Tuesday, April 24, 2012
Keith Good Farm Policy: Rice Growers at Odds With Senate Bill
By Keith Good
Farm Bill: Some Groups Seek Delay in Senate Markup
David Rogers reported last night at Politico that, “A draft Senate farm bill would save $26.4 billion over the next 10 years, but it faces resistance from Southern commodity interests who are pressing for a delay in Wednesday’s markup before the Senate Agriculture Committee.
“The new cost estimates, released late Monday by the Congressional Budget Office, offer the most complete assessment yet of the 900-page measure that seeks to end the current system of direct cash payments to growers and reinvest more in new forms of crop insurance.”
Mr. Rogers explained that, “The new approach is most popular in the Midwest Corn Belt, and Southern cotton and peanuts have been promised concessions in the process. But there is still Southern regional sympathy with rice growers, who are put at a decided disadvantage and who had been banking on some relief through a more traditional system of target prices and supports.
“Because of its high capital costs, rice has relied most heavily of the direct cash subsidies and will lose as much as $3 billion from the proposed change in commodity payments. At the same time, rice has been reluctant to jump into crop insurance, since the crop is grown in flooded paddies not vulnerable to drought.
“Indeed, an earlier draft farm bill embraced by top House and Senate lawmakers last November had included targeted prices — to help rice initially. But when other crops jumped in with demands of their own, lawmakers became concerned about distortions disrupting markets and crop growing decisions. The new draft rolled out last Friday by the Senate Agriculture Committee leadership included no target price language.”
The Politico article noted that, “If ever there were an example of elections having consequences, this is one. Prior to 2010, when she lost her seat, Sen. Blanche Lincoln (D-Ark.) chaired the same Senate Agriculture panel and as a rice farmer’s daughter, she would never have permitted the current situation.
“Both the White House and House GOP leadership want still more savings from farm programs, and one battleground will be the level of premium subsidies provided for crop insurance.”
Meanwhile, a news release yesterday from the American Soybean Association (ASA) indicated that, “In response to the mark of the 2012 Farm Bill released Friday by the Chair and Ranking Member of the Senate Committee on Agriculture, Nutrition and Forestry, the [ASA] voices its overall support of the draft language, and calls on the Committee to approve the mark quickly in the interest of passing the Farm Bill as soon as possible.”
The release added that, “ASA believes the additional risk management provided under ARC [Agriculture Risk Coverage] would complement revenue protection provided through the crop insurance program, without influencing planting decisions and distorting production. The combination of these programs would enable and encourage producers to continue to seek to maximize total returns from the market rather than from the prospect of receiving government payments. Allowing farmers full planting flexibility to follow market signals has been the most important farm policy for the past 16 years.”
National Corn Growers Association (NCGA) President Gary Niemeyer noted in part from a statement yesterday that, “NCGA believes the Committee print is consistent with what our members have been advocating … . While we understand this is the first step in a very long process, we applaud the Senate Ag Committee for holding a markup and hope the House Agriculture Committee will swiftly follow suit.”
A news release yesterday from the American Farm Bureau Federation (AFBF) indicated that, “Numerous provisions of the Senate Agriculture Committee’s draft farm bill follow the American Farm Bureau Federation’s core principles for ‘rational, acceptable farm policy,’ but there is room for adjustments to improve the legislation.
“AFBF President Bob Stallman delivered that message to Senate Agriculture Committee leaders in a letter today following a meeting of the organization’s board of directors. In the letter, AFBF urged the committee to approve the draft ‘as a vehicle to move the farm bill to the Senate floor in a timely manner.’ While the letter said ‘the importance of completing a farm bill cannot be overstated,’ it also said that AFBF would seek opportunities ‘to make adjustments and refinements to improve the legislation.’”
The release noted that, “The letter specifically outlined AFBF’s support for several points included in the Senate farm bill, including: the decision to ‘stand firm on utilizing the figure of $23 billion in savings suggested to the Super Committee last fall’; the fact that the Senate bill protects and strengthens the federal crop insurance program and does not reduce funding for the program; that programs are not based on cost of production; and that it includes ‘a commodity title that attempts to encourage producers to follow market signals rather than make planting decisions in anticipation of government payments.’
“AFBF’s letter stated that while the draft legislation addresses many of its policy priorities, the organization continues to support a single program option for the commodity title that is extended to all crops and it has concerns about the need for improved ‘equity across all commodities.’”
Farm Bill: Additional Reaction to Senate Draft Bill
Also yesterday, the American Farmland Trust (AFT) noted in a news release that, “[AFT] welcomed the 2012 farm bill draft unveiled late last week by the Senate Agriculture Committee. AFT President Jon Scholl commended Michigan Senator Debbie Stabenow, Chairwoman of the Committee on Agriculture, Nutrition and Forestry, and Senator Pat Roberts of Kansas, the committee’s Ranking Minority Member, for their efforts to move the farm bill forward.
“‘It’s great to see the Chair and Ranking Member working together on a bipartisan basis to advance this farm bill process,’ said Scholl. ‘Crafting a viable and effective farm bill will only get harder if Congress kicks the can down the road and the budget noose tightens further.’ AFT is one of more than 60 groups that urged Congress earlier this year to produce a timely farm bill.
“‘We cannot afford to delay this crucial legislation when our farmers and ranchers face continued pressure to produce food, fiber and fuel while also maintaining healthy soils, protecting water quality and providing wildlife habitat,’ Scholl continued.”
A news release yesterday from the Coalition to Promote U.S. Agricultural Exports stated that, “In a letter dated April 19, 2012, 127 members of the Coalition to Promote U.S. Agricultural Exports urged Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Ranking Minority Member Pat Roberts (R-KS) to maintain funding for U.S. Department of Agriculture (USDA) export programs when the Committee on Agriculture, Nutrition, and Forestry considers reauthorization of a new Farm Bill. The coalition members called specifically for funding the Market Access Program (MAP) at no less than $200 million annually and the Foreign Market Development (FMD) program at no less than $34.5 million, the same funding levels in the current Farm Bill.”
The World Food Program USA noted yesterday that, “The Farm Bill, developed by the bipartisan leadership of the Senate Agriculture Committee, helps alleviate global hunger. It is a testament to the longstanding dedication of Chairwoman Stabenow and Ranking Member Roberts who have been steadfast in their commitment to addressing hunger. We strongly support the global hunger provisions in the bill.”
And the National Wildlife Federation indicated yesterday that, “At this point in the process, however, vital improvements are needed before the farm bill can meet the critical test of whether wildlife will be better off if it is enacted.”
A National Journal Daily Email, the Need-To-Now Memo, pointed out yesterday that, “The massive Farm Bill, set for markup in a Senate committee this week, is already drawing criticism. The group Taxpayers for Common Sense, complains that ‘instead of offering up significant savings when farm incomes are at record levels,’ the Agriculture committee doubled down on bloated farm programs. The measure is billed as contributing $23 billion toward deficit reduction. But even if true, the group says this is less than the $33 billion the president included in his budget and the $30 billion House Republicans agreed to in their budget. The last Farm Bill was passed in 2008 and expires this year.”
Last Week’s House Ag Committee Business Meeting on Budget Reconciliation
Recall that last week, the House Agriculture Committee held a Business Meeting to consider a proposal to satisfy the Committee’s reconciliation instructions required by H. Con. Res. 112. A FarmPolicy.com summary of that meeting is available here, while a Congressional Budget Office summary of the action, which was released yesterday, can be found here.
On this issue, The New York Times editorial board indicated today that, “For months, House Republicans have been trying to wriggle out of the agreement they made in August that will force deep cuts in military spending. Now we know how they propose to do it: They will take tens of billions out of programs for the poorest Americans, particularly food stamps, along with health care for the middle class.
“The House Agriculture Committee voted on Wednesday to cut $33 billion over the next decade out of food stamps. That would immediately end benefits for two million people, and reduce benefits for the remaining 44 million people who use the program. A family of four would find their benefits lowered by $57 a month beginning in September, according to an analysis by the Center on Budget and Policy Priorities. The committee trimmed job training for food-stamp recipients by 72 percent; 280,000 students would no longer be eligible for free meals.”
The Times added that, “The Senate and the White House have said they would reject all the proposed cuts. Earlier this month, the White House budget director told the House that the president would not sign any appropriations bills until it agrees to abide by the spending levels in the budget deal.
“The extremists who run the House budget process seem willing to force a shutdown later this year to get their way, but they may find themselves isolated. On Thursday, Senate Republican leaders said they would abide by the spending targets in the budget deal. There is still time for them to persuade the House to come to its senses.”
Meanwhile, Audrey Rowe, the USDA’s Food and Nutrition Service Administrator, indicated in an update yesterday at the USDA Blog that, “In the three months since Agriculture Secretary Tom Vilsack announced USDA’s ‘Blueprint for Stronger Service,’ the Food and Nutrition Service has continued to develop cost-saving and efficient strategies that will save taxpayers money and streamline operations.”
In a broader look at federal budget issues, John Harwood pointed out in yesterday’s New York Times that, “But beneath the campaign noise, some elected officials and policy experts see improving odds for 2012 to end up yielding much more, including progress toward a deal on tax and budget issues that have confounded Washington’s divided government.”
Mr. Harwood noted that, “But two looming events — an automatic $1.2 trillion budget ‘sequester’ hitting defense and domestic spending, and the expiration of all of President George W. Bush’s tax cuts — will create pressure for the two parties to strike a compromise.
“‘The probability of a deal strikes me as pretty high, since no agreement would be such a disaster,’ said Peter R. Orszag, President Obama’s former budget director.”
The Times piece stated that, “Steve Bell, a longtime Senate Republican budget aide now at the Bipartisan Policy Center, said the White House and Congress ‘will not allow the sequester to occur and all the Bush tax cuts to expire. They’re going to be looking at each other on Nov. 20 and saying, ‘Well, what do you want to do?’”
“The potential breakthrough in question is the sort that the Simpson-Bowles commission proposed in 2010: roughly $4 trillion in deficit reduction over 10 years in a compromise requiring Republicans to accept tax increases and Democrats big changes in Medicare and other entitlement programs,” Mr. Harwood said.
IFPRI (International Food Policy Research Institute) Report
Agri-Pulse reported yesterday that, “The International Food Policy Research Institute (IFPRI) launched the Global Food Policy Report, the first in a new annual series. The Report provides a comprehensive overview of major policy changes at the global, regional, national, and local levels in the last year, as well as their significance for food and nutrition security.
“‘It is based on research, it is evidence-based, however; it is non-technical,’ said IFPRI Director General Shenggen Fan. ‘So the non-technical person such as politicians, policymakers, practitioners or anybody else who is interested in food security can use it as a comprehensive handbook.’”
Cheri Zagurski and Anthony Greder reported yesterday at DTN (link requires subscription) that, “Soybeans made their first appearance of the season on USDA’s weekly Crop Progress report Monday, with 6% of the nation’s crop in the ground as of Sunday, April 22. That compares to 2% last year at this time and a five-year average of 2%.
“In addition, corn emergence was reported for the first time this season, at 9% emerged, compared to 2% last year and a 2% five-year average. Corn planting continues to chug along, jumping 11 percentage points since last Sunday to 28% planted. That compares to 8% last year at this time and a 15% five-year average.”
Julia Preston reported in yesterday’s New York Times that, “When Georgia passed a law last year authorizing the local police to question and detain illegal immigrants, Darvin Eason felt the impact immediately on his farms here in south Georgia.
“At the peak of the harvest, many of the Mexican workers he had relied on to pick his blackberries were scared away from the state. Ripe berries fell to the ground uncollected, and Mr. Eason lost $20,000 — even though the sections of the law that struck fear in the immigrants had been suspended by federal courts.
“So Mr. Eason is one of many people across the country who will be watching closely when the Supreme Court hears arguments on Wednesday on the bitterly disputed immigration
The Times article added that, “Mississippi considered an enforcement bill this year, but the State Senate allowed it to die after a surge of opposition from business and agriculture interests. Alabama saw months of turmoil after the state adopted an even tougher law than Arizona’s last year. Last week, lawmakers there revised the legislation to mitigate its impact on businesses and schools.
“In Georgia, after an outcry from farmers, the legislature ended its session without any new immigration measures for the first time in six years.”
“Georgia farmers are cutting back on their spring planting. Some small farmers have warned that they could go out of business if the labor supply continues to decline. With agriculture the biggest industry in the state, the Georgia Agribusiness Council has been vocal in its complaints to Gov. Nathan Deal, a Republican,” the Times article said.
Shahien Nasiripour and Tom Braithwaite reported on Sunday at The Financial Times Online that, “US regulators are exploring ways to give large foreign banks and overseas subsidiaries of US lenders a reprieve from stringent new derivatives rules, potentially alleviating one of the biggest concerns facing global financial institutions.
“The US Commodity Futures Trading Commission is looking to grant a temporary exemption to swap dealers that may fall under the jurisdiction of foreign financial authorities from complying with a host of post-financial crisis regulations governing derivatives transactions, people familiar with the matter said.”
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