DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Kansas farmers and agribusiness people offered a unified theme Thursday that crop insurance provides the strongest safety net and deserves more protection from federal budget cuts than other farm-bill programs such as direct payments.
“A field hearing by the Senate Agriculture Committee in Wichita offered Chairwoman Debbie Stabenow, D-Mich., a chance to see drought’s effects on Kansas farmers and hear people involved in Kansas agriculture offer their thoughts on what the next farm bill should offer farmers and ranchers. A hotel ballroom was packed with more than 400 people from across the state for the hearing that lasted more than three hours.”
Mr. Clayton noted that, “With a joint 12-member committee in Congress tasked with cutting $1.2 trillion in spending over 10 years, the House and Senate Agriculture Committees are now tasked with recommending places to cut. That likely accelerates possible changes in the next farm bill and keeps the target on programs such as direct payments.
“‘Agriculture remains a target with this new super committee,’ Stabenow said. Shortly after, she added, ‘The bottom line is, I think it’s clear we in agriculture have to make some tough decisions or somebody else is going to make them.’”
(Note: To listen to extended remarks from Chairwoman Stabenow from yesterday’s hearing click on this FarmPolicy.com audio link (MP3- 2:30)).
Also her in opening statement, Chairwoman Stabenow pointed out that, “Let’s review the facts: the House of Representatives passed a bill earlier in the year that would have cut $48 billion from production agriculture’s baseline. That bill did not have the votes in the Senate.
“Then, Senator Roberts and I worked very hard and successfully to create a process where the Agriculture Committees can recommend the deficit reduction cuts and policies related to them. As a result, the deficit reduction agreement didn’t make any immediate cuts to Agriculture.”
In his opening statement yesterday, Committee Ranking Member Pat Roberts (R-Kansas) indicated that, “Yesterday I lead a drought tour to see firsthand the effects of Mother Nature. For months I have been working with the state and USDA to find ways to provide necessary and responsible relief for our farmers and ranchers.
“We know that our programs face budget pressure…and they should. The federal debt and deficit are out of control. All USDA programs should be under consideration in a budget review and the agriculture committees with the best experience and knowledge of those programs should lead in that effort.
“Agriculture faces a tough challenge ahead. Global population continues to grow at a rapid pace…exceeding 9 billion in the next several decades. That’s a lot of mouths to feed. At the same time, emerging economies are demanding higher value proteins and grains.”
(Note: To listen to extended remarks from Ranking Member Roberts from yesterday’s hearing click on this FarmPolicy.com audio link (MP3- 1:37)).
Yesterday’s DTN article by Chris Clayton pointed out that, “Steve Baccus, president of the Kansas Farm Bureau, said crop insurance cannot afford more cuts such as those made in the 2008 farm bill and the $6 billion cut over 10 years in the growth of crop-insurance expenses that was made last year. Baccus also defended the value of direct payments in providing stability for farmers facing disaster.”
“Yet, the Kansas Farm Bureau stated in written testimony, ‘If priorities must be declared, then a strong and viable crop insurance program will top our list.’”
Mr. Clayton added that, “While advocating for crop insurance, farmers said they worry about yield declines in actual production history, or APH, because of repeated claims, particularly in a major disaster. Further, dealing with shallow losses not covered under crop insurance is a problem.
“‘As your crop declines from these severe droughts and extended droughts in Texas and western Kansas and all over, those decline your insured acreage,’ said Ken McCauley, a farmer from White Cloud, Kan., and former president of the National Corn Growers.”
(Note: To listen to an extended Q & A between Chairwoman Stabenow and the second panel of witness from yesterday’s hearing, click on this FarmPolicy.com audio link (MP3- 5:53)).
Yesterday’s DTN article also stated that, “Roberts, who is considered by many as the father of direct payments, said before the hearing that everything is on the table in terms of cuts. Later in the hearing, he told farmers he understood the message lawmakers needed to heed when looking at places to protect in the farm bill. ‘We have heard crop insurance about 100 times. We get the message. I hope we can bring that message back to Washington.’”
The AP reported yesterday that, “Kansas farmers and rural leaders told the U.S. Senate committee drafting the new Farm Bill that the federal crop insurance program is critical to Kansas agriculture.”
The article pointed out that, “Direct payments, which pay producers for crops whether they have had a good year or a poor year, is not as effective for the taxpayer, said Jeff Whitham, chairman of Western State Bank in Garden City.
“‘From our perspective, the most effective is multi-peril crop insurance,’ he said.”
A news release yesterday from the National Association of Conservation Districts stated that, “Kansas farmer and conservationist Ronald Brown testified this morning at a field hearing held by the U.S. Senate Agriculture Committee in Wichita, Kan. The hearing focused on issues surrounding the 2012 Farm Bill. A lifelong resident of Fort Scott, Brown serves as president of the Kansas Association of Conservation Districts and on the Board of Directors for the National Association of Conservation Districts.
“Brown urged Congress to, at a minimum, maintain the mandatory conservation funding levels as agreed in the 2008 Farm Bill. He also called for full funding of technical assistance to help farmers, ranchers and landowners continue their critical role in protecting our nation’s air, water and soil.”
Rick Plumlee reported yesterday at The Wichita Eagle Online that, “Gov. Sam Brownback called on Congress to consider policies for the 2012 Farm bill that will benefit the Ogallala Aquifer, the main source of underground water for western Kansas farmers.
“Specifically, he wants to see programs that will encourage producers to conserve water without negative financial impacts.”
Additional reporting on yesterday’s hearing is also available at the DTN Ag Policy Blog where an update by Chris Clayton titled; “Senators on Appropriations, Research” is available.
July 28– Opportunities for Specialty Crops and Organics in the Farm Bill. FarmPolicy.com Summary:
A news release from the Senate Ag Committee yesterday indicated that, “Michigan Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today said that specialty crops and organics are bright spots in the nation’s economic future, but maintained that critical support for research and risk management will be key to continuing growth in the sectors.
“‘Specialty crop and organic growers are not only helping to supply healthy products to our schools, families and communities, but these farmers are also making a major contribution to the American economy,’ Chairwoman Stabenow said. ‘Sales of U.S. specialty crops top $60 billion annually, with nearly $2 billion of those sales coming from Michigan alone. Organic sales also continue to grow, reaching nearly $29 billion in 2010. We need to make sure these important producers are heard as the next Farm Bill is being written.’”
The release noted that, “Chairwoman Stabenow championed the development of the specialty crops title in the 2008 Farm Bill, providing specialty crop growers for the first time assistance with pest and disease prevention, organic research, and trade assistance for growers hurt by new trade deals.”
During her opening statement at yesterday’s hearing, Chairwoman Stabenow stated that, “As our panelists will tell us, producing specialty crops continues to be risky business. New and emerging pest and diseases continue to threaten the productivity of many farmers throughout the country and high input costs often mean tight margins and limited resources. Successful efforts like the Specialty Crop Block Grants and the Specialty Crop Research Initiative have been critical in helping producers manage these risks and expand opportunities.”
Committee Ranking Member Pat Roberts (R-Kansas) pointed out at yesterday’s hearing that, “My job is to make sure our growers are given adequate tools they can utilize to continue providing our families with safe, nutritious, and healthy foods, and they’re doing this under some of the most stringent government regulations with very tight profit margins,” said Roberts. “We need to look closely at all programs and determine whether they are generating the results we expected from the 2008 Farm Bill, and be very mindful of any duplication of efforts to ensure that we are using financial resources wisely.”
A variety of important issues were discussed at yesterday’s hearing; however, as the second panel of witnesses (which consisted of agricultural producers) testified, two topics of particular interest were highlighted: Planting flexibility issues for vegetable processing, and crop insurance issues.
During his opening remarks, Indiana farmer Glenn Abbett provided a general explanation of his farm and noted that, “I am here today on behalf of the American Fruit and Vegetable Processors and Growers Coalition (AFVPGC). We have come together to seek a modification of Federal law that restricts Midwestern farmers from growing fruits and vegetables on program acres” (audio– MP3- 2:16).
As background on this issue, see this brief article from USDA’s Economic Research Service (ERS), “Few Farms Participate in the Vegetable Planting Pilot Program,” (Amber Waves, March 2011), which explained that, “The 2008 Farm Act’s Planting Transferability Pilot Program (PTPP) allows program crop producers who participate in Federal commodity programs in seven Upper Midwestern States to plant selected vegetables destined for processing without violating Government payment contracts.” (The Amber Waves article was based on these ERS reports: “Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market,” and, “An Analysis of the Planting Transferability Pilot Program’s First Year, 2009.”)
Indiana GOP Sen. Richard Lugar discussed the planting flexibility issue in greater detail with Mr. Abbett, a portion of this discussion is available here (MP3- 4:40).
Meanwhile, Sen. Lugar issued a news release yesterday, which stated that, “Sen. Dick Lugar today re-introduced the Farming Flexibility Act of 2011 which would save taxpayer dollars, create Hoosier jobs and allow farmers more flexibility while limiting the role that government plays in the farming industry.
“‘Farmers are more profitable when they make their own planting decisions based on markets as opposed to government policy,’ Lugar said. ‘The Farming Flexibility Act of 2011 will reduce government’s role in American farming and reduce government spending by $8 million dollars over ten years while adding American jobs and supporting family farms. It is a valuable expansion of the Planting Transferability Pilot Program that was included in the 2008 Farm Bill, based on the proven benefits for American farmers, processors, and consumers.’”
Another important topic discussed at yesterday’s Senate hearing was crop insurance.
Michigan farmer Dennis Engelhard noted that specialty crop growers use crop insurance as a risk management tool, but that the program could be reviewed to protect specialty crops in the face of bad weather- audio (MP3- 0:25).
Chairwoman Stabenow brought up risk management programs at yesterday’s hearing and New York farmer Paul Bencal noted how crop insurance has worked with grapes and other specialty crops- audio (MP3- 1:21).
And Ranking Member Pat Roberts briefly pointed out yesterday that crop insurance has been cut by $12 billion in the last two Farm Bills– audio (MP3- 0:27).
July 14– Growing Jobs in Rural America. FarmPolicy.com Summary:
A news release yesterday from the Sen. Ag Committee stated that, “Michigan Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today said that bio-based manufacturing and energy efficiency efforts in rural areas will be key in creating jobs and growing the rural and national economy. Noting that 16 million Americans have jobs because of agriculture, Chairwoman Stabenow called the rural economy a bright spot and underscored the potential for a manufacturing boom in the bio-based sector – where innovators and entrepreneurs are processing American grown agriculture products for use in manufactured goods and displacing the need for foreign petroleum.”
Chairwoman Stabenow’s opening statement from yesterday’s hearing can be viewed here.
Illustrating the potential for growth and development in the biobased product sector, Dennis Hall, the Assistant Director at the Ohio BioProducts Innovation Center, provided an interesting overview of biobased products at yesterday’s hearing (related audio– MP3- 3:49).
During the discussion portion of yesterday’s hearing, Chairwoman Stabenow highlighted job creation issues in remarks with Bruce Graham, the CEO of Indiana Statewide Association of Rural Electric Cooperatives, Inc., and Zac Stewart, the Owner of Ambient, LLC- (audio clip– MP3- 3:21).
And South Dakota GOP Senator John Thune briefly highlighted budget and spending issues within the context of the next Farm Fill as it relates to program funding for research on biobased products at yesterday’s Ag Committee hearing (related audio– MP3- 1:09).
A news release yesterday from Sen. Bob Casey (D-PA) stated in part that, “I have supported the Farm Bill and other rural development programs, such as those that provide loans and loan guarantees to rural businesses to provide economic opportunities and create jobs. By increasing access to capital, we can help provide economic opportunities and create jobs.
“Rural manufacturing certainly has an important role to play in creating a strong economic base for rural towns. Manufacturing still accounts for 22 percent of total wage income in nonmetropolitan Pennsylvania compared with 17 percent in metropolitan Pennsylvania. Penn State research shows that for Pennsylvania’s rural counties, a higher degree of industry diversity and a better educated workforce contribute to lower rates of unemployment and underemployment.”
DTN Ag Policy Editor Chris Clayton reported yesterday that, “USDA’s chief economist found himself on the spot Tuesday trying to defend USDA’s controversial livestock marketing rule, which senators argued oversteps USDA’s authority and will cost the livestock industry dearly.
“Three major issues were raised repeatedly at a hearing on livestock held by the Senate Agriculture Committee: the USDA livestock marketing rule, ethanol subsidies and trade agreements.”
The article stated that, “Agriculture Committee Ranking Member Pat Roberts, R-Kan., set the tone early, lashing out at EPA and USDA for a regulatory attack on animal agriculture, particularly with the GIPSA rule. Roberts was the first of several senators to quiz [USDA Chief Economist Joe Glauber].
“‘The exact proposals in the proposed rule were debated in the 2008 farm bill and we rejected them all, in some cases by a very substantial vote margin,’ Roberts said. ‘So much for Congressional intent.’”
(FarmPolicy Note: An audio replay of a portion of this discussion between Sen. Roberts and Dr. Glauber is available here (MP3- 2:19). Also, in a second round of questioning later in yesterday’s hearing, Sen. Roberts elaborated on the scope of authority and Congressional intent in fostering the development of the GIPSA rule; these more forceful remarks can be heard here (MP3- 2:06)).
Mr. Clayton explained that, “One of the early problems in releasing the GIPSA rule was that it was not designated as ‘economically significant’ to the industry by the Obama administration. Yet, several privately-funded studies by opponents of the rule cite hundreds of millions, if not billions, of dollars in lost revenue. One study by the packing industry stated potentially 104,000 lost jobs. Glauber said USDA has changed its view and does consider the GIPSA rule economically significant to the industry.
“‘There is no doubt, particularly with the comments that were raised, (it) would suggest that the rule has a larger impact’ than previously thought, Glauber said.
“Sen. Mike Johanns, R-Neb., a former agriculture secretary, followed up that line of questioning, saying Glauber and him had several conversations in the past about the need for solid economic analysis of proposed rules.
“‘From my standpoint, certainly looking at the costs, we certainly see this in the comments, in particular that have been raised by the people who have written, show significant costs on the order of billions of dollars, so I think there is no question the designation on this rule will change to be economically significant.’”
Yesterday’s article added that, “Most of the industry witnesses were opposed to the rule as well. Steven Hunt, CEO of U.S. Premium Beef LLC, which owns National Beef, said the rule increases the risks to packers that they will be sued, so premiums and various marketing arrangements will go by the wayside as a result…[S]till, Dennis Jones, a pork producer from the South Dakota Farmers Union, told senators the rule will help farmers and ranchers ensure transparency and bargaining rights. Jones said the rule was a vastly-needed upgrade to the eight-decade-old Packers and Stockyards Act.”
Mr. Clayton noted that, “Ethanol was also raised at the hearing, as livestock producers said corn prices hinge on the ethanol blenders’ credit, import tariff and the Renewable Fuels Standard. Those have combined to hurt margins for producers who can’t afford the high-priced grain. Still, ethanol had its defenders at the hearing as Sen. Charles Grassley, R-Iowa, told the livestock panel they were misinformed and no one can afford to produce corn at $2.50 a bushel.
“Livestock producers also cited the importance of getting pending free-trade agreements passed to expand markets.”
Dr. Glauber elaborated on issues associated with ethanol and feed costs in response to a question from Sen. Thad Cochran (R-Miss.), related audio (MP3- 0:41), and also from Sen. John Boozman (R-Ark.)- who specifically asked, “How much does ethanol affect the price of corn?” (audio clip here– MP3- 2:08).
And Sen. Amy Klobuchar (D-Minn.) brought up budget issues and specifically asked Dr. Glauber about the House passed budget and its implications on farm spending. A portion of this discussion, which also included remarks from Natural Resources Conservation Service chief Dave White, is available here (MP3- 1:32).
June 23– Farm Bill Accountability: The Importance of Measuring Performance, While Eliminating Duplication and Waste. FarmPolicy.com Summary:
Agri-Pulse Senior Editor Stewart Doan reported yesterday that, “Democrats and Republicans alike on the Senate Agriculture Committee on Thursday praised U.S. Department of Agriculture efforts to crack down on fraud and abuse in farm and nutrition assistance programs and asked a panel of senior USDA officials for suggestions on how they might further streamline programs and services in the 2012 Farm Bill.
“‘We need to be thinking about ways that we can streamline the services we’re offering to make them more effective, and cut red tape and paperwork that our producers shouldn’t have to worry about,’ said Chairwoman Debbie Stabenow at a hearing on accountability in USDA programs.”
“Four agriculture undersecretaries in charge of implementing ag and nutrition programs assured committee members they’d taken steps to measure performance and eliminate duplication and waste in their respective mission areas.”
Mr. Doan indicated that, “‘All available resources, from state of the art data-mining technology to undercover investigations to criminal prosecutions, are used to ensure that recipients and retailers alike who misuse Supplemental Nutrition Assistance Program (SNAP) benefits are held accountable,’ said Kevin Concannon, undersecretary for food, nutrition and consumer services.
“The sale, purchase or exchange of SNAP benefits for cash, an illegal practice commonly referred to as ‘trafficking,’ now accounts for 1% of program expenditures, down from 4% in the mid- 1990s.”
(FarmPolicy Note: To listen to a portion of the Q and A between Chairwoman Stabenow and Undersecretary Concannon on the SNAP issue yesterday, just click here (MP3- 3:24)).
Yesterday’s Agri-Pulse article added that, “Sen. Kent Conrad saluted USDA for recognizing that ‘when we’re borrowing as a nation 40 cents of every dollar we spend, NO taxpayer money can be wasted and no program can be abused.’
“The North Dakota Democrat, who chairs the powerful Budget Committee, lauded USDA for achieving ‘significant’ savings by limiting employee travel, canceling bad loans and reducing overhead costs of federal crop insurance.
“Conrad urged White House and congressional budget negotiators to take these and other USDA cost-cutting measures into account, complaining that some participants in the talks led by Vice President Biden are ‘pushing an agenda that would absolutely cripple production agriculture.’” (Note: Related FarmPolicy audio of remarks from Sen. Conrad are available here (MP3- 1:08)).
Also at yesterday’s hearing, Mississippi GOP Senator Thad Cochran queried Acting Under Secretary for Farm and Foreign Agricultural Services Michael Scuse about issues associated with farm payments administered by the Farm Service Agency (FSA), a portion of that discussion from yesterday can be heard here (MP3- 2:59).
And Ag Committee Ranking Member Pat Roberts (R-Kansas) also engaged Undersecretary Scuse with respect to farm program complexity and executive branch implementation of 2008 Farm Bill programs such as ACRE (Average Crop Revenue Election) and SURE (Supplemental Revenue Assistance Payments Program).
Current technology that is available to FSA was also noted as part of this discussion when Undersecretary Scuse pointed out that, “As you are well aware, technology is an issue for the Farm Service Agency when you are dealing with systems that date back to the 1980s.” Scuse added that, with respect to SURE, “We have had to do manual calculations because of the lack of technology.” (Related FarmPolicy audio from this portion of yesterday’s hearing is available here (MP3- 4:27)).
Julie Harker reported yesterday at Brownfield that, “Concerns over record flooding and other weather issues were front and center at the Senate Ag Committee Farm Bill hearing this morning.
“Senator Kent Conrad of North Dakota says 11,000 people were evacuated from the north central region Wednesday as his state faces the worst flood in recorded history.
“‘We are now anticipating a flood that would be eight feet higher than the last flood of record in our state. So, as soon as we’re done voting here, I will be going home,’ Conrad said.”
Also at yesterday’s hearing, Sen. Chuck Grassley (R-Iowa) noted that, “I know many farmers are probably eager to hear the department’s comments regarding crop insurance. Most farmers tell me crop insurance is crucial to their operations…I am also eager to hear from the department about what they are doing to ensure individuals applying for farm program payments are truly actively engaged in farming.”
And Sen. Sherrod Brown (D-Ohio) stated that, “USDA’s Rural Development programs are vital to ensuring that small towns and rural communities receive the resources and support to promote economic development, create jobs, and strengthen local economies. As I travel across Ohio on my ‘Grown in Ohio’ Tour, I hear and see this first-hand. What I also hear from Ohio’s farmers is that some programs are duplicative or so cumbersome that they fail to serve their intended purpose: helping local communities grow economically. In considering the 2012 Farm Bill, we must ensure efficiency and accountability while maintaining efforts that strengthen our communities and Ohio’s agriculture sector.”
May 31– Opportunities for Growth: Michigan and the 2012 Farm Bill. East Lansing, Michigan. Unofficial FarmPolicy.com transcript of hearing, available here. FarmPolicy.com Summary:
In more specific Farm Bill developments, Zlati Meyer reported yesterday at the Detroit Free Press Online that, “Funding for research, price protection for commodity farmers, pests and access to credit are all issues important to Michigan agricultural community, according to the 15 witnesses who testified at the first public hearing on the 2012 federal farm bill, held at Michigan State University today.”
Yesterday’s Free Press article noted that, “More than 250 people attended the hearing, hosted by U.S. Sen. Debbie Stabenow, D-Michigan, chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry at the United States’ first land-grant school.”
A news release yesterday from Sen. Stabenow’s office regarding yesterday’s hearing quoted the Committee Chairwoman as saying: “This hearing is officially the first field hearing of the Agriculture Committee on the 2012 Farm Bill. And in Michigan, where one in four jobs relies on agriculture, and where agriculture contributes over $71 billion to our economy, when we talk about the Farm Bill, we are really talking about a jobs bill.”
DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Going into a farm bill where spending cuts are demanded, senators at the Senate Agriculture Committee’s first field hearing Tuesday heard from farmers and other groups who like the current programs, but have more demands as well.”
The DTN article added that, “Ranking Member Pat Roberts, R-Kan., let it be known they understand the farm bill will face cuts, but they don’t believe agricultural programs should take a disproportionate share.”
“Roberts noted that witnesses in the hearing talked little about deficit reduction, but spoke more about the value of current programs. Roberts also stressed that Congress and federal officials must realize that 2% of the country is tasked with feeding the other 98% and more.”
Click here for Sen. Roberts’ opening statement at yesterday’s hearing, and to listen to some of the Ranking Member’s remarks on the farm safety net, crop insurance, the tenuous nature of high commodity prices and sudden disasters, click here (MP3- 1:46).
Mr. Clayton indicated in his DTN article from yesterday that, “As far as commodity programs, Clark Gerstacker, a corn and soybean farmer from Midland, Mich., told senators he is enrolled in the Average Crop Revenue Election Program, or ACRE. Gerstacker said the program hasn’t paid out, and he repeated a theme heard around the country that ACRE might work better on a county level. Nonetheless, when asked by Roberts, Gerstacker said he would enroll in ACRE again as a risk-management tool to work with his insurance.
“‘I do like ACRE. I think it has some very good pieces behind it,’ Gerstacker said.
“Roberts noted only 6% of Michigan farmers have enrolled in ACRE, and in Roberts’s home state of Kansas only 2% of farmers have enrolled.”
To listen to a portion of this exchange between Sen. Roberts and Mr. Gerstacker, where the interaction of crop insurance with the ACRE program was also discussed, click here (MP3- 3:38).
During his opening statement, Mr. Gerstacker, highlighted the importance of risk management tools such as ACRE and crop insurance- which he referred to as “vital.” (Related FarmPolicy audio (MP3- 2:21)).
Also with respect to risk management, Chairwoman Stabenow asked Julia Rothwell, the Chair of the U.S. Apple Association, about crop insurance and specialty crops. Stabenow wanted to know how crop insurance could be improved for specialty crop producers (Related FarmPolicy audio (MP3- 2:16)).
Peter B. Blauwiekel, a member of the Michigan Pork Producers Council, expressed concern at yesterday’s Senate hearing about a potential short U.S. corn crop this year. He specifically noted issues associated with the Conservation Reserve Program and biofuels policy. (Related FarmPolicy audio (MP3- 0:42)).
Later in the hearing yesterday, Mr. Blauwiekel stated that he was “scared to death going into this fall” because of crop supply concerns and biofuels policy (FarmPolicy audio (MP3- 0:51)).
(Note: In related news on biofuels policy and livestock producers, the National Cattlemen’s Beef Association (NCBA) issued a press release yesterday which stated that, “The [NCBA] threw its weight behind the Fuel Feedstock Freedom Act, which amends the Clean Air Act to allow states to opt out of the corn ethanol portion of the renewable fuel standard (RFS) and to broaden eligibility of the cellulosic biofuels carve out by redefining ‘cellulosic biofuels’ as ‘next generation biofuels’ to allow non-ethanol sources of renewable fuel. NCBA President Bill Donald said this legislation is a big step toward leveling the playing field for a bushel of corn.)
The American Soybean Association (ASA) also submitted testimony at yesterday’s Senate Ag Committee field hearing. The ASA statement indicated in part that, “Crop insurance is an important part of the farm income safety net for soybean producers. ASA believes crop insurance should be modified to reflect the lower return per acre and higher input costs for soybean producers in regions that do not participate at meaningful levels. The soybean industry is conducting a survey among soybean producers in different regions to determine why producers choose to participate, or not participate, in crop insurance, and what improvements could be made to increase participation.”
A news release yesterday from the Agricultural Leaders of Michigan (ALM) noted that, “[ALM] said key areas that must be addressed in the 2012 Farm Bill revisions include: Protecting the agricultural safety net and crop insurance; [and] allowing landowners to take their land out of the Conservation Reserve Program (CRP) early without penalty, which is essential to increase production amid growing global demand and shrinking stocks of grain…”
May 26– Food for Thought: The Role, Risks and Challenges for American Agriculture and the Next Farm Bill in Meeting the Demands of a Growing World. Unofficial FarmPolicy.com transcript of hearing, available here. FarmPolicy.com Summary:
Sara Wyant reported yesterday at Agri-Pulse Online that, “Citing the need to focus on ‘principles, not programs,’ Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich, kicked off the first official 2012 farm bill hearing today. An ‘all-star’ cast, including Agriculture Secretary Tom Vilsack and former Secretary Dan Glickman testified during the event, which focused on ‘The Role, Risks and Challenges for American Agriculture and the next Farm Bill in meeting the demands of a Growing World.’”
(FarmPolicy Note: A video replay of yesterday’s hearing, along with submitted testimony from the witnesses is available here. Recall that a summary of House Agriculture Committee hearings on the Farm Bill from last spring and summer, prior to the November 2010 elections, can be viewed here. And a summary of Senate hearings relating to the Farm Bill from last summer, under the previous Congress, can be found here. The next Senate Farm Bill hearing, “Opportunities for Growth: Michigan and the 2012 Farm Bill,” will be on Tuesday at Michigan State University.)
Ms. Wyant indicated that, “Much of the hearing focused on highlighting the important role that farmers and the agriculture industry, in general, have played in sustainably feeding Americans, but also a growing, hungry world. But panelists also addressed a number of short and long-term challenges ahead including increased volatility, the need to increase productivity and farm program flexibility, and the need to make investments despite the nation’s debt crisis.
“‘Despite all of the economic and budget struggles over the last decade, agriculture has remained a bright spot: agriculture has continued to grow, farmers have innovated and become even more productive, and they have become even better stewards of our land and water resources,’ noted Sen. Stabenow. ‘And we are not only feeding the world because of that innovation, but we’re showing farmers in every corner of the world new strategies to be more productive themselves.’”
Forrest Laws reported yesterday at the Delta Farm Press Online that, “In her opening remarks, Sen. Debbie Stabenow, D-Mich., chairman of the Senate Agriculture Committee, said innovation in American agriculture can help revolutionize global farming in order to successfully meet the needs of a growing and diverse world but the U.S. still faces many challenges to continue leading the world in productivity, innovation and sustainability.
“‘It’s easy to take our agriculture policies for granted – to assume that without them, things would work just the same as they do now,’ she said. ‘But when we look back at history, we can only marvel at how far we have come. Today, people in the western edge of the Oklahoma panhandle are enduring the longest drought on record, with nearly 220 days without rain.
“‘That’s worse than the droughts experienced during the Dust Bowl. And yet we are not experiencing another Dust Bowl; the topsoil isn’t blowing away. That’s a testament to the good work our farmers and ranchers have done thanks to voluntary conservation efforts in the farm bill.’”
Meanwhile, Sara Wyant also noted in her Agri-Pulse article from yesterday that, “Asked to name the top 2-3 lessons he’s learned since becoming Secretary, Vilsack noted the importance of continued investments in research, a responsibility to conserve natural resources, and need for the rest of the world to continue to embrace technology.
“However, he noted that continuing to make investments in agriculture will be difficult because of the ‘fiscal and political realities about the size of the debt, the deficit, and the tight budget environment.’”
Also at yesterday’s hearing, Nebraska GOP Senator Mike Johanns noted that he was pleased with Sec. Vilsack’s reference in his testimony for the need for a farm safety net in appropriate circumstances. With respect to “the whole concept of a safety net,” Sen. Johanns said that when he speaks with producers, they often referred to the crop insurance program as the “mainstay” of the safety net. The former U.S. Agriculture Secretary pointed out that, “it is crop insurance that we need to be focused on.” Johanns sought Sec. Vilsack’s thoughts on “crop insurance as kind of the bedrock upon which we built a safety net for the next Farm Bill.” To listen to a portion of this discussion between Sen. Johanns and Sec. Vilsack, just click on this FarmPolicy link (MP3- 4:20).
Later, near the end of yesterday’s hearing, Sen. Johanns stated that, “As we think about the next Farm Bill, in many respects I am coming to the conclusion that this Farm Bill is about risk management.” (Related FarmPolicy audio here (MP3- 1:04)).
Similarly, Senator John Thune (R-SD) indicated at yesterday’s hearing that, “All we have to do is look across the country, from drought in the Southwest, severe flooding in the Northern Plains, Midwest and South and record-setting numbers of tornadoes in numerous states, and we realize the incredible devastation and toll that natural disasters have wreaked on millions of acres of farmland and to poultry and other livestock producers.
“From any perspective, effective risk management for agriculture producers should be one of the highest priorities for all of us on this Committee as we write the next Farm Bill.”
A full replay of Sen. Thune’s remarks from yesterday can be found here.
Highlighting the need for American agriculture to remain competitive, particularly in light of the continued commitment of the European Union to support its producers, Senate Budget Committee Chairman Kent Conrad (D-ND) queried Sec. Vilsack about how current budgetary issues could potentially impact the competitiveness of U.S. agriculture in the international arena. (Related FarmPolicy audio here (MP3- 2:48)).
A news release from Sen. Conrad regarding yesterday’s hearing can be found here.
Tight commodity supplies were another issue that came up at yesterday’s Senate hearing.
Barry Mumby, a farmer from Michigan, discussed a variety of issues that have impacted spring planting throughout the country, in conjunction with already tight supplies, and noted that; “I fear that we are going to fall substantially short of what is projected right now and I think that we are on the edge of a very, very dangerous time.” (Related FarmPolicy audio here (MP3- 1:50)).
Sen. Johanns picked up on the issue of short commodity stocks and also expressed concerns about adequate supplies. In response to questions and observations from Sen. Johanns, Mr. Mumby stated that, “I think we are going to have historically low corn stocks at the end of this year. September is going to be very difficult for anyone to buy a bushel of corn any place.” (Related FarmPolicy audio here (MP3- 3:01)).
A news release yesterday from Agriculture Committee Member Sen. Sherrod Brown (D-OH) noted that, “US farmers are now struggling with difficult weather, natural disasters, growing populations, and improving diets abroad – all putting a greater demand on U.S. agricultural exports and international food aid programs. The world’s population is estimated to grow to more than 9 billion by 2050, yet the amount of available farmland is expected to remain stagnant. Food production will need to increase by 70-100 percent by mid-century to meet this growing population.”
DTN Political Correspondent Jerry Hagstrom reported today that, “Told by Sen. Mike Johanns, R-Neb., that Congress needs to focus on continuing the crop insurance program as the ‘mainstay’ of the farm safety net, the secretary replied, ‘It depends on what crop you are talking about.’
“It’s important to maintain crop insurance, Vilsack said, ‘but you need to couple that with a disaster package when it’s not enough.’
“Vilsack made the statement a day after Senate Finance Committee Chairman Max Baucus, D-Mont., said it is vital to maintain the permanent farm disaster program that he and Senate Budget Committee Chairman Kent Conrad, D-N.D., authored in the 2008 farm bill. That program, known by the acronym SURE, runs out of money before the 2008 farm bill expires, and is one of the 37 programs that will not have baseline funding when Congress takes up the bill.”
Mr. Hagstrom added that, “In reaction to a question from Sen. John Hoeven, R-N.D., about the use of conservation programs to deal with the flooding problems in Devils Lake, N.D., Vilsack suggested that Congress give USDA fewer conservation programs, more specific objectives, and more flexibility in running the programs to achieve them.
“Sen. Richard Lugar, R-Ind., a former Agriculture committee chairman, asked the secretary if he thinks it would be possible to put more American land into production. Vilsack said that most of the 30 million acres in the Conservation Reserve Program are likely to remain there, because the program has its own benefits and a lot of the land in CRP is not highly productive. The better answer, Vilsack said, is to make the 264 million acres in crops more productive through better use of research and science.”
Reuters writer Charles Abbott reported yesterday that, “‘We need to focus on research,’ Vilsack said, to develop higher-yielding crops that withstand bad weather as well as find more effective controls on crop pests and diseases.
“Analysts in a Reuters survey said they expect U.S. corn plantings to be 2 percent smaller than expected, which could mean tight supplies through fall 2013.
“‘Given just average yields, we should have good enough crops to meet our needs,’ Vilsack said in an Insider interview. He said crop production would be large enough to meet food, feed and biofuel demand while holding food inflation at a moderate 3.5 percent for the year.”
February 17– Agriculture: Growing America’s Economy. FarmPolicy.com Summary:
Secretary of Agriculture Tom Vilsack spent nearly four hours testifying about the U.S. farm economy yesterday on Capitol Hill.
In the morning, he appeared before the House Ag Committee, (prepared testimony, audio replay of the hearing) while in the afternoon, he spoke before the Senate Ag Committee, where a second panel of witnesses also followed his presentation (video replay and prepared testimony, opening statement from Chairwoman Debbie Stabenow (D-MI), remarks from Ranking Member Pat Roberts (R-KS)).
During his appearances before the two committees, lawmakers raised a variety of subject matters, including: Biotechnology, conservation, the proposed GIPSA rule, nutrition, trade, the estate tax, and civil rights.
However, larger themes also emerged from yesterday’s hearings. These themes included commodity prices; land values and economic stability; regulation; dairy policy; and crop insurance.
During the Senate hearing yesterday, Nebraska GOP Senator and former Agriculture Secretary Mike Johanns brought up recent USDA supply and demand estimates in a general sense, and highlighted that corn ending stocks are very low (related graph). He asked Sec. Vilsack, “Where do you think we are headed here, what would happen if we had a tough weather cycle here as we go into this crop season?”
In part, Sec. Vilsack highlighted issues associated with biotechnology in response.
This interesting exchange can be heard here (MP3- 4:01).
In related news on this topic, the “Washington Insider” section of DTN (link requires subscription) indicated yesterday that, “A key concern in the minds of U.S. producers and producer groups is what the government might be expected to do if the available grain supplies continue to tighten. Last week, Chief USDA Economist Joe Glauber commented to the press that the government has few options to slow down the ethanol boom.”
The DTN update stated that, “As Glauber noted, EPA has authority to issue waivers to cut that mandate, if it determines it would severely harm the economy of a certain state or the entire country. Still, he pointed out, even such an action might not limit ethanol output in some cases…[O]utside of the EPA waiver, there is not much the government can do to persuade firms not to produce ethanol, he repeated. Congress could rescind ethanol blender tax credits, but continuing high energy prices might mean that such an action would have little effect, Glauber added.”
Yesterday’s DTN item added that, “[O]bservers have been quick to note that Glauber’s comments contrasted sharply with those of Agriculture Secretary Tom Vilsack who said earlier last week when asked about the U.S. corn situation, ‘I’m not concerned about it. I think there is going to be enough corn for food, for feed, for fuel and for export opportunities’…[T]his is a fast moving controversy, but an important one with international implications. It involves very large amounts of speculation about what might happen, along with a few hard facts. Grain stocks are down; the weather has been bad in a number of important markets; and renewable fuels are claiming a very significant share of the U.S. corn crop in spite of recent high and rising prices.”
At the Senate hearing yesterday afternoon, Ranking Member Pat Roberts (R-KS) indicated that world population is growing, food demand is increasing, that and a stable food supply is a current concern. He pointed out that 10% of farms with revenue greater than $250,000 a year account for nearly 80% of agricultural output. Sen. Roberts stated that “farm policy should be ‘agnostic’ in terms of size,” and noted that an acre of farmland does not produce any more, or any less based on the size of the operation that its in.
In response to the inquiry from Sen. Roberts, Sec. Vilsack offered some of his perspectives on farm policy goals with respect to these larger farm operations- this exchange can be heard here (MP3- 4:49).
Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register Online) that, “Vilsack did not offer those industries [livestock and dairy sectors] any relief although he said the department expects corn acreage to increase by 3 to 5 percent this year.”
“Groups representing livestock producers are pressing Congress to roll back incentives for using corn to make fuel ethanol, but Vilsack, a former Iowa governor, is a staunch advocate for the biofuel industry. Both at the Senate hearing and during an earlier appearance in the House, Vislack warned against cutting off subsidies for ethanol, suggesting that industry might face a similar fate to the biodeisel sector, which collapsed in 2010 after its tax subsidy temporarily lapsed. Economists say the ethanol producers are far less dependent on federal subsidies than biodiesel makers are,” Mr. Brasher noted.