FarmPolicy

February 21, 2019

Budget and the Farm Bill; Ag Economy; Trade; Biofuels; and Regulations

Budget Issues and the Farm Bill

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee ranking member Collin Peterson wants Congress to consider adding the farm bill, which was prepared for the failed supercommittee on deficit reduction, to a bill to pay for an extension of payroll tax relief and unemployment insurance and to prevent doctors who take Medicare patients from seeing a cut in their payments.

“In a speech Tuesday, Peterson, D-Minn., said the deal would allow use of the $23 billion in agricultural cuts over 10 years to offset the payroll and unemployment costs. In return, lawmakers would pass the new farm bill and not make the agriculture budget subject to the across-the-board cuts that are supposed to go into effect in 2013 because the supercommittee was unable to reach agreement.

It’s unclear whether Peterson’s proposal is realistic.”

The DTN article added that, “Peterson added he had not talked to [Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich.] about adding the farm bill to the payroll tax bill. Peterson did not mention Senate Agriculture Committee ranking member Pat Roberts, R-Kan.

“‘We’re not going to do anything until we see what happens over the next couple weeks,’ Peterson said, adding that he has not discussed the idea with House leaders. ‘It’s a slim chance but they’re going to be scrambling [for offsets],’ he said.

“Peterson noted that while he is not enthusiastic about extending the payroll tax and the other provisions in the bill, adding the farm bill would mean that the 46 members of the House Agriculture Committee would have to consider voting for it.”

Also yesterday, Gannett writer Philip Brasher reported that, “Putting the farm bill in the deficit-reduction plan would have avoided a ‘big, huge floor fight’ over agricultural policy, said Minnesota Rep. Collin Peterson, the senior Democrat on the House Agriculture Committee.

“There still is a ‘slim possibility’ that the draft farm bill could be resurrected and inserted in a tax bill to help offset the cost of extending a series of expiring tax breaks, said Peterson.

Otherwise, the House Agriculture Committee will start work on a new bill around February.”

Meanwhile, on yesterday’s Agriculture Today radio program, from the Red River Farm Network, House Agriculture Committee Chairman Frank Lucas (R-OK) responded favorably to Rep. Peterson’s idea of potentially bringing the Farm Bill into the budget debate over offsets for increased spending for the payroll tax and other programs.

To listen to a portion of yesterday’s Agriculture Today program, just click here (MP3- 1:42).

In the clip, RRFN’s Mike Hergert noted that, “House Agriculture Committee Chairman Frank Lucas says he supports Ranking Member Collin Peterson’s idea to attach the draft Farm Bill, that never got to the supercommittee, to a bill to offset the costs of the payroll tax cuts.”  The RRFN clip includes specific remarks from Chairman Lucas.

The idea of potentially including the Farm Bill into the end of the year budget debate was also noted in Monday’s FarmPolicy.com report.

With respect to the process of the payroll tax cut debate, Meredith Shiner reported yesterday at Roll Call Online that, “After a meeting at the White House with President Barack Obama this morning, Senate Majority Leader Harry Reid (D-Nev.) said Democrats are open to using spending cuts to offset the cost of extending a payroll tax holiday.

“Democratic and Republican leaders have been haggling all week, not over whether to extend the temporary tax breaks, but over how to pay for them. Democrats have tried and failed to approve various forms of a millionaire surtax, while Republicans proposed enacting a three-year federal workers pay freeze and federal employee attrition.”

Wall Street Journal writer Naftali Bendavid provided an overview of the respective Democrat and Republican approaches to the payroll tax cut issues yesterday on the Diane Rehm radio program (WAMU); he noted that, “we are probably going to end up with an amalgamation of other revenues and spending cuts that will be used to fund this thing.”  (The full clip from yesterday’s Diane Rehm show is available here (MP3- 1 minute).

Rosalind S. Helderman reported yesterday at The Washington Post Online that, “House Speaker John A. Boehner said Wednesday that Republicans will put forward a measure that would renew the payroll tax cut when it expires, but also would require spending cuts that would be used to restore the lost funding to Social Security.”

And Jake Sherman reported yesterday at Politico that, “[Eric] Cantor sees himself — and others see him — as playing a role as the rank and file’s lobbyist at the leadership table. He has been meeting with GOP lawmakers in an attempt to uncover what will get them to support an extension of a payroll tax holiday their party doesn’t like and a jobless benefits program they see as broken.

“[Speaker John] Boehner is trying to balance Republican desires with the eventuality of creating a package that could pass the Senate by next Friday.

In the next few days, they need to come together to decide what they can tack onto the bill to ensure its passage — and maintain some unity within the ranks.”

Felicia Sonmez reported last night at the 2chambers blog (Washington Post) that, “President Obama will meet with members of the House Democratic leadership at the White House on Thursday morning, a closed-door huddle that comes as Congress enters the final stretch of a heated debate over the payroll tax cut, a government-funding bill and other high-priority measures.

“The Democratic leaders will meet with Obama at 10:15 a.m. in the Oval Office, according to a schedule released by the White House Wednesday night.”

The update added that, “No agenda for the meeting was released, but among the hot-button issues Congress is grappling with are a one-year extension of the payroll tax holiday and a measure to keep the government funded past Dec. 16.

House Republican leaders are expected to announce in the coming days their plans on a measure that includes a payroll tax holiday extension.”

In other Farm Bill news, Ron Hays of the of the Radio Oklahoma Network and the Oklahoma Farm Report, spoke with Chairman Lucas yesterday about a variety of topics, including farm policy developments.

An audio replay and summary of the discussion with Ron Hays and Chairman Lucas is available here, while an unofficial transcript of the interview can be found here.

On the issue of direct payments, Chairman Lucas noted that, “Direct payments are the most politically difficult part of the ’08 Farm Bill to defend. By the way, they are also the most WTO, World Trade Organization, compliant part of the farm bill. In many ways they make the most economic sense as being non- distorting about production decisions. But they are in the crosshairs of the Tea Party, they’re in the crosshairs of the liberals, the national media. It’s difficult to defend them.

“But I’ll say this. I had some members who came back after Thanksgiving from districts who perhaps were new enough not to have been through the ’08 Farm Bill process who reported to me they were impressed to discover that not only did their farmers, but their bankers seemed to think that those direct payments were very important. So the folks out in the countryside who have lived through farm policy for the last 20, 30, 40 years, understand how successful that’s been.”

On conservation, Chairman Lucas indicated yesterday in the interview with Ron Hays that, “Of all the sections of the Farm Bill, that’s probably…yeah, of the proposed effort of the farm bill, that’s the one I think that will be received with the greatest amount of enthusiasm. While you reduce the number of delivery programs, you keep the basic programs in place. We reduced the overall dollars because when better times come, we’ll be able to meet those conservation needs and not lose the basic delivery mechanism. So yes, I was very pleased at how that worked out. And once again, that involved all four principals.”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Earlier this week I [Chris Clayton] talked with Rep. Randy Neugebauer, R-Texas, about both MF Global and his farm-bill proposal focusing on crop insurance coverage he called the Crop Risk Options Plan, or CROP Act. [related news release, bill background].”

Yesterday’s update noted that, “Neugebauer’s plan would allow producers to buy on-farm coverage for a percentage of the crop, then buy a smaller county-wide coverage plan to protect against higher loss levels.

“‘One of the things we felt our bill would do is take existing products so we didn’t have to go out and do all of the research and development of new products,’ Neugebauer said.

“Neugebauer introduced the CROP Act a bill on Oct. 5. In a news release, Neugebauer said the plan would allow farmers to insure crops against shallow losses up to 25-30% of a farmer’s expected production. The bill’s county-level trigger for area plans would closely mirror a farmer’s production. Further, the CROP Act would change the way the Risk Management Agency determines yield histories, moving from a 10-year average to a seven-year Olympic average.”

And Jim Harger reported earlier this week at The Grand Rapids Press Online (Mich.) that, “U.S. Sen. Debbie Stabenow may have been speaking via satellite from her Washington D.C office, but the fruit and vegetable growers in the Pantlind Ballroom heard her loud and clear during Tuesday’s luncheon at the Great Lakes Expo.

“Stabenow, who chairs the Senate’s Committee on Agriculture, Nutrition and Forestry, pledged to push for a new farm bill that includes benefits for ‘specialty crops’ despite a budget-cutting climate in Congress.”

 

Agricultural Economy: Land Values

Dan Piller reported yesterday at the Green Fields Blog (Des Moines Register) that, “Iowa set a new farmland price Wednesday when a 74-acre tract near Hull in Sioux County went for $20,000 per acre.

“The buyer was a neighboring farmer, Leland Kaster, who bought the land from Clinton Shinkle of Washington State.”

However, Sameer Mohindru reported yesterday at The Wall Street Journal Online that, “U.S. farmland prices are due to drop, after having risen sharply in recent years because of speculative investment, low interest rates and high prices of crops, a Macquarie Agricultural Funds executive said.

A bubble appears to be building up and there is a cause for caution because returns are getting squeezed, said Daniel Hough, agricultural product specialist with Macquarie, on the sidelines of an agriculture conference.”

And a Daily Radio News item yesterday from USDA (“Not All Farm Land Values in All Areas are at Record Levels”) noted that, “While much of the Corn Belt has experienced record ag land values lately, other regions have not seen the same. (Rod Bain and Leeland Strom of Farm Credit Administration).”

 

Trade

A news release yesterday from the House Ways and Means Committee stated that, “Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on the Trans-Pacific Partnership.  The hearing will take place on Wednesday, December 14, 2011, in 1100 Longworth House Office Building, beginning at 10:00 A.M.”

 

Biofuels

A news release yesterday from the National Cattlemen’s Beef Association stated that, “In a letter to the Senate Environment and Public Works (EPW) Committee, a coalition of the U.S. livestock and poultry industry associations, including the National Cattlemen’s Beef Association, the American Meat Institute, the National Chicken Council, the National Meat Association, the National Pork Producers Council and the National Turkey Federationrequested a hearing to discuss the Renewable Fuel Standard’s (RFS) impact on the economy. The groups cited ongoing pressure on domestic feed grain supplies and a discovery of $9 million of fraudulent renewable identification numbers as justifications for a hearing.”

 

Regulations

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House on Wednesday passed legislation that would require Congress to approve all major federal regulations with an effect of $100 million or more, a Republican attempt to rein in what they see as the expanding regulatory burden faced by companies across the country.

“The Regulations from the Executive in Need of Scrutiny (REINS) Act, H.R. 10, was approved in a mostly party-line vote. The bill passed 241-184, and only four Democrats joined Republicans.”

The update noted that, “House passage sends the bill to the Senate, which again is not expected to consider it at all. House Republicans have argued over the last several weeks that the House is sending jobs bills to the Senate, which is refusing to act on them.”

And Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The White House is threatening to veto a Republican-backed bill that would bar the Environmental Protection Agency from regulating dust from farms, mines and many other sources in rural areas. The House is set to vote tomorrow on the bill, which has been a key part of the Republican to solidify support in rural areas and to portray government regulation to as an enemy of economic growth.”

And the AP reported yesterday that, “The U.S. Department of Agriculture on Thursday will release a new but stripped-down antitrust rule regulating meat companies that’s far less sweeping than initial reforms that ran into strong opposition from businesses and Congress.

“The department will publish the final version of the rule after more than a year of heated debate that pitted the nation’s biggest meat companies against many farmers and ranchers. Congress voted last month to prohibit the USDA from passing most portions of the reform.”

Keith Good

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