FarmPolicy

December 19, 2014

Farm Bill; Regulations; Trade; and the Ag Economy

Farm Bill: National Cotton Council Perspective

On yesterday’s AgriTalk Radio Program with Mike Adams, Dr. Mark D. Lange, the President and Chief Executive Officer of the National Cotton Council (NCC) explained the organization’s recent decision regarding its proposed 2012 Farm Bill recommendations.

An audio replay of this portion of yesterday’s AgriTalk program is available here,(MP3- 10:41), while an unofficial FarmPolicy.com transcript of the conversation can be read here.

In part, Mr. Lange indicated that, “[T]he first thing the cotton growers were looking at was the expectation that either through action of this Super Committee or other deficit reduction action there was going to be quite a reduction in the amount of money available for direct payments in a 2012 Farm Bill.”

Mr. Lange went on to explain that, “So what our producers began looking at is if there’s reduced funding available for direct payments, and if the countercyclical program is being challenged, has been successfully challenged, in fact, by the Brazilians in the WTO case, again, particular to cotton, then an alternative should be considered. And they looked at quite a few and have essentially decided that if we have to face the significant budget reduction in the deal with our international obligations, an area-wide revenue product such as a GRIP type of program, delivered through crop insurance, could be created that would essentially be sort of a shallow loss program that would essentially ride on top of existing crop insurance.

So we’re not recommending any changes to existing crop insurance programs that are available to cotton producers or other agricultural producers anywhere in the U.S. We’re saying this could be a program that could ride on top of those and provide some losses. When you’re taking, say, ten to 20% loss in revenue, this has the possibility of providing some offset to some of those. We looked at it from an area- wide standpoint because the area-wide policies tend to be a little bit cheaper.

Again, a GRIP type program, generally based on the county, rather than the individual losses, whether the county takes losses on average to trigger payments. And again, it would be provided through crop insurance, so it’s not a mandatory program. If a producer doesn’t want to buy, the producer doesn’t buy it. We think that’s probably the best opportunity to provide the kind of safety net support that we were able to previously generate for cotton from the direct and countercyclical programs.”

Separately in yesterday’s AgriTalk interview, Mike Adams asked: “[W]e talked to the corn grower leaders last week about their concerns that decisions-makers, policy-makers in Washington would try to make long-term decisions for agriculture based on short- term situations, what’s happening right now – looking at high prices, for example, and saying, well, you really don’t need much of a safety net, you have high commodity prices. Are you concerned about that as well, that long ranging decisions will be made based on one year of history?

Mr. Lange: “Mike, my growers are very concerned about that. I think all of agriculture is. Right now we see strong commodity prices, but as I just noted, it wasn’t that long ago we had horribly low commodity prices. These markets move. They can move very rapidly. It is a concern. It’s our sense that there’s a good chance that the underlying legislation for a 2012 Farm Bill could be developed this fall. And that’s why we chose, at our board meeting two weeks ago, to go ahead and move to a more public position about what we think would best serve a U.S. cotton industry in a new farm bill.”

Later in the program, Mike Adams spoke with Iowa GOP Senator Charles Grassley about a variety of current policy matters including the recent NCC proposals.  To listen to Senator Grassley’s comments on the NCC Farm Bill proposals, just click here (MP3- 1:27).

Also yesterday, Forrest Laws reported at the Delta Farm Press Online that, “In a series of meetings over the last month, Cotton Council leaders and staff have been working on a new direction for the cotton program that would incorporate ‘an affordable, revenue-based crop insurance program’ in place of the current payment-based farm bill provisions.”

The article added that, “During its mid-year board meeting in Albuquerque, the NCC’s board of directors’ voted to recommend an adjustment to the current farm program to include a new revenue-based crop insurance program and a modified marketing loan that would be adjusted to satisfy the Brazil WTO case.

“The new crop insurance program, which has been labeled STAX for Stacked Income Protection Plan, would address ‘shallow’ revenue losses on a county-wide or area-wide basis with producer premiums offset to the maximum extent possible using available cotton program spending authority.”

The revenue-based crop insurance safety net would be complemented by a modified marketing loan that would be adjusted to meet the requirements of the Brazil WTO case.”

 

Farm Bill: Budget- Supercommittee Issues

Russell Berman reported yesterday at The Hill Online that, “For Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.), the job of leading a congressional search for $1.5 trillion in deficit reduction over the next three months is tough enough.

But that task is further complicated by a little-known oddity: The two Capitol Hill veterans have never met each other. Not in the month since they were tapped to lead the vaunted ‘supercommittee,’ nor in the preceding nine years that they jointly served in Congress, aides to both lawmakers say.”

The article did note that, “Aides say that while the co-chairmen have not met in person, they have spoken by phone frequently over the last month, working together to hire senior staff and schedule the panel’s initial meetings.”

Meanwhile, Politico reported yesterday that, “The deficit-cutting supercommittee continues to staff up, adding Sarah Kuehl, a senior budget analyst for Democrats on the Senate Budget Committee, as the panel’s deputy staff director.”

“Kuehl, who has worked in the Senate for more than 13 years, has had her hands in several major bills, including the health care reform law and a wide range of budget and appropriations bills. She also advised Senate Budget Committee Chairman Kent Conrad (D-N.D.) when he served on the Bowles-Simpson fiscal commission” [see related statement from Sen. Conrad on this development from yesterday].

Manu Raju reported yesterday at Politico that, “Senate Minority Whip Jon Kyl (R-Ariz.) is lowering expectations for the new House-Senate deficit-slashing committee, saying that it’ll be ‘very, very hard’ for the six Democrats and six Republicans to bend on bedrock principles over taxes and entitlements that are significant drivers of the deficit.

“Speaking to reporters outside the Senate chambers on Tuesday, Kyl voiced optimism that the committee could find common ground to reach the goal to slash $1.5 trillion in budget deficits over the next decade. But he said that if there’s an effort to dramatically overhaul Medicare or the tax code, for instance, it’ll be extremely difficult for the committee to reach its goal.”

The article added that, “Kyl’s comments come ahead of Thursday’s first public meeting of the panel, which is charged with finding between $1.2 trillion and $1.5 trillion in budget cuts over the next decade.”

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Democrats last week introduced three bills that would either adjust the deficit supercommittee’s mandate to also focus on job creation or establish a new jobs supercommittee. But as of early this week, all three bills face Republican opposition in the House, and there were no signs that similar proposals would be taken up in the Senate.”

And Dan Eggen wrote an article that appeared on the front page of today’s Washington Post titled, “K Street has close ties to the debt panel.”

In other budget related news, recall that the Senate Appropriations Committee will consider the agriculture appropriations bill this afternoon.  A summary of the House Ag Appropriations bill is available in this Congressional Research Service report, “Agriculture and Related Agencies: FY2012 Appropriations.”

 

Farm Bill: Dairy

Marc Heller reported yesterday at the Watertown Daily Times Online (NY) that, “Rep. William L. Owens, D-Plattsburgh, is looking to tinker with a key element of a dairy reform plan making the rounds on Capitol Hill. But it’s not clear whether his efforts will advance — or whether the reform package can pass in anything resembling its present form.

Mr. Owens said last week he wants to see if some farmers can be exempted from milk production limits in the proposal if they have a long-term supply contract with a milk processor, perhaps for three to five years.

“He said he has discussed the idea with Rep. Collin C. Peterson, D-Minn., ranking Democrat on the House Agriculture Committee, who has said the panel will deal with that issue. He did not necessarily commit to making the change, however, by Mr. Owens’s account.”

The article explained that, “The market stabilization program is part of a comprehensive reform package Mr. Peterson released in draft form earlier this summer, based on a proposal from the National Milk Producers Federation. The program is triggered when the margin between milk prices and feed costs narrows to a certain point; farmers then will be paid on just 98 percent of their average milk marketings for the past three years — a strong signal to cut production, proponents say.”

 

Farm Bill: Nutrition

Jonathan Ellis and Megan Luther reported yesterday at USA Today Online that, “The number of businesses approved to accept food stamps grew by a third from 2005 to 2010, U.S. Department of Agriculture records show, as vendors from convenience and dollar discount stores to gas stations and pharmacies increasingly joined the growing entitlement program.

Now, restaurants, which typically have not participated in the program, are lobbying for a piece of the action.

Louisville-based Yum! Brands, whose restaurants include Taco Bell, KFC, Long John Silver’s and Pizza Hut, is trying to get restaurants more involved, federal lobbying records show.”

 

Regulations

Robin Bravender reported yesterday at Politico that, “Will EPA chief Lisa Jackson stay or go?

“That’s the new parlor game among Washington insiders after the White House publicly undercut the agency’s attempts to install tougher regulations on smog.”

The article noted that, “Since the White House’s announcement Friday, Jackson hasn’t spoken publicly on the rule beyond an official statement touting the president’s leadership on clean air issues. Someone who has spoken with Jackson since Friday told POLITICO she’s still digesting it all and hasn’t shared even with those closest to her what her thinking is.

“President Barack Obama invited Jackson on Air Force One Sunday when he toured areas of New Jersey that had been damaged by Hurricane Irene. Jackson served as a New Jersey state official for several years.”

Alan Gomez and Fredreka Schouten reported yesterday at USA Today Online that, “After the summer’s red-hot battles over the nation’s debt ceiling, Republican freshmen return to the nation’s capital Wednesday emboldened for one of the fights that could dominate the fall: repealing environmental and labor rules Republican leaders say have stymied hiring.”

Meanwhile, DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Though Iowa has a zero-discharge law for confined animal feeding operations, three environmental groups point to the state’s record on waste discharges as reason to let the Environmental Protection Agency permit those lots.

“The Environmental Integrity Project, Iowa Citizens for Community Improvement and the Iowa Chapter of the Sierra Club asked EPA to implement a National Pollutant Discharge Elimination System permitting program for Iowa CAFOs or face a lawsuit, according to a letter sent to EPA Administrator Lisa Jackson Aug. 18.

“The groups are prepared to charge that EPA’s delay in responding to the groups’ 2007 petition calling for these NPDES permits is ‘unreasonable.’ Since that petition, EPA has responded to similar concerns in Illinois.”

 

Trade

Reuters writer Doug Palmer reported yesterday that, “After a heated fight this summer over the U.S. debt ceiling, cooler-headed Republicans and Democrats could come together this fall to pass three long-delayed free trade agreements.

“But to get past distrust built up on each side, business groups such as the National Association of Manufacturers and the U.S. Chamber of Commerce anticipate a series of votes on related trade issues leading up to the pacts with South Korea, Colombia and Panama, each signed more than four years ago.”

The article pointed out that, “The process is expected to begin on Wednesday with action on an expired program that helps domestic manufacturers by waiving duties on goods from developing countries.

“Former U.S. Trade Representative Susan Schwab said she was optimistic Congress would soon pass the trade deals but worried the effort could fail if the White House ‘overplays its hand’ on Trade Adjustment Assistance.”

Mr. Palmer noted that, “Administration officials have said Obama will submit the pacts for congressional approval after the exact timing and sequence of votes have been agreed.”

Yesterday, Senate Minority Leader Mitch McConnell penned an Op-Ed on trade issues that was published in The Washington Post, while House Majority Whip Rep. Kevin McCarthy (R-Calif.) offered an opinion item on trade that was posted yesterday at Politico.

And Vicki Needham reported yesterday at The Hill Online that, “National Cattlemen’s Beef Association President Bill Donald also urged the White House to send up the trade deals.

“‘If the president is serious about creating jobs, we expect the three trade agreements to be sent to Congress this week,’ Donald said. ‘There is absolutely no conceivable reason to delay these job-generating trade pacts any longer.’”

Also yesterday, Politico writer Jake Sherman reported that, “The two top House Republicans want President Barack Obama to huddle with congressional leadership before his Thursday jobs speech to discuss potential areas of bipartisan agreement.

In a letter to the president Tuesday, Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) laid out several areas of common ground, including passing three long-stalled trade agreements, reducing regulation and funding certain infrastructure projects.”

 

Agricultural Economy

Sheila McNulty reported yesterday at The Financial Times Online that, “Wildfires are raging across central Texas, compounding drought that has caused $5.2bn in agricultural losses and led ranchers in the largest cattle-producing US state to rush to slaughter.

“At the weekend, the Texas Forest Service responded to 63 new fires, many fanned by winds from tropical storm Lee.

“Texas has been in drought for a year, with more than 3.6m acres burnt in wildfires since the fire season began in November. A record number of 38C days has dried grass and hay, leaving ranchers with no choice but to sell cows for slaughter.”

The FT article added that, “Weekly auctions that usually sell 1,500 cows at this time of year are attracting 5,000 and even turning away potential sellers, underlining the cost of severe weather that Texas A&M University estimates has brought $5.2bn losses.

“While Texas is the biggest drought victim, Oklahoma, New Mexico, Kansas, Georgia and Louisiana are also affected. ‘This is an all-time record for the driest, hottest summer on record in this area since 1895,’ said Travis Miller, a professor in Texas A&M soil and crop sciences department.”

Keith Good

Comments are closed.