FarmPolicy

November 12, 2019

Farm Bill; Political Notes; EPA Issues; Trade; and the Agricultural Economy

Farm Bill: Direct Payments

Reuters writer Charles Abbott reported yesterday that, “A direct payment subsidy that guarantees farmers $5 billion a year is the most prominent target in agriculture’s complex web of subsidies as budget-cutting Republicans flex their new legislative muscle in the House of Representatives.

Created in 1996, the subsidy is a point of dispute in farm country. Some farm groups want Congress to eliminate direct payments as part of an overhaul of farm policy due next year while others would keep it.

“The new Republican majority says it will unveil in coming weeks how it will cut spending by $60 billion this year. House Budget Committee chairman Paul Ryan says cuts of more than $100 billion would be made in 2012.”

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Farm Bill; Political Notes; Ag Economy; Trade; Biofuels; and Climate Issues

Farm Bill: Crop Insurance

AP writer Steve Karnowski reported yesterday that, “The federal government proposed Thursday to reward farmers who use crop insurance and demonstrate good management practices that limit their losses.

“The awards under the Good Performance Refund plan would average about $1,000 per eligible farmer, and payments would go out in the first quarter, in time to help with spring planting, said William Murphy, administrator of the U.S. Department of Agriculture’s Risk Management Agency. More than 67,000 farmers would be eligible, he said.

The plan will cost about $75 million, but the Federal Crop Insurance Corporation said the benefits will outweigh the costs by promoting sound farming practices that reduce losses, discouraging the filing of small claims and encouraging producers to keep using crop insurance. The agency also said the savings may allow for decreases in future premium rates, reducing costs to farmers and taxpayers who subsidize the federal crop insurance program.”

The AP article added that, “Draft regulations for the program were published in the Federal Register on Thursday. The public comment period ends Jan. 21. Murphy said his agency hopes to issue the final rule in mid-February and send out the checks shortly after that.”

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Ag Economy; Political Notes (Farm Bill); Climate; Animal Agriculture; and Sec. Vilsack

Ag Economy: Global Food Prices, Domestic Land Values; and Farm Income

Alex MacDonald and Liam Pleven reported in today’s Wall Street Journal that, “A prominent indicator of international food prices hit a record high in December, sounding a warning about looming threats to the world’s poor and to global growth.

“The United Nations Food and Agriculture Organization’s monthly food price index rose for the sixth consecutive month to 214.7, topping the previous peak, 213.5, reached in June 2008.

“The index doesn’t measure domestic retail prices, which can be affected by a wide range of factors, including government subsidies. Instead, the index tracks export prices and can still serve as a barometer of what consumers may pay.”

The Journal article pointed out that, “The prior record was set months after violent food riots struck several nations, an experience that is heightening concerns about potential consequences from the current rise.

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Farm Bill; Political Notes; Biofuels; Food Safety; and Climate

Farm Bill

Chris Clayton, writing yesterday at the DTN Ag Policy Blog, noted that the American Farm Bureau Federation (AFBF) is holding its annual meeting in Atlanta next week. He added that, “So Atlanta becomes the locale for the first farm-policy debate this year. Sen. Charles Grassley, R-Iowa, said the AFBF meeting would help set the tone for direction in where Congress may look to cut agricultural programs.

“‘The biggest farm organization is having their annual meeting next week and this is going to be a big debate in the American Farm Bureau Federation and I think that the outcome of that will kind of determine the extent to which direct payments will get a hit,’ Grassley said.

“He added that Sen. Pat Roberts, R-Kan., is expected to be named ranking member of the Senate Agriculture Committee. Roberts, as House chairman in the 1996 farm bill, was the father of direct payments. Roberts’ view will be a major factor in how direct payments are treated.”

Mr. Clayton pointed out that, “After $6 billion cut in the renegotiations with insurance companies, Grassley said he doesn’t see more cuts there.”

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Political Notes; Biofuels; Food Safety; and Climate Issues

Political Notes: Issues Stemming from the New Congress-

Potential Implications for the Farm Bill: Spending

Jackie Calmes reported in today’s New York Times that, “The incoming Republican majority in the House is moving to make good on its promise to cut $100 billion from domestic spending this year, a goal eagerly backed by conservatives but one carrying substantial political and economic risks.

“House Republican leaders are so far not specifying which programs would bear the brunt of budget cutting, only what would escape it: spending for the military, domestic security and veterans.”

[FarmPolicy.com Side Bar on Domestic Security and Farm Subsidies: GOP Representative-Elect Vicky Hartzler from Missouri, who will be serving on the House Agriculture Committee, has indicated that, “[S]ome agriculture programs represent a ‘national defense issue’ because they help guarantee that ‘we have a safety net to make sure we have food security in our country.’” An update at the Environmental Working Group’s Blog in November disputed the idea of linking farm subsidies to domestic security concerns.]

Ms. Calmes noted that, “The reductions that would be required in the remaining federal programs, including education and transportation, would be so deep — roughly 20 percent on average — that Senate Republicans have not joined the $100 billion pledge that House Republicans, led by the incoming speaker, Representative John A. Boehner, made to voters before November’s midterm elections.”

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Farm Bill; Ag Economy; Climate Issues; and Biotechnology

Farm Bill: Political Background

Patrick O’Connor and Janet Hook reported in today’s Wall Street Journal that, “The Republican majority that takes over the House this week plans an ambitious drive to slash government spending by tens of billions of dollars in the next few months, a strategy that ensures that the capital soon will be consumed by intense debate over how and where to reduce the size of government.”

Today’s article explained that, “Unlike its predecessors in the Republican Revolution of 1994, or among the Democrats who took charge of the House after the 2006 election, the new Republican majority doesn’t return to power with a long to-do list of legislative priorities. Instead, party members say they were elected with one big mandate: Cut spending. The details of that push will unfold in the weeks leading up to the March 4 deadline for Congress to fund the federal government and play out against a backdrop of mounting federal deficits.”

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