FarmPolicy

June 16, 2019

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

Budget Issues

Pete Kasperowicz reported on Friday at The Hill’s Floor Action Blog that, “Whatever show of bipartisanship Republicans and Democrats manage to put on during President Obama’s State of the Union address on Tuesday, 2012 is already looking like another year of bitter divide over what has become the political question of our time: How much should government spend?

“Obama has made a recent nod toward cutting the deficit, by combining several economic agencies into one. He’s likely to remind his GOP critics of this proposal during Tuesday night’s speech.

“But outside the glare of the speech, Republicans are already planning their next assault on federal spending. Tuesday and Wednesday, the House Budget Committee will mark up bills that seek to end the automatic inflation of budget items, require a macroeconomic analysis o the budget, and ensure that the congressional budget resolution has the force of law.”

And Molly K. Hooper and Erik Wasson reported on Friday at The Hill’s On the Money Blog that, “Budget Committee Chairman Paul Ryan (R-Wis.) confirmed Friday that House Republicans will move a budget resolution this year.

“Ryan’s comments appear to put to rest speculation that the House GOP would put the onus on the Senate to act first and defer until the upper chamber moves a budget, which is seen as very unlikely.”

Meanwhile, Jackie Calmes reported in yesterday’s New York Times that, “President Obama will use his election-year State of the Union address on Tuesday to argue that it is government’s role to promote a prosperous and equitable society, drawing a stark contrast between the parties in a time of deep economic uncertainty.”

Laura Meckler and Carol E. Lee reported in today’s Wall Street Journal that, “Mr. Obama’s State of the Union speech will be a continuation of the agenda he articulated last month in Osawatomie, Kan. He’ll push his jobs policies and some modest ways to revive housing, call for higher taxes on the wealthy, take a tougher stance on China and craft a vision of America that relies on manufacturing, domestic energy production, and education and training.”

Alexander Bolton reported yesterday at The Hill Online that, “Senior administration officials have told allies in the progressive and labor communities that Obama will shift the focus away from budgets and deficit cutting, which dominated 2011, to job creation and the economy.”

With respect to the House GOP, Jake Sherman and John Bresnahan reported yesterday at Politico that, “After a brutal year filled with infighting and legislative crises, the Republican majority has a simpler goal for the rest of this year: stay unified and tranquil during a presidential election year and avoid the battles that reveal the divides within their own party.

“The 2012 GOP playbook is a poll-tested group of bullet points that seems to illustrate a fresh start for the majority. That means tackling issues that unify the party, such as the Keystone XL pipeline, domestic energy production, infrastructure spending and tax reform. It also means dodging the spending and deficit battles that hurt the party last year.”

Reuters writer Richard Cowan reported on Saturday that, “With a national jobless rate of 8.5 percent and millions of long-term unemployed people losing hope, Republicans and Democrats will both try to convince voters in the November presidential and congressional elections that they hold the keys to an improving economy.”

And on the issue of the payroll tax cut, Scott Wong and Seung Min Kim reported yesterday at Politico that, “On one side, Democrats are pushing a millionaires’ surtax reviled by the GOP. On the other, Republicans want to reverse President Barack Obama’s decision last week rejecting the Keystone XL oil pipeline.”

“Neither provision may end up in the final deal as Congress seeks to avert a Social Security tax increase set to hit 160 million working Americans at the end of February. But for now, the millionaires’ tax and the oil pipeline are all about getting the base fired up again as negotiators look for a middle-of-the-road compromise.”

The article added that, “The kickoff of the payroll-tax conference committee will take place just hours before Obama ascends the House podium and delivers the final State of the Union address of his current term — a speech in which he’s expected to press a deeply unpopular Congress to quickly pass the payroll bill.”

Bernie Becker reported on Friday at The Hill’s on the Money Blog that, “Rep. Chris Van Hollen (D-Md.) has said that a tax break used by private equity executives should be sacrificed to pay for a full-year extension of the payroll tax cut.”

More specifically with respect to USDA budget issues, a news release Friday from Sen. Kirsten Gillibrand (D., N.Y.) stated that, “With seven USDA offices across New York State facing closure, [Sen. Gillibrand], New York’s first member of the Senate Agriculture Committee in nearly 40 years, is urging U.S. Agriculture Secretary Tom Vilsack to keep all of New York’s USDA offices open and available to New York State’s agriculture communities.”

 

Farm Bill

Scott Waltman reported on Friday at the Aberdeen News Online (S.D.) that, “Crop insurance programs have to be continued and strengthened if direct payments end when a new farm bill is crafted later this year, U.S. Sen. Tim Johnson, D-S.D., said in Aberdeen on Thursday.

“Johnson spoke to a handful of invited guests from the agriculture sector during a listening session at the South Dakota Wheat Growers offices.

“Audience members said they are OK with so-called direct payments — made to farmers regardless of yield or market prices — going away. But, they said, crop insurance, provided via the federal government through insurance agencies, is vital.”

In this week’s Agri-Pulse Open Mic program, Agri-Pulse Senior Editor Stewart Doan interviewed House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) and a portion of their discussion focused on the Farm Bill.  To listen to the Open Mic interview, just click here.

An Agri-Pulse summary of the interview noted in part that, “Rep. Collin Peterson, D-Minn., one of the four House and Senate lawmakers who developed a farm bill package for the Joint Select Committee on Deficit Reduction, tells us why he believes Congress will pass new farm legislation in 2012. The top Democrat on the House Agriculture Committee endorses the concept of safety net options for ‘program’ crops and comments on competing ideas being floated by North Dakota Democratic Senator Kent Conrad and the American Farm Bureau Federation.”

An update Friday from Inside U.S. Trade noted in part that, “If efforts to pass new farm legislation fail, even securing a one-year extension could be difficult. One public interest lobbyist noted that almost no legislation is getting off the floor in the House without some kind of concession on spending, meaning that even an extension could get wrapped up in difficult negotiations over cuts to farm programs.

“Still, it is unthinkable that legislators will not pass some kind of extension if that proves necessary.

Failure to renew the current farm bill would mean U.S. farm policy would revert to the programs that were in place in the early half of the 20th century. Those programs entail drastically more spending on farm subsidies relative to today’s farm policy. It would also entail kicking some 43 million people off of food stamps, as that program did not exist at the time, sources noted.”

An update posted on Friday at the Environmental Working Group Online indicated that, “With the 2012 Farm Bill fast upon us, Congress has an opportunity to make smart, timely changes to help fix our broken food and farm system by embracing a package of policy reforms outlined in the Local Farms, Food and Jobs bill. This legislation was recently introduced by Rep. Chellie Pingree (D-Maine) and Senator Sherrod Brown (D-Ohio) and is co-sponsored by 63 representatives in the House and 9 in the Senate.”

In other policy news, the AP reported on Friday that, “It’s unclear whether farmers in Georgia and Alabama will face a shortage of workers due to tough new laws targeting illegal immigration, but some producers said they have begun changing their plans for planting and harvesting this year’s crops.

“Some farmers said they might reduce the number of acres they plant or shift to less labor-intensive crops, while others are bracing for higher labor prices and have turned to new recruiting tools to attract workers.”

And with respect to EU farm policy ideas, Bloomberg writer Rudy Ruitenberg reported late last week that, “The European Commission will resist calls by France, the European Union’s largest agricultural producer, to scale back environmental clauses within the 27- nation bloc’s new farm policy, a spokesman said.

The commission doesn’t intend to dilute plans to allocate 30 percent of national agricultural budgets for environmental measures, leave 7 percent of farm land free of crops and force farmers to diversify crops they plant, said Roger Waite, a spokesman for the commission, in Berlin today, speaking for Dacian Ciolos, EU agriculture commissioner.

Setting aside 7 percent of land for environmental purposes is ‘too much’ and in conflict with the need to produce more food, Bruno Le Maire, France’s agriculture minister, said this week in Dijon. He also said 30 percent of national farm budgets for environmental measures is excessive, and the crop-diversity plans are incompatible with crops such as corn.”

The article added that, “‘I underline that this is not set-aside,’ Waite said. ‘The aim is to have a positive effect on biodiversity loss, climate change and environmental problems throughout the EU by making everybody do it.’

“The commission’s crop-diversity proposals don’t amount to forced crop rotation, according to Waite. Under the plan, farmers must grow at least three crops and can’t plant more than 70 percent of a single crop in order to get subsidies.”

 

Agricultural Economy

Marshall Eckblad and Mark Peters reported in Saturday’s Wall Street Journal that, “Cattle prices rose to a record as a drought in the southern Plains is beginning to bear down on the nation’s beef supplies.

“Faced with the worst drought since the Dust Bowl in the 1930s, ranchers in states such as Texas and Oklahoma culled their herds last year because they couldn’t afford to buy feed and water to replace the parched grass and dry ponds. They sold young cattle to feedlots, where the animals are fattened before they are slaughtered and butchered.

“The ripple effects of those decisions are now being felt in the cattle market, as those sales are beginning to slow. The U.S. Department of Agriculture on Friday reported that 1.68 million head of cattle were sold to feedlots in December, a 6% drop from the previous year.”

A news release Friday from Purdue University indicated that, “Hog producers have remained cautious about expanding their breeding herds despite the industry’s return to profitability – a wise decision considering there is still much economic uncertainty for them, Purdue Extension agricultural economist Chris Hurt says.

“According to the December inventory report from the U.S. Department of Agriculture, the country’s breeding herd grew by only 0.4 percent even though 2011 profits averaged about $15 per head. While that is far from the $27 a head that producers made in 2006, producers lost money over the next few years as feed costs skyrocketed.”

Annie Lowrey reported in Saturday’s New York Times that, “Two years ago, President Obama popped a surprise into his State of the Union address: His administration would double American exports in five years, helping to create two million jobs…[T]wo years later, the administration is on track — for now — to meet its ambitious goal. Growing exports have been one of the central drivers of the recovery, accounting for about half the nation’s economic growth since the recession ended. Economists say the administration deserves credit for some of the gains. It has pressured China to increase the value of its currency and open its markets to American businesses. It has worked closely with American companies looking to sell goods and services throughout the world.”

Meanwhile, Alan Beattie reported late last week at The Financial Times Online that, “The US administration has urged Congress to pass legislation easing the imposition of anti-subsidy tariffs on imports from China, overruling a recent federal court ruling that restricted the practice.

“The court ruling in December surprised and dismayed companies that compete with imports from China by saying the US could not impose both ‘countervailing duties’, which aim to compensate for state subsidies to exporters, and ‘antidumping’ measures, which are levied on imported goods priced unfairly low.

“This week, Ron Kirk, US trade representative, and John Bryson, commerce secretary, sent a letter to Congress urging immediate legislation to overrule the court’s decision.”

 

Biofuels

Bloomberg writer Rudy Ruitenberg reported today that, “The use of corn to make ethanol in the U.S. is helping to lift the grain price worldwide, said Jose Graziano da Silva, the new director general of the United Nations’ Food and Agriculture Organization.

“‘FAO has been raising its voice against using food to produce bio energy,’ Graziano da Silva told 64 agriculture ministers in Berlin yesterday. That’s ‘especially’ the case for corn in the U.S. and oilseeds in Europe, he said.”

Todd Neeley reported on Friday at DTN (link requires subscription) that, “As the budding cellulosic ethanol industry continues to struggle to achieve commercial production, an Iowa company received a financial jolt from USDA with a $25 million guaranteed loan to build a cellulosic ethanol plant in eastern Iowa.

“Fiberight LLC has plans to build a 55,000-square-foot, $59.5 million plant on the site of an old corn-based ethanol plant in Blairstown, Iowa, about 25 miles west of Cedar Rapids. The company plans to convert municipal solid waste and other industrial pulps into advanced biofuels.”

Meanwhile, the AP reported on Friday that, “The nation’s largest ethanol company, Poet LLC, announced Friday that it is putting on hold its plan to build a dedicated ethanol pipeline because of the lack of prospects for a federal loan guarantee.”

And Reuters news reported last week that, “Ethanol derived from natural gas and coal would compete with corn-based ethanol for a share of the U.S. motor fuel market under a bill unveiled by six U.S. House members on Wednesday.

“The bill would include ethanol produced from alternative sources, such as natural gas and coal, in the federal mandate for use of renewable fuels.”

 

Regulations

Todd Neeley reported on Friday at the DTN Ag Policy Blog that, “Back in March members of the U.S. House Committee on Agriculture raised concern that the EPA was reaching legal settlements with environmental groups to allow the agency to draft regulations that could be harmful to farmers.

“On Thursday a group of Republican lawmakers sent a letter to EPA Administrator Lisa Jackson, questioning the agency’s recent move toward settlements on two recent lawsuits.”

Mr. Neeley added that, “In the letter Republican leaders of the House Transportation and Infrastructure Committee and Senate Environment and Public Works Committee, ask Jackson numerous questions about two recent lawsuits that resulted in EPA settlements with two environmental groups.

“The lawsuits were brought by the Conservation Law Foundation and the Buzzards Bay Coalition. They allege EPA has a non-discretionary duty in the Clean Water Act to regulate groundwater pollution and to require states to regulate non-point source pollution.”

Julie Harker reported on Friday at Brownfield that, “Agriculture department leaders from 10 states met with Environmental Protection Agency (EPA) officials in Kansas City, Kansas.

“The ag directors – or their representatives – discussed with EPA region 7 and region 8 officials environmental regulatory issues involving agriculture – from air quality standards for particulate matter to water quality to CAFOs.”

Keith Good

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