FarmPolicy

August 29, 2014

Farm Bill; Food Safety; and the Ag Economy

Farm Bill Issues

Kevin Bogardus reported on Friday at The Hill Online that, “Tom Vilsack thought he knew a lot about the Agriculture Department from his days as a farm-state governor, but he found out he had a lot to learn when he took the helm as secretary in 2009.

“‘Honestly, when I was governor of Iowa, I didn’t understand the reach of USDA, so it has been a learning opportunity for me,’ Vilsack said. ‘The thing that surprised me the most is the scope of USDA and how underappreciated that scope is by folks.’”

The article noted that, “[Sec. Vilsack’s] profile is certain to rise in Washington as the Obama administration and Congress begin work on a farm bill, which is up for reauthorization next year.”

“‘Tom is a strong ally for U.S. agriculture. He gets it and understands it’s important for all the varied interests to work together,’ said Rep. Collin Peterson (D-Minn.), the House Agriculture Committee’s ranking member.”

Mr. Bogardus pointed out that, “Cuts have already eaten into USDA’s operating budget for this year. In the compromise deal that averted a government shutdown, the department’s funding was slashed by $2.3 billion. That reduction — combined with expectations that more belt-tightening is on the way — will force USDA to refocus on its ‘core responsibilities,’ Vilsack said.”

More cuts to farm programs are already looming. Vilsack cited the House Appropriations Committee’s ‘interesting’ move this week to cap subsidies for the wealthiest farmers, which he said resembles past proposals from the administration.”

The Hill article stated that, “Nevertheless, the Cabinet secretary said the next farm bill must set aside resources to help farmers in distress.

“‘They need a safety net. They need a crop insurance program that works. They need to make sure that we have a disaster program in place in the event they have a major catastrophe,’ Vilsack said.

“Vilsack noted that the farmers affected by the severe storms in Alabama, Mississippi and Missouri will need help from the federal government.”

And on trade, Friday’s article indicated that, “One of the top issues for farmers this year are the pending trade deals with Colombia, Panama and South Korea. Vilsack is a big supporter of all three agreements, which he says would be a boon for the U.S. agriculture industry.

“The sticking point for the trade deals is whether to renew an expanded Trade Adjustment Assistance program. Vilsack said Congress should sign off on the aid in tandem with the trade pacts.”

Also on trade, The Washington Post editorial board opined today that, “But the big picture is clear: For two years, Republicans justifiably demanded that Mr. Obama end his opposition to the pacts; he has done that. All he wants in return at this point is a commitment by the GOP to accept trade adjustment assistance — or at least not block it — as it has in the past. If Republicans on Capitol Hill are more concerned about the national interest than placating their own right wing, they’ll meet the president halfway — and get these deals done while they still matter.”

On Friday, Ron Hays reported at the Oklahoma Farm Report Online that, “The Chairman of the House Ag Committee, Oklahoma Third District Congressman Frank Lucas, does not plan to go along quietly with the efforts of Republican Jeff Flake and Democrat Rosa DeLauro in the House Appropriations Committee as they offered amendments that were accepted by a voice vote by the full Committee that have huge farm policy considerations in the final year of the 2008 Farm law, as well as what lawmakers may be able to do as the 2012 Farm Bill is crafted.

“Congressman Flake offered an amendment that would reduce Commodity Title Spending for Direct Farm Payments to cotton producers to cover the $147 million dollars owed Brazil that is a part of the settlement of the WTO cotton case the South American case brought against the US and won. Congresswoman DeLauro then latched onto the $147 million that was in the Ag Subcommittee report to up the spending levels for the WIC nutrition program. Congressman Lucas says the members of the Appropriations Committee jumped into the policy arena in a huge way and made the job of the House Ag Committee a lot more difficult. Congressman Lucas tells Ron Hays that he will be talking to the Rules Committee and Republican leadership about these measures and their place within this Appropriations measure- and that he hopes to change the mind of Congress on the floor when this package is considered by the House.”

A portion of Friday’s discussion between Ron Hays and Chairman Lucas, where the two discuss the House Appropriations Committee action and 2012 Farm Bill issues, can be heard here (MP3- 3:25), while the full conversation (about ten minutes) is available here at the Oklahoma Farm Report Online.

Also on the ag appropriations issue, Agri-Pulse Senior Editor Stewart Doan interviewed Rep. Jeff Flake late last week and garnered additional perspective on agriculture and farm spending issues from the conservative GOP lawmaker from Arizona.  To listen to this discussion (about a minute and a half), just click here.

Meanwhile, Forrest Laws reported on Friday at the Delta Farm Press Online that, “On May 31, the House Appropriations Committee passed a $125.5 billion agricultural appropriations bill that would reduce spending by more than $7 billion below what the Obama administration requested for fiscal year 2012. The Republican-controlled House is expected to adopt the bill.

“Among the cuts are language that puts a $250,000 adjusted gross income cap on eligibility for farm program payments; a $354-million reduction in research dollars that can be spent by USDA; chopping federal crop insurance program outlays by 59 percent; and a sharp curtailment in conservation and nutrition programs.”

With this background in mind, a news release Friday from Rep. Leonard Boswell (D-Iowa) stated that, “Today, Congressmen Leonard Boswell, Bruce Braley [D-Iowa], and Dave Loebsack [D-Iowa] joined together to push back against cuts that would hurt Iowa farmers, the state’s economy, and America’s energy independence by slashing crop insurance and gutting renewable energy programs that encourage the harvesting of agriculture energy inputs and help rural gas stations to purchase ethanol blend pumps.

In a letter to leadership of the Senate Appropriations Subcommittee on Agriculture, Rural Development, Federal Drug Administration, and related agencies, the Members urged the Senators to take a second look at the House’s cuts to crop insurance, renewable energy programs, and the U.S. Commodity Futures Trading Commission. The House Members asked the Subcommittee to retain the $250,000 income cap leveled on direct farm payments in the legislation.”

Philip Brasher reported on Friday at the Green Fields Blog (Des Moines Register) that, “The three Democrats will have at least one ally on the Senate subcommittee, Iowa Democrat Tom Harkin, who has already sharply criticized the bill. Sen. Chuck Grassley, R-Ia., was asked about the bill on a conference call with reporters today but declined to say much except that farm programs should not be cut disproportionately in comparison to other areas of the budget. Critics of the bill say that it does just the opposite, sparing most farm subsidies at the expense of programs that aid the poor, conserve land or ensure that food is safe.

“‘These budget situations are going to require a little bit more give on all of our parts than what we would normally would do or like to do,’ Grassley said.”

In broader fiscal analysis of the budget and farm related spending, Eric Pianin reported on Thursday at The Fiscal Times Online that, “It seemed gutsy when Republican presidential hopeful Tim Pawlenty traveled to politically pivotal Iowa recently and vowed to help end federal ethanol subsidies – the mother’s milk of ethanol producers and the Midwestern farmers who supply the grain used to produce it. ‘We need to cut spending, and we need to cut it big-time,’ Pawlenty said, adding, ‘we can’t have any more sacred cows.’

“But Pawlenty, the former Minnesota governor, is hardly the first prominent farm- state politician to take aim at the once politically sacrosanct ethanol program–or other costly farm safety net programs. With food prices soaring, farm incomes at record levels and Congress and the White House negotiating ways to slash the $1.5 trillion budget deficit, many lawmakers and farm groups see the handwriting on the wall.”

The article added that, “Meanwhile, House Republican leaders, the White House, and a bipartisan group of six House and Senate members led by Vice President Joe Biden have set their sights on a much fatter target–the estimated $20 billion a year in Agriculture Department commodity payments, crop insurance, credits and other programs aimed at stabilizing the agricultural industry.”

The negotiating team headed by Biden is considering cuts in commodity payments and crop insurance totaling $34 billion over 10 years, according to congressional and agriculture industry sources. That would be more than a 50 percent cut in the $63 billion currently projected to be spent on government commodity price and income supports in the coming decade, according to the American Farm Bureau Federation, the lead lobbying group for farmers and ranchers.”

In more general news about budget and deficit negotiations, The New York Times reported on Saturday that, “President Obama and Speaker John A. Boehner are taking their budget negotiations to a place where a lot of deals get done in the business world: the golf course.

“White House officials confirmed Friday that the president had invited Mr. Boehner to tee up on June 18 at a course that has not yet been disclosed. The golf date comes as the White House and House Republicans are trying to come to an agreement on spending cuts that would clear the way for a vote this summer to raise the federal debt ceiling.”

And Brent Kendall and Corey Boles reported in today’s Wall Street Journal that, “Political leaders say they want a deal to boost the federal borrowing limit by July 4th, a month before the Treasury said the government will be in danger of a default, but it isn’t yet clear how they get past stark differences on federal spending and taxes.”

“But Mr. Boehner said last week that federal budget talks led by Vice President Joe Biden and involving lawmakers of both parties aren’t making enough progress. The group will next meet on Thursday.”

Anna Palmer reported today at Roll Call Online that, “Despite public doubts expressed by none other than the Speaker that the [Biden] group will not be able to meet the Aug. 2 deadline for raising the debt ceiling, the Virginia Republican [House Majority Leader Eric Cantor] said Thursday in an interview with Roll Call that he is playing an important role in laying the groundwork for a final deal.

“Cantor has a lot at stake in the negotiations, given his role as House Republicans’ conservative standard-bearer in talks led by Vice President Joseph Biden. He maintained that the group has engaged in serious discussions, which have already pinpointed ‘well over $1 trillion’ in cuts.”

In other Farm Bill related developments, a news release Friday from Senate Ag Committee Chairwoman Debbie Stabenow (D-Mich.) stated that, “[Senator Stabenow], today made a series of visits in Northern Michigan to underscore the critical role agriculture plays in Michigan’s economy as well as protecting Michigan’s Great Lakes and natural resources. She visited American Spoon in Petoskey, a thirty-year-old small business that partners with local fruit producers to make preserves, and also the Horticulture Research Station in Traverse City, to meet with conservation leaders and discuss the roles landowners and farmers are playing, protecting Michigan’s Great Lakes and other treasured natural resources.”

A news release Friday from Sen. Kirsten Gillibrand (D-NY) stated that, “As Congress begins debate over the next Farm Bill, [Sen. Gillibrand], the first New Yorker to serve on the Senate Agriculture Committee in nearly 40 years, today met with Central New York farmers to continue her statewide listening sessions to discuss new efforts to help New York farmers and farming communities. Senator Gillibrand plans to focus on key areas of the Farm Bill that will have major influence on New York, including access to financing, new market opportunities, assistance for specialty crops, and investments in renewable energy.”

An update posted on Friday at The Daily Republic Online (Mitchell, SD) reported that, “U.S. Representative Kristi Noem, R-S.D., gained a seat on the U.S. House Agriculture Committee this week as negotiations on the next Farm Bill begin to heat up. Noem, a lifelong farmer and rancher, asked for the committee assignment when the seat came available recently.

“‘As someone who grew up on a South Dakota farm and ranch operation, and continued there until I ran for Congress, I understand first-hand how agriculture impacts our state’s economy and why it is our number one industry. I had always planned on serving as a strong voice for South Dakota ag. Now this new committee appointment makes it official,’ said Noem.”

And in nutrition issues, Mary MacVean reported on Saturday at the Los Angeles Times Online that, “An item that’s on millions of kids’ meal trays once or twice a day has become the subject of a food fight in school districts around the country, called everything from part of a healthy diet to ‘soda in drag.’ How could a half-pint carton of chocolate milk be so complicated?

The new superintendent of the Los Angeles Unified School District, John Deasy, said he will recommend that the school board eliminate chocolate- and strawberry-flavored milk in its next dairy contract for the 650,000 meals it serves daily. The current contract expires June 30.”

 

Food Safety

Judy Dempsey and William Neuman reported in today’s New York Times that, “Local German officials said Sunday that they had evidence that tainted domestic sprouts had caused the deadly E. coli outbreak that has afflicted Germany and unnerved fresh-produce markets throughout Europe, and they shut down the farm in the northern part of the country where the sprouts were grown.”

The article noted that, “The German authorities had acted prematurely once before in their investigation, blaming cucumbers grown in Spain for the outbreak after preliminary tests showed that they might have contained toxic E. coli bacteria. Further tests showed that the Spanish cucumbers did not contain the strain making people sick, and investigators then backtracked.”

William Neuman reported in Saturday’s New York Times that, “The deadly wave of food-borne illness in Europe, caused by a rare form of E. coli bacteria, could finally push the United States to take long-delayed steps to protect the food supply in this country from a similar group of toxic organisms.

“Food-safety advocates hope the federal government will act soon to ban the sale of ground beef if it contains any of six dangerous strains of E. coli that have increasingly been found to cause illness in the United States — a step that regulators have been considering for at least four years in the face of stiff industry opposition.

The outbreak in Europe could also bring more scrutiny of the produce industry.”

 

Agricultural Economy

Lisa Miller reported on Saturday at The Dickinson Press Online (ND) that, “Experts say no matter how hard farmers try, it is inevitable that some acres just won’t get planted this year due to moisture.

“‘It’s disheartening to hear, because prices are so good right now, but as the days and weeks go by the window of opportunity is slowly closing,’ North Dakota State University Crops Economist and Marketing Specialist Frayne Olson said. ‘In some cases, farmers may have to take their crop insurance payments and start focusing on preparing for next year.’”

On Thursday, the Red River Farm Network’s Agriculture Today Radio Program included an interview with USDA Risk Management Agency Administrator Bill Murphy, who met with North Dakota commodity organizations last week.  A brief audio clip from Thursday’s Agriculture Today program that includes comments from Mr. Murphy on crop insurance issues and late planting concerns can be heard here, (MP3-  2:35).

Meanwhile, Corey Dade reported on late last week at NPR Online that, “Just as the Mississippi River settles after washing out swaths of the South, the flooding elsewhere has just begun: A raging Missouri River in the northern Plains now will threaten parts of the Midwest well into the summer.”

Joe Barrett reported in today’s Wall Street Journal that, “Only a few farmers have planted crops a month after flooding prompted the Army Corps of Engineers to blow a two-mile hole in a levee that protected them from the Mississippi River for decades.

In areas where the floodwaters have receded, many farmers have major erosion problems and damaged or destroyed buildings. Other farmland is still under water, and all farmers face the threat of further flooding until the levees are repaired.”

Russ Zimmer reported on Saturday a The News-Messenger Online (Fremont, Ohio) that, “On Sunday, farmers with crop insurance can begin filing claims for losses incurred due to preventative weather. Because late planting leads to smaller yields, crop insurance on acreage planted after this weekend will pay less, [Natalie Lehner, spokeswoman for the Ohio Corn and Wheat Growers Association] said.

But there may be some continued planting after this weekend anyway, because crop insurance typically covers revenue losses, but not expenses, such as fertilizer or diesel fuel, she said.”

The article also noted that, “Granted a reprieve from seemingly endless rain, Ohio farmers are working overtime to get corn planted.”

For related analysis on how fast crops can get planted, see, “Corn Planting Speed Revisited,” which was posted on Friday at the FarmDoc Daily Blog (University of Illinois).

Morgan Carlson reported yesterday at the Jackson County Floridian Online that, “The Florida Panhandle had a record day for temperatures Thursday. Jackson County was no exception, hitting 105 degrees.”

The article noted that, “Ken Barton, Florida Peanut Producers Association executive director, said he doesn’t remember a planting season this dry – ever.

“The lack of rain in the winter and spring made for extremely low and in some cases non-existent moisture in the subsoil of peanut fields in the area.

“Most years, there is a dry period, but this year was different because of the timing. May is the optimal month to plant peanuts and cotton. Normally, there is sufficient rain going into May from the winter and spring to make up for the dry period. But not this year, Barton said.”

The article indicated that, “It’s also a good possibility that some of this year’s anticipated 34,000 acres of peanuts in Jackson County won’t be planted. He said there is really only one or two weeks left that peanuts can be planted, and even that will be extremely late for planting.

“Barton added the industry had a fairly short crop last year and needs a good yield across the country to be able to meet the needs of consumers.”

And Justin Gillis reported in yesterday’s New York Times that, “The rapid growth in farm output that defined the late 20th century has slowed to the point that it is failing to keep up with the demand for food, driven by population increases and rising affluence in once-poor countries.

“Consumption of the four staples that supply most human calories — wheat, rice, corn and soybeans — has outstripped production for much of the past decade, drawing once-large stockpiles down to worrisome levels. The imbalance between supply and demand has resulted in two huge spikes in international grain prices since 2007, with some grains more than doubling in cost.”

The Times article stated that, “Now, the latest scientific research suggests that a previously discounted factor is helping to destabilize the food system: climate change.”

Keith Good

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