January 28, 2020

Farm Bill; Budget; Ag Economy; Trade; and, CFTC

Farm Bill Issues

David Rogers reported yesterday at Politico that, “House Agriculture Committee Chairman Frank Lucas said Thursday that he had been assured by Speaker John Boehner that the farm bill remains part of the year-end ‘big picture’ for Republicans and the promise of $35 billion in 10-year savings ‘has gotten somebody’s attention.’”

“The Oklahoma Republican underscored that the fate of his bill –first reported from his committee in July—remains unclear still even to him. But he said he had talked with Boehner directly on the question Tuesday after the House returned from the November elections.”

The Politico article indicated that, “‘He assured me that was on their agenda and gave me the impression that it was one of the issues that will be addressed in the big picture sense…I assume he means sequestration and taxes,’ Lucas told POLITICO. ‘When the speaker answered my question, the way he acted, led me to believe—I’ll put it that way—that they are focused on the big picture and this is one of those elements. No more specifics than that.’

“‘Whether it is part of the ‘bridge’ –he’s used that phrase before—to the ultimate thing I don’t know,’ Lucas said. ‘But clearly our $35 billion in the House package in savings has gotten somebody’s attention.’”

House Agriculture Committee Ranking Member Collin Peterson (D., Minn.) was a guest on yesterday’s AgriTalk radio program with Mike Adams, where the discussion focused on Farm Bill issues.

An audio replay of the AgriTalk interview can be heard here (MP3 -12:11), while an unofficial transcript of the discussion is available here.

In part, Rep. Peterson stated that, “Well, I am absolutely 110% against a one-year extension, and I will do everything in my power to stop it, including making the Ag Committee partisan for the first time, if that’s what it takes…[I]f they’re going to dilly-dally around and not get this thing done, I am ready for permanent law, and I am ready for $38 milk January 1st, and so are the National Milk Producers. I talked to them yesterday. They do not want an extension.

“One of the primary reasons not to have an extension is that we need this Dairy Security Act in law as soon as possible.”

Bloomberg writer Alan Bjerga, referencing the AgriTalk interview, reported yesterday that, “The top Democrat on the House Agriculture Committee says the $1-trillion agriculture bill the panel approved in July is out of his hands — and if milk prices double next year because Congress doesn’t act, it has only itself to blame.”

Meanwhile, James Q. Lynch reported yesterday at The Gazette (Cedar Rapids, Iowa) Online that, “Sen. Tom Harkin opposes a short-term extension of the federal Farm Bill and says the U.S. House – specifically House Republicans – need to get their act together.

“‘We passed a good farm bill here,’ the Iowa Democrat said about the Senate. ‘There’s no reason for the House not to take it up and pass it. We can’t keep caving in all the time to a few producers in the South who have peanuts and rice, who are doing quite well, but want more government funding.’”

The article also noted that, “He also hopes to see the wind energy production tax credit extended. Harkin called that ‘crucially important’ to Iowa.”

On Wednesday, Rep. Tim Walz (D., Minn.- Ag. Comm.) indicated on the House Floor that, “The House has already passed the farm bill through the Ag Committee with a two-thirds vote. The Senate passed a farm bill with a two-thirds majority. They couldn’t agree it’s Wednesday over there, yet they passed a farm bill. This bill adds certainty to rural America. It creates jobs on Main Street. It provides stable prices in the grocery stores, and it makes sure that in drought-stricken areas of our country farmers are there to produce.  This is a jobs bill. It’s a bipartisan bill. It’s a compromise. Every major farm and nutrition group has asked for it to be done. All we need to do is to bring it to the floor and to push one of the two buttons—‘yes’ for jobs in rural America and food for this country or ‘no’ for more gridlock.”

Rep. Jim Costa (D., Calif.- Ag. Comm.) also recently spoke on the House Floor to call for action on the Farm Bill during the Lame Duck (video). Farmers, dairymen, and producers need the security that only a five-year bill can give, he noted.

Meanwhile, Dow Jones writer Corey Boles reported earlier this week that, “Conservative House Republicans want to split the farm bill into two pieces–stripping out the funding for food stamps and other nutrition programs that account for the majority of the bill from the core programs aimed at agribusinesses.

“Rep. Jim Jordan (R., Ohio), the chairman of the Republican Study Committee, an influential conservative group of lawmakers in the larger GOP conference, said that if the farm bill is brought to the House floor before the end of the year, he and other conservatives are going to push to divide the legislation into two pieces.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Some conservatives have proposed trying to split the legislation into two pieces, which would be a ‘non-starter,’ Harkin said. ‘With the results of the election what they are, I think the House realizes they can’t make those huge, huge cuts to the food-stamp program,’ he said.”

And, Reuters writer Charles Abbott reported on Wednesday that, “Mississippi Sen. Thad Cochran could replace Pat Roberts of Kansas as the top Republican on the Senate Agriculture Committee, which could affect work on the farm bill if it is delayed into 2013.

“Roberts took a lead on the Senate farm bill which would eliminate traditional crop subsidies. But southern Senators including Georgia’s Saxby Chambliss said the plan was unfair to rice and peanut growers.”

Mary Clarkin reported earlier this week at The Hutchinson News (Kan.) Online that, “U.S. Sen. Pat Roberts, R-Dodge City, ‘intends’ to remain the ranking Republican on the Senate Agriculture Committee, according to a statement from his staff.  But Republican Sen. Thad Cochran, Mississippi, has more seniority than Roberts and potentially could seek that role in the next session.”

In other news, Bloomberg writer Alan Bjerga noted earlier this week that, “Mitt Romney was the overwhelming choice of voters in counties that receive the biggest federal farm subsidy payments, even as the Republican presidential candidate campaigned against dependence on government.”

Marcia Zarley Taylor reported yesterday at DTN’s Minding Ag’s Business Blog that, “Drought years like 2012 should be a testimonial for federal crop insurance and its evolution into meaningful revenue protection over the last 15 years. After all, U.S. agriculture suffered the disaster equivalent of Hurricane Sandy and no one is writing ‘FEMA, please help me’ messages in farm country.

“Instead, the federal budget crisis means much of that sound economic policy could be up for grabs when Congress tackles the farm bill in the next few weeks, speakers at the upcoming DTN-The Progressive Farmer Ag Summit in Chicago tell me. Kansas State University Economist Art Barnaby, University of Illinois Economist Gary Schnitkey and John Deere Insurance Co. President Don Preusser all see 2012 as a pivotal year and maybe the high water mark of coverage as we know it. What has been the backbone of farm risk management in the last decade may look entirely different within the next few years.

“‘This is the largest crop disaster since 1988, allowing critics to claim that crop insurance is a runaway program,’ Barnaby says. ‘They seem to forget about all the years farmers have paid premiums and in some of those years, the government even generated underwriting gains.’”

And Ellyn Ferguson reported yesterday at Roll Call Online that, “Antibiotic-resistant super bacteria: It sounds like the makings of a science fiction plot. But it’s a real concern for some, and it’s the reason the livestock and drug industries are united in a fight on Capitol Hill against efforts to regulate the use of antibiotics in animal feed.

“Cattle, hog and poultry producers use higher doses of antibiotics to treat animals when they are sick and when they might be under stress — perhaps from being transported or being weaned — because stress can make them susceptible to infections. Low doses of the drugs are used to accelerate animals’ weight gains for market. For an undetermined reason, animals seem to able to make more efficient use of nutrients with the antibiotics in their systems.”

Ms. Ferguson pointed out that, “A House bill, sponsored by New York Democrat Louise M. Slaughter, would require the Food and Drug Administration to deny approval for new drugs for food animals if they contain antibiotics or other drugs used to treat humans and if a drug company cannot prove that it is unlikely to lead to resistance in pathogens. The bill (HR 965) has 92 co-sponsors but has not been given a hearing or a committee or floor vote. Sen. Dianne Feinstein, D-Calif., has a companion bill (S 1211) with seven co-sponsors.”

Yesterday’s article added that, “In the meantime, supporters do not expect to see much movement on this issue until the next Congress. Rep. Henry A. Waxman, ranking Democrat on the House Energy and Commerce Committee, plans to file legislation this month that would require drug companies to detail agricultural use of antibiotics, including the type of animals that receive the drugs and the reason the drugs were administered. But he does not expect anything to happen with it until the 113th Congress. The plan at this point is probably to try to include it in the Animal Drug User Fee Act, which will be up for reauthorization in 2013.”


Budget Issues

Janet Hook and Carol E. Lee reported in today’s Wall Street Journal that, “When congressional leaders meet at the White House to open budget talks Friday, it will be a reunion of sorts for President Barack Obama and Republican House Speaker John Boehner, who spent weeks in mid-2011 pursuing in vain a grand budget bargain.

“The problems are familiar, but much has changed in the intervening 16 months, and the atmosphere today seems somewhat more conducive to deal-making. The election is over. The fiscal concerns are more acute. And after the August 2011 downgrade of the U.S.’s credit rating, both men are painfully aware of the consequences of failure.”

The Journal article noted that, “Mr. Obama is aiming for a sweeping deal, which his aides believe makes it easier for both parties to compromise. And while he sees a change in tone among Republicans on taxes, he also believes his re-election gives him some clout with his own party in getting them to agree to entitlement changes.

“In the election’s wake, Mr. Boehner has publicly expressed uncharacteristic openness to compromise on the question of raising fresh tax revenue. Unlike the private 2011 talks, which were hobbled in part by opposition from fellow Republicans, Mr. Boehner has done more to consult with fellow GOP leaders and keep his lieutenants in synch.”

Carrie Budoff Brown and Jake Sherman reported last night at Politico that, “The meeting at the White House between Obama and the top four congressional leaders will be the opening gambit in a six-week push to beat the Jan. 1 deadline, when more than $500 billion in tax increases and spending cuts start taking effect. It will be less about policy than positioning and personalities.”

With respect to fiscal issues, note that Rep. Peterson, in his interview yesterday on AgriTalk, stated that: “But given the rhetoric that’s come out of Boehner and the President here yesterday and today, it looks to me like they’re heading towards no resolution on the fiscal cliff. Now, they’re going to meet tomorrow. We’ll see how this progresses.

“But they’ve kind of drawn lines in the sand here, and I think… You know, clearly they’re not going to resolve that stuff. They might come to some agreement to delay everything and give them some time next year, but that’s problematic. I really think the most likely outcome here is that we will see everything expire—the tax cuts, the sequestration go into effect, the doctor cuts go into effect in Medicare. And all of that stuff, if it’s let to expire by the end of the year, it actually reduces the deficit five trillion dollars. And all that’s got to be done in order to accomplish that is nothing, and we’re pretty good at getting nothing done.”


Agricultural Economy

Ian Berry reported yesterday at The Wall Street Journal Online that, “Land prices in the Farm Belt continued to surge in the third quarter, even as a severe drought battered crops and slashed some farmers’ incomes.

“Farmland values in the heart of corn-growing country, including Illinois and Iowa, jumped 13% in the three months through Sept. 30 compared with a year earlier, according to a report Thursday by the Federal Reserve Bank of Chicago.

“Meanwhile, prices of nonirrigated farmland in a seven-state stretch of the Great Plains soared 24% from a year ago, a separate report from the Federal Reserve Bank of Kansas City said.”

And, Zack Colman reported yesterday at The Hill’s Energy Blog that, “A top House Energy and Commerce Committee Republican said he does not expect Congress to change a renewable fuel mandate, despite the oil-and-gas industry’s goal of weakening it.

“‘I don’t think that there’s going to be any effort to roll back the renewable fuel standard,’ Energy and Power subcommittee Chairman Ed Whitfield (R-Ky.) said Thursday at an event hosted by CQ.”



Pete Kasperowicz reported yesterday at The Hill’s On the Money Blog that, “The House on Thursday advanced a bill giving Russia Permanent Normal Trade Relations (PNTR) Status with the United States, and is expected to pass the bill in a Friday vote.”

And, Al Kamen reported yesterday at The Washington Post Online that, “We’re hearing that U.S. Trade Representative and former two-term Dallas mayor Ron Kirk has let the White House know that he intends to leave Washington and head back to Dallas.”


Commodity Futures Trading Commission (CFTC) Issues

Aaron Lucchetti and Jamila Trindle reported in today’s Wall Street Journal that, “Republican lawmakers denounced former MF Global Holdings Ltd. Chief Executive Jon Corzine’s leadership in the months leading up to its collapse late last year, while also criticizing credit-rating firms and the futures brokerage’s regulators, in a much anticipated report that explored the main causes of the firm’s collapse last year.

“The long-anticipated report from the House Financial Services Subcommittee on Oversight and Investigations, which wasn’t supported by Democrats on the panel, stopped short of saying anyone at the company broke the law when it filed for bankruptcy protection in October 2011 and an estimated $1.6 billion in customer money went missing.

“But it told the story of the eighth-largest bankruptcy in U.S. history as a preventable affair in which regulators ‘failed to share critical information,’ and the securities and commodities brokerage firm exploited loopholes in rules that put customer funds at risk.”

Peter Schroeder reported yesterday at The Hill Online that, “Republican lawmakers at the top of Congress’s agriculture committees are bristling over a recommendation from their GOP colleagues that would do away with a key financial regulator.

“A new report issued by Republicans on the House Financial Services Committee on Thursday suggested that the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) streamline their operations, or potentially be combined into a single agency. The lawmakers behind the report, released Thursday, blasted the two regulators for failing to communicate before the collapse of the futures firm MF Global, previously headed by Jon Corzine.

That suggestion has sent top Republicans on the farming panels rushing to protect their turf, as any potential merging could mean they would lose jurisdiction over the CFTC, with much of the regulatory oversight falling to the banking panels.”

Separately, Mr. Schroeder also reported yesterday at The Hill Online that, “The Commodity Futures Trading Commission (CFTC) has decided to appeal a court ruling that halted its efforts to implement new restrictions on derivatives trading.

“By a 3-2 vote, the commission agreed to challenge a district court ruling that vacated the regulator’s efforts to implement a portion of the Dodd-Frank financial reform law setting limits on the amount of positions a trader could hold in various commodities. These position limits are aimed at curbing speculative trading in commodities markets.”

Keith Good

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