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Policy Issues; Drought; Trade; Immigration; Biotech; Ag Economy; and, Political Notes

Policy Issues

David Pierson reported in today’s Los Angeles Times that, “If your eggs seem a little pricier, consider the recent changes on Frank Hilliker’s ranch.

“In the last six months, the third-generation egg farmer in central San Diego County has reduced his flock by half and embarked on a $1-million overhaul of his henhouses to make them more spacious. Customers are now paying about 50% more for a dozen eggs from Hilliker’s family business at around $3 a carton.

It’s all to comply with a landmark animal welfare law that takes effect in California on New Year’s Day. Voters overwhelmingly approved Proposition 2 in 2008 to effectively abolish the close confinement of farm animals in cramped cages and crates — a practice that animal advocates say causes needless suffering and boosts the likelihood of salmonella contamination.”

Mr. Pierson noted that, “Already, the specter of California’s regulations are believed to be contributing to record prices for eggs. The average wholesale cost of a dozen large eggs hit a peak of $2 on Thanksgiving Day — doubling in price from the start of November before settling this week to about $1.40. It comes at a time when soaring meat prices are expected to help push U.S. egg consumption to its highest level in seven years.”

The L.A. Times article explained that, “California’s rules are rippling beyond its borders. No state consumes more eggs — and about a third of its supply must be imported. Iowa, where laying hens outnumber people 2 to 1, sells about 40 million eggs a day to out-of-state buyers.

“Under a separate bill signed by former Gov. Arnold Schwarzenegger in 2010, all shell eggs arriving from other states must also comply with Proposition 2 by Jan. 1, 2015.”

Also on this issue, in Friday’s paper, the L.A. Times editorial board indicated that, “Despite the backlash from egg producers and their allies, it is clear that these measures reflect a growing concern on the part of consumers about the welfare of farm animals. Just because they are certain to end up on a dinner plate or in a barn producing eggs or milk doesn’t obviate the need to treat them humanely during their short lives…[C]alifornia voters, to their credit, were ahead of the game in voting to better the welfare of California’s hens. Over time, that will lead to improvements for all 300 million egg-laying hens in the country.”

Meanwhile, Jim Spencer reported on Saturday at the Minneapolis Star Tribune Online that, “The language is tucked into a paragraph on page 13 of Division A of the 1,600-page Consolidated and Further Continuing Appropriations Act, 2015, better known as the federal budget.

It requires the secretary of agriculture to change a United States meat labeling rule to comply with a World Trade Organization (WTO) decision that brands the rule unfair. The paragraph would eliminate the need for meat producers, packers and distributors to show where the animals used in their products are born, raised and slaughtered.

“The paragraph’s inclusion in the budget is a testament to the lobbying power of the biggest players in the American meat industry, including Minnesota-based Cargill Inc. and Hormel Foods Corp. Both companies have battled in the courts and Congress against country-of-origin labeling, which both call onerous and ineffective.”

Mr. Spencer indicated that, “Minnesota’s U.S. Sens. Amy Klobuchar and Al Franken, both Democrats, think the WTO appeals process should play out before the U.S. does anything to dilute its labeling requirements. In e-mail statements to the Star Tribune, each stressed the importance of letting consumers know where the food they eat comes from.

“Democratic Rep. Collin Peterson of Minnesota said the meat industry was trying to ‘legislate through allocation’ and ‘trying to put heat on [Secretary of Agriculture Tom] Vilsack to get him to do something.’ But Peterson, ranking minority member of the House Agriculture Committee, said Vilsack may lack the power to dilute the rules.

“‘We don’t know what will satisfy the WTO,’ Peterson said in an interview. ‘When we do know, I don’t know if we can legislatively get it done.’”

Also on Saturday, AP writer Lisa Rathke reported that, “Move over farmers’ markets. More than 300 food hubs around the country are also providing small farms another outlet to sell locally raised food to consumers.

“There’s no one model for a food hub — it depends on the market, the location and what it is grown in that area. Some collect food from farms and dole it out to customers in weekly deliveries. Other hubs help consumers, restaurants, colleges and institutions to source food online. But producers, consumers and experts all say food hubs have an important thing in common: it’s an efficient way to get locally raised food to those clamoring for it.”

The AP article noted that, “‘We’ve seen in the last few years in particular as local and region food systems have grown and become not only larger but kind of more sophisticated that there has been a need for sort of the logistics of moving food from the field to the consumers. And food hubs kind of fill that space,’ said Doug O’Brien, deputy undersecretary for rural development for the U.S. Department of Agriculture. The agency spent about $25 million from 2009-2013 supporting food hubs.

“The number of food hubs has doubled over the last six years, and many are in urban areas, with the Northeast leading the way. Some operate as nonprofits, others are for-profit or producer-consumer cooperatives. Some are modeled after CSAs, or community supported agriculture, where consumers pay up front for food throughout the season.”


Drought- Water Policy Issues- California

Felicity Barringer reported in yesterday’s New York Times that, “California’s almond orchards have been thriving over the past decade and now provide an $11 billion annual boost to the state economy. Covering 860,000 acres, they account for 80 percent of world production. But the growth coincides with another record development here — drought — and the extensive water needs of nut trees are posing a sharp challenge to state water policy.

“Farmers in the area where almond production has been most consistent have relied on water from a federally controlled project that draws its supply largely from the Sacramento River. But that source is less reliable because of legal requirements that in a time of scarcity, waterways that nurture California salmon must also get available water flows.

Growers, some very wealthy, tried to get Congress to change those rules but failed. Also, new state groundwater legislation may eventually constrain farmers’ well drilling.”

Evan Halper reported on the front page of Saturday’s Los Angeles Times that, “The long-range weather forecast is the biggest wild card in the battle over every available bucket of water in drought-stricken California — but a close second may be Dianne Feinstein.

“In a dispute in which positions have hardened after years of fighting, the state’s senior U.S. senator, who is expected to broker any deal that reallocates water supply, is one of the few remaining enigmas. The only thing consistent about Feinstein’s role as water referee is that the fights have left bruises on the exacting and thick-skinned senator over the years. The last few weeks have been particularly rough.

“A year that started with Central Valley figures branding her a radical environmentalist and Bay Area dilettante ended with accusations from once-friendly colleagues and liberal editorial boards that the 22-year veteran of the Senate was shilling for Big Agriculture.”

The L.A. Times article pointed out that, “For months, Feinstein had tried to craft a compromise drought relief bill by negotiating a water deal behind closed doors with the state’s major agricultural interests. Late in Congress’ lame-duck session, those talks collapsed. No legislation got passed.

“Yet Feinstein is eager to get back in the ring as soon as Congress picks up again in January.

“‘We can’t wait for more rain, we need to be able to do more with what we have,’ she said in an email.”



David Nakamura reported on the front page of Saturday’s Washington Post that, “President Obama is preparing a major push on a vast free-trade zone that seeks to enlist Republicans as partners and test his premise that Washington can still find common ground on major initiatives.

“It also will test his willingness to buck his own party in pursuit of a legacy-burnishing achievement. Already, fellow Democrats are accusing him of abandoning past promises on trade and potentially undermining his domestic priority of reducing income inequality.”

Mr. Nakamura explained that, “The dynamic, as the White House plots strategy for the new year when the GOP has full control of Congress, has scrambled traditional political alliances. In recent weeks, Obama has rallied the business community behind his trade agenda, while leading Capitol Hill progressives, including Sen. Elizabeth Warren (D-Mass.), have raised objections and labor and environmental groups have mounted a public relations campaign against it.

The administration is moving aggressively in hopes of wrapping up negotiations by the middle of next year on a 12-nation free-trade pact in the Asia-Pacific region before the politics become even more daunting ahead of the 2016 presidential campaign.”

“The TPP aims to lower tariffs, establish guidelines on patents and copyrights, and level competition for international companies that compete with government-backed businesses. The first major test could come next month, when Senate Republicans are expected to put forward legislation that would grant U.S. trade negotiators ‘fast-track authority’ to reach final terms that could not be changed by Congress before an up-or-down vote,” the Post article said.

Rep. Charles Boustany (R., La.) and former U.S. Trade Representative Robert B. Zoellick indicated in today’s Wall Street Journal that, “After the midterm elections, political commentators identified trade policy as one area for cooperation between President Obama and the Republican Congress. We agree. Under the U.S. Constitution, Congress has authority over trade. But the active direction and use of that authority depends on an energetic executive, in partnership with Congress…[I]t’s time for Mr. Obama to persuade on trade. He must make use of the convening power of the executive to bolster his advocacy. His administration must work closely with Congress—to listen, explain, address problems and cut deals.”

And the editorial board at the Minneapolis Star Tribune noted late last week that, “Rising exports mean more jobs. Minnesota has the natural and human resources to compete at the highest global level, meaning that state workers can benefit from expanded free trade.

That’s reason enough for Minnesota’s congressional delegation to rally behind the Obama administration’s efforts to advance two proposed free trade agreements: the Transatlantic Trade and Investment Partnership (T-TIP), which would ease trade between the United State and the 28-nation European Union, America’s largest export market, and the Trans-Pacific Partnership (TPP), a proposed trade pact between the United States and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.”

Also, Patrick O’Connor reported in The Wall Street Journal last week that, “[U.S. Chamber of Commerce] Chief Executive Tom Donohue said in an interview that the GOP has two years to enact ‘a vigorous program aimed at meeting the needs of the American people’ or risk losing their majority. The Chamber wants Congress to act on business priorities such as an immigration overhaul, transportation funding, tax breaks and trade agreements.”



Laura Meckler reported in Saturday’s Wall Street Journal that, “Republicans in Congress are preparing a variety of bills that would make substantial changes to the immigration system, suggesting that the embers of interest in addressing immigration law, once thought to be extinguished, remain alive…[T]he Republican efforts begin with measures tightening security on the Southwest border—a top concern of GOP lawmakers—but go beyond that to include legislation favored by high-tech, agricultural and other business interests that would make more workers available to those sectors.”

The Journal article pointed out that, “Sen. Dianne Feinstein (D., Calif.) is working on a bill revamping the agricultural visa program, based on provisions in last year’s Senate bill. Her staff is in talks on the measure with Republicans including Sen. Marco Rubio of Florida, who helped work out a compromise on this issue in 2013.”

Jeremy Diamond reported yesterday at CNN Online that, “If Republicans don’t wield their congressional majority next year to pass immigration reform legislation, a GOP takeover of the White House in 2016 will be ‘difficult, if not impossible,’ Sen. Lindsey Graham of South Carolina said during a CNN interview released on Sunday.

“Graham, a Republican who has long-favored comprehensive immigration reform, said he believes the GOP has hurt itself with Hispanic voters due to its resistance to reforming the current system. And without a major change, Democrats will get another four years in the Oval Office, Graham told CNN’s Dana Bash on ‘State of the Union.’”

And AP writer Scott Smith reported yesterday that, “Farmers already scrambling to find workers in California — the nation’s leading grower of fruits, vegetables and nuts — fear an even greater labor shortage under President Barack Obama’s executive action to block some 5 million people from deportation.

“Thousands of the state’s farmworkers, who make up a significant portion of those who will benefit, may choose to leave the uncertainty of their seasonal jobs for steady, year-around work building homes, cooking in restaurants and cleaning hotel rooms.

“‘This action isn’t going to bring new workers to agriculture,’ said Jason Resnick, vice president and general counsel of the powerful trade association Western Growers. ‘It’s possible that because of this action, agriculture will lose workers without any mechanism to bring in new workers.’”

The AP article added that, “‘Hopefully there will be the opportunity for comprehensive immigration reform,’ said Karen Ross, secretary of the California Department of Food and Agriculture. ‘That’s the right thing to do for this country.’”



Soumya Karlamangla reported yesterday at the Los Angeles Times Online that, “Three days before Los Angeles lawmakers voted on a proposal to ban genetically modified crops, the world’s largest biotechnology trade group hired three top City Hall lobbyists to stop it.

“The matter had sailed through a meeting weeks before with only one City Council member expressing doubt.

“But when a council committee sat down to vote again this month, three of the five members came out strongly against it — though they said lobbyists had nothing to do with it.”

The L.A. Times article stated that, “Such a ban would be largely symbolic in L.A. because there are currently no known genetically modified organisms, known as GMOs, grown within the city.

“Nevertheless, before this month, L.A.’s 15 council members had voiced almost no opposition to the ban. In October, the council approved the ban with only one opposing vote.

Opponents of the proposal said the shift on the City Council came after members received more information and had more time to spot possible problems with the ban.”


Agricultural Economy

DTN Executive Editor Marcia Zarley Talyor reported on Friday that, “It’s still early in the new-crop season. True, 2015 corn prices have climbed more than 70 cents since bottoming in late September. There’s even a chance corn futures could spike as high as $5.20 by midsummer, if weather scares and demand tweak markets just right, DTN’s Senior Analyst Darin Newsom told the DTN/Progressive Farmer Ag Summit earlier this month.

“Despite that potential, growers with debt still face a worrisome scenario in the year ahead. Cash rents haven’t budged much, fertilizers still hover above year-ago levels and seed discounts haven’t materialized. When spring crop insurance guarantees set for most states March 1, they aren’t likely to cover cost of production, land-grant universities forecast. So the uncomfortable discussions with farm lenders this winter may focus on minimizing losses, not necessarily showing a profit in 2015.”

Reuters news reported on Friday that, “Russia has introduced grain exports duties of no less than 35 euros per tonne starting from Feb. 1 to stabilise domestic prices, according to a government statement published late on Thursday.

“The government said that the duty would amount to 15 percent of the customs price plus 7.5 euros, but it would be no less than 35 euros per tonne.”

In developments regarding U.S. policy on Cuba, Victoria Burnett and William Neuman reported on the front page of Saturday’s New York Times that, “As the United States and Cuba enter a period of unprecedented dialogue, many dissidents who have stood shoulder to shoulder with American officials in condemning the Castros contend that Mr. Obama gave away too much — and got too little in return.”

The article added that, “Many dissidents argue that the United States surrendered its leverage without extracting broad political changes, and they wonder whether American officials will continue to press as hard for reform now that a deal has been struck.

“But experts say dissidents fear something else as well: that in an era of negotiation, dissidents who reject dialogue will become irrelevant.”



Beth Reinhard reported on the front page of today’s Wall Street Journal (“Hillary Clinton Faces Uphill Fight for White, Rural Vote”) that, “Working-class voters have long been a bedrock of Democratic support, and the party continues to do well with voters from lower-income households overall, according to exit polls.

“But white, more rural voters in the South and elsewhere have been fleeing the party. Just five years ago, Arkansas Democrats held both Senate seats, three out of four House seats, the governor’s office and control of both chambers of the state legislature. The election in November of Republicans Tom Cotton to the U.S. Senate and Asa Hutchinson to the governor’s office will leave the Democratic Party without a single federal or statewide officeholder in Arkansas, a state that Bill Clinton carried twice by at least 17 percentage points.”

Keith Good