FarmPolicy

September 24, 2018

Farm Bill; Biofuels; and, Immigration

Farm Bill: Prelude to Conference Committee

David Rogers reported yesterday at Politico that, “As formal talks open Wednesday [at 2:30], farm bill negotiators are looking at new alternatives to better align the House and Senate commodity titles and reduce the cost of rival revenue insurance plans to protect against shallow losses.

“An anticipated meeting between President Barack Obama and the top four leaders of the House and Senate Agriculture Committees has been put off because of an apparent scheduling conflict. But the White House signaled it will still pursue discussions to underscore Obama’s commitment to completing a farm bill before January.

“Most public attention has focused on the deep divide over food stamp funding. But the commodity title is its own battleground.”

Mr. Rogers explained that, “Trying to break the ice, the House has shown a willingness to scale back the subsidy rate for its new Supplemental Coverage Option (SCO) while increasing the minimum deductible from 10 percent to 15 percent. Under this approach, the same 15 percent deductible rule would apply as well to the Senate’s favored initiative — Agricultural Risk Coverage (ARC) — which is now triggered after losses of just 12 percent.

No decisions have been made at this stage. But the choices illustrate the challenges for lawmakers as they try to craft a new safety net to replace the current system of direct cash payments that will be ended under both bills.”

The Politico article pointed out that, “Indeed, the Senate would now prefer an ‘all in’ approach in which farmers can enroll in both the price and revenue protection plans.

“To keep down costs, [House Ag Committee Chairman Frank Lucas] had insisted that producers make a choice based on their needs. Combining all the pieces together now would require scaling back individual elements. And the House would be under pressure to lower its target prices, which are significantly higher than the Senate’s for wheat, corn and soybeans.

But the greatest political danger to an ‘all-in’ approach is perhaps that the combination of programs will seem excessive.”

Mike Lillis reported yesterday at The Hill Online that, “The top Democrat on the House Agriculture Committee is pushing back hard against the notion of wrapping farm policy into the broad budget conference set to launch this week.

“A bipartisan group will begin negotiations Wednesday to iron out the differences between the House and Senate 2014 budget proposals, with some observers suggesting that elements of the idled farm bill will be thrown into the mix.

“But Rep. Collin Peterson (D-Minn.), ranking member of the Agriculture panel, thinks that strategy would be a disaster for farm country.”

The Hill article indicated that, “‘I am absolutely opposed to that,’ Peterson told reporters in the Capitol.

“Asked to expound, Peterson suggested some of the Republican negotiators – notably Budget Committee Chairman Paul Ryan (R-Wis.) – would gut the proposal.”

“‘Do you think we’re going to let them write the farm bill? What do you think Paul Ryan would end up doing if he was writing the farm bill?,’ Peterson asked.

“‘I don’t think it would be anything that Jim and I could support,’ he added, referring to Rep. Jim Costa (D-Calif.), another senior member of the Agriculture Committee.”

Mr. Lillis pointed out that, “Rep. Steny Hoyer (Md.), the Democratic whip, said Tuesday that ‘there’s room for a bipartisan bill’ on farm policy. But such a deal, he warned, will hinge on the willingness of GOP leaders to resist their right flank and move closer to the Democrats’ bill.”

(Note: For more perspective on the Farm Bill from Budget Chairman Ryan, see this FarmPolicy.com update from June 24).

And with respect to the budget negotiations, Ginger Gibson reported yesterday at Politico that, “Don’t expect the budget negotiating committee convening on Capitol Hill Wednesday to arrive at any sweeping resolution that tackles long-term government spending, entitlement programs or the Tax Code.

“If anything happens — which is highly uncertain — it will be because members of the negotiating panel want to go small and avoid the pitfalls that have left Washington gridlocked for several years by trying to tackle all of the problems at once.”

Damian Paletta and Janet Hook reported yesterday at The Wall Street Journal Online that, “The White House has cracked open the door to a budget compromise with congressional Republicans by signaling it might not insist on raising taxes as part of a deal to replace some scheduled spending cuts, people familiar with the matter said.”

The Journal writers pointed out that, “White House officials are expected to reject any cuts to entitlement benefits in a deal that doesn’t raise revenue, potentially protecting Social Security and Medicare beneficiaries. But the White House has been more willing to consider cuts in other entitlement programs—such as agriculture subsidies—that both parties have eyed, as a swap for easing the sequester cuts.”

Meanwhile, Christopher Doering reported in yesterday’s Des Moines Register that, “The 41 lawmakers are charged with merging farm bills passed this summer by the House [July 11, September 19] and Senate [June 10] into one piece of legislation, an arduous task highlighted by the $35 billion gap between the two sides on food stamp spending and the apparent reluctance of each side to budge from its position.”

“The Wednesday conference, where lawmakers will make opening statements, could be the only gathering for the farm bill not held behind closed doors. By law, at least one meeting must be open to the public.

“Wednesday’s speeches ‘may be some indicator of just how eager everybody is to get to an agreement,’ said Pat Westhoff, director of the Food and Agricultural Policy Research Institute, a research group at the University of Missouri.”

Mr. Doering explained that, “Congress has struggled to craft a farm bill to replace the 2008 measure that expired Sept. 30, 2012. Lawmakers extended the legislation earlier this year through the end of September in the hope that the delay would provide them more time to reach a deal [background, additional details here]. While some farm programs have expired for a second time, the more pressing deadline comes on Jan. 1, when a 1949 farm law requires that subsidy prices begin to increase, starting with dairy payments.

“The five-year $500 billion farm bills being proposed by each chamber have a handful of differences. The provisions expected to be the most contentious focus on crop insurance. Unlike the House, the Senate bill requires farmers who get crop insurance to meet certain environmental requirements. The Senate also would require farmers with adjusted gross income above $750,000 a year to pay more for federally subsidized insurance. Both bills would end direct payments, given regardless of need, and increase the number of crop insurance programs.”

Vicki Needham reported yesterday at The Hill’s On the Money Blog that, “Food stamps and crop insurance stand out as the prickliest issues.”

Also, Bloomberg writers Alan Bjerga and Derek Wallbank reported yesterday that, “U.S. lawmakers meeting tomorrow to reconcile House and Senate versions of agricultural policy legislation will find the table crowded with members who have deeply held and widely divergent views on food stamps.

“The tension is underscored by conferees the House leadership has added to the House-Senate negotiating committee: Tea Party Republican Representative Steve Southerland of Florida and Representative Marcia Fudge of Ohio, chairwoman of the all-Democrat Congressional Black Caucus.”

The article noted that, “‘I know where he stands, he knows where I stand,’ Fudge said of Southerland. ‘Obviously we are in very, very different places in our position, but I just hope there will be more reasonable people on the conference, people who understand in a very different way then maybe he does.’”

The Bloomberg article added that, “The appointment of Southerland ‘says there are a lot of people from around this place who are very interested in the details of this bill,’ Lucas said in an interview. ‘So am I.’ Fudge’s appointment is a sign that Democrats are serious about finding a solution, he said. Southerland did not respond to requests for comment.”

Rep. Jim McGovern (D., Mass.) tweeted yesterday that, “Proud to stand w/ colleagues as we vow to fight mean-spirited #SNAP cuts in the #farmbill.”

Also on the SNAP issue, Cliff Pinckard reported yesterday at the Cleveland Plain Dealer Online that, “The program costs the government $75 billion annually. But cuts are coming. A 13.6 percent boost that was part of the 2009 American Reinvestment and Recovery Act will expire on Friday. That will mean a cost reduction of $5 billion in 2014 and about $11 billion through 2016 for the federal government, according to the Center on Budget and Policy Priorities.”

On this specific SNAP development, Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “Dozens of House Democrats have proposed legislation that would extend food stamp benefits for 47 million beneficiaries.

“Food stamp benefits were enhanced by the 2009 stimulus bill, but that boost will expire at the end of October. As a result, a family of four faces a $36 per month cut, and benefits for a single adult will be cut $11 a month to $189.

“The Extend Not Cut SNAP Benefits Act, H.R. 3353, would extend those benefits for another year. House Judiciary Committee ranking member John Conyers (D-Mich.) said the bill is needed to avoid making worse the problem of hunger in America.”

In other developments relating to the Farm Bill Conference Committee, a joint statement yesterday from Rep. Bob Gibbs (R., Ohio) and Sen. Sherrod Brown (D., Ohio) noted that, “The PLC program [Price Loss Coverage], created by the House bill, would undermine provisions of the Senate-passed bill that tie farm payments to planted acres, instead of the historic base acre calculation.

“‘PLC could create inverse incentives for farmers to plant for the program instead of listening to the market,’ Brown and Gibbs continued. ‘This proposal would drive farmers to overplant the crop that would give the highest guaranteed price. We want a Farm Bill that will provide farmers with the risk management tools they need without distorting market forces.’”

A news release yesterday from Sen. Heidi Heitkamp (D., N.D.) pointed to some of her ag policy priorities, including: “Make sure Farm Program does not influence planting decisions – Coupling planted acres with target prices may lead to incentives for growers to make planting decisions based on the payouts offered by a farm program.”

The release also noted: “Eliminate conservation compliance for crop insurance – Request that the conservation compliance language not be included in the final bill.”

Sen. Pat Roberts (R., Kans.) spoke yesterday with Greg Akagi of the Kansas Ag Network, where a portion of the discussion focused on the Farm Bill.

In part, Sen. Roberts noted that, “The problem is the House is in recess next week so there’s only going to be two weeks in November for the Conference Committee to meet again and hopefully have a product, hopefully have a Farm Bill before breaking for the Thanksgiving holiday.  We need to get this Farm Bill passed before the end of the year for sure, but I would sure like to get it done during those two weeks.” (Related audio here (MP3- 1:21)).

DTN Ag Policy Editor Chris Clayton reported yesterday that, “With formal conference talks on the farm bill set for Wednesday, more than 250 groups have sent a letter to conference negotiators stressing the need to protect the long-standing permanent farm law.”

Mr. Clayton noted that, “Leading into Wednesday’s meeting, the agricultural groups stated that the 1938 and 1949 permanent farm laws play a critical role in forcing Congress to continually reexamine farm policies. The letter reflects a somewhat ironic statement: the old permanent laws are such a poison pill that they force Congress to keep updating farm policy. Without the old laws, there would be no significant reason for Congress to renew a temporary farm policy every five or six years. Thus, Congress should keep the old laws in place.”

An update yesterday at the National Sustainable Agriculture Coalition Blog stated that, “On Tuesday, October 29, 278 national, regional, and state-based organizations delivered a letter urging House and Senate farm bill conferees to reattach basic conservation requirements to federal subsidies for crop insurance, and to include a nationwide Sodsaver provision in the final farm bill conference report.  The letter comes as farm bill conference begins with conferees’ opening remarks this Wednesday.”

With respect to the executive branch, an item in yesterday’s Orlando Sentinel indicated that, “As U.S. agriculture secretary, Tom Vilsack is the Obama administration’s point man on the legislation. In an email interview with Opinions Editor Paul Owens, Vilsack argued there are multiple reasons to pass a farm bill.”

In part, Sec. Vilsack noted that, “Historically, the passage of a farm bill required an alliance between supporters of farm programs and nutrition assistance. Farmers represent less than 1 percent of America’s population, so that alliance remains important in getting support for farm programs that have helped recently to achieve record farm exports, conservation activities and farm income. Ending the alliance between supporters of farm programs and nutrition assistance will erode support for these important farm programs at a time when they are needed most.”

And, Kimberly Kindy reported in today’s Washington Post that, “Nearly 1 million chickens and turkeys are unintentionally boiled alive each year in U.S. slaughterhouses, often because fast-moving lines fail to kill the birds before they are dropped into scalding water, Agriculture Department records show.

“Now the USDA is finalizing a proposal that would allow poultry companies to accelerate their processing lines, with the aim of removing pathogens from the food supply and making plants more efficient. But that would also make the problem of inhumane treatment worse, according to government inspectors and experts in poultry slaughter.”

 

Biofuels

Gregory Meyer reported yesterday at The Financial Times Online that, “Archer Daniels Midland has cautioned US officials against a change to biofuels policy as Washington considers cutting an ethanol consumption mandate for the first time.”

And Christopher Doering reported yesterday at The Des Moines Register Online that, “Nearly three dozen advanced biofuel companies warned the White House Tuesday that as the administration considers making changes to the country’s renewable fuels policy, it should be careful not to irreversibly harm the next generation of fuels.

“In a letter to President Barack Obama, the 37 companies, including ethanol producer Poet and agribusinesses giants Monsanto and DuPont, urged the administration not to make major changes to the Renewable Fuel Standard — a law that requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country’s dependence on foreign energy. The oil industry has lobbied vigorously against the standard that it calls outdated.”

 

Immigration

Ashley Parker reported in today’s New York Times that, “Heading to Washington to spend Tuesday urging House Republicans to take up a broad immigration overhaul, the team of Utah business leaders buttonholed several members of their state’s congressional delegation — Senators Orrin Hatch and Mike Lee, both Republicans, and Representatives Jim Matheson, a Democrat, and Chris Stewart, a Republican — as the lawmakers waited to board their flight Monday at the Salt Lake City airport.”

“On Tuesday, the group of more than 600 leaders from roughly 40 states descended on the Capitol for meetings with nearly 150 Republican lawmakers. They are largely taking aim at House Republicans who they think could support a broad immigration overhaul, including some sort of legal status for the 11 million immigrants in the country illegally. The leaders are urging the lawmakers to take a more proactive role in pushing immigration legislation to a House vote.”

Elise Foley reported yesterday at the Huffington Post Online that, “Rep. Ileana Ros-Lehtinen (R-Fla.) became the second Republican on Tuesday to sign on to a Democrat-led comprehensive immigration reform bill that would increase border security, change the legal immigration system and provide a path to citizenship for undocumented immigrants.”

The article noted that, “Rep. Jeff Denham (R-Calif.) announced his support for the bill over the weekend, and teased that more Republicans might follow. Although House GOP leadership has said they will not bring the bill to the floor for a vote, supporters are hoping that bringing on more pro-reform Republicans can increase the pressure on them to do so.”

And Alexander Bolton reported yesterday at The Hill Online that, “Sen. Ted Cruz (R-Texas) has shaped the view of Republican leaders on immigration reform, and his sway with grassroots conservatives will make passing comprehensive legislation significantly more difficult.

“Cruz scored a victory in the battle for the hearts and minds of his party over the weekend when Sen. Marco Rubio (R-Fla.) backed away from the Senate’s overhaul of immigration laws.”

Keith Good

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