FarmPolicy

Farm Bill; Biofuels; Food Safety; Climate Issues; and Ag Economy

Farm Bill- Lawmaker Perspectives

Yesterday on the AgriTalk Radio Program, host Mike Adams spoke with current House Agriculture Committee member Jerry Moran (R-Kansas), who was just elected to the U.S. Senate.

In part the conversation focused on the 2012 Farm Bill debate, which is now underway in a political environment where many newly elected GOP lawmakers campaigned this fall on the prospect of cutting the size of the federal budget. Mr. Adams inquired, “Is that going to mean significant cuts to agriculture spending?”

After outlining some of the spending allocations under the 2008 Farm Bill and pointing out that over 70 percent of Farm Bill spending goes to nutrition related programs, Rep. Moran indicated that a bigger threat to agriculture could come from expanding federal regulations relating to the environment and animal rights; he noted that the GOP stands a better chance of holding off additional regulatory threats to production agriculture. As an example, Rep. Moran indicated that a Republican House would not have passed a cap and trade bill. So, as he sees it, the Republican gains in the House and Senate are a positive development for U.S. agriculture.

To listen to this interesting exchange from yesterday’s AgriTalk program, just click here, (MP3-2:56)

Rep. Moran was first elected to Congress in 1996; in a comparative view on the political environment and agriculture, Agri-Pulse Senior Editor, Stewart Doan recently interviewed Rick Crawford- a just elected GOP Congressman from the First District of Arkansas (entire interview available here).

According to the CQ Roll Call Guide to the New Congress (at page 32), “Crawford is a new comer to elective politics who rode the wave of voter anger to capture an open seat that had been in Democratic control for more than a century.

“The 1st District’s economy is heavily focused on agriculture, and Crawford has been personally invested in the field. He has spent most of his working life in agriculture-related news services, including stints as an agriculture reporter for TV and radio stations. He also owns AgWatch, a farm news radio and TV network that is broadcasted in multiple Southern states.”

The Guide added that, “A self-described deficit hawk, Crawford says he will focus on reducing spending and deficits.”

Mr. Doan asked Rep-Elect Crawford about the election and his desire to serve on the Agriculture Committee (clip available here, (MP3- 2:57)).

More specifically, Mr. Crawford was asked about the federal deficit and spending for the 2012 Farm Bill in the Agri-Pulse interview, to listen to this exchange, where Mr. Crawford incorporated an argument about national security, just click here (MP3- 1:25).

Another newly elected GOP Representative- Bob Gibbs from Ohio’s Eighteenth Congressional District- also wants to serve on the House Agriculture Committee.

The CQ Roll Call New Members Guide pointed out (at page 56) out, “Gibbs’ top priority is cutting the federal deficit and lowering the national debt.”

An article from Monday, which was posted at the Lancaster Eagle Gazette (Ohio), reported that, “‘I have a full understanding how important agriculture is, not only to the economy, but to the energy sector,’ Gibbs said.

“Gibbs’ economic philosophy is straightforward, and nothing new to those who followed the 2010 campaigns. Stop federal spending, and no new taxes.”

The article added that, “John Fisher, executive vice president of the Ohio Farm Bureau, said Gibbs will put his constituents first.”

Farm Bill- Political Environment

A recent editorial posted at the Sacramento Bee Online noted that, “Leaders of the new Republican majority in the U.S. House of Representatives say they want a smaller federal government. President Barack Obama says he wants to encourage a healthier diet.

“One place where these two sides could find common ground is through selective cuts in the U.S. Department of Agriculture.

“Each year, this agency consumes about $26 billion, often on outdated programs that prop up farm and dairy operations at the expense of other federal priorities.”

With respect to the idea of whether or not newly elected GOP members will be able to deliver on the idea of a “smaller federal government,” Jonathan Martin and Marin Cogan reported yesterday at Politico that, “Interviews with more than a dozen Republican freshmen reveal a group determined to serve as delegates for the discontent that powered their elections but also to avoid the pitfalls of their predecessors.

“Many said that the difference between this moment and 1994 is that the country’s fiscal problems are more urgent now and that voters would therefore be more apt to turn them out with haste if they didn’t enact change.”

Matt Laslo reported on Monday at the Atlantic Online that, “‘We need to get it right this time. And if I had to put my finger on one thing that I think we as a group went astray, it was on the spending and that we’ve got to be much more fiscally disciplined than we were,’ offered [Representative-elect Steve Chabot of Ohio] shortly after flying to Washington from Cincinnati. ‘We were pretty good early on, but then we went off the tracks.’

“Now observers say the party faces the problem of going off the tracks in a different direction. Many of the new Tea Party members are bringing some drastic, as well as small but significant, deficit cutting proposals to the table, which could hurt the party with Independent voters in 2012.

“Republican Party leaders are working hard to bring the freshman class into their fold, but it may not be easy.”

Meanwhile, Lori Montgomery reported in today’s Washington Post that, “Forget about convincing Congress. The leaders of the president’s fiscal commission came under fire from the panel’s own members Tuesday as they struggled to forge a bipartisan consensus on an ambitious plan to balance the federal budget.

“In separate appearances, two lawmakers who sit on the 18-member panel rejected major elements of the budget-cutting proposal announced by commission co-chairmen Erskine Bowles and Alan K. Simpson – offering a glimpse of how difficult it will be to win broad political support for a serious assault on rising national debt.”

In other news with agricultural implications, Darren Samuelsohn and Jake Sherman reported yesterday at Politico that, “House Republicans avoided any serious bloodletting in their leadership races, but the campaigns for two powerful committee chairmanships are getting downright nasty.”

“The stakes are enormous: The Appropriations Committee is ground zero for efforts to curb earmarks and federal spending, both goals of the tea party movement that helped sweep the GOP into power. The Energy and Commerce panel will be the hub for attempts to repeal the Democrats’ health care reform law and block the Obama administration’s planned climate change regulations,” yesterday’s article explained.

For a more in-depth and detailed look at the midterm elections, see this recent webinar that was sponsored by the Washington, D.C. based law firm McLeod, Watkinson & Miller titled, “Election Results and the Agriculture Committees.”

Some excerpts from the webinar are available here.

Biofuels

In an opinion column yesterday, Reuters writer Christopher Swann noted that, “Ethanol will put Republican fiscal fortitude to the test. Bumper U.S. exports of the corn-based fuel raise fresh questions for an industry that boasts of reducing dependence on foreign oil. It’s another reason to let the nearly $5 billion annual subsidy die as scheduled at the end of this year.

“Few industries are compromised by export success. Ethanol is an exception. By definition, none of the 250 million gallons sold overseas this year were being used to free America from its reliance on crude brought in from the likes of Venezuela and Saudi Arabia, undercutting one of the industry’s main justifications for taxpayer handouts. They’re even harder to defend given U.S. producers sold ethanol to Riyadh.”

However, a news item yesterday from the Renewable Fuels Association stated that, “Tens of thousands of jobs could be a stake if Congress fails to extend key ethanol tax incentives in the lame duck session warned a group of leading ethanol and agriculture advocates in a letter to House and Senate leadership.”

Julie Harker reported yesterday at Brownfield that, “Getting the ethanol tax incentive extended past the December 31st deadline is the focus of the Renewable Fuels Association. RFA President Bob Dineen told Brownfield in Kansas City he’s feeling better about the chances an extension will happen.”

“Dineen says the message from the November election was clear – it’s about the economy and jobs.”

A news release yesterday from Rep. Leonard Boswell (D-Iowa) indicated that, “Today, [Rep. Boswell] urged House leadership to make the renewal of the biodiesel tax credit (BTC) and extension of the Volumetric Ethanol Excise Tax Credit (VEETC) top priorities in the closing of the 111th Congress.”

Meanwhile, on the issue of E15, Matt Kelley reported yesterday at Radio Iowa Online that, “The head of the U.S.D.A. says big plans are on the horizon for biofuels. The federal E.P.A. announced last month it would lift the amount of ethanol blended into gasoline from the long-standing ten-percent, raising it to 15%. U.S. Agriculture Secretary Tom Vilsack calls the E-15 ruling a ‘good momentum builder,’ for other plans in biofuels.”

A Growth Energy news release from yesterday stated that, “Growth Energy CEO Tom Buis released the following statement after testifying today at the EPA’s public hearing on the agency’s proposed rule governing how pumps carrying E15 will be labeled. The E15 pump labeling rule follows the first of two expected decisions by EPA on Growth Energy’s Green Jobs petition to permit the blending of up to 15 percent ethanol, or E15, in transportation fuel.

“‘I am confident that E15 can be added to the American fuels market safely, without major problems. We recognize EPA’s vast experience in introducing new fuels into the commercial marketplace and we appreciate the effectiveness of proper labeling, documentation and public education. We believe EPA can design a label that is objective and educational,’ Buis said. ‘This is not the first time this has happened. Many consumers today are required to use premium fuel, and diesel drivers have a bifurcated market that requires them to be educated about their fuel choices at the pump. Consumers are capable of reading a label. They have been doing it for years.’”

A DTN article from yesterday reported that, “A senior official at the National Petrochemical & Refiners Association said during a public hearing in Chicago on Tuesday that proposed federal regulations to prevent misfueling with gasoline containing 15 percent ethanol will fail to protect consumers, and so the Environmental Protection Agency should call another meeting with stakeholders to discuss how such a problem could be prevented.”

In more detailed analysis of biofuels, the Center for Agriculture and Rural Development at Iowa State University recently released a paper titled, “Impact on Ethanol, Corn, and Livestock from Imminent U.S. Ethanol Policy Decisions;” and the Environmental Working Group released an analysis this week titled, “Will the Real Ethanol Beneficiaries Please Stand Up?”

Food Safety

Bill Tomson reported yesterday at The Wall Street Journal Online that, “The Senate is scheduled to vote as early as Wednesday on a long-delayed food-safety bill that gives new authority to the Food and Drug Administration, amid signs that the bill might have a path to get through Congress before the end of the year.

“A different version of the bill passed the House more than a year ago, in July 2009, but it has had trouble making it through the Senate after small farmers expressed concern that the new regulations might disadvantage them.

“A bipartisan roster of senators is trying to push it through the Senate during the lame-duck session. A vote was tentatively set in the chamber for Wednesday that would move the bill to formal debate and allow consideration of amendments.”

Chris Clayton noted in part yesterday at the DTN Ag Policy Blog that, “Some of the major ag/food-processing groups effectively state they will walk away from the bill if there are any exclusions for small producers.

“Sen. Jon Tester, D-Mont., continues to push an amendment that would exempt small processors and farms that make less that $500,000 in sales to direct markets, restaurants or stores in a 400-mile radius of the processing facility, or in the same state. Those facilities would continue to fall under state or local regulations. Tester plans to hold a press conference about his amendment on Wednesday.”

As a side note, the AP reported yesterday that, “Reinvigorated Republicans have their first announced candidate in what could be a 2012 election battleground to win Montana Democrat Jon Tester’s seat and control of the U.S. Senate.”

Climate Issues

Shane D’Aprile reported yesterday at The Hill’s Ballot Box Blog that, “Sen. Joe Manchin (D-W.Va.) said Tuesday that Senate Majority Leader Harry Reid (D-Nev.) has personally promised him that Senate Democrats would not pursue a cap-and-trade bill during the next Congress.”

And Ben Geman reported yesterday at The Hill’s Energy Blog that, “Senate Majority Leader Harry Reid (D-Nev.) said Tuesday it is not clear whether he will schedule a lame-duck vote on Sen. Jay Rockefeller’s (D-W.Va.) bill that would block looming Environmental Protection Agency greenhouse gas rules for two years.

“Reid earlier this year pledged to Rockefeller that he would bring up the measure. But the Nevada senator told reporters in the Capitol Tuesday that it’s unclear if there’s enough time in the lame-duck session.”

Ag Economy

Andrew Johnson Jr. reported in today’s Wall Street Journal that, “Soybean futures fell sharply on Tuesday as China considered possible price controls on food among other steps to control inflation.”

The Journal article explained that, “Soybeans futures settled 5.2% lower at $12.1975 a bushel, while corn futures also ended down 5.2% at $5.265 a bushel. Both pared losses after hitting those trading limits.

“Commodity prices have suffered wild swings in recent days as market participants weigh China’s growth prospects against the possibility that government measures to temper inflation may hit demand for raw materials. Agricultural commodities have rallied in recent weeks on strong U.S. export sales to China. In addition to soybeans, prices for crude oil and copper—also both influenced by China’s demand—were also hard-hit on Tuesday.

“Global agricultural markets are increasingly tied to Chinese demand.”

Meanwhile, Kathleen Masterson reported recently on NPR (“For Farmers, High Grain Prices a Welcome Surprise”) that, “The price of meat is where we’re just beginning to see the consumer impact of a recent boom in the agriculture sector. Crop prices hit record highs in 2007 and 2008, and they have spiked again this fall.

“After a wet summer and fears that both yields and prices might plunge, the boom has been a welcome surprise for farmers. Many are acting now to lock in current high prices — because who knows what the volatile commodity markets will do next year.”

Keith Good

Posted by Keith Good • November, 17, 2010 • 4:52 am