FarmPolicy

Farm Bill; Budget Issues; Ag Economy; EPA; Trade; and, Biofuels

Farm Bill- Policy Issues

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Lobbyists on the farm bill are facing crunch time this week, even with lawmakers in both chambers out of town.

“Staff for the House Agriculture Committee are putting the finishing touches on a five-year farm bill that would set the nation on a track to spend at least $900 billion on farm subsidies and food stamps over the next decade.

“K Street is eagerly expecting a draft summary to circulate Thursday or Friday.”

Mr. Wasson noted that, “House Agriculture Committee Chairman Frank Lucas (R-Okla.) is proceeding with a July 11 markup of the measure, despite the leadership scheduling a healthcare repeal vote for that day. Lucas expects the committee to need at least three days to finish because of the large number of amendments.

“Lobbyists for farm groups and other interests are using the week ahead of the markup for a final chance to influence the bill’s shape.

“For commodity groups dissatisfied with the Senate farm bill, this is a do-over — and for conservatives, it’s a chance to win bigger budget cuts to food stamps.”

The Hill update pointed out that, “Lucas has said he wants to ‘equalize’ cuts to nutrition programs and farm subsidies, and anti-poverty lobbyists are bracing for about $16 billion in cuts to food stamps. Lucas would find his savings by ending automatic food stamp eligibility for welfare and heating assistance recipients.

“Groups opposed to the cuts are spending the week strategizing on whether to wait for an eventual House-Senate conference to reverse them.”

“The Coalition for Sugar Reform, made up of large food manufacturers, is pressing Rep. Bob Goodlatte (R-Va.) to offer an amendment to end the U.S. sugar import quota system. The group argues it has momentum after a strong Senate floor vote that ultimately failed,” yesterday’s update said.

In other policy developments, Michael M. Grynbaum reported in yesterday’s New York Times that, “Lobbyists from Coca-Cola and other big soda companies have met with mayoral candidates and City Council members. Canvassers hired by the beverage industry are stopping New Yorkers on the street to solicit signatures on petitions. Facebook and Twitter pages tell readers to ‘say no to a #sodaban.’

“Confronting a high-profile attack on its fizzy products, the American soft-drink industry is beginning an aggressive campaign to fight New York City’s proposed restrictions on large servings of sugary drinks.”

Meanwhile, Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Nearly two years since it was made law, nearly 36 percent of the roughly 400 rules required by the Dodd-Frank financial reform law have yet to be written, according to a new report.

“According to the law firm Davis Polk, regulators have finalized just 30 percent of the rules required by the sweeping overhaul, while 34 percent of those required have been proposed. President Obama signed the Wall Street reform into law on July 21, 2010.

“Regulators still have more time to get many of those rules written. As of Tuesday, just 221 of the rule writing deadlines for the law have passed, or just 55.5 percent of the 398 separate sets of rules the government needs to compose to put the law in place.”

Budget Issues

Tom Lauricella reported in yesterday’s Wall Street Journal that, “Financial markets seem to have gotten another reprieve from worries about Europe. But attention is now turning to the U.S., where concerns over political stalemate threaten to dominate the second half of 2012.

“With government policy playing a greater-than-usual role in driving financial markets, investors are nervously eyeing the November U.S. presidential election and the year-end expiration of tax cuts and economic stimulus that could drive the U.S. economy into recession should Congress fail to step in.”

The Journal article noted that, “[Mark Keller, chief investment officer at Confluence Investment Management of St. Louis] says the fall elections are a hurdle, but he is hopeful that investors will be able to better handicap the outcome and impact as Nov. 6 draws closer. Other investors question whether there will be much more clarity after the election.

“That is especially the case for the likely looming budget showdown over what has become known as the fiscal cliff. If Congress takes no action, the U.S. economy will likely be driven into recession, economists say.”

Reuters writers Kim Dixon and Richard Cowan reported earlier this week that, “Members of Congress from both parties are increasingly mulling the unthinkable: going home in December without acting to avoid the $4 trillion in tax hikes and deep spending cuts known as the fiscal cliff.

“Neither Democrats nor Republicans claim this is their preferred option, as it could rattle global financial markets badly and anger their constituents.

“But as they circle each other in an ever-more partisan atmosphere they see little prospect for a settlement acceptable to both parties in the lame duck session of Congress after the November 6 election.”

The Reuters article pointed out that, “Politicians are scared to death of raising taxes. But they wouldn’t have to if they just let the Bush tax cuts expire. They don’t have to lift a finger. They just let them die, as scheduled, on December 31.

“Then, flush with cash, they take some of the $3.7 trillion, which they would then have on the budget books from the expired Bush tax cuts, and they announce to voters that they’re going to give it back to them in the form of brand new tax cuts.

“They take another chunk of the $3.7 trillion and devote it to deficit-reduction – maybe – and as they rewrite the tax code to include rate reductions for corporations and others, they also end some tax goodies, possibly getting more money for the Treasury.”

And Carlo Munoz reported earlier this week at The Hill’s Defense Blog that, “Senate Republicans are floating the idea of establishing House-Senate working groups as a way to forge a compromise plan to avoid massive defense budget cuts in the coming year.

“Sen. Kelly Ayotte (R-N.H.) said that forming the bipartisan working groups would be a critical piece in getting lawmakers in both chambers on the same page, regarding the automatic defense cuts under sequestration.”

The article explained that, “A group of 15 to 30 senators has been drafting sequestration alternatives behind closed doors for the past month, but those talks have largely remained on the Democrat-controlled Senate side.

“Bringing in House members via the working groups could hasten those informal Senate talks into a tangible, bipartisan solution that can be brought to the White House.”

Agricultural Economy

Cheri Zagurski and Lindsay Calvert reported yesterday at DTN (link requires subscription) that, “For the fourth week in a row, the nation’s corn and soybean conditions declined on USDA’s weekly Crop Progress and Condition report. And this week the decline picked up some steam from the continued hot and dry weather.

“Corn in the very poor to poor category increased eight percentage points to 22% and corn rated good-to-excellent dropped a like amount to 48%.”

“Twenty-two percent of the nation’s soybeans were also rated very poor to poor, up seven percentage points from a week ago. The percentage of the crop rated good to excellent fell 8 points,” the DTN article said.

An update yesterday from University of Missouri Extension noted that, “This year’s corn needs rain and needs it soon.

“The next couple weeks are critical for corn pollination, because silk growth and tassel pollen-shed must be in sync to create corn kernels. That coordination relies on water.”

And the AP reported yesterday that, “Prices for grains and beans are continuing a steady climb as crops languish in summer heat across much of the nation’s farmland.

“Corn, wheat and soybeans all rose Monday, extending hefty price gains posted in June on expectations that the hot dry weather will erode production. At the same time, global demand remains strong.”

A related update regarding the corn market by University of Illinois Agricultural Economist Darrel Good was posted yesterday at the farmdoc daily blog, “Considerable Uncertainty About Both Corn Supply and Demand.”

In other news, Bloomberg writer Leslie Patton reported yesterday that, “McDonald’s Corp. (MCD)’s new chief executive officer is playing chicken with the menu.

“As Don Thompson, 49, steps into the CEO role at the world’s largest restaurant chain, customers may see more new chicken items instead of beef. Thompson is pulling from McDonald’s 160- item recipe book, which includes bone-in chicken wings and cashew teriyaki salads with chicken, to sell new food and attract cash-conscious consumers amid a shaky global economy. It’s a ‘tremendous opportunity,’ Thompson said during a consumer conference on May 30.”

EPA Issues

The AP reported yesterday that, “Midwest ranchers have never been enamored with environmental regulators, but they really began to complain after learning that federal inspectors were flying over their land to look for problems.

“The Environmental Protection Agency flies over power plants and other facilities nationwide to identify potential air, water and land pollution. It began using aerial surveillance in the Midwest in 2010 to check farms for violations of federal clean water regulations.

“Ranchers who object to the program said they’re not trying to hide anything. It’s the quiet approach the EPA took with the program designed to spot illegal disposal of animal waste that they find upsetting. Most were not even aware of the flyovers until regional EPA officials mentioned it at a meeting three months ago.”

The article noted that, “EPA officials explained during a meeting with ranchers in West Point, Neb., that they lease small planes that fly EPA staffers over cattle operations. The staffers take photographs as they seek evidence of illegal animal waste running off into rivers and streams.”

Trade

A recent update posted at the World Trade Organization (WTO) Online indicated that, “At its meeting on 25 June 2012, the Dispute Settlement Body (DSB) established a panel to examine the US complaint against India’s agricultural import measures (DS430).”

The WTO update stated in part that, “The US said that, as it had explained at the May 2012 DSB meeting, the US and other members had concerns about India’s measures prohibiting the importation of various agricultural products into India from members reporting outbreaks of Low Pathogenic Notifiable Avian Influenza (LPAI).  The US was of the view that such measures had no scientific basis; were inconsistent with the guidelines of the World Organization for Animal Health; and appeared to be inconsistent with a number of India’s WTO obligations.  Thus, the US requested, for the second time, the establishment of a panel to examine the matter.

“India said that during the consultations, it had provided explanations and scientific rationale and was disappointed that the US had chosen to litigate rather than negotiate the matter.  India considered that its measures were consistent with its WTO obligations and stood ready to defend them.”

Meanwhile, an update posted yesterday at the U.S. Trade Representative’s Office Blog noted that, “This week, trade policy makers and stakeholders from nine Asia-Pacific nations will be gathering in San Diego, California to participate in the 13th Round of the Trans-Pacific Partnership negotiations. TPP negotiators are seeking creative and balanced approaches to 21st century trade and investment issues that greatly affect California, the second largest state exporter in the United States.”

Biofuels

Zack Colman reported yesterday at The Hill’s Energy Blog that, “The Obama administration is putting another $62 million into its bet that biofuels can power the Navy, rankling many lawmakers who say the programs are wasteful.”

Keith Good

Posted by Keith Good • July, 3, 2012 • 4:05 am