FarmPolicy

March 25, 2017

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.”

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

Food Stamp (SNAP) Issues

Categories: Farm Bill

AP writer Mary Clare Jalonick reported last week that, “A key House Republican is renewing a GOP push to allow drug tests for low-income food stamp recipients, a move to help states like Wisconsin, where Gov. Scott Walker has sued the federal government to permit screening.

“Alabama Rep. Robert Aderholt unveiled the measure on Thursday as Republicans look to find savings in the program. Aderholt says that states could choose whether they wanted to allow drug testing, so the legislation wouldn’t be a mandate. He says it’s common sense to create drug programs for those who need help.”

The AP article added that, “The food stamp program, now called the Supplemental Nutrition Assistance Program, or SNAP, served more than 46 million Americans and cost $74 billion last year. That’s twice the program’s 2008 cost.”  (See related Bloomberg chart).

Ms. Jalonick noted that, “Though he has not weighed in on Aderholt’s legislation, House Speaker Paul Ryan, R-Wis., has long said he wants to overhaul the food stamp program, along with other federal assistance for the poor. He has in the past proposed budgets that would convert federal food stamp dollars into block grants for the states, a move that would cut spending for the program.

“Aderholt says he hopes his legislation is a first step in a larger GOP effort to overhaul the food stamp program.”

Recall that nutrition programs account for the majority of Farm Bill expenditures.

Keith Good

Overview: ERS 2016 Farm Income Forecast

Yesterday, USDA’s Economic Research Service (ERS) updated its 2016 farm income forecast. The ERS farm income data estimates are released three times a year, including February, August, and November.

ERS explained that, “Farm sector profitability is forecast to decline for the third straight year. Net cash farm income is forecast at $90.9 billion, down about 2.5 percent from the 2015 forecast levels. Net farm income is forecast to be $54.8 billion in 2016, down 3 percent. If realized, 2016 net farm income would be the lowest since 2002 (in both real and nominal terms) and a drop of 56 percent from its recent high of $123.3 billion in 2013.”

Yesterday’s update indicated that, “Nearly all major animal specialties—including dairy, meat animals, and poultry/eggs— are forecast to have lower receipts, as are vegetables/melons and feed crops,” and added that, “Direct government farm program payments are projected to rise $3.3 billion (31.4 percent) to $13.9 billion in 2016 in response to the expected price environment.”

Meanwhile, “Farm asset values are forecast to decline by 1.6 percent in 2016, and farm debt is forecast to increase by 2.3 percent.”

ERS also noted that, “Most farm households earn all of their income from off-farm sources—median off-farm income is forecast to increase 4.1 percent to $75,354 in 2016.”

With respect to production expenses, in a broader analysis, ERS stated yesterday that, “In 2016, the drop in expenses [$3.8-billion (1 percent)]is expected to alleviate, but not completely offset, the drop in cash receipts, and ultimately lead to tighter margins.”

More specifically with respect to cash rents, the income report indicated that, “Net rent expense—the amount paid to rent land, adjusted for the landlord’s share of government payments and insurance indemnities and net of any expenses paid by the landlords—is forecast to increase by 2.9 percent to $21 billion in 2016. As in recent years, the majority of net rent expense is forecast to be paid to nonoperator landlords as opposed to landlords who are also operators.”

With respect to the projected 31.4% increase in farm program payments, ERS noted that, “The new Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs, introduced in the 2014 Farm Bill, are expected to account for almost two-thirds of direct payments to farm operations.”

In a separate look at some financial variables, ERS also noted yesterday that, “Farm real estate values have increased rapidly in recent years as high crop prices and low interest rates led to strong demand for farmland and buildings. With a third straight year of lower commodity prices and income forecast in 2016, farm real estate values are expected to decline modestly.”

Wall Street Journal writer Jesse Newman reported yesterday that, “Farm incomes are declining because prices for corn, soybeans and wheat have fallen sharply after three straight years of bumper U.S. crops and rising output elsewhere in the world. Overseas demand for some U.S. crops also has cooled, in part because of the strong dollar.”

Bloomberg writers Alan Bjerga and Jeff Wilson reported yesterday that, “The 2013 boom spurred farmers to boost crop and livestock production, triggering a cycle for surpluses in major agricultural commodities at the same time, David Anderson, a livestock economist at Texas A&M University in College Station, said in a telephone interview. Farmland values have dropped from all-time highs.”

Des Moines Register writer Christopher Doering reported yesterday that, “Still, Agriculture Secretary Tom Vilsack said the drop ‘is an improvement from the double digit declines seen in 2014 and 2015. It reflects a more competitive trade environment, softening projection for global demand and a continuation of the dip in agricultural commodity prices.’”

Meanwhile, the World Agricultural Outlook Board released its monthly World Agricultural Supply and Demand Estimates (WASDE) report yesterday, which stated that, “The projected range for the corn season-average farm price is narrowed 5 cents on both ends to $3.35 to $3.85 per bushel.”

Regarding soybean prices, the WASDE report stated that, “The 2015/16 season-average soybean price range projection is unchanged at $8.05 to $9.55 per bushel.”

In a separate Wall Street Journal article from yesterday, Jesse Newman explained that, “Grain prices fell to multiweek lows Tuesday after federal forecasters raised their outlook for U.S. stockpiles amid sluggish overseas demand.

Corn futures reached a more-than three-week low, while wheat dropped to the lowest level in more than two months.”

And recall that earlier this month, the Food and Agriculture Organization of the United Nations (FAO) indicated that, “The FAO Food Price Index fell in January, slipping 1.9 percent below its level in the last month of 2015, as prices of all the commodities it tracks fell, sugar in particular.”

home_graph_1

The FAO report pointed out that, “The main factors underlying the lingering decline in basic food commodity prices are the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the US dollar.

“This month, FAO also raised its forecast for worldwide cereal stocks in 2016, as a result of lowering its projected consumption and raising 2015 production prospects.”

With respect to some potential general implications of this outlook for the ag economy, see this update from earlier this month, “Agricultural Outlook: Concerns Persist for Farmers and Ag Lenders in 2016.”

Keith Good

Wednesday Update: Ag Economy; Policy; and, Regulations

Reminder: Only two FarmPolicy.com reports left.

Agricultural Economy

A news release yesterday from USDA’s National Agricultural Statistics Service (NASS) stated that, “For a second year in a row, U.S. growers are raising the bar on soybean acreage. Growers across the United States intend to plant an estimated record-high 84.6 million acres of soybeans in 2015, [related graph], according to the Prospective Plantings report released today by [NASS].”

Yesterday’s release added that, “NASS today also released the quarterly Grain Stocks report to provide estimates of on-farm and off-farm stocks as of March 1. Key findings in that report include:

“- Corn stocks totaled 7.74 billion bushels, up 11 percent from the same time last year. On-farm corn stocks were up 13 percent from a year ago, and off-farm stocks were up 7 percent.

“- Soybeans stored on farms totaled 1.33 billion bushels, up 34 percent from March 1, 2014. On-farm soybean stocks were up 60 percent from a year ago, while off-farm stocks were up 18 percent.”

University of Illinois agricultural economist Darrel Good indicated yesterday at the farmdoc daily blog (“USDA Stocks and Acreage Estimates Smaller than Expected for Soybeans and Larger than Expected for Corn”) that, “Compared to pre-report expectations, the March 1 soybean stocks and 2015 planting intentions estimates represent modestly friendly surprises. On the other hand, the stocks and planting intentions estimates represented modestly negative surprises for the corn market. Part of the negative corn price response to the estimates likely reflects inflated trend yield estimates for 2015 and perhaps an incorrect interpretation of the pace of feed and residual use during the first half of the marketing year. Attention will now turn to spring weather and planting progress.”

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Tuesday Morning Update: Policy; Ag Economy; Trade; Immigration; and, Regs

Note: FarmPolicy.com ends publication on Friday.

Policy Issues

An interview with House Ag Committee Ranking Member Collin Peterson (D., Minn.) aired on yesterday’s AgriTalk radio program with Mike Adams.

The interview, which focused on the Farm Bill, trade, regulations, and biotech issues, was recorded last week and was conducted before a group of Farm Bureau members from Missouri, Minnesota, Iowa, and Texas.

An unofficial FarmPolicy.com transcript of the AgriTalk interview is available here.

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AgriTalk Transcript: House Ag Committee Ranking Member Collin Peterson

House Ag Committee Ranking Member Collin Peterson (D., Minn.) was a guest on Monday’s AgriTalk radio program; the conversation with Mike Adams focused on the Farm Bill, trade, regulations, and biotech issues.

The interview that aired on Monday’s program was recorded last week and was conducted before a group of Farm Bureau members from Missouri, Minnesota, Iowa, and Texas.

This is an unofficial FarmPolicy.com transcript of that discussion.

Mr. Adams: Last week in Washington, D.C., had an opportunity to talk with Congressman Collin Peterson, Ranking Member of the House Ag Committee. We talked about a number of issues, starting off with how he feels it’s going with the new dairy program, and was he happy with the signup.

Rep. Peterson: Well, I think relatively. You know, I think we could have had a higher turnout, but—or signup—but coming off one of the best years in dairy for a long time, and I think people looking at what’s going to happen this year, kind of figuring, well, might be payments, there might not, so they decided, some people decided to forego it. I think you’re going to see a lot more people sign up, the way things are looking, for next year.

And that’s one good thing about the dairy program: you don’t have to lock in for five years, you can sign up every year. And given what’s been going on, I think I’m not as worried as I was about us not having the program in there to try to limit production, if it gets out of control. It looks like that’s not going to be necessary anyway, so that was a maybe a fight we didn’t need to have.

Mr. Adams: We’ve had a lot of talk here this afternoon about trade. You have expressed some concerns about trade deals, and making sure that we’re protected. When you see what’s happening with TPP and the ongoing debate over TPA, what are your thoughts?

Rep. Peterson: Well, you know, I opposed NAFTA vigorously, and we had it defeated for a while. We were told, at the time, that we were going to have twice as many ag exports in NAFTA as we had imports, and what I predicted ended up happening—we had twice as many imports as we had exports under NAFTA. We had a problem in sugar that we’ve somewhat resolved now, but we had to work through that.

So one of my big issues with the TPP is that we finally solved some of the problems that were caused by NAFTA, and if we don’t solve it in the TPP, we’ll never solve it. And one of the biggest problems is dairy. And it’s Canada dairy. A lot of people aren’t focused on this, and a lot of people don’t even know about it.

But in the NAFTA, we allowed the Canadians to keep their supply management system. And so if you dairy farm in Canada, you are making a lot of money, considerably more than you make in the United States. Also, when we try to sell dairy products to Canada, there’s a tariff, but when they sell to us there’s no tariff. So the result of that has been, because the Canadian system can’t grow, and they’re making all this money in these co-ops, we now have the Canadian co-ops in Quebec owning—they’re No. 1 and 3 in ownership of dairy processing in the United States. That’s the effect of what we did.

And it’s got to be fixed, or at least get on a path to be fixed, in this deal for me to support it. So that’s one of my main issues. Also it applied—poultry and eggs are also supply managed in Canada. I’m not as familiar with the economics of that as I am of dairy. But that’s the big issue.

Another big issue is getting access in the Japanese market for beef and rice. Now, Froman sat in my office and said we will get a pathway or get changes in the Canadian supply management system, and we will get access to the Canadian rice and beef market or we won’t have a deal. And I said, well, you’re saying to me that we’re not going to have a deal, because I am very skeptical that the Canadians will be able to agree to anything in the supply management area.

Mr. Adams: RFS. We’re waiting for that announcement from EPA. Are you getting any feeling one way or another where they’re going with it?

Rep. Peterson: I don’t know. I’ve had so many meetings with the White House, with the EPA. You know, we have some speculation, I guess, but it could be wildly off. I don’t know, it just looks to me like maybe they’re going to lock in for three years and around 14.4 billion, but I really don’t know. We’re going to have to wait and see what they come out with.

I hope they don’t screw up the ethanol industry. That would be…you know, we’ve finally been able to balance the marketplace in corn and get the pricing situation at a more reasonable level. But if they screw up the RFS and we lose ethanol in this country, we’ll be back to $2 corn, and that ain’t gonna work very good with the prices that we got, land and inputs right now.

Mr. Adams: Is this EPA out of control?

Rep. Peterson: Yes. [Laughter.]  [Applause.] Well, and, you know, the problem is they don’t understand a lot of these issues. They just don’t. This Waters of the U.S., I’ve had Gina McCarthy in my office three times. She thinks she’s helping you. I just want you to know. And she sincerely believes that, that she’s somehow or another clarifying the wetland determinations with what she’s doing.

And she doesn’t know enough about all the problems that we’ve been through to understand that what they’re doing is putting, actually, one more chink in the thing that we never will get this determined, you know, so I don’t know. It’s…I don’t know what you do to fix this, but it’s a big problem.

Mr. Adams: We were talking with the Chairman earlier. Is this Congress willing to step in and stop funding things like WOTUS if they keep pushing it?

Rep. Peterson: Yeah, I think so. I think the first thing we’re going to try, as I understand it, is to use the Congressional Review Act, which has never been used, but it was put in place some years ago, with my support, that says that the Congress can stop a rule within 60 days after the final rule is published. So the first thing that I think we’re going to try to do is we’re going to bring it up under the Congressional Review Act. I think we can pass…or stop it in the House. I don’t know about the Senate, but, you know, hopefully we can do it over there, too.

If we aren’t able to do that, then we’re going to try to deal with it in the Appropriations Committee, somehow or another. We have a bill, you know. We’re going to try any way we can. We’ve got to stop this. This is a bad idea.

We still haven’t—in Minnesota, I don’t know about the rest of the country—but we still haven’t resolved the blue dots and yellow dots from the ’85 Farm Bill. We’ve still got people out there that haven’t gotten determinations from that. And we’ve got four agencies deciding what a wetland is, and in Minnesota we’ve got a wetland law at the state level, so you’ve actually got five people, and you can’t ever figure out what the bottom line is. So, you know, we don’t need this. This is just going to be a big problem.

Mr. Adams: We have a major lawsuit in Iowa over runoff. Regardless of how this turns out on this particular one, is this the future, we’re looking at this type of litigation and threat of litigation moving forward for farming?

Rep. Peterson: I don’t know. I mean, we…the way we’ve set up some of the, you know, the NEPA law, National Environmental Policy Act, you know, these things that have been put in place back in the ‘70s, Endangered Species, these things need to be overhauled, because they’re basically set up to help people that want to sue and try to change the policy through lawsuits and so forth, and there just needs to be more balance put into it.

Frank Lucas and I last week passed the Science Advisory Act for the EPA, and there was another bill that Lamar Smith had on the secret science bill that we passed last Congress, too. You know, in the EPA, I mean, I had the local guy back home come to the Rotary Club and go after me because I was trying to get a balanced, scientific advisory committee at the EPA, that this was going to destroy the environment.

And I said, well, this advisory committee has no authority to do anything, they’re strictly advising the administrator; why wouldn’t you want to hear all points of view? Why would you want to limit it to a bunch of egghead professors, which is what they’ve done, and three-fourths of the people that are on this advisory committee are getting grants from the EPA to tell them what they already want to hear. And then you wonder why the thing is screwed up? You know, but anyway. [Applause.]

Mr. Adams: One more question and we’ll turn it over to the audience.

Rep. Peterson: I’m not running for President. [Laughter.]

Mr. Adams: Yeah. [Laughs.] Well, we cleared that up. Okay, all right. Biotech labeling. National standards or leave it up to the states?

Rep. Peterson: Well, we need a voluntary label, national. We need to preempt these states from setting their own, you know, own laws. The last thing we need is to have 50 different states have 50 different labels. That’s not workable. And we had a good hearing yesterday. We got some people criticized it.

But, you know, the reality is, you know, I’ve told some of these big companies that if Vermont is successful with this appeal to their lawsuit, and they are allowed to go ahead with their labeling law, I wish that these big companies would just not sell to Vermont, and let them understand what the effect of what they’re doing is.

The same thing in California. I don’t want them to fix the egg problem. If those people created that problem, and I hope they run out of eggs, and I hope eggs go to 20 bucks a dozen, you know, so people figure out what’s going on, you know, so… [Applause.]

Mr. Adams: Congressman Collin Peterson, Ranking Member of the House Agriculture Committee, speaking last week before a group of Farm Bureau members from Missouri, Minnesota, Iowa, and Texas.

[End of recording.]