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Biofuels; Climate Issues; Trade; Farm Bill; Animal Agriculture; and Food Safety

Biofuels

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The division in agriculture over ethanol policy is expanding after the National Corn Growers Association publicly lashed out at the American Meat Institute for partnering with organizations that frequently attack animal agriculture.

“Rick Tolman, NCGA’s chief executive officer, is questioning the meat lobby’s bedfellows, including groups such as Friends of the Earth, Environmental Working Group and Natural Resources Defense Council. ‘All folks who are fighting agriculture,’ Tolman said. ‘Right now, I’m working the better part of today and yesterday putting coalitions together to raise money to fight the Humane Society (of the United States) efforts on animal-welfare issues,’ he said.

Tolman said his members are angry NCGA is working with livestock groups to raise money and defend animal agriculture from attacks by the Humane Society of the United States while AMI is now partnered with groups friendly to HSUS to defeat an extension of the ethanol blenders credit.”

The DTN article indicated that, “David Ray, a spokesman for AMI, said the meatpacker lobby has been part of a broad-based group of livestock, food-processing, hunger, environmental and social justice organizations resisting what they see as an expansion of subsidies and government support for corn-based ethanol.

“‘We all come at this issue from different perspectives, of course, but the one thing we agree upon is the continuation of 30-year-old taxpayer subsidies and the import tariffs that keep out competing ethanol is not in the public interest,’ Ray said. ‘We’re seeking legislation to phase out the tax credits and the import tariffs.’”

“Ray said bioenergy should focus on investments in other promising products that don’t increase the feed versus fuel debate. ‘This has been going on for 30 years now,’ Ray said. ‘It’s time for the corn-based ethanol either prove it can make it on its own in the free-market system or it doesn’t.’”

Yesterday’s article added that, “It’s certainly not new to see groups that fight on other topics come together on one specific issue, said Katie McMahon, energy policy campaigner for Friends of the Earth. McMahon said she thinks NCGA’s position doesn’t mesh with the Washington lobby environment. ‘We’re in D.C., and there’s no permanent friends and no permanent enemies.’”

Meanwhile, Reuters writer Timothy Gardner reported yesterday that, “U.S. daily ethanol output rose in January for the fourth month in a row as distillers took advantage of relatively low prices for corn and natural gas, the Energy Information Administration said Thursday.

“Monthly output of the alternative motor fuel rose about 3.9 percent in January to 818,260 barrels per day, the EIA said in its Petroleum Supply Monthly Report. January was the latest month for which data was available.”

On the issue of the extension of the biodiesel tax credit, the “Washington Insider” section of DTN pointed out yesterday (link requires subscription) that, “Biodiesel supporters were concerned last year when the package of tax credit ‘extenders’ failed to clear Congress at the end of last year, and the $1 per gallon biodiesel credit was allowed to expire. Congressional leadership expressed confidence the credit would be renewed early this year, and be made retroactive.

“However, that assurance has become somewhat shaky as congressional disagreements on other issues have tied up the legislative package containing the extenders, and as investors have begun to cut back on operations that are losing money in the absence of the credit.”

After additional analysis, the DTN item noted that, “So, in the multi-layered fight over health care and tax issues, many smaller issues have been either ignored or mixed in uncomfortably with larger issues. And, in the case of the biodiesel tax credit, the result is operational uncertainty that could be damaging. House Ways and Means Committee Chairman Sandy Levin, D-Mich., told the press recently he expects the extremely contentious question of how to offset costs of the tax credit extenders bill to be settled in a conference committee, but warned it could take a ‘considerable’ period of time to reach agreement.

“So, prospects just now for renewing federal support for biodiesel are somewhat murky. Support for the policy seems assured, but congressional delays risk severe damage to biodiesel production operations, industry observers say.”

Climate Issues

Reuters writer Alister Doyle reported yesterday that, “Climate negotiators meet in Bonn on Friday for the first time since the fractious Copenhagen summit but with scant hopes of patching together a new legally binding U.N. deal in 2010.

“Delegates from 170 nations gathered on Thursday for the April 9-11 meeting that will seek to rebuild trust after the December summit disappointed many by failing to agree a binding U.N. deal at the climax of two years of talks.

“Bonn will decide a programme for meetings in 2010 and air ideas about the non-binding Copenhagen Accord, backed by more than 110 nations including major emitters China, the United States, Russia and India but opposed by some developing states.”

The AP reported yesterday that, “Climate change negotiators convening this weekend are hoping to renew momentum on a new global warming treaty after setbacks at the Copenhagen summit four months ago — but the talks could easily turn into a round of recriminations.

“Delegates from 175 countries begin a three-day meeting in Bonn, Germany, on Friday with an open session meant to be a stocktaking. But it could turn bitter over blame for the failure to deliver a firm agreement in the Danish capital on limiting manmade emissions of greenhouse gases, the cause of the Earth’s rising average temperatures.”

The AP article explained that, “The main task this weekend is to set a schedule of talks for the rest of the year leading up to another major conference in Cancun, Mexico, starting Nov. 29.”

Washington Post writer Juliet Eilperin reported yesterday at the Post Carbon Blog that, “For those looking for a sneak preview of how the United States might conduct itself in the upcoming U.N. climate talks, look no further than its draft Fifth National Communication to the U.N. Framework Convention on Climate Change.

“The document, which the administration released late Wednesday night, details how the U.S. government is grappling with climate change–and puts a heavy emphasis on both the House-passed climate bill and a measure that made it through the Senate Environment and Public Works Committee, even though that bill has been shunted aside in favor of a compromise climate bill that Sens. John F. Kerry (D-Mass.), Lindsey O. Graham (R-S.C.) and Joseph I. Lieberman (I-Conn.) should unveil later this month.”

And Reuters writers Jeff Mason and Richard Cowan reported yesterday that, “The United States will host a meeting of major economies on April 18-19 in Washington to advance talks on a global deal to fight climate change, the top U.S. climate negotiator said on Wednesday.

“Todd Stern told Reuters he hoped U.N. climate talks in 2010 would lead to agreements on six outstanding issues, including financing for poor countries’ pollution-control efforts, but he said it was unclear whether a legally binding deal to reduce greenhouse gas emissions would be reached this year.”

The article pointed out that, “Stalled progress in the U.S. Senate on a bill to curb domestic emissions has hampered global talks. Stern said he hoped there would be movement in that area.

“‘It’s obviously highly important that progress be made on the domestic front,’ he said, adding the bill was critical for U.S. leverage and credibility in U.N. negotiations.”

“Stern declined to predict whether a bill would pass this year. Analysts view it as an uphill fight to enact legislation before the congressional elections in November,” the Reuters article said.

And with respect to the November elections, Amy Harder reported yesterday at the NationalJournal Online that, “When voters go to the polls for the midterm elections later this year, the environment and global warming will be far down their list of concerns, according to a new poll.

“Only 46 percent of respondents in the new USA Today/Gallup Poll said ‘the environment, including global warming,’ was extremely or very important; all other issues scored around 70 percent or higher. Almost all respondents (93 percent) said the economy was extremely or very important, the most of the seven issues pollsters asked about.”

More specifically with respect to agriculture and the climate debate, DTN Executive Editor Marcia Zarley Taylor reported yesterday (link requires subscription) that, “Irrigated-grain farmer Don Anthony knows only one thing for certain about the climate bill pending in Congress: His energy costs would spike. In fact, the Lexington, Neb., farmer thinks input prices would erupt much like they did in 2008, when $140 crude oil pushed up the price of everything from fertilizer to rail surcharges.

Whether the Nebraskan could offset some of those expenses by selling carbon credits for environmentally friendly farming practices like no-till, cover crops or nitrogen stabilizers remains a major unknown.

“As a national director of CHS Inc., the nation’s top farm supply and grain cooperative, Anthony worries that proposed carbon ‘caps’ put on oil refiners would impose a whole new set of direct and indirect costs on agricultural producers.”

Yesterday’s DTN article explained that, “CHS officials believe refiners would bear an undue burden under cap and trade plans. Like their brothers in Big Oil, the co-op refineries would eventually pass higher costs on to customers.

“At the higher price, farmers could expect to pay an extra 38 to 50 cents per gallon at the pump, says Bob Looney, CHS vice president for government affairs. CHS believes counting all fuel, fertilizer and electricity spikes under the climate bill could raise farm production costs about $7 per acre.”

In a related development, a news release issued yesterday by the American Farmland Trust (AFT) stated that, “[AFT] has released a comprehensive study analyzing existing data and cost-benefit studies to assess the effects of climate change legislation on the agricultural economies of Arizona, Colorado and New Mexico. AFT sponsored the research to advance understanding of the economic implications for U.S. agriculture as Congress considers legislation to address the impact of carbon emissions on the environment.

“‘Overall, the research suggests that while the legislation would challenge the agriculture sector in these states, there are improved revenues from higher crop prices, new bio-fuel markets, carbon-sequestration and offsets,’ says Dr. Brian Hurd, New Mexico State University, and co- author of the study. And co-author Dr George Frisvold of the University of Arizona notes further that ‘only small changes are expected in regional land use as some farmers can benefit from reducing tillage and putting land into conservation reserve and grass.’”

Trade

A Daily Radio News item from USDA yesterday provided a brief one-minute audio recap of recent developments in the WTO cotton dispute between the U.S. and Brazil and noted that, “Brazil’s agreement earlier this week to delay issuing retaliatory tariffs allows the U.S. time to enact commitments to help ensure a permanent settlement of the issue.”

Meanwhile, the International Food and Agricultural Trade Policy Council (IPC) issued a release yesterday, which noted that, “The fact that Brazil and the US have reached an agreement on the longstanding WTO cotton dispute is good news. The slowly recovering global economy will not be burdened with further trade restrictions in the form of Brazilian countermeasures. Moreover, coming at a time when WTO Doha Round negotiations continue to be at an impasse, this agreement is an important demonstration that the other pillar of the WTO – the dispute settlement system – is functioning relatively well. Yet, it is by no means a perfect outcome, and also points to weaknesses in the multilateral trade system requiring ongoing consideration and work.”

The IPC update added that, “‘A negotiated compensation settlement is always preferable to trade restrictions, which is after all what countermeasures are. This is especially the case today, when trade flows have finally begun to pick up again after a significant decline caused by the financial crisis,’ notes IPC Chairperson Carlo Trojan, ‘yet the ideal resolution to a WTO dispute is compliance by the guilty party with the panel’s findings. While the US has taken some steps to address the underlying policies found to be WTO illegal, it has deferred on the big ticket items – the marketing loans and countercyclical payments.’

“African cotton producers, most of them living at subsistence levels, have of course also been hoping for a change in US policy, but they, too, will have to wait to see if the US-Brazilian agreement will be translated into substantial changes to the farm bill. ‘The cotton initiative, which the Africans were able to incorporate in the Doha Round, unfortunately remains stuck, along with the rest of the Doha negotiations, reminding us that a healthy and evolving multilateral trade system requires both negotiations and dispute settlement,’ IPC Vice Chairperson Marcelo Regunaga emphasizes. Moreover, not having brought a WTO case against the US, the Africans will not benefit from any compensation. ‘This situation exemplifies how difficult it is for LDCs to benefit from the dispute settlement process’ comments IPC member and Executive Director of the IDEAS Center Nicolas Imboden; ‘their scope of action is limited because they lack serious retaliation threats to force the big players into compliance or compensation.’”

Farm Bill

An editorial posted yesterday at the Capital Press Online (“Peterson’s farm bill efforts point in right direction”) stated that, “We like the direction House Agriculture Committee Chairman Collin Peterson wants to take the 2012 Farm Bill.

“The Minnesota Democrat says his committee will soon begin work on the bill, and he hopes to make some dramatic changes to crop insurance and price support programs.

With regards to crop insurance, Peterson wants to eliminate the flat fee farmers now pay in favor of a fee more consistent with what’s actually being insured. That would allow farmers to buy insurance that fits their individual situations, and allow limited USDA funding to be stretched further.

He would also like to eliminate direct payments program crop farmers now get regardless of whether commodity prices are high or low in exchange for a system that protects farmers against economic losses when prices actually fall below the cost of production.”

The opinion item noted that, “Both ideas are worth talking about in the process of writing the final bill. But the pros and cons of his proposals aren’t the point. We agree with Peterson that real farm program reform is necessary, and that changes will be forced on farmers and ranchers by the realities of budget politics.”

“Peterson has 32 months to bring the next bill in on time. His committee, and their counterparts in the Senate, will need every bit of that time to produce the reforms necessary to produce a viable farm safety net and meet the new budget realities.”

Animal Agriculture

Dave Russell reported yesterday at Brownfield that, “Following the Humane Society of the U.S. (HSUS) news conference in Des Moines, Iowa on Wednesday, April 7, where HSUS released a video of chickens being abused at poultry facilities owned by Rose Acre Farms and Rembrandt Enterprises, Rose Acre Farms is undergoing a third party audit of their poultry operations in Iowa.

“‘Today, we’re actually doing an independent audit, with a third party, on all three of our Iowa locations, to get a confirmation from a third party that everything’s good,’ said KY Hendrix, Vice President of production at Rose Acre Farms.

Hendrix also tells Brownfield Rose Acre Farms stand behind their production practices.”

The Brownfield item, which included an audio interview with Hendrix, noted that, “The employee that recorded the HSUS video only worked for Rose Acre Farms for 2 weeks. Hendrix says that as of now, no legal action against that individual is planned, even though the employee did sign the company’s ‘Animal Welfare’ paper that says if anything was being done, like what was shown in the video, they were to bring it to the attention of a supervisor, which obviously did not happen.”

Food Safety

Jean Spencer reported today at The Wall Street Journal Online that, “Congress’s food-safety fight is nearing an end but small farmers still have a bone to pick with the legislation.

“The Senate version of a food-safety bill has attracted broad bipartisan support and is expected to pass easily soon after Congress returns from recess next week. Iowa Democratic Sen. Tom Harkin, a co-sponsor, predicted it would be ‘on the president’s desk by May.’ But small farmers worry the measure’s fees and inspection requirements would be ruinously expensive and are pushing for exemptions.

“‘I know people who have been small farmers for 25 to 30 years who are looking to get out of the business because food safety is becoming so alarmist,’ said Mary Alionis, whose eight-acre Whistling Duck Farm in Grants Pass, Ore., sells produce to farmers markets and restaurants.”

The Journal article pointed out that, “Both House and Senate versions of the bill would require more FDA inspections of farms, food production and processing facilities, give the agency enhanced authority to order recalls, and force better recordkeeping as food moves from farms to store shelves. The aim is to prevent widespread outbreaks of food-borne illnesses and give the FDA more resources to trace those that occur to their source.

Big food companies generally support the bill, judging the added expenses it would bring to be small compared with the potential financial damage of a vast product recall. But smaller producers say the bill’s stepped-up inspection requirements and provisions allowing the FDA to issue preventive recalls would put too big a financial burden on them.”

Keith Good