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Farm Bill; Budget; and, the Ag Economy

Farm Bill Issues

Ron Nixon reported yesterday at The New York Times Online that, “House leaders on Tuesday said they were working with their Senate counterparts toward a new five-year farm bill, just days after the House pushed through a bill that would slash billions of dollars from the food stamp program.

“But with only a few days left before the current farm bill expires at the end of the fiscal year, and with a fight over the debt ceiling looming, few lawmakers see any chance of getting a new farm bill done.

“‘I’m an eternal optimist, but I can’t see them getting anything done before the fiscal year ends,’ said Dale Moore, the executive director of public policy for the American Farm Bureau Federation. ‘Right now we’re just hoping that something will get done before the end of the year.’”

The Times article added that, “It remains unclear how the two chambers will deal with the split House farm and nutrition bills. The House is expected to vote — possibly this week — to join the two before sending a full farm bill to the Senate for consideration.”

Mr. Nixon explained that, “Food stamps are financed through an annual appropriations bill, and their funding will continue despite the uncertainty surrounding the farm bill.

“But the coming battle over the debt ceiling and a possible government shutdown does threaten financing for farm and nutrition programs.

“‘At this point, everything is up in the air,’ said Mr. Moore, of the Farm Bureau. ‘Between the debt ceiling fight and all the issues with getting a new farm bill, we just don’t know what’s going to happen.’”

Frank Witsil reported yesterday at The Detroit Free Press Online that, “Michigan farmers, as well as public officials, are anxious as the deadline approaches for Congress to work out and approve a new farm bill.

“‘If you don’t know what’s going to happen it is hard to plan ahead, and that creates a lot of angst in the countryside,’ said Ryan Findlay, the national legislative counsel for the Michigan Farm Bureau. ‘Farmers are saying: Just get it done.’”

Meanwhile, DTN Ag Policy Editor Chris Clayton reported yesterday that, “Payment-limit provisions in the farm-bill conference talks should be non-negotiable, the Senate’s leading advocate said Tuesday.

“Sen. Charles Grassley, R-Iowa, said the payment-limit provisions in the House and Senate are the same, so it shouldn’t be up for negotiation by conferees. The proposals would cap farm commodity payments at $125,000 for an individual or $250,000 per married couple annually. The bills also tighten rules on defining how a farmer is actively engaged in the operation.”

House Ag Committee Member Rodney Davis (R., Il.) spoke about the Farm Bill yesterday with Dave Gentry (WDWS radio- Champaign, Il.) and noted in part that, “What I am being told is that they are going to appoint conferees very, very quickly and hopefully get this conference committee put together and a final Farm Bill out before any impact on the family farmers based on the expiration date of next week.”

The full Farm Bill discussion yesterday with Rep. Davis can be heard here (MP3- 3:49).

O. Kay Henderson reported yesterday at Radio Iowa Online that, “Republican Congressman Steve King predicts congress will pass a new, five-year Farm Bill, but it won’t be before the current one-year extension expires October 1.

“‘Congress is not going to allow this to fall back to the permanent law from 1949. It’s unworkable. It’s unaffordable and nobody wants it,’ King said this morning. ‘That puts pressure on us, though, to reach an agreement. That part of it is a good thing.’

Yesterday’s update indicated that, “‘This is all procedural. I think we get that done this week [merging the farm only Farm Bill with the nutrition measure] and I expect that sometime in about a week the speaker will name the conferees and we will have already gone to work sorting out the differences,’ King said.

“King is a member of the House Ag Committee and the leader of the subcommittee that drafted the proposed $40 billion in cuts to the food stamp program. King is not predicting he’ll be one of the House members appointed to negotiate the final deal with the senate, however.

“‘I’ve sat on the ag committee as long as anybody there with the exception of the current chair and the past chair and so that should be a likely thing, but that’s the discretion of Speaker Boehner,’ King said. ‘I wouldn’t want to make any presumptions and let him put the list out.’”

Also, Jason Noble reported yesterday at the Iowa Politics Blog (Des Moines Register) that, “The House Majority PAC, a political action group that supports Democrats in Congress, has a new web video slamming U.S. Rep. Steve King, R-Iowa, over his vote to cut funding for the Supplemental Nutrition Assistance Program, better known as food stamps.

“The 82-second video keys in on comments from U.S. Rep. Jackie Speier, D-Calif., who noted in a speech on the House floor that King received food and lodging worth $3,588 during a six-day trip to Russia — enough, she said, to feed a food-stamp recipient for a year.”

Mr. Noble indicated that, “In an interview with the Des Moines Register on Tuesday, King rejected the comparison between nutrition assistance and foreign travel costs.

“‘They go a long ways to try to equate things that cannot logically be equated,’ he said.”

Eli Saslow reported on the front page of today’s Washington Post that, “The congressman [Steve Southerland (R., Fla.)] had been called a ‘starvation expert’ by analysts on TV and a ‘monster’ by colleagues in the House of Representatives. Protesters had visited his offices carrying petitions demanding he resign. And now, six months into his crusade to overhaul the food stamp program, Rep. Steve Southerland (R-Fla.) departed the Capitol to address his most wary audience yet: the people whose government benefits he hoped to curtail.

“‘Stick to your talking points this time if you can,’ said a staff member, handing him a sheet of those talking points minutes before they left for the event.

“‘It’s too late to start being cautious,’ Southerland said, folding the paper and leaving it on his desk. It was already late summer, and he hoped to pass the most significant food stamp overhaul in decades by the end of the fiscal year on Sept. 30.”

Mr. Saslow pointed out that, “The event was listed on his schedule as a ‘Poverty Tour,’ and Southerland had invited a dozen Republican policy experts to join him. They boarded a bus provided by the Heritage Foundation, a conservative think tank, and traveled across Washington to a job training center, where three homeless men idled outside. Southerland stood at the front of the bus to address his colleagues. He looked like the funeral director he had been before running for Congress in 2008 – shoes polished, suit pressed, eyes solemn, head bowed as if in prayer. ‘This is an important moment for us,’ he said. If only his tough-love message could resonate with the unemployed, then maybe he could win over a divided Congress.

“‘What we are fighting for is a cultural shift,’ Southerland told his colleagues on the bus. ‘The explosion of food stamps in this country is not just a fiscal issue for me. This is a defining moral issue of our time.’

Southerland’s food stamp proposal, which on Thursday the House narrowly voted to approve, would require able-bodied adults to work or volunteer at least 20 hours each week in order to receive government food assistance. ‘It’s the simple solution,’ he said in March at a news conference introducing the idea. But in the months since, he has learned that no idea is simple in Washington, especially not one that would fundamentally alter a program that has tripled in size during the past decade, growing to support a record 47 million people at a cost of $80 billion each year.”

Today’s article also noted that, “His food stamp proposal was not, in fact, his proposal. It was something that was handed to him by a stroke of political luck. He had wanted to pursue food stamp reform since arriving in Washington, but he lacked authority as a junior lawmaker relegated to subcommittees on fisheries and highway transportation. Instead, the idea for a work requirement came from 17 state human service secretaries who gathered in November to pitch their proposal to Republican members of the House Ways and Means Committee, who forwarded some of those ideas to Majority Leader Eric Cantor (R-Va.), who suggested the human service secretaries work with Southerland because, Cantor said, he was ‘a passionate true believer.’

“‘Absolutely! This is what I’m about,’ Southerland had said, promising to make the proposal his No. 1 priority until it passed.”

In other Farm Bill related news, Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “A coalition of more than 80 organizations is telling Congress to block a House farm bill provision that could overturn state food and agriculture rules.

“Organizations including the Humane Society of the U.S., the Union of Concerned Scientists, Natural Resources Defense Council and Organic Consumers Association want lawmakers to oppose the measure authored by Rep. Steve King (R-Iowa), which they claim would leave Americans vulnerable to unsanitary food and dangerous chemicals.”

The Hill update stated that, “King has supported the measure as a way to prevent states from ‘entering into trade protectionism’ and allowing states to create a ‘patchwork’ of laws ‘aimed at slowly suffocating production agriculture out of existence.’”

For more background on the King Amendment, see this transcript from the House Agriculture Committee Farm Bill mark up in May.

In addition, National Crop Insurance Services (NCIS) released a brief video yesterday titled, “Crop Insurance by the Numbers,” which indicated that, “Over the last decade, overall taxpayer spending on farm policy as a whole has steadily declined. Commodity prices have strengthened and the country has shifted to an insurance system that reduces the need for traditional subsides and limits taxpayer exposure.”

A news release yesterday from NCIS pointed out that, “With crop insurance in place, farmers and private insurance companies now share the risk, ensuring that the entire burden doesn’t fall solely on the laps of taxpayers. Each farmer must pay the premium for their individual policy, and when disaster occurs, the billions paid in premiums by farmers help offset the cost of the insurance. ‘Farmers have paid $30 billion of their own money on crop insurance protection to buy this coverage,’ [NCIS President Tom Zacharias] notes. In addition to the premiums paid by farmers, the government has collected more than $4 billion in underwriting gains from 2001-2010, which helped offset losses in the bad years as well.

Zacharias points out that crop insurers have stood alone in offering up budget reductions in recent years, totaling $12 billion. Unfortunately, some in Congress are angling for more, says Zacharias. ‘The additional cuts they are proposing would result in lower crop insurance participation, ironically shifting risk away from farmers and crop insurance companies right back to taxpayers,’ he said.”

Meanwhile, DTN Editor Emeritus Urban C. Lehner noted yesterday at his blog that, “Uncertainty envelops three of today’s big Congressional debates: funding the government, raising the debt ceiling and passing a farm bill. The farm bill is, alas for farmers, by far the least important of the three, and therefore the most uncertain.

“All three are shrouded in uncertainty in one sense: We don’t know how Congress will resolve them. But with the first two there’s an end point to the uncertainty.”

Mr. Lehner also noted that, “The reversion to 1949 law in the wake of a farm-bill failure would raise milk prices for consumers, but Congress could theoretically solve that problem without touching other farm bill issues.

“As much as most of our elected representatives might prefer to see a farm bill passed, the two sides are so far apart on food stamps and so dug in to their positions that compromise might be unachievable.

Consider: A House-Senate conference bill that made only token cuts might well not pass the full House. Yet Democrats will feel little pressure to make larger ones because food-stamp spending would continue in the absence of a farm bill.”

Also yesterday, David Rogers reported at Politico that, “A controversial legislative rider added by Monsanto to the Agriculture Department budget last spring will no longer be effective after Sept. 30 under a draft stopgap government funding bill being drafted by Senate Democrats.

“The provision touched off a storm last spring as critics accused Monsanto of ‘court-stripping’ to protect its sales of the genetically modified seeds for which the St. Louis-based giant is a pioneer in commercializing.

The continuing resolution approved by the House last week would extend the rider without comment for the first months of the new fiscal year. But the Senate substitute, to be unveiled Wednesday, will explicitly go back and make clear that that Monsanto-backed provision will end this month.”

 

Budget

Siobhan Hughes and Patrick O’Connor reported in today’s Wall Street Journal that, “Senate Democrats Tuesday announced they would support a six-week federal-funding extension—a month shorter than the bill passed by the House—creating another difference that needs to be ironed out to avoid a partial government shutdown.

“Senate Majority Leader Harry Reid (D., Nev.) filed an amendment Tuesday to a bill passed by the House that would continue government services through Nov. 15—earlier than the Dec. 15 date set by the House measure.”

The Journal writers explained that, “Senate Appropriations Committee Chairwoman Barbara Mikulski (D., Md.) said she wanted a shorter-term funding extension because she feared Congress would leave the across-the-board cuts known as the sequester in place for the rest of the fiscal year.

“A full-year status-quo funding bill would mean ‘we’re on autopilot and you’ve accepted the sequester as the new normal,’ said Ms. Mikulski. ‘I reject both.’ She said her goal is to cancel the sequester cuts for two years.”

Jake Sherman and John Bresnahan reported yesterday at Politico that, “The House Republican leadership is seriously considering attaching a one-year delay of Obamacare’s individual mandate to the Senate bill to avert a government shutdown, according to senior GOP aides.

“If House Republicans decide to go this route, it would all but provoke a government shutdown, since Senate Democrats might not even schedule a vote on a bill that includes that provision, Senate leadership staffers say. Even if the Senate schedules a vote, there might not be time to move the legislation through the slow-moving chamber.

“The House Republican leadership is planning its next move as it becomes abundantly clear that Texas Sen. Ted Cruz’s gambit to defund Obamacare will fall short. The federal government is set to shut down Tuesday unless a new funding bill is enacted, and the Senate might not even send a bill to the House until Sunday — leaving a hot potato on Speaker John Boehner’s lap shortly before a government shutdown. The Senate bill will fund the government through Nov. 15.”

 

Agricultural Economy: Trade, Renewable Fuels- CFTC

James Politi and Shawn Donnan reported yesterday at The Financial Times Online that, “A bipartisan majority of the US Senate demanded that US President Barack Obama address ‘currency manipulation’ in trade negotiations with 12 Pacific nations, throwing up a potential roadblock as the talks approach their final stages.

“On Tuesday, a group of 60 senators out of 100, including both Democrats and Republicans, sent a letter to Mike Froman, the US trade representative, and Jack Lew, the Treasury secretary, asking them to fight for currency measures in the so-called Transpacific Partnership and ‘future trade agreements.’”

More broadly, Ambassador Froman discussed “the Obama administration’s push to open markets in Asia-Pacific and elsewhere” in a video interview yesterday with The Wall Street Journal.

In other trade related news, Ben Goad reported yesterday at The Hill’s RegWatch blog that, “Meat and livestock trade groups from across North America are appealing a federal court decision that upheld Obama administration regulations requiring labels on cuts of meat that say where the animals were born, raised and slaughtered.

“The groups on Tuesday filed their first brief in support of the appeal with the D.C. Circuit court of Appeals, less than two weeks after a judge for the U.S. District Court for the District of Columbia blocked their bid for an injunction blocking the contentious rule.”

And AP writer Michael Felberbaum reported yesterday that, “Shareholders of Smithfield Foods Inc. on Tuesday approved a plan to sell the world’s largest pork producer and processor to a Chinese company.”

Also yesterday, a video presentation from the Washington Post On Background program noted that, “The USDA quietly approved cooked chicken imports from China last month, raising concerns with some food safety groups and on Capitol Hill. Chris Waldrop of the Consumer Federation of America weighs in on the debate.”

Meanwhile, a news release from the Senate Ag Committee indicated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today called on the Commodity Futures Trading Commission to review recent allegations about possible manipulation of the markets for Renewable Identification Numbers (RINs) – the tracking mechanism to ensure petroleum blenders and refiners meet their requirements under the Renewable Fuels Standard. Stabenow called on the CFTC, which is tasked with overseeing markets for commodity futures, options and swaps, to use its expertise and authority to help preserve the integrity of the RINs market.”

Keith Good