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Farm Bill; Ag Economy; and, Immigration

Farm Bill

Randy Krehbiel reported earlier this week at the Tulsa World Online that, “The conservative schism that has all but paralyzed the U.S. House of Representatives and contributed to the defeat of one long-time Oklahoma Republican congressman showed itself Monday at the town hall meeting of another veteran GOP congressman who is catching heat from the right.

“Taking their cue from the Heritage Foundation and other conservative groups, a half-dozen or so people in a crowd of about 25 at Skiatook’s First Baptist Church urged 3rd District Rep. Frank Lucas to cut even more from the farm bill than the $40 billion he and the Agriculture Committee he leads propose.”

Mr. Krehbiel noted that, “[Rep. Jim Bridenstine (R., Okla.)] ousted incumbent John Sullivan [in the GOP primary] with a boost from tea party and other conservative groups. A contingent of those folks, some of whom do not live in Lucas’ district, arrived Monday with a video camera and some cordial but pointed questions for the longest-serving member of the state’s congressional delegation.

“‘If you want the conservative Republican vote, you need to come forward with a conservative Republican bill,’ said Ronda Vuillemont-Smith, a conservative activist from Broken Arrow, which is in District 1.”

The Tulsa World article indicated that, “A few moments earlier, Lucas bristled when Vuillemont-Smith cited material from the Heritage Foundation and its adjunct, Heritage Action. Heritage Action has been airing radio spots and threatening to recruit a ‘real conservative’ to run against Lucas in 2014.

“‘I’m under attack by those people,’ said Lucas. ‘They’re coming after me. They are all special interest groups that exist to sell subscriptions, to collect seminar fees and to perpetuate their goals.

“‘You’ve got to understand: They don’t necessarily want a Republican president or a Republican Congress,’ he continued. … They made more money when (Democrat) Nancy (Pelosi) was speaker. … It’s a business.’”

Also, Mr. Krehbiel pointed out that, “Lucas said the Republican majority walked away from $40 billion in real cuts he proposed to the farm bill, including the first major reform of the food stamp program. If the bill is split in two — one with actual farm programs, the other with nutrition programs — as some conservatives want, Lucas predicted that the nutrition bill would die in the Senate, leaving foods stamps as they are today.

“‘Democrats are happy with the way things are going,’ he said.”

Meanwhile, a report yesterday by Mike Hergert on the “Agriculture Today” radio program yesterday (Red River Farm Network) included remarks on the Farm Bill process from House Ag Committee Ranking Member Collin Peterson (D., Minn.)- audio here (MP3- 0:39)).

In part, Rep. Peterson’s remarks focused on the potential idea of repealing the permanent farm related legislation from 1949.

A Reuters article from yesterday by Charles Abbott pointed out that, “If a new farm law is not enacted by Sept. 30, the farm program will revert to the terms of a 1949 law that calls for sky-high support rates for certain goods. In one of the most visible impacts, the price of milk in grocery stores could double.”

Julie Harker reported yesterday at Brownfield that, “Congressman Tom Latham of Iowa says dividing the Farm Bill into separate farm policy and nutrition program legislation is not a good idea because it needs broad support for urban and rural legislators. And, in light of the House’s failure to pass a farm bill last month, Latham says extending the current farm bill would be ‘an unfortunate last resort.’”

“Latham says he’s been assured by Speaker Boehner that there will be a concerted effort to get a House bill passed that can go to conference with the Senate-passed Farm Bill,” the Brownfield item said.

The Brownfield link also included an audio replay of a discussion with Rep. Latham and Ms. Harker, which can be heard here.

In addition, AP writer Thomas Beaumont reported yesterday that, “For decades, country and city interests had come together every few years to pass the farm bill, a measure that provided billions of dollars in subsidies to farmers and businesses in rural areas and food stamp money for urbanites.

“No more.

“The recent defeat of this year’s farm bill — traditionally a sturdy, albeit lonely pillar of cooperation in Washington — highlighted how the country-city political marriage became yet another victim of partisan politics in polarizing times. The divorce throws into doubt the future of sweeping agriculture and nutrition spending.”

Mr. Beaumont explained that, “The congressman [Rep. Walter Jones (R., N.C.)], who often talks about his district’s tobacco, cotton and soybean production…[v]oted against the bill after Americans for Prosperity targeted him with radio ads and an email push to contact his office.

“Jones explained his ‘no’ vote this way: ‘At a time when America is over 16 trillion dollars in debt and running massive deficits, we simply cannot afford this.’

“Republican Rep. Phil Gingrey, who has represented rural Georgia during his decade in Congress, also voted against it. One of his advisers argued that the measure didn’t do enough to benefit farming. But the adviser, Chip Lake, also noted the increased pressure from outside groups, saying, ‘That activity between the last farm bill and this farm bill has increased exponentially.’”

The AP article added that, “Democrats, meanwhile, were fearful of backlash from liberals who warned them against voting in favor of deep food-stamp cuts.

“‘They are worried they will be challenged in a primary if they don’t fight tooth and nail on food stamps,’ said Rep. Collin Peterson, a Minnesota Democrat and former Agriculture Committee chairman.”

Also yesterday, David Rogers reported at Politico that, “A broad coalition of commodity, wildlife, forest and renewable energy groups is asking Speaker John Boehner to keep the farm bill intact and not split off the nutrition title as now being considered by the Republican leadership.

A letter to Boehner released Tuesday lists more than 500 signatories brought together by the American Farm Bureau and the National Farmers Union. A second from the National Sustainable Agriculture Coalition [NSAC]  — more closely linked to grass-roots conservation and organic foods groups — also urges Boehner and Minority Leader Nancy Pelosi (D-Calif.) to work together to find some solution that keeps the bill together.”

The NSAC letter noted that, “This is critical legislation that should not be allowed to continue to drift further into uncertainty. Nor should it be split up into narrower component parts, a move that doom its completion;” while yesterday’s letter to the Speaker that over 500 groups signed stated that, “Farm bills represent a delicate balance between America’s farm, nutrition, conservation, and other priorities, and accordingly require strong bipartisan support. It is vital for the House to try once again to bring together a broad coalition of lawmakers from both sides of the aisle to provide certainty for farmers, rural America, the environment and our economy in general and pass a five-year farm bill upon returning in July. We believe that splitting the nutrition title from the rest of the bill could result in neither farm nor nutrition programs passing, and urge you to move a unified farm bill forward.”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Fiscal conservatives have long sought to break up the urban-rural McGovern-Dole coalition that backs the farm bill, believing that doing so would open up the chance to trim farm subsidies and food stamp spending much more deeply.

“Splitting the farm bill may not be enough to get it passed, however.”

The article noted that, “‘Splitting the farm bill absent real reforms isn’t cause for celebration; it’s just different path toward financial ruin,’ Heritage spokesman Dan Holler said.

“Club for Growth spokesman Barney Keller said ‘Splitting the bill in two as the vehicle to simply pass more bad policy is not something that we would support.’”

And Daniel Looker reported yesterday at Agriculture.com that, “Chandler Goule, a lobbyist for National Farmers Union, told Agriculture.com that his group contacted the staffs House leaders before sending the letter. All were ‘very helpful’ he said, describing those who work for Boehner as well as Minority Leader Nancy Pelosi (D-CA), House Agriculture Committee Chairman Frank Lucas (R-OK) and the committee’s ranking member Collin Peterson (D-MN). Goule said he also reached out to House Majority Leader Eric Cantor (R-VA). ‘Leader Cantor’s office absolutely did not respond,’ Goule said.

“‘The idea of splitting the bill, this is coming from Leader Cantor’s office. It is designed to do two things–cut SNAP benefits more and to dismantle the farm program,’ Goule asserted. ‘It’s easier to do that if you split the bills.’

“(Agriculture.com messaged Cantor’s press aides Tuesday but so far has not gotten a response.)”

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Sen. Charles Grassley, R-Iowa, also was touring southwest Iowa on Monday. He told DTN he supports the idea of splitting SNAP from the rest of the farm bill, though an effort to do so a year ago in the Senate was defeated, he said. Grassley said he backs dividing the legislation because too many people hear about a $900-billion, 10-year cost of a farm bill and think all the money goes to farmers when 80% of it is nutrition aid.

“‘People read that in the New York Times and think it all goes to farmers,’ Grassley said.

“Food aid was an original component of the ‘farm bill’ going back to the 1930s when the federal government created programs to buy commodities from farmers who needed federal support to survive as well. Excess commodities were then turned over to relief agencies to give to the poor. Sens. George McGovern and Bob Dole built on that concept in the 1970s to create the food stamp program after a CBS documentary put a spotlight on hunger in America.”

An update yesterday at the USDA’s Economic Research Service (ERS) Chart Gallery webpage noted that, “In March 2013, close to 48 million Americans participated in USDA’s Supplemental Nutrition Assistance Program (SNAP)—a program designed to increase the purchasing power of low-income people by providing them with monthly benefits to purchase food.”

“Economic conditions can also affect participation rates, with periods of economic decline generally boosting the participation rate,” the ERS update noted.

The chart depicting the “participation rate for eligible persons,” and “number of participants” in the SNAP program from the mid 1970s to 2011 can be seen here.

Also on the issue of SNAP participation, recall that a Wall Street Journal article from March 28 (“Use of Food Stamps Swells Even as Economy Improves”) reported that, “But there is another driver, which has its origins in President Bill Clinton’s 1996 welfare overhaul. In recent years, the law has enabled states to ease asset and income tests for would-be participants, with the encouragement of the Obama administration, allowing into the program people with relatively higher incomes as well as savings…The new rules were designed to encourage people to take advantage of the program before they became destitute. By expanding the pool of potential applicants, they are redrawing the landscape of government assistance. It is one reason why SNAP appears to have evolved from a program that rose and fell with the unemployment rate to a more permanent feature of the landscape.”

A related graph from the March Wall Street Journal article can be viewed here.

And in other policy related news, on the issue of crop insurance, University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Reductions in Insurance Guarantees Due to Lower 2013 Yields”) that, “Late planting of soybeans could cause low 2013 yields. Low 2013 actual yields then could lower future Actual Production History (APH) yields. Since these lower APH yields are used to set crop insurance guarantees, this year’s low APH yields could cause lower insurance guarantees in future years.

The possibility of lower APH yields may be a consideration when making prevented planting decisions. If a farmer takes a prevented planting payment and does not plant a crop following the late planting period, there is no impact on the APH yield as prevented planting acres do not enter into the calculation of the APH yields (see here for a more complete discussion and the exception for planting after the late planting period. Conversely, yields from soybeans planted late will enter into the calculation of APH yield, potentially leading to reductions in APH yields. While this year’s expected returns from prevented planting and late planting should have the largest impact on decisions, the potential for lower APH yields could be a consideration and favors taking the prevented planting payment.”


Agricultural Economy (Trade)

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Negotiations on a $5 trillion trade deal between the United States and the European Union are expected to forge ahead despite outrage in Europe over the U.S. government’s bugging of offices.

“Officials from several European governments suggested the talks could be damaged by the spying fight, but U.S. experts said it is more likely that European negotiators will use the controversy as leverage.”

In addition, James Politi reported yesterday at The Financial Times Online that, “US labour unions and business groups clashed on Tuesday over Japan’s looming entry into the TransPacific Partnership trade talks, highlighting the divisive nature of any agreement and the political obstacles facing it in Congress.

“At a public hearing, top officials from the Afl-Cio, the largest US labour group, and the United Auto Workers, both key components of Barack Obama’s political base, lashed out at Japan’s accession to the negotiations, fearing the Obama administration will not be tough enough on issues such as Japan’s manipulation of its currency.”

The FT article added that, “[Bob King, president of the United Auto Workers], who has been a big supporter of Mr Obama, particularly in the wake of the US government bailout of the auto sector during the recession, said a TPP deal would work only if it included big concessions from the Japanese on access to their car market and if Japan clamped down on its ‘manipulation’ of the yen.

“Meanwhile, advocates for the TPP from corporate America said a deal that included Japan would deliver big economic benefits and help set standards for trade liberalisation around the world, including the trade negotiations about to begin next week between the US and the European Union.”



Kristina Peterson reported in today’s Wall Street Journal that, “A comprehensive rewrite of U.S. immigration laws passed the Senate last week. In Wisconsin, dairy farmers, one of the state’s biggest business groups, are embracing a stance not shared by some Republican lawmakers and their skeptical constituents, providing a preview of the debate to come.

The farmers represent a powerful force pushing for an immigration overhaul. The industry’s reliance on immigrant labor has deepened as milk producers have turned to nearly 24-hour milking cycles to boost productivity. Immigrant workers make up about 40% of hired labor on Wisconsin’s dairy farms, according to a 2009 estimate from the University of Wisconsin at Madison.

“Farmers say they can’t find enough U.S. citizens to fill the shifts needed to milk cows three times a day, often with one overnight milking, every day of the year. The current agricultural-visa system provides permits only for seasonal jobs.”

The Journal article noted that, “Rep. Jim Sensenbrenner (R., Wis.), said in an interview that business groups have ‘drunk the Kool-Aid’ offered by supporters of a broad approach when they argue that a path to citizenship needs to be a part of a bill for it to pass. While citizenship isn’t business groups’ top priority, many are happy to include it if doing so helps a bill win approval.

Mr. Sensenbrenner said he opposes any form of citizenship or legalization for illegal immigrants. He said he would like to see the House pass individual bills strengthening enforcement of immigration laws, expanding guest-worker programs and offering temporary visas to illegal immigrants working here whose children are U.S. citizens.”

Keith Good