Washington Report for 8-24-12

By Steve Kopperud

EPA Calls for Comment on Governors’ RFS Petitions; Romney, Obama Silent

This week, the Environmental Protection Agency (EPA) published the prepublication version of its Federal Register notice announcing its intent to take public comment for 30 days on the petitions from the governors of North Carolina, Arkansas, Delaware and Maryland for EPA to formally waive the Renewable Fuel Standard (RFS) for ethanol because the industry takes more than 40 percent of available corn supplies while the county faces the worst corn crop in nearly a decade. However, President Obama and GOP presidential candidate Mitt Romney have stayed generally silent on the issue lest they offend either side of the biofuels battle. The silence is despite calls from 150 House members and 26 Senators from both sides of the aisle for EPA to waive the ethanol RFS. Romney, in an energy policy paper released this week, said he supports the concept of the RFS, but doesn’t elaborate on the waiver issue. In addition to the governors’ petitions and congressional pressure, ActionAid USA, Oxfam America and Jose Graziano da Silva, director-general of the United National Food & Agriculture Organization (FAO), have issued calls for an RFS waiver. The EPA notice asks for input on whether the current RFS is causing regional or state economic harm and/or how it affects the price of corn, feed, food and/or ethanol. The agency, however, also wants data supporting the notion that waiving the RFS will solve the supply/price problems alleged by the livestock, feed, food and processing industries. More governors are expected to join the list of those requesting an RFS waiver, and still pending is EPA’s decision on how to handle an administrative petition from nearly two dozen livestock/poultry/feed/processing industry groups asking for the same RFS relief. Dwindling corn supplies was documented by the U.S. Department of Agriculture (USDA) crop report issued August 10, which predicted a corn crop of 10.8 billion bushels, with a yield of 123.4 bushels per acre, down more than 22 bushels since last month’s report. Corn stocks will be about 533 million bushels less than previous estimates, USDA said, with carryover of corn for 2012-2013 seen at 650 million bushels – 5.8 percent of total use – the smallest corn carryover since 1995-96. The notion of waiving the RFS – a legislated mandate on how much ethanol must be blended with gasoline to reduce the amount of diesel used – is a political hot potato for the Administration. While industry continues to argue the RFS ethanol mandate arbitrarily creates an ethanol market that competes directly with food and feed uses of corn, driving corn prices to record levels in recent weeks and resulting in dramatically higher livestock and poultry feed prices, the ethanol industry continues to counter the RFS is needed because it allowed ethanol to become a “mature industry” and that waiving the RFS will do little to affect corn availability or  prices since ethanol producers contend they use only 16 percent of the crop, not the 40 percent estimated by industry. One ethanol company called the petitions for an RFS waiver the equivalent of a “domestic grain embargo, benefitting large corporate food companies by lining their pockets at the expense of the family farmer and our nation’s pursuit of energy independence.”

“Farm Bill Now” Coalition Formed by 39 Ag Groups

A coalition of farm, livestock, poultry, feed, specialty crop and related organizations called the “Farm Bill Now Coalition” has been set up in Washington, D.C., designed to press the need for Congress to complete work on a 2012 Farm Bill before the current law expires at the end of September. The coalition plans to hold a coalition rally in Boone, Iowa at the Farm Progress Show on August 28 at 1:45 p.m., and a similar event on the west lawn of the Capitol in Washington, D.C., on September 12 to publicize the effort. However, House leadership continues to stymie efforts by House Agriculture Committee Chairman Frank Lucas (R-OK) and his ranking member, Rep. Collin Peterson (D-MN) to bring their committee’s version of omnibus farm legislation to the floor out of fear there aren’t enough votes to pass the bill and that it will set off a major partisan floor battle over issues unrelated to farm support. The House leadership’s unwillingness to bring up the Farm Bill has handed President Obama’s campaign a major talking point during his swings through rural states, as Obama calls on the House to pass the Farm Bill and finish its work on drought assistance. Details of the coalition’s actions and membership, along with a petition to Congress anyone can sign, can be found at www.FarmBillNow.com.  

Romney Campaign Announces Farmers & Ranchers Coalition

Late last week, the Mitt Romney campaign named the leadership and membership of Farmers and Ranchers for Romney. The six national chairmen are Florida Ag Commissioner Adam Putnam, Western Growers President Tom Nassif, Iowa Ag Secretary Bill Northey, Kentucky Ag Commissioner James Comer, Sen. Mike Johanns (R-NE) and National Council of Farmer Cooperatives President Chuck Conner. For a full list of national cochairs and the full advisory committee roster, go to www.mittromney.com and search the press release list.

Vilsack Announces Emergency Loan, Crop Insurance Changes to Help with Drought

Secretary of Agriculture Tom Vilsack this week announced a series of emergency actions designed to mitigate the impact of the worst U.S. drought in decades. The ag secretary said he’s added 33 more counties in eight states as disaster areas, bringing the total of federally designed natural disaster areas to 1,821 counties in 35 states. Vilsack said he’s filed special provisions with the Risk Management Agency (RMA), which oversees federal crop insurance, to allow haying or grazing of cover crops with impacting the insurability of 2013 spring crops, and said he will modify U.S. Department of Agriculture (USDA) emergency loan programs so loans can be made earlier in the season to benefit livestock producers faced with rising feed costs and herd liquidation. The most recent actions are in addition to the Administration’s decision to buy up to $170 million in pork, lamb, chicken and catfish for federal nutrition assistance program, including food banks. USDA has also opened the Conservation Reserve Program (CRP) to emergency haying and grazing, lower the borrower interest rate for emergency loans and worked with insurance companies to provide greater flexibility to farmers. A full list of Administration actions to provide drought relief can be found by going to www.usda.gov.

Eleven-Mile Stretch of Mississippi River Closed to Traffic

The federal government this week shut down an 11-mile stretch of the Mississippi River south of Memphis to all barge and commercial traffic because of low water levels blamed on the drought. The closure immediately impacted grain and soybean shippers trying to move barges to export facilities on the Gulf of Mexico. The Coast Guard reported that about 100 barges and ships were affected, and said the area closed has been affected similarly since August 11, when a barge ran aground. Readings near Memphis show the river is at least 12 feet below normal August levels, and the impact of the closure affects not only ag shippers, but other industries moving products south for export. Experts report that a one-inch drop in river level means a vessel’s capacity is reduced by 17 tons of cargo. The Army Corps of Engineers has sent dredges to the area to deepen and widen the river, but without rain, the Corps expects the river level to continue to drop.

Alabama, Georgia “Papers” Laws on Illegal Immigrants Upheld in Part

Laws in Georgia and Alabama allowing law enforcement officers to seek proof of citizenship when checking backgrounds on criminal suspects were upheld in part by a federal appeals court this week. The U.S. Court of Appeals for the 11th District in Atlanta decision paralleled that of the U.S. Supreme Court in its review of Arizona’s “show me your papers” law. As in the Arizona high court review, the appeals court continued to block other parts of the two states’ laws, including a provision that would allow schools to check the immigration status of children upon enrollment and sections requiring all immigrants to carry a registration document at all times. Officials of both states said the heart of their state laws was upheld, namely the ability of law enforcement to check on immigration status for criminal suspects, but opponents continue to argue the laws are akin to racial profiling.