FarmPolicy

April 24, 2014

Farm Bill Issues; Ag Economy; Biofuels; and, Immigration

Farm Bill: Senate Issues, Chairwoman Stabenow on C-SPAN

Pete Kasperowicz reported on Friday at The Hill’s Floor Action Blog that, “The Senate starts work at 2 p.m. [today], and will continue to debate the Border Security, Economic Opportunity, and Immigration Modernization Act, S. 744. At 5 p.m., debate will shift to the Agriculture Reform, Food, and Jobs Act, S. 954.

“At 5:30 p.m., senators will vote on an amendment to the farm bill from Sen. Pat Leahy (D-Vt.), which would set up a pilot project for Internet projects in rural areas.

After that, the Senate should be in a position to vote on final passage of the farm bill.”

Philip Brasher reported on Friday at Roll Call Online that, “Farmers know they’ll lose $5 billion in annual direct payments when a new farm bill passes. But up until now, few growers have complained about that prospect, because they know they can still count on buying federally subsidized crop insurance.

“However, those popular crop insurance policies may start coming with some strings attached. The Senate farm bill (S 954) would add a means test to the insurance program for the first time and would also begin requiring policyholders to comply with rules for protecting wetlands and preventing soil erosion.

“‘There is consternation out here in the countryside,’ said David Miller, director of research and commodity services for the Iowa Farm Bureau, that state’s largest and most powerful farm organization. The crop insurance restrictions are ‘making the Senate bill less attractive to people,’ he said.”

Mr. Brasher explained that, “The House Agriculture Committee’s farm bill (HR 1947) contains no new restrictions on crop insurance. But several amendments expected to be debated on the House floor include proposals to cap the amount of premium subsidies any one farmer can receive. The conservation compliance measure and adjusted gross income limit also are likely to be proposed as amendments.”

In a separate note on crop insurance, Iowa farmer Mark Gerdes explained on Friday at the Ames Tribune Online that, “Critics are quick to point out that more than $17 billion will be paid out to farmers and ranchers who purchased crop insurance for their losses in 2012. The implication here is that the $17 billion is some sort of windfall being bestowed upon farmers by the federal government.

“But the math tells a very different story. Insurance policies must first be purchased, and then policy holders must absorb the policy’s deductible after suffering a verifiable loss, before they can collect a single dime. In 2012, farmers paid $4.1 billion out of their own pockets to purchase crop insurance policies. Then, farmers shouldered $12.7 billion in losses as part of their crop insurance policy deductibles. Together, these total about $17 billion.”

Meanwhile, Abbie Fentress Swanson reported on Friday at the Field Notes Blog (Harvest Public Media) that, “The U.S. Department of Agriculture first began designating funds for rural development in 1933 as part of the New Deal. More federal funds were allocated in the Agricultural Act of 1970. During this fiscal year, the rural development program is administering approximately $38 billion in loans, loan guarantees and grants. It’s being used to construct or improve 48 rural libraries, assist 243 projects in the delivery of healthcare and help more than 270,000 low income families get affordable housing, according to the USDA.

“But how are decisions made about projects that benefit rural America? On a recent visit to Washington, [Abbie Fentress Swanson] spoke with Doug O’Brien, acting under secretary for the USDA’s Rural Development program. He explained how the rural development program is implemented and how its funds are dispersed.”

In addition, David A. Fahrenthold reported in yesterday’s Washington Post that, “The problem is that the U.S. government has at least 15 official definitions of the word ‘rural,’ two of which apply only to Puerto Rico and parts of Hawaii…[T]here are 11 definitions of ‘rural’ in use within the U.S. Department of Agriculture alone.”

The Post article indicated that, “‘If you were starting from a blank slate, providing one definition would be optimal,’ said Doug O’Brien, the USDA official in charge of rural development programs.

“But optimal is not happening. This week, as soon as Monday, the Senate is expected to pass a bill that would pare down the list of definitions. Not down to one, however.

“Down to nine.”

Mr. Fahrenthold added that, “Now, the U.S. Senate is considering a farm bill that would knock six definitions off the list by settling on a single population cap for ‘rural’ areas. The Senate bill decrees that any place that has fewer than 50,000 residents, and isn’t adjacent to a big city, should be counted as rural.

“That’s simpler. The USDA supports the idea. But in the House, both Republicans and Democrats have said the population cap is too high and the bill’s vision of ‘rural’ is too expansive.”

On Friday, veteran agricultural reporter Jerry Hagstrom and Senate Roll Call reporter Niels Lesniewski interviewed Senate Ag Comm. Chairwoman Debbie Stabenow on C-SPANS weekly Newsmakers program (video replay here, and FarmPolicy.com transcript of the discussion available here).

One topic of particular interest during the interview was the proposed sale of Smithfield Foods, the world’s largest pork producer, to the Chinese (Shuanghui).

Mr. Lesniewski reported on Friday at Roll Call Online that, “‘This is the largest sale of a company in the United States to a Chinese state-owned enterprise,’ the Michigan Democrat [Chairwoman Stabenow] said in an interview Friday about the proposed sale of Smithfield Foods to Shuanghui International. She said she has a number of concerns about the deal at this point, but declined to oppose it outright.

“Speaking at length about the proposed purchase for the first time, Stabenow raised the possibility that the Chinese entity might cause problems for the U.S.-Japanese pork trade.

“‘Pork producers are dependent upon exports, and so I totally understand that. My concern is our biggest export market in the U.S. is Japan, right next door to China. So, what happens when you have a Chinese company now owning [Smithfield],’ Stabenow said during an interview that will air Sunday on C-SPAN’s ‘Newmakers.’”

More details on this subject can be found on pages 5-7 of the FarmPolicy transcript of the Newsmakers interview.

In remarks on Newsmakers after the detailed discussion with Chairwoman Stabenow, Mr. Hagstrom noted that, “I’m still betting that the House and Senate will come together [to pass a Farm Bill].

Now, if they don’t, most likely then they would pass another extension. And there are some people who like the extension because the extension doesn’t cut the big farm programs and the extension also doesn’t make any cut in food stamps. But the thing is, that’s not reform. And also it leaves out any changes in agricultural policy that would respond to what’s happened to agriculture in the last five years. So really, it would be a better idea if they can pass a bill.”

Similarly, Corey Boles reported yesterday at The Wall Street Journal Online that, “A failure by lawmakers to reach a compromise would almost certainly see the current farm and nutrition programs continue on autopilot for at least another year.”

 

Farm Bill: House

Linda Vanderwerf reported on Saturday at the West Central Tribune (Willmar, Minn.) Online that, “U.S. Rep. Collin Peterson believes a new federal Farm Bill could be approved before Congress’ August recess.”

The article added that, “[P]eterson said he believes the House will finish voting on a final bill by July 1. A conference committee would meet in July, giving both chambers a chance to approve a bill before the August recess.”

Brett Neely reported last week at Minnesota Public Radio Online that, “Privately, Democratic sources say the newest [Farm] bill may only receive the votes of 30 out of 201 House Democrats because the legislation cuts too much spending on the federal Supplemental Nutrition Assistance Program — nearly $21 billion over the next decade.

“U.S. Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee, admits he’s having trouble convincing many Democrats to back the bill. But Peterson, who co-authored the farm bill with the committee’s Republican chairman, U.S. Rep. Frank Lucas of Oklahoma, said the GOP is also having trouble drawing support because conservatives want even deeper food stamp cuts.”

The update noted that, “‘I’ve had some Republicans tell me they only have 150 votes,’ said Peterson, who represents Minnesota’s 7th District.

“If the Republican and Democratic vote tallies are accurate, the farm bill is far short of the 218 votes needed to pass the House.”

Dan Voorhis reported on Friday at The Wichita Eagle Online that, “The Senate is expected to vote on its version of a farm bill on Monday, [Rep. Kevin Yoder (R., Kans.)] said, and he expects the House to vote on its version sometime this month.”

The article added that, “The Senate bill would cut about $400 million a year from the SNAP program, or about 0.5 percent. The House bill would cut SNAP spending by about $2 billion a year, about 3 percent, and partially eliminate the practice of automatically awarding food stamps when people sign up for certain other welfare programs.

“Yoder said he expects the two bills to be sent to a conference committee to determine a single version before the August recess.”

Jerry Hagstrom reported yesterday at National Journal Online that, “That cantankerous body [House] did not take up the farm bill last year, so the argument that members have already voted on the farm bill will not work. But the major issues that supposedly stopped the House leadership from bringing the bill to the floor have been known for two years: whether the House will consider the Agriculture Committee’s $20.5 billion cut to food stamps over 10 years too much or too little; whether a majority will go along with a proposal for a dairy program written by Agriculture Committee ranking member Collin Peterson, D-Minn., and beloved by dairy farmers, or prefer an alternative sponsored by Judiciary Committee Chairman Bob Goodlatte, R-Va., and favored by dairy processors; and finally, whether the full House will go along with the Agriculture Committee’s generosity toward crop insurance or want to restrict subsidies and impose conservation compliance, as the Senate has done.

“With the farm bill expected to come to the House floor the week of June 17, House leaders must decide whether to have an open rule or limit amendments. If the bill passes on the House floor, strong leadership from both the Senate and the House will be needed to complete a conference report and send a bill to President Obama before the current extension of the farm bill expires Sept. 30. The decision of more than three-quarters of the Senate to end debate on the farm bill might signal that there is a point at which all legislators will beg for someone to whip them into line.”

In a recent bipartisan, bicameral discussion on the Farm Bill hosted by Sen. Mark Pryor (D), where he interviewed his fellow federal lawmakers from Arkansas Sen. John Boozman (R) and Rep. Rick Crawford (R), Rep. Crawford indicated that, “Our big issue is probably going to be nutrition.”  He added that, “I think what we are going to see is kind of jockeying for position on what amendments are in order on the floor.”

 

Farm Bill- Regulations, Egg Bill, GMO Labeling

An update Friday from the House Agriculture Committee indicated that, “This week during The Ag Minute, guest host Rep. Rodney Davis discusses a key regulatory relief measure that is contained in H.R. 1947, the Federal Agriculture Reform and Risk Management (FARRM) Act of 2013. The measure, which Rep. Davis sponsored and introduced during the House Agriculture Committee markup of FARRM, would ensure that the U.S. Department of Agriculture (USDA) reviews the Environmental Protection Agency’s (EPA) regulatory proposals that could negatively impact farmers and ranchers.”

Attorney Erika Harold, who is challenging Rep. Davis in the GOP Congressional primary, has similarly noted that: “I will oppose the passage and implementation of burdensome regulations that undermine the agricultural industry and unnecessarily increase production costs.”

And Ben Goad reported on Friday at The Hill’s RegWatch Blog that, “President Obama defended his administration’s regulatory record during a speech on this week’s California swing, saying he favors in a ‘light touch’ when it comes to federal rules.”

Meanwhile, in more specific developments regarding regulations, Richard Simon reported on Saturday at the Los Angeles Times Online that, “A fight has broken out over how egg-laying hens should be treated — and specifically whether California can be blocked from requiring that eggs imported into the state be produced under voter-approved standards ensuring that the chickens can spread their wings.

“This being Congress, the measure pushed by Rep. Steve King (R-Iowa) is not just about eggs. It has morphed into a dispute over the rights of the states versus those of the federal government, with a host of laws governing food and even animal welfare potentially in the balance.”

Mr. Simon noted that, “King persuaded House Agriculture Committee colleagues to include in the proposed farm bill a prohibition on states imposing conditions on another state’s production of agricultural goods. The bill is expected to come before the House this month.”  [Note that a video replay and FarmPolicy.com transcript of this issue during the Ag Comm. Farm Bill debate is available here].

King is taking aim at California’s Proposition 2, a much-debated 2008 initiative that requires California farmers to give egg-laying birds enough room to stand and spread their wings. Although the measure does not specify cage size, industry officials believe it will require that hens be given about twice as much room and perhaps more than the current standard of 67 square inches per bird, about as much space as a sheet of letter paper, while the Humane Society of the United States contends it will effectively lead to cage-free production.”

Also on this issue, an editorial yesterday at the Ventura County Star (Calif.) “Don’t take away states’ right to make food laws,” stated that, “Karen Ross, head of California’s Department of Food and Agriculture, wrote to California’s congressional representatives in opposition to Rep. King’s idea. She said it’s a ‘significant threat’ to our nation’s food supply and ‘severely undermines states’ rights.’”

And Julian Hattem reported on Friday at The Hill’s RegWatch Blog that, “The federal government should take a cue from Connecticut and require special labels on that foods containing genetically modified products, says Sen. Richard Blumenthal (D-Conn.).”

Dan D’Ambrosio penned an interesting article on Friday at the Burlington Free Press Online titled, “The battle over GMOs.”  The subtitle to the article stated: “States are taking the lead in requiring labels on genetically engineered food as legal battles with the biotech industry loom. The main question: Are GMOs safe?”

 

Agricultural Economy- Trade

Ricardo Lopez reported recently at the Los Angeles Times Online that, “A decade or so ago, dozens of California dairy farmers built million-dollar systems called methane digesters that convert manure into power. Then, unexpected pollution problems, regulatory roadblocks and low rates of return killed most such digester systems, leaving only a handful in operation.

All that could be changing as renewable energy companies develop new ways of running digesters to boost profits. They’re improving technology to meet tough smog-control rules. At the same time, the state is trying out a streamlined permitting process to help remove costly regulatory hurdles.”

Reuters writer Sam Nelson reported on Friday that, “Rain showers over the next week will present a challenge to U.S. farmers trying to finish up planting this season’s corn and soybean crops, an agricultural meteorologist said on Friday,” while a separate Reuters article from Friday stated: “U.S. hog producers are losing hope for an early harvest of this year’s expected bumper corn crop, which could lower feed costs sooner rather than later, as wet fields continue to impede planting in parts of the Midwest, producers and analysts at a pork industry meeting here [Des Moines] said on Friday.”

And a news release Friday from University of Missouri Extension indicated that, “Soybean yields may be lower this year as weather forces farmers to postpone planting, says a University of Missouri Extension agronomy specialist.”

John Eligon reported in today’s New York Times that, “As farmers go through the ritual of examining every weather map and every tick on the futures boards, trying to divine if and how their pocketbooks can survive another curveball from nature, they are also keeping an eye on Washington, where Congress is still bickering over the farm bill. Farmers are hoping that lawmakers will maintain taxpayer-subsidized crop insurance and other support programs that will help them get through disasters like floods and drought.

Another year of mediocre crop yields could well trickle down to consumers, though agriculture experts insist that it is too early to rule out a robust harvest of corn and soybeans for this year.”

In trade news, Nirmala Menon reported on Friday at the Canada Real Time Blog (Wall Street Journal) that, “Canada has declared war on new U.S. meat rules, and Friday unveiled a list of possible retaliatory tariffs on American imports.  Some obvious items made the list: American meat, potatoes, fruit and cheese.

“Some less obvious ones are also being considered: chocolate, corn flakes, spaghetti and ‘swivel seats with various height adjustment.’ See the full list here.”

 

Biofuels

Amy Harder reported yesterday at National Journal Online that, “Two Senate committees are wrestling over a critical energy policy that influences prices of both fuel and food: the renewable-fuels standard that mandates an increasing amount of biofuels—mostly corn-based ethanol—to be blended with gasoline each year.

“The two panels that set energy and environment policy both want jurisdiction over the mandate, which has come under intense scrutiny from both parties in the past year. The standard is administered by the Environmental Protection Agency, which is squarely in the wheelhouse of the Environment and Public Works Committee. That puts the burden on the backs of Energy and Natural Resources Committee leaders to argue why they should have top billing on the issue.”

 

Immigration

Ramsey Cox reported on Friday at The Hill’s Floor Action Blog that, “Senate Majority Leader Harry Reid (D-Nev.) praised the bipartisan efforts of the Gang of Eight as the Senate began debating a comprehensive immigration reform package Friday…[R]eid said the Senate would complete work on the bill before the July 4 recess.”

David Nakamura and Rosalind S. Helderman reported in Saturday’s Washington Post that, “Leading critics took to the floor [on Friday] to begin making their case against the proposal, which features a 13-year path to citizenship for immigrants who entered the country illegally, new visas for high-tech and low-skilled workers, increased border security investments and the elimination of some categories of visas for extended family members.”

David Nakamura and Rosalind S. Helderman reported in yesterday’s Washington Post that, “As the full Senate engages in intensive deliberations over a landmark immigration bill this week, proponents are scrambling to maintain crucial bipartisan support in the face of Republican demands to strengthen border security.”

And Michael D. Shear and Ashley Parker reported in today’s New York Times that, “Senator Kelly Ayotte, Republican of New Hampshire, announced on Sunday that she would support the immigration bill, calling it a ‘thoughtful bipartisan solution to a tough problem.’

“At the same time, conservative Republican senators, led by Jeff Sessions of Alabama and Ted Cruz of Texas, are preparing an onslaught of amendments that threaten to unravel the carefully crafted compromise.”

Keith Good

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