FarmPolicy

July 28, 2014

Budget- Policy Issues; Ag Economy; and, Biotech

Budget- Sequestration, Policy Issues

Ian Swanson and Alexander Bolton reported on Friday at The Hill’s On the Money Blog that, “The question in Washington is no longer whether the automatic spending cuts known as the sequester will be implemented: It’s when and even if the spending reductions will ever be shut off.”

The update noted that, “‘We’re pretty far away because we have revenue in ours,’ said Sen. Ben Cardin (D-Md.), commenting on the daylight between Democratic and GOP leaders.

“Cardin was commenting on a proposal unveiled Thursday by Senate Democrats that would thwart the first $85 billion in spending cuts set to hit government on March 1.”

Besides increased revenue, the proposal from Senate Democrats also cuts direct payments for farmers, as does a package from House Democrats that would also forestall sequestration.

At a news conference on Friday with Democratic House Leaders, Budget Committee Ranking Member Chris Van Hollen (D., Md.) stated that, Direct Payments “serve no useful purpose right now” [related video clip].

However, recall that House Ag Committee Chairman Frank Lucas noted last week that, “The Senate’s approach of taking away our investment in rural America without addressing the hole it will create is not balanced and not acceptable.”

Jonathan Weisman reported in Friday’s New York Times that, “Senator Max Baucus of Montana, the chairman of the tax-writing Finance Committee, said he worried that wringing savings from farm subsidies now instead of in a broad farm bill would make it harder to pass an overhaul of agricultural programs that has been stalled for nearly a year.”

In a news release Friday, Senate Ag Committee Ranking Member Thad Cochran (R., Miss.) pointed out that, “I’m disappointed that the Senate Democratic sequester package falls squarely on the backs of our defense and agriculture sectors.  I understand that this is a political messaging bill, and I think it’s unfair and unfortunate that the entire federal government looks to agriculture and national defense to pay for its debt.  I look forward to working collaboratively with members of both parties to address the challenges facing the nation.”

An update Friday from Sen. John Boozman (R., Ark.) indicated that, “The Senate Majority’s so-called ‘balanced’ proposal to avoid sequestration includes $27.5 billion in cuts to agriculture programs that would leave a gaping hole in our nation’s food safety net.

“[Sen. Boozman], a member of the Agriculture Committee, rejected this proposal, calling it a ‘food fight with rural America.’”

As part of a longer analysis of the agricultural safety net, Sen. Boozman stated that, “Some in the Senate Majority continue to imply that Direct Payments are given to folks who don’t need them. To be clear, Direct Payments have been incredibly important to our farmers in Arkansas as they have suffered through the drought that has rippled through our nation’s entire agriculture economy. They have been important to our growers who have suffered significant increases in input costs, poor yields, or market interruptions due to low river levels on the Mississippi River and they have been incredibly important in securing credit, including this spring as growers are making planting decisions and arranging financing. Our producers are ready to contribute to deficit reduction—including the ultimate elimination of Direct Payments—but not by singling out one particular program in some shady back-room deal. We need a responsible and balanced process that reforms our safety net in the context of a five-year Farm Bill that includes choices that protect all crops and regions, and we should begin working on that right away.”

Also on the Senate proposal, American Farm Bureau Federation President Bob Stallman stated in part on Friday that, “The magnitude of these proposed cuts will hamstring the House and Senate Agriculture committees from crafting a farm bill that includes the safety-net and risk-management provisions that our farmers need. We also believe it is very unfair that only the Defense and Agriculture programs are tapped to reduce spending in this bill.”

Chuck Conner, president and CEO of the National Council of Farmer Cooperatives, pointed out on Friday that, “The larger issue is that the proposal targets only a tiny sliver of the farm bill budget for cuts–over three quarters of farm bill spending goes towards nutrition programs like SNAP and these programs will not contribute a single penny towards deficit reduction under this proposal.  Less than a year ago, the Senate found savings of $4.5 billion from SNAP when they overwhelmingly passed a new five-year farm bill; I think that farmers have the right to ask their Senators why these cuts have gone from acceptable to unacceptable in less than 10 months.”

Meanwhile, an update posted on Friday at the National Sustainable Agriculture Coalition (NSAC) Blog stated that, “The Senate Appropriations Committee held a hearing on February 14, 2013 on the varying doomsday scenarios that will play out should Congress fail to prevent the self-imposed sequestration.  The hardline cuts are expected to take effect on March 1 and the damage could begin immediately in some cases.”

The NSAC item added that, “Senators Mark Pryor (D-AR) and Roy Blunt (R-MO), Chairman and Ranking Member of the Senate Subcommittee on Agriculture Appropriations highlighted the devastating impact the loss of USDA Food Safety and Inspection Service inspectors would have on our nation’s meat, poultry, and egg industries.

“In a letter to Senate Appropriations Chairwoman Barbara Mikulski (D-MD), USDA estimated that up to 2 billion pounds of meat, 2.8 to 3.3 billion pounds of poultry, and over 200 million pounds of egg products would be lost, resulting in a $10 billion industry loss.”

Furthermore, Dan Piller reported in Saturday’s Des Moines Register that, “U.S. Secretary of Agriculture Tom Vilsack said Friday he is not crying wolf when warning that meat processing plants could go out of business if Congress fails to pass a budget by March 1.

“‘Every production line needs an inspector at the end, and if we have to furlough them, then production will stop,’ Vilsack told Des Moines Register editors and reporters Friday.”

The Register article added that, “But Vilsack said: ‘We have no options. The cuts have to be made across the board, and I don’t have enough authority to shift money from one program to another.’”

Josh Hicks reported on Friday at The Federal Eye Blog (Washington Post) that, “Asked about food inspections and air-traffic controllers, [Office of Management and Budget controller Danny Werfel] said [on Thursday] neither would be exempt from sequestration.”

In other developments, Rupa Shenoy reported on Saturday at Minnesota Public Radio Online that, “U.S. Agriculture Secretary Tom Vilsack came to Minnesota on Saturday in part to urge passage of the farm bill in Congress…“‘An extension of the existing bill did not include any livestock disaster assistance,’ Vilsack said. ‘It didn’t include a new system for dairy that would’ve made it a little bit easier for dairy producers in this state to continue in production. Didn’t include a rural development commitment; it didn’t include an energy title. So all of the things we were talking about in terms of rebuilding this rural economy, that in turn helps to create jobs here in cities, isn’t adequately supported with an extension of the existing bill as it was structured.’”

And Denise Ross reported on Friday at The Daily Republic (Mitchell, S.D.) Online that, “The U.S. House Agriculture Committee is likely to roll up its sleeves for work on the farm bill this spring, Rep. Kristi Noem, R-S.D., told reporters Thursday.

“‘It will be sooner this spring rather than later into the summer,’ Noem said after meeting with Agriculture Committee Chairman Frank Lucas, R-Okla.”

Eric Brown reported on Saturday at the Greeley Tribune (Colo.) that, “Mark-up sessions for a new five-year farm bill aren’t expected to take place until the middle of March, according to the agricultural policy staffer for Sen. Michael Bennet, D-Colo.

“During the Governor’s Forum on Colorado Agriculture on Thursday, Jeffery John — joined by Colorado Deputy Agriculture Commissioner Ron Carleton and Colorado Farm Service Agency Executive Director Trudy Kareus — told his audience that the speed at which farm bill discussions progress is at the mercy of lawmakers’ larger budget discussions, much like it was in 2012.”

In news regarding crop insurance, Don Jergler reported last week at the Insurance Journal Online that, “As the newest member of the House Agriculture Committee Congressman John Garamendi [D., Calif.] says he plans to put crop insurance, agricultural research, conservation programs, food security and the marketing of regional crops worldwide at the top of his list of priorities.”

The article noted that, “Among those topics crop insurance is of particular interest to him, Garamendi told Insurance Journal.

“‘I expect that I’ll be deeply ingrained in that issue,’ he said, adding he believes the role of crop insurance is to help ‘provide the kind so support the agricultural industry needs at a cost that they can afford.’”

In other policy news, Rhonda Cook and Shannon McCaffrey reported yesterday at The Atlanta Journal Constitution Online that, “A federal program that provides food for low-income women and their children is so badly mismanaged in Georgia that state taxpayers could be slammed with a $20 million penalty.

“Systemic problems in the Women, Infants and Children nutritional program, commonly know as WIC, have allowed stores to charge the government outrageous prices for basic commodities such as milk, according to a review of state and federal records by The Atlanta Journal-Constitution. The situation is so dire that federal officials want Georgia to stop approving new stores as WIC vendors until the state gets its act together.”

Ben Goad reported on Friday at The Hill’s RegWatch Blog that,  “The Food and Drug Administration (FDA) announced Friday it is delaying the close of the comment period on a long-awaited food safety overhaul.

“The move sparked immediate criticism from Rep. Rosa DeLauro, a vocal food safety advocate who has pressed the agency to move swiftly to adopt a pair of proposed rules unveiled last month.

“DeLauro (D-Conn.) said she feared special-interest pressure was compelling FDA to slow-walk the rule.”

And Chad Gregory, the president of the United Egg Producers, in an update posted on Friday at the Hill’s Congress Blog (“Egg bill is good for farmers, consumers and for egg-laying hens”), discussed “legislation providing a national standard for egg production in the U.S.”

 

Agricultural Economy- Trade

Bloomberg writer Alan Bjerga reported on Friday that, “U.S. crop values rose 6.4 percent last year to a record as the worst drought since the 1930s pushed the price of corn and soybeans, the two most-valuable U.S. crops, to all-time highs.

The value of all crops was $225.7 billion, up from $212.1 billion in 2011, the U.S. Department of Agriculture said today in a report. Field crops including corn and soybeans jumped to $187.8 billion from $175.4 billion. Fruits and nuts rose to $25.9 billion from $24.2 billion, while commercial vegetable harvests were valued at $12.1 billion, down from $12.5 billion.”

Bloomberg writer Elizabeth Campbell reported late last week that, “The worst U.S. drought since the 1930s is shrinking a cattle herd that’s already the smallest since 1952 and signaling tighter beef supplies and higher costs for restaurant owners.”

While Dan Piller reported in Saturday’s Des Moines Register that, “Cowboys aren’t driving cattle northward from Texas, but the drought that began in the Southwest two years ago has caused a shift in the nation’s cattle population from south to north.”

The Register article included this interesting graphic depicting regional changes in cattle numbers, “Cattle inventories decline.”

In a separate article in Sunday’s Des Moines Register, Dan Piller reported that, “Beef prices are expected to increase as much as 10 percent by summer, leading beef producers and sellers to worry that their product might become a luxury.

“‘We can’t let beef turn into lobster,’ said Ed Greiman of Garner, the president of the Iowa Cattlemen’s Association.”

With respect to trade issues, an update Friday at The Des Moines Register Online indicated that, “U.S. Secretary of Agriculture Tom Vilsack said Friday that a ban on imports of pork and beef by Russia has less to do with recent strains in the diplomatic relationship between the two countries than a desire by Russian President Vladimir Putin to protect his country’s agriculture.

“‘Putin wants to favor his own country’s agriculture and make it more self-sufficient,’ said Vilsack. The Secretary noted that the USDA and the U.S. Trade Representative’s office had voiced objections ‘in no uncertain terms.’ to the import ban, which went into effect Monday.”

And Bloomberg writers Brian Wingfield, Alan Bjerga & Rudy Ruitenberg penned an article on the US- EU trade agreement on Friday titled, “California Wine May Not Pair With French Cheese in Talks.”

 

Biotech- Monsanto U.S. Supreme Court Case

Andrew Pollack reported in Saturday’s New York Times that, “With his mere 300 acres of soybeans, corn and wheat, Vernon Hugh Bowman said, ‘I’m not even big enough to be called a farmer.’

“Yet the 75-year-old farmer from southwestern Indiana will face off Tuesday against the world’s largest seed company, Monsanto, in a Supreme Court case that could have a huge impact on the future of genetically modified crops, and also affect other fields from medical research to software.”

The article added that, “At stake in Mr. Bowman’s case is whether patents on seeds — or other things that can self-replicate — extend beyond the first generation of the products…[M]onsanto says that a victory for Mr. Bowman would allow farmers to essentially save seeds from one year’s crop to plant the next year, eviscerating patent protection. In Mr. Bowman’s part of Indiana, it says, a single acre of soybeans can produce enough seeds to plant 26 acres the next year.”

Keith Good

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