FarmPolicy

February 21, 2019

Farm Bill; Supercommittee Issues; Ag Economy; and Trade

Farm Bill

Erik Wasson reported yesterday at The Hill Online that, “Lawmakers on the House and Senate Agriculture committees are trying to write a new five-year farm bill through the supercommittee process.

“The legislators are using the supercommittee to avoid what would be a more public, election-year debate in 2012, when the current farm bill expires and new legislation would be scheduled for writing, according to critics of the effort.”

The Hill article indicated that, “The $23 billion package is expected to include billions in cuts to nutrition and conservation programs, but the biggest chunk, estimated at $13 billion, would come from payments to farmers.

“[Sen. Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.)] has focused on a new revenue-based ‘shallow loss’ insurance program that is supported by corn, wheat, barley, soy and canola farmers.

“[House Agriculture Committee Chairman Frank Lucas (R-Oklahoma)], with the support of rice and peanut farmers, wants to modify the existing price-based payment to farmers for those crops.”

Yesterday’s article added that, “Payments to cotton farmers have been a sticking point, and they are set to get their own program, also linked to commodity prices.”

“The proposed replacement payments for cotton, rice and peanuts would be based on higher ‘target’ prices. If the market falls below the higher ‘target,’ the government would pay farmers the difference through countercyclical payments or marketing loans.”

With respect to the process of including Farm Bill changes through the supercommittee, The Hill article noted that, “Ben Becker, a spokesman for the Senate Agriculture Committee, defended the effort to propose farm bill changes to the supercommittee.

“‘Either the supercommittee would in essence write the Farm Bill, with no hearings or public input, or the Agriculture Committees and the communities we represent would have a voice. Democrats and Republicans are working hard within the process that’s been imposed on us to develop a sound bipartisan and bicameral recommendation that members of both parties can support,’ he said.”

Secretary of Agriculture Tom Vilsack also noted last Thursday during a “Q & A” at the National Association of Farm Broadcasters meeting in Kansas City (audio here, MP3- 3:10) that the opportunity for Ag Committee leaders to facilitate the Farm Bill into the supercommittee process was “strategically smart.”   He indicated that the Farm Bill-Supercommittee intersection could provide needed “certainty” to producers, and added that, “it beats the process we had before.”  Sec. Vilsack was referring to the acrimony surrounding the 2008 Farm Bill debate when Congress voted to override two Presidential vetoes of the legislation.

And Dave Russell reported yesterday at Brownfield that, “Roger Johnson, President of the National Farmers Union (NFU) says it is time for agriculture to give House and Senate agriculture committee leader’s credit.

“‘They are the only ones that have taken the legal charge that happened with the Super Committee process legislation seriously,’ Johnson said. ‘What that law contemplated was that all the committees with jurisdiction would come to these 12 members with proposals of where to save money, and so far it is only the agriculture committees that have taken that charge and trying to do something with it.’”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “The House and Senate Agriculture Committees are more than two weeks behind schedule, and have yet to release any details on what they have negotiated thus far.

“It doesn’t appear a farm bill will be released Tuesday, either.

“Sen. Charles Grassley, R-Iowa, said he hasn’t seen the farm bill language, but he was worried about whether lawmakers will run out of time.”

The DTN update pointed out that, “Grassley said one thing that did happen was the super committee ruled out a simple framework of just providing the super committee with a dollar figure in different farm-bill titles and working out the details later.”

Brett Neely reported yesterday at Minnesota Public Radio Online that, “Two weeks after a self-imposed deadline by congressional agriculture leaders to come up with $23 billion in cuts to farm programs, DFL Rep. Collin Peterson said Tuesday that he hopes an agreement can be worked out by the end of the week.”

Yesterday’s update noted that, “‘Certain senators have brought problems to the table,’ said Peterson, who said the House members involved in the talks are agreed on the bill. Peterson said the sticking point remains the commodity chapter of the bill, which covers farm payments.

“As is often the case with agricultural issues, Peterson said regional differences were at the heart of the disagreement, pointing to a variety of crops most commonly found in the South.

“‘Cotton, rice and peanuts need a different program than the rest of the crops,’ said Peterson.”

A news release yesterday posted at the National Cotton Council Online stated that, “Commodity groups representing cotton, rice, peanuts and grain sorghum are urging the development of a farm bill that maintains equity among all of U.S. agriculture…The commodity groups reiterated support for a farm policy structure that recognizes the inherent differences in production practices across the major crops and urged the Committees to develop a set of programs that will best serve all commodities. While supporting policy that promotes market-oriented and flexible cropping decisions, the groups urged the Committees to be mindful of the potential imbalance and disproportionate effects of payment limits.”

The news item noted that, “Armond Morris, representing the Southern Peanut Farmers Federation and chairman of the Georgia Peanut Commission, commented, ‘We appreciate the House and Senate Agriculture Committees working with our farm organizations to achieve a farm bill that is fair to all commodities and regions of our country. With our current economic environment, it is critical that all farm organizations pull together to support legislation that is fiscally responsible and strives to keep Rural America healthy.’”

For additional perspective on payment limit issues from Sen. Charles Grassley, see this update from yesterday at Farm Futures Online, “Senator Charles Grassley Says Any Hope for Payment Limits Rests with Super Committee.”

Jim Spencer reported yesterday at the Minneapolis Star Tribune Online that, “Leaders of the agriculture committees of the House and Senate, including Minnesota Democratic Rep. Collin Peterson, have fashioned a farm bill proposal privately and hope to offer it to the supercommittee by week’s end. If the supercommittee includes the farm bill specifics in any agreement it reaches, those principles will largely govern agriculture policy for the next five years.”

Mr. Spencer noted that, “American Crystal Sugar Co., a Moorhead, Minn.-based co-op, has contributed $143,750 since Jan. 1 to the re-election campaigns or political committees of supercommittee members.”

Meanwhile, late last week the Congressional Research Service provided an update titled, “Farm Safety Net Proposals for the 2012 Farm Bill,” which included an overview of recent farm policy proposals.

And yesterday, the National League of Cities also released policy ideas for the 2012 Farm Bill.

In other developments, a news release Monday from Senator Amy Klobuchar (D-MN) stated that, “[Sen. Klobuchar] sponsored legislation to extend, improve and strengthen programs at the U.S. Department of Agriculture (USDA) that have proven successful in helping beginning farmers and ranchers continue, start and build family farming and ranching operations. The Beginning Farmers and Ranchers Act, introduced by Senator Tom Harkin (D-IA), would help beginning farmers and ranchers obtain education and training, necessary financial resources and credit, assistance for practicing sound conservation in their operations, and adequate income insurance and risk management.”

In related news, an update posted yesterday at the National Sustainable Agriculture Coalition blog noted that, “A new report recently released by the National Young Farmers’ Coalition reveals some of the top barriers facing young and beginning farmers in the U.S. today.  Building a Future with Farmers: Challenges Faced by Young, American Farmers and a National Strategy to Help Them Succeed includes results from 1,000 young farmers across the country who were surveyed in order to identify specific challenges and most useful resources confronting those who want to farm.”

From an international perspective, Mary Goode and Julia Holman reported yesterday the  Australian Broadcasting Corporation Online that, “Farmers are urging the Prime Minister to push for reforms to agricultural subsidies in the United States when President Barack Obama visits Canberra this week.

“In his first presidential visit to Australia, President Obama will address Federal Parliament and visit Darwin.

“At the APEC conference just ended, a group of countries, including Australia and the US, agreed to form a Trans Pacific Partnership to cut subsidies and tariffs, but there’s been scepticism about whether this will affect American farm aid.”

In news pertaining to nutrition programs, Bloomberg writer Roger Runningen reported yesterday that, “The Obama administration said it cut wasteful or improper payments in social and welfare programs by almost $18 billion in the year that ended Sept. 30.

“The government reduced errors in Medicare and Medicaid payments, Pell Grant student loans and the Agriculture Department’s food stamp program, the Office of Management and Budget said in a statement.”

 

Supercommittee Issues

Rosalind S. Helderman reported in today’s Washington Post that, “Top congressional leaders intervened Tuesday in ‘supercommittee’ talks about the national debt, as negotiators faced mounting pressure from both parties to back away from any deal that requires tax increases and cuts to cherished social programs.

“With one week remaining before a Thanksgiving deadline, House Speaker John A. Boehner (R-Ohio) and Senate Majority Leader Harry M. Reid (D-Nev.) met briefly to discuss the panel’s deliberations. Aides described the 15-minute session as a ‘gut check’ to determine whether the parties can reach an accord to slice at least $1.2 trillion from projected borrowing over the next decade.

But there was no sign of progress.”

Meredith Shiner and John Stanton reported today at Roll Call Online that, “Senate Majority Leader Harry Reid (D-Nev.) on Tuesday demonstrated his most direct involvement to date with bipartisan talks to rein in the nation’s deficit, meeting with all six Democratic super committee members for the first time since negotiations began in August.

“With one week remaining for the super committee to find a deal, the hour-and-a-half session in the Majority Leader’s suite marked a shift in Reid’s strategy and reflected the urgency of trying to secure a deal through the Joint Committee on Deficit Reduction.”

Mike Lillis reported yesterday at The Hill Online that, “Rep. Xavier Becerra suggested Tuesday that the budget supercommittee could finalize parts of its deficit-reduction plan this week to send to the Congressional Budget Office (CBO).

“The California Democrat said he’s ‘pragmatically optimistic’ that the 12-member panel can ‘reach that sweet spot that can get us to a result’ before the Nov. 23 deadline.”

Nonetheless, Manu Raju and Jake Sherman reported yesterday at Politico that, “The congressional supercommittee headed into the 11th hour Tuesday with no deal in sight and growing expectations that it will deadlock despite its broad mandate to right the country’s fiscal ship.

“A flurry of meetings from the highest levels of congressional leadership on down to a handful of key negotiators yielded no breakthroughs as of Tuesday evening, and both parties laid the groundwork for a bitter round of fingerpointing.”

Jennifer Steinhauer and Robert Pear provided more perspective from the GOP in today’s New York Times, reporting that: “Congressional leaders began to insert themselves more deeply Tuesday into the work of a joint committee charged with taming the deficit, as Republicans in both chambers embraced a plan devised by Senator Patrick J. Toomey, one of their party’s representatives on the panel. Democrats appeared to be less united and struggling to come up with a counteroffer.

“House Republicans, back from a week of recess, met to discuss the Republican offer, which includes $300 billion in new tax revenue over 10 years and a rewriting of the tax code. The package was warmly received by many House Republicans at a meeting of their caucus on Tuesday, according to people who attended.”

The Times article added that, “Democrats said they were dismayed to see Republicans rallying around the proposal without offering further concessions to address Democrats’ concerns.”

With respect to the executive branch, Anne E. Kornblut reported in today’s Washington Post that, “White House officials are quietly bracing for ‘supercommittee’ failure, with advisers privately saying they are pessimistic that the 12-member Congressional panel will find a way to cut $1.2 trillion from the deficit as required.

“In public, however, the official administration stance is that failure is not an option.”

 

Agricultural Economy

Hal Weitzman and Gregory Meyer reported yesterday at The Financial Times Online that, “Farmland prices in the US Midwest rose in the third quarter at their fastest pace since 1977, accelerating the divergence between rural and urban property prices, according to the Federal Reserve.

“The cost of good farmland was 25 percent higher by the end of September than a year ago, the Chicago Fed found in its survey of the central Corn Belt states of Illinois, Indiana, Iowa, Michigan and Wisconsin.”

And Reuters news reported yesterday that, “Cropland values in the Plains states rose more than 25 percent over the past year to a record high while ranchland values increased 14 percent, the Federal Reserve Bank of Kansas City said in its quarterly survey of 243 banks in the region. It was the fastest rise in cropland values in the survey’s history.”

Ron Hays reported yesterday at the Oklahoma Farm Report Online that, “The U.S. agriculture land prices have been increasing steadily over the past five to ten years, which has left farmers and ranchers wondering if these high land values are really sustainable. Ron Hays talked with Sterling Liddell, Vice President for the Food and Agribusiness Research and Advisory department of Rabobank International, recently at the National Association of Farm Broadcasters annual convention in Kansas City about the possibility of a land value bubble and China’s impact on U.S. agriculture.

“When it comes right down to it, Liddell simply states that we are not in a land value bubble, which Rabobank defines as a commodity or an asset that is not supported by its fundamental value. One reason for this Liddell explains is because of the high commodity prices and low interest rates, which he says fundamentally support the value of the land where it is.”

To listen to a replay of the discussion with Ron Hays and Sterling Liddell, just click here.

 

Trade

A news item Monday from the Senate Finance Committee stated in part that, “Senate Finance Committee Chairman Max Baucus (D-Mont.) commented today following Japan’s announcement that it wishes to begin consultations to participate in the Trans-Pacific Partnership negotiations.  From Chairman Baucus:

“‘Today’s announcement by Japan that it wishes to begin consultations on participating in the Trans-Pacific Partnership negotiations represents the first step in a process that we hope will achieve a new level of openness in Japan and the resolution of long-standing trade concerns, particularly in the area of agricultural goods like beef.  U.S. ranchers and farmers produce world-class beef and agricultural products that are 100 percent safe, so Japan needs to eliminate the unscientific and unjustified barriers to our exports.’”

Keith Good

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