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Budget and Policy Developments; Regulations; and Biofuels

Budget and Policy Developments

Janet Hook and Laura Meckler reported in today’s Wall Street Journal that, “House Speaker John Boehner, bowing to heavy pressure from fellow Republicans, agreed Thursday to a two-month extension of a payroll-tax break, ending a stalemate that had created a wedge within the party.

“The deal, which forestalls a Jan. 1 tax increase on 160 million workers, represents a retreat for the House GOP, which had been at odds with Senate Republicans and party elders who feared the party would suffer in the 2012 elections if the tax break was allowed to expire.

“The new agreement still must be approved by the House and Senate, but with most members already gone for the holidays, congressional leaders hope the compromise can be adopted Friday without a formal vote.”

Today’s article noted that, “Mr. Boehner (R., Ohio) changed course a few hours after Senate Minority Leader Mitch McConnell (R., Ky.) stepped into the debate and urged House Republicans to pass the two-month extension approved by the Senate last Saturday in an 89-10 vote. As part of the new deal, all sides committed to negotiating early next year a full-year extension of the tax break. That also would have been the likely outcome of the original deal.”

Jennifer Steinhauer reported in today’s New York Times that, “[President] Obama, who has reaped political benefits from the standoff, welcomed the outcome.

“‘This is good news, just in time for the holidays,’ he said in a statement.  ‘This is the right thing to do to strengthen our families, grow our economy, and create new jobs. This is real money that will make a real difference in people’s lives. ‘”

And Daniel Newhauser and Meredith Shiner reported yesterday at Roll Call Online that, “If any Member objects and demands a roll call vote on the matter, Boehner said the vote would happen next week. But if Members sign off on the legislation, the unanimous consent move would happen Friday. The Senate is likely to pass the extension by unanimous consent as soon as it is presented with the House product.

“Still, frustration among the Republican rank and file indicates that the deal is not yet a sure thing.”

Marin Cogan reported last night at Politico that, “Will the House freshmen comply?

That’s the open question looming over the 11th hour deal to extend the payroll tax holiday by two months — agreed to by House GOP leaders after facing extreme pressure from Congressional Democrats and the White House.”

The article noted that, “At least two House freshmen left open the possibility that they would object to the unanimous consent to extend the tax holiday by two months while congressional conferees work out a year-long deal.

“Alabama freshman Rep. Mo Brooks, who voted against the initial year-long deal passed by House Republicans, said he was ‘not yet sure,’ whether he’d protest the deal. Protesting would require the House to reconvene for a roll call vote.”

The Politico update added that, “Under the plan, the House will move to approve the two-month deal without requiring all of its lawmakers to return to Washington. It will pass the Senate automatically after it passes the House. GOP leaders secured promises from Democratic leaders that they would appoint conferees to hash out a year-long deal.

“The last-minute agreement angered several of the freshmen who were among the most strident supporters of the leadership’s showdown with the Senate.

Other freshmen said it wasn’t worth protesting the deal.”

In other news, DTN Ag Policy Editor Chris Clayton reported yesterday that, “Rolling into what will be a hotly-contested presidential election year, Agriculture Secretary Tom Vilsack wants to see the country’s farming economic machine continue with strong forecasts.

“In at least some parts of America, the president’s team could legitimately get a positive response asking people if they are better off now than they were four years ago.

“‘Obviously we want to continue the progress we have seen recently,’ Vilsack said in a phone interview Wednesday.”

Yesterday’s article indicated that, “Vilsack noted that higher farm income is a function of several factors. He cited those areas in which USDA played a role, such as implementing commodity, disaster aid, and crop insurance. The secretary also noted the growth of credit from Farm Service Agency, or federal loan guarantees. Then there is USDA’s help with renewable energy projects.

“‘So all of that needs to be part of 2012,’ Vilsack said. ‘Job growth in rural America is an important consideration. I am proud of the fact we have done a lot of work in development. Part of the benefit of our work is that the unemployment rate is going down in rural America much faster than it is in other parts of the country.’

“Vilsack notes that over the past three years, the federal government has provided more than $20 billion in crop-insurance indemnities and disaster program payments. Crop insurance indemnities this year have topped $7 billion.”

The DTN update added that, “Despite the status of the farm economy, the Obama administration often finds itself fending off critics of regulatory policies. USDA ended up dramatically culling back a livestock marketing rule. EPA and now the Department of Labor have recently come under fire.

“‘It’s easier to react to this stuff and it’s just hard for people to accept the fact that agriculture is doing well, unemployment rates are going down at a faster rate, exports are at record levels,’ Vilsack said. ‘It’s a little easier to complain about things than it is to pat folks on the back.’

“The secretary said much of what people are complaining about are events that did not happen or will not happen, such as the multi-year fight raised by farm groups over the EPA and dust regulations, even though the EPA never moved ahead with a tighter dust standard. Vilsack criticized House members for legislation that passed earlier this month on a 268 to 150 vote.”

Mr. Clayton pointed out that, “Moving ahead in 2012, however, Vilsack’s department is starting to operate with tighter budget constraints under the fiscal 2012 budget passed last month. The overall discretionary budget is $19.8 billion, about $350 million from 2011 figures, but there were significant cuts made from some programs.

“‘We are going to manage that effectively and we’re going to try to look for ways to strengthen services, notwithstanding the fact we’ll have fewer dollars to essentially implement our programs,’ he said.”

Agri-Pulse Senior Editor Stewart Doan also interviewed Sec. Vilsack in the latest Agri-Pulse Open Mic program.

A summary of the Open Mic interview, which can be heard here, indicated that: “Agriculture Secretary Tom Vilsack is presiding over arguably the most profitable period in the history of U.S. agriculture. On a special year-end edition of Open Mic, Vilsack explains what USDA needs to do to keep the good times going and also discusses the political fortunes for farmers and ranchers, as well as for President Obama in rural America. The USDA Chief is readying a number of announcements early in the new year with respect to the size, structure and scope of USDA that he suggests will impact both the Department and its stakeholders for decades to come. In the meantime, he remains committed to brokering peace between biotech, conventional and organic producers and expresses doubt that a new farm bill will be enacted in 2012.”

In other policy news, Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The Obama administration raised alarms in the livestock industry two years ago when it announced a shift in policy toward the use of antibiotics to speed the growth of hogs and other animals. But the administration is making clear that is trying to change industry practices only on a voluntary basis for now.

“The Food and Drug Administration recently denied petitions from consumer advocacy groups to ban the use of antibiotics for growth promotion and disease prevention. Today, the FDA took the step of killing proposals that dated back to the Carter administration to ban the feed use of two major classes of antibiotics, penicillins and tetracyclines.

“FDA says it does not consider giving antibiotics to livestock for growth promotion a judicious use of the drugs. The concern is that overuse of antibiotics on farms is contributing to the problem of salmonella and other bacteria becoming resistant to the drugs in human medicine. But rather than bar the drugs from being used for the purpose the FDA has been trying to talk companies into voluntarily ending those sales.”



Josiah Ryan reported yesterday at The Hill’s Floor Action Blog that, “Sen. John Barrasso (R-Wyo.) released a report Wednesday, titled ‘United States of Regulation,’  that claims additional regulations implemented by the Obama administration in 2011 have cost Americans more than $230 billion.

“‘In 2011 alone, the Obama Administration’s proposed and final rules have a cost of over $230 billion and will impose 120 million hours of paper pushing,’ wrote Barrasso, ranking member of the Senate Environment and Public Works subcommittee on Clean Air and Nuclear Safety.”

Meanwhile, Reuters writer Charles Abbott reported yesterday that, “Monsanto’s genetically engineered, drought resistant corn is deregulated, the U.S. Agriculture Department said Thursday, clearing the variety for sale.

“USDA approved the variety after reviewing environmental and risk assessments, public comments and research data from Monsanto.

“Corn is the most widely grown U.S. crop and farmers grew 91.9 million acres of the feed grain this year, the second-largest area since World War Two.”

The article pointed out that, “In its 2009 petition for approval of its GM variety, Monsanto said 40 percent of crop losses in North America are due to sub-optimal moisture.

“In a statement, Monsanto said it planned farm trials in the western U.S. Plains in 2012 to demonstrate the variety for growers and to generate data that will help guide Monsanto’s commercial decisions.”

The major U.S. area for adoption of drought-tolerant corn would be the Plains, which produce one-quarter of the U.S. crop, Monsanto estimated, as well as similar dryland regions of Africa, Europe and Latin America,” the Reuters article said.



Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “The new year is almost here and the Obama administration has yet to tell refiners how much biofuel they’ll have to use in 2012. The Environmental Protection Agency is overdue releasing next year’s requirements under the Renewable Fuel Standard.

“One of the biggest questions is how much cellulosic biofuel the EPA will mandate. Cellulosic fuels are made from crop residue, grasses, wood and other sources of cellulose, the fibrous material that makes up plants.”

Yesterday’s update noted that, “The 2007 energy law mandated the use of 500 million gallons of cellulosic ethanol in 2012 that very little production has actually developed. The EPA proposed in June to slash the cellulosic target for 2012 to a range of 3.5 to 12.9 million gallons.

The final numbers are currently at the White House for review. ‘We will issue it (the final regulation) as soon as that review is complete,’ said EPA spokeswoman Catherine Milbourn.”

Keith Good