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Farm Bill; and, the Agricultural Economy

Farm Bill

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “The leader of a House GOP effort to split the $1 trillion farm bill into pieces said Monday that he is gaining confidence his effort can succeed.

“Rep. Marlin Stutzman (R-Ind.) told Tea Party activists from Americans for Prosperity that his colleagues are rallying behind the idea.

“‘I am finding a lot of interest for separation of the bill,’ he said.”

Mr. Wasson noted that, “When pressed, Stutzman did not outline specific, additional food stamp or farm subsidy cuts that he is seeking. He praised the cuts to direct payments in the committee bill and talked of addressing overhead and delivery costs for food stamps.

“‘It’s not that we want to take food away from people. We have a food stamp delivery problem,’ he said.”

The Hill article added that, “Food stamp advocate Bob Greenstein of The Center for Budget and Policy Priorities said Monday that failing to reauthorize food stamps could make the program vulnerable to cuts during the annual appropriations process.

“‘I think that’s a short term gain but puts the whole program in greater political danger,’ he said. ‘We would actually recommend defeat of any stand-alone farm bill.’

“Greenstein said that many rural GOP lawmakers may resist the Stutzman push because once the farm subsidies are divorced from food stamps, they will be a the mercy of GOP budget cutters.”

Emma Dumain reported yesterday at Roll Call Online that, “Splitting up the farm bill into two pieces won’t be enough to appease the Club for Growth, one of the conservative interest groups that claimed credit for the farm bill’s surprise defeat on the House floor last month.

“‘Splitting up the Farm Bill is a good first step, but just splitting a bad bill into two pieces doesn’t suddenly make either piece better,’ said Barney Keller, a spokesman for the Club for Growth, in an email statement to CQ Roll Call on Monday afternoon. ‘Instead, Republicans should put farm subsidies on a path to elimination and devolve food stamps to the states, where they belong.’”

Meanwhile, Will Beaton reported yesterday at the Grand Forks Herald (N.D.) Online that, “U.S. Rep. Collin Peterson said changes to food stamps sabotaged a new Farm Bill in the House of Representatives, but he is pushing for new legislation.

“Dozens of area residents gathered Monday at the University of Minnesota-Crookston campus to visit with politicians about the Farm Bill, which was recently voted down in the House.

“Peterson, D-Minn., and Sen. Amy Klobuchar, D-Minn., gave the crowd an update about the bill and answered questions from the audience.”

The article noted that, “‘It’s a mess,’ Peterson, who voted for the House version of the bill.”

“‘We had the votes to pass this bill,’ said Peterson. ‘People blew it up on purpose.’

Last minute additions to the bill involving the Supplemental Nutrition Assistance Program (SNAP), which provides food stamps to needy citizens, were among biggest concerns to those who voted against the bill.”

The Grand Forks Herald article added that, “‘If they split the bill, I will vote against the food stamp part of it,’ said Peterson.

“However, he believes that splitting the bill is not the right option, because the farm legislation may still not pass.”

An update yesterday at WDAZ Television (Grand Forks, N.D.) Online, which included a two-minute news video, indicated that, “U.S. Congressman Collin Peterson says getting a new farm bill pasted has been like a four year nightmare. Peterson and U.S. Senator Amy Klobuchar were in Crookston today to meet with those working in the Ag Industry about the sticky point on getting a bill passed.”

“Peterson told those at the meeting there is now work being done to spilt the farm bill, making the farm programs separate from the nutrition programs, but he says that might make it even tougher to get a bill to pass,” the update said.

An audio replay of the WDAZ video report can be heard here (MP3- 2:00).

Christopher Doering reported yesterday at The Des Moines Register Online that, “The U.S. House plans to take up another farm bill this month, but Republican leaders are still reviewing what the legislation should ultimately look like to ensure they have the votes they need to pass it, Rep. Steve King [R., Iowa] said in an interview.”

“‘We’re going to take a bill up in July,’ said King. ‘We don’t know what it’s going to be yet but we’re going to take another stab at it.’”

Mr. Doering indicated that, “King said ultimately he doesn’t see breaking up the farm bill as a pathway forward. ‘I don’t think that there is support for splitting it,’ he said, adding that it is an idea he does not support. ‘I think leadership needs to go through that deliberation process and if they do that they’re likely to come to a similar conclusion that I have.’”

And Jim Krencik reported yesterday at The Daily News (Batavia, NY.) Online that, “Amid a far-ranging conversation with Orleans County officials, Rep. Chris Collins [R., N.Y.] detailed plans for a halved-version of the previously voted-down farm bill to be passed by the House of Representatives this month.

“According to Collins, the modified bill would split farm-specific legislation from legislation changing the funding level for federal nutrition aid to low-income families and individuals. Collins told 25 attendees of a Coffee with Chris event at Tillman’s Village Inn Saturday that he and a majority of House members would support the farm-only bill, which contains reforms to crop insurance and continuations of agricultural assistance programs.

“‘We will, I promise, pass a Farm Bill by August,’ said Collins, who echoed his optimism at an event later Saturday in Ridgeway.”

Also yesterday, Chris Clayton reported at the DTN Ag Policy Blog that, “Rep. Tom Latham, a Republican whose western Iowa district was reshaped due to redistricting, has been a member of Congress from the state since being elected in 1994. In his 19 years and two redistricting cycles, Latham has represented roughly two thirds of the state.

“Latham and Iowa Secretary of Agriculture Bill Northey are touring southwest Iowa this week, which gave me [Clayton] a chance to ask Latham what he has been hearing on the farm bill and what direction the debate will go when Congress returns from break next week.

“‘We’re getting input. Everybody wants to get it done, like I do,’ Latham said Monday. ‘The Speaker is committed to getting a bill passed in July so that’s what we’re looking forward to, so we get it through conference in August and get it done in September,’ Latham said.”

The DTN update noted that, “‘I’m not sure you pass either section of it, as a stand alone’ (bill), Latham said. ‘I think it would be very difficult to get enough support, certainly for the food stamps by themselves. A lot of the urban folks in the House of Representatives probably would not be supportive of just the farm section of it by itself. So I don’t know how you pass it without what used to be the coalition of the urban folks with the food programs and the aggies.’

“‘The reason it is getting some traction is just trying to find a sweet spot on the food stamps and on the ag policy has been difficult with the vote we had so they are looking at all options trying to find a way to move a bill so we can find a way to get to conference,’ Latham said. ‘Technically, if you pass the food-stamp portion then you could conference with the Senate on a larger bill with the farm policy also in that.’

Latham said he doesn’t know what the strategy will be at this point. ‘There could be changes. The Southerland amendment, we may need to have that removed. There are different ways of going about it, certainly, that would help us get more votes.’”

The “Washington Insider” section of DTN noted in part yesterday (link requires subscription) that, “[R]ep. Peter Roskam, R, Ill., told the press that the House leadership might be helped by the Independence Day recess because some members who voted against the bill are ‘starting to realize the political effects that could have on farm-state Republicans. I think there were some members who voted no, but when they reflected back and heard how important this actually was to their own members, I think they may come at it with a different position.’

So, the smart money seems to on a ‘clean bill’ option that would strip the ‘poison pill’ amendments and try again. At the same time, there are lingering doubts that the deep-seated opposition to the Nutrition programs held by many House members can be overcome by yet another trip home. An example widely cited is the House committee and subcommittee chairman who got their favorite amendments passed, but still opposed the bill on the final vote.”

Charles Lane indicated in a column published in today’s Washington Post that, “House Republicans want to cut SNAP by at least $20 billion over the next decade, and Democrats want to preserve it pretty much as is. The dispute sent the 2013 farm bill — legislation in which SNAP has traditionally been twinned with subsidies for farmers — down to an unexpected defeat last month.

“Fortunately, there is a solution. Abolish food stamps, on one condition: Congress would have to distribute the SNAP budget among other programs for the poor, for which many SNAP recipients also qualify.

“The result would be a safety net as generous as today’s but considerably more efficient and transparent — and without the Faustian linkage to subsidies for agribusiness.”

Mr. Lane noted that, “Supporters hail SNAP as a key income support for the working poor, seniors and the disabled, as well as an ‘automatic stabilizer’ that bolsters demand during economic downturns and then recedes during recoveries.

“That’s true — but the government already has programs, and bureaucracies, for each of those groups and policy goals. For example, a third of the seniors living on food stamps also get Supplemental Security Income (SSI).

“And unlike food stamps, the other programs — SSI, the earned-income tax credit, unemployment insurance — deliver benefits in the form most poor people find most useful: cash.

Reallocating the SNAP budget to beef up the rest of the safety net would also eliminate food stamps as a perennial political target.”

More broadly on the current political environment in the House, an update yesterday at the NBC News “First Read” webpage pointed out that, “When it comes to productivity, only 15 legislative items have become law under the current Congress. That’s fewer than the 23 items that became law at this same point in the 112th Congress, which passed a historically low number of bills that were signed into law. These numbers might not be surprising given the legislative stalemates so far this year — on the sequester, the farm bill, and student loans.”

Also, Gerald F. Seib noted yesterday at The Wall Street Journal Online that, “Many House Republicansparticularly the younger freshmen and sophomore members who now make up a stunning 46% of the caucus—don’t much care what conventional wisdom says they should do. They are happy to rock the boat.”

And Juan Williams indicated yesterday at The Hill Online that, “Democrats are bashing Boehner too: ‘If he were a woman, they’d be calling him the weakest speaker in history,’ said his predecessor, House Minority Leader Nancy Pelosi (D-Calif.). She explained that the House GOP majority led by Boehner ‘are not able to get anything done.’”

In other news, an item in the July edition of Amber Waves (USDA- Economic Research Service) by Alisha Coleman-Jensen (“Food Insecurity Increased in Most States From 2001 to 2011”) stated that, “As the 2007-09 Great Recession and its accompanying higher unemployment took its toll on U.S. families, food insecurity at the national level increased. In 2011, 14.9 percent of U.S. households were food insecure—up from 10.7 percent in 2001. Food-insecure households are those that were, at times, unable to provide adequate food for one or more household members due to insufficient money or other resources for food. States differed both in the percentage of households that were food insecure and in the change in that prevalence rate during the period. Changes in food security may signal worsening or improving economic conditions in a State or shifts in the composition of a State’s population.”

In more specific policy news relating to animal agriculture, an update yesterday at the National Sustainable Agriculture Coalition Blog indicated that, “Late last week, Senator Dianne Feinstein introduced legislation to limit the use of antibiotics in livestock production.  If enacted, the ‘Preventing Antibiotic Resistance Act of 2013’ would direct the Food and Drug Administration (FDA) to restrict the use of antibiotics critical to human health in livestock production unless they are used to treat clinically diagnosable diseases.   The bill, co-sponsored by Barbara Boxer (D-CA), Maria Cantwell (D-WA), Susan Collins (R-ME), and Jack Reed (D-RI), would also require drug companies and livestock producers to demonstrate they are using the drugs to treat sick animals.”

And DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The president of the Humane Society of the United States [Wayne Pacelle] says Congress is blocking a commonsense solution to providing certainty for the egg industry, and it’s costing votes in getting the farm bill passed.”

The DTN article explained that, “Pacelle is still smarting from a setback for his organization in the farm bill debate as both the House and Senate Agriculture Committees declined to take up a bill stemming from an agreement struck between HSUS and the United Egg Producers. Since 2011, the two groups have been championing the Egg Products Inspection Act that would create a national standard for the treatment of egg-laying hens.

“The U.S. egg industry is a $6 billion industry. Pacelle noted several major egg trade associations, consumer groups and veterinarians all back the egg bill.

“‘The egg industry deserves a vote and we deserve a vote on this issue,’ Pacelle said. ‘It’s clear at this point Congress is jeopardizing this agreement and jeopardizing the future of the egg industry and all of the farmers involved with it.’”

Mr. Clayton noted that, “Yet, one of the reasons for proposing national standards comes as an unintended consequence of a Humane Society win in California. Proposition 2 in 2008 created new confinement requirements for laying hens, veal calves and breeding hogs to provide each with the ability to stand up, turn around and extend their limbs. The proposition goes into effect Jan. 1, 2015. After it was passed, the California Legislature passed a law that applied Proposition 2 standards to sales, including eggs. So for a company to sell eggs in California beginning in 2015, it would have to meet the same standards for laying hens.”

Yesterday’s article added that, “Rather than adhere to the rules of Prop 2, the House farm bill instead has an interstate commerce provision crafted by Rep. Steve King, R-Iowa. The provision would prevent any state from banning food products produced in another state that meets USDA or Food and Drug Administration guidelines. It would effectively undercut Prop 2, but it also is opposed by lawmakers for the possible impacts that King’s provision could have in eliminating other state laws as well.

“‘I don’t think King survives. I think people realize it’s a radical overreach. I don’t think it survives at the end of the day. (Senate Ag Chairwoman Debbie) Stabenow is against it. A lot of people are against it.’

“Despite the lack of support from House Ag Committee leaders and Republicans, Pacelle said he believes the egg amendment would have won if it had gotten a vote on the floor.”

In other news, Thomas M. Burton reported in today’s Wall Street Journal that, “The Obama administration has missed a deadline for issuing congressionally mandated rules on imported foods—a delay highlighted by a U.S. outbreak of hepatitis A cases linked to Turkish pomegranate seeds.”

The Journal article noted that, “Under the proposed rule, an importer would need to ascertain whether farms and processors overseas are taking steps to cut or eliminate risks at its facilities. The FDA would then inspect records and work with its counterparts overseas to confirm standards were met. About 15% of food consumed in the U.S. is imported, including about 80% of seafood and 30% of produce. The FDA has made other new food-safety rules public, such as one for produce.

The White House Office of Management and Budget declined to say when it might finish vetting the import rule, which was due to go into effect this January. The office’s website that states it ‘has not yet quantified the cost and benefits’ of the import rule, which it said might impose ‘significant’ burdens and affect about 60,000 importers. A spokeswoman said the office is committed to food safety and has made steady progress in reducing the time rules spend under review.”


Agricultural Economy

University of Illinois Agricultural Economist Darrel Good indicated yesterday at the farmdoc daily blog (“Corn and Soybean Market Prospects Following USDA Reports”) that, “The USDA’s June 1 Grain Stocks and Acreage reports contained estimates that were generally as expected for soybeans, but both reports contained surprises for corn. The estimates were friendly for old crop price prospects, but negative for new crop prices, at least in the short run.”

After specific analysis, yesterday’s update noted that, “The June 1 stocks estimates for corn and soybeans confirmed very small inventories and the need to continue to limit consumption until new crop supplies are available. As a result, old crop corn and soybean cash prices are expected to be well supported through the summer months. There is considerably more uncertainty about new crop production and price prospects. We expect planted and harvested acreage of both crops to be less than revealed in the June survey. However, production will be influenced more by yield prospects than by acreage estimates. The period for determining yields is just beginning, with July and August weather critical for both crops. Based on current crop condition ratings and near term weather forecasts, prospects for yields likely exceed current market expectations, particularly for corn. If weekly condition ratings remain high, new crop prices are expected to remain under pressure.”

And Brad Plumer reported yesterday at the WonkBlog (Washington Post) that, “Crop yields have been steadily improving since the advent of synthetic fertilizer and modern agricultural techniques. So those yields will just need to keep improving in the years to come.

“But there’s a big problem: This isn’t happening. Or at least, it’s not happening fast enough. A recent peer-reviewed study in the journal PLOS ONE found that crop yields haven’t been rising at a sufficient pace to meet projected demand by 2050. Here’s the key graph.”

The Post update noted that, “The study takes a careful look at historical improvements in crop yields for corn, rice, wheat and soybeans. As you can see, yields per acre have been growing fairly constantly in all four areas. The solid lines show what would happen if this growth continued.

“And it’s not enough. The dashed lines above show how productivity would need to grow even more rapidly for the world to satisfy expected demand and double global food production by 2050 in a sustainable manner, without razing more forests for farmland. ‘Current rates,’ the authors note, ‘are not achieving this goal.’”

In trade developments, Stephen Castle and Eric Schmitt reported in yesterday’s New York Times that, “European officials and politicians reacted angrily on Sunday to reports that the United States has been spying on its European Union allies, saying the claims could threaten impending talks with Washington on an important trade agreement.”

The Times article stated that, “The United States and the European Union are scheduled to begin talks on a trans-Atlantic trade agreement over the summer and to complete them by November 2014. Those talks would be threatened by the espionage revelations, according to Viviane Reding, the European Union’s commissioner for justice.

“‘We cannot negotiate over a big trans-Atlantic market if there is the slightest doubt that our partners are carrying out spying activities on the offices of our negotiators,’ Ms. Reding said at a meeting in Luxembourg on Sunday. ‘The American authorities should eliminate any such doubt swiftly.’”

AP writer Tom Raum reported yesterday that, “Even before the latest disclosures, talks at the upcoming free-trade sessions were expected to be fragile, with disagreements surfacing over which items should be covered or excluded from an agreement. The United States has said there should be no exceptions. But France has called for exempting certain cultural products, and other Europeans do not appear eager to give up longtime agricultural subsidies.

“[Pres. Obama] said the Europeans ‘are some of the closest allies that we have in the world.’ But he added, ‘I guarantee you that in European capitals, there are people who are interested in, if not what I had for breakfast, at least what my talking points might be should I end up meeting with their leaders. That’s how intelligence services operate.’”

Keith Good