FarmPolicy

August 17, 2019

Ag Appropriations; Ag Economy; Regs; Water Bill; and, Political Notes

Agricultural Appropriations- Policy Issues

Today the House will consider the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2015 (H.R. 4800), which will be debated under a “Modified Open Rule.” (“The rule provides for one hour of general debate and makes in order any amendment offered that complies with the House rules. Additionally, the Rule provides for 10 minutes of debate per amendment equally divided between the proponent and an opponent and up to 10 pro forma amendments for the purpose of debate offered by the Chair and Ranking Member or their designee.”)

Bloomberg writers Alan Bjerga and Derek Wallbank reported yesterday that, “House Republicans today will try to roll back school-lunch nutrition requirements — passed in 2010 with the backing of First Lady Michelle Obama — saying the rules bust local budgets and micromanage what children eat.

The vote, over a provision in the U.S. agriculture spending bill, is a proxy for a larger debate between Republicans, who call the rules a massive government overreach, and Democrats, who say the opposing party is trying to protect the interests of big food producers.”

The Bloomberg article noted that, “The agriculture bill being debated on the House floor today authorizes spending for farm programs, food aid, the Food and Drug Administration and the Commodity Futures Trading Commission.

“It includes a provision to let some school districts opt out of the healthy-food mandates, which call for more fresh foods and fewer calories. Schools that can prove they’re losing money on their school lunch programs can get a one-year waiver from the federal rules.”

“House Republicans said that in reality, the rules don’t work. Representative Rick Crawford, an Arkansas Republican, said schools in the eastern part of his state had to dip into general-fund revenue for the healthier lunches, which were often left uneaten. General funds also are used to buy books or pay teachers.”

Yesterday’s article also indicated that, “Exacerbating the lunch funding issue is a 2.6 percent increase in fresh fruit and vegetable prices so far this year because of the California drought. Also, hog and cattle prices have reached record highs this year, and a devastating pig virus is lowering pork production.”

At the Rules Committee hearing yesterday on the Appropriations measure, Ag Appropriations Subcommittee ranking member Sam Farr (D., Calif.) expressed concern about the waiver provision contained in the bill (related audio (MP3- 0:18)), as well as a provision in the spending bill relating to the Special Supplemental Nutrition Assistance Program Women, Infants and Children (WIC) and white potatoes (related audio (MP3- 0:52)) .

Rep. Jim McGovern (D., Mass.) also commented on both the school lunch waiver issue and the WIC white potato variable (related audio (MP3- 1:16)).

AP writer Mary Clare Jalonick reported yesterday that, “A House bill that would allow some schools to opt out of healthier meal standards drew a veto threat Tuesday from the White House.

The GOP spending bill would allow schools to waive the school lunch and breakfast standards championed by first lady Michelle Obama for the next school year if they lost money on meal programs over a six-month period. The House is expected to consider the legislation as soon as Wednesday.”

A news release yesterday from First Focus Campaign for Children stated that, “The bipartisan children’s advocacy organization First Focus Campaign for Children sent a letter today urging members of the United States House of Representatives to oppose legislation funding the U.S. Department of Agriculture (USDA), absent the adoption of amendments to strike policies that undermine efforts to mitigate childhood hunger and obesity. Though the legislation fully funds critical child nutrition initiatives, it weakens those initiatives’ nutritional standards.”

In a “Q and A” with Politico’s Mike Allen yesterday, Secretary of Agriculture Tom Vilsack indicated that, “Obesity among our youngsters is a big problem. Hunger among our youngsters is a big problem. Here’s where I think the challenge is- rather than try to take a step back as some are suggesting, maybe it would be better for all of us to focus on getting the equipment grants fully funded that would give the folks the ability to prepare things at school less expensively. Maybe its a way of taking advantage of the grants that are already out there to assist with technical assistance. We have a smarter lunchroom grant program, over $5 million available. Folks should be applying for that.”

Also, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Sen. Charles Grassley, R-Iowa, opened his weekly press call with agricultural reporters complaining about some policy riders in the House funding bill for agriculture. Specifically, Grassley noted eight sections of the rule for the Grain Inspections, Packers & Stockyards Administration would not be allowed to go into effect. The appropriations bill blocks definitions that would allow GIPSA to help producers. It also blocks a section that requires poultry companies give growers 90-day notice before cutting off any chick deliveries to the grower.

“Grassley noted the livestock title was developed in the 2008 farm bill to provide a little more balance to growers who deal with a highly-concentrated industry. He noted that consolidation continues, such as the Tyson purchase of Hillshire brands for $7.7 billion.”

In other developments, a news release yesterday from the American Sugar Alliance stated in part that, “The damage caused by dumped and subsidized sugar imports from Mexico – including depressed domestic prices, lost revenue to U.S. producers, and approximately $260 million in taxpayer expenses – was detailed in a nearly 200-page government report issued on Monday.

“The report, published by the U.S. International Trade Commission (ITC), explained the ITC’s reasoning for its recent preliminary determination that unfair trading practices by Mexico are harming U.S. interests.  That ruling came in a 5 to 0 vote by commissioners on May 9.”

 

Agricultural Economy

An update yesterday at AgriMoney.com indicated that, “China’s apparent curbs on imports of US distillers’ grains and corn represent only a ‘temporary’ hiccup, Joseph Glauber, one of the most important people in agriculture, although the head of a major Chinese grains group took a more cautious view.”

The update added that, “‘The discussion we have seen in the trade [over the corn and DDG import restrictions] will be temporary,’ he [Dr. Glauber] told a conference in London.

“‘The US will continue to be a major exporter in the world for coarse grains and oilseeds.’”

Also, Sec. of Agriculture Tom Vilsack provided remarks on this issue on yesterday’s Agriculture Today radio program (Red River Farm Network) in a report by Mike Hergert (MP3- 1:36).

Meanwhile, Jacob Bunge reported in today’s Wall Street Journal that, “JBS of Brazil has made a string of acquisitions over the past decade to transform the company into what its executives say is the world’s biggest meat processor, with sales of $41.7 billion last year. JBS also bid for Hillshire, through its Pilgrim’s Pride Corp. unit, but lost to Tyson.

“Meat, eggs, dairy products, beans and grains are among the principal sources of protein, which the digestive system breaks down into amino acids that replace existing proteins in human cells. Because the body can’t produce some amino acids on its own, protein is considered an essential part of the human diet.

Protein deficiency remains a problem for millions of people in poorer countries but, as incomes grow, meat typically becomes a bigger part of peoples’ diets.”

The Journal article pointed out that, “World-wide meat consumption will rise 1.9% a year over the next decade, according to projections from the U.S. Agriculture Department, as rising incomes in places like China, Mexico and Central America allow consumers to afford more pork, chicken and beef.”

In more specific news on the ag economy, University of Illinois agricultural economist Gary Schnitkey indicated yesterday at the farmdoc daily blog (“Projected 2014 Gross Revenues and Farmer Returns on Cash Rent Farmland”) that, “Returns to farmers are projected to be lower in 2014 as compared to 2011 through 2013 levels. Lower prices contribute to these lower return projections. Also playing a role are lower projected crop insurance payments. In 2013, many farmers received crop insurance payments on corn because of lower prices. These crop insurance payments then contributed to positive farmer returns in 2013. Crop insurance payments caused by price decreases will not lead to positive farmer returns in 2014. This is illustrated here by examining historical and projected returns from corn grown in central Illinois on high-productivity farmland.”

Also yesterday, an update from the Senate Ag Committee stated that, “Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, will convene a Committee hearing on Tuesday, June 17 at 10:00 a.m. in room 328A of the Russell Senate Office Building. The hearing, “Grow it Here, Make it Here: Creating Jobs through Bio-Based Manufacturing”, will examine the role that bio-based products are playing in helping to revitalize and re-energize American manufacturing, and how that is helping to grow the economy and create jobs.”

And in trade related news, Reuters writer Krista Hughes reported yesterday that, “U.S. farmers are in an uproar over signs Japan will maintain some barriers to agricultural exports under a Pacific trade pact, which threatens to unravel a deal that is central to U.S. efforts to retain economic and security influence in the region.

“Four years into Trans-Pacific Partnership (TPP) talks, U.S. negotiators are fighting to balance the goal of total tariff elimination with the sensitivities of Japanese and American farmers and the needs of other trading partners.”

The article explained that, “Acting Deputy United States Trade Representative Wendy Cutler said U.S. negotiators were working with Japan to achieve the maximum possible access for U.S. farm exports. ‘We are really focused on concluding TPP with Japan. That is why we are spending so much time with them,’ Cutler said on Tuesday in response to a question at a Center for Strategic and International Studies event.”

Ms. Hughes also pointed out that, “A deal with broad agricultural exemptions would be ‘dead on arrival in the House of Representatives,’ said Republican Aaron Schock, a member of the congressional trade panel which has called a hearing on agriculture trade for Wednesday. He noted that 60 seats in the House represent agriculture-dominated districts.”

 

Regulations

Janell Baum reported yesterday at Farm Futures Online that, “The U.S. EPA on Tuesday said it would allow farmers, ranchers and other interested stakeholders more time – until Oct. 20 – to comment on its proposed definition for waters of the United States under the Clean Water Act.

“The extension tacks on nearly three extra months to the comment period, which was scheduled to end July 21. Comment on the interpretive rule governing agricultural exemptions that accompanied the Waters of the U.S. rule will be extended from June 5 to July 7.”

Both the American Farm Bureau Federation and the National Milk Producers Federation welcomed the extension.

Ben Goad and Tim Devaney reported yesterday at The Hill Online that, “Amid pressure from congressional Republicans, the EPA announced Tuesday that it is extending the public comment period for its controversial ‘Waters of the United States’ rule, through which the agency is seeking to make clear that its regulatory authority extends to streams, floodplains and smaller bodies of water.

“The de facto delay comes as members of the GOP-led House Transportation Committee plan on Wednesday to grill Deputy EPA Administrator Robert Perciasepe and Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy over the rule’s economic impact.”

The Hill update pointed to three specific elements to watch for in today’s hearing:

“1) Signs of wavering from the administration. More than 200 House members, and some senators, have called upon the Obama administration to rescind the rule, described by critics as a blatant power grab by the EPA. Does the extended comment period signal the first step towards an, ahem, watered down rule?

“ 2) Signs of wavering from Republicans. Will GOPers view the extension as a good faith effort to find common ground, or at least a sign that their aggressive pushback campaign can be dialed back?

“ 3) Cost estimates. Like most regulatory fights, this battle will ultimately be fought in terms of dollars and cents. Either side might float an economic argument in an effort to help shape public opinion in their favor.”

A news release yesterday from the Theodore Roosevelt Conservation Partnership (TRCP) noted that, “As members of the U.S. House of Representatives meet tomorrow to consider the regulatory scope of the federal Clean Water Act, sportsmen continue to advocate in support of conserving the wetlands, streams and waterways valuable to fish and wildlife and crucial to hunting and angling…[T]he TRCP statement to Congress asserts, ‘This rule represents the best chance in a generation to restore protections to waters upon which hunters and anglers rely while preserving all exemptions for agricultural activities – and, in some cases, enhancing them.’”

In other news, Stephanie Strom and Kim Severson reported in today’s New York Times that, “A decision by the Food and Drug Administration to question the use of wooden planks to age some cheeses has produced a stink that rivals Limburger, prompting an uproar among the artisanal cheese makers and consumers who fear they might lose access to products like obscure blue cheeses from Vermont and imported Parmigiano-Reggiano.

“The agency recently interpreted a decades-old regulation requiring that cheese-making equipment be designed and constructed of material that is ‘adequately cleanable’ in ways that made it appear that wood, which has been used for centuries to help age cheese, was no longer sanitary enough.”

 

Water Bill

Jacqui Fatka reported yesterday at Feedstuffs Online that, “Tuesday President Barack Obama signed the Water Resources Reform and Development Act of 2014. This final reauthorization bill, which will improve the reliability and efficiency of the U.S. inland waterways system, was passed by the House on May 20 and the Senate on May 22.

“The bill has been a major priority for U.S. agricultural groups as it provides a crucial step in infrastructure improvements on the nation’s waterways which transport as much as 60% of the nation’s grain exports.”

Remarks by President Obama delivered at the bill’s signing can be viewed here, and a news release yesterday from the American Farm Bureau Federation (AFBF) noted that, “Signing of the Water Resources Reform and Development Act of 2014 into law today puts America’s inland waterways and port infrastructure on a solid and sustainable foundation to contribute to U.S. economic growth, jobs and global competitiveness for generations to come, said the [AFBF].”

 

Political Notes

Kristina Peterson and Janet Hook reported yesterday at The Wall Street Journal Online that, “A tea-party-backed challenger resoundingly defeated Rep. Eric Cantor of Virginia, the second-ranking House Republican, in a primary election Tuesday, an unexpected assertion of insurgent conservative power sure to reshape Republican policy and leadership.

“Mr. Cantor, considered the leading candidate to be the next House speaker, lost to David Brat, a college economics professor, by 11 points, 56% to 45%.

“Mr. Cantor’s defeat marked an unexpected and staggering turn in this year’s primary-election season, overturning the building narrative that Republican Party leaders and allied business groups had trampled the GOP’s tea-party wing, which has fought to push the party to the political right.”

The Journal writers noted that, “Mr. Cantor’s defeat could reshape many areas of policy in Congress, foremost the prospects for immigration legislation. Many Republican leaders say the GOP won’t make gains with the fast-growing Hispanic population unless it helps to liberalize immigration laws and grant legal status to some illegal immigrants. House Speaker John Boehner (R., Ohio) has said he wants to take up the issue, but opposition from conservatives in his ranks has stalled the effort.”

Keith Good

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