FarmPolicy

Farm Bill; Biofuels; Animal Agriculture; Ag Economy; Climate Issues; and Financial Regulation

Farm Bill

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Following [last Wednesday’s Ag Committee hearing], [Ag Committee Chairman Collin Peterson] told the press he expects fundamental changes in U.S. farm policy this time, and there will be ‘little room for the status quo’ in the 2012 bill. To achieve that, he thinks it will be important to, ‘… get all this stuff out there, get it all on the table so everyone understands what’s what. Let’s have an honest discussion … and work together to come up with the most rational risk-management type of system we can.’”

“[Chairman Peterson] commented that the current programs overlap each other and the crop insurance programs, and suggested there will be ‘no money available to increase the subsidy rates under existing programs as some commodity groups want.’ As a result, he is looking to make fundamental changes in the way ‘corn and other crops’ are subsidized when Congress writes the next farm bill in 2012.

“One idea is to link subsidies more to swings in farm revenue rather than commodity prices. ‘Let’s come up with the best risk management system that we can,’ he said. He further commented that this might lead to integrating the current subsidies with crop insurance, ‘in some way.’ He further suggested that in a couple of decades, crop insurance likely will be ‘the single way that the government subsidizes farmers,’ in part because an insurance program is easier to sell to urban voters than the conventional subsidy programs.”

Yesterday’s DTN update noted that, “[I]t is clear that, for now, at least, the chairman is willing to suggest agriculture would be better off attempting to find an entirely different approach than trying to fix what it has. Press speculation suggests that part of the chairman’s motivation is the difficulty of finding a way to change cotton programs to comply with the ruling of the World Trade Organization cotton case panel and to settle that trade dispute with Brazil, as the administration has agreed to try to do.

“In addition, the chairman is enlisting commodity groups in his nationwide hearing process with his promise to try to find new, modern program approaches suited to current budget pressures. This likely will be increasingly attractive to the extent it is interpreted as a promise to avoid wholesale support cuts, such as those implied by the administration’s proposal last year for much tougher program caps.”

University of Illinois Agricultural Economist Gary Schnitkey indicated in a paper released yesterday (“Estimated 2009 and 2010 ACRE Payments”) that, “Estimates of 2009 and 2010 Average Crop Revenue Election (ACRE) payments are provided for Illinois. These estimates are useful as farmers make decisions concerning whether to enroll in ACRE for the 2010 cropping year. The deadline for enrolling Farm Service Agency (FSA) farms into ACRE that have not already been enrolled in ACRE is June 1.

“For 2009, state ACRE payments are estimated at $27 per acre for corn, $0 for soybeans, and $90 for wheat. For 2010, corn has an expected payment of $41 per acre and a 51% chance of making a payment, soybeans have an expected payment of $14 per acre and a 35% chance of making a payment, and wheat has an expected payment of $33 per acre and a 66% chance of making a payment.”

The paper stated that, “Based on April 2010 price expectations, corn, soybean, and wheat payments are likely to have a higher chance of occurring in 2010 than would be expected from an analysis using historical prices. From a standpoint of obtaining payments, 2010 is likely to be an opportune year to sign up for ACRE due to these higher chances of receiving ACRE payments. This is particularly true for farmers that plant a large amount of their acres in wheat and corn.”

Meanwhile, Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia), along with Sens. John McCain (R-Arizona) and Pat Roberts (R-Kansas), sent a letter earlier this week to Secretary of Agriculture Tom Vilsack regarding USDA’s “Know Your Farmers Know Your Food” program.

In part, the letter stated that, “We are writing to request information concerning the USDA’s “Know Your Farmers, Know Your Food” Initiative. While the concept of educating consumers about production agriculture is a worthwhile endeavor, we have serious misgivings about the direction of the Know Your Farmers program.”

The letter added that, “Unfortunately, this spending doesn’t appear geared toward conventional farmers who produce the vast majority of our nation’s food supply, but is instead aimed at small, hobbyist and organic producers whose customers generally consist of affluent patrons at urban farmers markets.”

“American families and rural farmers are hurting in today’s economy, and it’s unclear to us how propping up the urban locavore markets addresses their needs,” the letter said.

Lauren Etter reported in today’s Wall Street Journal that, “Farmers markets, with their hodgepodge of organic kale, artisan rye bread and peach preserves, have surged in popularity in recent years. But now authorities are questioning whether they’re missing a crucial ingredient: real farmers.

“Here in Tomah, [Wis.] where a farmers market has operated for the past decade in a grassy downtown park, a nasty dispute has cropped up. Local farmer Ronald Waege, who grows his own apples and blueberries just outside of town, says resellers are buying up produce at an auction and peddling it here, sometimes undercutting his own prices. Mr. Waege, who insists he’s looking after the interests of consumers, has prodded the Tomah City Council to decide whether or not to ban resellers from the market. The council plans to vote on the issue next month.

“Resellers, some of whom have been operating here for years, are furious. Ralph Wendland, a vendor who grows his apples but also resells pumpkins, made ‘verbal threats to bash my head in while swinging a cane in my direction,’ Mr. Waege wrote in a letter to city officials in January.”

Biofuels

Steve Everly reported yesterday at the Kansas City Star Online that, “President Obama visited Macon, Mo., today and told 200 people that green energy was a key to the country’s future [full transcript of remarks here].

“Speaking at Missouri’s first ethanol plant, which produces 46 million gallons a year, he said that the biofuel was important to the country’s move to green energy.”

The article added that, “The amount of ethanol used in the U.S. must triple by 2022 under the federal Renewable Fuels Standard, and crops grown for biofuels to meet that standard should boost farm income by $13 billion, according to a new federal report on the green economy and rural economic prospects.

“The increase required by the renewable standard also will boost the number of ethanol plants, which are mostly in rural areas.”

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “If ethanol producers were expecting any revelations about the Obama administration policy, say E15, they were disappointed by the president’s visit to a Poet ethanol plant in Macon, Mo., today.

“As he did yesterday in Iowa, Obama talked briefly about the renewable energy incentives in last year’s stimulus bill, including money for advanced biofuels research. And he noted that his cabinet is working together on a number of issues facing the industry. But he said nothing in his prepared remarks about E15.”

Meanwhile, an American Farm Bureau news release from yesterday stated that, “Tax incentives play a key role in the development and production of renewable energy, and the American Farm Bureau Federation is urging Congress to pass two bills that would extend renewable fuel tax credits for five years.”

“AFBF supports H.R. 4070, introduced by Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.), which would extend the biodiesel tax incentive for five years. In addition, the legislation would change the biodiesel tax incentive from a blenders excise tax credit to a production excise tax credit. This change will improve administration of the nation’s tax laws and protect the integrity of the credit, according to AFBF.

“AFBF also backs H.R. 4940, the Renewable Fuels Reinvestment Act, introduced by Reps. Earl Pomeroy (D-N.D.) and John Shimkus (R-Ill.), that extends the Volumetric Ethanol Excise Tax Credit and the Small Ethanol Producers Tax Credit for five years through 2015. The bill also extends the Cellulosic Ethanol Production Tax Credit for three years, through 2015 and the secondary tariff on ethanol that offsets the benefit received by imported ethanol.”

And a news release issued yesterday by the Renewable Fuels Association stated that, “A recently completed state-of-the-art analysis from Purdue University concludes that the California Air Resources Board (ARB) overestimated the indirect land use change (ILUC) impact of grain-based ethanol by a factor of two in developing its Low Carbon Fuels Standard (LCFS) one year ago.

“In a letter sent today to ARB Chair Mary Nichols, the Renewable Fuels Association pointed out this dramatic conclusion and reminded ARB of its promise to review and incorporate new science as it becomes available.”

Animal Agriculture

Philip Brasher reported yesterday at the Green Fields Blog that, “Putting antibiotics in animal feed can lead to the development of drug-resistant bacteria that threaten human health, but there’s no U.S. data yet linking feed use to human illness, top health experts told a House panel today.

“Thomas Frieden, director of the Centers for Disease Control and Prevention, told the lawmakers that giving antibiotics to hogs and other livestock to speed their growth ‘is not a judicious use’ of the drugs.”

Mr. Brasher noted that, “‘We know that theoretically there is a risk,’ Frieden told the House Energy and Commerce Committee’s health subcommittee.

“[Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases] said, ‘There’s no doubt that if you give antibiotics to an animal, a cow or bull or whatever, there’s unequivocally going to be the evolution of antimicrobial resistance in that animal.’

“The question is to what extent that drug resistance can be – or is being – transferred to humans.

“Democrats on the panel expressed frustration that the officials could not give more definitive answers about the issue, while Republicans generally defended the use of the drugs in feed.”

Ken Anderson reported earlier this week at Brownfield that, “One of the items on the agenda at the Animal Agriculture Alliance summit is a presentation on ‘Ensuring Healthy Animals and Food Safety—The Need to Preserve Antibiotics.’ Legislation has been introduced in Congress that would restrict the use of antibiotics in livestock. Supporters of tougher laws claim that non-theraputic use of antibiotics is contributing to antibiotic resistance in humans. But Dr. Elizabeth Parker, chief veterinarian for the National Cattlemen’s Beef Association–and chair of the Animal Ag Alliance– says they have nothing to back up those claims.”

The Brownfield link included an audio interview with Dr. Parker.

James Kanter reported earlier this week at The New York Times Online that, “One of the first things the European Union’s new health and consumer affairs commissioner did after taking office was to approve the planting of a genetically modified potato in Europe — riling environmentalists but giving hope to U.S. officials that an end to a long trade dispute over biotech crops might be in sight.

“But John Dalli, who began his first official visit to Washington on Monday, may open a new, potentially disruptive front: animal welfare.

“In an interview ahead of the trip, Mr. Dalli said he planned to tell his American counterparts that he intended to propose a new law on animal welfare.”

The Times article stated that, “According to E.U. experts familiar with the plans, Mr. Dalli’s law probably would promote the use of cruelty-free labels for some meat products, which could lead to European consumers shunning U.S. products.

“He signaled there would be no end to Europe’s bans on imports of chickens washed with chlorine and beef treated with hormones, which have long irritated American meat exporters. And he said that Europe needed further time to determine whether to allow imports of meat from cloned animals, which U.S. regulators have declared safe to eat.”

Ag Economy

Geoff Dyer reported yesterday at the Financial Times Online that, “China announced on Wednesday it would impose a second round of tariffs on imports of US chicken products of as much as 31.4 per cent, raising the temperature in the trade tussles between the two countries.

“The commerce ministry said the new tariffs were a response to what it said were unfair subsidies given to poultry farmers in the US. The duties come on top of tariffs of up to 105.4 per cent that China placed on US poultry two months ago because of alleged dumping.”

Bloomberg writer Alan Bjerga reported yesterday that, “U.S. exporters sold 115,000 metric tons of corn to China, its first major sale of the grain to the world’s most-populous nation since 2001, according to U.S. Department of Agriculture data.

“The corn is for delivery in the year that ends on Aug. 31, the USDA said today in a statement. The department, which discloses all export-sales activity involving more than 100,000 tons of a commodity in a single day, last reported a major Chinese corn sale on Dec. 11, 2001, a purchase that was later canceled.”

More broadly on the trade issue, Sudeep Reddy reported in today’s Wall Street Journal that, “President Barack Obama’s goal of doubling U.S. exports over the next five years will be difficult to meet, business leaders and economists say, because of the lack of momentum on demolishing trade barriers and the shift by more American companies toward producing overseas.”

And a news release issued yesterday by the National Farmers Union stated that, “National Farmers Union (NFU) President Roger Johnson testified today before the U.S. House of Representatives Committee on Small Business, evaluating the impact of small business trade policy on job creation and economic growth.”

The release added that, “There are two pieces of important legislation that will help with trade problems. H.R. 4645, the Travel Restriction Reform and Export Enhancement Act, sponsored by House Agriculture Committee Chairman Collin Peterson, would open a market for small agriculture and businesses in Cuba. The Trade Reform, Accountability, Development and Employment Act (TRADE Act), sponsored by Congressman Michael Michaud, would force the United States to revisit past trade agreements to ensure all aspects of the agreement are being fulfilled.”

Climate Issues

Ben Geman reported yesterday at The Hill’s Energy and Environment Blog that, “The authors of Senate climate and energy legislation on Wednesday sent the draft measure to the U.S. EPA for modeling, a sign that the senators are continuing to prepare for possible floor debate even though the bill has stalled on Capitol Hill.

“The EPA analysis is expected to take roughly five weeks and will yield forecasts of effects such as predicted household costs.

“The step comes as the bill itself is in limbo politically. Sen. Lindsey Graham (R-S.C.) has suspended his support for advancing the measure he crafted with Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.).”

Darren Goode added yesterday at the National Journal Online that, “The timing means it will likely be completed right around when senators return from their Memorial Day break in June, setting up a potential floor debate later that month.”

Alexander Bolton, also writing yesterday at The Hill’s Blog, reported that, “Senate Majority Leader Harry Reid (D-Nev.) has closed the door on the possibility of moving immigration reform before a comprehensive energy and climate bill.

“‘I am going to move forward on energy first,’ Reid said Wednesday.”

And the AP noted today that, “President Barack Obama says there ‘may not be an appetite’ in Congress to deal with immigration immediately after going through a tough legislative year.”

Glenn Thrush reported yesterday at Politico that, “Senate Democrats, business groups and environmentalists are pressuring President Barack Obama to break the climate change logjam — saying only his personal intervention can save splintering efforts to pass a bill this year.”

Meanwhile, Ben Geman reported on Tuesday at The Hill’s Energy and Environment Blog that, “The fate of Senate climate legislation is in limbo, but Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) said Tuesday that the Senate should take up a package of energy measures his committee approved last year.

“The energy package should come to the floor regardless of whether lawmakers can agree to attach climate change provisions, he told reporters in the Capitol today.”

Financial Regulation

Shailagh Murray and Brady Dennis reported in today’s Washington Post that, “Republicans ended their three-day filibuster of a financial regulatory overhaul Wednesday, reaching agreement with Democrats to begin debate on a bill aimed at curbing the risky investment practices that brought the U.S. economy to the brink of collapse.

“After voting three times this week to block debate, GOP senators decided to reverse course and attempt to reshape the bill through the amendment process. The change in tactics came after Senate banking committee Chairman Christopher J. Dodd (D-Conn.) and the ranking Republican on the panel, Sen. Richard C. Shelby (Ala.), announced that they had again reached an impasse in their efforts to reach a bipartisan compromise.”

The Post article explained that, “After Shelby and Dodd announced their impasse, Reid and Senate Minority Leader Mitch McConnell (R-Ky.) delivered back-to-back Senate floor statements, agreeing that proceedings would begin at 12:15 p.m. Thursday. Reid said he would allow votes on numerous GOP amendments, a pledge that some Republican senators had sought before agreeing to lift their objections.”

Keith Good

Posted by Keith Good • April, 29, 2010 • 4:06 am