FarmPolicy

December 15, 2019

Farm Policy Issues; and Climate Change

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

With respect to Monday’s House Ag Committee field hearing in Texas, DTN Political Correspondent Jerry Hagstrom (link requires subscription) reported that, “Texas farm leaders on Monday told the House Agriculture Committee that the traditional farm commodity programs including direct and counter-cyclical payments and marketing loans that are in the 2008 farm bill should be continued in the 2012 rewrite. But House Agriculture Chairman Collin Peterson said they might want changes if crop prices go down and the safety net proves it cannot cover rising production costs.

“After the hearing, Peterson told reporters that the 2008 bill has been popular because crop prices have been ‘pretty good.’ He added, ‘If we get down to $2 (per bushel) corn, you’d have different testimony than what we had here today.’ He said no matter how the 2012 program is constructed, it will have to be designed so that banks can use it as collateral for loans and so that it is based not just on revenue losses but also on cost of production.”

Mr. Hagstrom added that, “Farmers representing the Texas Farm Bureau and commodity groups said the direct payment, countercyclical and marketing loan programs should be continued even though crop prices have been so high many producers have been benefiting only from the direct payments. They also struggled to propose changes to the crop insurance program and to two new programs in the 2008 bill that have not been working so well: the Average Crop Revenue Election (ACRE) program and the Supplemental Revenue Assistance (SURE) program, which is also known as the permanent disaster program.

“Several witnesses said crop insurance does not work in the South, because USDA’s calculations of farmers’ production histories are dated and because rates are higher than for comparable levels of coverage in the Midwest.”

Ron Smith reported yesterday at the Southeast Farm Press Online that, “Farm commodity representatives asked members of the U.S. House of Representatives Committee on Agriculture to do all they can to maintain the basic structure of the 2008 farm law, but suggested sweeping changes in a few new programs such as ACRE and SURE.

“The representatives, speaking at a hearing in Lubbock, Texas, also asked committee members to increase crop insurance coverage while making premiums more affordable and to maintain direct payment and marketing loan options.”

Yesterday’s article added that, “Doyle Schniers, a cotton and grain farmer from San Angelo, said stability has been the core principal of farm programs in the United States since the Great Depression. To maintain that stability, he said, farmers need ‘a sound farm policy that will protect the viability of the cotton industry and American agriculture.’

“He agrees that the marketing loan is crucial. He said new crop insurance products, ‘such as revenue coverage, enterprise policies and group risk coverage have given producers options for risk management,’ but should ‘complement traditional commodity programs, not be used to replace them.’”

Mr. Smith noted that, “Jimbo Grissom, Seminole, Texas, president of the Western Peanut Growers Association, said the current farm program could be stronger and provide more financial support, ‘but (it) provides an understood and reliable basis upon which a lender can work with a farmer, even in bad times. If not successful in getting a satisfactory revenue insurance program through the administrative proceedings of RMA, we will seek legislation that makes a good revenue program a reality for peanut producers.’

Grissom and others, responding to a question from Rep. Mike Rogers of Alabama, said they would be reluctant to give up the direct payment program for a new insurance policy with higher yield coverage and more affordable premiums.

“‘The direct payment is a dependable security for our lenders, and it is the only part of our program that can be reliably protected from World Trade Organization sanctions,’ Grissom said.”

Farm Bill: House Ag Committee Field Hearing- Sioux Falls, South Dakota

Yesterday, the House Ag Committee held a field hearing in Sioux Falls, South Dakota.

As it turns out, Rep. Mike Rogers (R-Alabama) asked a panel of farmers at yesterday’s hearing the same question he had asked Texas producers on Monday, “If we were able to get the crop insurance reimbursement rates higher…with a premium that you felt good about…would you be willing to opt out of the direct payment and counter cyclical payment programs for that very favorable crop insurance program?”

To listen to some of the responses to this question from yesterday, just click here (MP3-3:31).

DTN Ag Policy Editor Chris Clayton reported yesterday that, “In contrast to some statements at other field hearings, farmers in South Dakota testified that some elements of the farm program aren’t as important as in the past. [Kevin Scott, chairman of the South Dakota Soybean Association] said his members don’t consider direct payments as important as in the past because of current commodity prices. However, Scott added that bankers have put a lot of emphasis on direct payments when it comes to financing operations.

“‘The direct payment is something that is consistent and can be identified,’ Scott said.”

More broadly, Mr. Clayton indicated that, “Unlike Southern farmers who say some newer risk-management programs don’t work for their crops, farmers from South Dakota and neighboring states didn’t outright condemn the Average Crop Revenue Election (ACRE) program. But in what has been a constant theme in some hearings, leaders from some groups testified that ACRE would be more effective if it were based on county yields and also if the program were not so complicated to explain to landlords.”

“Rodney Gangwish, a farmer from Shelton, Neb., and former president of the National Corn Growers Association, enrolled 70 percent of his acreage in ACRE as a put option against a catastrophic event. He noted there were no other choices in the farm bill that offered that kind of risk protection. So Gangwish was willing to give up 20 percent of his direct payments in return.”

“Scott and Gangwish both said they signed up for ACRE for risk protection, though it did not pay out on their 2009 crops. Overall, ACRE has not been heavily embraced across most of the country. A USDA official told the committee that about 18 percent of producers in South Dakota and 10 percent in North Dakota enrolled in ACRE last year. The enrollment period for ACRE on this year’s crop ends June 1,” the DTN article said.

(FarmPolicy.com Note: Rep. Mike Conaway (R-Texas) asked the first panel of farmers at yesterday’s hearing for more specific details regarding the ACRE program, to listen to this interesting exchange, just click here (MP3-2:53)).

And Ken Anderson reported yesterday at Brownfield that, “The ACRE program was one of the main topics of discussion. In general, growers like the revenue protection the program offers, but also agree that it needs to be more localized. Gary Duffy of Oldham, South Dakota is the president of the South Dakota Corn Growers Association.

“‘I know what my production history has been. As a marketer, I’m somewhat guessing on the price—but to have that state trigger, it’s kind of tough to get your arms around it,’ Duffy says. ‘So I think that’s one of the things we would like to do is to get it more localized, at least down to the county level.’”

Mr. Clayton added in his DTN article from yesterday that, “One overriding theme from Tuesday also was the strong support for ethanol as farmers asked lawmakers to extend the 45-cent ethanol blenders’ credit and push ahead to raise ethanol blend levels to at least 20 percent of gasoline and even higher.”

Ken Anderson reported yesterday at Brownfield that, “Several of the farmers who testified at Tuesday’s farm bill hearing in Sioux Falls stressed the importance of a growing ethanol market to Midwest corn growers. One of them was Rod Gangwish of Shelton, Nebraska, a former president of the National Corn Growers Association.

“‘The topic of the extension of the tax incentive for ethanol—the flexible fuel vehicle requirements—and the increase in the blending of ethanol from E10 to E15—do not fit within the parameters of the farm bill,’ Gangwish said, ‘but they are significantly related to the profitability of my business.’”

“House Ag Committee member Stephanie Herseth-Sandlin of South Dakota says that ethanol has played a big role in reduced farm program spending. ‘The VEETC and the blend wall—while they may be outside of the parameters of the farm bill—we know how important having an additional market in biofuels has been to reducing the amount of payments that we’ve made to corn growers and other producers in the commodity title,’ she said.”

An update posted yesterday at the Argus Leader Online (Sioux Falls) reported that, “Gary Duffy, president of the South Dakota Corn Growers Association, said the Federal Crop Insurance Program is the most important program for all producers.

“‘Crop insurance is the greatest risk management tool producers have. No one knows what Mother Nature is going to do and the risk she brings to our industry,’ he said. ‘Crop insurance is efficient, effective and a program that works for all crops.’”

The Omaha World-Herald reported yesterday that, “Congressman Adrian Smith (R-NE) today joined with eleven other members of the House Agriculture Committee in Sioux Falls, S.D., to review U.S. agriculture policy as part of the process of writing the 2012 Farm Bill.”

The article noted that, “‘We should be working to create policies which will strengthen American agriculture and provide long-term stability for our nation’s producers to compete in the international market place.’

“‘Such economic policies will foster sustained growth in rural communities. My goal for the next Farm Bill is to build on the successes we have heard about in previous field hearings and to craft policies which will provide long-term stability for our nation’s producers,’ Smith said.”

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

Biofuels; and Research, Dr. Kevin Kephart, Vice President for Research and Dean of the Graduate School, South Dakota State University, Brookings, South Dakota (MP3-1:49).

The blend wall, Rep. Jeff Fortenberry (R-Nebraska) (MP3-1:49).

Research; and Biofuels, Rep. Tim Walz (D-Minn.) (MP3-3:42).

An audio replay of yesterday’s hearing, can be replayed or downloaded from this link; and for a quick overview of all of the 2012 House Ag Committee Farm Bill hearings, just click here.

Farm Bill: FarmPolicy.com Resources- UNOFFICIAL Transcripts

Recall that last Thursday, the House Ag Committee heard from ag policy experts about the 2012 Farm Bill at a hearing in Washington, D.C.

An UNOFFICIAL transcript of this hearing has been posted at FarmPolicy.com and is available here.

Likewise, recall that back on April 21, the House Ag Committee heard testimony about the 2012 Farm Bill from Secretary of Agriculture Tom Vilsack.

An UNOFFICIAL transcript of the hearing with Sec. Vilsack has been posted at FarmPolicy.com and is available here.

Please Note: These are UNOFFICIAL transcripts of live-stream audio and may not be completely accurate. Despite this potential limitation, these UNOFFICIAL transcripts are provided as a complimentary professional courtesy to foster constructive discussion and debate on the 2012 Farm Bill.

The transcripts are in PDF format and can be searched by key word.

Competition

A news release issued yesterday by the National Farmers Union indicated that, “The U.S. Department of Agriculture (USDA) and the Department of Justice (DOJ) announced the schedule and panelists for the second of five joint workshops on competition and regulatory issues in agriculture, focusing on the poultry industry. The workshop will be held in Normal, Ala., at the Ernest L. Knight Reception Center at Alabama A&M University on May 21, 2010.

“‘National Farmers Union (NFU) greatly appreciates the concern USDA and DOJ have shown regarding competition and regulatory issues in agriculture,’ said NFU President Roger Johnson.

“U.S. Attorney General Eric Holder, USDA Secretary Tom Vilsack and Assistant Attorney General for the Justice Department’s Antitrust Division Christine Varney will participate in the workshop, and will be joined by Congressman Artur Davis, Alabama Attorney General Troy King and Alabama Agriculture Commissioner Ron Sparks.”

Trade

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Mexico’s president, Felipe Calderon, is coming to Washington this week, and there are indications that before Calderon arrives, Transportation Secretary Ray LaHood may issue a proposal aimed at resolving a trade issue that has been bothering both nations since 1995.

“LaHood earlier indicated that the Department of Transportation was working on a plan that finally would allow trucks registered in Mexico to operate on U.S. roads and highways. Under the North American Free Trade Agreement, this was to have happened beginning in 1995, but Congress has prevented this part of the agreement from going into effect, offering as the reason the allegation that Mexican trucks were by their very nature unsafe.

“DOT had been operating a pilot program under which a few Mexican trucking firms were allowed to operate within the United States provided they submitted to close inspection and monitoring by department officials. That program was working well, supporters reported, with the trucks in the program generally earning high marks. Nevertheless, Congress shut down the pilot program only a short time after it was up and running. After Congress ended the pilot program, Mexico retaliated in March 2009 by imposing tariffs on $2.4 billion worth of U.S. goods.”

The DTN item added that, “Given the current U.S. economic and political scenes, the DOT proposal, whatever it turns out to be, is more likely to gain the approval of the Mexican government than it is to pass muster with the U.S. Congress.”

Climate Issues

Reuters writer Richard Cowan reported yesterday that, “The compromise climate change proposal unveiled last week in the U.S. Senate is in legislative limbo, its fate apparently uncertain until at least next month.

“The plan by Democratic Senator John Kerry and independent Senator Joseph Lieberman to reduce U.S. carbon dioxide emissions that contribute to global warming is not the subject of any committee hearings; it’s not being debated on the Senate floor; it’s not even been formally introduced.

“At a weekly luncheon that Democratic senators hold on Tuesdays to talk politics and policy, the nearly 1,000-page draft proposal was barely mentioned, according to senators who attended this week’s closed-door meeting, the first since its unveiling.”

The article explained that, “Senate Majority Leader Harry Reid told reporters that during the week of June 14, he hoped to gather all 57 Senate Democrats and two independents ‘where we will just talk about nothing but energy.’

“By then, the Environmental Protection Agency and Energy Information Administration could be done, or nearing completion, of an economic analysis of the Kerry-Lieberman bill. The two senators hope the studies will boost prospects if they show minimal negative impact on the U.S. economy from gradually shifting U.S. energy sources from fossil fuels like coal and oil to wind, solar and biomass.”

An update posted yesterday at the House Committee on Agriculture Republicans Online stated that, “Ranking Member Frank Lucas discusses the Kerry-Lieberman cap and tax bill introduced in the Senate last week, and the efforts of the Obama Administration to implement a job-killing cap and tax program whether Congress passes a bill or not.”

The item quoted Rep. Lucas as saying; “Senators John Kerry and Joe Lieberman introduced their much anticipated climate bill in the Senate last week.”

It’s no coincidence that this cap and tax bill was unveiled the same week the Environmental Protection Agency released a rule stating it would begin regulating greenhouse gases by requiring energy producers and manufacturers to obtain permits.

The Obama administration has not been shy about its intentions to bully Congress into passing a job-killing cap and tax bill. It has made it clear that it’s ready to expand EPA authority and regulate if it deems necessary.

“But, what is clearer is how out of touch the administration is to hardworking Americans who are already enduring rising gas prices, food prices and energy costs. Americans can’t afford cap and tax – no matter how the administration and the Democratic leadership try to sell it.”

On the other hand, The Washington Post editorial board noted today that, “Sens. John F. Kerry (D-Mass.) and Joseph I. Lieberman (I-Conn.) have provided Congress with an opportunity. Their climate bill, released last week, is imperfect. But it offers a start, very much in the right direction. Contrary to popular wisdom, acting on global warming is not going to get easier after this year’s election. Legislators should seize this moment.”

Meanwhile, Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “The Senate could face a key vote next week on controlling greenhouse gas emissions. At issue is a measure aimed at blocking the Obama administration from using the Clean Air Act to impose limits on the largest sources of emissions.

“Sen. Chuck Grassley, R-Ia., says the legislation should send a signal to the Environmental Protection Agency to take a ‘more reasonable approach’ to regulating carbon emissions. However, it’s not clear that it can pass. So far, the measure introduced by Sen. Lisa Murkowski, R-Alaska, has 41 cosponsors, including Grassley and three Democrats. Murkowski has until June 7 or 8 to bring the measure to a vote, a spokesman said, but the Senate will be in recess the week of Memorial Day so there is little time left.”

And Amy Harder reported yesterday at the NationalJournal Online that, “The U.S. and the world can be successful in moving forward on a global climate change deal this year even if Congress doesn’t pass a comprehensive climate bill, the Obama administration’s top climate envoy said today.”

Keith Good

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