FarmPolicy

November 21, 2019

Farm Bill; Budget; Ag Economy; CFTC; and, Immigration

Farm Bill

House Ag Committee Ranking Member Collin Peterson (D., Minn.) and Rep. Kevin Cramer (R., N.D.) were guests yesterday on the Valley News Live (Fargo, N.D.) Point of View television program with Chris Berg.  The conversation focused on the Farm Bill, and in particular nutrition related issues (video replay of the entire program here, the video can also be seen at this link).

In part, Rep. Peterson indicated that, “This is really not about food stamps per se and the Farm Bill per se.  What this is about is an effort by the Heritage Foundation and others that have been going on for twenty, thirty years, until now nobody has listened to them.

They have been trying to split the farm bill from the nutrition bill for years.  This has been something they have tried every time we have done a Farm Bill.  And the reason is not so much to cut SNAP (food stamps), that’s not what they after.  What they are after is, they want to get rid of farm programs.

“So if you are a farmer out there and if you live in the Red River Valley which is dependent on the sugar program, you have to be careful what you do here because if these bills were split, and if it were permanently split so that we never had nutrition together with the farm bill, I can guarantee you the sugar program would not survive in the future.”

(Rep. Peterson audio clip from yesterday’s Point of View program available here (MP3- 1:45)).

Also on yesterday’s program, Rep. Cramer noted that, “I am confident that the bill will get put back together, in fact we are going to pass a rule later this week that allows that to happen and conferees will be named.  And there is no doubt that the bill is going to come back to the House and the Senate, in my mind anyway there is no doubt, that it will come back, put back together and that the savings in the food stamp program is going to be a lot closer to $4 billion than to $40 billion.”

(Rep. Cramer audio clip from the Point of View program available here (MP3- 0:57)).

An update yesterday at the DTN Ag Policy Blog indicated that, “This [Farm Bill] battle is far advanced now, and House leadership could move this week to appoint conferees for the overall bill, once it merges its dual farm and food efforts. And, what is most unusual and may be telling is the majority leader’s role in the final talks. Even as Ag Committee Chair Frank Lucas, R-Okla., continues to suggest confidently that he will have the lead and be able to ‘cut a deal’ on the nutrition issue, it seems increasingly that Cantor will push Lucas into the background in order to ensure that no ‘Lucas deal’ emerges.

This could be important because Lucas probably could work a deal — if he were is permitted to do so. The proposals have been different — the House nutrition bill would reduce spending by nearly $40 billion, twice as much as in Lucas’ House Ag Committee bill and ten times the $4 billion the Senate would cut. By all appearances, the conferees will have a wide range of choices — but perhaps not if Cantor freezes them fast to the $40 billion version.

“The Cantor vs. Lucas speculation includes other features, as well, including much tighter rules that would roll back state waivers that allow able-bodied, childless adults to collect benefits and similar features. Cantor and Lucas also appear to disagree over the House bill’s early expiration date for the nutrition title.”

The DTN update pointed out that, “Observers argue that Cantor knew that no Democrats would support his approach, and that he lacked GOP votes to pass it, so he tightened down authorization to just three years — an effort to permanently split the urban-rural alliance that has been critical to both food stamps and farm programs in the past — a move apparently intended to provide additional leverage in the conference committee by making it appealing to House conservatives.”

In addition, yesterday’s report stated that, “So, increasingly the fate of the farm bill is seen hanging on Supplemental Nutrition Assistance Program details and the efforts of the majority leader. Without a tightened work requirement and its effects on nutrition spending, Cantor would lose perhaps half the bill’s savings. And, the changed expiration date goes a long way toward weakening the traditional farm-bill coalition, long an objective of conservatives.

“Thus, an examination of the high political stakes for conservatives in this battle seems to signal a large, continuing role for Cantor and a diminished one for Lucas — and, increasing odds for a farm bill standoff, and, at best, yet another extension.”

Also, agricultural reporter Christopher Doering tweeted yesterday that, “.‪@johnthune says ‪#foodstamp cuts ‘in $20 bln range’ could be enough to get support in ‪#House and ‪#Senate during ‪#farmbill talks”

Rachel Lerman reported earlier this week at Skagit Publishing (Mount Vernon, Wash.) Online that, “‘The debate on food stamps has moved beyond ideology,’ [Rep. Rick Larsen (D., Wash.)] said. ‘What the House Republicans pushed forward instead was just mean.’”

The article added that, “Rep. Suzan DelBene (D., Wash.)], who recently lived off food stamps herself as a way to highlight what people are going through, said the funding is essential for many people in the district. The cuts would remove 3.8 million people nationawide from food stamps next year.”

And Matt Kelley reported yesterday at Radio Iowa Online that, “Some Iowans are about to lose food stamp benefits because a federal waiver tied to the recession will soon expire. Iowa’s unemployment rate has improved, so starting October 1st, the state will again require able-bodied adults without kids to hold down jobs to qualify for food stamps.

Wendy Rickman, the administrator of the program for the Iowa Department of Human Services, says the waiver was a good thing while so many Iowans were jobless. ‘The idea that we would have that expectation of not allowing food assistance for folks who weren’t getting work just didn’t make sense, but again most states, because of their high unemployment, are still able to operate under that waiver,’ Rickman says, adding, ‘Iowa is not.’

“The government is waiving the work requirement for more than 6,000 Iowans and Rickman says she’s concerned some who still can’t find work will continue to need food assistance.”

The update pointed out that, “The U.S. House last week passed a bill eliminating the work requirement waivers in the future, regardless of the nation’s unemployment rate.”

 

Budget

Philip Brasher and Ellyn Ferguson reported yesterday at Roll Call Online that, “One thing’s certain on Oct. 1: Congress will have allowed the nine-month extension of the 2008 farm bill to expire.

“Added to that, in a sort of one-two punch, the Agriculture Department could be faced with shutting down operations that same day, should Congress fail to reach agreement on a stopgap spending bill. USDA officials were tight-lipped Tuesday about any contingency plans, although one key Democratic senator voiced concerns about the impact on the agency.

“‘No doubt it is going to hurt a lot of their efforts to continue to have a vibrant agriculture economy here in this country. I hope we don’t get there, but it looks as though we are headed in that direction,’ said Sen. Mark Pryor of Arkansas, the chairman of the Senate Agriculture Appropriations Subcommittee.”

The Roll Call article noted that, “However, Nebraska Republican Sen. Mike Johanns, who was Agriculture secretary under President George W. Bush, said he was not worried yet about the department. Mississippi Sen. Thad Cochran, an appropriator and ranking Republican on the Senate Agriculture Committee, also said he had no immediate concerns. Cochran said he trusted agriculture officials would take steps to ‘cause the least amount of pain and confusion.’”

For more background on these issues, see, “Everything you need to know about how a government shutdown works,” by Brad Plumer, which was posted this week at the WonkBlog (Washington Post).

Lori Montgomery and Juliet Eilperin reported on the front page of today’s Washington Post that, “With federal agencies set to close their doors in five days, House Republicans began exploring a potential detour on the path to a shutdown: shifting the fight over President Obama’s health-care law to a separate bill that would raise the nation’s debt limit.

If it works, the strategy could clear the way for the House to approve a simple measure to keep the government open into the new fiscal year, which will begin Tuesday, without hotly contested provisions to defund the Affordable Care Act.

But it would set the stage for an even more nerve-racking deadline on Oct. 17, with conservatives using the threat of the nation’s first default on its debt to force the president to accept a one-year delay of the health-care law’s mandates, taxes and benefits.”

The article added that, “GOP leaders met for nearly 90 minutes Wednesday afternoon to discuss the strategy, which they plan to present to rank-and-file lawmakers Thursday morning. If it wins approval, the leaders hope to introduce the debt-limit bill Thursday and hold a vote as soon as Saturday — letting GOP lawmakers mount a fresh assault on the health-care law before deciding whether to shut down the government.

The debt-limit bill will be loaded with dozens of other conservative priorities, including the approval of the Keystone XL oil pipeline and the abolition of the new Consumer Financial Protection Bureau.

“Rep. Steve Southerland (Fla.), who attended the meeting on behalf of the massive class of GOP lawmakers elected in 2010, sidestepped questions about whether conservatives would be willing to trade the leverage of a government shutdown for the leverage of a default.”

Damian Paletta and Kristina Peterson reported on the front page of today’s Wall Street Journal that, “Lawmakers on Wednesday cast about for options to keep the government funded beyond Oct. 1, a separate deadline that is offering a taste of what a debt-ceiling fight might look like later in October. Democrats and Republicans remain far apart on how to avoid a government shutdown, with no path to a deal in sight.

Unlike the previous budget battles that have consumed the federal government since 2011, there appear to be no back-room negotiations aimed at crafting a comprehensive deal that might offer a respite, or even a small deal to get past the looming deadlines.”

Meredith Shiner and Emma Dumain reported yesterday evening at Roll Call Online that, “House Republican leaders are now in full flinging-spaghetti-at-the-wall mode as they float ideas for a spending bill that could win over enough of their rank and file to prevent a government shutdown.

“Since sending the Senate a short-term continuing resolution and full defunding of the Affordable Care Act, the GOP has leaked an array of ideas, from a one-year delay of the health care law as part of an amended stopgap bill to ending health subsidies for lawmakers and staff to, most recently, as reported by the conservative National Review, a one-week stopgap measure to buy time.

“But at this point, the differences between Republicans in both chambers are almost as numerous as the potential solutions being proposed and the outcomes they would achieve. Aides in both parties and chambers concede that once the Senate sends a bill to the House, the House will send something else back. The billion-dollar questions now are when that all happens and what that next House GOP product looks like.”

The Wall Street Journal editorial board indicated today that, “An offer to ease the sequester has a far better chance to win entitlement reforms worth the name, perhaps including a delay in some or all of ObamaCare, than does a government shutdown that Mr. Obama would welcome so he can blame Republicans one more time.”

While the editorial board at The New York Times noted today that, “The budget crisis manufactured by Congressional Republicans will never succeed at halting health care reform, but it has already caused long-lasting harm. It will preserve the deeply damaging spending cuts, known as the sequester, that are costing jobs and hurting the lives of millions.”

 

Agricultural Economy

The USDA’s Economic Research Service (ERS) indicated yesterday that, “The Consumer Price Index (CPI) for all food increased 0.2 percent from July to August, increased 0.1 percent from June to July, and is now 1.4 percent above the August 2012 level.”

A separate update at the ERS Chart of the Day webpage stated that, “Most farmers receive off-farm income, but small-scale operators depend on it [chart].  Median total household income among all farm households ($57,050) exceeded the median for all U.S. households ($50,054) in 2011. More than half of U.S. farms are very small, with annual sales under $10,000; the households operating these farms typically draw all of their income from off-farm sources. Median household income and income from farming increase with farm size, as defined by sales. The typical household operating the largest commercial farms earned about $380,000 in 2011, and most of that came from farming. This chart is found in the chart collection, Ag and Food Statistics: Charting the Essentials, on the ERS website, updated September 2013.”

Bloomberg writer Raymond Colitt reported yesterday that, “Atop a mountain plateau in Brazil’s northeastern Piaui state, Luciano Curioni inspects shriveled corn cobs as dust whirls across his rattlesnake-infested farm that has no water, power or a phone.

Farmers like Curioni are testing the limits of climate and technology, pushing the country’s agricultural frontier into increasingly inhospitable regions, as the world’s fourth-largest farm exporter runs out of arable land. Companies providing solutions, such as Deere & Co., Monsanto Co., and Bayer AG, stand to gain.

Unable to afford acreage in the productive western grain belt where his family has farmed for decades, Curioni invested 3.5 million reais ($1.6 million) two years ago to clear 2,000 hectares (4,940 acres), the equivalent of 2,801 football fields, of virgin savanna near the town of Bom Jesus. A drought this year left him owing 1.3 million reais and nearly drove him into bankruptcy.”

The article noted that, “Driven by rising global food demand, stricter environmental laws and expansion of protected areas, arable land prices have risen as much as sevenfold in some regions over the past decade.

That’s more than four times the return of shares in Petroleo Brasileiro SA, the country’s largest company by market value. The United Nations’ Food Price Index, which is made up of 55 agricultural commodity prices, in August was about double its level a decade ago.”

In news regarding trade issues, a news release yesterday from the National Chicken Council stated that, “United States Trade Representative (USTR) Michael Froman announced that today the World Trade Organization (WTO) adopted an August 2, 2013 dispute settlement panel report in favor of the United States in a major trade dispute with China, proving that China’s imposition of duties on U.S. chicken ‘broiler’ products violates international trade rules. With the report now formally adopted by the WTO Dispute Settlement Body, China must bring itself into compliance with its WTO obligations. In 2009 – the year before China imposed the duties – the United States exported over 613,000 metric tons of broiler meat to China. Exports fell almost 90 percent after the imposition of the duties, according to a USTR press release.”

Also, a news update yesterday from the National Cattlemen’s Beef Association stated in part that, “An alliance of cattlemen representing Australia, Canada, New Zealand and the United States recently signed a letter, announcing their support for a comprehensive Trans-Pacific Partnership (TPP) agreement.”

And AP writer Mary Clare Jalonick reported yesterday that, “The United States and Japan have agreed to make it easier to import each other’s organic products.

“The Agriculture Department is planning to announce Thursday that organic products certified in Japan or in the United States may be sold as organic in either country. The agreement will allow producers to sell in both countries without going through the lengthy process of getting certified twice.”

On the issue of biofuels, a news item yesterday from Iowa GOP Senator Charles Grassley stated that, “[Grassley] is pressing the Environmental Protection Agency (EPA) to increase the transparency of the Renewable Identification Number (RIN) market and provide assurances that the market is functioning for its intended purpose, rather than acting as a profit mechanism for Wall Street banks and other financial institutions.

In a letter to EPA Administrator Gina McCarthy, Grassley wrote, ‘I’m concerned about recent reports of manipulation or exploitation of the RIN market by non-obligated parties, including financial institutions.  Allegations that the opaqueness of this market is leading to abuse and exploitation by individuals or firms simply to generate profits at the expense of refiners, other obligated parties, and perhaps consumers is troubling.’”

Meanwhile, University of Illinois Agricultural Economist Scott Irwin penned an update yesterday at the farmdoc daily blog titled, “Biodiesel Supply Response to Production Profits.”

 

CFTC- Commodity Futures Trading Commission

Gina Chon reported yesterday at The Financial Times Online that, “A bipartisan group of US Congressmen sent a letter on Wednesday to the Commodity Futures Trading Commission to express concerns that farmers will face increasing costs as part of customer protection rules that the agency is finalising.

“The pressure on the CFTC comes as the legislation authorising the agency expires at the end of September, meaning a bill to renew its legal status is due for consideration.

“As part of hearings on that legislation, the CFTC has been criticised by House Republicans for overreaching in its rule making, and the Congress could include language that would curb some of the agency’s efforts in the reauthorisation bill.”

 

Immigration

Seung Min Kim reported yesterday at Politico that, “The new House Democratic strategy on reviving immigration reform in Congress is already being questioned by some of its own members.

“That was on display during a party meeting Wednesday night, when at least two House Democrats voiced concerns about the new approach on immigration that was made public earlier this week, according to several sources inside the room.

“One vocal lawmaker was Illinois Rep. Luis Gutierrez, who — according to multiple sources — questioned why House Democrats were giving up on fighting for immigration visas based on diversity and family reunification. That’s a key Democratic position, particularly for minority lawmakers.”

Yesterday’s article noted that, “With immigration reform on Capitol Hill seemingly dormant now, key House Democrats have pieced together a plan to release a bill in the coming weeks that could garner support not only from their caucus but also several House Republicans who have indicated they could support some kind of reform.”

Also yesterday, House Judiciary Committee Chairman Bob Goodlatte (R., Va.) tweeted that, “.‪@HouseJudiciary is working on ‪#stepbystep approach to ‪#immigration reform. 1st priority: strengthen border security & interior enforcement.”

Keith Good

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