FarmPolicy

November 1, 2014

Farm Bill; Ag Econ; Regulations; and, Immigration

Farm Bill

David Rogers reported yesterday at Politico that, “Moving further to the right, the House Republican leadership is actively pursuing a strategy of splitting its failed farm bill into two parts so that the nutrition title and food stamps funding can be considered on their own.

“Majority Leader Eric Cantor (R-Va.) is driving the new approach, which dovetails with the agenda of outside conservative groups. But Speaker John Boehner’s office signaled Thursday that he also is open to the two-bill strategy and a final decision will be made after the July Fourth recess.

“‘We are going with this play and see where it gets us,’ a senior leadership aide told POLITICO. ‘We are trying to break the bill apart to get something to conference with the Senate.’”

(Note that in a news briefing yesterday with Speaker Boehner, the following exchange took place, QUESTION: On the farm bill, do you support the — the notion of splitting food stamps away from the [farm program] as a possible…?

“BOEHNER: There’s a lot of conversations going on about the farm bill and a way forward. There have been no decisions” (Audio clip.))

In his Politico article, Mr. Rogers explained that, “Even if successful in getting out of the House, the two-bill strategy raises real parliamentary problems about what the scope of future House-Senate talks will be. Leadership aides admitted some uncertainty as to whether negotiators will be able to meld the two pieces back together again. And the commodity title of the farm bill includes tariff provisions which make it technically a revenue measure.

“For Boehner and larger American agriculture interests, the two-bill approach represents a major challenge: Do they allow themselves to be whittled down more from the right or embrace a larger reform agenda that rebuilds the old urban-rural coalition more from the middle?

“The food stamps fight has dominated farm bill politics to date. But last week’s floor debate also reflected a bipartisan appetite for more reforms in crop insurance and international food aid — a path that could attract votes from both sides of the aisle.”

Yesterday’s article also noted that, “I told John, `We need to get together and fix this, and the sooner the better,’” [Rep. Collin Peterson] told POLITICO of his conversations with the speaker. Sen. Saxby Chambliss (R-Ga.), a friend of the speaker with a background in farm debates, may be enlisted in the effort.

Indeed moving far to the right on the farm bill can become a trap for the speaker.

“It exposes him to attacks from conservatives down the road, when the final House-Senate conference report — which will almost certainly be a more centrist document — comes back to the House floor.”

Mary Kay Thatcher, the Senior Director of Congressional Relations at the American Farm Bureau pointed out yesterday on the AgriTalk radio program with Mike Adams that, “But I think one thing you have to keep in mind is it’s not just about passing it this time, it’s about making sure we have enough votes to come back once it’s through conference and pass the House and the Senate.”

Also, Emma Dumain and Matt Fuller reported yesterday at Roll Call Online that, “House Majority Leader Eric Cantor is looking at splitting food stamps and farm programs in an effort to unite Republicans to pass a farm bill so leadership doesn’t have to count on Democratic votes.

“‘Cantor believes the best path now is to move forward with a bill that has 218 Republican votes since Democrats proved they cannot be trusted to work in good faith, and that path may be splitting up the bill,’ a GOP aide told CQ Roll Call on Thursday morning.”

Corey Boles reported yesterday at The Wall Street Journal Online that, “No final decisions have been made on how to move a farm bill forward, the aide said, but Mr. Cantor (R., Va.), who controls the House agenda, is pushing for a vote by the full House in July after a one-week recess. Two senior GOP leadership aides said decisions aren’t likely to be made until lawmakers return from the Fourth of July break.”

Mr. Boles indicated that, “[Rep. Marlin Stutzman (R., Ind.), an advocate for splitting the Farm Bill] said he had attended a meeting between a group of conservative lawmakers and Mr. Cantor where the issue was discussed, and had a one-on-one meeting with the majority leader on Thursday.”

The Journal article added that, “Mr. Stutzman said that he thought there would be 218 Republican votes—the minimum number needed to approve legislation if every representative casts a vote—for a standalone bill covering the core farm programs. But he acknowledged that food-stamps funding would likely be cut substantially to get enough Republican support to clear the House.”

Yesterday’s article stated that, “Rep. Frank Lucas (R., Okla.), the House Agriculture Committee chairman, who is the main author of the current farm bill is strongly opposed to splitting food-stamps funding from the core farm bill.

“‘When you look at the so-called political activists groups on the East Coast—the paid mercenaries—they don’t want a farm bill and that’s why they advocate for these things because they see it as the best way to kill the farm safety net,’ Mr. Lucas said Wednesday during an interview with Radio Oklahoma Network.”

Bloomberg writer Derek Wallbank reported yesterday that, “The largest House Republican caucus, the Republican Study Committee, has been pushing leaders to treat the issues separately, a position advocated by a coalition of small-government groups.

“‘We should separate food stamps from what we call the commodity title,’ Budget Chairman Paul Ryan, an RSC member, told MSNBC on June 24.

The Bloomberg article added that, “Senate Agriculture Chairman Debbie Stabenow, Democrat of Michigan, has said a farm bill without food stamps is a non-starter.”

Also, Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Conservative Rep. Steve King (R-Iowa) said he opposed splitting the bill. He said that, heading into a conference with the Senate, a combined bill is the only way to get Democrats to swallow any food stamp cuts.

“‘What I want from leaders is a plan to get 218 votes on a combined bill by the time we leave here for July 4,’ he argued.”

In addition, O. Kay Henderson reported yesterday at RadioIowa Online that, “Republican Congressman Steve King admits there’s a chance congress cannot come up with a compromise on the Farm Bill.

“‘At this point, I don’t know if we can do it,’ King says.”

Meanwhile, speaking yesterday on WDWS Radio (AM- 1400, Champaign, Il.), Ag Committee Member Rodney Davis (R., Il.) noted that, “I think, after talking with Chairman Lucas yesterday, I think we’ll try and craft some minor changes to this bill and go into a conference committee in good standing with a good ability to find that common sense solution,” the freshman lawmaker added that, “But we’ve got to get a bill out of the House to even be able to sit down across the table and find that common sense solution.” (Related audio here (MP3- 2:09)).

And on yesterday’s AgriTalk radio program with Mike Adams, Mary Kay Thatcher noted that, “So I suspect in the end there will be a way to find one or two or three amendments that could be jiggered, or new ones offered and accepted and this bill can pass.  But I don’t think we’ve figured out the vote counting yet.  It’s really not that big, Mike, you know.  You’ve got some people who were already [let] away, you know, saying, well, you can vote no.  They promised to vote yes on the bill if it came really close, but when it was defeated by [as many] they let them go.  So you probably only have to find 10 to 12 people to pass this.”

And with respect to an extension, Ms. Thatcher stated on AgriTalk that, “You know, Harry Reid said very forcefully, probably three months ago now, that if there was another extension, it would not include direct payments, so I think there was already pressure on the ag community to get something done, not necessarily because of the direct payments, because everybody knows they’re going away, but because without those direct payments you wouldn’t have the $5 billion a year to put towards deficit reduction and to put towards building a viable safety net.”

In other news, Sec. of Agriculture Tom Vilsack was a guest yesterday on the “Morning Joe” television program (MSNBC) where he discussed mostly nutrition issues, but also commented on the Farm Bill in response to a question (video replay here).

Sec. Vilsack noted that one of the consequences of not getting a new Farm Bill passed is the trade retaliation threat from Brazil that continues to loom due to an adverse WTO decision, something that could potentially impact all sectors of the economy, not just agriculture.  Brazil has held off on exercising this retaliatory option, but it does remain.

Sec. Vilsack was also asked about the SNAP program.

This portion of yesterday’s MSNBC interview can be heard here (MP3- 1:12).

And Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Candy bars and Cokes will be replaced in school vending machines around the country with fruit cups and calorie-free flavored water under new snack standards unveiled Thursday.

“The Department of Agriculture regulations apply to all food and drinks sold to kids in school, outside of the national school breakfast and lunch programs, which are already subject to new rules under the Healthy, Hunger-Free Kids Act of 2010.” (Related USDA video available here).

Stephanie Strom reported in today’s New York Times that, “The law, supported by Michelle Obama and drafted with an unusual level of cooperation between nutrition advocates and the food industry, required the Agriculture Department to set nutritional standards for all foods sold in schools.

“The department had previously set the standards for fats, sugars and sodium in meals prepared in schools, and the new rules bring other foods under similar standards. When schools open in the fall of 2014, vending machines will have to be stocked with things like whole wheat crackers, granola bars and dried fruits, instead of M&Ms, Cheese Nips and gummy bears.”

Rep. Lee Terry (R., Neb.) tweeted yesterday that, “#Gatorade and sugary drinks and chips banned in schools by @USDA.  # nannystate.”

Meanwhile, Government Accountability Office (GAO) testimony yesterday (“SCHOOL LUNCH: Modifications Needed to Some of the New Nutrition Standards”) indicated that, “School districts faced several challenges implementing the new lunch requirements in school year 2012-2013, according to the eight districts GAO visited and food service and industry officials GAO interviewed from across the country; and the U.S. Department of Agriculture’s (USDA) response to some of these challenges has been limited. For example, because USDA regulations restrict the amounts of meats and grains that can be served in school lunches each week, all eight districts GAO visited needed to modify or eliminate popular menu items. These changes sometimes led to negative student reactions. The meat and grain restrictions also led to smaller lunch entrees, making it difficult for some schools to meet minimum calorie requirements for lunches without adding items, such as gelatin, that generally do not improve the nutritional quality of lunches.”

 

Agricultural Economy

Yesterday, the USDA’s National Agricultural Statistics Service released its monthly Agricultural Prices report, which stated in part that, “The corn price, at $7.02 per bushel, is up 5 cents from last month and 65 cents above June 2012 [related graph] …the soybean price, at $15.10 per bushel, increased 20 cents from May and is $1.20 above June 2012 [related graph] …and…the June price for all wheat, at $7.13 per bushel, is down 55 cents from May but 43 cents higher than June 2012 [related graph].”

Emiko Terazono reported yesterday at The Financial Times Online that, “Soyameal, the key ingredient for feeding chickens and pigs, hit a seven-month high on concerns over the low levels of soyabean inventories in the aftermath of last year’s severe drought.

“The meal, produced from crushing soyabeans, is mixed with corn to make animal feed.

Despite expectations of a bumper harvest later this year, prices for soyabeans and meal have remained high due to dwindling stocks for the commodities for immediate delivery.”

The FT article noted that, “Details on planting, stocks and usage are likely to become clearer on Friday when the US Department of Agriculture publishes its quarterly planting and stocks report.”

Ian Berry and Owen Fletcher reported in today’s Wall Street Journal that, “Buoyed by strong consumer demand and tight supplies, lean-hog prices have leapt 19% so far this year.”

The Journal writers noted that, “The jump in prices is helping hog farmers counteract higher costs for feed grains after last summer’s severe U.S. drought, while meatpackers have been able to pass along the higher costs due to ample retail demand. Pork demand has risen due to its lower price compared with beef, which hit record prices at retail this spring.”

Today’s article added that, “The rally in hog futures got a boost last month when Smithfield Foods Inc., the world’s biggest pork processor and hog producer, agreed to a $4.7 billion takeover by China’s Shuanghui International Holdings Ltd., in what would be the biggest Chinese takeover of a U.S. company. The deal led to speculation that U.S. pork exports to China will rise if the deal is completed.

Futures also have been lifted by tighter U.S. hog supplies. Supplies often shrink this time of year due to the animals’ breeding patterns—a trend accentuated by last summer’s heat in the Midwest, which curbed swine reproduction and resulted in fewer pigs this year.”

Meanwhile, USDA’s Economic Research Service released a report yesterday (“International Food Security Assessment, 2013-2023,” by Birgit Meade and Stacey Rosen) which noted that, “Food insecurity in the 76 low- and middle-income countries examined in this report is expected to remain virtually unchanged between 2012 and 2013. By 2023, however, the number of food-insecure people is projected to increase nearly 23 percent to 868 million, with the share of the population that is food insecure growing from 20.4 percent to 21.5 percent.”

In trade news, James Politi reported on Wednesday at The Financial Times Online that, “General government procurement accounts for more than 10 per cent of economic output in the US, according to the OECD, the Paris based group of countries that tries to promote growth. So a proliferation of Buy America bills – similar to the one supported by [Ron Young, a veteran Maryland legislator], which requires Maryland to choose domestically produced products over foreign ones where possible – are barriers that European officials would like to see removed in trade talks, due to begin next month.

“‘What we are trying to establish in these negotiations is free trade – we’re not going to be able to do that everywhere but that is the general objective – and that means not discriminating between European goods or services and their American counterparts,’ says an EU official in Washington. ‘This is an issue for us because in Europe we have used procurement as an instrument to open up trade between member states, and in doing that we haven’t discriminated against foreigners.’”

 

Regulations

Reuters writer Douwe Miedema reported yesterday that, “A top U.S. regulator charged former MF Global chief Jon Corzine over the collapse of the futures brokerage, blaming the former Goldman Sachs co-chief executive with being a key actor in one of the country’s 10 biggest bankruptcies.

“The Commodity Futures Trading Commission said on Thursday it will seek in a civil case to ban Corzine and former Assistant Treasurer Edith O’Brien from the industry, and also seek penalties against the two.”

In a statement yesterday, Sen. Ag Comm. Chairwoman Debbie Stabenow (D., Mich.) indicated that, “This is an important step forward and I appreciate that the CFTC continues to pursue this matter and fight for customers and market integrity.  As I have said before, there must be accountability in this case and we need to do all we can to help MF Global customers get their money back. The loss of $1.2 billion in customer funds represents an extraordinary breach of trust and devastated thousands of farmers, ranchers and small businesses who rely on the futures market to hedge business risk. The Senate Agriculture Committee will continue throughout the upcoming CFTC reauthorization process to consider additional protections to ensure that customer money is not used improperly and to prevent situations like the MF Global bankruptcy from happening again.”

And Randy Neugebauer (R., Tex.), Chairman of the Financial Services Subcommittee on Housing and Insurance, noted yesterday that, “The CFTC’s conclusions track closely with my subcommittee’s findings that Jon Corzine’s decisions caused farmers, ranchers, and other customers to lose more than $1 billion.  He didn’t act in good faith as a steward of these funds, and he violated his legal obligations by failing to adequately oversee MF Global’s operations.  He should bear the responsibility for these unlawful and harmful actions.  I appreciate all the work the CFTC has put into this case.”

On a separate issue, Reuters writer Charles Abbott reported yesterday that, “U.S. lawmakers will examine the proposed purchase of Smithfield Foods, the world’s largest pork processor, by Shuanghui International of China at a hearing in July, Debbie Stabenow, the head of the Senate Agriculture Committee, said on Thursday.

“Smithfield Chief Executive Larry Pope will be among those to testify at the July 10 hearing. Other witnesses have not been announced.”

 

Immigration

Sara Murray and Janet Hook reported in today’s Wall Street Journal that, “The Senate easily passed the most sweeping changes to immigration law in nearly 30 years, sending the landmark measure to the House, where conservative lawmakers threaten to slow the drive to grant legal status to many of the estimated 11 million people living illegally in the U.S.

“The 68-32 vote Thursday marked a major step in a long-debated overhaul to the immigration system and drew ceremonial flourish. Vice President Joe Biden presided over the proceedings, and lawmakers rose from their desks to cast their votes, a rarely used gesture of formality.

Fourteen Republicans joined all of the Senate Democrats and two independents to support the measure, in a clear marker of how far the political calculus of immigration reform has shifted in the six years since a similar effort stalled on the Senate floor.”

The Journal writers noted that, “House Republican leaders have pledged to chart their own path, which is sure to diverge from the Senate’s bipartisan approach.

“In particular, the two chambers are likely to clash over the Senate-backed provision to grant legal status and a possibility of citizenship to illegal immigrants, an idea rejected by many House conservatives.

“‘The House is not going to take up and vote on whatever the Senate passes,’ House Speaker John Boehner said Thursday before the final Senate vote. But in a sign of how far House Republicans are from consensus on their alternative, Mr. Boehner wouldn’t say what he wanted to see in the bill.”

Mike Lillis reported yesterday at The Hill Online that, “The surprise failure of the farm bill last week is not a bad omen for immigration reform, Rep. Nancy Pelosi (D-Calif.) insisted Thursday.

The Democratic leader said the two issues are entirely separate and will be treated as such.

“‘The farm bill was a bad sign for what happened on the farm bill,’ Pelosi said during a press briefing in the Capitol. ‘Every day is a new day here in terms of the legislation and what the public demand for legislation is.’”

Keith Good 

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