FarmPolicy

December 19, 2014

Farm Bill; Budget; Ag Economy; and, Trade

Farm Bill, Policy Issues

Daniel Looker reported yesterday at Agriculture Online that, “Senator Chuck Grassley (R-IA), a member of the Senate Agriculture Committee, told reporters Tuesday that leaders of the committee remain optimistic about a new farm bill being passed in the current lame-duck session of Congress, which will resume after this week’s Thanksgiving break.

“Grassley said that he talked to the committee’s chairwoman, Senator Debbie Stabenow (D-MI), about the farm bill recently on the floor of the Senate.

“‘She said she thinks we have a good chance of getting it passed,’ Grassley said.”

Mr. Looker noted that, “[Sen. Grassley] added that the committee’s ranking Republican, Senator Pat Roberts of Kansas, is ‘enthusiastic’ about putting pressure on the House to pass a bill, which still hasn’t come up for a vote in that chamber of Congress.

“Grassley said that it’s possible that a farm bill would be included as part of any legislation passed next month to avoid the so-called fiscal cliff. But he said his gut feeling is that ‘if we pass either an extension or a farm bill, it’s probably going to be done separately.’”

A news release yesterday from Sen. Tim Johnson quoted the South Dakota Democrat as saying, “My Senate colleagues and I have passed a bipartisan farm bill that would create certainty for South Dakota’s producers, and the House has yet to bring a farm bill to a vote.  We only have a few short weeks before the end of the year. South Dakota producers and I are again calling on the House to bring this critically important bill to the floor for a vote.”

Meanwhile, Christina Calloway reported recently at The Portales News-Tribune (N.M.) Online that, “After four years of massive blows to the New Mexico Dairy industry that closed nearly 40 dairies, experts are saying the passing of the U.S. Farm Bill could provide hope for recovery.”

The article noted that, “[New Mexico State University Extension Dairy Specialist Robert Hagevoort] said the industry is now hoping for a new farm bill to do away with old price support systems.

“‘The new farm bill proposes what is called a margin insurance program, very similar to what other commodities already have,’ Hagevoort said. ‘It’s a producer-paid insurance program that the government would regulate. It makes sure that if margins are upside down, insurance will pay out.’

Beverly Idsinga, executive director of the Dairy Producers of New Mexico, said her  organization supports the farm bill.

“‘It needs to be passed because it will help out producers,’ Idsinga said. ‘We are in a crisis.’”

Earlier this week, Patton- Boggs updated its 2012 post-election brief, which indicated in part that: “With Democrats retaining control of the Senate, Senator Debbie Stabenow remains Chairwoman and Senator Pat Roberts had expected to continue as the Ranking Member. However, Senator Thad Cochran (R-MS), who under term limits established by the Republican Conference, is required to relinquish his position as Ranking Member of the Senate Appropriations Committee, has signaled his intent to challenge Senator Roberts for the position of Ranking Member of the Agriculture Committee.

If Cochran decides to challenge Roberts, the Republicans on the Committee would first vote on who should be Ranking Member, a decision that could then be appealed to the full Republican Conference. Considering the differing perspectives on agriculture policy held by midwestern Senators such as Roberts, and southern Senators like Cochran, the decision as to who will be Ranking Member is bound to impact the direction of taken by the Senate with respect to reauthorization of the Farm Bill” (at page 13).

The report added that, “In terms of the Renewable Fuel Standard, we expect House committees to start holding hearings on this issue given Members’ concerns with high commodity prices, how the mandate regulates the market, and the problems refiners are confronting to comply with EPA regulations. We also expect the Senate to address the ethanol mandate, particularly in the Energy and Natural Resources Committee most likely chaired by Senator Ron Wyden (D-OR). Most likely, the House will move first on this issue” (at page 12).

And, Ramsey Cox reported yesterday at The Hill’s Energy Blog that, “Montana Sens. Max Baucus (D) and Jon Tester (D) told Senate leadership that they don’t want programs reducing military use of foreign oil to be harmed in the National Defense Authorization Act.”

Meanwhile, Elizabeth Flock reported yesterday at U.S. News Online that, “More Americans will use food stamps to buy their Thanksgiving dinner this year than ever before, according to a new report from the nonprofit government watchdog group The Sunlight Foundation.”

Ms. Flock pointed out that, “This Thanksgiving, 42.2 million Americans will be on food stamps, according to the Economic Policy Institute. This is roughly the size of the populations of California and Connecticut combined.

“Not surprisingly, feeding millions of Americans isn’t cheap. The cost of the SNAP program last year reached $72 billion, the highest to date, according to the Congressional Budget Office.”

David Rogers reported yesterday at Politico that, “The share of food stamp benefits going to American households with gross incomes over 130 percent of poverty has more than doubled in the past four years, according to the most recent data compiled by the Agriculture Department and released Tuesday.

“The 130 percent cap — about $28,680 for a family of four in recent years — dates back to the early 1980s. But it has been increasingly ignored by cash-strapped governors trying to help working-class households in hard economic times.”

Mr. Rogers explained that, “The House Agriculture Committee leadership, trying to achieve real savings while protecting the core food stamp program, proposed a bipartisan plan last summer that would have set new national standards to replace the patchwork quilt that has developed in recent years.

“Included was a Texas-style change in the outdated 1980s SNAP asset test to allow families to keep some cash savings and also own a car to get to work. But the proposed gross income cap, 140 percent of poverty, was judged too high for some conservatives even though it was lower than current policy in 26 states including Texas.”

Yesterday’s article added that, “Minnesota Rep. Collin Peterson, the ranking Democrat on the House Agriculture panel and its former chairman, has signaled a willingness to look at a compromise that would come down a notch to 135 percent of poverty. Peterson has also argued that for efficiency’s sake the government should end the practice of paying a minimum food stamp benefit — about $16 a month — to persons who don’t qualify for more aid.

“The new report indicates that more than a million individuals received this minimum benefit in 2011. Peterson would argue it is too small to make a real difference in people’s lives and a needless administrative cost for the government.”

A recent update at the Food Research and Action Center Online stated that, “Congress reconvenes on November 26 for the Lame Duck session. Budget negotiations will begin in earnest and it is expected that the Farm Bill will be included in any ‘grand bargain.’ We must get Members to support SNAP by weighing in with House and Senate leadership and the White House insisting that any grand bargain not increase hunger and poverty in this country.”

In other developments, 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 $5 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 grain sorghum.”

Also yesterday, Mateusz Perkowski reported yesterday at the Capital Press Online that, “The USDA should study launching a crop insurance pilot program for farmers harmed by cross-pollination from transgenic crops, according to a committee advising the agency.

“A panel of experts assembled by USDA last year recommended the agency should first study the extent of economic losses to determine whether such a compensation mechanism is even necessary.

A final report issued by the USDA Advisory Committee on Biotechnology and 21st Century notes that its members had reservations about the proposal.”

A news release yesterday from the American Farm Bureau Federation (AFBF) stated that, “The [AFBF] is pleased with the outcome of a year-long discussion of the Agriculture Department’s Advisory Committee on Biotechnology and 21st Century Agriculture on ways to promote coexistence in agriculture. The AC21 presented its report to Agriculture Secretary Tom Vilsack to be used as guidance to enhance working relationships among farmers growing different types of crops, specifically biotech and non-biotech crops.

“In 2011, Vilsack tasked the AC21 with providing recommendations for strengthening coexistence among various agricultural production methods. American Farm Bureau Federation Vice President Barry Bushue, a member of the AC21, said the report’s recommendations could benefit all of agriculture.”

And, Erica Martinson reported yesterday at Politico that, “EPA officials say the agency wasn’t trying to hide anything by giving Administrator Lisa Jackson a secondary email address to use when corresponding with other government officials.

“But the name she chose to use — ‘Richard Windsor’ — has triggered an inadvertent ruckus for an agency already under fire from conservatives.”

The article noted that, “The name came from that of a family dog when Jackson lived in East Windsor Township, N.J., an EPA official said Tuesday.

“The seemingly cryptic name has spawned a host of accusatory news reports and questions from lawmakers in recent days, all of them implying that Jackson was trying to dodge congressional oversight and public records laws by using a ‘private’ email account under a fake name.”

 

Budget Issues

Jake Sherman, John Bresnahan and Carrie Budoff Brown reported yesterday at Politico that, “The opening round of negotiations this week between White House and senior GOP congressional staffers left both sides pessimistic about their ability to reach a quick deal on averting the fiscal cliff, according to sources familiar with the talks.

“Hill Democrats say Republicans aren’t serious about crafting a deal that President Barack Obama can accept. The GOP’s opening offer, the sources said, would freeze the Bush-era tax rates, change the inflation calculator for entitlement programs, keep the estate tax at 2012 levels and authorize a major overhaul of the Tax Code — although they did not provide a revenue target.

“The behind-the-scenes clash in negotiations stands in contrast to the more conciliatory rhetoric both sides have used in public statements, casting doubt on the coming four weeks of talks before Christmas.”

The article added that, “But taxes are not the only thing being lumped into discussions on the so-called fiscal cliff. Unemployment benefits expire, as does the payroll tax holiday and the reimbursement rate for doctors who treat Medicare patients. Automatic cuts to the Pentagon and other domestic programs take hold at the beginning of 2013. Republicans want to delay the first year of automatic cuts.

Then there’s the debt ceiling, which is increasingly creeping into the year-end discussion.”

Carol E. Lee and Janet Hook reported yesterday at The Wall Street Journal Online that, “In private meetings, White House and House Republican staff have been reviewing deficit-reduction proposals and discussing what ideas could be applied to either a short-term agreement that would likely translate into savings next year, or to a broader deal that would set targets for lawmakers in 2013 to overhaul spending and taxes over the longer term.

“Indicating the slow pace, aides are careful to point out that they aren’t making decisions on what would be included in or excluded from a deal. Rather, they are sifting options for their bosses.”

Also, Alexander Bolton reported yesterday at The Hill Online that, “Senate Finance Committee Chairman Max Baucus [Ag. Comm. Member], who watched President Obama and congressional leaders bypass his panel several times, wants a seat at the table for talks about the ‘fiscal cliff.’”

And, Peter Schroeder reported yesterday at The Hill’s On the Money Blog that, “Federal Reserve Chairman Ben Bernanke implored Washington policymakers Tuesday to get the nation’s fiscal house in order for the good of the economy.

“The head of the nation’s central bank used a high-profile speech to outline a ‘must-do’ list for Congress and the White House in the comings months: avoid the ‘fiscal cliff,’ raise the debt ceiling and come up with a long-term plan to bring down the deficit. Finally, Bernanke said it’s important do so with as little drama as possible.”

 

Agricultural Economy

Bloomberg writers Jeff Wilson and Elizabeth Campbell reported yesterday that, “Even after the worst drought in a half century shriveled crops from Ohio to Nebraska, U.S. farmers are having their most-profitable year ever because of record- high prices and insurance claims…‘Crop insurance was a savior this year,’ said Kyle Wendland, 29, whose corn yields plunged 36 percent and soybean output dropped 11 percent on the 1,030 acres he farms near Fredericksburg, Iowa.”

The article noted that, “Livestock producers are also paying higher feed costs. Hog farmers that didn’t hedge lost about $54 on each animal sold for slaughter in September, from a year-earlier loss of $2.65, according to data from Iowa State. Smithfield Foods, the largest U.S. pork producer, said Sept. 4 that net income fell 25 percent in the quarter ended July 29.”

Also yesterday, University of Illinois Agricultural Economist Gary Schnitkey penned a brief update at the farmdoc daily Blog titled, “2013 Net Farm Income Projections.”

An update earlier this week at the Food and Agriculture Organization of the United Nations noted that, “Global rice production for 2012 is forecast to outpace consumption in 2012/13, resulting in an upward revision of 5 million tonnes in 2013 closing inventories, according to a new forecast by FAO’s Rice Market Monitor (RMM) issued today.

“‘Compared to last year, world rice carryover stocks are expected to rise by 7 percent, or 10 million tonnes, to a new high of almost 170 tonnes, marking the eighth consecutive year of stock accumulation,’ says the RMM. ‘As a result, the world rice stock-to-use ratio is forecast to rise from 33.6 percent in 2012 to 35.5 percent in 2013.’”

 

Trade

A news update yesterday from Rep. Ron Kind (D., Wis.) stated that, “[Rep. Kind], Chair of the New Democrat Coalition and member of the House Ways and Means Committee, and Tim Walz (D-MN),  member of the House Agriculture Committee, today sent a letter to U.S. Trade Representative Ambassador Ron Kirk and U.S. Secretary of Agriculture Tom Vilsack urging them to make full use of all of the World Trade Organization’s tools to address issues that have continued to prohibit U.S. dairy exports from having fair access to the Russian market.”

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “World leaders are aiming to complete an Asia-Pacific trade agreement within the next year.

President Obama, who is wrapping up a three-country swing to Cambodia, Thailand and Myanmar, met with leaders from Trans-Pacific Partnership (TPP) countries and concluded that the trade deal should be done in 2013, according to several news reports.

“Australian Prime Minister Julia Gillard said Tuesday that the aim is October 2013 for the 11 countries involved in the ongoing negotiations of the trade deal to complete an agreement.”

Lastly today, Joshua Miller reported yesterday at Roll Call Online that, “The campaign of Rep. Mike McIntyre, D-N.C. [Ag. Comm.], begrudgingly accepted a recount of the vote in the 7th Congressional District but slammed Republican David Rouzer for requesting one. McIntyre currently leads the state senator by 655 votes.

“McIntyre campaign manager Lachlan McIntosh said Rouzer’s request is hypocritical because he supports fiscal responsibility and is ‘asking taxpayers to pay for his pursuit of his own personal political ambition.’”

Keith Good

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