FarmPolicy

November 28, 2014

Farm Bill; Ag Economy; Regulations; and, Immigration

Farm Bill

Erik Wasson reported on Friday at The Hill’s On the Money Blog that, “Congress has left Washington for the 10-day Fourth of July holiday without figuring out how to deal with the failed farm bill.

“House Democratic and Republican sources said they expect a decision shortly after the recess ends.

“Agriculture Committee ranking member Collin Peterson (D-Minn.) said the GOP whip count on a split farm bill had not finished as of Friday afternoon.”

Mr. Wasson explained that, “Peterson said that he had ‘no idea’ how a House-Senate farm bill conference would work if the House passed a farm bill without food stamp changes in it. He said that the Senate would likely feel entitled to ignore any House demands for additional cuts to the program.

“The ranking member said he has not yet decided whether he would vote for the split farm bill or whether he would whip support for it.

“The fate of the farm bill is holding up consideration of a 2014 Agriculture appropriations spending bill that has already gone to the Rules Committee.”

The Hill update noted that, “Sources said the 2014 spending bill was on the back burner because it would attract the same type of amendment debate that plagued the farm bill and there would be no reason to stir the pot until the bigger $940 billion bill’s fate is figured out.”

Rep. Kristi Noem (R., S.D.) indicted on Friday in a column at the Rapid City Journal Online that, “The next step is unclear, but I remain committed to passing this Farm Bill and remain hopeful we will be able to regroup in the coming days. We need to figure out a way to bring a bipartisan majority of the House together in support of this bill.”

Bloomberg writers Derek Wallbank and Alan Bjerga reported late last week that, “Food assistance has been part of farm legislation since 1977, when Jimmy Carter was president, marrying the interests of urban and rural lawmakers. Since then, the number of participants in what’s officially called the Supplemental Nutrition Assistance Program has more than doubled to more than 47 million from 17 million, while the ranks of rural lawmakers has declined, making them more dependent on representatives of urban districts with needy constituents to back farm subsidies.

“Mounting federal debt has brought fresh scrutiny to both types of aid, as agriculture profits are projected to reach a record $128.2 billion this year and food-stamp costs more than doubled from 2008 to $78.4 billion last year. The House Republican Study Committee, the party’s largest caucus, has pushed leaders to treat the issues separately, as has a coalition of small-government groups that consider food-assistance and crop-subsidy spending wasteful.”

And, Dale Denwalt reported last week at the Enid News and Eagle (Okla.) Online that, “[House Ag Committee Chairman Frank Lucas], R-Cheyenne, said Speaker John Boehner and Majority Leader Eric Cantor are looking at all the options.

“‘One of those is the concept of splitting the bill into a nutrition title and basically everything else, the farm bill, staying in a separate bill,’ he said. ‘My personal prospective is the coalition has been successful in the past for 50 years almost for addressing these issues at the same time. But if leadership chooses to go the route of two separate bills, then of course I’ll be supportive.’”

An update on Friday at a Heritage Foundation blog noted that, “Splitting up the bill is the first step toward reforming both food stamp and farm spending.”

Rep. Marlin Stutzman (R., Ind.) tweeted on Friday that, “It’s time to #SplitTheBill & have a real farm-only #farmbill.”

On the other hand, National Farmers Union President Roger Johnson noted on Friday that, “Separating farm programs from nutrition programs and proposing two bills would be a huge mistake. The likely result would be to kill the bill. This will allow Congress to continue to take no action to provide certainty to U.S. family farmers, ranchers, rural residents and those who depend on the Supplemental Nutrition Assistance Program (SNAP).”

Also, Chris Casteel reported on Friday at The Oklahoman (Okla. City) Online that, “Republican leaders might commit ‘political malpractice’ if they separate food stamps from farm policy to move the critical legislation through the House, Rep. Tom Cole said Friday.

“‘Count me as skeptical of that strategy,’ said Cole, R-Moore.”

The article pointed out that, “Cole said that separating the two components would be a high-risk move, particularly since both parts likely would be shaped to satisfy the most conservative wing of the House Republican conference. Even if they passed the House, he said, they ultimately would have to be reconciled with the farm bill passed by the Senate, where Democrats are in the majority and object to major cuts to food stamps.

Cole said House GOP leaders should defer to Lucas on strategy because of the Oklahoman’s expertise in agriculture and the House politics of farm bills.”

In other Farm Bill news, Zack McDonald, writing on Saturday at The News Herald (Panama City, Fla.) Online, provided additional perspective on the “Southerland amendment,” a measure that was added to the Farm Bill near the end of the House floor debate that dealt with work requirements and the SNAP program.  Some have noted that this amendment may have been the breaking point for many Democrats when it came to voting for the final passage of the Farm Bill.

The News Herald article indicated that, “Southerland’s amendment to the Federal Agriculture Reform and Risk Management (FARRM) Act allowed states to apply federal welfare work requirements to the food-stamp program. Most adults who receive or apply for Supplemental Nutrition Assistance Program (SNAP) — including those who support children through the program — would be required to work or participate in a work or training program for at least 20 hours a week to receive SNAP benefits.”

Mr. McDonald added that, “Southerland said the amendment’s work requirements would only apply to ‘able-bodied people’ and states would determine the criteria for an ‘able-bodied status.’ He argued the work amendment would not keep disabled, elderly or children from benefits of state food programs. Southerland also said the amendment was ‘very liberal’ in its approach to the definition of work, including training, looking for work or volunteering.

“‘The point is, people are producing a result not just in their own best interest, but in the best interest of the community,’ Southerland said. ‘And what we are doing to people who have never known work — we are doing a great injustice by not showing them the empowering element in having some say in your future through the gift of work.’”

Chris Cillizza noted in today’s Washington Post that, “Politics is a team sport. Except the way House Republicans have played it for the past few years…[T]he farm bill was perhaps most illustrative of the lack of team spirit in the House GOP. Among the 62 Republicans who voted against the bill, five were committee chairmen — positions they hold thanks to the very party leaders they bucked in voting ‘no.’

“‘We have younger members [who] seem incapable of following and who constantly make the perfect the enemy of the good,’ explained one GOP lawmaker, who spoke candidly on the condition of anonymity. ‘We have chairmen . . . who seem to think they have no obligation to the majority that gave them gavels or even to their fellow chairmen.’”

In a related article on Speaker Boehner’s leadership style, Paul Kane and David A. Fahrenthold reported over the weekend at The Washington Post Online that, “Never — ever — is there a sense of real anger from the Ohio Republican [Speaker Boehner]. His leadership style does not involve rapping knuckles, breaking arms or even threatening to rap knuckles or break arms. He has sworn off intimidation and punishment, in a House that has rarely been run on anything else.

“As a result, Boehner has allowed rank-and-file Republicans more freedom to vote their will, with him or against him, than any speaker in modern times.”

The Post article added that, “The speaker’s inner circle contends that not only does he have the right approach with his raucous caucus, but also that it is the only one that might work. Many House Republicans first won election in 2010 or 2012, and almost certainly ran on a pledge of transparency and against backroom deals, usually citing Obama’s health-care reform as Exhibit A of a bad legislative process.

“With pledges like that, a top-down style probably would cost Boehner his job, said Rep. Patrick J. Tiberi (R-Ohio), who is close to the speaker. ‘I don’t think it would work on the Republican side. Not with the dynamics of where the Republican Party is today, with its decentralized approach.’”

Separately, on the dairy issue, AP writer M.L. Johnson reported on Friday that, “Dairy farmers expressed frustration this week with Congress’ failure to pass a farm bill, saying the uncertainty made it hard to do business and some could go under without changes to the federal milk program.

“Farmers also worried that if a current nine-month extension of the 2008 farm bill expires with no action, a 64-year-old law will kick in, sending milk prices spiraling. While that might provide short-term profits, they say, it’d hurt them in the long run because no one wants to buy milk at $6 a gallon.”

The article noted that, “Wisconsin farmers grow more of their own feed than those in states like California, the nation’s top milk producer. Dean Strauss, 41, who milks 1,900 cows in Sheboygan Falls, said growing 3,000 acres of feed provides some protection from high feed prices but doesn’t reduce the need for a new farm bill, which would likely have better crop insurance programs.”

Marcia Zarley Taylor reported on Friday at the DTN Minding Ag’s Business Blog that, “[Rep. Ron Kind (D., Wis.)] charged more reforms are needed for crop insurance, arguing that the ‘government guarantees a 14% profit for insurance companies with virtually no risk to the companies, while paying 100% of administrative and operating expenses.’ His amendment, which was narrowly defeated, would have curbed underwriting gains and agent commissions; established a limit of $50,000 in subsidies to any person (about 1,100 acre Iowa corn grower or 2,000 acre Kansas wheat grower); and also required anyone with gross sales over $250,000 to pay unsubsidized insurance rates on policy coverage. Other provisions would have required USDA to make certain crop insurance claims public information.

Rick Gibson, a consultant for NAU Country Insurance and one of the executives who pioneered revenue-based crop insurance in the 1990s, questions Kind’s premise and has encouraged agents to rebut it.

“The charge that the insurance industry is guaranteed a profit ‘just isn’t true,’ he says. ‘If we were guaranteed a profit, how did we lose money last year?’”

The DTN item stated that, “The industry and USDA are still counting losses from the Great Drought of 2012, he notes. It’s made complicated because each company has a different loss sharing agreement. Estimates vary but some believe that private industry could lose $3 billion to $5 billion, he says.

Crop insurance companies also lost money in 1983, 1984, 1988, 1993 and 2002, according to the National Crop Insurance Services. It claims that is in sharp contrast to providers of everyday property and casualty insurance, which have only lost money once over the past 50 years. That loss was in 2001—the year of the 9-11 attacks.”

And in other news, Al Kamen reported on Friday at The Washington Post Online that, “The White House cranked out nominations this week for ambassadorships and some top sub-Cabinet jobs… Krysta Harden, chief of staff at the Department of Agriculture and before that assistant secretary for congressional relations, was nominated to be the department’s deputy secretary…and… Robert Bonnie, a senior policy adviser at the Agriculture Department and before that a longtime official at the Environmental Defense Fund, got the nod to be the department’s undersecretary for natural resources and environment.”

 

Agricultural Economy

Emiko Terazono and Jack Farchy reported on Friday at The Financial Times Online that, “New crop corn prices to be harvested later this year fell sharply as US farmers planted the largest acreage of the commodity since 1936, despite a wet, cold spring that delayed fieldwork.

“Although farmers had been expected to plant record levels of both corn and soyabeans in response to last year’s surge in prices brought on by the drought, there had been uncertainty over the scale of new plantings this year due to poor weather.”

The FT writers added that, “The latest release from the US Department of Agriculture showed that the planted area for corn totalled 97.4m acres, the highest figure since 1936 when an estimated 102m acres were planted. The number was 2m acres, or 2 per cent, higher than analysts’ forecasts of around 95m acres, and up marginally from last year’s 97.2m acres.

The data took analysts and traders, who were expecting the planting numbers to fall rather than rise, by surprise.”

Owen Fletcher and Jeffrey Sparshott reported in Saturday’s Wall Street Journal that, “The forecast suggests that U.S. corn supplies could increase sharply if summer weather is favorable for the nation’s crop. Last year, a severe U.S. drought battered the Farm Belt, sending corn prices to a record $8.3125 a bushel on Aug. 21. But futures have fallen since then due to tepid demand from foreign importers and expectations that the U.S. could produce a record crop this fall.

“The USDA said corn supplies as of June 1 totaled 2.76 billion bushels. That marked the lowest level in 16 years and was below analysts’ forecast of 2.86 billion bushels, but traders focused instead on the fact that the government didn’t reduce projected corn acreage.

The government also raised its estimate of planted soybean acreage to a record 77.7 million acres this year, up 1% from last year but still shy of expectations. Analysts expected the USDA to estimate this year’s domestic soybean plantings at 78.02 million acres, in part on the view that farmers unable to plant corn would switch to soybeans, which have a later growing season.”

On Friday, University of Illinois Agricultural Economist Darrel Good provided analysis and perspective on the reports from USDA in an interview with Todd Gleason of University of Illinois Extension; a replay of their discussion can be heard here (MP3- 4:55).

 

Regulations

Ben Goad reported on Friday at The Hill’s RegWatch Blog that, “House Energy and Commerce Committee Chairman Fred Upton and a pair of the panel’s subcommittee chairmen called Friday for an investigation into the Environmental Protection Agency’s alleged ‘sue and settle tactics.’

“The EPA has come under fire from conservatives, who question agency lawsuit settlements that trigger new regulations. Critics say the practice allows environmental groups to coerce the agency into setting policy as a result of the litigation.

Upton (R-Mich.), along with Reps. Tim Murphy (R-Pa.) and Ed Whitfield (R-Ky.), are requesting that the Government Accountability Office (GAO) launch a probe into the practice, saying they are worried about the decisions being made behind closed doors.”

The New York Times editorial board indicated today that, “President Obama’s new regulatory agenda on climate change will face inevitable legal and political challenges. But in all fields — not just energy and the environment but health, safety and labor — one of the most formidable obstacles to reform has been the administration’s own resistance to finalizing new rules, even when it has expressed support for the causes those rules would address.

“Recently, 136 draft rules from executive agencies were under review at the White House’s Office of Information and Regulatory Affairs, or OIRA, a branch of the Office of Management and Budget. Of them, 72 have been held up for longer than the 90-day limit set by executive order, and of those, 38 have languished for more than a year, including 24 from 2011 and three from 2010.”

The Times noted that, “In January 2011, Mr. Obama signed a major food-safety law. But three rules to implement the law, submitted to OIRA by the Food and Drug Administration in November 2011, are still not completed. Two of them, on produce safety and food-related illness prevention, got preliminary clearance from OIRA in January, which allows the F.D.A. to resume work on them before resubmitting them to OIRA for final review. A third rule, to enhance the safety of imported food, has not budged.”

“At the end of the day, what the public needs most is not just a more timely and transparent review process but a president unafraid of Republicans or corporate interests and determined to enact his regulatory agenda,” the Times said.

 

Immigration

Janet Hook reported in today’s Wall Street Journal that, “For all the battles in Congress over immigration, the issue isn’t likely to be a decisive one in many individual campaigns for House seats in 2014, strategists for both parties say.”

Ms. Hook explained that, “With few House members of either party feeling pressure to make any concessions, the politics of the House go a long way toward explaining why the prospects for the legislation are uncertain as it moves to the House from the Senate.

“Lawmakers said Sunday it would be tough for the House to pass an immigration plan, although backers held out hope for a final deal by the end of the year.”

AP writer Philip Elliot reported yesterday that, “The Republican chairman of the House Judiciary Committee [Bob Goodlatte (R., Va.)] said Sunday [on CNN’s “State of the Union”] that any attempt at comprehensive immigration legislation cannot offer a ‘special pathway to citizenship’ for those in the United States illegally.”

The AP article noted that, “Illustrating the strong opposition among conservative lawmakers in the House, Rep. Trey Gowdy, R-S.C., said flatly [on “Fox News Sunday”]: ‘The Senate bill is not going to pass.’

“Bowing to those pressures, House Republicans have said they would consider each piece of immigration separately as they tried to navigate the politically dicey subject that could complicate not only their efforts to reclaim the White House but also thwart some incumbent GOP lawmakers’ attempt to win re-election.

“House Speaker John Boehner has ruled out taking up the Senate bill and said the Republican-controlled chamber would chart its own version of the legislation with a focus on border security.”

Keith Good

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