FarmPolicy

October 20, 2014

Farm Bill; Budget Issues; Trade; and Regulations

Categories: Budget /Farm Bill /Trade

Farm Bill

Reuters writer Charles Abbott reported yesterday that, “The U.S. farm law being written by agricultural leaders in Congress would boost support rates for some crops and may remove caps on how much money growers collect in subsidies.

“Three agricultural sources said that crops grown in the Midwest and Plains — corn, soybeans and wheat — would be covered by one subsidy plan, while cotton and rice, grown in the South, each would have a separate program.

“This three-track plan is designed to shore up support from a broader number of farm-state lawmakers for a new approach to farm policy.”

Yesterday’s article added that, “Leaders of the House and Senate Agriculture committees, who could unveil the package as soon as Tuesday, hope to piggyback it onto a government-wide deficit bill in exchange for a $23 billion cut in their programs. It would bar any change in their plan and enact it a year ahead of schedule.

“Critics say the farm bill is being written in secret and the new initiatives could prove very costly.”

(Note: For additional analysis on the Farm Bill being “written in secret,” see this item that was posted recently at Agri-Pulse).

In his article yesterday, Mr. Abbott explained that, “Under their plan, corn, soybean and wheat growers would get federal payments when revenue from a crop was more than 15 percent below average, said a farm lobbyist. Crop insurance would cover deep losses. So-called marketing loans would put a floor on prices.

Cotton growers would operate with a higher marketing loan and revenue insurance policies. Target prices for rice and peanuts would be raised, an effective guarantee of revenue.

“The package also could remove caps on subsidy payments.”

Meanwhile, in an Op-Ed posted yesterday at Roll Call Online, Vincent Smith provided a response to an October 27 column (“Reform Farm Policy but Keep Safety Net”) on the Farm Bill.

Yesterday’s opinion piece stated that, “The farm group representatives’ real agenda is to argue that farmers should not only have access to heavily subsidized crop insurance for losses in excess of 15 percent (or in some locations 25 percent) of their average yields or average revenues, but they should also be given additional free insurance through what is now being called a ‘shallow loss’ program that is funded, of course, at the taxpayers’ expense.

“The shallow-loss program would give farmers subsidies to bring them up to 90 percent or even 95 percent of the average revenues they have received for any given crop over the previous five years whenever current revenues from those crops fall below those amounts.

“The program would be modeled on the Average Crop Revenue program introduced in the 2008 farm bill and could well be similar to the Agricultural Risk and Revenue Management initiative put forward by Sens. Sherrod Brown (D-Ohio), John Thune (R-S.D.) and Dick Lugar (R-Ind.) and Rep. Marlin Stutzman (R-Ind.).”

The opinion piece added that, “As the American Farm Bureau Federation recently noted in a letter to the House and Senate Agricultural committee , that sort of shallow-loss program will damage productivity, create incentives for farmers to make foolishly risky decisions, make life harder for young people who want to enter farming and (my addition) undercut the farm sector’s ability to compete with countries around the world.”

And earlier this week, a news release from Senator Tom Coburn (R-OK) stated that, “[Sen. Coburn] today released a new report ‘Subsidies of the Rich and Famous’  illustrating how, under the current tax code, the federal government is giving billions of dollars to individuals with an Annual Gross Income (AGI) of at least $1 million, subsidizing their lavish lifestyles with the taxes of the less fortunate.”

The Coburn report stated on page 14 that, “The IRS collects information on individuals that report receiving farm program payments. Its data shows that from 2006 to 2009, taxpayers reporting an AGI of $1 million or more disclosed receiving over $283 million in farm program payments.”

Additional background on the agriculture portion of Sen. Coburn’s report is available here.

Humberto Sanchez reported yesterday at Roll Call Online that, “As Congress wrestles with how to bring down the historically high budget deficit, Sen. Tom Coburn (R-Okla.) today released a report that showed that under the current tax code, millionaires are receiving billions in federal aid.”

The Roll Call article noted that, “These billions of dollars for millionaires include $74 million of unemployment checks, $316 million in farm subsidies…”

In news developments regarding nutrition issues, Tom Albright, Holly Freishtat and Robert S. Lawrence indicated in an Op-Ed posted yesterday at the Baltimore Sun Online that, “In Baltimore City, 1 in 8 families with young children are ‘food insecure,’ and 20 percent of all residents live in poverty. More than half a million Marylanders get help affording food through the Supplemental Nutrition Assistance Program (SNAP)In fact, SNAP, or what we used to call food stamps, enrolled 45 million people nationwide this year, a leap from 25 million in 2008.

“Shouldn’t SNAP participants in Baltimore — or other cities — be able to spend their SNAP dollars on nutritious, locally produced food?

“We have a proposal that benefits both financially strapped consumers who depend on SNAP and small-scale Maryland farmers: Supply farmers markets with electronic benefit transfer (EBT) machines so that people can spend their SNAP dollars at those markets.”

In a related article, the AP reported yesterday that, “A new U.S. Department of Agriculture report says sales of ‘local foods,’ whether sold direct to consumers at farmers markets or through intermediaries such as grocers or restaurants, amounted to $4.8 billion in 2008. That’s a number several times greater than earlier estimates, and the department predicts locally grown foods will generate $7 billion in sales this year.”

 

Budget, Supercommittee Issues

Nutrition issues have also figured into the current appropriations process.

The AP reported yesterday that, “Congress is fighting to keep pizza and french fries on school lunch lines, picking apart an Obama administration proposal to make school lunches healthier.

“A spending bill released late Monday would unravel school lunch standards proposed by the Agriculture Department earlier this year, forcing USDA to pull back an attempt to limit potatoes on the lunch line, delaying limits on sodium and delaying a requirement to boost whole grains.

“The spending bill also would allow tomato paste on pizzas to be counted as a vegetable, as it is now. The department’s proposed guidelines would have attempted to prevent that.”

The AP article added that, “In a bill summary released Monday, Republicans on the House Appropriations Committee said the changes would ‘prevent overly burdensome and costly regulations and … provide greater flexibility for local school districts to improve the nutritional quality of meals.’”

Separately, the appropriations summary from yesterday also stated that, “Livestock Marketing – The bill places restrictions on the implementation of a Grain Inspection and Packers and Stockyards Administration (GIPSA) proposed rule that would have allowed harmful government interference in the private market for livestock and poultry.”

The summary also stated that, “Commodity Futures Trading Commission (CFTC): The conference agreement provides $205 million for the CFTC – a reduction of $103 million below the President’s request. This funding level provides adequate resources to ensure sound financial markets while preventing regulatory overreach.”  (See a related article on this development by David Rogers at Politico, “Congress slashes financial watchdog.”)

In a broader look at the appropriations measure, David Fahrenthold reported yesterday at the 2Chambers Blog (Washington Post) that, “House and Senate negotiators have agreed on the details of a spending package that will keep the federal government running until Dec. 16–and fund five major federal departments through all of fiscal 2012, staffers announced Monday night.”

The update pointed out that, “The committee’s report must now face a vote in both the Senate and the House. Those votes are expected later this week, before the government runs out of money on Friday. After that, the House and Senate must work through a series of other ‘mini-buses,’ allotting a full year’s worth of funding to the rest of the federal government, one chunk at a time.”

More specifically on supercommittee developments, Naftali Bendavid and Janet Hook reported in today’s Wall Street Journal that, “With time running out for Congress’s special deficit-reduction committee, the two sides Monday were grappling for ways to inch closer on the crucial issue of taxes.

“The parties are looking for ways to include smaller tax increases than Democrats had previously sought but more than Republicans want. In addition, Democrats last week proposed keeping upper-income tax rates at 35%, the level set in the Bush-era tax cuts.”

The Journal added that, “House Majority Leader Eric Cantor (R., Va.) said he is confident the committee can strike a deal to avoid the ‘sequester’ that would require automatic cuts if the panel fails. ‘I remain hopeful that there will be an outcome nine days from now,’ Mr. Cantor said. ‘I don’t think the sequester will be relevant.’

“A senior Senate Democratic aide said the pace of negotiations was quickening. ‘It looks like people are getting ready for one last engagement,’ he said. ‘I’m more optimistic today than I was on Friday.’”

Reuters writers Richard Cowan and Thomas Ferraro reported yesterday that, “U.S. lawmakers might opt to postpone tough tax decisions until next year as they struggle to forge a deficit-reduction deal over the coming week, congressional aides said on Monday.

“With time running short, the ‘super committee’ of six Democrats and six Republicans could agree to some spending cuts and instruct their fellow lawmakers to raise more tax revenue by retooling the byzantine tax code next year, aides said.”

Lori Montgomery reported in today’s Washington Post that, “The congressional ‘supercommittee’ is looking to count as budget savings as much as $700 billion that the nation no longer plans to spend on the wars in Iraq and Afghanistan over the next decade, an accounting gimmick that has drawn fire from both Democrats and Republicans.”

And Meredith Shiner and John Stanton reported today at Roll Call Online that, “As the super committee approaches its final week of negotiations, Congressional leaders who created the panel in the first place will have to decide whether to become more proactive in forcing the group to a deal.”

 

Trade

Bloomberg writer Shamim Adam reported yesterday that, “President Barack Obama’s push to expand an Asia-Pacific trade accord gained momentum at a summit in Honolulu with agreements from Japan and Canada to join what would be the largest American trade deal.

“Obama said nine Asia-Pacific nations aim to reach a Trans- Pacific Partnership accord within a year in what would be the biggest U.S. pact since the 1994 North American Free Trade Agreement. Japanese leader Yoshihiko Noda and Canadian premier Stephen Harper told the Asia Pacific Economic Cooperation summit they will join the talks, which may help the U.S. regain influence lost to China in a region that’s leading global growth.”

For more background and developments on the Trans-Pacific Partnership (TPP), see this summary that was posted yesterday at FarmPolicy.com.

In addition, Nick Giordano of the National Pork Producers Council, was a guest on yesterday’s AgriTalk radio program with Mike Adams, where he outlined some of the potential benefits TPP could bring to the pork sector.  To listen to this conversation yesterday with Mike Adams and Nick Giordano, just click here.

 

Regulations

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Farm groups are concerned that a proposed EPA rule that would require all concentrated animal feeding operations (CAFO) to report information to the agency would jeopardize the privacy and security for livestock producers.

“The proposed rule could make it possible for the public to access otherwise proprietary and personal information on farms either online or through the Freedom of Information Act. In addition, the rule could be costly for states to implement. The rule came about as a result of a legal settlement EPA made with environmental groups in 2010.

“The data would include basic facts such as contact information, location of production areas, permit status, the number and type of animals confined and the number of acres available for land application of manure.”

And Erica Martinson reported on Sunday at Politico that, “The Environmental Protection Agency is likely to play an unusually prominent role in the 2012 presidential election, reflecting ongoing partisan debate in Congress over the ties between environmental regulations and jobs.”

Keith Good

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