FarmPolicy

Farm Bill; Biofuels; CFTC Issues; and, Food Security

Farm Bill Issues

Vicki Needham, Erik Wasson, Bernie Becker and Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “The House Agriculture Committee starts work Wednesday [markup will be broadcast on C-SPAN3] on a $900 billion farm bill that faces plenty of hurdles in the lower chamber.

“Agriculture Chairman Frank Lucas (R-Okla.) said Tuesday afternoon that fewer amendments than expected had been filed to the bill that represents a compromise between himself and ranking member Collin Peterson (D-Minn.).

“‘I have a lot of new underclassmen so they may have a hard time getting their work done ahead of time,’ he said.”

The update added that, “Lucas predicted that he and committee experts ‘may have a long night ahead of us’ evaluating what’s being offered.

“The markup could wrap up Wednesday but will probably leak into Thursday.”

“There is no sign yet that the bill is coming to the floor,” The Hill item noted.

An update posted earlier this week at The Hill Online noted that, “Agriculture Committee Chairman Frank Lucas (R-Okla.) faces long odds in his effort to move a farm bill through his panel, onto the House floor and ultimately to President Obama’s in-tray this year.

“Lucas is marking up his farm measure Wednesday. The good news for Lucas is that Rep. Collin Peterson (D-Minn.), ranking member on the Ag Committee, backs the bill. So the chances are good that the panel will clear it this week.

“But whether it gets to the House floor is another matter.”

Chairman Lucas commented on the Farm Bill process yesterday on the Agriculture Today radio program (Red River Farm Network).  To listen to a report by Mike Hergert from yesterday’s Agriculture Today program, just click here (MP3- 1:29).

Meanwhile, Daniel Newhauser reported today at Roll Call Online that, “Without even a committee markup, the House farm bill has caused intraparty tensions to flare up among both Democrats and Republicans, who are primarily squabbling over how much money should be allotted for food stamps.

“So it is no small wonder that House leaders have been reticent to bring the bill to the floor. Nonetheless, all eyes are on what could be a marathon Agriculture Committee markup today to determine the way forward.”

The Roll Call article explained that, “But, of course, there is a chance the bill never gets there [to the House floor]. In that case, Lucas and Peterson said they are considering bypassing floor consideration and going straight to a conference with the Senate, which already passed a farm bill along bipartisan lines.

“Peterson, however, noted that it is unlikely Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) would allow that. A GOP leadership aide confirmed that House leaders are not considering that option right now. Worth noting is that GOP leaders did resort to a similar course on the transportation reauthorization bill.

“Another option would be to pass a short-term extension of the current farm bill and consider a long-term solution next year.”

Bloomberg writer Alan Bjerga reported yesterday that, “‘Leader Cantor supports Chairman Lucas in his markup of the farm bill,’ Laena Fallon, a spokeswoman for the Virginia Republican, said in an e-mail. Cantor’s office hasn’t listed a farm bill as a priority in a memo outlining his July schedule.

“While Congress has shown that it can pass legislation — it approved a highway-spending bill last month — the House leadership delayed committee consideration of a farm law for two weeks, in order, it said, to debate the annual agriculture appropriations bill. That spending proposal too has been delayed.”

In addition, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “A member of the House Agriculture Committee told farmers near Capitol Hill on Tuesday that it’s ‘highly likely’ the House farm bill doesn’t see a floor debate and instead goes straight from committee to conference negotiations with the Senate.

“One possible scenario for the farm bill could be that its potential savings provides leverage during the lame-duck session to ensure its passage even if the House is divided on the legislation.

“Freshman Rep. Bob Gibbs, R-Ohio, who is a farmer and member of the House Agriculture Committee, updated members of the American Soybean Association on Tuesday about the House version of the farm bill, which will be marked up in committee on Wednesday.”

Mr. Clayton pointed out that, “A big question following the House Agriculture Committee markup will be exactly when the House might debate the bill. The House has three weeks left until its August break. After that, the House is only scheduled to be in session a handful of days this fall before the presidential election. That offers a narrow window to get a bill passed.

“Along with that, House leaders likely wouldn’t bring a farm bill to the floor if Republicans are divided on the legislation. House Republicans were divided over the transportation bill this spring, so that bill never saw a floor debate until House members voted on a final piece of legislation hammered out between House and Senate leaders.

“‘That scenario would be highly likely in the farm bill,’ Gibbs said.”

More specifically on SNAP funding issues, Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Rep. James Clyburn (D-S.C.) on Tuesday became the highest-ranking House Democrat to come out against the 2012 farm bill.

“Clyburn, the third-ranking member of the caucus, joined a liberal press conference to denounce the farm bill, which will be marked up in the Agriculture Committee on Wednesday…[C]lyburn called the bill an ‘abomination’ because it contains $16 billion in cuts to food stamps. He also criticized it for being too generous to agribusiness.”

Mr. Wasson added that, “House Minority Leader Nancy Pelosi (D-Calif.) and Minority Whip Steny Hoyer (D-Md.) have not joined the liberal wing of the caucus in denouncing the bill, although they have said they are concerned about the food stamp cuts. The top leaders have also praised Peterson for moving a farm bill forward.”

Congresswoman Rosa DeLauro (D., Conn.) also spoke out yesterday against the proposed cuts to SNAP, while House Ag Committee Member Jim McGovern (D., Mass.) tweeted yesterday that, “This Farm Bill literally takes food out of the mouths of poor seniors, women & children. These immoral cuts are wrong & we will fight them.”

David Rogers reported yesterday at Politico that, “Food stamps are fast becoming a flash point for the House farm bill this week — but also an increasingly partisan, even racially tinged debate in Congress over the future of the social safety net in these hard economic times.

“The politics are explosive enough that Republican farm bill proponents are working now to tamp down any further nutrition cuts demanded by conservatives on the House Agriculture Committee, which will take up the bill on Wednesday. At the same time, Assistant Democratic Leader Jim Clyburn stepped into the fray Tuesday, warning that the $16.5 billion in food stamp savings are already an ‘abomination,’ but ‘I stand ready to do whatever I can to assist in this discussion.’”

Mr. Rogers noted that, “Lucas signaled to POLITICO that he will oppose further reductions from SNAP in the committee Wednesday, and rank-and-file Republicans said they had been warned that a ‘bloody’ markup would hurt the chances of getting a bill called up on the floor. As it is, Republican leadership has yet to commit itself, but if Lucas can report a bipartisan product, the pressure will build.”

Also yesterday, both the American Farm Bureau Federation and the National Farmers Union conveyed Farm Bill priorities to the House Agriculture Committee.

With respect to dairy issues, a news release yesterday from the Dairy Business Association stated that, “The Wisconsin Dairy Business Association is 100% behind an amendment offered by Rep. Bob Goodlatte (R-VA 06) and Rep. David Scott (D-GA 13) that will provide a safety net for Wisconsin’s dairy farmers without forcing them to participate in a supply management program. Mark Stephenson, PhD, Director of Dairy Policy Analysis at the University of Wisconsin, Madison has confirmed that this alternative will result in a reduction in milk price volatility in dairy markets, without limiting the growth of the dairy industry.”

Meanwhile, a letter to House Ag Committee Members from several organizations yesterday indicated that, “As representatives of food processors, retailers, restaurateurs, consumers and taxpayers, we respectfully ask you to support the bipartisan Goodlatte/D. Scott amendment that will establish support for dairy farmers without mandating that they participate in a new government dairy ‘supply management’ program.”

A news update from the National Council of Farmer Cooperatives (NCFC) stated that, “[NCFC] today expressed its strong opposition to a proposed amendment to the House Agriculture Committee farm bill that would change key components of the dairy reform package contained in the bill, costing taxpayers money and jeopardizing the livelihoods of producers across the country.

“The amendment, offered by Representatives Bob Goodlatte (R-Va.) and David Scott (D-Ga.), would effectively separate participation in the market stabilization program from other parts of the dairy program contained in the Federal Agriculture Reform and Risk Management (FARRM) Act.”

Meanwhile, a letter to Representatives yesterday signed by 73 organizations called on the Ag Committee to reverse cuts to Rural Development programs.

And Dow Jones writer Ian Berry reported yesterday that, “Provisions in a pending U.S. House farm bill that would accelerate the review process for genetically modified crops are raising objections from environmental groups and a major grain industry organization.”

An update posted yesterday at the farmdoc daily blog (“First Draft of New House Farm Bill”) by Agricultural Economists Carl Zulauf, Gary Schnitkey and Nick Paulson indicated that, “On July 5, 2012, the U.S. House Committee on Agriculture released a discussion draft of the 2012 Farm Bill. The Bill’s title is the Federal Agriculture Reform and Risk Management Act (FARRM). This article summarizes provisions in FARRM that concern the safety net for U.S. crops: The provisions are in Title I, Commodities and Title XI, Crop Insurance. The article also compares FARRM with the 2012 Farm Bill recently passed by the U.S. Senate.”

Biofuels

Zack Colman reported yesterday at The Hill’s Energy Blog that, “The renewable fuel standard (RFS) for transportation fuel is becoming another proxy battleground between Republicans and Democrats in the renewable energy debate, as the parties demonstrated Tuesday during a House Energy and Commerce subcommittee on Energy and Power hearing.

“Enacted by the Energy Policy Act of 2005, the Environmental Protection Agency-administered RFS requires 36 billion gallons of renewable fuel to be blended into transportation fuel by 2022.”

Mr. Colman noted that, “Rep. Mike Pompeo (R-Kan.) likened the RFS to the $535 million federal loan guarantee given to the failed solar panel-maker Solyndra, calling the incident ‘the absolute danger of intervention in the energy market.’

“‘Why aren’t my constituents screaming for E85 [gasoline with 15 percent ethanol by volume] if it’s such a good thing?’ a bellicose Pompeo asked a witness.   ‘You’re talking about a mandate.’”

Yesterday’s article added that, “Republicans, environmentalists and traditional oil-and-gas producers have lined up to repeal or change the RFS — all for different reasons.

“Environmentalists claim the RFS is a mandate for corn ethanol that has driven up global food prices, and that even cellulosic biofuels — advanced biofuels made from sources such as algae — would create environmental sustainability problems if produced at the commercial scale.

“Republican lawmakers and gas firms have pilloried the RFS and wondered aloud why new-found, domestic sources of liquefied natural gas have not garnered more support as a transportation fuel when ‘we are so adept at discovering and manufacturing’ it, as Rep. Joe Barton (R-Texas) put it.”

CFTC Issues

Jacob Bunge, Jerry A. Dicolo and Josh Dawsey reported in today’s Wall Street Journal that, “A deepening scandal in the futures-trading business has left an elder statesman of the industry hospitalized after a suicide attempt and regulators seeking to find out what happened to about $215 million of customer money allegedly missing from his firm.

“The firm, Peregrine Financial Group Inc., filed Tuesday evening in Chicago to liquidate under Chapter 7 of the bankruptcy code.

“Earlier in the day, the Commodity Futures Trading Commission filed a lawsuit in federal court in Chicago accusing Peregrine Financial and its founder, Russell Wasendorf Sr., of fraud, customer-funds violations and making false statements. The CFTC said shortfalls may have been present since at least February 2010. A spokeswoman for the FBI said it has also begun an investigation into the company, also known as PFGBest. Brokerage and retail customers had their accounts frozen as regulators began looking into the company’s books.”

A news release yesterday from the Senate Ag Committee indicated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today issued the following statement regarding the failure of financial firm Peregrine Financial Group and the reported hundreds of millions of dollars in customer funds that are potentially missing.

“‘It is absolutely imperative that there is accountability in the futures markets so customers can feel safe knowing their money is protected,’ Chairwoman Stabenow said. ‘We are working closely with regulators to find out what happened because farmers and small businesses need assurances that their funds are safe from reckless or criminal activity. Congress also has a responsibility to assess current customer protections and strengthen them where needed to put a stop to executives misusing customer funds in the future.’”

And, Ben Protess reported yesterday at The New York Times Online that, “Regulators on Tuesday took a major step toward reining in risky Wall Street trading, approving new rules aimed at preventing a repeat of the financial crisis.

“The rules, stemming from the Dodd-Frank financial regulatory law, will give regulators more control over the $700 trillion derivatives industry, an opaque business that was blamed for many of the ills of the 2008 crisis. While regulators have spent more than two years retooling the sector, the latest reforms laid crucial building blocks for the remaining aspects of the Wall Street overhaul.”

Food Security

On Monday, USDA’s Economic Research Service released a report, “International Food Security Assessment, 2012-22,” which noted in part that, “Food security is estimated to improve slightly in 2012 as the number of food-insecure people in the 76 countries covered in this report declines from 814 million in 2011 to 802 million in 2012. The share of the population that is food insecure remains at 24 percent. Over the next decade, the share of the population that is food insecure is projected to decline from 24 percent in 2012 to 21 percent in 2022, but the number of food insecure people is projected to increase by 37 million.”

And Bloomberg writer Alan Bjerga reported yesterday that, “An abundant food supply doesn’t guarantee that a nation will have the healthiest or safest diet, according to a study of global food security.

“The U.S., Denmark, Norway and France are the world’s most ‘food-secure’ countries in terms of availability, cost and nutrition value while Israel, 22nd overall, had the best quality and safety, according to the study released today by the Economist Intelligence Unit. Germany, while 10th in food security, ranked 21st in quality, measured by nutrient content and balance. The Democratic Republic of Congo ranked last.

“The findings are part of a global food-security index developed to measure hunger worldwide and identify areas for improvement. World food prices may rise this month after a drought in the U.S. Midwest wilted crops, the United Nations forecast. Rapid price gains contributed to more than 60 food riots around the globe from 2007 to 2009, while nutrition costs that peaked in April 2011 sparked revolutions in North Africa.”

Keith Good

Posted by Keith Good • July, 11, 2012 • 4:04 am