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Farm Bill- Policy Issues; Ag Economy; Immigration; and, CFTC

Farm Bill- Policy Issues

David Rogers reported yesterday at Politico that, “Despite the explosion in food stamp enrollment, the percentage of American households experiencing food shortages remains stubbornly high, with so-called ‘insecure’ families having 26 percent less for food than a typical ‘secure’ household of the same size.

“The survey data — covering 2012 — was released Wednesday morning as part of the Agriculture Department’s annual report on household food security in the U.S. An estimated 14.5 percent of households were listed as food insecure — a number that’s consistent with findings since the economic downturn in 2008 but substantially higher than the decade beforehand.

“From 1998 through 2007, for example, the same survey showed that the percentage of insecure households averaged about 11 percent. But with the recession, the number jumped to 14.6 percent in 2008 and has largely remained there since.”

Mr. Rogers noted that, “At the same time, federal expenditures for food stamps or the Supplemental Nutrition Assistance Program (SNAP) have more than doubled, provoking a backlash in Congress that has stalled action on a new farm bill.

“Indeed, Wednesday’s report comes as the House faces a showdown vote this month over an estimated $40 billion package of food stamp cuts promoted by Majority Leader Eric Cantor (R-Va.).

“The reductions double the level of 10-year savings previously proposed by the House Agriculture Committee on a bipartisan vote in June. The great fear in the agriculture community is that Cantor is pushing the House so far to the right on the nutrition issue that he will kill any chance of enacting farm legislation before the current law runs out Sept. 30.”

With respect to yesterday’s food security report, Secretary of Agriculture Tom Vilsack stated: “Food insecurity remains a very real challenge for millions of Americans. Today’s report underscores the importance of programs such as the Supplemental Nutrition Assistance Program that have helped keep food insecurity from rising, even during the economic recession. As the recovery continues and families turn to USDA nutrition programs for help to put good food on the table, this is not the time for cuts to the SNAP program that would disqualify millions of Americans and threaten a rise in food insecurity. For our part, USDA will continue to deliver a strong nutrition program with an error rate that is at a historic low.”

And Rep. Rosa DeLauro (D., Conn.) noted yesterday that, “This report is further proof that Republican leadership needs to stop the dangerous path it is currently on and ensure our critical anti-hunger programs are adequately funded.”

Niraj Chokshi reported yesterday at the GovBeat Blog (Washington Post) that, “More than one in seven households were unable to get access to quality food at some point over the past three years, according to a new federal report. But that hasn’t stopped some states from refusing federal food-stamp support in an effort to coax recipients back to work.”

The Post update noted that, “Mississippians topped the list, with 20.9 percent having experienced so-called ‘food insecurity’ from 2010 to 2012. Arkansas followed with a 19.7 percent rate, while the rate was 18.4 percent in Texas. North Dakotans suffered least from food insecurity, with the rate there at 8.7 percent. Virginians followed with just 9.2 percent suffering from food insecurity. And New Hampshire was next with a 9.9 percent rate.”

Yesterday’s update added that, “‘SNAP is not the reason that jobless individuals are not working,’ says Stacy Dean, vice president for food assistance policy at the Center for Budget and Policy Priorities think tank. ‘It’s the labor market.’

“Under federal law, able-bodied adults without dependents can receive a maximum of three months’ worth of food stamps in a three-year period, unless they work 20 hours a week or participate in a work-training program. But a federal waiver has allowed those individuals in most states to continue to receive benefits. Kansas announced Wednesday that it will become the latest state to decline renewing that exception when it expires at the end of the month [related article].”

Sheryl Gay Stolberg reported on the front page of today’s New York Times that, “As a self-described ‘true Southern man’ — and reluctant recipient of food stamps — Dustin Rigsby, a struggling mechanic, hunts deer, dove and squirrel to help feed his family. He shops for grocery bargains, cooks budget-stretching stews and limits himself to one meal a day.

“Tarnisha Adams, who left her job skinning hogs at a slaughterhouse when she became ill with cancer, gets $352 a month in food stamps for herself and three college-age boys. She buys discount meat and canned vegetables, cheaper than fresh. Like Mr. Rigsby, she eats once a day — ‘if I eat,’ she said.

“When Congress officially returns to Washington next week, the diets of families like the Rigsbys and the Adamses will be caught up in a debate over deficit reduction. Republicans, alarmed by a rise in food stamp enrollment, are pushing to revamp and scale down the program. Democrats are resisting the cuts.

No matter what Congress decides, benefits will be reduced in November, when a provision in the 2009 stimulus bill expires.”

The Times article noted that, “Surrounded by corn and soybean farms — including one owned by the local Republican congressman, Representative Stephen Fincher — Dyersburg, about 75 miles north of Memphis, provides an eye-opening view into Washington’s food stamp debate. Mr. Fincher, who was elected in 2010 on a Tea Party wave and collected nearly $3.5 million in farm subsidies from the government from 1999 to 2012, recently voted for a farm bill that omitted food stamps.

“‘The role of citizens, of Christianity, of humanity, is to take care of each other, not for Washington to steal from those in the country and give to others in the country,’ Mr. Fincher, whose office did not respond to interview requests, said after his vote in May. In response to a Democrat who invoked the Bible during the food stamp debate in Congress, Mr. Fincher cited his own biblical phrase. ‘The one who is unwilling to work shall not eat,’ he said.”

Ms. Stolberg also noted that, “In Washington, House Republicans propose cutting $40 billion more in food stamps over the next 10 years by imposing work requirements and eliminating waivers for some able-bodied adults. The cuts would push four million to six million low-income people, including millions of ‘very low-income unemployed parents’ who want to work but cannot find jobs, off the rolls, according to the Center on Budget and Policy Priorities, a left-leaning research organization.

“Even if approved in the House, the cuts would face strong opposition from Democrats in the Senate. But the arguments of [Robert Rector], the Heritage Foundation scholar, are gaining traction with conservatives on Capitol Hill. “I think food stamps have in the Republican mind become the symbol of an out-of-control, means-tested welfare state,” Mr. Rector said.

“Here in Tennessee, Mr. Fincher embraces that view. ‘We have to remember there is not a big printing press in Washington that continually prints money over and over,’ he said in May.”

And more broadly on the political environment surrounding the Farm Bill debate, Mike Allen and Jim VandeHei reported yesterday at Politico that, “Grab a chair: Congress is about to get as fascinating and powerful as it gets.

“In the next two months, the most unpopular institution in America will decide the fates of a president’s power, a military strike, defense contracts, the budget, health-care implementation, the Federal Reserve chairmanship, illegal immigrants, and all of us who would be hit by a debt default.”

The Politico writers noted that, “Based on talking to the smartest members and aides we know, Republicans and Democrats alike feel the Syria resolution would not pass today, even after party leaders endorsed it. Immigration reform looks dead for this year and probably next. They think the chances of defaulting on debt are low, but not as low as many think because conservatives are showing no signs of bending. And they see very little hope of any budget deal that allows for major changes to the sequestration cuts.”

DTN Editor Emeritus Urban C. Lehner indicated at his blog earlier this week that, “Passing a farm bill this month was going to be a squeeze even before the Syria vote came up. In the nine legislative days between September 9 (when legislators return from August recess) and September 30 (when current law expires) Congress has a full plate of tax and spending issues to masticate. Now it must also vote on whether to bomb Syria.”

An interesting front page article in today’s Washington Post by Matea Gold and Lori Montgomery provided a closer look at “Heritage Action for America, the new advocacy arm of the venerable Heritage Foundation,” and indicated that: “The Republican Study Committee, a group of the most conservative House members, recently barred Heritage analysts from its weekly strategy meetings, where they had played a central role for years, according to multiple people familiar with the episode. The move came after noisy disputes over a farm bill and other legislation, which left many lawmakers feeling blindsided by Heritage’s positions.

“‘I pay no attention to Heritage Action,’ said Sen. Tom Coburn (R-Okla.), who has accused the group of ‘destroying the Republican Party’ with its push to strip funding for Obamacare. ‘They’ve become a purely partisan group that never asks anybody’s opinion.’”

The Post article indicated that, “‘They’ve used bully tactics, and they’re going way beyond the scope of promoting conservative ideology,’ [Rep. Renee L. Ellmers (R., N.C.)] said. ‘They are now trying to influence members of Congress through what I consider very threatening actions.’”

In other policy developments, Bill Tomson reported yesterday at Politico that, “The Department of Agriculture paid out $20.3 million more than it should have last year to farmers and other aid recipients, according to a new report released Wednesday by the USDA’s inspector general.

“As members of Congress return from their recess and prepare to head to conference over a 2013 farm bill, establishing policy for farm subsidies among other agriculture-related policies, they confront news that the USDA sent out more money than it should have for subsidies and that other farmer assistance rose by 67 percent in 2012.”

Alexandra Wexler reported yesterday at The Wall Street Journal Online that, “As the U.S. Department of Agriculture scrambles to boost sugar prices and keep processors from defaulting on government loans, one sugar company recently borrowed more.

“The $71.2 million loan, made to American Crystal Sugar Co., a sugar-beet processor in Clay County, Minn., was reported on the USDA’s website Tuesday. The loan represents 20% of the $355 million processors owe by the end of the month. The USDA said it would announce later this week whether any defaults occurred on $41.7 million in outstanding loans that were due at the end of August.”

Meanwhile, Ron Nixon reported in today’s New York Times that, “The Agriculture Department’s plan to change its poultry inspection procedures relied on incomplete and antiquated data, according to a new report by the Government Accountability Office released on Wednesday.”

Tarini Parti and Bill Tomson reported yesterday at Politico that, “A federal poultry inspector could spend three days staring at a chicken and never see a foodborne pathogen.

So the idea that a modernized poultry inspection system that involves faster line speeds and fewer federal inspectors would somehow put the public in any more danger is absurd, says the country’s top meat safety official.

Elisabeth Hagen, undersecretary for food safety at the U.S. Department of Agriculture, sat down for an exclusive interview with POLITICO on Wednesday morning in the wake of a report from the Government Accountability Office that suggests the department should provide more information on the impact of its plans to expand its HACCP-based Improvement Project.”

Yesterday’s article noted that, “Since 1998, the USDA has allowed a certain number of chicken, turkey and hog plants to operate outside of their normal set of rules, using faster line speeds and replacing some federal inspectors with plant employees. In early 2012, USDA proposed expanding the program, setting off a firestorm of reaction from consumer advocates and unions concerned about the safety of poultry workers.

But Hagen said the public is getting the wrong impression of the program.

“‘The proposed rule is bigger than [HIMP],’ Hagen said in making the department’s case for HIMP expansion. ‘And we know that these are things that are tough to get done and the industry understands that these things are important, and they see a lot of incentives in this rule, and I think that’s why they’re supporting some of these tougher consumer protections.’”

In addition, Jeremy Bernfeld indicated yesterday at the Field Notes Blog (Harvest Public Media) that, “The new poultry and hog plant regulations are controversial, but the USDA maintains that they will ultimately reduce the instances of foodborne illnesses. Al Almanza, administrator of the USDA’s Food Safety Inspection Service, stuck to that belief in a written response to the GAO report posted online.

“‘If finalized and implemented broadly, this new inspection system would enable FSIS to better fulfill our food safety mission,’ Almanza wrote. ‘Nothing in the GAO’s report contradicts this basic fact.’”

Also yesterday, Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) noted in a column at Politico (“Protect American food innovation”) that, “It’s obvious why foreign entities would be interested in purchasing American food companies: We’ve created the gold standard for global food production and food safety. So it’s no surprise Chinese food giant Shuanghui International recently announced its desire to buy Smithfield Foods, America’s — and the world’s — largest pork producer. China sees that it is in its strategic interest to obtain American innovation and expertise in food production, both to sell domestically and to potentially boost its exports and grow its agriculture economy.

The question is, are foreign purchases like this one in America’s interests, for our food security, national security, and for our economy? A bipartisan group of members of the U.S. Senate Agriculture Committee is raising this question.”

Chairwoman Stabenow added that, “Shuanghui’s move raises real concerns about foreign competitors acquiring decades of American innovation and food production technology, funded in part by American taxpayers. Over the years, taxpayer-supported research and development has contributed to highly efficient operations that have made American agriculture the best in the world.

“This has driven American exports and job growth. Due in part to these investments, agriculture is one of the only areas where the U.S. has a trade surplus, and the U.S. Department of Agriculture estimates that every $1 billion in exports creates 8,400 American jobs.”

 

Agricultural Economy

Yesterday the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions. Commonly referred to as the “Beige Book,” the report included observations with respect to the U.S. agricultural economy; a summary of this portion of the report has been posted here, at FarmPolicy.com Online.

University of Illinois Agricultural Economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Farm Managers See More Stable Farmland Prices”) that, “Recently, the Illinois Society of Professional Farm Managers and Rural Appraisers conducted a mid-year survey of its membership concerning outlook for farmland price and cash rental markets. After several years of large increases in farmland prices, Illinois Society members expect more stable farmland prices over the next twelve months and five years.”

And with respect to dairy issues, and specifically the increased popularity of Greek yogurt, both National Public Radio (“New York’s Dairy Farmers Squeezed By Greek Yogurt Boom”) and The Wall Street Journal (“The Greek Yogurt Culture War”) this week provided a closer look at economic variables associated with the product.

 

Immigration

Emma Dumain reported yesterday at Roll Call Online that, “Rep. Xavier Becerra has a plan for dealing with two thorny political problems at once this fall: bring down the national deficit by passing an immigration overhaul.”

The Roll Call item noted that, “‘Each issue is looking for some locomotion, and I certainly think any time you can add a trillion dollars of deficit reduction to fiscal negotiations, that’s pretty big,’ Becerra said. ‘And any time you can also give a jump-start to the reluctance of some on the Republican side to move on fixing the economy at the same time, I think that’s gotta help.’

“He also has another tool in his belt: an analysis from the nonpartisan Congressional Budget Office and Joint Committee on Taxation showing that the Senate-passed immigration overhaul bill would reduce the deficit by $158 billion over the next decade.”

Also, Sen. Jeff Sessions (R., Ala.) penned an opinion column yesterday at USA Today Online (“Immigration plan bad for U.S. workers”) where he noted in part that, “Unemployment has crushing human consequences. Yet this is happening is cities and towns all across America. We have a national obligation to help struggling Americans get back to work, earning incomes that can support a family, and ultimately rescue them from reliance on welfare.”

Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Sen. Dianne Feinstein is calling on Immigration and Customs Enforcement (ICE) officials to halt enforcement actions against illegal farm workers and their employers, saying continued prosecutions could cripple the agriculture sector.”

 

CFTC- Commodity Futures Trading Commission

Jamila Trindle reported yesterday at The Wall Street Journal Online that, “The Commodity Futures Trading Commission is closing in on rules designed to make the futures market safer in the wake of implosions at MF Global Holdings Ltd. and Peregrine Financial Group Inc.

“CFTC staff is expected to recommend as early as this week the agency approve a package of rules, including a provision that could require futures brokers to put aside about twice as much collateral that firms currently must hold, according to people familiar with the matter. The Futures Industry Association, a trade group, has estimated the proposal could require brokers or their customers to put aside roughly $100 billion more in collateral. A CFTC spokesman declined to comment.”

Keith Good