With the chairs of the House and Senate Agriculture Committees having produced a consensus letter allowing agriculture can withstand about $23 billion in cuts over the next 10 years, and that document is now in the hands of the Joint Special Committee on Deficit Reduction, eyes are now on how to achieve that number going into the 2012 Farm Bill drafting process. Of the $23 billion, $15 billion would come out of farm program payments, $4 billion would be shaved off conservation programs, and another $4 billion would come out of nutrition programs, including food stamps, according to Sen. Charles Grassley (R-IA). However, the devil is now in the details and with 10 national organizations having provided the ag committees their proposals on how to reinvent the “income safety net” for farmers—with nearly all talking about one form of income insurance or another—the proposals and reactions are flying hot and heavy around town. Over the next few weeks, committee chairs and ranking members will be brought into the super committee to discuss their recommendations. The American Farm Bureau Federation (AFBF) is the 800-lb. gorilla in this fight, and the only national group to propose retaining all existing programs, but cutting them all by an equal amount to achieve the $23 billion. AFBF waded into the fray again this week when it took on so-called “shallow loss” proposals on revenue protection, cautioning Farm Bill drafters of possible unintended consequences of such programs if not carefully crafted. Under a shallow loss program, a farmer absorbs only the first 5-10% of income loss, with the federal government picking up the next 20-25% of the loss before insurance kicks in. AFBF cautions this could entice farmers into taking on greater risk than they might otherwise, including higher rents. In a related Farm Bill discussion, Senate Agriculture Committee Chair Debbie Stabenow (D-MI) made it clear she’s concerned about cutting too much out of conservation programs. However, others have put forward a plan by which the current 24 programs could be distilled and consolidated into three or four programs, resulting in a major savings in overhead and administrative expense. Sen. Pat Roberts (R-KS) made it clear in a separate statement he’s concerned with how Congress might approach “reforms” in the federal crop insurance program, and vowed it will be “protected” as the “cornerstone to agriculture’s foundation and the top risk management priority” for farmers and ranchers.
Emergency planning required of farmers and ranchers for petroleum spills, mandated by EPA’s Spill Prevention Control and Countermeasures (SPCC) rulemaking, will be delayed for 18 months for farmers only, EPA announced this week. The new deadline—May 10, 2011—was chosen after EPA studied the impact of this past year’s floods and fires across the country, with the agency deciding farmers and ranchers need more time to come into compliance with new spill rules. The rule applies to any entity storing 1,320 gallons of fuel above ground or 42,000 gallons in underground storage. Other entities will need to have plans in place by November.
The Joint Special Deficit Reduction Committee, which has received over 100,000 recommendations on how to cut the federal budget by $1.5 trillion over 10 years, this week heard from 38 members of the House demanding an end to federal tax breaks for oil and gas companies. The group said Washington can no longer “afford to give away billions of dollars every year to corporations earning billions of dollars in profits;” this move would save $122 billion over 10 years. These cuts, the House members said, will reduce oil production by less than one half of one percent, and will increase the cost of exploration by less than 2%. The industry can absorb these costs without eliminating jobs or increase fuel prices at the pump, the House members said.
EPA Administrator Lisa Jackson avowed yet again her agency has no intention of modifying current air particulate rules to regulate on-farm dust. Jackson said she wants to “finally put an end to the myth that the agency is planning to tighten up this regulation.” EPA is required to reevaluate every five years its so-called PM10 rules, and during its most recent reviews comments from the agency led farm and ranch groups to believe the agency was going to propose making air particulate controls so tight as to “regulate the dust on a farm road.” Jackson, in a letter to Senate Ag Committee Chair Debbie Stabenow (D-MI) this week, said her decision was based on the advice of EPA scientists and the Clean Air Science Advisory Council. She also reminded lawmakers that even if EPA did tighten the air standard, it would be left to the states to determine which industries were the biggest violators. Rep. Kristi Noem (R-SD) introduced legislation to stop any rulemaking, and while Senate critics, including former secretary of agriculture Sen. Mike Johanns (R-NE), appear to have been mollified by Jackson’s formal announcement, Noem said this week she’s concerned because EPA retains authority to tighten the requirement in the future, and this concern has been supported by a number of national farm and ranch groups. Noem’s bill will be the subject of a hearing October 25 in the House Energy & Commerce Committee.
Ten bills aimed at changing the way FDA operates were introduced late last week by House Republicans – many of whom are members of the House Energy & Commerce Committee—setting the stage for Congress’ oversight of upcoming user fee legislation for both human and animal drugs. The bills also signal other changes to how FDA operates are likely to be brought forward by regulated industry, even as the agency struggles with implementation of the Food Safety Modernization Act (FSMA) enacted last year. The bills are aimed at changing the agency’s mission to include support for innovation; changing FDA advisory committee conflict-of-interest operations; harmonization of international regulatory bodies; third party review of medical devices; changing the way FDA oversees laboratory-developed testing, and streamlining the medical device review process. And while similar sentiments have been voiced in the Senate, legislation to the extent seen in the House has not emerged in that chamber. Some also see the flood of FDA “reform” bills as perhaps setting the stage for the broader issue of consolidating FDA and USDA food safety authority into a single federal food agency.
Even as USDA announced it has approved more than $27 million in loans and grants to more than 500 rural businesses and producers to put ethanol “flex fuel” pumps into their operations, a Senator took to the floor to try and block any further federal spending on ethanol infrastructure. The grants and loan guarantees are part of USDA’s Rural Energy for America Program (REAP), authorized in the 2008 Farm Bill, which provides funds for farmers, ranchers and rural business to purchase and install green energy systems and to make efficiency improvements. This most current round of grants and loans funds 54 flex fuel pump projects that will lead to 200 more pumps, part of the Administration’s goal of 10,000 new flex fuel pumps over the next five years. But during this week’s Senate floor debate on HR 2112, the agriculture appropriations bill – which cuts REAP funding nearly in half from last year – Sen. John McCain (R-AZ) rose to oppose the infrastructure spending, threatening an amendment to eliminate the program completely. The Renewable Fuels Assn. (RFA) said the amendment was a jobs creation move for oil producing countries, and the amendment was strongly opposed by the National Farmers Union (NFU). McCain withdrew the amendment after attacking the program.
With the first Mexican truck getting ready to cross the border under the new U.S.-Mexico cross-border trucking agreement, the program continues to draw fire from U.S. trucking interests. The Owner-Operator Independent Drivers Assn. (OOIDA) this week said it continues to strongly oppose the trucking deal based on safety, homeland security and regulatory fairness grounds. The group said the deal should not go into effect until Mexico has increased its safety standards, environmental protections and security regulations. The group is supported in their opposition by Rep. Duncan Hunter (D-CA) and Rep. Bob Filner (D-CA). With the onset of the program, Mexico will lift the remaining retaliatory tariffs slapped on U.S. exports when Congress killed the program during the final years of the Bush Administration.