FarmPolicy

January 20, 2020

Farm Bill; Legislative Issues; Climate; Ag Economy; and, Immigration

Farm Bill

Marcia Zarley Taylor reported yesterday at DTN that, “Producers of bulk commodities like corn, soybeans and wheat have made crop insurance a staple of their risk management plans, insuring about 85% of eligible acres nationwide. Unfortunately, specialty crops like fresh sweet corn lag far behind at a mere 21% of planted acres and fresh green beans at 3%. Now the Risk Management Agency hopes attractive new features in a Whole-Farm Revenue Protection policy will aid risk management for diversified specialty crop and livestock producers [related graph].

“‘Crop insurance provides a tremendous safety net for core crops,’ Risk Management Agency Administrator Brandon Willis told DTN. ‘This is just another example if someone wants crop insurance, we have something for them.’

“The new program combines elements of the existing Adjusted Gross Revenue (AGR) and Adjusted Gross Revenue-Lite (AGR-Lite) programs targeting farms selling two to five commodities. It also expands eligibility to new counties and states starting in 2015. In 2014, only 802 of those policies had been sold nationwide, a participation rate Willis hopes to significantly improve.”

A news release yesterday from USDA indicated that, “‘Crop insurance has been the linchpin of the farm safety net for years and continues to grow as the single most important factor in protecting producers of all sizes from the effects of unpredictable weather,’ said [Sec. of Ag. Tom Vilsack]. ‘Providing farmers the option to insure their whole farm at once gives farmers more flexibility, promotes crop diversity, and helps support the production of healthy fruits and vegetables. More flexibility also empowers farmers and ranchers to make a broader range of decisions with their land, helping them succeed and strengthening our agriculture economy.’

The 2014 Farm Bill requires a whole-farm crop insurance policy option, and paves the way for the Risk Management Agency (RMA) to make it broadly available to specialty crop, organic, and diversified growers. The Federal Crop Insurance Corporation Board of Directors (FCIC Board) approved the Whole-Farm Revenue Protection pilot policy for RMA to offer it through the federal crop insurance program in 2015.

“USDA has taken many steps to provide effective insurance coverage for diversified, organic and specialty crops. The whole-farm crop insurance policy provides flexibility to meet the needs of specialty crop growers, organic producers and those with diversified farms, and who have farm production and revenue history, including five years of historic farm tax records. This policy is also part of USDA’s commitment to small and mid-sized producers managing diversified operations.”

Meanwhile, Erik Wasson reported yesterday at The Hill Online that, “More than a million kids confronted by healthier school lunches are turning up their noses, leaving the cafeteria and heading out to get a burger instead.

“The difficulty in getting students to eat lower-fat, lower-sodium meals is at the center of a food fight between House Republicans and first lady Michelle Obama that erupted this week.

“The Healthy, Hunger-Free Kids Act of 2010, supported by President Obama, requires lunch programs that receive federal dollars to provide healthier meals. The new standards began to go into effect in 2012.”

Mr. Wasson noted that, “Childhood obesity has spiraled in recent decades, and the first lady has made the fight against it a signature issue. Democrats say stemming the epidemic will cut healthcare costs and keep the armed forces functioning.

But Agriculture Department statistics show the number of school children in the National School Lunch Program dropped from 31.8 million in 2011 to 30.7 million in 2013.

“School boards are asking Congress to allow schools to opt out. Some schools are raiding their teaching budgets to cover the costs of mounds of wasted fruits and vegetables, Lucy Gettman of the National School Boards Association said.”

The Hill article added that, “Lawmakers acted this week. A House spending bill approved by a subcommittee on Tuesday would force the U.S. Department of Agriculture (USDA) to give a temporary waiver to school lunch programs that can show they were operating at a net loss for the last six months. That provision is supported by the National School Boards Association, as well as the School Nutrition Association. They also support other efforts, including a bill by Rep. Kristi Noem (R-S.D.) to stop imposition of more stringent standards coming down the pike.

“Subcommittee Chairman Robert Aderholt (R-Ala.) said the temporary waivers are needed because some school districts are losing too much money and need more time to adjust to the requirements. He said a big problem is that students are refusing to eat the healthier foods.”

Also yesterday, a news release from Sen. Patty Murray (D., Wash.) stated that, “[Today Sen. Murray] delivered a speech on the Senate floor to introduce the Stop Child Summer Hunger Act, which would provide families who have children eligible for free and reduced-price school meals with an electronic benefit transfer (EBT) card. During the academic year, millions of kids from low-income families are able to get free or reduced-priced meals at school, so they can get the nutrition they need to learn in class. But when school lets out for the summer, many of those same kids lose access to regular meals, which leaves them without the nutrition they need to lead healthy lives. The Stop Child Summer Hunger Act is modeled on the successful Summer EBT for Children demonstration project that has been piloted in 14 sites and 10 states and Indian Tribal Organizations. This pilot has seen positive results, decreasing hunger among children by 33 percent.  During her speech, Senator Murray told the story of a single mother from Washington state who struggles to provide for her two children during the summer months.”

 

Legislative Issues: Ag Appropriations (GIPSA), Budget, Water Resources Bill, and USTR Ag Nominee

Erik Wasson reported yesterday at The Hill Online that, “Differences between House and Senate Agriculture Department spending bills related to poultry regulations have sparked an intense lobbying battle this week.

“The issue relates to implementation of 2008 changes to the Packers and Stockyards Act favored by livestock and poultry growers but opposed by processors.”

The Hill article explained that, “Proponents say the new rules are needed to end unfair marketplace practices by giant food companies by making contracts with farmers more transparent, but opponents say the regulations are economically burdensome and target non-existent problems.

“For years, appropriations bills have blocked the USDA from fully implementing the Grain Inspection, Packers and Stockyards Administration (GIPSA) rules but this year’s farm bill saw a victory for growers because GIPSA changes were left out of the final package.”

Mr. Wasson noted that, “The House Appropriations Committee this week unveiled a newly GIPSA rider that opponents say is more restrictive than existing spending law. The rider is not in the Senate companion bill also being considered in committee this week.

“In particular, the House rider forces the USDA to rescind a completed rule forcing poultry integrators to give farmers a 90-day notice before it suspends delivery of baby birds to a farmer.

“Farm groups like the National Farmers Union (NFU) and 167 other farmer groups say the rider allows processors to strong-arm farmers into accepting less-favorable contracts. Opponents of the rule argue that most poultry companies have been contracting with growers for decades without any problems.”

Earlier this week, David Rogers reported at Politico that, “Tornadoes and floods qualify as natural disasters. Wildfires less so — especially on the vast federal lands in the West.

“Indeed, Smokey’s Forest Service ends up competing for dollars with the Environmental Protection Agency, which is charged with addressing what many believe is the biggest disaster of all and a new catalyst for wildland fire: climate change.”

Mr. Rogers pointed out that, “All this comes into play in Congress as wildland firefighters and EPA’s scientists are thrown together in the same $30 billion-something bill that funds the natural resources side of the federal budget.

“Since Republicans took over the House in 2010, this bill has been reduced by 14 percent in real dollars, adjusted for inflation. EPA has borne the brunt of those cuts. But as fire costs continue to grow, Republicans have had to scramble to preserve some balance for popular lands and wildlife programs in the West.

“It took a last-minute deal on the farm bill in February to save $425 million in promised aid this year for counties and towns surrounded by tax-exempt federal lands. And Idaho Republicans — hit hard by fire — have taken the lead for their party now in proposing that some portion of the firefighting costs be treated as natural disasters, outside the traditional appropriations process.”

And Keith Laing reported yesterday at The Hill Online that, “Sen. Barbara Boxer (D-Calif.) pushed her fellow senators on Wednesday to vote to approve a $12.3 billion bill to boost U.S. ports and waterways so it can be sent to President Obama.

“The House passed the bipartisan bill, known as the Water Resources Reform and Development Act (WRRDA), on a 412-4 vote.

“Boxer said she hoped the water infrastructure funding package would pass by a similarly-wide margin in the upper chamber.”

The adoption of the conference report to accompany H.R.3080, the Water Resources Development Act of 2013, is on the Senate Floor schedule for today.

An update yesterday from the Senate Finance Committee stated that, “Senate Finance Committee Chairman Ron Wyden, D-Ore., today led the committee to approve three nominees to fill key positions in the administration.

“The committee approved Sylvia Mathews Burwell’s nomination to be the Secretary of the Department of Health and Human Services (HHS), Stefan Selig nomination to be Under Secretary of Commerce for International Trade, and Darci Vetter’s nomination to be Chief Agricultural Negotiator at the Office of the United States Trade Representative (USTR). Burwell was approved by a vote of 21-3. Selig and Vetter were approved unanimously by voice vote.”

The update noted that, “Darci Vetter is currently the USDA deputy under secretary for farm and foreign agricultural services, a position she has held since 2010. Prior to her service with USDA, she was an international trade advisor on the Senate Finance Committee.”

A news item yesterday from the American Soybean Association (ASA) stated in part that, “The growers of the [ASA] applauded today’s Senate Finance Committee confirmation of Darci Vetter as Chief Agricultural Negotiator in the Office of the United States Trade Representative (USTR). ASA worked extensively with Vetter in her former role as Deputy Under Secretary for Farm and Foreign Agricultural Services at the U.S. Department of Agriculture.”

 

Climate

Evan Halper reported yesterday at the Los Angeles Times Online that, “Climate change threatens to undermine not only how much food can be grown but also the quality of that food as altered weather patterns lead to a less desirable harvest, according to a new study.

“Crops grown by many of the nation’s farmers have a lower nutritional content than they once did, according to the report by the Chicago Council on Global Affairs.”

The article added that, “The council has been examining the effects of climate change on food for several months as part of a project chaired by former Agriculture Secretary Dan Glickman and former Rep. Doug Bereuter (R-Neb.).

“The findings will be unveiled Thursday in Washington to agricultural industry leaders and policymakers, who are gathering to examine how to find and promote new and more resilient ways to farm amid the extreme heat, drought and flooding that threaten to drive down food production.”

 

Agricultural Economy

A recent update from Iowa State University Extension indicated that cash rents for 2014 in Iowa are down from last year [related info graphic].”

University of Illinois agricultural economist Gary Schnitkey tweeted yesterday that the Iowa State results regarding cash rents is similar to a recent Illinois survey.

Meanwhile, Reuters writer Rod Nickel reported yesterday that, “Tyson Foods Inc., the United States’ largest meat processor, is buying heavier hogs and expects to scale down production more than usual this summer, as it copes with a drop in pig supplies due to a deadly virus.

“‘We’re seeing very heavy hogs come to market,’ Chief Executive Donnie Smith told Reuters on the sidelines of the BMO Farm to Markets conference in New York.

“Porcine Epidemic Diarrhea virus (PEDv) has killed about 7 million piglets since it was detected a year ago in the U.S., where the outbreak has been most severe.”

Yesterday’s article also pointed out that, “Worries about PEDv led the European Commission on May 6 to introduce new rules for imported pig blood products as a precaution against spreading the virus.

But Smith said he is more concerned about a trade backlash against U.S. pork due to another issue, its country of origin food labeling rule…‘We need to either dramatically rewrite that rule or eliminate it,’ Smith said. ‘I’m afraid what could happen is trade retaliation from our good trading partners in Canada and Mexico, and frankly I wouldn’t blame them.’”

Bloomberg writers Eric Martin and Brian Wingfield reported yesterday that, “Disputes over sugar and steel trade between the U.S. and Mexico are straining ties between the countries just as negotiators try to hammer out the details of a Pacific-rim trade pact to further integrate their economies.

“U.S. Secretary of State John Kerry today concludes a two-day visit to Mexico aimed at bolstering trade and security, and the nations are among 12 countries seeking to conclude the Pacific accord that would be the largest in history.”

The Bloomberg article noted that, “The U.S. International Trade Commission determined in a preliminary finding on May 9 that the domestic sugar industry has been harmed by imports from Mexico, which reached $1.1 billion last year — more than the value of sugar imports from all other nations combined. The Commerce Department is investigating whether the Mexican goods should be subject to penalties and may begin to issue its first findings as early as next month.”

In other developments, Reuters writers Niu Shuping and David Stanway reported yesterday that, “China’s imports of distillers dried grains (DDGs) hit a record high in April, with bargain-hunting buyers undeterred by government efforts to block shipments that contain unapproved genetically-modified organisms (GMO).

“China imported 613,678 tonnes of DDGs, a protein-rich by-product of corn-based ethanol which is used as feed for livestock, a rise of 252 percent from a year ago and up 40.6 percent from March.”

Also, Grigori Gerenstein reported yesterday at The Wall Street Journal Online that, “Ukraine’s grain harvest this year is likely to fall to about 60 million metric tons from 63 million tons in 2013 as a result of the current political instability, the Ukrainian Agrarian Confederation said Wednesday.”

Domestically, Jacob Bunge reported in yesterday’s Wall Street Journal that, “U.S. antitrust regulators said they would bless a joint venture to create the country’s largest seller of wheat flour if the companies involved followed through on plans to sell four mills to a smaller rival.

“The joint venture, called Ardent Mills, would comprise the flour operations of Cargill Inc., CHS Inc. and ConAgra Foods Inc. in a company with an estimated $4 billion in annual sales, about a third of the U.S. flour business.”

And Bloomberg writer Alison Vekshin reported this week that, “California’s drought won’t affect the creditworthiness of the state or most of its local governments, Moody’s Investors Service said.

“While the third consecutive dry year may harm the economies of a few cities and counties that rely on agriculture, the impact on municipal finances will be limited, analysts Emily Raimes and Robert Azrin wrote in a report released yesterday. The state’s rating, A1 or fifth-highest, won’t be hurt, they said.”

Also on the California drought issue, Ramsey Cox reported yesterday at The Hill Online that, “Sen. Orrin Hatch (R-Utah) said California’s drought is being caused by some of the ‘stupidest people’ because they’re trying to protect the delta smelt.

“‘Some want to put the needs of fish ahead of the needs of people,’ Hatch said on the Senate floor Wednesday. ‘I think we have some of the stupidest people in the environmental movement.’”

The Hill update added that, “Hatch said he’d support a bill from Sen. Dianne Feinstein (D-Calif.) that aims to provide relief for her state’s drought problems but that he thinks an amendment from Sen. John Barrasso (R-Wyo.) should be added.

He said Barrasso’s amendment would allow localities to balance species protections with protections for California’s farm industry.”

 

Immigration

Martin Matishak reported yesterday at The Hill Online that, “Language that would have issued green cards to young illegal immigrants who serve honorably in the military did not make the cut for House amendments to the 2015 defense policy bill.

“Rep. Jeff Denham (R-Calif.)’s proposal, commonly referred to as the ENLIST Act, was not on the list of 162 amendments to the National Defense Authorization Act (NDAA) the House Rules Committee approved late Tuesday night.”

Keith Good

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