FarmPolicy

August 21, 2014

Budget; Farm Bill; Regulations; Ag Economy; MF Global; and Trade

Budget: Payroll Tax Cut Extension

Yesterday’s Need-to-Know Daily Email from the National Journal reported that, “The conference committee tasked with bridging the partisan divide over how to extend unemployment insurance and a payroll-tax break convenes today for their second public meeting. Lawmakers have until the end of the month to strike a deal. Also on their agenda is the Medicare ‘doc fix,’ which entails preventing a pay cut for doctors who treat Medicare patients. That task got harder on Tuesday, however, when the Congressional Budget Office said that freezing physicians’ pay at current levels for the coming decade would cost $26 billion more than had been assumed in November.”

Bernie Becker reported yesterday at The Hill Online that, “With their approval ratings in the tank, Congress perhaps doesn’t need another anxiety-ridden, eleventh-hour deal. But with the payroll tax cut set to expire at month’s end, that may well be where lawmakers are heading.

“Lawmakers tasked with hammering out a yearlong payroll tax cut extension appeared to jump-start their negotiations on Wednesday, after a month in which little public progress was made.

“But even as they dived deeper in to the details, the members of a House-Senate conference committee remained far apart in discussions over how to pay for their proposals.”

Daniel Newhauser and Meredith Shiner reported today at Roll Call Online that, “Members aiming to hash out a deal on the payroll tax cut conference committee still find themselves on shaky ground after their second meeting, with broad agreement on where to go but little agreement on how to get there.

“Still, an opening offer from Senate Finance Chairman Max Baucus (D-Mont.) looks to secure at least some progress on low-hanging fruit at today’s follow-up meeting.”

The Roll Call article explained that, “The 20 conferees agreed Wednesday on general goals: extend the payroll tax holiday and unemployment benefits for the balance of the year and temporarily prevent cuts to doctors’ Medicare reimbursement while working on a long-term solution.

When it comes to paying for or changing the programs, however, there was almost no accord, and the panel’s co-chairman, House Ways and Means Chairman Dave Camp, encouraged Members to ignore talk of how to pay for things for now.”

And from a political perspective regarding GOP House leadership issues, Jake Sherman and John Bresnahan reported last night at Politico that, “The top aides to House Majority Leader Eric Cantor and Speaker John Boehner are now seeking a truce after a bitter year of behind-the-scenes fighting that pitted the top House Republicans against one another.

Tensions had gotten so bad between the two offices that senior aides decided, for the good of the party and their own bosses, that the rivalry has to be toned down.”

The article noted that, “So like two warring nations, Boehner and Cantor aides, with the approval of their bosses, have decided to hit the ‘reset button.’ GOP insiders used different terms to describe the new reality — a truce, a cease-fire, a détente.”

 

Farm Bill Issues

A news update yesterday from the Senate Agriculture Committee stated that,  “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today announced the Committee’s Farm Bill hearing schedule for February and March, noting that the Committee will continue examining Farm Bill principles and evaluating policy solutions to develop a 2012 Farm Bill.”

Details of the next series of hearings include:

- Wednesday, February 15- Energy and Economic Growth for Rural America.

- Wednesday, February 29- Strengthening Conservation through the 2012 Farm Bill.

- Wednesday, March 14- Healthy Food Initiatives, Local Production and Nutrition.

- Wednesday, March 21- Risk Management and Commodities in the 2012 Farm Bill.

Also yesterday, USDA indicated in a news release that, “Acting Under Secretary for Farm and Foreign Agricultural Services (FFAS) Michael Scuse announced today that the [USDA] will conduct a four-week Conservation Reserve Program (CRP) general signup, beginning on March 12 and ending on April 6.”

An update yesterday from the Theodore Roosevelt Conservation Partnership stated that, “Prominent voices in the sportsmen’s community are commending a decision by the U.S. Department of Agriculture to open a general signup for the federal Conservation Reserve Program, a cornerstone of the Farm Bill critical to sustaining privately owned lands and the fish and wildlife resources that rely on them, the Theodore Roosevelt Conservation Partnership announced today.  Members of the TRCP Agriculture and Wildlife Working Group joined in praising news of the signup, the first opportunity in a year for landowners to participate in the successful conservation program.”

Meanwhile, an update posted yesterday at Inside U.S. Trade’s World Trade Online noted that, “Brazilian officials intend to discuss the development of the next farm bill with officials from the Office of the U.S. Trade Representative today (Feb. 1) in a meeting in Brazil, and will convey their views to USTR on various farm bill proposals that have been floated by U.S. commodity groups, sources close to the Brazilian government said.”

And an editorial posted earlier this week at the Wisconsin State Journal Online stated that, “Finally, it appears, Washington is ready to scale back billions of dollars in wasteful farm subsidies.”

The opinion piece noted that, “But $5 billion in direct payments to landowners each year are handed out regardless of need, occupation or high commodity prices. Just as bad, these payments inflate land prices, making it harder for young farmers to get started.

“President Barack Obama last year added his voice to the push to end the $5 billion in direct payments…Wisconsin’s congressional delegation should help keep the momentum going to finally rein in these excessive payments as America struggles to ease its soaring debt.”

An update posted yesterday at the Mineral Wells Index Online (Tex.) reported that, “Last year, farmers in Palo Pinto County saw drought and record heat take their toll on their crops. The only thing standing between many in the area and total devastation was crop insurance and other safety net programs.

“‘When you have a year like we did last year, all you can do is prepare for the next one,’ said Greg Gilbert, Palo Pinto County Farm Bureau president. ‘We know budget cuts are coming to the next farm bill, but crop insurance is one safety net that allows us to keep growing food and fiber.’”

 

Regulations: Department of Labor, EPA, and Sugar

Rachel Leven reported yesterday at The Hill Online that, “The Obama administration plans to rework a regulation that lawmakers and industry groups fear would prohibit young people from working on family farms.

“The Department of Labor on Wednesday said it would re-propose a portion of the child-labor rule to allow for more input from members of Congress and the public.

Specifically, the department intends to reconsider its interpretation of the ‘parental exemption,’ which allows children under 16 years of age to continue working on the farm of a parent or guardian. While the exemption is not new, the language in the rule caused controversy.”

The Hill update added that, “Several senators and representatives sent letters to Solis discouraging changes to the child labor regulations. Comments also flowed from farm associations, other members of Congress, unions and public health professionals on both sides of the issue.

“Sen. Debbie Stabenow (D-Mich.), the chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry, praised Solis’s move to re-propose the regulation.

“‘I am glad the Department of Labor heard my concerns and the concerns of so many families in Michigan and decided to re-evaluate this rule. I was concerned when I learned about the proposed rules,’ Stabenow said in a statement.”

Senate Agriculture Committee ranking member Pat Roberts (R., Kans.) noted yesterday that, “While I am pleased the Department of Labor has listened to commonsense straight from America’s farmers and ranchers, this proposed regulation would threaten the most fundamental tradition in agriculture—working on the family farm,” Roberts said, “I encourage them to scrap the whole thing and start over.”

Senator Jerry Moran (R., Kans.) indicated that, “DOL’s decision to withdraw with the ‘parental exemption’ portion of its rule is promising news and speaks to the power of citizens sharing their concerns with Washington. Unfortunately, the entire proposal – not just this one portion – is a threat to the future of agriculture.”

American Farm Bureau President Bob Stallman noted yesterday that, “The decision today by the Labor Department to re-propose the ‘parental exemption’ in the child labor rule is a positive step, but much more work is needed.”

And National Farmers Union (NFU) President Roger Johnson stated yesterday that, “NFU is pleased that the administration listened to the concerns of the agriculture community and determined that these rules would hinder the ability of young workers to learn about agriculture while doing little to make them safer.”

In other news, Bill Tomson reported yesterday at The Wall Street Journal Online that, “The Environmental Protection Agency missed a deadline to release federal guidelines on the dangers of excess dioxin chemicals in the food supply and environment, giving ammunition to critics that hope the agency will change course.

“The EPA was scheduled to release standards in January that would for the first time set a maximum human-exposure level for dioxins. The delay comes after criticism by food and chemical industries that have argued the EPA is using flawed science and will scare Americans about the food they eat.”

Karen Kaplan reported yesterday at the Los Angeles Times Online that, “Move over salt. Step aside, saturated fat. There’s a new public enemy in the pantry, and it’s … sugar.

“In a provocative commentary coming out in Thursday’s edition of the journal Nature, Dr. Robert Lustig and two colleagues from UC San Francisco argue that the added sugars in processed foods and drinks are responsible for so many cases of chronic disease and premature deaths that their use ought to be regulated, just like alcohol and tobacco.”

 

Agricultural Economy: China

Keith Bradsher reported earlier this week in The New York Times that, “As the White House prepares for a Washington visit by the man who is expected to run China for the coming decade, trade tensions between the United States and Beijing are on the rise.

“On Tuesday, a coalition of big American labor unions, Democratic politicians and trade advocacy groups plans to start campaigning for the Obama administration to file a series of trade cases against China in the auto industry. They accuse Beijing of unfairly subsidizing Chinese auto parts makers and illegally restricting the exports of crucial raw materials that foreign parts makers need to stay competitive.”

Mr. Bradsher explained that, “Separately, the Commerce Department is considering whether to levy punitive tariffs against China over green energy technology. And on Monday, Washington was on the winning side of a World Trade Organization ruling against China for its export restrictions on industrial minerals.

“All of which promises to test diplomacy on both sides during a Feb. 14 White House visit by China’s vice president, Xi Jinping, who is expected to succeed President Hu Jintao next winter as China’s leader.”

The Times article added that, “Hoping to reduce the trade tensions just before Mr. Xi’s visit, Chinese officials are preparing to send at least six business delegations on buying trips to the United States, people familiar with the plans but not authorized to discuss them said. Similar delegations have preceded past visits by top Chinese leaders to Washington and have focused on bundling planned purchases of Boeing jets, American grain and other exports into multibillion-dollar contracts that can be signed at elaborate ceremonies.

The Obama administration has also made a few small conciliatory moves. The Commerce Department planned to issue a preliminary ruling on Feb. 13 on whether to impose tariffs on Chinese solar panels to offset reported Chinese export subsidies. But when the United States and China agreed last week that Feb. 14 would be the date for Vice President Xi’s visit to Washington, the department pushed back its ruling until March 2.”

Also this week, Wall Street Journal writers Jeremy Page and Mark Peters penned an interesting article highlighting a trip Xi Jinping [who is expected to succeed President Hu Jintao next winter as China’s leader] made to Muscatine, Iowa 27 years ago when Mr. Xi was “then an up-and-coming official in a pig-farming region in China.”  He “led an animal-feed delegation to Iowa,” the Journal noted.

The Journal writers stated that, “On Feb. 15, one day after he visits the White House for the first time, Mr. Xi, now China’s vice president, plans to return to Muscatine and share tea with the people he met in 1985. His trip back to the American heartland appears intended to showcase what makes him so different from China’s current leader, Hu Jintao—a confident, personable style and easygoing familiarity with the U.S.”

The article pointed out that, “Mr. Xi shed his uniform in 1982 and took a job as deputy Communist Party chief of Zhengding county, a pig-farming region in the northern province of Hebei. That is when he first met Terry E. Branstad, the current governor of Iowa, who visited Hebei in 1984 as part of a ‘sister-states’ exchange. The following year, Mr. Xi led the animal-feed delegation to Iowa.”

The Journal writers indicated that, “Late last year, Mr. Branstad wrote to Mr. Xi to invite him back to Iowa, suggesting a reunion with his 1985 hosts.

“About two weeks ago, the Chinese consulate in Chicago informed the governor they were considering the invitation. A few days later, the Chinese ambassador in Washington flew to Iowa to help with arrangements. The Chinese Embassy in Washington and the Foreign Ministry in Beijing didn’t respond to requests for comment.”

Meanwhile, Reuters news reported yesterday that, “China said on Wednesday it would boost agriculture innovation in an effort to increase food output, signaling that the world’s most populous country is trying to tackle outdated farm and food infrastructure to feed its people.

“China accounts for a fifth of the world’s population with less than 9 percent of its arable land, and the cabinet suggested in a document that China’s leaders were aiming to get serious about technology to ensure long-term food supplies.”

Domestically, MJ Lee reported yesterday at Politico that, “Alabama’s controversial immigration law, considered one of the toughest in the nation, is costing the state’s economy up to a whopping $10.8 billion annually, according to a new study.”

 

MF Global

Ben Protess and Azam Ahmed reported in yesterday’s New York Times that, “Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.

“While authorities have traced hundreds of millions of dollars to banks, MF Global’s trading partners and even the firm’s securities customers, investigators remain uncertain about whether they can retrieve the money.

“Some recipients were entitled to payouts from MF Global, which could make clawing back the money difficult. For instance, securities customers withdrawing their money as MF Global began to collapse were paid from accounts that belonged to futures clients, according to other people briefed on the matter.”

The Times article added that, “The findings shift the pressing question surrounding the collapse of MF Global from what happened to the money to how to recover it and who is at fault.

“Answers will not come easy. A significant impediment has been clashes among the parties trying to resolve the MF Global mess: three federal agencies and two bankruptcy trustees.”

 

Trade

An update posted yesterday at Bridges Online (International Centre for Trade and Sustainable Development) reported that, “Trade talks between Brussels and New Delhi, which were launched in 2007, are reportedly moving forward in advance of the upcoming India-EU Summit, scheduled for 10 February in New Delhi. While the pact is unlikely to be ready for signature by the February meet, both sides have confirmed that steady progress is being made toward concluding negotiations, possibly by year’s end.”

Keith Good

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