FarmPolicy

December 16, 2017

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.”

After outlining three general areas of influence (Production cost impacts, Biofuel sector impacts, and Land use impacts), the summary introduction of the FAPRI report stated that, “For the US farm sector as a whole, the effect on net farm income depends on the magnitude of these various impacts. Higher production expenses reduce aggregate net farm income, but biofuel effects, land use shifts and income from the sale of offsets push farm income higher.

Consumers are likely to face higher food prices, both because of higher farm commodity prices, and because costs of processing and transporting food also increase when energy costs rise.”

Brad Swenson reported on Saturday a the Bemidji Pioneer Online (Minnesota) that, “U.S. Rep. Collin Peterson voted for an energy bill last year that included concessions to agriculture on cap-and-trade carbon policy. He might not vote for the conference report this year.

“‘I voted to move the bill forward,’ Peterson, DFL-7th District, said Thursday in an interview. ‘If it would have been the final bill, I have problems with what they did on the cap and trade part of things, I would have voted no.’”

The article stated that, “Last year, when the House was considering the measure, Peterson, chairman of the House Agriculture Committee, said he had been negotiating for four weeks with Energy Chairman Henry Waxman, D-Calif, for concessions for agriculture, with farming creating carbon dioxide with inputs.

“‘We saw an opportunity to fix some problems we have in ethanol, primarily … and we also got the precedence set that farmers will not be subject to cap and trade at all — exempted,’ Peterson said of the concessions he won. ‘The other thing is, any involvement in terms of farmers, if any did get into this, they would be controlled by the USDA (U.S. Department of Agriculture) and not by EPA (Environmental Protection Agency).’”

Saturday’s update added that, “‘I put all this on the table and negotiated with Waxman for four weeks and never got any place,’ Peterson said of requests he thought never would be accepted. ‘The environmentalists were fighting me; the EPA was fighting me.’

“In the end, Waxman was short of votes and Peterson said the Energy chairman came into his office and told Peterson he’d get all his requests. At that point, a congressman can’t vote against a bill when he’s given all he’s asked for, Peterson said.

“‘That was the position I was in,’ he said. ‘It’s the process, and you can criticize me, but I was doing what I was asked by agriculture and I think I did the right thing.’”

Climate Issues: Senate Action

Meanwhile, Reuters writer Richard Cowan reported on Saturday that, “Democrats in the U.S. Senate aim to debate in late July a bill clamping down on offshore oil drilling practices and fostering more alternative energy use, but no decision has been made on whether to include controversial climate change provisions, aides said on Friday.

“As the Gulf of Mexico oil spill entered its 81st day with BP still unable to plug its leaking undersea well, the Senate was planning a two-week debate on an energy and environmental bill that could start as early as July 19.

“‘Staff spent this week preparing different options,’ said Jim Manley, a spokesman for Senate Majority Leader Harry Reid. He said Reid and other senior senators will review those options when Congress returns from a 10-day break next week.”

The Reuters article explained that, “Leaving a climate change component out of the massive bill would be a major blow for environmentalists, while the failure to pass a climate bill in Congress this year would deal a further setback to international negotiations for tougher carbon pollution controls.

“Without legislation, Obama’s Environmental Protection Agency early next year could go ahead with new regulations on carbon pollution that are already facing legal challenges.”

Puneet Kollipara reported on Saturday at The Hill’s Energy Blog that, “Republicans are increasingly accusing Democrats of exploiting the BP oil spill to win traction for global warming legislation, but they maintain that leading climate plans would do little to wean the country off oil.”

“[Sen. James Inhofe, R- Okla.] has pointed to Environmental Protection Agency (EPA) studies showing that leading climate proposals would have little effect on the nation’s daily use of roughly 20 million barrels of oil.

“The main House and Senate cap-and-trade bills would decrease oil use only by a few percent, if at all, in the next few decades, EPA found. The studies show a much greater effect on electricity generation, with renewable, non-carbon and low-carbon sources providing nearly all electricity by 2050, alongside declining use of traditional coal-fired power plants and increases in energy efficiency.”

And David A. Fahrenthold and Juliet Eilperin pointed out in today’s Washington Post that, “For environmentalists, the BP oil spill may be disproving the maxim that great tragedies produce great change.

“Traditionally, American environmentalism wins its biggest victories after some important piece of American environment is poisoned, exterminated or set on fire. An oil spill and a burning river in 1969 led to new anti-pollution laws in the 1970s. The Exxon Valdez disaster helped create an Earth Day revival in 1990 and sparked a landmark clean-air law.

“But this year, the worst oil spill in U.S. history — and, before that, the worst coal-mining disaster in 40 years — haven’t put the same kind of drive into the debate over climate change and fossil-fuel energy.”

Standard Reinsurance Agreement (SRA)

Philip Brasher reported on Friday at The Green Fields Blog (Des Moines Register) that, “Sen. Tom Harkin, D-Ia., is challenging Agriculture Secretary Tom Vilsack to explain the legal justification for planned cuts in the commissions paid to agents who sell federal crop insurance. The agents claim that it’s illegal for Vilsack to use an operating agreement with insurance companies to impose caps on the commissions that the firms can pay to agents. Unlike the companies, the agents don’t have a voice in shaping the agreement.”

Mr. Brasher added that, “Harkin has been relatively quite on the issue, unlike Sen. Charles Grassley, R-Ia., who has long defended the interests of the companies and the agents. But in a letter dated Thursday to Vilsack, Harkin said there was ‘wide disagreement’ about the impact the caps will have on agents and Harkin raised several legal questions that the agents have. ‘A key question is whether there is a sound legal basis,” he wrote, for the USDA to use the agreement with the companies to limit ‘the ability of agents to negotiate the amount of their compensation’ with the firms.

“Vilsack’s office declined comment on the legality of the commission caps other than provide the transcript of what he said in response to a question earlier this week about objections to the plan. ‘We saw a near doubling of profits for both the agents and the companies in the last couple of years even though we are selling fewer and fewer policies, several hundred thousand fewer polices than we did in 2000,’ Vilsack said.”

Farm Bill

Brad Swenson reported on Friday at the Bemidji Pioneer Online (Minnesota) that, “‘We had a good farm bill, we fixed a lot of problems,’ [Rep. Collin] Peterson, DFL-7th District, said of the 2008 Farm Bill in a wide-ranging interview Thursday while he was in Bemidji to attend Bemidji Regional Airport groundbreaking for its Aircraft Rescue and Firefighter Facility.

“‘Now the issue is making this all work in 2012 within the baseline,’ he said. ‘We’re not going to spend any more money. I’m not going to go ask anybody for money, I’m going to stay within, which is what I believe we should be doing in all of government.’

“Peterson has held 10 field hearings on the upcoming 2012 Farm Bill, the latest Wednesday near Casselton, N.D., with Rep. Earl Pomeroy, D-N.D.”

The article noted that, “‘In the commodity title, the most important thing is crop insurance,’ he said. ‘It will be good, even though we’re making changes.’”

Mr. Swenson added that, “Direct payments are $5.2 billion a year [related graph] ‘that are given to farmers whether they need it or not,’ he said. ‘When they were making a lot of money, we were making payments, and it caused us trouble.’

But dropping them will be controversial. ‘The Southerners are addicted to these things,’ Peterson said.

“Peterson said he heard from farmers in North Dakota this week that the direct payment money can be used to improve ACRE, crop insurance and permanent disaster funding.”

Friday’s article indicated that, “‘The idea is having crop insurance that covers all of agriculture, not just the big crops like corn and soybeans,’ the Democrat said. ‘It makes sense to take that direct payment money and redirecting it to a better safety net that follows the need, not just paying people because they own land.’

“Removing direct payments would also make it easier for farmers actually producing the food to enroll in ACRE and other safety net programs, he said.”

The July 8 edition of the “Agriculture Today” radio program, which is produced by the Red River Farm Network, contained additional information from the Farm Bill Forum recently hosted in Rural North Dakota by House Ag Committee Chairman Collin Peterson, D-Minn., and Rep. Earl Pomeroy, D-N.D.

In part, the “Agriculture Today” report indicated that, “While working on the financial reform bill, House Agriculture Committee Chairman Collin Peterson spent a lot of time with his Senate counterpart, Blanche Lincoln. During Wednesday’s Farm Forum in Amenia, North Dakota, Peterson said Lincoln has agreed to a Farm Bill timetable that is similar to the House. ‘One of the problems I had last time, the Senate didn’t want to move; there is a different attitude over there with her and her staff than what we had last time and I’m encouraged by that, I think we’re going to be able to get this thing done.’”

To listen to a related audio clip from the July 8 Red River Radio Network program, just click here (MP3- 1:44).

With respect to Sen. Ag. Comm. Chairman Lincoln, Melinda Alvarado reported on Saturday at Fox 34 News Online (Lubbock, Texas) that, “Senator Blanche Lincoln of Arkansas was in Lubbock on Friday, addressing the Southwest Council of Agri-Businesses during it’s annual meeting.

“The democrat, spoke with area agriculture producers, ranchers and farmers about the 2012 Farm Bill, and how good farm policy is more than just about support for farmers, it’s also about support for the economy. Including all of the businesses in Texas and the southwest.

“Senator Lincoln says agriculture is one of the few places in industry in this country where we still have a trade surplus and a great opportunity to rebuild our economy.”

A video replay of the TV news update regarding this story can be viewed here.

Farm Bill- Nutrition Issue

Several recent news items have highlighted nutrition related issues, including the problem of obesity, that have overarching implications for some aspects of the 2012 Farm Bill.

Some of these recent items include the following:

– “Whether a Child Lights Up, or Chows Down,” New York Times. 7.9- “‘Obesity is the new kid on the block, relatively speaking,’ said Kenneth E. Warner, dean of the University of Michigan’s school of public health. ‘Tobacco is old news.’”

– “Kentucky town of Manchester illustrates national obesity crisis,” Washington Post. 7.12- “The national obesity rate for adults is 24 percent; in Manchester and surrounding Clay County, it’s been estimated to be as high as 52 percent. In a study of the healthiness of Kentucky’s 120 counties, Clay County ranked dead last, with 41 percent of the population classified as in poor or fair health.”

– “The best ‘big gun’ against obesity.” San Francisco Chronicle. 7.9- “First, food habits and taste preferences, once formed, are hard to break. It’s time to make forming good food habits in children a national priority. Let’s focus on cultivating Nutritional Intelligence – the ability to recognize and enjoy healthy amounts of good food.”

Farm Bill: Personnel Change

Steve Kopperud noted on Friday at Brownfield that, “The Obama Administration did a very good thing this week when the President ended nearly 18 months of indecision and named someone to fill the legally mandated ag/food advisor slot on his policy staff. David Lazarus, currently a senior advisor to Secretary of Agriculture Tom Vilsack, got the nod, and, to my mind, the selection makes this a two-fer for the Prez.”

The update explained that, “Lazarus moves to the White House on Monday, July 12. He’s technically a detailee, meaning USDA continues to pay his salary, but in his new gig, he operates as the senior policy advisor to the President for rural affairs and agriculture. While Vilsack may have a friend and former trusted advisor in that slot, the job reports directly to Melody Barnes, director of the Domestic Policy Council.

“Well-respected for being intelligent, analytical, quick on the uptake and pragmatic in his policy work, Lazarus went from a total unknown in the backroom of Sen. Richard Durbin’s (D, IL) office, to Durbin’s ag legislative assistant when the Senator was elevated to majority whip. Almost immediately, Lazarus handled the melamine in dog food issue and the resulting law, but won his stripes as the chief staff architect for Durbin’s bipartisan comprehensive food safety bill, S. 510, a bill enjoying producer, food industry and consumer support, an almost impossible hat trick in this town.”

Food Safety

The Washington Insider section of DTN reported on Friday (link requires subscription) that, “President Obama finally joined the discussion about pending food safety legislation this week by throwing his support behind a Senate bill sponsored by Sen. Dick Durbin, D-Ill. In his statement of support for the Food Safety Modernization Act, the president said his Food Safety Working Group, chaired by Health and Human Services Secretary Kathleen Sebelius and Agriculture Secretary Tom Vilsack, already has issued recommendations on how to upgrade the U.S. food safety system.

The president’s primary problem in shepherding the measure through Congress comes from the calendar. Pressing Senate action on a host of other issues could thwart final action on Durbin’s food safety bill. Those include Elena Kagen’s Supreme Court nomination, jobless benefits, tax extenders, Child Nutrition Act reauthorization, and energy/climate change legislation.

Efforts are being made to put the food safety bill on the Senate’s agenda before the month-long August recess, a process that likely will go more smoothly because Durbin is the Senate’s majority whip, the second highest Democrat in the chamber.”

Meanwhile, USDA issued a news release on Friday titled, “Federal Agencies Announce Progress in First Year of Implementing Food Safety Working Group Recommendations.”

And the AP reported on Friday that, “The Food and Drug Administration says egg safety rules that just took effect could prevent thousands of cases of salmonella poisoning each year.

“The new rules were announced by the Obama administration last year and go into effect Friday. The FDA says they could reduce the number of salmonella illnesses by nearly 60 percent.”

Animal Ag

The New York Times editorial board noted today that, “The life of animals raised in confinement on industrial farms is slowly improving, thanks to pressure from consumers, animal rights advocates, farmers and legislators. In late June, a compromise was reached in Ohio that will gradually put an end to the tiny pens used for raising veal calves and holding pregnant sows, spaces so small the animals can barely move.

“In California last week, Gov. Arnold Schwarzenegger signed a law requiring that all whole eggs sold in the state conform to the provisions of Proposition 2, the humane farming law that was embraced by state voters in a landslide in 2008. By 2015, every whole egg sold in the state must come from a hen that is able to stretch her wings, standing or lying, without touching another bird or the edges of her cage. This requirement would at least relieve the worst of the production horrors that are common in the industry now.”

The Times stated that, “In fact, there is no justification, economic or otherwise, for the abusive practice of confining animals in spaces barely larger than the volume of their bodies. Animals with more space are healthier, and they are no less productive.

Industrial confinement is cruel and senseless and will turn out to be, we hope, a relatively short-lived anomaly in modern farming.”

Trade

Nebraska GOP Sen. Mike Johanns indicated in an Op-Ed published in today’s Wall Street Journal that, “More than three years ago the United States and Colombia signed a trade agreement that would reduce or eliminate tariffs on most U.S. exports to Colombia. Unfortunately the agreement has been languishing ever since, and it is still waiting on the president to submit it to Congress. In the time since it was negotiated, American exporters have paid over $2.8 billion in tariffs that would have been eliminated under the agreement.

While we continue to dither and our exporters continue to pay the price, Colombia isn’t waiting around. Earlier this month the Canadian parliament ratified a free trade agreement with Colombia that will improve Canada’s access to the Colombian market.

This is just the latest example of our competitors speeding past us while we are stuck in neutral. Since signing the trade agreement with the U.S. in November 2006, Colombia has concluded trade agreement negotiations with Argentina, Brazil, Chile, Paraguay, Uruguay and the European Union. These countries are now gaining a competitive advantage over U.S. exporters.”

Crop Estimates

Reuters writer Charles Abbott reported on Friday that, “Exporters, livestock feeders and ethanol makers are going through the U.S. corn stockpile faster than farmers can grow the crops, the government said on Friday.

“Despite record crops in two of the past three years and another record within reach this year, the Agriculture Department estimated the corn carryover will shrink to the lowest level since 2006/07.”

Keith Good

Comments are closed.