November 21, 2019

Farm Bill; Ag Economy; Food Safety; and, CFTC

Farm Bill

In a radio interview earlier this week with Mick Kjar (Ag News 890, Terry Loomis, Farm Director (Fargo, ND)), Senate Agriculture Committee member John Hoeven (R., N.D.) discussed several Farm Bill issues.

In part, Sen. Hoeven indicated that, “I think that the conference committee really has the parameters for an agreement, people just need to agree and we need to have the bill on the floor when we get back the first weeks in January and get it passed.  I think right now we are on track to do that.  People are positive about it, so I think right now it’s going the right way.

“Now I am here and I’m pushing every single day to make sure something doesn’t go off track, but I think right now we’re going to be in a position where we can get this thing to the floor, that second week in January, and it get passed, and I’m just going to keep doing everything I can to make that happen.”  (Related audio here (MP3- 0:55)).

Also in his discussion on Ag News 890, Sen. Hoeven briefly discussed crop insurance and Title I issuesrelated audio here (MP3- 1:00).

Meanwhile, Denise Ross reported earlier this week the Grand Forks Herald (N.D.) Online that, “As negotiations over a new farm bill continue on Capitol Hill, South Dakota’s senators are worried about the fate of reforms they fought to include in the Senate version of the bill.

Southern interests are fighting to remove the caps on payments to farmers that were championed by Sen. Tim Johnson, D-S.D.”

The article noted that, “Johnson said he worked with other senators to craft language that placed a hard cap on direct payments to farmers and would ‘ensure that only individuals actually engaged in the operations of a farm are able to receive payments.’

“‘That language has come under attack by some on the conference committee,’ Johnson said. ‘I find it ironic that members of Congress who want to tighten the requirements of eligibility for the Supplemental Nutrition Assistance Program are the same members who want to loosen eligibility requirements for farm programs. The farm bill needs to maintain this language in order to maintain the legitimacy of farm programs and to balance out the disproportionate share of payments currently going to big farms.’

“Both Johnson and [Sen. John Thune (R., S.D.)] said they are watching a ‘sodsaver’ provision that would reduce crop insurance premium subsidies for farmers who plow up prairie to grow crops.”

Johnson said he does not favor trying to roll an extension of long-term unemployment benefits into the farm bill,” the article said.

More specifically on nutrition issues, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Conference negotiators on the farm bill will raise the levels of home-heating assistance a person or family must receive before they automatically qualify for food stamps, a compromise that will likely save the government more than $8 billion over 10 years.

“While the four key negotiators in the farm bill have largely kept a lid on details of their compromise framework, Sen. Tom Harkin, D-Iowa, spoke in a conference call Thursday about some of the details on the cut to the Supplemental Nutrition Assistance Program, commonly known as SNAP.

“Harkin is a former chairman of the Senate Agriculture Committee and a conferee, but he hasn’t been part of the behind-closed-doors talks of the four principal members from the House and Senate. Harkin told reporters he spoke with Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., about the nutrition cuts. Harkin doesn’t like the level of SNAP cuts, ‘but I think we can live with it.’”

Mr. Clayton noted that, “The Senate version of the farm bill will cut $3.9 billion from SNAP over 10 years while the final version of the House nutrition will cut $39 billion over 10 years. An $8 billion cut might be considered too high for the Democratic-controlled Senate while being too low for the Republican-controlled House.”

Reuters News reported yesterday that, “The new U.S. farm bill is likely to cut the food stamp program by $8 billion over a decade, a key Democratic senator said on Thursday, an amount that is a fraction of the cuts demanded by many Republican lawmakers.

“While conservatives want stricter eligibility rules that would disqualify up to 4 million recipients and save $40 billion over 10 years, Iowa Sen. Tom Harkin, a Democrat, said the expected $8 billion in savings would be generated by closing a loophole on utility costs.”

Meanwhile, the “Washington Insider” section of DTN indicated in part yesterday (link requires subscription) that, “Like the baseball umpire who reportedly said that a pitch wasn’t either a ball or a strike he called it, Sen. Pat Leahy, D-Vt., is being quoted as saying that if he is not happy with the proposed dairy section the conference proposes, ‘it won’t pass.’ That mindset, is in sharp contrast to the happy confidence of Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., who asserts that the committee is close, close — but won’t say what issues are not ‘close,’ or which ones are.

“Details, it seems, will be available only just ahead of the formal return of the House and Senate from their December recess.

“In fact, it seems that the negotiators are not actually working on an agreement regarding the issues, they are working on a ‘framework’ for compromise legislation which won’t see any daylight until early January.”

After additional analysis, the DTN item pointed to the reported $8 billion in potential nutrition savings and noted: “Can the majority Democratic Senate really take a cut of more than twice the level its members previously approved [$4 billion] back to its constituents? Can Stabenow really be happy about that?

And, can [House Agriculture Chairman Frank Lucas, R-Okla.] really gain House agreement on nutrition cuts that are less than half of those in the House passed bill [$40 billion]? Perhaps skeptics can be pardoned if they see Stabenow’s framework compromise as somewhat short on key areas of support for bridges for very wide gaps.”

Yesterday’s DTN item concluded by pointing out that, “It seems that the more cheerful confidence exuded by Stabenow and Lucas, the deeper they bury the details and the murkier the debate becomes. Right now, a compromise cut in nutrition of $8.8 billion over ten years seems likely to cause severe heartburn in so many quarters that it may well be much more difficult to digest than the lords of compromise now believe.

“As a result, skeptics advise keeping the House-passed farm bill extension close at hand in the expectation that it might be of some use even as the stresses Stabenow denies come to bear on the apparently shaky compromises still dwelling in the legislative shadows, Washington Insider believes.”

Also yesterday, in an apparent reaction to a recent suggestion by a Republican Congressman that “that low-income students either pay or work for their subsidized school lunches,” Rep. Jim McGovern (D., Mass.) tweeted that, “Memo to GOP: Child labor was outlawed 100yrs ago. Shaming poor kids doesn’t fix childhood hunger-Their lives are hard enough.”

And an update yesterday from USDA’s Daily Radio News Service indicated that, “A top USDA official says a new farm bill will likely go a long way toward resolving issues between Brazil and the U.S. revolving around U.S. cotton programs.” (Audio clip (MP3- 1:00)).

In more detail on dairy issues, Ohio State University Agricultural Economists John Newton and Cam Thraen indicated yesterday at the farmdoc daily blog (“The Dairy Safety Net Debate of 2013 Part II: Questions and Answers”) that, “In Tuesday’s post (see here) we made the argument that an insurance-style target index-deficiency payment program without premium oversight from USDA’s Risk Management Agency may result in farmers using the insurance program strategically to extract subsidies. Additionally, our research supports the view that the dairy market stabilization program may have unintended consequences with respect to the equity of the revenue penalty and free-rider incentives to expand milk production. In today’s post we will build on Tuesday’s post by providing additional evidence on functional equity to make the case why we believe that a combination of the countercyclical payment program and a slightly modified income-over-feed-cost (IOFC) margin program is a better path forward and common sense dairy safety net alternative (see here).

“The big questions to be addressed in today’s farmdoc daily post include:

– Who benefits with an all-inclusive safety net program?

– How much of a safety net for dairy farms should society provide?

– Is there a better way forward?

“In addressing these questions we will make the claim that a variant of Pareto’s 80-20 rule also applies to the margin insurance program and that a majority of the benefits of will accrue to the largest, and wealthiest, dairy farm operators. The aforementioned questions on the role of society in providing a farm safety net should be carefully considered before advancing alternative safety net programs as proposed by either the U.S. House or Senate. Failure to consider potential implications of proposed reform may result in irreversible structural changes to the industry.”


Agricultural Economy

Kirsten Salyer noted yesterday at Bloomberg Online that, “Eggs are great. They’re cheap. They’re plentiful. They’re a protein-rich dietary staple. They’re the culinary glue holding together quiches and cakes. They’re one half of a profound existential question: Which comes first?

“And now, apparently, they’re passé. The egg has come under attack from a technology startup offering plant-based egg alternatives. San Francisco-based Hampton Creek Foods has sparked quite the Internet buzz while attracting high-profile investors, including Microsoft’s Bill Gates and PayPal co-founder Peter Thiel, and raising some $6 million. The goal, as the Wall Street Journal’s Farhad Manjoo reports, is to ‘surpass’ the egg with products that are free of cholesterol, longer-lasting, more ecologically sustainable, more humane and cheaper than the chicken-based original. In other words: calling all vegans, cholesterol counters and thrifty shoppers.”

The item stated that, “Egg producers have begun firing back. The American Egg Board is running online ads against Google search terms linked to Hampton Creek’s eggless products. With about 1.8 trillion eggs laid globally each year, you can build up a surplus pretty quickly. Will plant-based alternatives spell the end of Big Egg?”

Chuin-Wei Yap reported today at The Wall Street Journal Online that, “China has rejected 545,000 metric tons of U.S. corn containing an unapproved genetically modified strain so far this year as of Thursday, the government’s quality-control watchdog said Friday.

“The move comes as Chinese and U.S. officials begin trade talks Friday in Beijing at their Joint Commission on Commerce and Trade to address bilateral-trade issues.”

Meanwhile, an update yesterday at the U.S. Trade Representatives Office webpage noted that, “Yesterday, hundreds of global stakeholders interested in the current transatlantic trade negotiations shared their input and received information from chief negotiators on the third negotiating round of the Transatlantic Trade and Investment Partnership (T-TIP). Stakeholder engagement events are an important opportunity for the U.S. Trade Representative and its trade negotiators to receive feedback on the ongoing talks, with the aim of ensuring the strongest possible outcomes for the T-TIP.”

And Shane Romig reported yesterday at The Wall Street Journal Online that, “Argentina has filed a new complaint against the European Union at the World Trade Organization, accusing the EU of imposing illegal tariffs on Argentine biodiesel shipments to Europe.

“The complaint is the third filed by Buenos Aires against EU barriers to its biodiesel, which EU biofuels makers say is unfairly dumped on the European market.

“Last month, the EU slapped steep import taxes on Argentine biofuel ranging from 217 to 246 euros ($298-$336) per metric ton, ‘having the direct and immediate effect of closing the European market to Argentine biodiesel and affecting exports worth over $1.5 billion per year,’ the country’s foreign ministry said on Thursday.”


Food Safety- Labeling Issues

Kelsey Gee reported yesterday at The Wall Street Journal Online that, “The U.S. Food and Drug Administration on Thursday said it would revamp new food-safety rules for fruits and vegetables after its first proposal met with opposition from farm groups and some members of Congress.

“The FDA said it would make significant revisions to the rules, which are part of what the agency has called the biggest overhaul in 70 years of the government’s oversight of food safety. The produce rules, required under the 2011 Food Safety Modernization Act, are aimed at minimizing the risk of contamination of raw fruits and vegetables on the farm or during their handling by food processors.”

A news release yesterday from Rep. Chellie Pingree (D., Maine) indicated that, “Federal regulators made a major announcement today about new food safety rules, withdrawing proposed regulations that [Rep. Pingree] had said would threaten small farmers around the country. The Food and Drug Administration (FDA) said they would spend the winter making ‘significant changes’ to the proposed rules and release new regulations for comment next summer.

“‘This is a major victory for farmers in Maine and across the country,’ Pingree said. ‘The one-size-fits-all approach the FDA was pursuing was overkill for thousands of small farmers and would have put many of them out of business. The size of the regulation just didn’t match the size of the risk.’”

Also yesterday, Jacob Bunge reported a the Corporate Intelligence Blog (Wall Street Journal) that, “Consumer-safety advocates and poultry producers fired off salvos of statistics Thursday over contaminants in raw chicken, after Consumer Reports unveiled an investigation the group said showed ‘potentially harmful bacteria’ on 97% of chicken breasts tested.

“The industry immediately fired back: Out of 160 million servings of chicken consumed in the U.S. per day, 99.99% are eaten safely, said the National Chicken Council in a lengthy statement.

“Hang on to your stomachs, chicken fans: They may both be right.”

Mr. Bunge added that, “E.coli and other bacteria like enterococcus and klebsiella pneumonia, which can cause infections, aren’t considered food safety risks in chicken by the U.S. Department of Agriculture, the chicken group said. ‘Eliminating bacterial entirely is always the goal,’ NCC President Mike Brown says in a statement. ‘But in reality, it’s simply not feasible.’

“The industry might make more progress combating dangerous bacteria if food regulators had a consistent standard, says Bill Marler, a Seattle lawyer specializing in food safety. ‘There’s this whole nonsensical discussion that it’s okay to have some pathogenic bacteria and not others,’ says Mr. Marler, referring to bacteria that cause infections in humans.

“If regulators like the USDA and its Food Safety and Inspection Service designated, say, e.coli as an adulterant – a substance legally barred from being in food or beverages – the poultry industry would eventually find a way to stamp it out almost entirely, Mr. Marler says.”

And Julian Hattem reported yesterday at The Hill’s RegWatch Blog that, “The former deputy for food safety at the U.S. Department of Agriculture (USDA) has been promoted.

Brian Ronholm has been named the acting undersecretary for food safety, The Hill has confirmed, making him the top-ranking food safety official in the country. He replaces Elisabeth Hagen, who left for an advisory post with the consulting firm Deloitte this month.

President Obama has yet to name a permanent successor to the position.”

In addition, Stephanie Strom reported in today’s New York Times that, “The trade organization representing the nation’s largest food and beverage companies wants permission to label as ‘natural’ products that contain genetically engineered ingredients like corn, soy, canola and sugar, according to a letter sent to the Food and Drug Administration.

“In the letter dated Dec. 5, the Grocery Manufacturers Association said it planned to petition the agency to issue a regulation that would allow foods containing genetically modified ingredients to be labeled ‘natural.’

“Use of the term ‘natural’ is now generating battles similar to previous fights over terms like organic, amid initiatives in several states that seek to label foods in a more transparent way. Last summer, Connecticut passed legislation on labeling that would make it illegal to use the word ‘natural’ on the packaging of any food product containing biotech ingredients, and the governor signed it on Dec. 11.”


Commodity Futures Trading Commission (CFTC)

Andrew Ackerman reported yesterday at The Wall Street Journal Online that, “President Barack Obama nominated Sharon Bowen, a partner at law firm Latham & Watkins LLP, to serve as a member of the Commodity Futures Trading Commission.

“If confirmed by the Senate, Ms. Bowen would succeed Bart Chilton, a Democrat on the five-member commission who plans to soon leave the agency.”

The Journal article added that, “The Senate Agriculture Committee is expected to take up Ms. Bowen’s nomination early next year as it also weighs the nominations of Timothy Massad, a senior Treasury Department official tapped to succeed Gary Gensler as the agency’s chairman; and brokerage executive J. Christopher Giancarlo, to fill a vacant Republican slot at the agency.”


Lastly today, an update posted yesterday at The Center for Public Integrity Online indicated that, “A secretive, conservative nonprofit tied to billionaire brothers Charles and David Koch has commenced a media attack against Rep. Collin Peterson, the 12-term Minnesota Democrat already been marked by national Republicans for defeat in 2014.

“But Peterson, perhaps one of the nation’s more vulnerable Democratic congressmen, told the Center for Public Integrity that the ads’ stinging indictment of his dedication to constituents is ‘ridiculous.’

“‘I don’t know who these guys are or what they’re up to,’ he said. ‘If I’d only been in office a couple terms, it might have a bigger impact, but people know me.’”

The update added that, “And as for the new ads’ effect on whether he will run for re-election, something on which he plans to decide next year?

“‘What they are doing is making me more inclined to not hang up my hat,’ Peterson said.

“‘Right now we’re trying to get the farm bill done. That’s what I’m focused on,’ he continued. ‘Once that’s over with, then I’ll figure out what I’m going to do.’”

Keith Good

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