Donnelle Eller reported on the front page of yesterday’s Des Moines Register that, “Economists expect Iowa corn and soybean growers will lose money over the next four years, beginning with this year’s harvest, squeezed by low commodity prices and high production costs.
“The potential downturn follows a boom that saw growers worldwide bringing millions more acres into production to take advantage of record-high prices.
“Experts in Iowa compare the downturn to the devastating 1980s farm crisis, the only time in at least 60 years that the state’s farm industry posted a loss. This correction is unlikely to be as severe, because farmers are coming off record-high net incomes. But enough similarities exist to cause concern.”
DTN Political Correspondent Jerry Hagstrom reported yesterday that, “All crops need a farm program that protects them from multiyear price drops, House Agriculture Committee Chairman Frank Lucas said Tuesday, a position with which House Agriculture ranking member Collin Peterson agrees.
“In a wide-ranging exclusive interview with The Hagstrom Report and DTN, Lucas, R-Okla., praised Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., for her ‘herculean efforts’ to get a bill through committee, and said that he would not underestimate her ability to convince Senate Majority Leader Harry Reid, D-Nev., to provide time on the Senate floor to debate the bill.
“However, Lucas said although the Senate bill’s ‘shallow loss’ revenue program that would cover some losses beyond crop insurance is ‘a great tool’ in good times when prices are high, it would not provide a proper safety net if prices plummet.”
Rosalind S. Helderman reported in Saturday’s Washington Post that, “Senate leaders reached an agreement Friday to extend the payroll tax cut for two months, averting a New Year’s tax increase for millions of workers. The agreement also will require the administration to decide quickly whether to allow construction of a controversial transcontinental oil pipeline.”
The Post article noted that, “White House communications director Dan Pfeiffer called the deal a ‘significant victory,’ extending a tax cut that many analysts say will help the economy.”
Janet Hook reported in today’s Wall Street Journal that, “Congress lurched toward another round of political brinksmanship, as haggling over payroll-tax relief has slowed approval of a year-end budget bill needed to keep the government open beyond Friday.
“The House, on a largely party-line vote, Tuesday passed its version of legislation to extend a payroll-tax break, renew extended unemployment benefits and offset the revenue loss with a package of spending cuts.
And earlier this month, we noted that potential changes in farm policy in the U.S., given the probability of the Farm Bill intersecting with the supercommittee, was moving at a much more rapid pace than in the EU.
More recently, an update posted yesterday at EUractive Online reported that, “Agriculture Commissioner Dacian Cioloş faced a barrage of criticism yesterday (7 November) over plans to overhaul the Common Agricultural Policy (CAP) before a rare gathering of national farm ministers and members of the European Parliament.
Josiah Ryan reported today at The Hill’s Floor Action Blog that, “An amendment offered by Sen. Tom Coburn (R-Okla.) to prohibit payments of subsidies to persons with an average income over $1 million, cleared the Senate Thursday night by a vote of 84-15.
“Coburn argued forcefully to his colleagues, who were seated at their desks for the series of rapid-fire votes, that such payments from a government that is running in the red were preposterous.
“‘We had 2,705 people in this country who had adjusted gross incomes in excess of $2.5 million last year who got farm payments,’ said Coburn. ‘[R]ather than taxing millionaires, the first thing we ought to do is quit giving them subsidies.’”
An update posted yesterday at Wallaces Farmer Online reported that, “The National Farmers Union has issued a white paper giving its overview of the 2012 Farm Bill. The organization says the next Farm Bill will likely face intense scrutiny by Congress as the Joint Select Committee on Deficit Reduction examines ways to achieve unprecedented levels of deficit reduction.
“NFU says risk management must be made economical for all farmers, regardless of crop or geographic region, and that the next farm bill should use the funding from and combine parts of theSURE, Average Crop Revenue Election, countercyclical and direct payment programs. Mandatory disaster assistance should be improved so payments are reflective of actual market prices.”
Meredith Shiner reported today at Roll Call Online that, “Battle-weary from the year’s constant spending fights and hyper-aware of stagnating job numbers, Congressional leaders are working to avoid a rehash of the same disputes in the impending debate to fund the government for the coming year.
“However, serious obstacles remain, including a potential clash over disaster relief funding and the fact that a deal must be completed in less than four weeks. The fight to finish last April’s stopgap spending bill, set to expire Sept. 30, was the opening act for the debt ceiling debate that dominated the House and Senate floors for months.”
Editor’s Note: Yesterday’s FarmPolicy report has been corrected.
Farm Bill- Budget Issues
Hembree Brandon reported earlier this week at the Delta Farm Press Online that, “The fiscal 2012 budget in the House would cut $30 billion from commodity programs and crop insurance, $18 billion from conservation, and $127 billion from nutrition programs — a total of a little less than 15 percent for all three, [Chip Morgan, executive vice president of the Delta Council said at the annual meeting of the Delta Council/Southern Cotton Ginners Association’s Ginning and Cotton Quality Improvement Committee.]
“‘In my 37 years with Delta Council, the fiscal outlook for writing a farm bill is about as bleak as I’ve ever seen for southern agriculture.’”
DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee ranking member Collin Peterson on Wednesday endorsed the Gang of Six senators’ budget proposal and said he has instructed his staff to begin researching a farm bill with the $11 billion in cuts that the proposal would involve.
“‘I think this is coming together,’ Peterson, a Minnesota Democrat, told DTN. ‘I told my staff to start looking at this yesterday.’
“One key farm lobbyist said farmers would be ‘dancing cartwheels’ if the cuts in farm programs can be held to $11 billion over 10 years. House Budget Committee Chairman Paul Ryan, R-Wis., proposed a $48 billion cut over 10 years in the fiscal year 2012 budget bill that the House passed. Senate Agriculture Chairman Debbie Stabenow, D-Mich., has said that passage of the Ryan budget proposal has made it increasingly difficult to keep the discussion of ag cuts at the $10 billion proposed under the Simpson-Bowles presidential commission plan.”
Farm Bill Issues and Policy- Budget and Appropriations Issues
Stephen Gandel reported recently at Time Online that, “If you want to become rich, Jim Rogers, investment whiz, best-selling author and one of Wall Street’s towering personalities, has this advice: Become a farmer. Food prices have been high recently. Some have questioned how long that can continue. Not Rogers. He predicts that farming incomes will rise dramatically in the next few decades, faster than those in most other industries — even Wall Street. The essence of his argument is this: We don’t need more bankers. What we need are more farmers. The invisible hand will do its magic. ‘The world has got a serious food problem,’ says Rogers. ‘The only real way to solve it is to draw more people back to agriculture.’
“It’s been decades since the American heartland has been a money pump and longer since farming was a major source of employment. Old rural towns have emptied as families — and the U.S. — have moved on. Technology, service jobs and finance have been the basis of the economy since at least the 1980s. Farming became the economic equivalent of a protected species — supported by a mix of government handouts, lax regulation (agriculture is one of the few industries shielded from certain child-labor laws) and charity concerts.
“But in the past few years, thanks to a wealthier (and hungrier) emerging-market middle class and a boom in biofuels, the business of growing has once again become a growth business. At a time when the overall economy is limping along at an anemic growth rate of 1.9%, net farm income was up 27% last year and is expected to jump another 20% in 2011. Real estate prices in general are again falling this year. But according to the Federal Reserve, the average farm has doubled in value in the past six years. Farmland is quickly emerging as one of the year’s hottest investments on Wall Street.”
Ron Hays reported yesterday at The Oklahoma Farm Report Online that, “The Chairman of the House Ag Committee, Oklahoma Third District Congressman Frank Lucas, talked with Director of Farm Programming Ron Hays about a variety of ag issues on Wednesday morning– including a discussion of the three day debate on the FY2012 Ag Appropriations bill. Lucas says that except for the amendment offered by Arizona Congressman Jeff Flake that prohibits USDA from paying the $147 million to the Brazilian Cotton Institute [background on that trade case available here and here], the attempts to change farm policy on the floor was turned back.”
(FarmPolicy Note: To listen to a portion of yesterday’s discussion between Mr. Hays and Chairman Lucas, which included analysis of the House Agriculture Appropriations bill, just click here (MP3- 3:21). Also, a related editorial on the Brazil cotton issue posted earlier this week at the Wisconsin State Journal Online (Madison) stated that, “If Congress can’t cut off one wasteful payment to Brazil, how will it ever get serious about scaling back billions in domestic subsidies?”)
Jake Sherman reported on Friday at Politico that, “House Majority Leader Eric Cantor told Republican lawmakers in a memo Friday what to expect for the rest of the summer, including votes on three stalled trade agreements, action on an intelligence bill, and movement throughout the summer on the debt ceiling…[C]antor did not let on to when he thinks there will be a vote to raise the statutory debt ceiling — the major issue of the next two months. He said he expects action ‘throughout the summer.’”
More specifically on the debt ceiling issue, Carl Hulse reported in yesterday’s New York Times that, “As hard as it may be for lawmakers and the White House to reach an agreement to raise the federal debt ceiling in the coming weeks, striking a budget bargain is just the beginning of the real work.
“When and if bipartisan talks being overseen by Vice President Joseph R. Biden Jr. produce some combination of spending cuts, major program changes and revenue increases, the House and Senate must then assemble those various agreements into legislative form and approve them.
“While many members of Congress might like the overall framework of any budget deal, some are sure to balk at the legislative detail required to wring money out of popular programs like farm subsidies, Medicaid and Medicare or to force federal retirees to kick in more of their own money for their pensions.”
The AP reported yesterday that, “President Barack Obama plans to create a special advisory council to recommend ways to boost the economic outlook and quality of life for the estimated 60 million people who live in rural areas of the U.S., a White House official said.
“Obama was expected to sign an executive order Thursday establishing the White House Rural Council and naming Agriculture Secretary Tom Vilsack, of Iowa, to be its chairman.”
DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “With budget-cutting in vogue, Sen. Charles Grassley is dusting off his long-time proposal to put a hard cap on farm-program payments.
“Grassley, an Iowa Republican, told reporters Tuesday that he is introducing ‘The Rural American Preservation Act’ that would put a $125,000 cap on farm payments for individuals and a $250,000 cap for married couples.
“‘We need to not subsidize big farmers getting bigger and driving up the costs of farmland and cash rents so younger, beginning farmers can’t get started,’ Grassley said.”