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Appropriations; CFTC; Ag Economy; Farm Bill; Biofuels; and Estate Tax

Appropriations Issues

A news release yesterday from Sen. Mark Pryor (D., Ark.) indicated that, “Chairman Mark Pryor today spoke on the Senate floor in support of the Agriculture Appropriations Bill, bipartisan legislation he crafted to help grow our agricultural industry, support our rural communities, and improve the quality of life for families. Pryor is the Chairman of the Agriculture Appropriations Subcommittee.

“The bill passed unanimously out of the Appropriations Committee in May and will now be voted on by the full Senate as part of the bipartisan appropriations package.”

In part, Sen. Pryor stated that, “Mr. President, today I rise in support of the FY15 Agriculture Appropriations Bill. Ranking Member Blunt and I worked tirelessly to craft this common-sense, bipartisan bill. It passed unanimously out of the Appropriations Committee last month, and I’m confident my colleagues will support it this week on the Senate floor.

“Agriculture is something America does better than anyone else. In Arkansas alone, agriculture contributes $17 billion in economic activity annually. It supports 25% of my state’s economy and it is responsible for 1 in 6 jobs.”

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The Senate began debate Wednesday on the Agriculture appropriations bill to fund the government for fiscal year 2015, while the House version of the bill languishes until after the election of a new House majority leader.

“It is unclear how long the Senate debate will last because the Agriculture bill has been packaged with two other appropriations measures in what is being referred to as a ‘minibus’ as opposed to the omnibus bills that sometimes fund the government when Congress doesn’t pass individual appropriations bills.”

Mr. Hagstrom added that, “The Office of Management and Budget issued a statement of administration policy on the Senate bill that was generally supportive of the Agriculture bill, but includes criticisms of some of the provisions.

In its statement, OMB said the Obama administration said it ‘appreciates the bill’s continued support for science-based nutrition standards for children’ and would oppose any language that would ‘override science-based standards.’

“That is a reference to the Senate bill’s provision calling for more flexibility on grains and sodium and the House bill’s provision requiring the Agriculture Department to grant a waiver from healthier meal standards to any school that says it has been losing money in its school meals program for six months.”

And Roll Call reporter Ellyn Ferguson tweeted yesterday that, “Senate appropriators say they are open to minibus floor amends. Ag Chair Pryor, D-Ark., ask colleagues to visit him on the floor w/ ideas.”

A news release yesterday from Sen. John Thune (R., S.D.) stated that, “Today [Sen. Thune] offered two amendments to the Fiscal Year (FY) 2015 Agriculture Appropriations bill, including one that would reprogram $2 million in the FY2015 Natural Resources and Conservation Service (NRCS) budget to address the backlog of undetermined wetlands in all states.”

The update added that, “Thune’s second amendment directs the Secretary Agriculture to complete National Environmental Policy Act (NEPA) activities, if required, within 30 days of receiving an emergency Conservation Reserve Program (CRP) haying or grazing request due to drought.”

Meanwhile, AP writer Andrew Taylor reported yesterday that, “Apparently fearing that the top Senate Republican might score a political win, Democrats for the second time in a week cancelled a preliminary vote on a major spending bill.

“At issue was an amendment by Senate GOP leader Mitch McConnell that would have allowed the Kentucky Republican and Appropriations panel member to successfully go to bat for his state’s coal industry as the spending panel was to consider on Thursday a measure funding the Energy Department and other agencies.

“Senate Appropriations Committee Chairwoman Barbara Mikulski, D-Md., officially made the call Wednesday night as she separately struggled to open debate on a huge spending bill to fund five Cabinet departments for the upcoming budget year. It will require unanimous agreement among all 100 senators to open debate along the process Mikulski wants and such approval was lacking.”

The AP article explained that, “Mikulski’s decision to call off the vote on the underlying energy and water appropriations measure came a week after she cancelled debate on a huge measure that would also have forced endangered Democrats to vote on politically poisonous amendments regarding the implementation of President Barack Obama’s health care law.

“The broader spending bill had easily advanced Tuesday evening on a 95-3 test vote, but a subsequent agreement for debate terms proved elusive. Democrats controlling the Senate have for years followed their GOP predecessors in restricting the ability of the rank and file to offer amendments to legislation, under longstanding Senate traditions.

“The hybrid $180 billion measure by Mikulski would fund the departments of Agriculture, Commerce, Justice, Transportation, and Housing and Urban Development for the 2015 budget year beginning Oct. 1, but complicated Senate rules require unanimous agreement to protect the budgets of the largest agencies from procedural challenges.”

With respect to the House Ag Appropriations measure, Carolyn Lochhead reported earlier this week at the San Francisco Chronicle Online that, “House Republicans have repeatedly delayed votes on a controversial waiver of school lunch nutrition rules amid leadership turmoil and a fierce pushback from first lady Michelle Obama.

“Democrats suspect that the delay indicates Republicans have concluded they’re on the losing side of the school lunch fight, which has touched off a firestorm in Washington and schools across the country.

“The waiver would grant schools that are losing money on their lunch programs a yearlong reprieve from requirements to serve more fresh produce, more whole grains and less sugar, trans fat and salt.”

Ms. Lochhead explained that, “The waiver poses a big test for Bakersfield Republican Rep. Kevin McCarthy, who is working to solidify his all-but-guaranteed election Thursday to become the majority leader, following the surprise primary defeat of Rep. Eric Cantor, R-Va.

“The delays on the waiver vote are reminiscent of several miscalculations that have occurred under McCarthy’s watch as the GOP whip, when he was responsible for rounding up votes to ensure passage of farm and budget legislation, only to come up short.

“‘I think they pulled the bill because they didn’t know if they had enough of their own votes,’ said Rep. Sam Farr of Carmel, the top Democrat on the House Appropriations agriculture subcommittee, who is leading the fight against the waiver. ‘Members go home, they pick up from the newspapers the feedback of what’s happening in Washington, and I think the longer this issue is on front pages the more difficulty they have in passing their provision.’”

On a separate appropriations related issue, Laura Barron-Lopez reported yesterday at The Hill Online that, “The House Appropriations Committee approved a $34 billion spending bill for the Department of Energy (DOE) and Army Corps of Engineers Wednesday.

“The energy and water bill, which funds programs under the direction of DOE and the corps for fiscal year 2015, also contains a number of controversial environmental riders.”

The Hill article indicated that, “One rider on mining waste, which has already taken effect, keeps the Army Corps of Engineers from working on a new rule for the waste left over from mining operations like mountain top removal called ‘fill material.’

Another rider seeks to stop the EPA from clarifying its jurisdictional authority over certain bodies of water. While the EPA vows the rule does not extend its powers, but simply removes legal uncertainty, the GOP has called it a power grab.

“‘These efforts are fruitless attempts to legislate through regulation,’ the chairman of the committee, Rep. Hal Rogers (R-Ky.) said, saying the rule would be ‘crippling for the U.S. economy.’”

The Los Angeles Times editorial board indicated yesterday that, “The Clean Water Act, which has been on the books since 1972,, has slowed the degradation of the nation’s lakes, rivers and streams by blocking polluters from using waterways as sewers. Careful oversight by the Environmental Protection Agency has brought many damaged rivers back to health, restoring them as safe drinking water sources and wildlife habitats and allowing them to continue bringing fresh water to environmentally sensitive wetlands.

“A pair of U.S. Supreme Court rulings over the last 15 years found some EPA interpretations of the act overly broad, but the court failed to offer clear guidance on what was permissible and left it to the agency to craft rules governing just which waters the act covers. After considering scientific studies demonstrating the interconnection of waterways, and after a long and painstaking rule-making process, the agency proposed a sensible rule and put it out for public comment in March. The comment period remains open through the middle of October.”

The opinion item stated that, “Now some members of Congress are carrying the dirty water of would-be polluters by attacking the agency’s very public, transparent and evenhanded process. Their tool is a late amendment to spending bills that would prevent another agency — the Army Corps of Engineers — from recognizing or enforcing any change in federal jurisdiction over water pollution. The Army Corps helped the EPA craft the rule and issues permits for projects that comply with pollution laws.

Congress should butt out and let the rule-making process take its course, both because the rule as proposed would restore some (although by no means all) of the protections that seasonal and other intermittent waterways had for years, and also because a spending bill is a sneaky way to derail months of careful work, not just by environmental administrators but by members of the public who have been helping to bring clarity and predictability to the law.”


CFTC- Commodity Futures Trading Commission

Yesterday the Rules Committee approved a “structured rule” for considering H.R. 4413 – the Customer Protection and End User Relief Act, a measure to reauthorize the Commodity Futures Trading Commission.

A news release from the National Grain and Feed Association [NGFA] stated that, “[NGFA] and more than 30 other organizations urged members of the House of Representatives to vote yes on the ‘Customer Protection and End-User Relief Act,’ (HR 4413) when it moves to the floor for consideration.

“In a letter the organizations write that the legislation, which was unanimously approved by the Committee on Agriculture, provides important protections for futures customers.”

Also with respect to the CFTC, Reuters writer Douwe Miedema reported earlier this week that, “The new head of the U.S. derivatives regulator on Tuesday filled a number of senior positions, picking a mix of newcomers from Capitol Hill and veterans at the agency, which helps oversee the $710 trillion swaps market.

Clark Ogilvie, who comes from the House Agriculture Committee and its highest-ranking Democrat, Congressman Collin Peterson, will become the new chief of staff at the Commodity Futures Trading Commission.”

The article added that, “Cory Claussen will become the agency’s new director of legislative affairs, the CFTC said. He worked as a staff member for Senator Debbie Stabenow, who heads the Senate Agriculture Committee, which oversees the CFTC.”


Agricultural Economy

Reuters writer Sybille De La Hamaide reported yesterday that, “U.S. Agriculture Secretary Tom Vilsack said on Wednesday he was confident a vaccine approved this week by the U.S. administration would help fight a deadly virus which has killed millions of pigs in the United States.

“The U.S. Department of Agriculture said on Wednesday preliminary studies of a vaccine developed by Harrisvaccines ‘have been promising’ in controlling Porcine Epidemic Diarrhea virus (PEDv). The virus has killed up to 8 million pigs and pushed pork prices to record highs since it was first identified in the United States last year.

“‘I don’t want to say the virus will be eradicated but I think you will see we’re on the other side of this,’ Vilsack said after a speech to representatives of the French farm sector at the U.S. embassy in Paris.”


Farm Bill

A news release yesterday from the North Dakota Farm Service Agency indicated that, “USDA Farm Service Agency (FSA) North Dakota State Executive Director Aaron Krauter has announced that prevented planting reporting deadlines have been extended this year to coincide with the final acreage reporting date of July 15 due to planting issues caused by North Dakota’s cold, wet spring. ‘Farmers need to visit their local FSA office before July 15 to report all their crop acreage, including that which has been prevented from planting,’ Krauter said.”

A news release earlier this week from Sen. Jon Tester (D., Mont.) stated that, “Senators Jon Tester and John Walsh today told Agriculture Secretary Tom Vilsack that the Agriculture Department needs to speed up the implementation of two critical crop insurance initiatives to support a strong Montana harvest in 2015.

“Tester and Walsh want Vilsack to move forward with the Crop Margin Coverage Pilot Program and the Malt Barley Endorsement. The initiatives would support farmers growing spring wheat and barley – two of the most important crops in Montana.

“But the Agriculture Department has said it might not implement the two initiatives until 2016, a possibility both Tester and Walsh find unacceptable.”



Bloomberg writer Mario Parker reported yesterday that, “Ethanol declined to a six-week low after a government report showed production of the biofuel rose to a record.

“Futures fell after the Energy Information Administration said output rose 3 percent to 972,000 barrels a day last week, the most in four years of weekly data from the Energy Information Administration.

Corn prices that have dropped 34 percent in the past year have helped reduce production costs for ethanol makers and allowed them to boost operations.”

University of Illinois agricultural economists Darrel Good and Scott Irwin indicated yesterday at the farmdoc daily blog (“Shifting Trade Patterns and Higher Crude Oil Prices Brighten Prospects for U.S. Ethanol and Corn”) that, “In the farmdoc daily article posted on June 11 we concluded that the recent shift in the U.S. net ethanol trade balance, particularly since October 2013, has contributed to the continuation of high ethanol prices relative to corn prices and the resulting historically large margins for ethanol producers.  Here we examine some of the details of the shifting trade pattern.  In addition, we discuss the potential implication of this shift along with the recent increase in crude oil prices for the prospects of U.S. ethanol production and corn consumption.”


Estate Tax

A news release yesterday from the American Farm Bureau Federation indicated that, “With 218 co-sponsors – more than half of the House of Representatives – on board, legislation to repeal estate taxes is ripe for floor action, the American Farm Bureau Federation said today.

“Rep. Kevin Brady’s (R-Texas) Death Tax Repeal Act, H.R. 2429, would repeal estate taxes, and maintain stepped-up basis.

“‘Although permanent law enacted as part of the American Taxpayer Relief Act of 2012 provided significant estate tax relief, repeal is the best solution to protect all farms and ranches from the estate tax,’ said AFBF President Bob Stallman.”

Keith Good