FarmPolicy

July 29, 2016

Rep. McGovern Address Hunger Issues

Categories: Farm Bill /Nutrition

Rep. Jim McGovern (D., Mass.) addressed issues associated with hunger in America on the House floor yesterday.  A transcript of his remarks follows.

Mr. Speaker, thousands of people will gather in Washington, D.C., this weekend for Feeding the 5000, an event designed to bring awareness to the issue of food waste. Participants will be served a communal meal made entirely out of food that would otherwise have been discarded—in other words, wasted. Since 2009, Feedback, a global environmental organization working to end food waste, has hosted dozens of Feeding the 5000 events in cities across the globe.

I am pleased to see so many local partners—including government agencies, charitable organizations, NGOs, industry, and chefs—joining together to call attention to food waste, because the truth of the matter is we will need all of these partners working together to solve the issue of food waste.

Last year, the USDA announced their first ever food waste reduction goal, calling for a 50 percent reduction in food waste by 2030. USDA is working with charitable organizations, faith- based groups, and the private sector, and I believe this goal is 100 percent achievable.

American consumers, businesses, and farms spend an estimated $218 billion per year growing, processing, transporting, and disposing of food that is never eaten. Up to 40 percent of all food grown is never eaten; 40 to 50 million tons of food is sent to landfills each year, plus another 10 million tons is left unharvested on farms. This food waste translates into approximately 387 billion calories of food that went unconsumed. With 50 million Americans—including 16 million children— struggling with hunger every year, these are startling figures.

We know food waste occurs throughout the supply chain, from harvesting to manufacturing, to retail operations and consumer habits. But we must do more to reduce food waste at every stage, recover food that would otherwise have been wasted, and recycle unavoidable waste as animal feed, compost, or energy.

Thankfully, there is already a lot of great work being doing to raise awareness about the problem of food waste. Just last week, I attended a screening of the documentary film called ‘‘Just Eat It’’ at Amherst Cinema, organized by The Food Bank of Western Massachusetts. ‘‘Just Eat It’’ follows a cou- ple, Jen and Grant, as they stop going to the grocery store and live solely off of foods that would have been thrown away. Jen and Grant were able to find an abundance of perfectly safe and healthy food available for consumption that would have been thrown away.

It is exciting to see new partnerships forming to study food waste and find ways to use this perfectly good food to reduce hunger in our communities. One such private-public collaboration, ReFED, has brought together over 30 business, government, and NGO leaders committed to wide-scale solutions to U.S. food waste.

In March 2016, ReFED released a Roadmap that charts the course for a 20 percent reduction of food waste within a decade. The Roadmap calls for farmers to reduce unharvested food and create secondary markets for imperfect produce. It calls on manufacturers to reduce inefficiencies, make packaging adjustments, and standardize date labeling. It calls on food service companies to further implement waste tracking and incorporate imperfect produce and smaller plates into restaurants. It urges the Federal Government to strengthen tax incentives for food donations and consider standardized date labeling legislation.

The good news is that many in the industry are already taking steps to dramatically cut down on wasted food by implementing robust donation programs. For example, Starbucks recently announced it will soon scale up its successful food donation pilot program nationwide. In partnership with the Food Donation Connection and Feeding America, Starbucks will donate unsold food from more than 7,000 company-operated stores—salads, sand- wiches, and other refrigerated items— to the Feeding America food bank network. By 2021, that amounts to almost 50 million meals.

Our college campuses are also stepping up. Both the Campus Kitchens Project and the Food Recovery Net- work will work with college dining facilities and students to provide hunger relief in their local communities. In my congressional district, Becker College, Holy Cross College, Smith College, the University of Massachusetts Amherst, and Worcester Polytechnic Institute all have campus food recovery initiatives.

Over the past 35 years, Feeding America has demonstrated an outstanding commitment to ensuring food that would otherwise have been wasted makes its way to food banks across the country and into the homes of families in need. There are dozens of other in- dustry leaders also taking steps to reduce food waste by implementing manufacturing upgrades, maximizing harvests, and utilizing recycling initiatives.

I appreciate the efforts of the Food Waste Reduction Alliance in bringing together industry partners to reduce food waste, shrink the environmental footprint, and alleviate hunger in our communities.

Reducing food waste is one step we can take toward our goal of ending hunger in the United States and throughout the world. I am pleased to see so many partners at every level of the food supply chain taking action to reduce food waste, but there is still more that needs to be done. Let’s solve the problem of food waste, and let’s end hunger now.

Rep. Jim McGovern Addresses SNAP (Food Stamp) Issues

Categories: Farm Bill /Nutrition

Rep. Jim McGovern (D., Mass.), the ranking member of the House Agriculture Subcommittee on Nutrition, delivered a floor speech yesterday where he addressed issues associated with the Supplemental Nutrition Assistance Program (SNAP, or Food Stamps).

A transcript of Rep. McGovern’s remarks follow:

Mr. Speaker, on April 1, thousands of poor Americans started losing their SNAP, or food stamp, benefits.

All told, over the course of this year, as many as 1 million adults will be cut off from SNAP. That is because one of the harshest provisions in the 1996 welfare reform law says that adults working less than 20 hours a week or not enrolled in a job training program can only receive 3 months of SNAP in a 36- month period.

The problem is, however, that many areas of the country haven’t fully recovered from the recession. There are no open jobs, and worker training slots are all full.

The economic recovery has been uneven across the country, and for many individuals—through no fault of their own—getting back to work has been difficult.

At the height of the recession, Governors across this country, both Democratic and Republican, asked the U.S. Department of Agriculture to allow them to temporarily waive work requirements and provide SNAP benefits to unemployed, childless adults for longer periods of time.

But now some Governors are refusing to extend those work waivers even in areas of their States with high unem- ployment. For 1 million of the poorest Americans, to lose food assistance in the midst of this is unconscionable.

Mr. Speaker, we are talking about the poorest of the poor. These are childless adults whose income averages 29 percent of the poverty line, or about $3,400 a year, a year. No one can live on that.

Many face multiple barriers to employment, including disability, limited education, and chronic homelessness. Their employment can be sporadic, often cycling in and out of low-wage jobs with unpredictable hours that do not lift them out of poverty.

What is most appalling is that about 60,000 of those who will be cut off from SNAP this year are veterans. That is right. These are the brave men and women who stood up to protect our country, and now we don’t have the decency to help them put food on the table when they come home. We should be ashamed.

Mr. Speaker, let me be clear about something. The 3-month limit on childless adults receiving SNAP is not a work requirement, despite what some of my Republican colleagues say. It is a time limit. There is no requirement that States offer work or job training to those who are about to lose their benefit. There is nothing here that incentivizes work. Rather, it penalizes those who are struggling the most.

Work requirements and other Federal assistance programs typically require people to look for work or accept any job or job training slot that is offered, but do not cut people off who are willing to work and are looking for a job simply because they cannot find one.

But that is not the case with SNAP. So individuals who have been searching for a job for months, who have applied to every job posting they have seen, and who can’t get into a job training program because the wait list is too long are punished.

Study after study shows that the longer someone is unemployed, the harder it is to get hired. It is baffling to me that the Republicans’ answer to them is: Sorry. You are out of luck.

The Bureau of Labor Statistics estimates that it takes someone who is unemployed about 6 months of looking to find a job.

That is twice as long as the 3-month time limit. For the life of me, I can’t understand how making someone hungrier helps them find a job faster. We should be making people’s lives better, not harder.

This notion that some on the Republican side peddle that somehow SNAP is this overly generous program that people are just jumping to get into, it is ridiculous. It is false. The average SNAP benefit is $1.40 per meal per day. That is meager. It is inadequate.

And this idea that SNAP is the root of our budget problems is outrageous. New data released from the Department of Treasury just last week shows that SNAP spending is falling. In the first half of the current fiscal year, SNAP spending was at its lowest level since 2010. Not only that, but SNAP caseloads are falling, too. That is due to the improving economy.

SNAP operated like it was supposed to during the recession. It was expanded to meet the needs of the millions who lost their jobs, of middle class families who never imagined they would need food assistance in the first place. And now, as our economy improves, fewer people need the assistance. But we are not there yet.

Cutting 1 million of the poorest Americans off from food assistance is wrong. Increasing hunger is wrong. And I would say to the Republican leadership of this House, the narrative that you have put forward about those in poverty does not reflect the reality. Rather than demonize the poor and diminish their struggle, we ought to come together to help, not hurt, people. We ought to end hunger now. This war on the poor has to stop.

 

House Ag Subcommittee: Growing Farm Financial Pressure

Recall that recent news items regarding the agricultural economy have included phrases like, “Mounting Pressure,” and “There Definitely Could be Some Pain;” while the Federal Reserve Board indicated in its most recent Beige Book report that, “Some crop input prices, such as fertilizer and diesel prices, moderated from year-ago levels, but profit margins were expected to remain relatively weak due to suppressed commodity prices.”

The Fed added that, “A contact in eastern Montana reported that less- profitable farms were leaving the business, and more exits were expected.”

Yesterday, the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management held a hearing on the “growing financial pressures faced by U.S. farmers and ranchers. ”

A Subcommittee news release yesterday indicated that, “Conditions in farm country today contrast sharply with those during the formulation of the 2014 Farm Bill. While high prices for many farm commodities led to tremendous growth in net farm income through 2013, many of those prices have spiraled downward over the past three years. Witnesses spoke broadly about the factors that are driving current market conditions, the bleak outlook going forward, and the impact that both are having and could continue to have on our nation’s farmers and ranchers going forward. They also spoke to the vital role that farm policy and crop insurance are playing in helping absorb some of the shock, and they stressed the devastating impact that further reductions to these vital tools could have.”

Subcommittee Chairman Rick Crawford (R., Ark.) stated that, “Next year, we will head into a new Congress, and we will write a new Farm Bill. As we head into that long and difficult process, I hope our colleagues who are less directly involved in agriculture or farm policy will reflect on just how critically important farm policy is in responding to a crisis that can happen overnight.”

USDA Chief Economist Dr. Rob Johansson indicated at yesterday’s hearing that, “A strong dollar coupled with high-levels of global agricultural production leave U.S. producers facing commodity prices that continue to decline from record levels and a more difficult trading environment than last year. As a result there will be growing financial pressures on some producers this year, as expected revenue may not be sufficient to cover expected costs. Overall, USDA forecasts that net cash income will fall again in 2016.”

And Texas A&M agricultural economist Joe Outlaw pointed out yesterday that, “Cash rents have come down a little, but nowhere near the amount that commodity prices and returns have fallen. This is due in-part because some producers have multi-year lease agreements. However several cash lease tenants reported their landlord’s have been unwilling to lower cash lease rates.”

Dr. Outlaw added that, “[T]the current poor situation on farms across this country would be considerably worse if not for the safety net provided by both Title I commodity policies and federal crop insurance. There are some in agriculture who say that commodity policies are more important than crop insurance or vice versa. I believe they are equally important – especially during times of low prices. For example, lenders tend to view crop insurance as being more important because the insurance guarantee is ‘bankable,” meaning it is something on which they can base a loan. On the other hand, producers see the commodity assistance as the only chance they have of coming close to breaking even in a low price environment.

“And finally, in my opinion, the interest groups that continue to call for changes that would negatively impact these two key policy tools clearly either have no idea how difficult the financial situation is across agriculture or they simply do not care. Farmers in this country deserve better than to continually be threatened with changes that I consider a dismantling of the safety net.”

With respect to the price outlook for 2016, University of Illinois agricultural economists Scott Irwin and Darrel Good indicated recently at farmdoc daily (“Forming Corn and Soybean Price Expectations for 2016-17“) that, “Using new ending-stocks-to-use pricing models (farmdoc daily, April 6, 2016), we conclude that the probability of the 2016-17 marketing year average farm price of corn and soybeans to be below $3.40 and $9.00, respectively, appears to be quite low at this time. For perspective, substantially lower prices would require a demand environment even weaker than occurred during the Great Recession of 2008-09. A more interesting question revolves around the conditions required to increase the average price to levels that would be considered profitable for most producers. If overall demand remains weak, prospects of very small year ending stocks would likely be required to move averages above $4.00 and $10.00 for corn and soybeans, respectively, which would be helpful but would not represent a return to general profitability. However, there are factors that could improve the demand environment in the year ahead. These include crop production problems in other parts of the world that would extend the demand for U.S. corn and soybeans, a realignment of currency exchange rates that would favor U.S. corn and soybean exports, and policies that enhance the domestic demand for corn and soybeans. Recent dryness that poses, or may pose, some threat to the Malaysian palm oil crop and the second-season Brazilian corn crop are examples of production problems that would enhance export demand. The current biofuels policy that is supporting biodiesel production also has the potential to support soybean oil consumption at a higher level. It is interesting that the futures markets may already be anticipating some of these developments, as the markets are currently projecting 2016-17 marketing year average prices of about $3.70 for corn and $9.40 for soybeans.”

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GOP Proposes SNAP Funding Cut

Categories: Farm Bill /Nutrition

Pete Kasperowicz reported today at The Washington Examiner Online that, “House Republicans are looking to push through a Department of Agriculture spending bill this year that would cut the federal food stamp program by $1.2 billion compared to current year funding.

“The House Appropriations Committee released legislation Tuesday that provides $79.7 billion for the Supplemental Nutrition Assistance Program, or SNAP.”

The article noted that, “In March, USDA noted that compared to two years ago, there are 2 million fewer people using SNAP, informally known as the food stamp program.”

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House Ag Committee Holds Hearings to Review USDA Agencies (SNAP, Crop Insurance)

Categories: Farm Bill

On Thursday and Friday, the House Agriculture Committee held hearings “examining USDA organization and program administration.”

A Committee news release on Thursday noted that, “USDA officials from the Food, Nutrition and Consumer Services (FNCS), Food Safety (FS), and Rural Development (RD) mission areas served as witnesses.

“This hearing series follows a similar series the committee held with USDA last fall. By setting aside two days each year to focus on examining each of USDA’s seven mission areas and their respective agencies, members of the committee gain a fuller understanding of how the various parts of USDA work together to achieve the department’s purpose and goals.”

Recall that nutrition programs comprise the largest percentage of Farm Bill spending.

In prepared remarks on Thursday, USDA Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon, indicated that, “As this Committee continues to review SNAP [food stamps], I want to speak candidly about the proposal raised by some to change SNAP into a block grant provided to States; such a change would have significant and negative consequences for the SNAP program. A block grant structure would significantly erode SNAP’s responsiveness to those it serves and ultimately be a step backwards in the national fight against hunger.”

Mr. Concannon added that, “While flexibility is critical to ensuring that States can meet the needs of their residents facing difficult circumstances, members of this Committee have criticized States for how they have used their flexibility, and sought to constrain it in certain areas. The most notable of these is States use of broad-based categorical eligibility, an option by which States extend eligibility to households that receive a non-cash benefit funded by TANF. Conversely, there are examples where States are not taking options favored by the Committee. The Agricultural Act of 2014 codified existing FNS rulemaking that allows States the option to withhold issuing replacement cards to households with excessive requests, defined as five or more in a year. FNS provided States this option as excessive card replacements may be an indicator of potential benefit trafficking. To date, only three States – Iowa, Massachusetts, and Michigan –have adopted this State option.”

Mr. Colcannon also noted that, “As vital as the program is to so many, we can all agree that it would be better if fewer families needed to utilize SNAP because poverty and need were lower. And while the trends are pointing in the right direction – we are currently projecting a 2.3 percent decrease in participation for Fiscal Year 2017 – some ask, why haven’t we made more progress in reducing the need for SNAP, given the reductions in unemployment in recent months?

While overall unemployment has declined, unemployment rates for some workers remain far higher than average. Bureau of Labor Statistics data show that unemployment rates for high school graduates are substantially higher than for college graduates. Workers without high school diplomas are even more likely to be unemployed, and their wages are likely to be far lower than those with more education. Furthermore, some citizens have trouble entering the labor force because of criminal records or other problems from years past. And, many who have jobs do not get the hours and wages they need to meet their food needs but may not be eligible for many other forms of assistance. SNAP is also serving more eligible people because of State and USDA efforts to streamline the program to ensure that those who need benefits are able to access the program with less hassle and paperwork.”

In a news release yesterday, the Ag Committee noted that, “Today, the House Agriculture Committee completed its two-day examination of the USDA’s organization and program administration. Over the past two days, members of the committee heard from 25 undersecretaries, administrators, and other department officials across USDA’s seven mission areas, on a variety of topics, which included an accounting for each area’s purpose and goals, programs administered, and annual budget.”

Witnesses testifying on Friday included, “USDA officials for the Natural Resources and Environment (NRE), Farm and Foreign Agricultural Services (FFAS), Research, Education and Economics (REE), and Marketing and Regulatory Programs (MRP) mission areas.”

As was noted in an earlier FarmPolicy update, the administrations proposed cuts to crop insurance were highlighted on Thursday at the House Agriculture Appropriations Subcommittee.

In prepared remarks on Friday, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services, Alexis Taylor, indicated that, “The Federal crop insurance program is a vital risk-mitigation tool available to our Nation’s agricultural producers. It provides risk management solutions that are market driven and reflect the diversity of the agricultural sector, including specialty crops, organic agriculture, forage and rangeland, as well as staple row crops.

“Over its history, the value of the Federal crop insurance program to American agriculture has grown. In 2015, the crop insurance program provided coverage on more than 298 million acres of farm and ranch land and protected over $102 billion of agricultural production. As of February 25, 2016, indemnity payments to producers on their 2015 crops total just over $5.6 billion on a premium volume of just under $10 billion. Our current projection for the 2016 crop year shows the value of protection will be slightly less than $100 billion.”

Ms. Taylor added that, “Incentives authorized in the 2014 Farm Bill make crop insurance more affordable for beginning farmers and ranchers by providing a 10 percent premium discount, as well as a waiver of the catastrophic and additional coverage administrative fees. Over 13,500 producers have taken advantage of these incentives. Beginning farmers and ranchers have saved over $14.5 million in premiums and administrative fees because of this program.

“The Farm Bill included several reforms to the Federal crop insurance program; however, there remain further opportunities for improvements and efficiencies. The President’s 2017 budget includes two proposals to reform crop insurance, which are expected to save $18 billion over 10 years. This includes reducing subsidies for revenue insurance that insure the price at the time of harvest by 10 percentage points and reforming prevented planting coverage. These reforms will make the program less costly to the taxpayer while still maintaining a quality safety net for farmers.”

With respect to program integrity, Ms. Taylor stated that, “I am proud to report that the improper payment rate for Fiscal Year 2015 is 2.2 percent, down from 5.5 percent in FY 2014.”

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Agriculture Budget and Appropriations Issues, Including Crop Insurance

Categories: Budget /Farm Bill

An update yesterday at the National Sustainable Agriculture Coalition Blog (NSAC) provided an excellent recap of budget and appropriations issues that are impacting agriculture.

The NSAC update included a link to the House Agriculture Appropriations Subcommittee hearings for the FY2017 appropriations cycle that the Subcommittee held last month, as well as a recap of the remaining Subcommittee appropriations that concluded last week.

With respect to the Farm and Foreign Agricultural Services Subcommittee appropriations hearing, which was held on Thursday,  yesterday’s NSAC update pointed out that, “Congressman Robert Aderholt (R-AL), Chairman of the House Agriculture Appropriations Subcommittee [opening statement here], began the Farm and Foreign Agricultural Services hearing by arguing against the Administration’s proposal to reform crop insurance subsidies.

“‘The budget proposal is misguided by seeking to change a mandatory spending program through the appropriations process,’ Chairman Aderholt said.”

Yesterday’s NSAC update also explained that, “Ranking Member [Sam Farr (D., Calf.)] asked RMA Administrator Brandon Willis [prepared testimony] what is being done to make crop insurance work better for producers practicing sustainable, organic, and diversified agriculture. Administrator Willis mentioned Whole-Farm Revenue Insurance, and noted that the number of organic price elections has expanded significantly over the last several years. He committed to continuing to expand those opportunities.

“Similarly, Congresswoman [Chellie Pingree (D., Maine)] urged RMA to make it easier for producers to use conservation practices, such as cover crops, without having to fear losing their crop insurance. Producers who use cover crops must follow a complicated and sometimes confusing set of guidelines for terminating those crops in order to qualify for crop insurance. Pingree urged Administrator Willis to instead classify cover crop as a ‘good farming practice‘ so that producers can more easily pursue conservation efforts without fear of losing their insurance.”

The NSAC update added that: “Following weeks of lobbying for program support by fellow members, and public and private stakeholders, Members of Congress finally submit their appropriations requests to the Subcommittee this week. We expect the Subcommittee to begin reviewing those requests and writing its bill between now and early April. At this point, the Senate Agriculture Appropriations Subcommittee has held far fewer appropriations hearings than the House, so it may require considerably more time before it begins to write its own bill.”

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FAPRI Baseline Update

The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri released its U.S. Baseline Briefing Book today.

The FAPRI report noted that, “Lower agricultural commodity prices have contributed to a sharp reduction in net farm income. The outlook for the next several years suggests continued pressure on farm finances is likely.”

The report added that, “Projected corn prices average $3.75 per bushel for the 2016/17 marketing year, up only slightly from 2015/16. Corn prices average less than $4.00 per bushel for the 2017-2025 period.

“Other crop prices also remain well below recent peak levels. Soybean prices average $8.73 per bushel in 2016/17, while wheat averages $4.97 per bushel and upland cotton averages 56.9 cents per pound.”

“With farm income well below recent peak levels and if interest rates increase as forecasted, there will be continued pressure on farm finances and farm real estate values,” the report said, while adding that, “Crop insurance net outlays are projected to average about $8 billion per year for fiscal years 2017-2025.”

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SNAP and Farmers Markets

Categories: Farm Bill /Nutrition

The editorial board at the Los Angeles Times indicated today that, “On any given day in and around Los Angeles, more than half a dozen farmers markets pop up to cater to crowds of Angelenos in search of heirloom Cherokee Purple tomatoes, cilantro hummus, chili-lime cashews or a dozen eggs from a small family run poultry farm. Not to mention more prosaic fruits, vegetables, breads and other fresh-food staples.

“Los Angeles does love its farmers markets — but not all Angelenos can use them. Of the approximately 60 certified markets in Los Angeles, only about half accept the modern version of food stamps, Electronic Benefit Transfer cards. There’s something terribly wrong when Jack in the Box and corner liquor stores eagerly accept EBT, but a farmers market does not.”

Today’s editorial explained that, “The Los Angeles City Council is trying to rectify that and has asked the public works staff and city attorney to figure out how to make that happen by the end of this month. Farmers markets serving the public, especially those operating on public land or in the public right of way, really should serve all of the public. And although it would be preferable for city leaders to persuade markets to accept EBT rather than coercing them to do so, a mandate along those lines would nevertheless seem to benefit everyone.

While accepting EBT does require extra effort, the operating costs are negligible. The state provides the electronic card readers, and even pays for wireless access if needed. And accepting EBT wouldn’t reduce the vendors’ profits, given that an EBT dollar has the same value as a dollar bill.”

It’s hard enough for low-income Angelenos to obtain nutritious groceries, with wide swaths of the city virtual healthy-food deserts. They shouldn’t be cut off from the few oases of reasonably priced, healthy and local produce,” the LA Times said.

Keith Good

Cotton Oilseed Issue- Continues

Forrest Laws reported yesterday at the Delta Farm Press Online that, “Secretary Tom Vilsack’s answer to the question was short and to the point.

After he was asked during a news briefing why he couldn’t designate cotton as an ‘other oilseed,’ a request made by the cotton industry and a number of farm-state congressmen, he replied: ‘Because I can’t.'”

For more detail on this issue, see this backgrounder.

Mr. Laws added that, “But [Sec. Vilsack] went on to explain USDA does want to help cotton producers and two possible avenues for that. One would be to provide a Cotton-Transition-Assistance-Payment-type program, using Commodity Credit Corp. funding. The other would be a cost-share for cotton ginning through marketing assistance funding.

“The latter is being explored through negotiations with the cotton industry aimed at determining the costs and the mechanics of how such a program would work. Vilsack has mentioned a figure of $300 million for the total cost of ginning while the cotton industry estimated the total could be closer to $800 million.”

Recall also that The Wall Street Journal recently looked closer at the issue of Chinese cotton stocks and the market price of cotton.

Keith Good

SNAP Enrollment Declines- Remains High

Categories: Farm Bill /Nutrition

Pete Kasperowicz reported today at The Washington Examiner Online that, “The U.S. Department of Agriculture said Monday that nearly 2 million people have stopped using the federal food stamp program over the last two years, and said reduced rolls are a sign that economic growth is finally beginning to reduce the need for federal nutrition aid more than six years after the Great Recession ended.

But that 2 million drop is not even 10 percent of the more than 21 million people who signed up for the Supplemental Nutrition Assistance Program, or SNAP, from 2008 to 2013.

“‘Seven years later, a stronger economy is helping slow and reverse the trend of rising participation in SNAP,’ Undersecretary of Agriculture Kevin Concannon wrote in a blog post. ‘From its peak rates during the Great Recession, as families and communities begin to rebuild, participation in SNAP has dropped by over 2 million participants — and that’s the way the program is designed,’ he added.”

Today’s Washington Examiner update added that, “The Great Recession started at the very end of 2007, and lasted through June 2009. Before it began, there were an average of 26.3 million people using SNAP, and the rolls quickly grew each year through 2013, ending at an average of 47.6 million people.”

In his blog post today, Undersecretary Concannon also noted that, “In the last year of this Administration, I am committed to keeping up our work to ensure states and local partners have the tools they need to reach their constituents so that we can continue to see more of the positive changes that we’ve seen in the last seven years. We are also working to take stock of what’s working and how those programs can reach more people who really need them. I’m very proud of what we’ve accomplished in seven years, but our work here is far from done.

“Today, we launched Part II of our two-part series on how these historic changes to our nation’s nutrition programs came to be. You can catch up on Part I and read a blog from Secretary Vilsack reflecting on seven years of progress.”

Recall also that the House Ag Committee held a hearing last week on SNAP related issues.

Keith Good

Cotton Issues Persist

Recall that back in December, at a House Agriculture Subcommittee hearing on the current state of the U.S. cotton industry, Shane Stephens, the Vice Chairman of the National Cotton Council, explained that: “Current stocks-to-use ratios stand in stark contrast to historical stocks that generally ranged between 50 and 60 percent of total use. The recent increase in stocks was the direct result of policies in place in China for the 2011 through 2013 crops. During those years, China supported its cotton farmers by purchasing vast amounts of its production into government reserves at prices well above the world market.”

Rep. Rick Crawford (R., Ark.), the House Ag Subcommittee Chairman on General Farm Commodities and Risk Management, noted at the December hearing that, “In the not too distant past, we lost to China most of what was once the largest manufacturing sector in America, our textile industry. Now, I believe we are in grave danger of losing the vast majority of our production to China, India, and other countries that are employing anticompetitive trade practices that no American farmer can match.”

Lucy Craymer reported in Friday’s Wall Street Journal that, “Global cotton prices have plunged in recent weeks as speculation mounts that China is getting ready to sell some of its 11 million-metric-ton stockpile—enough to make 10 billion pairs of jeans.

“Commodity analysts expect China to conduct a cotton auction in the next few months, its first since the end of August.

“While the government sells nearly all of its cotton at home, it is such a big player in the market that unloading a chunk would depress global prices by reducing how much foreign cotton Chinese businesses buy. China holds about 60% of the world’s cotton stockpiles and is responsible for slightly less than a third of global consumption.”

The Journal article added that, “The expectation of a new round of selling by China has pushed down prices on the Zhengzhou Commodity Exchange to their lowest levels since 2004. Meanwhile, the benchmark ICE Futures U.S. exchange has cotton trading near its lowest since 2009, dropping about 12% since the beginning of the year; the May contract settled at 56.41 cents a pound on Thursday.”

Ms. Craymer explained that, “One factor putting pressure on China to sell is that cotton deteriorates, so it can’t simply hold supplies for years in hopes the price will rise.

The stockpile dates back to a government program introduced in March 2011 to improve the livelihoods of domestic cotton farmers by setting a floor for prices. But with global cotton prices dropping, China chose to store the cotton rather than sell it on the global market.

The result, according to the USDA, was a doubling of the world’s stockpiles, which further depressed prices. USDA estimates of cotton stockpiles are slightly above China’s.”

The Journal article added that: “China has since ended the price-support program for cotton. But that won’t help it with its huge stockpile—which is enough to make three times more jeans than the total sold globally in 2015, according to Euromonitor.”

Lower cotton prices for U.S. producers, and international policies, such as those implemented by China, have been an impetus for cotton farmers to ask the USDA to “use legal authority provided under the 2014 Farm Bill” to provide additional federal assistance to struggling cotton farmers.

So far, Agriculture Secretary Tom Vilsack has indicated that the USDA does not have the authority to make this change.

A backgrounder on the cotton Farm Bill issue is available here.

Keith Good

House Ag Committee Discusses SNAP (Food Stamp) Issues

Categories: Farm Bill /Nutrition

A news release yesterday from the House Ag Committee indicated that, “Today, the House Agriculture Committee held a hearing to review the various options available to states when implementing the Supplemental Nutrition Assistance Program (SNAP). Members heard from a panel of witnesses who shared the current options available to states when implementing the program and how those options allow states to respond to the needs of their respective populations. Some of these state options streamline program administration, coordinate SNAP with other assistance programs for low-income families, and enable states to design the program to meet their objectives through determining their own financial eligibility, work-related eligibility, and reporting requirements.”

Committee Chairman Mike Conaway (R., Tex.) noted at yesterday’s hearing that, “When carrying out the program, states determine eligibility requirements, such as income thresholds, asset limits, and work-related requirements. Through categorical eligibility, states can utilize the participation from one means-tested program, such as the Temporary Assistance for Needy Families program, or TANF, to defer eligibility for SNAP. When calculating and issuing monthly benefits for those eligible, states have the flexibility to determine the value of medical deductions or standard utility allowances. It is important to note SNAP does not operate in a vacuum.

“When administering SNAP, states have a multitude of programs they are overseeing. As we will hear today, other programs, such as TANF and the Supplemental Security Income program have an effect on how SNAP is administered in states. It is important to look at how, as a collective whole, these programs are used by the people they serve.”

Ranking Member Collin Peterson (D., Minn.) pointed out yesterday that, “I’ve been urging, for some time now, that the Committee take a good look at the flexibility states have when administering SNAP. I understand that this is done to simplify the process but I worry that it’s gone too far and they now have too much leeway.

“During the last farm bill debate I offered a plan to reform categorical eligibility. Of course that didn’t happen but I still have a hard time understanding how states, with both Democratic and Republican governors, are allowed to exceed federal eligibility guidelines and then charge the federal government for the additional expense. This creates a system where we treat people differently in different parts of the country and I don’t think that’s right.

My district, for example, borders North Dakota. North Dakota and Minnesota have different income and asset tests to qualify for SNAP. So people in the same community are being treated differently.”

Karen Cunnyngham of Mathematica Policy Research stated in prepared remarks yesterday that, “In FY 2014, the average monthly percentage of a state’s population subject to work requirements ranged from fewer than 3 percent in Delaware, Massachusetts, and Oregon to over 20 percent in Florida and Michigan. The percentage subject to time limits varied from less than half a percent in Maryland, Massachusetts, and Nevada to 9 percent or more in Florida, Georgia, and Mississippi. The average monthly benefit per person was higher for participants subject to work requirements ($162) and subject to time limits ($178) than the average benefit per person for all participants ($124).”

In addition, Stacy Dean, Vice President for Food Assistance Policy at the Center for Budget and Policy Priorities indicated in her prepared remarks that, “The number of SNAP households that have earnings while participating in SNAP has more than tripled — from about 2 million in 2000 to about 7 million in 2014. The share of SNAP families that are working while receiving SNAP assistance has also been rising — while only about 28 percent of SNAP families with an able-bodied adult had earnings in 1990, 57 percent of those families were working in 2014…[M]ost SNAP recipients who can work do so.”

Ms. Dean also noted that, “The percentage of SNAP benefit dollars issued to ineligible households or to eligible households in excessive amounts fell for seven consecutive years and stayed low in 2014 at 2.96 percent, USDA data show. The underpayment error rate also stayed low at 0.69 percent. The combined payment error rate — that is, the sum of the overpayment and underpayment error rates — was 3.66 percent, low by historical standards.3 Less than 1 percent of SNAP benefits go to households that are ineligible.”

And, Ms. Dean pointed out that, “SNAP has low administrative overhead. About 90 percent of federal SNAP spending goes to providing benefits to households for purchasing food.”

Meanwhile, Claire Williams reported this week at Arkansas Online that, “The 30,000 Arkansans who could lose food stamps this year will have more options to receive training and find jobs through a program sponsored by the U.S. Department of Agriculture, Agriculture Secretary Tom Vilsack announced Tuesday.

“The SNAP to Skills program will help states organize programs to ultimately move adults off the Supplemental Nutrition Assistance Program. People who would otherwise lose access to government food stamps could continue to use them under the training programs as they search for employment and receive training, Vilsack said.”

And Lynn Bonner reported earlier this week at The News & Observer (NC) Online that, “The goal of such employment and training projects, said U.S. Agriculture Secretary Tom Vilsack, is to get adults to a point where they no longer need help from the food stamp program, officially called the Supplemental Nutrition Assistance Program, or SNAP.

“States ‘will learn best practices, get technical assistance and learn how they can make more robust their efforts to find jobs’ for food stamp recipients, Vilsack said in an interview. ‘This is the right way to reduce SNAP rolls, not some artificial process.'”

Keith Good

Hearing: House Ag Subcommittee on Conservation

Categories: Conservation /Farm Bill

Yesterday afternoon, the House Agriculture Subcommittee on Conservation and Forestry held a hearing titled on land conservation issues.

Subcommittee Chairman Glenn ‘GT’ Thompson (R., Pa.) indicated at yesterday’s hearing that, “The Earth’s population is projected to grow to roughly 9 billion people by the year 2050. Given the growing demands on farm land everywhere, we must invest in the necessary resources and best practices to be certain that producers can continue to meet this growing need. To that end, I am particularly proud of this committee’s work on conservation programs during the deliberation of the most recent farm bill. The 2014 Farm Bill contained creative, outside-the-box approaches to funding and delivering conservation programs.

“One of the biggest successes of this creative approach has been the Regional Conservation Partnership Program, known as RCPP. RCPP is an innovative approach to target conservation initiatives. It uses NRCS programs that produce known conservation improvements, and leverages that federal funding with matching funding from partners in the private sector. It has brought together broad coalitions consisting of commodity organizations, conservation groups, sportsmen, and others to unite around a common goal.

“In the first two years, RCPP has awarded funding to 199 projects across all 50 states and Puerto Rico and matched over $500 million in program funding with $900 million from partner contributions. These efforts that bring all perspectives to the table are the ones that are actually working. It takes everyone coming together.”

USDA’s Natural Resources Conservation Service Chief, Jason Weller, noted yesterday that, “Science-based solutions and innovative tools are also supporting the locally led approach. NRCS is advancing innovative partner-driven conservation through the [RCPP]. Created by the 2014 Farm Bill, RCPP is a locally led conservation approach that is already showing results. Now in its second year, RCPP has demonstrated high demand, with over 2,000 partners leading nearly 200 projects nationwide. All told, in the first two years of the program, NRCS will have invested about $500 million while another $900 million is being brought in by partners to address locally defined, nationally significant natural resource issues. For the next round of RCPP funding, NRCS will challenge partners to consider environmental markets and conservation finance systems with agricultural opportunities.”

Frank Price, a rancher from Texas, explained at yesterday’s hearing that, “U.S. cattlemen own and manage considerably more land than any other segment of agriculture— or any other industry for that matter. Cattlemen graze cattle on approximately 666.4 million acres of the approximately 2 billion acres of the U.S. land mass. In addition, the acreage used to grow hay, feed grains, and food grains add millions more acres of land under cattlemen’s stewardship and private ownership. Some of the biggest challenges and threats to our industry come from the loss of our natural resources. The livestock industry is threatened daily by urban encroachment, natural disasters, and government overreach. Since our livelihood is made on the land, through the utilization of our natural resources, being good stewards of the land not only makes good environmental sense; it is fundamental for our industry to remain strong.”

Mr. Price noted that, “The Environmental Quality Incentive Program, or EQIP, is a cost-share program that rewards and provides incentives to producers for implementing conservation practices. When wildfire came through our ranch in 2011, we had to rebuild miles of fencing. EQIP helped us do it. One of the reasons EQIP has become popular among ranchers is because it is a working-lands program. Conservation programs that keep land in production and do not limit its use are best for both the ranchers and conserving our resources.

“Another working lands program is the Conservation Stewardship Program. CSP rewards those of us that have been conservationists and have spent the time and money in the improving of our land, water, and wildlife habitats. CSP offers cattlemen the opportunity to earn payments for actively managing, maintaining, and expanding conservation activities like cover crops, rotational grazing, ecologically-based pest management, and buffer strips.”

Subcommittee Ranking Member Michelle Lujan Grisham (D., N.M.) added at yesterday’s hearing that: “I’ve often mentioned the inadequate rainfall and drought conditions in New Mexico and the Southwest. Fortunately, there are conservation tools available to help Southwestern producers cope with these situations. I’ve heard from several New Mexican producers that the Conservation Stewardship Program, which pays producers to adopt conservation activities to improve working lands, helped in keeping many farmers and ranchers on their lands and in business during the past drought, which lasted about 5 years.”

Keith Good

Backgrounder: Cotton oilseed and the 2014 Farm Bill

Categories: Farm Bill

In December of last year, House Agriculture Committee Chairman Mike Conaway (R., Tex.), along with 100 of his colleagues, made a formal request to Secretary of Agriculture Tom Vilsack to “use legal authority provided under the 2014 Farm Bill” to provide additional federal assistance to struggling cotton farmers.

The depression in cotton prices was highlighted at a House Agriculture Subcommittee hearing in December, while earlier this year, an economist from the University of Georgia noted that cotton producers “can expect prices to remain low for their crop until worldwide demand improves.”

Specifically, Chairman Conaway requested “that the Secretary use his authority under the Farm Bill to designate cottonseed an oilseed, allowing farmers who produce cottonseed to access the same risk management tools available under the Farm Bill to other oilseed farmers.”

Reporter Rick Kelly has explained that, “If cottonseed oil is designated an oilseed, cotton growers will be eligible for federal programs that could help farmers in the event of catastrophic weather, or provide protection from losses due to commodity price drops. Canola oil and flax seed oil producers already have that safety net.

Without those federal guarantees, and with cotton prices bottoming out below 60 cents a pound, some growers are worried they won’t be able to obtain financing to plant this spring.”

Media reports subsequently indicated that Secretary Vilsack had concluded that he did not have the authority to designate cottonseed as an oilseed.

In a statement released in early February, Chairman Conaway noted that, “The Department has not only the legal authority to designate cottonseed as an ‘other oilseed,’ but the responsibility to act…”

After receiving an official denial of the cottonseed request from Sec. Vilsack, Chairman Conaway sent a letter to USDA  that included a detailed rebuttal to the Secretary’s conclusion. Chairman Conaway also noted that, “Given the increasingly dire conditions farm families face in the cotton belt and the grave consequences of failing to act, I have little choice but to continue to press for the same kind of responsible, urgent, and meaningful response that has always been taken to address emergencies impacting producers of other commodities.”

An update posted on February 24 at AgWeb (“Vilsack Explains Why Cotton Can’t Qualify for ARC/PLC”)  included this explanation from Secretary Vilsack:

“Just before the holidays, I received a request from the cotton industry to designate cotton as an ‘other oilseed’ in order to qualify for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payments. We examined the laws closely—the 2014 Farm Bill, the 2016 Appropriations law, and other authorities—and after close scrutiny, we determined that such a designation is not authorized under the 2014 Farm Bill. The reason is very clear: The Farm Bill expressly removed eligibility of cotton for such payments, as cotton is no longer listed as a ‘covered commodity.’ In other words, the Farm Bill intended to exclude cotton from ARC and PLC payments and USDA was provided with clear direction that it would not be included nor covered. Instead, at the request of the cotton industry, the Farm Bill created two new programs for cotton as an alternative to ARC and PLC: STAX, or the Stacked Income Protection Plan, and the Cotton Transition Assistance Program (CTAP).”

University of Illinois Clinical Assistant Professor Jonathan W. Coppess explained to me that, “So the whole reason cotton is not a covered commodity under the 2014 Farm Bill is because of the World Trade Organization dispute with Brazil over cotton support policies that date back to 2002 until 2014, about 12 years this dispute had ran. In the end, Brazil won overwhelmingly before the WTO against American cotton support policies, programs, the old countercyclical program and those sort of things.”

Mr. Coppess added that, “And so Brazil won. They then won on appeal. They then won the right to retaliate. They won on appeal on the right to retaliate against American exports. And, that got a lot of attention in 2009, 2010. Somewhere around 2010, I believe it was, USDA settled kind of a temporary agreement with Brazil to hold off on retaliation.”

“But the Secretary made it clear that the administration couldn’t change farm programs, Congress had to do it, so they basically held Brazil in abeyance, they sort of held off retaliation pending Congress rewriting the farm bill in 2014,” Mr. Coppess said.

In addition, Mr. Coppess pointed out that, “Brazil was very adamant that cotton supports be changed in the farm bill, and so they were. So you can imagine that aside from the sort of legal arguments about whether the Secretary could do this, there’s another whole set of questions about how Brazil would look at and react to this, and what that would do in the WTO situation, so it raises a lot of questions.”

With respect to the situation cotton producers are in, Mr. Coppess observed that, “The challenge is they don’t have that ARC or PLC program. Cotton does continue to have the Marketing Assistance Loan program, so they can take out loans on cotton and get LDPs or marketing loan gains. The 2014 Farm Bill did create a new insurance program just for cotton, but there is not that sort of long-term price until you get into the marketing loan situation. And that’s where they’re concerned and have had issues, which is where this has come about.”

In his explanation at AgWeb, Sec. Vilsack added that, “In addition to this assistance provided through the Farm Bill, USDA began to explore other ways to provide support to struggling cotton producers as we’ve done in the past. This has been done in two ways, historically: first, provide temporary assistance to cotton producers facing low prices through a Congressional action or, second, administratively use either Section 32 (of the Act of August 24, 1935) or Section 5 of the Commodity Credit Corporation (CCC) Charter Act to provide some level of support. Unfortunately, these administrative options have been severely limited by the law that funds the government, also called the Appropriations Act.”

At a House Ag Committee hearing on February 24, Sec. Vilsack and Chairman Conaway discussed this issue in more detail. A transcript of this portion of the hearing is available here.

Sec. Vilsack stated that, “First of all, in putting together the ARC and PLC program, there was obviously a decision to remove cotton from those programs. I think everybody acknowledges that. Within the law, essentially there’s provisions that define the opportunity for the Secretary to include additional oil seeds as crops as they evolve. That listing of other oil seeds includes a variety of other oil seeds. It includes sunflower seeds, rape seeds, canola seeds. Clearly Congress could have also included cottonseed in that list. They did not. That’s an issue.

Secondly, the industry came to us, when we were crafting the risk management program under STAX, and requested oilseed to be included in that risk management program. So those two facts—Congress didn’t include it in the list, and the industry asked us to include it in the risk management program—indicate what the intent was at the time. Now, if Congress wants to reopen the farm bill, then obviously you’ll have to deal with the issue of the cost, which I think is one of the motivating reasons why all of this was established.”

With respect to the oilseed provision, Chairman Conaway asked, “Are you arguing that the list of oilseeds included is exclusive and that you have no discretion?”

Sec. Vilsack pointed out that, “What I’m arguing is that that list and that provision is set up for oilseeds that arise during the course and between farm bills… Not seeds that have existed, Mr. Chairman, but seeds that have come up in between farm bills to allow us the flexibility.”

Going forward, Mr. Coppess of the University of Illinois explained that:

“Then the question becomes without that authority, then the only thing left would be for Congress to somehow step in and basically grant the Secretary the authority. Like they’re going to have to do something that would say, you know, in this case, you’re allowed to do it, or we’ll write cottonseed in as a covered commodity. Whether Congress would open a farm bill at this point to do that is obviously another big question.

You know, we’re still dealing with budget scenarios, so that would mean figuring out how to pay for it, you know, in a standard baseline discussion. To add something in like that that’s going to cost, that’s going to have to be paid for somewhere, so that’s another challenge.

The Brazil response clearly is another challenge; getting retaliation against American exports did not go unnoticed by the American manufacturing industry, by the intellectual property right questions that came up with cross retaliation. I mean, it opens a whole lot of that. I think everybody is realistic about what Congress could do, even in a good year, and then you add onto it this is probably not a good year, we don’t expect to see Congress do much.”

Meanwhile, an update posted on February 25 at AgWeb (“Agriculture Secretary Can Relieve Crisis in Cotton Country”) Chairman Conway noted in part that, “The Secretary argues that Congress removed cotton from Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) in the 2014 Farm Bill and, thus, his hands are tied. Here’s what Congress actually did in the 2014 Farm Bill: As a result of a WTO settlement with Brazil, Congress effectively removed cotton lint from ARC and PLC. Cottonseed has not historically been a covered commodity, and Congress never discussed adding cottonseed to the list of covered commodities. Rather, Congress left intact the Secretary’s authority to designate any oilseed as an ‘other oilseed.'”

Chairman Conway added that, “The Secretary has also argued he cannot designate cottonseed as an oilseed because the provision is reserved for ‘emerging oilseeds.’ That is also not the case. The Farm Bill defines an oilseed as ‘a crop of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, or any other oilseed designated by the Secretary.’ The Farm Bill does not restrict this authority to ’emerging oilseeds.’ The Secretary imposes this limitation on himself.”

Keith Good

Key Ag Hearings this week on Capitol Hill

There are several key agricultural related hearings taking place this week on Capitol Hill.

On Wednesday morning, the House Appropriations Ag Subcommittee will hear budget related testimony from Kevin Concannon, the Under Secretary for USDA’s Food, Nutrition, and Consumer Services.   Al Almanza, USDA’s Deputy Under Secretary for Food Safety will testify before the Ag Subcommittee on Wednesday afternoon, while the Food and Drug Administration’s Acting Commissioner  Stephen Ostroff will be before the Subcommittee Thursday morning.

Jason Weller, Chief of USDA’s Natural Resources Conservation Service will finish the week in front of the Ag Subcommittee where he will testify on budget related matters Friday morning.

Meanwhile, the House Ag Committee will hold a hearing Wednesday morning where the full Committee will explore the state of the rural economy; Ag Secretary Tom Vilsack will provide testimony at this briefing.  Related background regarding the condition of the U.S. ag economy is available here.

And on Thursday, the Senate Ag Committee will hold a business meeting to consider the Chairman’s Mark on Biotechnology Labeling Solutions- background on this bill, which “would prevent states from requiring labels on genetically modified foods,” is available here.

Also this week, USDA’s Economic Research Service will update its monthly Food Price Outlook on Thursday, and Wednesday, USDA’s National Agricultural Statistics Service will release its Crop Values Annual Summary.  This report contains the marketing year average prices and value of production of principal crops.

Keith Good

SNAP Developments

Categories: Farm Bill /Food Aid

AP writer Mary Clare Jalonick reported today that, “The Agriculture Department unveiled new rules on Tuesday that would force retailers who accept food stamps to stock a wider variety of healthy foods or face the loss of business as consumers shop elsewhere.

“The proposed rules are designed to ensure that the more than 46 million Americans who use food stamps have better access to healthy foods although they don’t dictate what people buy or eat. A person using food stamp dollars could still purchase as much junk food as they wanted, but they would at least have more options in the store to buy fruits, vegetables, dairy, meats and bread.”

The AP article explained that, “Under current rules, SNAP retailers must stock at least three varieties of foods in each of four food groups: fruits and vegetables, dairy, breads and cereals, and meats, poultry and fish. The new rules would require the retailers to stock seven varieties in each food group, and at least three of the food groups would have to include perishable items. In all, the rules would require stores to stock at least 168 items that USDA considers healthy.

“The proposal would also require that retailers have enough in stock of each item so that the foods would be continuously available.

“The rules could mean that fewer convenience stores qualify to be SNAP retailers.”

Ms. Jalonick also noted that, “The rules come as a key House Republican is pushing for drug tests for food stamp recipients and new cuts to the program.”

Keith Good