December 15, 2019

Farm Bill; Ag Economy; Wheat; Regs; Immigration; and, the Budget

Farm Bill

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “In a strong showing of support, the U.S. Senate voted 75-22 on Thursday morning to close off debate on amendments to the farm bill and move ahead to final debate on the legislation and one more vote likely on Monday to send the bill to the House.

“Thursday’s cloture vote allowed leaders of the Senate Agriculture Committee to avoid other possible changes to the legislation and broke the gridlock over just how many amendments warranted debate. Twenty-two Republicans joined 53 Democrats in voting for the bill. All 22 votes opposing the cloture vote were Republicans.”

Mr. Clayton noted that, “The Senate bill would also tie conservation compliance to eligibility for crop-insurance premium subsidies. Following an amendment to the bill, people with more than $750,000 adjusted gross income would see their crop-insurance premium subsidies capped as well.”

Prior to yesterday’s vote, Ag Committee Chairwoman Debbie Stabenow (D., Mich.) and Committee Ranking Member Thad Cochran (R., Miss.) urged their colleagues to vote for the cloture measure, a video replay of their floor remarks can be viewed here.

There will be two votes in the Senate at 5:30 p.m. on Monday, one on the an amendment by Pat Leahy (D., Vt.) -amendment #998 (rural gigabit internet projects)- and the second vote will be on passage of the Farm Bill.

Bruce Alpert reported yesterday at the New Orleans Times-Picayune Online that, “The Senate won’t consider an amendment to delay flood insurance premium rates as part of the 2013 Farm Bill. Senate Majority Leader Harry Reid, D-Nevada, announced Thursday that when the Senate resumes consideration of the bill Monday, it will debate just one amendment, one by Sen. Patrick Leahy, D-Vt.

“That means 250 proposed amendments to the farm bill won’t get a vote, including Sen. Mary Landrieu’s flood insurance proposal.”

Recall that on the Senate floor Tuesday, Sen. Landrieu stymied the Farm Bill amendment process by raising objections to every GOP amendment that was offered because she could not get a vote on her flood insurance amendment (amendment #1113).  A video replay of a portion of Sen. Landrieu’s remarks on this issue from Tuesday can be viewed here.

In his Times-Picayune article, Mr. Alpert pointed out that, “One Senate aide said the two mangers of the Farm Bill decided the best way to move the legislation, critical to farmers, was to rule out consideration of all but one of the 250 pending amendments. The problem, the aide said, was that Democrats and Republicans couldn’t agree on what amendments to eliminate.

“‘There just isn’t time to spend weeks voting on hundreds of amendments to every bill when there are other bills the Senate needs to work on,’ another Senate staffer said. ‘After weeks of working toward a bipartisan agreement to vote on a reasonable number of amendments, and with the parties unable to reach a deal, Senate leaders made the decision to move to a final vote on the bill.’”

Senator John Thune expressed frustration on the Farm Bill amendment process yesterday on the floor.  During remarks that focused mostly on an amendment he had filed regarding target prices in Title I of the measure, the South Dakota Republican indicated that, “Several of my colleagues and I pointed out during the debate on the Farm Bill during the Ag. Committee, we have deep concerns over what we believe is a step backwards in the Commodity Title with the creation of the Adverse Market Payments, or what we refer to as the ‘AMP’ Program.

“This program takes a step backward from last year’s Farm Bill by re-creating a program with countercyclical payments and fixed target prices.  In fact, I would argue that this is a policy that goes back, this policy predates cell phones.  This policy predates the Internet.  This is going back to 1980s type farm policy” (video replay of Sen. Thune’s remarks here).

Senator Mike Johanns (R., Neb.), who had also expressed concerns about target prices in the Committee process, noted yesterday in a conference call with reporters that, “So the final thing I would say is this. And this is really what it came down to for me: Are we better off passing this bill than not having a farm bill? I think the answer to that is without a doubt yes. And so I decided to support the bill, even though it does have some warts to it. We’re better off with this bill than not having a farm bill.”

AP writer Mary Clare Jalonick reported yesterday that, “The Senate legislation would eliminate some subsidies paid to farmers whether they grow crops or not and would make a small cut to food stamps — about $400 million a year out of the program’s almost $80 billion annual cost, or about half of a percent. The bill would also create new subsidy programs for Midwestern and Southern farmers.”

Meanwhile, Senate Majority Leader Harry Reid (D., Nev.) indicated yesterday that, “Unfortunately, last year the House of Representatives failed to take up the Senate’s bipartisan farm bill. I hope this year Republican leadership will allow a vote in the House on the Senate’s bipartisan legislation, which will create jobs, cut taxpayer subsidies and reduce the deficit by $23 billion.

“America’s farms and ranches are the most productive in the world. But to keep America’s farms and America’s economy strong, Congress must pass a strong farm bill and do it quickly.”

At a news conference yesterday, House Speaker John Boehner (R., Ohio) stated: “Leader Cantor announced that the House will be taking up the farm bill later this month. I think it’s important for the House to work its will on the farm bill. I’m hopeful that we can pass a farm bill and get to conference with the Senate and resolve this issue for Americans, farmers and ranchers.”

David Rogers reported yesterday at Politico that, “A strong Farm Bill showing in the Senate Thursday clears the way for a final vote on passage Monday evening and puts added pressure on the House to move ahead this month with its own five-year plan to revamp major commodity programs.”

Mr. Rogers indicated that, “A bloody, knockdown fight lies ahead in the House, scheduled to take up its bill the week of June 17th. But having blocked floor action last year, Speaker John Boehner (R-Ohio) will find it harder to justify more stalling after the bipartisan showing in the Senate Thursday.”

More specifically on policy implications, University of Illinois Agricultural Economist Nick Paulson indicated yesterday the farmdoc daily blog (“Expected Price Support Payments for Corn and Soybeans”) that, “The current farm bill proposals being debated in the Senate and House continue to include price supports in the commodity title while repealing the current system of direct and countercyclical (DCP) payments. More detailed discussions of the modified price support programs – AMP in the Senate, and PLC in the House – were provided in recent posts (here and here). Today, attention is turned towards comparing the expected payments each program might generate for corn and soybean producers.”

Also yesterday, a news release from Sen. Heidi Heitkamp (D., N.D.) stated that, “[Heitkamp] today pressed the U.S. Department of Agriculture Risk Management Agency to honor its commitments to North Dakota farmers by ensuring crop insurance coverage for growers unable to plant due to wet conditions.

“‘Missing a planting window can be as devastating to farm family’s bottom line as drought or midseason flooding. For insurance programs to function effectively as risk mitigation tools that serve the needs of all regions of the country, it is important that prevented planting coverage be made available whenever appropriate,’ wrote Senator Heitkamp in a letter to the Risk Management Agency at USDA.”


Agricultural Economy- Trade

Lynn Hicks and Kyle Munson reported in yesterday’s Des Moines Register that, “Wang Cheng You came to Iowa to buy. He wants 1,000 breeding hogs, and he wants them in a hurry.

“The farm manager from Iowa’s sister state in China, Hebei, quizzed breeders Wednesday at the World Pork Expo, trying to find who could accommodate such a large order. His desire could cost $3,000 per boar or $1,000 per sow, not including blood tests, quarantine costs, and a one-way ticket to fly the hogs, which could weigh 180 to 300 pounds by the time they’re ready.

“Wang said he likes Iowa pork because of its high survivability rate and disease resistance. And he needs to double the size of his breeding herd to fulfill demand for protein in China, the world’s largest consumer of pork.”

The Register article noted that, “China’s agriculture industry, still dominated by small farms, is under pressure. The world’s most populous nation needs to improve its productivity to prevent food shortages. And as its population grows wealthier, it’s eating more protein. But chronic water shortages, lack of arable land and other environmental constraints will restrict productivity gains.”

David Kesmodel reported yesterday at The Wall Street Journal Online that, “Tyson Foods Inc. Chief Executive Donnie Smith said the planned sale of rival Smithfield Foods Inc. to China’s largest pork processor highlights the intensifying globalization of the agriculture industry and could help increase Tyson’s pork exports to the Asian nation along with Smithfield’s.

“‘Smithfield is commenting that this will be good for exports,’ Mr. Smith said. ‘We are the nation’s second-largest pork processor. So if it’s good for exports, that’s a good thing for us.’”

And Reuters writers Dominique Patton and Niu Shuping reported earlier this week that, “The need to feed the world’s most populous nation has seen Chinese firms gobble up foreign dairy, sugar and cereal producers, and Shuanghui International’s $4.7 billion bid last week for top U.S. pork producer Smithfield Foods is just the country’s latest food ‘land grab’.

Beef could be next on the menu as Chinese opt for the protein-rich meat, which is seen as a higher quality product than pork, the nation’s staple. While pork and poultry remain China’s meats of choice, beef consumption is growing rapidly as hot-pot restaurants, Korean barbecue joints and burger bars set up across the country.”

In other trade related developments, James Politi reported yesterday at The Financial Times Online that, “Barack Obama requested ‘fast track’ authority from Congress to swiftly pass trade deals through the US legislature for the first time since he took office, to help seal what Mike Froman, his nominee for US trade representative, described as ‘among the most ambitious trade agendas in history’.

In testimony before the Senate finance committee, Mr Froman said such legislation – which allows trade deals to move quickly through Congress without amendments – was a ‘critical tool’ for negotiating agreements with the European Union and Asia-Pacific nations including Japan.”

The FT article noted that, “Fast track authority, also known as Trade Promotion Authority, lapsed in 2007 and Republicans and some Democrats have criticised the White House for being skittish about demanding this authority from US lawmakers.

“‘If we can conclude these agreements – and let me be clear: my view is that it’s better to accept no agreement than a bad agreement – we will have positioned the United States at the centre of a network of agreements, creating free trade with 65 per cent of the global economy,’ Mr Froman said.”

Reuters writer Doug Palmer reported yesterday that, “President Barack Obama’s nominee to be U.S. trade representative on Thursday pledged to work with leaders of the Senate Finance Committee to craft major trade legislation needed by the White House to win approval of trade deals.

“‘If confirmed, I will engage with you to renew Trade Promotion Authority. TPA is a critical tool. I look forward to working with you to craft a bill that achieves our shared goals,’ Mike Froman, currently the White House international economic affairs adviser, said at his confirmation hearing.”

Former U.S. Trade Representative Rob Portman, now a GOP Senator from Ohio, highlighted the importance of TPA at yesterday’s Finance Committee confirmation hearing for Mr. Froman (audio– MP3- 1:09), while Sen. Ron Wyden (D., Ore.) specifically raised the GMO wheat issue and sought assurances from Mr. Froman that he would actively engage in agricultural related issues as Trade Representative (audio– MP3-0:52).

Also at yesterday’s hearing, Sen. John Thune (R., S.D.) highlighted the TPA issue and also raised the issue of EU duties on U.S. ethanol imports, which Mr. Froman noted was a topic he was familiar with and was committed to reviewing (audio– MP3- 2:05).


GMO Wheat Issues

Mateusz Perkowski reported yesterday at the Capital Press Online that, “Several wheat farms in Washington are seeking a class action lawsuit against the Monsanto Co., accusing the biotech developer of negligence for the unauthorized release of transgenic wheat.

“Dreger Enterprises of Creston, Wash., and Wahl Ranch of Lind, Wash., have filed a legal complaint seeking compensation for diminished wheat prices, loss of export markets and ‘contamination of the entire wheat farming and production chain.’”



A news release yesterday from Sen. John Thune (R., S.D.) indicated that, “[Thune] this week again called on the Obama administration’s Environmental Protection Agency (EPA) to answer for leaking approximately 80,000 farmers and ranchers’ personal data to left-wing environmental groups. Thune joined a bipartisan group of senators in a letter to the EPA requesting answers on the leaked data. Thune first sent a letter in April objecting to the release of this sensitive information and questioning whether the agency had violated the Privacy Act.”

Also yesterday, DTN writer Todd Neeley reported that, “The scope of a recently dismissed mega pesticides lawsuit involving hundreds of chemicals and their potential effects on hundreds of endangered species has been scaled back in a new complaint filed with the U.S. District Court for the Northern District of California on Wednesday.

“In its April 22 dismissal of the pesticides case, the court ruled the plaintiffs, the Center for Biological Diversity, failed to show that U.S. Environmental Protection Agency actions on pesticide registrations specifically led to potential harm to endangered species.

“In a 437-page amended complaint filed with the court, the CBD attempts to make the connection between how actual EPA actions on more than 80 chemicals used in hundreds of name-brand pesticides across the country could be harming hundreds of endangered species. The CBD asks the court to require EPA to consult with the U.S. Fish and Wildlife Service to determine potential harm to endangered species.”

Meanwhile, Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “The chairman of the Commodity Futures Trading Commission (CFTC) on Thursday defended the agency’s work in developing rules required by the Dodd-Frank Act but said more must be done to regulate the international derivatives market.

“The CFTC has come under fire from public interest groups, who say new regulations on swaps and derivatives issued by the agency in accordance with the Wall Street reform law have been weakened under industry pressure.

“But Chairman Gary Gensler said the CFTC has completed 90 percent of its rules to bring more oversight to the previously unregulated swaps market, which was a significant contributor to the 2008 economic crisis.”



Meredith Shiner reported yesterday at Roll Call Online that, “Senate Majority Leader Harry Reid, D-Nev., on Thursday filed cloture on the motion to proceed to the immigration bill, setting up votes as early as June 10 on the landmark legislation.

“A Senate Democratic aide said Thursday that the chamber would proceed to the immigration bill as soon as it wraps work on the pending farm bill.”

Ms. Shiner noted that, “In layman’s terms, this means that next week is when the real show on immigration begins.”

Ashley Parker and Julia Preston reported in today’s New York Times that, “With the Senate beginning debate next week on an ambitious bill to overhaul the immigration system, Republicans in the House moved this week to set a tougher tone on the issue and to stake out their own course on legislation.

Late Wednesday, a bipartisan group of representatives who had been meeting to write a broad immigration bill announced they had completed their negotiations. But a prominent Republican in the group, Raúl Labrador of Idaho, said he was leaving. Mr. Labrador said that he disagreed with the other lawmakers over health care provisions for illegal immigrants who would gain legal status under the measure.”

And Molly Hooper reported yesterday at The Hill Online that, “The top-ranking House Democrat is ‘optimistic’ that lawmakers can pass a comprehensive immigration reform measure.

“Despite several setbacks in the lower chamber’s effort to move a comprehensive measure to the floor, House Minority Leader Nancy Pelosi (D-Calif.) said she remains ‘more optimistic and positive’ about the yet-to-be-seen bill’s prospects.”


Budget Issues

Niels Lesniewski reported yesterday at Roll Call Online that, “The White House and Speaker John A. Boehner exchanged barbs Thursday over the potential for a shutdown showdown this fall, underscoring the yawning budget gap between the parties that threatens to torpedo this year’s appropriations bills.

“The House passed the first fiscal 2014 spending bills this week despite two veto threats, and the Senate is set to mark up funding measures in the coming weeks. But the two chambers are operating off vastly different numbers — given that the House and Senate haven’t come close to reaching a budget deal — setting the stage for another stopgap spending bill this fall and, theoretically, a shutdown fight if the two sides can’t agree.

The House is following a $967 billion spending level that assumes the budget sequester remains in effect. Senate Appropriations Chairwoman Barbara A. Mikulski, D-Md., has said she is moving forward at a $1.058 trillion level that operates on the idea Congress will find a fix for the sequester.”

Keith Good

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