FarmPolicy

December 16, 2017

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).

Similarly, in his testimony at yesterday’s hearing, Ohio producer Robert Jones pointed out that, “Sixty percent of all the nation’s farmers do not raise Farm Bill program crops and therefore do not receive direct subsides. Please let me be very clear on this point, we do not want them. Ohio growers like myself are much more interested in becoming better growers, marketers and promoters.” (Related audio– MP3- 2:22).

Note that all of the opening statements from the witnesses at yesterday’s hearing, which included producers and no USDA officials, can be viewed at this House Ag Committee webpage.

Also at yesterday’s House hearing, Subcommittee Ranking Member Jean Schmidt (R-Ohio) highlighted the increasing federal regulatory burden that U.S. producers are facing. (Related audio– MP3- 1:55). “As we prepare for the next Farm Bill, it is critically important to consider the regulatory pressures are farmers are facing from this current administration,” she said.

Note that an audio replay yesterday’s House meeting is available here and a summary of all of the House Ag. Comm. hearings related to the 2012 Farm Bill can be viewed here.

Senate Hearing- Energy and Rural Development

As the House was conducting its Farm Bill hearing yesterday, the Senate Agriculture Committee was also receiving testimony on issues associated with energy and rural development.

A video rebroadcast of the hearing, and complete witness list is available at this Senate Ag Committee webpage, while an audio replay of yesterday’s meeting is available here.

A news release from the Sen. Ag. Comm. yesterday indicated that, “U.S. Senator Blanche Lincoln (D-Ark.), Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today called for strong energy and rural development Farm Bill programs in order to create jobs and improve Arkansas’s rural economy. Today’s hearing is the second that Lincoln has held as she leads the Committee in reauthorizing the 2012 Farm Bill. [Note that a summary of the first hearing is available here]. General Wesley Clark, Mayor JoAnne Bush of Lake Village, Arkansas, and Dennis Sternberg of Lonoke, Arkansas, were among those who testified.

“‘Arkansans know firsthand that rural America is often the first to feel the impact of economic downturns, and is often the last to reap the rewards of economic recoveries. The development and deployment of renewable sources of energy produced in rural America presents an opportunity to create jobs, put our economy back on track, and reduce our dangerous dependency on foreign oil. The Farm Bill energy programs provide a model which should be the basis of our national energy policy. In May of this year, we sent $27.5 billion overseas to purchase oil – much of that to hostile foreign governments. In Arkansas if we used only a fraction of that money to build just 10 cellulosic ethanol facilities, we would create 2,090 long-term jobs, generate $216 million in economic activity and reduce Arkansas’s need to import oil by 50%. That sounds like a good investment to me,’ said Lincoln.”

As part of her complete opening statement at yesterday’s hearing, Chairman Lincoln indicated that, “Without critical investments in infrastructure, a safe water supply and affordable housing opportunities, it is impossible for rural communities to attract new industries, such as the type of renewable energy production opportunities that we will discuss today.

“Additionally, we are seeing that broadband internet service is a requirement for many businesses when they consider where to locate. Rural America will not be able to compete with the rest of the country without it. I know that there has been tremendous interest in broadband funding, and I plan to hold a hearing specifically on the Broadband Initiatives Program in the near future.”

Interestingly, in very similar comments to those delivered yesterday at the House hearing by Rep. Jean Schmidt regarding federal regulations facing producers, Senator Pat Roberts (R-Kansas) offered his own assessment and analysis of current the current regulatory climate.

A news release from Sen. Roberts yesterday pointed out that he is “concerned with numerous new federal regulations impacting rural Americans.”

In part, Sen. Roberts noted at yesterday’s hearing that, “Your testimony points out that ‘95 percent of rural income is earned off the farm.’ Yet recently proposed government actions threaten the viability of off farm opportunities. Let me name a few: Non-science based standards over particulate matter or what some call ‘rural fugitive dust,’ spray drift, Atrazine, the Environmental Protection Agency’s potential carbon rule, Concentrated Animal Feeding Operations, the definition of ‘navigable waters,’ levee certifications and I could go on and on.

Mr. Under Secretary, your agency is charged with ‘helping improve the economy and quality of life in rural America.’ With so many rural communities concerned that your sister agencies’ actions result in the direct opposite of your goal, how does the Rural Development Agency work in a ‘multi-agency’ fashion to address these concerns?

For a more detailed account of the Q and A on federal regulations from Sen. Roberts and Dallas Tonsager, the
USDA Undersecretary for Rural Development, click on this FarmPolicy.com audio clip (MP3- 5:21).

Also testifying at yesterday’s Senate hearing was General Wesley Clark, the Co–Chair of Growth Energy.

Senate Agriculture Committee Ranking Member Saxby Chambliss (R-Georgia) asked General Clark about Growth Energy’s Fueling Freedom plan and ethanol tax credits at yesterday’s hearing, to listen to this very interesting exchange, just click here (MP3- 4:18).

And Senator Chuck Grassley (R-Iowa) asked General Clark about his perspective on ethanol tax credits in the absence of the Senate passing energy legislation, to listen to this exchange, click here (MP3- 2:09).

Also yesterday, Senator John Thune (R-South Dakota) discussed the ethanol “blend wall” with General Clark (MP3- 3:01).

Biofuels

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “The recent Congressional Budget Office study that concluded that the blending subsidy is not essential to the growth of the ethanol industry appears to be changing the outlook for future industry support. Since the current ethanol blenders’ credit expires at the end of this year, the House Ways and Means Committee is considering proposals for an extension and appears poised to move quickly to consider an energy tax incentive package that will include a one-year extension of the ethanol tax credit, which it would cut by 9 cents per gallon from the current 45-cent level. However, it still would carry a price tag of $3.8 billion, committee staff told the press last week.

“The proposal could be marked up as early as this week.

“The proposal is part of a broader ‘green jobs’ bill that also includes a number of other tax incentives, including an expansion of an investment tax credit for clean-energy manufacturing projects, an extension of investment tax credits for geothermal energy and bonding authority for energy conservation projects. The draft also would extend the $1 per gallon tax credit for blending biodiesel into petroleum fuels that expired last Dec. 31.”

Yesterday’s DTN item added that, “A major hurdle for the bill is the need for revenue offsets to cover the cost, now estimated at around $22 billion, but which is expected to be pulled back modestly to perhaps $15 to $20 billion.

“Observers suggest that Ways and Means members are divided on the energy incentives issue, with three Democrats who sit on the panel — Joseph Crowley of New York and Mike Thompson and Pete Stark of California — among the sponsors of legislation that would eliminate the ethanol blending credit by 2014. However, other committee Democrats — Earl Pomeroy of North Dakota, Danny Davis of Illinois and Artur Davis of Alabama — back a Pomeroy measure that would extend the current credit through 2015.”

Meanwhile, an update posted yesterday at the Domestic Fuel Blog reported that, “The nation’s major fuel marketing associations are advocating legislation that will help them sell higher blends of renewable fuels, including ethanol and biodiesel greater than E10 or B5.

NACS – the Association for Convenience and Petroleum Retailing, along with NATSO (representing America’s Travel Plazas and Truckstops), Petroleum Marketers Association of America (PMAA), and Society of Independent Gasoline Marketers of America (SIGMA) have joined the Renewable Fuels Association (RFA) in supporting the Renewable Fuels Marketing Act of 2010 (HR 5778), which was introduced yesterday by U.S. Representatives Mike Ross (D-AR) and John Shimkus (R-IL).

“According to NACS, ‘the bill will enable retailers to have existing equipment evaluated and legally approved to sell new renewable fuels and will expedite the approval of new equipment. It also will protect retailers from Clean Air Act violations and liability associated with self-service consumers fueling unapproved engines with higher blends of renewable fuels.’”

Climate Issues

Darren Samuelsohn and Coral Davenport reported yesterday at Politico that, “Senate Democrats are increasingly divided over whether to move forward on any energy and climate bill in the coming weeks.

“On one side are those who say it’s too late to move even a modest energy measure, and are urging colleagues to abandon their efforts and bring up a small package of offshore drilling reforms next week before heading home.

“On the other are ardent liberals, who are mounting a last-ditch campaign to push through an ambitious climate bill with a cap on greenhouse gas emissions.”

And in an update from this morning, Politico’s Darren Samuelsohn reported that, “Key senators and industry officials are defending the closed-door negotiation strategy they deployed for climate legislation — even though several months of work have failed to yield the 60 votes needed to get a bill passed this year.

“Critics say Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) have made too many concessions to industries without picking up a single ‘yes’ vote in return, leaving climate legislation all but dead as the Senate prepares for its August recess.

“But Kerry and Lieberman insisted Wednesday that the many meetings they’ve had with major oil, gas, electric utility and manufacturing trade associations will help them pass a climate bill — someday.”

Bloomberg writers Lisa Lerer and Simon Lomax reported yesterday that, “Senate Majority Leader Harry Reid is struggling to meet a self-imposed deadline for passing energy legislation, his fellow Democrats say, and they expressed doubt the measure could be approved before Congress takes its month-long August recess.

“Reid previously said he was close to announcing the bill’s details and aimed to open Senate debate on the measure next week. During Senate Democrats’ weekly luncheon yesterday on Capitol Hill, though, lawmakers said Reid told them the bill remained far from finished.”

Similarly, Emily Pierce reported yesterday at Roll Call Online that, “The Senate may not have time to take up an energy and climate bill before recessing for the monthlong August break, Senate Majority Whip Dick Durbin said Wednesday.”

And with respect to a potential delay, The Hill’s Darren Goode reported yesterday that, “A key green group would be ok if the Senate waits until this fall to debate reducing greenhouse gas emissions.

“The view of the Pew Center on Global Climate Change — part of a small band of environmental groups and utility companies that have been negotiating a first-time carbon-pricing plan for power plants — may resemble a growing consensus among green activists.

“‘With a little more time it might be possible to get broader support from the utility sector,’ said Manik Roy, the Pew Center’s vice president of federal government outreach. ‘The problem is we don’t have a proposal on the table and until we do, it’s hard for the power sector companies to know what they’re responding to.’”

Meanwhile, Noelle Straub of Greenwire reported yesterday at The New York Times Online that, “The Forest Service has issued a national road map for responding to climate change, along with a performance scorecard to measure how well each individual forest implements the strategy.

“The new blueprint outlines a series of short-term initiatives and longer-term projects for field units to address climate impacts on the country’s forests and grasslands.”

Financial Reform

Damian Paletta reported in today’s Wall Street Journal that, “President Barack Obama on Wednesday signed into law the most sweeping financial overhaul since the Depression, putting the country on a course toward a more muscular regulatory framework.

“The law gives the government authority to take over and liquidate failing financial firms, injects transparency into transactions involving financial instruments called derivatives and will restrict banks from making risky bets with their own capital. It directs agencies to write hundreds of new rules.”

For more perspective on this bill, see this FarmPolicy.com interview with House Agriculture Committee Chairman Collin Peterson (D-Minn.) from earlier this month.

USDA Issue

Sheryl Gay Stolberg, Shaila Dewan and Brian Stelter reported in today’s New York Times that, “The White House and Agriculture Secretary Tom Vilsack apologized profusely and repeatedly on Wednesday to a black midlevel official for the way she had been humiliated and forced to resign her Agriculture Department job after a conservative blogger put out a misleading video clip that seemed to show her admitting antipathy toward a white farmer.

“By the end of the day, the official, Shirley Sherrod, had gained instant fame and emerged as the heroine of a compelling story about race and redemption.”

For additional analysis on this development see this item by The Des Moines Register’s Philip Brasher, and this piece by DTN’s Chris Clayton.

Keith Good

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