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Farm Bill; EPA Issues; and, the Ag Economy

Farm Bill Issues

An update posted yesterday at The Oklahoma Farm Report Online reported that, “Work continues on the House version of the 2012 Farm Bill, and Congressman Frank Lucas took some time to speak with Ron Hays about the progress that has been made to date and how the process will continue.

“Lucas says that he has had the opportunity to read the version recently passed in the Senate. He says there are major differences in approach between the Senate and House versions.

“‘They have a bill that is very focused on crop insurance. It is very heavy on the crop revenue side which my economists on the House Agriculture Committee assure me will be good for the folks in corn and bean country in the Midwest. They’ve got a bill that is very frugal in its savings on the nutrition side. They save about $4 billion through reforms. The nutrition programs are about 80 percent of all farm bill spending. They have a bill that imposes a variety of other things, some conservation requirements on crop insurance and things like that.’”

Yesterday’s update noted that, “Lucas said he was happy the bill got passed by the Senate, ‘but we’ve got to have a more comprehensive bill. We’ve got to have a bill that achieves more savings across the board through reforms, not just the commodity title. We’re going to have a different bill. I think it will be more balanced and more equitable. Thank goodness the Senate passed something so we’ll now get our work done in the House and go to conference and have the ultimate farm bill.’”

The Oklahoma Farm Report article indicated that, “Lucas says that the House version of the bill will contain target price provisions.

“‘Whether you want to call it target prices or reference prices or whatever the ultimate term is, yes. I think it’s going to be a big part of the House bill. Now, we’ll have a revenue option also. We’ll have something for our corn and bean friends in the Midwest, by using a reference price concept or something similar to target prices. We’ll provide that safety net for everybody else. That’s just not only going to be a big part of the House bill, but it ultimately has to be an important part of the final bill where we ultimately work out our differences with the Senate.’”

Yesterday’s report pointed out that, “Some conservative critics of the Senate’s version of the farm bill said the $4 billion dollars in cuts to the nutrition program were not enough in light of the fact that spending on the nutrition title is nearly 80 percent of the bill’s total price tag. The Senate bill identified $23 billion dollars in cuts to the bill overall.

Lucas says he hopes to do better at balancing that equation and hopes equalize cuts in the nutrition program and in the commodity title.

“The Congressman also says he is a little uncomfortable with the conservation compliance amendment attached to the Senate bill by Saxby Chambliss of Georgia.

“‘I’ve always been a little hesitant about that because I believe the resources follow the production. And if crop insurance is something you’re paying for as a producer to provide you with protection, then I have a little difficulty with attaching additional provisions on.’”

On the issue of timing the Farm Report article stated that, “Lucas had hoped to tackle the House markup on the bill just as soon as it passed the Senate, but he pushed that date back when it was learned the leadership wanted to take up the Ag Appropriations bill first. Lucas did not want staffers having to deal with both bills at once, so he agreed to move the farm bill markup to July 11th.

“‘Wednesday, July 11th, it’s all hands on deck in the House Agriculture Committee as we will begin and, hopefully, before the week is over, conclude the markup of the House version of the 2012 Farm Bill. And remember, that’s not just the commodity title, that’s the nutrition, the conservation, rural development, ag research, farm credit. It is a thousand potential pages of policy that affect every American consumer and every farmer and rancher and everybody who lives in or depends on rural America.’

“Lucas says he has hopes of moving the bill quickly through his committee and out onto the floor. He says he hopes the House leadership will bring the bill quickly before the full House.”

Meanwhile, Senator Chuck Grassley was a guest on yesterday’s AgriTalk radio program with Mike Adams, and during the course of their discussion the Iowa Republican also addressed the issue of linking conservation compliance to crop insurance.  A portion of Sen. Grassley’s remarks from yesterday’s AgriTalk program can be heard here (MP3- 2:33).

And, Paige Winfield Cunningham reported earlier this week at The Washington Times Online that, “The five-year farm bill, which cleared the Senate last week, could be headed for rough waters in the House with Republicans complaining that the upper chamber’s bill favors Midwesterners’ crops over Southerners’ produce and saying a final compromise will need to have deeper cuts to the food-stamp and crop-insurance programs.

“Rep. Frank D. Lucas, Oklahoma Republican and chairman of the House Agriculture Committee, has promised the House bill will cut at least $33 billion from the federal deficit — $10 billion more than the Senate version — with the cuts coming equally from food stamps and commodity programs.

“The bill is likely to ignite fights along both regional and party lines.”

The article noted that, “Complicating the fight, Democrats are opposed to cutting safety-net programs in the face of high unemployment, while House Republicans have already taken action to cut food stamps this year to reduce the deficit and avert automatic cuts in defense spending.

“‘It’s going to be very difficult for Chairman Lucas to walk that line and satisfy his deficit-reduction members but not alienate these Democrats they’ve typically relied on to pass this bill,’ said Joshua Sewell, a policy analyst for Taxpayers for Common Sense, a group that opposes the Senate farm bill.”

Ms. Cunningham added that, “Republicans voted to cut the food-stamp program by $13.3 billion annually over the next decade as part of the House budget passed earlier this year. If they insist on similar cuts now, it could stall the farm bill, since Democrats have said cuts that deep are out of the question.

“‘The level that passed by the House in their budget resolution is absolutely unacceptable to me and the majority of those in the Senate,’ Debbie Stabenow, Michigan Democrat, said after shepherding the Senate bill through the floor last week. ‘Certainly, that is not something I would support.’”

With respect to the executive branch, Bloomberg writer Alan Bjerga reported yesterday that, “Agriculture Secretary Tom Vilsack urged House Majority Leader Eric Cantor, a Virginia Republican, to schedule floor time for the new farm bill, saying U.S. producers need to know the shape of programs that support them.

“‘I would ask him to take his finger off the pause button so the rest of us don’t have to hit the panic button,’ Vilsack said today at a Washington meeting of land-grant universities. Farmers ‘need that certainty,’ he said.”

Mr. Bjerga noted that, “Efforts to obtain a response from Cantor to Vilack’s appeal were unsuccessful.”

And more specifically on nutrition issues, an article posted on Monday at CNN Money Online reported that, “More than one in seven Americans are on food stamps, but the federal government wants even more people to sign up for the safety net program.

The U.S. Department of Agriculture has been running radio ads for the past four months encouraging those eligible to enroll. The campaign is targeted at the elderly, working poor, the unemployed and Hispanics.

The department is spending between $2.5 million and $3 million on paid spots, and free public service announcements are also airing. The campaign can be heard in California, Texas, North Carolina, South Carolina, Ohio, and the New York metro area.”

The CNN article pointed out that, “The radio ads, which run through June 30, come amid a bitter partisan fight over the safety net program. Republican lawmakers want to reduce funding for the benefit or turn it into a block grant program, which would also minimize the cost. Democrats, however, are not willing to make major cuts…[P]resident Bush launched a recruitment campaign, which pushed average participation up by 63% during his eight years in office. The USDA began airing paid radio spots in 2004.

“President Obama’s stimulus act made it easier for childless, jobless adults to qualify for the program and increased the monthly benefit by about 15% through 2013.”

Mary MacVean reported yesterday at the Los Angeles Times Online that, “The federal government is slated to come up with rules governing the food sold at school that’s not part of the regular meals.

“Those foods are often called competitive foods, because what’s sold in the student store or in vending machines or other spots at schools often competes with the meal programs.

“‘Ensuring that schools sell nutritious foods is critical to improving children’s diets,’ a report issued Tuesday says. ‘This is one of the goals of the Healthy, Hunger-Free Kids Act.’”

The article stated that, “That law, passed in 2010, directs the federal government to update standards for all foods sold at school by bringing them into alignment with dietary guidelines.

“An assessment of what those new rules might do for kids’ health and the schools’ bottom line was released Tuesday by two projects from the Pew Charitable Trusts and the Robert Wood Johnson Foundation.

The projects argue for standards that require competitive foods and beverages to be healthy.”


EPA Issues

Vicki Needham, Bernie Becker, Peter Schroeder and Erik Wasson reported yesterday at The Hill’s On The Money Blog that, “The House Appropriations Committee will mark up the 2013 Interior and Environment spending bill on Wednesday, which cuts the Environmental Protection Agency budget by $1.4 billion, about 17 percent, compared with current funding. Funding cuts are aimed at blocking environmental regulations. In particular, the bill defunds attempts to apply greenhouse gas regulations to new power plants. Riders include one preventing EPA from expanding its authority to regulate ‘navigable waters’ under the Clean Water Act. The committee is expected to approve the bill and send it to the floor. But it has no chance of becoming law without changes forged in a compromise with the Senate, which wants much higher funding.”

Meanwhile, Brent Kendall reported on the front page of today’s Wall Street Journal that, “A federal appeals court backed the Obama administration’s campaign to limit greenhouse-gas emissions, in a blow to the coal industry and other companies that say regulators acted without a scientific basis and are stifling job creation.

“The court in Washington, D.C., gave the Environmental Protection Agency almost everything it wanted in the 82-page ruling on Tuesday. A three-judge panel unanimously upheld the EPA’s central 2009 finding that greenhouse gases such as carbon dioxide endanger public health and likely have been responsible for global warming over the past half century.”

Brad Plumer reported yesterday at The Washington Post Online that, “A federal court just handed down a ruling that could have far-reaching consequences for human health and the U.S. economy. Er, no, it wasn’t the upcoming Supreme Court decision on Obamcare. But this case might end up proving just as significant.”

Ben Geman reported yesterday at The Hill’s Energy Blog that, “The court left intact EPA’s rules on carbon emissions from automobiles, and the ‘tailoring rule’ that shields smaller stationary sources from greenhouse gas permitting that the EPA is using to target emissions from big sources like power plants.

Knocking down the tailoring rule might have created a chaotic, uncertain path ahead for emissions regulations by opening up massive numbers of businesses and other facilities to regulation.

“EPA Administrator Lisa Jackson applauded the ruling, calling it a ‘strong validation’ of the agency’s work on greenhouse gases.”

Mr. Geman noted in a separate update at The Hill Energy Blog yesterday that, “A top House Republican is using Tuesday’s court decision that upheld EPA’s climate regulations to launch fresh calls for action on GOP legislation that would nullify EPA’s authority to limit greenhouse gases.

“‘While some in Washington may claim today’s court ruling is a win for the Obama administration, it delivers a devastating blow to the U.S. economy and American consumers,’ said House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) in a statement.”

In other EPA related news, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Two years ago I [Clayton] was at an agricultural law meeting where a Region 7 EPA official gave a powerpoint presentation about Clean Water Act activities in the region (Nebraska, Iowa, Missouri and Kansas). Included in that presentation were pictures showing some of the aerial photography EPA was gathering on possible discharge violations.

As EPA put it, the aerial flights made it easier to determine which confined animal feeding operations should be getting on-site inspections. In some pictures, it was obvious to point out manure runoff from the feedlot to a local waterway…[T]he photo you see of the dark trail streaming across a field is from that 2010 EPA powerpoint.”

Mr. Clayton noted that, “Sen. Charles Grassley, R-Iowa, said in a weekly conference call with reporters that he met Monday with EPA officials about the flyovers and left with more questions than answers. Iowa farmers have raised issues over the flights.

“‘While I was able to get some answers yesterday, I was left still with a lot of unanswered questions,’ Grassley said.

“Grassley questioned why EPA region 7 was concentrating on Iowa and Nebraska, and said the flyovers were inconsistent because EPA wasn’t doing them nationally. ‘I got their acknowledgement that I was right and it’s a national law and you ought to have uniform administering of that law, but they say you have limited resources and this is how we’re doing it,’ Grassley said. ‘So maybe that’s unfair to Iowa farmers.’”


Agricultural Economy

The AP reported yesterday that, “The price of corn is climbing as a blistering heat wave wilts crops in parts of the Midwest.”

A Purdue University news update from last week stated that, “Corn in Indiana will begin a crucial period for its development in late June and the first half of July – pollination. Insufficient water during pollination can significantly reduce the amount of corn the crop produces by harvest in the fall. Corn in a few fields in southern Indiana already has started to pollinate.

“‘The big concern now is as we approach pollination statewide,’ [Bob Nielsen, Extension corn specialist] said. ‘We can lose an awful lot of yield potential per day with drought stress during pollination.’”

And, University of Illinois Agricultural Economists Scott Irwin and Darrel Good provided a timely analysis on the U.S. corn crop yesterday at the farmdoc daily Blog titled, “Where Should We Be Now With Corn Yield Expectations?

In other news, Andrew Grossman reported in today’s Wall Street Journal that, “It has been called the Chobani Paradox.

“The growing popularity of thick Greek-style yogurt has brought hundreds of manufacturing jobs to this tiny town in the green hills of central New York, where Hamdi Ulukaya decided in 2005 to buy an idled cheese plant and start producing a brand named Chobani.

Now, with Americans quickly developing a taste for the stuff, Mr. Ulukaya is running into an unlikely problem for a factory owner in the middle of the third-largest dairy-producing state in the country: He can’t get enough milk to keep increasing production.”

The Journal article noted that, “Meanwhile, the long-struggling dairy farmers of New York aren’t seeing their bottom line soar thanks to the Greek yogurt boom—and they aren’t adding to their herds to meet the demand.

“So instead of expanding his plant here—in a region trying to reverse a trend of population and job loss—Mr. Ulukaya is building a factory in Idaho, in part because he can be sure of a steady supply of milk there. The New Berlin plant will remain open, but Mr. Ulukaya said he might have expanded it instead of opening another if he knew he could get enough milk.

Milk production in states such as Idaho has surged in the past decade. Land is cheaper and dairy farms tend to be larger than in New York, making it easier for farmers to grow their herds. New York farmers say they are weighed down by property taxes and the high cost of land. Since their herds are smaller, expansion tends to be riskier.”

Keith Good