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Budget; Policy Issues; and, the Agricultural Economy

Budget

Ashley Parker and Jonathan Weisman reported in today’s New York Times that, “Congressional leaders reached a deal Tuesday on a more than $1 trillion spending package that would fund most of the federal government through the current fiscal year.

“But because negotiations on the package dragged over policy details, House lawmakers also prepared to move on a short-term spending measure that would avert a government shutdown if Congress cannot pass the larger bill by Thursday, when the current funding expires.”

The Times article explained that, “The spending bill would fund nearly all of the federal government through September 2015, except for the Department of Homeland Security, which it would fund only through February, in retaliation for President Obama’s unilateral action to defer the deportation of as many as five million undocumented immigrants. Congressional Republicans plan to take up funding for the agency — which has primary responsibility for carrying out the president’s immigration directive — early next year, when they will control both chambers of Congress and believe they will have more leverage.”

A summary of the Agriculture Appropriations bill included in the Omnibus budget measure was posted yesterday at the House Appropriations Committee webpage.

This overview indicated that, “The bill provides $2.7 billion for agriculture research programs, including the Agricultural Research Service (ARS) and the National Institute of Food and Agriculture… The legislation includes $871.3 million – a $49.5 million increase above the fiscal year 2014 enacted level – for the Animal and Plant Health Inspection Service (APHIS)… The legislation provides $1.5 billion for FSA, which is $22 million above the fiscal year 2014 enacted level and $66 million above the President’s request…and…the bill provides a total of $2.4 billion for rural development programs, which is $173 million above the President’s request.”

The agriculture overview added that, “The legislation also restricts the Grain Inspection, Packers and Stockyards Administration (GIPSA) from implementing certain regulations that would allow harmful government interference in the private market for the livestock and poultry industryCFTC is funded at $250 million, which is $30 million below the President’s budget request…and… the bill provides $859 million for the Natural Resources Conservation Service to help farmers, ranchers, and private forest landowners conserve and protect their land.”

With respect to nutrition, the Appropriations overview stated that, “The bill provides full funding for WIC at $6.6 billion – $93 million below the fiscal year 2014 enacted level – which will ensure all eligible participants will be served…In addition, a provision is included to ensure that all varieties of fresh vegetables, including white potatoes, are eligible for purchase through the WIC program. The provision also ensures that science-based requirements are used to determine which vegetables will be allowed for purchase in the WIC program.”

Also, “The bill allows $21.3 billion in required mandatory funding – which is outside the discretionary funding jurisdiction of the Appropriations Committee – for child nutrition programs. Of this amount, $25 million is directed to help schools purchase needed equipment to operate the program. This funding will provide for an estimated 7.7 billion school breakfasts, lunches and snacks for 31 million children who qualify for the program.

The bill also includes a provision that provides flexibility to local schools to implement whole grain nutrition standards if the school can demonstrate a hardship when procuring whole grain products, and that ensures further reductions in new sodium standards will not take effect until supported by additional scientific studies.”

And with respect to SNAP (food stamps), the overview indicated that, “The bill allows $81.8 billion in required mandatory spending – which is outside the discretionary funding jurisdiction of the Appropriations Committee – for SNAP. This is $332 million below the fiscal year 2014 enacted level and $2.4 billion below the President’s request. This program provides food assistance to a monthly average of more than 46 million Americans.”

The National Sustainable Agriculture Coalition indicated in a statement last night that, “The 2014 Farm Bill cut $4 billion from voluntary conservation assistance programs, or over $6 billion when accounting for sequestration. The new spending bill unveiled today piles on, taking hundreds of millions more, primarily from the Environmental Quality Incentives Program and the Conservation Stewardship Program. We are witnessing the browning of the farm bill. It is a sad day for those who believe in voluntary solutions to our agro-environmental problems, and a sad day for those who believe annual appropriations bills should not be using backdoor mechanisms to cut mandatory farm bill spending that is not within their jurisdiction.

“The spending bill also includes the policy rider from the House bill to prevent the Packers and Stockyards program at USDA from doing anything to protect the rights of farmers and ensure a fair marketplace for meat and poultry. The rider is so extreme as to effectively gut the law, including an unprecedented action to force the repeal existing regulations. Adoption of the rider will deny farmers protection from retaliation when they use their first amendment rights, deny them the right to a jury trial, and even deny them the right to know how the prices they receive are calculated. It is an extreme, radical, and blatantly anti-farmer provision that has no place in an appropriations bill, or indeed in any bill.”

Meanwhile, a summary of the Interior and Environment portion of the Omnibus budget measure stated that, “The bill cuts the EPA by $60 million below the fiscal year 2014 level, providing a total of $8.1 billion for the agency. Overall, EPA funding has been reduced by $2.2 billion – or 21% – since 2010. In addition, the bill continues reductions to EPA staff, bringing staffing to the lowest level since 1989.”

The summary added that, “To stop actions by the Fish and Wildlife Service that would have severe economic consequences on Western states and the nation’s efforts to become energy independent, the bill prohibits funding for the Service to issue further rules to place sage-grouse on the Endangered Species List. The bill also includes $15 million within the BLM to conserve sage-grouse habitat to continue efforts to protect the species and its natural environment for the future.”

More specifically with respect to the Omnibus budget measure, Parker and Weisman noted in their New York times article today that, “Environmental regulations on some waterways were nullified for the Army Corps of Engineers, but the Environmental Protection Agency would not be limited in its ability to regulate new bodies of water under the Clean Water Act.”

And Lisa Mascaro reported yesterday at the Los Angeles Times Online that, “New funding is provided for emerging needs, including …$50 million for drought relief in Western states…”

With respect to procedural issues, Kristina Peterson, Michael R. Crittenden and Siobhan Hughes reported yesterday at The Wall Street Journal Online that, “To prevent even a brief shutdown, the House was expected to vote by Thursday on a stopgap measure that would keep the government running for a few days to give both chambers time to pass the longer-term bill.”

The Journal article added that, “Despite misgivings, however, many Democrats are expected to support the measure, which is viewed as a good deal wrested out of the lame duck session.”

 

Policy Issues

Reuters writer Tom Polansek reported yesterday that, “Six of the largest U.S. school districts are switching to antibiotic-free chicken, officials said on Tuesday, pressuring the world’s top meat companies to adjust production practices in the latest push against drugs used on farms.

“The move by districts in New York City, Los Angeles, Chicago, Dallas, Miami-Dade County and Orlando County is intended to protect children’s health amid concerns about the rise of so-called ‘superbugs,’ bacteria that gain resistance to conventional medicines, school officials said.”

Meanwhile, Cristina Marcos reported yesterday at The Hill Online that, “The House on Tuesday passed legislation to provide relief to areas in California affected by prolonged drought.

Passed 230-182, the measure directs the Obama administration to authorize two state water projects, the Central Valley Project and the State Water Project, to help store more water from storms. The legislation would last through September 2016.”

In a statement yesterday, California GOP Reps. David G. Valadao, Kevin McCarthy, Ken Calvert, Doug LaMalfa, Tom McClintock, and Devin Nunes indicated that, “In order to get this bill across the finish line in time for the rainy season, House Republicans included many provisions from the Senate’s own legislation as well as agreed upon language from negotiations in the bill passed in the House today. Unfortunately, Barbara Boxer and many of her Democratic colleagues in the Senate have not shown the same commitment to achieving a solution to the California water crisis as House Republicans have, and they remain opposed even to bipartisan compromise. It is time the Senate recognize the severity of this situation and act on this legislation before they adjourn for the year.”

Rep Jim Costa (D., Calif.) noted yesterday that, “This short-term legislation would provide increased flexibility to bring more water to the Valley while preserving discretion to prevent additional harm to endangered species.”

On the other hand, California Democratic Reps. Mike Thompson, George Miller, Doris Matsui, Jerry McNerney, and John Garamendi voted against H.R. 5781 and indicated that, “This deeply flawed legislation is nothing more than a thinly veiled attempt to use the drought as an excuse to steal water from the Bay Delta – and to do so with zero regard for the folks who depend on that water for their livelihoods. It was rushed to the House Floor with no consideration given to the jobs it would destroy, the water supply to urban and rural areas it would jeopardize, environmental protections it would gut, the drinking water it would damage, or the fact that it would do nothing to alleviate the drought.”

The executive branch has issued a veto threat on the bill.

In related news, Veronica Rocha reported yesterday at the Los Angeles Times Online that, “California is already facing heavy rain, strong winds and flooding with a major storm expected to hit late Wednesday. Now there’s a blizzard warning.”

With respect to the House Ag Committee, Philip Brasher reported yesterday at Agri-Pulse Online that, “Incoming House Agriculture Committee Chairman Mike Conaway is setting up a separate subcommittee to oversee federal nutrition programs, confirming that food stamps and other feeding programs will be a major focus in the next Congress.”

Mr. Brasher added that, “Conaway, R-Texas, on Tuesday announced the creation of six subcommittees. The other five are:

“- General Farm Commodities and Risk Management. This panel will oversee implementation of the new commodity programs in the 2014 Farm Bill.

Commodity Exchanges, Energy, and Credit: Reauthorization of the Commodity Futures Trading Commission will be an issue in the new Congress.

Conservation and Forestry. This panel will oversee implementation of changes in key land conservation programs.

Biotechnology, Horticulture, and Research: Biotechnology notably gets top billing in the title of this subcommittee. In the current Congress the panel is called Horticulture, Research, Biotechnology and Foreign Agriculture.

Livestock and Foreign Agriculture: Country-of-origin labeling is likely to be an issue in the next Congress.”

Caelainn Barr reported yesterday at The Wall Street Journal Online that, “The $35 billion organic-food industry has nearly tripled in size in the past decade, challenging the Agriculture Department’s ability to monitor the more than 25,000 farms and other organizations that sell organic crops and livestock.

There are currently 81 accredited ‘certifying agents,’ or groups that stamp food as organic in the U.S. But of the 37 that had a complete review this year, 23 were cited for failing to correctly enforce certification requirements on farms in audits, according to an internal Agriculture Department report. The 23 firms didn’t properly conduct onsite inspections or correctly review applications for organic certification, among other things, the report said.

“A separate Wall Street Journal investigation of USDA inspection records since 2005 found that 38 of the 81 certifying agents failed on at least one occasion to uphold basic Agriculture Department standards.”

Christopher Doering reported yesterday at The Des Moines Register Online that, “Organic crops could become more attractive to farmers as low corn and soybean prices prompts them to look for ways to boost their bottom line.”

Mr. Doering pointed out that, “The challenge for organic is that producers of traditional crops must make changes to their land, such as ending the use of pesticides, and wait three years before they can be certified organic.

During the transition, they grow crops using organic practices, but they can’t have their produce certified as such. As a result they may not benefit from the higher prices attached to the crops.”

And, a news release this week from Rep. Chris Gibson (R., N.Y.) stated that, “[Rep. Gibson] applauded the announcement that New York is one of eight states selected for participation in the USDA Pilot Project for Procurement of Unprocessed Fruits and Vegetables, which supports the purchase of locally-sourced produce by school lunch programs.

“Congressman Gibson, a member of the House Agriculture Committee, advocated for inclusion of the farm-to-school initiative in the federal Farm Bill.”

The Washington Post editorial board today provided its perspective on recent developments regarding sugar policy and trade in an item titled, “A Sour Sugar Deal: A pact on Mexican imports will benefit only big companies.” The Online version of the opinion item is titled, “U.S.-Mexico sugar deal means higher prices for consumers.”

 

Agricultural Economy

Secretary of Agriculture Tom Vilsack addressed the Commodity Futures Trading Commission’s Agricultural Advisory Committee yesterday.

In part, Sec. Vilsack noted that, “Our ability to continue to help production agriculture will depend in part on our capacity to continue to engage the world in trading relationships. That’s why it’s extraordinarily important in 2015 that Congress sees its way to provide the President with trade promotion authority.”

In response to a question at yesterday’s meeting, Sec. Vilsack noted that, “When the commodity prices were particularly high, it had a tendency to increase both the value of land and the rental costs of access to land. And we have seen a moderating of commodity prices; we have not necessarily seen a corresponding moderating of land values or rental values.

We would anticipate and expect that there would be some adjustment to rental rates over time if these commodity prices remain where they are today.”

And in response to a separate question on trade and the Trans-Pacific Partnership (TPP) , Sec. Vilsack pointed out that, “China is trying to encourage Asian countries to disregard TPP, and focus on an agreement that China would help to fashion.”

Sec. Vilsack added that, “We still have one other participant in this agreement who has not stepped up as much as they ought to have, given what’s at stake, and that’s our Canadian friends. They have refused up to this point to even enter into negotiations. Candidly I think it’s ill-advised and it’s unfortunate. And it may very well be that if that attitude persists, that you could find an agreement that does exclude a country, but I don’t believe at the end of the day it will be Japan.”

Keith Good