Congress enacted a short-term funding bill keeping the federal government operating until October 4, and the House will take up next week a Senate-passed six-week budget extension measure. The Senate avoided another stalemate with the House last week, tinkering with a continuing resolution to fund the government by removing $1 billion in disaster funding for the Federal Emergency Management Administration (FEMA) in approving the six-week funding package, along with the stop-gap four-day extension. Because the House had recessed, the Senate passed the shorter continuing resolution so the House could handle it under unanimous consent this week and avoiding calling the full chamber back into session during recess. The two chambers disagree on how to funnel more money to FEMA programs, and an earlier passed version in the House set the new FEMA money target at $3.65 billion. The Senate, after hearing from FEMA it had enough money to begin the first week of October operations, pared back the House figure to $2.65 billion, avoiding a confrontation over offsets to the House bill that would have pulled $1 billion from an energy efficiency loan guarantee program at the Department of Energy.
“Risk Management for America’s Farmers” (RMAF) is the soybean industry’s reinvention of its income safety net program, a move says the American Soybean Association (ASA) that “will help farmers manage the risks they face from adverse weather, crop disease and volatile commodity markets.” RMAF would “partially protect revenue losses” resulting from reduced yields by establishing commodity-specific revenue benchmarks for each farmer based on historical yields and prices. The farmer would receive a payment covering part of the difference between the current year’s income and a percentage of the historical benchmark, ASA said. All planted and prevented planted acres would be covered under the plan, and it would “complement the existing crop insurance program used by most farmers.” “Farmers want a program that operates off a farm-level loss trigger rather than a state, crop reporting district or even a county loss trigger,” said ASA. “Farmers told us the use of a state-level revenue loss trigger in the current ACRE program was one of the problems…that resulted in low participation rates.” ASA said preliminary indications show RMAF will cost significantly less than the ACRE, direct payment and the counter-cyclical programs. ASA also recommended agriculture’s share of overall federal spending reductions should come equally from cuts in commodity and conservation programs, adding federal crop insurance programs are the core of the farm income safety net, adding ASA will strongly oppose any further effort to cut the program as recommended by President Obama. Details of the program can be found at www.soygrowers.com/policy/ASA-RMAF.pdf.
Senate Agriculture Committee Chair Debbie Stabenow (D-MI) said this week she fully believes the days of direct farm program payments are over, and that her committee will be challenged with creating a new approach to a federal income safety net for producers while preserving crop insurance. She said she welcomes alternative income protection proposals being developed by producer groups, including the National Corn Growers Association (NCGA) Agriculture Disaster Assistance Program (ADAP), the American Soybean Association’s Risk Management for America’s Farmers (RMAF), and the National Cotton Council’s (NCC) Stacked Income Protection Plan (STAX), a risk/income protection program designed to complement existing crop insurance. The National Farmers Union (NFU) is pushing for a return to a producer-owned grain reserve, complete with set-asides. She also said a plan by Sen. Kent Conrad (N, ND) to rework the existing the ACRE program was “thoughtful,” acknowledging the work on a new plan from Sens. Sherrod Brown (D-OH), John Thune (R-SD), Dick Durbin (D-IL) and Richard Lugar (R-IN) calling for an “aggregate risk and revenue management program (ARRM).” Like Conrad, this plan builds off the current ACRE program – Durbin was a primary ACRE author in 2008 – but is touted as less complicated and more efficient. Again, direct and countercyclical payment programs would disappear, with the ARRM program determining farm losses based on a district price rather than on a state basis and reduce the overlap with crop insurance.
A coalition of 56 environmental and conservation groups this week said Congress should fully fund federal conservation programs at the current baseline of $6.5 billion per year, and should enforce provisions requiring farms to implement basic conservation practices to qualify for “farm subsidies” and the mandate should be extended to crop insurance “subsidies,” as well. The groups said “current market pressures and competition for land are exacerbating our conservation challenges and threatening to rollback the past gains of federal conservation programs.” The coalition is asking Congress to also target conservation dollars to where they will do the most good and outcomes can be expected to be greatest; streamline existing programs by reducing the administrative hurdles; “ramp up” program effectiveness by linking payments to performance and focusing on whole-farm and whole-ranch conservation systems, and ensure all segments of the farming community—women, minorities and beginning farmers—have access to funding and technical assistance.
A draft bill ordering EPA to reduce the Renewable Fuels Standard (RFS) for corn-based ethanol when corn stocks drop to dangerously low levels is already under attack by the ethanol industry. In a related development, a bill to ensure vehicles made in the U.S. beginning in 2015 can run on a variety of biofuels has resurfaced in the Senate. Rep. Bob Goodlatte (R-VA), chair of the House Agriculture Committee when the RFS was enacted in 2005 and a staunch supporter of a balance between biofuels and feed use of commodities, has a draft bill to require the EPA Administrator to consult with USDA twice a year on the corn stocks-to-use ratio, and suspend the RFS by a set percentage based on sliding scale of stocks levels. For instance, if the stocks-to-use ratio fell below 7%, the RFS mandate for use of corn-based ethanol in gasoline blending would be cut by 25%; if the stocks figure dropped below 5%, the RFS would be cut 50%. Rep. Jim Costa (D-CA) and a member of the House Ag Committee, is also considering being an original author of the bill. The Renewable Fuels Association (RFA) called the Goodlatte draft “bad policy”, adding that “seeking to re-legislate the RFS in this manner would do nothing to address the concerns raised by the livestock constituents of Rep. Goodlatte,” again asserting its research shows the RFS “has no effect on corn prices.” RFA also asserts any RFS waiver won’t change supplies, but will increase gas prices. In the Senate, Sens. Maria Cantwell (D-WA) and Dick Lugar (R-IN) resurrected legislation from the last Congress that would mandate U.S. vehicle manufacturers ensure 50% of their production would be capable of running on a “wide range of domestically produced fuels starting in 2015.” The bill mandates flex-fuel capable cars and trucks, capable of burning non-petroleum fuels including ethanol, methanol, other alcohols and biodiesel. By 2018, 80% of U.S. vehicle production would need to meet the flex-fuel vehicle mandate. A similar bill was introduced in the House last spring. The Cantwell-Lugar bill drew praise from the ethanol industry.
Democrat leaders in both the House and Senate don’t share President Obama’s enthusiasm for three trade deals supported by the agriculture and business communities. Senate Majority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA) are critical of President Obama’s claims the pending trade pacts with Colombia, Panama and South Korea will create U.S. jobs, with Reid saying, “I’m not a big fan of free trade agreements, and my voting record reflects that.” Pelosi, who has voted for free trade agreements in the past, said she’s skeptical of how quickly the deals are moving. Both Reid and Pelosi contend none of the three agreements contains sufficient protections for U.S. workers, or sufficient reforms in environmental practices and labor protections overseas. While Reid has made his intentions clear, Pelosi stopped short of saying she’d vote against the pacts, but the AFL-CIO sent a message to Congress last week contending the measures will cost U.S. workers 159,000 jobs, with Colombia alone costing 55,000. Under a deal cut with the White House, last week’s Senate approval of a bill that would reauthorize General Trade Preferences and Trade Adjustment Authority is a “clear pathway“ and the White House will formally submit the three trade deals to the Hill. Congress has 90 days to consider the treaties on a straight up-or-down vote with no amendments. The House continues to struggle with how to move the TAA bill, and House Speaker John Boehner (R-OH) this week reiterated the House will take up the Senate-passed bill once the President has submitted the three pending free trade agreements to the Senate, expressing disappointment the bills have not been submitted yet.
EPA’s Inspector General, the agency’s internal watchdog, reported this week that while EPA met all requirements for greenhouse gas emissions rule-writing and determining if supporting information was qualified, the agency should have conducted its own peer review of the supporting science rather than relying on reviews done by other organizations. The report was done after Sen. Jim Inhofe (R-OK), ranking member of the Senate Environment & Public Works Committee, said the agency’s so-called “endangerment finding”—that greenhouse gasses are a threat to human and animal health—was done in violation of EPA’s science review process. EPA said, “…we disagree strongly with the Inspector General’s finding and followed all appropriate guidance in preparing the (endangerment) finding.” Inhofe said the report confirms the EPA action was “rushed, biased and flawed,” and called on Sen. Barbara Boxer (D-CA), chair of his committee, to hold immediate hearings on the Inspector General’s report. EPA said “the report does not question or even address the science used or the conclusion reached…that greenhouse gas pollution poses a threat to the health of the American people. Instead, the report is focused on questions of process and procedure.”
In an attempt to force China to fairly revalue its currency and modify its exchange policies, Sens. Sherrod Brown (D-OH) and Charles Schumer (D-NY) will bring a bill to the Senate floor next week. The American Soybean Association is opposing the measure as a step too far that may jeopardize U.S. soybeans’ top export market. The bill is supposed to provide recourse for exporters—who continue to struggle with a trade deficit with China—under World Trade Organization (WTO)-consistent processes who believe a country is illegally devaluing its currency, and allows for a mechanism to petition the U.S. Department of Commerce to impose countervailing duties on imports from the offending nation. ASA contends the bill will undermine the entire U.S.-China trade relationship, the U.S.’s third largest export customer and the world’s largest buyer of U.S. soybeans. “Counterproductive” is how the soybean industry described the bill, adding it will not create jobs, and shifts the focus away from meaningful negotiations with the Chinese toward a punitive approach. The bill may actually cost U.S. jobs by cutting Chinese purchases of U.S. goods, and result in retaliatory tariffs by the Chinese on U.S. goods, ASA warned.
October 18 is the new deadline for a Commodity Futures Trading Commission (CFTC) vote to finalize new speculative position limit rules as required under the Dodd-Frank Wall Street Reform & Consumer Protection Act. The announcement this week comes on the heels of a previous CFTC announcement that several of the mandated rulemakings under Dodd-Frank will be delayed until 2012. CFTC Chair Gary Gensler said CFTC received 13,000 comments on the January, 2011, proposal to set new position limits on 28 commodities as part of the Dodd-Frank effort to reduce excessive speculation by institutional investors. Also postponed was a vote on so-called “legacy limits” for certain ag commodities, including wheat, corn and soybeans, commodities deemed to require special consideration because of their marketplace position. The commission has proposed these position limits remain at current levels. Rules expected to be voted on before the end of 2011 include recordkeeping and reporting, an end-user exception from swaps clearing requirements, definitions, including “swap dealer,” and a separate speculative position limits rulemaking.
The comment period on OSHA rulemaking changes to recordkeeping requirements on illness and work-related injury reporting has been reopened, the agency announced this week. The comment period now closes October 28. The revised OSHA proposal would require employers to report to the agency any work-related fatalities and all in-patient hospitalizations within eight hours, and any amputations within 24 hours. The agency also proposes to update Appendix A of the recordkeeping regulations that lists industries partially exempt from the requirements to maintain work-related injury or illness logs due to relatively low injury incidence. The National Chicken Council (NCC), in reporting on the extension, said the enhanced reporting requirements will do nothing to improve workplace safety. The full text of the rule can be found by going to www.osha.gov.
The EPA Farm, Ranch and Rural Communities Committee (FRRCC) will hold a public meeting October 26-27 in Arlington, Virginia to “discuss specific topics of unique relevance to agriculture…including effective approaches to addressing water quality issues associated with agricultural production.” Full notice of the meeting can be found at www.gpo.gov/fdsys/pkg/FR-2011-09-26/htm/2011-24638.htm. The meeting agenda will be published prior to the meeting at www.epa.gov/ocempage/frrcc/meetings.htm. The committee membership roster can be seen at www.epa.gov/ocempage/frrcc/members.htm.
A unique set of surveys on how much consumers know about farming and ranching – polling both consumers and farmers and ranchers – shows the groups agree: Consumers know little or nothing about how their food is produced. Consumers said, however, they think often about where their food comes from and make purchasing decisions based upon what they think they know. Farmers/ranchers agree consumers are ignorant of production, but also believe what little they do know is inaccurate. The survey, done for the Farmers & Ranchers Alliance, was released last week at a series of town hall meetings in Washington, D.C., New York, Davis, California and Fair Oaks, Indiana. The survey of 2,000 Americans revealed the following: 72% say they know little or nothing about farming or ranching; 69% of consumers think about food production at least somewhat often; 70% say purchase decisions are affected by how food is grown and raised, and 72% say they think about production when buying food, and 42% say the way food is grown has improved in the last 10 years, while 37% say production has gotten worse. The farmer/rancher survey showed the biggest challenge identified by producers is that a few bad actors are seen as representative of the entire industry. In addition, 86% said the average consumer has little or no knowledge about modern farming and ranching; 58% felt consumers have a completely inaccurate perception of food production, and 80% said consumers have little or no knowledge about proper care of livestock and poultry.