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Budget; Farm Bill; Ag Economy; and, EPA

Budget Issues

David Rogers reported yesterday at Politico that, “A stopgap bill to avert a government shutdown next week and keep agencies operating through September advanced in the Senate Monday night — powered by a renewed bipartisan partnership in the Appropriations Committee leadership.

“On a 63-35 roll call, 10 Republicans joined Democrats to limit further debate on the 587-page package, which seeks to greatly expand on the House-passed version of the same continuing resolution or CR.

“The strength of the vote all but assures passage, and Senate Majority Leader Harry Reid said it was his ‘sincere hope’ that this will occur Tuesday. All indications are once the Senate acts, the House Appropriations Committee leadership is prepared to take the modified Senate CR directly to the House floor, possibly as early as Thursday.”

Mr. Rogers explained that, “Indeed, since Oct. 1 the government has been operating under a CR due to expire March 27, a week from Wednesday. The resolution now ensures a smooth transition but also is pivotal for agencies trying to adapt to the across-the-board cuts ordered March 1 under sequestration.

“As part of its political bargain with the House, the Senate made no attempt to overturn sequestration. Instead the focus has been to update the base from which the cuts are made by providing departments with more detailed full-year appropriations.

“The House did the same but for only Defense and Veterans Affairs. The Senate added Justice, Agriculture, Commerce, Homeland Security, the Food and Drug Administration, the National Science Foundation and NASA. Taken all together, more than two-thirds of the discretionary funding for 2013 will now be subject to relatively detailed appropriations.”

Yesterday’s article pointed out that, “Nonetheless, there remains considerable pressure for rifle-shot changes sought by a variety of home state interests impacted by sequestration.

Meat packers want to shift money in the Agriculture Department’s budget to prevent furloughs of food safety inspectors whose presence is needed to operate been and poultry processing plants.”

Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Unless a deal is reached, a vote on final passage of the C.R. can’t occur until 30 hours after cloture is invoked.

Republican Sens. Lamar Alexander (Tenn.), Roy Blunt (Mo.), John Boozman (Ark.), Thad Cochran (Miss.), Susan Collins (Maine), Mike Johanns (Neb.), Johnny Isakson (Ga.), John Hoeven (N.D.), Lisa Murkowski (Alaska) and [Richard Shelby (Ala.)] voted with Democrats to advance the bill. Sen. Jon Tester (Mont.) was the only Democrat to vote against the motion.”

Recall that last week Sen. Tester highlighted two separate provisions contained in the Senate CR, that in his view, were detrimental to family farmers.  These included measures relating to “large meatpacking corporations and companies that develop genetically-modified crops.”

A tweet yesterday from the National Sustainable Agriculture Coalition explained that, “Senate just dealt #sustainableag a major blow: cloture vote means bad #GIPSA and #biotech riders stay in the CR, despite massive opposition.”

A news update yesterday from Sen. Roy Blunt (R., Mo.) stated that, “This afternoon, Senate Democrats blocked [Sen. Blunt’s] attempt to introduce an amendment today to protect American jobs and public safety by ensuring ‘essential’ federal employees continue to provide vital services in the wake of sequestration.

“Blunt’s amendment would apply the same standards used during occurrences of inclement weather or other government shutdowns to the sequestration cuts to each agency, which would protect food inspections, control tower operations, and border security. During his remarks on the floor, Blunt promised to introduce the provision as a stand-alone bill” (related video of a portion of Sen. Blunt’s remarks from yesterday available here).

The update added that, “Blunt offered a separate amendment with U.S. Senator Mark Pryor (Ark.) to solve a funding gap for the Food Safety and Inspection Service (FSIS) and ensure that food inspectors are not furloughed.”

And AP writer Andrew Taylor reported today that, “The catchall bill advanced on a 63-35 procedural vote that sets up a vote Tuesday to pass the measure and send it back to the House, which is likely to clear it later this week for Obama’s signature.

“While top Senate leaders like No. 1 Democrat Harry Reid of Nevada focused on the big picture — preventing a government shutdown — rank-and-file senators were sweating the small stuff, focusing on local concerns like keeping meat inspectors on the job, preventing furloughs at rural airports and trying to ease layoffs at Army depots.

“But 10 Republicans, mostly members of the appropriations committee, joined with Democrats to send the measure over the 60-vote hurdle set by Republicans, probably blocking amendments sought by senators in both parties.”

In other budget developments, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Sen. Jeff Sessions (R-Ala.) asked Agriculture Secretary Tom Vilsack how much money is spent on immigrants using food assistance programs in the United States.

“Sessions said the information was important for senators to know as they consider a budget resolution this week.

“‘To assist Senators in their work on the budget, and as well as work on future government funding measures, it would be helpful to have certain additional details about the food stamp program as well as the 14 other nutrition-support programs administered by USDA,’ Sessions wrote in a letter to Vilsack on Friday.”

The Hill update added that, “The Senate will likely vote on Chairwoman Patty Murray’s (D-Wash.) budget later this week.”

And, Erik Wasson reported yesterday at The Hill Online that, “House and Senate leaders appear to have minimized defections on their budget plans in a show of strength ahead of fiscal fights this summer.

“The dueling blueprints from Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) tested party unity on both sides, but a whip count by The Hill indicates leaders have enough support to pass them.”

The Hill update pointed out that, “Neither budget resolution has a shot at being reconciled with the other, but both sides believe the votes — which could happen later this week — will give them leverage as they head into another high-stakes battle over the debt ceiling.

The budget votes could come at an electoral cost, particularly for Senate Democrats. “

 

Farm Bill

Rep. Kristi Noem (R., S.D.) was interviewed last week by AgriTalk host Mike Adams and their discussion was featured on yesterday’s AgriTalk program (FarmPolicy.com transcript).

With respect to the Farm Bill, Rep. Noem stated that, “I’m thinking as soon as we’re done with some of these budget issues we’re facing right now the [Agriculture] committee will get to work on it and we’ll be able to put a package together that we can get through the House and get agreement with the Senate.”

More specifically on the SNAP program, Rep. Noem indicated that, “You know, I don’t look at it as cuts. I look at it as reforms, because we’re not going to change the eligibility levels. If people qualify for that program today, they’re going to qualify in the future. What we want to do is eliminate a lot of the fraud that’s happening, or some of the loopholes that were created by the law.

“For instance, many states are receiving incentive payments from the federal government to sign more people up, and they found a loophole where, if they can qualify a family for heating oil assistance, they automatically then can qualify them for food stamps, which in turn, they may send a family a one or five dollar check for heating oil assistance, which gets them on food stamps.”

Rep. Noem added that, “The state then receives more money from the federal government, and at the end of the day we have a family that didn’t have to prove any income levels to become eligible, people that maybe called an 800 number qualified and signed up for the program. They maybe got a brochure in the mail that they used to qualify. They maybe won the lottery, but that wasn’t taken into account on their income level.

All we want to do is to make sure that the integrity of the program is protected. If you put those reforms in there that say, hey, just show us your income level, and if you’re below that, we want to make sure that you get the help, but if you’re above that, then we’re going to ask that this continue…this program no longer be abused. And if we really care about the SNAP program and recognize that it’s there to help people in need, we’ll want to protect the integrity so that it’s not jeopardized for having a bad reputation and could be lost in the future.”

And on the issue of crop insurance, Rep. Noem stated during the AgriTalk interview that, “You know, when I’m talking to people who don’t understand agriculture, I tell them that crop insurance prevents us from having a disaster bill every year to deal with in Congress, because ag is going to face some kind of a challenge somewhere in this country that’s going to have to be taken care of. So that’s what crop insurance does. It’s a much more responsible way to do it. We can budget for crop insurance. And it also, a lot of producers need it just to go to their banks and be able to get an operating loan at the beginning of the year, so that safety net is critical, and we’re going to work real hard to make sure we protect it and make sure it works.”

Meanwhile, Christopher Doering reported yesterday at the Des Moines Register Online that, “Crop insurance indemnities have risen to nearly $16 billion for 2012 crop year, the U.S. Agriculture Department said in its latest report issued on Monday, as the impact of last year’s widespread drought continue to take their toll.

“The figure, which was up more than $150 million from the prior week, pushed the total for 2012 to $15.9 billion. The figure is far higher than 2011 when a series of natural disasters ranging from a freeze in Florida to drought in Texas prompted insurance companies to pay out a record $10.8 billion to farmers, short of the $12 billion they collected in premiums.”

Also, the Des Moines Register editorial board stated yesterday that, “Increasingly, urban interests have a hard time seeing the need for taxpayer-financed farm support programs. That means farmers are going to have to work harder to make the case that taxpayer subsidies are needed and that those subsidies are not encouraging irresponsible farming practices.”

 

Agricultural Economy- Trade

Julie Creswell reported in today’s New York Times that, “From the potato fields of Michigan to the high prairies of Kansas, farmers are receiving record prices for their land — but economists and banking regulators warn that this boom, like so many before it, could end badly.

“Across the American heartland, farmland prices are soaring. In places like Waco, Neb., and Chickasaw County, Iowa, where the boom-and-bust cycle of farming reaches deep into the psyche, some families are selling the land that they have worked for generations, to cash in while they can.”

The Times article added that, “But if the price of corn falls — and many forecasters predict it will, particularly if the ethanol boom wanes — the price of farmland will fall with it. While many farmers have borrowed little money or used cash to finance their purchases, those who have overexpanded could run into trouble, leaving banks and other creditors with their bad debts.

“‘You can’t continue to see the price increases in land like we’ve been seeing. That’s just heading for trouble,’ said Michael Duffy, an economist in farm management at Iowa State University. If the price of a bushel of corn were to fall to $4.50 from about $7 now, farmland values could collapse by as much as 25 percent, he said.

“The potential dangers for the economy are nowhere near as serious as the consequences of the housing collapse. But for individual farmers and farming communities, as well as rural farming banks, the repercussions could be severe.”

Meanwhile, Jonathan Soble reported yesterday at The Financial Times Online that, “When he is not tending his small one-hectare rice paddy in the mountains of Shikoku island, Hitoshi Kondo is a banker to Japanese farmers…Mr Kondo is worried that Shinzo Abe, the prime minister, is about to damage his way of life, and that of his neighbours and customers, by joining talks over the trans-Pacific Partnership (TPP), a sweeping trade deal being negotiated by the US and 10 other countries.”

The FT article noted that, “Mr Abe has pledged to protect Japan’s ‘beautiful’ rice fields and ‘safe, delicious food’. Yet in acting against the views of Mr Kondo, and most of Japan’s agricultural sector, he has made clear that a once-fearsome lobby has lost much of its power.”

“Yet, in spite of such objections, a poll published on Monday by the Yomiuri newspaper showed that 60 per cent of Japanese support Mr Abe’s decision. That is partly a function of demographics: today only one in 10 Japanese lives in the countryside, compared with one in four in 1985,” the FT article said.

Also, the Senate Finance Committee will hold a hearing today with Demetrios Marantis, the Acting U.S. Trade Representative, titled, “The President’s 2013 Trade Agenda.”

 

EPA Issues

A news release yesterday from Sen. Roy Blunt (R., Mo.) stated that, “[Sen. Blunt] announced today that he is placing a hold on the Environmental Protection Agency’s (EPA) Administrator nominee, Gina McCarthy, until the Obama Administration announces a timeline for the release of the draft Environmental Impact Statement (EIS) for the St. Johns Bayou and New Madrid Floodway Project in Southeast Missouri.

“Five months after the U.S. Army Corps of Engineers cancelled a scheduled public presentation on the plan, Blunt and U.S. Senator Claire McCaskill (Mo.) brought the EPA, U.S. Army Corps of Engineers, and the Fish and Wildlife Service together on February 27, 2013 to resolve the disputes that are delaying a final decision on the project. During the meeting, representatives from the agencies committed to providing the Senators with a progress report by March 15, 2013 to ensure that all federal entities involved in the project agree on the facts and are finally moving toward a final decision.”

And Randy Spronk, the president of the National Pork Producers Council, indicated in a recent column at Roll Call Online that, “The management of the Environmental Protection Agency and how it interacts with industries it regulates is in need of a major overhaul. The U.S. Pork Industry believes that Gina McCarthy, President Barack Obama’s nominee to be the agency’s new administrator, is poised to make that happen.

“Under McCarthy’s leadership as assistant administrator for EPA’s Office of Air and Radiation for the past four years, the staff in the EPA Air Office has been smart, professional, transparent and trustworthy; they say what they mean and mean what they say. And for the stakeholders affected by the policies of that office, that has been, well, a breath of fresh air.”

The column noted that, “There are some challenging roads ahead for the U.S. pork industry. The real effect of one of our nation’s biggest droughts in history is expected to be felt for years to come; the threshold for temporarily waiving the renewable fuel standard, especially in times of drought, continues to be too high; and we continue to be attacked with non-scientific claims by well-funded special interest groups. However, in these times of adversity, it is promising to U.S. hog farmers that the new EPA administrator will treat us as partners and not adversaries.”

Keith Good