FarmPolicy

May 26, 2017

Farm Bill; and, the Ag Economy

Farm Bill: Senate Agriculture Committee Advances Legislation

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The markup of the Senate version of the farm bill translated into few substantive changes in the legislation, but Tuesday’s three-and-a-half-hour debate highlighted the philosophical and regional split among Republicans over target prices.

“The bill, formally named the Agriculture Reform, Food and Jobs Act of 2013, passed out of committee early Tuesday afternoon on a vote of 15-5. Four Republicans [Roberts, Thune, Johanns, McConnell] and one Democrat [Gillibrand] voted against it.

“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., told reporters afterward that floor debate on the Senate farm bill could begin as early as Wednesday. Senate Majority Leader Harry Reid, D-Nev., said the bill will come up immediately after the Water Resources Development Act (WRDA) is finished. Final votes on that bill are expected Wednesday.”

The DTN article noted that, “Regional differences again flared Tuesday. Southern Republicans backed the bill while Midwest Republicans fought against what they saw as backsliding on commodity reforms…[T]he bill would eliminate $4.9 billion a year in direct payments as well the Average Crop Revenue Election program, or ACRE. The bill also renames the current counter-cyclical program as Adverse Market Payments. Under the AMP, target prices for most major commodities remain the same as under the counter-cyclical program, with exceptions for rice and peanuts. Rice producers would see a $13.30-per-cwt price, and peanuts would see a price of $523.77 per ton.

“Last year, southerners largely opposed the farm bill in committee because the legislation would have completely eliminated target prices. On Tuesday, Republican Sens. Mike Johanns of Nebraska [related news release], Pat Roberts of Kansas [related news release] and John Thune of South Dakota [related news release] opposed the bill after failing to eliminate target prices from the legislation.”

Mr. Clayton noted that, “Thune proposed an amendment to save $897 million over 10 years by eliminating target prices for commodities other than rice and peanuts. That also was voted down.”

A FarmPolicy.com transcript of the debate regarding this Thune amendment is available here.  This debate included strong arguments on both sides of the issue of target prices.  Points and counter-points on this amendment were made by:

Sen. Thune– “A target price countercyclical program, in my view, is a step backwards to an old, outdated policy that we removed in last year’s Senate passed farm bill.”

Sen. Cochran– “This [amendment] would be a disruptive influence in the process of commodity programs that are presented to the committee for its consideration today.”

Sen. Roberts– “At the levels the target prices for rice and peanuts have been set above the cost of production on average world price, I’m afraid the WTO will consider the high target prices as trade distorting, and thus put us in the red box. That’s a big red flag for me and my producers. Why should the two commodities dictate that all others have to have target prices when we don’t want them?”

Sen. Chambliss– “But as we discussed last year, the crop insurance provision does not work as a safety net for rice and peanuts, and my farmers are most likely to accept the AMP program.”

Sen. Johanns– “We’re already paying Brazil, every year, tens of millions of dollars because of the defeat of the cotton litigation that they had. I think this is just begging for additional litigation.”

Daniel Looker reported yesterday at Agriculture.com that, “Thune offered another amendment to require that the base acres for rice be updated, which he said would save about $1 billion more over the next 10 years.

Roberts said that because AMP payments are made on a crop’s historical base, that estimate of $1 billion in savings means that AMP payments will be going to farms that no longer grow rice.

“Speaking against Thune’s amendment, Senator John Boozman (R-AR) said that if it passed, he would urge that other crops be required to have updated bases as well.”

AP writer Mary Clare Jalonick noted yesterday that, “Under the House bill, authored by Rep. Frank Lucas, R-Okla., those subsidies for rice and peanut farmers could kick in even sooner. These ‘target price’ programs allow farmers to receive subsidies if prices fall below a certain threshold. It hasn’t been used much in recent years because of record crop prices, but is intended to be a safety net if prices collapse.

“The bill includes generous protections for other crops as well. Both bills would boost federally subsidized crop insurance and create a new program that covers smaller losses on planted crops before crop insurance kicks in, favoring Midwestern corn and soybean farmers who use crop insurance most often.”

And David Rogers noted yesterday at Politico that, “The House Agriculture Committee is slated to markup its own bill Wednesday, and in making her concessions to Southern growers, Stabenow is also trying to open the door toward a final deal with House Agriculture Committee Chairman Frank Lucas (R-Okla.), whose roots lie in the South as well.

Nonetheless, some of the chairwoman’s staunchest Midwest allies in last year’s farm bill debate have been lost along the way.”

In his DTN article from yesterday, Chris Clayton also explained that, “For cotton producers, the bill keeps the Stacked Income Protection for Cotton, or STAX. Under STAX, USDA would pay 80% of the premiums. The bill also would include a new crop insurance coverage for peanut producers.

The one major change to the bill Tuesday was that Stabenow included the compromise language for tying conservation compliance to eligibility for crop-insurance premium subsidies. That compromise also eliminates what would have been a $750,000 cap on adjusted gross income to be eligible for the full premium subsidy.

“Sen. John Hoeven, R-N.D., offered an amendment to remove the language on conservation compliance, arguing it would create a whole new mandate on farmers.”

To listen to a related discussion on the conservation compliance / crop insurance issue from yesterday’s hearing, just click here (MP3- 7:00).

A news release yesterday posted at the National Association of Conservation Districts Online (“Conservation Compliance Coalition Praises Agreement in Senate Farm Bill”) stated in part that, “A coalition of agriculture, conservation, environment and crop insurance groups are applauding the passage of an historic conservation compliance agreement as part of the bipartisan Agriculture Reform, Food and Jobs Act of 2013 passed by the Senate Agriculture Committee today. The non-partisan conservation compliance agreement represents a compromise position that supports the linking of conservation compliance with crop insurance premium assistance, and opposes means testing, payment limitations or premium subsidy reductions for the crop insurance program.”

The release included specific responses from members of the coalition on the measure.

Bloomberg writer Alan Bjerga reported yesterday that, “The Senate bill would cut $24.4 billion in spending in the next decade by trimming $4 billion from food stamps, the biggest USDA program, $17 billion in farm subsidies and $3.6 billion in environmental programs the Congressional Budget Office reported. Crop insurance, which is making record payouts after last year’s drought, would rise by $5 billion. The full Senate will take up the bill next week, said Senator Debbie Stabenow, the Michigan Democrat who heads the committee.”

Meanwhile, Bill Tomson reported yesterday at The Wall Street Journal Online that, “Sen. Kirsten Gillibrand (D., N.Y.), who sits on the Agriculture panel, vowed Tuesday to fight any larger cuts to food-assistance programs. Ms. Gillibrand said the program serves ‘children, hard-working adults, struggling seniors, veterans, active-duty troops and the families that stand by them. That’s who suffers in this callous political fight.’”

Sen. Gillibrand tweeted yesterday that, “I could not support the #farmbill that passed out of Ag cmtee today because of the steep cuts to the #SNAP food stamp program.”

Reuters writer Charles Abbott reported yesterday that, “Analysts say food stamps are the make-or-break issue for enactment of a new U.S. farm law because Republicans want deep cuts in food stamps and Democrats oppose them.”

Ron Nixon reported yesterday at The Caucus Blog (New York Times) that, “The most contentious fight during the hearing was over cuts to food stamps. The Senate bill would reduce the food stamp program by about $4.1 billion. Ms. Stabenow said most of the cuts would come from a program overhaul. But Senator Kirsten Gillibrand, Democrat of New York, said the reduction in financing for the program would cause millions to go hungry.”

And Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Johanns offered an amendment to eliminate categorical eligibility for food stamps to save $11 billion. The provision — included in the House draft farm bill — was defeated.”

To listen to the debate regarding this issue from yesterday’s markup, just click here (MP3- 7:41).

Additional news item yesterday regarding the Senate Ag. Comm. action can be found here:

Sen. Cochran– “Cochran ready for Senate Consideration of 2013 Farm Bill.”  (“A key provision would create Adverse Market Protection, a price protection program that would aid rice and peanut growers and work in tandem with an Agriculture Risk Coverage program that is suited to crops like corn, wheat and soybeans.  The Senate measure also authorizes a new cotton insurance program that will contribute $2.8 billion toward deficit reduction and lead to a resolution of the Brazil Cotton Dispute in the World Trade Organization.”)

Sen. Grassley– “Farm and Nutrition Bill Clears Committee, Grassley Provisions Included.”  (“In addition, an amendment sponsored by Grassley along with Senators Mike Johanns, John Thune and Pat Roberts was approved during today’s Agriculture Committee action on a new farm bill…Grassley said the measure is intended to make the farm bill more market-oriented in the way target prices are set.  Grassley would have preferred that a target price program not be included in the bill, but since the target price program was included he wanted to push for ways to make it more market-oriented.  For commodities except rice and peanuts, the measure set the target price by averaging the prices from the five previous years, while dropping the low and high price for that average, and multiplying it by a factor of 55 percent.”)

Sen. Boozman– “Farm Bill Framework ‘a step in the right direction.’”  (“This framework is a fair approach to providing a safety net for all crops and regions of the country.”)

Sen. Heitkamp– “Committee-Passed Bipartisan Farm Bill Gives North Dakota Producers Certainty They Deserve.”  (“It is my hope that the House and Senate continue moving the bill forward so we can get this signed into law and give North Dakota farmers and ranchers the certainty they need to run their businesses.”)

Sen. Harkin– “Harkin Supports Senate Agriculture Committee’s Passage of Bipartisan Farm Bill.”  (“The legislation also builds upon reforms in recent farm bills to strengthen and tighten payment limitations, while strengthening the crop insurance program and making it more beneficial to farmers.”)

Sen. Leahy– “Statement Of Senator Leahy (D-Vt.) Farm Bill Business Meeting Committee on Agriculture, Nutrition, and Forestry.”  (“Specifically, this mark includes a significant dairy reform proposal that I hope will help producers and consumers get off this dangerous rollercoaster of price swings.  I believe this is key to our consideration of a Farm Bill, and I know it is what farmers in Vermont are watching closely; I have been hearing from them regularly in strong support of stabilization and margin insurance working in tandem.”)

Organizations and groups also commented on the Sen. Ag. Comm. Farm Bill yesterday, including, the National Milk Producers Federation, National Council of Farmer Cooperatives, the American Soybean Association, National Cattlemen’s Beef Association, National Farmers Union, The Nature Conservancy, the National Cotton Council, the American Farm Bureau Federation, American Farmland Trust , International Dairy Foods Association, and the United States Cattlemen’s Association.

 

Farm Bill: Dairy Issue

A news release yesterday from the National Milk Producers Federation stated that, “A new analysis of the key Farm Bill dairy proposals under consideration in the House Agriculture Committee finds that the Dairy Security Act (DSA) is better for farmers – as well as taxpayers – compared to the Goodlatte-Scott alternative proposal that will be offered in the committee deliberations tomorrow.”

A news release yesterday from the National Council of Farmer Cooperatives (NCFC) indicated that, “The [NCFC] today expressed its strong opposition to a proposed amendment to the House Agriculture Committee farm bill that would change key components of the dairy reform package contained in the bill.

“The amendment, offered by Representatives Bob Goodlatte (R-Va.) and David Scott (D-Ga.), would effectively separate participation in the market stabilization program from other parts of the dairy program contained in the Federal Agriculture Reform and Risk Management (FARRM) Act.”

 

Executive Branch Perspective- Other Policy Issues

In a report yesterday on the Agriculture Today radio program (Red River Farm Network), Mike Hergert provided perspective on Farm Bill developments from Ag. Sec. Tom Vilsack.

In his remarks on Agriculture Today, Sec. Vilsack specifically addressed the issue of linking conservation compliance to crop insurance, and spoke broadly about the Farm Bill- Red River Farm Network audio clip here (MP3- 2:49).

Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “Legislators and regulators pledged to increase their support for the organic food industry on Tuesday, as representatives from the sector pushed for friendly policies.

“As members of the House and Senate mark up the farm bill, organic farmers, handlers and manufacturers came to Washington to make their case for the burgeoning industry at the annual Washington policy conference of the Organic Trade Association, which represents the sector.

On Tuesday, the U.S. Department of Agriculture (USDA) announced that a crop insurance program will increase options for organic producers, and it said that it would ask other agencies to keep the organic sector in mind for future programs and services.”

And a Farm Service Agency (USDA) release from yesterday  noted that, “Secretary of Agriculture Tom Vilsack today reminded farmers and ranchers that the U.S. Department of Agriculture (USDA) will conduct a four-week Conservation Reserve Program (CRP) general sign-up beginning May 20 and ending on June 14.”

 

Farm Bill: House Ag Committee

Vicki Needham reported yesterday at The Hill’s Floor Action Blog that, “The House Agriculture Committee will take up its version of the farm bill on Wednesday with the hopes of not only moving it through the panel but finally getting it to the floor for a vote…[H]ouse Agriculture Committee Chairman Frank Lucas (R-Okla.) and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) have expressed an eagerness to get their bills passed by their respective chambers so they can negotiate a final piece of legislation over the summer before this current extension of the 2008 law expires Sept. 30.

The House bill has bigger cuts in spending — $39.7 billion over 10 years compared to $23 billion in the Senate bill — and it would slash food stamps by $20.5 billion, more than five times the amount of the Senate’s $4 billion in cuts from the program.”

 

Agricultural Economy

Reuters writer Sam Nelson reported yesterday that, “Drier weather early this week in the U.S. Midwest will boost corn plantings that have fallen to a record slow pace due to wet and chilly weather, an agricultural meteorologist said on Tuesday.

“‘It will remain dry today,’ said Don Keeney, meteorologist for MDA Weather Services. ‘Then showers develop late on Wednesday and continue into the weekend with the heaviest rain in the northern Midwest.’”

Agricultural related tweets from yesterday, which included photos, showed planting in Illinoishere and here, and in Missouri.

Keith Good

Comments are closed.