FarmPolicy

October 2, 2014

Farm Bill; Budget; Ag Economy; Biofuels; and, EPA

Farm Bill- Policy Issues

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Agriculture Secretary Tom Vilsack stressed Tuesday that the Obama administration opposes another extension of the 2008 farm bill even though time is running short as the latest extension ends Sept. 30.

“‘An extension is not the answer, and I will tell you we are very much opposed to the idea of an extension and so is the Senate,’ Vilsack said in a conference call with reporters. ‘That’s just not going to happen.’”

Mr. Clayton explained that, “The House of Representatives could hold a floor debate as early as next week on a bill that would cut nutrition programs by as much as $40 billion over 10 years. The cuts to the Supplemental Nutrition Assistance Program are 10 times the level passed in the Senate earlier this year. The administration also opposes the House SNAP proposal and is lobbying for its defeat. Vilsack called the SNAP vote a ‘foil’ for an argument over government entitlement programs.

“‘I sincerely hope it gets defeated and I sincerely hope that regardless of the outcome of that vote, that the House then gets serious about getting this farm bill done,’ he said. ‘To do that, they have got to get conferees appointed.’

“The Senate has been prepared to move to conference. Not so in the House. In fact, House members have indicated there is no likelihood of House leaders appointing conferees for the farm bill until after Oct. 1.”

The DTN article added that, “An extension rewards past failures and ‘creates great risk,’ Vilsack said. One concern would be if Congress were to eliminate the $4.8 billion annual direct payments in an extension without allowing at least some of those funds to be shifted elsewhere. That would translate into significantly steeper farm-program cuts than under either the Senate or House versions of the farm bill.”

David Rogers reported yesterday at Politico that, “The secretary stopped short of raising a veto threat — instead just seeming to add an extra ‘very’ or two to his sentences. But from his own conversations with Vilsack, Minnesota Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee, said a veto strategy is in play.

“‘If there is an extension, they [the Obama administration] are going to veto it,’ Peterson told POLITICO. ‘Because they believe that’s the only way they can force us to do a bill.’

“Peterson, who helped steer the last successful farm bill through Congress in 2008, is clearly pessimistic at this stage.”

The Politico article noted that, “‘They are not doing what needs to be done to get the bill done,’ Peterson said of the House Republican leadership. ‘Maybe this will change, but I am worried at this point.’

“‘It looks like to me you are going to end up with a bill that can pass the Senate and not the House, or a bill that can pass the House and not the Senate.’

“‘I don’t see a bill that can pass both of them at this point. That’s where we need to get.’”

The USDA also released a short video yesterday that included additional perspective on the dearth of Congressional legislative action from Sec. Vilsack.

Meanwhile, an update posted on Monday at the Heritage Foundation Online (“An Extension Is the Only Way to Properly Reform the Farm Bill”) stated that, “An extension would give Members of Congress the time to identify the best ways to keep the food stamp program and farm programs separated from each other…[S]eparation is a prerequisite for reform.”

An update yesterday at the DTN Ag Policy Blog pointed out that, “Effectively, the big stumbling block for the farm bill will be coming to terms on nutrition cuts. [Iowa GOP Sen. Chuck Grassley] noted those cuts will be somewhere between the $4 billion voted on in the Senate and the $40 billion proposed by the House. ‘So you have to find a compromise between $4 billion and some other number coming out of the House,’ he said.

“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., was forceful in stressing Monday in Washington that there will not be another extension. Grassley said that would leave on option open. ‘If you do nothing then the law of the land is the 1949 farm bill.’”

In other policy news, Sec. Vilsack penned an update yesterday at The White House Online, noting in part that, “Since the White House Rural Council was formed in 2009, our members from across the Federal government have taken a renewed look at many critical programs and services that impact rural residents, with an overarching goal to ensure that Federal agencies are collaborating to achieve the greatest possible benefit in rural America.

“Today, I hosted a meeting of the White House Rural Council where we continued our focus on shared efforts to better serve rural America – from conservation, to veterans’ services, to rural development, to support for American agriculture and more.

“Today’s meeting included a special focus on expanding rural access to health care.  Rural Americans face unique barriers with regard to health care services, and new investments in medical facilities, expanded information technology and stronger veterans’ health care services can help meet these challenges.”

And Keith Laing reported yesterday at The Hill’s Transportation Blog that, “Republican leaders in the House are planning to unveil their version of a bill to reauthorize federal waterways funding on Wednesday, lawmakers in the lower chamber announced on Tuesday.

“House Transportation and Infrastructure Committee Chairman Rep. Bill Shuster (R-Pa.) will release the House’s version new Water Resources and Reform Development Act (WRRDA) as Congress attempts to pass a water bill for the first time in six years.”

 

Budget

Lori Montgomery reported in today’s Washington Post that, “House Republican leaders unveiled a plan Tuesday to keep the government open past Sept. 30, but were scrambling to build support within their own ranks after conservatives savaged the proposal for failing to defund President Obama’s health initiative.

“The plan, as presented to the party’s rank and file in a closed-door meeting Tuesday morning, calls for the government to be funded at current levels through Dec. 15, continuing the sharp budget cuts known as the sequester.

“It would also include a resolution to defund the Affordable Care Act, commonly known as Obamacare. But the Democrat-controlled Senate could vote that down and send the underlying budget bill on to the White House for Obama’s signature, avoiding a government shutdown when the new fiscal year begins Oct. 1.”

Mike Lillis reported yesterday at The Hill’s On the Money Blog that, “House Minority Whip Steny Hoyer (D-Md.) vowed Tuesday to oppose any temporary spending bills that include the sequester cuts.”

The Hill update noted that, “The warning came on the same day that House GOP leaders floated a stopgap proposal that would prevent a government shutdown by extending current spending levels – including the sequester cuts – into December. Without congressional action, the government would run out of funding on Oct. 1.

The Republicans bill is expected to hit the floor as early as Thursday.”

Emma Dumain and Meredith Shiner reported yesterday at Roll Call Online that, “All four congressional leaders — Speaker John A. Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell — are scheduled to meet Thursday to discuss the fiscal challenges ahead.

“The closed-door meeting, to be held at 10 a.m. in Boehner’s leadership suite, will be the first time the leaders have sat down together to discuss fiscal issues since last spring when they discussed sequester cuts with President Barack Obama. The leaders are expected to discuss both the continuing resolution and the debt ceiling.”

And Corey Boles reported in today’s Wall Street Journal that, “Negotiations to boost the nation’s $16.7 trillion borrowing limit could come by mid-October. No final decision has been made about what demands Republicans might make, but a GOP leadership aide said options include asking for a one-year delay in requiring individuals to purchase health insurance or pay a fine. Other possible demands include pressing for administration approval of the contested Keystone XL pipeline or changes to large entitlement programs such as Medicare and Medicaid.

Mr. Obama and Senate Democrats have said they won’t negotiate on the debt ceiling, saying the Treasury needs to be able to borrow to pay for spending already allocated by Congress.”

 

Agricultural Economy

Donnelle Eller and Daniel P. Finney reported on the front page of yesterday’s Des Moines Register that, “Iowa sweated through record temperatures Monday as the hot, dry weather continued to punish Iowa crops.

“Farmers head into harvest season with about two-thirds of the state considered in a moderate drought and a large swath of central Iowa in severe drought, according to the National Drought Monitor.”

The Register article noted that, “A U.S. Department of Agriculture report scheduled for Thursday should provide a glimpse of the drought’s impact on yield in Iowa and the rest of the nation. That, in turn, should illuminate the economic impact of the state’s second consecutive abnormally dry growing season.

“‘Early on, Iowa was the only one struggling. Now, we’re seeing struggles a little more widespread,’ said Chad Hart, an Iowa State University farm economist.

“‘If the drought does broader damage, we would see lower production, which would lead to higher prices,’ Hart said.”

The article added that, “Mark Johnson, an Iowa State University Extension field agronomist, said severe drought has taken a toll on some areas of central and north-central Iowa.

“‘They’re the spots that have been hurting for over two months now,’ Johnson said. ‘There’s getting to be a lot of patches in corn fields that have simply died.’”

A news release yesterday from Purdue University stated that, “Much of Indiana’s once thriving corn crop continues to deteriorate as hot, dry conditions continue their stranglehold on much of the state, a Purdue Extension corn specialist says.

“The combination of dryness and extreme heat during critical weeks for corn kernel weight development is further cutting into yield potential.”

And Bloomberg writer Jeff Wilson reported yesterday that, “Cattle ranchers may ditch plans to expand their herds in Texas, the biggest U.S. beef producer, as an expanding drought damages pastures and water reservoirs drop to record lows, according to Texas A&M University.

“‘We have had more dry years than wet years since 1996, and the cumulative effect has been to reduce the cattle herd,’ David Anderson, an agricultural economist at Texas A&M, said in a telephone interview from College Station, Texas. ‘It all starts with the dry weather and the impact it has on pastures, crop development and keeping livestock watered. Everybody is concerned about the depleted water supply.’”

More broadly, Bloomberg writer Whitney McFerron reported yesterday that, “Farmers in Brazil and Argentina, South America’s biggest corn and soybean growers, face dry weather just as planting is about to begin, Oil World said.

The Bloomberg article indicated that, “Dry weather in Brazil ‘is delaying the start of corn and soybean plantings and jeopardizing satisfactory germination,’ Hamburg-based Oil World said. ‘It is still early in the season, but there is an increasing risk that insufficient soil moisture will result in deteriorated new crop prospects.’

Soybean futures on the Chicago Board of Trade, the global benchmark, climbed 12 percent since the end of July as heat and dryness eroded crops in the U.S., the world’s biggest grower of the oilseed. Brazil is the largest global soybean exporter and Argentina ranks second for corn shipments, after the U.S.”

 

Biofuels

Christopher Doering reported yesterday at The Des Moines Register Online that, “The U.S. Congress should back away from its push to change the country’s controversial renewable energy program, Agriculture Secretary Tom Vilsack told the nation’s largest ethanol trade group on Tuesday.

“The former Iowa governor, speaking to members of Growth Energy in Washington, said the Obama administration will continue to be ‘strong’ in its support of an eight-year old mandate known as the Renewable Fuel Standard that he stressed continues to work; remarks that drew applause from the friendly audience.”

Mr. Doering noted that, “The House Energy and Commerce Committee is working on a bill to change the Renewable Fuel Standard, and House Majority Leader Eric Cantor, R.-Va., said legislation to change the mandate may be included in a package to raise the U.S. debt ceiling.

“‘There is no need for Congress to intervene in this,’ said Vilsack.  ‘There is no need for Congress to try to rewrite this renewable fuels standard. They got it right the first time.’

“Ethanol supporters have said there is enough flexibility within the mandate to allow the Environmental Protection Agency to alter annual blend requirements, a point Vilsack reiterated on Tuesday.”

 

EPA- Environmental Protection Agency

Jenny Hopkins reported yesterday at Politico that, “The Environmental Protection Agency is giving the green light to some pesticides without enough data to prove they are safe, a report for Congress warns.

“In a 52-page report released Monday, the Government Accountability Office raises concerns about EPA’s method of granting conditional approval for new uses of pesticides in advance of receiving full reports from the manufacturers to support the safety of their use. The findings in the report come amid growing concern over the effects of pesticides on humans and the environment, which have been linked to neurological disorders and cancer, among other things.”

And Erica Martinson reported yesterday at Politico that, “A calm yet defiant Lisa Jackson faced her Republican critics Tuesday during a House hearing on government secrecy, while denying yet again that she tried to evade federal record-keeping requirements as the EPA’s administrator during President Barack Obama’s first term.

“In turn, House Oversight and Government Reform Chairman Darrell Issa (R-Calif.) implicitly compared Jackson to disgraced former lobbyist Jack Abramoff. But he also acknowledged that transparency problems at the EPA stretch back at least to the George W. Bush era.”

Keith Good

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