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Farm Bill Developments; Appropriations; and, the Ag Economy

Farm Bill: Senate Process

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Senate Majority Leader Harry Reid (D-Nev.), less than a day after the Senate stalled on the Paycheck Fairness Act, called on senators Wednesday morning to come together to pass a five-year farm bill, which could take up several weeks of time on the Senate floor.

“‘I know there are a number of Democrats and Republican senators who wish to offer amendments to this legislation,’ Reid said of the farm bill, S. 3240. ‘I have confidence in the leadership of Sen[s.] [Debbie] Stabenow [D-Mich.] and [Pat] Roberts [R-Kan.]. I look forward to working quickly and cooperatively to pass a bill that creates jobs, cuts subsidies and reduces the deficit while protecting American farmers.’”

Mr. Kasperowicz added that, “‘Congress must give farmers the certainty they need to keep this industry thriving,’ [Reid] said. ‘This measure will create jobs and cut subsidies, and includes important reforms to make farm and food stamp programs more accountable and more defensible.’”

A news release yesterday from the American Farmland Trust (AFT) noted that, “[AFT] commends Senate Majority leader Harry Reid of Nevada for bringing the 2012 farm bill before the full Senate.  ‘We look forward to working with Majority Leader Reid and Minority Leader McConnell to move this farm bill forward.  We hope the leadership’s engagement will build on the strong bipartisan effort begun by Chairwoman Stabenow and Ranking Member Roberts, who have worked tirelessly to bring this bill to the floor,’ said Jon Scholl, AFT President. AFT has frequently urged Congress to address crucial conservation and farm production issues this year rather than delay the legislation any further.”

A Senate Agriculture Committee news release from yesterday indicated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, and Senator Pat Roberts, the Committee’s Ranking Member, today urged the Senate to swiftly pass the Agriculture Reform, Food and Jobs Act of 2012 (the Farm Bill), which reforms agriculture policy and saves more than $23 billion in taxpayer money by streamlining and consolidating programs and ending unnecessary farm subsidies. While saving taxpayer dollars, the bill strengthens initiatives that help America’s agriculture economy continue creating jobs.  The measure was adopted by the Committee on a strong bipartisan vote of 16-5 in April and is now being considered by the full Senate.”

Remarks by Ag Committee Chairwoman Debbie Stabenow on the Farm Bill, which were delivered yesterday on the Senate floor, can be viewed here; while Farm Bill floor comments by Ranking Member Pat Roberts yesterday can be viewed here (video replay here).

Sarah Gonzalez reported yesterday at Agri-Pulse Online that, “Senator John Thune, R-S.D., said obstacles to passing the Agriculture Reform, Food and Jobs Act of 2012 through the Senate include likely amendments regarding regional differences as well as potential, unrelated amendments that might be proposed during the Farm Bill process.

“‘The thing to be more concerned about are the non-germane amendments that might be offered,’ he said.  ‘Those are the types that could affect the balance.’”

Ms. Gonzalez pointed out that, “[Sen. Thune] believes the odds are better than 50/50 to get the bill passed through the Senate,” and added that, “After the legislation gets through the Senate, Thune said the big concern is whether the House can produce a Farm Bill, noting that he has confidence in the House Agriculture Committee.”


Farm Bill: Policy, Equity Issues

Ed O’Keefe reported in today’s Washington Post that, “But the farm bill that the Senate will begin debating Thursday is a considerably slimmed-down version of previous incarnations. It would slash tens of billions of dollars in direct subsidies to farmers and in the federal food stamp program.

It may the be most tangible symbol yet that the age of austerity has dawned in Washington. The bill, which sets the nation’s agricultural and food policy for the next five years, enjoys rare bipartisan support and could be the only significant piece of deficit-reduction legislation to gain congressional approval this year.

“‘This isn’t your father’s farm bill,’ Senate Agriculture Committee Chairman Debbie Stabenow (D-Mich.) said Wednesday.”

The Post article noted that, “‘This is a north/central farm bill, but eventually it will affect the whole country,’ said Sen. Richard Burr (R-N.C.).

“Burr and Sen. Saxby Chambliss (R-Ga.) said peanut farmers in their states need more assistance because they face different farming schedules and a more volatile market than those who grow wheat, corn and other crops.”

David Kesmodel and Bill Tomson reported yesterday at The Wall Street Journal Online that, “A North-South divide is complicating attempts to overhaul federal farming subsidies and trim federal spending.”

The Journal writers explained that, “Sen. John Boozman (R., Ark.), whose state is the biggest rice producer, accounting for about 42% of U.S. production, called the new measure unfair. ‘We can’t support the bill unless we have a modification,’ he said.

“He and other Southern senators, including Saxby Chambliss (R., Ga.), whose state is the biggest peanut producer, are pressing Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) to make changes to the roughly 1,000-page bill to appease rice and peanut growers.”

“The new bill’s Agriculture Risk Coverage program would provide subsidies to offset some of farmers’ losses when revenue falls below specific benchmarks, which are calculated using recent average yields and market prices. Southern rice growers say the program is ill-suited for them, in part because they irrigate their land and thus see relatively little fluctuation in yields each year. Most Midwestern corn and soybean acreage, by contrast, depends on rainfall,” the Journal article said.

Peter Urban reported yesterday at Arkansas News Online that, “While the floor debate goes on, Arkansas Sens. John Boozman and Mark Pryor are looking to amend the bill to boost support for rice farmers.

“‘It does not adequately provide the safety net we need for rice,’ Pryor said during a conference call today with reporters.”

Mr. Urban pointed out that, “Boozman said there is also a sense among some senators that they can rely on the House to fix the problem for southern farmers.”

DTN Political Correspondent Jerry Hagstrom reported yesterday at DTN (link requires subscription) that, “As the Senate takes up the farm bill, corn growers and rice growers have gotten into a nasty dispute over the meaning of academic studies related to the Senate Agriculture Committee’s new Agriculture Risk Coverage program.”

In part, Mr. Hagstrom noted that, “Last week, Carl Zulauf of Ohio State University released a study that said a five-year Olympic moving average with an 89% coverage rate would have provided sizable price protection to U.S. crop producers during the low price period of the 1990s.

On Tuesday USA Rice Producers Group Chair Linda Raun distributed a news release that said since Zulauf based his study on price protection — rather than the change of revenue for which farmers would get payments under the ARC program — Zulauf’s study amounted to an endorsement of the rice producers’ proposal for a system of target prices and countercyclical payments.”


Farm Bill: Crop Insurance- Nutrition (Sen. Gillibrand)

Ron Nixon reported in today’s New York Times that, “Crop insurance has existed for decades, with the government now spending about $7 billion a year to pay about two-thirds of the cost of farmers’ premiums. Under the federal program, farmers can buy insurance that covers poor yields, declines in prices or both.

“On Tuesday, the Senate began debate on a farm bill, passed by the Agriculture Committee in April, that would set up another crop insurance subsidy, costing $3 billion a year, to cover any losses farmers suffer, known as deductibles, before their crop insurance policies kick in.”

Daniel Looker reported yesterday at Agriculture.com that, “An amendment to limit crop insurance premium subsidies to America’s largest farms is one of some 30 changes that farm groups will be watching for when the Senate begins active debate on its farm bill on Thursday.

“Senator Dick Durbin of Illinois, who ranks 2nd in Democratic leadership in the Senate, promised Wednesday that he and Senator Tom Coburn, a Republican deficit hawk from Oklahoma, will offer an amendment to the bill to reduce spending on crop insurance premiums for large farms.”

Meanwhile, a news release yesterday from Sen. Kirsten Gillibrand (D., N.Y.) stated that, “In an effort to protect access to healthy, nutritious food for struggling children and families, [Sen. Gillibrand] took to the Senate floor today to urge her colleagues not to cut $4.5 billion from the Supplemental Nutrition Assistance Program (SNAP) as part of the Farm Bill, now being debated by the full Senate [full remarks and a video replay of Sen. Gillibrand’s presentation available at the release link].

In a column yesterday at the Huffington Post Online, Sen. Gillibrand stated that, “My amendment would pay for the restoration of this [SNAP] funding by reducing federal subsidies for crop insurance companies that are already making huge annual profits.”


Farm Bill: Additional Developments

A news release yesterday from the New England Farmers Union noted that, “The President of New England Farmers Union, acting on behalf of the Board of Directors and the members, sent letters to twelve New England U.S. Senators this week asking them to support the Agriculture Reform, Food and Jobs Act of 2012 when it reaches the Senate floor.”

A news release yesterday from the National Milk Producers Federation stated that, “Dairy farmers need Congress to pass a new Farm Bill now to help provide certainty for making future business decisions, according to Sarah Leonard, a fourth-generation dairy producer from Midland, VA, who spoke at a Senate news conference today about the Agriculture Reform, Food and Jobs Act of 2012 (the 2012 Farm Bill).”

On the other hand, an update yesterday at the Club for Growth Blog stated that, “The Club for Growth urges all Senators to vote ‘NO’ on the Agriculture Reform, Food, and Jobs Act of 2012 (S. 3240).”

A news release yesterday from Sen. John McCain (R., Ariz.) noted that, “[Sen. McCain], along with all Republican members of the Senate Armed Services Committee, today filed an amendment to the Farm Bill requiring the Secretary of Defense to provide to Congress a detailed report by August 15, 2012 on the specific impacts on national security if an additional nearly $500 billion in automatic budget cuts, also known as sequestration, are imposed upon the Department of Defense less than six months from today.”

Meanwhile, a letter to Senators yesterday from a variety of groups and organizations stated that, “One of the proven job-creating titles of the farm bill is the Rural Development title, which authorizes essential grants and loan programs targeted at leveraging local initiatives to spur growth and opportunity in rural areas. Since 1996, Congress has provided an average of $413 million per farm bill for the Rural Development title, while the new bill as reported by the Committee includes no funding at all.

“We urge you to correct this deficiency by providing robust funding for the following successful Rural Development programs: Value-Added Producer Grants, Rural Microentrepreneur Assistance Program, Rural Energy Savings Program, and Water/Wastewater Backlog.”

And, an update posted yesterday at the National Sustainable Agriculture Coalition blog stated that, “In a bipartisan letter sent June 4, 2012, the House organic caucus co-chairs and two members of the Committee on Agriculture urged the Chairman and Ranking Member of the House Committee on Agriculture to continue investing in organic agriculture in the 2012 Farm Bill.  Representatives DeFazio (D-OR), Hanna (R-NY), Kind (D-WI), Ribble (R-WI), Farr (D-CA), and Welch (D-VT) stated that the organic industry grew by nearly 10% last year, had $32 billion in sales, and was comprised of over 17,000 operations.  As such, the co-signers recognized the importance of the organic industry and asked that the House Committee on Agriculture include provisions to enhance this growing sector.”

A news release yesterday from the American Soybean Association (ASA) indicated that, “In a letter to House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Ranking Member Collin Peterson (D-Minn.) this week, the [ASA] joined counterparts from across the agriculture industry in urging the House Agriculture Committee to include a provision establishing a Foundation for Food and Agriculture Research (FFAR) in its version of the upcoming farm bill. ASA and its partner groups are urging the House Agriculture Committee to take action comparable to the FFAR provision included in the Senate Agriculture Committee’s recently-approved Agriculture Reform, Food and Jobs Act of 2012.”


Farm Bill: Opinion

An editorial yesterday at the Waco Tribune-Herald (Tex.) stated that, “Anytime special-interest groups and politicians work together to shift paradigms to address pressing challenges of the day is a genuine blue-moon day, especially in these fiercely polarizing times. The so-called ‘farm bill’ now up for debate in the Senate is such a case. Brimming with compromise and innovation, it’s not only worthy of praise but passage.”

On the other hand, The Salt Lake Tribune (Utah) opined yesterday that, “The latest edition of the federal farm bill, a 1,000-page tome that Congress produces every five years, continues an unbroken string of laws that would pour taxpayers’ money into a system that helps big farms get bigger, gluts the market with starches, sweeteners and fats — adding significantly to the girth of the average American — and does little to encourage cultivation or consumption of foods that are better for you, in ways that are better for the Earth.”



Kenneth Chamberlain reported yesterday at National Journal Online, in an article filled with analytical charts, that, “Both the House and the Senate appropriations committees are off to strong starts in the appropriations process for fiscal 2013. Will both chambers pass all 12 major bills before the end of the current fiscal year on Sept. 30? Probably not. In most years, many key bills are passed well after the start of the new fiscal year, necessitating continuing resolutions to keep the government funded.”

Reuters writers Charles Abbott and Sarah N. Lynch reported yesterday that, “Two U.S. House Appropriations panels on Wednesday took aim at the budgets of the country’s leading financial market regulators, voting to slash spending for one agency and only marginally boost funding for the other.

The Commodity Futures Trading Commission would get a 12 percent budget cut for fiscal 2013, from $205 million to $180.4 million in an agriculture funding bill approved by one House Appropriations subcommittee.

“The Securities and Exchange Commission, meanwhile, would see its budget rise by $50 million, from $1.32 billion to $1.37 billion under a financial services spending package approved by another House Appropriations panel.”

An article posted yesterday at Agri-Pulse Online reported that, “The House Appropriations Subcommittee on Agriculture cleared on a voice vote $140.7 billion in FY 2013 discretionary and mandatory funding for the USDA and FDA. The bill now goes to the House Appropriations Committee.

“The subcommittee held 11 hearings covering all the mission areas of the Department of Agriculture, the Food and Drug Administration, and the Commodity Futures Trading Commission, said Subcommittee Chairman Jack Kingston.

“He said some of the ‘common sense reforms’ included in the FY 2013 bill include a requirement to include OIG’s fraud hotline on SNAP EBT cards and WIC coupons, requirements that the Secretary verify those being approved for certain USDA programs  have not been permanently debarred, and a directive to establish uniform income standards in the WIC program.”

A news release yesterday from the National Farmers Union [NFU] stated that, “(NFU) expressed disappointment today at the mark up of the U.S. House of Representatives Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Fiscal Year 2013 agriculture appropriations bill today. The bill was approved by voice vote and will move on to the House Appropriations Committee.”

“‘Compared to some of the proposals that this committee has produced in recent years, the FY 2013 appropriations bill is less severe in its percentage cuts,’ said NFU President Roger Johnson. ‘The bill still contains unacceptable provisions that would effectively remove any possibility that rules to restore fairness for livestock and poultry producers could be implemented, including a clearer definition of competitive injury. These common sense regulations should be put in place immediately, and it is extremely disappointing that language to prevent that is in the subcommittee’s bill. This language should be removed before the appropriations bill becomes law.’”


Agricultural Economy

Also yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included observations with respect to the U.S. agricultural economy; a summary of those observations has been posted at FarmPolicy.com Online.

Lastly today, University of Illinois Agricultural Economists Scott Irwin and Darrel Good penned an interesting post yesterday at the farmdoc daily blog (“Recent Observations on the Tolerance of Corn Yield to Drought Conditions”) where they noted in part that, “The drought tolerance of U.S. corn yield is always a topic of interest and it is especially important in a year like this when a relatively low level of stocks is projected for the start of the marketing year. The take home message from this analysis is two-fold: 1) U.S. corn yields are likely somewhat less susceptible to drought conditions than in the past; and 2) a Corn Belt-wide drought would still lead to sizable yield reductions relative to trend.”

Keith Good