It was back to the drawing board this week for the chairs of the House and Senate Agriculture Committees after a proposal to rewrite farm payment and nutrition programs to achieve $23 billion in savings over 10 years—as promised to the Joint Special Committee on Deficit Reduction—came up short on savings according to the Congressional Budget Office (CBO). Sen. Kent Conrad (D-ND), chair of the Senate Budget Committee, said the CBO score returned on the ag panels’ plan was not surprising when it said the ag chairs’ plan was nearly $10 billion shy of the $23 billion in promised savings. Senate Agriculture Committee Chair Debbie Stabenow (D-MI) and Rep. Frank Lucas (R-OK), chair of the House Agriculture Committee, now embrace a new three-program approach to reworking the income safety net, and the “triplet approach” is proving controversial among farm groups. Trying to overcome regional and crop differences in a single program proved too much in the short time frame given the committees, so the two chairs now favor a variation on revenue protection insurance for all three program options. First, a new revenue protection insurance approach would be offered for corn, wheat and some other programs, including a “shallow loss” component, which holds farmers liable for only for the first 10-15% of losses, with federally-subsidized insurance kicking in to cover the rest; second, a countercyclical program for rice and peanuts would be offered, and third, an approach for cotton growers that includes revenue insurance and a shallow loss program, that is supposed to keep them from getting cross-ways with the World Trade Organization (WTO). Stabenow acknowledged the earlier approach scored by CBO would have yielded a $7-8 billion cost overrun, but said the new approach “dialed back” costs. However, Sen. Pat Roberts (R-KS), ranking member on the Senate ag panel who was not part of the day-to-day negotiations, is not happy, and warned the three-part approach will lead to new international trade conflicts rather than mitigating old problems. The American Farm Bureau Federation (AFBF) is leery of the three-program approach, agreeing with Roberts the programs are not free-market oriented enough, but is willing to push for a super committee version of the farm bill rather than a stand-alone bill that would be a target for fiscal conservatives and Democrats out to cut ag programs. Conrad, meanwhile, is pushing a shallow loss revenue protection program for all farmers if they get hit with a 10-25% loss based on whole farm revenue, and tieing the program to crop insurance to pay the bulk of major losses. As for dairy programs, the International Dairy Foods Assn. (IDFA) said trying to reinvent dairy policy as envisioned by cooperatives as part of the super committee deficit reduction effort “makes a mockery” of the process, calling the “Dairy Security Act of 2011” bad policy that would increase deficit spending and “harm our nation’s economy.” Meanwhile, several ag, enviro and consumer organizations joined 27 House members in protesting development of the “secret farm bill” because if a program is eventually accepted by the super committee and the super committee can come up with a bill for full congressional consideration, the bill is protected from amendments. Insiders say this is only the first battle in a long war and that any program rewrite accepted by the super committee essentially sets a spending baseline for 2012 and beyond, and that it’s likely the “farm bill” will be almost completely redrafted next year.
As with all important issues in Congress, as the deadline approaches, the finger-pointing begins. The Joint Special Committee on Deficit Reduction, facing a November 23 deadline to craft legislation to cut $1.2-1.5 trillion from federal spending over the next decade is no exception. And because the committee has been uncharacteristically silent on its progress, media reports are rife that the committee is deadlocked. With Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX), super committee co-chairs, this week publicly trading blame for an apparent lack of an agreement, offers and counteroffers continue. The biggest development politically was this week’s confirmation by Senate Majority Leader Harry Reid (D-NV) and House Speaker John Boehner (R-OH), that they’ve met to discuss the committee’s progress after having stayed away from the committee deliberations up to now. Observers say, however, this doesn’t mean leadership is trying to co-opt the committee, but rather both leaders must begin planning for contingencies should the panel fail to craft a bill. If that happens, $1.2 trillion in across-the-board federal budget cuts kick in. As of November 17, the Democrats had floated a new deal to the GOP, one that would cut spending by $876 billion, including over $300 billion from Medicare and Medicaid, along with increase in tax-related revenues of about $400 billion. The Democrats also want to take $300 billion not spent on the wars in Iraq and Afghanistan and use to fund a $300-billion jobs bill pushed by the White House, also agreeing to fix the alternative minimum tax so it doesn’t negatively affect the upper middle class and paying doctors who participate in Medicare. The GOP countered the Democrat offer is predicated on $800 billion in new revenue from allowing the Bush personal income tax cuts to expire. The GOP has not formally responded to the latest offering, instead pushing its offer as crafted by Sen. Pat Toomey (R-PA) that would include $700 billion in spending cuts, $500 billion in new tax-related revenue that would be made up of in part $250 billion in tax code “reform.” Complicating the formal committee deliberations is Sen. Kent Conrad (D-ND), the chair of the Senate Budget Committee, a lame duck member of the Gang of Six, a bipartisan group which struggled over the last two years to come up with a deficit-reduction package. Conrad says if the super committee fails, the Gang of Six has a bill that will cut $4 trillion, a package Senate staff says “will need a lot of fixes” before it’s ready for Senate floor action.
The agriculture/FDA FY2012 appropriations bill – one third of the so-called “minibus” that combined three spending bills into one package -- received swift congressional approval this week, because it also carried a continuing resolution to keep the federal government operating until December 16. President Obama is expected to quickly sign the bill, finalized late on the evening of November 17, because the current continuing resolution, expires at midnight Saturday, November 19 . The remaining nine spending bills will likely be bundled into a single omnibus spending package due to an inability of the Senate to get agreement on a series of small appropriations packages. This “minibus” also carries the spending bills for Transportation/House & Urban Development and Commerce/Justice/Science spending. Overall, agriculture spending totaled $136.6 billion, nearly $5 billion less than President Obama recommended. Discretionary funding totals $19.8 billion, about $350 million less than last year and $2.5 less than the White House request. Ag research took a $53-million cut to $2.5 billion; animal/plant health now sits $47 million less than last year, and the Farm Service Agency budget is now $1.2 billion, $9 million less than last year. Conservation programs received $844 million for Natural Resources & Conservation Service (NRCS) programs, about $45 million less than last year. The Food Safety & Inspection Service (FSIS) receives $1 billion for food safety programs, about the same as last year. FDA receives a total of $2.5 billion in discretionary spending, $50 million more than last year, with most of that money dedicated to implementation of the Food Safety Modernization Act (FSMA). User fees already authorized are expected to provide about $4 billion in additional funding. Stripped from the final version of the bill is House language prohibiting USDA from spending money to provide inspection to horse processing plants, as well as language forbidding FDA from spending federal money to complete its review of the safety and efficacy of genetically enhanced salmon eggs.
House Republicans are teeing up a vote on a constitutional balanced budget amendment—the first such effort since 1995—but the effort is not expected to succeed. The amendment (HJ Res 2) would require total government spending in any year not exceed the total amount of revenue taken in unless a three-fifths majority of Congress votes to allow the increased spending. Sponsored by Rep. Bob Goodlatte (R-VA), former chair of the House Agriculture Committee, the amendment has 240 cosponsors, but is opposed by Democrat leadership who contend it will threaten Social Security and leave the country unable to deal with unforeseen challenges and disasters. The House and Senate would both have to approve the amendment along with ratification by 38 of the states, and the amendment’s provisions wouldn’t take effect until the second year after ratification or 2017, whichever is later.
A controversial FDA salmonella testing program targeting pet foods “where they (pet foods) could be directly handled or ingested by humans” has begun, with the agency taking samples since late October of dry pet food from PetSmart, PetCo, WalMart, Costco, Sam’s Club and Target stores. FDA says it’s concerned about people contracting salmonella from foods, treats and supplements which may carry contamination. The agency said Centers for Disease Control (CDC) data shows 70 people were sickened in 2006-2007 from dry dog food contaminated with salmonella made at a Pennsylvania plant. An original proposal put forward by FDA last summer was withdrawn and reworked after industry pointed out the methodology reflected in the proposal was unsound.
The first step in getting certified a California ballot question calling for the labeling of all foods containing genetically enhanced ingredients was achieved this week when a broad coalition of activist groups and organic food producers submitted the California Right to Know Engineered Food Act to the state attorney general for “title and summary” prior to gathering signatures to get the measure on the ballot. The ballot question would require genetically enhanced foods or foods containing GE ingredients to be labeled just as nutritional information is labeled. The group which is seeking to get the question on the ballot is called the Committee for the Right to Know, which includes consumer groups, led by the Washington, DC-based Center for Food Safety; public health and environmental organizations; organic food companies, and individuals. Critics contend the measure would require nearly every food product sold in California be labeled given over 85% of the corn crop and over 90% of the U.S. soybean crop is genetically enhanced.
The federal government of Canada has been sued by the Canadian Wheat Board (CWB) in a move to stop the government from implementing legislation to “open up” the marketing of western Canadian wheat and barley. At issue is a federal move to break up the marketing monopoly of the CWB by allowing farmers to sell wheat and barley individually on the open market without obligation to the board, though farmers could still voluntarily sell through the CWB. However, the chair of the CWB said, “Prairie farmers are tired of their voices being ignored,” explaining the government is legally obligated to consult with the farmers before taking any action to change marketing operations. One member of Parliament is calling for a series of western Canada hearings so that CWB supporters can appear as “expert witnesses;” the government said such expense is unnecessary since members hear from farmers “every weekend when we’re home…that’s what we do for fun.”
When you sit down to your Thanksgiving dinner next week, be aware the retail cost of that spread is about 13% higher than last year, the American Farm Bureau Federation (AFBF) reported this week. The average cost of a Thanksgiving Day dinner for 10 this year is $49.20, a $5.75 price jump from 2010. While still “a bargain at just under $5 per person,” the big ticket item was the turkey. A 16-lb. turkey will cost roughly $1.35 per pound, 25 cents per pound more than last year, AFBF said.