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Farm Bill; and, the Ag Economy

Farm Bill- Senate Focus

Nearly two weeks ago, the Senate Agriculture Committee passed a Farm Bill on a strong bipartisan vote of 15-5.  Without objection, the measure moved in astonishing time to the Senate floor, where debate began a week ago today.

Amendments focusing on the nutrition title (expanding cuts (v. 58-40); eliminating cuts (v. 26-70); and, block granting some programs (v. 60-36)) all failed, as did an effort to change the sugar program (v. 44-54).

In addition to other amendments, the Senate considered three amendments focusing on specific aspects of the crop insurance program.  An amendment eliminating the federal crop insurance premium subsidy for tobacco fell short (v. 44-52); however, a measure adding $5 million in funding to help eliminate fraud (v. 94-0), and an amendment to reduce the premium subsidy by 15% for farmers with an annual adjusted gross income of $750,000 or higher (v. 59-33), both passed.

A large number of amendments to the 2013 Farm Bill have been filed and have not yet been addressed on the floor (click on “Amendments” at this link, S.954).

Speaking on the Senate floor on Thursday (transcript), Ag. Comm. Chairwoman Debbie Stabenow noted that, “We have debated, and will debate more, something called crop insurance, which I will remind my colleagues does not allow for someone getting a check. They get a bill. They pay for crop insurance. We do it in a partnership between the Federal Government and farmers to help them have affordable risk management. That is what we strengthen in this bill. We have been told by farmers all across the country that the most important risk management tool for them is insurance—crop insurance that is affordable.”

With respect to additional amendments on crop insurance, a news release Wednesday from Sen. Mark Begich (D., Alaska) stated that, “[Senators Begich], Jeanne Shaheen (D-NH), Pat Toomey (R-PA), and Jeff Flake (R-AZ) today called for millions in potential savings in the Farm Bill and highlighted the need to bring greater transparency and common-sense limitations to crop insurance premiums during a press conference in the U.S. Capitol.

“The Senators specifically highlighted two amendments they have proposed to the Farm Bill.  The first, spearheaded by Sens. Begich and Flake, would bring transparency to the crop insurance premium program by permitting the U.S. Department of Agriculture (USDA) Risk Management Agency to disclose the names of policyholders, along with the amount of premium support they receive for crop insurance policies. The federal government currently spends almost $9 billion a year on crop insurance subsidies but there is no way to publicly track who receives the payouts because the USDA is not permitted to disclose their names, unlike other USDA programs.

“The second, authored by Sens. Shaheen and Toomey would cap crop insurance premium subsidies at $50,000, reducing the deficit by about $3.4 billion over 10 years, according to Congressional Budget Office estimates. Fewer than 4 percent of producers would have been affected by a $50,000 premium support limit in 2011, according to the Government Accountability Office.”

Erik Wasson reported on Saturday morning at The Hill’s on the Money Blog that, “Senators critical of the level of spending in the giant $955 billion farm bill are fighting for floor votes after the Memorial Day recess on deeper cuts to its subsidies payments… [S]ens. Jeff Flake (R-Ariz.), Pat Toomey (R-Pa.), Claire McCaskill (D-Mo.) and Jean Shaheen (D-N.H.) are leading the effort to put further limits on the bill’s expanded crop insurance provisions.

“As of Friday, they had not yet been able to secure an agreement that their amendments would be considered. Senate leaders want a so-called time agreement in order to wrap up the farm bill before the Senate takes up an immigration overhaul.

“Agriculture Chairwoman Debbie Stabenow (D-Mich.) and ranking member Thad Cochran (R-Miss.) are hoping to limit amendments to get the farm bill passed by the full Senate the week of June 3.”

In her floor remarks Thursday, Chairwoman Stabenow indicated that, “We have also in this legislation done something that is historic, which is as we have moved from subsidies to insurance, we are tying conservation compliance to the purchase of insurance. This is a very important policy, and we have many groups—over 30 groups— that have come together, and I want to commend all the commodity groups and the Farm Bureau and the Farmers Union and all those that came together, along with environmentalists and conservation organizations, to put a real priority on both a strong risk management system called crop insurance and a strong conservation policy called conservation compliance. This is a very important part of our bill as we look to savings.”

(Recall that DTN Ag Policy Editor Chris Clayton reported last Thursday that, “The House Agriculture Committee version of the farm bill does not include any means testing for crop insurance, nor does the House bill tie conservation compliance to eligibility for the crop-insurance premium subsidy.”)

Chairwoman Stabenow added that, “We will be putting together a list for final votes on amendments when we come back into session, and we are looking forward to doing that and to completing this effort…[B]ut it will be time, when we get back, to bring this to closure and to once again demonstrate the Senate can work together on a bipartisan basis to do the right thing for the families and the businesses and the farmers and the ranchers we represent. Sixteen million people in this country are counting on us to get our job done, and I am sure we will.”

Sen. Chuck Schumer (D., N.Y.) highlighted a Farm Bill amendment relating to the dairy industry on Thursday; a news release stated that, “Today, [Sen. Schumer] announced his plan to authorize a pilot program for a ‘dairy block grant program,’ that would aim to boost dairy farm profitability and efficiency, particularly on smaller farms. As an amendment to the Farm Bill now being considered on the Senate floor, Schumer is pushing for this dairy block grant concept to be tested in a $5 million pilot that would be similar to the popular specialty crops grant program.”

Meanwhile, Jim Harger reported on Friday at Michigan Live Online that, “Stabenow, who chairs the the U.S. Senate Committee on Agriculture, Nutrition and Forestry, will visit May Farms near Sparta on Tuesday, May 28, for a press conference that will urge passage of her 2013 Farm Bill.”

The article pointed out that, “Stabenow, D-Mich., will be joined at the press conference by representatives of Michigan’s apple and asparagus-growing industry. Nearly one-in-four jobs in Michigan are supported by agriculture.

The full Senate is expected to complete its debate and vote on the Farm Bill when it comes back into session next month, said Stabenow spokesman Matt Williams.”


Farm Bill: House Focus

In his Hill update on Saturday by Erik Wasson noted that, “‘I would like to think that watching the Senate committee-passed text essentially remain whole…I’d like to think that bodes well for my efforts to keep the House draft on the floor in June whole,’ [House Ag. Comm. Chairman Frank Lucas (R., Okla.)] said. ‘You also have to remember you have a very engaged, active chairwoman in the form of Sen. Stabenow.’

“Lucas said the House farm bill is coming to the floor in mid-June.”

In update on Friday, Chairman Lucas noted that, “The House Agriculture Committee has stepped up to the plate.  We’re working hard to get a bipartisan, cost-saving farm bill enacted this year.  The next step in the process is consideration of our bill by all members of the U.S. House of Representatives this June.”

The House Ag. Committee passed its version of the Farm Bill on May 15th on a vote of 36-10 (13 of 21 Democrats on the committee voted for the bill).

An article on Friday from Inside U.S. Trade (“Senate Begins Consideration Of Farm Bill, But Long Slog Still Ahead”) stated in part that, “Because the margin of support for the bill is so close [in the House], if a controversial amendment is adopted and influences 10 to 15 members to vote against the broader legislation, it could derail the process, one lobbyist said. For example, House Agriculture Committee Chairman Frank Lucas (R-OK) could ask the leadership to pull the bill from the floor if the amendment’s votes appear to be weakening the bill’s chance of passage, and he would then have to try again later.”


Farm Bill: Food Aid

Emily Cadei reported on Friday at Roll Call Online that, “A White House-proposed overhaul of the United States’ $1.4 billion food aid program is not going to happen, at least not in as ambitious a form as the administration requested in its fiscal 2014 budget.

“Lawmakers and officials with the U.S. Agency for International Development are now in negotiations on a smaller package of changes that supporters of the overhaul hope could pave the way for incremental updates to the system of food aid delivery.

“The administration’s proposal, which would have loosened requirements on how much of the food the United States sends to hungry people around the world has to come from U.S. farmers on U.S. ships, ‘is just way too far, way too aggressive,’ said Sen. Mike Johanns, R-Neb., a member of the Senate Agriculture and Appropriations committees. It ‘never had much of a chance.’”


Agricultural Economy- Food Prices

An update posted on Friday at the Economic Research Service (USDA- ERS) webpage (“Food Price Outlook, 2013”)  stated that, “Based on current conditions, ERS’s inflation forecast for both all food and food-at-home (grocery store) prices in 2013 is for increases of 2.5 to 3.5 percent. This forecast means that prices are likely to increase more than in 2012, but that overall inflation is expected to be near the historical average for both indexes. Inflation is expected to remain strong, especially in the first half of 2013, for most animal-based food products due to higher feed prices. For most food categories not directly affected by the 2012 drought, however, inflation is expected to be at or even below normal levels.”

Kelsey Gee, Ian Berry and Curt Thacker reported on the front page of Saturday’s Wall Street Journal that, “As Americans prepare for Memorial Day—the official kickoff to a summer grilling season of burgers and T-bones—rising beef prices have some consumers balking in the grocery aisles.

Retail beef prices are widely expected to set new records in coming weeks after wholesale prices, or the amount meatpackers charge sellers for beef, hit an all-time peak this past week.”

The Journal article also included this interesting graphic.

Keith Good