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Farm Bill; Ag Economy; and Senate Procedural Issue

Farm Bill Issues

DTN Political Correspondent Jerry Hagstrom reported on Friday morning that, “While farm and other interest groups are continuing to press their cases, the chairmen and ranking members of the House and Senate agriculture committees are scheduled to send the super committee in charge of deficit reduction a letter today [Friday] stating they will support a reduction of $23 billion in farm-bill spending over 10 years in exchange for changing farm programs within the bill that the committee is supposed to produce, a key Senate source told DTN.

“Another Senate source said that while the letter is scheduled to be sent, the four leaders — Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., Senate Agriculture ranking member Pat Roberts, R-Kan., House Agriculture Committee Chairman Frank Lucas, R-Okla., and House Agriculture Committee ranking member Collin Peterson, D-Minn. — had not yet agreed to a final number.

“Roberts confirmed the $23 billion figure the Associated Press reported Thursday.”

Mr. Hagstrom explained that, “The Obama administration had proposed $33 billion in cuts to agricultural programs last month, but lawmakers and groups said that was too much.

“The four agricultural leaders have not discussed publicly what programs would be rewritten, but indications are that the bill would eliminate or drastically cut back the direct payments that crop farmers get whether prices are high or low, rewrite the other crop subsidy programs and include the sugar and dairy titles. It’s also likely the bill would cover conservation and nutrition programs.”

Erik Wasson reported on Friday afternoon at The Hill’s On the Money Blog that, “The leaders of the House and Senate Agriculture committees will recommend that the deficit supercommittee cut no more than $23 billion from farm programs, but are not providing details Friday.

“House Agriculture Chairman Frank Lucas (R-Okla.), ranking member Collin Peterson (D-Minn.), Senate Agriculture Chairman Debbie Stabenow (D-Mich.) and ranking member Pat Roberts (R-Kan.) are making the recommendation in a joint letter to the deficit supercommittee on Friday. Farm-state members are eager to head off deeper cuts to farm payments and conservation programs in the name of fiscal responsibility.

“According to an aide, the leaders are pledging to provide a joint set of specific policy recommendations by Nov. 1.”

The Hill update added that, “Senate Finance Chairman Max Baucus (D-Mont.), a member of the supercommittee, on Friday acknowledged that while farmers ‘want to pay their fair share they don’t want to be taken advantage of either.’”

An update posted on Saturday at the National Sustainable Agriculture Coalition (NSAC) Blog indicated that, “The October 14 deadline for the authorizing committees of Congress to send their deficit reduction recommendations to the Joint Select Committee on Deficit Reduction (often referred to as the Super Committee) has passed without a letter from the House and Senate Agriculture Committees.  Word from the House and Senate Committees with jurisdiction over the farm bill is that they are close to having a joint letter ready to share with the Super Committee, but there are still some issues being worked out.  It is not clear yet if the letter will be issued later this weekend or sometime early next week.  Nor is it clear what issues are holding up the letter, which means that all of the rumored details could still be in a state of flux.

“According to multiple published accounts, the farm bill deal that will be offered to the Super Committee will be a net reduction in farm bill spending of $23 billion over the next decade.  The package is expected to include a proposed shift from in commodity programs from direct and counter-cyclical payments to revenue-based payments.  That shift in commodity payments would still benefit the same ‘program’ crops, primarily corn, soy, wheat, cotton and rice, but at a somewhat reduced cost to the taxpayer.  The savings could be in the range of $1 billion to $2 billion a year relative to current farm programs.”

The NSAC update added that, “Observers expect that the letter from the Agriculture Committees to the Super Committee will not include any details about how the proposed cuts would be divvied up, but rather will keep to broader messages.  The Agriculture Committees are working under the assumption that they will have approximately two more weeks to develop all of the details to reach $23 billion in net cuts and to send those details to the Super Committee by the beginning of November.

It is not yet clear what type of process will be used to achieve that detailed package.  Whether there are any public hearings or business meetings of the Committees or whether the details are hammered out behind closed doors remains to be seen.  Of course, whatever the Agriculture Committees deliver to the Super Committee is a recommendation.  The Super Committee can accept it, reject it, or revise it.  Hence, there is no absolute certainty that the final farm bill 10-year funding cut will be $23 billion.”

Meanwhile, Sally Schuff reported on Friday at Feedstuffs Online that, “A farm bill proposal from two Indiana lawmakers was submitted to the Super Committee on Friday as the deadline loomed for Congressional committees to propose the 10-year cuts they would make in the nation’s deficit… Sen. Richard Lugar (R., Ind.) and Rep. Marlin Stutzman (R., Ind.) delivered their REFRESH bill, a proposed farm bill that would cut $40 billion over 10 years. Andy Fisher, a spokesperson for Sen. Lugar, said the bill’s savings had been scored by the Congressional Budget Office. The bill was introduced in both chambers on Oct. 5.”

In other developments, a news release Friday from Sen. Thad Cochran (R-Miss.) stated that, “[Sen. Cochran] today pointed to shortcomings in a federal agriculture disaster assistance program to advocate for reforms to ensure timely benefits for farmers who lose crops to flooding or other disasters.

“Cochran addressed problems with the Supplemental Revenue Assistance Payments Program (SURE) at a Senate Homeland Security Appropriations hearing this week (video replay of hearing) that looked at federal programs for disaster recovery and response.

“Cochran indicated that complaints from agriculture producers in Mississippi suggest that the SURE program is not working as it was intended to when it was created as the largest of five disaster programs in the 2008 Farm Bill to provide financial assistance for crop losses due to natural disasters.  SURE is administered by the Farm Service Agency (FSA).”

Also on Friday, a USDA Daily Radio News item indicated that, “The [USDA] Deputy Secretary [Kathleen Merrigan] is among those keeping an eye on how specialty crop programs will fare in the 2012 Farm Bill.”  To listen to this one-minute audio overview, just click here.

And on dairy issues, Marc Heller reported yesterday at The Watertown Daily Times (NY) Online that, “A new safety net for dairy farmers proposed in Congress won’t take effect until after the current one expires, temporarily leaving farmers with much less protection in case milk prices tumble.

“Rep. Collin C. Peterson’s proposal, modeled after a plan from farmer-owned bargaining cooperatives, opens a gap between the Milk Income Loss Contract program — which ends next September — and a new plan that lets farmers buy government insurance to protect their profit margins.

“Sen. Kirsten E. Gillibrand’s office highlighted that potential flaw in Mr. Peterson’s plan as the senator introduced two dairy proposals, one eventually to replace the MILC program with margin insurance and one to keep it in place for at least an additional five years. Mr. Peterson, D-Minn., is the House Agriculture Committee’s ranking Democrat.”

In more detailed news on the supercommittee, Janet Hook reported in Saturday’s Wall Street Journal that, “Congress’s deficit-cutting supercommittee was deluged with recommendations on Friday. Unfortunately for the panel, much of it was advice about what not to cut.”

The Journal article added that, “To make the committee’s job even harder, leaders of both parties are increasingly looking to it not just to produce a deficit-reduction plan, but also to propose ways to spur job creation.”

Lori Montgomery reported in Saturday’s Washington Post that, “By all accounts, that ideological divide, which torpedoed hopes for compromise during the debt-limit debate this summer, continues to bedevil the 12 supercommittee members. Republicans are open to some modest tax increases by ending subsidies for oil and gas companies and corporate jet owners, for example, but have so far resisted the more substantial tax increases that Democrats are demanding in exchange for cuts to federal health programs, according to aides and lawmakers with knowledge of the deliberations.

No one has given up hope but no one can quite make out the path forward, either.”

The Senate Budget Committee made recommendations to the supercommittee on Friday, as did a group of Republicans from the Senate Finance Committee.

Marin Cogan and John Bresnahan reported yesterday at Politico that, “The joint select committee has been one of the most secretive — and scrutinized — congressional panels in recent history, notable on Capitol Hill for its virtual lack of leaks, both on the policy details and the personal relationships between members. [Sen. Patty Murray (D-Washington)] and [Rep. Jeb Hensarling (R-Texas)] face what many in gridlocked Washington consider to be an impossible task: coming up with $1.2 trillion in savings over the next 10 years that can win support of the 12-member panel and pass a House and Senate divided on nearly every major issue.

“With the deadline for a deal drawing near, the way this Washington odd couple gets along could mean more for deficit reduction than anything else.

“Yet for all the pessimism about dealmaking, lawmakers and staff working on the supercommittee express wonderment at how Murray and Hensarling are getting along, saying it makes their chance at getting a deal more likely. But the history of fast friends with admirable compromises that failed to pass congressional muster — like McCain-Kennedy or Simpson-Bowles — still lingers in the hive mind of Capitol Hill, making the Murray-Hensarling bond that much more important in the coming weeks.”

Reuters writers Richard Cowan and Tim Reid reported yesterday that, “The deficit-reduction ‘super committee’ of Congress is now struggling to find just the right balance of spending cuts and tax increases to achieve $1.2 trillion in savings.

“Super committee member Chris Van Hollen, a House Democrat, Friday warned it was ‘still unclear’ whether it will succeed. There are broad implications because of the November 23 deadline for presenting a plan to the full Congress.

“House of Representatives Majority Leader Eric Cantor said in an interview on the ‘Fox News Sunday’ program that he was confident there would be a deal by the November 23 deadline.”

In a broader look at budget issues, Josiah Ryan reported on Friday at The Hill’s Floor Action Blog that, “The Senate will attempt to return to regular order in the appropriations process next week when it takes up a $182 billion ‘minibus’ package that includes discretionary spending for the departments of Agriculture, Commerce, Justice and Transportation, as well as the Food and Drug Administration (FDA) and federal housing programs for fiscal year 2012.”

The Hill update noted that, “Debate on the spending bill will start Monday; aides said that because it will mark the first detailed Senate discussion on FY 2012 spending, members will likely file dozens if not hundreds of amendments to the legislation.”

Humberto Sanchez and Jonathan Strong reported today at Roll Call Online that, “September’s continuing resolution might keep the government funded through Nov. 18, but the first signs of yet another ugly shutdown showdown are already starting to appear.

With overall funding levels set, round four of the 2011 government shutdown fight isn’t expected to center on conservatives’ effort to cut more spending. Instead, in the House and Senate, Republicans are gearing up for a far more traditional battle over policy riders ranging from abortion to farm dust.”

The article stated that, “Sen. Mike Johanns (R-Neb.) will likely force a vote on an amendment that would forbid the use of funds for the regulation of farm dust.  ‘My legislation [would say], you can’t regulate farm dust, that’s absurd,’ Johanns said. ‘It’s just indicative of what this administration is about. They are so incredibly out of touch. You can’t farm without creating dust.’

“Democrats say the issue is a red herring — the Environmental Protection Agency and Department of Agriculture say no regulation is forthcoming. But Johanns said he has been in contact with the EPA and feels it has not been clear.”

Today’s article noted that, “Sen. Tim Johnson (D-S.D.) dismissed Johanns’ complaints.

“‘Lisa Jackson of the EPA has declared repeatedly that there is no [farm] dust [rule afoot],’ Johnson said.”

 

Agricultural Economy

In a separate budget issue with implication for the agricultural economy, Reuters writer Charles Abbott reported on Friday that, “If facts feed the commodities market, a data cutback could leave a bitter taste for traders and analysts who digest government statistics.

“The federal agencies that gather data and issue reports on agriculture — from almonds to ethanol — face sizable cuts in funding as part of federal belt-tightening.

“Cutbacks are coming as grain prices are near historical highs and supplies are tight. They also come at a time when some in the market question the veracity of government data.”

The article noted that, “‘The need for data … probably is as high as it ever has been,’ said agricultural economist Scott Irwin of the University of Illinois, during a recent panel discussion.”

Mr. Abbott also noted that, “USDA’s National Agricultural Statistics Service could see cuts as large at 5 percent, following cuts in fiscal 2011. An official with the service was reviewing its offerings and the resources needed to produce them.

Key indicators for NASS, besides the twice-a-decade Census of Agriculture, include the monthly Crop Production, Cattle on Feed and Agricultural Prices reports, the quarterly Grain Stocks and Hogs and Pigs reports, and annual reports on Prospective Plantings, issued in March, and Acreage, issued in June. NASS produces more than 500 reports in a year.”

In other news, an article posted yesterday at the Daily Mail Online reported that, “The world’s population looks set to smash through the seven billion barrier in the next few days, according to the United Nations.

“It comes just 12 years since the total reached six billion – with official estimates saying the figure will top eight billion in 2025 and 10 billion before the end of the century.

“And it is most likely the baby will be born in the Asia-Pacific region – where the population growth rate is higher than anywhere else in the world [See related graph].”

The article added that, “The major issues will be how to feed the new arrivals, which will see the need for new varieties of improved crops.”

And a press release on Friday from the National Peanut Board stated that, “Looking for a nutritious, affordable alternative to your favorite jar of USA grown peanut butter because you heard prices may be increasing? Don’t be so fast to switch, say registered dietitians.

“A combination of factors ― including rising energy prices and severe heat and drought throughout peanut growing regions this year ― are leading to a peanut crop that is smaller than last year. As a result, some peanut butter manufacturers have recently announced they expect to raise prices.

“Still, according to the National Peanut Board, the cost of one serving of peanut butter (equivalent to one ounce, or two tablespoons) would increase less than four cents, from 12.7 to 16.5 cents [Based on expected price increase figures announced by The J.M. Smucker Company, manufacturer of Jif® – the nation’s top selling brand.] Breakfast, lunch, dinner and in between, peanut butter is a perfect ingredient for any meal or snack for people of all ages.”

 

Senate Procedural Issue

Alexander Bolton reported on Friday at The Hill Online that, “Senate Republicans say Majority Leader Harry Reid (D-Nev.) must undo last week’s ‘nuclear option’ if he wants to defuse their anger and restore peace to the upper chamber.

“They are brushing aside Reid’s efforts to soothe them with private phone calls, offers of meetings and promises to allow amendments to appropriations bills that are scheduled to reach the floor next week.”

The article pointed out that, “None of this is allaying anger over an ambush Reid pulled off last week, using a simple majority vote to nix precedent and deny Republicans the chance to offer amendments.

“Republican senators across the ideological spectrum united in resisting the majority leader’s blandishments.”

Keith Good