June 18, 2018

Farm Bill Issues; Trade; and the Agricultural Economy

Farm Bill: Budget Background- Supercommittee, Agriculture Appropriations (Senate)

The first meeting of Joint Select Committee on Deficit Reduction, or the supercommittee, will be held this morning and will be aired live at 10:30am ET on C-SPAN3.

Seung Min Kim reported yesterday at Politico that, “The top Republican congressional leaders on Wednesday struck an optimistic tone that the deficit-slashing supercommittee will stave off an automatic round of cuts of defense and domestic programs.

“House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) emerged from a 30-minute meeting with the GOP members of the supercommittee, who had been conferring in the office of the panel co-chairman, Rep. Jeb Hensarling (R-Texas).

“‘Failure is not an option,’ McConnell told reporters. ‘This committee is going to succeed in meeting at least the floor that is established in the legislation.’”

The article noted that, “Both Boehner and McConnell emphasized that getting the nation’s debt under control was a crucial avenue to creating jobs and boosting the economy.”

Rosalind S. Helderman pointed out yesterday at The Washington Post Online that, “Appointed by House and Senate leaders as part of the August deal that allowed the nation’s legal borrowing limit to rise, the six Democrats and six Republicans on the committee have until Nov. 23 to come up with a plan to reduce the deficit.

Their goal is to cut $1.5 trillion over the next decade. But if they can’t come up with at least $1.2 trillion in savings — or if Congress does not adopt their recommendations by the end of the year — government spending will automatically be cut by $1.2 trillion over the next 10 years, split evenly between defense and domestic programs.

“The threat of that kind of across-the-board cut, particularly to the nation’s military, is designed to compel agreement on a more strategic approach.”

Jonathan Allen and Seung Min Kim reported this morning at Politico that, “Washington’s influence class lined up against the deficit-reduction supercommittee as the dozen lawmakers charged with cutting as much as $1.5 trillion over a decade scrambled to write ground rules in advance of Thursday’s first public meeting of the panel.

The lobbying is coming from all sides as a wide range of agencies and interest groups look to protect their turf.”

Against the backdrop of today’s supercommittee hearing, David Nakamura reported in today’s Washington Post that, “President Obama is planning to propose a jobs program on Thursday that could entail at least $300 billion in tax cuts, local government aid, and spending on infrastructure such as roads and schools as he aims to restore public confidence in his ability to boost the economy.”

The Post article added that, “The president’s plan, in large part, will call for continuing current measures to stimulate the economy, including a 2 percentage-point payroll-tax cut and extended unemployment benefits, administration officials say. Obama is also likely to call for an additional tax cut for companies that hire workers. Those measures together could cost about $200 billion next year.

“Obama is planning to propose $100 billion or more in spending on infrastructure, state and local aid, and programs that target people who have been unemployed for more than six months, according to officials and other people familiar with the deliberations.”

And in related news, David Leonhardt reported in today’s New York Times that, “If history is a guide, the odds that the American economy is falling into a double-dip recession have risen sharply in recent weeks and may even have reached 50 percent.”

The New York Times editorial board today tied together these economic realities with the supercommittee meeting and indicated that, “Just in time to be irrelevant to the nation’s most pressing task, the Congressional ‘supercommittee’ officially starts work on Thursday to come up with a plan to cut $1.5 trillion from the deficit. Fortunately, a few Democrats are trying to steer the committee toward the far more practical goal of creating jobs and stimulating the down-bound economy. If they succeed, there may still be a chance for the group to play a useful role.”

The Times noted that, “Since that bad deal was struck, darkening economic news has pushed the public conversation back where it belongs: on jobs. And yet the committee is preparing to drain a huge amount of Congressional energy and focus in the wrong direction, on whether to preserve fundamental government programs, stifling the hopes for new efforts to put people back to work.”

In separate budget developments on appropriations, Erik Wasson reported yesterday at The Hill Online that, “Under the terms of the August deal to raise the federal debt ceiling, $7 billion must be trimmed from 2012 spending, with half of the cuts coming from ‘security’ funding, which includes homeland security, foreign aid, the State Department and the Pentagon.

The Senate Appropriations Committee on Wednesday determined how the $1.043 trillion in spending is to be divided among the 12 appropriations bills. Twenty-nine members voted for the allocations, with only Sen. Ron Johnson (R-Wis.) voting no.”

The Hill article added that, “The committee levied the biggest cuts on the State Department and the foreign aid budget, trimmed by $3.5 billion to $44.6 billion. Defense spending is frozen at $513 billion next fiscal year, the same as 2011.

House Republicans have not decided how they are going to split up the spending, but aides say the six bills that have passed the House will not be revised prior to negotiations with the Senate.”

A news release yesterday from the Senate Appropriations Committee stated that, “The Senate Committee on Appropriations today adopted FY 2012 302(b) subcommittee allocations and approved the FY 2012 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies; Energy and Water Development; and Homeland Security Appropriations Bills.”

On the topic of agriculture, the Committee released this overview summary of spending allocations.

The overview pointed out that, “The FY 2012 provides $6.582 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), as compared to $6.734 billion in FY 2011.  This level will fully fund participation in the program. The decrease from FY 2011 is due to lower program participation rates than originally estimated.”

On the issue of food safety, the overview indicated that, “The FY 2012 bill provides $2.497 billion for the Food and Drug Administration, as compared to $2.447 billion in FY 2011, not including funding collected through user fees.  The Food and Drug Administration is the only non-security Agency to receive increased funding in this bill…An increase is provided the Food and Drug Administration to begin implementation of the recently passed Food Safety Modernization Act.”

Helena Bottemiller reported today at Food Safety News Online that, “The bill advanced by the Senate Appropriations Committee this week provides more than $350 million more for FDA and $35 million more for the U.S. Department of Agriculture’s Food Safety and Inspection Service than the House appropriations bill. The Senate bill boosts FDA’s budget $50 million and keeps FSIS’ budget flat compared to fiscal year 2011 — an impressive feat as programs across government agencies sustain significant cuts.”

To listen to remarks on agriculture related spending from yesterdays hearing by Senator Herbert Kohl (D-Wis.), the Chairman of the Appropriations Subcommittee on Agriculture, just click here (MP3- 2:54).  Remarks yesterday from the Ranking Member of the Ag Appropriations Subcommittee, Sen. Roy Blunt (R-Missouri), can be heard here (MP3- 2:17).

On the issue of conservation spending, a letter yesterday signed by the nation’s leading hunting and angling organizations, representing millions of sportsmen and women across the nation, expressed collective opposition to disproportionate cuts to Farm Bill conservation spending.

The Appropriations Committee overview of agriculture related spending stated that, “The FY 2012 bill provides $828 million for the Natural Resources Conservation Service, as compared to $871 million in FY 2011.  The bill does not include funding for the Watershed Rehabilitation Program.”


Farm Bill: Policy Related Issues

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “Farmers and ranchers who have faced weather-related losses this year can get federal disaster aid if they document those losses by Sept. 30, the date the USDA’s Supplemental Revenue assistance program expires, Farm Service Agency Administrator Bruce Nelson has told DTN.

“‘If you believe you have a loss and are eligible for benefits under any of these programs, head down to your local Farm Service Agency office as soon as possible,’ Nelson said in an interview late last week. He noted that the disaster programs cover crop, livestock, forage honeybee, farm-raised fish and trees. Experienced farmers are familiar with the requirements, but beginning farmers may not be, he added.

“That also means unless Congress makes a change, any winter crops being planted now will not be eligible for disaster aid.”

In other policy related news, yesterday, USDA’s Economic Research Service (ERS) released a report titled, “Household Food Security in the United States in 2010.”

The Abstract of the ERS report stated that, “An estimated 85.5 percent of American households were food secure throughout the entire year in 2010, meaning that they had access at all times to enough food for an active, healthy life for all household members [related graphic]. The remaining households (14.5 percent) were food insecure at least some time during the year, including 5.4 percent with very low food security—meaning that the food intake of one or more household members was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food. The prevalence rate of very low food security declined from 5.7 percent in 2009, while the change in food insecurity overall (from 14.7 percent in 2009) was not statistically significant [related graphic]. The typical food-secure household spent 27 percent more on food than the typical food-insecure household of the same size and household composition. Fifty-nine percent of all food-insecure households participated in one or more of the three largest Federal food and nutrition assistance programs during the month prior to the 2010 survey.”

Yesterday’s ERS report noted that, “In 2010, the typical U.S. household spent $43.75 per person each week for food (table 5). This measure of food spending, which is not adjusted for food price inflation, was unchanged from 2009.”

Also, the ERS update pointed out that, “Fifty-nine percent of food-insecure households reported receiving assistance from one or more of the three largest Federal food and nutrition assistance programs during the month prior to the December 2010 food security survey (table 8).”



Tom Barkley reported yesterday at the Real Time Economics Blog (Wall Street Journal) that, “Republicans are seeking to kickstart the stalled U.S. trade agenda, planning a vote Wednesday in the House on tariff bill that could pave the way for eventual approval of free-trade agreements with South Korea, Colombia and Panama.

“The proposed renewal of the expired Generalized System of Preferences program, which provides duty-free access for more than 100 developing countries, is part of a Republican effort to put pressure on President Barack Obama to submit the three trade pacts.”

Yesterday evening, Pete Kasperowicz reported at The Hill’s Floor Action Blog that, “The House on Wednesday evening approved legislation that retroactively authorizes the Generalized System of Preferences (GSP) program, which expired in February and lets specified goods from more than 120 countries enter the U.S. duty-free. The bill was brought up under a suspension of House rules, usually reserved for noncontroverisal bills, and was approved by voice vote.

“In brief debate on the bill, H.R. 2832, House Ways & Means Committee Chairman Dave Camp (R-Mich.) said GSP is a ‘vital part of a robust trade agenda.’ Republicans are hoping that approving GSP will lead to passage of three pending free trade agreements with Colombia, Panama and South Korea.”

The update added that, “Democrats welcomed approval of GSP, but complained that Republicans have blocked another trade priority — renewing the Trade Adjustment Assistance (TAA) program. That program helps retrain workers who lose their jobs to international trade.”

“[Sander Levin (D-Mich.)] also said he expects the Senate to add TAA to the GSP bill once the House sends the bill to the Senate, and called on Republicans to support this addition.”

And a news release yesterday (video clip included) from Senate Agriculture Committee Ranking member Pat Roberts (R-Kansas) stated that, “[Sen. Roberts] today called on President Obama to send to the Senate languishing trade agreements with Colombia, Panama and South Korea where they could be approved to create jobs and significantly improve the economy.

“The Senator made the remarks at a press conference with Senators Lamar Alexander (R-TN), Orrin Hatch (R-UT), Roy Blunt (R-MO), Chuck Grassley (R-IA) and others.”


Agricultural Economy

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included several notable observations with respect to the U.S. agricultural economy, a summary of these observations have been posted here, at the homepage.

Leslie Josephs reported in today’s Wall Street Journal that, “Cotton futures jumped to their highest point in nearly two months as storm damage to southern U.S. cotton fields added a new layer of worry over the size and quality of this year’s domestic crop… Hurricane Irene walloped the East Coast last month, and the torrential rain and wind hurt crops in Virginia and North Carolina, which together are expected to produce more than 9% of the U.S. crop this year.”

And a news release earlier this week from Purdue University stated that: “Food prices will continue to rise for the remainder of this year and well into 2012 because processors now are beginning to pass along higher costs of commodities to consumers, a Purdue University agricultural economist says.

“While world grain stocks diminished amid growing demand, drought and flooding, food prices did not significantly increase for most of 2009 and 2010 even though prices that processors pay for raw ingredients such as corn and soybeans did, Corinne Alexander said.

“That is changing.

“‘The question is not whether costs at the grocery store will increase, it’s when,’ she said.”

Keith Good

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