FarmPolicy

November 1, 2014

Farm Bill; Budget; Ag Economy; and, Immigration

Farm Bill Issues

Laura Misjak reported yesterday at the Lansing State Journal Online that, “Sen. Debbie Stabenow is ready for round two of retooling the federal farm bill, legislation she said impacts jobs and the economy just as much as the agriculture sector.

“‘Sixteen-million people work in America because of agriculture and one in four people in Michigan have a job because of the food and agriculture industry,’ Stabenow said in her ‘State of Michigan Agriculture’ speech this morning to more than 200 people at the Michigan Agri-Business Association’s 80th Annual Winter Conference at Lansing’s Radisson Hotel.

“‘I needed to care about every page because Michigan is on every page (of the farm bill).’”

The article added that, “‘For the first time ever the House of Representatives would not take up that bill,’ [Chairwoman Stabenow] said. ‘I know there was enough bi-partisan support that if it had been brought up, it would have passed.’”

Jake Neher reported yesterday at Michigan Radio Online that, “Senator Debbie Stabenow is asking Michigan leaders in agriculture to push Congress to pass a new farm bill…[S]tabenow said she expects the Senate to take up a new bill in February or March.”

 

A news release yesterday from Chairwoman Stabenow’s office indicated that, “Stabenow called on House Republican leadership to follow her lead and pass a Farm Bill.”

The release also quoted the Michigan Democrat as saying: “Despite the many challenges last year, from the early freezes to the devastating drought, Michigan growers are resilient and are up to the challenge. That is why it’s critical that we have the right policies and why I fought so hard to get disaster assistance in the Senate Farm Bill while reforming agriculture programs, ending direct payments and saving $24 billion.”

Devin Henry reported yesterday at the MinnPost (Minneapolis) Online that, “Collin Peterson showed off his characteristically pessimistic view of a long-term farm bill’s prospects in a Q and A  published yesterday — he’s worried about Republican leadership roadblocks and White House indifference, and while he said he’s ready and willing to work with lawmakers on the traditionally friendly Agriculture Committee to write a new bill, he won’t do so unless he knows it’s going to go somewhere in the full House.

“Peterson is the ranking Democrat on the House Agriculture Committee, and he counts among his colleagues two other Minnesota Democrats — Reps. Rick Nolan and Tim Walz. I took Walz’s and Nolan’s temperature on the issue, and of the three, really only Walz has high hopes for a farm bill this session.”

Mr. Henry noted that, “Given the recent partisan battles that have scarred Capitol Hill, Nolan said he doesn’t think any more than a short-term farm bill extension passes the House this year, with maybe a longer-term fix to the dairy program, the expiration of which threatened to raise milk prices last year.

“‘It wouldn’t surprise me if we ended up just extending the program for x number of months or another year with some type of specifically-tailored fix to the dairy program,’ he said.”

Tim Hearden reported earlier this week at the Capital Press (Salem, Ore.) Online that, “Ensuring fiscal responsibility and passing a five-year farm bill will be key priorities for freshman U.S. Rep. Doug LaMalfa, R-Calif., in the coming months.

“The rice farmer and former state legislator from Richvale, Calif., will insist on ‘something that fundamentally changes the way things are done’ in exchange for raising the debt ceiling, he said in an interview.”

Mr. Hearden added that, “Now that the election is over, LaMalfa believes there’s a good chance a deal will be reached on a five-year farm bill this year. However, he wouldn’t commit that specialty crop funding important to some California industries will be fully restored.”

In a recent column at the Poughkeepsie Journal Online, Rep. Chris Gibson (R., N.Y.) stated that, “Unfortunately, this legislation [the House Ag. Comm. passed Farm Bill] stalled. Disappointingly, only a one-year stopgap became law and our work towards a full five-year bill will need to resume again this year.

“The priority as we go through this process is to reincorporate the important reforms and initiatives that became part of our committee’s final product last Congress.”

Rep. Gibson added that, “We must also restructure our existing dairy support framework, which is costly and ineffective. As we proposed last year, we should replace the outdated program with a new marginal support system.”

Meanwhile, during an interview yesterday on the AgriTalk radio program with Mike Adams, American Farm Bureau Federation Senior Director of Government Relations, Mary Kay Thatcher, highlighted the dairy portion of the Farm Bill, as well as concerns going forward regarding budgetary issues, direct payments, and noted an upcoming January Congressional Budget Office baseline report.

Specifically, Ms. Thatcher indicated that, “There will be people who will try to take [direct payments] away.  We had a Member from South Carolina that tried to put in an amendment in just this week to say take those direct payments away and use them for Hurricane Sandy.” (Related AgriTalk audio clip here (MP3- 2:19)).

Recall that late last week, Burgess Everett and Jake Sherman reported at Politico that, “[Rep. Mick Mulvaney (R-S.C.) and Rep. Tom McClintock (R-Calif.)] have also submitted a separate proposal with new Republican Study Committee Chairman Steve Scalise (R-La.) to pay for the [Appropriations Chairman Hal Rogers (R-Ky.)] [Sandy relief] bill by killing transit subsidies for federal employees, eliminating the Agriculture Direct Payment Program and prohibiting further obligations to the Troubled Asset Relief Program.”

Likewise, a recent update at the Red River Farm Network reported that, “The farm bill was just extended two weeks ago, but there’s already an amendment in the House to eliminate direct payments. Dale Thorenson, a lobbyist with Gordley Associates in Washington, D.C., has the latest. ‘Hardliners and the Republican party are saying we need to have disaster bills offset because in the past they have not been offset,’ Thorenson said. According to Thorenson, one sentence in the one-page amendment deals with direct payments, ‘it basically eliminates direct payments.’”

A related audio clip on this subject from yesterday’s Agriculture Today radio program (Red River Farm Network) featuring Don Wick, can be heard here (MP3- 1:11).

Gannett writer Mary Orndorff Troyan reported yesterday that, “Mulvaney’s amendment is one of 13 up for consideration today on the Sandy aid. Another of his amendments was not cleared to come up for a vote. That proposal was to offset the disaster aid with $18 billion in cuts to the transit subsidy for federal workers, agriculture subsidies for farmers, and the Trouble Asset Relief Program.”

In the end, it appears that no offsets were included in the Sandy disaster measure, as David Rogers reported yesterday at Politico: “The House approved nearly $50.7 billion in long sought emergency aid to help the victims of Hurricane Sandy Tuesday night, after Northeast lawmakers successfully added tens of billions to bring the package more in line with the White House’s initial request last month.

“Thirty-eight Republicans joined 190 Democrats on the pivotal 228-192 vote, which effectively tripled the underlying $17 billion bill first recommended by the House Appropriations Committee leadership. Passage followed minutes later on a 241-180 roll call with the great majority of Republicans left opposed but also powerless to stop the measure—or cut the spending levels significantly.”

Looking ahead, farm subsidies could also be scrutinized in other upcoming budget scenarios.  Meghan Grebner reported yesterday at Brownfield that, “[American Farm Bureau economist Matt Erickson] defines what he calls the three impending fiscal cliffs.  ‘The first one is the debt ceiling – if we’re going to raise the debt ceiling – is this going to be offset with spending cuts,’ he says.  ‘The second one is the sequestration.  How are we going to address this $1.2 trillion over 9 year spending cut issue?  The third one is the Continuing Resolution that is set to expire March 27th of this year.’”

Meanwhile, Ron Nixon reported in today’s New York Times that, “The worst drought in 50 years could leave taxpayers with a record bill of nearly $16 billion in crop insurance costs because of poor yields.

The staggering cost of the program has drawn renewed attention, as the Obama administration and Congressional Republicans wrangle over ways to cut the deficit. Last month, Treasury Secretary Timothy F. Geithner said that reducing farm subsidies was one way that the administration could cut government spending. But Congress has resisted.”

Mr. Nixon pointed out that, “Thomas P. Zacharias, the president of National Crop Insurance Services, an industry trade group, defended the program, saying that the record crop losses last year showed the need for insurance.

“‘This year, most farmers will be able to rebound from historic drought, thanks to crop insurance,’ Mr. Zacharias said.”

Today’s article added that, “President Obama has proposed cutting crop insurance subsidies and reducing the amount paid to insurance companies, saving $4 billion over 10 years.

“But Congress has balked at making such cuts, and has even proposed expanding the program. Last year, lawmakers on the House and Senate Agriculture Committees passed legislation that would eliminate $5 billion a year in direct payments to farmers and farmland owners who receive government checks regardless of whether they grow crops. But the legislation would use the savings to expand crop insurance.”

In other policy developments, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Delegates for the country’s largest general farm organization passed resolutions Tuesday seeking immigration reform while also crafting broad policy language asking for Congress to give farmers a menu of commodity programs.

“At its annual delegate session Tuesday, the American Farm Bureau Federation called on Congress to reform immigration, adopt a farm bill and tighten the country’s fiscal policies. The group also reaffirmed its support for renewable fuels.”

Mr. Clayton added that, “Farm Bureau members don’t want caps or limits applied for crop insurance premium subsidies to producers. Delegates pointed out that members of Congress have proposed a $40,000 premium cap, a proposal likely to come back up as debate about the farm bill is renewed. Farm Bureau delegates argued that such a cap would be detrimental to producers.

The group also opposes means testing and payment limitations for crop insurance.

“Farm Bureau supports the development of a revenue insurance program for peanuts and rice. The group also would like to see a risk-management program for forage producers.”

The DTN update noted that, “Delegates started debate on farm programs with a proposed resolution that was comparable to the House Agriculture Committee farm bill. Under the resolution, Farm Bureau would have backed giving farmers an option between a shallow-loss revenue program and one that provides a reference price or target-price program to producers.

“Louisiana Farm Bureau delegates wanted to ensure a reference price program is included, because it was one of the few programs that would work for rice producers. Georgia delegates opposed an attempt to remove language on reference prices.

At the end, delegates approved a broader farm-policy language offered by the Illinois Farm Bureau that stated, ‘If a catastrophic risk program is not achievable, we support producers being allowed a choice of program options.’ That approach didn’t support a specific program.”

 

Budget

More broadly on the budget issue, Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Failure to raise the debt ceiling ahead of the possible mid-February deadline would likely lead to another downgrade of America’s credit rating, Fitch Ratings warned Tuesday.”

And, Mike Lillis reported yesterday at The Hill Online that, “Rejecting GOP ultimatums, Rep. Steny Hoyer (D-Md.) said Tuesday that new revenues must accompany spending cuts as Congress prepares to jump headfirst into a series of high-stakes budget debates.

“Republican leaders have vowed that the tax hikes in the recent ‘fiscal cliff’ deal will be the last they consider as lawmakers brace for the coming battles over raising the debt ceiling, avoiding blunt sequester cuts and extending government funding.”

The Washington Post editorial board indicated today that, “However, the approaching debt ceiling is not the only inflection point facing the government and, possibly, the economy. On March 1, some $109 billion in automatic spending cuts kick in, the first installment of a ‘sequester,’ evenly divided between defense and domestic programs, that is worth about $1 trillion over the next decade. On March 27, the most recent extension of federal spending authority will lapse, forcing a partial shutdown of government operations.

“Though fraught with potential pain for the economy, and with potential political blame for the Republicans, neither the sequester nor a partial government shutdown poses quite the same risk, for the country or the GOP, that the debt ceiling does. Hence, the party retains some leverage. While Mr. Obama may refuse to negotiate over the debt ceiling, it’s not so clear that he and his fellow Democrats can avoid negotiating with the Republicans entirely — the urgings of certain members of Mr. Obama’s party to the contrary notwithstanding.

“Fortunately, Mr. Obama left the door open to that possibility in his otherwise combative news conference Monday. Alluding to his close-but-no-cigar debt-reduction talks with House Speaker John A. Boehner (R-Ohio) after the November election, he suggested that there could still be a modified version of that near-deal, worth about $1.5 trillion over 10 years, including revenue raised by tax reform and ‘some additional cuts, including . . . reducing our health-care spending.’ That would be unsatisfactory, relative to the country’s debt problem. But relative to the country’s current political and fiscal impasse, such an outcome would rate as a very happy ending indeed.”

 

Agricultural Economy

Hannah Furfaro reported yesterday at the Ames (Iowa) Tribune Online that, “Supermarket prices for beef are expected to rise for the second year in a row this year, as much as 4 percent, according to an Iowa State University economist who studies cattle market prices.

“The increase would follow a jump of 6.5 percent in 2012, experts said Monday.

“ISU livestock specialist and economist Lee Schulz, who does projections based on cattle production and liquidation, said fluctuations in retail prices for beef and pork are typical, but the double-whammy of last year’s drought conditions and prior years of high liquidation rates of cattle herds will cause higher-than-average increases in supermarket prices over the next several months.”

Zack Colman reported yesterday at The Hill’s Energy Blog that, “A federal court on Tuesday preserved an Environmental Protection Agency (EPA) ruling that permits the sale of a high-ethanol fuel blend.

“The U.S. Court of Appeals for the District of Columbia denied a rehearing on the EPA decision that put fuels with a 15-percent ethanol concentration, known as E15, on the market.

“The development is a win for the biofuels industry, which also is fighting off a lobbying effort against E15 and a biofuel blending mandate vital to the industry.”

 

Immigration

David Nakamura and Felicia Sonmez reported in today’s Washington Post that, “The Obama administration suggested Tuesday that there are signs that bipartisan cooperation might be possible on immigration reform, in light of some new ideas being championed by Republican Sen. Marco Rubio (Fla.).

“White House press secretary Jay Carney said that Rubio’s proposals to offer more visas to highly skilled tech workers and potentially provide legal status and citizenship to many of the nation’s 11 million illegal immigrants ‘bode well for a productive, bipartisan debate.’”

The Post article noted that, “President Obama has promised a vigorous push for comprehensive immigration reform — including a path to citizenship for illegal immigrants — early in his second term.

“Rubio, a tea party favorite and potential 2016 White House contender, laid out his newest ideas in an interview with the Wall Street Journal last week. He insisted on tight border security and emphasized that foreigners who arrive legally must be treated fairly. But he split from conservatives who do not favor offering any legal status or citizenship to undocumented workers because, they say, it would reward people who break the law.”

Keith Good

Comments are closed.