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Farm Bill; Ag Economy; Immigration; and, Biotech

Farm Bill

After passing the House last week, the U.S. Senate webpage indicated this morning that, “Monday, Feb 03, 2014- 2:00 p.m.: Convene and resume consideration of the conference report to accompany H.R.2642, the Farm bill.”

Recall that back in 2012, the Senate passed a Farm Bill with 64 votes , and again in 2013,  ‪the Senate passed a ‪Farm Bill with 66 votes.

As the Senate is poised to act on the Farm Bill conference report, Senate Ag Committee Chairwoman Debbie Stabenow (D., Mich.) recorded a segment for the C-SPAN Newsmakers program late last week that aired yesterday on the cable channel.

A video replay of the discussion with Chairwoman Stabenow is available here, while an unofficial FarmPolicy.com transcript of the program can be found here.

Chairwoman Stabenow explained that, “What I am very proud of is that this really is a farm bill for the future, not the past. You know, for decades we’ve been talking about the fact we shouldn’t be giving farm subsidies to farmers when prices are high, you shouldn’t just get a check just because you plant something. In this farm bill, that’s gone. Instead farmers are going to get a bill for crop insurance instead of a check, or they are going to get help only when there’s a weather disaster or when there’s a market disaster.

“And so if they have a disaster—and we don’t want any farmers losing the farm for three or four days of bad weather—they’ll be able to get help. And just like any other insurance, it’ll cover 65, 70% of their loss, they’ll cover the rest of it. And most of the time farmers will be paying thousands of dollars in crop insurance and get nothing in an individual year, so this is different.”

She added that, “…[c]orn prices are high right now. If corn prices don’t dip, you get zero. If you don’t have a weather disaster, you get zero….This is not a bait and switch shuffle. We are fundamentally saying we are not paying farmers just because they grow corn, wheat, cotton, rice and so on.”

During the C-SPAN discussion, Chairwoman Stabenow pointed out that, “I’m not saying this is perfect. I mean, every farm bill there are things that I personally would write differently. It’s 12 different bills hooked together called titles. But I will tell you, between the commodity title, where, when you look overall, 31% reduction in the commodity title as opposed to 1% in nutrition. For the first time we have a conservation title spending more than the commodity title. I mean, we are fundamentally shifting to investments in land and water protection, supporting farmers through insurance, and supporting folks who have not had a lot of support, like fruit and vegetable growers and organics.”

With respect to livestock issues, Chairwoman Stabenow noted that, “Well, first of all, we have a first time ever permanent livestock disaster assistance program in this bill, which was the number one priority of all these groups. We then have gone on to have rigorous support for exports, very important, and specific things for livestock on conservation. And so there’s the most significant investment to support the livestock community and ranchers that we have ever seen in a farm bill.”

And on how the Senate may view the Farm Bill conference report, Chairman Stabenow indicated in the C-SPAN interview that, “Well, it did take us three years. I wish it hadn’t taken us three years. The first time we passed the farm bill in the Senate the House didn’t even take it up. The second time we passed it they took it up and it failed. And then they divided it up and there was all kinds of stuff that went on, so I can’t control that.

The reality is that the fundamentals in this bill are very, very close to what we passed in the Senate, so our senators are very comfortable with this because it’s within the framework. The conservation title almost exactly the same that we passed; specialty crops, fruits and vegetables; energy title; research title; rural development title, crop insurance. Probably the biggest difference is that we melded the commodity title, part of the House and part of the Senate. This is very close to what we passed in the Senate, and I think people feel comfortable with it.”

Erik Wasson reported on Saturday at The Hill’s On the Money Blog that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) offered a defense of controversial aspects of the farm bill, in an appearance on C-Span’s Newsmakers airing Sunday.

“During the interview, she explained why a provision requiring lawmakers to disclose crop insurance aid they themselves get from the government was not in the final bill.

“The farm bill has passed the House and is heading for a Monday vote in the Senate.”

Also, AP writers Steve Karnowski and Mary Clare Jalonick reported on Saturday that, “Farm subsidies that have guided agriculture through record profits in recent years are going away in the five-year farm bill that could become law in the coming week. But new subsidies in the legislation could be just as generous, and farmers aren’t complaining.

“Gone are direct payments, a politically untenable system in which landowners got fixed amounts per acre, whether crop prices were high or low — or even if they didn’t plant at all. Those will be replaced by a choice of one of two different subsidy approaches that require producers to suffer losses before they can get payouts. The bill also contains a new insurance-based program for cotton farmers.”

The AP article noted that, “The farm bill’s authors tout the changes as reform, particularly the elimination of direct payments, which cost $4.5 billion annually. The legislation also caps how much money an individual farmer can receive — $125,000 annually for all payments and loans. But that maximum is more generous than versions that passed the House and Senate earlier.

“‘We don’t pay people unless there’s actually a reason, because we’ve got a price loss or a crop loss,’ said U.S. Rep. Collin Peterson, a Minnesota Democrat who was instrumental in crafting the final package. ‘Under the direct payments you got payments whether you needed them or not.’”

Karnowski and Jalonick added that, “One of the new programs, called Agriculture Risk Coverage, will cover farmers’ ‘shallow losses’ — what they lose before their regular crop insurance kicks in. For example, if a producer’s crop insurance carries a 25 percent deductible, but the farm suffers only a 15 percent loss, ARC could help cover the gap. The program might kick in sooner than previously thought because some crop prices have dropped in recent months.

“The other program, Price Loss Coverage, looks more like the soon-to-end traditional price support programs. Farmers will get payments if crop prices fall below certain targets, such as $3.70 per bushel for corn, $8.40 for soybeans and $5.50 for wheat. The bill would raise the floor price for all 14 crops it covers, almost doubling some, so the subsidies would kick in much sooner than current law if prices drop enough.”

The Des Moines Register editorial board noted in Friday’s paper that, “Taxpayer-subsidized crop insurance would come with an important string: a requirement that participating farmers comply with conservation practices to protect against soil loss and destruction of wetlands.”

The Register stated that, “The goal of the farm bill should be protecting the nation’s food supply from economic and weather disasters, assuring affordable and healthful nutrition for all Americans while preserving the soil and water for future generations. The newest version of the bill falls short of those goals, however.”

The editorial board at the St. Louis Post-Dispatch stated on Saturday that, “The farm bill cuts $8 billion out of a program that more and more Americans rely on in a changing economy to feed their families.

That travesty alone should convince both Sens. Roy Blunt and Claire McCaskill of Missouri to vote no and Mr. Obama to veto the bill.”

On the other hand, the Tulsa World editorial board noted last week that, “There remain those who aren’t happy with the bill — it cuts too much, it cuts too little, it continues big agriculture subsidies, it doesn’t do enough to help family farms. But, in the end, the bill represents something to satisfy most lawmakers, a ‘coalition of the middle,’ in the words of [House Ag Comm. Chairman Frank Lucas (R., Okla.)].

“There isn’t much of that sort of coalition-building going on in Congress these days. Our nation is lucky to have a talented leader like Lucas to help work this important legislation through the process, and we wish it were seen as a model for a new round of legislative progress in Washington.”

And The Oklahoman (Okla. City) editorial board noted on Friday that, “The farm bill won’t satisfy many conservatives because of its price tag — $96 billion per year over the next decade. But Lucas says the bill will save about $23 billion during that time (the Congressional Budget Office estimates savings at $17 billion), and it includes needed reforms to the food stamp and farm subsidy programs.”

The opinion item added that, “Lucas can defend himself regarding his conservative bona fides. His work on the farm bill is to be commended. It’s a reminder that compromising once in a while in order to conduct the people’s business is still possible in gridlocked Washington.”

Ron Nixon and Derek Willis reported on Friday at The Caucus Blog (New York Times) that, “Few states are as identified with farming as Kansas. Among its nicknames are the ‘The Wheat State’ and ‘American’s Bread Basket.’ And Kansas’s lawmakers are quick to point out the importance of agriculture to the state’s economy.

“But when a new five-year farm bill, which authorizes nearly $1 trillion in spending on farm and nutrition programs, came up for a vote in the House of Representatives on Wednesday, the entire Kansas congressional delegation voted against it.”

The update noted that, “In the end, the Kansas delegation vote did little to affect the outcome of the farm bill’s passage. It passed comfortably, 251 to 166.”

Jerry Hagstrom noted yesterday at National Journal Online that, “For [Rep. Marlin Stutzman, R-Ind.], [Rep. Tim Huelskamp, R-Kan.], [Rep. Tom Cotton, R-Ark.], [Sen. Pat Roberts, R-Kan.] and [Sen. Chuck Grassley, R-Iowa] to oppose a farm bill conference report on final passage goes against the traditions of rural lawmakers. But they can vote no with the luxury of knowing the bill will pass. It would have been interesting to know how they would have voted if their votes determined whether farmers would get a new five-year safety net or not.”

Meanwhile, Pat Westhoff, the director of the Food and Agricultural Policy Research Institute at the University of Missouri indicated in a recent column that, “Even if the bill does become law, it doesn’t mean the end of the debate about farm and food policy. The U.S. Department of Agriculture will have to decide how to implement many provisions, and you can bet people will be unhappy with some of the choices that will be made. Budget and other concerns might mean Congress will revisit important provisions long before the five-year term of the bill has expired.

And if the next farm bill takes as long as this one, we should begin the 2018 farm bill debate very soon.”


Agricultural Economy

The USDA’s National Agricultural Statistics Service (NASS) indicated in it’s Cattle report on Friday that, “All cattle and calves in the United States as of January 1, 2014 totaled 87.7 million head, 2 percent below the 89.3 million on January 1, 2013. This is the lowest January 1 inventory of all cattle and calves since the 82.1 million on hand in 1951” [see related graph].

Kelsey Gee elaborated on the report in an article from Friday, and explained that, “Years of drought have shrunk the U.S. cattle herd and led to record beef prices for consumers, but a government report Friday indicated the picture could start to improve this year.

“The nation’s cattle supply fell 2% last year to 87.7 million head, a six-decade low, the U.S. Department of Agriculture said. But ranchers retained more young female cattle to produce new animals, a sign they are rebuilding their herds as feed prices decline and drought eases in some regions.

“The report suggested the U.S. cattle herd may begin to expand as soon as next year, analysts said, which would mark the first gain in nearly a decade.”

The Journal article added that, “Such a shift would be welcome news to consumers, who have faced soaring prices for beef in recent years. In December, average retail fresh-beef prices hit a record $5.036 a pound, according to the USDA. Federal forecasters expect consumer prices for beef to rise 3% to 4% this year, up from 2% last year.”

Also on Friday, NASS pointed out in its monthly Agricultural Prices report that, “The corn price, at $4.37 per bushel, is down 4 cents from last month and $2.59 below January 2013 [related graph] … The soybean price, at $13.00 per bushel, is unchanged from December but is $1.30 below January 2013 [related graph]…and… The January price of all wheat, at $6.31 per bushel, is down 42 cents from December and $1.81 below January 2013” [related graph].

Meanwhile, Adam Nagourney and Ian Lovett reported on the front page of yesterday’s New York Times that, “Already the drought [in the western U.S.], technically in its third year, is forcing big shifts in behavior. Farmers in Nevada said they had given up on even planting, while ranchers in Northern California and New Mexico said they were being forced to sell off cattle as fields that should be four feet high with grass are a blanket of brown and stunted stalks.”

AP writer Scott Smith reported yesterday that, “Amid California’s driest year on record, the nation’s leading agricultural region is locked in drought and bracing for unemployment to soar, sending farm workers to food lines in a place famous for its abundance.”

Also, Ian Lovett reported in Saturday’s New York Times that, “Responding to one of the worst droughts in California’s history, state officials announced on Friday that they would cut off the water to local agencies serving 25 million residents and about 750,000 acres of farmland.”

In addition, Pete Kasperowicz reported on Friday at The Hill’s Floor Action Blog that, “The House will pass legislation next week that would restore the flow of water to farms, homes and businesses in California’s Central Valley, to help victims of what congressional Republicans say is a drought that is being made worse by the Obama administration.

“The legislation, H.R. 3964, is sponsored by California’s entire Republican delegation, and seeks to restore a 1994 agreement called the Bay-Delta Accord that found a compromise between environmentalists and the water needs of homeowners and industry.

“In 2009, the Obama administration upset that agreement by requiring the diversion of water away from farmers and residents to help ensure enough water for salmon and a three-inch fish called the Delta smelt. The Obama administration justified this under the Endangered Species Act (ESA), but California Republicans say this decision led to a government-created drought for regions of California’s Central Valley.”

With respect to trade related issues, James Politi reported yesterday at The Financial Times Online that, “America’s top trade official has sought to reassure European and Asian negotiating partners that the White House can overcome rising dissent in Congress as it tries to keep momentum behind two of the world’s most ambitious regional trade agreements.

Michael Froman, US trade representative, told the Financial Times that the administration was convinced it could secure congressional backing for the deals even after Harry Reid, the Democratic senate majority leader, last week said he would oppose fast-track legislation for any agreements.”

The FT article stated that, “European and other officials have said that unless the Obama administration secures support for legislation known as ‘Trade Promotion Authoritythey would be wary of making the concessions that are likely to be needed for either deal. The legislation would prevent Congress from amending any pact and ensure that it would have to consider any accords in a timely fashion.

“But Mr Froman said he was sure that the support of Congress could be achieved. He also said both negotiations remained ‘very much on track’ for the time being.”

Mr. Politi added that, “On Saturday, John Kerry, secretary of state, also sought to minimise the significance of Mr Reid’s comments. ‘I’ve heard plenty of statements in the Senate on one day that are categorical, and we’ve wound up finding accommodation. . .  So this should not be a deterrent, and I hope nobody will let it stand in the way,’ Mr Kerry said in Munich.”



Niraj Chokshi reported in today’s Washington Post that, “Republicans stressed a ‘security first’ approach to immigration reform Sunday but said the prospects for a deal this year are far from certain, in part because of distrust of the Obama administration.

“When asked by George Stephanopoulos, host of ABC’s ‘This Week,’ whether a reform package could make it to the president’s desk before 2015, House Budget Committee Chairman Paul Ryan (R-Wis.) said: ‘I really don’t know the answer to that question. That is clearly in doubt.’

“Ryan, House Majority Leader Eric Cantor (R-Va.) and Louisiana Gov. Bobby Jindal (R) said in separate appearances on Sunday news shows that they would support an immigration overhaul package, but only if it focused first on security. The comments echoed a set of broad principles announced late last week at a GOP retreat.”



Jayson Lusk and Henry I. Miller indicated in a column in today’s New York Times that, “Three crops — corn, soybeans and wheat — account for a vast majority of the value of America’s agricultural crop output. But wheat is different in one important respect. While more than 90 percent of the nation’s corn and soybean acres are now planted with seeds genetically engineered to resist insects, herbicides or both, there is not a single acre of genetically engineered wheat being grown commercially in the United States.

Wheat farmers have suffered as a result, as have consumers of bread and pasta, who have been paying higher prices than they might have because fewer and fewer acres are planted in wheat. Without the benefits of the newer molecular techniques of genetic engineering, the nation’s wheat industry will continue to struggle against other commodities that have adopted biotechnology, and against the drought conditions out West. All of this is happening as the planet’s population increases and global wheat demand expands in response.

The writers pointed out that, “The scientific consensus is that existing genetically engineered crops are as safe as the non-genetically engineered hybrid plants that are a mainstay of our diet. The government should be encouraging and promoting these technologies.

“How does wheat differ from the other commodity crops, and why does it matter? Much of our domestically produced corn and soybeans are fed to animals or made into ethanol, while most wheat is consumed by humans as bread or pasta. This is why there were fears that genetically engineered wheat would suffer as an export crop. The European countries and Japan have traditionally imported about 15 percent of our wheat exports. But they have also been antagonistic to genetically engineered crops and food derived from them.

“As a result, wheat farmers missed out on perhaps the most important benefit of genetic engineering: the development of crops that can survive droughts or grow with lower-quality water.”

Keith Good