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Farm Bill Issues; Ag Economy; Regulations; Trade; and Animal Agriculture

Farm Bill Issues: Budget- Super Committee Takes Shape

Following Tuesday’s super committee announcement by Senate Majority Leader Harry Reid (D-Nev.), yesterday, both Senate Minority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) announced their choices to fill six additional seats on the 12 member panel that has been charged to come up with $1.5 trillion in budget savings over the next decade.  The “super committee,” which is officially called the Joint Committee on Deficit Reduction, will be complete when House Democrat Leader Nancy Pelosi (D-Calif.) makes her three choices known, a decision that is due by August 16.

A news release yesterday from Sen. McConnell stated that, “[Sen. McConnell] Wednesday announced his appointments to the 12-member Joint Select Committee on Deficit Reduction tasked with reducing the deficit by $1.5 trillion more than the cuts already identified in the Budget Control Act. McConnell appointed Sens. Jon Kyl (R-Ariz.), Pat Toomey (R-Pa.) [related statement], and Rob Portman (R-Ohio) [related statement].”

Senator’s Toomey and Portman are freshman, while Sen. Kyl is not seeking re-election.

Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Sen. Pat Toomey (R-Pa.) will serve as the de facto Tea Party voice on Congress’s ‘supercommittee’ following his surprise appointment to the deficit-reduction panel.

“The freshman senator has taken on an outsized role in Congress since being sworn into office eight months ago, and now will serve as a conservative anchor to the panel charged with finding more than a trillion dollars in deficit cuts.”

The article noted that, “An actual agreement from the panel would be ‘much, much preferred’ to the trigger of cuts that would ensue if the panel fails to strike a deal, he added.”

And as a former U.S. Trade Representative in the George W. Bush administration, Sen. Portman was involved in the WTO Doha Round of world trade talks, where he and then Agriculture Secretary Mike Johanns took part in multilateral trade discussions where domestic farm programs were a key issue of consideration.  Sen. Portman is also a former House Member, where he served on the Ways and Means Committee, and is a former director of the White House budget office.

A news release yesterday from Speaker Boehner stated that, “[Speaker Boehner] today announced his intent to appoint the following three lawmakers to represent House Republicans on the Joint Select Committee on Deficit Reduction:

“- House Republican Conference Chairman Jeb Hensarling (R-TX) [related statement]

“- House Ways & Means Committee Chairman Dave Camp (R-MI) [related statement]

“- House Energy & Commerce Committee Chairman Fred Upton (R-MI) [related statement]

“Speaker Boehner has tapped Chairman Hensarling to serve as a co-chair of the joint select committee.”  (Note that Sen. Patty Murray (D- Wash.), who heads the Democratic Senatorial Campaign Committee, will be the co-chairwoman of the super committee.)

Darren Samuelsohn reported yesterday at Politico that, “Rep. Fred Upton gives the high-powered congressional debt committee instant experience on entitlement programs central to reining in the nation’s runaway debt, as well as the billions in energy subsidies that Democrats are itching to slash.”

Yesterday’s article added that, “Since grabbing the gavel, Upton has been a go-to player in the GOP push to overturn Obama administration policies on health care and climate change. He’s also shunned the tea party wing and stuck close to Republican leaders on critical votes, including last week’s vote to raise the debt limit, slash more than $900 billion in discretionary spending over a decade and create the supercommittee.”

Andrew Restuccia reported yesterday at The Hill’s Energy Blog that, “Senate Majority Leader Harry Reid (D-Nev.) isn’t worried that House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) will try to hobble key Obama administration environmental regulations as part of a looming fight over deficit reduction.”

“The move [Upton’s appointment] elicited an immediate outcry from environmental groups and others, who noted that Upton has led the charge to block or limit Environmental Protection Agency regulations and has opposed eliminating oil-industry tax breaks.”

More broadly, Jonathan Allen reported last night at Politico that, “As markets continue to rise and dive in a post-downgrade free-for-all and lawmakers face angst-ridden constituents on the town hall circuit, Capitol Hill is looking at the lineup of the new deficit reduction ‘super committee’ as a critical chance to prove Congress can function during a crisis.

“The roster is nearly set, and veteran political analysts say the picks made so far show a seriousness of purpose from Republican and Democratic leaders in the Senate and House, giving a glimmer of hope that there could be a breakthrough deal this year.”

The article added that, “There’s also a sense developing on Capitol Hill that rather than a bare majority — say, six Republicans and a Democrat or six Democrats and a Republican — a deal will need approval from at least eight of the supercommittee members to give it any serious momentum, likely two from each party in each chamber, to break through the partisanship.”

Robert Pear reported in today’s New York Times that, “Two of the Republican appointees have a history of working with Democrats. All oppose tax increases, but at least one supports eliminating tax breaks like the subsidies for ethanol…[M]r. Toomey said he had voted to eliminate ethanol subsidies and added: ‘If we tackle tax policy, and I hope we will, the goal should be to broaden the base and lower rates so we can create an environment that’s more conducive to economic growth. That will also generate more revenue. A stronger economy always does.’”

The Times article noted that, “If just one panel member crosses party lines, the committee can send its recommendations to the floor of the House and the Senate for up-or-down votes without amendments. If a deal is to be struck in the middle, it is likely to involve Mr. Portman, Senator John Kerry of Massachusetts and perhaps Senator Max Baucus of Montana, Congressional aides said.”

Naftali Bendavid reported in today’s Wall Street Journal that, “In naming members, congressional leaders bypassed several lawmakers who had been pursuing a bipartisan deal on the deficit. The panel includes none of the ‘Gang of Six’ senators who forged their own bipartisan deficit-cutting plan this year. It includes lawmakers who served on a bipartisan White House deficit commission, but none who voted in favor of that panel’s recommendations.”

The Journal added that, “A key figure on the committee may be Mr. Portman, who has budget expertise and solid conservative credentials, as well as a reputation for being open to compromise.”

Paul Kane reported in today’s Washington Post that, “The question now is whether this group can draw on its combined 180-plus years of congressional experience to forge an agreement or whether it will end up gridlocked in a manner similar to other special fiscal panels established to solve the nation’s economic woes. Budget experts rendered a split verdict about the group’s chances, with no one doubting the panel’s credentials.

“Even the ‘supercommittee’s’ most junior members, the freshman senators Toomey and Portman, have 18 years of combined experience in the House before joining the Senate in January. Portman has also done two stints in Republican White Houses, including as President George W. Bush’s director of the Office of Management and Budget.”

The Post explained that, “Failure to approve a report would result in an automatic reduction of $1.2 trillion in federal agency spending, equally drawn from security programs and those that benefit the middle class.”

(Recall that House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) has explained that this default position could potentially be a more advantageous outcome with respect to budget issues associated with agriculture).

And The Wall Street Journal editorial board indicated today that, “The debt deal’s ‘super committee’ is now stocked with nine of its dozen members, and the conservatives who want the panel to usher in fiscal salvation are unhappy. So are the liberals who demand major new tax increases. Our view is that the appointments look good, given the realities of a divided Washington.”

 

Farm Bill Issues: Policy

J.D. Sumner reported earlier this week at the Albany Herald Online (Georgia) that, “Both of Georgia’s U.S. senators were in Fitzgerald Tuesday for a town hall meeting with constituents who were interested in the debt issues in Washington, along with some issues that were closer to home.”

The article stated that, “On an issue that is particularly geared toward Southwest Georgia, [GOP Sen. Saxby Chambliss] said the work on the 2012 farm bill is under way. He predicted the legislation would look much different than previous farm legislation, but said farmers could look forward to keeping many of the aspects that they need in the bill.”

A news release Tuesday from American Farmland Trust (AFT) stated that, “‘The various budget deficit talks that have gripped the attention of Washington these past months have finally resulted in a plan to reduce our nation’s deficit,’ says Jon Scholl, President of [AFT]. ‘While we are thankful that this crisis has been dealt with, we also know that the plan will have serious implications for the future of U.S. agriculture and its ability to provide food, fiber, fuel and stewardship of our natural resources.’”

The update noted that, “Scholl notes that many of today’s farm programs and rural development efforts have been in place for decades, with the last major overhaul of Title I occurring in 1996, and conservation programs evolving since 1985.  ‘Congress is now asking very different questions. Rather than asking how a program works, or how it can be improved, they are asking what is the appropriate societal benefit for the program, what is the role of government, and how can we ensure programs best serve producers and society?

“These different questions could lead to a transformation of farm policy next year.”

 

Agricultural Economy

Daniel Looker reported earlier this week at Agriculture Online that, “Farmers who borrow from the Farm Credit System don’t need to join the panic on Wall Street yet. If anything, the volatility in stocks is making bonds more attractive to investors, including those who buy into the nation’s farmer-owned agricultural lender.

“Standard & Poor’s was busy Monday issuing more downgrades to debt issued by entities that have ties, no matter how strong or weak, to the federal government.  The Farm Credit System was just one of the affected institutions. The S&P rating of its long-term debt dropped a notch, from AAA to AA+.”

The article indicated that, “But by late Tuesday, the effect was the opposite of what economists have predicted. If bonds are considered of lower quality, the value of the bond is supposed to fall. The yield—in this case the interest rate the System pays to investors—would be expected to go up.

“‘Yields have gone down,’ Glenn Doran, managing director of the Federal Farm Credit Banks Funding Corporation told Agriculture.com at about 3:40 EDT Tuesday.”

Mr. Looker noted that, “The Farm Credit System reported combined net income of $982 million and $1.986 billion for the three and six months ended June 30. That reflects $100 million more in the second quarter than in the previous year and $302 million better than the first half of 2010.

“But, because the Farm Credit System is a government sponsored entity, with the expectation that the federal government would come to the aid of the system in tough times, its debt rating can’t be higher than that of the U.S. government, [Regina Gill, the Funding Corporation’s vice president for investor relations] and Doran said.”

Meanwhile, Ron Smith reported earlier this week at the Southwest Farm Press Online that, “Texas corn growers are experiencing one of the toughest years they’ve ever seen and High Plain producers expect overall production at about half a normal crop.

“Severe drought, intense heat and high winds have devastated much of the state’s corn crop, says David Gibson, Texas Corn Producer’s Board executive secretary.

“This has been one of the most challenging years many corn growers have had to face, Gibson said at the Texas Alliance for Water Conservation field day.”

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “[FSA] Administrator Bruce Nelson traveled to Texas today to tour areas of the southern parts of the state devastated by drought and wildfires. Nelson said that USDA would continue to work to deliver assistance to those impacted by drought and encouraged producers to contact their local county or state USDA Service Center or Farm Service Agency office. Nelson also highlighted an announcement made earlier this week that will offer additional flexibility in the Conservation Reserve Program to assist producers struggling from drought.”

 

Regulations

A news release yesterday from the Department of Transportation stated that, “The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) announced today that it has no intention to propose new regulations governing the transport of agricultural products. The agency also released guidance designed to make sure states clearly understand the common sense exemptions that allow farmers, their employees, and their families to accomplish their day-to-day work and transport their products to market.

After hearing from concerned farmers earlier this year, FMCSA initiated this review to make sure states don’t go overboard in enforcing regulations on agricultural operators, and to ensure consistent access to exemptions for farmers. No regulations will be proposed for any new safety requirements or changes to the rules governing the transport of agricultural products, farm machinery, or farm supplies to or from a farm.”

The American Farm Bureau Federation and the National Cattlemen’s Beef Association welcomed this development yesterday.

 

Trade

A Daily Radio News item from USDA yesterday (“Work Continues to Implement Mexican Trucking Agreement”) noted that, “Work is continuing to open the way for Mexican trucks to be allowed to operate in the U.S. and for Mexico to lift the rest of the tariffs it imposed because of the U.S. restrictions on Mexican trucks.”  To listen to this one-minute report, just click here.

Julie Harker reported yesterday at Brownfield that, “Senate Republicans and some others in Congress have indicated they may be able to move forward on Trade Adjustment Authority provisions of the pending Free Trade Agreements with the United States and Congress could begin consideration of the FTAs in September.

“Ag Secretary Tom Vilsack spoke with reporters about that this week.

“‘That is certainly the hope. We are obviously interested and excited about having these free trade agreements approved as quickly as possible. And, I think it’s important for folks to work in a bipartisan way to make sure that what we do is holistic and comprehensive.’”

 

Animal Agriculture

In a separate update yesterday at Brownfield, Julie Harker reported that, “New York Congresswoman Louise Slaughter says the recent recall of turkey products in the U.S. due to salmonella contamination is another reason action must be taken to eliminate ‘the routine use of antibiotics’ in animal agriculture production [related news release from Rep. Slaughter].

“Slaughter – a microbiologist – contends the use of antibiotics in healthy food-producing animals has led to an upsurge in antibiotic resistance among humans.”

Yesterday’s update added that, “Slaughter and six other members of Congress have written to Food and Drug Administration Commissioner Margaret Hamburg urging the FDA to quickly move a Guidance Document forward that creates regulations for a ‘strong antibiotics oversight system’ as well as ‘meaningful veterinary oversight’ through the FDA’s 10-year-old Veterinary Feed Directive which she says would ‘improve data collection.’”

Keith Good