FarmPolicy

December 18, 2018

Budget; Climate Issues; Biofuels; and the Ag Economy

Budget

An article posted yesterday at Agriculture Online stated that, “Fifteen conservation groups oppose cutting more than $2 billion dollars from the largest of USDA’s working lands conservation programs, the Environmental Quality Incentives Program (EQIP), to pay for a child nutrition reauthorization bill drafted by Senate Agriculture Committee Chairwoman Blanche Lincoln (D-AR). The Senate Agriculture Committee is scheduled to mark up the bill and vote on it Wednesday.

“‘This current proposal would not only rob farmers, ranchers, and forest landowners of conservation and environmental stewardship assistance in the next decade, but would take away well over $2 billion from the farm bill conservation baseline, or nearly half of the widely-lauded conservation increase in the 2008 Farm Bill,’ the groups says in a letter addressed to Lincoln and the other Senate Agriculture Committee members. ‘This cut clearly violates the carefully negotiated compromise that you supported in the 2008 Farm Bill.’

“‘We understand and appreciate the critical need to provide additional funding for the child nutrition school meal programs,’ the letter adds. ‘There are other sources for this funding outside of the Farm Bill conservation programs that could be tapped to pay for these needs without taking away from the programs that support farmers and forest landowners in their efforts to provide conservation benefits in addition to food, forest products, and fiber. However, if Farm Bill resources are determined to be the only resort, then fairness demands that the conservation title should not bear the full burden of providing the solution.’”

Similarly, an update posted yesterday at the Ag Mag Blog (Environmental Working Group) indicated that, “Senate Agriculture Committee Chairwoman Blanche Lincoln (D-Ark) plans to mark up her Healthy, Hunger-Free Kids Act of 2010 this week (March 24). The legislation would reauthorize child nutrition programs and increase their funding by $4.5 billion over 10 years.

“Although the bill is a positive step toward providing healthier food to America’s children, the funding is less than half of President Obama’s proposal for a $10 billion increase over 10 years. Worse, Senator Lincoln is pitting conservation against kids by capping the amount of money spent on the Environmental Quality Incentives Program (EQIP) in order to pay for the nutrition increase. EQIP, which has been chronically underfunded and repeatedly targeted for cuts, helps ensure cleaner water, rivers, lakes and streams, protects sources of tap-water, and helps preserve the quality of soil and air for children in rural communities.”

In a news conference with agricultural journalists yesterday, Iowa GOP Senator Chuck Grassley noted that, “Tomorrow, our Agriculture Committee is going to start consideration of what’s called the child nutrition bill. This bill is a — is going to bring into consideration a number of improvements and heavy investment in programs that gives kids healthier meals and learn more nutritious habits.”

There are some concerns about using EQIP money as an offset to pay for nearly half the bill. Some will argue that not all the EQIP dollars were spent last year, but the problem with that argument is that the funds are lost from the baseline for the 2012 farm bill yet to be negotiated.

“I look forward to seeing amendments offered in committee to improve the bill without increasing the deficit.”

The following exchange was also part of yesterday’s discussion with Sen. Grassley:

“Question: Senator, I was visiting with the Iowa cattlemen. They’re quite concerned about that EQIP money. Will you be offering any amendments yourself to try to restore that funding?

“GRASSLEY: I don’t — I haven’t reached a decision on that yet, but my guess is that I probably would not, but I think that others are, and then I’ve got to look at what they substitute as a source of revenue on that point to whether or not it’d be EQIP or other dollars.”

Meanwhile, David Bennett, writing on Monday at the Delta Farm Press Online, indicated that, “In mid-March, members of the California Roundtable on Agriculture and the Environment — pointing at a budget proposal from President Obama — began complaining that funding for popular federal conservation programs is being shifted. Days later, the environmental members of the ecumenical group said Arkansas Sen. Blanche Lincoln’s proposed increase in nutrition programs would also harm conservation funds.

Is such concern warranted? After speaking with those on both sides, it turns out that how one sees the issue largely depends on what one considers a ‘cut’ in today’s political budgeting and accounting processes.”

Mr. Bennett noted that, “Not only are the EQIP ‘cuts’ not going to happen, [several Mid-South political staffers and agriculture advocacy group leaders] say, but producers will actually get more money.

“Both the 2002 and 2008 farm bills contained ‘authorized’ levels of funding for the EQIP program. In the arcane language of Capitol Hill, those are essentially dollar figures that could be spent. For example, the 2008 farm bill authorized roughly $1.2 billion to be spent on EQIP initially. That went up in 2009 to about $1.4 billion and progressed to $1.6 billion and $1.8 billion in following years.

“However, since 2002, the ‘authorized level’ was never reached and what’s been provided to producers has been less.”

Monday’s article stated that, “What happens to those unused EQIP funds? They’re often ‘chimped’ [Change In Mandatory Programs] and allocated elsewhere — sometimes on political pork projects. For example, while $1.2 billion is authorized for EQIP this year, what’s actually being spent is $1.05 billion.

“‘In relation to the authorization level, it looks like a cut,’ says one Arkansas official. ‘But there’s a difference between the authorization level and what’s actually appropriated and reaches producers’ pockets.’

“Sen. Lincoln is not only capturing the unused authorized funds and sending them to nutrition programs instead of pork projects, but is also ‘forcing more money to be appropriated’ to the EQIP program itself, insists another staffer.”

The Delta Farm Press item concluded by saying, “‘In ‘crazy D.C. budget world’ it may look like the program is being cut. But in actuality you’ve already been getting cut for years under that scenario. We’re insuring you’ll get more money next year.’

“The staffer often talks to farmers and asks ‘would you rather be provided a really high, but fictitious, mandatory authorization level? Or would you rather have a check cut for a larger sum?’ Every time the farmers say, ‘Cut the larger check!’”

In related developments, a news release from USDA yesterday stated that, “Agriculture Secretary Tom Vilsack today announced that USDA will be holding a series of school nutrition events throughout the country to highlight the Obama Administration’s efforts to improve school meals as Congress considers reauthorization of the Child Nutrition Act. USDA leaders will outline a number of steps to reduce hunger and improve the health and nutrition of our nation’s children.”

Climate Issues

Margaret Kriz Hobson and Alexis Simendinger reported yesterday at the NationalJournal Online that, “Senate Majority Leader Harry Reid, D-Nev., will meet with Senate committee chairs on Wednesday to decide how to move energy and climate change legislation this spring. Reid’s staff confirmed that among the options under consideration is to provide floor time for the bipartisan energy bill passed last year by the Senate Energy and Natural Resources Committee. Then Reid could give Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joe Lieberman, I/D-Conn., the opportunity to append their climate change proposals to the energy bill.”

Yesterday’s updated added that, “A Reid spokesman said the option of using the energy bill as the vehicle for moving climate legislation is one of many possible courses of action that the majority leader will discuss with committee chairs. But industry lobbyists say Reid has been talking up that approach in recent meetings.”

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “If Kerry’s effort doesn’t gain traction, a big question remains whether the Senate will take up, as a stand-alone measure, a broad energy bill the Energy and Natural Resources Committee approved last June. Senate Democratic leaders are keeping that option in the mix.”

The Hill update noted that, “Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) sponsored that bill and wants it to proceed – either with climate provisions in tow or on its own. ‘In some form it should come to the Senate floor for consideration, either by itself or combined with some other things,’ he told The Hill Tuesday. ‘That will be the decision Senator Reid makes.’

Kerry, for his part, believes Reid is committed to advancing a bill that includes greenhouse gas limits. ‘He has said repeatedly that we are going to do the combination of climate and energy,’ Kerry said.”

Darren Goode reported yesterday at the NationalJournal Online that, “A draft climate and energy bill will be released after Congress returns from the upcoming two-week spring recess, Sen. John Kerry, D-Mass., said today. And Joe Lieberman, I/D-Conn., referencing the upcoming debate on financial regulatory reform, said the Senate probably won’t get to a climate and energy bill until June.

“Kerry told reporters that there is not a dilemma over whether Majority Leader Harry Reid, D-Nev., will decide to separately move an energy plan and one that puts a price on carbon emissions. ‘He has said repeatedly that we’re going to do the combination of climate and energy,’ Kerry said. ‘I don’t think he’s ever varied from that.’ Kerry plans to meet with Reid this evening.

“But Reid has been asked by Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., and Sen. Byron Dorgan, D-N.D., to first move an energy bill Bingaman’s panel approved last year with support in both parties. Reid has said he will try to reach a compromise between Kerry and Bingaman on strategy. Reid is meeting Wednesday with committee chairs — including Kerry and Bingaman — with jurisdiction over a climate and energy plan to discuss a strategy. ‘I just want to see the bill when it’s written,’ said Senate Finance Chairman Max Baucus, D-Mont. ‘I’d be foolhardy to get more specific.’”

Meanwhile, Reuters writer Richard Cowan reported yesterday that, “Senators negotiating a bill to address global warming fears and encourage the use of more alternative energy in the United States struggled over details on Tuesday as lawmakers approached a two-week break without a full legislative proposal in hand.

“‘We have a lot of work to do in the next 48 hours,’ Senator John Kerry told reporters shortly after he briefed a group of about 20 senators.

“The Democrat was referring to the congressional recess that begins at the end of the week. Kerry and other senators working on a climate change bill hope to make as much progress as possible this week so that aides can work over the recess drafting legislation.”

In related news, Darren Samuelsohn of ClimateWire reported yesterday at The New York Times Online that, “Sen. Lindsey Graham (R-S.C.) says he is not abandoning negotiations on a comprehensive energy and climate bill even as he warns of partisan gridlock following the Democrats’ push this week to pass health care reform.

“‘It’s going to make it very difficult to do anything complicated and controversial,’ Graham told reporters yesterday.

‘I’m still committed to trying to roll out a vision of how you can price carbon and make it business-friendly. We’re still going to do that. … But the truth of the matter is, I think you’re going to find most of our colleagues around here risk adverse.’”

And Amy Harder reported on Monday at the NationalJournal Online that, “If the climate and energy bill being drafted by the Senate trio does not include language that pre-empts EPA and state regulation of greenhouse gas emissions, then two major industry organizations will not support the bill, their leaders said today.

“Cal Dooley, president and CEO of the American Chemistry Council, and Thomas Gibson, president and CEO of the American Iron and Steel Institute, told reporters today in a conference call that the pre-emption language is essential for their support.”

Biofuels

Reuters writer Charles Abbott reported yesterday that, “Congress is unlikely to revive the $1 a gallon biodiesel tax credit before mid-April the earliest, till after a two-week recess, U.S. biofuels officials said on Monday.

“The credit expired at the end of 2009 and virtually shut down the industry, says the American Soybean Association. Roughly 11 percent of U.S. soybean oil is used in making the biofuel, which is a bolster for soybean prices.”

Mr. Abbott explained that, “A resolution is unlikely before mid-April, said two biofuels officials. Congress soon will recess until April 13, they noted, and a final vote on the credit could be delayed until late April or later, depending on the pace of House-Senate negotiations.”

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “Two farm state House members are seeking cosponsors for an upcoming bill to extend a major ethanol industry tax break for five years and boost other incentives as well.

“Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.) are circulating a ‘dear colleague’ letter for a bill that would extend the 45 cents-per-gallon credit until the end of 2015.

“The letter cites a Renewable Fuels Association study released last week that concludes allowing the incentive to die would cost 112,000 jobs. The credit boosts the ethanol market by paying refiners and gasoline blenders to mix ethanol into their product.”

And an update posted yesterday at the DomesticFuel Blog reported that, “U.S. Senator Chuck Schumer (NY-D) visited New York’s only commercial biodiesel producer last month to assure them of his support for the federal tax incentive for biodiesel.”

“However, while Sen. Schumer supports biodiesel, he opposes corn ethanol. Informa Economics reports that Schumer sent a letter to a constituent outlining his concerns, saying that ‘corn ethanol provides no environmental, economic, or security benefit over petroleum, and it raises serious ethical concerns about our obligations towards our neighbors.’ At the same time, Schumer does support the development of cellulosic ethanol, saying production does ‘have the potential to protect the environment and reduce America’s dependence on foreign oil, without putting strains on American agriculture or other countries’ food supplies.’”

Ag Economy

Dan Piller reported yesterday at The Des Moines Register Online that, “Led by a 4.4 percent rise in central Iowa land prices, Iowa farmland rose in average price by 2.8 percent from September 2009 to this month, according to a survey of Iowa land realtors.

“The survey by the Iowa Farm and Land Realtors Institute tracks a recent survey by the Federal Reserve Bank of Chicago showing a 2 percent rise in values during the last half of 2009 and reverses what had been a small decline in late 2008 through early 2009.”

A recent update that was posted at the Federal Reserve Bank of Kansas City Online indicated that, “With fragile financial markets and increasing lending risks, agricultural bankers have raised their credit standards. As profit opportunities in the farm sector emerge, many potential borrowers wonder if credit will be available for all segments of the agricultural industry. The latest release of ‘The Main Street Economist,’ by Omaha Branch Executive Jason Henderson and Maria Akers, associate economist, explores this issue.”

Keith Good

Comments are closed.