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Farm Bill; EPA Issues; Biofuels; and the Agricultural Economy

Farm Bill

Joseph Weber reported earlier this week at The Washington Times Online that, “The anti-spending crusade of Capitol Hill’s resurgent Republicans could find itself with a tough row to hoe down on the farm.

“Republicans now controlling the House have wasted no time advertising their determination to rein in federal spending, cutting their own legislative budget on the second day of the 112th Congress. But the dozens of new GOP lawmakers — many hailing from rural districts — could face a more difficult choice considering cuts in the successor to the current five-year, $288 billion farm bill that expires just weeks before the 2012 elections.

“Economists, farming lobbies and policy analysts predict that cuts to the bill’s nutrition programs, such as food stamps, will be largely spared during this prolonged economic downturn, despite an annual price tag of $89 billion. The more likely target is the remaining 25 percent of the bill’s budget, which includes $5 billion in direct, annual subsidies to farmers who grow favored commodities such as corn, wheat and peanuts.”

The article added that, “‘The main bull’s-eye is on the $5 billion in direct commodity payments,’ Joe Outlaw, an economist and co-director of Texas A&M University’s Agricultural and Food Policy Center, said during a conference last month in Texas.

“Analysts and lawmakers say the debates on Capitol Hill next year and beyond will focus on moving farmers from those direct payments to revenue-insurance programs, a transition the Obama administration backs.

“But Rep. Frank D. Lucas, who will play a key role in the debate as the new chairman of the House Agriculture Committee, strongly supports the current payments, which he considers vital to the livelihoods of farmers and ranchers.”

Mr. Weber indicated that, “The upcoming farm debate could very well prove a flash point within the expanded GOP caucus. An Associated Press survey late last year found that the families of a number of prominent GOP members, including outspoken conservative Rep. Michele Bachmann of Minnesota and such high-profile freshman as South Dakota Rep. Kristi Noem and Tennessee’s Rep. Stephen Fincher, have received federal crop- subsidy payments in the past.”

“But the list of House Republicans who voted against the 2008 farm bill includes new Speaker John A. Boehner, new Majority Leader Eric Cantor of Virginia, new House Majority Whip Kevin McCarthy of California and new [Budget Committee] Chairman Paul D. Ryan of Wisconsin. Sen. John McCain of Arizona, the GOP’s presidential standard-bearer that year, also opposed the bill.”

On the budget issue, Andy Eubank reported earlier this week at Hoosier Ag Today Online that, “Along with concerns about the cost of regulation, the debate over the 2012 farm bill is a top priority at this year’s AFBF annual meeting in Atlanta. Georgia Senator Saxby Chambliss spoke Sunday morning. Because of the severe budget and deficit issues facing lawmakers, the ranking Republican on the Senate Ag Committee said it would be the most difficult farm bill that we’ve ever had to write.

“‘But the good news is, when we look at American agriculture today, it’s as healthy as it’s ever been in my lifetime,’ Chambliss told members of the nation’s largest farm organization. ‘And that’s due certainly to in some small part policy, but from an overwhelming standpoint it’s due to what you do, and your family and your farmer friends around the country do every single day.’”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Senate Agriculture Committee Ranking Member Saxby Chambliss welcomed American Farm Bureau Federation members to a colder-than-expected Georgia by noting that Congress is going to have to do more with less in crafting the next farm bill.

“‘It’s going to be the toughest farm bill we’ve ever produced,’ said Chambliss, a Republican who worked on farm bills while serving in both the House and Senate.”

Mr. Clayton added that, “Chambiss said incoming Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., will likely emphasize expansion programs in specialty crops and organics that she worked on in the 2008 farm bill. Chambliss said the Agriculture Committee ‘will continue to work in a bipartisan way for a safety net’ for farmers. Still, Chambliss said lawmakers realize they will have to work with fewer dollars than in 2008.

“‘We know that the current baseline is going to be reduced if nothing else because of the hit we took on crop insurance,’ Chambliss said.”

Yesterday’s DTN article noted that, “‘That’s already a price agriculture is paying to try to reduce the deficit,’ Chambliss said. ‘I expect there will be additional shots taken at us. You know, we’ve always been willing to step up, whether it’s in a reconciliation process or whatever to try to pay our fair share in reductions in spending and we’re going to continue to do that. But we’re only going to be willing to do what’s fair and appropriate for agriculture compared to other agencies around Washington and we’re not going to let there be an undue burden be put on farmers because of excess reductions of spending in agriculture.’

“While Agriculture Secretary Tom Vilsack has highlighted the budget cuts agriculture has taken from the crop-insurance agreement, Chambliss said he wants to see whether the administration gives USDA any credit for those cuts in President Barack Obama’s budget for fiscal-year 2012.

“‘That’s going to be a real key in what will happen in the Senate side and the House side from a budget standpoint,’ he said.”

Also on the budget issue, Ron Hays reported on Friday at the Oklahoma Farm Report Online that, “Former Iowa Congressman Jim Nussle says the fiscal picture for our country and our government is dire- and will force hard decisions to be made in the next couple of years. Nussle told the Case IH Business Meeting at AgConnect 2011 that the upcoming vote on the debt ceiling in March or April would be huge political theatre as new members of Congress balk at doing things the ways we have always done them before.

The pressure will extend over to the next farm bill debate– saying he thinks that doing farm policy by tweaking the previous farm bill is no longer an option. He says that both Oklahoma Congressman Frank Lucas as well as Michigan Senator Debbie Stabenow will have to get creative in writing the farm bill– mostly because of the lack of money in this cycle compared to either 2008 or 2002.”

Click here to listen to the complete interview with Jim Nussle.

Meanwhile, Kevin Hassett indicated in a Bloomberg column over the weekend that, “Farm-state lawmakers in both parties, using the Agriculture Committee as their base, have long beaten back efforts to slash direct payments to growers. So why might now be different? Because of the unprecedented power that [House Speaker John Boehner] is investing in [Paul Ryan] and the Budget Committee.

“This doesn’t mean America’s farmers have to be left to fend for themselves.”

Mr. Hassett noted that, “Canada has experimented with a program that provides government matching funds for farmers’ deposits into savings accounts that help them buffer their incomes against the ups and downs of farm prices. Such a program in the U.S. could achieve the objective of helping family farmers survive while enabling policy makers to withdraw billions of subsidies to big agriculture.

These changes, plus closing the U.S. Agriculture Department’s Foreign Agricultural Service, would save about $19.5 billion. Not a bad start.”

And in more specific reporting on direct payments, Ken Anderson reported yesterday at Brownfield that, “Iowa Farm Bureau is one of the state groups saying it’s time to do away with direct payments in favor of a stronger safety net for agriculture.

“‘What we’ve said from the Iowa Farm Bureau is that we need to look at direct payments in a different way,’ says Iowa Farm Bureau president Craig Lang. ‘Not taking away from the support from USDA or the U.S. government to farmers and ranchers—but can we use the direct payments in a way that give us what we feel is a safety net though protecting our crops.’”

The Brownfield item noted that, “And Iowa Farm Bureau will propose adding livestock to that safety net, as well.

“‘We have some language on Tuesday we’re going to add to bring livestock to that,’ Lang says, ‘but we really think it’s time to look at the direct payments—that’s a baseline of five-billion dollars a year that can be utilized in a way to protect revenues sources for both livestock and crops.’”

Click here (MP3- one minute) to listen to a portion of the Brownfield interview with Iowa Farm Bureau president Craig Lang.

In a podcast from yesterday, Ron Hays of the Oklahoma Farm Report interviewed American Farm Bureau Federation president Bob Stallman. Part of their conversation focused on the timing of the 2012 Farm Bill debate, as well as issues associated with educating new Members of Congress about agricultural issues. To listen to a portion of that discussion from yesterday, just click here, (MP3- 2:32).

Bob Stallman was also a guest on yesterday’s AgriTalk Radio program with Mike Adams were, in part, the two discussed potential budget impacts on the 2012 Farm Bill. To listen to a portion of that conversation, just click here, (MP3- 1:50).

With respect to the executive branch, Daniel Looker reported yesterday at Agriculture Online that, “Agriculture Secretary Tom Vilsack braved a rare Atlanta snow and ice storm Monday to thank members of the American Farm Bureau Federation for what they do as farmers and ranchers and pledged to continue promoting U.S. ag exports and fiscally conservative farm policies.”

Mr. Looker noted that, “Vilsack said that he and his staff have been working hard to increase exports of U.S. commodities and will continue to do so. Jim Miller, Under Secretary of Agriculture for Farm and Foreign Agricultural Services, is currently in China working to remove barriers to U.S. beef exports, he said.

“The Obama Administration is expected to soon submit a free trade agreement with Korea to Congress for ratification.”

A Farm Bureau news release from yesterday indicated that, “Looking ahead to the 2012 farm bill, Vilsack cautioned that lawmakers will have to be creative with limited resources, but the safety net critical to so many producers will be preserved.”

And an update posted yesterday at KTVQ Online (Billings, Montana) reported that, “Senator Jon Tester [D-Montana] was in Billings Monday where he hosted a listening session with area agriculture producers and advocates seeking their input on the 2012 Farm Bill and the recently passed Food Safety Modernization Act.”

“The conversation focused on broad issues that affect Montana’s small producers including competition reform, commodities programs, trade agreements, crop insurance, and genetically engineered crops.”

Environmental Protection Agency (EPA) Issues

Associated Press writer Mark Scolforo reported yesterday that, “Two farmers’ organizations sued the federal government Monday over a Chesapeake Bay clean-up plan, challenging the legality of its pollution standards and asking a judge to keep them from being enforced or applied.

“The American Farm Bureau Federation and the Pennsylvania Farm Bureau said in the complaint against the U.S. Environmental Protection Agency, filed in federal court in Harrisburg, that there are numerous flaws in recently enacted standards to reduce the flow of pollutants and sediments that have harmed the bay and its wildlife.

“The lawsuit claims the EPA lacks authority to allocate limits on levels of nitrogen, phosphorus and sediment, the standards are based on erroneous information, the agency used flawed computer models and the public did not have an adequate opportunity to weigh in.”

In his appearance on AgriTalk yesterday with Mike Adams, Bob Stallman also discussed environmental issues and agriculture, to listen to a portion of that discussion from yesterday, just click here, (MP3- 2:21).


Reuters news reported yesterday that, “Senators John McCain and John Barrasso said on Monday the extension of U.S. ethanol subsidies and a tariff on imports is likely illegal under international trade rules, lending some support to Brazil’s opposition to U.S. ethanol policy.

“‘I believe the WTO would rule against the United States because it’s clearly a subsidy that is neither warranted nor in keeping with WTO regulations,’ Senator McCain of Arizona told reporters after a meeting with Brazilian President Dilma Rousseff in Brasilia.

“In December, the U.S. government extended through end-2011 a 54-cent-per-gallon import tariff on ethanol as well as a 45-cent-per-gallon subsidy for blenders worth up to $6 billion.”

Ag Economy

Tom Polansek reported in today’s Wall Street Journal that, “Corn futures surged as a heat wave threatened Argentina, raising expectations U.S. government forecasters will cut their crop estimate for the South American country later this week.”

“Corn for March delivery settled up 12 cents, or 2%, at $6.07 a bushel at the Chicago Board of Trade,” the Journal article said.

Reuters writer Nigel Hunt reported yesterday that, “Rising food prices are stoking global inflation with many agricultural commodity markets driven higher by bad weather in key producing countries, a senior trader at JP Morgan said Monday.”

The article added that, “High food prices have moved to the top of policymakers’ agendas because of worries about the impact on inflation, protectionism and unrest.” (Note: See this recent picture from Algeria on Friday- authorities tried to quell unrest over rising food prices).

And Chris Clayton reported yesterday at DTN (link requires subscription) that, “U.S. acreage of major crops may need to increase about 10 million acres this spring to handle the higher demand for commodities, the chairman of USDA’s World Agricultural Outlook Board said Monday.

“Effectively, corn needs more than last year’s 88.2 million acres, but prices for crops such as soybeans and cotton are going to make it harder than in the past for corn to take those acres, said WAOB Chairman Gerald Bange.

“Bange presented a 2011 crops outlook to American Farm Bureau Federation members Monday at the AFBF’s annual meeting. Bange cautioned, however, that he was being careful not to offer any new numbers, as the board releases its monthly World Agricultural Supply and Demand Estimate on Wednesday.”

Keith Good