January 19, 2020

Budget; Farm Bill; Biofuels; Ag Economy; and, Regulations

Budget Issues

David Rogers reported yesterday at Politico that, “A far-reaching six-month funding bill cleared the Senate on Wednesday afternoon after final adjustments were made for the meat industry to forestall the planned furloughs of food safety inspectors this summer in the wake of sequestration.

“The measure goes next to the House, which is expected to give its quick approval Thursday so as to avoid any threat of a government shutdown when the current continuing resolution runs out March 27.

“The final 73-26 Senate roll call followed a 63-36 vote in which 10 Republicans — nine of them from the Senate Appropriations Committee — again provided pivotal support. And the eight days of floor debate signaled a renewal of that bipartisan partnership that has been historically important in moving legislation through the Senate.”

Yesterday’s article pointed out that, “Under the sequestration order March 1, the Food Safety and Inspection Service is subject to an estimated $51 million cut, and FSIS has warned that this will force 11 furlough days beginning in July.

“This could force major disruptions in the operation of plants — affecting consumers, as well. Sens. Mark Pryor (D-Ark.) [news item] and Roy Blunt (R-Mo.) [news item] — both with large packing houses in their states — combined Wednesday to add back an estimated $21 million of that cut by shifting money from other areas of the Agriculture Department budget, including a school breakfast grant program favored by the White House.”

Mr. Rogers explained that, “At one level, the action underscored the immense power that the major beef packers have in Congress. Indeed, elsewhere in the same CR is language added by the industry to block funding for proposed market regulations sought by smaller ranchers and cow-calf operations fearful of the packers’ concentrated economic power.

“At a second level, the meat industry’s success testifies to Blunt’s willingness to work with the Appropriations leadership and Senate Majority Leader Harry Reid (D-Nev.) to move the bill ahead.

In Monday night’s first cloture vote, Blunt backed cloture even before agreement was certain on his amendment.”

With respect to the Blunt-Pryor Amendment, Reuters news reported yesterday that, “‘If it gets passed, we will apply it,’ Agriculture Secretary Tom Vilsack told reports on Tuesday. Otherwise, he said, there was no way to avoid furloughs of all inspectors for a total of 11 days.”

However, in a statement yesterday, Iowa GOP Senator Chuck Grassley indicated that, “It seems pretty clear that the Department of Agriculture is not doing everything possible to avoid something as drastic as furloughing meat and poultry product inspectors, and has failed to follow the OMB directive on the sequester, which unfortunately made this amendment necessaryGiven the uncertainty USDA has created with its rhetoric about furloughs, this amendment allowed Congress to give certainty back to farmers, consumers, and workers in the meat and poultry products industry.”

In addition, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Sen. Jon Tester, D-Mont., also had two amendments that didn’t make the final cut. One would have stripped out language in the CR that would require USDA to approve the harvest and sale of crops from a biotech seed even if there is a court order declaring that the environmental studies on the crop were inadequate. The language in the CR is comparable to language that was in the House farm bill last year. The provision would require USDA to issue a permit to the farmer to harvest the crop. While the anti-biotech crowd opposes the provision, several major agricultural groups opposed the language in the House farm bill last year, fearing potential problems mainly with exports.”

Also, an amendment by Sen. Pat Toomey (R., Pa.) that would have slashed military biofuels program and transferred the money to military maintenance failed to pass on a 40-59 vote.  (Related audio featuring remarks from Sen. Toomey yesterday on the floor available here (MP3- 1:15).

In a tweet yesterday, Senate Appropriations Chairwoman Barbara Mikulski (D., Md.) referenced a Committee news release on the Senate CR and noted that, “I look forward to swift action in House so we can focus on a budget, cancel sequester & get back to regular order.”

And Bloomberg writer Alan Bjerga reported yesterday that, “The Senate spending bill would fund the federal government through Sept. 30. House Budget Committee Chairman Paul Ryan yesterday said his Republican colleagues may accept the Democrats’ spending measure as-is. House Appropriations Committee Chairman Hal Rogers said he expects the bill to pass tomorrow.”

Also yesterday, the Senate moved to begin considering its 2014 budget resolution.   When the Senate gets started this morning, there will be 34 hours of debate remaining on the measure.

And Jeremy W. Peters and Jonathan Weisman reported in today’s New York Times that, “While the Senate dealt with the most immediate financial concerns, the House of Representatives engaged in an animated debate over the budget for the 2014 fiscal year that begins when the spending measure expires Sept. 30.

The irreconcilable views that the two parties hold on economics, public spending and the role of government could not have been in starker conflict.”


Farm Bill

A recent update posted at Farm Policy Facts Online indicated that, “Former USDA Chief Economist Keith Collins, Ph.D., predicts a smaller farm safety net in the future, but one that cements crop insurance.

“‘We will see a greater evolution in the reliance on crop insurance in 2013, Collins said.

“Collins stated that one only needs to look at the past few years to recognize the important role crop insurance plays in helping farmers hit by Mother Nature.”

The update noted that, “‘Crop insurance has prevented lots of farm stress that would have occurred and as a result, farmers are paying their bills,’ Collins said.

“Collins made his remarks during the Capitol Hill Ag Day forum, ‘Farm to Fork Politics: An Insider’s Look at the Year Ahead.’”

A news release yesterday from USDA stated that, “Agriculture Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon today announced a new federal-state partnership targeting recipient fraud in the Supplemental Nutrition Assistance Program (SNAP). USDA will share its extensive experience in monitoring retailer fraud to help states develop a more robust set of tools to identify suspicious activity and improve tactics to catch recipients that attempt to commit SNAP fraud. By law, USDA is responsible for overseeing the more than 250,000 retailers that redeem SNAP benefits nationwide, while states are responsible for identifying and pursuing fraudulent activity by recipients.”

A news release from Rep. Adrian Smith (R., Neb.) indicated that, “[Rep. Smith] and Congressman Mike McIntyre (D-NC) will serve as co-chairmen of the bipartisan Congressional Rural Caucus for the 113th Congress.”

And Manu Raju reported yesterday at Politico that, “Could Mississippi Sen. Thad Cochran be the next GOP senator to retire?

He won’t say.

“‘It’s too early to decide,’ Cochran said when asked about whether he’ll run in 2014.

“As for a timeframe on making a decision, Cochran said, ‘I don’t have it.’”

The Politico item added that, “But it’s widely expected inside the Senate that he will call it quits. If he retires, he would become the seventh senator to forgo an attempt at reelection next year. Others who are on the watch list for possible retirements include Sens. Tim Johnson (D-S.D.) and Mike Enzi (R-Wyo.).”



Amy Harder reported yesterday at National Journal Online that, “For the first time since President Obama won the White House in 2008, the top Republican and top Democrat on the House Energy and Commerce Committee are working collaboratively on a controversial piece of energy policy: the renewable-fuels standard.

“Energy and Commerce Chairman Fred Upton, R-Mich., and ranking member Henry Waxman, D-Calif., released the first in a series of white papers on Wednesday seeking input on how—or whether—Congress should change the mandate for production of biofuels as gasoline blends.

“‘As part of a bipartisan review, the committee plans to release a series of white papers examining a number of issues emerging with the RFS,’ committee spokeswoman Charlotte Baker said.”

A news release yesterday from Sen. Sen. David Vitter (R., La.) stated that, “[Sen. Vitter], the top Republican on the Environment and Public Works Committee, and Sen. Lisa Murkowski (R-Alaska), Ranking Member of the Energy and Natural Resources Committee, asked Gina McCarthy, nominee to lead the Environmental Protection Agency (EPA), to outline how she will protect American citizens from rising gas prices due to the rising cost of ethanol Renewable Identification Numbers (RINs).”

And Alison Sider reported yesterday at The Wall Street Journal Online that, “Valero Energy Corp. said it will have to spend two or even three times as much as it did last year to comply with the federal ethanol-blending requirement due to the high prices of credits it needs to buy under the law.

“The company said in a presentation posted on its website Tuesday evening that it will spend $500 million-$750 million buying the credits this year, compared to $250 million in 2012 and $230 million in 2011.”


Agricultural Economy- Trade

Bloomberg writer Alan Bjerga reported yesterday that, “Above-average rainfall is needed in the U.S. Midwest and Great Plains to replenish soil parched from last year’s drought and ensure adequate harvests, a climatologist with the National Drought Mitigation Center said.

“Since Oct. 1, precipitation has broken the worst drought since the 1930s in eastern parts of the Corn Belt, while dryness continues to grip more westerly grain-growing areas, Mark Svoboda, the University of Nebraska-based climatologist, told reporters today in Washington. Unlike last year, when crops had some reserve moisture from 2011 to draw upon, fields have a deficit heading into planting season, he said.”

With respect to trade developments, a news release yesterday from the U.S. Trade Representatives Office stated that, “The Obama Administration today notified the U.S. Congress of its intent to enter into negotiations on a comprehensive trade and investment agreement with the European Union. Today’s notification follows a joint announcement last month by President Obama and the Leaders of the European Union indicating their intent to pursue talks toward a Transatlantic Trade and Investment Partnership. Acting United States Trade Representative Demetrios Marantis noted in a letter to lawmakers that an ambitious, comprehensive, and high-standard agreement could significantly expand trade and investment between the United States and the European Union, generating new business and job opportunities.”

Earlier this week, a news item from Sen. Bob Casey (D, Pa.) stated that, “[Sen. Casey has] announced that he has written a letter to the United States Department of Agriculture (USDA) and Acting U.S. Trade Representative (USTR) Demetrios Marantis urging them to use upcoming trade negotiations to level the playing field for dairy farmers in Pennsylvania and across the U.S. The Administration is engaged in ongoing trade negotiations as part of the Trans-Pacific Partnership (TPP) during which one of the key issues will be the treatment of dairy exports to countries like Canada and New Zealand. Casey’s letter was joined by a bipartisan group of 30 Senators.”



Megan R. Wilson reported yesterday at The Hill’s RegWatch Blog that, “Legislation that would give Congress veto power over major regulations was sent to the full House Judiciary Committee on Wednesday.

“The bill, which has broad support among House Republicans, was approved out of a Judiciary subcommittee in a 6-3 party line vote.

“Originally introduced in 2011, the Regulations in Need of Scrutiny (REINS) Act would allow Congress to review regulations with an estimated impact of $100 million or more. Committee Chairman Spencer Bachus (R-Ala.) said it’s ‘common sense’ to have Congress review the ‘increasing tide of major federal regulations.’”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The House Agriculture Committee renewed its push Wednesday to soften some of the regulatory confines of the Dodd-Frank Wall Street Reform Act, but at least one of the committee’s efforts invoked words of caution from the committee’s ranking member.

The committee passed a series of seven bills meant to change several rules being implemented by the Commodity Futures Trading Commission or require more cost-benefit analysis by the CFTC before drafting further rules. Legislation would also require the CFTC and Securities and Exchange Commission to work more hand-in-hand while also limiting the scope of U.S. regulatory agencies for swaps in certain foreign countries that have regulatory systems comparable to the U.S.”

Mr. Clayton explained that, “Most of the bills passed the committee Wednesday with a voice vote, no objection or amendments. However, when the committee came to the ‘Swaps Regulatory Improvement Act,’ or HR 992, committee ranking member Collin Peterson, D-Minn., cautioned fellow committee members by first noting one of the worst votes he ever took in Congress was supporting the Commodity Futures Modernization Act in 2000 that broadly opened up the markets for Wall Street financial tools such as derivatives. The swaps market went from $80 billion or so traded to $700 trillion ‘and it blew up on us.’

“‘Ninety percent of the swaps market is already exempt,’ Peterson noted. ‘This would exempt 99%. And you are putting taxpayers on the hook.’”

Yesterday’s article added that, “HR 992 ended up clearing the committee, but 14 Democrats voted against the bill.

“Peterson said he didn’t think the bill would become law.”

Keith Good

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