FarmPolicy

August 18, 2019

Farm Bill; Ag Economy; Trade; and, Regulations

Farm Bill- Policy Issues

Ron Hays, of the Oklahoma Farm Report and Radio Oklahoma Network, spoke yesterday with House Agriculture Committee Chairman Frank Lucas (R., Okla.) about a variety of current policy variables regarding the Farm Bill.

An audio replay and summary of the Chairman’s remarks from yesterday can be found here, while an unofficial FarmPolicy.com transcript of the conversation with Ron Hays and Chairman Lucas is available here.

Chairman Lucas noted that, “May 15’s a go. We’ve not issued the official markup notice yet, Ron, but both Ranking Member Peterson and myself are discussing this in public. I think we have an understanding. Leadership’s been alerted. May 15, I believe that’s a Wednesday, we will mark up the 2013 Farm Bill in the House Agriculture Committee.

“We’ll begin with a draft that essentially is the 2012 document. There have been some adjustments in some points, simply because the various entities like OMB and CBO have rescored some of our expenditures, our savings, and we’ve had to make adjustments to reflect that. But we’re going to have choice, we’re going to save money, we’re going to do it in a bipartisan way, we’re going to have a safety net for all crops in all regions, and we’re going to make sure our fellow citizens who need help have something to eat.”

In the extensive discussion with Ron Hays, Chairman Lucas was asked about crop insurance, in part he noted that, “I think, I believe the Ag Committee will be able to explain and justify everything that will be in the draft of the farm bill when it leaves the committee and goes to the floor, but the floor is where crop insurance will come under assault. It won’t be assaulted in the Ag Committee itself because the membership understand how the program works and why it’s important. And literally, it is becoming, in effect, the safety net of the farm bill as these other programs change so dramatically.”

Also yesterday, the House Agriculture Committee Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture held a hearing to review specialty crop and horticulture priorities for the 2013 Farm Bill.

Subcommittee Ranking Member Kurt Schrader (D., Ore) noted in his opening remarks that, “When it comes to discussing the Farm Bill, all too often the conversation tends to focus on just the commodity or the nutritional elements of the bill.  And that’s despite the fact that specialty crops account for nearly half of all domestic farm gate value nationwide.”  (Audio clip of remarks here (MP3- 1:17)).

In prepared testimony, Barry Bushue, American Farm Bureau Federation Vice President and President, Oregon Farm Bureau Federation, pointed out that top level recommendations included: “Allow program crop producers to choose either a Stacked Income Protection Plan (STAX) or a target price program, on top of participation in crop insurance and marketing loans, as the three legs of a safety net; establish a STAX program for all program commodities, as well as for apples, potatoes, tomatoes, grapes and sweet corn; and provide a target price program for all program commodities, with the exception of cotton.”

Mr. Bushue noted that, “The Stacked Income Protection Plan (STAX) is an insurance product designed to provide a fiscally responsible and effective safety net for program crop farmers and growers of tomatoes, potatoes, apples, grapes and sweet corn. The program would be administered by USDA’s Risk Management Agency in a manner consistent with the current crop insurance delivery system. It is designed to complement existing crop insurance programs. It does not change any features of existing insurance policies.”

“The STAX plan addresses revenue losses on an area-wide basis, with a county being the designated area of coverage. In counties lacking sufficient data, larger geographical areas such as county groupings may be necessary to preserve the integrity of the program. The ‘stacked’ feature of the program implies that the coverage would sit on top of the producer’s individual crop insurance product.”

Later in the hearing, Rep. Chris Collins (R., N.Y.) explained that, “When I put together my agricultural roundtable I said, ‘What is it we should be doing here on the Ag Committee,’ and they said number one, we just need a Farm Bill.  We need to know what we are going to be facing in the next five years.  We can’t continue to go with uncertainty.”

Immigration was a reoccurring theme at yesterday’s hearing- an issue brought up by both the panel of producers as well as lawmakers.

Rep. Schrader highlighted the immigration policy variable in his questions, and solicited responses from all three witnesses during the hearing; an exchange on this issue from yesterday can be heard here (MP3- 3:02).

In addition, Rep. Juan Vargas (D., Calif.), a Harvard law classmate of President Obama, in a different inquiry asked the panel members about terrorists being “radicalized” while working on their farms.  This attempt to draw attention to themes occurring on the broader debate on immigration reform in the context of current news developments can be heard here (MP3- 1:26).

In other legislative activity yesterday, the House Agriculture Appropriations Subcommittee held a budget hearing on USDA’s Rural Development mission area.

Subcommittee Chairman Robert Aderholt (R., Ala.) noted that, “It seems that I’ve seen this budget request before and is hard to believe that once again USDA proposes very large cuts for the programs, such as Single Family Direct Loans and Water and Waste Disposal grants, that matter the most in rural America. Instead, the administration seems to have placed its focus on a new $55 million economic development program that has not been reviewed by Congress.

“As the only federal department dedicated to rural America, I have to wonder if this budget request is truly in tune with its needs, especially the needs of rural Americans with the lowest incomes.”

In a separate budget hearing yesterday, the House Agriculture Appropriations Subcommittee examined USDA’s Natural Resources and Environment mission area.

“We convene today to review NRCS’s fiscal year 2014 budget request. NRCS requests a total of $808 million in discretionary funding for its salaries, expenses and activities. In addition, more than $3.1 billion will be available to farmers, ranchers and private landowners through the farm bill’s mandatory conservation programs to help them preserve, protect and enhance their land,” Subcommittee Chairman Aderholt said.

Meanwhile, a news update yesterday from Sen. John Thune (R., S.D.) stated that, “[Sen. Thune] and Senator Amy Klobuchar (D-Minn.) today introduced legislation that would modify crop insurance premium assistance for insured crops grown on native sod converted to cropland and land that a producer cannot verify has ever been tilled. The Congressional Budget Office projects that this bill could save taxpayers $200 million over 10 years, and would encourage conservation of grasslands that pheasants, ducks, and other wildlife use as a habitat. This legislation is supported by farm and conservation groups including the National Farmers Union, Pheasants Forever, Ducks Unlimited, and the National Wildlife Federation.”

Earlier this week, in her maiden speech on the Senate floor, Heidi Heitkamp (D., N.D.) noted that, “We have frustration in farm country. There are 16 million jobs in agriculture. It is the bright spot on our economy, and it is helping to reduce our trade deficit. It is everything in my State.

“We have small farmers, small family farmers who must spend $1 million before they can even take a crop out of the ground. That is an average farmer in my State. That is how much it costs to engage in farming. When we don’t have a farm bill that provides certainty and security for them, we not only hurt them and hurt American agriculture, we risk our secure food supply. So I came here to speak for North Dakota farmers.”

In other Farm Bill analysis, the “Washington Insider” section of DTN stated in part yesterday (link requires subscription) that, “One debate in the constellation of farm-bill issues that has been conspicuous by its absence in recent months concerns the promised ‘farm-bill fix’ of U.S. cotton policies promised in the 2010 temporary stand down of the cotton case Brazil and others won in the late-2000’s.”

“The temporary deal with Brazil is increasingly embarrassing to the United States, and continually undercuts U.S. efforts to lead broad negotiations to open global markets. And, trade advocates note that not only did Brazil win the original WTO case but that it has made clear its determination to press trading partners aggressively for future compliance. This suggests that Brazilian complaints regarding proposed safety net policies need to be taken seriously, else the sector may not only continue to face sanctions under the cotton case, but to face new, tougher penalties for new violations in the future if the current proposals are implemented,” the DTN item said.

David Rogers reported yesterday at Politico (“A food fight over aid program”) that, “Behind all this is President Barack Obama’s plan to revamp international food aid to allow more flexible, cash purchases overseas — rather than commodity shipments from the U.S.

“About $1.47 billion from the Food for Peace program would be reallocated to three accounts, the biggest designated for emergency assistance. The White House promises that 55 percent of the funds would still go to buy and ship American commodities, but that’s a big drop from today and could be ruinous for some carriers.

It’s not a fight that will ever capture the same headlines as gun control or immigration reform. But it’s a real test of the president’s muscle in two gritty corners of Congress where Obama rarely goes: appropriations and agriculture.”

In news regarding domestic nutrition, USDA’s Economic Research Service (ERS) released a report yesterday titled, “Supplemental Nutrition Assistance Program (SNAP) Participation Leads to Modest Changes in Diet Quality,” which noted that, “Recent research has shown that the Supplemental Nutrition Assistance Program (SNAP) effectively reduces food insecurity. Questions remain, however, about the extent to which SNAP affects the quality of adult participants’ diets.”

An ERS summary of the report stated that, “The evidence as to whether SNAP participation is beneficial or adverse regarding diet quality is inconclusive…[T]he study shows the effects of SNAP participation on those who choose to participate. SNAP increases the likelihood that participants will consume whole fruit by 23 percentage points; it also induces participants to decrease their intake of dark green/orange vegetables by a modest amount— the equivalent of about 1 ounce for a 2,000-calorie diet.”

In other policy developments, a news release yesterday from Sen. Barbara Boxer (D., Calif.) stated that, “[Sen. Boxer] and Congressman Peter DeFazio (D-OR) today introduced the Genetically Engineered Food Right-to-Know Act, bipartisan legislation that would require the Food and Drug Administration (FDA) to clearly label genetically engineered (GE) foods so that consumers can make informed choices about what they eat.”

And a news release yesterday from USDA noted that, “Agriculture Secretary Vilsack today renewed a historic agreement with U.S. dairy producers to accelerate the adoption of innovative waste-to-energy projects and energy efficiency improvements on U.S. dairy farms, both of which help producers diversify revenues and reduce utility expenses on their operations.. The pact extends a Memorandum of Understanding signed in Copenhagen, Denmark, in 2009.”  [Note: See also this Bloomberg article by Alan Bjerga titled, “Cattle Waste Feeds New Profits for Dairy Farmer”].

Megan R. Wilson reported yesterday that, “The public will have even longer to give feedback to the Food and Drug Administration about three food safety rules proposed at the beginning of the year.

“The Obama administration said the 120-day delay is a result of receiving requests to extend the comment period, which was originally set to end May 16.

“All three proposals were released on Jan. 16 as part of the administration’s implementation of the Food Safety Modernization Act (FSMA), a sweeping overhaul of the nation’s food safety system that was passed by Congress in 2011.”

 

Agricultural Economy

Karina Gonzalez reported yesterday at The Pantagraph (Bloomington, Il.) Online that, “Farmers might have a late start to corn and soybean planting if Mother Nature continues to dump rain across Central Illinois…[Don Immke, who farms corn and soybeans southeast of Saunemin] estimates it might be another 10 days before he can get out into the fields to plant. But that’s only if it stops raining and temperatures rise enough to warm the soil, Immke said Tuesday.”

Caroline Porter and Mark Peters reported in today’s Wall Street Journal that, “Swollen rivers across a wide swath of the Midwest are forcing hundreds of evacuations, flooding streets and farmers’ fields, and prompting a squabble in the northern Chicago suburbs over flood management.”

AP writer Roxana Hegeman reported yesterday that, “Cool temperatures this spring in Kansas have delayed the growth of pasture grasses and the first cutting of alfalfa fields, keeping cattle ranchers from turning out their herds out for grazing and putting pressure on tight hay supplies.”

And AP writer Susan Montoya Bryan reported yesterday that, “In southern New Mexico, the mighty Rio Grande has gone dry — reduced to a sandy wash winding from this chile farming community to the nation’s leading pecan-producing county… Across the state’s eastern plains, wells stand empty and ranchers are selling their cattle.”

The article stated that, “Going on three years, drought has had a hold on nearly every square mile of New Mexico. Now, with forecasts predicting hotter, drier weather ahead, farmers and small and large communities alike are questioning whether dwindling supplies can be stretched enough to avoid costly fights over water.”

Beyond weather variables, Purdue University Agricultural Economist Brent A. Gloy recently penned a brief paper regarding farmland values titled, “Some Thoughts on the Relationship between Corn Price Expectations and Farmland Values.”

 

Trade

Jo Dee Black reported yesterday at the Great Falls Tribune (Mont.) Online that, “Sen. Max Baucus championed expanded export markets for Montana’s agricultural commodities, worked for changes in the federal taxes for estate and capital gains and depreciation, and safe-guarded provisions in Farm Bills that benefit grain and livestock producers during his tenure in Congress, Montana ag organization leaders said Tuesday.”

The article added that, “Baucus recognized early in his career that trade with Asia was an opportunity for Montana’s commodity producers, said Jake Cummins, executive vice president of the Montana Farm Bureau Federation.

“‘Today 40 percent of Montana’s ag exports go to the Pacific Rim,’ Cummins said. ‘MFBF President Bob Hanson was in Washington testifying before the Senate Finance Committee about ag trade and the addition of Japan in the Trans-Pacific Partnership talks at Baucus’ invitation. Sen. Baucus has brought the Korean ambassador here to our offices for meetings. He has worked very hard to open up those markets for Montana.’”

During yesterday’s Finance Committee hearing on the Trans-Pacific Partnership (TPP), Chairman Baucus noted that, “Last year, U.S. goods exports to current TPP countries totaled $619 billion, representing 40 percent of total U.S. goods exports.  And U.S. agriculture exports to current TPP countries totaled $47 billion, making up a third of all U.S. agricultural exports.”

Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) also participated in yesterday’s Finance Committee hearing.  A replay of some of her remarks and questions, which included topics on auto and dairy issues, can be heard here (MP3- 4:55).

After the hearing, in a news update, Sen. Stabenow “called for additional hearings to allow those who have serious concerns about the agreement to express their views. Stabenow said more hearings are needed to get the perspective of the American auto industry, many agriculture leaders, and others who have raised legitimate points about how the inclusion of Japan into the trade agreement could hurt the U.S. economy if Japan does not end anti-competitive barriers to trade.”

Earlier this week, Sen. Stabenow penned a column at Politico titled, “Pact must open Japan’s markets.”

Note also that an update yesterday from the U.S. Trade Representative’s Office stated that, “The Obama Administration today notified Congress of its intent to include Japan in the Trans-Pacific Partnership (TPP) Agreement negotiations.”

And Howard Schneider reported in today’s Washington Post that, “That deep-seated attitude about rice is perhaps the sharpest edge of a Japanese backlash against the proposed free-trade pact.”

Meanwhile, Reuters writer Doug Palmer reported yesterday that, “An influential Democratic U.S. senator said on Wednesday he was working on a bipartisan bill to boost President Barack Obama’s ability to negotiate trade deals, while Republicans made clear that more White House involvement is needed to pass the measure.

“‘I would like to see a bipartisan TPA (trade promotion authority) bill introduced by June,’ Senate Finance Committee Chairman Max Baucus said at a hearing on the Trans-Pacific Partnership pact, a proposed free trade agreement among 12 countries on both sides of the Pacific.”

 

Regulations

Ben Geman reported yesterday at The Hill’s Energy Blog that, “The acting chief of the Environmental Protection Agency sparred with GOP senators Wednesday over the use of aerial surveillance to help guide enforcement of water pollution laws in farm country.

Bob Perciasepe came under fire from Sens. Mike Johanns (R-Neb.) [video here] and Roy Blunt (R-Mo.), who slammed the EPA’s use of aerial surveillance of animal feedlots, calling it an intrusion into the lives of private landowners.

“Perciasepe denied that the agency is engaged in surveillance and said the EPA is only trying to spot pollution.”

Keith Good

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