January 25, 2020

Farm Bill; RFS; Budget; and, Regulations

Farm Bill

In a news briefing yesterday, Senate Majority Leader Harry Reid (D., Nev.) commented on the Farm Bill process and the House of Representatives by noting that: “The farm bill, just the work we did here, do it in the House, it would pass overwhelmingly. But they’ve got this weird deal they’re doing over there that no one really understands.”

Also yesterday, the “Washington Insider” section of DTN (link requires subscription) indicated in part that, “In the meantime, the [farm bill] debate itself has become almost impossibly complex, in part because the House bill would make the commodity programs permanent rather than face expiration and fights for reauthorization every five years. This is drawing severe criticism on the grounds that the proposed programs are potentially expensive, extremely complicated and may not work well in practice.

“It also is true that they are highly interventionist and almost certainly will face litigation from World Trade Organization members that may be difficult to defend, so writing them into permanent law could make it more difficult to comply with adverse decisions from trade panels. For example, this has already happened with the Brazil cotton case that continues to embarrass the United States which is still paying Brazil $147 million annually under a temporary deal to avoid the much larger trade sanctions awarded by the WTO.”

The DTN item added that, “So, the next step in this year’s farm bill debate is no clearer than earlier efforts have been. While the proposals have become increasingly complex, the debate has been drawn far away from farm policy toward arguments about the nature and role of the federal government. As a result, they seem to be increasingly intense rather than nearing a resolution, Washington Insider believes.”

Meanwhile, DTN Political Correspondent Jerry Hagstrom reported yesterday that, “Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., said Tuesday she is waiting for the House leadership to respond to the receipt of the Senate farm bill, to call for a conference and to appoint conferees.

“‘We are waiting for them to take a step,’ Stabenow told reporters after a confirmation hearing, adding that she hopes the conferees are appointed before the August congressional recess.”

Mr. Hagstrom added that, “Stabenow noted that she, Senate Agriculture Committee ranking member Saxby Chambliss, R-Ga., House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn, have met and that their staffs are ‘in the process’ of meeting. But she added that there is a limit to what the Agriculture committee leaders can do before a formal conference is called and conferees are named.”

The DTN item also noted that, “On the House provision that would repeal current permanent law from 1938 and 1949 and make Title I — the commodity title — of the new bill permanent, Stabenow said that replacing permanent law ‘doesn’t make sense for the future of the farm bill.’”

Meanwhile, in an interview yesterday on KASU (Jonesboro, Ark.) radio, Sen. John Boozman (R., Ark.) discussed Farm Bill issues with Mark Smith.

To listen to a portion of this interview, just click here (MP3- 2:42).

And a recent update from National Crop Insurance Services pointed out that, “Americans will spend ONLY two cents per meal on crop insurance – the risk management tool most used by farmers to protect themselves from the whims of Mother Nature – through FY 2023, according to CBO’s latest 10-year budget projections. That figure is up from one cent per meal, which was the average cost for the period of FY 2000 to 2011.”

The update noted that, “The cost per meal figure is derived from CBO’s projected crop insurance program outlays, the Census Bureau’s projections of total U.S. population, the Department of Commerce’s data on consumption spending on food, and the assumption that consumers eat three meals a day.

“Total government spending on crop insurance is projected at roughly $8.5 billion per year, with farmers paying $4 billion out of their own pockets to purchase their policies. With the elimination of direct payments in the Farm Bill currently being discussed, crop insurance will be the primary risk management tool available to many farmers, and the only risk management tool available to some farmers, like specialty crop growers.”

And in other developments, a news release yesterday from USDA’s Farm Service Agency indicated that, “The [USDA] today announced that in order to continue to address the domestic sugar surplus at the least cost to the federal government, purchase invitations have been sent to domestic sugarcane processors soliciting bids to sell raw cane sugar to the Commodity Credit Corporation (CCC). The CCC will purchase sugar from domestic sugarcane processors under the Cost Reduction Options of the Food Security Act of 1985, and simultaneously exchange this sugar for credits offered by refiners holding licenses under the Refined Sugar Re-export Program.”


Renewable Fuel Standard (RFS)

Zack Colman reported yesterday at The Hill’s Energy Blog that, “A legislative push to change a federal biofuel-blending rule may be nearing full throttle, as House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said Tuesday that the ‘current system cannot stand.’

“Upton made the comment at the opening of a two-day Energy and Power subcommittee hearing on the Renewable Fuel Standard (RFS), which has come under fire from lawmakers on both sides of the aisle. It raises the possibility that the House could move on legislation to tweak the rule.

“‘I hope we can start a discussion that considers a host of potential modifications and updates to the RFS, with the end goal being a system that works best for the American people,’ Upton said, according to prepared remarks.”

Rep. Lee Terry (R., Neb.) tweeted from the hearing yesterday, and noted that: “RFS hearing very passionate. Both sides seem very entrenched.  Opening statements like WWE smack.”

Rep. Bob Goodlattte (R., Va.) tweeted yesterday that, “My bill, The #RFS Reform Act (H.R. 1462), has the support of 43 bipartisan House Members.”

And Rep. Kristi Noem (R., S.D.) tweeted that, “Let’s get serious about an all-of-the-above American energy plan. The RFS and biofuels should be part of the equation. RT if you agree!”

Hill writer Zack Colman indicated earlier this week that, “Separately, Senate Energy and Natural Resources Committee Chairman Ron Wyden (D-Ore.) last week pledged to look into the Renewable Fuel Standard, saying he has concerns about whether the mandate’s blending targets can be met.”

Amy Harder reported yesterday at National Journal Online that, “Senate Democrats from the Mid-Atlantic states are wading into a debate over a controversial biofuels standard that upends the conventional wisdom about their party’s steadfast support for a policy whose goal is to promote renewable-energy fuels over oil.

“Sen. Ben Cardin, D-Md., is working on legislation to reform the renewable-fuels standard, while senators from neighboring states, including Delaware and Pennsylvania, may urge the Obama administration to temporarily waive sections of the law that require increasing amounts of biofuels—mainly corn-produced—to be blended with gasoline each year.

“Since last summer’s historic drought that sent corn prices soaring, the eight-year-old renewable-fuels standard has come under attack for adding to the pressure on corn supplies. Mid-Atlantic lawmakers, in particular, are hearing from the poultry industry, which is concerned about rising feedstock prices, and from oil refineries, which are facing increased costs for blending ethanol with gasoline.”

In a related article, Owen Fletcher reported in today’s Wall Street Journal that, “Corn futures slid 3.4% to a fresh 2 ½-year low Tuesday, pressured by favorable weather for the U.S. crop as it enters a critical growth stage.

“Heavier-than-expected rain in parts of Iowa on Monday night helped ease traders’ concerns about dryness in the biggest corn-producing state. Traders also exited bets on rising prices because forecasts for much of the Farm Belt are promising for the next two weeks as the crop undergoes pollination, which determines the number of kernels on each ear of corn.”

The Journal article added that, “The favorable forecast comes at a time when corn buyers such as ethanol companies and livestock producers are counting on a big crop to replenish supplies following last summer’s historic U.S. drought, which curtailed production.

“Corn for September delivery fell 18.25 cents to settle at $5.225 a bushel at the Chicago Board of Trade, the lowest closing price for the front-month contract since November 2010.”



Kerry Young reported yesterday at Roll Call Online that, “Republican appropriators in the House are starting to discuss potential terms for a stopgap funding bill to keep the government operating after September, even as both chambers gear up for a flurry of action this week on competing spending measures.

House Republicans say they are undecided so far on whether to press a simple extension at the fiscal 2013 level of roughly $988 billion for discretionary spending programs or to a stopgap bill at the roughly $967 billion level now demanded by federal law.

GOP appropriators will not work with the $1.058 trillion level for discretionary spending sought by Senate Democrats, according to Mike Simpson, a GOP appropriator and chairman of the House Appropriations Subcommittee on Interior and Environment.”

David Rogers reported yesterday at Politico that, “Like an army that’s outrun its supply line, the Republican budget strategy in Congress shows almost daily signs of coming apart.

“The central premise, as sold by House Budget Committee Chairman Paul Ryan, was that Washington could wipe out deficits in 10 years and protect defense spending, all while embracing the lower appropriations caps dictated by sequestration.

“Four months later, it’s proving to be a bridge too far.”

Mr. Rogers pointed out that, “The fragile illusion of it all — like Cinderella’s coach turning back into a pumpkin — was underscored again last Wednesday at a House Republican meeting in the wake of the farm bill debacle.

“Majority Leader Eric Cantor (R-Va.) had called together about 20 House conservatives to explore options on resurrecting the nutrition title — stripped out of the House bill. The Virginia Republican has been a strong advocate of more cuts but he was also candid in explaining that Ryan’s claim to save $125 billion by simply block-granting the program in 2019 was short of policy details.

“According to two persons in the meeting, Cantor never said outright that the $125 billion was a ‘plug’ — slang for a budget estimate without backing. But others in the conversation took it that way — and did use the term.”

The Politico article stated that, “Indeed, to achieve that level of savings in a five-year period would require a one-third cut from what the Congressional Budget Office is currently projecting for food stamps. The loose assumption had been that total enrollment would somehow get back to 2008 levels by 2019. How to get there was never worked out.

“‘Details beyond what can be found in the budget resolution would be left to the Agriculture Committee,’ a Ryan spokesman said.

For the House Appropriations Committee, plugs are a luxury it doesn’t have. Each of its bills must answer ‘how’ to meet Ryan’s goals.”


Regulations– Commodity Futures Trading Commission (CFTC) 

Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “The White House is promising to veto a House bill that would impose new checks on regulations from the Environmental Protection Agency (EPA).

“The legislation would waste time and money, the administration said, ‘thereby delaying or permanently preventing EPA from fulfilling its legal obligations to protect public health and the environment.’”

Also yesterday, a news release from Sen. Joe Donnelly (D., Ind.) stated that, “[Sen. Donnelly] and Chuck Grassley (R-IA) today introduced the Farmer Identity Protection Act, legislation that would protect farmers and ranchers by prohibiting the Environmental Protection Agency (EPA) from disclosing their private and confidential information to the public.”

And Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Food and worker safety groups are asking to the Obama administration’s new regulatory czar to put he brakes on proposed regulations meant to modernize the Agriculture Department’s poultry inspection system.”

Meanwhile, Jamila Trindle reported in today’s Wall Street Journal that, “The Commodity Futures Trading Commission is delegating too much authority to the enforcement division, Republican Commissioner Scott O’Malia said Tuesday.

“Mr. O’Malia, testifying at a House hearing, said enforcement staff is trying to circumvent the powers of the full commission by proposing to bring investigations without a full CFTC vote. He said the staff is using a process, known as ‘absent objection of the majority of the commission,’ to pursue certain cases and issue subpoenas without a full commission vote.”

The Journal article noted that, “Proponents of the process argue that delegating authority reduces bureaucracy and prevents bottlenecks. Democratic Commissioner Bart Chilton said all probes are approved by the commission and he sees no problem.

“‘Our enforcement folks are cooking on all burners and doing a great job,’ Mr. Chilton said in an email.”

Keith Good

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