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Farm Bill; Ag Economy; Regulations; and, Immigration

Farm Bill- Policy Issues

In an interview last week with Don Wick of the Red River Farm Network, House Ag Committee Ranking Member Collin Peterson (D., Minn.) remarked on USDA’s implementation of the new Farm Bill and noted that, “I think the Department is well along, and it’s gotten a much quicker start this farm bill as opposed to the last farm bill. But there are a lot of complications. As you said, the first thing they focused on was getting the livestock disaster thing going, so that’s happening now. They’re working…I think, I’m expecting in the next week or two to get them to designate these critical conservation areas so we can start getting some of this retention stuff moving yet this summer. I’ve talked with the Secretary a couple times about this, and I think that’s going to happen.

“And they’re working on like 600 different areas that they had to work on, so they’ve got a lot of work to do. But because the bill had been out there for so long, I think they were a little more prepared this time than they were in ’08. But the commodity title, with us getting rid of direct payments and setting up these two new safety nets, where you have to make a choice, that’s more complicated, and it’s going to take them a while to get that put together.”

And on the issue of the new dairy program, and potential costs, Rep. Peterson noted that, “Well, that was why we had the stabilization fund in there, was to mitigate any potential runaway of the system. So the way it’s…you know, because the stabilization was taken out, we’ve got two other provisions in there that I think are going to have some impact. The question is we don’t know how much. But if we get in an oversupply situation, you’re only going to be reimbursed on your base production, and not on any increased production until that oversupply goes away. So that’s some mitigation.

“And we also have a purchase program that’s going to be put together where the Department will be able to go in and buy retail products off the market, which will have a much bigger impact than what they were doing before, where they were limited to buying commodities off the market. So we just don’t know how much that will mitigate the situation if we get in an oversupply position. But this is something that has been thoroughly debated.

The Speaker, who was the one that insisted we take the stabilization out, I told him, I said if this gets out of hand, this is your choice. And by taking out the stabilization, you know, they had told us we had to do a dairy program that cost less than the existing program. Well, we did that. But when they took out stabilization, the cost of it went from $130 million to $950 million. So they’ve already spent a lot more money on the dairy program, and from everything I can hear from people, they’re willing to live with it, no matter what comes out of it.”

He added that, “We’re going to have probably as good a year in dairy this year as we’ve had in a long time, probably next year as well.”

And on the issue of the Renewable Fuel Standard and the Environmental Protection Agency, Rep. Peterson indicated that, “The feedback I’m getting is that I think they, at least the EPA has figured out they screwed this up, and they’re trying to figure out a way to back off, from what I can tell. The Administration also appears to be listening. But I’m not as confident of their backing off. So it’s a little unclear, but I think that it’s pretty…it seems to me that the rule was put out there will not be the final rule, they will back off of that. The question is how much and how soon.

“And there have been some mitigating factors. One of the reasons that they claim they did this was because the mileage on the cars had improved and the demand for fuel was down because of the recession, which is true, and that was part of what they said was driving this. Well, the consumption has gone up here the last few months, and they’re now recalculating that into their situation, so I don’t know. But I think it’s going to be better than what was originally proposed. I doubt if we’re going to be able to have it stay exactly the way it was in the statute when we passed it, but we’ve been pushing hard to try to get them to back off.”

Meanwhile, an update Friday from Inside U.S. Trade reported that, “The government of Brazil will not request a World Trade Organization panel this month to challenge whether the United States has complied with a 2005 WTO ruling that faulted subsidies to U.S. cotton producers and agricultural exporters, according to an informed source, though it is still expected take such a step in the next few months.”

The update added that, “But the government of Brazil has since grown pessimistic that the U.S. will be able or willing to address its outstanding demands regarding the implementation of the new U.S. farm bill, and is expected to seek new compliance proceedings at the WTO before the summer.”

On the nutrition issue, a graphic from the Congressional Budget Office (CBO) on Friday depicted mandatory spending levels for some federal programs as a percent of Gross Domestic Product in 1993 and 2013. Among the programs highlighted was the Supplemental Nutrition Assistance Program (SNAP- food stamps), and the CBO update indicated that spending on SNAP, as a percent of GDP in 1993 and 2013, increased by 0.1%.

And Niraj Chokshi in an update Friday at the GovBeat Blog (Washington Post) pointed to “11 graphics show how bad local food insecurity can be in America.”

Also, a news release last week from Rep. Robert Aderholt (R., Ala.), the Chairman of the House Appropriations Ag Subcommittee, stated that, “[Rep. Aderholt] today heard from key school nutrition professionals from across the state to gauge their experiences providing school lunches to students. Following the Healthy, Hunger-Free Kids Act of 2010, school meal programs must adhere to strict new federal guidelines for school meals and will soon implement new standards for competitive foods, those foods sold outside the reimbursable school meal program. These new ‘Smart Snacks in School’ rules are set to go into effect July 1, bringing a series of new regulations for school meal planners and students to adjust to.

“School nutrition professionals from seven AL counties joined the congressman at West Point Schools in Cullman to share concerns of increased food costs coupled with decreased student participation in meal programs. The requirement for students to take certain foods deemed ‘healthy’ has further challenged schools working with very limited budgets while resulting in significant plate waste.”

With respect to the executive branch, Juliet Eilperin reported on the front page of today’s Washington Post that, “Each president and first lady sets a new tone for the White House, partly based on personal beliefs and private quirks, but few have so transformed the culture inside the building the way the Obamas have regarding nutrition and fitness.

“Gone are Tex-Mex Thursdays at the White House Mess and the least healthy vending machine options; calorie counts and hummus with vegetables are in. Working out with the Obamas’ personal trainer is one of the few acceptable excuses for being late to a meeting; the first family reserves desserts for weekend meals despite having a full-time pastry chef.”

 

Agricultural Economy

Kelsey Gee reported in Saturday’s Wall Street Journal that, “The U.S. Department of Agriculture said Friday that it would try to combat a fast-spreading swine virus by requiring the pork industry to report and track all incidents of the disease.

The USDA said the measures could help slow porcine epidemic diarrhea virus, which has afflicted hog farms in 29 states and killed millions of young pigs since it was first identified in the U.S. last spring.”

The Journal article added that, “The USDA, the Food and Drug Administration and industry officials have been struggling to identify sources of the virus’s spread. Regulators and industry groups have said they are examining a wide range of feed ingredients and manufacturing processes and other possible pathways for the disease, like contaminated air or dust particles carried from farm to farm.”

Meanwhile, Stephanie Strom reported in today’s New York Times that, “This summer, Todd Allen’s only crop will be Pima cotton.

“He and his brother, Joel, usually also grow cantaloupes and, later in the season, winter wheat on about 600 acres or so. But this year, they and hundreds of others will get no water from the reservoirs that sustain farming in the Central Valley, where much of the nation’s fresh fruits, nuts and vegetables are grown.”

The Times article explained that, “Heading into the third year of a prolonged drought, the Allens are among the many California farmers forced to make dire choices that could leave as much as 800,000 acres, or about 7 percent of the state’s cropland, fallow. While some think that estimate may be inflated so early in the planting season, the consensus is that drier and drier seasons are on the horizon.

“A recent report on prospective planting from the federal Department of Agriculture forecast a 20 percent decline in California’s rice crop and a 35 percent decline in cotton this year from last year’s crop.

“The decisions by farmers like the Allens will translate directly into higher prices at the grocery store.”

AP writer Scott Smith reported on Friday that, “Drought-stricken California farmers and cities are set to get more water as state and federal officials ease cutbacks due to recent rain and snow, officials announced on Friday.

“The Department of Water Resources said it is increasing water allotments from the State Water Project from zero to 5 percent of what water districts have requested. The State Water Project supplies water to 29 public agencies serving more than 25 million Californians and irrigates nearly a million acres of farmland.”

The article pointed out that; “All California farmers and water users get the advantage of the state’s 5 percent increase, if they’re tapped into California’s State Water Project. Others tied to the federally run Central Valley Project north of the Delta get the 75 percent increase with Friday’s announcement.

Yet those using federal water south of the Delta remain at a zero water allotment, including hundreds of Central Valley farmers who rely on the Westlands Water District, the nation’s largest supplier of water for agricultural use.”

(For more on California water issues, see this Los Angeles Times article from March 16, “For Imperial Valley farmers, abundant water amid drought,” by Tony Perry).

And, AFP writer Juliette Michel reported on Friday that, “A citrus disease spread by a tiny insect has devastated Florida’s orange crop, which is expected to be the worst in nearly 30 years, and sent juice prices soaring on New York markets.

“The culprit? The gnat-sized Asian citrus psyllid, which is infecting citrus trees across the Sunshine State with huanglongbing, or citrus greening disease, which causes fruit to taste bitter and fall from trees too soon.”

In trade related news, a news release on Friday from the American Sugar Alliance stated that, “The U.S. Department of Commerce (DOC) today announced that it would initiate an investigation to determine if the Mexican government has subsidized Mexico’s sugar production and whether that sugar is being dumped into the U.S. market.

“A group of U.S. sugar producers filed antidumping and countervailing duty petitions against Mexico’s sugar industry on March 28, and they applauded DOC’s decision.

“‘It is clear that the petitions have merit in the eyes of the U.S. government,’ said Phillip Hayes, a spokesperson for the American Sugar Alliance. ‘Considering what’s currently happening in the market, we are hopeful that corrective action will be taken as soon as possible.’”

Juliet Eilperin reported on the front page of today’s Washington Post that, “President Obama departs Tuesday for a week-long, four-nation tour of Asia, where he and his top aides will be less focused on any big policy announcements than on reassuring jittery allies that America remains committed to bolstering its security and economic ties to the region.

“The trip — rescheduled from October, when Obama canceled his plans because of the government shutdown — includes two of the countries on his original itinerary, Malaysia and the Philippines, as well as Japan and South Korea.”

The Post article noted that, “Economic relations rank just as high as security issues on the president’s list of concerns to be addressed on this trip. The United States and Japan have been engaged in intense negotiations for months — and as recently as Friday— over how to resolve their trade differences in the context of the broader Trans-Pacific Partnership, a pact that would encompass 12 nations and 40 percent of the world’s gross domestic product.

“The two sides still have serious differences over how to treat the agricultural and automobile sectors, but officials from both governments said last week that they remain optimistic about reaching a deal. Even so, any agreement will face Democratic opposition once it reaches Capitol Hill.”

Democratic lawmakers George Miller, Rosa DeLauro and Louise Slaughter penned a column today at the Los Angeles Times Online, “Free trade on steroids: The threat of the Trans-Pacific Partnership,” which noted that, “But foremost among all these issues is the devastating effect the agreement would have on jobs and the American middle class. Americans were promised 20 years ago that NAFTA would bring an unprecedented economic boom and 200,000 jobs in the first year. The three of us doubted those promises and voted against it. The data on NAFTA’s outcomes make clear that the concerns we and other critics had were warranted.”

The New York Times editorial board opined yesterday that, “To gain the support of a divided Congress and public, the administration must ensure that new agreements are much stronger than Nafta and other pacts. President Obama, who criticized the agreement with Canada and Mexico as a candidate in 2008, promised that his negotiations would avoid a race to lower costs and standards by requiring that countries adhere to common regulations in areas like labor rights, environmental protection and patents. Living up to that promise should be one of his highest priorities.”

 

Regulations: EPA, FDA, Biotech

Timothy Cama reported on Friday at the Hill’s Energy Blog that, “Sen. Chuck Grassley (R-Iowa) wrote a letter to the Environmental Protection Agency Thursday with questions about how the Obama administration’s methane-reduction efforts would affect dairy farms.

“Grassley’s questions came weeks after the administration released a plan to reduce methane emissions. The strategy called on the EPA and the U.S. Department of Agriculture (USDA) to outline their own plans to lower methane releases, including from biogas produced by cows.”

Also on Friday at The Hill’s RegWatch Blog, Cristina Marcos reported that, “Lawmakers are pushing the Food and Drug Administration to modify proposed rules requiring breweries to inspect spent grain given to cattle.

“In a letter to FDA Commissioner Margaret Hamburg, 13 House members said the proposed regulation would impose heavy costs on small breweries. [READ LETTER HERE.]

“Under the proposed regulation, breweries would have to dry, package and inspect all food used for cattle. Many breweries use their spent grain, which is steeped in hot water to extract natural sugars for alcohol production, as cattle feed. The lawmakers said that requiring breweries to go through the inspection process would cut into profits and ultimately waste the grain.”

AP writer Audrey McAvoy reported on Saturday that, “You can trace the genetic makeup of most corn grown in the U.S., and in many other places around the world, to Hawaii.

“The tiny island state 2,500 miles from the nearest continent is so critical to the nation’s modern corn-growing business that the industry’s leading companies all have farms here, growing new varieties genetically engineered for desirable traits like insect and drought resistance.”

The article indicated that, “But these same farms have become a flash point in a spreading debate over genetic engineering in agriculture.

“Kauai and Hawaii counties have moved in the past several months to regulate genetically modified organisms and the pesticides the farms use. In Maui County, a group is collecting signatures for a potential ballot measure that would impose a temporary ban on the crops.”

 

Immigration

Wall Street Journal writer Laura Meckler reported late last week that, “Speaker John Boehner and other senior House Republicans are telling donors and industry groups that they aim to pass immigration legislation this year, despite the reluctance of many Republicans to tackle the divisive issue before the November elections.

“Many lawmakers and activists have assumed the issue was off the table in an election year. But Mr. Boehner said at a Las Vegas fundraiser last month he was ‘hellbent on getting this done this year,’ according to two people in the room.

“A spokesman for Mr. Boehner didn’t dispute the account but said no action is possible until President Barack Obama proves himself a trustworthy partner to Republicans.”

And Erik Wasson reported on Friday at The Hill Online that, “Speaker John Boehner’s (R-Ohio) office on Friday moved to tamp down speculation that GOP leaders are preparing to act on immigration reform.

The Wall Street Journal reported Friday that Boehner last month told donors at a Las Vegas fundraiser that he was ‘hellbent on getting this done this year,’ referring to immigration legislation.”

Mr. Wasson added that, “The comment appears to run counter to recent public statements where Boehner has argued that conservative distrust of President Obama has made action on legislation nearly impossible.

But a spokesman for the Speaker said the quote does not reflect any change in position.

“‘Nothing has changed. As he’s said many times, the Speaker believes step-by-step reform is important, but it won’t happen until the president builds trust and demonstrates a commitment to the rule of law,’ Boehner spokesman Brendan Buck said.”

Keith Good