FarmPolicy

November 21, 2014

Farm Bill; Ag Economy; Budget; and, Immigration

Farm Bill

A news release Wednesday from Senator Kay Hagan (D., N.C.) indicated that, “[Hagan] today visited J.P. Davenport & Son Farm in Greenville to talk about the importance of approving a Farm Bill. In June, Hagan helped pass a bipartisan Senate Farm Bill that contained major victories for North Carolina farmers. The Senate and House of Representatives must agree on a Farm Bill before the current law expires on September 30. Agriculture is North Carolina’s largest industry, generating $77 billion in economic activity and employing nearly one-fifth of the state’s workforce.

“‘Agriculture is North Carolina’s biggest industry, and one of the most pressing issues facing Congress right now is the looming deadline to pass a new Farm Bill,’ said Hagan. ‘Approving a 2013 Farm Bill would give farms like J.P. Davenport and Son the certainty needed to expand and create jobs, and access to new measures that help to recover after losses caused by events outside their control. Congress must put partisan politics aside and approve a 2013 Farm Bill to keep our agricultural economy humming.’”

The update stated that, “The Davenports rely on federal crop insurance to protect against losses caused by extreme weather and other events outside their control.

“‘Federal Crop Insurance has a direct positive impact on farmers, and I appreciate Senator Hagan’s leadership to strengthen the program in this year’s Farm Bill,’ said Lawrence Davenport, co-owner of J.P. Davenport & Son.”

A news update yesterday from Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) stated that, “[Stabenow] today announced that Michigan tart cherry growers will now have federal crop insurance available to them for the first time ever. The new insurance program comes following Sen. Stabenow’s call on the U.S. Department of Agriculture to give cherry growers access to insurance like other crop growers get across the country. Early freezes and frosts in 2012 decimated orchards, vineyards and fields across the state, destroying 97% of Michigan’s cherry crop, underscoring the need to have protections in place to prevent farmers from being wiped out by disasters. The new insurance coverage will protect growers against such losses and continue strengthening Michigan agriculture, which supports nearly one out of four jobs in Michigan and is helping to drive the state’s economic recovery.”

A news item yesterday from National Crop Insurance Services pointed out that, “[M]ore than 1.1 million policies have been processed through participating companies and RMA as of August 19, 2013…In 2012, farmers invested more than $4.1 billion to purchase more than 1.2 million crop insurance policies, protecting 128 different crops.”

Meanwhile, Senator Jerry Moran (R., Kan.) spoke yesterday with Tad Felts on KKAN radio (Phillipsburg, Kan.) about a variety of issues including agriculture and farm policy.

In part, Sen. Moran noted that, “But it was great to drive down Highway 36 yesterday.  The problem I saw, the disappointing part was how dry it is in so many places.  Out in Atwood, I talked to a farmer who had six inches of rain at his farm, and it was green in a few places, but driving down from Prairie View to Logan on the county blacktop yesterday, it was so discouraging to see how dry it is.

We’re anxious to get a farm bill completed that provides crop insurance to get in place, disaster assistance for our livestock producers.  The most recent opportunity we had to be of help was opening up conservation reserve acres to haying and grazing.  But the weather, when you ask what people talk about, weather remains front and center in our part of Kansas.”

He added that, “But if we’re going to get a farm bill passed that benefits agriculture, and in my view that means a viable, valuable crop insurance program, it’s going to take some folks who don’t come from places like Kansas to vote for it.  And therefore these two issues [farm programs, and the nutrition title] will have to be combined if we’re going to have farm programs.

“Secondly, if you want to reform, me as a rural member of Congress, if I want to make changes in the farm bill related to food stamps, I’ve got a better shot of doing that when they’re combined than leaving it up to people whose focus is trying to find more ways to spend more money.  And so for both reasons, for changing food stamps and for passing farm policy, it takes a combination of members of Congress to get that accomplished, again reminding us that so few of us come from places like Kansas, and particularly rural Kansas.”

With respect to nutrition issues, the Center on Budget and Policy Priorities issued an update earlier this week titled, “House Leadership SNAP Proposal Would Eliminate Food Assistance for 4 Million to 6 Million Low-Income People.”

Feeding America has also posted a resource at its webpage titled, “SNAP (Food Stamps): Facts, Myths and Realities.”

Meanwhile, Jason Noble reported in yesterday’s Des Moines Register that, “U.S. Rep. Bruce Braley offered hope but little certainty for agreement and passage of a new federal farm bill during a series of meetings with northeast Iowa constituents on Wednesday.

“Braley, D-Waterloo, outlined several steps he’s taken over the last year to force a vote on the massive agriculture-policy legislation. But, he acknowledged, passage of the bill ultimately depends on the House’s Republican majority, which has balked at the funding level for nutrition programs supported by Democrats and approved by the Senate.”

The Register article added that, “‘I’m hoping that now that there’s been this cooling-off period and people realize what’s at stake that we’re going to be able to bring … reasonable people on both sides to the table to get to 218 (votes),’ Braley said during a meeting with about a dozen farmers and business leaders in Peosta. ‘But it’s not going to be easy.’

“Once lawmakers return to Washington, they’ll have to move quickly: The House’s current schedule includes just nine work days before Sept. 30, when the current farm bill is due to expire. Expiration would revert U.S. agriculture policy to the 1949 Farm Bill, eliminating modern emergency relief programs, canceling aid and incentive packages for new farmers, ending conservation programs and, perhaps, doubling the price of milk.”

Gregory A. Hall reported yesterday at The Courier-Journal (Louisville, Ky.) Online that, “At the Kentucky Farm Bureau’s Country Ham Breakfast Thursday, the political rhetoric may have been sharper than the main dish.

“Speeches by Democratic Gov. Steve Beshear and Republican U.S. Sen. Mitch McConnell played off one another on federal topics such as the lack of a new Farm Bill and the implementation of the Affordable Care Act more commonly known as Obamacare.”

The article noted that, “‘So, governor, the solution to Obamacare is to pull it out, root and branch,’ McConnell said, to applause. McConnell also said he expects a Farm Bill compromise will be worked on soon.”

Agricultural Economists Carl Zulauf (Ohio State University) and Gary Schnitkey (University of Illinois) indicated yesterday at the farmdoc daily blog (“Farm Bill Conference Issues”) that, “A diverse set of differences exist between the House and Senate farm bills. However, many of the differences concern the farm safety net. These differences can largely be grouped into two categories.

One category contains issues that reflect a broad debate over what society should expect from farms in return for the public subsidies it provides. This set of issues includes payment limits, limits on crop insurance subsidies, and conservation compliance.

The second category contains issues that revolve around the determination of assistance levels for the farm safety net. In this farm bill debate, these issues are largely about multiple-year assistance. Some of the issues arise because the U.S. has decided not to enact annual supply control constraints for most crop safety net programs. The one exception is sugar. The vote by the House to remove the supply control provision in the proposed dairy margin program is consistent with the current situation for crop support programs, excluding sugar.”

 

Agricultural Economy- Biofuels, Weather, Trade, Antibiotics (Animal Production)

Bloomberg writer Alex Pashley reported yesterday that, “Global sugar supplies will exceed demand for a fourth consecutive year in the season that starts Oct. 1, possibly sending prices even lower, the International Sugar Organization said.”

Also yesterday, Reuters writer Chris Prentice reported that, “Agribusiness Bunge Ltd is considering buying sugar from the U.S. government through the fledgling ‘sugar-for-ethanol’ program to reopen its biofuels plant in Mississippi, according to two industry sources.

“The firm, one of the world’s largest agricultural trading houses, has looked into purchasing a significant portion of the sugar the U.S. Department of Agriculture (USDA) plans to sell as it prepares to launch the program this week, the sources said.

The move is the first sign that the government program has won the backing from some in the burgeoning biofuels industry as producers struggle to secure corn due to high prices and low supplies.”

The Reuters article added that, “The USDA last week announced plans to implement the ‘sugar-for-ethanol’ program for the first time since it was written into 2008 farm law as the government battles plunging domestic prices and looming forfeitures of sugar used as collateral for government-backed loans that come due at the end of the month.”

Tennille Tracy reported in yesterday’s Wall Street Journal that, “The Federal Trade Commission said it was looking into assertions by some members of Congress that oil companies are using their influence over retail gas stations to block consumers from accessing gasoline blended with extra ethanol.

“The inquiry underscores the deepening divide between the renewable-fuels industry, which wants to promote ‘E15’ gasoline containing 15% ethanol, and the oil industry, which says consumers don’t want E15. Oil producers and refiners are pressing Congress to repeal the U.S. law that requires refiners to use ever-greater amounts of corn ethanol and renewable fuels.”

Meanwhile, an update yesterday from the National Drought Mitigation Center stated that, “Long-term extreme and exceptional drought in the south Plains and Southwest receded substantially in the week that ended Aug. 20, while moderate drought returned to parts of the Corn Belt, according to the U.S. Drought Monitor.

“‘Until recently, rain has been falling in several areas experiencing long-term drought, including the central and southern Plains and the Southwest,’ said Brad Rippey, a meteorologist in the U.S. Department of Agriculture’s Office of the Chief Economist. ‘At the same time, 1- to 2-month rainfall deficits remain a concern in some of the nation’s key crop production areas, including parts of the Midwest. As a result, the latest U.S. Drought Monitor, valid August 20, indicates a general reduction in the severity of long-term drought in the south-central and southwestern U.S., but an expansion of short-term drought in the Corn Belt.’”

Regina Zilbermints and Joel Aschbrenner reported in yesterday’s Des Moines Register that, “The past two months have seen Iowa pivot from the wettest spring on record to an abnormally dry summer. Like fishermen, farmers and water suppliers face challenges with the swing in the weather.

“‘Obviously on the very short term, we’ve been very dry,’ Iowa state climatologist Harry Hillaker said. ‘What’s lessening the impact is how wet things were right before the dry pattern.’”

The Register article noted that, “The lack of moisture is becoming a concern for Iowa farmers, with both topsoil and subsoil moisture levels declining by 6 percentage points in the past week, according to Monday’s U.S. Department of Agriculture weekly crop report.”

In other news, Amy Schweitzer reported yesterday at The Grand Island Independent (Neb.) Online that, “Most of the people who eat Nebraska’s beef, pork and corn don’t live in Nebraska…[N]inety percent of the world’s consumers are outside of the United States, [Rep. Adrian Smith (R., Neb.)] said [at a town hall meeting], adding that 80 percent of the world’s purchasing power belongs to those living outside the U.S.

“‘Trade agreements are great opportunities to level the playing field,’ he said.”

An update yesterday from USDA’s Economic Research Service at its Chart Gallery webpage explained that, “According to USDA’s baseline projections, developing-country demand for agricultural products is expected to increase faster than production in those countries, leading to continued growth in import demand. Developing countries are projected to account for 92 percent of the total increase in world meat imports, 92 percent of the increase in total grains and oilseeds imports, and nearly all of the increase in world cotton imports.”

Also yesterday, Donald Kennedy, who was commissioner of the U.S. Food and Drug Administration from 1977 to 1979, noted in a column at The Washington Post Online (“The threat from antibiotic use on the farm”) that, “Today, the science is even clearer that antibiotic overuse in agriculture is dangerous — yet the same risks persist. Fortunately, the FDA appears poised to act by instituting a measure known as Guidance 213. This voluntary policy instructs pharmaceutical companies to stop marketing certain antibiotics for animal production purposes. Some public health advocates want the agency to make the restrictions mandatory, but voluntary guidance can work — if it is finalized. The agency issued a draft version of its policy in April 2012 and received public comments, as required, but the comment period closed about a year ago. Drugmakers have been left awaiting further instruction.”

Kennedy noted that, “About 80 percent of the antibiotics sold in this country are intended for food animals, not people. Consumers and the public health community would like to know more but, unfortunately, the FDA is not authorized to collect data from pharmaceutical manufacturers, feed mills or livestock producers to demonstrate exactly how many antibiotics are being used and for what specific purpose. Until it has the data, the agency cannot be certain that its voluntary approach can be effective. FDA officials have initiated a process to obtain that information, but whether it will work, and how long it will take to complete, is not certain.

“In 2012, during his reelection campaign, President Obama said that his ‘administration is taking steps to limit antibiotic use for livestock. This will help ensure that antibiotics are used only [to] address diseases and health problems, and not for enhancing growth and other production purposes.’”

 

Budget

Lori Montgomery reported in today’s Washington Post that, “House Speaker John A. Boehner said Thursday that he plans to avert a government shutdown at the end of September by passing a ‘short-term’ budget bill that maintains sharp automatic spending cuts, known as the sequester.

“‘When we return, our intent is to move quickly on a short-term continuing resolution that keeps the government running and maintains current sequester spending levels,’ Boehner (R-Ohio) said on a conference call with GOP lawmakers, according to a person on the call.”

Corey Boles and Janet Hook reported in today’s Wall Street Journal that, “House Speaker John Boehner said Thursday GOP leaders were crafting a strategy that could avert a September showdown with Democrats over government funding levels by deferring the toughest budget issues to later in the fall, when lawmakers face a deadline to raise the debt ceiling.”

Jake Sherman and John Bresnahan reported yesterday at Politico that, “Speaker John Boehner (R-Ohio) and other GOP leaders think that if they are able to lump the sequester and debt ceiling into one legislative fight, they will be able to extract some changes to entitlement programs from President Barack Obama and Congressional Democrats. The more issues thrown in the same debate, the better — as they create more leverage points, Republicans say. Obama could say he didn’t negotiate over the debt ceiling, but rather the sequester, and Republicans can brag about more concessions from the president.”

The article noted that, “But here’s where the fight begins: a senior Obama administration official said there is nothing that will compel the White House to negotiate over the debt ceiling — including the sequester. The White House doesn’t believe the Republicans will push the nation into default if they don’t get their way.”

 

Immigration

Ashley Parker and Michael D. Shear reported in yesterday’s New York Times that, “Catholic bishops and priests from major dioceses across the country will preach a coordinated message next month backing changes in immigration policy, with some using Sunday Masses on Sept. 8 to urge Congressional passage of a legislative overhaul that includes a path to citizenship for unauthorized immigrants.”

And Sara Murray reported in yesterday’s Wall Street Journal that, “Across the country, and in Congress in particular, the debate over the future of immigration continues to bat the same questions back and forth: Will legalizing immigrants and allowing in additional low-skill laborers displace native-born workers and cut wages? Or will new workers simply fill empty employment niches and spark a broader economic boon that benefits all? Economists are divided, but a plant like this one [a JBS USA meatpacking plant in Greeley, Colo.]—which dealt with immigrants, first illegal, and then legal—may provide some clues.

“So far, there isn’t any broad evidence the new, legal immigrants are taking jobs from locals. They didn’t drive down wages, but did allow the addition of that second shift, with additional workers whose presence is sparking other economic activity around town.

“Dig deeper, though, and there are hints of why some worry about immigration’s impact. Critics charge that, while wages have held up recently, immigrant and refugee labor have helped produce a long-term decline in meatpacking pay.”

Keith Good

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