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Farm Bill; Biofuels; and Climate Change

Farm Bill

Dan Morgan reported on Friday at The Fiscal Times Online that, “When Democratic leaders in Congress pushed through a sweeping new farm bill with generous payouts to agriculture two years ago, it was partly with politics in mind.

They reasoned that a farmer-friendly bill would boost the party’s standing and help restore the urban-rural coalition that enabled Democrats to rule the House for much of the last two-thirds of the 20th Century.

“At a key moment in the House debate, Speaker Nancy Pelosi, a liberal Democrat from San Francisco, sided with the farm bloc against reform-minded lawmakers pushing to slash traditional subsidies on crops. When President Bush vetoed the legislation, Democrats in both the House and Senate voted overwhelmingly to override him.”

The article explained that, “But with little more than two weeks to go before the midterm elections, rural Democrats appear to be getting little credit for their efforts – or for an agricultural economy that largely dodged the recession. Agricultural exports are booming, farm profits are at near record levels, and corn prices neared $6 a bushel this week, a two-year high. Farmland values, bucking national real estate trends, are up nearly 5 percent in the northern Great Plains, according to the National Agricultural Statistics Service.”

Mr. Morgan noted that, “In the House, some freshmen Democrats on the Agriculture Committee, including Betsy Markey of Colorado and Kathy Dahlkemper of Pennsylvania, are in tough battles to save their seats. More senior Democrats with a long record of support for agricultural interests are also struggling.

“The most prominent example may be North Dakota Rep. Earl Pomeroy, a veteran member of the Agriculture Committee, who used his seat on the Ways and Means Committee to help engineer crucial funding for the 2008 farm bill. A Rasmussen Reports telephone survey of likely voters in late September found Pomeroy trailing his Republican opponent, businessman Rick Berg, though the margin had narrowed.

“Iowa Rep. Leonard Boswell, who chairs the subcommittee on farm commodities, is also in a tight race, despite an endorsement from the Iowa Corn Growers Association. Boswell, analysts say, is paying a price for supporting health care, climate and stimulus legislation. Also in tight races are Democratic Reps. Mike McIntyre of North Carolina, a seven-term moderate ‘Blue Dog’ who chairs the rural development subcommittee, and Stephanie Herseth Sandlin of South Dakota, who is from a political dynasty in her state and who played an important role in drafting the 2008 farm bill.”

Friday’s article added that, “But some are puzzled by the backlash this year against many ‘agricrats’ – Democrats with a record of putting farming interests at the top of their agendas. ‘We’re the one committee where the Democrats have a story to tell,’ House Agriculture Committee Chairman Collin Peterson, D-Minn., said last month.”

After additional analysis, The Fiscal Times article stated that, “The Obama administration has been a strong supporter of a growing biofuels industry, a top priority of corn and soybean interests. This week, over the objection of the oil and automobile industries, the administration announced steps to increase the amount of ethanol used in car engines.

But in recent months Republicans have worked to portray the Obama administration — and implicitly, Democrats in Congress — as enemies of large-scale agriculture. That effort may have been made easier by early administration missteps, such as proposing sharp cuts in a key subsidy in its first budget. First Lady Michelle Obama’s interest in farmers’ markets and the local food movement has not endeared the administration to large-scale farmers and agribusinesses.”

Mr. Morgan pointed out that, “In the House, the attack on administration policies has been led by Rep. Frank Lucas of Oklahoma, the ranking Republican on the House Agriculture Committee. A man who runs his own farm and ranch in western Oklahoma, Lucas represents the conservative values of his rural district. But he also strongly embraces traditional government farm programs and has stated that the Obama administration is ‘no friend to agriculture’ and ‘the most unfriendly to farmers and ranchers in recent history.’ Lucas made no mention of Bush’s veto of the 2008 farm bill.”

The tough rhetoric, and the bitterness of the current election, could spill over into the debate over the next farm bill. Republican supporters of traditional farm programs then may need the help of rural Democrats in fending off deep cuts pushed by austerity-minded GOP leaders,” the article said.

Dawn House reported earlier this month at The Salt Lake Tribune Online that, “In the dust-up to curb federal powers, the Utah Farm Bureau and the Utah Cattlemen’s Association have joined with conservative groups pushing for states’ rights.

“But many of the organizations in the newly formed Utah United Coalition also want to eliminate federal programs that many farmers and ranchers hold sacred: farm subsidies.”

However, the article added that, “Corinne rancher John Ferry said he supports the Farm Bureau aligning itself to ultra-conservative groups on issues related to multiple use of public lands and unreasonable environmental standards.

“But he is uncomfortable with the general perception that the Farm Bureau is in lock step ‘with every other issue these groups are promoting.’”

AP writer Steve Karnowski reported on Friday that, “Republicans might take control of Congress as they ride a wave of voter anger over deficit spending and big government, but experts who follow agriculture say they don’t expect deep cuts in subsidies to farmers who grow crops such as corn and soybeans.

“Those payments are long-entrenched policy that have had the support of a wide range of lawmakers, from liberal to conservative. Regardless of the election results, that likely won’t change much, politicians and other said.

“Still, federal farm programs could be examined closely given the size of the deficit and the chance that the election could change the makeup of the agriculture committees and their leadership.”

The AP article indicated that, “Likely to come under fire, however, are ‘direct payments,’ a $5 billion a year subsidy that pays landowners a set per-acre amount regardless of what they’re currently growing or whether prices are high or low. Prices for corn and other crops have soared lately.

The Iowa Farm Bureau made waves last month by calling for an end to direct payments, but it also proposed shifting the money to other programs that shield farmers from losses due to poor prices, bad weather or diseases.”

Also on the direct payment issue, Archie Ingersoll reported on Saturday at the Grand Forks Herald Online (ND) that, “U.S. Rep. Collin Peterson met with an agriculturally inclined crowd here [Stephen, Minn.] Saturday, hashing over the next farm bill, the state of the economy and the ever-present regional issue of flood control.”

The article noted that, “Peterson, chairman of the House Agricultural Committee, said he and other committee members went on a 10-stop tour around the nation to hear comments about the next farm bill that will be in effect for five years, starting September 2012.

“‘The No. 1 thing we heard around the country was the most important part of the safety net is crop insurance,’ he said.

Peterson said he’s suggested reducing direct payments to farmers and shifting that money to funding crop insurance.

“‘What that means then is you’ll have protection when you need it, and then when you have a good crop, you won’t get any money from the government,’ he said. ‘If you don’t protect yourself, you’re on your own.’”

Meanwhile, The Washington Post editorial board opined in today’s paper that, “This is a good time to be a cotton farmer. The price of cotton is up 86 percent over last year and exceeds $1 per pound for the first time in 15 years. The Agriculture Department expects growers to reap cash receipts of $5.3 billion for 2010. Taxpayers benefit as well: In August, the Agriculture Department projected that the high prices will reduce the cost of a program that protects cotton farmers from cyclical downturns from $1.17 billion in 2009 to $243 million in 2010.

However, cotton farmers will still be eligible for direct payments, which don’t vary with the business cycle. And on top of that, the Obama administration announced last month that it will shower about $630 million in special aid on Southern agriculture, much of it destined for cotton growers. Ostensibly, this is to make the farmers whole for losses they suffered during an unusually rainy 2009 harvest season.”

The Post added that, “This lavish payout would have been wasteful under normal circumstances; it becomes that much more grotesque at a time when cotton is doing better than most other sectors of the economy.”

In Farm Bill related news regarding the Supplemental Nutrition Assistance Program (food stamps), Anemona Hartocollis reported in yesterday’s New York Times that, “[Ellen Vollinger, legal director for the nonprofit Food Research and Action Center] found allies in what some might consider unlikely quarters, at least when it comes to bleeding hearts: Big Food and Big Beverage. Traditional, old-line liberals in the shaggy, idealistic, antihunger, antipoverty sector are joining with the nation’s food industry, which represents some of the most sophisticated, powerful corporate interests in the world, to fight [New York City Mayor Michael R. Bloomberg’s plan to bar New York City’s food stamp users from buying sodas and other sugary drinks with their benefits]. Together, they are taking on the nation’s health czars, including groups like the Center for Science in the Public Interest and New York City’s influential health commissioner, Dr. Thomas A. Farley.

New York City’s proposal has put a spotlight on an the unusual relationship between the antihunger groups and the food industry. But the relationship has always been there, in various forms. Federal programs to feed the poor go back to the 1930s, and were intended as much to raise the incomes of farmers by distributing surplus farm commodities as to help the poor. In the 1960s, President Lyndon B. Johnson and his supporters in Congress championed the modern-day food stamp program as part of an effort that would help both poor people and farmers.

“That tradition continues today. ‘So you have a natural coalition between urban and rural that includes farms, food stamp recipients and other related constituencies,’ said Edward M. Cooney, executive director of the Congressional Hunger Center, a nonprofit policy and advocacy group.”

The Times article added that, “Like the birth of the food stamp program, the outcome of the dispute will depend on politics. Mr. Bloomberg has injected his proposal into the middle of a contentious election season. And whatever the Department of Agriculture decides, Mr. Cooney predicts that creating lists of good and bad foods will be on the agenda as Congress debates the farm bill and deficit reduction in 2011.”

An editorial item in yesterday’s New York Times by Francis X. Clines indicated that, “In the perverse ways of politics, Newt Gingrich, the Republican former House speaker, is advising his party’s candidates to make a big issue of the fact that food stamp distribution has hit a historic high of more than 40 million Americans.”

The opinion item added that, “Democrats preoccupied with political survival have been nearly as hostile toward the food stamp program. Fecklessly invoking fiscal responsibility, the Democratic-controlled Congress voted to strip $11.9 billion in long-term food stamp financing in a Peter-to-Paul stunt to pay for emergency aid for state budgets. And the Senate has been aiming to cut another $2.2 billion in stamps to finance child nutrition reform.

Child nutrition is essential, but the legislation’s title as the Healthy, Hunger-Free Kids Act doesn’t parse well in the face of parallel food stamp cuts. The administration has promised to seek a saner form of financing when the House takes up the measure after the election. Otherwise, the Congressional shell game could eventually cut $59 from a family of four’s monthly stamp allowance, currently at $294.”

In other developments, Bill Tomson reported today at The Wall Street Journal Online that, “U.S. sugar production will be cut by about 20% if farmers are banned from planting genetically modified beets next year, according to data prepared for the U.S. Department of Agriculture as part of a court case over whether to continue allowing the practice.

“Genetically modified beets have come to account for 95% of the U.S. sugar-beet crop in the five years since they were approved by the Agriculture Department. But in August, a judge threw out the USDA’s initial approval for the use of genetically modified seeds, saying it hadn’t done enough research into the environmental impact. The department says the studies the judge required will take about two years.

That triggered concerns there wouldn’t be enough traditional sugar-beet seeds for next spring’s planting season, as many seed producers had switched to genetically modified varieties. It takes about two years to produce seeds.”

The article noted that, “Strict tariffs imposed by the U.S. on sugar imports mean it will be difficult to make up any shortfall by bringing in sugar from other countries. And tight supplies globally are already driving up sugar prices. World sugar prices have almost doubled since early May and are approaching 30-year highs.

“‘Right now, we’re looking at a lot of uncertainty,’ said Joe Glauber, the USDA’s chief economist. After the Aug. 13 ruling by Judge Jeffrey White of the U.S. District Court for the Northern District of California, the Agriculture Department sought to reassure markets about sugar supplies by granting permits to seed companies to begin the seed production process to prepare for the 2012 planting. It also has said it is considering a plan to once again allow genetically modified sugar beets by the end of this year in time for planting in March, but it hasn’t said how it might do that.

That has led to new rounds of legal squabbling between the department and environmental groups.”

Biofuels

The Wall Street Journal editorial board noted today that, “Scenes from a bailout: Last week, the Environmental Protection Agency decided to make the ethanol lobby’s guaranteed ‘market’ even larger. Shares in Archer Daniels Midland, the second largest U.S. ethanol maker, rose to a near 28-month high. Midwest Democrats in tight races got a political bump. Maybe for the first time in history, Exxon and the Natural Resources Defense Council shook out on the same side of an issue—in opposition.”

The opinion item added that, “We might think this was a play to reprise cash for clunkers, if this announcement on the eve of the election wasn’t such a transparent exercise in Corn Belt pandering. The Energy Department’s overall safety testing is continuing, but the EPA released the results for newer models early because—well, let’s just say it wasn’t trying to fulfill President Obama’s promise to put science ahead of politics.”

Reuters writer Christine Stebbins reported late last week that, “Agribusiness giant Cargill Inc, a major producer of biofuels, said on Thursday the U.S. government’s move to allow more ethanol in U.S. gasoline would have no immediate effect on its investment plans.

“‘I think it’s something that has to be considered. At this moment it’s unlikely to be an immediate stimulus,’ Cargill chief executive Greg Page told Reuters in an interview on Thursday.”

Climate Change

Darren Goode reported yesterday at The Hill’s Energy Blog that, “California has become the primary battleground for environmental activists this election cycle thanks to a ballot initiative that would stymie a first-in-the-nation cap on greenhouse gas emissions.

The Proposition 23 measure would suspend California’s global warming law — which calls for a reduction in emissions back to 1990 levels by 2020 — unless the state’s unemployment rate drops below 5.5 percent. Currently, the state’s unemployment rate is 12.4 percent, the third highest in the nation.”

The Wall Street Journal editorial board indicated in today’s paper that, “Proposition 23 is the number one national target of the green movement this election year. With the failure of cap and tax in Congress, the greens are trying to hold onto this remnant of their anticarbon crusade. Both sides are spending heavily, and the polls show a close vote.”

The Journal editorial concluded by saying, “Proposition 23 faces an uphill fight against green moneyed interests, but its passage would give California a regulatory reprieve and save tens of thousands of jobs. If it fails, Nevadans and Chinese will rejoice.”

The New York Times editorial board noted today that, “Former Vice President Dick Cheney has to be smiling. With one exception, none of the Republicans running for the Senate — including the 20 or so with a serious chance of winning — accept the scientific consensus that humans are largely responsible for global warming.

“The candidates are not simply rejecting solutions, like putting a price on carbon, though these, too, are demonized. They are re-running the strategy of denial perfected by Mr. Cheney a decade ago, repudiating years of peer-reviewed findings about global warming and creating an alternative reality in which climate change is a hoax or conspiracy.”

The Times added that, “Nowadays, it is almost impossible to recall that in 2000, George W. Bush promised to cap carbon dioxide, encouraging some to believe that he would break through the partisan divide on global warming. Until the end of the 1990s, Republicans could be counted on to join bipartisan solutions to environmental problems. Now they’ve disappeared in a fog of disinformation, an entire political party parroting the Cheney line.”

Keith Good