FarmPolicy

August 20, 2019

Farm Bill; Biofuels; Trade; Regulations; and House Passes Spending Bill

Categories: Audio /Budget /Ethanol /Farm Bill

Farm Bill: Budget and Policy Issues

In an interview yesterday with FarmPolicy.com that focused on the Farm Bill and the supercommittee , Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) indicated that, “First and foremost, we’re focused on the recommendations that we’re being asked to give to this joint committee, the super committee, and we’re focusing on proactive policy changes rather than just giving them a list of areas to cut.”

Sen. Stabenow noted that, “My colleagues and I are working on a bipartisan basis to come to agreement on a set of policies that would actually make sure that our farmers and our small businesses are able to be able to be successful and have the tools they need when they need it, and at the same time providing real and credible reforms to reduce the deficit, so that’s what we’re working on.”

After commending the National Cotton Council and National Corn Growers Association for “coming forward with responsible solutions, creative solutions, to help us at a time where we have a very tight budget environment,” Sen. Stabenow added that, “I am working with other commodity groups as well, and am strongly encouraging them to come forward with what they believe are the important risk management tools that we need to have for farmers so that we make sure we have help for them when they need it.”

With respect to executive branch proposals on farm spending, the Senate Ag Committee leader noted that, “I’m concerned about the president’s proposals on cutting crop insurance and do not support that. I’m concerned about other areas as well…we’ve heard strongly, whether it’s Michigan, Kansas or from growers and producers around the country, that they are very strongly behind strong crop insurance, effective for as many different crops as possible, and we’ve heard loudly and clearly strong support for conservation tools.”

On the issue of agricultural research, recall that last week Chairwoman Stabenow and South Dakota GOP Sen. John Thune introduced The Charitable Agricultural Research Act.

During yesterday’s conversation, Sen. Stabenow noted that, “And in the current budget situation, the way we fund ag research has been eliminated, a lot of that through direct funding to universities and through community designations and so on, what’s been called earmarks in the past. And that’s fine to change that structure, but it wasn’t replaced with anything. And so we’ve seen huge cuts in the current budget that are very concerning to me.

“So our bill, first of all, sets up one way to encourage private individuals and other entities to be able to invest in ag research from a tax exempt status. We have the same kind of approach in medical research, so this is a tool to do that. It does not take the place of the investments that we need to make through the federal government, and that is really done on a yearly basis through the appropriations process. But we’re looking for creative alternatives.”

A transcript of yesterday’s entire conversation with Chairwoman Stabenow is available here.

More specifically on the potential interplay between Farm Bill development and supercommittee action, Secretary of Agriculture Tom Vilsack, in a recent interview with the Red River Farm Network, noted that the actions of the supercommittee could have an impact on the 2012 Farm Bill timeline.

An audio clip featuring the Secretary’s perspective on this issue from yesterday’s Agriculture Today program on the Red River Farm Network, is available here (MP3- 0:44).

The increased possibility of an accelerated Farm Bill timeline stemming from the supercommittee process is an impetus for both commodity groups and lawmakers to put forward policy ideas for consideration.

Today a bipartisan group of Senators will introduce a bill with major reforms to federal farm policy.

Senators Sherrod Brown (D-OH), John Thune (R-SD), Dick Durbin (D-IL), and Richard Lugar (R-IN) propose eliminating direct and counter-cyclical payments and replacing the current ACRE and SURE programs with a consolidated revenue protection program called the Aggregate Risk and Revenue Management (ARRM) program.

This program would improve upon the ACRE option included in the 2008 farm bill by simplifying application and administrative processes, calculating the program guarantee on average revenue—the 5-year Olympic average of yield x harvest price—and moving from a state to a crop reporting district trigger.  According to the Congressional Budget Office, ARRM costs nearly $20 billion less than the current suite of farm programs.

Meanwhile, in additional reaction to the President’s deficit proposal from earlier this week on farm spending, in a telenews conference yesterday Sen. Mike Johanns (R-Neb.) noted that, “So with all of that going on, the president steps in and he suggests balancing these cuts by putting more money into a program that has really worked very poorly called the SURE program. I don’t get it.

“I didn’t hear a single farmer in all the meetings I’ve had support the SURE program. It’s a program that doesn’t work well. And typically farmers are waiting two years if they even qualify for the program.

“So the president plans to spend $8 billion on a program that farmers aren’t even asking for, don’t want, a program that is 100 percent paid for by tax dollars in comparison to crop insurance where you have a division of responsibility between the purchaser of the policy and the taxpayer.”

The former Agriculture Secretary added that, “So expanding the program at 100 percent taxpayer expense at the expense of a program that is working like crop insurance is goofy policy. And I’m being very generous there. I don’t get it.”

The “Washington Insider” section of DTN noted in part yesterday (link requires subscription) that, “The administration’s proposal for farm program cuts has certainly caught the attention of policy folks in Washington. So far, nobody is entirely happy with what they see, but the reasons vary widely.”

The DTN item added that, “Ag advocates are complaining that the proposal is not fair. For example, Senate Budget Chairman Kent Conrad, D-N.D., a sometime deficit hawk who had an important role in the last farm bill debate, praised the overall deficit reduction plan but thinks it ‘calls for larger agriculture cuts than are necessary or appropriate, and which could undermine our ability to develop an effective farm bill.’

“A similar argument has come from the Senate and House Agriculture committees, particularly regarding the federally subsidized crop insurance program on the grounds that it has been cut heavily already, a reference to the $6 billion (over the next 10 years) in cuts USDA made to payments to the private insurance companies that write and sell policies, although those cuts were made to increase efficiency, not reduce coverage.”

Rep. Kristi Noem (R-SD) also expressed concern regarding the President’s budget outline in comments yesterday on the Agriculture Today radio program (Red River Farm Network).  Click here (MP3- 0:56) to listen to a related audio clip from yesterday’s show.

And Peter Urban reported earlier this week at Arkansas News Online that, “U.S. Sen. Mark Pryor, D-Ark., voiced strong opposition today to cuts in agriculture programs in the debt reduction plan President Barack Obama announced Monday.

“‘Rural America is going to take it on the chin, and that is what you see with the Obama plan,’ Pryor said during a conference call with reporters.

“Obama’s plan to reduce deficits by $3.6 trillion over the next decade includes proposals to cut agriculture subsidies by $33 billion. It would end direct payments to farmers and reduce total spending on crop insurance by about 10 percent.”

In news related to dairy policy, Bob Meyer reported yesterday at Brownfield that, “In response to comments gathered over the past few months, the Board of Directors of the National Milk Producers Federation has made some changes to their Foundation for the Future plan. CEO and President Jerry Kozak says the ultimate goal of the changes is to give the legislation to be introduced in the House a better chance at passage.

“The biggest change involves the Dairy Market Stabilization part of the program. A number of dairy producers and processors expressed their objection to the mandatory supply management plan. On top of that, Kozak says when the legislative discussion draft proposed by Congressman Collin Peterson was scored it was determined that half of the money collected under Dairy Market Stabilization would have to go to the Federal Treasury. The revised plan gives producers an option, if they participate in the margin protection insurance plan, they must participate in the supply management plan but they can opt out. ‘If they don’t want the government to provide either basic or supplemental margin protection coverage, they don’t have to take that and they are not part of the market stabilization.’”

However, a news release yesterday from the International Dairy Foods Association (IDFA) stated that, “[IDFA] today said that even though there is a historic opportunity to reform U.S. dairy policy to benefit consumers, farmers and the entire dairy industry, the proposed changes to the Foundation for the Future (FFTF) plan put forth by the National Milk Producers Federation (NMPF) continue to include unacceptable policy reforms.

“‘NMPF’s proposal continues a complex, government milk pricing system that will force even higher prices on fluid milk and penalizes producers who want insurance with mandatory supply controls,’ said Connie Tipton, president and CEO of IDFA. ‘Unfortunately, these provisions are unacceptable to our members.’”

And Marc Heller reported yesterday at the Watertown Daily Times Online (NY) that, “Sen. Kirsten E. Gillibrand [D-NY] has some fresh ideas for next year’s five-year farm bill. But she’s also guarding her turf.”

Yesterday’s article indicated that, “Mrs. Gillibrand offered changes to Mr. Peterson’s supply management provision, saying New York and some other regions should be allowed to expand production because demand for milk outstrips supply. And she called for reducing the number of federal milk marketing orders from four to two.

There were indications Wednesday that the debate on dairy policy is about to shift a bit. The National Milk Producers Federation, representing dairy farmers’ bargaining cooperatives, said it would back away from a mandatory supply management program by making it obligatory only for farmers who buy into a proposed margin insurance program. And the margin insurance program is optional.

“The NMPF, after a meeting of its board of directors, also said it would recommend charging farmers a fee for the margin program, which would help reduce the government’s cost. The group did not say how much the fee might be, but that it would be set on a sliding scale.”

In a separate Farm Bill issue, an update posted yesterday at Agri-Pulse Online reported that, “The Campaign for a Renewed Rural Development today called on Congress to include a strong and comprehensive Rural Development Title in the 2012 Farm Bill to create jobs and promote economic growth in rural America. The campaign, a diverse coalition of 32 national organizations, released its legislative priorities to guide lawmakers as they begin work on writing the new Farm Bill. [Senate letter / House letter].”

In more specific news on the supercommittee, Eric Lichtblau reported in yesterday’s New York Times that, “With bitter partisanship surrounding the debate, some officials inside and out of Congress are already predicting that the committee will fail. Without a plan, the across-the-board cuts would begin in 2013. Pentagon financing would be particularly hard hit — with cuts expected of $55 billion per year for 10 years — but some social and entitlement programs, including Social Security, Medicare and food stamps, would be spared.

“As lobbyists and executives in education, agriculture, social services and other areas game out the possibilities, some say their sectors could conceivably be better off, and the sting of cutbacks less painful, if the automatic cuts take effect.

“But with many unknowns, few interest groups are willing to take that risk. As Joe Schultz, a senior economist with the Senate agriculture committee, told a Texas cotton growers’ group, the risks of even deeper hits should the automatic cuts take effect makes him ‘very, very worried.’”

Manu Raju and Jake Sherman reported today at Politico that, “House Speaker John Boehner and Senate Minority Leader Mitch McConnell have been remarkably united this Congress — but they face competing political interests when it comes to the powerful deficit-slashing supercommittee.

“McConnell has set his sights on a more modest $1.2 trillion to $1.5 trillion in cuts while avoiding any proposal that pushes higher tax revenues, fearing it would provoke a backlash from the right.

Boehner said he wants to go big — he’s pushing to far exceed $1.2 trillion and has called for the committee to lay the groundwork for major tax reform, hoping for a historic, long-term deal.”

Also yesterday,  Meredith Shiner reported at Roll Call Online that, “The Joint Committee for Deficit Reduction conducted its third public meeting today, just hours before the panel was set to meet again behind closed doors to continue negotiations on a deficit reduction package worth at least $1.2 trillion.

“In this morning’s public session, the 12 bipartisan, bicameral lawmakers showered Joint Committee on Taxation Chief of Staff Thomas Barthold with a series of questions regarding taxes and revenue reform, how feasible it is to achieve meaningful reform before the group’s Thanksgiving deadline and about how those changes would affect the long-term debt.”

 

Biofuels

Reuters writer Charles Abbott reported yesterday that, “Legislation was being drafted in the U.S. House of Representatives that would reduce the federal mandate to use fuel ethanol when corn supplies are tight, a congressional staff worker confirmed on Thursday.

“The staffer said a bill was under consideration but declined to discuss details.

“The Renewable Fuels Standard guarantees a share of the motor fuel market for corn-based ethanol. Livestock and dairy producers say the mandate gives a financial advantage to ethanol makers and unfairly.”

The article noted that, “Representatives Bob Goodlatte, a Virginia Republican, and Bob Costa, a California Democrat, were the likely sponsors. They are from districts with large livestock industries.”

 

Trade

Steven T. Dennis reported yesterday at Roll Call Online that, “The Senate passed legislation today to provide job training and other assistance to workers displaced by trade, setting the stage for passage of three free-trade agreements after next week’s recess.

“The bill, which the Senate passed 70-27, now goes to the House. Speaker John Boehner (R-Ohio) said his chamber would take up the measure after President Barack Obama submits the Colombia, South Korea and Panama trade deals.

“‘We await the President’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem with the Senate-passed … legislation,’ Boehner said in a statement. ‘If the President submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.’”

The article added that, “It’s not clear whether the administration will go ahead with sending the agreements, however, without a guarantee that the trade assistance measure will reach Obama’s desk.”

A news release yesterday from the U.S. Trade Representative’s Office stated in part that, “‘The Senate’s action is an important step toward renewal of the Generalized System of Preferences and enactment of Trade Adjustment Assistance reforms and the pending trade agreements with South Korea, Panama, and Colombia,’ said Ambassador [Ron] Kirk. ‘Discussions continue with congressional leadership on how these bills will move through the legislative process. The trade agreements, along with Trade Adjustment Assistance, are an integral part of the President’s plan to create jobs here at home. The President looks forward to their prompt passage.’”

 

Regulations

A news release yesterday from Sen. Rob Portman (R-OH) stated in part that, “[Sen. Portman] and Mark Pryor (D-AR), House Judiciary Committee Chairman Lamar Smith (R-TX), and U.S. Representative Collin Peterson (D-MN), today unveiled their plan to significantly reform the federal regulatory process and reduce unnecessary burdens on job creators. The Regulatory Accountability Act of 2011 reforms the current rulemaking process to lower the costs and improve the quality of new regulations.

“This bipartisan, bicameral effort is the first of its kind in more than a decade to reform and minimize regulations that stifle economic growth.”

“‘While it is difficult to enact a new law, it’s even harder to get a regulation written correctly,’ said Peterson. ‘In many cases, interest groups try to use regulation to interpret the law in their best interest, instead of following the intent of the law. By bringing transparency and accountability to the regulatory process, the American people will be allowed to have a voice in these policy decisions.’”

 

Budget: House Passes Spending Bill

Rosalind S. Helderman reported in today’s Washington Post that, “Washington lurched toward another potential government shutdown crisis Friday, as the House approved a Republican-authored short-term funding measure designed to keep government running through Nov. 18 that Democrats in the Senate immediately vowed to reject.

“In an after-midnight roll call, House Republican leaders persuaded conservatives early Friday morning to support a stop-gap bill nearly identical to one they had rejected just 30 hours earlier.

“The bill, which will keep federal agencies funded through Nov, 18, passed over staunch objections from Democrats, who opposed a provision that would pair increased funding for disaster relief with a spending cut to a program that makes loans to car companies to encourage the production of energy-efficient cars.”

Keith Good

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