December 7, 2019

Farm Bill Issues; Ag Economy; Trade; and Regulations

Farm Bill Issues

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) noted this week at The Hill Online that, “Americans overwhelmingly agree that the nation’s top two priorities should be creating jobs and reducing the deficit. The farm bill, set to expire this year, gives Congress the opportunity to pass bipartisan legislation to accomplish both.

“That’s why Congress must pass a strong farm bill this year and not kick the can down the road with a short-term, Band-Aid extension, as has become all-too-common in Washington.

The farm bill is a jobs bill. Farm bill programs give small businesses and farmers critical tools that help them invest and grow.”

Chairwoman Stabenow added that, “But farmers cannot continue investing in their operations or boost production when they’re surrounded by uncertainty. Passing a farm bill would provide the certainty that America’s farmers need to continue meeting the demands of a growing world. Failing to pass a bill would damage our farmers’ ability to compete globally and would undermine growth in the economy. Short-term extensions and piecemeal fixes threaten the health of a robust farm sector that’s critical to our economic recovery.”

“The Senate Agriculture Committee will mark up a farm bill this spring. Having a bipartisan bill on the president’s desk by this fall would demonstrate the kind of leadership that the public should expect from its elected officials during these tough economic times,” Chairwoman Stabenow said.

House Agriculture Committee Chairman Frank Lucas (R-Okla.) indicated this week in a separate update at The Hill Online that, “With the 2008 farm bill expiring this fall, the House Agriculture Committee is working to develop a more cost-effective law that not only better achieves the goals of a farm bill, but does so with less money. My overall philosophy is quite simple: Give producers the tools to help them do what they do best, which is to produce the safest, most abundant and most affordable food supply in the world.”

Chairman Lucas explained that, “As for policy, I believe the federal crop insurance program is the backbone of the safety net we provide producers. At one point last year, more than 25 percent of the continental United States — including my home state of Oklahoma — was experiencing a severe drought, while many other areas of the country were suffering devastating floods. While improvements to crop insurance can and will be made, these events are clearly beyond the control of producers, and helping them manage risk in a fiscally responsible manner is critical.

Beyond weather and yield risk, it is vital to provide producers protection if and when prices fall. As I have stated before, my goal is to have commodity programs that work for all producers in all regions of the country, not just a select few. With the incredibly diverse nature of production agriculture, it is incumbent on the committee to give producers a choice in how best to manage their risk. Washington telling our producers what is best for them would be Washington arrogance at its worst.”

And Sen. John Hoeven (R-N.D.) pointed out yesterday at The Hill’s Congress Blog that, “As a member of the Senate Agriculture Committee, I urge all Americans to take a closer look at what our farm policies accomplish and what they really cost. Farm programs represent less than one quarter of one percent of federal spending, and yet for that small fraction of the federal budget, the American people get a stable, safe, and affordable food supply. In fact, Americans spend just 9.5 percent of their income on food, less than any other country. In addition, agriculture employs about 14 percent of the U.S. workforce, and agriculture exports generate about 600,000 jobs in the non-farm sector alone.”

Sen. Hoeven pointed out that, “It is important that as Congress takes up the Farm Bill reauthorization this year, we work to strengthen crop insurance. I have confidence that the members of our Agriculture Committee can work together to pass a strong Farm Bill under the leadership of Chairwoman Sen. Debbie Stabenow (D-Mich.), and Ranking Member Sen. Pat Roberts (R-Kan.). As part of that effort, I have been working with three members of the committee, Sens. Kent Conrad (D-N.D.), Max Baucus (D-Mont.), and John Thune (R-S.D.), on a proposal designed to strengthen the farm bill’s risk management mission.

“This proposal will preserve existing crop insurance, help farmers buy higher levels of crop insurance coverage, and reduce the risk of failure for producers who are exposed to repetitive, shallow losses. Also, in a sector as diverse as agriculture, there remains a need to have programs designed specifically for certain commodities, such as the sugar program that operates at no-net cost to the federal government. I believe that for the majority of farmers, our proposal could serve as a powerful tool to manage price and yield losses in a fashion that is consistent with the budget constraints we face.”

Meanwhile, Dave Russell reported yesterday at Brownfield that, “Ohio Senator Sherrod Brown met with Ohio Farm Bureau County Presidents Wednesday morning, March 7, on the final day of their trip to Washington, D.C.

“Senator Brown, a member of the Senate Agriculture Committee believes that the work done by the Super Committee late last year could be the catalyst to pass a Farm Bill in 2012. Brown told the County Presidents direct payments are history, but there will be other provisions to provide the necessary safety net, including the Aggregate Risk and Revenue Management Act (ARRM), a bill introduced by Senator Brown and Senator Thune of South Dakota.”

The Brownfield link included an audio replay of an interview with Sen. Brown.

With respect to dairy issues, after explaining some recent price history in the dairy sector since 2008, Rep. Joe Courtney (D-Conn.) noted yesterday at The Hill’s Congress Blog that, “I am once again partnering with my colleague Collin Peterson and others to preserve this vital industry and American consumers. Together we introduced the Dairy Security Act, legislation based largely on the Foundation for the Future plan created by the National Milk Producers Federation. This bill would ensure that federal dairy programs provide relief to farmers, so that in good times and bad they can make a profit on the products they deliver. The Dairy Security Act consists of a margin protection program and a stabilization program. In tandem, these programs provide a better safety net for the industry and would prevent long periods of depressed prices.

Our bill would replace programs that have proven ineffective at keeping farms in business during market downturns. While I support programs like Milk Income Loss Contract for the financial relief it provides to farmers in bad times, since its creation in the 2002 Farm Bill more than a third of America’s dairy farmers have gone out of business. Clearly, the program is insufficient, and new steps are needed to defend our farmers.”

On the issue of conservation, Tom Lawrence reported yesterday at The Daily Republic Online (Mitchell, S.D.) that, “High prices for farm commodities have farmers smiling, but those profits are having a negative impact on South Dakota’s natural resources.

“That reality was made clear during a meeting Wednesday evening at the Highland Conference Center in Mitchell to discuss the South Dakota Coordinated Plan for Natural Resources Conservation.”

The article added that, “‘We’re getting too far away from some of the CRP (Conservation Reserve Program) programs,’ said Jim Lehi, manager of the Davison County Conservation District. ‘And the wetlands are disappearing.’

“Lehi said he doesn’t blame farmers. With record corn prices and other high returns for ag products, farmers are planting land that was once set aside either for conservation reasons or because the return wasn’t worth the investment.”

And in a letter this week to Senate and House Agriculture Committee leaders, ten Mayors, representing cities from across the country, stated that, “We believe that the reauthorization of the Farm Bill presents an opportunity to promote food security and the health of our residents, while also fueling economic growth and protecting our environment. As Mayors, we see each of these aims as critical to the long-term well-being of our residents.”

The letter noted that, “Funding for the Supplemental Nutrition Assistance Program (SNAP), The Emergency Food Assistance Program (TEFAP), and other nutrition programs are vital components of city nutrition programs where the rates of poverty and food insecurity are disproportionally high. As you know, approximately 46 million Americans, half of whom are children, are currently enrolled in SNAP, while millions also rely on TEFAP. We request that you maintain funding levels for these programs so that millions of Americans do not go hungry.”

As GOP House Budget Committee Members draw closer to drafting a budget outline for FY2013, it seems increasingly likely that proposed cuts to the SNAP (food stamps) program could potentially become a significant point of friction between the House and Senate.

Last year, the House targeted $127 billion in savings from SNAP, cuts of that magnitude would likely find sparse support among urban lawmakers whose backing will be necessary to pass a Farm Bill.

Program participation in the SNAP program is another variable that is also factoring into the policy discussion on Farm Bill spending.  An article in the March edition of Amber Waves (USDA- Economic Research Service) stated that, “In October 2011 46.2 million Americans were participating in USDA’s Supplemental Nutrition Assistance Program (SNAP). Formerly known as the Food Stamp Program, SNAP increases the purchasing power of eligible, low-income people by providing them with monthly benefits to purchase food at authorized foodstores. Just 10 years earlier, participation stood at 17.3 million. What accounts for the growth of the program over the past decade?

“There is little question that declining economic conditions are a major factor.”

Margaret Andrews and David Smallwood, the authors of the ERS article, pointed out that, “But economic factors alone do not fully explain the growth in SNAP participation. Changes in SNAP policies, some of them associated with the 2002 and 2008 Farm Acts, have made benefits easier to apply for, available to more people, and more generous. Parsing out the relative effects of policy changes and macroeconomic conditions in a dynamic economy is difficult. Yet recent research has begun to paint a clearer picture of how some policy factors impact the program.”

The Amber Waves article went on to detail some of these policy changes and their corresponding impacts on participation.

Yesterday, Rep. Darrell Issa (R., Calif.), the Chairman of the House Oversight and Government Reform Committee, began a hearing looking into the SNAP program by playing a video containing clips of television news items documenting instances of program fraud from around the country.

In his opening remarks, Chairman Issa cited an opinion column by USDA Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon which stated that, “The Agriculture Department’s efforts to combat SNAP trafficking have been particularly successful.”  Nonetheless, Chairman Issa stated, “We need to do better.”

Committee Ranking Member Elijah Cummings (D., Md.) suggested the true purpose of the hearing was to discredit the entire SNAP program in order to justify “draconian” cuts that may be a part of the GOP’s FY2013 budget proposal.  He reminded the Committee that last year’s GOP budget contained $127 billion in cuts over ten years.  Rep. Cummings also referred to “compassion deficit” in Washington, D.C. (Related audio, (MP3- 1:25)).

Phyllis Fong, Inspector General of the U.S. Department of Agriculture, pointed out at yesterday’s hearing that, “In the last 5 years, we have completed 779 SNAP investigations that have resulted in 1,356 indictments, 944 convictions, and 792 sanctions against individuals and businesses.  During that time, our monetary results have totaled more than $186 million.”

Ms. Fong added that, “Our ongoing work includes looking at FNS’ methodologies for determining its rate of SNAP trafficking (which it estimates at 1 percent) and its rate of improper payments (estimated at about 3.8 percent).”

Under Secretary Concannon noted that, “Over 98% of SNAP clients are indeed eligible and accuracy in 2010 reached 96%, an historic high.”

Chairman Issa and Under Sec. Concannon also highlighted the electronic processing of SNAP benefits in “grocery” stores, “liquor” stores, and “convenient” stores.  Mr. Concannon briefly discussed a “depth of stock requirement” test that is based on the kinds of products that are sold in a store and sets minimum standards for a business to accept SNAP purchases.  Policy changes relating to this variable could lead program beneficiaries to have a stronger incentives to use SNAP benefits in a “grocery” store- and avoid patronage in “liquor” and “convenient” stores where the probability of program abuse is significantly higher (Related audio, (MP3- 1:26)).

A related update posted yesterday at reported that, “Food stamp scams cost taxpayers hundreds of millions of dollars each year. Store clerks secretly ring up a case of beer as a box of cereal or charge $100 on the card and give $50 in return.

“Repeatedly gaming the system for cash means recipients are even buying big-ticket items.

“‘It’s critical that we focus our efforts on retailers who bypass the system that we put in place to control access,’ Fong said.”

The USDA has also set up a webpage to assist with combating fraud in the SNAP program.


Agricultural Economy

Ken Anderson reported yesterday at Brownfield that, “A new University of Nebraska-Lincoln (UNL) report confirms the big increase in the state’s farmland values in 2011.

“But while many projections have put the overall increase in the 25 percent range, the latest farm real estate survey from the UNL shows it’s even more than that.

“‘When the dust settles here, it looks like our preliminary numbers show a little over 30 percent—in fact, a 31 percent increase for the state all-land average,’ says UNL ag economist Bruce Johnson.”

A news release yesterday from the Food and Agriculture Organization of the United Nations stated that, “FAO today forecast that 2012 world wheat production will be the second highest on record at 690 million tonnes and also announced that international food prices rose one percent in February —  the second increase in two months.

“Published today, FAO’s quarterly Crop Prospects and Food Situation report forecast a 2012 wheat crop 10 million tonnes or 1.4 percent down from the record 2011 harvest but still well above the average of the past five years.”

Yesterday’s release noted that, “FAO’s Food Price Index, published separately today, rose 1 percent, or 2.4 points from January to February.  The Index climbed nearly two percent in January – its first increase in six months.

“The increase in the February Index was mostly driven by higher prices of sugar, oils and cereals while dairy prices fell slightly after a marked rise in January. At its current level, the Index was 10 percent below its peak in February 2011.”



A news update yesterday from the U.S. Trade Representative’s Office stated that, “U.S. Trade Representative Ron Kirk met today with Canadian Trade Minister Ed Fast to discuss Canada’s interest in joining the Trans-Pacific Partnership (TPP) negotiations.

“Ambassador Kirk and Minister Fast discussed each government’s engagement with its domestic stakeholders and consultations with other TPP partners on Canada’s interest in joining the TPP talks.

“The United States, along with Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam, are working to craft a high-standard agreement that addresses new and emerging trade issues and 21st-century challenges through the TPP. In November 2011, Canada expressed its interest in joining the TPP negotiations. Canada and the United States, along with Mexico, are members of the North American Free Trade Agreement (NAFTA), which entered into force in 1994. Canada is the United States’ largest export market, with exports increasing over 12 percent in 2011.”



A news item yesterday from Iowa GOP Congressman Tom Latham stated that, “Just in time to honor National AG Day, [Rep. Latham] introduced bipartisan legislation on Wednesday in the U.S. Congress that will block Washington’s attack on America’s long-standing family farm tradition.  Latham’s bill blocks recent attempts by the Department of Labor, with moral support from the Department of Agriculture, to increase federal regulatory involvement into family farms that risk outlawing farm youth from working on their family-owned farms.”

Keith Good

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