“The final day for farmers to update their crop acreage and yield history, the first step to qualify for the new subsidies, will be extended to April 7. The farmers had already had the deadline to update their acreage data extended by one month to March 31.”
David Rogers reported yesterday at Politico that, “The knives are out for the new farm bill even before next Tuesday’s deadline for producers to sign up with the Agriculture Department for the first commodity support payments due in October.
“A spate of recent forecasts shows that costs will be higher than predicted given the drop in grain prices. But in the rush to judgment, one cardinal rule still applies: As thickheaded as the farm lobby can be, its critics are often thicker.
“The Environmental Working Group has asserted that corn growers in most counties of Ohio, Iowa, Minnesota and Kansas will cash in on payouts of $60 to $200 an acre. The Washington Post editorial page picked up on this number and came down hard: ‘Like so many of its predecessors, the 2014 farm bill promised cheaper, more efficient federal agricultural policy, but delivered the opposite.’”
Mr. Rogers explained that, “But when POLITICO went back and looked at the farm bill numbers, the picture that emerged was very different.”
Note: Thanks again very much to the many readers who have expressed how much they have enjoyed the FarmPolicy newsletter over the years. The numerous Emails and tweets from readers about the newsletter ending next week have been extraordinarily gracious and very much appreciated.
Secretary of Agriculture Tom Vilsack and Deputy Agriculture Secretary Krysta Harden were both guests on yesterday’s AgriTalk radio program with Mike Adams, where a good deal of the discussion focused on the Farm Bill.
An update on Friday at the National Sustainable Agriculture Coalition (NSAC) Blog stated that, “This week the House and Senate Budget Committees each passed their Fiscal Year 2016 budget resolutions on party line votes.
“Each Committee’s resolution will now go to the floor of the House and Senate for consideration. This will likely take place next week with final passage targeted for the end of the week.”
The NSAC update explained that, “Budget resolutions provide the blue print for the appropriations process that will take place in the coming months. They set binding top line spending caps for the House and Senate Appropriations Committees.
“Budget resolutions may also include ‘budget reconciliation’ instructions, which instruct certain Committees to meet specific deficit-reduction targets through reductions in mandatory spending. Only the House Budget Committee’s version contains reconciliation instructions to the Agriculture Committee.”
Janet Hook and Kristina Peterson reported in today’s Wall Street Journal that, “House and Senate Republicans have resurrected efforts to curb spending for Medicare and other safety-net programs, releasing budgets this week that bring government entitlements back to the center of political conversation.
“The Senate GOP budget released Wednesday calls for saving $5.1 trillion over 10 years, including $4.3 trillion by repealing the Affordable Care Act and curbing entitlement programs such as Medicare, Medicaid and food stamps.”
The Journal article noted that, “Each chamber will vote on its own budget, before merging them and voting on a unified budget setting overall spending levels for the fiscal year. The policy proposals described in the budgets aren’t binding and stand little chance of becoming law under Mr. Obama, but they send a message about GOP priorities.”
Jonathan Weisman reported in today’s New York Times that, “House Republicans called it streamlining, empowering states or ‘achieving sustainability.’ They couched deep spending reductions in any number of gauzy euphemisms.
“What they would not do on Tuesday was call their budget plan, which slashes spending by $5.5 trillion over 10 years, a ‘cut.’
“The 10-year blueprint for taxes and spending they formally unveiled would balance the federal budget, even promising a surplus by 2024, but only with the sort of sleights of hand that Republicans have so often derided.”
The Times article added that, “The House Budget Committee will formally draft the budget on Wednesday, as Senate Republicans unveil their counteroffer. Like the House version, the Senate’s will balance in 10 years, aides to Republicans senators said. Like the House, the Senate will include language to help lawmakers repeal or reshape the Affordable Care Act this year. How the two chambers resolve their differences could be a central drama in Washington throughout the spring.”
On Tuesday, the House Appropriations Agriculture Subcommittee heard USDA budget related testimony from Under Secretary for Food, Nutrition, and Consumer Services, Kevin Concannon.
During his opening statement, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “USDA’s nutrition programs account for 75 percent of total resources in the Agriculture Appropriations Bill. Your request for fiscal year 2016 is approximately $112.4 billion, a $2.1 billion increase above the fiscal year 2015 enacted level. The Supplemental Nutrition Assistance Program (SNAP) is USDA’s largest program serving more than 46 million people per month with a requested program level of $83.7 billion. For Child Nutrition Programs the President’s budget projects that total funding needs will approach $21.6 billion in fiscal year 2016 – a $2.2 billion increase since fiscal year 2014. The Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, accounts for the single largest discretionary program in the bill. The budget proposes level funding for WIC at $6.6 billion to meet the estimated 8.5 million participants each month.”
He added that, “The President’s budget proposes cuts to the crop insurance program, and Secretary Vilsack said in an interview that this proposal was a way to help keep projected farm bill savings on track. But in case the Administration missed it, farm bill nutrition savings are not materializing as projected either, so where in this budget is a proposal to ensure the nutrition savings stay on track?”
Chairman Aderholt also noted that, “And finally, I cannot stress enough the importance of your role in making sure the final 2015 Dietary Guidelines for Americans are strictly focused on dietary and nutrient recommendations. The most current science must be used and the statutory directive must be followed – and this goes beyond just sustainability and statements on meat consumption. While I appreciate Secretary Vilsack’s comments that he understands his role and he knows he has to follow the law – and Commissioner Hamburg from the Food and Drug Administration made similar statements two weeks ago – that message needs to be clear throughout the entire Administration.”
The Senate Appropriations Ag Subcommittee heard testimony on Tuesday from Secretary of Agriculture Tom Vilsack about the FY16 USDA budget request. During the discussion portion of hearing three key issues were discussed relating to Dietary Guidelines, Crop Insurance and Bird Flu.
Subcommittee Chairman Jerry Moran (R., Kan.) indicated in his opening statement yesterday that, “Agriculture remains one of the bright spots in our nation’s economy, supporting more than 16 million jobs nationwide and forming the backbone of our rural communities. American farmers and ranchers are the best at what they do when given the opportunity to compete on an even playing field.
“After a long, arduous process and a great deal of economic uncertainty, Congress enacted the Agricultural Act of 2014 one year ago. The Farm Bill authorized sweeping changes to commodity and crop insurance programs, consolidated and reinforced conservation efforts, and reauthorized vital research and rural development programs. Agriculture is Kansas’s #1 industry – directly responsible for 37% of the state’s economy. Enactment of a new Farm Bill was welcome news for producers, research institutions, and rural communities in my home state.”
Sec. Vilsack indicated that, “The Department has completed implementation of many new Farm Bill authorities. This includes major new safety net programs providing certainty to American agricultural producers going into the 2015 crop year. We have made available over $5 billion in critical assistance to producers across the country since sign-up for the disaster programs began on April 15, 2014. Significant new crop insurance protections were also made available. America’s new and beginning farmers and ranchers, veteran farmers and ranchers, and women and minority farmers and ranchers were given improved access to credit.”
Sec. Vislack pointed out 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.”
Seung Min Kim and Jake Sherman reported yesterday at Politico that, “As budget season kicks off in earnest this week, defense hawks are clashing with fiscal hard-liners over military spending, Republicans are scaling back their deficit reduction targets, and Democrats are waiting in the wings to hammer GOP lawmakers with politically tough votes on education, infrastructure and health care.
“In the House, Speaker John Boehner of Ohio, Majority Leader Kevin McCarthy of California and Majority Whip Steve Scalise of Louisiana are stuck between the budget-cutting demands of conservatives and the desire of defense hawks to provide the military with more robust funding. In the Senate, Republicans are already getting hit by Democrats after indicating they’ll target Medicaid and food stamps.
“The blueprints due out this week in each chamber will provide the first hard evidence of how aggressively the GOP intends to pursue its top stated priority of fiscal discipline. Though the budgets are partisan documents that won’t be signed into law, failing to marshal enough GOP support to pass one would be a debilitating setback for a party trying to prove it can govern after taking full control of Congress.”
The article noted that, “As some details of the Senate budget became clear last week, Democrats began their attack — pointing to savings that Republicans would like to extract from Medicaid and food stamps for the poor.
“‘Balancing the budget on the backs of working families who have borne the brunt of the recession makes no economic sense,’ said Sen. Bob Casey (D-Pa.).
“If the two chambers ultimately can’t come together on a budget, Republicans won’t be able to wield a powerful budget maneuver known as reconciliation, which would allow them to enact policy changes with 51 rather than 60 votes.”
The House Appropriations Subcommittee on Agriculture resumes hearings this week and will garner additional details regarding USDA budget requests from three Agency Under Secretaries.
On Tuesday the Subcommittee will hear from Kevin Concannon, Under Secretary for Food, Nutrition, and Consumer Services, and on Wednesday, Under Secretary for Rural Development Lisa Mensah will testify before the Subcommittee.
Michael T. Scuse, Under Secretary for Farm and Foreign Agriculture Service and Brandon Willis, the Administrator for the Risk Management Agency will be at the Subcommittee on Thursday.
Meanwhile, the Senate Appropriations Ag Subcommittee will hear perspective on USDA’s budget from Secretary of Agriculture Tom Vilsackon Tuesday.
Recall that last month Sec. Vilsack presented testimony at the House Appropriations Ag Subcommittee (February 25) , as well as the House Ag Committee (February 11) and Senate Ag Committee (February 24).
In addition to the USDA budgetary hearings, the full House Ag Committee will hold a hearing Wednesday on the importance of trade to U.S. agriculture, while the House Ag Conservation and Forestry Subcommittee will hold a hearing on Tuesday, “To review the definition of ‘waters of the United States’ proposed rule and its impact on rural America.”
As these hearings regarding the USDA budget and ag policy issues are going on this week, the House and Senate Budget Committees will also be holding important meetings that have potential ramifications for the Farm Bill.
More recently, Jordain Carney reported on Friday at The Hill Online that, “Senate committees are laying the groundwork for the budget next week.
“Sen. Bernie Sanders (I-Vt.) said this week that the Budget Committee will mark up a budget proposal on Wednesday and Thursday. Sanders, the ranking member of the committee, said Democrats will likely offer ‘very strong amendments’ during markups next week.”
And an update on Friday at the National Sustainable Agriculture Coalition (NSAC) Blog (“The Farm Bill Reloaded”) explained that, “The House Budget Committee is expected to markup the fiscal year 2016 budget resolution on Wednesday March 18. The Senate Budget Committee is expected to follow suit the next day. Assuming the measures pass out of committee they will be debated and voted on in the full House and Senate the following week.
“While the chairmen of the two Committees have kept details of their proposed budget bills very close to the vest, it is widely expected that they will include ‘budget reconciliation’ instructions to various committees of Congress, including the Agriculture Committees. Budget reconciliation is a congressional process used primarily as a means of reducing government spending for mandatory programs.
“It is still unclear exactly what the reconciliation instructions to the Senate and House Agriculture Committees will be, but it has become increasingly clear that there will be instructions to the Agriculture Committees.”
The NSAC update added that, “The rumor in D.C. is that the Committees will be instructed to cut $20 billion, over 10 years, from the 2014 Farm Bill. This amount would be eerily similar to the House’s original 2013 proposal for $20 billion in cuts to the food stamps or Supplemental Nutrition Assistance Program (SNAP).
“Whatever the dollar figure is, it doesn’t come with any dictates on what programs to cut. It will be up to the two Agriculture Committees to determine what parts of the farm bill to cut.”
Also on Friday, Kimberly Leonard reported at USNews Online that, “The days of mystery meat and soda-dispensing vending machines may be gone, but that doesn’t mean that the new era of school meals and snacks hasn’t come without its own challenges.
“Nutrition guidelines for schools, which have gradually gone into effect since Congress passed the Michelle Obama-backed Healthy Hunger-Free Kids Act in 2010, can be logistically and financially difficult for already strapped district budgets.”
The article noted that, “In response, earlier this month 1,000 members of the School Nutrition Association, which represents school cafeteria workers and companies that supply food and equipment to districts, lobbied Congress for more funding and flexibility when it comes to school meals.
“Critics have called out the group for attempting to roll back quality nutrition standards, but the members maintain they are asking for a more realistic approach.”
William Mauldin reported on Sunday at The Wall Street Journal Online that, “Sweeping trade deals of the past—with Canada and Mexico in 1993, for instance, or China in 2000—presented big upsides and big risks for a broad swath of U.S. companies.
“By contrast, the trade bloc President Barack Obama is trying to hammer out with 11 Pacific countries shows how much smaller both the benefits and perils of trade liberalization have become.
“Complicating the pact’s path, meanwhile, are a host of accompanying fights over issues like environmental regulations and drug-pricing rules.”
The Journal article stated that, “Washington already has trade agreements with more than half the countries in the TPP, among them Singapore, Australia, Peru and Chile… Administration officials and business groups are saying the TPP would lower traditional barriers at the border but also open up U.S.-dominated services industries, boost intellectual-property protection for Hollywood movies and Silicon Valley software, and set rules on the international free flow of data, foreign investment and the environment. A successful deal would also lower regular agricultural and food barriers in Japan and other countries, raising profits for American farmers, an increasingly small but influential part of the electorate.”
Christopher Doering reported in Sunday’s Des Moines Register that, “Congress is wrestling with whether to grant President Barack Obama authority to negotiate potentially lucrative trade deals that could be a boon to an Iowa economy already dependent on trade to support thousands of jobs and pump millions of dollars into the state each year.
“Exports provide a major boost to Iowa’s economy, helping a host of industries ranging from agriculture and construction equipment manufacturers to bioscience and aerospace companies.
“The state shipped a record $15.1 billion in goods and services last year — up sharply from $6.4 billion a decade ago, according to the Commerce Department’s International Trade Administration. Trade now supports more than 80,000 jobs in the state.”
The article noted that, “Without trade, [Gov. Terry Branstad] said, the state’s unemployment rate of 4.1 percent in December would likely be higher, while agriculture, manufacturing and other industries in Iowa would be far less profitable.”
Sunday’s article added that, “Agriculture Secretary Tom Vilsack said recently that agricultural exports have been among the biggest beneficiaries of trade, representing 9.2 percent of the record $1.64 trillion in U.S. goods exported in 2014, compared to 6.6 percent in 2000. Overall, exports are equal to about 30 percent of U.S. farm sales.
“‘Without exports, American agriculture would not be a particularly profitable venture,’ he said.”
“McDonald’s will phase out chicken raised with antibiotics that are important to human health over two years to allay concern that use of the drugs in meat production has exacerbated the rise of deadly ‘superbugs’ that resist treatment, Reuters reported last week. Within days, retailer Costco Wholesale Corp told Reuters it aims to eliminate the sale of chicken and meat raised with human antibiotics.
“KFC is owned by Louisville, Kentucky-based Yum Brands Inc, which has no publicly stated policy on antibiotic use in the production of meat it buys. Chick-fil-A, another chicken restaurant chain that competes with KFC, says about 20 percent of the chicken it serves is raised without any antibiotics, and that its entire supply chain will be converted by 2019.”
Also, a news release this week from Cargill indicated that, “Dr. Stephanie Cottee joins Cargill animal welfare team with global responsibility for poultry.
“She will be based in Guelph, Ontario, Canada and report to Dr. Mike Siemens, PhD, Cargill’s head of animal welfare based in Wichita, Kan. Dr. Cottee’s appointment is effective immediately.”
And Reuters writers Tom Polansek and P.J. Huffstutter reported yesterday that, “A case of bird flu confirmed Wednesday in the heart of America’s poultry region, is certain to mean more export restrictions, increasing U.S. supply and likely forcing the world’s biggest poultry companies to trim prices.”
The article noted that, “The USA Poultry & Egg Export Council said it expects 30 to 40 additional countries to impose new trade restrictions on U.S. poultry and eggs in the $5.7 billion export market. Additional limits could come from Mexico, the top U.S. chicken importer, which already is blocking poultry imports from Minnesota, Missouri and California due to bird flu, the trade group said.
“Previous cases of avian flu in other states triggered China and South Korea to recently impose bans, still in effect, on U.S. poultry imports. Last year, they accounted for about $428.5 million in export sales of poultry meat and products, according to U.S. Department of Agriculture data.
“Other countries have banned exports from only states or counties with positive cases of avian flu.”
Chris Kirkham reported yesterday at the Los Angeles Times Online that, “The short-term economic impact of the recent labor standoff at West Coast ports will be small, according to a new economic forecast, but the ports face a long-term struggle to remain competitive in the rapidly changing realm of global trade.
“Many businesses in California, particularly those tied to agriculture, suffered from missed orders and produce spoiling on docks. But many other shipments were simply delayed rather than lost entirely, according to the quarterly UCLA Anderson Forecast.”
And Ann M. Veneman and Dan Glickman, who respectively served as Agriculture Secretary for George W. Bush and Bill Clinton, indicated in a column this week at The Hill Online that, “As former secretaries of Agriculture, we know firsthand the importance of international trade to America’s farm and ranch families, to our nation’s rural communities, and to the U.S. economy as a whole. There’s no other sector of the U.S. economy where the link between trade and prosperity is clearer than in agriculture.”
The column noted that, “Key to our ability to negotiate and implement market-opening agreements has been enactment of trade negotiating authority. This authority, now called trade promotion authority (TPA), ensures U.S. credibility to conclude the best deal possible at the negotiating table. TPA also ensures common negotiating objectives between the president and Congress, and a continuous consultation process prior to final Congressional approval or disapproval of a trade agreement.
“That’s why we, together with all living former secretaries of Agriculture, recently signed an open letter urging Congress to reinstate Trade Promotion Authority to allow the president to effectively negotiate job-supporting trade agreements as other presidents have done.
“With TPA, the United States will be able to pursue trade agreements that support high-paying U.S. jobs while helping America’s farmers and ranchers increase U.S. exports and compete in a highly aggressive globalized economy. TPA will signal to our TPP partners that Congress and the administration stand together on the high standards our negotiators are seeking.”
On Thursday, the Senate Appropriations Subcommittee on Agriculture heard testimony from FDA Commissioner Dr. Margaret Hamburg.
In his opening statement, Subcommittee Chairman Jerry Moran (R., Kan.) noted that, “Over the past four years, FDA has been given significant new responsibilities through the Food Safety Modernization Act,menu labeling legislation, and drug compounding legislation.
“When implementing these laws, FDA must avoid the trappings of ‘one-size-fits-all’ solutions. Small businesses suffer under this practice all too frequently because they have limited capital to respond to significant new requirements and little time to implement these changes.”
Chairman Moran added that, “The agency’s final rule on menu labeling is overly broad and inflexible and lacks a great deal of business practicality. I was disappointed to see the inclusion of grocery stores, convenience stores, and other entities that do not sell restaurant style food as their primary business.
“Under the Food Safety Modernization Act, FDA is tasked with implementing the most sweeping changes to food safety laws in over 70 years. I was pleased that the Agency took many of the concerns within the agricultural community into account by re-proposing significant portions of the rules because they were unworkable for farmers. With the court-mandated deadlines for finalization approaching, I encourage FDA to consider deliberate and thoughtful implementation of the law.”
A news release on Thursday from Sen. Jon Tester (D., Mont.) indicated that, “During a Senate Agriculture Appropriations hearing Tester called on the Food and Drug Administration (FDA) to better identify the ingredients that are in food. With the commitment that the FDA would improve food safety without burdening small producers, Tester voiced his support for the $300 million increase for food safety included in the Administration’s budget request.
“‘Folks deserve to know what ingredients are in their food-which ingredients are good for them and which are going to kill them,’ Tester told FDA Commissioner Dr. Margaret Hamburg. ‘I want to support your efforts to keep our food safe, but we need to do it in a way that meets the needs of producers and consumers.’”
During the discussion portion of yesterday’s hearing, Chairman Moran had the following exchange with Dr. Hamburg about the 2015 Dietary Guidelines Advisory Committee Report: “In regard to dietary guidelines, what role will FDA have in advising the Department of Health & Human Services?”
Dr.Margaret Hamburg: “Well, the dietary guidelines, at least as I understand it, it is a process that ultimately involves decision-making that is coordinated between the Secretary of Health & Human Services and the Secretary of the Department of Agriculture of USDA. FDA does play a role in reviewing reports and information that goes into the final determinations, and we of course bring our science-based approaches to our recommendations in terms of nutrition science and health.”
Sen. Moran: “What’s the status of that process now at the Department of Health & Human Services and your role?”
Dr. Hamburg: “I believe that there’s a report that is currently under review that was developed by a group of outside scientific experts, and we, like other components of HHS, have been asked to review that report and make comments for the Secretary.”
And Montana GOP Sen. Steve Daines had the following exchange with Dr. Hamburg on the Dietary Guidelines issue: “As you know, Montana is a large producer in ag. It’s our number one industry, $5 billion a year, and maintaining a high quality food supply is of paramount importance for our producers. And Montana agriculture plays an important role in the diets of Montanans, for Americans across the country, and even around the world.
“And a question I had really relates to some of the dietary guidelines. And specifically, in the FY15 omnibus, there was a congressional directive that expressed concern that the Advisory Committee was, quote, ‘showing an interest in incorporating environmental factors into their criteria,’ and directed the Secretary to include, and I quote, ‘only nutrition and dietary information, not extraneous factors in the final guidelines.’
“Well, as you know, the scientific report of the 2015 dietary guidelines advisory committees was just released last month. It included, and I quote, ‘environmental approaches are needed to complement individual based efforts to improve diet and reduce obesity and other diet related diseases.’ So the question I have is, do you think the advisory committee report is compliant with the congressional directive?”
Dr. Hamburg: “Well, as I think you probably know, our role in this is not a direct one, but it’s advisory to the Secretary of Health & Human Services in terms of reviewing materials, including the report you mentioned, that then become the basis for decision-making by the Secretary of HHS and the Secretary of the Department of Agriculture. Our role is really to provide feedback in terms of the science of nutrition and health.
“And the broader issues that you were referring to I think were reflected in a report that was done by an outside group of scientists, but in terms of what we’ll be commenting on to the Secretary of Health & Human Services will be on nutrition science and health. And I think that, you know, my understanding is that, you know, at the end of the day the decisions that are made will really focus on the dietary guidelines that are science [based]—”
Sen. Daines: “Doctor, do you believe the environmental issues are within the purview of developing those dietary guidelines?”
Dr. Hamburg: “Well, you know, from the FDA perspective, as I said, that is not something that we are looking at. And my understanding is that the Secretary of Agriculture and the Secretary of Health & Human Services understand their role in terms of establishing the dietary guidelines.”
Sen. Daines: “Okay.”
Also on Thursday, a news release from Chairman Moran noted that, “Today, [Sen. Moran] and 29 of his Senate colleagues called on U.S. Department of Agriculture (USDA) Secretary Tom Vilsack and U.S. Department of Health and Human Services (HHS) Secretary Sylvia Burwell to stay within statutory guidelines, consider the most relevant nutrition scientific literature, and reject the committee’s inconsistent conclusions and recommendations regarding the role of lean red meat in a healthy diet.
“In a letter led by U.S. Senator John Thune (R-S.D.), they request an extension of the 45-day comment period to ensure stakeholders have enough time to review and comment on the lengthy report.”
Lydia Wheeler reported on Thursday at The Hill Online that, “The North American Meat Institute has a message for the Dietary Guidelines Advisory Committee – ‘Get your hands off my hot dog.’
“The meat and poultry trade association is calling all hot dog, sausage, bacon and salami lovers to sign a petition on change.org, which asks the Departments of Agriculture and Health and Human Services to include meat as part of a healthy diet in the 2015 Dietary Guidelines for Americans.”
Kristina Peterson reported on Thursday evening at The Wall Street Journal Online that, “The Senate Republican budget slated for release next week is expected to generate savings by turning more responsibility for Medicaid and food-stamp programsover to states, GOP lawmakers and aides said Thursday.
“While details of the document aren’t final, Republicans would propose turning funding for those programs into something similar to a block grant, said Senate Budget Committee Member Lindsey Graham (R., S.C.). That approach would call for the federal government to pay states a lump sum, instead of a percentage of the program’s costs. States would have more control over the program and would be responsible for footing the rest of the bill.”
Ms. Peterson explained that, “To get a sense of potential savings, under last year’s House GOP budget, converting the food-stamp programs into a block grant starting in 2019 would have saved $125 billion over 10 years.”
The Journal article added that, “Not all Republicans support the idea of turning food stamps into a block grant-type program.
“‘The governors would love the money, but they don’t want to be in charge of food stamps,’ said Sen. Pat Roberts (R., Kansas), the Agriculture Committee chairman.”
Recall that President Obama released the executive branch budget outline in February. With respect to SNAP, Alan Bjerga reported at the time that, “The biggest spending item in the USDA budget, the Supplemental Nutrition Assistance Program, which distributes food stamps, would decline 0.1 percent to $78.7 billion.”
In other areas of the President’s budget, DTN writers Chris Clayton and Todd Neeley explained back in February that, “‘The White House budget proposal for 2016 seeks to cut crop insurance under the argument that such cuts are needed to offset higher projected direct farm-program subsidies.”
The DTN article explained that, “The crop-insurance cut is smaller than in earlier budget proposals, but it would take an average of $1.6 billion a year out of crop insurance, or $16 billion over the next decade. Agriculture Secretary Tom Vilsack said in a discussion Monday [Feb. 2] with reporters that the crop-insurance proposal was a way to help keep projected farm-bill savings on track.
And earlier this week, an update at the National Sustainable Agriculture (NSAC) Blog (“Budget Time on Capitol Hill- Farm Bill to be Re-Opened?”) indicated that, “With the new CBO projections as backdrop, the House and Senate Budget Committees plan to markup their respective version of the congressional budget resolution for fiscal year 2016 next week. The budget resolutions will then go to the House and Senate floor, and if passed, will be negotiated into a final budget resolution to guide spending decisions for fiscal year 2016.
“In addition to setting the overall size of the spending pie for annual appropriations bills which dictate government discretionary spending, the budget resolution is occasionally also used to send budget reconciliation instructions to House and Senate authorizing committees with jurisdiction over mandatory spending. Those instructions are in essence directives to cut spending in mandatory-spending programs under a committee’s control by a specific dollar amount. Budget reconciliation is most often used as a procedure for deficit reduction.
“According to the Capitol Hill rumor mill, there is a strong possibility that the draft budget resolutions to be introduced by the Budget Committee chairmen next week will include reconciliation instructions and that those instructions may include a directive to the Agriculture Committees to cut farm bill spending by a designated amount. Should that happen, a farm bill that took three years to create and that was signed into law just over a year ago for what was presumed to be a five-year period will be open for debate all over again.”
The NSAC Blog update pointed out that, “A broad coalition of farm, anti-hunger, conservation, and rural groups with a stake in the farm bill, including NSAC, wrote to both budget committees several weeks ago urging them not to re-open the farm bill through the budget reconciliation process. That farm bill coalition will very likely mobilize in opposition to any moves by the Budget Committees to re-open the farm bill.
“Whether such moves are forthcoming remain to be seen, though the situation should become clear one way or the other in the coming week. NSAC will work against farm bill reconciliation instructions.”
And earlier this week, a Texas newspaper reported that, “[House Ag Committee Chairman Mike Conaway (R., Tex.)] said Monday that [House Ag Committee] review [of the SNAP program] is underway and that he does not want his fellow legislators to make cuts to the program before he is finished.
“‘I’m trying to maintain this idea that we don’t have any preconceived reforms in mind right this second, and we want to let those percolate out of the review itself,’ Conaway said. ‘One of the fights I’m having with the budget is to make sure they don’t do things there that would taint the water.’”
Corey Paul reported on Monday at the The Odessa (Tex.) American Online that, “[House Ag Committee Chairman Mike Conaway (R., Tex.)] said when he was appointed chairman in January that his chief priority was launching a review of the country’s Supplemental Nutritional Assistance Program, or food stamps, criticizing a lack of oversight for the $80 billion annual program.
“Conaway said Monday that review is underway and that he does not want his fellow legislators to make cuts to the program before he is finished.
“‘I’m trying to maintain this idea that we don’t have any preconceived reforms in mind right this second, and we want to let those percolate out of the review itself,’ Conaway said. ‘One of the fights I’m having with the budget is to make sure they don’t do things there that would taint the water.’”
Meanwhile, with respect to the commodity title of the Farm Bill, Reuters news reported yesterday that, “Government support for U.S. grain farmers under the new five-year farm bill will peak with the coming 2015 crop, the Food and Agricultural Policy Research Institute said in a new report.”
The article noted that, “‘Payments under 2014 farm bill programs increase when crop prices fall,’ FAPRI said in its 2015 U.S. Baseline Briefing Book. The think tank estimated that $3.9 billion in ARC and PLC payments for last year’s 2014 crop would be made after fiscal 2016 begins on Oct. 1.
“‘ARC spending is greatest in 2015/16 but declines in later years as the moving averages that determine benchmark revenues adjust,’ FAPRI said. ‘Projected average ARC and PLC payments peak with the 2015 crop at about $6.5 billion but decline to $3.4 billion for the 2018 crop.’”
David Rogers reported on Monday at Politico that, “Fresh projections for the new farm bill Monday show a greater participation rate — and higher costs — associated with a Senate-backed revenue loss program championed by Midwest corn and soybean producers.
“A revised farm baseline prepared by the Congressional Budget Office shows a decided shift in this direction from just months ago. A second report from the Food and Agricultural Policy Research Institute at the University of Missouri projects that the program’s costs will jump by nearly $1.7 billion, or 81 percent, above what FAPRI had previously predicted for the 2015-2016 marketing year.”
Mr. Rogers explained that, “Proponents of the program, formally known as Agricultural Risk Coverage or ARC, argue that it is still more efficient than traditional counter-cyclical, price support programs. And in fact, both the FAPRI and CBO numbers show that the ARC payments to corn farmers will drop off significantly in three to four years.
“Nonetheless, the infusion of so much government money up front is sure to invite criticism. CBO projects that total payments to corn and soybean producers from ARC alone will be $3.37 billion in fiscal 2017 — when the big subsidies come due for the government.
“That is 38 percent higher than what this sector collected in 2014 under the old system of direct cash payments to producers.”
The Politico article pointed out that, “It’s still a bit of a guessing game as to how many farmers will sign up for ARC vs. PLC, but the combined costs in the early years are striking.
“In the case of corn and soybeans, CBO is projecting most producers will go in the direction of ARC, but thousands will opt for PLC instead, accounting for another $1.47 billion in costs in fiscal 2017.
“When added to the ARC subsidies, the corn and beans sector is expected then to receive a total of $4.8 billion in government payments in fiscal 2017. That’s nearly double what the direct payments were for these two crops in 2014.”
And Philip Brasher reported on Monday at Agri-Pulse that, “The new farm programs for grain and oilseed growers will pay them up to $7 billion annually over the next few years, surpassing what they would have received through the old system of direct payments, according to new forecasts released Monday.”
After additional analysis of the updated CBO and FAPRI reports, Mr. Brasher pointed out that, “After 2018, ARC payments decline dramatically as the five-year moving average begins to reflect the drop in commodity prices. FAPRI economists estimate that ARC payments will drop from $3.1 billion in fiscal 2018 to $1.8 billion in 2019 and then to $1.2 billion the following year.
“PLC payments, on the other hand are expected to peak at $2.8 billion in fiscal 2018 and drop to $2.4 billion the following year, according to FAPRI.
“Both CBO and FAPRI estimate that the cost of the federal crop insurance program, which has been expanded with new products under the 2014 farm bill, including a new policy for cotton, will hover around $8 billion a year.”
More broadly, the FAPRI update stated that, “Lower prices have resulted in a large decline in crop producer income and could result in significant federal spending under new programs established by the 2014 farm bill. After reaching record levels in 2014, most livestock sector prices are also expected to decline in 2015. As a result, net farm income is projected to fall sharply.”
“Average projected corn prices recover to $3.89 per bushel for the 2015/16 marketing year in response to reduced U.S. production. Wheat and soybean prices both fall in 2015/16, to $5.17 per bushel and $9.29 per bushel, respectively, given continued large global supplies,” FAPRI said.