FarmPolicy

December 15, 2019

Farm Bill; Ag Economy; Biotech; and, Biofuels

Farm Bill Issues

House Ag Committee Ranking Member Collin Peterson (D., Minn.) was a guest yesterday on the News & Views program with Joel Heitkamp (790 AM Fargo-Moorhead, N.D.) where the discussion focused on the Farm Bill.

An unofficial FarmPolicy.com transcript of the News & Views discussion is available here.

Mr. Heitkamp asked Rep. Peterson, “Obvious first question, are we going to get a farm bill before the end of the year?”

Rep. Peterson indicated that, “Well, I hope so. I’ll probably have a better answer for you by later on this afternoon or maybe tomorrow. I thought we were going to get together this morning, but like everything that’s been happening with this bill, it got delayed, so now we’re not meeting ‘til 1:00 Washington time. And so I had a call from Stabenow for a while this morning, which, you know, was not encouraging. But we’ll have to see what happens when we get in the room at 1:00.”

Rep. Peterson added that, “In this discussion I had with Stabenow this morning, she brought that up again, you know, that, well, if we don’t get this thing done, then they’re going to put it in the budget, which means, I guess, elimination of direct payments. Well, all that’s going to do is [kill the budget], and there won’t be a [budget]. That may be the only good thing you can get out of that is that they’re going to be able to blame agriculture for that instead of their own failure. But who knows? Still got a lot to untangle here.

“At least we got people back. I got Lucas to come back. He was not going to come back this week. I just said we can’t afford to waste another week here, we need to get this thing resolved. And frankly, we need to get it resolved before Thanksgiving, at least an agreement amongst ourselves so this stuff can be drafted and it can be scored by CBO and all that kind of stuff, so we can get it done before the end of the year.

“So at least we’re here. We’re going to meet. And I told both Lucas and Stabenow that the time for posturing is over and we need to sit down and start doing some horse trading and get this thing resolved.”

Also on yesterday’s News & Views program, Rep. Peterson explained that, “If we don’t get this done by December, are we going to extend current law? That’s what we did last year.  If we extend the current law for a year or two years, well, that’ll be one thing. And if we extend it the way it was written in 2008, it’s not perfect, but it’s something we can live with. So it wouldn’t be the end of the world. There’s certain things that I support that wouldn’t be funded if we do that, but we lived this last year with that.

“If we don’t get an extension, which some people have said, [the President] has said, Stabenow has said that they’re not going to support an extension, so if we don’t get an extension, and we don’t get a farm bill, then the only alternative at that point is permanent law. And that is a big question mark because nobody really knows how that’s going to play out.

So there’s no good outcomes here for not getting this bill done. There’s no reason why we can’t get this bill done. The President wants it done, the four of us want it done, John Boehner wants it done, and I think Harry Reid wants it done, so with all of that I don’t see why we can’t get it done.”

Recall also that back in June, on the Senate floor, Majority Leader Harry Reid (D., Nev.) highlighted the Farm Bill and noted that, “I want everyone within the sound of my voice, as well as my colleagues on the other side of the Capitol, to know that the Senate will not pass another temporary Farm Bill extension.”

Rep. Peterson also addressed policy issues associated with planted acres in yesterday’s radio interview with Joel Heitkamp: “But we’re having a fight with the Senate over planted acres versus base acres, and they want to pay people based on what they grew 20 years ago, and we don’t want to do that anymore. We want to go to planted acres. And what that does is it shifts the program, the balance of power, from landowners to farmers. And this is a fundamental change that needs to happen in our policy. We should be supporting farmers, not land. And that’s what we’ve been doing the last 20 years, ostensibly, to placate the WTO or whatever.

But that’s one of the big hang-ups we’re having with the Senate right now. And some of them want to hang onto these base acres. Well, it’s kind of the same issue you’re talking about with the sugar program, where you’ve got people that have the land and have base on it are renting it to somebody else. It’s much better to have the program follow the farmer, and that’s what we’re trying to do.”

Meanwhile, David Rogers reported yesterday at Politico that, “House Agriculture Committee Chairman Frank Lucas (R-Okla.) is being asked to defend a Republican plan to permanently repeal waivers allowing able-bodied, jobless adults to continue to get aid in periods of high unemployment. Yet back home in Oklahoma, his own state already passed a law ending its waiver effective last month—without requiring any action by Congress.

“Minnesota Rep. Collin Peterson, the ranking Democrat on Lucas’ panel, has the opposite task of trying to preserve, as best he can, the current nutrition program. But Peterson’s Seventh Congressional district butts up against North and South Dakota counties which operate under wildly different income eligibility rules than Minnesota’s.”

The article noted that, “Rep. Steve Southerland is a Bible-quoting Florida conservative who has been tapped by Majority Leader Eric Cantor (R-Va.) to be the Republican point man on SNAP work requirements in the farm bill talks.

“‘We in the federal government would be far better off if we took the time to learn from these incubators known as our states,’ Southerland told POLITICO. ‘To have these governors out there, who think outside the box, is positive.’

But many of the changes championed by the House GOP go in the opposite direction.”

Yesterday’s Politico article pointed out that, “At the opening session of the House-Senate farm bill conference last week, both parties put the best light on the prospects for a deal this year. Peterson and Lucas cut short their recess to resume talks Wednesday. But there’s no denying the gap over food stamp funding is huge.”

Mr. Rogers explained that, “Peterson suggested last week that SNAP is one area where President Barack Obama could be useful in brokering a deal which Democrats could accept. Stabenow was decidedly cool to that idea Tuesday in a short interview with POLITICO. And at a time when food stamp benefits are already being cut –because of prior legislation—the Michigan Democrat is defiant and draws a parallel between SNAP and crop insurance.

“‘I’m not interested in taking food away from folks who have had an economic disaster,’ she said, ‘Just as I’m not interested in cutting crop insurance for farmers who have had economic disasters.’

One potential path to compromise would be for Democrats to move toward some of the policy changes sought by Republicans—but also insist that a portion of the savings be plowed back into job training programs for food stamp beneficiaries.”

“Indeed a proposal by freshman Rep. Suzan DelBene (D-Wash.), which sets a national gross income standard of 160 percent of poverty and a $4,000 asset test, could become a starting point for discussions. This is stricter than current SNAP rules in about half the states but a portion of the resulting savings could be plowed back into increased federal support for job training,” the Politico article said.

AP writer Hope Yen reported yesterday that, “The number of poor people in America is 3 million higher than the official count, encompassing 1 in 6 residents due to out-of-pocket medical costs and work-related expenses, according to a revised census measure released Wednesday.”

The article noted that, “Last week, more than 47 million Americans who receive food stamps saw their benefits go down, while Congress began negotiations on further cuts of up to $4 billion annually to the program;” and added that, “Food stamps helped lift about 5 million people above the poverty line. Without such aid, the overall poverty rate would increase from 16 percent to 17.6 percent.”

Reuters writer Susan Heavey reported yesterday that, “Melissa Boteach of the Center for American Progress said policymakers should keep Census’ findings in mind as they look to curb food stamps and make changes to mandatory budget cuts.”

Meanwhile, an update posted yesterday at the Red River Farm Network (RRFN) Online (viewed earlier today) stated that, “In an interview with the Red River Farm Network, Minnesota Senator Al Franken is urging colleagues who are members of the Farm Bill Conference Committee to finish the Farm Bill Conference as soon as possible saying farmers need a farm bill. ‘Hopefully we can get this done by Thanksgiving. If not Thanksgiving, we have to get it done by Christmas.’ Franken thinks the gap between the House and Senate nutrition titles can be worked out. ‘This is important to both rural and urban America. So I think this is going to work out.’”

A related report by RRFN’s Randy Koenen from yesterday’s Agriculture Today radio program included remarks from Sen. Franken; in part, he mentioned the importance of the SNAP program to the state of Mississippi, the home of Senate Ag Committee Ranking Member Thad CochranRRFN Agriculture Today audio clip (MP3- 1:16).

And a news release yesterday from Sen. Franken stated that, “U.S. Senators Amy Klobuchar and Al Franken along with a bipartisan group of 12 other senators called for a strong energy title in the final version of the Farm Bill. In a letter to the Chair and Ranking Member of the Senate Agriculture Committee, the senators highlighted the important role programs like the Rural Energy for America Program (REAP) and the Biomass Crop Assistance Program (BCAP) have in supporting jobs in rural communities and encouraging the development of energy efficiency and renewable energy production from wind, solar, biomass and biofuels in farms and rural businesses.”

Also yesterday at the Red River Farm Network, a separate report indicated that, “Livestock disaster assistance and maintaining Country of Origin Labeling [COOL] are two of South Dakota Senator Tim Johnson’s top priorities in the farm bill.”

Additionally on the COOL issue, a report this week at the Canadian Broadcasting Corp Online indicated that, “Agriculture Minister Gerry Ritz says he believes the United States will back off on country-of-origin labelling (COOL) regulations on beef and pork, and he’s hoping to convince the U.S. to change the rules in its upcoming farm bill…[C]anada is appealing the case before the World Trade Organization and is in talks with government administration, including U.S. Secretary for Agriculture Tom Vilsack, said Ritz.

Canada is ready to retaliate if necessary, the minister added.”

A news release yesterday from the National Farmers Union (NFU) included remarks from NFU President Roger Johnson, who noted in part that, “NFU will continue to defend the COOL law and urge Congress and other policymakers to allow the law to be implemented with the final rule issued by the USDA earlier this year.”

Also yesterday, an update at the National Sustainable Agriculture Coalition Blog stated that, “Thirteen Senators have delivered a letter to Senate Farm Bill Conferees calling for a final farm bill to include provisions that will help make crop insurance appropriate and accessible for a wider range of producers.”

With respect to the executive branch, DTN writer Todd Neeley reported yesterday that, “U.S. agriculture could lose momentum unless Congress passes a farm bill and moves on immigration reform, U.S. Agriculture Secretary Tom Vilsack said Tuesday during a lecture at the University of Nebraska.

“Because agriculture in many areas of the country relies on immigrant workers, Vilsack said immigration reform would go a long way in providing certainty to farmers.

“‘Yes, we can plant crops all over the United States but if we don’t have a workforce to be able to harvest the crops, it won’t do much good,’ Vilsack said to a crowd of college Future Farmers of America members and state and USDA officials attending the University of Nebraska’s Rural Futures Institute conference.”

The DTN article quoted Sec. Vilsack as saying, “The [Farm] bill lapsed and needs to be replaced. And we need to do it soon. Because if we fail to pass a farm bill, eventually USDA will be compelled to institute permanent agricultural law, which will not be good for farmers and ranchers, producers and consumers and grocers. It’s just not the right way to do business.”

Mr. Neeley noted that, “Following Vilsack’s speech [Rep. Jeff Fortenberry (R., Neb.)] said he believes USDA’s efforts to make budget cuts will help move a farm bill across the finish line.

“‘Something that I do think bodes well for the farm bill process that will occur over the next month or so is the fact that agriculture is also giving at the office, the savings that could be potentially generated from a new farm bill,’ Fortenberry said.

“‘If we get this through the narrow way, we’ll actually go toward the budget committee and get through some of this deep impasse on our overall deficit and debt problem.’”

And Kate Howard Perry reported this week at the Omaha World Herald Online that, “Vilsack spoke at length about the harm the lack of a new farm bill is bringing to rural communities. The public discourse about the farm bill has focused on the Supplemental Assistance and Nutrition Program and farm subsidies, but little in between, he said.

The bill also means money for research, education and jobs, he said, and those issues need to be better explained to the 99 percent of Americans who aren’t in farming.”

From an international perspective, Mitsuru Obe reported yesterday at The Wall Street Journal Online that, “In a sign Japan may soon start tackling the inefficiency of its domestic industries, Prime Minister Shinzo Abe’s government proposed Wednesday ending a four-decade policy of protecting domestic rice farmers through maintaining tight output controls.

The proposal calls for ending production rationing and across-the-board cash handouts to all farmers within five years. Its approval by Mr. Abe’s ruling Liberal Democratic Party is somewhat surprising for a party known more for serving vested interests than for initiating tough reforms, especially those involving small farmers, its key base of support.”

 

Agricultural Economy

Bloomberg writer Ranjeetha Pakiam reported yesterday that, “Corn dropped for a seventh day to a three-year low on speculation that the U.S. government will increase its production estimate for the domestic crop [on Friday].”

“The grain has slumped 40 percent this year as output in the U.S., the world’s biggest grower, recovers from the country’s most-severe drought since the 1930s last year,” the article said.

AP writer Ken Sweet reported yesterday that, “Wheat prices continued their two-week slide Wednesday, as traders speculated that good weather in the U.S. and abroad would lead to a bumper crop.”

 

Biotech

Stephanie Strom reported in today’s New York Times that, “Some of the nation’s major food companies declared victory on Wednesday over an initiative in Washington State that would have required labeling of some foods that contain biotech ingredients, although supporters of labeling held out hope that hundreds of thousands of uncounted votes might yet turn the tide.

“With roughly 990,000 votes counted, Washington residents appeared to reject mandatory labeling of genetically engineered products, with 55 percent voting against the initiative and 45 percent for it.”

 

Biofuels

Jonathan Coppess, who recently joined the Department of Agricultural and Consumer Economics at the University of Illinois, indicated in an update posted yesterday at the farmdoc daily blog (“EPA Authority to Reduce the RFS”)  that, “A recent farmdoc daily post exploring options for the Renewable Fuel Standard (RFS) raised a question about the Environmental Protection Agency’s (EPA) authority to reduce the RFS requirements below what Congress mandated. Recently, an EPA draft of a proposed rule for the 2014 calendar year fuel supply was leaked and seems very likely to put that issue to the test. It is important to keep in mind, however, that the leaked document is the summary of a draft of EPA’s proposal – it is not the final proposal nor is it the final rule. This post examines EPA’s authority to reduce the RFS statutory mandates.”

DTN writer Todd Neeley reported yesterday that, “Hundreds of farmers in Iowa, Kansas and other states already have signed feedstock supply contracts to provide biomass to next-generation biofuels production companies in recent years as the cellulosic ethanol industry draws near to launching commercial production.

“However, the U.S. Environmental Protection Agency may reduce the Renewable Fuel Standard’s mandated volumes for corn-based ethanol and advanced biofuels in 2014. If that happens, representatives from two of those biofuels companies told reporters Wednesday, their companies would reconsider the future of multi-million-dollar investments expected to create a new agriculture market for corn stover, wheat straw and other crops.

“EPA announced plans to release the 2014 volumes in November — possibly within days.”

The DTN article explained that, “A draft copy of the RFS was leaked to the press last month. It suggested that EPA would cut the overall RFS mandate by about 16%, from about 18.15 billion gallons in 2014 to 15.21 billion gallons. That would include a cut in the advanced biofuels mandate.

The oil industry would see a windfall. An RFS cut would lead to lower purchases of ethanol, and it would discourage investment in fueling infrastructure. Based on projected gasoline demand for 2014, the oil industry would see a $9 billion to $14 billion benefit from a cut to the RFS, said Geoff Cooper, vice president of research and analysis for the Renewable Fuels Association.

“‘This would send a signal to the oil industry that we don’t need to invest in infrastructure,’ he said. ‘When you peel back the onion, it would be a huge step back for corn ethanol.’”

Keith Good

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