FarmPolicy

July 28, 2014

Farm Policy Issues; Trade; and Regulations

Farm Bill and Policy Issues

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Despite the economics of crop production and federal spending right now, there is still room for conservation practices and promoting wildlife, USDA’s chief conservationist said.

Dave White, chief of the Natural Resources Conservation Service, spoke over the weekend to hunters at the Pheasant Fest convention and expo in Kansas City. White said landowners are trying to balance the various growing demands on their land.

“‘We have agriculture production and we have sustainability and we can have it built in where wildlife is a part of it,’ White said. ‘I don’t think there is one farm or one ranch or one woodlot in the United States of America that doesn’t have room for wildlife.’”

Mr. Clayton explained that, “Agriculture faces increased environmental pressure as USDA’s conservation programs are going to see the conservation budget, projected at about $65 billion over 10 years, likely take a $6 billion cut in that projected spending in the next farm bill. That was the estimated conservation cut in the farm-bill proposal last fall during the failed supercommittee talks.

“‘We know we need more boots on the ground, but we don’t see it’s going to be federal boots,’ White said.

“On Friday, USDA announced a $10 million project with the National Fish and Wildlife Foundation to leverage more non-profit or local government dollars through conservation grants that will range from $50,000 to $250,000. White expects the $10 million to turn into $20 million to $30 million in projects.”

The DTN item noted that, “The Senate Agriculture Committee is scheduled to hold a hearing on conservation programs Feb. 28,” and added that, “USDA also announced a new conservation initiative at Pheasant Fest to protect up to 750,000 acres of the nation’s most highly erodible croplands. The initiative will assist landowners with targeting their most highly erodible cropland by allowing them to plant wildlife-friendly, long-term cover through the Conservation Reserve Program.”

Meanwhile, a news release yesterday from Rep. Adrian Smith (R., Neb.) indicated that the Third District Congressman would be holding a Farm Bill listening tour in the coming weeks.  The release noted that, “Nutrition programs account for more than 3/4 of all Farm Bill spending,” and included this corresponding graphic illustration of federal resource allocation.

An update earlier this week at WBAY-TV Online (video included) indicated that, “Two area Congressmen teamed up to host an agriculture policy conference in Kimberly [Wis.] Monday.

“Republican U.S. Representatives Tom Petri and [House Agriculture Committee member] Reid Ribble joined local farmers and key organizations in the agricultural sector to discuss issues affecting Wisconsin farming, including the 2012 farm bill.”

“‘We really wanted to listen and get input from people in different aspects of Wisconsin on agriculture — what’s working, what’s not working, and how we can do a better job of supporting our important agricultural sector,’ Rep. Petri said.”

And a news release Friday from Sen. Al Franken (D., Minn.) noted that, “As the U.S. Senate begins work on the 2012 Farm Bill, Key members of Senator Al Franken’s staff will hold a Farm Bill Outreach Tour in communities across Minnesota to update the farmers, ranchers, and agriculture officials on the status of the Farm Bill and to hear their concerns.  Senator Franken will use the input he receives from these meetings during the upcoming Senate debate to ensure Minnesota’s interests are reflected in the bill.”

An update yesterday at The New York Times Room for Debate webpage featured a variety of perspectives and opinions on farm policy and the Farm Bill.  Roger Johnson, the President of the National Farmers Union, pointed out that, “The most important addition to the farm bill would be a new approach to the commodity programs that provide income support to farmers…As it adopts this approach, the government should eliminate the current structure of direct payments.”

Craig Cox of the Environmental Working Group, expanded policy criticism beyond direct payments to include crop insurance.  At the Times Room for Debate webpage yesterday, Mr. Cox stated that, “The $5 billion in direct payments the government sends to farm businesses every year regardless of need should be eliminated in the 2012 farm bill. These cash handouts were supposed to ease the transition to a market-driven system in 2002, but that new day never dawned.

Crop insurance has morphed into an income guarantee for highly profitable agribusinesses, and subsidies have exploded from $2.1 billion in 2002 to $8.8 billion last year. Requiring minimum conservation standards and focusing insurance on helping farmers survive a crippling crop failure would save billions, improve the environment and end insurance companies’ windfall profits.”

Also, an editorial posted earlier this week at The Register-Guard (Eugene, Ore.) stated that, “As Congress struggles to rein in the federal budget, it has an opportunity for a big-ticket reduction — the billions of dollars the government spends every year on direct subsidies to U.S. farmers.

“With the nation mired in debt and agricultural subsidies at record highs, Oregon Rep. Earl Blumenauer and other federal lawmakers are calling for elimination of direct subsidies to farmers — a move that would save billions of dollars a year and help bring U.S. agriculture into the 21st century.”

With respect to nutrition issues, Ron Nixon reported in yesterday’s New York Times that, “The government’s attempt to reduce childhood obesity is moving from the school cafeteria to the vending machines.

The Obama administration is working on setting nutritional standards for foods that children can buy outside the cafeteria. With students eating 19 percent to 50 percent of their daily food at school, the administration says it wants to ensure that what they eat contributes to good health and smaller waistlines. The proposed rules are expected within the next few weeks.”

The Times article added that, “Efforts to restrict the food that schoolchildren eat outside the lunchroom have long been controversial.

“Representatives of the food and beverage industries argue that many of their products contribute to good nutrition and should not be banned. Schools say that overly restrictive rules, which could include banning the candy sold for school fund-raisers, risk the loss of substantial revenue that helps pay for sports, music and arts programs. A study by the National Academy of Sciences estimates that about $2.3 billion worth of snack foods and beverages are sold annually in schools nationwide.”

Yesterday’s article noted that, “No details of the proposed guidelines have been released, but health advocates and snack food and soft drink industry representatives predict that the rules will be similar to those for the government’s school lunch program, which reduced amounts of sugar, salt and fat.”

The New York Times editorial board highlighted food safety in an opinion item yesterday, stating in part that, “In some ways, it looks like a small thing — President Obama’s latest budget proposes cutting a $5 million research program at the Department of Agriculture. But the elimination of the Microbiological Data Program, which tests fruits and vegetables for disease, is an alarming setback in the fight to keep the food supply safe.

“The program’s research helps the Centers for Disease Control and Prevention and the Food and Drug Administration more easily find foods contaminated with salmonella, E. coli or other pathogens. The elimination of federal testing would leave regular testing of many fruits and vegetables to states and to the food industry.”

In other policy developments, Charles Pope reported yesterday at The Oregonian Online that, “With all the difficult questions bombarding Congress these days, the one attracting heavy attention in Rep. Kurt Schrader’s office is this:

“Which came first, the chicken or the controversy?

“It’s a serious question. Schrader is the lead author of a bill that would bring about more humane treatment for egg-laying hens, a quest that has kept animal rights groups hard at work for years.”

The article stated that, “In July, the United Egg Producers, whose members own 95 percent of all egg-laying hens in the country, forged an agreement with the Humane Society of the United States to support national regulations requiring larger cages for hens. The deal halted activists’ lobbying to change regulations state by state, and abruptly stopped cage-free initiative campaigns in Oregon and Washington.

“To make the agreement work, Congress must act.

That’s where Schrader, a veterinarian and member of the Agriculture Committee comes in. He wrote a bill that would more than double the size of cages, from 67 square inches to 124 square inches for hens laying white eggs. The cages would also have to have separate areas for nesting, perching and ‘bathing in dust.’”

Mr. Pope pointed out that, “Schrader focuses on the economic issues — the fact that eggs are a ‘national commodity’ and that patchwork regulations would make the industry vulnerable to foreign eggs. He stresses that the 18-year transition period lessens the economic hardship for producers and notes that ‘there will be no cost to the federal government, and no new bureaucracy.’”

“But as fast as a dropped egg shatters, the push-back came. First, the powerful beef producers raised concerns. Then even stronger objections came from the pork lobby and the Turkey Federation and the two big farm lobbies. Neither the chairman of the House Agriculture Committee, Rep. Frank Lucas, R-Okla., nor the top Democrat, Rep. Collin Peterson of Minnesota, has embraced the bill. Their committee is preoccupied with renewing the massive farm bill, which expires at the end of year.”

Yesterday’s article added that, “Schrader isn’t surprised at the opposition. ‘We’re talking about changing the social fabric of farming and that’s a big issue,’ he said. ‘They’re all worried about, ‘well, we’re next.’ I don’t think that’s accurate.’”

“Schrader frames it this way as a congressman: ‘The issue, I think, revolves around, are you willing to adapt to the 21st century of American agriculture? Or do you want to slowly fight a losing battle here that puts you out of business?’”

On a separate issue impacting animal agriculture, Agri-Pulse Senior Editor Stewart Doan provided an audio update at Agri-Pulse Online yesterday, noting that: “Animal health industry awaits FDA’s next move on antibiotics.”

In more general policy background, Conor Dougherty reported in today’s Wall Street Journal that, “The nation’s rural regions saw much slower population growth over the past decade, reflecting a drop in the number of jobs in these often-isolated areas.

Rural America—which includes about three-quarters of the nation’s landmass—gained 2.2 million people between 2000 and 2010, about half the increase seen in the previous decade, according to an analysis of Census data released Tuesday by Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey Institute. Driving the change is fewer jobs. During the booming 1990s, far more people moved to rural areas to take manufacturing and other jobs. In more recent years, however, rural employment growth has dwindled.

“Population growth in metropolitan America—which encompasses urban and suburban areas—also slowed over the decade, but much more modestly, to just under 11% growth from 14% in the 1990s. About 51 million people, or roughly 17% of the U.S. population, live in rural America.”

The Journal article added that, “The few counties that bucked the overall rural decline did so largely through ties to nearby metro regions. Rural counties that lie just beyond cities and suburbs grew 5.5% over the decade—much slower than during the 1990s, but still twice as fast as rural counties not adjacent to metropolitan areas. Counties that are popular with retirees and those that are rich in attractions such as lakes and ski resorts both grew faster than 10% over the decade, still slower than in the 1990s but on par with the growth rates seen in urban America.”

 

Trade

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “In less than a month, the United States will implement the first of three free-trade agreements passed by Congress last fall.

“The trade accord with South Korea will go into effect March 15, following the completion over the Presidents Day weekend of the final remaining legal issues, trade officials said Tuesday.”

Ms. Needham explained that, “Congress cleared the deals with South Korea, Panama and Colombia on Oct. 12 — the Korea trade deal is by far the most economically meaningful of the three for the United States.

Trade officials are still in talks over the agreements with Colombia and Panama.”

The Hill update indicated that, “Implementation of the Korean trade deal means that about 80 percent of U.S. exports of industrial products to Korea will become duty-free, including aerospace equipment, auto parts, consumer goods, all footwear and travel goods and transportation equipment.

“‘This is good news for U.S. job-creators,’ said House Ways and Means Chairman Dave Camp (R-Mich.).”

The American Soybean Association, the National Cattlemen’s Beef Association,  and the Western Growers were among the agricultural groups yesterday that expressed positive sentiment regarding the Korea FTA announcement.

Also on trade, the “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “U.S. and Canadian officials have held another in a series of official bilateral consultations on the subject of the Trans Pacific Partnership free trade agreement. Canada earlier decided not to join the talks in their preliminary stages but wants a seat at the table.

“Negotiators reported good progress among those committed to the trade agreement and hold out for a process that will not allow agriculture protectionism to delay or scuttle a TPP package as it has in the multilateral Doha Round of trade negotiations.”

The DTN item stated that, “In a Washington briefing last week, TPP supporters said there will be an agreement in 2012 among some parties, covering traditional and nontraditional areas, such as sequencing, trade needs of small- and medium-sized businesses, financial services, government procurement, rules of origin and more.

“Meanwhile, New Zealand’s Ambassador to the United States Mike Moore said for those countries who want to join the TPP process already underway — Canada, Mexico and Japan being chief among such candidates — they will be invited to the table only if they agree to the elimination of all tariffs and barriers and can get up to speed quickly.”

 

Regulations

A news release yesterday from Rep. Kristi Noem (R., S.D.) stated that, “[Rep. Noem] joined two of her colleagues on the House Committee on Education and the Workforce in sending a letter to the U.S. Department of Labor questioning the agency’s decision-making process as they revise labor regulations for youth hired as farm workers.  The letter specifically requests additional information to be sent to the committee, so Rep. Noem and others can better understand their reasoning for pushing for tougher new standards.”

And Julie Harker reported yesterday at Brownfield that, “A letter to Labor Secretary Hilda Solis, authored by South Dakota Senator John Thune and co-signed Iowa Senator Chuck Grassley and others, about proposed child labor standards has, so far, gone unanswered.”

More broadly on the regulation issue, Pete Kasperowicz reported yesterday at The Hill’s Floor action blog that, “House Republicans have put forward a bill that would prevent federal agencies from issuing any new significant regulation until the national unemployment rate drops to 6 percent.

“Under the bill, H.R. 4078, federal agencies could not finalize regulations that cost the economy $100 million or more, or have other significant effects on job creation, until the Bureau of Labor Statistics reports that the national unemployment rate averages 6 percent over any quarter. The president could waive this ban only if he believes a rule is needed for reasons related to national security, to enforce criminal laws or to implement an international trade agreement.

“Rep. Tim Griffin (R-Ark.) sponsored the bill along with 14 other Republicans who have argued that the government needs to reduce the number of rules it puts out in order to give companies a breather from additional compliance mandates while the economy struggles to recover.”

Keith Good

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