FarmPolicy

October 22, 2014

Disaster Aid; Climate Issues; Biofuels; Farm Bill; Ag Production Issues; and Trade

Disaster Aid

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The White House has promised Senate Agriculture Committee Chairman Blanche Lincoln that the Obama administration will provide $1.5 billion in agriculture disaster assistance to Arkansas farmers by administrative action.

“Lincoln, D-Ark., said Thursday she agreed to let Senate Majority Leader Harry Reid, D-Nev., remove her disaster aid package from a small business bill that he was trying to get the Senate to adopt.

“‘While I firmly believe agricultural producers are rural small businesses — it was clear the Republicans pulled out all the stops to block my legislation,’ Lincoln said in a statement. ‘In exchange for pulling ag disaster from the small business bill, I have secured an agreement from both Majority Leader Reid and White House Chief of Staff Rahm Emanuel and have their commitment to deliver critical agriculture disaster assistance administratively in the next two weeks.’”

Mr. Hagstrom added that, “The aid package would give producers who suffered crop losses in counties USDA declared ‘primary’ disaster areas $1.1 billion in payments. In addition, it would give $300 million to specialty crop producers, $50 million to livestock producers and $42 million to cotton seed handlers. It also earmarks $75 million for Arkansas poultry producers who took losses due to the bankruptcy of Pilgrim’s Pride and provides $20 million in aid to Hawaiian sugar producers.”

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House Ag. Comm. Hearing -Votes; Biofuels; Climate Issues; Soybean Checkoff; and Biotechnology

House Agriculture Subcommittee Hearing- Quality Control Systems in SNAP

Yesterday, the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, Nutrition and Forestry, held a hearing to review quality control systems in the Supplemental Nutrition Assistance Program (SNAP).

A House Agriculture Committee news release stated that, “The Subcommittee heard testimony from government officials and advocacy and industry groups about efforts to reduce the error rate in the SNAP program and to combat fraud and abuse in the system.”

Ms. Julie Paradis, the Administrator of USDA’s Food and Nutrition Service, provided a fascinating background and statistical overview on the recent upsurge in SNAP program participation rates. She also indicated that according to a report last month, “The SNAP national payment accuracy rate, for FY2009, had reached an all time high of 95.64 percent.” To listen to a portion of this overview, just click here (MP3- 1:08).

During the discussion portion of yesterday’s hearing, Rep. Kurt Schrader, D-Oregon, inquired about the possibility of reaching a “tipping point,” or point of “diminishing returns” with respect to resource allocation for improving SNAP program payment accuracy. In addition, Rep. Schrader also asked about “unauthorized immigrants” and the SNAP program. To listen to a portion of this dialogue from yesterday, just click here (MP3- 2:38).

Meanwhile, Rep. Kathy Dahlkemper, D-Pennsylvania, asked the first panel of witnesses at yesterday’s hearing about the use of SNAP benefits at local farmers markets, a portion of this exchange is available here (MP3- 1:28). In the clip, FNS Administrator Paradis notes that, “Our goal is to have every farmers market in the country participating in the [SNAP] program.”

Subcommittee Ranking Member Jeff Fortenberry, R-Nebraska, expressed concern about health and obesity rates, and noted that data from the Healthy Incentives Pilot (HIP) would not be available for another two years. He went on to ask the second panel of witnesses yesterday an interesting theoretical question about a potential “new paradigm” in linking SNAP benefits to improved choice. He offered a hypothetical example: “Instead of a SNAP card having $100 on it, a SNAP card would have 100 ‘nutritional points,’ and that would also be measured as you buy certain foods and therefore the market would then respond to develop food products that would fit easily into the nutritional categorizations.” To listen to this interesting discussion on linking SNAP benefits to nutritional health, click here (MP3- 8:12).

An audio replay of yesterday’s Subcommittee hearing on SNAP is available here, while prepared testimony can be found here.

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Climate Issues; Biofuels; Disaster Aid; Biofuels; Nutrition; Trade; and Farm Costs

Climate Issues

Sam Youngman reported yesterday at The Hill’s Energy Blog that, “Climate measures could be added in conference to an energy bill the Senate will take up this week, according to the White House.

“White House press secretary Robert Gibbs said he wouldn’t rule out adding some climate measures to the legislation in conference, assuming a scaled-down energy bill passes the Senate.”

The update indicated that, “The measure in the Senate drops the language from the House dealing with climate change and carbon emissions. By dropping those controversial measures, Democrats hope they can pass a bill through the Senate before lawmakers leave for the August recess.

“‘I don’t think the bill is essentially dead for the year,’ Gibbs said. ‘The House passed a very strong and very comprehensive energy bill last year. The Senate is going to take up a version that is more scaled down, but still has some important aspects, particularly dealing with how we deal with oil spills in the future.’

“He added: ‘I don’t think that closes the door. Once a bill passes each house, it doesn’t close the door to having some sort of conference.’”

In addition, Mr. Youngman stated that, “Gibbs said tackling expanded legislation in conference isn’t something that would have to wait for a lame-duck session.

“‘We could do it in September,’ he said.”

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Farm Bill (Budget Issues, CRP); Disaster Aid; GIPSA Rule; Biofuels; EPA; Climate Issues; Trade; and ERS Reports

Farm Bill (Budget Issues, CRP)

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., made a bold political move to use what observers suggest was bitter medicine for some of his constituents as a political bargaining point.”

At issue is USDA’s Crop Insurance program. The agency uses private insurance companies and agents to offer the federal programs under a Standard Reinsurance Agreement.”

The DTN item explained that, “USDA began the renegotiation process late last year, and now has finally determined that payments for administrative and operating costs subsidized by the government would be capped at $1.3 billion next year, with the limit rising to $1.37 billion in 2015. Recently, USDA announced that all 16 companies signed the new SRA that will cut costs about $6 billion over 10 years.

As the negotiation process wound down, its effect on the ‘agriculture baseline,’ became controversial, especially a decision by the Office of Management and Budget that $4 billion of the reduction would be used to reduce the deficit rather than support other agricultural programs as many agricultural supporters proposed.

The remaining $2 billion in ‘baseline credit’ is to be allocated for several programs, including expansion of the pasture, rangeland, and forage program; providing a performance discount or refund to reduce the cost of crop insurance for certain producers; increasing conservation reserve program acreage; and, investing in new and amended conservation reserve enhancement program initiatives and CRP monitoring.”

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Interview with Rep. Adrian Smith (R-Neb.); Climate Issues; Biofuels; and Food Safety

Interview with Rep. Adrian Smith (R-Neb.)

On Friday, FarmPolicy.com had the opportunity to speak with Rep. Adrian Smith (R-Neb.). Rep. Smith serves on the House Agriculture Committee and our conversation focused on trade issues.

A transcript of our discussion from Friday is available here, while an audio replay can be heard here (MP3- about five minutes).

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House Hearing (Crop Insurance); Climate Issues; Biofuels; and Trade

House Agriculture Subcommittee Hearing on Crop Insurance

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Groups representing crop insurance companies and agents told members of a House Agriculture Subcommittee that USDA didn’t negotiate in good faith in a new Standard Reinsurance Agreement and that farmers will feel the effects of $6 billion in cuts the industry must absorb over the next 10 years.

“At a hearing on Capitol Hill on Thursday, representatives from the crop-insurance industry questioned USDA’s authority to demand such a steep fiscal cut and said services to farmers would end up being affected by the new contract. DTN/The Progressive Farmer watched the hearing through the House Agriculture Committee webcast.

“Rep. Leonard Boswell, D-Iowa, who chairs the Subcommittee on General Farm Commodities and Risk Management, said he was concerned by the level of cuts in the SRA due to cuts already made when lawmakers chopped $3 billion from the industry and also created a timing shift that will delay up to $3 billion in payments in 2012 as well. ‘We also must acknowledge that the crop insurance industry is a business, and both the companies and agents need to make a profit in order to stay in the market,’ Boswell said.”

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Farm Bill Hearings; Biofuels; Climate Issues; Financial Reform; and USDA Issue

Yesterday, both the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, and the Senate Agriculture Committee, held hearings in advance of the 2012 Farm Bill.

House Subcommittee Hearing- Specialty Crops and Organic Agriculture

A news release from the House Agriculture Committee yesterday stated that, “Today, Congressman Dennis Cardoza, D-Calif., Chairman of the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, held a hearing to review specialty crop and organic agriculture programs in advance of the 2012 Farm Bill.

“The Subcommittee heard from producers from operations of various sizes that grow a diversity of products, and they provided insight on U.S. Department of Agriculture (USDA) Farm Bill program implementation at the ground level.

“‘I am once again reminded of the extraordinary diversity of products and practices represented by the specialty and organic sectors of our nation’s agriculture industry,’ said Subcommittee Chairman Cardoza. ‘It is imperative we work together to address health and nutrition issues in this country by increasing accessibility to healthy fruits and vegetables. Based on what I have heard today, it is clear we have work to do but are on the right track.’”

In a news release from yesterday, Subcommittee Chairman Cardoza also indicated that, “Today’s hearing comes on the heels of the first round of field hearings conducted by the full House Agriculture Committee on the 2012 Farm Bill. The Committee convened a hearing on May 3, 2010 in Fresno, CA. To read more, please click here.”

In his opening statement from yesterday, Subcommittee Chairman Cardoza indicated that, “Specialty crop producers have never sought direct subsidies even though their sector represents over half, more than 50 percent, of the total crop farm gate value in the country.” (Related audio- MP3- 0:39).

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Farm Bill Hearings; Biofuels; Climate Issues; Food Safety; and USDA Issue

Farm Bill Hearings- Rural Development

Two House Ag Subcommittees held hearings yesterday highlighting rural development and livestock programs in advance of the 2012 Farm Bill.

With respect to rural development, a news release from the Ag Committee yesterday stated that, “Today, Congressman Mike McIntyre, D-N.C., Chairman of the House Agriculture Committee’s Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture, held a hearing to review the U.S. Department of Agriculture’s rural development programs in advance of the 2012 Farm Bill.

“The Subcommittee heard testimony from Dallas P. Tonsager [opening statement], Under Secretary for Rural Development at USDA and from rural economic development stakeholders utilizing rural development programs across America.

“‘Today’s hearing provided a good overview of the strengths and the weaknesses of our rural development programs given their current resources. I appreciate hearing from Under Secretary Tonsager and the USDA Rural Development administrators about their progress on Farm Bill implementation, the administration of Recovery Act funds, and issues we might consider for the next Farm Bill,’ Chairman McIntyre said. ‘Our second panel of witnesses provided good testimony and helpful suggestions, particularly on the complexity of the loan and grant application process, that I hope USDA will keep in mind as we move forward with the 2012 Farm Bill.’”

An audio replay of yesterday’s rural development hearing is available here.

During yesterday’s hearing, Subcommittee Ranking Member K. Michael Conaway inquired about USDA’s “Know Your Farmer, Know Your Food” program (related audio-MP3- 3:24), and also asked witnesses on the second panel if federal allocations for farmer’s markets were as important as allocations for emergency first responders (related audio- MP3- 2:59).

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Biofuels; Farm Bill; Climate Issues; Animal Agriculture; and USDA Issue

Biofuels

Reuters writer Tom Doggett reported yesterday that, “A pipeline carrying ethanol from the corn-producing heartland of the Midwest to big East Coast cities would not be feasible without government backing and a mandate requiring higher ethanol blends in gasoline.

“The U.S. Energy Department was required by Congress to assess the economic feasibility of building an ethanol pipeline, which is being pushed by the struggling industry.

The department’s assessment found the project would not be profitable without higher demand for the biofuel.”

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Nutrition; Know Your Farmer; Biofuels; Trade; and Appropriations

Nutrition

DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “House, Senate and White House officials are working together to find offsets to reauthorize child nutrition programs before they expire on Sept. 30, according to an aide to House Democratic leaders.

“The House Education and Labor Committee approved the bill Thursday but significant hurdles remain if Congress is to meet the deadline for reauthorizing the programs.

“‘The leadership supports this bill going forward; we are working with the White House and the Senate to find a way to pay for it,’ the aide stated an email after the House Education and Labor Committee approved the measure by a wide bipartisan vote of 32 to 13. First lady Michelle Obama praised the committee for its passage of the measure and said President Obama looks forward to signing the bill this year. The first lady’s statement following passage of a bill out of committee reflects both the importance placed on the bill by the administration.”

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Biofuels; Farm Bill; Climate Issues; Nutrition; Trade; Animal Ag; and Financial Reform

Biofuels

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Ethanol industry advocate Growth Energy on Thursday called for the gradual phasing out of the 45-cent ethanol blenders’ tax credit, while redirecting a portion of what amounts to billions of dollars toward building ethanol infrastructure such as blender pumps, flexible fuel vehicles and dedicated pipelines for ethanol.

“Growth Energy CEO Tom Buis said in a conference call that doing so would allow for the end of the blenders’ credit — or the Volumetric Ethanol Excise Tax Credit (VEETC) — and the industry to compete on its own in the open market.

“‘We no longer have a problem producing ethanol,’ he said. ‘Our challenge is infrastructure barriers. We’re saying the buck stops here.’”

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Farm Bill; Biofuels; Animal Agriculture; and Taxes

Categories: Ethanol /Farm Bill

Farm Bill: Related Developments and Overview

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Agriculture Undersecretary for Farm and Foreign Agriculture Services Jim Miller on Tuesday joined the call of House Agriculture Committee Chairman Collin Peterson, D-Minn., for a simplification of farm programs.

“In a speech to the American Soybean Association board, Miller said, ‘We may have gotten to the point that the programs are so complex we don’t get the benefits we want.’ Peterson has said that adding farm program on top of farm program over the years has made the system too complicated.”

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SRA; Climate Issues; Taxes; Biofuels; Nutrition; Farm Bill Issues; and Trade

Standard Reinsurance Agreement (SRA)

Bloomberg writer Alan Bjerga reported yesterday that, “The crop-insurance industry will be forced to consolidate by a U.S. government plan to spend $6 billion less on subsidizing farmer policies, according to the president of the insurers trade group.

All 16 companies that provide government-subsidized policies to protect farmers from natural disasters, including Wells Fargo & Co. and Ace Ltd., have agreed to the 20 percent cut in funding over 10 years, the U.S. Department of Agriculture said today.”

Yesterday’s article explained that, “The deal, which companies had to sign to continue to receive subsidies, will drive some companies out of business within two years, said Bob Parkerson, the head of National Crop Insurance Services.

“‘Our hands were definitely tied, and we were marched against the wall’ to sign the agreement, Parkerson said in a telephone interview from the group’s headquarters in Overland Park, Kansas.

“Under the USDA’s proposal announced June 10, payments for government-subsidized administrative costs would be capped at $1.3 billion next year, with the limit rising annually to $1.37 billion in 2015. Two-thirds of the cut will go toward federal- deficit reduction, with the remainder sent to government land- conservation programs, the USDA said.”

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

Climate Issues

Carol Davenport reported yesterday at Politico that, “The next three weeks represent Democrats’ last, best shot at getting an energy and climate change bill passed this year.

In the White House and the office of Senate Majority Leader Harry Reid, it’s moment-of-truth time. People on every side of the energy debate say that Reid must unveil a concrete plan backed by a full-court press from the president this week, or the entire effort will fall apart in the run-up to the midterm elections.

“After weeks of indecisive caucus meetings and passionate but vague speeches calling for ‘comprehensive energy legislation,’ Reid’s office on Friday assured POLITICO that clarity, at long last, is coming.”

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Climate Issues; SRA; Farm Bill; Food Safety; Animal Ag; Trade; and Crop Estimates

Climate Issues: Agricultural Analysis

On Friday, the Food and Agricultural Policy Research Institute (FAPRI) released a report that “summarizes analysis of possible impacts of climate change legislation on US agricultural markets.”

The report, “Impacts of Climate Change Legislation on US Agricultural Markets: Sources of Uncertainty,” indicated that, “Climate change legislation could have important effects on US agriculture. The impacts depend on the particular features of any final legislation, how it is implemented and how individuals and firms respond.

“The American Clean Energy and Security (ACES) Act, approved by the US House of Representatives in 2009, would establish a regulatory framework intended to reduce greenhouse gas (GHG) emissions. To evaluate the bill’s impacts on the US agricultural sector, the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI‐MU) used an extended version of its modeling system to evaluate a wide range of possible scenarios over the 2010‐2030 period. The analysis shows that altering a few key assumptions can lead to qualitatively different estimates of the bill’s impact.”

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Trade; Standard Reinsurance Agreement (SRA); Farm Bill (Nutrition Issues); Biofuels; Climate Issues; and Food Prices

Trade

Edward Luce reported earlier this week at the Financial Times Online that, “Barack Obama on Wednesday set up a high-level panel of American chief executives in his effort to double US exports over the next five years, even as economists were sceptical of his chances of getting anywhere near that target.

“The move, which the US president said would help create higher-paying manufacturing jobs, comes amid mounting concern about the persistence of high unemployment in the build-up to November’s midterm elections.”

The FT article explained that, “There are more than 100 regional and bilateral trade agreements under negotiation around the world but the US is involved in only one, the Trans Pacific Partnership, the WTO says.

“‘There has never been a five-year period where the US has doubled its exports,’ says Mark Zandi, chief economist at Moody’s Analytics, a research group.”

“Wednesday’s move comes as Democrats are starting to worry that their party will lose control of the House of Representatives in November. Voters cite the economy and jobs as their main concerns,” the FT article said.

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