Thursday, March 22, 2012
Keith Good Farm Policy: Senators Push for Tighter Farm Payment Limits
By Keith Good
Farm Bill Issues
Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “A bi-partisan group of senators is once again championing tighter farm payment limits as changes are made to commodity programs in the debate over the next farm bill.
“Sen. Charles Grassley, R-Iowa, and Sen. Tim Johnson, D-S.D., are spearheading reintroduction of the ‘Rural America Preservation Act,’ which is a retooled version of a comparable bill the senators introduced last year.”
Mr. Clayton explained that, “The legislation would have a $250,000 cap for married couples and maintains a hard cap on marketing-loan gains. Under a shallow-loss program, it would set a $100,000 cap for a couple under that program. It would also tighten language defining ‘actively engaged’ to collect payments. Grassley said there are too many people claiming they are actively engaged because they participate in a phone call or two each year about the farm.”
“The payment limit will not apply to indemnity payments for crop insurance.
“The bill is also sponsored by Sen. Tim Johnson, D-S.D., Sherrod Brown, D-Ohio, Kirsten Gillibrand, D-NY, Mike Enzi, R-Wyo., Tom Harkin, D-Iowa, and Ben Nelson, D-Neb,” the DTN update said.
The National Sustainable Agriculture Coalition (NSAC) issued a news item yesterday that stated in part that, “The Rural America Preservation Act of 2012 will restore integrity and fiscal responsibility to federal farm policy during this time of budgetary constraints, and NSAC will be advocating for its inclusion in the 2012 Farm Bill.”
A National Farmers Union (NFU) update from yesterday indicated that, “‘Farm bill programs are designed to help protect farmers in times of need, not to make farmers and ranchers rich,’ said NFU President Roger Johnson. ‘The Grassley-Johnson bill strengthens the definition of ‘actively engaged in farming’ by requiring substantial active management and/or personal labor on the farm operation.’”
Meanwhile, a news release yesterday from Senate Budget Committee Chairman Kent Conrad (D., N.D.) stated that, “With the U.S. House of Representatives scheduled to vote next week on a federal budget proposed by Wisconsin Republican Congressman Paul Ryan, Senator Kent Conrad today warned of its potential impact on vital programs in North Dakota and across the nation.
“‘The House Republican proposal digs deep into programs vital to both our nation and to North Dakota, including dramatic cuts to health care and farm programs,’ Senator Conrad said. ‘The cuts to agriculture programs will especially hurt North Dakota, and would pull the rug out from under thousands of hard working farm and ranch families.’”
Yesterday’s release added that, “The House Republican proposal also upends a bipartisan agreement on the amount of federal support for agriculture programs and will make it extremely difficult to craft a new Farm Bill this year. Leaders of the House and Senate agriculture committees had agreed to cut $23 billion in agriculture, conservation and nutrition program funding in the new Farm Bill to assist with deficit reduction. However, the House Republican proposal calls for about $180 billion in cuts to Farm Bill programs, including $31 billion to commodity and crop insurance programs, $133.5 billion to nutrition assistance programs, and about $16 billion to conservation programs.
“‘We had an agreement on what the savings would be out of agriculture and then Congressman Ryan comes along and throws that agreement out the window,’ Senator Conrad said. ‘In order to get this Farm Bill done now, it’s going to require House Republicans to tell Congressman Ryan that his plan goes way too far and that they’re not going to go for it.’”
In policy issues regarding the sugar program, a news release yesterday from Senator Richard Lugar (R., Ind.) stated that, “[Sen. Lugar] renewed his call for elimination of the Federal sugar program as part of the Farm Bill reauthorization.
“‘Government manipulation to increase U.S. sugar prices is driving jobs across the border and taxing American consumers. Continuing Big Sugar’s big handout would cost private sector jobs at a time when the Farm Bill should be enhancing job growth.’ Lugar said.”
The update noted that, “According to a recent study from Iowa State University, consumers could save up to $3.5 billion each year on a wide variety of food products. In addition, as many as 20,000 additional jobs could be created each year in the food sector, if the U.S. sugar support program were eliminated.
“Lugar has introduced the Free Sugar Act to eliminate federal government controls on sugar. The bill is co-sponsored by Senators Rand Paul (R-KY), John McCain (R-AZ), Tom Coburn (R-OK), Dan Coats (R-IN), Mike Lee (R-UT), and Bob Corker (R-TN). Lugar’s sugar repeal is also included in Lugar’s REFRESH Act proposal, which would cut federal government spending by $40 billion.”
On the other hand, a news update from the American Sugar Alliance (ASA) yesterday indicated that, “Thanks to the no-cost sugar policy passed by Congress in 2008, the widespread closures of sugar facilities that once plagued sugar farmers and sugar workers have largely subsided, the [ASA] reported to the Senate Agriculture Committee in written testimony.
“‘U.S. sugar policy has been a resounding success during the 2008 Farm Bill and deserves to be extended,’ ASA wrote. ‘It has achieved its goals of providing reliable supplies of high-quality sugar at reasonable prices, and a critical safety net for producers. It has done so without government expenditure. Furthermore, if extended, USDA predicts zero expenditures through 2022.’
“All told, the sugar industry ‘has shed 139,000 jobs in the past 19 years’ because of two decades of low, stagnant prices and rising input costs. But there have been fewer facility closures under the current Farm Bill than any of its predecessors.”
In other developments, a news release yesterday from the House Ag Committee stated that, “Today, Rep. Timothy V. Johnson, Chairman of the House Agriculture Committee’s Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, held a public hearing to identify duplicative federal rural development programs. There are at least 16 federal agencies which operate more than 88 programs relating to rural development in communities across the country. Subcommittee Members questioned the U.S. Department of Agriculture’s (USDA) Undersecretary for Rural Development and the Director of the Government Accountability Office (GAO) on the efforts being made to streamline duplicative programs and improve coordination among agencies that administer programs.”
An update posted yesterday at the National Sustainable Agriculture Coalition (NSAC) Blog noted that, “[Rep. Jim Costa (D., Calif.)] emphasized that program consolidation should occur with serious consideration to whether or not a program is duplicative. He referred to the President’s Consolidation Authority Act, which would combine six agencies, including the Department of Commerce and Small Business Association (SBA), as ‘better bang for the buck,’ but cautioned against blind consolidation. Rep. Costa cited from personal experience the Value-Added Producer Grant (VAPG) as an example of a program that has come under fire, but one that he believes provides an essential service.
“‘These grants help agricultural producers and cooperatives who are not always on a level playing field,’ he stated. Costa explained how VAPG helped the Rosa Brothers, based in his district, grow their family-owned dairy business.
“Finally, Costa urged USDA to submit the promised report defining ‘rural.’ He proposed his own definition, one where ‘rural’ was flexible enough to meet the demands of the community and included regions with urban centers in otherwise very rural communities.”
And, Sarah Gonzalez reported yesterday at Agri-Pulse Online that, “Rep. Cynthia Lummis (R-Wyo.) said she plans to propose an amendment to the agriculture appropriations bill that would reduce some funding for USDA data collection during today’s hearing hosted by the House Appropriations Subcommittee on Agriculture. Her efforts would address what she believes to be a redundant collection of data from the Farm Service Agency (FSA), the Risk Management Agency (RMA) and the National Agricultural Statistics Survey (NASS).
“‘I’m trying to consolidate the collection of agricultural statistics in way that’s efficient and meaningful,’ Lummis told NASS Administrator Cynthia Clark. ‘I don’t want there to be unintended consequences of what I’m trying to accomplish. I need your superior knowledge on this subject so I don’t mess this up.’”
Agricultural Economy: Early Planting
The AP reported yesterday that, “Mike Bergeron started sowing wheat on his farm in northwestern Minnesota on St. Patrick’s Day. One week earlier, he was towing two of his daughters on a sled behind his snowmobile.
“Bergeron and his business partner Jon Ross are among at least a few farmers in the Upper Midwest taking advantage of an unusually mild and dry winter to start planting spring wheat in mid-March. While there could still be a bad frost, they’re taking a calculated risk that the early start will let them reap a bigger crop this summer.”
Brandin Pattengill, a farmer from Southeast Missouri stated in a tweet yesterday (@bpattengill) that, “Corn up and growing around Poplar Bluff March 9th planting date. Scary!” And the tweet included this picture of the corn as well,pic.twitter.com/EZo81yv2.
University of Illinois Agricultural Economist Gary Schnitkey indicated recently at the farmdoc daily blog (“Impacts of Planting before Crop Insurance Earliest Planting Date”) that, “Planting may occur earlier than normal this year due to unseasonably warm, dry weather. Some of this planting may occur before the earliest planting date included in the COMBO policy, a crop insurance policy providing farm-level protection. Those acres planted before the earliest planting dates are not eligible for replant payments. Insurance guarantees will exist for crops planted before the earliest planting date given that good farming practices are followed.”
After analysis looking at Illinois counties, Dr. Schnitkey noted that, “By planting before the earliest planting date, acres are not eligible for replant payments. However, those acres still receive full coverage for losses due to reduced yields and/or revenues.”
A similar update was posted this week at Wisconsin Extension News (“Crop Insurance Implications of Planting Crops Early”); this update focused on Wisconsin state information.
And Julie Harker reported earlier this week at Brownfield that, “An ag weather expert says farmers need to remember that this warm weather spell doesn’t mean there won’t be a freeze. While it may be the first day of spring today – some farmers in the Corn Belt have already begun planting.
“Iowa State University Extension climatologist Elwynn Taylor, ‘The corn planting that’s going on means that some people just can’t resist it – but I haven’t seen anyone committed to plant their whole farm – at least if they’ve got an extensive farm,’ Taylor adds, ‘It isn’t too sure of a thing that we’re going to go from now right into summer without a damaging freeze.’”
In other news, the AP reported yesterday that, “Agriculture officials say losses from Texas’ historic drought are more than $2 billion more than previously thought.
“The Texas AgriLife Extension Service now estimates crop and livestock losses at $7.62 billion for 2011. The extension service’s preliminary estimate of $5.2 billion in August already topped the previous record of $4.1 billion in 2006.”
A news update this week from Purdue University stated that, “U.S. beef producers have started the early stages of herd expansion as beef supplies remain very short, says Purdue Extension agricultural economist Chris Hurt.
“Beef cow numbers have dropped by 9 percent, or 3 million head, since 2007. They dropped by 3 percent in 2011 alone, meaning a smaller calf crop in 2012 and lower slaughter numbers through 2014. But strong finished cattle prices and moderating feed costs have driven some producers to start the expansion.
“Producers have reduced their herds in recent years primarily because of escalating feed costs since 2007 and a drought in the southern Plains that dried up pastures and forages.”
The update noted that, “According to a January U.S. Department of Agriculture cattle report, the most recent available, beef heifer retention has increased 1 percent – a sign that producers are starting to expand. If U.S. crop yields return closer to normal during the 2012 crop year, Hurt said feed prices could come down even more, which would encourage further herd expansion.
“‘This is the first increase in heifer retention since feed prices began increasing,’ he said.”
DTN writer Todd Neeley reported yesterday (link requires subscription) that, “In siding with an Idaho property owner Wednesday, the U.S. Supreme Court may not have stopped the EPA from enforcing the Clean Water Act, but the ruling reaffirms that farmers and other landowners have a right to due process when the agency makes wetlands determinations.
“The court ruled the Environmental Protection Agency cannot threaten property owners with thousands of dollars in fines unless landowners have a chance to contest agency wetlands determinations.
“Landowners often learn about EPA wetland determinations by mail, with little chance to challenge those decisions.”
Mr. Neeley explained that, “Mike and Chantell Sackett of Priest Lake, Idaho, were told by EPA and the Ninth Circuit Court that they could not get direct court review of EPA’s claim that a two-thirds-of-an-acre parcel on their land is wetlands and that they must follow an EPA compliance order or face fines of up to $75,000 per day.
“Damien M. Schiff, an attorney with the Pacific Legal Foundation who argued the Sacketts’ case in January, said while there is no way to know how the ruling will affect other cases, it has given farmers and other property owners a tool to challenge EPA.
“‘It’s not clear what kind of retroactive impact the decision will have, but there’s no question that going forward the decision will be very important,’ he said.”
American Farm Bureau Federation President Bob Stallman noted yesterday that, “The American Farm Bureau Federation is pleased with the Supreme Court’s unanimous decision on behalf of property owners in Sackett v. EPA. AFBF filed amicus briefs in the case to educate the court about the legal and on-the-ground consequences of Environmental Protection Agency Clean Water Act policies.”
The Wall Street Journal editorial board indicated today that, “These are hard times for economic liberty, but the Supreme Court on Wednesday offered a modest reason to hope. In a 9-0 ruling, they concluded that the Environmental Protection Agency can’t terrorize Americans via regulation without allowing them a day in court.”
Also yesterday, a news release from Senator John Thune (R., S.D.) stated that, “[Senators Thune] and Jerry Moran (R-Kan.) today introduced common sense legislation, the Preserving America’s Family Farm Act, to prevent the Department of Labor (DOL) from enacting its controversial proposed restrictions on youth working on family farms.”
Recall that on Tuesday, AgriTalk radio program host Mike Adams and Secretary of Agriculture Tom Vilsack discussed the DOL youth farm labor issue in more some detail, an unofficial transcript of that portion of their conversation can be found here (at page four).
On a separate issue, Reuters writer Christopher Doering reported yesterday that, “The head of the U.S. regulator in charge of ridding commodity markets of fraud and manipulation implored lawmakers on Wednesday to think of consumers paying more for gasoline as Congress decides how much money to give his agency.
“Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, warned that without sufficient funding, his agency would struggle to employ new market-surveillance tools to target inappropriate activity.”
Also, an update posted yesterday at Senator Richard Durbin’s (D., Il.) YouTube page stated that, “While chairing a Senate Appropriations Subcommittee hearing, Durbin questioned Chairman of the US Commodity Futures Trading Commission, Gary Gensler, about the effects market speculators have on the price of gasoline.” To view this exchange, just click here.
A news update yesterday from the National Pork Producers Council noted that, “An ad hoc coalition of 40 food and agricultural organizations led by the National Pork Producers Council in a letter sent today to the Obama administration and Congress expressed concern that a proposed free trade agreement between the United States and the European Union might fall short of long-established U.S. objectives for trade pacts.
“‘Some non-agricultural members of the business community have suggested that a U.S.-EU FTA negotiation should not be pursued as a ‘single undertaking’ with success in one area dependent on success in all the others,’ said NPPC President R.C. Hunt, a pork producer from Wilson, N.C. ‘The agriculture community, however, believes that, rather than creating a high-standard 21st century trade agreement that is central to the administration’s trade policy efforts, approaches other than a single undertaking would assure the perpetuation of trade barriers to many U.S. products and sectors, including agriculture.’”
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