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Farm Bill; Budget; Ag Economy; and, Immigration

Farm Bill- Policy Issues

David Rogers reported yesterday at Politico that, “When the farm bill conference meets Wednesday afternoon, it will be on a grand stage: the gilded Ways and Means Committee meeting room in Longworth with its sculpted eagles and history of past bargains.

“The challenge for negotiators is to think as big and bold.

“The Agriculture Committees argue—somewhat defensively— that they have already taken major steps. Both bills end the current system of direct cash payments to producers—costing about $4.5 billion annually. At the same time, organic and specialty crops gain modest ground. Much tighter payment limits are imposed on future subsidies. More of an effort is made to help only producers who have put seed in the ground, put themselves at risk and experienced a loss.”

Mr. Rogers noted that, “What that ‘loss’ entails is still debated. The Senate’s ‘shallow loss’ revenue protection program could end up distributing taxpayer funds to corn and soybean producers who are already making a profit. At the same time, critics would say the House goes off the deep end with a heavily subsidized supplemental coverage option— with only a 10 percent deductible.

The next few days could be pivotal as the Senate responds to new options outlined by the House. Time is running short, and given the erratic legislative schedule this fall, neither side can afford to allow matters to drift.

“Most importantly, perhaps, the hide-bound commodity lobbies are under pressure to show more flexibility themselves. Fair or unfair, the disconnect surrounding the farm bill is real. And farm-bill advocates admit that new approaches are needed to expand their base of support in Congress.”

The lengthy and broad-based Politico article also indicated that, “‘The farm bill and the American consumer, it’s kind of like a bunch of high school kids,’ [House Ag Committee Chairman Frank Lucas (R., Okla.)] told POLITICO. ‘As long as the car’s out front, it’s full of gas, the insurance is paid, and you have the keys, the kids take it for granted.’

“‘I think my colleagues and the folks out in the countryside take it for granted that agriculture is always going to be there, it’s going to work. That said, somebody has to put gas in that car. Somebody has to buy that insurance. Somebody has to pass a farm bill. Somebody has to create a safety net.’

“‘We may not get the respect but nonetheless we’re still the defense between every consumer on this planet and hunger.’”

Meanwhile, Rep. Rodney Davis (R., Il.) discussed Farm Bill issues yesterday in an interview on WDWS radio (Champaign, Il.).  Rep. Davis is serving on the Farm Bill conference committee; a portion of his remarks from yesterday’s discussion can be heard here (MP3- 2:30).

In part, Rep. Davis noted that, “I think we in this country have a decision to make.  We can either pass a Farm Bill and create a long-term plan and give our agricultural producers and our family farmers the certainty they need; or, we can just get out of the farm program and become a food importer rather than a food exporter…”

Also, Nathaniel Shuda reported this week at the Wisconsin Rapids Tribune Online that, “In preparation for talks next week on the federal farm bill, Wisconsin’s junior senator made a stop Wednesday in south Wood County to learn more about the state’s largest fruit crop.

“U.S. Sen. Tammy Baldwin toured Fanning Cranberry Co. in Seneca, where she got the chance to experience firsthand what industry leaders are saying is one of the largest fall crops on record, followed by a tour of the Ocean Spray Cranberries processing plant in Wisconsin Rapids. It was Baldwin’s first publicized visit to the Wisconsin Rapids area since being elected last year to succeed retiring Sen. Herb Kohl.”

A news release yesterday from Sen. Kay Hagan (D., N.C.) stated that, “[Sen. Hagain] is leading a bipartisan group of 12 Senators in urging the Senate Agriculture Committee to include a provision in the 2013 Farm Bill that eliminates a duplicative Environmental Protection Agency (EPA) regulation on pesticides. A copy of the letter to Agriculture Committee Chair Debbie Stabenow and Ranking Member Cochran is available here.

“‘This redundant regulation creates unnecessary liability and paperwork burdens on farmers, state and local governments, public health officials and small businesses,’ Hagan said. ‘This is not about whether pesticides should be regulated, but rather it is about eliminating an unnecessary and duplicative regulation that wastes taxpayer dollars and provides little to no environmental or public health benefits. Agriculture is our state’s largest industry, and we need to be breaking down barriers that keep farmers from growing jobs, not adding more paperwork. I am hopeful that Agriculture Committee leaders in both the Senate and the House will remove this burdensome requirement in the final 2013 Farm Bill.’”

Andrea J. Cook reported yesterday at the Rapid City Journal (S.D.) Online that, “Three weeks after a blizzard killed thousands of cattle in western South Dakota, nearly 50 ranchers told Sen. John Thune about the problems confronting them while asking about the farm bill’s future at a Wednesday meeting in Hermosa.”

The article noted that, “Several ranchers encouraged Thune to support an increase the $100,000 payment cap for the Livestock Indemnity Program because their losses will far exceed that cap.”

And Dave Gallagher reported recently at The News Tribune (Tacoma, Wash.) Online that, “As Congress gets back to the business of passing legislation, several local farmers are hopeful that a proposed farm bill is one that will offer a long-term solution for research in specialty crops.

“U.S. Sen. Maria Cantwell, D-Wash., toured BelleWood Acres on Tuesday, Oct. 23, an event that included a discussion about the farm bill and about specialty crop research. The bill expired Sept. 30 and Cantwell said a new bill needs to be passed by the end of the year to ensure that block grants for specialty crops are not put in jeopardy.”

With respect to the executive branch, in remarks delivered yesterday at the Center for American Progress, Treasury Secretary Jack Lew indicated that, “As we move forward, we should make a pro-jobs, pro-growth agenda our focus. And we can advance this agenda by taking bipartisan action to replace sequestration, fix our broken immigration system, and pass a farm bill.”

Sec. Lew added that, “Another bipartisan bill that can strengthen our economy is the farm bill. Bipartisan legislation that has already passed the Senate is designed to protect America’s farmers and ranchers and provide a safety net for America’s most vulnerable children. The farm bill conferees have an opportunity to work together to develop a bipartisan package that promotes economic growth and job creation while protecting the most vulnerable. It is time to get a bipartisan farm bill signed into law.”

Also yesterday at a news briefing, White House Press Secretary Jay Carney indicated that, “We’re focused on, you know, making progress with Congress and addressing the very important issues that the American people care about and want us to address here in Washington, including growing the economy, creating jobs, passing comprehensive immigration reform, passing a farm bill which is so vitally important to rural areas of this country. That’s what we’re working on.”

A news release yesterday from the National Council of Farmer Cooperatives (NCFC) noted yesterday that, “The [NCFC] today sent a letter to the leaders of the House and Senate conference committee on the farm bill outlining the top recommendations of America’s farmer-owned businesses in the legislation.

“‘Of primary importance, the farm bill must preserve the long-standing rural-urban alliance that reinforces the fact that food security, investment in rural America and a safety net for those in need are priorities benefitting the entire nation,’ the letter states.”

A recent update at the National Association of Wheat Growers (NAWG) Online stated that, “NAWG wrote House and Senate agriculture leaders and farm bill conferees this week to stress wheat growers’ priorities going into the official conference process. The letter urged conferees to maintain a strong federal crop insurance system and explicitly opposed provisions in the Senate-passed bill to link conservation compliance requirements or apply means testing to the insurance program. NAWG supports establishing farm-level protection within Title I and urged committee members to ensure that any reference price does not distort the market or impact planting decisions.”

An update yesterday at the National Sustainable Agriculture Coalition Blog stated that, “As House and Senate farm bill conferees prepare for their first official public meeting next Wednesday, a group of bipartisan Representatives and Senators delivered two ‘Dear Colleague’ letters to House [letter here] and Senate leadership [letter here] earlier today.

“Thanks to the leadership of Representatives Jeff Fortenberry (R-NE), Chris Gibson (R-NY), and Chris Collins (R-NY) in the House and Senator Al Franken (D-MN) in the Senate, dozens of members of Congress have joined together to call for a farm bill that invests in the next generation of farmers and breaks down barriers that many new farmers face when starting out.”

In developments on the crop insurance program, a news release yesterday from USDA’s Risk Management Agency (RMA) stated that, “Agriculture Secretary Vilsack today announced that the [USDA’s] Risk Management Agency will support crop insurance education and outreach in 45 states to ensure that small and underserved producers get the information they need to effectively manage risk and ensure their businesses are productive and competitive. Cooperative agreements totaling nearly $10 million from two RMA programs— The Targeted States Program and The Risk Management Education Partnership Program—will support thousands of American farmers, ranchers, and producers during a successful yet challenging period for American agriculture.”

In more specific Farm Bill program developments, Alexandra Wexler reported yesterday at The Wall Street Journal Online that, “U.S. sugar processors defaulted on more than half of the outstanding federal loans that came due at the end of last month, the U.S. Department of Agriculture said Thursday.

“The defaults bring the total cost of the U.S. sugar program, a complex collection of loans and import restrictions that guarantee a minimum price to processors, to about $325.2 million this year, including defaults on loans that came due in August.”

Ms. Wexler noted that, “Good weather and a surge in Mexican imports have boosted domestic sugar supplies this season, weighing on prices, which have tumbled about 50% over the last two years.”

Also this week, the Dallas Morning News editorial board indicated that, “It’s the food stamps piece that has gummed things up. The House voted last month to cut $40 billion over 10 years from food stamp spending. The Senate prefers a $4.5 billion reduction over the next decade.

The Senate has it right. Undoubtedly, there are ways to wrangle savings out of the food stamp budget, which has doubled since the economy tanked in 2007. The number of recipients has jumped from 26 million in 2007 to 47 million in 2012.

“But taking $40 billion out of food stamps, known as the Supplemental Nutrition Assistance Program, would hammer deserving families. The Congressional Budget Office reports that most beneficiaries are children, the disabled or those over 60 years of age.”

An update yesterday at the USDA’s Economic Research Service Chart Gallery webpage stated that, “Children accounted for 45 percent of SNAP participants in 2011.”

In other policy related news, Bloomberg writer Alison Vekshin reported yesterday that, “Monsanto Co. and DuPont Co., among the biggest makers of bioengineered crop seeds, are persuading Washington state voters to change their minds about a proposal to require labels on genetically modified food.

“The companies are backing an anti-labeling campaign with $18.1 million — twice that of advocates for a ballot measure next month. The labeling proposal had a 45 percentage-point lead among registered voters five weeks ago that has narrowed to 4 points since opponents began advertising, the independent Elway Poll showed Oct. 21.”



Kevin Cirilli reported yesterday at Politico that, “Treasury Secretary Jack Lew said on Thursday that Congress should replace the across-the-board spending cuts known as sequestration with ‘commonsense’ spending reductions while a broader budget deal is considered.

“Lew said sequestration is weighing on the economy and needs to be addressed.”

And David Rogers reported yesterday at Politico that, “House Budget Committee Chairman Paul Ryan said Thursday he is encouraged by his early talks with Senate Democrats and hopes the two parties can skip past ‘grand bargains’ and focus on ‘achievable’ goals such as substituting entitlement reforms for sequestration cuts this winter.”


Agricultural Economy

Fred Gale indicated in recent update at the USDA’s Economic Research Service Amber Waves webpage (“U.S. Exports Surge as China Supports Agricultural Prices”) that, “U.S. farmers have been major beneficiaries of a Chinese agricultural import boom that coincided with the growth in Chinese agricultural support. China is now the leading destination for U.S. agricultural exports (up from seventh in the early 2000s). U.S. agricultural exports to China totaled $5 billion in 2003—the year before China began its direct subsidy payments. By 2012, U.S. sales of agricultural commodities to China had risen more than fivefold to nearly $26 billion per year. China now accounts for 18 percent of U.S. agricultural export sales, up from 8 to 9 percent during 2003-07” [see related graph].

And a recent update from University of Nebraska Extension pointed out that, “Concomitant with China’s phenomenal economic growth is the livestock revolution, a demand-driven increase in meat consumption worldwide. Until the mid- nineties, the amount of meat consumed in developing countries grew three times as fast as compared to developed countries, lending support to Bennett’s Law (Pinstrup-Andersen, Pandya-Lorch and Rosegrant, 1999). Bennett’s Law states that if a country is developing, household income rises, and therefore consumption of starchy staples decreases. Conversely, there is an increase in the consumption of animal-products such as dairy or meat” [see related graph].

In a more detailed article trade issues, Doug Palmer reported yesterday at Politico that, “President Barack Obama was often criticized in his first term for moving too slowly on trade, but now his chief negotiator is pressing Congress to pick up the pace as the White House pushes to conclude a landmark trade deal in the Asia-Pacific by the end of the year.

“‘We think it would be good to get TPA [trade promotion authority] as soon as possible with as broad bipartisan support as possible,’ U.S. Trade Representative Michael Froman told POLITICO in an exclusive interview this week.

“That legislation, also known as ‘fast track,’ would allow Obama to submit trade agreements to Congress for straight up-and-down votes without any amendments, giving other countries confidence that any deal they reach with the White House wouldn’t be picked apart by U.S. lawmakers unhappy with one provision or another.”

Meanwhile, University of Illinois Agricultural Economist Scott Irwin penned an update yesterday at the farmdoc daily blog titled, “Biodiesel Supply, Demand, and RINs Pricing.”

And an update yesterday at the National Drought Mitigation Center Online stated that, “Rain whittled away at the remnants of long-term drought in the Plains in the week that ended Oct. 22, according to the U.S. Drought Monitor map.  The only areas that got worse were in Texas, Oklahoma, Hawaii and Long Island.

The proportion of the contiguous 48 states in moderate drought or worse fell to 35 percent from 36.71 percent a week earlier, down from a late-summer (Sept. 10) peak of 50.69 percent, noted Brad Rippey, meteorologist in the U.S. Department of Agriculture’s Office of the Chief Economist. Thirty-five percent represents the smallest U.S. drought area since May 15, 2012.”

In other news, Neil Munshi reported yesterday at The Financial Times Online that, “Thousands of US farmers will take to their fields this month for the main annual harvest on tractors equipped with cutting edge technology, as agricultural equipment makers increasingly incorporate elements of data analytics, GPS and remote sensing in a race to make farming more precise.

“At a time when carmakers are targeting 2020 for the first self-driving cars, a tractor that maps a field, drives itself and precisely calibrates its movements within inches to minimise wasted fuel, fertiliser or seed, is already almost standard.”

The FT article pointed out that, “Mark Rosegrant, of the International Food Policy Research Institute, estimates that the rigorous adoption of ‘precision agriculture’ technology could increase yield on any given farm by about 10 per cent, compared with average global annual crop yield increases of about 1 per cent.”

Also, Mark Peters reported in today’s Wall Street Journal that, “An analysis by the Carsey Institute at the University of New Hampshire found 1,135 U.S. counties had more deaths than births last year, a nearly 30% increase from 2009. The number was the highest on record, with deaths outpacing births in nearly half of all nonmetropolitan counties.

Kansas officials are trying to attract more residents and businesses to rural areas where population losses have been the steepest. But past efforts such as land giveaways in the Great Plains have struggled in the face of larger demographic forces.”

The article added that, “The Center for Economic Development and Business Research at Wichita State University forecasts through its model steady population declines in western Kansas for decades to come, with Greeley County predicted to be less than half its current size in 25 years. And while unemployment rates are low in the region, many counties lack the job growth needed to attract new residents, limiting the effectiveness of incentive programs, said Jeremy Hill, director of the center.”



Michael D. Shear reported in today’s New York Times that, “President Obama on Thursday renewed his call for an immigration overhaul, telling an audience of activists at the White House that the fate of a bipartisan Senate bill now rests with Republicans in the House.

“‘Anyone still standing in the way of this bipartisan reform should at least explain why,’ Mr. Obama said to repeated applause in the East Room. ‘If House Republicans have new and different additional ideas for how we should move forward, then we should hear them. I will be listening.’

“The Senate passed legislation in June by a vote of 68-32, giving a lift to Mr. Obama’s plans to improve border security, require employers to verify the immigration status of their workers, and provide a path to citizenship for 11 million undocumented immigrants. White House strategists hoped that the vote would prompt action in the House, where Republicans had resisted similar calls for an overhaul of the system.”

Bloomberg writers Jim Efstathiou Jr. and Marvin G. Perez reported yesterday that, “U.S. fruit and vegetable growers say delays in processing visa applications during the government shutdown has left them so short of immigrant workers that crops may be lost if the process isn’t expedited.

“The 16-day shutdown that ended Oct. 17 has delayed the arrival of temporary workers needed to harvest Florida’s citrus crop, Mike Carlton, director of labor relations for the Florida Fruit & Vegetable Association, said.”

Keith Good