FarmPolicy

December 19, 2014

Farm Bill; Food Safety; Regulations; and Trade

Farm Bill Issues

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Agriculture Secretary Tom Vilsack, in an interview with The Hill this week, said demands by the House GOP for deep cuts especially for food stamps now constitute the top obstacle for passage of a 2012 farm bill by September when current farm programs expire.

“Vilsack offered some praise for the version of the farm bill that passed out of the Senate Agriculture Committee last week, even though it contains about $9 billion less in deficit reduction than President Obama had sought in his latest budget.

“He said the differences with the president pale in comparison to the differences with the House.”

Yesterday’s update added that, “The House-passed 2013 budget authored by Rep. Paul Ryan (R-Wis.) calls for the food stamp program to be block granted to the states, resulting in massive spending cuts.

“Vilsack said these cuts would not only harm the poor who use food stamps, but farmers could lose $20 billion in direct income from cuts to the program as well.

“‘That’s obviously just not going to happen,’ he said.”

The Hill article pointed out that, “The secretary did say more work may be needed on a proposed cotton program that has been newly criticized by Brazil. Traditional cotton subsidies have been ruled against in the World Trade Organization and Brazilian opposition to a new revenue insurance scheme could lead to sanctions, Vilsack noted.

“Vilsack would not say he is hopeful about passing a farm bill by September but instead he stressed the dangers of not doing so.”

With respect to WTO issues and the Senate version of the Farm Bill, Bridges (International Centre for Trade and Sustainable Development) reported yesterday that, “The most discussed trade issue in the Farm Bill debate is perhaps a resolution to the United States – Upland Cotton dispute with Brazil. The high-profile dispute was put on hold in 2010, after the US agreed to pay Brazil US$147 million annually in exchange for the South American country refraining from putting into effect promised retaliation. Both countries also agreed that US farm legislation would be modified to resolve the dispute.

“A Brazilian official, speaking on condition of anonymity, observed that the National Cotton Council’s STAX proposal will likely ‘not be accepted as a solution’ to the US-Brazil cotton dispute. ‘We were disappointed with the markup from the Senate,’ he added.

“STAX is the Stacked Income Protection Plan for producers of upland cotton, a programme meant to make up for losses beyond what is covered under ordinary crop insurance. Ambassador Roberto Azevedo, Brazil’s representative to the WTO, had earlier written to Congressional agriculture committees describing how STAX and other proposals would be trade distorting.”

(Note that Craig Brown, Vice-President of Producer Affairs for the National Cotton Council spoke about Farm Bill issues, including the STAX program earlier this week on AgriTalk with Mike Adams, an unofficial FarmPolicy.com transcript of that conversation can be downloaded here.)

And, the editorial board at The Wisconsin State Journal indicated yesterday that, “U.S. Rep. Ron Kind, D-La Crosse, warned Friday that big new subsidies to cotton producers, protecting them against shallow revenue losses, would cost $3.2 billion over 10 years.

“Kind — along with Reps. Jeff Flake, R-Ariz., and Earl Bulmenauer, D-Ore. — also introduced legislation to end a nearly $150 million annual subsidy to the Brazilian cotton industry. The payment to Brazil essentially pays off the South American nation so it doesn’t object further to the World Trade Organization about heavy subsidies of cotton growers in the United States that violate trade agreements.

Kind suggested the payment to Brazil is emblematic of a Congress that still isn’t serious about approving a fiscally-responsible farm bill.”

The opinion item added that, “Congress is getting closer to a farm bill that cuts waste while preserving a solid safety net for those hard workers who produce our food.

It’s the right direction — but not far enough toward reform.”

Meanwhile, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Senate Agriculture Committee Member Charles Grassley, R-Iowa, told reporters Wednesday the farm bill is generating more questions, particularly regarding timeframe.

“Grassley noted Senate Majority Leader Harry Reid, D-Nev., had indicated at least once that the farm bill was on the list of major legislation Reid would like to get done. Grassley said the Senate has to move before the August break.

“‘If we don’t get this done by the Aug. 5 break, then it’s not going to get done until September, then of course you get down to November and December,’ Grassley said.”

The DTN update stated that, “There has been no official word from Reid or Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., about a timeframe for a floor debate. Stabenow said last week she hoped to know more in a few weeks.

“On the idea some farmers or groups would like to see the farm bill held up for a year, Grassley said there would be no benefit to Southerners delaying the farm bill because a year down the line the budget score will likely be worse for commodities.”

In other news, Mikkel Pates reported yesterday in an article posted at the Grand Forks Herald (ND) Online that, “The head of the U.S. Department of Agriculture’s Natural Resources Conservation Service promised by September to come up with a just solution for wetland determination backlogs when he spoke Monday at the Red River Valley Fairgrounds here [West Fargo, ND].

“Wetlands determinations that are held up, waiting for NRCS approval, have become frustrating for the region’s farmers, particularly those in the central and southern Red River Valley. They want to use tile drainage or water management to contend with a string of wet years, and to capitalize on higher commodity prices and land values.

“‘I have one shot to make this right,’ said NRCS chief Dave White, who came to Fargo at the invitation of Sen. John Hoeven, R-N.D. ‘It’s got to be legally defensible. It’s got to be fair, it’s got to be equitable, it’s got to be transparent…”

The article noted that, “Farmers who want to tile and need to drain land must fill out federal forms (AD-1026), requiring that NRCS complete a ‘certified’ wetland determination. This can start with office work, but ends with a field determination.”

Fed up with the backlog, some farm leaders at the meeting reported that they or their neighbors have dropped out of the farm program entirely. Hoeven took the opportunity to stress that he’s against tying conservation compliance to crop insurance, which is one tool environmental groups have advocated to keep conservation techniques in place,” yesterday’s article said.

 

Food Safety

Dina ElBoghdady reported in today’s Washington Post that, “More than a year after President Obama signed a landmark food-safety bill, the key provisions are hung up at a unit of the White House that is in charge of reviewing proposed policy changes.

“The delay at the Office of Management and Budget baffles consumer advocates and industry groups, which joined forces to lobby for passage of the legislation and press for its funding. The united front by this unusual alliance — and the president’s enthusiastic endorsement of the legislation in the past — makes the hold-up especially puzzling.

“In recent letters to the administration, nearly half a dozen groups expressed frustration with the OMB.”

The Post article indicated that, “OMB officials say the duration of this review is not unusual given the complexity of the regulations. ‘The administration is working as expeditiously as possible to implement this legislation we fought so hard for,’ said Moira Mack, an OMB spokeswoman.

Obama signed the legislation in January 2011 after a string of food-borne outbreaks shook consumer confidence in the nation’s food supply.”

Bloomberg writer Stephanie Armour reported yesterday that, “Sources of tainted beef will be identified faster under a U.S. plan to improve the tracking of meat sent from suppliers and processors that may sicken consumers.

“Investigators will search for where the spoiled meat came from after their own tests find E. coli in beef rather than waiting days for multiple confirmation tests, the Agriculture Department said today in a statement. The investigation to find the origin of the contaminated product, such as a slaughterhouse or processor, will happen 24 to 48 hours faster, the USDA said.

“‘These measures will provide us with more tools to protect our food supply, resulting in stronger public health protections for consumers,’ Elisabeth Hagen, the USDA’s undersecretary for food safety, said in the statement.”

Meanwhile, Kathie Obradovich noted this week at the Iowa Politics Blog (Des Moines Register) that, “Christie Vilsack, a Democratic candidate for Congress, said she talked to her husband, U.S. agriculture secretary Tom Vilsack, about the USDA’s proposed poultry inspection rule before taking a somewhat contrary position. They won’t discuss it again, she said.

“Iowa’s former first lady, who is running against Republican Rep. Steve King, said in her statement that jobs for poultry inspectors should not be privatized. ‘There are inherent concerns with allowing companies to inspect themselves, especially with an increase in line speeds that could make inspection more difficult and raise safety issues,’ she said.

“The USDA proposed rule, aimed at providing quicker inspections, would speed up factory lines for inspections and eliminate an estimated 800 jobs.  The proposal also shifts responsibility from the Food Inspection and Safety Service to employees of the processing facility.”

The update added that, “She said her husband explained the USDA’s proposal to her, but it’s now a closed subject.  ‘I won’t, now that I’ve made that statement, I will not ever talk to my husband about it again. Or, I should say, he will not talk to me,’ she said. ‘He made it clear that we will not be talking about this again. But he certainly educated me on the department’s position.’

“That’s because USDA is in a public comment period on the proposed rule, a campaign staffer said.”

Erik Wasson reported earlier this week at The Hill’s Ballot Box Blog that, “Agriculture Secretary Tom Vilsack on Tuesday signaled that he could soon hit the campaign trail on behalf of his wife, Christie, who is running against Republican Rep. Steve King in Iowa’s 4th district.

“Vilsack, the former governor of Iowa, made clear that if he does get involved, he will follow strict guidelines governing his appearance.

“‘There are important necessary restrictions that need to be followed not just for Christie but for any congressional candidate,’ he told The Hill in an interview.”

 

Regulatory Issues (GMO Labeling, Labor, and Speculation)

Ian Berry reported yesterday at The Wall Street Journal Online that, “Opponents of genetically modified foods are making headway in California with a proposed ballot initiative that would require food companies to label many products containing such ingredients.

“Backers of the initiative, including consumer activists and organic-food groups, said Wednesday they had submitted nearly double the number of signatures required by the state to place the proposal on the Nov. 6 ballot. California officials will take at least several weeks to certify the initiative, but people on both sides of the issue expect it to appear on the ballot.

“The proposal, which faces opposition from big agribusiness and food companies, puts California at the center of a wider debate over genetically engineered foods that has gained new life in the U.S.”

Miriam Jordan reported yesterday at The Wall Street Journal Online that, “The Department of Homeland Security, continuing its crackdown on employers who hire illegal immigrants, has ordered hundreds of companies in recent weeks to submit their hiring records for inspection.

“This year’s first ‘silent raids’ haven’t been publicly announced by Immigration and Customs Enforcement, the DHS agency that conducts them. But an ICE spokeswoman confirmed on Tuesday that as of March 29, the agency had notified 500 businesses ‘of all sizes and types’ to turn over I-9 employment-eligibility forms and other documents for audits.”

The Journal article pointed out that, “Since January 2009, the Obama administration has audited at least 7,533 employers suspected of hiring illegal labor and imposed about $100 million in administrative and criminal fines—more audits and penalties than were imposed during the entire George W. Bush administration. The latest penalty hit HerbCo International Inc., a big Washington state-based supplier of organic herbs, which agreed Tuesday to pay $1 million in fines for employing illegal immigrants and then rehiring some of them after an ICE audit last year.”

Francesco Guerrera reported yesterday at The Wall Street Journal Online that, “The chairman of the world’s largest futures exchange is coming to the defense of speculators.

“Two weeks after President Barack Obama blamed speculators, traders who wager on the future direction of commodity prices, for driving fuel prices higher and urged regulators to be tougher on them, Terry Duffy, the executive chairman of exchange operator CME Group Inc. hit back with a pointed explanation of investors’ role in financial markets.

“‘People need to study their facts before criticizing speculators,’ Mr. Duffy, whose Chicago company is the largest futures exchange by volume, said in an interview on the sidelines of the Milken Institute’s Global Conference. He argued that speculators provide vital liquidity to a host of markets.”

The Journal article indicated that, “Last month, the president accused ‘speculators’ of rigging the oil markets, pushing up fuel prices for ordinary Americans. ‘Rising gas prices means a rough ride for a lot of families,’ he said in a speech at the White House. ‘We can’t afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage and driving prices higher, only to flip the oil for a quick profit.’

Mr. Duffy dismissed the criticism, saying that speculators play an important part in financial markets. ‘When the Dow goes above 13000, Google goes above $600 per share and everybody celebrates, who do you think did that? The U.S. equity market is 100% speculators,’ he said.”

 

Trade

Bridges (International Centre for Trade and Sustainable Development) reported yesterday that, “Six months after expressing interest in joining the proposed Trans-Pacific Partnership (TPP) Agreement, Canada, Japan, and Mexico have yet to join the nine-country talks, with a high-profile bilateral meeting in Washington between the US and Japanese heads of state on Monday ending without a formal announcement regarding Tokyo’s bid. Current TPP members are said to be still evaluating whether it is feasible to take on new members while also trying to clinch a deal by year’s end.

“The TPP negotiations – launched in 2005 among four countries, and eventually expanding to a group of nine – are three-quarters of the way done, according to Dominic Goh, director-general of international economics at Singapore’s foreign affairs ministry, in comments reported by the Wall Street Journal. The administration of US President Barack Obama has made the accord one of the centrepieces of the White House trade agenda, with Obama hoping for a deal by the end of 2012.

“The proposed pact currently includes Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US, and Vietnam as members. Canada, Japan, and Mexico expressed interest in joining the talks in November 2011 at the annual Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting (see Bridges Weekly, 16 November 2011).”

Keith Good

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