Wednesday, April 25, 2012
Keith Good Farm Policy: Senate Postpones Action on Farm Bill
By Keith Good
Farm Bill: Senate Ag Committee Mark-up Postponed
David Rogers reported last night at Politico that, “After a steady drumbeat of Southern grumbling, the Senate Agriculture Committee abruptly announced Tuesday night that it was postponing action on its new draft farm bill, a 900-page giant promising $26.4 billion in savings over the next decade, largely by ending the current system of direct cash payments and reinvesting in new forms of crop insurance.”
A statement from Committee Chairwoman Debbie Stabenow (D., Mich.) noted that, “‘The Agriculture Committee has made significant progress and have bipartisan agreement on the bulk of the Farm Bill. We are committed to continuing to work together in a bipartisan way as we come to agreement on a few outstanding issues. This is a bill that impacts 16 million jobs and a huge sector of America’s economy, and it is important that we move prudently to create the best possible product.’
“A new date and time for the rescheduled hearing will be announced shortly.”
And Ranking Member Pat Roberts (R., Kan.) noted yesterday that, “I support Chairwoman Stabenow’s decision to postpone the Farm Bill mark-up scheduled for tomorrow morning. Significant bipartisan progress has been made on many sections of the bill. Just a few issues remain to be worked out. I have given the Chairwoman my commitment to getting this job done. I’m confident the Committee can move forward in a bipartisan manner in the near future.”
In his Politico article, Mr. Rogers indicated that, “Among Southern crops, cotton is promised its own income protection program, costing $3.1 billion, but producers of peanuts and rice remain unhappy with the proposed tradeoffs. Dozens of Southern commodity groups weighed in this week with a letter asking for the postponement.
“The sudden change in signals from Stabenow testifies to the power still of these commodity lobbies but the Michigan Democrat has her own vested interest in finding a solution.
“Senate Majority Leader Harry Reid (D-Nev.) has signaled that he is prepared to devote Senate floor time to the bill once it is out of committee, but Stabenow would be in a much stronger position if she can first hold the farm coalition together.”
Mr. Rogers noted that, “‘They are not going to satisfy peanuts and rice. … It’s just not a safety net,’ Sen. Saxby Chambliss (R-Ga.) told POLITICO. ‘A producer who lost all his crop will get a minimal payment, while the folks in the Midwest are going to be getting a significant return on their investment.’
“‘To get my support,’ said Sen. John Boozman (R-Ark.), ‘there’s going to have to be some compromise.’”
The Politico article pointed out that, “Former Texas Rep. Larry Combest, the former House Agriculture Committee chairman and longtime champion of cotton, helped organize the commodity letter, for example. And Chambliss is no small player, having once chaired the Senate panel himself.”
Yesterday’s article also stated that, “Because of its high capital costs, for example, rice 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 Stabenow and Roberts included no target price language.”
Vicki Needham, Erik Wasson, Peter Schroeder and Bernie Becker reported yesterday at The Hill’s On the Money Blog that, “At this point, there is no clear path for the farm bill to become law before the current 2008 bill expires in September.
“Sen. Chuck Grassley (R-Iowa) said Congress will need to pass a farm bill by August, or a new bill will probably be delayed until next year.”
The Hill writers added that, “House Speaker John Boehner (R-Ohio) has not committed to giving the bill, which is controversial with fiscally conservative freshmen, floor time.
“One source said Senate Majority Leader Harry Reid (D-Nev.) is reluctant to spend Senate floor time on a bill that would stall out in the House.”
Also yesterday, the Government Accountability Office (GAO) released a report titled, “Issues to Consider for Reauthorization.” According to a summary of the GAO report: “[GAO] and the U.S. Department of Agriculture’s Office of Inspector General (OIG) seek to enhance the efficiency, effectiveness, and accountability of the federal government. As Congress debates ways to address the federal government’s long-term fiscal imbalance, it becomes even more critical that we help with this challenge by identifying opportunities for cost-savings and for improving programs to ensure that every dollar counts.
“In this spirit and in anticipation of upcoming deliberations over the 2012 Farm Bill, we are issuing companion reports today. They present the following set of principles significant to the integrity, efficiency, and effectiveness of programs in the farm bill.”
Farm Bill: Additional Reaction to Senate Draft
Daniel Looker reported yesterday at Agriculture.com that, “Senator Chuck Grassley (R-IA) said Tuesday that he and possibly two other Republicans on the Senate Agriculture Committee will introduce an amendment to provide $800 million in funding over 10 years for an energy title of the new farm bill when the Senate Agriculture Committee meets to consider the bill tomorrow.
“The farm bill draft released by Committee Chairwoman Debbie Stabenow (D-MI) last Friday has an energy title, but most of it does not have mandatory funding. That means that energy programs are authorized but funding in the current fiscal environment would be doubtful.”
Mr. Looker added that, “Grassley said that Senators Kent Conrad (D-ND) and Richard Lugar (R-IN) are likely co-sponsors of his amendment. It would be financed by taking funds from a program for cotton gins, he said.
“Grassley also said he’s pleased that the Senate bill has a payment limit on some commodity programs, set at $50,000 for individuals and $100,000 for couples. He’s still working to tighten up rules on how USDA defines those actively engaged in farming and eligible for payments.
“He said that he may also offer an amendment to ban packer ownership of livestock.”
Also with respect to energy, an update posted earlier this week at the Domestic Fuel Blog indicated that, “A coalition of trade groups and organizations representing renewable energy, energy efficiency, farm and environmental interests is disappointed in a 2012 Farm Bill draft out of the Senate Agriculture Committee that they say provides ‘no real funding for energy programs.’
“‘The Committee draft bill moves the process forward, thankfully, and we support getting a bill done this year,’ said Ag Energy Coalition Co-director Lloyd Ritter in a statement. ‘However, the core energy title programs that are necessary to move the country toward greater energy security, increase jobs, revitalize manufacturing, and improve environmental quality require mandatory funding. REAP, BCAP, Biorefinery Assistance and BioPreferred, among others, have produced results across the country, especially in rural America where jobs are dwindling.’”
Meanwhile, a news release yesterday from the National Farmers Union (NFU) stated that, “[NFU] President Roger Johnson sent a letter to U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairwoman Debbie Stabenow, D-Mich., and Ranking Member Pat Roberts, R-Kan., today, praising their work on the 2012 Farm Bill while also urging them to strengthen certain programs within the legislation.”
Agri-Pulse reported yesterday that, “The Union of Concerned Scientists (UCS) released its farm policy report today, ‘Ensuring the Harvest: Crop Insurance and Credit for a Healthy Farm and Food Future,’ which recommends USDA offer a whole-farm revenue insurance program for diversified, small and organic farms.
“‘The USDA offers this crop insurance and credit to large farms growing corn, soy and other commodity crops, and to some large fruit and vegetable farms, such as tomatoes in California, but the agency shuts out ‘healthy-food’ farms—small- to medium-size farms growing fruits and vegetables or raising livestock sustainably,’ according to UCS.”
The Agri-Pulse article added that, “Rep. Chellie Pingree, D-Maine, said during a conference call with UCS today that the Senate version of the 2012 Farm Bill seeks to expand crop insurance to include whole-farm revenue insurance and eliminates planting restrictions with the repeal of direct payments. However, she said ‘it falls short so far when it comes to improving credit and lending programs for small farmers.’”
A news release yesterday from the Specialty Crop Farm Bill Alliance (SCFBA) stated that, “The SCFBA is pleased to see the proposed Farm Bill continues the important investments made in specialty crop programs through the 2008 Farm Bill. The Alliance urges the Committee to complete its work on the bill and pass this important legislation this week.
“The 900-page Farm Bill proposal includes support for key specialty crop industry priorities such as research, pest and disease mitigation, trade, nutrition, and other programs that enhance the ability of specialty crop producers to be competitive and meet the needs of American consumers. The SCFBA believes the proposal put forth by the Senate Agriculture Committee is a critical step in maintaining the momentum begun in 2008.”
Also yesterday, the Campaign for Renewed Rural Development sent a letter to Senate Agriculture Committee Leadership, which stated in part that, “While the draft legislation addresses many of our policy priorities which will improve the programs for rural stakeholders, it is our sincere hope there will be additional opportunities to address our concern regarding the lack of mandatory funding for rural development programs, which leverages local funding to create rural jobs.”
Farm Bill: Dairy Issues
A news release yesterday from the National Milk Producers Federation (NMPF) stated that, “A new analysis of the dairy policy changes being considered by the House and Senate Agriculture Committees finds that the reforms will have a minimal effect on milk production and dairy product exports, the [NMPF] said today.
“At the same time, two other national farm groups, the American Farm Bureau Federation (AFBF) and the National Council of Farmer Cooperatives (NCFC), have endorsed the changes in dairy policy that NMPF is pushing for on Capitol Hill. The groups sent a letter today to the Senate in support of the dairy reforms.”
Meanwhile, the International Dairy Foods Association (IDFA) noted in a release from yesterday that, “Dairy industry leaders today called for the Senate Agriculture Committee to remove a new dairy program that is designed to control milk prices from the draft 2012 Farm Bill and instead focus on providing proven safety-net programs, such as revenue insurance, typically used for other commodities. Miriam Erickson Brown, president and CEO of Anderson Erickson Dairy; Jon Davis, president and CEO of Davisco Foods International, Inc.; and David Ahlem, vice president of dairy procurement and policy for Hilmar Cheese Company, Inc., held a press briefing before heading to Capitol Hill for scheduled meetings with committee members.”
Crop Insurance: Additional News
University of Illinois Agricultural Economist Gary Schnitkey noted yesterday at the farmdoc daily Blog (“Payments from a 70% Yield Insurance”) that, “In an article entitled Giving it Away Free (see here), the Environmental Working Group proposes that Federal crop insurance programs be replaced with a yield insurance at a 70% coverage level. The 70% yield insurance would have no cost to farmers. In this blog post, size and timing of payments of 70% yield insurances are examined for corn and soybeans in select Illinois counties. Payments from a 70% yield policy would generally be low. As would be expected, areas with higher yield variability would receive higher payments. Payouts from the policy would occur primarily in drought years like 1988, not necessarily corresponding to low revenue years.”
After a brief analysis, Dr. Schnitkey indicated that, “Yield insurances with 70% coverage level would make very small payments on most Illinois farms. Payments from this yield insurance would not necessarily match years of low income.”
And a news release yesterday from National Crop Insurance Services (NCIS) stated that, “[NCIS] today released a new educational video on crop insurance – what it is, how it works and why it has become the risk management tool of choice for America’s farmers. The video, titled ‘Crop Insurance 101,’ is the first in a series that will be released over the next few months.” Click here to view the NCIS video.
A news release yesterday from the House Appropriations Committee stated that, “The House Appropriations Committee today released the proposed funding allocations – also known as the 302(b)s – for the 12 Appropriations bills for fiscal year 2013. The allocations represent the top-line funding level for each Appropriations bill, and are consistent with the overall top-line discretionary spending level of $1.028 trillion approved in the House Budget Resolution last month. The allocations will be voted on in committee tomorrow.”
The release noted that the Agriculture Subcommittee allocation is $19.405 billion.
Recall that last week an update posted at the National Sustainable Agriculture Coalition blog stated that, “On Thursday, April 19, the Senate Appropriations Committee approved discretionary spending allocations for the coming 2013 fiscal year. The size of the total spending pie was completely consistent with the levels set by law in the Budget Control Act of 2013.
“The agricultural appropriations slice of the pie was set at $23.357 billion, nearly the same as the fiscal year 2012 level. About $2.5 billion of that total will likely go to the Food and Drug Administration, with most of the balance to USDA.”
Also note that, Rosalind S. Helderman reported earlier this month at the 2Chambers Blog (Washington Post) that, “President Obama has threatened to veto any appropriations bill adopted by Congress that would cap agency spending at lower levels than agreed to in the bipartisan deal to raise the nation’s debt limit last summer.”
BSE (Bovine Spongiform Encephalopathy) Issue
Diana Marcum reported today at the Los Angeles Times Online that, “The first confirmed case of mad cow disease in the U.S. since 2006 surfaced in California’s Central Valley on Tuesday, triggering concerns about food safety. But health officials stressed that the diseased animal never entered the human food chain and that U.S. beef and dairy products are safe.
“The diseased cow ‘was never presented for slaughter for human consumption, so at no time presented a risk to the food supply or human health,’ John Clifford, the U.S. Department of Agriculture’s chief veterinarian, said in a statement.”
The article added that, “Clifford said the cow died of an atypical strain of the disease. Officials believe it is a rare spontaneous case and not linked to contaminated food.”
Stephanie Strom reported in today’s New York Times that, “Dr. Clifford noted that milk did not transmit bovine spongiform encephalopathy, the scientific name for mad cow disease. He expressed confidence in the health of the nation’s cattle and the safety of beef during a press briefing in Washington.
“The animal had been picked up from the farm and taken to a rendering plant, which noticed some of the signs of B.S.E., such as unsteadiness and aggression, and notified U.S.D.A. inspectors, Dr. Clifford said in a brief interview.”
The Times noted that, “It was the fourth reported case of mad cow disease, a degenerative disease that affects the brains and spinal cords of cattle, in the United States. Humans can contract the disease by eating meat from an infected cow.
“Only one case of mad cow disease in the United States was of the type derived from feed. That case set off a panic in 2003 when a Canadian-born cow in Washington state tested positive.”
Bill Tomson, Ian Berry, and Marshall Eckblad reported in today’s Wall Street Journal that, “Mad-cow disease is most commonly spread in herds through contaminated feed, but USDA Chief Veterinarian John Clifford said that wasn’t the case with this cow. He called this a rare, ‘atypical’ type of mad-cow disease. Agency officials wouldn’t say how they believed the cow got the disease.
“Edward Mills, associate professor of dairy and animal science at Pennsylvania State University, said mad-cow experts believe some cases can appear spontaneously, as opposed to occurring after a cow ingests remains of a sick cow used in cattle feed. (The practice of using cow byproducts in cattle feed is now banned.)”
Bloomberg writer Elizabeth Campbell reported yesterday that, “Cattle tumbled the most in 11 months in Chicago, and feeder-cattle prices fell by the exchange limit as a case of mad-cow disease was reported in the U.S. Corn, used in livestock feed, also slumped.”
Reaction and Statements regarding the BSE issue included:
Chairwoman Stabenow and Ranking Member Roberts– “‘In the U.S., strong, internationally recognized safeguards are in place precisely so rare cases like this can be detected,’ said Stabenow. ‘The fact that we’re hearing about this discovery and that there was never any threat to consumers in this case shows that the mechanisms in place for protecting our food supply worked as intended.’
“‘This case is again proof that internationally recognized science has performed just as it was intended, by immediately detecting a problem, protecting public health and further ensuring the safety of our nation’s livestock,’ Roberts said. ‘I look forward to a good beef dinner tonight.’”
Sen. Mike Johanns (R., Neb.)– “The most important facets of this detection are that the cow in question was identified through our rigorous system of interlocking safeguards; it did not enter the food chain; and that American beef continues to be among the safest in the world. Because the U.S. remains fully compliant with international animal health standards, there should be no impact on trade. Americans and the entire world should continue to be confident in the safety of American beef.”
Sen. Jerry Moran (R., Kan.), Reps. Lynn Jenkins (R., Kan.), Tim Huelskamp (R., Kan.), Mike Pompeo (R., Kan.), and Kevin Yoder (R., Kan.)– Today’s announcement by the USDA reaffirms the fact that our food safety system works. The USDA has very strict guidelines in place to protect our food supply and the system performed exactly how it was designed to perform. The animal was never presented for slaughter and at no time presented a risk to the food supply or human health. It is important to remember that this is an isolated incident and has been contained.”
Calif. Dept. of Food and Agriculture Secretary Karen Ross– “The detection of BSE shows that the surveillance program in place in California and around the country is working. Milk and beef remain safe to consume. The disease is not transmitted through milk. Because of the strength of the food protection system, the cow did not enter the food or feed supply. There are numerous safeguards in place to prevent BSE from entering the food chain.
“The atypical BSE designation is important because this is a very rare form of BSE not generally associated with an animal consuming infected feed. CDFA veterinarians are working with the USDA to investigate this case and to identify whether additional cows are at risk. Feed restrictions in place in California and around the country for the last 15 years minimize that risk to the greatest degree possible. We will provide additional information about this case as it becomes available.”
Bob Stallman, President, American Farm Bureau Federation– “American beef and dairy products are safe. The safeguards our government has in place to detect any incidence of this disease are clearly working. The report of a cow with bovine spongiform encephalopathy, discovered during the pre-rendering process, is proof that our detection system works.”
National Cattlemen’s Beef Association– “The bottom line remains the same – all U.S. beef is safe. America’s cattle producers’ top priority is raising healthy cattle. As such, the U.S. beef community has collaborated with and worked with animal health experts and government to put in place multiple interlocking safeguards over the past two decades to prevent BSE from taking hold in the United States.”
National Milk Producers Federation– “America’s dairy farmers are encouraged that the on-going surveillance and inspections performed by federal authorities continue to ensure that bovine spongiform encephalopathy (BSE), or mad cow disease, does not enter the U.S. food supply.”
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