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Farm Bill Issues; and Climate Issues

Farm Bill Issues

Earlier this week, the House Agriculture Committee completed its tenth hearing reviewing U.S. agriculture policy as lawmakers begin the process of writing the 2012 Farm Bill. News articles on these hearings, which have been held in Washington, D.C. and around the country, continue to unfold.

With respect to Tuesday’s hearing in South Dakota, Dan Looker reported yesterday at Agriculture Online that, “Tuesday, a House Agriculture Committee hearing on the next farm bill found at least one consistent theme: farmers there and in nearby states like USDA-supported crop insurance and don’t want the program weakened. Other new programs, such as ACRE (Average Crop Revenue Election) do need changes, they were told, even though many of the farmers who testified said they decided to enroll in ACRE last year.

“South Dakota Farmers Union president Doug Somke, who raises grain and beef near Conde, asked the panel to keep crop insurance supported at current levels when Congress writes the next farm bill in 2012.

“‘Farmers have grown to use it as a marketing tool,’ Somke said. ‘And bankers have come to use it as well.’”

Mr. Looker indicated that, “The committee has heard proposals for replacing crop insurance with a USDA-supported revenue coverage that’s better than ACRE. And the committee’s chairman, Collin Peterson (D-MN) has said several times that he’d like to consolidate crop insurance and USDA programs so that they would be less complicated and more effective.”

“Shelton, Nebraska, corn farmer and seed producer Rod Gangwish, a past president of the National Corn Growers Association, agreed that crop insurance is an important tool to allow farmers to forward market their crops.

“One problem for his farm is that on fields where it grows seed corn, it hasn’t been able to update its Actual Production History (APH) since the 1980s, when yields were in the 150 bushel-an-acre range. Now, with irrigated yields in his area routinely hitting 230 to 250 bushels, it would be difficult to switch those fields back to commercial corn with the lower APH used for crop insurance,” the article said.

Steve Young reported yesterday at the Argus Leader Online (Sioux Falls) that, “House Agriculture Committee members preparing to draft the 2012 farm bill heard South Dakota and regional producers lobby for more crop insurance protection, less confusion in commodity programs and expanded use of corn and cellulosic ethanol.”

The article added that, “Farmers complained that crop disaster efforts such as the Supplemental Revenue Assistance Program, or SURE, fall short because its payments are not available until a full year after the end of a crop year in which a disaster occurred.”

Meanwhile, an update posted earlier this week at KTIV-TV (Sioux City, Iowa- video included) reported that, “Scott VanderWal, SD Farm Bureau President said, ‘If we can come up with some kind of a whole farm revenue product that you could buy we could do away with the other programs basically and use that as your risk protection.’

“However, Chairman Peterson says he thinks crop insurance funding can be maintained by coordinating it with all the other risk management tools like ACRE.

“‘I think in the transition there may be a better way for us to provide the safety net that coordinates better with crop insurance. So I don’t think it’s a question of taking one and putting it into the other,’ said Rep. Collin Peterson, the House Ag Committee Chair, ‘its more a question of coordinating what we have.’”

The KTIV update indicated that, “As far as new innovative new ideas, Peterson says they’ve heard a few in the country but the Committee is working on some behind the scenes.

Peterson said ‘Well, we have some ideas that we are looking at that we haven’t talked about too much in public.’

He says those new safety net concepts could be rolled out by the Committee as early as next month.”

A one-minute audio clip from the KTIV-TV report is available here (MP3).

An AP article from Tuesday noted that, “[Rep. Stephanie Herseth Sandlin (D-SD)] suggested that lawmakers look at tweaking the ACRE program to base revenue numbers on a county or local basis, an idea that was well received by growers on the panel.”

In other developments, Harry Cline reported yesterday at the Western Farm Press Online on the Farm Bill hearing that took place on May 3 in Fresno, California.

Yesterday’s article stated that, “Traditional farm programs have not played well in California. The No. 1 agricultural state in the nation ranks ninth among 50 states in subsidies from 1995 through 2009.

“Two of the non-traditional planks of the federal farm bill — greatly expanded conservation funding and the first ever specialty crops programsnetted praise for the House Agriculture Committee in a rare appearance in California.”

Mr. Cline reported that, “Rice is one of the few California crops receiving direct crop support payments. Live Oak, Calif., rice grower Frank Rehermann, a California Rice Commission member, told the committee ‘the current farm bill is working and that reforms adopted in 2008 are having a tremendous effect.’

Although farm program spending on rice has been reduced from $1.2 billion to just over $400 million annually, farmers receive a ‘small, but predictable’ level of ongoing support and have the ‘benefit of a greater safety net when market prices fall.’

“The Average Crop Revenue Election (ACRE) and the Supplemental Revenue Assurance (SURE) programs were part of the last farm bill. They were created as an alternative to the counter cyclical payments and as a standing disaster assistance supplement to federal crop insurance.

“However, Rehermann said ‘These programs do not work for rice as evidenced by the nearly non-existent sign-ups for these programs.’ The other California farmer panelists indicated to the committee that they do not use these programs. He added the federal crop Insurance program does not work for rice growers. Most others who spoke said the crop insurance programs do not fit California agriculture well.”

(FarmPolicy.com Note: Recall that at the House Committee field hearing in Troy, Alabama on Saturday, the rice / crop insurance issue also came up. To listen to an exchange on this issue with Rep. Glenn Thompson (R-Pennsylvania) and Joe Mencer, a rice producer from Arkansas, just click here (MP3-1:37)).

Mr. Cline noted in his article from yesterday that, “Modesto, Calif., tree fruit and tree nut grower Paul Van Konynenburg, echoed [Jamie Strachan, a vegetable producer and shipper from Salinas] praise of the specialty crop programs and wants to see them expanded in the 2012 farm bill.”

And with respect to the Farm Bill hearing last Friday in Morrow, Georgia, an update posted yesterday at The Cedartown Standard Online (Georgia) reported that, “[Georgia Farm Bureau President Zippy Duvall] testified that, overall, the 2008 farm bill is working well for Georgia farmers saying, ‘Georgia’s cotton and peanut farmers fundamentally support the current program of direct and counter-cyclical payments provided by the current farm bill. Farmers and lenders understand these programs.’

[GFB Peanut Advisory Committee member Andy Bell] expounded on this in his testimony saying, ‘Farmers need downside price protection against extreme low prices. The marketing loan program is a must for all program crops. All crop production on a farm should remain eligible for the marketing loan.’

The article added that, “Duvall asked that Congress consider revising the permanent disaster program included in the current farm bill, explaining that the Supplemental Revenue Assistance Program (SURE) doesn’t work well for most Georgia farmers because of the diversity of crops they grow.”

“Bell testified that improvements need to be made to the federal crop insurance program in the next farm bill saying, ‘Insurance coverage above the 70 to 75 percent level is simply not affordable. Crop insurance must remain affordable for it to be a useful tool in today’s agriculture.’”

Later, the article stated that, “Congressmen from both sides of the aisle speaking at the farm bill hearing repeatedly warned there will be less federal funds available for the 2012 farm bill than there were for the 2008 bill.

“‘We’re not going to have any more money for the next farm bill. We’re going to have less money. It’s not going to be easy because someone is going to have to give up something,’ said House Agriculture Committee Chairman Collin Peterson D-Minn. ‘Maybe it’s time we’re going to have different programs for different crops. We’ve got to think outside the box. Are we spending our money the best way? That’s why I’m starting these hearings so early.’”

Chairman Peterson reiterated this point again on Monday at the field hearing in Lubbock, Texas. To listen to his comments on the issue of “different programs for different crops” from Monday, click here (MP3-0:39).

David Bennett reported yesterday at the Southeast Farm Press Online on the May 13 hearing that took place in Washington, D.C. with agricultural policy experts.

Note that FarmPolicy.com has provided an unofficial searchable transcript of this hearing in a PDF file located here.

Yesterday’s article started by saying, “The 2008 farm bill debate was packed with claims that funding would be tight and the resulting legislation would be crafted to reflect the reality of diminishing U.S. treasure.

Early debate on the next farm bill is being built upon the same rhetorical foundation, although the funding priorities being pushed — rural development pushed by the Obama administration and crop insurance/commodity program reforms by politicians and advocacy groups — have changed.”

Mr. Bennett noted that, “Darryl Ray, economist/director of the Agriculture Policy Analysis Center at the University of Tennessee, urged the committee while writing the next farm bill, not to be lulled into thinking ‘$3 to $4 prices for corn — and corresponding prices in other crops — are going to be the future. I’m not convinced. One of the things we need to do when looking at policy, is how it affects all the stakeholders at the extremes when we have extremely high and extremely low prices. Because if history has taught us anything it’s that we will have both.’”

“‘I want to talk about some of the specific types of programs and how they might react to those extremes. There’s a lot that can be said positively about the ACRE program. But when prices are very high, the ACRE program does the best job of providing benefits to farmers. Therefore, it would cost taxpayers potentially a considerable amount of money.’

“On the bottom side, ‘I’d argue we don’t have the same protection with ACRE. If prices fall … the safety net drops with the prices. At some point, there would be very little, or no, protection, at all.’”

Also at the May 13 hearing, recall that Dr. Rob Paarlberg, a Professor of Political Science at Wellesley College, noted that, “Sweetened beverages, particularly caloric sodas, are, on the consumption side, perhaps the single most important contributor to our current obesity crisis, so it may be time to look at the federal nutrition programs as a place to address this concern. The nutrition programs currently take up – most critics don’t know they take up about 80% of the farm bill baseline. Maybe this is a more promising place to turn for solutions.

It may be time for these nutrition programs, particularly the SNAP program [food stamps], to stop subsidizing the consumption of caloric sodas. I would argue that caloric sodas should be made ineligible for purchase under the SNAP program, a little bit like tobacco and alcohol. This would not be an imposition of a tax. It would simply be the removal of a subsidy, and the total dollar value of SNAP benefits wouldn’t fall. These benefits would simply be deployed away from an obesity inducing product, which isn’t even a food product, after all.”

In a related article, David Leonhardt reported on Tuesday at The New York Times Online that, “The argument for a soda tax is the same as the argument for a tax on tobacco, pollution or, for that matter, banks that take big, expensive risks. When an activity imposes costs on society, economists have long said that the activity should be taxed. Doing so accomplishes two goals: it discourages the activity, and it raises money to help pay society’s costs.

“In the case of soda, those costs come in the form of medical bills for diabetes, heart disease and other side effects of obesity. We’re all paying these bills, via Medicare, Medicaid and private insurance premiums. Obesity has become a significant cause of our swelling long-term budget deficit.

And soda is a huge reason the country is so much more obese. The typical American consumes almost three times as many calories from sugary drinks as in the late 1970s. This increase accounts for about half the total per-capita rise in calorie consumption over the same period. Remember, many of these drinks have zero nutritional benefit — unlike meat, cheese or juice.”

In other nutritional news, Bloomberg writer Alan Bjerga reported yesterday that, “Chronic unemployment and federal efforts to reduce the stigma of accepting aid will push food- stamp use up from levels already at record highs, the U.S. Department of Agriculture’s top nutrition-program official said.

“The number of Americans participating in the Supplemental Nutrition Assistance Program will top 40 million this year and rise further next year, Kevin Concannon, the head of the Food and Nutrition Service, said today in a media briefing in Washington. About 39.7 million Americans received food stamps in February, the most ever, the government said on May 4 in its most-recent report.

“The USDA is distributing new signs at grocers such as Wal- Mart Stores Inc., the nation’s largest retail-food chain, Safeway Inc. and Kroger Co. to encourage greater use of food- stamp cards. Public education is crucial to getting food to more Americans as the need for services expands, Concannon said.”

Climate Issues

Reuters writer Deborah Zabarenko reported yesterday that, “The best way to curb global warming is to put a price on climate-warming carbon dioxide emissions, according to a trio of reports from the U.S. National Academy of Sciences released on Wednesday.

“In blunt language at odds with the unwieldy climate change debate in the U.S. Congress, the academy said: ‘A carbon-pricing system is the most cost-effective way to reduce emissions. Either cap-and-trade, a system of taxing emissions, or a combination of the two could provide the needed incentives.’”

Gautam Naik reported yesterday at The Wall Street Journal Online that, “The National Academy of Sciences, a group of elite American researchers that advises the U.S. government, on Wednesday issued an 869-page report reasserting mankind’s role in altering the climate and calling for specific policy measures to help forestall undesirable effects.

“The report, requested by Congress 2008, essentially supports the main findings of the Intergovernmental Panel on Climate Change, a United Nations body whose most recent report released in 2007 was criticized for containing several errors.”

Ben Geman and Jim Snyder reported yesterday at The Hill Online that, “Sen. John Kerry (D-Mass.) said Wednesday that a major new scientific report on global warming demonstrates the ‘urgency’ of passing the climate change and energy bill he unveiled last week.”

“‘This is yet another wake-up call on the threat of global climate change,’ Kerry said in a prepared statement. ‘These studies clearly demonstrate the urgency for Senate action on the American Power Act [APA].’”

And with respect to the APA, Darren Samuelsohn of ClimateWire reported yesterday at The New York Times Online that, “The Senate climate and energy bill unveiled last week now resides in a no man’s land without any clear consensus on who is responsible for collecting 60 votes.

“‘It’s a good question: Who’s in charge?’ said Sen. Sherrod Brown (D-Ohio).

“For starters, Majority Leader Harry Reid (D-Nev.) makes the decisions when it comes to what proposals reach the floor and how much time they get once they get there. But he is leaving the heaviest lifting on the climate issue to Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.), lead authors of the bill (pdf) that would place a first-ever limit on greenhouse gases while also expanding domestic oil, gas and nuclear power production.”

The article noted that, “Reid asserted his own authority yesterday when he outlined plans to meet during the week of June 7 with Democratic committee leaders, followed a week later by a larger gathering of the entire 59-member Democratic caucus. In those meetings, Reid said he hopes to get a better picture of whether to go with the Kerry-Lieberman bill or instead move toward an energy-only approach (S. 1462) approved last June by the Senate Energy and Natural Resources Committee.

“Still, by waiting a month, Reid is also buying time for others to get engaged. The Senate’s top Democrat has repeatedly blamed Republicans for not taking a more proactive role in the negotiations, starting with Sen. Lindsey Graham’s (R-S.C.) decision last month to walk away from talks with Kerry and Lieberman because of an unrelated political battle over immigration.

“‘What we’re trying to do is get a Republican to help us,’ Reid said. ‘You know, without a Republican, I can’t do much.’”

“For now, Kerry and Lieberman are taking the reins. More closed-door meetings are in the works over the next month with several moderate lawmakers from both parties,” the article said.

Meanwhile, the American Farm Bureau Federation (AFBF) issued a news release yesterday, which noted that, “The [AFBF] and 48 other farm groups have joined together in urging the Senate to adopt a resolution that would prevent the Environmental Protection Agency from regulating greenhouse gases under the Clean Air Act without prior congressional approval.

“AFBF President Bob Stallman said virtually all of American agriculture is united in the belief that regulation of carbon dioxide and other greenhouse gases should be decided by Congress and not by fiat from a federal regulatory agency.”

Keith Good