Keith Good Farm Policy: Senate Bill Gives Farmers 2 Insurance Options
Farm Bill: Senate Ag Committee Farm Bill Draft
DTN Ag Policy Editor Chris Clayton reported on Friday that, “Farmers will have to choose between a commodity program based on their individual farm or one that factors in countywide yield and income.
“Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., on Friday released a 900-page ‘chairman’s mark’ of the farm bill for the full committee to debate or amend. The committee is set to meet on Wednesday to consider the legislation.
“The Senate bill is expected to save $23 billion over 10 years compared to the baseline spending on the current farm and food programs. Stabenow’s bill would eliminate direct and cou
Mr. Clayton explained that, “The bill sticks with the ‘Agriculture Risk Coverage’ [ARC] program language crafted for the supercommittee last fall. Farmers would have to make a one-time choice between enrolling for individual coverage or cou
Friday’s DTN article pointed out that, “For a farmer signing up for individual coverage, the crop revenue will be compared to the Olympic five-year average individual yield for that commodity on the producer’s farm. In an Olympic average, the high and low years are excluded.
“Those averages would then be matched with either an Olympic five-year national marketing price for a commodity or the marketing-
“Once the payment rate is determined, the rate is multiplied by 60% of eligible acres for the commodity. For prevented planting, a 45% calculation will be factored.”
Mr. Clayton included an alternative explanation for countywide coverage. The DTN article stated: “Farmers who take the county option would have their crop revenue compared to the Olympic five-year county average yield. The eligible acres covered would rise to 75% for planted acres and remain at 45% for prevented acres.
“Under county coverage, all acres planted or prevented from being planted would be covered on a farm. However, for most farmers, the total acreage would not exceed total acres a farmer had for the years 2009 through the 2012 crop year. There would be an opportunity to add acres, such as when land comes out of the Conservation Reserve Program.”
Daniel Looker reported on Friday at Agriculture.com that, “The bill to reauthorize farm programs through 2017 keeps nonrecourse marketing loans. But for nearly all commodities, at the same level as in 2008. That’s $2.95 a bushel for wheat, $1.95 a bushel for corn, $6.50 a bushel for long grain and medium grain rice and $5 a bushel for soybeans. Rice farmers had been seeking a higher loan rate.”
Mr. Looker noted that, “The [ARC] program takes a bite out of potential payments several ways:
“First, the [ARC] guarantee offered by the farm bill would be 89% of that average benchmark revenue.
“The second limit is the payment rate. Each year’s crop revenue will be calculated by yields times the mid-season price for that commodity. Payments are made if that revenue falls below the guarantee, but they can’t be bigger than 10% of the benchmark revenue.
“The third limit is the amount of eligible acres of the covered commodity. If you sign up for county-wide coverage, payments are made on 75% of your acres. If you sign up for the individual level, payments are on 60% of your acres.”
Reuters writer Charles Abbott reported on Friday that, “The Senate bill would give cotton its own revenue plan as part of the federally subsidized crop insurance program, in a step to resolve a World Trade Organization ruling against U.S. cotton subsidies.”
Mr. Abbott pointed out that, “The Senate bill would cut conservation by 10 percent and crop subsidy outlays by 19 percent and shave public nutrition programs by $4 billion. Together, it would be the largest farm-bill cuts in a generation.”
The Associated Press reported on Friday that, “Most difficult will be narrowing the gap between the Democratic Senate and House Republicans taking aim at the food stamp program that comprises some 80 percent of the bill’s spending;” while Erik Wasson noted on Friday at The Hill’s On the Money Blog that, “The bill also includes cuts to food stamps favored by the GOP. It strengthens requirements on education and stops liquor stores and tobacco shops from accepting food stamps.”
Ron Nixon reported on Friday at the Caucus Blog (New York Times) that, “The full committee is to vote next week on the bill, which also combines several conservation programs, stops lottery and gambling winners from getting nutritional assistance and helps family farmers sell locally by increasing support for farmers’ markets.”
Farm Bill: Statements and Reactions on Senate Ag Committee Draft
Secretary of Agriculture Tom Vilsack indicated on Friday that, “I commend Chairwoman Stabenow and Ranking Member Roberts for working together in a bipartisan fashion to write a farm, food and jobs bill this year. Farmers, ranchers, and the men and women who live in rural communities deserve to know what the rules will be moving forward. With the current law expiring, we cannot wait any longer to reauthorize this essential law for rural America.”
The American Soybean Association noted that, “At this point, we are very pleased to see that the proposal includes a revenue-based risk management program that will complement the federal crop insurance program. We also applaud leadership’s decision not to cut crop insurance funding to achieve the Committee’s deficit reduction objectives.”
National Farmers Union (NFU) President Roger Johnson indicated that , “Overall, NFU is pleased with the legislation.”
The National Milk Producers Federation (NMPF) stated on Friday that, “The draft farm bill language released this afternoon by the Senate Agriculture Committee includes the key components of the Foundation for the Future dairy policy reform developed by [NMPF] nearly two years ago. The dairy legislation begins at Section 1401 (page 68) in Title 1 – Subtitle D and goes through Section 1481 (page 111)…‘The primary elements of NMPF’s comprehensive dairy reform package are included in this legislative draft, for which we are grateful,’ said Jerry Kozak.”
The National Association of Conservation Districts (NACD) indicated that, “[NACD] applauds leaders of the Senate Agriculture Committee for recognizing the significant value of conservation in supporting America’s long-term environmental and economic stability. In language released in the Title II framework today, Agriculture Committee leadership demonstrated strong bipartisan support for locally-led conservation efforts.”
The Oklahoma Association of Conservation Districts (OACD) stated that, “Leaders of the [OACD] today voiced their support for the Conservation Title contained in the proposed version of the Farm Bill released today by Senator Debbie Stabenow, Chair of the Senate Agriculture Committee. According to Joe Parker, President of OACD, the language in the proposed farm bill would continue providing farmers and ranchers the tools they need to practice good conservation on the land.”
Meanwhile, the Agricultural Leaders of Michigan “hailed the draft of the 2012 Farm Bill released today and praised Sen. Debbie Stabenow for her leadership in crafting the proposal, which protects programs essential to agriculture, family farms, rural development and jobs. ALM applauded Stabenow for working across the aisle and with the agriculture sector at every stage of the Farm Bill update.”
Vicki Escarra, President and CEO of Feeding America noted Friday that, “Feeding America is deeply disappointed that the Senate Agriculture Committee proposes to cut [SNAP] when the need for food assistance remains at unprecedented levels.”
Eric Munoz, Policy Advisor for Oxfam America noted Friday that, “This proposal takes important steps to cut waste and modernize America’s international food aid programs.”
Craig Cox, Senior Vice President for Agriculture and Natural Resources, Environmental Working Group (EWG) stated Friday that, “EWG is disappointed that the Committee failed to address the impact of fence-row to fence-row agricultural production, which is putting unprecedented pressure on our land, water and wildlife.”
Farm Bill: Chairman Lucas
After Friday’s House Agriculture Committee Farm Bill field hearing in Dodge City, Kansas, Ron Hays of the Radio Oklahoma Network sat down with Committee Chairman Frank Lucas (R., Okla.).
To listen to the full discussion between Chairman Lucas and Ron Hays, just click here (about seven minutes).
Farm Bill: Nutrition, and Other Policy Issues
Katharine Mieszowski reported in yesterday’s New York Times that, “The California WIC program, which provides staple foods like milk, dried beans and peanut butter to 1.48 million low-income Californians, is the largest in the country. But it is being hit hard by runaway food costs, driven by high prices at small stores, costing the program tens of millions of dollars a year. Under pressure from the United States Department of Agriculture, which oversees the program, California is scrambling to bring food costs down…[I]n recent years, California WIC has seen a flood of small stores seeking to join the program, and it has welcomed many of them. Those stores, some of which have been increasing their prices and aggressively marketing to WIC shoppers,can receive higher reimbursements from California WIC than bigger stores do.”
The article added that, “Earlier this month, under direction from the U.S.D.A., California WIC issued a ‘vendor bulletin’ announcing caps on how much stores with one to four cash registers can be reimbursed for WIC products.
“The new rules are set to take effect on May 25.
“The Agriculture Department said that if the plan had been in place in 2011, it would have saved the program an estimated $50 million.”
Meanwhile, on the issue of school breakfasts, which was discussed in a front page New York Times article on Friday (“With Classroom Breakfasts, a Concern That Some Children Eat Twice”), The New York Times editorial board indicated on Saturday that, “But as the City Council speaker, Christine Quinn, has rightly explained, depriving hungry children of good breakfasts because they might eat a candy bar or a bowl of cereal first makes no sense. A study from the Harvard School of Public Health in 2008 said that the nation’s School Breakfast Program ‘is highly effective’ in helping children learn in school, eat more nutritious diets and lead generally healthier lives.
“Other school districts get it. Administrators in Los Angeles County Schools are working to make healthy breakfasts available free to 70 percent of their students. Newark offers free breakfasts in the classroom to all of its 24,000 elementary school students and to all students in two of the city’s 16 high schools. Newark school administrators also have an intense outreach program at the start of each term to let parents know about the breakfasts. That all makes good, healthy sense.”
Agri-Pulse reported on Friday that, “Attaching conservation compliance to the crop insurance program would cause numerous unintended consequences, according to a group of 31 agricultural organizations in a letter sent today to Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich.” A copy of the letter can be viewed at this Agri-Pulse link.
A news release Thursday from Sen. Maria Cantwell (D., Wash.) stated that, “Today, [Sen. Cantwell] and Patty Murray (D-WA) expressed strong support of continued investment in key U.S. Department of Agriculture (USDA) export programs that help Washington state farmers and producers sell their products overseas.
“In a letter sent today to Senate Agriculture Committee Chairwoman Debbie Stabenow and Ranking Member Pat Roberts, Cantwell and Murray said these key export programs must be maintained at current levels in the next farm bill. USDA export promotion programs including the Market Access Program, Foreign Market Development Program, the Emerging Markets Program, and the Technical Assistance for Specialty Crops Program all help sell American products in foreign markets.”
Also on Thursday, a large number of organizations sent a letter to the Senate Agriculture Committee Leadership; the letter noted that, “We are writing to urge you to include two key programs that are part of a comprehensive package directed at supporting thenext generation of family farmers and ranchers, including socially disadvantaged, beginning and limited resource producers in the mark for the 2012 Farm Bill.” [Beginning Farmer and Rancher Development Program at $25 million in direct farm bill funding per year and 2501 Outreach and Technical Assistance for Socially Disadvantaged Farmers and Ranchers at $25 million in direct farm bill funding per year.]
A news release Friday from Sen. Sherrod Brown (D., Ohio) noted that, “[Sen. Brown] introduced legislation to expand access to broadband for Ohio’s rural communities. The Connecting Rural America Act will strengthen existing U.S. Department of Agriculture (USDA) programs that provide for the construction, improvement, and acquisition of facilities and equipment to provide broadband service to underserved, rural communities.”
Alex Frangos reported in today’s Wall Street Journal that, “In one of the largest transoceanic cattle drives in history, as many as 100,000 heifers from Uruguay, Australia and New Zealand will board multistory cattle-carrying ships this year—bound for China.
“The global roundup is a key part of China’s effort to satisfy growing domestic demand for milk and remake its dairies after a deadly tainted-milk scandal in 2008 devastated production and caused distrustful consumers to turn to imported milk.
“China’s dairy industry has a long way to go: Chinese cows are only half as productive as their American cousins. But just as it built up dominance in electronics, textile and toy manufacturing, the Chinese government has set its sights on becoming a dominant milk producer. It has set production goals, created tax and other financial incentives for big dairy producers and encouraged foreign investors to come in with capital and technology. And it is buying up high-producing foreign cows by the boatload.”
Vauhini Vara reported in Saturday’s Wall Street Journal that, “California’s agricultural Central Valley has thrived for decades on Americans’ seemingly endless appetites. Now, with U.S. market growth slowing, farmers are going after a different group of consumers: middle-class Chinese attracted to Western fare like milk and almonds.
“Consider Dave Bush, operating chief of California Dairies Inc. Mr. Bush recently discovered that the dairy cooperative, the nation’s second-largest, wasn’t exporting very much to China, whose population is now the world’s biggest consumer of milk powder. So he invested $35 million in machines here that process milk into powder to meet Chinese and other Asian requirements.”
Meanwhile, Stephanie Strom reported in today’s New York Times that, “Researchers have found that climate change is likely to have far greater influence on the volatility of corn prices over the next three decades than factors that recently have been blamed for price swings — like oil prices, trade policies and government biofuel mandates.
“The new study, published on Sunday in the journal Nature Climate Change, suggests that unless farmers develop more heat-tolerant corn varieties or gradually move corn production from the United States into Canada, frequent heat waves will cause sharp price spikes.”
And Yuriko Nagano reported in today’s International Herald Tribune that, “Toshiharu Ota, a rice farmer in Miyagi Prefecture, in northeastern Japan, survived the earthquake, tsunami and nuclear disaster last year. But his fields were devastated by the salt deposits left behind when the tsunami’s floodwaters receded. Now, to help farmers like Mr. Ota, a research team is working to develop a new salt-tolerant variety of rice.”
Regulatory Issues (Mf Global, Dept. of Labor)
Aaron Lucchetti reported in today’s Wall Street Journal that, “Customers of MF Global Holdings Ltd. are pushing regulators to get tougher on J.P. Morgan Chase & Co. about money that went missing from accounts just before the firm’s collapse.
“The move comes as a bankruptcy trustee representing brokerage customers of MF Global has said he is conducting an investigation of J.P. Morgan and had entered ‘substantive discussions regarding the resolution of claims’ against the Wall Street firm.
“In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to ‘return hundreds of millions of dollars in MF Global customer funds transferred’ to J.P. Morgan in late October.”
And Kansas GOP Senator Jerry Moran noted in an opinion column late last week at Politico that, “The recent influx of federal regulations is stifling Americans’ fundamental freedoms. Washington has instituted guidelines for everything from how to correctly change a light bulb to how loud TV commercials can be.
“Out of the 4,200 regulations now in the pipeline, there is no better example of government overreach into the daily lives of Americans than the Labor Department’s proposed rule to regulate young people working on farms and ranches.”
Sen. Moran stated that, “The Labor Department recently announced it would again propose the parental exemption portion of the rule, which was welcome news. But this doesn’t go far enough. The entire rule must be stopped.
“Sen. John Thune (R-S.D.) and I have introduced legislation to prevent the Labor Department from implementing its controversial proposed restrictions on youth working on family farms. Our bill, which has 42 co-sponsors, not only preserves a cherished way of life, but it will prevent a dangerous precedent from being set as to the amount of control our government can have over your life.”
The ICE Dec and Mar contracts gave back 160 and 87 points on the week, respectively, as last week’s inversion between the two contracts gave way to partial carry. Well,