FarmPolicy

September 17, 2019

Farm Bill; Ag Economy; Labeling Issues; Food Safety; and, Immigration

Farm Bill

AP writer Jeff Karoub reported yesterday that, “A group of scientists at Michigan State University huddled around a computer screen earlier this week — not poring over scientific data but watching a webcast of the U.S. Senate.

“Among them was Rufus Isaacs, an entomologist who leads a team of U.S. and Canadian scientists working to enhance bee pollination of crops. Isaacs was anxious to see if the Senate would approve the long-delayed farm bill, and with it continue the $8.6 million federal grant critical to his pollen project’s survival. The Senate passed the legislation and Congress sent it to President Barack Obama, who is expected to sign the bill Friday on Isaacs’ campus in East Lansing.

“‘It was a great relief and celebration in my lab,’ Isaacs said of the rare moment when pollen took a backseat to politics. ‘It’s been a long wait for this.’”

The article noted that, “The nearly $100 billion-a-year federal farm bill, passed after 2 ½ years of legislative wrangling, does two main things: Almost 80 percent of the money goes to food stamps for the needy, and around 15 percent is designated for farm subsidies and crop insurance subsidies. The pledge of hundreds of millions of dollars for agricultural research is a relative drop in the bucket, but it’s pumping money into universities across the country, particularly for advanced agricultural research.

Obama’s visit to Michigan State is a nod to the primary role a fellow Democrat, Michigan U.S. Sen. Debbie Stabenow, chairwoman of the Senate’s Agriculture Committee, played in authoring the bill and getting it passed.”

Mr. Karoub added that, “Another addition is $200 million to create the Foundation for Food Agriculture Research. The money for the nonprofit organization is guaranteed but also has to be matched through private investment. The aim of the foundation is to boost cooperation between industry, academia and private foundations, and research will focus on safe, efficient and sustainable food production, innovations to boost the economy and fight global hunger.

“Ian Maw, vice president for food, agriculture and natural resources with the Washington, D.C.-based Association of Public and Land-Grant Universities, said most of his advocacy organization’s priorities were incorporated into the bill.”

And AP writer Nedra Pickler reported today that, “President Barack Obama is launching a new program to help American farmers and rural businesses boost their exports.

Obama plans to announce the ‘Made in Rural America’ initiative Friday at Michigan State University. The president is visiting the school to sign into law a sweeping farm bill that sets policy for agricultural programs and food stamps.

He’s coupling the signing of the nearly $1 billion-a-year legislation with the announcement of the new administration program to connect rural businesses with federal resources that can help sell their products and services abroad. The program’s creation comes as U.S. farmers are sending more products overseas — a record $140.9 billion in the last fiscal year — but U.S. officials say additional opportunities exist overseas for farmers and other rural business owners.”

Also on the trade issue, Wall Street Journal columnist Kimberly Strassel penned a column in today’s paper titled, “How Politics May Sink Trade Deals:  Obama may want Trade Promotion Authority, but Harry Reid’s priority is the midterm elections.”

Meanwhile, Jonathan Coppess of the University of Illinois indicated yesterday at the farmdoc daily blog (“Evaluating Commodity Program Choices in the New Farm Bill”)  that, “On February 4, 2014, the 2014 Farm Bill (named the Agriculture Act of 2014) cleared its final Congressional hurdle.  The President is expected to sign the bill into law on February 7, 2014, then it goes down to the United States Department of Agriculture for implementation.  The commodity programs in Title I of the farm bill and the choices required all begin with the 2014 crop year.  The final regulations will further determine program and decision parameters, as well as when farmers can begin to sign up.  The discussion below is based on the legislative text.  It will be updated or revised as needed based on the regulations.

“The difficult negotiations between competing approaches to the farm safety net resulted in the compromise approach in the final bill that require the decisions discussed herein.  In short, the House farm bill required the owners of a farm to choose between a county revenue program and a fixed-price program.  The Senate version of the farm bill provided both a price and revenue program for all farms and covered commodities but within the revenue program it required a choice between county level revenue or individual farm level revenueThe final bill requires a choice among a price program, a county revenue program or an individual farm revenue program.

Title I of the 2014 Farm Bill includes a price-based assistance program called Price Loss Coverage (PLC) and revenue-based assistance programs called Agriculture Risk Coverage (ARC) (more information is available here).  Reflecting significant concerns about market and planting distortions, the compromise utilizes base acres for all program payments (i.e., payments are made on a percentage of the farm’s base acres); neither program makes payments on the acres actually planted to covered commodities with the exception of cotton base acres (now termed ‘generic base acres’) that are planted to covered commodities.  Cotton is no longer a covered commodity due to the World Trade Organization (WTO) dispute with Brazil.”

After more detailed analysis, yesterday’s update noted that, “The 2014 Farm Bill’s safety net requires farmers and landowners to elect which program design they prefer based on what they think will be most effective for their operation, particularly in conjunction with crop insurance.  Significant analysis is needed to compare the new programs and provide valuable information to the farm’s decision makers, who will be locked into the program choice for the life of this farm bill.”

Also yesterday, Chris Clayton provided a closer look at crop insurance issues at the DTN Ag Policy Blog.

Mr. Clayton explained that, “A few people have commented that they didn’t know exactly what the farm bill did in crop insurance. There is perception that crop insurance takes a cut. That’s actually the opposite of what happened in crop-insurance programs. For the most part, those programs and options for producers are propped up. The final bill also does not include any income means testing for crop insurance premium subsidies despite the initial language in the Senate version of the bill.

“The Congressional Budget Office calculated crop insurance costs increase about $5.7 billion over 10 years under the bill, totaling $89.8 billion over 10 years. That’s effectively double the estimated budget score for commodity programs, according CBO.

“The two new big ticket items in the crop-insurance title are the Supplemental Coverage Option — $1.7 billion over 10 years — and the Stacked Income Protection for cotton producers — $3.29 billion over 10 years. SCO and STAX are optional county-based revenue programs meant to add extra protection to individual crop-insurance policies for producers.”

The DTN update went on to discuss “some of the key changes in crop insurance under the Agricultural Act of 2014.”

In other news, The Cleveland Plain Dealer editorial board noted yesterday that, “The House, which is dominated by conservatives, earlier this year tried to cut a whopping $40 billion from SNAP over a decade.

“Working to avoid that were Democrats U.S. Rep. Marcia Fudge of Warrensville Heights and U.S. Sen. Sherrod Brown of Ohio. Both deserve credit for helping to craft a deal that cuts $8.6 billion from food stamps in a manner that leaves benefits untouched to Ohioans already were hit by recent federal and state food-stamp cutbacks.

“The $8.6 billion compromise comes from closing a loophole that some states – not including Ohio – had used to help food-stamp holders increase their food-stamp benefits by giving them federally subsidized heating assistance, in token amounts in some cases.”

An opinion item at The Economist Online recently stated that, “Democrats complained about savage cuts to food stamps, which actually amounted to a mere 1% over ten years compared with an earlier version. And the big picture is that food-stamp spending has exploded since 2000. The number of people receiving the benefit rose from 17m in 2000 to 26m in 2007 and then, as the recession bit, to 48m in 2013—though it is projected to shrink again as growth revives.”

 

Agricultural Economy

A news update yesterday from the Food and Agriculture Organization of the United Nations noted that, “The FAO Food Price Index fell in January for the first time in 3 months as lower prices of cereals, sugars, oils and meat outstripped gains in dairy values.

“The Index, based on the prices of a basket of internationally traded food commodities, averaged 203.4 points in January 2014, down 1.3 percent from December and 4.4 percent below January last year.

“‘We’re seeing lower prices due to abundant supplies, but stronger upturn in demand, such as an increase in the pace of imports from Asia, could limit the decline,’ said FAO economist Abdolreza Abbassian.”

And Emiko Terazono reported yesterday at The Financial Times Online that, “Global dairy prices have jumped by almost a third in the past year on the back of growing demand from China, north Africa and Russia amid limited supplies [related graph].

“The UN Food and Agricultural Organisation’s dairy price index, which tracks butter, skimmed milk powder and whole milk powder prices, jumped 28 per cent in January from a year before.”

The FT article pointed out that, “The jump in demand came as milk production in China and Russia has been declining, underpinning a surge in dairy imports. Chinese demand was exceptionally buoyant, said analysts.”

And, on a separate issue, with respect to drought issues in California, the U.S. Drought Monitor indicated this week that, “Though several inches of precipitation (liquid equivalent) fell over the northern one-half to two-thirds of California this week (locally 3-4 inches in the central Sierras), significantly more precipitation will be needed to justify improvement with the depiction. The central and southern Sierras report up to 4 inches of SWE, while the northern Sierras report only an inch. The precipitation received this week only keeps the snowpack/water supply from falling further behind. Reservoirs continue to go down” [see related graph].

Bloomberg writers Jennifer Oldham and Michael B. Marois reported yesterday that, “The drought that’s gripping California may soon have the rest of the country seeking relief.

“The emergency, which follows the state’s driest year on record, is likely to boost the prices of everything from broccoli to cauliflower nationwide. Farmers and truckers stand to lose billions in revenue, weakening an already fragile recovery in the nation’s most-populous state.”

Richard Simon reported in yesterday’s Los Angeles Times that, “The Republican-controlled House passed legislation Wednesday billed as a response to the California drought, but the measure is unlikely to go further in the face of a White House veto threat and opposition from the state’s Democratic senators.

“Still, the action highlights the growing interest on Capitol Hill in trying to do something about the water shortage, a potentially hot issue in this year’s elections. Democratic lawmakers are calling for hearings and hurriedly drafting legislation of their own.”

In addition, Allysia Finley indicated yesterday at The Wall Street Journal Online that, “The House on Wednesday passed water legislation that promises a modicum of relief to parched California farms, but the bill is dead upon arrival in the Senate.

President Obama has threatened to veto the measure, which the White House says would ‘undermine years of collaboration between local, State, and Federal stakeholders.’ California Sens. Dianne Feinstein and Barbara Boxer have called the bill ‘irresponsible,’ ‘dangerous’ and ‘divisive.’ But the only collaboration that has occurred has been between government regulators and environmental groups. What irks Democrats is that the bill would hold them responsible for the divisive and destructive environmental policies they’ve championed.”

The Journal item added that, “Rep. Jim Costa of Fresno, who is feeling the heat at home, was the only Democrat in California’s delegation to vote for the bill. The water shortage reflects how out-of-touch liberals are with the working class and has become a potent issue for Republicans in the Central Valley. ‘Anybody . . . who votes against this bill is literally saying, ‘I want to raise the cost of food (for) everybody in the United States,’’ freshman Rep. David Valadao, who pulled off a major upset two years ago in the Central Valley, noted on the House floor. ‘The time for stealing water has ended,’ added San Joaquin Valley Rep. Devin Nunes.”

In other news, David A. Fahrenthold reported yesterday at The Washington Post Online that, “America’s most famous load of yogurt — a shipment intended to feed U.S. Olympians in Sochi, but blocked by Russian authorities — remained in storage in New Jersey on Thursday, despite the best efforts of a senator and the Department of Agriculture to spring it loose.

“The yogurt at the center of this fight was made by Chobani in Upstate New York. According to Sen. Charles E. Schumer (D-N.Y.), it was supposed to be shipped to Sochi last weekend.

“But it wasn’t.”

The Post article indicated that, “Russia doesn’t allow the importation of American yogurt. Any yogurt.

“The U.S. government is involved in a long-running negotiation with Russia and Russia’s two partners in the Eurasian Customs Union — Belarus and Kazakhstan — about the public-health standards that American dairy products must meet.

“They have not resolved it yet. So no yogurt gets in. Still, with the Olympics coming, Chobani apparently wanted to try anyway.”

 

Labeling Issues

Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Major players in the American food industry formally launched an effort Thursday to head off regulations requiring labels on genetically engineered foods through the creation of a set of less restrictive federal standards.

“The push for voluntary federal labeling standards, first reported by The Hill in November, follows expensive battles in California and Washington state over ballot initiatives seeking to impose mandatory labeling regulations.”

The Hill update explained that, “The Coalition of Safe Affordable Foods, made up of roughly 30 trade groups from the food, biotechnology and farming industries, will press for legislation creating a voluntary labeling system for products containing genetically modified organisms (GMOs).

“The group’s proposal would require labeling for any products deemed by the Food and Drug Administration to carry a public health threat — though, to date, none has — and impose a new mandatory pre-market technology review process at the agency.

“At the same time, the measure would put an end to a growing number of mandatory bills that have cropped up in state legislatures around the country.”

AP writer Mary Clare Jalonick reported yesterday that, “Pamela Bailey, president and CEO of the Grocery Manufacturers Association, the food industry’s main trade group, said the decision on labels should rest with the Food and Drug Administration, which is set up to assess the safety of foods.

“‘It does not serve national food safety policy to leave these issues to political campaigns,’ she said.

“The grocery manufacturers announced a partnership with 28 farm and food industry groups Thursday to push for the legislation.”

 

Food Safety

Kimberly Kindy and Brady Dennis reported on the front page of today’s Washington Post that, “Federal regulators and poultry companies are scrambling to find new ways to reduce salmonella contamination, which sickens a million Americans annually. And the Agriculture Department is planning to expand rules to limit salmonella on chicken parts, not just whole birds.

“But food-safety groups say this doesn’t go far enough and that the USDA should ban the most perilous salmonella strains from poultry altogether, just as it did with other dangerous bacterial strains in many beef products.

“Poultry processors have resisted such an approach, arguing that it would be expensive and ultimately futile because salmonella is so pervasive.”

 

Immigration

Jonathan Weisman reported in today’s New York Times that, “The yearlong effort to overhaul the nation’s immigration laws, which had the support of President Obama, Republican leaders and much of American business and labor, was seriously imperiled on Thursday when Speaker John A. Boehner conceded that it was unlikely he could pass a bill.

“His pronouncement, amid mounting resistance from conservatives, significantly narrowed the window for success this year and left it to Mr. Obama to win the trust of balking Republicans.

“Mr. Boehner’s remarks came a week after he and other House Republican leaders offered a statement of principles intended to win support for the measure. But, he said, House Republicans are not prepared to move forward in partnership with a Democratic administration that they believe will not fairly and impartially carry out the laws they pass.”

Laura Meckler and Kristina Peterson reported in today’s Wall Street Journal that, “Many in GOP ranks also expressed distrust that President Barack Obama would enforce any law they pass. ‘There’s widespread doubt about whether this administration can be trusted to enforce our laws,’ Mr. Boehner told reporters. ‘It’s going to be difficult to move any immigration legislation until that changes.’

“The White House responded that it has aggressively enforced immigration laws.

“The move represents an effort by Mr. Boehner to apply the brakes amid heightened expectations after the GOP unveiled its ideas last week at a retreat in Maryland. It still remains possible he could bring legislation to the floor this summer, after many Republican primaries are over, or late in the year, after the elections.”

Keith Good

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