January 26, 2020

Farm Bill; and the Ag Economy

Farm Bill

Yesterday afternoon, the Senate proceeded to consider the Farm Bill (S.954).

“Democrats and Republicans disagree on many things. So it’s really remarkable and encouraging to see how well Senators Stabenow and Senator Cochran — the chairman and ranking member of the Senate Agriculture Committee — worked together to bring the agriculture jobs bill to the floor. Their work has been exemplary — some would say old-fashioned — the way things used to be,” Senate Majority Leader Harry Reid (D., Nev.) said yesterday.

“In an effort to expedite the floor process, the committee even included many of the amendments that were adopted last year, when the Senate considered and passed a farm bill. I hope their cooperative spirit guides our work on this important legislation. American farmers are counting on us. So is the economy,” Leader Reid noted; while adding that, “But to keep American farms strong, Congress must pass a strong farm bill.”

In remarks on the Senate floor yesterday (video replay here) Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) stated that, “Most of us don’t have to worry about how many days it’s been since the last rainfall.  Or whether or not it’s going to freeze in May after the fruit trees are blooming.  Most of us don’t have to worry about decisions and weather conditions around the world and how it affects our livelihood.  And that’s why we have the Farm Bill.  We have a Farm Bill because farmers are in the riskiest business in the world.”

Chairwoman Stabenow noted that, “We are putting in caps on payments to farmers, we’re closing loopholes that allowed people who weren’t actually farming to receive payments, and we’re strengthening crop insurance so farmers can go to an agent and buy insurance to protect their crops from bad weather or market swings.”

Committee ranking member Thad Cochran (R., Miss.) also addressed the Senate chamber yesterday (video replay) and “focused on farm program reforms and savings in the legislation, as well as the importance of agriculture to the American economy,” according to a news release.

Meanwhile, Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Sen. Sherrod Brown (D-Ohio) said the House farm bill cuts to food stamps, also called the Supplemental Nutrition Assistance Program (SNAP), could not pass in the Senate [video replay, full remarks].

“‘We shouldn’t be cutting federal nutrition programs,’ Brown said Monday. ‘[The Senate] bill cuts $4 billion from SNAP and that’s already $4 billion too much. … The House’s $20 billion in SNAP cuts won’t pass muster in the Senate and certainly won’t get my support.’”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Reid would like to clear the Senate calendar of legislation such as the farm bill with the plan to provide as much time as possible in June for the Senate to debate the comprehensive immigration reform bill now being debated in the Judiciary Committee.

“That said, it took all of about 30 minutes on the floor Monday before Sen. John McCain, R-Ariz., threw the first wrench into the farm-bill machinery. Introducing an amendment co-sponsored by Sen. Dianne Feinstein, D-Calif., McCain said the amendment would eliminate the crop-insurance premium subsidy for tobacco. McCain pointed to the $10 billion tobacco subsidy bailout to question why taxpayers now subsidize crop insurance for tobacco.”

The DTN article noted, “‘Well, it turns out Joe Camel’s nose has been under the tent all this time in the form of hidden crop-insurance subsidies,’ McCain said.

“McCain then questioned the justification for subsidizing crop insurance for tobacco considering the cost tobacco use creates for taxpayers in terms of more expensive health care [audio of a portion of Sen. McCain’s remarks available here (MP3- 2:37)].

David Rogers reported yesterday at Politico that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) urged her colleagues to look at the crop insurance program with a ‘broad lens’ and not focus on one crop singled out for its impact on health care.

“The underlying farm bill, in fact, ends direct cash subsidies to producers — a costly system dating back to the mid-90’s. And while the government absorbs about 62 percent of the premium costs for crop insurance, the farmer never sees that subsidy. What he or she sees is the bill for the remaining 38 percent — not some cash handout like today.”

Mr. Rogers noted that, “‘We’ve moved to a system where we’re asking farmers to put some skin in the game,’ Stabenow said. ‘We’re saying you have to have crop insurance, you have to be part of paying for it.’

“‘As we move to that cornerstone, I would hope that we could keep that in place and not see efforts that will weaken it around the edges.’”

A news update yesterday from Sen. Jeanne Shaheen (D., N.H.) stated that, “[Sens. Shaheen], Pat Toomey (R-PA) and Mark Kirk (R-IL) today are announcing plans to implement commonsense reforms to the U.S. sugar program by amending the Senate Farm Bill with a bipartisan effort that will save consumers money.  The trio will introduce the Sugar Reform Act as an amendment to roll back unnecessary provisions that unfairly benefit wealthy sugar famers at the expense of consumers.  This legislation, introduced earlier this year as a stand-alone bill with bipartisan, bicameral support, will reform domestic supply restrictions, lower price support levels, and ensure adequate sugar supplies at reasonable prices.”

And a news update yesterday from Sen. Jeff Merkley (D., Ore.) stated that, “Today, Oregon’s Senator Jeff Merkley announced that he would put forward an amendment to the Senate farm bill that would repeal a controversial provision of the recently-passed continuing resolution known as the ‘Monsanto Protection Act.’

“‘The Monsanto Protection Act is an outrageous example of a special interest loophole,’ said Merkley. ‘This provision nullifies the actions of a court that is enforcing the law to protect farmers, the environment and public health. That is unacceptable.’

“To avoid public scrutiny, the ‘Monsanto Protection Act’ was quietly and anonymously inserted into the continuing resolution passed this March to avert a government shutdown.”

Meanwhile, a news release yesterday from Sen. Heidi Heitkamp (D. N.D.) stated that, [Sen. Heitkamp] will spend the week pushing for agriculture policies that work for North Dakota as the full Senate debates a long-term Farm Bill. Heitkamp is committed to preserving the provisions she supported in the current bill, which passed the Senate Agriculture Committee in a strong bipartisan fashion last week.…‘This is a critically important week for the Farm Bill,’ said Heitkamp. ‘Now is the time for the Senate to step up and pass this major reform legislation, which will send a clear signal to the House of Representatives that this work must get done. While we can’t know for sure if the House will actually bring a Farm Bill to the floor for a vote this year, it is our duty in the Senate to show leadership and move this legislation forward.”

Speaking yesterday on the AgriTalk radio program with Mike Adams, Senior Director of Congressional Relations for the American Farm Bureau Federation, Mary Kay Thatcher, noted that, “I think the Senate floor, you’re likely to see some hits on crop insurance, probably quite a few.  I think you could have people come in and just try to repeal the ability to rely on permanent law to get this bill done every four years or five years.  And then you’re going to have just a whole host of conservation and nutrition type amendments.  And if you were a betting person, you’d bet at least 100 amendments will be filed on the bill.”

More specifically on the commodity title Ms. Thatcher noted that, “Well, certainly peanut and rice producers have wanted a reasonable target price throughout the debate on this bill.  They have, in general, felt like a revenue program or like the ARC program or the RLC over in the House, or a crop insurance program doesn’t work as well for them as it works for other commodities, and so they’ve pretty much said we don’t want to look at some of these shallow loss revenue programs.  We just want a target price that will be set, that target price will stay set for the life of the bill, we’ll worry about our own yields and revenue, etc., just give us the target price… [N]ow, the target prices on the Senate side, you would have to say, are less trade distorting than those on the House side, number one because they are lower, and number two because they’re tied to the old base acres rather than tied to current planted acres…”

With respect to the House side, Ms. Thatcher noted on yesterday’s AgriTalk program that, “I think the House floor is just going to be a nightmare.  We are going to have so many nutrition amendments, and we have so many fewer rural people on the House side.  I can’t really see a way that you make either the Senate or the House bill much improved from where they are now, and I can see lots of ways that they could get a lot worse.”

A floor schedule update posted recently at the Senate Democrats webpage indicated that, “The Senate stands in adjournment until 10:00am on Tuesday, May 21, 2013.  Following any Leader remarks, the Senate will be in morning business for one hour with the Majority controlling the first half and the Republicans controlling the final half.  Following morning business, the Senate will resume consideration of S.954, the Farm bill.”

With respect to executive branch perspective on the Farm Bill, Reuters writer Charles Abbott reported yesterday that, “The Senate should cut crop insurance subsidies, the most expensive part of the farm safety net, by $1 billion a year before it passes the new farm bill, the White House said on Monday.

The Reuters article noted that, “It [the executive branch proposal] would reduce the federal subsidy on premiums, now averaging 62 cents of each $1, by 3 percentage points on the most heavily subsidized and most popular policies, which shield crop revenue from low prices and poor yields.

“Premium subsidies would be cut by an additional 2 points on policies that base the revenue guarantee on market prices at harvest time rather than the price projected at planting time. One analyst said those policies were unduly expensive in the 2012 drought because commodity prices soared in the fall.

“The administration also would limit insurers to a 12 percent rate of return, down 2 points, and lower the annual payment, now $1.3 billion, to defray overhead costs.”

And in a statement yesterday, Sec. of Ag. Tom Vilsack noted in part that, “I also appreciate efforts by Chairman Lucas and Congressman Peterson to pass a bill out of the House Agriculture Committee. I am deeply concerned about portions of the House version of the bill, including significant cuts that would deny struggling families and their children access to food assistance. The Administration strongly supports the Supplemental Nutrition Assistance Program (SNAP), a cornerstone of our Nation’s food assistance safety net, which is why it was not subject to cuts in the President’s Budget.”


Agricultural Economy

Gregory Meyer reported yesterday at The Financial Times Online that, “US farmers driving floodlit tractors into the night have planted the most corn in any week on record in a sprint that could force prices lower on world agricultural commodity markets.

“US Department of Agriculture data suggested farmers seeded a record 42m acres (17m hectares) in the seven days to Sunday – an area larger than Austria, Ireland or South Korea. Seventy-one per cent of corn fields were planted in the main farm states by Sunday, up from 28 per cent the week before.”

The FT article added that, “Planted Illinois corn acreage jumped from 17 per cent to 74 per cent in the week, USDA reported.

“In Iowa, the biggest corn-growing state, the jump was from 15 per cent to 71 per cent.”

Mr. Meyer explained that, “Corn prices have remained high this spring as steady rain left fields too muddy to plant. This threatened to expose late-germinating corn stalks to severe midsummer heat.”

AP writer David Pitt reported yesterday that, “Clark Kelly plans to spend a lot of time on the links this spring. The Illinois farmer is plowing the Hend-Co-Hills Golf Course near tiny Biggsville into a cornfield.

“He’s not the only one turning over soil in unlikely places. Across the Midwest, farmers are planting crops on almost any scrap of available land to take advantage of consistently high corn and soybean prices. Growers are knocking down old barns, tearing out fencerows and digging up land that had once been preserved for wildlife.”

Also yesterday, a news release from the National Pork Producers Council (NPPC) stated that, “A coalition of U.S. food and agricultural organizations led by the [NPPC] is urging the Obama administration to press the European Union to negotiate a ‘comprehensive’ free trade agreement, including addressing sanitary-phytosanitary (SPS) barriers to trade.

“In a letter signed by 47 organizations sent today to U.S. Trade Representative nominee Mike Froman, the coalition expressed concern with a resolution approved last month by the European Parliament that in negotiating the Transatlantic Trade and Investment Partnership (TTIP) with the United States the EU should maintain the ‘precautionary principle’ for SPS issues. Precautionary measures are implemented based on the mere identification of potential risk or, worse, on public perception and political considerations rather than on science-based risk assessments. The World Trade Organization requires member countries’ SPS measures to be based on scientific risk assessments.”

Keith Good

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