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Budget and Farm Bill; MF Global; and Regulatory Issues

Budget and Farm Bill Issues

Bloomberg writer Alan Bjerga reported yesterday that, “U.S. lawmakers charged with writing a farm bill in 2012 should build upon a plan drafted for the failed congressional supercommittee, Senate Agriculture Committee Chairwoman Debbie Stabenow said.

“Subsidies based on crop insurance and safeguards against price drops can serve as the foundation of a bill that may be crafted by April, Stabenow, a Democrat from Michigan, said today in response to audience questions after a speech at a farm conference in Washington.

“‘We should not start from zero,’ Stabenow said. ‘We’re going to continue forward using the foundation of the ideas we developed.’”

The article indicated that, “Earlier today, the ranking Republican on the Senate Agriculture Committee, Pat Roberts of Kansas, said the plan prepared for the supercommittee should be scrapped so lawmakers can start over with ‘an open process.’”

A news release yesterday from the Senate Ag Committee noted in part that, “‘We will resume holding hearings when Congress returns in January,’ Chairwoman Stabenow said. ‘The goal is for the committee to complete an initial product in the spring to provide plenty of time for Congress to complete its work.’

“Chairwoman Stabenow said the twelve public hearings held in 2011 and the bipartisan framework developed by the House and Senate Agriculture Committees this year will serve as a strong foundation moving forward.”

Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The secret farm bill lawmakers drafted this fall is now history. Congress will take a second stab at overhauling agricultural policy next year, starting with public hearings. How much the new bill will change is an open question…[C]ritics say one or two of the proposed programs are so generous they could encourage farmers to make planting decisions based on what crops will most likely trigger a government payment rather than the crops the market most needs. The critics include the committee’s top Republican, Kansas Sen. Pat Roberts.”

Iowa GOP Senator Charles Grassley was a guest on yesterday’s AgriTalk radio program with Mike Adams, in part their conversation turned to the Farm Bill and budget issues; to listen to portion of Sen. Grassley’s remarks from yesterday, just click here (MP3- 3:00).

Meanwhile, Anna-Lisa Giannini reported yesterday at AgWeb Online that, “Representative Peterson plans to urge Chairman Lucas to reveal the dairy title of the failed farm bill proposal.

“After collaborating with National Milk Producers Federation (NMPF), Representative Collin Peterson (D-Minn.) and members from the committee representing states across the country, created Foundation for the Future which turned into the Dairy Security Act introduced as the dairy title of the failed farm bill proposal. Peterson believes that the title included in the proposal was the right one despite criticism and lack of support from groups like the International Dairy Foods Association (IDFA).”

Also yesterday, Philip Brasher reported at the Green Fields Blog (Des Moines Register) that, “Programs the Obama administration has been pushing to promote next-generation biofuels are likely to have little funding in the next farm bill, according to the top Democrat on the House Agriculture Committee, Rep. Collin Peterson.

“‘There will probably be hardly any money’ in the bioenergy section of the next farm bill ‘because we’ve lost faith’ in that sector, Peterson told reporters today.”

In other news, Ed O’Keefe reported yesterday at the Federal Eye Blog (Washington Post) that, “The nation’s struggling economy and an uptick in major natural disasters in recent months mean more Americans than ever are using federal money to buy food.

More than 46.2 million people received a total of $75.3 billion from the Supplemental Nutrition Assistance Program, formerly known as food stamps, in fiscal 2011, according to Agriculture Department statistics released Monday.”

The update noted that, “With more Americans relying on the program, the Obama administration on Tuesday plans to announce new steps to crack down on SNAP fraud amid estimates suggesting as much as $753 million in federal food aid is spent fraudulently each year.

“USDA plans to introduce what officials described as ‘severe penalties’ for the illegal ‘trafficking’ of SNAP benefits by retailers and beneficiaries.”

A copy of yesterday’s USDA release on this issue is available here.

A news release yesterday from Senator Debbie Stabenow indicated that, “[Sen. Stabenow] Chairwoman of the Agriculture, Nutrition and Forestry Committee, which oversees the federal food assistance program, today applauded new measures announced by the U.S. Department of Agriculture to crack down on fraud and abuse in the Supplemental Nutrition Assistance Program. The new measures will root out waste, fraud and abuse by combating trafficking – the sale of food assistance benefits for cash – to protect taxpayer dollars. Senator Stabenow has called for a continued federal crackdown on fraud and abuse, including new measures to crackdown on trafficking.  Senator Stabenow recently announced a bipartisan proposal to reduce the deficit by tens of billions that included a variety of measures to make sure food assistance resources are going only to those who truly need them.”

In news regarding crop insurance, USDA’s Risk Management Agency noted yesterday in a news release that, “The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced today a new a pilot insurance program for table and oil olives in 12 California counties, beginning with the 2012 crop year. The sales closing date is January 31, 2012.”

In budget related developments, which include the possible extension of the payroll tax cut and unemployment benefits, Jake Sherman and Manu Raju reported yesterday at Politico that, “House Republicans will not vote on a plan this week to extend jobless benefits and the payroll tax cut, setting up a one-week showdown next week to ensure the provisions are extended before the Christmas holiday.

“As it stands now, the parties are pushing forward on diametrically different paths. Democrats want to increase taxes on millionaires while the GOP is pushing for a pay freeze on federal employees. There are other differences, too: Republicans want to offset the costs of updating the reimbursement formula for doctors serving Medicare patients, unemployment insurance and the payroll tax cuts. Democrats only want to pay for the payroll tax holiday.

The decision leaves a narrow time frame during which the gap must be narrowed.”

The potential for some intersection between the Farm Bill and these related end of the year funding measures (payroll tax cut, unemployment benefits, and the Medicare “doc fix”) might exist.

Regarding remarks yesterday made by House Ag Committee Ranking Member Collin Peterson, Philip Brasher tweeted yesterday that, “House Ag Dem Peterson: ‘slim chance’ draft #farmbill could be resurrected to offset tax extenders.”

And an AgriPulse tweet from yesterday noted that, “Rep. C. Peterson: ‘slim chance’ the $23 billion proposed from Ag for #farm bill could be an offset in the $450 B yr-end tax package.”

Remarks on this topic by Rep. Peterson made last week were noted in Monday’s FarmPolicy.com update.


Regulatory Issues: MF Global- Commodity Futures Trading Commission

Reuters writers Dave Clarke and Sarah N. Lynch reported yesterday that, “Lawmakers examining the collapse of MF Global skewered the top U.S. futures regulator for sitting out his agency’s probe of the bankrupt brokerage, whose former chief executive, Jon Corzine, is due to face his own drubbing later this week.

“Republican senators accused Commodity Futures Trading Commission Chairman Gary Gensler of ‘ducking’ his responsibilities by recusing himself from an examination of MF Global.

“Gensler, who appeared pained by the repeated questioning during the Senate Banking Committee hearing on Tuesday, said he stepped aside from the MF Global investigation in early November so that he would not become a distraction or risk creating an appearance of a conflict of interest.”

The article added that, “‘To me it looks like you are ducking the responsibilities of your job,’ said Senator Mike Johanns. ‘As President Truman so famously observed, the buck stops with you.’”  (Note: The full exchange between Sen. Johanns and Chairman Gensler is available here (MP3- 7:00).

The Reuters item noted that, “‘It feels to me like you panicked, and it’s more about a career-enhancing situation to avoid accountability,’ Senator Bob Corker told Gensler.” (Related audio, (MP3- 3:00).

Josh Boak reported yesterday at Politico that, “Alabama Sen. Richard Shelby and his GOP colleagues aggressively pounced on the Commodity Futures Trading Commission on Tuesday, blasting its chairman over the regulator’s handling of the bankrupt brokerage MF Global and relationship with its former CEO, Jon Corzine.

“At a Senate Banking Committee hearing, Shelby slammed the commission Chairman Gary Gensler over his ties with Corzine, previously the Democratic governor of New Jersey and a senator. Gensler and Corzine were colleagues at the investment bank Goldman Sachs 14 years ago.”  (Audio replay of an exchange between Sen. Shelby and Chairman Gensler is available here (MP3- 5:30).

Bloomberg writer Alan Bjerga reported yesterday that, “The sudden collapse of MF Global Holdings Ltd. will require lawmakers and regulators to rebuild farmer trust in commodity markets, U.S. Senator Pat Roberts of Kansas said.”

Jerry A. Dicolo and Dan Strumpf reported in today’s Wall Street Journal that, “The havoc wreaked by MF Global’s bankruptcy filing has been felt not just by Wall Street investors and traders, but also by wheat and corn growers, cattle ranchers and pig farmers. Dotting the farm belt, many who used the commodities market to protect against price swings are finding their money locked up and their hedges unwound due to the firm’s downfall.

“Those ramifications will be in focus Thursday when the House Agriculture Committee convenes a hearing on MF Global. The committee members have subpoenaed former MF Global Chief Executive Jon Corzine, who is expected to appear in what would be his first public appearance since the firm’s collapse due to his more than $6 billion bet on European debt. A spokesman for Mr. Corzine declined to comment Tuesday.”

And a news release yesterday from the Senate Ag Committee indicated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, and Senator Pat Roberts, the Committee’s Ranking Member, issued the below statement following a unanimous voice vote of the full Committee on Dec. 6, 2011 in support of subpoenaing former MF Global CEO Jon Corzine, to testify at a Dec. 13 hearing on the collapse of MF Global and the whereabouts of the estimated $1.2 billion in missing customer funds. The financial firm’s collapse is the 8th largest bankruptcy in U.S. history.

“‘It’s important that citizens come forward and testify when asked by our committee, especially in a matter this serious. The committee’s bipartisan actions today demonstrate our commitment to understanding what happened to cause the extraordinary collapse of MF Global. We will continue to work to see that the futures market remains a valuable tool for investors, farmers, ranchers and small businesses and to see that the missing funds are returned to their rightful owners.’”

Rep. Collin Peterson explored a variety of issues associated with the collapse of MF Global in an opinion item that was posted yesterday at Politico, “MF Global’s fall a familiar tale.”


Regulatory Issues: Endangered Species Act

DTN writer Todd Neeley reported yesterday (link requires subscription) that, “Members of the House Natural Resources Committee expressed concern Tuesday that a lawsuit aimed at pesticides could lead to many ag chemicals being taken off the market, thus limiting food production and threatening food safety.

“The lawsuit, filed in January by the Center for Biological Diversity and other environmental groups, was among the topics covered at a hearing on the Endangered Species Act. The suit alleges EPA violated the ESA by not consulting federal wildlife officials about the potential effects that some 300 registered pesticides and other ag chemicals would have on about 200 species, before approving the use of those chemicals.

“Ag groups and other interveners have expressed concern that if the case is allowed to move forward without their input, many agricultural chemicals could be removed from the market while EPA reconsiders their effects on endangered species.”

The DTN article noted that, “Committee members expressed concern that the lawsuit could threaten food security by making pesticides less available in regions where they are used frequently, and would pass costs on to U.S. taxpayers through potentially higher food prices and other costs.”


Regulatory Issues: Farm Dust

A news release yesterday from the House Ag Committee stated that, “This week during The Ag Minute [MP3], Chairman Frank Lucas discusses H.R. 1633, the Farm Dust Regulation Prevention Act, a bipartisan bill that prohibits the Environmental Protection Agency (EPA) from regulating farm dust that is already regulated at the state or local level. Although EPA Administrator Lisa Jackson has announced that her agency does not intend to change the current standards, EPA retains the authority to do so. Furthermore, under the Clean Air Act, EPA is required to review these standards every five years. The Farm Dust Regulation Prevention Act gives farmers and ranchers a certain exemption from more burdensome standards, which will allow them to continue investing in their businesses with confidence.”

Regulatory Issues: House to Consider Bill- Change in Regulation Approval Process

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Republicans on Tuesday afternoon brought to the floor a bill that would give Congress the final say in administration regulations.

“The Regulations from the Executive in Need of Scrutiny (REINS) Act, H.R. 10, would require Congress to approve all major rules, which are those that would have an impact of $100 million or more on the economy. Rep. Rich Nugent (R-Fla.) said this change is needed because the executive branch how has too much authority to impose rules on companies.”

Votes on the measure are expected later in the week.

A Statement of Administration Policy from the executive branch stated in part yesterday that, “The Administration is committed to ensuring that regulations are smart and effective, and tailored to further statutory goals in the most cost-effective and efficient manner. Accordingly, the Administration strongly opposes House passage of H.R. 10, the Regulations From the Executive in Need of Scrutiny Act, which would impose an unprecedented requirement that a joint resolution of approval be enacted by the Congress before any major rule of Executive Branch agencies could have force or effect.”

Keith Good