FarmPolicy

October 26, 2014

Farm Bill Update

Categories: Budget /Farm Bill

Farm Bill: Budget Issues- Supercommittee

Reuters writer Richard Cowan reported on Friday that, “A newly-formed congressional panel on deficit reduction next week will kick off months of arduous negotiations that will be closely watched by financial markets hoping for a deal that puts the United States on an improved fiscal path.

“The opening meeting of the bipartisan ‘super committee’ will be held on Sept. 8, the co-chairs announced on Friday. It will convene just hours before President Barack Obama unveils his latest jobs-creation initiative to a joint session of Congress.”

Mr. Cowan added that, “The deficit-reduction panel will also hold its initial public hearing on Sept. 13, when it will review the history and causes of the growing U.S. debt, said co-chairs Democratic Senator Patty Murray and Republican Representative Jeb Hensarling.

“Congressional Budget Office Director Douglas Elmendorf is scheduled to testify.”

“At its meeting, which will be open to the public, the committee will consider rules under which it will operate, according to a press release.”

Russell Berman, in an update from Friday at The Hill Online reminded readers that, “The supercommittee, which has six members from each party and six members from each chamber of Congress, is charged with finding $1.5 trillion in deficit reduction by Thanksgiving, under the debt-ceiling deal enacted in August. Its recommendations will receive votes in each chamber by the end of the year.”

National Journal writers Billy House and Dan Friedman noted on Friday that, “With Congress set to return next week from recess, the panel has been gearing up for action. Murray and Hensarling announced the hiring of a staff director this week and committee Democrats and Republicans held separate discussions to plan strategy. Additional staff announcements are likely next week, aides said.”

Meanwhile, Mike Lillis reported on Friday at The Hill Online that, “A leading House Democrat introduced legislation Friday requiring the newly formed debt supercommittee to prioritize job creation as it seeks more than $1 trillion in deficit reduction.

“Rep. John Larson (Conn.), chairman of the House Democratic Caucus, said the panel’s sole focus on slashing deficits not only ignores the lingering jobs crisis, but threatens to make it worse by cutting programs that provide local jobs.”

In executive branch action regarding the supercommittee, Carrie Budoff Brown reported on Friday at Politico that, “President Barack Obama will release a detailed deficit-cutting plan soon after his jobs speech, the White House said Friday, answering Republican critics who demanded more specifics during the debt-limit debate but reopening old wounds with the Democratic base.”

“In the speech Thursday, Obama will challenge the 12-member congressional supercommittee to exceed its $1.5 trillion goal for budget savings — setting a higher target that would allow the additional money to fund tax breaks and other stimulus spending. But the ‘very specific’ deficit recommendations that Obama promised last month won’t come until after the speech, although the exact timing is unclear, White House officials said.”

“The deficit plan will be more specific than the framework the White House released in April. It is likely to include some unpopular measures that, until now, Obama backed only behind closed doors during the July talks with House Speaker John Boehner (R-Ohio), according to Democratic officials familiar with proposal.”

More specifically on the dual policy goals of deficit reduction and job creation, Jackie Calmes reported in Saturday’s New York Times that, “Having battled for months over deficit reduction, President Obama and Congress on Friday each confronted new urgency to shift their focus to job creation after the most anemic employment report in many months.

“For Mr. Obama, who last month promised a pivot to job creation, the Labor Department’s report raises the stakes as he prepares for a prime-time national address on Thursday before a joint session of Congress. In the speech, he will outline a new round of economic stimulus measures.

“In Congress, the reactions from some Republicans suggested small cracks in their party’s wall of opposition to such measures, whether tax cuts or spending. That change underscored the potential of the moment to alter the dynamic in Washington as Congress returns from its recess, though the prospects of a major compromise on short-term stimulus and long-term deficit reduction remain remote.”

The Times article added that, “While the scale of stimulus measures Mr. Obama will seek remains unclear, early indications suggest it will far exceed the limited agenda that the White House was talking about as recently as July, which mostly called for extending for another year a payroll tax cut for workers and unemployment compensation for those out of jobs for six months or more.

“Now Mr. Obama has said he will seek those extensions and more, including proposals to put people to work repairing and retrofitting roads, bridges, schools, airports, rails and other public projects, and giving tax incentives to employers to hire additional workers.”

 

Farm Bill: Budget Issues- FY 2012 Appropriations

An update posted on Friday at the National Sustainable Agriculture Coalition (NSAC) Blog stated that, “Congress returns to Washington, DC on Tuesday with two major funding activities aheadthe deficit reduction ‘super committee’ process and FY 2012 appropriations.  The former has enormous consequences for the farm bill and the latter for the farm bill and for food, rural and agricultural spending for the coming year.”

On the appropriations issue, the NSAC update indicated that, “All congressional action over the next three months will take place with the budget deal and deficit reduction committee as the backdrop.  This is especially true for the Senate Appropriations Committee, which returns from August recess on Tuesday, September 6 to address federal appropriations for fiscal year 2012 (FY 2012).  The Appropriations Committee intends to debate and pass all 11 remaining appropriations bills in the first part of September.

“The agriculture appropriations bill will be considered on Wednesday, September 7 at 3pm EST.”

A Congressional Research Service (CRS) report from early August (“Agriculture and Related Agencies: FY2012 Appropriations,” by Jim Monke) stated that, “The Agriculture appropriations bill provides funding for all of the U.S. Department of Agriculture (USDA) except the Forest Service, plus the Food and Drug Administration (FDA) and, in alternating years, the Commodity Futures Trading Commission (CFTC).”

An FY2012 Agriculture appropriations bill has been passed by the House, but the Senate has yet to mark up or report an Agriculture appropriations bill from committee.  In the House, the Agriculture appropriations subcommittee marked up its FY2012 bill by voice vote on May 24, 2011. The following week, the full appropriations committee reported the bill (H.R. 2112, H.Rept. 112-101) by voice vote, after adopting several amendments. On June 16, 2011, the House passed H.R. 2112 by a vote of 217-203 after adopting 22 amendments and removing 4 provisions by point of order.”

In part, the CRS report explained that, “The House-passed bill would cut discretionary Agriculture appropriations to $17.25 billion, a reduction of $2.7 billion (-14%) from FY2011 levels, and following a 15% cut in FY2011. Much of the floor debate related to funding reductions for Women, Infants and Children (WIC) feeding program (-11%), food safety (-10%), international food aid (-31%), preventing USDA payments to Brazil in relation to the U.S. loss in the WTO cotton case, and programs promoting locally produced food (USDA’s ‘know-your-farmer-know-your-food’ initiative). Other more notable non-money amendments that were adopted would prevent funding of blender pumps for higher mixtures of ethanol, prevent funding related to the RU-486 abortion pill (proposed relative to the USDA telemedicine program, but also affecting the FDA), prevent food aid to North Korea, and prevent implementation of USDA policy on climate change adaptation. The bill also includes a 0.78% across-the-board rescission to discretionary accounts.”

The CRS report also noted that, “On August 2, 2011, the Budget Control Act of 2011 (P.L. 112-25) was enacted. It sets the total FY2012 discretionary limit for all 12 appropriations bills at $1.043 trillion, $23.6 billion higher (+2.3%) than the House budget resolution. Although the Agriculture appropriations bill has not yet received an allocation from this new amount, some believe that the higher amount in P.L. 112- 25 implies that the final subcommittee allocation might be higher than in the House-passed bill.”

 

Farm Bill: Policy Issues

Gannett writer Philip Brasher reported on Friday that, “Farmers and landowners have long counted on getting a government check every year regardless of how profitable they might be or whether they even planted a crop. But those checks may soon be a lot smaller — or disappear altogether.

A congressional super committee that is charged with writing a plan this fall for slashing the federal budget deficit is widely expected to target those payments.”

Mr. Brasher added that, “Farm lobbyists and their allies in Congress are scrambling to come up with a new and cheaper way to subsidize growers, one that would provide payments when crops are poor or market prices collapse. The threat to the payments is so dire that even the cotton industry, which has long resisted cutting them, is now looking at alternatives. The ideas being tossed about include taking money that now goes to the annual payments and using it to sweeten the federal crop insurance program.

“‘I would gladly give up the direct payments if we made sure we had a good risk-management program with federal crop insurance,’ said Darrel McAlexander, who farms in southwest Iowa near Sidney.”

Friday’s article pointed out that, “The $4.7 billion in annual payments has been a mainstay of federal farm programs since 1996, when they were created as part of a Republican plan to wean farmers off government support. The payments were supposed to phase out within a few years, but Congress instead continued the subsidies and even extended them to other crops, including soybeans and peanuts. Now, the payments have come under increasing public criticism as commodity prices and farm profits have soared in recent years, making the money a fat target for budget cutters. Recipients get the same amount every year regardless of economic conditions or what crops are planted.”

The article stated that, “Purdue University agriculture economist Otto Doering told lawmakers last year that Congress should replace direct payments to farmers with a more effective and appropriate safety net.

“Doering said direct payments don’t address the volatility of crop prices, are viewed negatively by the public and are expensive.

“‘The goal of income parity of farm people versus urban people has been achieved,’ Doering said during a House hearing on agriculture policy. ‘Our chief concern now should be volatility.’” [See page 206 of this official transcript].

Mr. Brasher indicated that, “It’s unclear what will come next. While some farm groups are focused on expanding federal crop insurance, others are looking toward overhauling existing subsidy programs. A long-time leader in Congress on farm policy, Sen. Kent Conrad, D-N.D., has been working on a proposal centered on a disaster-assistance program that was created by the 2008 farm bill. Corn growers are focused on rewriting another program, created in 2008 but little used, that would more easily trigger payments when farm revenue falls.

“The idea of expanding crop insurance will raise new concerns. For example, farmers who receive direct payments must take measures to prevent soil from eroding from land that is hilly or rolling, but there are no such restrictions with crop insurance.”

In related news, The Des Moines Register editorial board opined on Friday that, “Iowa Farm Bureau members cast a historic vote in Des Moines Tuesday urging Congress to tie federal farm subsidies to compliance with land conservation programs.

“Alas, the members brought the resolution back for another vote the next day and killed it.”

The Register added that, “Iowa Farm Bureau Federation President Craig Lang deserves enormous credit for pushing the idea of enforcing conservation rules. In a meeting with the Register earlier this summer, Lang said two key elements of the farm bill should be preserved: Crop insurance and conservation programs, which he likened to vital national infrastructure, such as locks on the Mississippi River and dams on the Missouri River. He and others urged the Iowa delegates to take a stand for conservation by tying it to insurance subsidies.”

Robert Pore reported on Thursday at the Grand Island (Neb.) Independent Online that, “On top of the list of Farm Bill priorities, [Roger Johnson, president of the National Farmers Union] said, will be the federal crop insurance program.

“‘We have seen dramatic use by farmers as time has gone on,’ he said. ‘There are some improvements that should be made, particularly in developing products that can be used in some of the specialty crops and some of those places where it is not the traditional commodity program.’

“Johnson said other changes are needed in the crop insurance program, such as cost of production.”

Andrea Johnson reported on Friday at the Farm & Ranch Guide Online that, “As federal budget talks and negotiations continue, Sen. Amy Klobuchar, D-Minn., said maintaining a safety net for farming is a priority.

“Klobuchar gave this message at the last day of Farmfest, where she served as the day’s keynote speaker.”

The article noted that, “As work begins on the next farm bill and continues on budgeting, Klobuchar said legislation must include keeping the safety net in place for agriculture   including crop insurance and dairy programs.”

An update posted on Thursday (video report included) at WNYF-TV Online (Watertown, NY) reported that, “North country dairy farmers are hoping for more stability in the price they’re paid for milk.

“On Thursday, they had the ear of U.S. Senator Kirsten Gillibrand, who visited a farm near Carthage.”

The update noted that, “‘We want to change that. We want to increase the transparency in the pricing system. We want to make sure it’s a fairer system and we want to make sure there are safety nets in place that keep our farms in business when milk prices do dip low,’ said Gillibrand (D. – NY).

“Senator Gillibrand is on a statewide agricultural listening tour in preparation for debate over the farm bill.”

Meanwhile, on Thursday the House Agriculture Committee will hold its tenth Farm Bill audit hearing when the Subcommittee on Livestock, Dairy, and Poultry takes up an examination of USDA Dairy Programs.

Click here for an overview of the previous House Ag Committee audit hearings.

Keith Good

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