FarmPolicy

July 23, 2014

Farm Bill; Budget; Ag Economy; Immigration; and, Political Notes

Farm Bill

John Barry reported on Friday at The Bulletin (Norwich, Conn.) Online that, “Farming isn’t for the faint of heart, Marie Tyler told [House Ag Committee Member Joe Courtney (Conn.)] during a tour of her farm Friday…[T]he 2nd District Democratic congressman, along with several aides and agriculture officials, toured farms in North Grosvenordale and Hampton as well as the Tyler farm in Canterbury.”

The article noted that, “‘The Senate [farm] bill got through,’ Courtney told Tim Tyler. He said the bill the Senate passed had support from both Democrats and Republicans. ‘I’d vote for it in a heartbeat.’

“Courtney said the Republican-controlled House refused to pass the Senate bill, however.

“‘The House is a really tough place right now,’ he said. ‘They amended it — in my opinion, mangled it — and then wouldn’t vote for it.’”

Mr. Barry explained that, “Courtney told Tyler he wasn’t sure what would happen when Congress returns, but offered him some reassurance. ‘There’s a lot of external pressure to get it done.’

“A provision in the Senate version of the bill called the Dairy Security Act is crucial to dairy farmers in the Northeast, Courtney said. The provision gives them ‘some margin of safety’ if the prices they’re offered for milk drop.

“‘That’s what we’re fighting for,’ Courtney said.”

An article late last week at the Dothan Eagle (Ala.) Online reported that, “In relation to agriculture, [House Ag Committee Member Martha Roby (R., Ala.) said on Thursday in Ozark that] the House was unable to pass a Farm Bill in total and instead passed a farm policy alone that did not include a nutrition title.

“Roby said the Senate did pass a bill with the nutrition title included.

“‘This was our opportunity and I feel like it was a lost one, but we have to wait and see when we go to conference what that looks like,’ she said.

“‘…I understand it has to be reformed and food stamps is one of those things. If we don’t reform it, it will continue on autopilot and continue to grow.’”

David Davis reported on Thursday at the Cleveland Daily Banner (Tenn.) Online that, “[House Ag Committee Member Scott DesJarlais (R., Tenn.)] also expressed frustration by Congress’ failure to pass a bipartisan farm bill for the second year in a row.

“‘It makes it out of the Agriculture Committee onto the floor and then falls apart,’ he said. ‘Agriculture has always been considered kind of a nonpartisan committee. We all need to eat. We couldn’t even do that, that’s how bad it has gotten.’”

Rep. Rick Crawford (R., Ark.), the Chairman of the House Ag Subcommittee on Livestock, Rural Development, and Credit, was a guest Friday on the AgriTalk radio program with Mike Adams where the discussion focused on the Farm Bill.

During Friday’s interview, Mr. Adams asked Rep. Crawford about the likelihood of an extension, as well as Title I issues.  This portion of the AgriTalk program can be heard here (MP3- 2:59).

In part, Rep. Crawford noted that, “What [producers] are concerned about is if there is an attempt to do an extension and strip out the direct payment- that’s going to leave them high and dry; and, it’s going to mess up the baseline for marking up the new Farm Bill.

“So, I think that’s not the direction they want to see us go- is to do an extension- because I am almost positive if there is an extension that is proposed on the floor that it will include stripping out the direct payment completely and without any kind of provision in there for what we have in the Farm Bill, the Price Loss Coverage piece, I don’t think that is fair to those producers and that is not the direction I want to see us go.”

Meanwhile, a news update yesterday from Rep. Crawford indicated that, “On Monday, August 26, [Crawford] will begin a tour of farms and agriculture-related interests in Arkansas’s First Congressional District. Agriculture is the top industry in Arkansas and Crawford is the state’s sole representative on the House Agriculture Committee. The Farm Tour will be a chance for Crawford to listen to farm families and advocate for a Farm Bill.

“‘This year’s Farm Tour represents an important opportunity for me to hear directly from the growers and producers in our state on their priorities for action in Washington. As Arkansas’ only representative on the House Agriculture Committee, I am continuing to use every avenue in my power to push for a Farm Bill that will meet the needs of farmers in Arkansas while remaining cost-effective and efficient. Agriculture is the backbone of our rural economy both in Arkansas and across the nation, and we must have a bill in place that supports production agriculture and provides the certainty for business decisions that our farmers need. I will continue working with the agricultural sector until this critical piece of legislation is finished.’”

A news update Friday from Rep. Kevin Cramer (R., N.D.) indicated that, “Today [Cramer] reiterated his call for the USDA Risk Management Agency (RMA) to clarify its rules on prevented plant insurance. Last month the USDA Farm Service Agency (FSA) estimated North Dakota has over 4.4 million acres prevented from planting for the 2013 growing season, the second-highest acreage in the history of the insurance program. Cramer said farmers need greater certainty from the government as harvesting begins and fall planting considerations are made.”

“‘The lack of clarity surrounding prevent plant this year is telling. Our farmers and insurance agents need better certainty on these rules not only in the near-term, but for future years to prevent a repeat of the confusion we are seeing,’ Cramer said.”

Laura Lundquist reported on Friday at the Bozeman Daily Chronicle (Mont.) Online that, “While most congressmen can afford to use the August recess to travel internationally or tour their home states, one Montana senator uses part of the time to get his hands dirty.

“For the past few weeks, Democratic Sen. Jon Tester has spent the daylight hours driving either a combine or a grain truck to bring in the harvest on his organic farm near here. He stopped to respond to two state emergencies – hail-caused crop damage in Gallatin County and the wildfire near Lolo – but otherwise he was focused on avoiding any loss of his own crop.”

The article pointed out that, “For decades, the Farm Bill has included funding for food stamps to encourage support from the congressmen of less-rural states. The Senate version retained food stamps.

“‘You build a coalition with the nutrition funding and the crop insurance. If you start pulling it apart, everybody will lose,’ Tester said. ‘It should be about everybody winning. The Senate bill may not do everything we want, but it’s a step in the right direction.’”

And Lauren Fox reported on Friday at US News Online that, “The uncertainty surrounding the farm bill’s fate in Congress has made many farmers downright angry, but ranchers, who struggled through a historic drought last summer, say they lost hope in Washington long ago.

“‘I think most of us are moving on with the thought that Congress is not going to be our savior,’ says Leon LaSalle, a Montana rancher. ‘As ranchers, we take heavy blows and then put our boots on when the sun comes up and go back out.’”

The article noted that, “Congress voted to extend the 2008 farm bill in January, but ranchers, who’d experienced a devastating drought in the summer of 2012 were left to fend for themselves. In short, disaster relief for ranchers was part of the 2008 farm bill, but it was only budgeted to last through 2011, leaving them unprotected from Mother Nature’s wrath during 2012′s hot, dry summer.

“Half of the nation’s counties were considered drought disaster areas in 2012. And while most farmers have crop insurance to turn to, ranchers were literally left high and dry.”

Meanwhile, an editorial item posted yesterday at The Washington Post Online stated that, “Citing the commerce clause, [Rep. Steve King’s (R., Iowa)] Protect Interstate Commerce Act, which the House passed in its version of the farm bill this summer [replay and transcript of debate here], would repeal state laws dictating production standards for agricultural goods produced out of state. In particular, Mr. King was targeting a California law barring the sale of eggs produced under conditions cruel to hens.”

The opinion item added that, “If approved by the Senate after the summer recess, Mr. King’s reactionary amendment would precipitate a disaster. Not only would laws regarding animal cruelty be upended, but so would laws protecting the environment, workers’ rights and public health, because Mr. King’s amendment bars any state-imposed condition on agricultural products.”

In other news, the San Francisco Chronicle editorial board opined over the weekend that, “The House of Representatives jolted the country in June when it refused to renew the nation’s food stamp program as part of the Farm Bill. Passage of the Farm Bill is usually a bipartisan, uncontroversial matter, but little is bipartisan or uncontroversial in today’s Washington – and now, the nutrition needs of 46.6 million Americans are at risk. It’s a shocking number, but what’s just as unsettling is how many eligible people aren’t getting the food stamps they could use, especially in California.

“According to a U.S. Department of Agriculture study this year, California has the lowest rate of food stamp participation in the country. Nearly half of those eligible for food assistance don’t get it.”

The opinion item added that, “The good news is that California has made important changes to its program that will probably result in greater participation very soon.”

Also, in yesterday’s New York Times, Gretchen Morgenson reported that, “Creating jobs is an essential goal today, given our high unemployment rate. But when job programs rely on taxpayer backing, their success or failure should be clearly disclosed.

“For example, the United States Department of Agriculture has called its $1.6 billion business and industry loan program a rousing success. Not surprisingly, the department often trumpets the number of jobs that are expected to result from these loans — figures that it gets from the borrowers themselves. Whether these jobs are actually created, however, is another story.”

The article noted that, “Agency documents indicate that others are concerned with its job-creation numbers. A letter on Jan. 18 from the agency to business program directors of the Rural Development unit noted that the Office of Management and Budget wanted agency performance measures to be rigorously evaluated to improve programs’ efficiencies. It is essential that the jobs data reported by the Agriculture Department ‘is accurate, consistent, and verifiable,’ the letter said.

“The Agriculture Department’s office of the inspector general recently questioned the accuracy of the agency’s job figures. In a March audit, it identified one borrower that had estimated its loan would create and save 400 jobs. After visiting the borrower, investigators found that the borrower saved two jobs. ‘The agency’s success in meeting its established performance goals may be overstated,’ the report said.”

And on a separate policy issue, Amy Harmon noted in yesterday’s New York Times that, “One bright morning this month, 400 protesters smashed down the high fences surrounding a field in the Bicol region of the Philippines and uprooted the genetically modified rice plants growing inside.

“Had the plants survived long enough to flower, they would have betrayed a distinctly yellow tint in the otherwise white part of the grain. That is because the rice is endowed with a gene from corn and another from a bacterium, making it the only variety in existence to produce beta carotene, the source of vitamin A. Its developers call it ‘Golden Rice.’”

Ms. Harmon added that, ““There’s so much misinformation floating around about G.M.O.’s that is taken as fact by people,” said Michael D. Purugganan, a professor of genomics and biology and the dean for science at New York University, who sought to calm health-risk concerns in a primer on GMA News Online, a media outlet in the Philippines: ‘The genes they inserted to make the vitamin are not some weird manufactured material,’ he wrote, ‘but are also found in squash, carrots and melons.’

“Mr. Purugganan, who studies plant evolution, does not work on genetically engineered crops, and until recently had not participated in the public debates over the risks and benefits of G.M.O.’s. But having been raised in a middle-class family in Manila, he felt compelled to weigh in on Golden Rice. ‘A lot of the criticism of G.M.O.’s in the Western world suffers from a lack of understanding of how really dire the situation is in developing countries,’ he said.

“Some proponents of G.M.O.’s say that more critical questions, like where biotechnology should fall as a priority in the efforts to address the root causes of hunger and malnutrition and how to prevent a few companies from controlling it, would be easier to address were they not lumped together with unfounded fears by those who oppose G.M.O.’s.”

 

Budget

A front-page article in yesterday’s Washington Post noted in part that, “As Capitol Hill gears up for another budget battle, David Fahrenthold breaks down how much the federal government has actually changed since 2010.

It is still so big primarily because Congress and Obama have largely failed to deal with programs such as Medicare, Social Security and food stamps.

“These ‘mandatory spending’ programs are very large, accounting for about 60 percent of federal spending. Congress doesn’t set their spending every year. Instead, when need goes up, spending goes up. And, in the recession, need went up.”

The article added that, “Even after six paralyzing budget showdowns, this ‘mandatory’ spending has fallen by less than 1 percent. By contrast, spending on ‘discretionary’ expenses — the smaller pot of money that Congress does control every year — has fallen by 14 percent. That reduction is partially due to the winding down of a stimulus and two wars, as well as to ‘sequestration’ and other budget cuts imposed since 2010.

“‘We’re nowhere. I mean, the sad reality is that we’re nowhere’ toward taming those ‘mandatory’ costs, said Gordon Adams, a budget official in the Clinton administration and now a fellow at the Stimson Center.”

Peter Schroeder and Bernie Becker reported on Friday at The Hill’s On the Money Blog that, “Speaker John Boehner’s (R-Ohio) plan to push through a short-term government funding bill is already facing grumbling from conservative members of his caucus.

“Reps. Mick Mulvaney (R-S.C.) and Mark Meadows (R-N.C.) both told The Hill on Friday that they would oppose GOP leaders if they bring up a short-term continuing resolution at sequester levels – and suggested there were many others who felt the same way.”

 

Agricultural Economy

Ian Berry and Owen Fletcher reported on Friday at The Wall Street Journal Online that, “Grain processors that have been counting on southern U.S. crops to tide them over until the Midwestern harvest this autumn are waiting much longer than expected, exacerbating supply constraints and pushing prices higher in cash markets.

“Corn and soybean farmers are sitting on bumper crops in states such as Louisiana and Arkansas, helped by unseasonably cool weather. But those supplies—a potential lifeline to processors in the Midwest after last year’s drought-stricken harvests—are largely stuck in fields because recent rains have kept farmers from starting their harvests.

When those southern crops are harvested, much of the corn and soybeans will be headed north along the Mississippi River, a reversal from the typical flow of grain in the U.S., in which barges send supplies from big Midwestern farm states to New Orleans for export or to local processors.”

Bloomberg writer Phoebe Sedgman reported today that, “Soybeans surged to the highest level since June as hot, dry weather in the Midwest threatened to curb crop prospects in the U.S, the world’s biggest grower. Corn climbed to the highest price in a month and wheat advanced.

“The oilseed gained as much as 4.6 percent to $13.8925 a bushel on the Chicago Board of Trade, the highest since June 6, and traded at $13.8175 at 1:48 p.m. in Singapore. Prices rose 5.5 percent last week, the third straight increase.”

For a closer look at issues associated with soybean demand, see this brief video from University of Illinois Extension, which includes analysis from University of Illinois Agricultural Economist Darrel Good.

An update on Friday from USDA’s Economic Research Service (ERS), “Food Price Outlook, 2013-14,” indicated that, “Based on current conditions, ERS’s 2013 inflation forecast predicts increases of 1.5 to 2.5 percent for both all food and food-at-home prices. This means that prices are likely to increase less than they did in 2012 and that annual inflation should be lower than the 20-year historical average of 2.8 percent. The impact of the 2012 drought on retail food prices has been less than initially forecast. The inflationary pressure of the drought has been offset by factors such as decreased exports of many U.S. agricultural products, a stronger U.S. dollar, low energy price inflation, and decreased prices for many commodities unaffected by the drought.”

Meanwhile, Darren Goode reported yesterday at Politico (“When energy dreams fall short”) that, “President George W. Bush turned ‘switchgrass’ into a buzz word in his 2006 State of the Union address, when he promised to make ethanol produced from plants, wood chips and other alternatives to corn ‘practical and competitive in six years.’

“But U.S. producers made only 20,000 gallons of cellulosic ethanol last year, in a nation that gulps down more than 360 million gallons of gasoline a day. That shortfall forced EPA this month to slash its requirements for how much cellulosic ethanol refiners must blend in with gasoline this year.

“Opponents of the cellulosic mandate have long derided it as a ‘unicorn.’ But Congress was even more starry-eyed when it created the mandate in 2007: It estimated production would be 1 billion gallons in 2013.”

 

Immigration

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Business groups say their grassroots efforts to build support for an immigration overhaul are paying off and making them increasingly optimistic that Congress will complete comprehensive legislation this fall.

“Manufacturers and business leaders are spending the bulk of the August congressional recess canvassing the country, sitting down with lawmakers and chatting at local town-hall meetings to explain how fixing the immigration system is crucial to the nation’s economic future.”

 

Political Notes

Kent Cooper reported on Friday at Roll Call Online that, “The National Republican Congressional Committee reported it spent $59,491 on Aug. 20-22 for independent expenditure media ads opposing Rep. Collin Peterson, D-Minn.”

Keith Good

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