November 20, 2019

Thursday Morning Update: Policy Issues; Trade; Ag Economy; and, Budget Issues

Policy Issues

On Wednesday, the House Agriculture Committee met to discuss the SNAP program and nutrition issues, a summary and overview of this Committee hearing is available here.

Also on the SNAP issue, a report yesterday by  Mathematica Policy Research presented “estimates that, for each state, measure the need for SNAP and the program’s effectiveness in each of the three years from 2010 to 2012.”

The Mathematica item stated that, “This report presents estimates that, for each state, measure the need for SNAP and the program’s effectiveness in each of the three fiscal years from 2010 to 2012. The estimated numbers of people eligible for SNAP measure the need for the program. The estimated SNAP participation rates measure, state by state, the program’s performance in reaching its target population. In addition to the participation rates that pertain to all eligible people, we derived estimates of participation rates for the ‘working poor,’ that is, people who were eligible for SNAP and lived in households in which someone earned income from a job.”

The report noted that, “Tables III.1  and III.2  present our final shrinkage estimates of SNAP participation rates and the number of people eligible, respectively, in each state for FY 2010 to FY 2012 for all eligible people and for the working poor.”

Recall that he House Agriculture Nutrition Subcommittee will hold a hearing today, “to review SNAP recipient characteristics and dynamics.”

Also on Wednesday, Secretary of Agriculture Tom Vilisack presented testimony at the House Appropriations Subcommittee on Agriculture.

In his opening statement, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “I am especially concerned about the major changes proposed to the crop insurance program. Farmers have endured an estimated 43% decline in net farm income over the last two years. They are experiencing tough economic times with sharply lower crop prices and a number of natural disasters. There are a number of uncertain economic factors in the future. Yet, USDA is proposing to reduce crop insurance by $16 billion, a reduction of over 17%, and make it increasingly difficult for them to secure funding. I join my fellow colleague Mike Conaway, who is the Chairman of the Committee on Agriculture, in requesting that we not adversely change the rules of the farm bill. And I certainly do not want to do so through the appropriations process.”

Recall that at a Senate Ag Committee hearing on Tuesday, farmers cited crop insurance as the cornerstone of the farm safety net and pointed out that, “[C]rop insurance is not a way to get rich, it’s a matter of survival.”

In his prepared testimony, Sec. Vilsack noted that, “The Farm Bill included several reforms to the Federal crop insurance program; however, there remain further opportunities for improvements and efficiencies. The President’s 2016 budget includes two proposals to reform crop insurance, which are expected to save $16 billion over 10 years. This includes reducing subsidies for revenue insurance that insure the price at the time of harvest by 10 percentage points and reforming prevented planting coverage, including adjustments to payment rates. These reforms will make the program less costly to the taxpayer while still maintaining a quality safety net for farmers.”

As a side note on crop insurance, a news release yesterday from USDA’s Risk Management Agency stated that, “The [USDA] is proposing changes to existing regulations in order to expand crop insurance to farmers who currently don’t have coverage available for their crops, including many fruit and vegetable growers. The proposed rule will improve the submission process for insurance policies to the Federal Crop Insurance Corporation (FCIC). The changes will ease the burden on private submitters, while making crop insurance policies for underserved and specialty commodities a priority.

“The proposed rule was announced in the Federal Register today. Many of the recommended changes address provisions of the 2014 Farm Bill that were meant to expand the farm safety net options for modern agricultural practices.”

In addition, Sec. Vilsack pointed out in his testimony on Wednesday that, “The Administration strongly supports the Supplemental Nutrition Assistance Program (SNAP) and other critical programs that reduce hunger and help families meet their nutritional needs. SNAP is the cornerstone of the Nation’s nutrition assistance safety net, touching the lives of millions of low-income Americans, the majority of whom are children, the elderly, or people with disabilities. SNAP kept over 5 million people, including nearly 2.2 million children, out of poverty in 2013. Recent research has shown that SNAP not only helps families put food on the table, but it has a positive long-term impact on children’s health and education outcomes. We also support the ongoing implementation of the Healthy, Hunger-Free Kids Act. Over 90 percent of schools report that they are successfully meeting the new nutrition standards, serving meals with more whole grains, fruits, vegetables, lean protein and low-fat dairy, and less sodium and fat.”

A news release on Wednesday from Rep. Rosa DeLauro (D., Conn.) stated that, “[Rep. DeLauro] today won a commitment from United States Department of Agriculture (USDA) Secretary Tom Vilsack that he would suspend the Uniform Labeling Regulation so that the long-pending rule for labeling mechanically tenderized beef (MTB) products can finally be issued. DeLauro asked Secretary Vilsack to take this step in a letter sent last week.”

And a separate update yesterday from Rep. DeLauro indicated that, “[Rep. DeLauro] today commended United States Department of Agriculture (USDA) Secretary Tom Vilsack and Department of Health and Human Services (HHS) Secretary Sylvia Burwell for supporting a single food safety agency. DeLauro made her comments during meetings of the appropriations subcommittees responsible for funding the aforementioned departments.”

On this issue, the Los Angeles Times editorial board opined in Wednesday’s paper that, “The Government Accountability Office has repeatedly called for streamlining these disparate regulatory responsibilities under a single agency responsible solely for food safety, and President Obama has now joined in, proposing a Food Safety Administration within the Department of Health and Human Services. It’s a smarter, more efficient and effective way to protect American consumers. According to the Centers for Disease Control and Prevention, food poisoning sickens more than 80 million people a year in this country, killing 5,000, sending 325,000 to the hospital and, according to a 2012 study in the Journal of Food Protection, costing $14 billion — which doesn’t take into account the cost of lawsuits and recalls.”

Also, AP writer Mary Clare Jalonick reported today that, “In the ever-complicated debate over labeling of genetically modified foods, Agriculture Secretary Tom Vilsack says he has an idea: use your smart phone.

Vilsack told members of Congress on Wednesday that consumers could just use their phones to scan special bar codes or other symbols on food packages in the grocery store. All sorts of information could pop up, such as whether the food’s ingredients include genetically modified organisms, or GMOs.”

The article indicated that, “The Food and Drug Administration handles most food-package labeling, so Vilsack’s idea isn’t an official proposal. But the agriculture secretary suggested it could head off the debate between the food industry and those who have pushed for package labels that identify GMOs.”

Ms. Jalonick added that, “Vilsack has mentioned the idea before, but he said it could have new life as Congress becomes more involved in the issue. A Republican House bill would block any further state efforts to require GMO package labels. Last year Vermont became the first state to pass a law to requiring the labeling.”

Philip Brasher reported yesterday at Agri-Pulse that, “Agriculture Secretary Tom Vilsack assured lawmakers he would be personally involved in writing the government’s new dietary guidelines and indicated he would keep them narrowly focused on nutrition.

Vilsack stopped short of saying that he would scrap a scientific advisory panel’s proposal that the guidelines include environmental factors, a move that would encourage less consumption of meat.”

Mr. Brasher explained that, “The chairman of the House Agriculture Appropriations Subcommittee, Robert Aderholt, R-Ala., asked Vilsack for assurance that the final guidelines, which will be drafted by USDA and the Department of Health and Human Services, would not include the environmental factors.

“Vilsack didn’t answer Aderholt directly but said he would ‘make sure we follow the appropriate approach within the statutory guidelines and directions that we’ve received. I understand we need to color inside the lines and don’t have the luxury of coloring outside the lines.’”

Also yesterday, Sen. Jerry Moran (R., Kans.) posted a picture with Sec. Vilsack and the following statement at his Instagram account yesterday: “This afternoon, I visited with Secretary of Agriculture Tom Vilsack about our priorities for the upcoming Congress. In my role as chairman of the #Agriculture Appropriations Subcommittee, I will be working to making certain #USDA programs are working for farmers, ranchers and rural #Kansas.”

In other policy news, an update yesterday from Sen. Dianne Feinstein stated that, “Senators [Feinstein], Dick Durbin (D-Ill.) and Kirsten Gillibrand (D-N.Y.) today urged the Department of Agriculture to establish strong pathogen standards for pork and beef products.

“In a joint letter to Agriculture Secretary Tom Vilsack, the senators wrote: ‘There are currently no Salmonella performance standards for ground pork or pork parts, and the standards for pork carcasses have not been updated in nearly 20 years. Ground beef Salmonella performance standards are similarly outdated, and there are no Salmonella standards for beef parts.’”

And an update yesterday from Sen. Patrick Leahy (D., Vt.) stated that, “Five years ago, the President signed into law the Healthy and Hunger-Free Kids Act. This law has made improvements to our school lunch program by making healthy food choices a reality for students nationwide. One of the best ways to help students make healthy choices is to teach them about their food and how it is grown. That is why I championed the inclusion of funding for a farm-to-school grant program, which was included in the Healthy and Hunger-Free Kids Act. The program has had tremendous success and interest nationwide, and has awarded grants in 42 states — showing the reach and diversity of farm-to-school. In order improve upon this successful program and expand its reach, I am glad to be joined today by Senator Cochran, and Representatives Fudge and Fortenberry in the House, to introduce the Farm to School Act of 2015.”

Ron Nixon reported in today’s New York Times that, “With millions of households across the country struggling to have enough to eat, and millions of tons of food being tossed in the garbage, food waste is increasingly being seen as a serious environmental and economic issue.

A report released Wednesday shows that about 60 million metric tons of food is wasted a year in the United States, with an estimated value of $162 billion. About 32 million metric tons of it end up in municipal landfills, at a cost of about $1.5 billion a year to local governments.”

The Times article added that, “‘Food waste is a global issue, and tackling it is a priority,’ said Richard Swannell, director of sustainable food systems at the Waste and Resources Action Program, or Wrap, an antiwaste organization in Britain that compiled the new report. ‘The difficulty is often in knowing where to start and how to make the biggest economic and environmental savings.’”



Vicki Needham reported yesterday at The Hill Online that, “The Obama administration on Wednesday persisted in its lobbying effort for expanded trade while congressional lawmakers continued their battle over legislation to streamline passage of any agreements.

“Secretary of State John Kerry argued that trade promotion authority (TPA) is key to locking in a deal on the 12-nation Trans-Pacific Partnership (TPP), which will boost growth of the U.S. economy.”

Note that Wall Street Journal writer William Mauldin tweeted yesterday that, “Trade squabble continues: ‪@OrrinHatch officially cancels tomorrow’s hearing on ‪#TPA trade bill, blames ‘concerns expressed by ‪@RonWyden’”

A National Farmers Union (NFU) news release from yesterday stated that, “[NFU] President Roger Johnson urged members of Congress to oppose trade promotion authority – also known as fast track – noting that trade agreements should be fair to all parties involved, and the process should be transparent.”


Agricultural Economy

Emiko Terazono reported yesterday at The Financial Times Online that, “Almond shipments in California fell by almost a third in January, as a prolonged labour dispute at the ports in the US west coast added to the impact of high prices, which had been a drag on sales.

“California accounts for about 80 per cent of global almond supplies and the continuing drought has pushed prices higher on worries about future production.”

Jesse Newman and Jeffry T. Lewis reported in today’s Wall Street Journal that, “A widespread work stoppage by Brazilian truckers is roiling global soybean markets, boosting prices that had been deflated for months by soaring production of the oilseeds.

“U.S. soybean futures surged to a six-week high on Tuesday as truckers across Brazil’s main farming regions blocked roads to protest fuel-tax increases and low wages, impeding shipments to ports and fueling speculation the U.S. would enjoy increased overseas demand for soybeans at Brazil’s expense. Prices pulled back Wednesday as police officers cleared some roads, but analysts said the situation remained fluid as the protests spread to more states.”

Also, Bloomberg writer Pablo Rosendo Gonzalez reported yesterday that, “In Argentina, where soybeans help drive the economy, a battle over export taxes has farmers defending their fields at night amid accusations that they’re hoarding crops to undermine the government.

“At issue is the growing use of silo bags, sausage-shaped sacks 12 feet (3.7 meters) in diameter and 200 feet long that can hold 12,000 bushels of grain or oilseeds for three years. Some farmers say they only use the bags to store crops until they can get them to market, while others see them as type of savings account. The government asserts the farmers are stashing crops to avoid paying a controversial 35 percent export tax that supports a third of government spending.”



Sean Sullivan reported in today’s Washington Post that, “Congressional Republicans have been plagued in recent years by a fractious and politically harmful family feud. Wednesday provided fresh evidence that the party’s sweeping November midterm wins have done little to alter that dynamic.

House and Senate Republicans remained sharply at odds over how to fund the Department of Homeland Security while continuing to do battle with President Obama over immigration. With just two days left before funding authority for DHS runs out, there was great uncertainty about whether and how lawmakers can get a bill to Obama’s desk in time to avoid a partial shuttering of the department.”

Keith Good

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