FarmPolicy

Farm Bill; Budget; Crop Insurance; and, the Ag Economy

Farm Bill Issues

The National Journal Need-To-Know Daily Email reported yesterday that, “It’s looking like the Sept. 30 deadline will pass without a new farm bill. Most agricultural leaders are saying no bill will pass before the election. ‘Now we’re not going to have the time to get this bill done before the election even if we get it through the House,’ House Agriculture Committee ranking member Collin Peterson, D-Minn., said at a rally in support of the bill. ‘If we get it through the house and into conference, we can work on this in October,’ he said. ‘And when we come back after the election we can come back ready to move this thing.’”

Elahe Izadi reported yesterday at National Journal Online that, “So, who’s fault is it that a farm bill isn’t coming to the floor for a vote in the House? Like with nearly everything in Congress, it depends on who you ask.

“To hear Rep. Steve King, R-Iowa, tell it, it’s House Minority Leader Nancy Pelosi. In a statement released yesterday, King, who sits on the House Agriculture Committee, said Pelosi is ‘encouraging her Caucus to oppose the bill because of its reforms of fraud and abuse in the SNAP program, making it difficult to get support from the other side of the aisle.’”

Yesterday’s article noted that, “For her part, Pelosi all but accused King of living in an alternate universe, saying to reporters today, ‘What could he be thinking? Does he still think I’m speaker? Does he think the Democrats still have 218 votes to pass the bill?’

“She charged it was Republican leadership blocking the bill. ‘They have well over the votes they need for the bill,’ Pelosi said. ‘There would be Democrats voting for it as well. But they can’t vote unless it comes to the floor.’”

Rep. Pelosi also noted yesterday that, “But the bill came out of the committee with bipartisan support, with the idea then it would go to conference with the Senate, which it already passed its bill, and that we would have a farm bill. And it was only after that, that there seemed to be a silence of — well, it wasn’t on the agenda for the week we thought it was.

“And then it wasn’t on the agenda for the next week. And then it became clear that there was a major kicking of the farm bill down the road going on here. So this is really unfortunate.

“I hearken back five years to when we put the farm bill together. It’s hard. It’s a very difficult — it’s a complicated bill. And that the committee can come out with bipartisan support to bring something to the floor, to move the process forward, to take it to conference, and work out some of the differences within the bill is what we come here to do.”

In a tele-news conference yesterday, Nebraska GOP Senator Mike Johanns noted that, “Unfortunately there is increased discussion in Congress that we might have to settle for a short-term extension of the current law. If this is the best that we can do at this point, and if there is no other alternative, then I’m literally faced with a decision, do I support that or not?

“The one thing I will say is I just don’t want to leave farmers out there for any period of time without a farm bill. But I really am going to work to try to get the five-year approach, get it done, have it taken care of for five years.”

Sen. Johanns added that, “The second thing I wanted to talk about is drought relief. We know the House and the Senate both recognize the need to help livestock producers. They’ve had every bit as tough a time with drought as our row crop people.

“We included this assistance in the Senate farm bill. It is there. The House passed a standalone measure just before departing for the August work period. I have said many times I was disappointed that Senator Reid chose not to allow a vote on this.

“And I do believe if this is what we come down to before we break again in October, we should take a vote on this drought relief package and get that done. That in no way would jeopardize getting a five- year bill.”

Appearing yesterday on the AgriTalk radio program with Mike Adams, Sen. Charles Grassley (R, Iowa) also reiterated his desire to get a five-year Farm Bill passed, but noted he would work for an extension of current law if the multi-year measure remained elusive (related audio available here).

However, Senate Agriculture Committee Chairwoman Debbie Stabenow, in a speech yesterday on the Senate floor, stated that she would not be supportive of a one-year extension of the Farm Bill.  The Michigan Democrat added that a short-term disaster aid package is not an adequate path forward.

Recall that earlier this week, in a news conference with reporters, Chairwoman Stabenow referenced a letter from several farm and agricultural organizations that urged Senate leaders to “refrain from supporting” any legislation resembling the House-passed disaster bill.

But Alan Silverleib reported yesterday at CNN Online that, “Kevin Smith, a spokesman for House Speaker John Boehner, R-Ohio, said he hopes the Senate will pass a livestock disaster aid bill previously approved by the House. He stressed that ‘we are still discussing options on a farm bill extension.’”

An update earlier this week at the St. Louis Post-Dispatch also noted that, “But with the prospect of defeat [on the Farm Bill], House GOP leaders are refusing to hold a vote in this abbreviated, election-year session. Barring a change of heart, Congress appears headed to a short-term extension of existing programs and passage of limited drought-relief legislation that survived the House earlier this summer.”

Christopher Doering reported yesterday at The Des Moines Register Online that, “House Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., are reluctant to call for a vote on that chamber’s bill or the one passed by the Senate because they don’t believe they have the 218 votes necessary to pass it. Republican leadership has been quiet on the farm bill since Congress returned from its five-week-long recess earlier this week.”

In a similar observation made by Minority Leader Pelosi (see above) and Chairwoman Stabenow (press conference this week) who both indicated the votes are there to pass a House Farm Bill measure, Mr. Doering noted in his article yesterday that, “But at least one agricultural official was skeptical. ‘I don’t buy the fact that they can’t get the votes, and I don’t buy the fact that they don’t have enough time,’ U.S. Secretary of Agriculture Tom Vilsack said this week. ‘How about working on Saturdays? How about working an extra week? How about working all the way to Sept. 30 until you get the job done?’”

On the Senate floor yesterday, Chairwoman Stabenow pleaded for an even lower bar, asking the GOP leadership for “just one day for Rural America.”

A news release yesterday from the National Farmers Union (NFU) indicated that, “[NFU] sent a letter today urging Congressional representatives to sign a meeting request to discuss scheduling floor time for a vote on the farm bill, which is set to expire on Sept. 30.  The request letter is being circulated by Reps. Kristi Noem, R-S.D., and Peter Welch, D–Vt.”

More specifically on dairy provisions, Brian Amaral reported yesterday at The Watertown Daily Times (N.Y.) Online that, “Rep. William L. Owens said a safety-net program for dairy farmers has started to dry up amid congressional inaction.

“The Milk Income Loss Contract, or MILC, provides payments to dairy farmers if domestic milk prices fall below a certain level.

“But support the program provides has been reduced since Sept. 1, according to Mr. Owens, D-Plattsburgh, and will be defunct if Congress doesn’t pass a new farm law by Sept. 30.”

The article pointed out that, “Mr. Owens said he would consider supporting a one-year extension of the farm bill as long as it maintained the MILC program at pre-Sept. 1 levels, but would prefer to see the full bill passed.

“Passage of the full five-year extension would actually replace the MILC program with a margin insurance program.”

Meanwhile, Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Rep. Bruce Braley (D-Iowa) filed a discharge petition on the 2012 farm bill on Thursday after procedural hurdles were overcome.

“If a majority of the House signs onto the petition, leaders will be forced to hold an immediate vote on the stalled bipartisan measure.”

Yesterday’s update added that, “On Thursday, liberal House Democrats led by Agriculture Committee member Rep. Rosa DeLauro (D-Conn.) doubled down on their opposition to the $16 billion in food stamp cuts in the farm bill, making large Democratic support elusive.”

Rep. Kristi Noem (R., S.D.), Rep. Mike McIntyre (D, N.C.), Rep. Rick Crawford (R., Ark.), and Rep. John Garamendi (D., Calif.) have all signed the petition.  A complete and periodically updated list of lawmakers who have signed the discharge petition is available here.

The American Soybean Association indicated yesterday that, “While the discharge petition advanced today by Congressman Braley is certainly an unorthodox tactic, we are now forced to support this drastic measure,” and Secretary of Agriculture Tom Vilsack called it “an encouraging sign.”

Budget

Corey Boles reported in today’s Wall Street Journal that, “House lawmakers on Thursday easily passed a $500 billion spending package, likely the last major legislation to be taken up before the November elections.

“The move takes pressure off lawmakers to act on a multiyear farm bill stalled in Congress by extending a range of nutrition and low-income programs that were in danger of expiring. Those programs are normally part of the farm bill, which is up for renewal by Sept. 30, the end of the current fiscal year.”

The article added that, “Amid disagreement over farm policy and funding, Senate Democrats and the Obama administration pushed for inclusion of the nutrition programs with the broader budget bill. The move addresses some of the more critical programs that could have been disrupted by an expiring farm bill.”

David Rogers reported yesterday at Politico that, “The Senate must still vote next week but the CR has already been embraced by Obama under a prior agreement reached between Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.).”

Mr. Rogers added that, “And in their haste, Republicans added no new provisions for American farmers, already stressed by this summer’s drought and Boehner’s refusal to call up a five-year farm bill.”

Crop Insurance

The AP reported today that, “Thousands of farmers are filing insurance claims this year after drought and triple-digit temperatures burned up crops across the nation’s Corn Belt, and some experts are predicting record insurance losses — exacerbated by changes that reduced some growers’ premiums.

“G.A. ‘Art’ Barnaby, a Kansas State University Extension specialist in risk management, estimates underwriting losses on taxpayer-subsidized crop insurance will hit nearly $15 billion this year. He expects a staggering $25 billion in crop insurance claims to be filed by growers across the nation, driven primarily by one of the worst droughts in the U.S. decades. His loss estimate is based on a loss ratio of $2.50 for every dollar paid in premium.”

Prof. Barnaby also issued a brief paper yesterday regarding crop insurance issues titled, “NASS Yield Estimates May Cause Lower Corn Indemnity Payments.”

A release yesterday from National Crop Insurance Services (NCIS) stated that, “The American Enterprise Institute (AEI) released a paper in September 2012 claiming potential costs of $20 billion per year for the Price Loss Coverage (PLC) and Supplemental Coverage Option (SCO) programs in the Congressional 2012 Farm Bill proposals. The release is apparently intended to create alarm over potentially high costs of future farm policy. Unfortunately, AEI is following the model of other farm policy critics by employing inaccurate data and failing to tell whole story.”

In part, the NCIS item pointed out that, “The expected costs of the House and Senate bills have been well documented by the Congressional Budget Office (CBO), much more experienced, capable and balanced in cost estimation than AEI. Rather than estimating the effects of an improbable price scenario, CBO uses stochastic scoring, which takes into account the probability that some years will have high costs and some years will have smaller costs over time. CBO has estimated the expected annual cost of the House bill’s PLC to be $1.6 billion per year on average over the next 10 years. CBO estimates that the expected costs of the SCO program are $300 million per year in the Senate version of the Farm Bill and $400 million per year in the House version. Combined, CBO projects that PLC and SCO are expected to cost $2.0 billion or less over the next 10 years, taking into account the probability of both high and low cost years. This is far below the $20 billion per year trumpeted by AEI.”

Agricultural Economy- Drought, Biofuels, Animal Agriculture, Nutrition

Bloomberg writer Brian K. Sullivan reported yesterday that, “The worst drought conditions in the lower 48 states expanded for the third week in a row as the level of moderate-to-worse drought hit a high for the year, the U.S. Drought Monitor said.”

Recent updates at the DairyGood.org Blog and harvestpublicmedia.org have documented some of the drought’s impact on producers.

Meanwhile, a news release this week from Rep. Chip Cravaack noted that, “Today in a letter sent to U.S. Environmental Protection Agency (EPA) Administrator Lisa Jackson, Science, Space and Technology Committee Vice Chairman James Sensenbrenner (R-WI) and Committee Member, Rep. Chip Cravaack (R-MN), question EPA’s recent decision to mandate consumers purchase at least four gallons of fuel from blender pumps that dispense both E15 and E10 gasoline-ethanol blends.”

In other developments, Tim Carman reported yesterday at The Washington Post Online that, “Of all the media outlets that have taken shots at Beef Products and its ‘lean, finely textured beef,’ the South Dakota-based company apparently feels slimed by only one: ABC and its ABC News division.

“The largest U.S. producer of ‘pink slime’ — once widely found in fast-food burgers, supermarkets and the federal school lunch program — filed a defamation lawsuit Thursday against the network, claiming it went on a campaign that cost Beef Products $400 million. Anchor Diane Sawyer and reporters Jim Avila and David Kerley are also named as defendants.”

The AP reported earlier this week that, “A federal court judge in Los Angeles upheld the constitutionality of California’s voter initiative that gives more room to egg-laying chickens in cages and other farm animals when he dismissed the case with prejudice on Wednesday.”

And Michael M. Grynbaum reported in today’s New York Times that, “Seeking to reduce runaway obesity rates, the New York City Board of Health on Thursday approved a ban on the sale of large sodas and other sugary drinks at restaurants, street carts and movie theaters, the first restriction of its kind in the country.”

Keith Good

Posted by Keith Good • September, 14, 2012 • 4:09 am