FarmPolicy

December 21, 2014

Farm Bill; Budget (RFS); Ag Economy; Climate; and, Immigration

Farm Bill

The Associated Press reported yesterday that, “The U.S. House of Representatives in 2012 were given one year to come to an agreement on a long-term farm bill. They’re not getting another, said United States Agriculture Secretary Tom Vilsack.

“‘There is no support for an extension in the Senate. It just simply rewards failure, and this needs to get done. Everybody in the countryside knows it needs to get done,’ Vilsack said following a town hall hearing on what he calls the food, farm and jobs bill Saturday morning at the Old Threshers Reunion in Mount Pleasant.”

The article noted that, “Vilsack puts the standstill squarely at the heels of the House of Representatives, which passed its farm bill without the nutrition program provisions and has not moved forward with appointing its conferees.

“‘It’s time we say to House members, ‘We gave you a year. You promised you’d get it done. Get to work,’’ Vilsack said, adding the House has to ‘get its act together.’

Vilsack said there also would be problems with passing another one-year extension. Those problems include retaliatory tariffs Brazil could begin to impose if an agreement is not reached, halting any effort to redirect direct payments into other safety net areas and no disaster assistance to livestock producers who have been impacted by drought.”

Yesterday’s article added that, “During his brief opening speech, Vilsack voiced support for comprehensive immigration reform, saying it will ensure the workforce necessary for the agriculture industry’s needs.”

 

Budget- RFS (Renewable Fuel Standard)

The “Washington Insider” section of DTN reported on Friday (link requires subscription) that, “The Oil Price Information Service reported this week that House Majority Leader Eric Cantor, R-Va., is considering attaching a bill to reform the renewable fuels standard to a Republican proposal to raise the federal debt ceiling. Some members of the House Energy and Commerce Committee have been meeting during the August recess and could present an RFS reform measure to the full committee when Congress returns Sept. 9.

“‘The majority leader listed a number of options to fix this issue (of the RFS), and one option was if we came up with a good bipartisan reform agreement out of the Energy and Commerce Committee, then maybe we could try attaching it to a must pass bill like the debt ceiling,’ Cantor spokeswoman Megan Whittemore told OPIS. Cantor reportedly made the comments when he met with several petroleum industry executives before the August recess.

However, congressional sources say there is only a slight chance for RFS reform to be included as part of debt limit hike measure. The reason, they say, is that the goals the GOP leadership is seeking in exchange for Republican support of the debt ceiling measure already are sufficiently controversial and adding another high-profile issue — as RFS reform clearly is — would make negotiations with Democrats even more difficult.”

 

Agricultural Economy

Rep. Patrick Meehan (R., Pa.) and Pat Eiding, the president of the Philadelphia Council of the AFL-CIO, stated in today’s Wall Street Journal that, “The Renewable Fuel Standard created a market-based compliance system in which refiners must submit credits to prove that the required amount of renewable fuel is used or paid for by them each year. These credits, known as Renewable Identification Numbers, can be bought or sold like commodities. Both refiners and blenders acquire RINs by either blending the renewable fuel or buying credits in lieu of blending.

As a display of regulatory failure at its finest, current regulations place the compliance obligation on refiners rather than on renewable-fuel blenders—allowing blenders to sell RINs to anyone, including Wall Street speculators—and fail to require any transparency in the RIN market. One result: a shortage of RINs for purchase by refiners, and a lack of clarity about who is acquiring them.

“There’s somewhat less mystery about the price explosion in RIN credits. Historically, they have traded at a relatively low price—typically four cents per RIN. But higher blend quotas have become increasingly unrealistic to meet—required by law for a commodity that is not reliably available commercially. Another drawback: Ethanol blends beyond 10% can ravage older car engines. No wonder the limited number of RINs are becoming more valuable. Starting in early 2013, prices exploded from four cents per gallon to over $1.45 per RIN, a 3,625% increase since the end of 2012.”

In the opinion column, the authors noted that, “Like Monroe Energy, refineries across the country are facing unsustainable compliance costs. We need a solution for refineries struggling to comply with burdensome and mismanaged RIN credits, while balancing the intent of the Renewable Fuel Standard.

The Environmental Protection Agency’s Aug. 6 announcement that it will consider reducing the renewable fuel volume mandate next year—while refusing to take action this year—is a far too tepid response to this crisis. Next year may be too late. The federal government owes it to the thousands of refinery workers across the nation not to imperil their jobs with ruinous regulations.”

Also in the opinion pages of today’s Wall Street Journal, Allysia Finley penned a column titled, “California’s Union-Sponsored War on Farmers.”

Meanwhile, Bloomberg writer Rudy Ruitenberg reported yesterday that, “Flooding in Northeast China may have affected more than 2 million hectares (4.94 million acres) of crop land, the U.S. Department of Agriculture’s Foreign Agricultural Service wrote, citing local estimates.

“The region had ‘unusually heavy’ summer rainfall, with precipitation 40 percent to 50 percent above normal, resulting in widespread flooded and waterlogged farmland, the FAS wrote in an online report dated Aug. 29.”

Also, Chuin-Wei Yap reported today at the China Real Time Report (Wall Street Journal) that, “China’s fierce public debate on genetically modified food, long a political hot potato in a country obsessed with how to feed its 1.3 billion citizens, has become the subject of a spat between big guns from two of its most powerful governing institutions.

“Two weeks ago, a major-general in the People’s Liberation Army took to a popular newspaper to publish (in Chinese) a series of pointed rhetorical questions about Beijing’s policy allowing more trade in genetically modified grains, suggesting that genetically modified organisms, or GMO, are a strategy by which a Western conspiracy to supplant China’s food security is taking shape. GMOs are organisms that have had their genetic blueprint artificially re-engineered; for example, crops altered to become bug-resistant.”

The update noted that, “On Sunday, the Ministry of Agriculture – which has authority over GMO policy – fired back, posting a question-and-answer transcript (in Chinese) featuring an official from its GMO Security Committee rebutting Mr. Peng point by point. Lin Min, who is also director of the Biotechnology Research Institute of the Chinese Academy of Agricultural Sciences, flatly rejected Mr. Peng’s claim that ‘many scientists through experiments have proven GMO food is highly linked to cancer and infertility.’

Mr. Lin also pointed out that the U.S. is the world’s largest consumer of GMO crops and said that as China faces rising strains on its arable land, its use of ‘foreign resources and market coordination are inevitable.’”

And Mark Magnier reported yesterday at the Los Angeles Times Online that, “India passed into law Monday an ambitious program to provide nearly free food to some 800 million Indians. Supporters hailed it as a long-overdue fix for the nation’s rampant poverty, while critics slammed it as a shameless and electoral ploy the country can’t afford that will encourage more waste and corruption.”

Domestically, a telling graphical update from the National Weather Service depicted: “Accumulated Precipitation: Percent of Mean June 1, 2013 to August 31, 2013” for a large portion of the Corn Belt.

The graph highlights the low moisture environment, particularly in Iowa, northern Missouri, and west-central Illinois.

 

Climate

Alexandra Jaffe reported yesterday at The Hill’s Energy Blog that, “Secretary of State John Kerry warned on Monday that scientific evidence for climate change is ‘irrefutable’ and ‘alarming.’

“He also urged the international community to take action to stop it.

“‘The science is clear. It is irrefutable and it is alarming,’ he said in a video address broadcast at a climate conference in the Marshall Islands, according to AFP.”

Keith Johnson reported in today’s Wall Street Journal that, “A quiet move by the Obama administration to put a higher price tag on greenhouse-gas emissions has sparked a big fight, prompting new legislation in Congress and sniping in academic circles.

“Buried in new energy-efficiency standards the Department of Energy released in May for microwave ovens was an administration estimate that the cost to the country for each ton of carbon dioxide emitted was $36 in 2007 dollars—up from its 2010 estimate of $21 a ton.

“The number is important because the more costly carbon pollution is deemed to be, the greater the apparent economic benefits of new environmental regulations. The climate plan hinges on such regulations, including restrictions on new power plants that the Environmental Protection Agency is set to release in late September.”

The article indicated that, “Critics said administration officials calculated the numbers behind closed doors without transparency. ‘You can’t just step in and change the number, especially to that level, without some kind of input,’ said Rep. James Lankford (R., Okla.), chairman of the House Oversight Subcommittee on Energy Policy. He said he would prefer that Congress determine the price of carbon emissions. U.S. officials and advocates of carbon pricing dismissed the criticism.”

 

Immigration

AP writer Erica Werner reported on Sunday that, “As Congress wrestles with immigration legislation, a central question is whether the 11 million immigrants already in the United States illegally should get a path to citizenship.

“The answer from a small but growing number of House Republicans is ‘yes,’ just as long as it’s not the ‘special’ path advocated by Democrats and passed by the Senate.

“‘There should be a pathway to citizenship — not a special pathway and not no pathway,’ Rep. Jason Chaffetz, R-Utah, told ABC 4 Utah after speaking at a recent town hall meeting in his district. ‘But there has to be a legal, lawful way to go through this process that works, and right now it doesn’t.’”

Ms. Werner noted that, “Many House Republicans say people who illegally crossed the border or overstayed their visas should not be rewarded with a special, tailor-made solution that awards them a prize of American citizenship, especially when millions are waiting in line to attempt the process through current legal channels.

It’s far from clear, however, what a path to citizenship that’s not a special path to citizenship might look like, or how many people it might help.

The phrase means different things to different people, and a large number of House Republicans oppose any approach that results in citizenship for people now are in the country illegally. Some lawmakers say such immigrants should be permitted to attain legal worker status, but stop there and never progress to citizenship. That’s a solution Democrats reject.”

The AP article added that, “Nonetheless, advocates searching for a way ahead on one of President Barack Obama’s second-term priorities see in the ‘no special path to citizenship’ formulation the potential for compromise.”

Russell Berman reported yesterday at The Hill Online that, “After a summer of targeting individual House members in their districts, advocates for comprehensive immigration reform say they will escalate their efforts in the fall with larger rallies and demonstrations aimed at a national audience.

“The shift in tactics comes as some leaders in the movement are voicing frustration that the more narrowly tailored activities used during the August recess have failed to maximize pressure on House Republican leaders to take up immigration legislation.”

Meanwhile, Bloomberg writer Roxana Tiron reported yesterday that, “Paul Ryan is under pressure to drop his support for revising U.S. immigration laws: His adversaries are running television attack ads against him and warning of a primary challenge to the Wisconsin Republican congressman.

“Ryan is risking a ‘showdown with the Tea Party,’ said Bob Dane, an opposition leader, in reference to the anti-tax movement that backs primary challenges to some incumbents.

The effort to make him switch his position isn’t working: Ryan says he is committed to passing a law to allow 11 million undocumented immigrants to eventually become U.S. citizens. His conviction — dating to his work for fellow Republican Jack Kemp two decades ago — is rooted in economic policy, Ryan’s Catholic faith, and Wisconsin’s German and Irish immigrants.”

On the other hand, Daniel Halper reported yesterday at The Weekly Standard Online that, “Alabama senator Jeff Sessions, a Republican, is marking Labor Day with a statement lamenting the decline in America’s workforce and the strident push toward passing an immigration bill.

First, Sessions focuses on the sorry state of the American economy, where the unemployment rate is a staggering 7.4 percent. ‘As the nation recognizes Labor Day too many Americans remain without work,’ says Sessions in his statement.”

The update noted that, “Then, Sessions questions the action many are taking even knowing the facts about the American economy – the push toward an immigration bill. ‘Yet what is the message from the White House, certain businesses interests, and their allies in Congress?’ Sessions asks.

“And he answers: ‘Bring in more workers from overseas to do the jobs they say Americans aren’t cut out for.’

“Sessions tries to provide the most simple reason for why this isn’t a good idea. ‘This is not a moral or sustainable economic policy: we cannot continue to have millions of Americans leave the workforce while providing businesses with a constantly-growing supply of workers from abroad to do the jobs instead.   We need to help Americans get off of welfare, off of unemployment, and into good paying jobs that can support a family. Our first loyalty must be to US citizens,’ he says.”

Ed O’Keefe reported in today’s Washington Post that, “There are 36 congressional districts in Texas, but the 23rd is a geographic monster that swallows up almost a quarter of the state, stretching from little towns such as this one [Socorro] east of El Paso to the western suburbs of San Antonio. One former congressman who represented the people here used to say that he had to cross three climates and two time zones to get from one end to the other.”

Today’s article stated that, “As Republicans have tightened their hold on the Texas congressional delegation, the 23rd remains a uniquely volatile political territory, switching parties five times in the past 20 years. Republican presidential candidate Mitt Romney won the district last year by three percentage points; Sen. Ted Cruz (R) won it by six. It is represented by Pete Gallego (D), who won the seat by five points last year and has been trying to assure constituents that Congress will do something about immigration soon.

“‘If immigration reform doesn’t happen, that doesn’t say good things about our democracy, that everybody wants it but Congress couldn’t pass it,’ Gallego said during a recent dinner meeting with constituents.

“Heads around the table nodded, but folks didn’t seem as confident as the congressman; they worry that whatever Congress does may be the wrong thing.”

Mr. O’Keefe added that, “As a freshman member of the minority party in the House, Gallego knows he has minimal influence on the immigration debate in the GOP-controlled chamber. So he’s blaming Washington, telling constituents in English and Spanish that he’s at the mercy of a log-jammed Congress that is sharply divided between Democrats and a Republican Party splintered into mainstream lawmakers and those aligned with the tea party movement.

“‘There’s this fight for the heart and soul of the Republican Party and until that fight gets settled — because they’re the majority — there’s a lot of things that are pretty much on hold,’ he said.”

Keith Good

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