FarmPolicy

October 23, 2014

Budget (Farm Bill); Ag Economy; Regulations; Trade; Biofuels; and Immigration

Budget: Political Background

Paul Kane reported in today’s Washington Post that, “Congressional leaders in both parties agree they have to stop putting off the inevitable and reach a deal to fund the federal government through September, the end of the fiscal year.

“Washington is limping along on stopgap funds that expire April 8, the sixth short-term extension in the past 5.5 months. Neither side wants to pass another one. The extensions are a hassle to negotiate, with the two parties bickering over spending cuts for little benefit.

“But there is one big obstacle in the way of a long-term deal, one that goes beyond the arguments over dollars and cents. The budget proposal the House Republican majority approved this year included a number of unrelated amendments — riders, in Congress-speak — that would impose restrictions on federal agencies.”

Today’s article explained that, “[One rider] would curtail the Environmental Protection Agency’s ability to monitor air and water, and restrict the use of funds to inspect coal mines.

For Democrats, these riders are deal-breakers, and they are the ideological fault line in talks taking place this week….House Speaker John A. Boehner (R-Ohio), however, has delivered a much different message to Senate Majority Leader Harry M. Reid (D-Nev.) and the Obama administration. ‘A bill without any riders cannot pass the House,’ a senior House GOP aide said, requesting anonymity to discuss Boehner’s internal deliberations.”

The Post item noted that, “Boehner now thinks that if he cuts a funding deal for the remainder of 2011 that does not include any of the policy riders, the freshmen would lead a Republican revolt, according to senior GOP aides.”

Meanwhile, Janet Hook reported in today’s Wall Street Journal that, “Boehner spokesman Michael Steel said the House speaker ‘believes an increase in the debt ceiling cannot and should not pass without spending cuts and reforms so that we can keep cutting spending.’  Mr. Steel said that Republicans will have to keep reminding their allies that the GOP’s power in Washington remains limited. ‘Washington, D.C., is still controlled by Democrats, and congressional Republicans are the only thing standing between the American people and more ‘stimulus’ spending, more bailouts, and more big government takeovers,’ Mr. Steel said.”

Lori Montgomery reported in today’s Washington Post that, “With momentum building to rein in record budget deficits, Democrats are sharply divided over whether to tackle popular but increasingly expensive safety-net programs for the elderly, particularly Social Security.

“A growing number of Democratic lawmakers say they are willing to consider controversial measures such as raising the retirement age and reducing benefits for wealthier seniors as part of a compromise with Republicans to cut spending on the programs and stabilize them for future generations.

“But senior lawmakers such as Senate Majority Leader Harry M. Reid (Nev.) and Sen. Charles E. Schumer (N.Y.) are lining up against them, arguing that tampering with Social Security would harm the elderly — as well as the political fortunes of Democrats hoping to maintain control of the White House and the Senate in 2012.”

Today’s article added that, “Meanwhile, Third Way, the centrist Democratic think tank, plans to release a memo Friday arguing that the deficit has emerged as an uncommonly powerful political issue and that 2012 voters will reward the party that takes bold action to restrain government spending — including overhauling Social Security, Medicare and Medicaid.”

And in a joint article posted yesterday at Politico, ten ex-chairs of the president’s Council of Economic Advisers indicated that, “Repeated battles over the 2011 budget are taking attention from a more dire problem—the long-run budget deficit.

“Divided government is no excuse for inaction. The bipartisan National Commission on Fiscal Responsibility and Reform, under co-chairmen Erskine Bowles and Alan Simpson, issued a report on the problem in December supported by 11 Democrats and Republicans — a clear majority of the panel’s 18 members.

“As former chairmen and chairwomen of the Council of Economic Advisers, who have served in Republican and Democratic administrations, we urge that the Bowles-Simpson report, ‘The Moment of Truth,’ be the starting point of an active legislative process that involves intense negotiations between both parties.”

(Recall that the Commission’s report would reduce overall agricultural spending by $1 billion annually).

 

Budget: Agricultural Programs- Nutrition and Foreign Aid

With respect to the budget and agricultural programs, The New York Times editorial board opined today that, “Food stamps [SNAP benefits] are part of the social safety net, but they work more as the ultimate ground-level crutch for Americans staggering against poverty. During the recession, food stamps were an important factor in helping an estimated 4.5 million Americans stave off the official poverty (no more than $21,756 annually for a family of four) that engulfed nearly 16 percent of the nation. The stamps are win-win: $9 in fast economic stimulus for every $5 spent on food for a hungry family.

“Sad wonder, then, that cuts in food stamps are the latest proposal heading for the House Republicans’ budgetary chopping block.”

The Times noted that, “Even last year, when the Democrats controlled the House, the political vulnerability of food stamps was clear as sleazy budget deals were attempted to tap the program to protect farm subsidies and other power blocks. Now the threat is worse as Republicans wildly estimate that they could save $1.4 trillion across a decade in cutting the full array of welfare programs — yet still help down-and-out families.”

In a related article on food domestic food needs, Annie Gowen reported last night at the Washington Post Online that, “More than 400,000 Washington area residents experienced periods of hunger and empty cupboards during the recession, including tens of thousands living in some of the country’s most affluent counties, according to a new study released Thursday.”

Ms. Gowen noted that, “Nationally, the study showed that 16.6 percent of Americans experienced ‘food insecurity’ — the feeling of not knowing where one’s next meal is coming from — during 2009. About a third of them made too much money to qualify for food stamps or other assistance.”

Meanwhile, Washington Post columnist Michael Gerson indicated in a recent opinion item that, “In Malawi, five years of good rains and government subsidies for seed and fertilizer have successfully beaten back hunger, at least for now. Malawi’s isolation from world markets — a problem when it comes to trade — has made it relatively immune to global food price increases. But the promotion of agriculture — funding research on improved hybrids, training local companies in seed production, providing extension services to farmers — is among the best examples of long-term, bootstrap development. It is the kind of foreign assistance that encourages enterprise and independence, and that avoids the need for emergency famine relief.

Yet agricultural aid programs have been dramatically defunded in the past few decades — unfashionable in development circles and lost among other priorities. During the 1980s, a quarter of U.S. foreign assistance went to agriculture. Today the proportion is about 1 percent. Most of Malawi’s agricultural scientists were educated by the U.S. Agency for International Development. But that training has been largely abandoned, leaving few to replace a retiring generation.”

Mr. Gerson pointed out that, “The Obama administration has tried to address this imbalance, announcing Feed the Future in 2009. This program would eventually scale up agricultural efforts in about 10 target countries, supporting responsible governments such as Malawi’s that adopt effective policies on income generation and child nutrition.

“Feed the Future is innovative — and besieged. The Senate budget proposal is likely to fund six or seven countries, leaving some possibility that Malawi will make the cut. The House budget would limit that number to two or three nations, leaving Malawi with no hope of participation. Part of the blame falls to the administration itself, which has given Feed the Future little public emphasis and developed few congressional advocates. Nearly two years after its announcement, the program still lacks a coordinator. It is a good idea in need of champions.”

In more specific news related to the next Farm Bill, John Mulcahy reported earlier this week at The Daily Telegram Online (Adrian, Michigan) that, “U.S. Sen. Debbie Stabenow said Tuesday that Lenawee County has a ‘great stake’ in the upcoming Farm Bill due to it leading Michigan in total number of farms and in revenue from corn, soybeans and wheat.”

The article stated that, “The agriculture committee is beginning work on the 2012 farm bill, and the first official hearing for the bill will be April 9 at Michigan State University, Stabenow said.”

“Because of the budget deficit there will be pressure to cut direct payments to farmers, such as counter-cyclical payments that see farmers through years of low commodity prices, Stabenow said.

However, those programs are only a small part of the bill, she said. Most of the farm bill is for food and nutrition programs, she said.”

The article noted that, “There already have been about $14 billion worth of cuts to agricultural programs, Stabenow said.

Of that, $10 billion is from programs expiring over a five-year period ending in 2012, and $4 billion will be saved over 10 years beginning this year because of renegotiated standard crop insurance contracts, according to Stabenow press secretary Matt Williams.”

 

Agricultural Economy

Tom Polansek reported in today’s Wall Street Journal Online that, “Grain futures climbed as too much rain in some regions, and not enough in others, posed an early threat to the U.S. wheat and corn crops.

“Forecasts for dry weather fueled wheat prices. Meteorologists cut rainfall projections in the Plains region, a key growing area already struggling with dryness, pushing wheat futures 3.5% higher to $7.395 a bushel.

“The corn crop faces the opposite problem. Wet conditions are delaying early plantings in the Midwest, where corn is the dominant crop. Corn futures jumped 21.5 cents, or 3.2%, to $7.025 a bushel on the Chicago Board of Trade, the highest close since March 7.”

Meanwhile, Gregory Meyer reported yesterday at the Financial Times Online that, “China is set to import the largest amount of corn in more than 15 years, according to US government analysts in Beijing, injecting new demand into a tight global market.

“The analysts project that China will import 2.5m tonnes of corn in the crop year that begins in September, making its third significant international purchase in three years.

If the projection is confirmed, the imports will be hitting the third-highest level in 50 years.”

The FT article pointed out that, “Many analysts said China, whose middle class is consuming more meat, will need to turn to foreign corn suppliers to feed livestock. China is already the world’s largest importer of soyabeans, also an animal feed ingredient.”

And Chuin-Wei Yap reported in today’s Wall Street Journal that, “China may not be able to meet sharply rising food demand from its domestic resources, a senior Chinese agriculture official said, indicating room for further growth in imports.”

 

Regulations: Greenhouse Gases- Senate

Sean Higgins of Investor’s Business Daily reported yesterday that, “Republicans and coal-state Democrats are fighting to stop the Environmental Protection Agency’s stream of greenhouse gas regulations, fearing the higher costs for business and consumers will hurt jobs and already-sluggish economic growth.

EPA critics think they are near a filibuster-proof majority for a bill through the Senate. Whether all 60 votes are for the same bill is another story.

“At the very least, Republicans hope to make this an issue in the 2012 elections.”

 

Regulations: Animal Agriculture

An update posted yesterday at Feedstuffs Online reported that, “The Association of California Egg Farmers (ACEF) has requested intervener status to join J.S. West & Co. in its lawsuit seeking clarification of the ballot initiative that was approved in 2008 regarding housing for egg-laying hens.

“West sued for clarification last year. The lawsuit was brought in the Fresno County Superior Court in Fresno, Cal., and named the state of California and The Humane Society of the United States (HSUS) as defendants.

“The lawsuit does not challenge the legality of the ballot initiative, which was listed on the ballot as Proposition 2, or ‘Prop 2.’ However, it requests that the court interpret the measure as to the amount of space and, therefore, kind of housing that will be required to be compliant with Prop 2.”

 

Trade

Reuters writer Doug Palmer reported yesterday that, “Countries remain far from a deal in long-running world trade talks that world leaders have urged negotiators to complete this year, U.S. trade officials said on Thursday.

“‘We share with other members a significant concern that the Doha negotiations have not made the progress we had all hoped they would achieve by now,’ Michael Punke, the U.S. ambassador to the World Trade Organization, said in a statement.”

 

Biofuels

Kris Bevill reported earlier this week at Ethanol Producer Magazine Online that, “A coalition of small engine groups representing boaters, motorcyclists, snowmobilers and outdoor power equipment manufacturers, petitioned the U.S. EPA on March 23 seeking a mandate to ensure the continued availability of E10 at retail stations. The groups are concerned that once E15 is allowed to enter the marketplace retailers, will choose to sell that blend instead of E10, leaving consumers no option but to misfuel their small engines with E15.”

 

Immigration

Cameron McWhirter and Jennifer Levitz reported in today’s Wall Street Journal that, “Arizona-style immigration bills are under attack in several states, with some of the strongest opposition to the proposals coming from agricultural interests like the cotton and peach farmers here in central Georgia.

“Farmers in states from Florida to Indiana are pressuring—and in some cases persuading—state politicians to rethink proposed legislation that would authorize crackdowns on illegal immigration. They argue that the legislation will drive Mexican workers out of their states, and that there aren’t enough American workers willing to pick crops. They want legislation at the federal level, which wouldn’t favor one state over another.”

Keith Good

 

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