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

Farm Bill Issues

The AP reported yesterday that, “Republicans and Democrats in Congress who congratulated themselves for passing relatively routine legislation before July 4 are returning to the Capitol for a summer stocked with political show votes and no serious role for bipartisanship.

“Any thought of compromise on major issues — taxes, spending, deficit control or immigration among them — will have to wait until after the election or the new year.

“So, too, with a farm bill. It cleared the Senate on a bipartisan vote and is now at risk for becoming sidetracked in the House in the run-up to this summer’s presidential nominating conventions and the Nov. 6 election.”

Yesterday’s article noted that, “To pass the legislation, ‘I’ve got to work with my leadership. I’ve got to work with my members. I’ve got to work with the minority (Democrats). I’ve got to work with my friends in the Senate. I’m having a lot of fun,’ Rep. Frank Lucas, R-Okla., chairman of the House Agriculture Committee, told reporters with more than a trace of sarcasm several days ago.

“In the interim, the House Republican leadership intends to force a vote this coming week on a repeal of President Barack Obama’s health care law, recently upheld by the Supreme Court in a ruling that said the law imposes a tax on anyone who fails to purchase insurance [related updates on House activity can also be found here, here and here].

An editorial posted on Friday at The Bakersfield Californian noted that, “When Rep. Kevin McCarthy appeared before The Californian’s editorial board several months ago, he lamented the fact that Congress probably wouldn’t pass any significant legislation this session due to the polarity that dominates politics these days.

“It may not be groundbreaking legislation, but the farm bill is important not only to growers across the country and the millions of poor Americans who receive food assistance but also to Kern’s own $5 billion agriculture industry. And right now passage of a new five-year farm bill depends on the House’s willingness to take action. Surely McCarthy could use his leadership position in the House to move things along.”

Friday’s Agriculture Today radio program from the Red River Farm Network (RRFN) included a report by Mike Hergert that contained remarks on the Farm Bill, including the House legislative process, from House Ag Committee Ranking Member Collin Peterson (D., Minn.)  To listen to this portion of Friday’s RRFN Agriculture Today program, just click here (MP3- 1:39).

And Gannett writer Christopher Doering reported on Friday that, “U.S. lawmakers are considering an extension to the current farm bill as an October deadline to pass a new $500 billion law rapidly approaches;” but Mr. Doering pointed out that, “A spokeswoman with the House Agriculture Committee said House Majority Leader Eric Cantor, R-Va., has not said he is unwilling to move forward on the farm bill, and members of the committee are doing all they can to get it to the floor.”

Meanwhile, Chris Casteel reported yesterday at The Oklahoman Online that, “Since coming to Congress in 1994, Rep. Frank Lucas has worked on three farm bills to shape the nation’s policy on agriculture and nutrition. He starts work next week on a fourth, this time as chairman of the House Agriculture Committee.

“And his first test will be getting a huge bill with a huge price tag through his own committee, half of which has ‘never trooped down this trail’ of writing a farm bill, said Lucas, R-Cheyenne.”

The article stated that, “The projected savings, as estimated by the Congressional Budget Office, are about $12 billion more than the legislation approved by the Senate in June. The House draft includes far deeper cuts in the food stamp program — about $16 billion compared to $4 billion in the Senate bill.

“‘The nutrition crowd will go ballistic,’ Lucas predicted.”

Erik Wasson and Mike Lillis reported yesterday at The Hill’s On The Money Blog that, “Liberal Democrats are fuming over $16 billion in cuts to food stamp programs included in the House farm bill set for a markup on Wednesday.

“Rep. Collin Peterson (Minn.), the top Democrat on the House Agriculture Committee, agreed to the cuts as a pragmatic way of moving forward with legislation important to rural lawmakers.”

The Hill writers noted that, “In an interview with The Hill, he [Rep. Peterson] said much of the cuts would be restored in a conference with the Senate.

“Yet the move has led to anger on the left, while raising questions over whether the farm bill can pass the House given opposition among Republican and Democratic lawmakers.”

Yesterday’s update pointed out that, “A group of liberal congressmen plan a Tuesday press conference to protest the farm bill. Agriculture Committee members Reps. Jim McGovern (Mass.) and Joe Baca (Calif.) are slated to attend along with [Rep. Rosa DeLauro (Conn.)], Marcia Fudge (D-Ohio), and Gwen Moore (Wis.).

“The Democratic division could hurt the bill’s chances on the floor, Peterson told The Hill Friday, since many conservative Republicans are likely to oppose it over the price tag.

“Peterson said he has consulted [Minority Leader Nancy Pelosi (D-Calif.)] and House Majority Whip Steny Hoyer (D-Md.) and does not yet know how they will vote on the bill.”

The Hill update added that, “Rep. Peter Welch (D-Vt.), a liberal member of the Agriculture panel, said he’ll fight to get the food stamp cuts more in line with the Senate levels, but praised both House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Peterson for forging a compromise he characterized as this Congress’s ‘high-water mark of bipartisan cooperation.’”

Matt Laslo indicated in a report Saturday at WAMU Radio (Washington, D.C.) Online that, “House Republicans want to find savings through slashing the nation’s food stamp program by $16 billion, but Rep. Jim Moran (D-Va.) says the proposal is dangerous for low-income families in the region.

“‘They used the farm bill for another ideological instrument to punish the poor,’ says Moran. ‘Forty-four million people depend upon food stamps, and here they are cutting it back, and basically it’s in order to save subsidies that go to very wealthy agribusiness.’”

However, Nash Keune indicated on Friday at National Review Online that, “After the farm bill recently passed the Senate, the House is currently working on its version. Among the improvements the House Agriculture Committee draft, released Thursday, makes on the Senate bill is a restriction on the expansion of ‘categorical eligibility.’ As I’ve [Keune] written, using categorical-eligibility provisions, states can enroll people into their food-stamp programs who don’t meet the specific requirements for the program as long as they qualify for some other form of aid.”

A Palm Beach Post editorial from Friday indicated that, “Rep. Tom Rooney, R-Tequesta, is on the Agriculture Committee. A spokesman said he expects the House to make deeper cuts than the Senate but that it can be done without hurting people truly in need. Preserving that safety net is crucial. Cutting the deficit is good. Leaving people hungry isn’t.”

An editorial posted today at The Tampa Bay Times Online stated that, “The decision by the leaders of the House Agriculture Committee to apply their budget ax to the federal food stamp program is a step backward for the country.”

In other Farm Bill developments, Zack Colman reported last week at The Hill’s Energy Blog that, “Five rural energy programs will end while others will be slimmed down if a draft version of the 2012 farm bill released Thursday becomes law…The cuts, made by leaders of the House Agriculture Committee, will total about $500 million, according to the draft legislation, which ‘streamlines current programs, enhances program integrity, and repeals five programs that have outlived their usefulness.’”

Erik Wasson reported on Friday at The Hill’s On The Money Blog that, “Lobbyists for rice and peanut farmers who opposed a Senate-passed farm bill backed a draft House version on Friday.”

And Daniel Looker reported on Friday at Agriculture.com that, “The staff of farm groups and members of Congress were still digesting the House Agriculture Committee’s draft of a Farm Bill Friday, and finding parts of it more palatable than others.”

Mr. Looker noted that, “NCGA [National Corn Growers Association] sees the House revenue program as having the possibility of influencing planting decisions. The Senate’s ARC program uses an Olympic average to set a benchmark for measuring revenue. It’s based on an average of five years of yields and prices, with the high and low years thrown out. The House version puts a target price into that calculation.”

American Soybean Association (ASA) President Steve Wellman noted on Friday that, “A key priority for ASA throughout the farm bill deliberations has been to ensure that commodity policies do not distort farmers’ planting decisions, and we look forward to working with the House to ensure that soybeans are treated equitably and that planting decisions would not be distorted by farm programs offered under the House bill.”

In addition, David Rogers reported yesterday at Politico that, “To look behind the numbers for the House and Senate farm bills is to see rival visions of the government’s role in agriculture — each playing on the different ambitions and anxieties of farmers themselves.

“The centerpiece for the Senate is a new taxpayer-financed ‘shallow-loss’ program that reduces deductibles on crop insurance and can be tailored to each farm’s output. This plays to the ‘Captain of My Ship’ side of farming, and for Midwest corn and soybean producers — already riding a wave of high prices — it’s a bold, enticing view.”

Mr. Rogers explained that, “The House draft — to be marked up this week by the Agriculture Committee — bears the imprint of the South, which not only lost Tara but lives in fear of price swings on world markets and having no safety net.

“The House knocks the pins out from under the Senate by taking away the individual farm-level option in its shallow-loss plan. This cuts participation by half. And all those bold ‘captains’ revert to their farmer’s fatalism — embracing government-set price supports, the House’s old-style protection against deep losses if markets again plunge below production costs.

Among individual crops, corn and soybeans fare far worse in the House bill than in the Senate’s. Wheat does better on balance, but the biggest winners are Southern crops like rice and peanuts. The $14 per hundredweight reference price for rice is higher than many expected given that growers can also update their yields — an important concession to rice. Subsidies for peanut producers actually go up relative to the Congressional Budget Office’s 2012 baseline — while most other commodities go down.”

A recent update from the Oklahoma Association of Conservation Districts (OACD) noted that, “Leaders of the [OACD] today expressed support for the Conservation Title contained in the proposed version of the Farm Bill released yesterday by Congressman Frank Lucas, Chair of the House Agriculture Committee and Congressman Collin Peterson, Agriculture Committee Ranking Member. According to Joe Parker, President of OACD, the proposed conservation language will continue providing farmers and ranchers the tools they need to practice good conservation on the land.”

The National Milk Producers Federation indicated on Friday that, “The draft farm bill language released yesterday afternoon by the House Agriculture Committee includes the key components of the Foundation for the Future dairy policy reform package that was developed by the National Milk Producers Federation (NMPF) over the past three years…‘[T]he primary elements of NMPF’s comprehensive dairy reform package are incorporated into this legislative draft, for which we are grateful,’ said Jerry Kozak, President and CEO of NMPF.”

On Friday, the Congressional Budget Office noted that, “[The Senate passed Farm Bill] S. 3240 would amend and extend a number of major programs administered by the U.S. Department of Agriculture (USDA), including those addressing farm income support, food and nutrition, land conservation, trade promotion, rural development, research, forestry, energy, horticulture, and crop insurance.

“When combined with estimated spending under CBO’s baseline projections for those programs, CBO estimates that enacting S. 3240 would bring total direct spending for those USDA programs to $970 billion over the 2013-2022 period—$23.1 billion less than we project would be spent if those programs were continued as under current law.”


Animal Agriculture

Rod Smith reported on Friday at Feedstuffs Online that, “Oscar Mayer Co. has announced it will begin working with its pork suppliers to source pork from suppliers whose systems do not use gestation stalls for sows but rather use housing systems that can ‘safely’ allow for gestating sows to have ‘greater comfort and movement.’”

A recent editorial posted at the at the Tallahassee Democrat Online stated that, “Among other things, the Egg Products Inspection Act Amendments of 2012 (S. 3239/H.R. 3798) would replace conventional cages with colony housing that provides more space; require that hens be provided with extras such as perches, nesting boxes and scratching areas; and mandate labeling on egg cartons to let consumers know the method used to produce the eggs…The cost is relatively small — egg producers estimate that the changes could add 10 cents to the cost of a dozen eggs by 2025. The benefit is great.

The U.S. House should back this amendment, and the Senate should get back on board. Just knowing that the animals that produce our food are being treated humanely might even make those deviled eggs taste a bit better.”


Agricultural Economy

Gregory Karp reported on Friday at the Chicago Tribune Online that, “In the spring of last year, Illinois corn farmers were wringing their hands and waiting — waiting for the rain to stop so they could plant their crops before it was too late. Today, Illinois corn farmers are again wringing their hands and waiting — waiting for the rain to come before it is too late.

“As Illinois and much of the Midwest endure record heat, the Land of Lincoln is baked to bone dry. Corn leaves are starting to roll up to protect themselves atop dry, cracked soil. For corn farmers in particular, heat and drought couldn’t come at a worse time — a critical point in the development of an ear of corn, a point that will determine a decent crop or a bad one. Crops for some downstate farmers are already too far gone; they’ve plowed the fields under.”



Mark Landler reported in today’s New York Times that, “With a torpid job market and a fragile economy threatening his re-election chances, President Obama is changing the subject to tax fairness, calling for a one-year extension of the Bush-era tax cuts for people making less than $250,000.

“Mr. Obama plans to make his announcement in the Rose Garden on Monday, senior administration officials said. The ceremony comes as Congress returns from its Independence Day recess, and as both parties and their presidential candidates head into the rest of the summer trying to seize the upper hand in a campaign that has been closely matched and stubbornly static.”

Today’s article noted that, “White House officials insisted that Monday’s move was more than politics. They said it would ease anxiety over the ‘fiscal cliff’ — the combination of tax increases and automatic spending cuts that are scheduled to kick in at the end of this year. That one-two punch, economists say, could deal a heavy blow to an already tender economy unless the White House and Congress work out some kind of compromise.”

The Wall Street Journal editorial board noted in an opinion item from today’s paper that, “If Congress doesn’t act to change the law, tax rates on income, capital gains, dividends and estates are all scheduled to rise in January. (See the nearby table.)  The best policy would make the Bush-era tax rates permanent pending a major tax reform. But at least a one- or two-year extension of the Bush rates would avoid a nasty hit in the near term to a still-vulnerable economy.

“Business investment is slowing again, and the indices for manufacturing and services have been declining perilously close to contraction territory. The prospect of a nearly 60% increase in the capital gains tax and a tripling of the dividend tax only heightens investor worry and accelerates the flight into Treasurys or the financial sidelines.”

Keith Good