Hedegaard, who hosted December’s climate conference in Copenhagen, said that if Congress can’t pass a bill by December when Mexico hosts the next round of global climate talks, it could poison the well for years.”

Ms. Harder added that, “‘I definitely get the feeling that if it fails this time, then there will be a substantial risk that it will not come this side of the midterm elections,’ Hedegaard said at a media conference. ‘And that of course matters to the rest of the world because if nothing comes out positive from the United States for many years from now, where would that lead the international negotiations?’

“Hedegaard said Europe still wants the U.S. to enact some type of cap-and-trade system but acknowledged that the term has ‘turned into a very bad word’ in the Senate debate. She also said that EPA regulation of greenhouse gases would not go far enough to limit emissions and is likely to be tied up in litigation for years.”

Meanwhile, Christopher Snow Hopkins reported yesterday at the National Journal Online that, “Americans are more likely to favor growing the economy over protecting the environment when the two priorities are in conflict, according to the latest Gallup poll. This is the second straight year, and only the second time since Gallup began asking about the trade-off in 1984, that worries over the economy have superseded environmental concerns.”

Budget

A news release issued yesterday by the House Committee on Agriculture Republicans stated that, “Today, Ranking Member Frank Lucas issued the following statement regarding Senate Agriculture Chairman Blanche Lincoln’s recently unveiled child nutrition bill [background available here, and here].

“‘No one would question the importance of child nutrition and I appreciate Senator Lincoln’s efforts. However, it is unfortunate that the funding source for Senator Lincoln’s bill would require cuts to one of the most necessary conservation programs for our farmers and ranchers.

“‘The Environmental Quality Incentives Program (EQIP) provides necessary assistance to our farmers and ranchers who must comply with a growing number of environmental regulations. The threat of the Obama administration placing greater hardships on our agricultural producers with excessive regulations only emphasizes the importance of EQIP.

“‘This administration continues to pit programs that benefit our farmers against other programs and it’s to the detriment of American agriculture. We made a commitment to our farmers and ranchers in the 2008 farm bill and I intend to honor that commitment.”

Trade

A news release issued yesterday by the U.S. Trade Representative’s Office stated that, “The United States and China have reached an agreement to reopen the Chinese market to U.S. pork and pork products, U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack announced today.

“‘This agreement is a win for America’s pork producers, whose safe and high-quality exports can now flow freely into China and support agriculture jobs here at home,’ Ambassador Kirk said. Kirk further stated, ‘I am also pleased that China affirmed in our meetings that they will base their decisions on international science-based guidelines. We look forward to working cooperatively to resolve additional issues, including a resumption of trade in beef.’

“‘When I traveled to China with U.S. Trade Representative Kirk in October, our discussions with Chinese officials laid the groundwork for reopening this market,’ said Secretary Vilsack. ‘This resolution is excellent news for American hog producers.’”

Meanwhile, Reuters writer Jonathan Lynn reported yesterday that, “Members of the World Trade Organization are likely to conclude next week that it will take a political miracle to agree a new trade deal this year, consigning yet another Doha round deadline to the dustbin.

“The U.S. and European Union trade chiefs have already acknowledged that it may not be possible to complete the Doha round of negotiations by 2010, as demanded by leaders at the last G20 summit and other meetings.”

Biofuels

Dan Piller reported yesterday at The Des Moines Register Online that, “As National Biodiesel Day dawns this morning, the embattled Iowa industry hopes that it soon will enjoy some of the momentum that its biofuels cousin, ethanol, has had in the last few months.

While ethanol has ridden favorable corn prices to become profitable after two dismal years, Iowa’s biodiesel plants are operating at 30 percent of capacity. Most have laid off workers or gone through temporary periods of nonproduction.”

The Register article added that, “Congress allowed the $1 per gallon federal tax break to lapse Dec. 31, and renewal has been tied up in Washington’s jobs and health care legislation.

“The best prognostication now is that the Senate-based extension of the credit won’t come up in the full House before next month.”

And Ken Anderson reported yesterday at Brownfield that, “The Renewable Fuels Association (RFA) has released a new report on the economic importance of the ethanol blenders tax incentive.

“The incentive—officially called the Volumetric Ethanol Excise Tax Credit (VEETC)—is set to expire at the end of this year. VEETC encourages blenders to use ethanol in gasoline and RFA president and CEO Bob Dineen says if Congress fails to extend, it would be devastating to the ethanol industry.

“‘If you do not extend the tax incentive, we’re going to lose 112-thousand jobs across all sectors of the economy,’ says Dineen. ‘Just as the ethanol industry is beginning to evolve into new feedstocks, you remove the underpinnings of support that has allowed that to happen—and actually shutter some 38 percent of the industry.’”

A related update released yesterday by Iowa GOP Senator Chuck Grassley indicated that, “Grassley made the following comment on today’s [RFA] report.

“‘We hear a lot of talk from the Democratic majority in Congress and the President about green jobs, clean energy, and restoring jobs and income security for the middle-class. But the kind of policy to support clean energy jobs for the middle-class falls by the wayside under the current leadership. The Democratic-led Congress easily could have extended the biodiesel tax credit before it expired at the end of 2009. But the Democratic leaders chose to tangle up the biodiesel tax credit in more controversial debates, at the expense of renewable energy development and production. As a result, the biodiesel industry has lost 29,000 clean-energy jobs, and 23,000 more jobs will be lost if that tax credit is not extended. So there’s every reason for concern about what could happen with ethanol this year. That industry supports 400,000 jobs, and more than 112,000 jobs depend on extending the tax incentives. These jobs are often in rural communities where employment is hard to come by. And ethanol builds U.S. energy independence from imported oil. Congress needs to make sure the ethanol tax incentives are extended sooner rather than later.’”

In a related article on fuel, Reuters writer Tom Doggett reported on Wednesday that, “As U.S. gasoline prices head toward $3 a gallon, states with many drivers in rural areas would take the biggest financial hit if pump costs spiked to record levels again, according to a new report released on Wednesday.”

The article stated that, “The report, commissioned by the Natural Resources Defense Council, looked at the impact on drivers if U.S. gasoline costs spiked to the record levels seen in the summer of 2008, when the national pump price reached $4.11 a gallon for two weeks.

“The five states that are most vulnerable to the higher fuel prices are Mississippi, Montana, Louisiana, Oklahoma and South Carolina. Drivers in Mississippi would have to spend 11 percent of their annual income, or about $3,345 on average, on gasoline if costs returned to $4 a gallon.”

School Nutrition Standards

A news release issued yesterday by Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.) stated that, “U.S. Senator Blanche Lincoln, D-Ark., Chairman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, along with Senator Tom Harkin, D-Iowa, and Congresswoman Lynn Woolsey, D-Calif., today announced a major agreement between the food and beverage industry and public health and education groups on national school nutrition standards for all foods sold in schools. Leaders from the public health community and food and beverage industry participated in the announcement.

“The national school nutrition standards provision included in Lincoln’s Healthy, Hunger-Free Kids Act requires the Secretary of Agriculture, through a transparent regulatory process, to establish national nutrition standards consistent with the Dietary Guidelines for Americans for all foods sold on school campuses throughout the school day. Current regulations limiting the sale of foods sold in schools are very narrow and have not been updated in almost 30 years.”

Ag Legislation Passes

A news release issued yesterday by the House Ag Committee stated that, “This week, the U.S. House of Representatives passed the Agricultural Credit Act of 2009 and the Florida National Forest Land Adjustment Act of 2009. The House Agriculture Committee approved both bills for consideration by the House earlier this month.

The Agricultural Credit Act of 2009 (H.R. 3509) would reauthorize funding for the State agricultural mediation grant program. The grants fund state agricultural mediation programs that help agricultural producers, their creditors and various USDA agencies address disputes, including loan problems and USDA adverse decisions.

“‘The grant program for state agricultural mediation is a good-government program that helps thousands of Americans find practical solutions to loan problems and USDA adverse decisions,’ Agriculture Committee Chairman Collin Peterson said. Chairman Peterson is the lead sponsor and Agriculture Committee Ranking Member Frank Lucas is an original co-sponsor of H.R. 3509, which has attracted bipartisan support.”

Keith Good

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