June 21, 2018

Farm Bill; EPA; Ag Economy; and, Budget Developments

Farm Bill- Policy Issues

Heather Rutz reported earlier this week at The Lima News (Ohio) Online that, “House Speaker John Boehner had lots to say about many things Tuesday during a forum with members of the Ohio Farm Bureau but little to say about the bureau’s priority legislation: a new Farm Bill.

Boehner did pledge to get a new Farm Bill done and said he expected the Senate to do the same this year.

“‘We had a very tough time last year getting to a farm bill. We are going to do a farm bill this year. And I expect the Senate will do a farm bill as well,’ Boehner said.”

The article noted that, “Boehner is known to oppose supply management programs, especially for dairy. He said so again Tuesday but otherwise said he would ‘keep my opinions on the farm bill to myself at this point.’

Boehner said the large fight will be around food stamps and other government nutrition programs that make up 80 percent of the Farm Bill. Eligibility for food stamps was ‘widened in a significant way’ several years ago, he said, and now 18 million more Americans are on food stamps now than four years ago.

“‘The really big fight will be over how big of changes we’re going to make on the SNAP (food stamp) program,’ he said.”

And, a news release yesterday from Sen. Sherrod Brown (D., Ohio) stated that, “[Sen. Brown] renewed his call for a five-year farm bill while addressing the Ohio Farm Bureau in Washington, D.C. today. While outlining the Senate’s efforts to pass a farm bill that would reduce the deficit by $23 billion, Brown also discussed efforts to boost economic development and job growth. Although the Senate-passed a five-year farm bill, the Farm, Food and Jobs Act, the House has failed to act. During the speech, Brown, who is a member of the Senate Committee on Agriculture, Nutrition, and Forestry, renewed his call for Congress to pass a permanent farm bill.”

With respect to nutrition related issues, a news release yesterday from Sen. John Hoeven (R., N.D.) stated that, “[Sen. Hoeven], Mark Pryor (D-Ark.) and a bipartisan group of senators today were joined by senior officials of the School Nutrition Association (SNA), which earlier this week endorsed the senators’ Sensible School Lunch Act. The new legislation will provide school districts with greater flexibility in implementing new rules for the National School Lunch Program and School Breakfast Program to accommodate the differing nutritional needs of students.”

Meanwhile, Ohio State University Agricultural Economist Carl Zulauf noted yesterday at the farmdoc daily blog (“Persistence of Low and High Prices for U.S. Row Crops: Implications for Managing Risk and Farm Policy”) that, “This article examines the occurrence of multiple years of low prices and multiple years of high prices over the period from 1974 through 2006 for the farm program crops of barley, corn, rice, sorghum, soybeans, upland cotton, and wheat. Understanding the occurrence of persistent low prices and persistent high prices is important to managing risk as well as designing policy.”

Yesterday’s update added that, “Because the crop insurance guarantee price is determined each year, low prices that span multiple years is not a risk covered by crop insurance. In essence, the occurrence of multiple years of low prices is a hole in the current crop insurance safety net. Hence, this analysis suggests caution in concluding that crop insurance is the only risk management tool a farm needs.

“Farm commodity programs have traditionally provided assistance against multiple years of low prices. But, this study finds that periods of persistent low prices often involve low prices that are only slightly below the average price. Farms need to develop a risk management strategy for these persistent periods of shallow low prices. For persistent periods of shallow low prices, a key risk management strategy is to have a low cost of production relative to other farms.”

In other policy issues, Megan R. Wilson reported yesterday at The Hill’s RegWatch Blog that, “The Food and Drug Administration (FDA) is partnering with the Animal and Plant Health Inspection Service to hold meetings in five states nationwide in an effort to formulate a rule that curbs antibiotic use in livestock used as food.

“Last year, the FDA proposed to require a veterinary prescription for any antibiotic in animals that would become food, and is reaching out to the industry, the public and local communities about the challenges that those regulations may impose.”


EPA Issues, Regulations

A news release on Tuesday from the National Chicken Council indicated that, “The National Chicken Council, along with seven other trade groups, recently sent a letter to the acting administrator of the Environmental Protection Agency Bob Perciasepe, to express deep concern over the public release by EPA of the personal and business information about thousands of livestock and poultry farmers across 30 states.

“This information was gathered from more than 30 state permitting authorities and simply transmitted as raw data to the Natural Resources Defense Council, Earth Justice, and the Pew Charitable Trusts as part of two separate Freedom of Information Act requests.  EPA apparently released the information without undertaking a review of the data to protect against the release of private or confidential business information that may have been improperly included in the states’ submissions.”

Peter Urban reported on Tuesday at Arkansas News Online that, “Rep. Rick Crawford, R-Jonesboro, raised concerns Tuesday over the release of confidential farm information collected by the Environmental Protection Agency… [Rep.] Crawford questioned Agriculture Secretary Tom Vilsack [at the House Ag Committee hearing on the rural economy] about what USDA knew of the national database EPA had compiled on farms [video replay of the discussion between Rep. Crawford and Sec. Vilsack available here].

“Vilsack said he was aware EPA was collecting data but was ‘obviously not aware’ that confidential information would be released. EPA is not part of USDA.”

The article noted that, “Vilsack said that USDA has passed along to EPA the concerns it has received regarding the release of the data.”

Also at Tuesday’s hearing, in a colloquy with Rep. Bob Gibbs (R., Ohio) on the EPA data release issue, Sec. Vilsack stated that, “We know that EPA has taken this issue very seriously, as they should. And we have indicated to them the concern that you’ve expressed and that has been expressed to them by various groups. And I think that they realize this is something that probably shouldn’t have been done.”

Meanwhile, Rep. Gibbs indicated in a column yesterday at The Hill’s Congress Blog that, “Being nominated as administrator of the EPA is quite an achievement for Gina McCarthy, and in all of the pomp and circumstance surrounding this appointment, I thought I would try to give a few words of advice to the new administrator as she takes over at a critical time in our nation’s history as it relates to the environment.

Rep. Gibbs added that, “Stay in the Sunshine: No more secret email accounts to avoid public scrutiny. No more gimmicks through ‘guidance’ to avoid the proper rulemaking process. If an EPA proposal is good enough to consider, then it is good enough for the public to view, and if necessary, challenge in court.”

And Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Time is running out for President Obama to make one of his most influential appointments: a regulatory chief who will serve as the gatekeeper for an avalanche of new rules from federal agencies.

“With Congress mired in partisanship, Obama is expected to lean heavily on the use of executive power to enact his agenda. At the same time, scores of new rules are now under consideration at the Office of Information and Regulatory Affairs (OIRA), the White House’s clearinghouse for federal mandates. Hundreds more are in the pipeline.

Whomever the president taps as the next OIRA administrator could have enormous influence on those rules, which are expected to be ground zero for lobbying battles over the next four years.”


Agricultural Economy

Yesterday, the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included several observations with respect to the U.S. agricultural economy.  A summary and overview of the agricultural related remarks from the Fed report can be found here, at Online.

A news release from Purdue University on Tuesday stated that, “A Purdue University survey shows that Indiana farmland values have continued to increase despite last summer’s severe drought, and farm managers and rural appraisers from across the state expect the trend to continue.

“The results of the survey, conducted at a Feb. 5 meeting of the Indiana Chapter of Farm Managers and Rural Appraisers, closely follow a February issue of AgLetter in which the Federal Reserve Bank of Chicago said farmland values in Iowa and parts of Indiana, Michigan, Wisconsin and Illinois were up 16 percent since early 2012 – the third largest increase since the late 1970s.”

Also on Tuesday, Bloomberg writer Phoebe Sedgman reported that, “Conditions in the U.S., the biggest wheat exporter, are improving after snowstorms increased soil moisture following the worst drought since the 1930s Dust Bowl, according to the U.S. Department of Agriculture.

“The eastern corn belt, including Illinois and Indiana, is essentially out of drought, Joe Glauber, USDA’s chief economist, said in an interview in Canberra today. While Iowa is still in drought, conditions are getting better, he said.”

Owen Fletcher reported in today’s Wall Street Journal that, “U.S. wheat futures fell to a fresh eight-month low Wednesday, pressured by wet weather for U.S. crops and continued concerns about weak export demand for the grain.

Corn prices slid 3.3% on similar concerns, marking corn’s biggest percentage decline in more than five months.”

The Journal article pointed out that, “Wheat and corn futures fell at the prospect of soil conditions further improving, which could lead to bigger harvests and greater supplies. U.S. wheat crops planted late last year will be harvested starting in May, while corn growers will begin planting crops next month for harvest this fall.”


Budget Developments- Continuing Resolution, Looking Ahead

David Rogers reported yesterday at Politico that, “The House approved a six-month stopgap spending bill Wednesday to keep the government operating past March 27 and shift billions of dollars to military operations to help the Army and Navy cope with automatic spending cuts ordered last week.

“The 267-151 vote sends the measure to the Senate where a bipartisan coalition hopes to expand on the package next week and give other Cabinet departments the same relief promised to the Pentagon.

“It will be a delicate exercise given the tensions over sequestration and the need to avoid a government shutdown at the end of the month. But influential House Republicans said Wednesday that they welcomed what the Senate is proposing, and by acting quickly, the House deliberately gave itself three weeks to make such a deal.”

Mr. Rogers noted that, “And as adopted, the House measure leaves in place the sequestration mechanism that forced landmark across-the-board spending cuts last Friday.”

Emily Holden reported yesterday at Roll Call Online that, “Composition of the Senate version of a fiscal 2013 spending package remains a question, although some Democrats and Republicans have said they will seek to add more appropriations bills to the package.

“Sen. Lamar Alexander, R-Tenn., a senior appropriator, said he would like to see spending bills for other departments and agencies that have already been worked out with the House included in the measure, and Senate Appropriations ranking Republican Richard C. Shelby of Alabama said that discussions about that were ongoing.”

The Roll Call article added that, “Appropriations Chairman Harold Rogers, R-Ky., said the bill  ‘takes the risk of a government shutdown off the table — funding the government for the remainder of the fiscal year while helping maintain our national security and providing our troops and veterans with consistent, adequate funding.’”

Kerry Young reported yesterday at Roll Call Online that, “Among the clear candidates for the Senate’s fiscal 2013 bill are those from the Commerce-Justice-Science subcommittee and the Agriculture and Homeland Security measures. Staff members and appropriators largely worked out House-Senate compromise agreements for these two last years.”

In addition, Rosalind S. Helderman and Philip Rucker reported in today’s Washington Post that, “With a government shutdown now unlikely, Obama is focusing on a new round of talks that the White House hopes could break the fiscal impasse. After more than two years of negotiations with GOP leaders that did not achieve a ‘grand bargain,’ the president is courting rank-and-file Republicans who may be interested in a deal that pairs cuts in entitlement programs with a tax overhaul that would include new revenue.

Obama invited 12 GOP senators to dinner Wednesday at the Jefferson Hotel in downtown Washington, where they dined for two hours. Obama picked up the tab personally, and two of his guests, Sens. John McCain (Ariz.) and Tom Coburn (Okla.), emerged flashing a thumbs-up.

“‘I think what he is really trying to do is just start a discussion and break the ice, and that was appreciated,’ Mike Johanns (Neb.) told reporters as he left the dinner. ‘His goal is ours — we want to stop careening from crisis to crisis and solving every problem by meeting a crisis deadline.’”

Peter Nicholas and Kristina Peterson reported in today’s Wall Street Journal that, “In addition to the dinner, the president has asked to address Republican and Democratic caucuses in the House and Senate next week. And in recent weeks he has stepped up contacts with business leaders, who could be important allies in maintaining momentum in the budget talks, should they begin in earnest.

“The overtures mark a departure for a president who has been criticized for shunning lawmakers, choosing instead to socialize and play golf with a small circle of friends and aides.”

And, Lori Montgomery reported in today’s Washington Post that, “After two years of anxious, high-wire negotiations over the federal budget, an exhausted Washington is about to hand the mess back over to the experts: the chairmen of the House and Senate Budget committees.

“In the next few weeks, Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) will roll out competing proposals for taming the national debt. If lightning strikes, both sides hold out hope that a Ryan-Murray conference committee could become the forum for litigating the partisan dispute over taxes and spending.

Especially if President Obama makes headway in his new outreach campaign to Republicans, a Ryan-Murray summit could produce the big deal that would let Congress avoid another nasty fight over the federal debt limit, which is once again looming in August.”

Meanwhile, Craig Jagger, President of Legis Consulting, noted recently (“Why do CBO cost estimates change?”) at the AgChallenge2050 Blog (Farm Foundation) that, “The Congressional Budget Office (CBO) provides Congress with official cost estimates (aka ‘scores’) of proposed and enacted legislation. These estimates are important because if the scored costs of a bill are too high or savings too low, the provisions of the bill will have to be changed.”

After additional analysis on CBO budget issues, Dr. Jagger provided several explanatory points on why CBO cost estimates change or don’t change.

In addition, yesterday’s update stated that, “CBO’s February 2013 baseline will not be the final scoring baseline for laws enacted later in 2013The CBO March or April 2013 baseline will be the ‘scoring’ baseline for the following 12 months, adjusted for newly enacted legislation or major administrative changes. Delayed release of the President’s Budget, which provides needed information to CBO, is holding up CBO’s March baseline. How CBO incorporates sequestration changes, which are not in its February 2013 baseline at the program level, is yet to be determined.

The bottom line is that if members of Congress have a bill that CBO estimates will meet budget targets, they need to do everything possible to get it enacted before baselines and cost estimates change. Both House and Senate Ag Committee leadership and members worked very hard in 2012 to do so. Despite their efforts, refusal by House leadership in 2012 to bring the House Farm Bill to the floor prevented getting a 2012 farm bill to a House-Senate conference where differences between the House and Senate bills would have been resolved and, very likely, a 2012 farm bill enacted.”

Keith Good

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