FarmPolicy

November 12, 2019

Budget Issues Move to the Front Burner- Potential Farm Bill Implications

Categories: Budget /Farm Bill

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 programs over 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.

“Vilsack said one of the challenges of passing the farm bill was how to create sufficient savings. Lower commodity prices indicate higher spending for the new commodity programs — Agricultural Risk Coverage and Price Loss Coverage.” [Note that projected commodity program spending has risen since February].

On Thursday, the Congressional Budget Office released its estimate of the executive branch agricultural related budget proposals.

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.’”

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Wednesday Morning Update: Policy Issues-Ag Economy; Regulations; and, Trade

Policy Issues, Budget Baselines, USDA Reports

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.’”

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CBO, FAPRI March Baseline Updates

On Monday, the Congressional Budget Office (CBO) released its updated baseline Budget Projections for 2015 to 2025.

A brief overview of CBO’s January baseline projections can be found here.

Also on Monday, the Food and Agricultural Policy Research Institute (FAPRI) released its latest baseline-briefing book.

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.

In addition, CBO’s outlook for the SNAP program is available here, while the CBO’s outlook for child nutrition programs can be found here.

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Sunday Update: Iowa Ag Summit; Policy; Budget; Trade; and, Regs

Iowa Ag Summit

A summary and highlights of Saturday’s Iowa Ag Summit are available here, at FarmPolicy.com Online.

 

Policy Issues

In other news, Lydia Wheeler reported on Friday at The Hill Online that, “The U.S. Department of Agriculture is giving schools $5.5 million in training grants, in addition to the $25 million being allocated this year for new kitchen equipment, to help districts prepare healthier meals.

“‘Our kids today are growing up in a very competitive economy and in this competitive economy it’s going to be very important for them and their country to be on top of their game,’ Secretary of Agriculture Tom Vilsack said Friday.”

Beena Raghavendran reported on Saturday at the Minneapolis Star-Tribune Online that, “In Moorhead, to qualify for government cash assistance, residents must have lower incomes than people living right next door in Fargo, N.D.

“This discrepancy upsets U.S. Rep. Collin Peterson, a Democrat whose Seventh Congressional District includes Moorhead. Some Minnesota residents make slightly too much to receive benefits by Minnesota law while their counterparts making the same income across the state line are getting help. It’s a problem echoed across the country because states set their own cash benefit standards.

“‘We have to work on how we treat different people differently in different parts of the country,’ Peterson said.”

The article added that, “The House Agriculture Committee — where Peterson is the highest ranking Democrat — just began its review of the Supplemental Nutrition Assistance Program, or SNAP, formerly known as the food stamp program, to address a glaring problem: Though unemployment has fallen since the recession, numbers of food stamp recipients have remained constant.

“Some Republicans wonder whether the program is increasing its recipients’ dependency on welfare.

Peterson understands the concern, but he doesn’t think the food stamp program should be touched — at least for now.”

The article indicated that, “‘I don’t think we should do anything because we did the farm bill and it’s a five-year bill and they [Republicans] had their chance and it didn’t get done,’ Peterson said.

“The committee’s GOP Chairman Rep. Michael Conaway, of Texas, said there may be a legislative proposal to tackle food stamp inconsistencies.

“‘What we don’t want is for this program to hold people back from achieving their potential,’ he said.”

Julie Harker reported late last week at Brownfield that, “Missouri Attorney General Chris Koster and plaintiffs from five other states have filed an appeal in the case of the California egg legislation they are fighting. Last October, a district judge in California tossed out their lawsuit against California’s Proposition Two, which requires eggs produced in California and elsewhere to meet that state’s new enlarged-cage standards for egg laying hens. Koster tells Brownfield Ag News, ‘The egg case is a very important case. A lot of people have made fun of us for bringing this case and yet, increasingly as egg prices are now soaring because of the acts of the California legislature, they are recognizing that we were right to bring this case.’”

Meanwhile, The Washington Post editorial board indicated on Saturday that, “Farmers and ranchers have often argued they are not responsible for the rise of antibiotic resistance and have balked at change. The McDonald’s decision is certain to get their attention and cause change by market incentives. Also, as chicken producers adapt and learn how to keep their flocks healthy without the routine use of antibiotics, the know-how they develop may spread. Of course, the McDonald’s decision is good marketing, too — consumers say they want it. More power to the marketplace.

“This is the latest in a string of developments that suggest, at last, a more serious approach to the problem of antibiotic resistance, which the Centers for Disease Control and Prevention say leads to 2 million illnesses and 23,000 deaths a year in this country alone. The Food and Drug Administration has asked antibiotic manufacturers to stop selling the drugs for growth promotion in farm animals (although the FDA would permit continued use for disease prevention) and is giving veterinarians more control. Meanwhile, President Obama has proposed to double funding for combating antibiotic resistance, and the White House has mapped out an ambitious strategy. Bacteria have been evolving and adapting for many years, so it is encouraging to see the government and private sector doing more to address a major public health threat.”

 

Budget Issues

A recent Congressional Budget Office (CBO) news item indicated that the agency is set to release updated baseline projections on Monday.

A recap of January’s CBO baseline is available here.

Also, Jesse Byrnes reported on Sunday at The Hill Online that, “Senate Majority Leader Mitch McConnell (R-Ky.) on Sunday vowed that Republicans would figure out a way to handle the nation’s debt ceiling in order to avoid a government shutdown.

“‘The debt ceiling will be handled over a period of months,’ he said on CBS’s ‘Face the Nation’ when asked if Republicans would vote to lift the debt ceiling. ‘The secretary of the Treasury has a number of what we call ‘tools in his toolbox,’’ he added.”

 

Trade

In trade related news, an update on Saturday at The Japan Times stated that, “Japan and the United States failed to bridge the gap over tariff issues related to agricultural and auto trade as they wrapped up working-level bilateral talks associated with Trans-Pacific Partnership multilateral free trade negotiations on Friday.

Hiroshi Oe, Japan’s deputy chief TPP negotiator, told reporters after the two-day meeting that there still remain some thorny issues.”

The article added that, “Of the unresolved issues, Japan and the United States will hold talks on agricultural tariffs on the sidelines of a meeting of chief negotiators from all 12 members in the TPP talks set for Monday through Sunday in Hawaii.”

Vicki Needham reported on Sunday at The Hill Online that, “Labor unions and other groups opposed to free-trade policies are ramping up a spring offensive against the White House and congressional Republicans with new trade legislation set to emerge in the coming weeks.

“The AFL-CIO along with other groups this week trumpeted how trade promotion authority (TPA) will rubber stamp agreements like the Trans-Pacific Partnership (TPP) that they say would hurt American workers by leading to job and wage losses.

“Hundreds of members from the various groups canvassed Capitol Hill, bringing their anti-fast-track message to more than 100 congressional offices. It’s just the latest push from the left to stop the Obama administration’s push for TPA or fast-track, which would prevent trade deals from being amended by Congress.”

 

Regulations

A news release Friday from Rep. Randy Neugebauer (R., Tex.), Vice Chairman of the House Agriculture Committee, indicated that he “….introduced H.R. 1267 this week, a bill that would make it easier for farmers, custom harvesters, and agricultural producers to safely transport the fuel they need for a day of field work. Rep. Collin Peterson (D-MN), Ranking Member of the House Agriculture Committee, joined Neugebauer in introducing the bill. In the Senate, a companion bill was introduced by Senator Pat Roberts (R-KS), Chairman of the Senate Agriculture Committee, Senator Heidi Heitkamp (D-ND), and Senator Jerry Moran (R-KS).”

Keith Good

Thursday Morning Update: Policy; Ag Economy; Trade; Regs; and, Political Notes

Policy Issues

A House Ag Committee news release yesterday stated that, “Today, Chairman of the Agriculture Committee K. Michael Conaway (TX-11), Nutrition Subcommittee Chairwoman Jackie Walorski (IN-2), and Livestock and Foreign Agriculture Subcommittee Chairman David Rouzer (NC-7) sent a letter to Agriculture Secretary Tom Vilsack and Health and Human Services Secretary Sylvia Burwell raising concerns about recommendations received from the Dietary Guidelines Advisory Committee (DGAC).

“‘Members of the Dietary Guidelines Advisory Committee greatly exceeded their scope in developing recommendations,’ Chairman Conaway said. ‘The Secretaries share responsibility for these flawed recommendations because they failed to keep the Committee focused on nutritional recommendations and away from areas such as sustainability and tax policy, which are outside of the Committee’s purview. At a time when consumers are already subjected to conflicting and often contradictory nutrition and health information, the dietary guidelines must provide the public with realistic, science-based recommendations. Given the grave concerns that have been raised, more time is needed for public comment, and those comments should be fully reviewed and considered.’”

Also yesterday, House Appropriations Subcommittee on Agriculture Chairman Robert Aderholt (R., Ala.) turned his attention to the Dietary Guidelines during a hearing where FDA Administrator, Dr. Margaret Hamburg, presented budget related testimony.

During the discussion portion of yesterday’s hearing, Chairman Aderholt noted that, “Let me switch over to dietary guidelines. The Department of Health & Human Services, and of course FDA is a part of that, has a lead role in developing the dietary guidelines for Americans in 2015. The Secretary of Agriculture appeared before this subcommittee, was sitting where you are sitting just about a week ago. He made a commitment to adhere to the statutory directive for developing the dietary guidelines for Americans. And as he put it, and this was his quote, “I know my role and I will color within the lines.”

Chairman Aderholt went on to ask Dr. Hamburg: “Can we get an assurance from the Department of Health & Human Services that the final report would include only nutrient and dietary recommendations and not include environmental factors and other extraneous material?”

A complete transcript of the exchange between Chairman Aderholt and Dr. Hamburg on the Dietary Guideline issues can be found in this update that was posted yesterday at FarmPolicy.com.

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Dietary Guidelines Discussed at House Appropriations Subcommittee on Agriculture- FDA Budget Hearing

Today, the House Appropriations Subcommittee on Agriculture heard budget related testimony from the Food and Drug Administration.

Committee Chairman Hal Rogers (R., Ky.) noted at today’s hearing that, “Like many, I am concerned about obstacles created by the Chinese government to our inspection of foreign food and drug products. While the safety of American consumers is our paramount concern, there is also a fundamental question about fair trade practices. Domestic manufacturers and producers are subjected to extensive regulation to ensure the safety of their products, and they should have an equal playing field with their foreign competitors. The Fiscal Year 2015 Omnibus included $2 million to speed up drug facility reviews in China, and we are looking forward to an update on this effort.”

In his opening statement, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “The size of FDA’s FY 2016 request includes increases for budget authority that disregard the debt crisis facing our nation. The agency is proposing large increases using scarce discretionary resources. Since FDA is informing Congress that Food Safety, Medical Product Safety, and Rent and Infrastructure needs are their highest priorities this year, it will be incumbent upon FDA to prove to Congress that such priorities cannot be funded out of base resources first.”

Subcommittee Chairman Aderholt added that, “FDA’s request for budget authority exceeds the 2015 enacted funding level by six percent.”

FDA Commissioner Dr. Margaret Hamburg, who is stepping down at the end of the month after six years in that position, noted the FDA’s work on the Food Safety Modernization Act and stated at the hearing: “FDA published seven major proposed rules and, based on stakeholder input, four supplemental proposals to implement FSMA. The Agency also completed 8,607 high-risk food establishment inspections in FY 2014, exceeding the target of 6,507 inspections by 32 percent. FDA also released a FSMA Operational Strategy Document that focuses on how we can implement FSMA by prioritizing prevention, voluntary compliance, risk-based oversight, and expanded collaboration across the food safety community.”

During the discussion portion of the hearing, Subcommittee Chairman Aderholt focused on the 2015 Dietary Guidelines Advisory Committee Report, which was released last month.

Below is a transcript of the discussion on this issue.

Rep. Robert Aderholt: Let me switch over to dietary guidelines. The Department of Health & Human Services, and of course FDA is a part of that, has a lead role in developing the dietary guidelines for Americans in 2015. The Secretary of Agriculture appeared before this subcommittee, was sitting where you are sitting just about a week ago. He made a commitment to adhere to the statutory directive for developing the dietary guidelines for Americans. And as he put it, and this was his quote, “I know my role and I will color within the lines.”

I reminded him, when he was here last week, of the need to stay focused only on the dietary and nutritional recommendations of the Dietary Guideline Advisory Committee and subsequent comments collected by USDA and the Department of Health & Human Safety about these recommendations. To quote from former Senator Bob Dole, he said, “I believe the committee exceeded its mandate when it made dietary recommendations based on environmental concerns of sustainability.” I urged the Secretary of Agriculture and the Secretary of Health & Human Services to [amend] those recommendations in issuing their final guidelines.

The science of nutrition can be confusing to the average consumer. Integrating environmental considerations into dietary recommendations lessens the report’s impact and usefulness. My question, Commissioner, would be, as a vital player in the development of these final guidelines, can we get an assurance from the Department of Health & Human Services that the final report would include only nutrient and dietary recommendations and not include environmental factors and other extraneous material?

Dr. Margaret Hamburg: Well, our role in the nutrition space is a little bit different. We are involved, of course, in the dietary guidelines, but that’s not our direct responsibility. We have many responsibilities directly in areas of nutrition and nutrition science. And I’m really happy to be able to report to you that we have a very strong commitment to science-based decision-making in our nutrition programs, that as we look at what matters to promoting health and protecting health of the American public with respect to health and nutrition, you know, we spend a lot of time examining what is known, what does the [literature] show, soliciting input from other experts in helping to get additional information that we might not be aware of. We also do undertake research ourselves and in partnership with others.

We also have just recruited a wonderful new director of our Center for Food Safety & Applied Nutrition, Dr. Susan Mayne, who is here, who we got from Yale University, you know, who has a long and distinguished career in nutrition science and health. So I think we are well positioned to help advance understanding and to make sound policies based on evidence. And certainly we try very hard to color within the lines, too. We already have responsibilities that outstrip our resources. We have no desire to take on new activities that are outside of what we’ve been mandated and asked to do.

Rep. Aderholt: Okay, I’ll take that as a yes then, so… I find it interesting that the advisory committee has found that cholesterol is not an nutrient of concern for over consumption, even though previous dietary guidelines have recommended limiting cholesterol intake to [no] more than 300 milligrams per day. There are other such examples in the recent past where the advisory committee completely changed its focus, despite claims of sound science.

The advisory committee also recommended a diet higher in plant-based foods and lower in animal-based foods as more health promoting, even though lean meat has been included as a part of a healthy, balanced diet in previous dietary guidelines. How are consumers supposed to feel confident about following the dietary guidelines when the recommendations contradict what was just put out five years ago?

Dr. Hamburg: Well, I think one of the challenges in this arena and other arenas as well is that the science base is always changing. Also, with the vast array of different kinds of studies going on, with different perspectives, it can get very confusing about emerging [science] and how to put it into context, and what information consumers should rely on.

Again, I come back to my earlier answer that we really view as the foundation of the work we do establishing the database and the evidence for regulatory decision-making, but recognize that this is a dynamic process, and new evidence emerges as understandings of the science and of human biology advance, and as that happens, we do think it’s very important to periodically update the work we’re doing.

For example, not too long ago we put forward a proposal to update our nutrition facts label, which is the nutrition information on the back of various kinds of processed and other foods. That was first begun, I think now, more than 20 years ago. And some of the nutritional components being represented there didn’t represent advances in nutrition science, and also the serving size information didn’t reflect current practices and behaviors of American consumers. So I think that’s very important so that Americans can have access to the most recent and updated information so they can make informed choices.

Rep. Aderholt: I reminded Secretary Vilsack, when he was here last week, of the enormous impact the dietary guidelines have on individual diets. Also nutritionists and dieticians who plan and prepare food for schools and other institutions and elsewhere across the United States. I suggested to him that the 45 day timeline for the comments is too short. And he committed to discussing extending that comment period for an additional 60 days with Secretary Burwell. Can I get a commitment from you that you and your colleagues will convey that need to extend that comment period?

Dr. Hamburg: Well, I will certainly reflect back to Secretary Burwell, you know, your comments in this discussion.

Rep. Aderholt: Thank you. Well, as I say, he was…the Secretary, I think, he was in agreement that this additional 60 days was important because of the impact of this, and so we would appreciate your conveying that to the Secretary, and that how…that this, we…many of us feel here on the committee that it is important as well.

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

Policy Issues

Yesterday, the House Appropriations Subcommittee on Agriculture heard testimony regarding the USDA’s Marketing and Regulatory Programs.

In his opening statement, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “USDA is requesting a total of $987 million in discretionary resources in FY 2016 for the mission area, a decrease of $12.5 million from the 2015 enacted level…I am particularly concerned that USDA has requested scarce discretionary resources for lower priorities. For example, APHIS has requested an increase to enhance implementation of the Lacey Act provisions. I have trouble supporting such an increase at the expense of higher priority and more effective animal and plant health programs, many of which the agency has proposed to decrease.

“With the overall spending caps still in effect, I anticipate that the Subcommittee’s funding levels will remain relatively flat at best.”

Ed Avalos, USDA Under Secretary for Marketing and Regulatory Programs noted yesterday that, “To strike the balance between rigorous scientific review and timely entry to the market of genetically engineered crops, USDA streamlined and improved the process for making determinations on petitions involving biotechnology. Because of the enhancements, we reduced the length of the petition review by more than 600 days when we can use the environmental assessment process. With this improvement, we estimate that the cumulative number of actions taken to deregulate biotechnology products based on a scientific determination will increase from a cumulative total of 87 actions in 2011 to an estimated 119 in 2016.”

This topic came up in the discussion portion of yesterday’s hearing; Chairman Aderholt inquired: “Last year you reported that you were only able to reduce the backlog of 22 petitions by six. Your testimony this year states that you are nearly through the list of backlogged petitions. Can you provide us some more details on the status of the backlog and what progress you’ve been able to achieve?”

Animal and Plant Health Inspection Service Administrator Kevin Shea offered more details, and explained that, “You might recall a year ago I pledged to you we would cut the backlog of 16 by at least half, and I’m proud to say that the fantastic men and women who work in our biotechnology review program have indeed exceeded that goal, and there now only six of those 16 remain, so that means we reduced it by more than half.

“I would say this also, when we began our business process improvement just a few years ago, 2012, there were 23 re-regulation requests in the backlog. Since then 11 [more] requests to come in, so there were a total of 34 regulation requests. There are only six left. We got 28 out of 34 done. There are only six remaining. We’re going to get those done, we think, by the end of this fiscal year.

And so now we have the system in equilibrium. We can handle the amount that come in. And not only can we handle them, we can handle them quicker. It was taking us three to five years to do these things. We are now down to 15 to 18 months. Our goal is no more than 15 months, and I think we’re going to achieve that as well.”

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Tuesday Morning Update: Policy Issues; Trade; Ag Economy; Biotech; and Budget

Policy Issues

In a speech yesterday at the 2015 National Anti-Hunger Policy Conference in Washington, D.C., Secretary of Agriculture Tom Vilsack discussed the SNAP program and announced “more than $27 million in grants to fund innovative projects designed help end childhood hunger.”

Also yesterday, at the School Nutrition Association’s 2015 Legislative Action Conference, a separate venue in Washington, D.C., Sen. John Hoeven (R., N.D.) announced “that he plans to introduce the Healthy School Meals Flexibility Act later this week or early next week. The legislation would provide permanent flexibility to school districts in complying with the U.S. Department of Agriculture’s new school nutrition requirements.”

Additional details on these federal nutrition policy issues from yesterday, and on Sec. Vilsack’s remarks regarding the SNAP program, can be found here, at FarmPolicy.com.

On Monday, USDA’s Economic Research Service (ERS) updated its monthly Amber Waves publication; the March edition contained two particularly interesting articles on nutrition related policy. The first looked at the number of school districts serving “local” food, while the second addressed the potential of restricting sweetened beverages purchases through the SNAP program– an especially timely article considering the House Ag Committee’s ongoing top-to-bottom overview of the program (Committee SNAP hearing summaries here and here).

A summary overview of the two ERS articles is available here.

Arthur Delaney reported yesterday at the Huffington Post that, “The Republican Party’s new point man on food stamps, Rep. Mike Conaway (R-Texas), insists that he doesn’t want to cut nutrition assistance benefits. Instead, Conaway is leading a multiyear review of the program, just to make sure it’s the best it can be.

But it might not be up to Conaway. Republicans could push food stamp cuts this year through a parliamentary process known as ‘reconciliation.’

“The GOP has discussed using reconciliation as a way to repeal Obamacare or to do tax reform. Now, some Democrats and food stamp advocates are warning that the Republican-controlled Congress could use the obscure budget maneuver to reduce food stamp assistance.”

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Monday Quick Take: Ag Economy; Trade; Biofuels, and, the Budget

Agricultural Economy

As the ongoing drought in California persists, with resulting adverse water policy determinations for many Golden State farmers, Cindy Change and Matt Hamilton reported in Monday’s Los Angeles Times that, “A winter storm swept through Southern California on Sunday, bringing scattered showers, hail and thunder while higher elevations were expected to see a foot of snow overnight.

“The low-pressure system brought a smattering of storm cells, dumping rain throughout the region from San Luis Obispo to Orange counties.”

Monday’s article noted that, “After a morning lull in precipitation, a second, weaker storm is expected to pass through Monday afternoon. But the rain will not put much of a dent in the state’s lingering drought.

“‘Right now it’s enough to make my cactus smile and to green everything up,’ said Bill Patzert, a climatologist with the Jet Propulsion Laboratory in La Cañada Flintridge. ‘But we would need an inch a day for the next 30 days to make a dent in this drought…. Let’s get right down to it, this is puny.'”

Reuters news reported on Monday that, “Striking truck drivers resumed some roadblocks in Brazil on Monday even as the government cracked down on protesters and promised to implement a law to lower toll costs and give other benefits to the transport sector.

“In the southern state of Rio Grande do Sul, where police had cleared roads by detaining protesters and bringing in back-up troops on Sunday, protesters were stopping trucks at 10 points, the local highway police said. Police were working to clear them, a spokesman said.”

Monday’s article explained that, “The nearly 2-week-old movement has slowed grain deliveries, forced meat-processing plants to close and started to leave some grocery stores with bare shelves.

The country’s No. 2 and 3 soy-exporting ports of Paranagua and Rio Grande have warned that dwindling soy stocks at the ports could affect exports if roadblocks continue.”

Meanwhile, Alexandra Stevenson and Paul Mozur reported in today’s New York Times that, “The smartphone tells the story of a kiwi fruit in China.

With a quick scan of a code, shoppers can look up the fruit’s complete thousand-mile journey from a vine in a lush valley along the upper Yangtze River to a bin in a Beijing supermarket. The smartphone feature, which also details soil and water tests from the farm, is intended to ensure that the kiwi has not been contaminated anywhere along the way.”

Today’s article noted that, “Controlling China’s sprawling food supply chain has proved a frustrating endeavor. Government regulators and state-owned agriculture companies have tried to tackle the problem in a number of ways — increasing factory inspections, conducting mass laboratory tests, enhancing enforcement procedures, even with prosecutions and executions — but food safety scandals still emerge too often.

Chinese technology companies believe they can do it better. From the farm to the table, the country’s biggest players are looking to upgrade archaic systems with robust data collection, smartphone apps, online marketplaces and fancy gadgetry.”

Trade

The New York Times editorial board indicated on Monday that, “The Obama administration and the governments of 11 countries could conclude a sweeping trade agreement known as the Trans-Pacific Partnership in the coming months. Members of Congress should make sure that this and other deals being negotiated are good for America.”

The Times item, added that, “In recent years, trade agreements have become increasingly comprehensive, covering subjects that go far beyond familiar trade issues like tariffs and quotas. The T.P.P. negotiators, for instance, are discussing labor rights, environmental protection, patent and copyright law and how governments treat state-owned businesses. Done right, such deals can raise standards everywhere, protecting workers and opening new markets for American businesses. But there are potential downsides, too, including possible job losses.”

Biofuels

Dan Morgan, a retired reporter and editor with The Washington Post, noted in a column in yesterday’s Des Moines Register that, “Every day nearly a thousand railroad cars roll across the country carrying part of the soaring U.S. energy production that has shaken the global oil cartel and sent gasoline prices plummeting. The cargo is ethanol made from home-grown corn.

“This other American energy boom has been overshadowed by the stunning comeback of the domestic oil industry. President Barack Obama didn’t mention ethanol, biofuels, or agriculture in his State of the Union address, even as he boasted that the country was ‘number one in oil and gas.’ Yet a thriving renewable fuels industry also deserves a share of the credit for the energy renaissance.”

 

Mr. Morgan indicated that, “Based on numbers from the Department of Energy and the oil industry, the amount of ethanol used daily in the United States is now roughly equivalent to the gasoline from 1.2 million barrels of crude oil. That’s about the volume of oil from North Dakota’s Bakken shale, and only slightly less than Qatar’s daily output in 2014.

“Without ethanol, global stocks of oil would have been lower and crude oil prices would have been $10 a barrel higher at the end of 2013, according to a study last year by economist Philip K. Verleger Jr., an energy adviser to Presidents Gerald Ford and Jimmy Carter. Ethanol sold for less than gasoline for all but seven weeks between the start of 2011 and last November, according to data collected by Oil Price Information Service and New York Mercantile Exchange. ‘Blending ethanol with gasoline has been profitable to the refining industry and some of that has been passed on to consumers,’ said Scott Irwin, a University of Illinois agricultural economist.”

Yesterday’s column pointed out that, “Yet ethanol from corn is now out of favor in Washington. In 2011, Congress cancelled a 33-year-old tax credit for blending it with gasoline. For more than a year, the White House has been considering a proposal by the Environmental Protection Agency to scale back requirements for biofuels in gasoline and diesel fuel that were set in 2007 energy legislation. EPA has taken other actions as well that could slow or even end the growth of ethanol, based on the agency’s concern about the fuel market’s ability to absorb larger volumes.

“The just-released White House annual economic report to Congress does cite the growth of ethanol and biofuels along with other energy achievements. But President Obama, once an enthusiast, last mentioned ethanol publicly on Aug. 17, 2011, when he stressed the need to ‘figure out how we can make biofuels out of things that don’t involve our food chain.'”

Concluding, Mr. Morgan noted that, “With grain prices near lows of a few years ago and ethanol production at record levels, corn farmers insist they can grow more crops for energy without hurting consumers or the land. ‘No matter how you slice it, corn produces food and energy more efficiently than anything else,’ said Ron Alverson, a corn farmer and founding chairman of Dakota Ethanol, a 48 million gallon-a-year plant in Wentworth, S.D.

The administration may not see it that way. Even so, the biofuels industry deserves better than to be the orphan of President Obama’s energy policy. In an ‘all of the above’ energy strategy, it seems only fair to give the ‘corn patch’ a place alongside the ‘oil patch.'”

Budget

Mike DeBonis and Paul Kane reported on the front page of Monday’s Washington Post that, “House Republican leaders will face a familiar dilemma this week when they try again to approve funding to keep the Department of Homeland Security functioning through the end of September: They know their party is too divided to resolve the crisis on its own but fear the political fallout if they rely on Democrats to get them out of the jam.”

The Post article noted that, “By late Sunday, [Speaker John] Boehner’s House Republicans had no clear path to a solution other than retreating from their demands that the DHS funding measure include provisions that would block ­implementation of President Obama’s executive actions on immigration.”

Speaker Boehner addressed the DHS funding issue yesterday on “Face the Nation.”

Keith Good

Sunday Afternoon Update: Policy Issues; Trade; Ag Economy; Biotech; and Regulations

Policy Issues

A news release on Friday from USDA’s Farm Service Agency stated that, “Agriculture Secretary Tom Vilsack announced today that a one-time extension will be provided to producers for the new safety-net programs established by the 2014 Farm Bill, known as Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC). The final day to update yield history or reallocate base acres has been extended one additional month, from Feb. 27, 2015 until March 31, 2015. The final day for farm owners and producers to choose ARC or PLC coverage also remains March 31, 2015.”

Also on Friday, Senate Ag Committee Chairman Pat Roberts (R., Kan.) stated that, “‘USDA heard the concerns directly from producers earlier this week at our first Committee hearing and took action as a result,’ Chairman Roberts said. ‘I would encourage all producers to visit their local FSA office as soon as possible to make sure they have enough time and information to make these important decisions.’”

Reuters writer Christine Stebbins reported on Friday that, “Crop insurance price guarantees for U.S. corn, soybeans and spring wheat in 2015 will fall 10 percent or more based on futures settlement prices for February, grain analysts said on Friday.

“The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA), which oversees the multibillion-dollar crop insurance program, by law uses the average price in February for harvest-time grain futures contracts to set the ‘floor’ price that private insurers must guarantee farmers who sign up…[B]ased on Friday’s futures closes, the RMA is expected to set the floor price for corn at $4.15 a bushel, down 10 percent from last year’s $4.62, and for soybeans at $9.73 a bushel, down 14 percent from last year’s $11.36.”

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Budget Issues Linger– Could Portend Problems with Trade

Categories: Budget /Trade

Siobhan Hughes and Kristina Peterson reported in Saturday’s Wall Street Journal that, “Congress temporarily avoided a partial shutdown of the Homeland Security Department Friday night, approving a one-week extension of the agency’s funding as its midnight deadline approached.

“Support for the one-week patch came together Friday night hours after a three-week short-term spending bill was defeated in the House in a blow to the chamber’s GOP leaders.

“After watching top House Republicans’ plan derail Friday afternoon, House Democrats helped GOP leaders find the votes to pass the one-week funding measure Friday night in a 357-60 vote. House Republican leaders brought the one-week bill to the floor under a fast-track procedure that required a two-thirds majority for passage.”

The Journal writers noted that, “The defection of more than 50 Republicans represented an embarrassment for [House Speaker John Boehner] and was also an early setback in Republican efforts to prove they can effectively govern the GOP-controlled Congress…[T]he struggle to pass even a short-term fix in the House highlighted the tightrope Mr. Boehner must walk, despite controlling the biggest House GOP majority in decades.

“Though Mr. Boehner currently leads a pack of 245 House Republicans, potential defections from either the conservative or centrist wing on tough bills leave him little room to maneuver on votes where Democrats withhold their support.”

Lisa Mascaro and Michael A. Memoli reported in Saturday’s Los Angeles Times that, “The legislative maneuvering left conservatives upset that they had been unable to stop Obama’s immigration plan and more pragmatic Republicans weary of dragging out the fight over Homeland Security funds at continued risk.”

Carl Hulse reported in Saturday’s New York Times that, “The tense meltdown in the House on Friday over funding for the Department of Homeland Security underscores how Congress has lost the ability to perform its most basic functions no matter which party is in charge.”

Mr. Hulse pointed out that, “But the dysfunction also worried lawmakers from both parties who want to make some bipartisan deals on issues like taxes.

“‘My hope is that this does not define the session,’ said Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee. ‘We have to find some common ground.'”

Ashley Parker also writing in Saturday’s New York Times, reported that, “The funding stalemate bodes poorly for any larger policy accomplishments this year, leaving lawmakers pessimistic that the 114th Congress will be able to work in a bipartisan fashion on more complicated issues.

“The Office of Management and Budget has said that a vote to increase the nation’s debt limit will be necessary by mid-to late summer, and lawmakers were also hoping to take up trade policy, as well as at least a modest overhaul of the nation’s tax code — undertakings that now look increasingly imperiled.”

And The Washington Post editorial board opined on Sunday that, “The House has become an embarrassing spectacle, and the promises of Republican leaders in both houses to govern without hop-scotching from crisis to crisis have been shredded. Speaker John A. Boehner’s control of the tea party faction in his GOP caucus is so slight he couldn’t even manage a three-week funding extension for DHS, let alone approving a budget through the end of the fiscal year in September.

Now, instead of tackling major legislation, Congress will be paralyzed for more days — and perhaps even longer — as House Republicans continue to insist on measures to reverse Mr. Obama’s immigration moves that have no chance of passage in the Senate, no chance of being signed by the president and no chance of becoming law.”

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Highlights: House Appropriations Subcommittee on Agriculture- Budget Hearing, NRCS Chief

On Friday, the House Appropriations Subcommittee on Agriculture held a budget hearing and heard testimony from USDA- Natural Resources Conservation Service (NRCS) Chief Jason Weller.

In his opening statement at Friday’s hearing, Subcommittee Chairman Robert Aderholt (R., Ala.) indicated that, “We convene today to review NRCS’s fiscal year 2016 budget request. NRCS requests a total of $1.031 billion in discretionary funding for its salaries, expenses, programs, and activities. In addition, about $3.2 billion will be available through the farm bill’s mandatory conservation programs to farmers, ranchers, and private forest landowners to help them preserve, protect, and enhance their land.”

During the discussion portion of the hearing, Rep. Sanford Bishop (D., Ga.) brought up the issue of NRCS using drones in its remote sensing work– here is the exchange with Chief Well on this issue.

Rep. Sanford Bishop: Can you tell us if you have any plans to utilize drones to assist in the collection of information, because you do a lot of photography, put a lot of contracts out to take pictures, and there’s a tremendous amount of interest in the use of drones in agriculture, particularly in assisting the optimal design and layout of fields for water assessments and other related issues.

“Have you looked at this issue? Are there any current interagency discussions with FAA or other agencies concerning the growth in the use of drones? Obviously there are some security issues involved, but there’s also a great deal of interest for commercializing that practice and using it in agriculture.”

Mr. Jason Weller: “Absolutely. It’s a new technology, but we also have to be careful because folks do have privacy concerns. The FAA also had safety concerns. So in part NRCS, we sort of said full stop, let’s wait for FAA to actually come out with a rule.

Now that the rule has been issued, we’re trying to figure out how the NRCS can work within that to do remote sensing, but in a way that protects privacy, assure landowners who are not there there’s a regulatory component, because I know folks have some concerns when the federal government starts flying drones over their property. So we just need to make sure NRCS is doing this technology in a way that’s appropriate, that’s sensitive to landowners’ concerns, but also then helps us do a better job of managing resources.”

Also at the hearing, Rep. David Young (R., Iowa) wanted more information about NRCS wetland determinations and the farmer’s ability to appeal these decisions.

Rep. David Young: “Last year the NRCS proposed updating the way it conducts wetlands determinations in the prairie pothole states, you know, Minnesota, Iowa, North Dakota, South Dakota. How will the wetland determination proposal affect producers, and when there is a review, will there be an ability for folks to have a second request for review and a second opinion if they disagree with the determination you make?”

Mr. Weller: “Yes. So first starting with what a producer hopefully will experience with us. What we’re proposing is bringing a modern, up-to-date, scientifically driven approach to doing what we’re calling off site determinations. This is a practice we’ve had at NRCS for decades. But what we didn’t have in the prairie pothole region is a consistent approach across all four states. So depending on where your property was, you had a different approach that we needed to update.

“So what this means, though, is actually, at the end of the day, when we implement this—because we were just seeking comments on this approach so far—is better service for a producer. So right now, as you know, there’s been a backlog, particularly in North and South Dakota, but Iowa as well. And in a lot of cases it’s because it’s on site determinations. It takes staff time. When you do an off site determination, you’re using remote sensing technology, you know, photography, LIDAR coverage, other techniques to really do equivalent, if not a more accurate determination approach.

The bottom line is time savings. So the average number of times it takes to do an off site determination is six hours. The average number of hours it takes to do on site is at least 14 hours. Many of them are 40 hours. And that doesn’t count all the driving time. When you break that down in dollars and cents, if you just say, take—you assume 30 bucks an hour for like a field technician to go out and do it, that equates to about 170 bucks to do an off site determination. When you do on site it’s like over $400 a determination, on average.

But when you multiply that over like South Dakota, where they have 2,500 determinations in the backlog, that’s the difference between $300,000 over a million dollars. And when it comes down to that kind of expenditure, when you add that up across four states, you’re talking real money. And that’s money I’d rather employ back in the field to provide, you know, technical assistance to producers as opposed to investing it in a way that we can be more efficient.

“So to your question about what happens for the producer, the first approach would be the off site determinations, which will be much more efficient. They’ll get determinations made quicker. It’s a preliminary determination. If they don’t like the determination, they can then appeal it and they can then request an on site determination.

“If they don’t like the on site determination from the field staff, they can then appeal that to the state office. If they don’t like the state office determination, they can then appeal that to the national appeals division. So there’s absolutely all these protections for a producer. We’re not changing any of that, how that works. We’re actually just trying to streamline it and get the determinations made faster and cheaper.”

And a third key issue discussed at Friday’s Appropriations Committee hearing was on the Regional Conservation Partnership Program.

Chief Weller noted that, “It’s the Regional Conservation Partnership Program, which is a new authority in the 2014 Farm Bill. The basic idea here is you actually invite local partners to devise their own projects. You ask them what do they want to do. So what we’re finding is that more often than not you go into places like the Salinas Valley or the [Pajaro] Valley, in your district, for example, and there’s a lot of people doing a lot of really good things, but more often than not we’re not coordinated. We’re putting a lot of money in the ground, but in a way we’re like ships passing in the night.

“So what we did at the Regional Conservation Partnership Program, it’s sort of like pulling a sock inside out. Instead of the federal government saying this is what we’re going to do in your community, instead we asked the community what do you want to do, and then we’re here to support you. So we opened it up to competition, and we got applications, 600 applications from every state in the country, from all over the country, and folks were really excited about this.

“And what it does is it catalyzes that locally led approach where you get like the Santa Cruz RCD. They then talk to Driscoll’s Berries, they talk to the Pajaro Valley Water Management Agency, they talk to Santa Cruz extension, they talk to the marine sanctuary, and they leverage the resources upfront, and then they come to us and they say NRCS, this is what we would like to do with the EQIP program in the Pajaro Valley to save water, but also to increase ground water recharge.

“And so one of the projects we funded then in the Pajaro Valley this year through our first round was $800,000 of NRCS money matched by $900,000 of the partners, so a total project over one and a half million dollars that they estimate is going to save over 400 acre feet of withdrawal from the aquifer, but also add additional recharge aquifer of 600 acre feet. That is a lot of water savings in a water scarce area.

“But you’re getting industry involved, Driscoll’s Berries; you’re getting extension to provide really good outreach and education; you’re engaging RCD, so it’s a locally led approach; and the federal government then is just a co-investor, we’re a true partner in this. So this is one example. Nationally we have 115 of these projects that they’re just showing this is an approach we really absolutely have to pursue.”

Keith Good

Friday Morning Update: Policy; Trade; Ag Economy; Biofuels; Biotech; and, Budget

Policy Issues

On Thursday, the House Agriculture Nutrition Subcommittee met, “to review SNAP recipient characteristics and dynamics.” Yesterday’s hearing followed Wednesday’s full House Ag Committee meeting on SNAP and nutrition issues.

A FarmPolicy.com summary and overview of Thursday’s Subcommittee hearing is available here.

Over the past two days, the House Ag Committee has been presented with a large amount of detailed analysis and information on SNAP; it appears that Chairman Mike Conaway’s (R., Tex.) top-to-bottom review of the program is off to a substantive and serious start.

In remarks on the House floor Thursday, Ag Nutrition Subcommittee ranking member Jim McGovern (D., Mass.) indicated that, “Mr. Speaker, yesterday the House Agriculture Committee – where I am proud to serve – held the first hearing in its ‘top-to-bottom’ review of the Supplemental Nutrition Assistance Program, or SNAP.

“SNAP is the nation’s pre-eminent anti-hunger program that provides critical food assistance to more than 46 million Americans. Last year, 16 million children – or 1 in 5 American children – relied on SNAP. Unfortunately, every indication is that Republicans will once again try to cut this critical safety-net program.”

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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 FarmPolicy.com 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.

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Wednesday Morning Update: Senate Ag Committee Farm Bill Hearing, Ag Economy; Trade; Budget; and, Biofuels

Policy Issues- Senate Ag Committee Hearing; House Ag Committee Hearing Today

In two separate panels, agricultural producers and Secretary of Agriculture Tom Vilsack testified before the Senate Agriculture Committee on the implementation of  last year’s Farm Bill Tuesday morning.

A FarmPolicy.com summary and overview of the hearing is available here.

AP writer Mary Clare Jalonick reported on Tuesday that, “Congressional Republicans are laying the groundwork for an overhaul of the nation’s food stamp program, trying again after an unsuccessful attempt two years ago.

“House Agriculture Chairman Mike Conaway, R-Texas, said Tuesday that his panel is starting a comprehensive, multiyear review of the program to see what’s working. He said ‘either huge reforms or small reforms’ could come from that, though he wouldn’t detail what those might be.

“Conaway says a 2013 GOP effort to cut food stamps ‘didn’t resonate well’ because Republicans didn’t spell out why it was important. House Republican leaders tried unsuccessfully to cut the program by 5 percent annually by passing a bill with broad new work requirements.”

The AP article noted that, “Some Democrats say they are wary of the review process. Agriculture Committee member James McGovern, a Massachusetts Democrat who is a longtime advocate for food stamps, said he wonders why the SNAP program is singled out for review and not expensive farm programs.

“‘I am deeply concerned about this,’ McGovern said. ‘This is a program that by and large works.’”

Meanwhile, David Pierson reported yesterday at the Los Angeles Times Online that, “An estimated 9 million people are sickened and 1,000 killed by food-borne illnesses in the U.S. each year, but until now officials were unable to pinpoint which foods were most likely to blame.

“In a report released Tuesday, the U.S. Centers for Disease Control and Prevention, the U.S. Food and Drug Administration and the U.S. Department of Food and Agriculture’s Food Safety and Inspection Service detailed the sources of the most common food-borne illnesses with the aim of improving food safety and policy.”

The LA Times article noted that, “Among the findings: More than 80% of E. coli O157 cases were attributed to beef or crops such as leafy vegetables.

“About 75% of campylobacter illnesses were linked to dairy (66%), particularly raw milk dairy, and chicken (8%).

“More than 80% of listeria illnesses were attributed to fruit (50%) and dairy (31%).”

 

Agricultural Economy

Also on Tuesday, USDA’s National Agricultural Statistics Service released its annual U.S. Crop Values Summary, a link to the complete report along with highlights regarding corn and soybeans can also be found at FarmPolicy.com.

Tuesday’s Los Angeles Times contained an article highlighting ongoing drought concerns California. The article included this quote from Bill Patzert, a climatologist with the Jet Propulsion Laboratory: “If you think we’ve turned around on the drought, stop smoking whatever you’re smoking.”

Details on this article, as well as Reuters news updates that focused on agricultural issues in Brazil, Ukraine, and Russia have been posted here.

And Jon Hilsenrath reported on the front page of today’s Wall Street Journal that, “Federal Reserve Chairwoman Janet Yellen, sounding upbeat about the economy, laid the groundwork for interest-rate increases later this year.

“‘The employment situation in the United States has been improving on many dimensions,’ Ms. Yellen told the Senate Banking Committee on Tuesday, her first of two days of semiannual testimony before lawmakers. Spending and production had increased at a ‘solid rate,’ she added, and should remain strong enough to keep bringing unemployment down.”

 

Trade Issues (TPA, TPP); West Coast Ports

And in trade related news, William Mauldin reported in Wednesday’s Wall Street Journal that, “Lawmakers from both parties are trying to strike a difficult balance as they wrangle over the final intricacies of a bill that would expedite consideration of trade deals.

“House and Senate leaders crafting the so-called fast-track bill want to include sweeteners to attract skeptical Democrats, including rules to allow lawmakers greater access to the details of continuing trade negotiations.

“But supporters fear too many provisions friendly to Democrats could alienate Republicans and the business community, or even put a major Pacific trade deal at risk when it comes up for a final vote. The U.S., Japan and 10 other Pacific Rim countries are hoping to agree to the final terms of the trade partnership in coming months.”

Mr. Mauldin explained that, “The bill’s authors—Sen. Orrin Hatch (R., Utah), Sen. Ron Wyden (D., Ore.) and Rep. Paul Ryan (R., Wis.)—are now fighting over how much leverage to give lawmakers to remove any coming trade deals from fast-track protection. That would subject the pacts to ordinary amendments and procedural delays.”

Reuters writer Krista Hughes reported on Tuesday that, “U.S. Federal Reserve Chair Janet Yellen warned Congress on Tuesday against a bid to crack down on currency cheats and said adding currency rules to trade deals could hobble monetary policy.

“Lawmakers have introduced legislation allowing firms to seek compensation for currency weakness overseas and some are also fighting to include a currency chapter in upcoming trade deals such as the 12-nation Trans-Pacific Partnership (TPP).”

Also on Tuesday, Reuters news indicated that, “A meeting aimed at sealing a Pacific trade deal has been called for April, Mexico’s economy minister said on Tuesday, adding he was optimistic it would be sealed in the first half of 2015.

“‘I am very optimistic that there will be good news for the TPP in the first half of this year,’ Ildefonso Guajardo told Reuters, referring to the Trans-Pacific Partnership.”

On the West Coast Port issue, Diana Marcum reported on Tuesday at the Los Angeles Times Online that, “An end to labor strife at West Coast ports should speed up cargo operations, but it may be too late to help California’s drought-weary nut and citrus farmers.

Citrus took the hardest hit. Oranges, many bound for Chinese New Year celebrations, sat decaying on ships, at docks and on the ground as a nine-month labor dispute snarled ports. Fieldworkers, packinghouse employees and truck drivers had their hours cut.”

The article added that, “Losses could reach as high as 50% of citrus exports, or $500 million, according to trade groups… [F]or California’s almond farmers and processors, the severe cargo backlogs have raised fears that foreign buyers could cancel contracts for almonds stuck in storage and buy from other countries.”

 

Budget

David Nakamura and Sean Sullivan reported on the front page of today’s Washington Post that, “The Senate moved closer Tuesday to a deal to avert a partial shutdown of the Department of Homeland Security, but the proposal faced an uncertain future in the House, where Republican leaders conspicuously refused to embrace it.

“Senate Majority Leader Mitch McConnell (R-Ky.) told reporters he was prepared to move swiftly to extend funding for DHS through the fiscal year in a bill that is not contingent on Republican demands to repeal President Obama’s executive actions on immigration.”

 

Biofuels

Bloomberg writer Mario Parker reported on Tuesday that, “Ethanol producers are cutting output after getting squeezed by the biggest drop in gasoline prices since 2008.

“Valero Energy Corp. and Green Plains Renewable Energy Inc., representing about 15 percent of U.S. capacity, have reduced operations as margins narrowed. At a typical mill in Illinois that makes ethanol from corn, profit margins have almost totally disappeared, compared with $1.33 a gallon a year ago, according to AgTrader Talk, a Clive, Iowa-based consulting company.”

Keith Good

Policy Issues; Trade; Ag Economy; and, Budget Issues Tuesday

Policy Issues

In a letter yesterday to Senate and House Budget Committee leaders, a large number of food, agriculture and policy organizations indicated that, “The undersigned 392 organizations, representing America’s agriculture, nutrition, conservation, rural development, finance, forestry, energy, trade, labor, equipment manufactures and crop insurance sectors, strongly urge you to reject calls for additional cuts to programs within the jurisdiction of the Senate and House Agriculture Committees.

Just over one year ago, Congress passed, and the President signed into law, sweeping changes to our nation’s food and farm policy that included significant deficit reduction. The 2014 Farm Bill required over three years of debate in both chambers of Congress and ultimately ended with the consolidation of over 100 programs and cuts to mandatory spending across many titles, including the elimination of the direct payment program. These cuts came in addition to those already in effect due to sequestration.”

After noting that the new measure saved an estimated $23 billion, the letter stated that, “We, therefore, oppose re-opening any title of the Farm Bill during the consideration of the 2016 Budget Resolution and strongly urge you to refrain from including reconciliation instructions for either the Senate Committee on Agriculture, Nutrition, and Forestry or for the House Committee on Agriculture.”

Recall that The House Ag Committee will hold hearings this week on Wednesday and Thursday regarding Farm Bill nutrition issues; while, this morning, the Senate Ag Committee will hold a hearing on Farm Bill implementation and hear testimony from Sec. of Ag. Tom Vilsack.

Sec. Vilsack is also scheduled to appear on Wednesday at the House Appropriations Subcommittee on Agriculture.

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