FarmPolicy

April 22, 2019

Farm Bill Hearing; Biofuels; Climate Issues; and Animal Agriculture

Farm Bill Hearing: USDA-SRA Crop Insurance Proposal a Prominent Issue

A House Ag Committee news release from yesterday stated that, “House Agriculture Subcommittee on General Farm Commodities and Risk Management Chairman Leonard Boswell, D-Iowa, today held the Subcommittee’s first hearing to review U.S. farm safety net programs in advance of the 2012 Farm Bill.

“The Agriculture Committee has begun the process of writing the 2012 Farm Bill, holding field hearings in eight states. Today’s subcommittee hearing is the next step in the process.

“The Subcommittee heard from U.S. Department of Agriculture (USDA) Under Secretary for Farm and Foreign Agricultural Services Jim Miller.”

The release added that, “‘It was good to have the opportunity to continue the Committee’s discussion about how our current farm safety net is working and how we can improve it in the next farm bill. It was also important that members of the Subcommittee had the opportunity to ask questions about the latest draft of the Standard Reinsurance Agreement [SRA] that was submitted last Friday,’ said Subcommittee Ranking Member Jerry Moran, R-Kansas.”

An audio replay of yesterday’s entire hearing can be downloaded here.

A portion of Rep. Moran’s opening statement from yesterday’s hearing, in which he talks about the latest SRA proposal, can be heard here (MP3-2:11). Rep. Moran indicated that, “I do want to express my concern that this subcommittee or the full committee is not having a hearing to review what we are told is the final draft of the standard reinsurance agreement.”

Subcommittee Chairman Leonard Boswell asked Under Sec. Miller about the proposed cuts in the latest SRA proposal in the discussion portion of yesterday’s hearing. Under Sec. Miller provided a general overview of the issue and also briefly addressed potential budgetary baseline implications resulting from the suggested cuts in spending. To listen to this exchange, just click here (MP3-4:03).

The significance of the budgetary baseline impact of the latest SRA proposal was highlighted in much greater detail later in yesterday’s hearing in questioning by Rep. Moran. To listen to an in-depth discussion on some of the budgetary baseline variables associated with the SRA proposal, click here (MP3-7:56).

Julie Harker reported yesterday at Brownfield that, “Concerns about the USDA’s final draft of the Standard Reinsurance Agreement for crop insurance protection cropped up during a House Ag Subcommittee reviewing 2008 Farm Bill safety net programs.

“Kansas Republican Jerry Moran says the third draft released late last week had some surprises, ‘I am particularly concerned about the new method of administering and operating – a new and more rigid cap on agent commissions. And, they have inserted other miscellaneous provisions that have never appeared in previous drafts.’”

An expanded and in-depth discussion of some of the details of the SRA proposal, which were highlighted yesterday by Rep. Moran, can be heard here (MP3-10:18). This detailed discussion included explanations from Under Sec. Miller as well as from Bill Murphy, the Risk Management Agency Administrator.

Meanwhile, Reuters news reported yesterday that, “A comparative handful of U.S. farms — 4,000 — enrolled this year in a new federal program designed to protect grower revenue, said a top Agriculture Department official on Thursday.

Revenue protection is mentioned frequently as the preferable option in the 2012 farm law to succeed traditional crop subsidies, which are triggered by low prices. Revenue programs shield growers from poor yields as well.

Enrollment in the Average Crop Revenue Election, a farm program option, is far below projections. Farm groups say the revenue protection plan is too complex and needs revision.”

(FarmPolicy.com Note: Rep. Blaine Luetkemeyer, R-MO, inquired at yesterday’s hearing as to why the participation rate in ACRE was low, to listen to a portion of this discussion, click here (MP3-2:32)).

Yesterday’s Reuters article added that, “It will be mid-August by the time USDA opens enrollment in the land-idling Conservation Reserve, said Jonathan Coppess, head of the Farm Service Agency. Rep. Jerry Moran, Kansas Republican, said a late-summer signup would put winter wheat growers at a disadvantage.

“Some 31.3 million acres are enrolled in the reserve at present. Contracts on 4.5 million acres expire on Sept 30. Maximum enrollment is 32 million acres.”

In other Farm Bill related developments from yesterday, Reuters reported that, “Brazil on Thursday suspended retaliatory measures against U.S. goods over a cotton subsidy dispute, freezing until 2012 a long-running row that has demonstrated the South American nation’s trade clout.

“The government said a deal agreed between the two countries in April to head off up to $829 million in World Trade Organization-sanctioned retaliation against U.S. goods would stay in place until a new U.S. farm bill is passed.”

The Reuters article explained that, “Under the deal, the United States pledged to make some short-term tweaks to its export credit guarantees and give Brazil about $147 million a year in damages for a ‘technical assistance’ fund for cotton growers.

“‘Brazil doesn’t rule out taking countermeasures at any moment,’ Roberto Azevedo, Brazil’s envoy to the World Trade Organization, told reporters in Brasilia. ‘It is just a suspension of this right.’

“He said Brazil could retaliate at any time if the United States did not uphold the agreement, but added that Brazil had no interest in retaliating.”

Dow Jones news reported yesterday (article posted at DTN, link requires subscription) that, “The Brazilian government’s Foreign Trade Commission announced Thursday that an agreement has been reached with the U.S. government on ways to avoid trade retaliation in a case involving alleged U.S. subsidies to cotton farmers.

“In a written statement, the panel, also known as Camex, said: ‘The agreement does not represent a final solution to the problem, but it does set parameters for a final settlement and foresees the gradual and substantial reduction in the harm done by U.S. farm subsidies.’

The statement indicated that Brazilian officials view, with optimism, the prospects for substantial reductions in U.S. cotton subsidies when the U.S. farm subsidy program again comes up for congressional review in 2012.”

Separately, Sec. of Ag. Tom Vilsack was a guest last week on the Market to Market television program. As part of a discussion on the program, Sec. Vilsack stated that, “I certainly have gotten an earful as I’ve traveled around the country about the disparity between folks who are struggling and folks who are doing quite well and that gets you into the whole discussion of payment limits. I think the Chairman wants to avoid that. I think he wants to get into a system where that’s not the discussion and candidly I want to get in a position where people around this country understand and appreciate that a farm bill is not just simply about subsidies for farmers. It is about maintaining food costs that allow you to have ten to fifteen percent more of your paycheck to spend as you wish as opposed to spending it at the grocery store. I don’t think there’s a full appreciation for that in the rest of America.

In terms of priorities I think it’s not just a farm bill. I think it’s a rural development including production agriculture but also recognizing that there are probably 58 million people who live in rural America that aren’t necessarily on the farm and they want their schools, their communities to be vibrant great places so they can say to their kids you can pursue the American dream here. You don ‘t have to go to the city or some other place. You have an opportunity right here to make a difference to be a leader.”

In other executive branch news, DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The Obama administration’s initiative to examine antitrust issues in agriculture will not focus on the Capper-Volstead Act, Agriculture Secretary Tom Vilsack said Wednesday.

“The 1922 law allows farmers to organize in cooperatives without violating antitrust laws. Vilsack made his comments before the National Council of Farmer Cooperatives, saying concern about the act had been ‘unfortunately generated’ by statements by other administration officials.

“Earlier this year, USDA and the Justice Department began a series of workshops to address small-farm group concerns that mergers of farm suppliers and commodity buyers have reduced competition at both ends of the food supply chain, resulting in higher input costs and lower sale prices. USDA and Justice have scheduled a workshop in Madison, Wis., on June 25 to examine concentration in dairy, an industry in which co-ops are big players.”

In other executive branch farm related developments, Timothy B. Wheeler reported yesterday at the Baltimore Sun Online that, “Federal officials are launching efforts today in Maryland, Pennsylvania and Virginia to enlist farmers in targeted watersheds in a concerted effort to curb pollution running off their land.

“The upper Chester River, a 23,000-acre swath of mostly rural land on the Eastern Shore, is the Maryland watershed targeted for a special effort by federal, state and nonprofit agencies.

The aim of the ‘showcase watersheds,’ a U.S. Department of Agriculture official said Thursday, is to demonstrate that voluntary cooperation, aided by generous infusions of federal funds, can help restore degraded bay waters without the need for further government regulation of agriculture.”

Biofuels

The AP reported today that, “The Environmental Protection Agency says it will wait until this fall to decide whether U.S. car engines can handle higher concentrations of ethanol in gasoline.

“The agency had been expected to decide by this month whether to increase the maximum blend from 10 to 15 percent.

“The EPA said Thursday that initial tests ‘look good’ and should be completed by the end of September. A decision will come after the Energy Department completes the testing of the higher blend on vehicles built after 2007.”

Nebraska GOP Sen. Mike Johanns noted yesterday that, “I am very concerned over news reports this afternoon that the EPA will again delay its decision on E15. Another delay from EPA would mean even more uncertainty for our farmers and ethanol producers. I was disappointed when the EPA announced in December of last year that it would delay making a decision on E15, further delays would seriously call into question the Administration’s commitment to growing our nation’s renewable fuel sources.”

Meanwhile, Jeffrey Tomich reported earlier this week in the St. Louis Post-Dispatch that, “The ethanol industry has for years draped itself with the American flag, positioning itself as a cleaner, homegrown alternative to oil. Never has that been more true than today.

“With regulators and legislators poised to decide issues that will shape ethanol’s future for years to come, the ethanol lobby is increasingly making the scene unfolding in the Gulf of Mexico — with tens of thousands of barrels of crude still flowing daily from BP’s deepwater well — a backdrop for the nation’s energy debate.

“‘The choice between the dangers of our addiction to oil and the promise of American renewable fuels is as clear today as the contrast between the blackened estuaries of the Gulf Coast and the sparkling green fields of rural America,’ said Robert Dinneen, president of the Renewable Fuels Association, based in Washington.”

The article added that, “Industry officials say the BP spill is another reminder that America’s increasing thirst for fossil fuels is pushing the oil industry to drill deeper and explore for oil in more far-flung places.”

Climate Issues

Darren Samuelsohn reported yesterday at Politico that, “Senate Democrats emerged from a special caucus meeting in the Capitol on Thursday with no clear consensus yet on the fate of energy and climate legislation due on the floor before the August recess.

“Majority Leader Harry Reid of Nevada dedicated an hourlong session to a ‘full, frank discussion’ of three competing proposals for overhauling the nation’s energy policies and trimming greenhouse gas emissions. But senators spoke for so long that they had to bump back a more detailed question-and-answer session for another meeting that’s tentatively scheduled for next week.”

“Sens. John Kerry of Massachusetts and Joe Lieberman of Connecticut, authors of a bill to cap greenhouse gases across the economy, pulled out all the stops in their presentations even before the meeting started. Their staff plunked down on every Democratic senator’s chair a report from President Barack Obama’s pollster showing public support for placing carbon caps on the nation’s smokestacks and tailpipes in the wake of the Gulf of Mexico oil spill.”

The article noted that, “During the Democratic Caucus meeting, Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) offered a snapshot of the legislation his panel approved a year ago…[and]… Sen. Maria Cantwell (D-Wash.) also presented details of her alternative carbon pricing bill.” [Note, see a related Op-Ed on this issue by Sen. Cantwell and Sen. Susan Collins (R-Maine) that was published in today’s Washington Post.]

The Politico article added that, “Kerry, Lieberman, Bingaman, Cantwell and [Judd] Gregg [R-NH] are among the senators invited to the White House for a meeting Wednesday with [Pres.] Obama. Others expected to attend include Sens. Lisa Murkowski (R-Alaska), Dick Lugar (R-Ind.) and Debbie Stabenow (D-Mich.).”

Laura Meckler and Corey Boles reported in today’s Wall Street Journal that, “On Thursday, Senate Democrats met to hear competing proposals from senators but emerged without a decision on a way forward. They will gather again next week, and key senators will meet Wednesday with Mr. Obama at the White House. Their goal is to bring a bill to the Senate floor in just a few weeks, after senators return from their July 4 break, Senate leadership aides said.

“‘We have no one saying no [to an energy bill]; we have everyone saying yes,’ Senate Majority Leader Harry Reid (D., Nev.) told reporters after the Democrats’ hour-long meeting. ‘I am committed to getting [a bill] to the floor in the next work period.’”

Bloomberg writers Simon Lomax and Lisa Lerer reported yesterday that, “The 59-member Democratic caucus is split between senators who support ‘lots of carbon pricing’ and others who want ‘little or none,’ Senate Majority Leader Harry Reid told reporters after the meeting. Both a carbon price and a renewable mandate will aid ‘clean energy’ production and Democrats are still weighing ‘what can get the best bang for our buck,’ Reid said.”

With respect to yesterday’s Senate meeting, Darren Goode reported yesterday at the NationalJournal Online that, “‘There was no discussion, so there was no progress,’ Senate Finance Chairman Max Baucus, D-Mont., said afterward. ‘We already know what the proposals are.’”

And Reuters writer Richard Cowan reported that, “Senate Democrats huddled in the Capitol for an hour to hear competing ideas on how to tackle global warming.

Afterward, Senator John Rockefeller said he has received assurances of a Senate vote this year on his proposal to impose a two-year moratorium on Environmental Protection Agency regulations on greenhouse gas emissions. A Republican move to permanently ban such regulations failed earlier this month.”

As the debate unfolds, Alexander Bolton reported yesterday at The Hill Online that, “Liberal Democrats in the Senate are threatening to vote against energy legislation if it does not address global climate change;” while, ClimateWire writer Alex Kaplun penned an article yesterday titled, “Conservatives Work to Tar Cap-And-Trade Bill With BP Connection.”

Animal Agriculture

An update posted yesterday at The Des Moines Register Online reported that, “The Humane Society of the United States has filed a complaint with the Federal Trade Commission to stop an egg producer from making what the group claims are misleading statements about conditions at its Iowa egg farms.

“The Humane Society filed the complaint Wednesday against Rose Acre Farms of Seymour, Ind. It says Rose Acre falsely claims it provides a ‘humane and friendly’ environment for hens.”

The AP reported yesterday that, “Out-of-state egg suppliers who violate California’s animal welfare law would have their products banned from grocery stores, under a bill heading to Gov. Arnold Schwarzenegger’s desk.

“The state Senate passed a measure Thursday requiring that all eggs imported to California come from farms complying with Proposition 2, approved by voters in 2008. Violators could face up to 180 days in jail or a $1,000 fine.

“Proposition 2 says cages for egg-laying hens must be large enough for the animals to stand up, lie down and extend their wings. It will take effect in 2015, as would the bill if it becomes law.”

Keith Good

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