Crop Insurance Cuts
During his opening remarks, Committee Chairman Mike Conaway (R., Tex.) noted that, “Saturday marked the one-year anniversary of the signing of the Agricultural Act of 2014. As you know, economic conditions for many producers have changed dramatically since then, with commodity markets plunging by up to 50 percent. Drought and other natural disasters also resulted in disaster declarations in 33 states across the country last year. The net effect was an estimated 43 percent decline in net farm income over the past 2 years.”
Chairman Conaway indicated that, “I must admit that I was disappointed to see the administration’s FY2016 budget proposal that slashes $16 billion from crop insurance–a reduction of over 17%. With commodity markets plummeting and producers struggling to find financing, now is precisely the wrong time to weaken crop insurance.”
At the opening of the discussion portion of yesterday’s hearing, Chairman Conaway sought more detail on crop insurance issues from Sec. Vilsack- a transcript of this five minute conversation is available here, at FarmPolicy.com.
Later in yesterday’s hearing, Rep Rodney Davis (R., Il.) stated that, “I oppose the President’s call for a $16 billion cut to crop insurance. Farmers have endured an estimated 43% decline in net farm income over the last two years, and now is not the time, as Chairman Conaway said, to cut out this public-private partnership. And this is working, and it requires producers to have skin in the game.”
DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Even though House Agriculture Committee members grumbled about the administration’s proposed budget cuts, others in Congress are also pushing for more crop insurance cuts. A pair of Republicans will introduce companion bills Thursday to take up the president’s cause on eliminating the harvest-price option.
“Sen. Jeff Flake of Arizona, a long-time advocate for cutting farm programs, is taking the lead on the bill with Rep. John Duncan of Tennessee. Their bill, the ‘Harvest Price Subsidy Prohibition Act’ would do just as the title intends. The lawmakers said the bill would eliminate taxpayer subsidies for what they described as a ‘Cadillac coverage option’ for crop insurance. Flake and Duncan state their bill would save $19 billion for taxpayers over 10 years, which is actually $3 billion more than the president’s proposal.”
Chinese Market Policy
Meanwhile, Rep. Randy Neugebauer (R., Tex.) noted in his comments to Sec. Vilsack at yesterday’s Ag Committee hearing: “And I think one of the concerns that a lot of the people in cotton have right now is, particularly with China, are they playing by the rules. And, you know, their policy is not very transparent, and they have a huge influence on the world price of cotton.”
In his remarks on this issue (transcript), Sec. Vilsack pointed to “the announcement today from the U.S. Trade Representative’s office that beginning the process within the WTO to raise questions about the export subsidies that China is engaged in. And agriculture is one of the industries that was identified as being part of that effort. And certainly it’s fairly clear that they have been not necessarily playing by the rules in a number of areas.” (For more detail on the USTR action see these articles- from The New York Times, Wall Street Journal and Financial Times).
Pacific Coast Port Labor Dispute
And Rep. Dan Newhouse (R., Wash.), among other lawmakers, detailed concerns at yesterday’s hearing about the labor dispute that is taking place at West Coast ports.
Christopher Doering reported yesterday at The Des Moines Register Online that, “Agriculture Secretary Tom Vilsack told the House Agriculture Committee that he wrote a letter recently to President Barack Obama to express concerns about the port slowdown. The Obama administration, the former Iowa governor said, is talking daily with both sides to encourage them to end the stalemate.
“‘I can tell you that we know from prior history where there has been labor issues at the port that it is a serious issue to containerized supplies. Bulk grain supplies are moving, but containerized supplies have been delayed,’ Vilsack said. ‘We are looking at a very serious situation.'”
Laura Stevens reported in today’s Wall Street Journal that, “Terminal operators at the West Coast ports will again suspend vessel loading and unloading, but for four days this time, dealing another blow to shippers’ hopes that the labor contract negotiations delaying thousands of containers of goods and merchandise might soon ease.”
Also on this issue, Todd Neeley reported yesterday at DTN that, “The ongoing labor dispute on West Coast ports is beginning to take a toll on the flow of U.S. agriculture goods and could soon lead to lower prices for livestock and other ag products if the situation isn’t resolved, Sen. John Thune, R-S.D., told reporters Wednesday.”
Bloomberg writer James Nash reported yesterday that, “Negotiations toward a contract for dockworkers at 29 West Coast ports are within days of a resolution, hanging on whether their union can fire arbitrators, the top executive at the Port of Long Beach said.”
Also yesterday, during his opening remarks at the House Ag Committee hearing, ranking member Collin Peterson (D., Minn.) stated that, “Even with the budget savings this new bill provided, there are still people out there talking about reopening the farm bill and saving money in crop insurance or SNAP or other areas of the farm bill. This is, in my opinion, a very bad idea. We can’t… We had a hard enough time getting this bill done. We do not need to get back into that quagmire again. And so I hope the committee stays together in opposition to any cuts to farm bill programs or any opening of the farm bill. We’ve done our work and we were the one committee that stepped up to the plate and actually reduced the budget.”
Interestingly, Tennille Tracy reported in today’s Wall Street Journal that, “House Republicans are laying the groundwork for a revision of the food-stamps program after its sharp expansion during the recession.
“The effort kicks off Feb. 25 when the House Agriculture Committee holds the first of several hearings scheduled this year on food stamps, formally known as the Supplemental Nutrition Assistance Program.
“Committee Chairman Mike Conaway (R., Texas), who is leading the charge, said he wants to stay away from the type of party politics that can doom reforms before they are proposed. But as the son of a roughneck on oil rigs, he said he favors the kind of hard work that ‘built America,’ suggesting any changes will lead to a smaller program and fewer recipients.”
The Journal article noted that, “Democrats are likely to fight moves to cut benefits and make them tougher to get. Rep. Jim McGovern (D., Mass.), a member of the House Agriculture Committee, said the Obama administration should push back against any cuts to food stamps. ‘We cannot balance the budget on the backs of poor people,’ he said.”
Nutrition related issues also came up at yesterday’s hearing; thisFarmPolicy.com update includes a transcript of an exchange with Chairman Conaway and Sec. Vilsack on Dietary Guideline issues [related AP article], as well as an exchange between Rep. Rodney Davisand Sec. Vilsack on school nutrition issues.
Also with respect to nutrition, see this AP article from yesterday by Mary Clare Jalonick, “Bake sales are out, healthier school fundraisers are in.”
In other policy news, an update yesterday from the International Dairy Foods Association indicated that, “Michael Scuse, under secretary for Farm and Foreign Agricultural Services for the U.S. Department of Agriculture, kicked off the program with his keynote address on Monday, marking his fourth consecutive appearance at International Sweetener Colloquium. He discussed the U.S. sugar program and defended the administration’s actions to establish managed trade agreements with Mexico, the third largest trading partner for the United States.
“Scuse said the managed trade arrangements with Mexico can help because the agreements specify how much and when to expect more imports, rather than sudden and unexpected inflows of Mexican sugar. Noting that USDA is required by law to ensure adequate sugar supplies at reasonable prices, he said the current anti-dumping and countervailing duty investigations involving Mexican sugar imports have led to uncertainty in the market and among other U.S. trading partners as well.”
An update yesterday from Sen. John Thune (R., S.D.) noted that, “[Sen. Thune], member of the tax-writing Senate Finance Committee, todayushered three provisions through the committee, including his bipartisan bill to stimulate new agricultural research by leveraging private dollars to create charitable partnerships between universities and private entities. Thune’s bill, which he introduced last Congress with Sen. Debbie Stabenow (D-Mich.), would amend the tax code to allow for the creation of new tax-exempt agricultural research organizations, which are similar to medical research organizations that have been successfully supporting innovation in medical sciences since the 1950s.”
And yesterday’s Des Moines Register included an item by the editorial board titled, “Research on livestock needs more oversight.”
Yesterday, USDA released a report titled, “USDA Long-Term Agricultural Projections;” some highlights of the report have been posted atFarmPolicy.com.
Jeff Daniels reported earlier this week at CNBC Online that, “With California facing its fourth year of a devastating drought, and dairy operators struggling with the high cost of hay, other states are swooping in to try to lure them away. And they’re not pitching generous tax incentives, but the promise of water, a stable feed supply and abundant land.”
Commodity Futures Trading Commission Chairman Timothy Massadtestified yesterday before the U.S. House Committee on Appropriations Subcommittee on Agriculture.
In his opening remarks, Subcommittee Chairman Robert Aderholt (R., Ala.) noted that, “We look forward to discussing the CFTC’s FY 2016 Budget Request of $322 million. CFTC’s request for such a large increase prompts me to set the stage for the Subcommittee’s FY 2016 priorities funding picture. I am not always thrilled to be the bearer of bad news, but I must remind everyone here that our overall funding allocation across the Subcommittee will likely remain the same as last year.”
Andrew Ackerman reported in today’s Wall Street Journal that, “The Commodity Futures Trading Commission is considering ways to boost its oversight of foreign-exchange dealers catering to mom-and-pop retail investors in light of a trading debacle that nearly collapsed broker FXCM Inc. last month, the agency’s chairman said Wednesday.
“Timothy Massad, testifying on Capitol Hill, said the CFTC has found risks to U.S. currency dealers stemming from outsize bets made by overseas customers who aren’t subject to U.S. rules, including those governing how much borrowed money they can use for trades.”
An update yesterday from the House Committee on Natural Resources noted that, “[Committee Chairman Rob Bishop (R., Utah)] today issued the following statement in support of Colorado Governor John Hickenlooper’s (D) lawsuit against the U.S. Fish and Wildlife Service over the agency’s decision, under the Endangered Species Act (ESA), to list the Gunnison sage grouse as a ‘Threatened’ species and designate more than 1.4 million acres in portions of eastern Utah and western Colorado.
“‘It is my hope that governors across the country take note of what is happening in Colorado. The Gunnison sage grouse decision is emblematic of the federal government’s utter disregard for data-driven decisions and state and local input in ESA listing determinations…”