January 17, 2020

Farm Bill- Policy Issues; Ag Economy; and, Biofuels

Farm Bill- Policy Issues

Tim Carpenter reported earlier this week at The Topeka Capital-Journal Online that, “Sen. Pat Roberts promised Kansas farmers Wednesday he would dig his boot heel into formation of a new five-year farm bill covering crop insurance, production incentives and nutrition programs.

“The Kansas Republican, who serves on the Senate Agriculture Committee, said during a Topeka meeting of the Kansas Soybean Association that decline in the number of farmers in the U.S. House and Senate weakened the political coalition that traditionally gave rise to federal farm legislation.

“‘I have member after member after member say, ‘Agriculture? Let’s cut it.’ It’s going to be tough sledding, folks,’ Roberts said.”

The article added that, “‘We didn’t have any responsible solution except to extend that [Farm] bill with the opposition we faced in the House. It wasn’t the best possible bill. It was the only bill possible,’ Roberts said.

“He said retention of the old farm bill could serve the interests of some Kansas farmers suffering from a third year of drought because direct payments would be available. These producers will be eligible for relief without passage of a separate disaster aid bill, he said.”

Robert Pore reported earlier this week at the Grand Island Independent (Neb.) Online that, “[Sen. Mike Johanns (R., Neb.)] said getting a new Farm Bill through the Senate Agriculture Committee, then through the Senate and then through the House Agriculture Committee was an ‘uphill battle all along the way.’

“But to have it stopped at the end by the House leadership was characteristic of many of the problems faced by Congress last year.

“Johanns said it’s unfortunate that a lot of the legislation passed in Congress results from an agreement reached by a handful of people.”

The article indicated that, “‘We will go back to work and do a Farm Bill,’ Johanns said…But Johanns believes the Farm Bill template, which was passed by the Senate Agriculture Committee and was highly praised by many farm groups across the country, will be what the Senate passes.

“‘I think we can get a Farm Bill out of committee, and hopefully we can get floor time and an open amendment process,’ he said. ‘I continue to be confident that, on the Senate side, we can get it done.’”

In a closer look at the House, The New York Times editorial board noted yesterday that, “The only reason that income taxes on 99 percent of Americans did not go up this month was that Speaker John Boehner briefly broke with an iron rule of Republican control over the House. He allowed the fiscal-cliff deal to be put to a full vote of the House even though a strong majority of Republicans opposed it.

That informal rule, which bars a vote on legislation unless it has the support of a majority of Republicans, has been one of the biggest stumbling blocks to progress and consensus in Congress, and, in its own way, is even more pernicious than the filibuster abuse that often ties up the Senate.”

The Times noted that, “But under the majority-of-the-majority rule in the House, Democrats are completely cut out of the governing process, not even given a chance to vote unless Republicans have decided to pass something. Since 2010, there have been enough extremist Republicans in the caucus to block consideration of most of the bills requested by the White House or sent over from the Senate. If President Obama is for something, it’s a safe bet that most House Republicans are against it, and thus won’t bring it up.

That’s why the House never took a vote on the Senate’s latest five-year farm bill.”

With respect to future action on the Farm Bill, Gene Lucht reported yesterday at Iowa Farmer Today Online that, “Another factor is there are debates coming on the federal debt limit and on sequestration.

“Those items could ‘suck all the air out of the room over the next two months,’ [Iowa GOP Sen. Chuck Grassley] says. And, that could delay floor action on the farm bill.”

Meanwhile, a Wisconsin State Journal (Madison) editorial this week stated that, “Congress failed to pass a new five-year farm bill last week, choosing instead to extend the flawed 2008 farm bill for nine more months…That means $5 billion a year in farm checks will continue, regardless of need or high commodity prices.”

The opinion item stated that, “Don’t blame farmers, many of whom were hit hard by the drought, and many of whom support reform.

Blame Congress. Our leaders in Washington were close to adopting a more cost-effective safety net for farmers and consumers last year. The full Senate as well as the House Agriculture Committee had adopted a less expensive subsidy system based on crop insurance and, in the case of dairying, insurance protecting farmers’ margins between the price of milk and cost of feed.

“But a final deal never got done, in large part because of disagreements over food stamps — which don’t directly relate to farming.”

A news release yesterday from the Oklahoma Association of Conservation Districts (OACD) stated that, “The recent action by the United State Department of Agriculture (USDA) to declare 76 of Oklahoma’s 77 counties as agriculture disasters areas due to the ongoing drought is a good start but more needs to be done according to Joe Parker, President of the [OACD].”

The release added that, “‘It is amazing to me that we are in the middle of the worst drought our nation has seen since the 1930’s and Congress has still not reauthorized the Farm Bill,’ Parker said. ‘It’s incredible that during the debate over the fiscal cliff, no consideration was given to helping farmers and ranchers, especially livestock producers, that have been stricken by this drought. It’s also clear to me that many of our Federal lawmakers never learned about the Dust Bowl in history class, otherwise they would know that without conservation programs to help protect our soil, especially during a drought, we run the risks of repeating the mistakes of the past. We can only hope this disaster declaration by USDA helps jump start discussions at both the State and Federal level on what we need to do to get through this record drought.’”

In other policy news, Thomas Catan reported in today’s Wall Street Journal that, “The Obama administration’s first antitrust case was filed with great fanfare in 2010 against Dean Foods Co., forcing the company to divest itself of a milk bottling plant to preserve competition in three states.

“But that maiden enforcement action turned sour last weekend after the new owners shut the Waukesha, Wis., plant without warning, throwing more than 100 employees out of work and briefly threatening milk deliveries to regional schoolchildren.

The episode raised questions about the effectiveness of the administration’s first antitrust suit, which to date is its only significant one in agriculture.”

DTN Ag Policy Editor Chris Clayton reported yesterday from Washington, D.C. (link requires subscription) that, “The latest salvos in the battles between biotech and organic crops were fired Thursday as a federal appeals court heard arguments over a lawsuit against Monsanto Co. that had been dismissed by a lower-court judge.”

The DTN article noted that, “In what is effectively a patent-law case over biotech seed traits, attorneys for organic groups and farmers argued Thursday before a three-judge appeals court panel that a federal district judge erred in throwing out their claims against Monsanto last year. Attorneys for Monsanto defended the district court ruling, arguing the judge was correct in determining the organic groups had no standing and their claims were baseless.

“The appeals court ruling later this spring would either throw out the case against Monsanto or send it back to the district court for a full airing.”

And, Tiffany Hsu reported yesterday at the Los Angeles Times Online that, “Up to half of the food produced worldwide never makes it into a consumer’s mouth, according to a new report.

“That’s as much as 2 billion tons of grub that’s wasted, according to a study released Thursday by Britain’s Institution of Mechanical Engineers (hat tip to the Guardian).”


Agricultural Economy

A news release yesterday from the Food and Agriculture Organization of the United Nations stated that, “The FAO Food Price Index dropped for the third consecutive month in December 2012, edging down 1.1 percent.

“The decline in December, when the Index averaged 209 points, was led by drops in the international prices of major cereals and oils and fats. The Index’s previous low in 2012 was in June, at 200 points.

For 2012 as a whole, the Index averaged 212, that is, 7.0 percent less than in 2011, with the sharpest falls year-on-year registered by sugar (17.1 percent), dairy products (14.5 percent) and oils (10.7 percent). Price declines were much more modest for cereals (2.4 percent) and meat (1.1 percent).”

Meanwhile, Reuters writer Carey Gillam reported yesterday that, “The Plains remain tightly gripped by severe drought, according to a report issued Thursday, and fears mounted that another hot and dry year could lie ahead for the key crop-growing and cattle-grazing region.

“Good rains have fallen in Texas, Oklahoma and Arkansas over the last few days, which should provide some improvement to dry soils and shrunken rivers and streams. But generally the worst-hit areas remain in sad shape, said Brian Fuchs, climatologist with the National Drought Mitigation Center at the University of Nebraska-Lincoln.

“‘We’re still looking at significant precipitation deficits,’ Fuchs said. ‘We really haven’t seen anything that has changed the situation.’”

Sarah Lyall reported in today’s New York Times that, “Britons may remember 2012 as the year the weather spun off its rails in a chaotic concoction of drought, deluge and flooding, but the unpredictability of it all turns out to have been all too predictable: Around the world, extreme has become the new commonplace.

“Especially lately. China is enduring its coldest winter in nearly 30 years. Brazil is in the grip of a dreadful heat spell. Eastern Russia is so freezing — minus 50 degrees Fahrenheit, and counting — that the traffic lights recently stopped working in the city of Yakutsk.

“Bush fires are raging across Australia, fueled by a record-shattering heat wave. Pakistan was inundated by unexpected flooding in September. A vicious storm bringing rain, snow and floods just struck the Middle East. And in the United States, scientists confirmed this week what people could have figured out simply by going outside: last year was the hottest since records began.”

And Hannah Kuchler and Louise Lucas reported this week at The Financial Times Online that, “The second wettest year on record risks battering farmers and consumers alike as crops fail to thrive in soaked fields and the rising price of grain makes feeding livestock even more expensive in 2013.

“Analysts warn the extreme weather is going to have a ‘big knock-on impact’ on harvests this year after having caused an estimated £1.3bn financial black hole in the farming sector in 2012.”

Focusing on the midsection of the U.S., yesterday’s “On Point” radio program with Tom Ashbrook (National Public Radio) took a closer look at the “Drought And The Mississippi.”

Note also that Zack Colman reported yesterday at The Hill’s Energy Blog that, “Senate Committee on Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) has added a climate change counsel to her committee staff.

“Boxer said Thursday that environmental attorney Joe Mendelson would fill the newly created role. Mendelson was most recently policy director of climate and energy with the National Wildlife Federation.”



University of Illinois Agricultural Economists Scott Irwin and Darrel Good provided an update yesterday at the farmdoc daily Blog titled, “Does the Biodiesel Tax Credit Change the Advanced Biofuels Landscape?

This brief update can be read in its entirety by clicking here.

Keith Good

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