- FarmPolicy - http://farmpolicy.com -

Farm Bill; and, the Ag Economy

Farm Bill Developments, Political Environment- Budget

House Majority Leader Eric Cantor (R., Va.) was a guest on yesterday’s “Fox News Sunday” television program where host Chris Wallace asked him generally about the productivity of the House, and specifically about the Farm Bill: “But, Congressman, rightly or wrongly, none of these bills that you passed is going to become law. Your own members say they’re not going to pass the Senate. The president won’t sign them.

Let’s talk reality. You haven’t passed a farm bill. You’ve only passed four of 12 appropriations bills you are supposed to pass. We face a government shut down and a debt limit in the fall.

Again, is this the best time to spend your time, passing bills that aren’t going to become law? And added question, with so much unfinished business, why not stick around instead of taking a five-week vacation?”

As the interview progressed, Rep. Cantor indicated that, “Let me address — let me continue to address the list of items that you put forward. One, on the farm bill, we have passed the farm bill, OK? We, in the House, what we did is said, you know, we are going to bust up the almost 50-year custom where you’re going to marry two different issues and force people to vote on those. We passed the farm bill.

Mr. Wallace noted that, “But you take out…[a]ll of the food stamps — maybe the only way for 40 years that you’ve been able to get a deal.”

Rep. Cantor stated that, “No, that is not true, not on a Republican majority. And so, Republican majority for the first time says we don’t like the way things have always been done in Washington. That’s exactly what we are trying to change. And we’re going to bring a bill forward under Chairman Lucas’ leadership, that actually says about food stamps, we want the people who need those food stamp benefits to get them.

“But you know what? It’s an issue of fairness. If they are able- bodied people who can work, they ought to do that in order to receive a government benefit. That’s the proposal we are bringing forward.

“You talk about appropriations bills. Yes, we passed four in the House. The Senate has passed zero, right? And the fact is the House of Representatives has been the only one focused on trying to get a handle on our fiscal problems.”

An audio replay of this portion of yesterday’s “Fox News Sunday” program can be heard here (MP3- 2:57).

Also, Scott Wong reported yesterday at Politico that, “House Republicans are open to rolling back the sequestration this fall in exchange for cuts to entitlement programs, Majority Leader Eric Cantor said Sunday.”

News articles on Friday, today, and over the weekend, reflected on the sluggish and burdensome pace of the lawmaking process, including issues associated with the Farm Bill.

Patrick O’Connor reported in Friday’s Wall Street Journal that, “The defiant posture of [new Member Rep. Thomas Massie (R., Ky.)] and a dozen or more like-minded conservatives has changed the agenda in Washington. In a capital where partisan power is nearly evenly balanced, he and a small but committed group of new House activists have discovered that they have the ability to block not just Democrats but their own party’s leaders—and they are willing to use it.”

“Republicans hold just a 17-vote majority in the House, which means such a relatively small but cohesive bloc can derail just about any measure that doesn’t draw Democratic support. That already happened when Mr. Boehner was unable to bring the conservatives into line on a big farm bill, compelling unhappy Republican leaders to make wholesale changes in the legislation,” the Journal article said.

Mr. O’Connor added that, “These lawmakers, who now are the front line of the tea-party movement, are unwilling to fall in line with GOP colleagues. They are, however, willing to vote against what is perceived as their own political interests, as some did in opposing farm subsidies popular back home.”

Friday’s article noted: “Mr. Massie and his allies are supported by a network that raises money and builds support outside the party structure. Club for Growth, FreedomWorks and the Heritage Action for America use social media and direct outreach to congressional offices to fan discontent among conservative voters nationwide over legislation they oppose.”

Jake Sherman and Burgess Everett and John Bresnahan reported on Friday at Politico that, “The government shuts down Sept. 30. The farm bill isn’t done. The appropriations process is in shambles. Immigration reform is stagnant.

“And Congress is heading for the exits.

“The tensions on Capitol Hill are high, as legislative achievements are low.”

And, Lisa Mascaro reported in Sunday’s Los Angeles Times that, “Even by the standards of a Congress that has earned a reputation for dysfunction, this past week — the last before a long summer recess — set a mark for futility.”

Chris Cillizza noted in today’s Washington Post that, “From nearly being pushed to a second ballot in the vote for speaker at the start of this Congress to the failure of the farm bill in June, there are signs everywhere that the Ohio Republican [Speaker John Boehner] has been tasked with leading a Republican conference that has no interest in being led.”

More specifically on budget developments, Jonathan Weisman and Jackie Calmes reported in The New York Times on Friday that, “Congress appeared at a dead end, unable to pass spending bills at the levels mandated by the across-the-board spending cuts, but unwilling to retreat to higher numbers set by the 2011 Budget Control Act before those cuts went into force.”

The article noted that, “Two deadlines loom that could force a resolution. Because Congress will again fail to enact its spending bills on time, the government will run out of operating money Oct. 1 unless lawmakers approve a stopgap ‘continuing resolution’ — or C.R. — to keep the money flowing. Then in November, Congress must raise the government’s borrowing limit.”

Jackie Calmes and Catherine Rampell reported in Saturday’s New York Times that, “Congress’s annual budget appropriations process was in chaos by the time lawmakers left town on Friday. Hardly any of the annual bills have gotten to the House or Senate floor yet, and Congress is scheduled to be in session just nine days in September before the Oct. 1 deadline.

“In the House, Republicans are split over domestic cuts demanded by the most conservative members that would go deeper than sequestration. And the Democratic-controlled Senate has so far been unable to move measures that would raise spending above sequester levels, closer to the less restrictive amounts that both parties had agreed to in a July 2011 deal that ended an economically damaging showdown over raising the government’s borrowing limit.”

Janet Hook noted in Saturday’s Wall Street Journal that, “It is common for Congress to leave big budget fights until the last minute, but the budgeting process now seems so adrift that even congressional veterans find it hard to see a resolution.”

Meanwhile, House Minority Leader Nancy Pelosi (D., Calif.) was asked at a press briefing on Friday, “[H]ow confident are you that we’re going to have a farm bill by the end of September?

Rep. Pelosi stated that, “Not confident, unfortunately. The — again, you know, regular order on the budget, we passed a budget, if the Senate passes a budget, then we can go to conference. Senate passed a budget, didn’t happen….[T]he committee works in a bipartisan way to produce a farm bill that had some very serious cuts, but enough Democrats voted for it to make it bipartisan in order to bring it to the floor in a bipartisan way, with the anticipation and the statement of the speaker that they would respect the work of the committee. And you see what has happened since then.

“Either no food stamps — now the rumor is they’re going to cut $40 billion from food stamps. Well, our ranking member, Mr. Peterson, who always works in a bipartisan way, says — he has said that means that we probably won’t have a farm bill, if they stick — if they stick to that.

Let’s just go to the table. They passed their farm bill with no funds for it. Now, to go back — and I think even with that bill, as horrible as it was, at least it’s a path to the conference table. But to put their members on record as supporting $40 billion in cuts really makes the path back a harder one for a farm bill.”

She added that, “But to go to $40 billion is to say, we do not share the values of those who think that America should not be a country where 1 in 4 children in America goes to sleep hungry. And that’s really what their statement is.”

Although the Senate has appointed Farm Bill conferees, Reuters writer Charles Abbott reported on Friday that, “A spokesman for House Speaker John Boehner said no decision had been made on appointing House conferees.”

Sen. Thad Cochran (Miss.), Ranking Republican on the Ag. Committee, noted on Thursday that, “Reconciling differences between the Senate and House will be a challenge, but it is a job that needs to be done for an important sector of the American and global economy.”

Also, Sens. Pat Roberts (R., Kans.), Amy Klobuchar (D., Minn.), John Hoeven (R., N.D.), Michael Bennet (D., Colo.), and John Boozman (R., Ark.) all issued press releases late last week regarding their participation on the Farm Bill conference committee.

Meanwhile, Jack Lessenberry, the ombudsman at The Blade newspaper (Toledo, Ohio) noted late last week: “For weeks, a drama has been playing out in Washington about this year’s farm bill. The drama is far from over, but seems likely to have a once-unlikely heroine: U.S. Sen. Debbie Stabenow (D., Mich.), who heads the Senate Agriculture Committee.

The daughter of a small-town car salesman, Senator Stabenow, a 63-year-old former folk singer and social worker, has become perhaps Congress’ most highly respected voice on agriculture.

“She has so thrown herself into mastering the complex world of farm policy that the normally Republican Michigan Farm Bureau endorsed her for a third term last year, one factor in her nearly million-vote landslide victory margin.”

Mr. Lessenberry added that, “Senator Stabenow has flatly stated she will not agree to any bill that doesn’t include food stamps.”

“However this turns out,” Mr. Lessenberry stated, “Senator Stabenow, whom Republicans tried to lampoon as ‘ineffective’ and ‘do-nothing Debbie’ throughout her first two terms, seems to have won wide bipartisan respect for her role as agriculture chairman.

Republicans, on the other hand, seem to be — bafflingly — willing to risk alienating some of their core constituencies as they head into an election year.”

Ellyn Ferguson reported yesterday at Roll Call Online that, “Sen. Jeff Flake in a colloquy before lawmakers adjourned for their August recess helped Senate Agriculture Chairwoman Debbie Stabenow lay down her markers for shaping a final farm bill, or, failing that, another extension of the 2008 farm bill, by questioning continued payments for cotton farmers.”

(Note that a transcript of the brief colloquy on Thursday with Sens. Flake and Stabenow is available here, from the Congressional Record.)

Ms. Ferguson added that, “Flake, R-Ariz., who earned a reputation in the House as a hawk bent on reducing federal spending, called for a permanent end of an annual $5 billion a year in direct payments to farmers and land owners. He said provisions in the House-passed agriculture-only farm bill would make $823 million in direct payments to cotton farmers for two years after the measure ends such payments for other crops.

“Stabenow was happy to oblige, since she has voiced displeasure over the House provisions to continue cotton payments at a reduced level for fiscal 2014 and fiscal 2015. Stabenow promised Flake she would work to eliminate the payments. The colloquy was Stabenow’s messaging to Lucas, who includes 70 percent of direct payments to cotton growers in 2014 and 60 percent of direct payments in 2015 to help them transition from existing programs to a new one designed to satisfy a 2010 trade ruling Brazil won against the United States.

“Stabenow and Lucas say they hope to iron out such differences between the Senate bill and the agriculture-only bill through informal talks during the August recess. The goal, they said, is to get as many issues resolved as possible by September so they’ll be ready for a likely formal conference committee.”

In related news, a report on Friday from Inside U.S. Trade noted that, “U.S. Agriculture Secretary Tom Vilsack and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) will meet with officials in Brazil next week to discuss several issues, including the Brazilian government’s charge that pending farm bill proposals still fail to bring the U.S. into compliance with an adverse World Trade Organization ruling on agricultural subsidies.

“In a conference call yesterday (Aug. 1) with reporters, Stabenow said she and the U.S. delegation would try during the trip to ‘work through’ the outstanding issues Brazil has raised about the farm bill, in a sign that she may be open to making further changes to it.”

And, Tom Lutey reported recently at The Billings Gazette Online that, “U.S. Rep. Steve Daines, R-Mont., said he won’t settle for another short-term agriculture spending bill should Congress fail to pass a farm bill by September’s end.”

“‘It’s going to be unacceptable for any short-term extension to the farm bill,’ Daines told The Gazette.”

 

Farm Bill: SNAP

The U.S. Department of Agriculture’s Economic Research Service (ERS) released a report Friday titled, “Effects of the Decline in the Real Value of SNAP Benefits From 2009 to 2011.”

An ERS summary of the report noted that, “This report estimates the extent to which inflation in food prices has eroded improvement in the food security of SNAP recipients that followed the increase in benefit size in April 2009 mandated by the American Recovery and Reinvestment Act (ARRA).”

The ERS report also included this interesting graphic.

Also, Felice J. Freyer and Irene M. Wielawski noted in a recent column in the Los Angeles Times that, “The secrecy surrounding food stamps far exceeds that of any federal safety-net program… [W]hat foods are people buying with their SNAP benefits? How much of the SNAP budget is going for fruits and vegetables and how much for soft drinks and snack foods? No one knows. Here, Congress is the culprit: It has not given the USDA the authority to collect product-specific information, even though it would be easy to do so in an era of bar codes and EBT cards.”

And, AP writers Connie Cass and Mary Clare Jalonick provided more information about the SNAP program in an article from late last week titled, “Time to take a bite out of food stamps?

 

Agricultural Economy

Gregory Meyer reported on Friday at The Financial Times Online that, “Grain prices are softening as a balmy US growing season suggests massive crops will replenish depleted global stockpiles.

Corn has fallen below $5 a bushel for the first time since late 2010 and is off 42 per cent from record highs reached a year ago. Soyabeans, crushed into vegetable oil and meal used for livestock feed, have dropped sharply since early July.”

The FT article added: “‘We’re entering a new normal,’ said Sterling Smith, Chicago-based futures specialist at Citigroup. ‘We’re going to look at much better stocks if South America pulls out another bumper crop. We’re going to build a little fat back into the system, which will help stabilise prices.’”

On Friday, USDA’s National Agricultural Statistics Service (NASS) released two reports regarding land values and production expenses, a quick overview and links to the NASS updates can be found here, at FarmPolicy.com Online.

Also, James Politi reported on Friday at The Financial Times Online that, “The World Trade Organisation ruled that China violated global trade rules when it imposed duties on US chicken parts, handing a big win to the Obama administration and paving the way for American poultry exporters to gain more access to the Chinese market.

The decision by the WTO marks the second victory in as many years for the US in similar cases against China.”

The FT article noted that, “‘WTO members must use trade remedies strictly in accordance with their commitments, and we hope this win will discourage further violations that hurt American exporters,’ said Michael Froman, the US trade representative, at a press conference in Washington. ‘We have won the first two disputes, and we are actively litigating the third, which raises many of the same serious concerns,’ he said.”

Chairwoman Stabenow also issued a statement on this development Friday.

In other news, Steven Yaccino penned an article regarding livestock production in today’s New York Times titled, “Hog Producers Battling to Contain Virus That Has Killed Piglets by the Thousands.”

And, an AFP article from Friday (posted at DTN, link requires subscription) reported that, “French President Francois Hollande said Friday that a ban on growing GE corn sold by U.S. company Monsanto Co. would remain in place, despite a court ruling reversing the suspension.

“‘The moratorium will be extended,’ he said on a visit to the southwestern department of Dordogne.

“France’s Council of State court ruled Thursday that the French moratorium imposed on growing MON810 corn since March 2012 failed to uphold European Union law.”

Keith Good