FarmPolicy

Farm Bill; Ag Economy; and, Trade

Farm Bill: Perspective From Chairman Lucas- Policy Issues- Budget

Ron Hays of the Radio Oklahoma Network spoke with House Agriculture Committee Chairman Frank Lucas (R., Okla.) on Friday about the latest Farm Bill developments.  A summary and audio replay of their discussion is available at The Oklahoma Farm Report Online.  An unofficial FarmPolicy.com transcript of the Ron Hays interview with Chairman Lucas is available here.

Mr. Hays noted that, “With the political conventions behind us and Congress set to go back to Washington for eight legislative days before the end of September, [Chairman Lucas] has a lot on his mind.”  Mr. Hays quoted Chairman Lucas as saying, “I am counting on my members coming back in from the countryside and explaining to the elected leadership, on both the majority and minority sides, that it’s important that we have a comprehensive farm bill, that the certainty that a farm bill provides in drought years and in non-drought years is critically important. My concern is, though, I’m not seeing that kind of response.  The conversations I’m having with my colleagues, the interaction I’m having with folks across the country, I’m not seeing that fired up concern that will help drive this process.”

Mr. Hays pointed out that, “Some members of Congress are calling for the passage of a stripped down, short-term extension of the current farm bill even if it is only for a few months. That would allow for some disaster relief and would push a comprehensive farm bill into the next Congressional session. Lucas said he believes it would be even more difficult to pass such a short-term farm bill. He said he is seeing more support for a one-year extension and, if that’s all he can get, it may not be such a terrible idea. But even that is not a sure deal as some of his colleagues in the House and Senate are clamoring for reforms now. Lucas said his is not giving up on the 2012 Farm Bill and will keep pushing it forward.

“Lucas said the difficulty in garnering support from other farm state legislators is that even with the drought, some producers have not yet been sufficiently impacted. He said high corn prices would generate large crop insurance checks for producers experiencing the drought. And, he said, high cattle prices are pacifying the livestock industry somewhat.”

Friday’s update added that, “There has been some talk that behind-the-scenes negotiations are being carried out between House and Senate ag leaders to do some direct conferencing to bridge differences before the House even votes on its version of the farm bill. Lucas said he is exploring all options, but there is no progress to be reported.

“Lucas said there is so much that has to be packed into the next eight legislative days. The issue of a continuing resolution to fund government activities for the next six months is overshadowing the farm bill. He also said that looming tax hikes, sequestration, and the shredding of the defense budget are taking precedence as members head back to Washington.”

Interestingly, Humberto Sanchez reported today at Roll Call Online that, “With lawmakers eager to get back on the campaign trail, Congress will seek to make quick work of a six-month stopgap spending bill, which could be the vehicle for an extension of federal farm programs set to expire at the end of the month.

“The House is on track to clear the continuing resolution this week, with the Senate expected to follow suit next week, according to House and Senate aides from both parties.

“The House could unveil the measure as soon as Monday and vote on it by Thursday.”

The Roll Call article pointed out that, “Congressional leaders could include an extension of agriculture programs, which also expire at the end of the month.

“A farm bill extension ‘is the most realistic option’ for any unrelated provisions in the CR, a Senate GOP aide said.”

“If an extension is added to the CR, it is unclear whether it would be backed by Senate Agriculture Chairman Debbie Stabenow (D- Mich.), who has led the charge to ensure that her comprehensive five-year bill is passed,” today’s article said.

Today’s article noted that, “‘We are aware that there is a need and would have to accept that an extension is much preferable to no action at all,’ [Dale Moore, deputy executive director for public policy at the American Farm Bureau Federation] said. It was unclear how short an extension would be acceptable to Stabenow and farm interests, but her measure has long been seen as a potential agenda item for the post-election lame-duck session. That could mean the issue would be before Congress again this year. Another option would be to extend the measure through March, similar to the CR.

“Congress could also seek to pass a stand-alone extension, which would put pressure on the opposing party to follow suit or be blamed for allowing the programs to expire.

“Expiration could also be a strategy in which one party seeks political gain by blaming the other party, as they vie for votes in farm states, such as Iowa.”

Dan Friedman reported on Friday at National Journal Online that, “Hopes for a five-year farm bill in the near future are fading fast. Rep. Collin Peterson, D-Minn, ranking member of the House Agriculture Committee, now thinks the only thing that will happen before the election in November will be passage of a drought-assistance package to help livestock farmers. A disaster bill passed the House before the break, but has yet to be voted on in the Senate.

“Committee Chairman Frank Lucas, R-Okla., said that barring a five-year bill, he would like to extend the current bill for a year. But Peterson does not want to discuss a year-long extension. As long as there’s no vote on an extension, there’s hope there could still be a five-year bill before the end of the year, Peterson said.”

Also, Jennifer Steinhauer reported yesterday at The New York Times Online that, “When Congress returns this week, its members will be met not by the Code Pink antiwar protesters nor by the Tea Partyers who often gathered near the Capitol last year. Instead, farmers will be out in force, rallying in support of a bill that lawmakers failed to pass before they recessed five weeks ago.

“While that unfinished bit of business threatens to cut off aid to farmers across the nation, lawmakers, fresh off their parties’ conventions, appear to favor action on other bills that emphasize their political agendas over actual lawmaking.”

Ms. Steinhauer noted that, “In the House, Republicans will vote on a bill that seeks to phase out the Department of Energy’s loan guarantee program that financed Solyndra, the bankrupt maker of solar power equipment. Republicans will also continue to pressure Senate Democrats to come up with a measure like one already passed in the House that would replace the large-scale budget cuts to the Pentagon that are set to take effect on Dec. 31 with other trims. The automatic defense cuts were the result of an agreement to raise the debt ceiling last summer, known as the sequester.”  (Reuters news provided this Fact Box overview yesterday of “pending legislation” in Congress).

The Times article explained that, “The fate of the current farm bill, which expires at the end of the month, has preoccupied many voters in agricultural-heavy states and haunted lawmakers at town hall meetings, local and state fairs and debates. In South Dakota, the farm bill was the central topic at a recent debate between Representative Kristi Noem and her Democratic challenger, Matt Varilek.

“Over the summer, the Senate passed a bipartisan five-year farm bill that the House declined to take up. House leaders also refused to consider their own Agriculture Committee’s sweeping farm measure, instead jamming through a short-term $383 million package of loans and grants for livestock producers and a limited number of farmers. Senate leaders declined to take action on that measure because they said it was too limited, a view shared by many farmers.”

The New York Times article indicated that, “[House Speaker John Boehner (R., Ohio)] lacks enough votes to pass a bill because Democrats dislike the $16 billion in cuts to nutrition programs, including food stamps, proposed in the House committee’s bill. And many conservative Republicans would like to see more cuts over all in the measure.

“According to local news reports in places like South Dakota and Iowa, members of Congress have told their constituents that they anticipate a one-year extension of the current bill. But House and Senate officials said last week that there was no clear path to passage and that negotiations over the summer were not fruitful.”

An update on Friday from Inside U.S. Trade indicated that, “Passing a one-year extension before Sept. 30 is not really a feasible option either, lobbyists said. This is both because of the short time window and because Congress is unlikely to approve a straight extension of a farm bill that contains direct payments, which are subsidies paid to landowners whether or not they actually farm. These payments have become viewed as politically indefensible by the majority of stakeholders.

“But conversely, trying to extend the farm bill by one year without direct payments would lead to an outcry from farmers who currently depend upon them, lobbyists said. The Senate and House farm bill proposals both ax direct payments, but they also replace them with a reformed safety net that would not exist in the case of an extension.”

David Rogers reported yesterday at Politico that, “Hundreds are slated to rally Wednesday at the Capitol, demanding action on a long delayed, five-year farm bill. But August has passed with no real progress, and coming out of Tampa the overwhelming sense is that the fix is in — for what could be described as a monumental legislative failure by this Congress.

“The Senate passed its farm bill in June. The House Agriculture Committee followed within weeks. But two months later, the GOP leadership is paralyzed, torn between doing something for the rural economy vs. trumpeting the party’s attacks on food stamps as a new form of welfare under President Barack Obama.

“Speaker John Boehner (R-Ohio) seems most intent on stalling for time until after the election and then pushing through a one-year extension of current policy in the turmoil of the lame-duck session. ‘A ship trying to sail on yesterday’s wind’ was [GOP Vice Presidential candidate Paul] Ryan’s artful putdown of Obama. Yet , House Republicans aren’t even allowing their farm bill out of the harbor.”

Mr. Rogers explained that, “A short-term disaster aid package may still be salvaged, but House Agriculture Committee Chairman Frank Lucas (R-Okla.) is sounding grim. ‘I don’t know that there’s been a huge amount of movement,’ he told POLITICO. And the same pessimism is echoed by Minnesota Rep. Collin Peterson, the ranking Democrat on the panel.

“‘It’s a big failure. I just don’t see any good scenarios,’ Peterson said. ‘I think something happened in Tampa and a decision was made. That’s how I read it.’

“November will decide if there is any political price. And the supreme irony of this oft-ignored debate is it could come back to bite in the very same Midwest and Great Plains states that figure now in the battle for the White House and Congress.”

Yesterday’s Politico article added that, “Obama is not without blame for the debacle. Perhaps out of fear of the food stamp welfare charge, the White House has seemed painfully slow to recognize the import of the farm bill impasse — and lost opportunity for reform. But with Iowa in play, the president has begun to step up, and the state clearly figures heavily in his reelection strategy.”

The AP reported yesterday that, “The current farm act expires at the end of September. House Republican leaders are wary of bringing the bill to the floor. It now appears that Congress will at most opt for a temporary extension of the old bill, including drought aid for livestock producers whose assistance programs expired last year.

“But it’s not certain lawmakers will do even that. Without a formal extension, food stamp and other nutrition programs would continue to function beyond Sept. 30. Most farmers would not be affected because the current farm bill covers 2012 crops regardless of when they are harvested.

“The food and farm legislation has bedeviled House leaders because many GOP conservatives want deeper cuts to food stamps than Democrats, whose votes are needed to pass the measure, are willing to go for.”

Meanwhile, DTN Ag Policy Editor Chris Clayton reported on Friday (link requires subscription) that, “Major farm groups pushing for a new five-year farm bill wrote Senate leaders Friday asking them not to pass a stand-alone disaster bill.

“In a news release, the American Farm Bureau stated the 13 farm groups wrote Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., asking them to ‘refrain from supporting’ the disaster bill the House passed just before adjourning for the August recess.”

An update on Friday at the National Sustainable Agriculture Coalition Blog noted that, “A separate disaster bill is not needed and will only serve to defeat a new farm bill.”

And more specifically with respect to the budget and sequestration specifics, Jeremy Herb reported on Friday at The Hill’s Defense Blog that, “Mitt Romney accused President Obama of stonewalling over potential cuts to the military after the White House said Friday that it would miss its deadline to provide a report on the budget cuts under sequestration.

“Romney joined in widespread Republican criticism of the White House for not providing the report, legally required to be delivered to Congress by Friday, on how the across-the-board sequestration cuts of $109 billion for 2013 would be implemented.”

Agricultural Economy

The “Washington Insider” section of DTN reported on Friday (link requires subscription) that, “Russian Deputy Agriculture Minister Ilya Shestakov says Group of 20 nations will hold a food summit in October to discuss the rapid rise in global grain prices. Shestakov said the meeting would not involve a discussion of possible emergency intervention measures, but rather an analysis of the situation. He said that by the time of the meeting, more detailed figures on the state of the market would be available.

“The intention may be to analyze the situation, but if grain and oilseed supplies this autumn become extraordinarily tight, there will be greater pressure on government representatives to undertake actions that could meet the definition of ‘emergency intervention measures.’”

Marshall Eckblad and David Kesmodel reported on Saturday’s Wall Street Journal that, “Hog prices fell to their lowest close in nearly two years, the latest sign of how a drought is battering the pig-farming industry.

“Prices are declining as farmers thin their herds so they can reduce animal-feed costs, which is resulting in a rise in pork-industry supplies. The drought has eroded the nation’s corn and soybean crops, triggering record prices for the corn and soybean meal that hog farmers feed their swine” [see related graph].

Rick Barrett reported last week at the Milwaukee Journal Sentinel Online that, “Blistered by the drought, Wisconsin farmers face critical decisions this fall, including whether to remain in business or quit and do something else for a living…Livestock and dairy farmers also could be forced to quit if the price of animal feed – because of the drought – becomes more than they can afford.”

Trade

Steven Lee Myers and David Herszenhorn reported in yesterday’s New York Times that, “Secretary of State Hillary Rodham Clinton pledged Saturday that the United States would soon lift cold-war-era trade sanctions on Russia, but she did not address human rights legislation in Congress that has so far stalled passage, infuriated the Kremlin and become an unexpected issue in the American presidential race.

“Attending the annual Asia-Pacific Economic Cooperation summit meeting here [Russia] in place of the campaigning President Obama, Mrs. Clinton welcomed Russia’s accession to the World Trade Organization last month. And she said that the United States must now normalize trade relations so that American businesses can reap the benefits of Russia’s membership, including lower tariffs for American products.”

Yesterday’s article added that, “Although the sanctions included in the 1974 law known as Jackson-Vanik are waived each year and have no practical effect, they violate W.T.O. rules, which could allow Russia to retaliate against American businesses.

“The effort to grant Russia normal trade status, however, has become entangled in legislation that would punish Russian officials accused of abusing human rights, denying them visas and freezing their assets. That has raised doubts that any agreement on lifting the Jackson-Vanik provisions can be reached before the November election.”

And Nick Miroff and William Booth reported yesterday at The Washington Post Online that, “Trade between the United States and Mexico is surging, up 17 percent in 2011 to a record $461 billion, as Mexico vies with China to become America’s second-largest trading partner after Canada. China and the United States did $502 billion in trade last year.

“The growing middle class that is fast becoming Mexico’s majority is buying more U.S. goods than ever, while turning Mexico into a more democratic, dynamic and prosperous American ally.”

Keith Good

Posted by Keith Good • September, 10, 2012 • 3:14 am