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Farm Bill; Biofuels; Budget Issues; and, CFTC

Farm Bill- Policy Issues, Political Notes

Dan Piller reported in yesterday’s Des Moines Register that, “U.S. Secretary of Agriculture Tom Vilsack said Monday that a link between federal crop insurance and conservation compliance ‘just isn’t going to happen’ in any new farm bill to be debated after the November election.

“‘I’ve talked with the (congressional) leadership and members, and there just isn’t support for it,’ Vilsack said of proposals to make conservation and environmental rules compliance mandatory for farmers to qualify for federally subsidized crop insurance.”

Mr. Piller noted that, “Vilsack, meeting with Des Moines Register editors, said the leadership of the U.S. House of Representatives has deliberately bottled up the farm bill so it can impose reductions in farm programs deeper than the $23 billion taken in the Senate bill.

“The conservation question has hung over the bill because the likely end of federal direct payments to farmers, which contained the conservation lever, would leave the USDA and other federal agencies without the force of law. The crop insurance section in the farm bill hasn’t had a conservation compliance requirement since 1996.

“‘The feeling is that some type of voluntary, incentive-based conservation system would work just as well,’ said Vilsack.”

Recall that in a conversation last month with Des Moines Register editorial board, Rep. Leonard Boswell (D., Iowa- House Ag. Comm. Member) was asked about the idea of putting conservation compliance requirements on producers in order to make them eligible for crop insurance. Rep. Boswell indicated that he thinks that idea should be discussed and noted that there is “not too much land around” that “hasn’t had conservation practices take place.”

In other executive branch news yesterday, a Department of Agriculture release indicated that, “The U.S. Department of Agriculture’s (USDA) efforts to help producers rebound from drought have touched more than one million acres of farmland across the country as nearly 2,000 producers took advantage of conservation funding targeted to drought-stricken areas by USDA’s Natural Resources Conservation Service (NRCS). NRCS made more than $27 million available to farmers and ranchers to make conservation improvements, spurring recovery and ensuring lands are more drought resistant in the future.

“‘This tremendous response reflects the severity of this year’s drought conditions,’ Agriculture Secretary Vilsack said.  ‘The level of producer participation is also a testament to the hard work of USDA and other federal agencies to help farmers and ranchers weather one of the worst droughts in decades.’”

In other news regarding crop insurance, an update yesterday from National Crop Insurance Services stated that, “As the claims come in from one of the worst droughts in decades, farmers and ranchers across the country are receiving indemnity payments for the losses they have incurred. To date, more than $2.6 billion has been sent to farmers. And while crop insurance can be purchased to protect 128 different crops, the top five crops that suffered the most damage from the 2012 drought are corn, wheat, cotton, soybeans and Pasture Rangeland and Forage.

Farmers will invest more than $4.1 billion to purchase more than 1.2 million crop insurance policies,” and “Those policies protect more than 281 million acres of eligible crops.”

In other developments, Sen. John Boozman (R., Ark.- Sen. Ag. Comm. Member) was interviewed yesterday on KASU (Arkansas State University) radio; and during the conversation, Sen. Boozman was asked about the stalled Farm Bill.  To listen to this portion of yesterday’s KASU radio interview, just click here (MP3- 1:14).

Meanwhile, an article posted yesterday at The Scranton Times-Tribune (Pa.) noted: “Pointing to his ‘independent voice’ in Washington and leadership role on issues that affect the state and country, U.S. Sen. Bob Casey made a case for his re-election on Monday.

“The Scranton Democrat [and Sen. Ag. Comm. Member] told The Times-Tribune editorial board that one of the biggest differences between him and his Republican opponent, Tom Smith, is his ability to work to get things done rather than addressing an issue with an unwillingness to compromise.”

The article added that, “[Sen. Casey] blamed the Tea Party members in Congress with blocking progress on a highway/transportation bill and a farm bill.”

Also, David Catanese and Scott Wong reported yesterday at Politico that, “The latest evidence Pennsylvania Democrat Bob Casey is in a much tighter spot than he should be: Senate Majority PAC is coming to the rescue. The Smart Media Group reported Tuesday that the Democratic-aligned super PAC has placed a $515,000 buy in the Pittsburgh market for the final week of the campaign against self-funding tea party insurgent Tom Smith.”

More broadly on the issue of which party may control the U.S. Senate after November’s election, Stuart Rothenberg noted yesterday at Roll Call Online that, “One year ago, Republicans had every reason to believe that they were poised to net at least four Senate seats in November and gain control of the chamber in the next Congress.  A month ago, on the other hand, Democrats had reason to be confident that even if they lost a seat or two, their party would more likely than not retain control of the Senate in the next Congress.

But now, with the presidential race tight and polls contradictory, this year’s fight for the Senate is anything but clear.”

Recall that at least one lawmaker has suggested that if the Senate were to change to GOP control, perhaps the legislative branch would start over on the Farm Bill process in the next Congress.

Caroline Henshaw reported yesterday at the Dispatch Blog (Wall Street Journal) that, “Delays passing the latest U.S. farm bill shows the waning influence of the country’s traditionally powerful agriculture lobby as concern over rising world food prices grows, according to Paul Morris, executive director of Australia’s agricultural forecasting agency.”

The update noted that, “Traditionally, U.S. groups have wielded significant political clout, as farmers form significant voting blocks in several U.S. swing states. But Mr. Morris, who heads up the Australian Bureau of Agricultural and Resource Economics and Sciences, or Abares, said the impasse over the bill shows that this is changing.

“‘It’s quite telling that they weren’t able to push that through,’ he told The Wall Street Journal. ‘At the moment they’ve got some big issues with the economy that are maybe overshadowing the issues in the farm sector.’”

In developments yesterday on Capitol Hill, Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House briefly gaveled into session on Tuesday morning for the start of the fifth week of pro forma sessions, and as usual, the presiding Republican blocked a Democrat from speaking by quickly adjourning.

“But Tuesday’s meeting could be a sign that Democratic attempts to talk on the House floor and call on the House to return to work might be winding down.”

Rep. Betty McCollum (D., Minn.) tweeted yesterday that, “#GOP inaction on a farm bill is affecting farmers nationwide!”  Rep. McCollum linked to a recent AP article that explained how the stalled Farm Bill was negatively impacting the U.S. dairy sector.

And The Cleveland Plain Dealer recently endorsed Rep. Bob Gibbs (R., Ohio- House Ag. Comm. Member) for re-election and noted that, “[Rep. Gibbs] broke with Republican Party leaders to oppose the House version of the farm bill because it preserved outdated crop subsidies, and he won’t rule out raising more federal revenue — through tax reform — as part of a deficit deal.”

And in news regarding nutrition issues, The Des Moines Register editorial board opined yesterday that, “About 46 million lower-income Americans, including 400,000 Iowans, rely on this program [SNAP], also known as food stamps. An Iowa family receiving an average monthly benefit of $262 is not buying liquor or cigarettes or shoes with the public money. The family is buying food…Yet this assistance is in jeopardy as Congress considers cuts to the farm bill.”

The Register added that, “During a political season, everything from welfare to Medicaid to food stamps is subject to criticism. Some point to the fact that more people are using food stamps under President Barack Obama than under any president in history. The truth is the number of recipients using the program was already growing when Obama took office. The economy was weak and unemployment was increasing. More people met the federal income requirements and qualified to receive help.

“And it is good they received that help. It was also good for farmers, retailers and the entire economy. Congress should consider that reality as members try to find agreement on the farm bill.”

Nolan Hicks reported earlier this week at The San Antonio Express Online that, “[Mark Bradbury] said he was the type of man who couldn’t understand why people depended on government programs. But today, he and his son are among the more than 46 million Americans who receive food stamps, a program that’s aimed at bolstering nutrition for poorer families.

“‘It’s a godsend in a lot of ways,’ said Bradbury, who began receiving food stamps in September. ‘I don’t have to make the decision between do I put gas in the truck, or do I buy groceries.’”

The article pointed out that, “However, efforts to examine what items SNAP recipients are purchasing with their food stamps have been stymied because the federal government doesn’t track individual purchases.

“A newspaper in South Dakota, the Argus-Leader, discovered that the USDA had hired a firm to study the feasibility of tracking those purchases and filed a Freedom of Information request for the program’s progress reports. The records it received were almost completely redacted.”

The article also noted that, “While the details of the program remain mired in legal and bureaucratic opaqueness, lawmakers in several states — including Texas — have attempted to pass legislation that would attempt to impose additional restrictions on what food stamps can be used to purchase.

“The bill, authored by state Rep. Susan King, R-Abilene, would require the state to seek a waiver from the federal government so it could implement its own stricter rules for what can be purchased with food stamps.”



Zack Colman reported yesterday at The Hill’s Energy Blog that, “Tensions among ranchers and farmers might lead the nation’s largest farm lobby to alter its position on the federal biofuel mandate.

“The American Farm Bureau Federation has been a staunch supporter of the renewable fuel standard (RFS), a mandate for blending biofuels — currently, mostly corn-based ethanol — into traditional fuel. The rule has been a boon for the nation’s corn-growers, who have a guaranteed customer for 40 percent of their crop.”

Yesterday’s update explained that, “But ranchers say the biofuel mandate needs to be waived this year in the wake of a summer drought that has pushed corn prices to record highs. Several governors have asked the Environmental Protection Agency to waive the rule to ease the price crunch.

“The Farm Bureau, which represents a broad range of agricultural interests, finds itself caught in the crossfire, and could alter its position on the fuel standard if state chapters vote to do so.”


Budget Issues

Jeremy Herb and Erik Wasson reported yesterday at The Hill’s Defense Blog that, “President Obama’s vow at Monday’s debate that the sequestration cutswill not happen’ could come back to haunt him during Congress’s lame-duck negotiations on the fiscal cliff if he is reelected.

Republicans were already licking their chops at Obama’s statement Tuesday, and the White House was quickly backtracking the remark after the debate.

“Republicans said that Obama has given away leverage in any lame-duck talks.”

However, Byron Tau reported yesterday at Politico that, “The White House insisted Tuesday its policy on sequestration has not changed in the wake of Monday’s debate.

“‘What the president said last night was a reiteration of what his position has long been,’ White House press secretary Jay Carney told reporters traveling on Air Force Once. ‘The sequester that was designed and passed by Congress was never meant to become policy, it was never meant to be implemented.’

“‘It’s a designed trigger – a forcing mechanism — to compel Congress to make the difficult decisions required to reach a balanced deficit reduction package,’ Carney said.”

And Jeremy Herb reported yesterday at The Hill’s Defense Blog that, “The Aerospace Industries Association doesn’t want to wait for the lame-duck to solve sequestration.

Encouraged by President Obama saying at Monday’s debate that sequestration ‘will not happen,’ AIA CEO Marion Blakey said Tuesday that her trade association is calling on the Obama administration and Congress to immediately start negotiations on reversing the across-the-board cuts.”


CFTC (Commodity Futures Trading Commission) Issues

Patrick Fitzgerald reported yesterday at The Wall Street Journal Online that, “Lawyers for former MF Global Holdings Ltd. Chief Executive Jon Corzine are asking a federal judge to toss a civil fraud lawsuit accusing him of misleading investors about the risky bets the futures firm was taking before its collapse a year ago.

“Mr. Corzine’s lawyers blasted the investors’ suit as a ‘jumble of assertions and accusations’ that makes ‘no sense’ that should be dismissed in a filing Friday in U.S. District Court in New York. A group of banks and underwriters—among them units of Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Citigroup Inc. —that are also being targeted by the investors joined Mr. Corzine in asking Judge Victor Marrero to throw out the lawsuit.

“Mr. Corzine, a former co-chairman of Goldman Sachs who later became a U.S. Senator and then a governor of New Jersey, resigned from MF Global last autumn, just days after the brokerage’s collapse on Halloween over its losing bets on European sovereign debt revealed a $1.6 billion hole in its books.”

Jamila Trindle reported yesterday at The Wall Street Journal Online that, “The Commodity Futures Trading Commission proposed rules that would increase customer protections for the futures market, in a move that follows two high-profile brokerage bankruptcies over the past year.

“Agency Commissioner Bart Chilton said that the new rules, set late Monday and announced Tuesday morning, would have prevented the ‘fiascos’ at Peregrine Financial Group Inc. and MF Global Holdings Ltd., but that lawmakers should go further.”

The Journal article indicated that, “‘These protections fail to address something I’ve suggested to Congress and hope will be taken up next year: a futures insurance fund,’ Mr. Chilton said in an email.

“The agency has been working on stepping up oversight of futures firms and the customer funds that Peregrine and MF Global filed for bankruptcy protection and took customer money over the past year.”

Keith Good