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Farm Bill; Ag Economy; Food Labels; Trade; and Political Note

Farm Bill Issues: Senate Budget Action

Josiah Ryan reported today at The Hill’s Floor Action Blog that, “An amendment offered by Sen. Tom Coburn (R-Okla.) to prohibit payments of subsidies to persons with an average income over $1 million, cleared the Senate Thursday night by a vote of 84-15.

“Coburn argued forcefully to his colleagues, who were seated at their desks for the series of rapid-fire votes, that such payments from a government that is running in the red were preposterous.

“‘We had 2,705 people in this country who had adjusted gross incomes in excess of $2.5 million last year who got farm payments,’ said Coburn. ‘[R]ather than taxing millionaires, the first thing we ought to do is quit giving them subsidies.’”

Today’s update added that, “Sen. Debbie Stabenow (D-Mich.), who is the chairman of the Senate Agriculture Committee, fought back arguing that her committee was already working to remedy the problem through regular order.

“‘Give us the next ten days to come forward with the new approach that we will be offering,’ she said.”

The AP reported yesterday that, “Coburn argued that the government shouldn’t be subsidizing the highest earning farmers at a time of deep budget deficits. The leaders of the Senate Agriculture Committee, who opposed Coburn, are working on legislation that could eliminate the entire $5 billion-a-year direct payment program for farmers.

“Direct payments go to farmers regardless of crop prices or yields. They are relied on heavily by many rice and cotton farmers in the South.”

Earlier this week, Sen. Coburn spoke about his amendment on the Senate floor.

Meanwhile, with respect to dairy issues, a news release yesterday from Senator Olympia J. Snowe (R-Maine) stated that, “[Sen. Snowe], in conjunction with Senator Kirsten Gillibrand (D-New York), has introduced an amendment to provide certainty and stability for the nation’s dairy farmers. The amendment, introduced during Senate debate of the Fiscal Year 2012 agriculture appropriations legislation, would prevent any artificial government regulation of dairy that would drive up prices for consumers and limit growth opportunities for American dairy farmers.”

Marc Heller reported yesterday at The Watertown Daily Times (NY) Online that, “Sen. Kirsten E. Gillibrand moved to block a key part of a milk supply management program in the Senate Wednesday, setting up a conflict over the best approach to rewriting dairy policy well before next year’s farm bill debate.

“Mrs. Gillibrand, D-N.Y., is trying to stop a voluntary system by which farmers would be discouraged from expanding production. The setup of the program hurts small and medium sized farms, Mrs. Gillibrand said in an interview Wednesday.

“Mrs. Gillibrand’s measure is part of a complex spending bill moving through the Senate this week, and it also plays into the work a debt reduction committee is doing to identify deep cuts to domestic programs — including agriculture — by a late November deadline. She has filed an amendment to the bill to prevent any spending on the proposed program.”

And a statement on this issue from Jerry Slominski, the Senior Vice President for the International Dairy Foods Association (IDFA), indicated in part that, “IDFA applauds Senate Amendment 872, Stop the Peterson Bill, introduced by Senator Kirsten Gillibrand (D-NY) and co-sponsored by Senator Olympia Snowe (R-ME). This bipartisan amendment will prevent implementation of a controversial supply management program for the dairy industry, offered by Rep. Collin Peterson (D-MN), that we have learned will be included in the recommendations of the House and Senate Agriculture Committees to the Joint Select Committee on Deficit Reduction.”

In separate developments involving Senate budget action yesterday, Reuters writers Roberta Rampton and Rachelle Younglai reported that, “A proposal that would have stopped subsidies for new gas station pumps to boost ethanol sales failed to make it into the Senate’s version of the U.S. Agriculture Department’s fiscal 2012 budget on Wednesday.

“The measure, proposed by Senator John McCain as a way to trim federal spending, would have prevented the USDA from offering grants and loans for rural gas stations to install ‘blender pumps.’”

With respect to the withdrawn amendment, Growth Energy CEO Tom Buis noted yesterday that, “This was an ill-conceived amendment that would have put OPEC further in control of our economy and limited consumer choice at the pump. While the withdrawal of this amendment is an important milestone, we will continue to encourage Congress to oppose any other effort that would erect new barriers to the market.”

More broadly on the Senate “minibus” appropriations bill, Josiah Ryan reported last night at The Hill’s Floor Action Blog that, “The Senate will trudge through up to 16 amendment votes Thursday night as it scrambles to complete work on H.R. 2112, the pending appropriations ‘minibus’ before a weeklong recess begins.”

Later, Mr. Ryan noted that, “Early Friday morning the Senate continued to plod through around 25 votes on proposed amendments to the pending appropriations ‘minibus’ with the of aim completing work on the legislation and begin a week-long recess.

“The so-called ‘vote-O-rama’ afforded the rare site of every senator seated at their assigned desk voting in alphabetical order when their name was called by the clerk for each amendment.”

However, a later update at The Floor Action Blog indicated that, “Senate Majority Leader Harry Reid (D-Nev.) called-off the remainder of the slated amendment votes early Friday morning citing weary staff and set the wheels in motion for a final passage vote on the underlying appropriations package once the Senate returns from recess.”

Farm Bill: Policy Considerations- Supercommittee Analysis

Meanwhile, a recent Email from Kansas State University Extension noted that, “Many of the Farm Bill proposals focused on a risk management tool to cover shallow losses.  These proposed tools are all derivatives of put options and insurance.  Therefore, there are only two variables, price and yield in these revenue guarantees.  This paper, [“Why is the Farm Bill so Complicated?,” by G. A. (Art) Barnaby, Jr. and Troy Dumler], provides a brief overview of four different approaches to cover risk.  Other plans will follow but are likely variations of these four types of policies.”

Also yesterday, National Public Radio’s (NPR) All Things Considered program included a segment titled, “Are Farm Subsidies At Risk?

A transcript of the NPR show noted that: “NPR’s Brian Naylor– But what the farm lobby wants to replace the direct payments with is another subsidy. Instead of paying farmers directly for growing certain crops, they’re backing legislation that would provide farmers assistance only when crop prices fall. [Jon] Doggett of the [National] Corn Growers Association sees it as a fair exchange.

“DOGGETT: I think we’re putting across the table a dime and asking back for a nickel. I think that’s not a bad deal.”

Another portion of the NPR transcript included this exchange: “NAYLOR: The new subsidy would protect farmers from what are called shallow losses when a sudden decline in prices occurs. Its backers say the program would only pay out when farmers need it. [Sen.] Senator Richard Lugar is a co-sponsor of the measure that would cut some 40 billion in farm spending over 10 years. The Indiana Republican, who operates his own farm near Indianapolis, has incorporated the shallow losses proposal into his bill. He argues it is reform.

“Senator RICHARD LUGAR: It is no longer a subsidy, no longer a direct payment as they’re often called, but rather, simply an opportunity in which the federal government does provide a level of insurance. Farmers can buy some more if they want more, and in most cases will – I certainly will – but it takes it away from this crop-by-crop specific situation.

“NAYLOR: Still, if crop prices do decline, some estimates project the cost of the shallow loss insurance at as much as $40 billion over 10 years, not much less than the cost of the direct subsidy it would replace.”

In more specific developments on the supercommittee, the National Journal’s Need-to- Know Memo (Email) from yesterday stated that, “Lack of progress by the deficit reduction super committee has set off intraparty Democratic sniping. According to Senate Democratic aides, Majority Leader Harry Reid, D-Nev., is privately griping that House Democrats on the panel and House Minority Leader Nancy Pelosi, D-Calif., are not committed to compromise. The senators feel the House lawmakers are more tolerant than their Senate counterparts of an across-the-board sequestration spending cut of $1.2 trillion over 10 years, starting in 2013. The across-the-board cuts will be triggered if the committee fails to write a bill to reduce deficit spending by Nov. 23. ‘There’s a strong feeling that they aren’t on the same page, a feeling on all sides that House Democrats aren’t really trying as hard to reach a solution,’ said a Senate Democratic aide. The aide said Reid is invested in a deal because he first suggested the committee during debt ceiling talks this summer, but primarily because of his strong personal belief in compromise. ‘He doesn’t have patience for folks who don’t want to negotiate.’”

Matt Woolbright reported yesterday at USA Today Online that, “‘This is one of the most difficult undertakings I’ve ever experienced, but that’s why I signed up for this job,’ [Sen. Max Baucus (D-Mont.)] said. ‘I’m doing all I possibly can to get to an agreement and I think that attitude is shared by everyone else. There’s no question we’re going to get an agreement.’”

The article noted that, “Many in Washington believe that the committee will miss its Nov. 23 deadline to come up a plan to reduce the deficit by $1.2 trillion over the next 10 years.

“These sentiments are not shared by members of the committee, Baucus said.”

Reuters writer Richard Cowan reported yesterday that, “Hard bargaining by a special U.S. deficit-reduction panel is entering a more intensive stage, sources in Congress said Thursday, as a top budget official said analysis of some savings ideas was underway.”

Mr. Cowan noted that, “‘After prolonged and very high-level debates, they are now turning to more serious and substantive negotiations that could lead to a possible solution,’ said a senior Republican aide with knowledge of the committee’s work.

“Another source familiar with the discussions, who also asked not to be identified, told Reuters that panel members were moving forward.”

Jake Sherman and Manu Raju reported earlier this week at Politico that, “[Senate Leader Harry Reid] is getting ‘more involved’ with the supercommittee talks, aides say, but he hasn’t fully engaged yet as the supercommittee moves into the final rounds of talks. Reid is also chatting with [House Speaker John Boehner].

“‘They talk all the time about where we’re going,’ said Sen. Dick Durbin (D-Ill.), referring to Reid and Boehner. ‘We’re early in the process.’”

And Janet Hook reported in today’s Wall Street Journal that, “Senate and House leaders are becoming more directly involved with the supercommittee responsible for delivering a sizable deficit-reduction plan by Thanksgiving, amid growing concern the panel’s members could be deadlocked.

“Senate Majority Leader Harry Reid (D., Nev.) has been meeting more frequently with Democratic members of the 12-member supercommittee, an aide said. Last week, talks began between top aides to Mr. Reid and House Speaker John Boehner (R., Ohio).”

Jonathan Allen and Seung Min Kim reported yesterday at Politico that, “The supercommittee asked for a few good deficit-cutting ideas from around Washington. Here’s what it got: tens of thousands of recommendations that were culled from the legislative recycling bin, cloaked in fresh wrapping paper and regifted.”

But the article added that, “Not terribly original but also not necessarily a bad approach, according to congressional experts.

“‘Look, their time is short,’ said North Dakota Sen. Kent Conrad, chairman of the Budget Committee. ‘They’ve got to borrow heavily from work others have done.’”

 

Agricultural Economy

A news release yesterday from Purdue University stated that, “Growing an acre of corn, soybeans or wheat in 2012 will cost producers a lot more than it did this year, says a Purdue Extension agricultural economist.

Farmland rental costs and volatile fertilizer prices are the two primary drivers of increasing costs, and, according to Alan Miller, seed prices also will be up 5 percent to 10 percent in the coming year. Pesticide prices will vary by product.

“‘Preliminary budgets show variable costs for rotation corn increasing by 16 percent, soybeans by 15 percent and wheat by 12 percent as compared with our January 2011 budgets,’ Miller said.”

 

Food Labels

Dina ElBoghdady reported in today’s Washington Post that, “A symbol, such as a check mark or a star, should be displayed on the front of every food item and beverage sold in grocery stores so harried shoppers can judge nutritional value at a glance, according to a government-sponsored report released Thursday.

“In the report, a panel of experts from the Institute of Medicine told federal regulators that the epidemic of diet-related chronic diseases warrants a single rating system to help consumers sort through nutritional information. The panel devised a labeling plan intended to be simple enough for kids to use. But it’s unclear what regulators will do.”

 

Trade

Reuters writer Tom Miles reported yesterday that, “World Trade Organization chief Pascal Lamy is backing a new approach to the stalled Doha round of global trade talks, suggesting that the WTO’s members could agree bite-size chunks rather than swallowing the indigestible whole in one go.”

And Dow Jones news reported yesterday that, “Canada and the European Union will wrap up the ninth round of negotiations for a free-trade agreement on Friday in Ottawa.”

 

Political Note

Kyle Trygstad reported yesterday at Roll Call Online that, “California Rep. Dennis Cardoza announced today that he is retiring at the end of the 112th Congress.

“The five-term Blue Dog Democrat’s announcement came as no surprise. California’s new independent redistricting commission placed him in the same Central Valley district as Rep. Jim Costa, his good friend and a fellow Blue Dog. Costa and Cardoza voted for each other instead of for Minority Leader Nancy Pelosi (D-Calif.) during the roll call vote for Speaker at the beginning of this Congress.”

Keith Good