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Farm Bill; and, the Ag Economy

Farm Bill Issues

David Rogers reported yesterday at Politico that, “Senate Agriculture Committee Chairwoman Debbie Stabenow called on House Republican leaders Monday to begin talks promptly on their pared-back farm bill rather than wait for the House to act on a separate nutrition and food stamp package later this month or in September.

“‘I’m calling on [Speaker John Boehner] to send us what was passed on Thursday so that we can begin to go to conference,’ the Michigan Democrat said. Stabenow described herself as ‘pretty stunned’ last week by comments by House Majority Leader Eric Cantor (R-Va.) suggesting talks might have to wait until after the nutrition bill is voted on.” [See specific remarks by Rep. Cantor on the House Floor from last Thursday at this page of the Congressional Record.]

“‘We’re anxious to go. I am very concerned that the process begins this week,’ Stabenow said in a conference call with reporters. ‘We have only six legislative weeks before the current farm bill extension expires. … There’s no reason to wait or delay the process anymore.’”

Mr. Rogers explained that, “In fact, all signs indicate that the House Agriculture Committee already is moving in the direction Stabenow wants. Senate officials confirmed Monday afternoon that an advance sheet on the House farm bill had been received, which typically indicates the legislative papers will soon follow.

“The Senate sent its version of the farm bill, approved in early June, to the House within a day. But the House papers are essential now since farm bills touch on tariff provisions, and the Ways and Means Committee leadership wants to protect the House’s prerogatives over tax and revenue legislation.

“In fairness, Cantor’s remarks last week were ambiguous in that he did not directly say when the House will go to conference. Instead, he seemed to deflect the question and talked of moving quickly on the nutrition title.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “House Republicans passed a farm bill last week on a party-line vote mainly by taking action on nutrition programs. In farm policy, one of the biggest changes made in the bill would get rid of permanent farm law for commodity programs. Stabenow said this now has become a top concern for farm groups. The effect would be that the commodity programs in the 2013 legislation would be the new permanent law. Stabenow said that has a ripple effect throughout the rest of the legislation if a future Congress were to fail to pass new legislation.

“‘Having the commodity title become permanent law, what happens to everything else?’ Stabenow said. ‘It has wide implications on this. There is deep, deep opposition from farm groups, conservation groups — pretty much everybody involved with the farm bill.’

“The 1938 and 1949 permanent laws have price triggers and policies that have traditionally prompted Congress to pass a new bill. Last December, fear of dairy price spikes was one of the major drivers prompting Congress to extend the 2008 law until a new bill could be completed.”

Recall that at the Rules Committee meeting on the Farm Bill Wednesday night, Rep. Jim McGovern (D., Mass.) and Agriculture Committee Chairman Frank Lucas (R., Okla.) discussed some of the specifics of the new Farm Bill, including the portion relating to permanent law.  To listen to part of this exchange from Wednesday, just click here (MP3- 2:00).

And Stephanie Kirchgaessner reported on Sunday at The Financial Times Online that, “A spokeswoman for the Republican majority on the agriculture committee defended the legislation, which she said instituted important changes to an arcane system. ‘This has nothing to do with sugar and everything to do with not going back to the stone age of agriculture. If a new farm bill isn’t reauthorised in the future, we revert back to the 2013 farm bill rather than the farm bills of Franklin Roosevelt and Harry Truman,’ she said.

“But the top Democratic lawmaker on the agriculture committee warned that the new permanent law provision would remove every incentive for agriculture interests ever to renegotiate the terms of the farm bill in the future.”

In his DTN article, Mr. Clayton added that, “Stabenow said the House will either have to pass a separate bill for nutrition programs or go along with the $3.9 billion in cuts to nutrition programs over 10 years in the Senate bill. Stabenow said she won’t support passing a bill that only deals with farm policy and not nutrition policy as well.”

Roll Call writer Ellyn Ferguson reported yesterday that, “Funding for SNAP could continue without farm bill reauthorization, Stabenow said. However, the program, formerly known as food stamps, could be ‘vulnerable’ to significant cuts and fights in the appropriations process, she added.

“‘The policy is written through the farm bill. The funding is done through the appropriations process,’ Stabenow said. ‘The appropriators will still make decisions about how much will be spent. In order to have rational long-term policy and tackle the areas of fraud and abuse we tackle [in a comprehensive bill] you have to have the farm bill passed.’”

Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “While the Senate farm bill cuts some $4 billion in cuts to food stamps, lawmakers in the House have previously passed a nonbinding budget resolution calling for $135 billion in cuts.”  [See also this brief video presentation by Erik Wasson from yesterday].

Mr. Wasson pointed out that, “Stabenow said she is open to an unconventional process to reconcile the farm bill, such as a negotiation just between the chairmen and ranking members of the agriculture committees if no conference can be convened.

“‘Given the strange process we have had in the House, I will support any fair and open process that gets us a bipartisan, comprehensive farm bill,’ she said.”

In addition, Reuters writer Ros Krasny reported yesterday that, “Stabenow ruled out passing a farm bill that did not include food stamps. ‘We could not pass that through the Senate, nor would the president sign that kind of bill,’ she said.

“Food stamp payments would continue without a farm bill, because funding comes through the appropriations process. But Democrats have said the House strategy is to isolate food stamps for larger cuts by making them subject to annual funding.”

Also yesterday, Daniel Looker reported at Agriculture.com that, “When asked if she [Chairwoman Stabenow] expected an outcry from constituents during the August recess if no more progress is made on the farm bill, she replied, ‘I hope there’s an outcry, if we haven’t even been able to get to conference by August.’

“And, she suggested a political price in 2014 if delays continue.

“‘I know for sure that in Senate races, the fact that a the House would not even take up a farm will, was an issue in our winning some Senate races,’ she said, referring to the 2012 elections.”

Meanwhile, a report on Friday’s Agriculture Today radio program (Red River Farm Network– RRFN) by Randy Koenen indicated that, “House Ag Committee Ranking member Collin Peterson is unsure of a path forward with a split Farm Bill.  ‘I spent time (Thursday) talking to (Ag Committee Chair Debbie) Stabenow with the Senate; I talked to (House Speaker John) Boehner this week, a couple times, and what I’m hearing from her and from him and from what went on, I just don’t see how we can get a bill that can be passed in both Houses and signed by the President,’ Peterson told RRFN.”

A related audio clip from Friday’s Agriculture Today program can be heard here (MP3- 1:33).

Ranking Member Peterson was also a guest on the AgriTalk radio program with Mike Adams yesterday morning where the discussion focused on the Farm Bill (unofficial transcript here, audio replay here (MP3)).

Mike Adams asked Rep. Peterson, “What are you hearing? Will the House leadership appoint conferees any time soon?”

Rep. Peterson noted that, “Well, I don’t know, but from what I can tell, the answers we’ve gotten, the answer Cantor gave to Steny Hoyer was not until they pass a food stamp bill, so I don’t think it’s going to be any time soon. And on the food stamp bill, they haven’t decided how or when they’re going to move ahead with that.

“I don’t think they need to pass a food stamp bill in order to go into conference, but apparently they’ve made promises to do that. And depending on how all that goes, from what I can understand what they’re up to there, I think that could potentially blow things up to the point where we aren’t going to have a farm bill. That’s my read of things.”

Rep. Peterson indicated that, “I counseled Lucas on Thursday, you know, figure out a way to get this bill that you passed into conference and let’s try to work this thing out and get this resolved. I don’t think there’s a final decision been made over there, but who knows? So I’m going to continue to counsel them to just come to their senses here and send this to conference and figure out a way to get this done.

“If they won’t listen, and they blow this thing up, and we don’t get a bill, then there will be an extension, because if there isn’t, the permanent law will kick in, and I don’t think anybody’s going to let that happen. We went through that last year. And that’s another wrinkle that’s in the bill that passed the House, where they were going to eliminate permanent law and make Title I permanent. Well, that alienates the conservation people, and rural development, and everybody else in the bill.

“So what they’re doing here is not helpful to getting a final resolution, and the things they’re asking, demanding that they be in the bill, like this drug testing and work requirement that Cantor was pushing, those aren’t going to be in the bill at the end of the day anyway. So they’re pushing things that have no chance of being in the final bill, have no chance of being in the law, and they’re blowing up the chance of getting a farm bill in the process. I don’t understand it.”

Also on yesterday’s AgriTalk show, Mike Adams asked, “You’ve invested a lot of time in dairy policy reform, and that hangs in the balance as well.”

Rep. Peterson noted that, “Yeah, and I’ve been trying to be reasonable. But I think given the fact that nobody else is being reasonable, I’m not going to be either, and I’m going to demand that the DSA be part of the final bill. And I have the votes, I believe, in conference to do that. So that’s another wrinkle they’ll have to deal with.”

Ed O’Keefe provided additional reporting on Farm Bill developments at The Fix Blog (Washington Post) yesterday, and noted that, “House Republicans leaders are expected to settle on a plan this week to deal with federal funding for food stamps — after approving a scaled-down farm bill last week that focused only on agricultural subsidies.

While the House sorts out what to do, the Senate is waiting — and losing patience.

‘Bottom line is, we need to go to conference,’ Senate Agriculture Committee Chairman Debbie Stabenow (D-Mich.) said in an interview Friday. Current federal farm and food-aid policy runs out on Sept. 30 and Stabenow said she won’t support ‘a partial extension’ of the policy, ‘so they need to send whatever they’re doing over to us so that we can start a conference committee. I want them to send what they did over to us and then we’ll sit down and get to work.’

“Stabenow also said she’s a bit confused by what the House is doing, because House Agriculture Committee Chairman Frank Lucas (R-Okla.) initially told her they could begin hashing out a final bill this week without a House vote on food stamp money. But then House Majority Leader Eric I. Cantor (R-Va.) said last week that negotiations wouldn’t begin until a food stamp bill is approved.”

Meanwhile, Alex Daniels reported in yesterday’s Arkansas Democrat-Gazette that, that, “Rep. Tom Cotton, a Republican from Dardanelle, was the only Arkansas member to vote against the farm bill when it first went before the House in June. At the time, he said food-stamp cuts didn’t go deep enough, and that Arkansas farmers would only see 0.5 percent of all the benefits provided for in the farm section of the bill – a 50 percent drop compared with current policy. The bill was more to Cotton’s liking with the foodstamp section stripped out. He voted for it Thursday, explaining that it was no longer held ‘Arkansas farmers hostage to Barack Obama’s wasteful foodstamp program.’

“‘For 40 years, farm programs have been chained to the food-stamp program,’ he said. ‘We’ve now finally broken this needless link.’ Arkansas’ Sen. John Boozman, a Republican member of the Senate Agriculture Committee, criticized a provision in the House bill that would make the 2013 farm bill permanent law. Currently, if Congress fails to pass a new farm bill, the law is set to revert to a set of agricultural policies set in the 1930s and 1940s. Boozman said that prospect gave lawmakers a big incentive to revisit farm policy every five years.”

In addition, Roby Brock reported on Sunday at Arkansas Matters Online that, “Appearing on KARK’s Capitol View on Sunday morning, Cotton said splitting the farm bill from its long connection with food stamp funding is the first step in reforming the Supplemental Nutrition Assistance Program (SNAP) despite many state agricultural interests arguing to keep them united…[C]otton thinks the House can make deeper cuts to the SNAP funding than the $20 billion over 10 years proposed in the failed bill a few weeks earlier.”

In other developments, a news update yesterday from the North Dakota Farm Bureau (NDFB) indicated that, “The NDFB board of directors met on Friday, July 12, and agreed to support the House version of the new five-year farm bill that N.D. Congressman Kevin Cramer was instrumental in getting passed.

“‘We thank Congressman Cramer for his diligence on this issue and support the work he has done to get a bill which not only addresses our concerns about conservation compliance and crop insurance, but wetland mitigation and misunderstanding  about where most of the monies in the farm bill are spent,’ said NDFB President Doyle Johannes of Underwood.”

An update yesterday from the American Farm Bureau Federation noted in part that, “House passage on July 11 of a farm bill (H.R. 2642) without a nutrition title creates further uncertainty about the future of a much-needed five-year farm bill. Still, farmers and ranchers are committed to seeing through to passage balanced legislation that provides them much-needed risk management tools and a viable economic safety net.

“‘While we don’t yet know what the next steps will be, we will be working with both sides of the aisle and both chambers of Congress to ensure passage of a new five-year farm bill,’ said American Farm Bureau Federation President Bob Stallman.”


Agricultural Economy

Cheri Zagurski and Emily Garnett reported yesterday at DTN (link requires subscription) that, “Corn and soybean conditions worsened slightly and their development continued to lag the average pace in the week ended July 14, according to the latest USDA Weekly Crop Progress report.”

University of Illinois Agricultural Economist Darrel Good indicated yesterday at the farmdoc daily blog (“Corn and Soybean Production Prospects Continue to Evolve”) that, “The corn and soybean markets continue to reflect uncertainty about the potential size of the 2013 U.S. corn and soybean crops. Over the past month, December 2013 corn futures have traded in an $0.80 range and November 2013 soybean futures have traded in a $1.00 range as production expectations shifted up and down. Uncertainty about both acreage and yield prospects have contributed to the relatively wide trading range.”

Yesterday’s update noted in part that, “The same factors that have created uncertainty about planted and harvested acreage of corn and soybeans have also contributed to early season yield uncertainty. Judging from current crop condition ratings, yield prospects at this stage of the growing season are quite good. However, overall yield prospects will be influenced less by developments to date and more by weather conditions over the next two months as the crops go through the reproductive and filling stages. Recent weather and near term weather prospects are a bit of a mixed bag with almost ideal moisture conditions in many areas, but too much rainfall in some areas, dryness developing in some western areas, and generally above average temperatures this week. As usual, there are some differences of opinion about longer term weather forecasts. Prospects for moderating temperatures and thunderstorm activity, however, bode well for yield prospects. The markets will continue to monitor crop condition ratings for indications of yield potential.

Even with harvested acreage less than currently estimated, prospects for corn and soybean yields near trend value in 2013 point to large crops and the likely build-up in stocks during the 2013-14 marketing year. Due to the extreme lateness of soybean planting in some western and northern growing areas, soybean yields may be at more risk than corn yields. Soybean yield uncertainty could persist later in the season than is normally the case, with new crop soybean futures reflecting more production risk than new crop corn futures.”

Meanwhile, the Food and Agriculture Organization of the United Nations recently noted that, “World total cereal production is forecast to increase by about 7 percent in 2013 compared to last year, helping to replenish global inventories and raise expectations for more stable markets in 2013/14, according to the latest issue of FAO’s quarterly Crop Prospects and Food Situation report.”

And Gregory Meyer reported yesterday at The Financial Times Online that, “The price of US ethanol credits has notched a new high as oil companies scramble to comply with a biofuels mandate that Washington has given no hint of easing.

“The small, illiquid market has surged more than 2,300 per cent this year as petrol refiners and importers fear scarce future stocks of the credits.

“The credits, known as renewable identification numbers, jumped to a record $1.25 per gallon early on Monday, surpassing previous levels reached in March, according to Starfuels, a broker.”

And in trade related news, Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Manufacturers pressed trade lawmakers on Monday for a renewal of trade promotion authority as U.S. officials work on several major global agreements.

“The National Association of Manufacturers (NAM) sent a letter to members of the House Ways and Means and the Senate Finance committees, as well as House and Senate leaders, arguing the importance of renewing fast-track authority that gives the Obama administration the ability to negotiate trade agreements with congressional priorities while, eventually, providing Congress an up-or-down vote when they reach that point.”

Keith Good