FarmPolicy

February 23, 2019

Farm Bill (Debt Commission); Food Safety; Nutrition; Biofuels; Ag Economy; and EPA Issues

Farm Bill (Debt Commission)

AP writers Andrew Taylor and Tom Raum reported today that, “A painful package of spending cuts and tax increases drew sharp challenges from both the left and right on President Barack Obama’s deficit commission Wednesday, putting approval in doubt. However, both parties’ Senate budget point men embraced the plan, and even opponents called it a starting point for efforts next year to control the nation’s ballooning debt.”

“The 18-member bipartisan commission scheduled a vote on the plan for Friday. But as Wednesday’s meeting demonstrated, the co-chairmen, Democrat Erskine Bowles and Republican Alan Simpson, face a difficult chore in rounding up the 14 votes needed to officially send the plan to Congress for consideration.”

The AP article added that, “[Senate Budget Committee Chairman Kent Conrad (D-ND)] said there were ‘things in this plan that I dislike intensely.’ Yet, he said he was prepared to support it ‘and support it strongly. I don’t see another alternative.’”

(Note: To listen to remarks on the debt commission outline from Sen. Conrad, who is also a senior member of the Agriculture Committee, just click here (MP3- 4:24), and a press release on this issue yesterday from Sen. Conrad is available here).

Today’s AP article pointed out that, “Proposed cuts in payments to hospitals that serve more Medicaid patients were dropped, while cuts to agriculture subsidies were scaled back sharply to attract the vote of Conrad.”

Damian Paletta and Jonathan Weisman reported in today’s Wall Street Journal that, “Obama administration officials said they would harvest many of the commission’s ideas as the president assembles a budget plan for 2012. They pointed to cuts in defense spending, limiting tax deductions and a broad overhaul of Social Security as areas to pursue. Rep. Paul Ryan (R., Wis.), a commission member and the incoming House leadership’s point man on deficit reduction, said he would use many of the commission’s proposals as a starting point for a Republican plan.”

Reuters writer Charles Abbott reported yesterday that, “U.S. farm supports would be cut 10 percent under a proposal made on Wednesday by a presidential panel on balancing the budget, but the plan would not force idled cropland back into production.”

The article explained that, “Their plan called for a net cut of $10 billion through 2020 in Agriculture Department spending, chiefly in crop subsidy and land stewardship programs. The average cut of $1.25 billion a year equals 10 percent of annual farm spending.

While the end result would be a $10 billion cut, the commission said its initial target was a cut of $15 billion, with $5 billion reserved to extend the life of a disaster relief fund.”

Mr. Abbott pointed out that, “The Conservation Reserve, which pays landowners to idle 32 million acres of farm land, was not cited for cuts. Two other land stewardship programs, the Conservation Stewardship Program and the Environmental Quality Incentive Program, were listed.

“The commission also suggested ‘reductions in direct payments when prices exceed the cost of production or other reductions in subsidies’ along with smaller funding for an export promotion program.”

The agriculture provisions are highlighted on page 40 of the report.

Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “ “Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, said the proposed cut would amount to about 6 percent in all agricultural spending when crop insurance is included. ‘I expect we would find ag could live with a 6 percent reduction in spending if everybody else is living with a 6 percent reduction. However, we will NOT be willing to give more than our fair share,’ she said in an email.

“Congress already faces a tough budget situation when it goes to write the next farm bill, given that dozens of programs, including the disaster program, have no funding after 2012.

Agriculture Secretary Tom Vilsack said agricultural spending already is being reduced through cuts that his department made to crop insurance this year. Those cuts would reduce the federal deficit by $4 billion. ‘USDA didn’t have to wait for the deficit commission. We stepped up and we stepped up in a significant way,’ Vilsack told reporters on a conference call today. He pledged to ‘make sure that whatever happens we’ll have an adequate safety net for America’s farm families, ranch families and growers.’”

Meanwhile, a news release yesterday from Rep. Ron Kind (D-Wis.) stated that, “[Rep. Kind] today with a bipartisan group of his colleagues sent a letter to House Agriculture Committee Chairman Collin Peterson and Ranking Member Frank Lucas encouraging the committee to move forward with the reauthorization of the farm bill in 2011.

“‘We cannot wait to reauthorize the farm bill, it is essential to getting our deficit under control,’ said Rep. Kind. ‘We must reform the wasteful subsidies going to very few but large agribusinesses. They are not fair to the American taxpayer and not fair to family farmers.’

“The ongoing Brazilian cotton dispute, in which America provides millions in assistance to Brazilian agribusiness, the widespread recognition of inefficient and wasteful spending within American farm programs, as well as the affect this spending has on the deficit, prompted Rep. Kind and his colleagues to push for movement on the bill in 2011 rather than delaying action until 2012.”

And Former House Ag Committee Chairman Larry Combest indicated in an opinion item posted recently at the Delta Farm Press Online that, “Another similarity between then and now is this: prior to the GOP landslide of 1994, the Democratic caucus was heavily rural but, afterward, it was the Republican conference that was dominated by members representing rural districts. Today, these rural districts give Democrats their majority in Congress. On Nov. 2, rural residents once again decided the outcome of the election.

“Yet, some of the same groups that helped Democrats wrap their political car around a tree on Nov. 2 are now hoping to ride shotgun with Republicans. Their contention is that the 2008 farm bill could not politically insulate Democratic members who voted for cap and tax, health care reform, the stimulus and other unpopular legislative initiatives. So, cowboy up and pull the rug out from underneath American agriculture by upending farm policy.”

Mr. Combest noted that, “In view of all this, my unsolicited advice to rural members of Congress remains unchanged from the days that I served in the House, where I ranked among the most conservative of members. It is the same advice that 60 some people who currently serve in Congress but who will not be around next year might also offer. Sages in Washington may try to persuade you to do a lot of screwy things that hurt your own people.

Don’t do it. In the case of agriculture and farm policy, take my word on it: they matter to our economy, they matter to our culture because they have long been such a part of who we are, and they matter to our sense of respect and reverence for tradition, which in rural America does not go out of style.”

Food Safety

Lyndsey Layton reported in today’s Washington Post that, “A procedural problem is threatening to derail a landmark food safety measure passed by the Senate on Tuesday, sending congressional leaders scrambling to figure out a way to get the bill enacted into law by the end of the lame-duck session this month.”

The Post article noted that, “Several parliamentary maneuvers could get the bill back on track, but nearly all would require the Senate to take another vote on the bill. That is a challenging proposition given the Senate’s compressed agenda for the remaining four weeks, which includes passing a continuing resolution to fund the federal government and taking up a measure to extend the Bush-era tax cuts.

“Senate Republicans complicated that scenario Wednesday by sending a letter to Majority Leader Harry M. Reid (D-Nev.) in which they promised to block any legislation in the lame-duck session that does not extend tax cuts or fund the government.”

John Stanton reported yesterday at Roll Call Online that, “Sen. Tom Harkin said Wednesday that he hopes to put a derailed food safety bill back on track to final passage as soon as this week, despite a threat of a filibuster by Senate Republicans.

The Iowa Democrat said that he has spoken with Speaker Nancy Pelosi (Calif.) and other House Democratic leaders and that he hopes the chamber will pass a new version of the bill to send to the Senate before the end of the week.”

Mr. Stanton indicated that, “John Hart, a spokesman for [Sen. Tom Coburn (R-OK)], said he and other Republicans would continue to try to block the bill if it comes to the Senate. ‘Dr. Coburn supports a recall of the tainted food safety bill. He will not support passing the bill by unanimous consent, nor will any Republican,’ Hart said.”

Scott Wong noted yesterday at Politico that, “Sen. Tom Harkin (D-Iowa) remains optimistic that a procedural error wouldn’t derail the food-safety bill that cleared the Senate on Tuesday, saying ‘nothing is going to kill this bill.’”

Nutrition Bill

Abby Phillip, Jonathan Allen and Jennifer Haberkorn reported yesterday at Politico that, “House Republicans scuttled a pet bill of Michelle Obama, using a procedural gambit to knock her child nutrition bill off the House floor Wednesday.”

And the AP reported yesterday that, “House Democrats said the GOP amendment, which would have required background checks for child care workers, was an effort to kill the bill and delayed a final vote on the legislation rather than vote on the amendment.

Because the nutrition bill is identical to legislation passed by the Senate in August, passage would send it to the White House for President Barack Obama’s signature. If the bill were amended, it would be sent back to the Senate with little time left in the legislative session.

House Majority Leader Steny Hoyer, D-Md. said the House would hold separate votes on Thursday on the amendment and the bill.”

Rep. Rosa DeLauro (D-Conn.) spoke passionately about the Child Nutrition bill yesterday on the House floor, click here to listen to her forceful presentation (MP3- 5:18); in addition, Jim McGovern (D-Mass.) also spoke about the bill on the House floor yesterday, click here to listen to a portion of his remarks (MP3- 1:41).

Biofuels

Bloomberg writer Mario Parker reported yesterday that, “U.S. Senators Charles Grassley and Kent Conrad and 13 other lawmakers urged the government to extend incentives supporting the ethanol industry.”

Dow Jones news indicated yesterday that, “Among the lawmakers signing the letter are Sens. Chuck Grassley (R., Iowa), Kent Conrad (D., N.D.) and Debbie Stabenow (D., Mich.). All three senators are members of the Senate’s Finance Committee and Grassley serves as the ranking member of that panel.

“Debate over ethanol tax credits, known as the Volumetric Ethanol Excise Tax Credit, or VEETC, has been heating up in recent weeks. As the government tries to find ways to cut spending and raise revenue, the ethanol tax credit has become a symbol of Congress’ willingness to repeal financial incentives that are given to U.S. industries.”

Ag Economy

The Federal Reserve Board published its Beige Book of current economic conditions yesterday. With respect to the agricultural economy, the report included the following highlights:

Fifth District Richmond- “Results of our recent agricultural credit conditions survey indicated that income projections strengthened somewhat as a result of continued higher commodity prices and stronger demand.”

Sixth District Atlanta- “Strong global demand and tight supplies have particularly boosted soybean and cotton prices, recently reaching historic highs.”

Seventh District Chicago- “Prices for corn, soybeans, milk, hogs, and cattle were all above the levels of a year ago, particularly so for corn. Even with higher feed costs, margins for livestock producers remained positive.”

Tenth District Kansas City- “Crop prices continued their steady climb through the fall harvest, boosting incomes for crop farmers but raising feed costs for livestock producers. Farmland values and cash rental rates strengthened further with higher farm incomes and robust demand for good quality farmland from both farmers and non-farm investors. Farm operators also increased spending on farm equipment and grain storage bins. Demand for farm operating loans was steady, and agricultural bankers reported ample funds were available for qualified borrowers at historically low interest rates.”

Eleventh District Dallas- “Higher grain prices boosted margins for farmers but increased feed costs for livestock producers. Cotton prices were at record-high levels, and estimates for Texas cotton production put this year’s crop near historic highs for the state. Demand for agricultural products remained strong, with particularly robust export demand for cotton and beef.”

Pat Hill reported yesterday at the DTN Market Matters Blog that, “The mood among U.S. agribusiness leaders is positive, according to the year-end reading of the DTN/The Progressive Farmer Agribusiness Index.

“Released this morning, the index is at 120, up from 100 in the pre-harvest index in August.”

In a separate update at the DTN Blog yesterday, Ms. Hill pointed out that, “Strong ag income and farmer spending bolstered the economic outlook in the nine states of the Mid-America Business Conditions Index.

“The November index, released early this morning, advanced to 55.9, up from 52.3 in October, on a 100-point scale.”

Meanwhile, Sameer Mohindru reported today at The Wall Street Journal Online that, “[A]nalysts said prices of many global grains, already near two-year highs, are likely to rise further next year following a large draw-down in inventories, continuing poor weather and competition among major crops for limited acreage.

“This could complicate choices for policy makers, particularly those in fast-growing emerging markets, as they struggle to rein in inflation without hurting a fledgling global economic recovery.

“The United Nations’ Food and Agriculture Organization on Wednesday said its Food Price Index rose 3.7% to 205.44 points in November—the fifth straight monthly increase—taking the index to a 28-month high that is just eight points below the all-time peak in June 2008.”

EPA Issues

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “One of the toughest fights in next year’s Congress will concern the extent to which the administration succeeds in continuing to impose limits on greenhouse gas emissions. Earlier this week, Environmental Protection Agency Administrator Lisa Jackson told a conference that her agency will continue to develop and impose GHG limits unless Congress intervenes.

“‘We’re going to use the Clean Air Act as we were ordered to do by the U.S. Supreme Court,’ Jackson said, speaking at an event sponsored by the Aspen Institute marking the 40th anniversary of EPA’s founding. She defended EPA’s actions as ‘sensible, common-sense, step-wise, in many cases moderate rules that together add up to measurable reductions in greenhouse gas emissions.’”

Robin Bravender reported yesterday at Politico that, “GOP lawmakers say they want to upend a host of Environmental Protection Agency rules by whatever means possible, including the Congressional Review Act, a rarely used legislative tool that allows Congress to essentially veto recently completed agency regulations.”

“‘We’re not going to let EPA regulate what they’ve been unable to legislate. And if I’m chairman, we’re going to have a very aggressive, proactive schedule,’ Rep. Fred Upton (R-Mich.), the likely incoming chairman of the Energy and Commerce Committee, told POLITICO.”

And Juliet Eilperin reported in today’s Washington Post that, “Opponents have praised [Administrator] Jackson for her personal style: Sen. James M. Inhofe (R-Okla.) calls her ‘my favorite bureaucrat,’ and she keeps a photo of the senator and his family in her office. But Inhofe is ready to do battle next year on a range of regulations, and several industry officials note that her friendliness and accessibility have not translated into policy outcomes they can embrace.”

Also, Administrator Jackson penned an Op-Ed in today’s Wall Street Journal, where she noted in part that, “Last month’s elections were not a vote for dirtier air or more pollution in our water.”

Keith Good

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