FarmPolicy

November 1, 2014

Farm Bill and Policy Issues; Budget; and, the Agricultural Economy

Farm Bill: Senate Process, Lawmaker Perspective- Amendments

The Need-To-Know Memo (Email update from National Journal) stated yesterday that, “Backers hope early this week to nail down a deal on amendments that will allow passage of a farm bill by Friday. Lack of an agreement could endanger the bill and it is unclear if the Senate Agriculture Committee’s ranking member, Pat Roberts, R-Kans., can convince his GOP conference members to accept a limited number of non-germane amendments that Democrats will accept. Opposition from southern Republicans is also a hurdle.”

Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Senate Majority Leader Harry Reid (D-Nev.) said Monday that Republicans are once again forcing the Senate to move at a snail’s pace to pass legislation that creates jobs, which he said shows their ongoing effort to hurt President Obama.

“‘It’s a shame that we have now wasted 30 hours post-cloture on this bill,’ Reid said on the Senate floor. ‘It’s a bill that passed by 90 senators agreeing we should move for debate on this bill.’

“‘Republicans have made a decision that they would rather do anything they can to stop jobs from being created, hoping it will help them with the elections come November,’ Reid charged. ‘Too often in this Congress, the Republican strategy has been to kill job-creating bills in the hopes of harming the economy and hurting President Obama.’”

(A portion of Senator Reid’s comments from yesterday can be heard here- FarmPolicy audio (MP3- 2:13)).

Yesterday’s update added that, “Reid said he is continuing to work with senators on a deal outlining which amendments to the farm bill could come up for a vote.”

Also on the Senate floor yesterday, Nebraska GOP Senator Mike Johanns indicated that, “This is the first farm bill in recent history that does not pay farmers a specific payment just because they are farmers. You see, farmers have come to realize that risk management is best handled with crop insurance, and in fact in many listening sessions I had around the state, virtually no one asked for the continuation of direct payments. The bill actually saves $15 billion from commodity crop support by eliminating four programs, including direct payments, countercyclical payments, the average crop revenue election program called ACRE, and the supplemental revenue assistance program called SURE. It does not raise loan rates, the price levels that have traditionally triggered the making of payments, and it focuses the farm program on revenue, not price, something I proposed as the United States Secretary of agriculture when I served in the cabinet. I would remind my colleagues that our job in writing a farm bill is not to protect the interests of specific commodity groups. Instead, the farm bill should be about preserving the health of our agricultural community.”

Senator John Boozman (R., Ark.) also spoke about the Farm Bill yesterday on the Senate floor; in part, he addressed: The Commodity title and the potential of future multi-year prices declines and geographic issues, spending on nutrition programs, and, the willingness to work towards consensus in the Farm Bill process- FarmPolicy audio (MP3- 3:05).

Meanwhile, Joseph Morton reported yesterday at the Kearney Hub (Neb.) Online that, “[Sen. Tom Harkin, D-Iowa, former Senate Agriculture Committee chairman] said he believes that federal funding should be directed to such areas as ag research and conservation programs.

Harkin supports the legislation’s approach of using the money saved from direct payments to bolster crop insurance protection, in part by creating new ‘shallow loss’ programs that essentially would cover more of a farmer’s deductible in the case of a loss.”

And, a Senate Ag Committee news release from yesterday stated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today said that a new report showing that America’s rural economy is helping to drive the country’s economic recovery further illustrates the need to pass a Farm Bill before the current bill expires, to give farmers and other small businesses the certainty they need to create jobs. Chairwoman Stabenow’s remarks come following the release of a report by the White House on the agricultural economy.

“‘American agriculture represents a bright spot in our economy,’ Chairwoman Stabenow said. ‘Agricultural exports are reaching record highs and American farmers and ranchers are continuing to outpace the rest of the world in productivity and efficiency. Sixteen million American jobs are supported by American agriculture, so it’s critical we pass the Farm Bill this year. We must provide farmers and small businesses the certainty they need to continue growing and helping the country’s economy recover.’”

In other developments, Cody Winchester reported earlier this week at the Argus Leader (Sioux Falls, S.D.) Online that, “With the farm bill now on the floor of the U.S. Senate, lawmakers — and the various groups that have been jockeying to influence the process — are settling in for several weeks of arguing and amendments.”

The article noted that, “Every inch counts as competing interests hammer out the final language, and an analysis of a decade of campaign finance data shows strong ties between the agricultural industry and the legislators who will approve the legislation.”

A news release yesterday from Sen. Mike Crapo (R., Idaho) stated that, “Today, [Sen. Crapo] and Nebraska Senator Mike Johanns filed an amendment to fulfill Congressional intent by providing an explicit exemption from margin requirements for non-financial end-users that qualify for the clearing exemption.  The amendment is identical to H.R. 2682, which passed the U.S. House of Representatives by a vote of 370 to 24.”

And in the House, a news release yesterday from Rep. Tim Walz (D., Minn.) noted that, “Today, [Rep. Walz] announced the introduction of legislation that will improve access to rural energy programs and build upon the highly successful Rural Energy for America Program (REAP), which provides farmers and small businesses the opportunity to reduce overheard operating costs and increase efficiency. Walz introduced the legislation in late May, along with Congressman Peter Welch of Vermont, for consideration in the 2012 Farm Bill.”

With respect to the conservation title of the Farm Bill, Gene Schmidt, the president of the National Association of Conservation Districts, noted earlier this week at The Roanoke Times Online that, “The Senate Agriculture Committee deserves high accolades for its swift, bipartisan passage of a common-sense Farm Bill that will soon be taken up by the full Senate. The House is also making strong progress on its own bill.

This is truly a reform bill. And, as a conservationist, I can’t underscore enough how important this bill is to the future of the Chesapeake Bay.”

Mr. Schmidt noted that, “The bottom line is, producers in the Chesapeake Bay watershed have the opportunity to set the national standard for watershed conservation and protection. They have the know-how and the desire to do it; they just need the right tools and resources to get the job done. Success in the Chesapeake Bay is not an option; it’s a necessity. The rest of the country is watching what happens here as they look to set their own water quality goals.

I strongly believe that the 2012 Farm Bill — and in particular, the Conservation Title — will set us on a course for success.”

 

Policy Issues: Labor, Research, Soda Tax Ban, and Animal Agriculture

Robert Rodriguez reported late last week at The Fresno Bee Online that, “San Joaquin Valley farmers, already slammed this year by hail and high fuel costs, could be hit with another blow: a shortage of workers.

“Tighter border enforcement, increased smuggling costs for immigrants and drug-related violence are contributing to fewer people coming to the U.S. from Mexico — longtime source of undocumented workers for Valley farmers.

“And while critics of illegal immigration may be pleased with the current decline, farmers are worried.”

And an update yesterday at the Economic Research Service Charts of Note webpage (USDA) stated that, “Over the past 15 years, roughly half of the hired laborers employed in U.S. crop agriculture have lacked the immigration status needed to work legally in the United States. Large shifts in the supply of foreign-born farm labor, such as those that might result from substantial changes to U.S. immigration laws or policies, could have significant effects on production costs in U.S. agriculture. Hired labor (including contract labor) accounted for about 17 percent of the sector’s variable production expenses and even higher proportions in more labor-intensive sectors, such as vegetables (35 percent), nursery products (46 percent), and fruits (48 percent), according to 2006-10 Agricultural Resource Management Survey (ARMS) data. This chart is found in The Potential Impact of Changes in Immigration Policy on U.S. Agriculture and the Market for Hired Farm Labor: A Simulation Analysis, ERR-135, May 2012.”

The AP reported last week that, “The gap between federal support for agricultural research at large public universities and private investment continues to grow — and the divide comes with increased threats to academic freedom and more instances of meddling in the lab, a new research report suggests.

“A recent study by Food and Water Watch, a Washington-based environmental group, shows that nearly one-quarter of the money spent on agricultural research at land-grant universities comes from corporations, trade associations and foundations, an all-time high. Financial support from the U.S. Department of Agriculture accounts for less than 15 percent, the lowest level in nearly two decades.”

Winnie Hu reported in today’s New York Times that, “In the Bronx, where more than two-thirds of adults are overweight, the message has been unmistakably clear for a long time: Slim down now.

“But, if anything, this battery of efforts points to how intractable the obesity problem has become in New York’s poorest borough. The number of the overweight and obese continue to grow faster in the Bronx than anywhere else in the city — nearly one in three Bronx adults is obese — leading the city’s health commissioner to call it ‘ground zero for the obesity epidemic problem.’”

The Times article added that, “So it was to the weight-burdened Bronx that Mayor Michael R. Bloomberg went last week to make the case for his controversial proposal to ban supersized sodas and sugary drinks. Standing in the lobby of Montefiore Medical Center, the borough’s largest hospital, he was flanked by doctors who spoke of treating more patients than ever with diabetes, hypertension and other obesity-related diseases.

“Critics have described the proposed soda rule as interfering with a matter of personal choice, calling instead for less intrusive means to address the obesity problem, through education and access to healthy foods. But the Bronx experience helps explain why Mr. Bloomberg and city health officials embraced the aggressive new regulatory tact after years of trying, and failing, to curb obesity through those types of measures.”

And an editorial posted today at USA Today Online indicated that, “Most of the nation’s 285 million egg-laying hens spend their lives in spaces no bigger than a letter-sized piece of paper, barely able to move about freely, turn around or spread their wings.

“Animal-welfare activists have battled state by state for years to change that, taking on a well-funded egg production industry. As grassroots campaigns go, the activists have done well, but they knew the fight could go on for years and burn through tens of millions of dollars while animals continued to suffer.

“Now, though, there’s hope for the hens because a strange thing happened on the way to the next skirmish. The activists and the industry reached a compromise, pending in Congress, that involves phasing in larger ‘enriched cages,’ with a percentage of the industry installing new cages every six years for the next 18 years.”

The opinion item did note that, “Critics remain, and passage is not a done deal.”

But, the editorial added that, “In the U.S., a study done for the egg producers found that the gradual changes would add about 10 cents to a carton of eggs by 2025, which cost an average $1.83 in April.

Less than a penny an egg to treat animals humanely doesn’t sound like too high a price. Especially if it comes with a rare lesson in how to get things done in deadlocked Washington.”

 

Budget Issues- Congress

Kate Nocera reported yesterday at Politico that, “In January, the Capitol will be home to one of the least-experienced Congresses in decades, as the chambers will be filled with rookies and sophomores unbound by the institution’s traditions while having virtually no experience doing serious legislative work.

“Between the historically large 2010 freshman class, 36 lawmaker retirements in 2012 and the expected election turnover this fall, the new Congress could have upward of 155 members with less than four years of experience. And the implications of a youthful Congress are significant: On the upside, the American voter will get even more fresh blood infused into the least popular Congress in modern history, bringing new ideas and vigor to the stodgy Capitol.

“But there’s also a significant downside: The new breed — in both parties — is more partisan, less willing to compromise, not beholden to any leader, chairmen or customs, all of which can throw a wrench into the tradition of legislating.”

Meanwhile, Rosalind S. Helderman reported yesterday at the 2chambers Blog (Washington Post) that, “The Senate’s top Democratic tax writer advised Monday that Congress should avoid divisive votes on taxing and spending issues that could hem in members, making it harder to hatch a deal after the election to avert dramatic budget cuts and tax hikes scheduled to take effect in January.

“The suggestion came as Senate Finance Chairman Max Baucus (D-Mont.) addressed the Bipartisan Policy Center Monday to lay out principles that should undergird efforts to revamp the nation’s tax code, advocating a total review of tax credits and expenditures and elimination of those that are failing to spark growth.”

“Even as election year rhetoric heats up, Baucus insisted Democrats and Republicans are quietly negotiating behind the scenes to find an agreement to deal with the impending fiscal cliff,” yesterday’s update said.

 

Agricultural Economy

Mark Peters reported yesterday at The Wall Street Journal Online that, “America’s ethanol boom is stalling, and the effects are starting to spread across a Farm Belt that had grown accustomed to soaring growth. Annual U.S. production of ethanol more than tripled from 2005 to 2011, driving up crop prices and pumping money into rural communities from Nebraska to North Dakota.

Now, ethanol demand is topping out. The amount used in gasoline is near federal mandates, and gasoline consumption is declining. After 15 straight years of growth, ethanol production this year will fall slightly and will be roughly flat next year, according to the U.S. Energy Information Administration’s May forecast. Updated output numbers will be released Tuesday.”

Emily Garnett and Lindsay Calvert reported yesterday at DTN (link requires subscription) that, “The nation’s corn crop is finally completely planted but corn condition took a hit over the past week, with dry weather knocking the crop from 72% in good-to-excellent condition to 66%.”

The DTN article added that, “The nation’s soybean crop is 97% planted, up from 81% last year and 85% over the past five years. At 90%, emergence is also further along than usual, compared to 58% last year and 67% on average. Soybean condition also saw a five-point drop, from 65% good-to-excellent, to only 60% this week.”

Yesterday’s complete Crop Progress report from USDA is available here.

Keith Good

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