January 20, 2020

Policy Issues; Ag Economy; Climate – Biofuels Issues; and Financial Regulation

Farm Bill: House Ag Committee Field Hearing- Lubbock, Texas

Alyssa Dizon reported today at the Avalanche-Journal Online (Lubbock, Texas) that, “Producers from every major agriculture commodity group in Texas told agriculture legislators that provisions of a financial safety net was their common concern for the next farm bill.”

The article noted that, “‘I thought we had good testimony from a very broad range of agricultural interests,’ said U.S. Rep. Randy Neugebauer, R-Texas. ‘It’s important to come out here where agriculture is actually happening.’

“The select 13 witnesses submitted written testimonies to the committee and gave five-minute presentations regarding what has and has not been effective for their industries in the current farm bill. The most popular issues mentioned were crop insurance, international trade, environmental challenges and conservation programs.”

Most favored the USDA direct and counter-cyclical programs and marketing loan programs under the 2008 bill, which assisted in increasing production input costs and financial stability. Those same individuals cited problems with payment limitations, eligibility standards and complex application processes for some of USDA’s farm and conservation programs.”

Today’s article added that, “‘My intention is to get this bill out of the house by December of 2011 and try to get this bill done on time,’ [Chairman Collin Peterson, D-Minn] said.”

Katie Bauer reported yesterday at KCBD-11 Online that, “[B]ut one issue Congressman Neugebauer hopes to see updated is crop insurance guidelines.

“‘What we hear time and time again from our producers is that the current crop insurance program is not working well for them it doesn’t cover the risks that they are taking, it doesn’t give them adequate coverage, doesn’t give them very many choices,’ said Neugebauer.

“Ideal would be to see better coverage, more flexibility and a tool that allows producers to manage those risks.

“‘One of things that you have to do is have a farm bill that covers all of agriculture it would be nice if one size fit all, but what you heard from of the witnesses just awhile ago is that one size does not fit all,’ said Neugebauer.”

Jaime Gerik reported yesterday at Fox 34 News Online that, “Reps with Plains Cotton Growers say they’ll fight to protect crop insurance and conservation programs that could be cut in the upcoming bill.”

And DTN Political Correspondent Jerry Hagstrom reported yesterday from Lubbock (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., said here Monday he would like to eliminate all limitations on government payments to farmers due to the size of their payments or incomes.

“After a hearing on the 2012 farm bill at which several witnesses complained about the way Congress had written and USDA has implemented the 2008 farm bill’s rules on payment limitations, Peterson told reporters, ‘I hope we can make changes so we don’t have to have payment limits in the future.’

“Peterson said he is ‘all for local foods and organic’ production, and big farmers ‘should be treated equally’ with small farmers in getting payments. Noting that most of the food produced in the United States comes from the 300,000 to 350,000 biggest farms, Peterson said those operations still need a safety net.”

Mr. Hagstrom pointed out that, “‘The corporation has been demonized in this country,’ by people pushing payment limits. ‘That’s completely baloney,’ Peterson said, adding that when he was a practicing certified public accountant, he had farmer clients who were ‘family farmers’ seeking the best structure for their businesses.

“The Environmental Working Group has complained that the Obama administration’s recent release of farm subsidy data by individual was not as complete as the information the Bush administration released. Congress changed the law to say that USDA could decide whether to aggregate all payments under individual names, and the Obama administration chose not to spend the money to do it. Peterson said, ‘I have no problem with the way [the Obama administration] has handled it.’

Peterson also proposed changing the definition of a farm in USDA’s Agricultural Census from producing $1,000 in farm products, to a higher level of production. Using that Census data, Agriculture Secretary Tom Vilsack charged that the vast majority of farmers get most of their income off the farm and need more help, but Peterson said he considers that discussion and the payment limits issue ‘a distraction.’”

In addition, Chairman Peterson provided perspective and analysis on some other important policy variables during the course of yesterday’s discussion:

Potential future differences in program specifics between crops, trade with Cuba, crop insurance and the cotton WTO Brazil issue. (MP3-5:17).

Other topics and farm policy variables that were discussed yesterday included the following:

Safety net issues, Peanut Producer Jimbo Grissom (written testimony) (MP3-3:29).

Crop insurance, Producer and crop insurance agent Ronnie Holt (written testimony) (MP3-3:34).

Cap and trade, Rep. Mike Conaway (R-Tex.) (MP3-4:11).

Cap and Trade, (Rep. Adrian Smith (R-Neb.) (MP3-1:51).

Antibiotics issues and livestock, (Rep. Adrian Smith) (MP3-1:38).

An audio replay of yesterday’s hearing, which contains the Panel 1 discussion and most of the Panel 2 discussion, can be replayed or downloaded from this link.

Another House Ag Committee field hearing on the Farm Bill will be held this morning in South Dakota, and for a quick overview of all of the 2012 House Ag Committee Farm Bill hearings, just click here.

Farm Bill: Conservation

Chris Clayton reported yesterday at DTN (link requires subscription) that, “Trying to spur some new blood in farming and ranching, USDA rolled out a program on Friday to encourage retiring landowners with land leaving the Conservation Reserve Program to sell or rent that land to a beginning or socially disadvantaged farmer or rancher.

The Transition Incentives Program authorized $25 million under the 2008 farm bill to encourage a retiring farmer with land under contract in the Conservation Reserve Program to transition that land to a beginning or socially disadvantaged farmer or rancher. The program signup begins Monday.”

Meanwhile, Daniel Hellerstein penned an article in the June 2010 edition of Amber Waves (USDA- Economic Research Service) titled, “Challenges Facing USDA’s Conservation Reserve Program.” A summary of the brief article indicated that, “Improved targeting of benefits, encouragement of better conservation practices, and heightened competition among bidders could hold promise for increasing the environmental benefits and lowering the cost of the Conservation Reserve Program.”

Obesity Issues

Janet Adamy reported in today’s Wall Street Journal that, “Sixteen food makers on Monday pledged to cut 1.5 trillion calories from their products by 2015 as part of a White House campaign to combat childhood obesity. But it will be difficult to measure whether food companies meet the goal, and many of the industry’s biggest players haven’t signed on.

“The effort is the first major step by the food industry in response to first lady Michelle Obama’s drive to reduce the share of U.S. children that are obese to 5% by 2030, from nearly one-third now who are either overweight or obese.”

The Journal article explained that, “The industry group said it would tackle the problem three ways: by offering more lower-calorie alternatives to traditional products; by changing recipes for existing products; and by reducing portion sizes of single-serving items.

“The companies involved include Coca-Cola Co., PepsiCo Inc., Kraft Foods Inc. and Hershey Co., which make products from soda to cereal to cookies. The group doesn’t include any restaurant companies. The White House said the participating companies supplied 20% to 25% of U.S. food by volume, excluding food services.”

Jane Black reported in today’s Washington Post that, “‘This is precisely the kind of real private-sector commitment that we need. And I hope that more will follow the example that they’ve set,’ [first lady Michelle Obama] said at a news conference at the Eisenhower Executive Office Building.

“The announcement is one of the first substantial results of the first lady’s ‘Let’s Move!’ campaign, which aims to end childhood obesity within a generation. The industry’s pledge comes two months after Obama urged food corporations ‘to move farther, faster’ and less than a week after the White House announced the findings of its Childhood Obesity Task Force.

The industry has been under pressure from the first lady and from state and local governments considering junk-food taxes and other anti-obesity measures.

Missing from the announcement were any specifics on the new products or cuts that will be made to existing items. But White House officials stressed that the companies will be held accountable. Each year, their progress will be assessed by the Partnership for a Healthier America, a nonpartisan organization for which the first lady serves as honorary chair. If any one of the companies doesn’t meet its target, all of the companies will be held responsible, White House sources said. The Robert Wood Johnson Foundation, a nonprofit dedicated to improve Americans’ health, also will track the effort’s impact on childhood obesity. A first report is tentatively slated for 2013.”

EPA Regulation

The AP reported yesterday that, “The U.S. Environmental Protection Agency said Monday it will impose restrictions on spraying three agricultural pesticides to keep them out of salmon streams after manufacturers refused to adopt the limits voluntarily.

“EPA will develop new rules for applying the chemicals diazinon, malathion and chlorpyrifos that will include no-spray zones along streams and restrictions on spraying depending on weather conditions, EPA spokesman Dale Kemery said in an e-mail. There will also be requirements to report dead fish.”

The article noted that, “Manufacturers Dow AgroSciences, Makhteshim Agan of North America, Cheminova and Gharda Chemicals Ltd. notified EPA on Friday that they would not voluntarily adopt the restrictions, said Dow AgroSciences spokesman Garry Hamlin.

“In a letter to the EPA, a lawyer for Dow AgroSciencies and Makhteshim Agan said the companies feel there is no scientific evidence the pesticides are killing, harming or jeopardizing the survival of salmon, or harming critical habitat, and that the NOAA Fisheries analysis was deficient.”

Ken Anderson reported yesterday at Brownfield that, “The EPA last week announced a new federal clean-up strategy for the Chesapeake Bay, which the agency says includes ‘rigorous regulations to restore clean water.’ That includes expanded regulation of CAFOs—concentrated animal feeding operations—that are located in the Bay’s watershed.

The chairman of the National Pork Producers Council environment committee, Randy Spronk of Edgerton, Minnesota, says those new regulations could eventually impact Midwestern farmers.

“‘We all know it’s going to have an impact in the Mississippi or the Missouri River watershed,’ says Spronk, ‘so I think as producers we want to be very mindful of what’s going on in the Chesapeake Bay and what they’re doing to meet the standards.’”

Competition-Concentration Issues

Bob Keefe reported on Sunday at the Atlanta Journal-Constitution Online that, “Production is down, prices are flat and sales contracts are smaller and tougher to come by.

But is the poultry industry — Georgia’s biggest agriculture business by far — suffering from anti-competitive practices by big food companies, or is it just another victim of the recession?

“In an unprecedented inquiry, the U.S. Department of Justice’s Antitrust Division and the U.S. Department of Agriculture are teaming up to try to find out.”

The article noted that, “The eventual outcome could mean a lot to Georgia.

The state is the nation’s biggest poultry producer. The industry adds an estimated $18.4 billion to the state’s economy and directly and indirectly employs more than 100,000 Georgians, according to the Georgia Poultry Federation.

“Federal regulators say the field hearings — they’re also looking into the dairy, beef and hog industries — are more fact-finding mission than full-blown investigation.

“‘The goal is basically to have an open conversation, an open dialogue about the competition issues and regulatory issues and to listen and learn from all the different interested parties,’ said Department of Justice spokeswoman Gina Talamona.”

The AJC article pointed out that, “As ranking Republican on the Senate Agriculture Committee, Chambliss recently sent a terse letter to USDA Secretary Tom Vilsack warning the agencies not to overstep their authority.

In an interview, Chambliss said he worries the two agencies may be prepping for lawsuits against big food and agriculture companies and using the field hearings to try to get what he called ‘almost scripted testimony’ from farmers as support.

“‘We’ve never seen DOJ go into rural America,’ said Georgia’s senior senator. ‘If there’s a legitimate issue, it ought to be talked about. But we don’t want DOJ and the USDA going around the country promoting litigation and lawsuits.’”

Ag Economy

Susanne Stahl reported yesterday at DTN that, “Eight-seven percent of the corn crop is in the ground, with 55 percent of the crop emerged, according to USDA’s latest Crop Progress report.”

Soybean planting is 38 percent complete as of May 16, running well ahead of the 2009 pace and slightly ahead of the five-year average.”

Meanwhile, a University of Illinois Extension update from yesterday titled, “A Review of USDA Projections for the 2010-11 Corn Marketing Year,” indicated that, “There is always lots of interest in the USDA’s first projections of crop supply and consumption for the upcoming marketing year. Early season forecasts are often not very accurate due to all the unknowns surrounding future supply and consumption. Still, the first USDA forecasts establish a benchmark and many analysts recalibrate projections based on USDA analysis. Those first projections for the 2010-11 marketing year were released on May 11.”

The brief report goes on to outline some of the key variables of the USDA forecast.

Climate – Biofuels Issues

In related climate news, Cindy Zimmerman reported yesterday at that, “The National Corn Growers Association (NCGA) believes that it’s time to throw out the whole debated theory of indirect land use change.

“‘In 2010, the U.S. Department of Agriculture predicts our corn farmers will produce more than 300 million more bushels than just three years ago, and do so on nearly 5 million fewer acres,’ NCGA President Darrin Ihnen said in a news release. ‘International indirect land use change theory completely ignores or significantly downplays grower ingenuity and modern agronomy. This junk science needs to go the way of the horse-drawn plow.’

“The unproven theory and models related to it are being used by the California Air Resources Board to implement that state’s low carbon fuel standard in such a way that ethanol made from corn would not qualify for use. Ihnen points to the recent Purdue study that found California is overestimating the greenhouse-gas impact of land use changes related to corn ethanol by a factor of two.”

Also yesterday, a Daily Radio Newsline update (USDA), which featured recent comments from last week’s House Ag Committee Farm Bill hearing in Washington, D.C. by Purdue Agricultural Economist Otto Doering, noted that, “While the EPA deliberates on whether to lift the 10% limit on how much ethanol can be mixed with gasoline, experts are looking at the many possible effects lifting the limit might have.”

To listen to this interesting one-minute recap, just click here.

Meanwhile, Jim Snyder reported yesterday at The Hill’s Energy Blog that, “The new Senate climate change bill has some green groups seeing red.

“Fifteen organizations, including Greenpeace, Friends of the Earth, the Center for Biological Diversity, and the Friends Committee on National Legislation, which is a Quaker lobbying group, have formed the Climate Reality Check coalition to oppose the legislation, released last week by Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.).”

And an update posted yesterday at the minority page (GOP) of the Senate Committee on Environment and Public Works noted that, “Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works, spoke today on the Senate floor on the latest developments in global warming policy, including the release last week of the Kerry-Lieberman proposal. Senator Inhofe delivered the speech as many of the world’s leading skeptics gathered in Chicago for a major climate conference.”

Reuters news reported yesterday that, “U.N. Secretary-General Ban Ki-moon has chosen Costa Rican diplomat Christiana Figueres as the new U.N. climate chief to head stalled, international talks, sources close to the matter said on Monday.

“Figueres, 53, beat fellow short-listed candidate former South African environment minister Marthinus van Schalkwyk, to a role meant to rally global agreement on a successor to the Kyoto Protocol after a disappointing summit in Copenhagen in December.”

Financial Regulation

Brady Dennis reported in today’s Washington Post that, “Democratic leaders gave notice late Monday that they intend to wind down the weeks-long debate over new financial regulations, even as lawmakers continued to churn through proposed changes to the massive bill.

“‘This cannot be delayed any longer,’ Majority Leader Harry M. Reid (D-Nev.) said Monday afternoon on the Senate floor.

“Hours later, he and other senators filed a motion, known as cloture, that sets up a likely vote on Wednesday to limit further debate and paves the way for a final vote on the bill, potentially by week’s end.”

Keith Good

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