Senate Ag Set to Mark Up Its Bill Next Week; House Ag Announces Hearings – Sen. Debbie Stabenow (D-MI), chair of the Senate Agriculture Committee, said this week there’s a “tremendous amount of consensus” around most of the likely rewrites of omnibus ag legislation planned during the scheduled markup next week of her panel’s version of the 2012 Farm Bill. Her counterpart in the House, Rep. Frank Lucas (R-OK), said his committee will hold seven more hearings – most in Washington – on his ag committee’s consideration of the bill, signaling a commitment by both panel’s to try and get a Farm Bill this year. Stabenow continues to hope she can get the entire 2012 draft farm legislation marked up and approved by her committee by the end of next week, and she and ranking committee member Sen. Pat Roberts (R-KS), along with Lucas and his ranking member, Rep. Collin Peterson (D-MN), all said this week they’ll work together to hammer out a bill for floor action this year. Stabenow, who will go through the bill title by title, will likely begin with many of the identified savings included in last winter’s $23-billion deficit reduction package, and she continued to acknowledge the commodity title – which carries direct payments, loan programs, etc. – remains the big stumbling block. Both Stabenow and Roberts expect crop insurance or some form thereof to be the basis for their rewrite of a risk-based income safety net, and they will also need to wrestle with a cotton industry proposal already attacked as noncompliant with World Trade Organization (WTO) rules. The conservation title will likely emerge with consolidated programs – down from 24 to 12 or 13 – and a rewrite of rules governing the Conservation Reserve Program (CRP). Energy programs will likely remain pretty much as they are, but focus on loan guarantees to fund the various research initiatives; while no decision has been made, the 2008 Farm Bill livestock title will likely disappear. Lucas holds his last field hearing today in Dodge City, KS, and then moves to a series of hearings next week. On April 25, the subcommittee on rural development, research, biotechnology and foreign agriculture will hold a hearing on its rural development interests, followed by two hearings on April 26 – one by the subcommittee on conservation, energy and forestry and the other by the subcommittee on dairy, livestock and poultry. May 8 will see a hearing before the subcommittee on nutrition and horticulture to look at nutrition and specialty crop issues; May 10 there will be a hearing before the subcommittee on department operations, oversight and credit on credit issues; May 16 and 17 there will be hearings before the subcommittee on general farm commodities and risk management dealing with crop insurance and commodity programs, and May 18 will see a hearing before the subcommittee on conservation, energy and forestry on energy and forestry programs.
Seven Farm Groups Weigh in on Risk Management, Crop Programs – Seven major farm organizations, led by the American Farm Bureau Federation (AFBF), called on the Senate Agriculture Committee this week in a letter to stay the course on its 2012 Farm Bill markup, saying they support the approach the committee is taking, but offering several policy recommendations. The group supports the $23-billion deficit reduction starting point for the markup and praised the committee for protecting crop insurance, calling the program “the core risk management tool.” The groups recommended the insurance program be modified to enhance effectiveness, but oppose tieing crop insurance to current production levels and fixed price supports. The groups pushed for a new insurance program that would partially pay farmers for current-year income loss on crop-specific basis, adding this approach needs annual revenue benchmark adjustments. The groups also want “full planting flexibility” for farmers based on market signals, not programs. The groups also want to see continuation of the marketing loan program and oppose any changes to current payment limitations or eligibility, saying 98 percent of producers participate in the program and it’s key to conservation practices. The letter was also signed by the American Soybean Association (ASA), the National Association of Wheat Growers (NAWG), the National Barley Growers Association (NBGA), the National Corn Growers Association (NCGA); the National Sunflower Association (NSA); the U.S. Canola Association and the USA Dry Pea & Lentil Council.
Vilsack Wants Farm Bill to Emphasize Jobs and that means a Name Change – In a bow to election year politicking, Secretary of Agriculture Tom Vilsack this week said he wants the title of the Farm Bill changed to something like “the food, farm and jobs bill.” His justification is that one of 12 jobs in the U.S. is somehow linked to agriculture, and said, “I think we do a disservice when we simply refer to it as the farm bill.” Vilsack said the bill is also about the jobs created “not just in agriculture, but in the biobased economy that’s beginning to take hold in our economy. It’s about local and regional food systems.” The secretary also said the name change – reflecting a philosophical shift – would also help garner support of urban lawmakers who fear the loss of programs such as food stamps. Senate Agriculture Committee Chair Debbie Stabenow (D-MI) endorsed the idea. Vilsack, stopping short of the U.S. Department of Agriculture’s (USDA) position on the pending farm legislation, said he expects the ag committees to come up with a conservation title that is more streamlined and provides flexible program participation; some livestock disaster program improvements; strong crop insurance and new farmer programs.
EWG Continues to Push for Free Crop Insurance; Releases Iowa State Report – “Reforming” crop insurance and giving it free to farmers would save the federal government $18.5 billion over 10 years, according to a report released this week from Iowa State University economist Dr. Bruce Babcock, and commissioned by the Environmental Working Group (EWG). Capitalizing on a report released last week by the Government Accountability Office (GAO), requested by Sen. Tom Coburn (R-OK), which called for reforms in federally funded crop insurance, EWG proposes to provide all farmers free crop insurance that would cover 70 percent of average crop yield at 100 percent of the market price for the lost crop. Farmers would pay a “small fee” to cover administrative costs, and initial savings would total about $10.4 billion if every acre of corn, cotton, rice, soybeans and wheat grown in 2011 were covered. That number jumps to $18.5 billion over 10 years if only the 2011 acres insured were covered by the “new safety net.”
Despite some House members’ description of the budget reconciliation process – balancing program costs against a budget recommendation – is just “an exercise,” the chamber-approved resolution continues to drive much of the current legislative agenda, including the 2012 Farm Bill. Six House committees, including the agriculture committee, were charged by House leadership to reconcile their program costs to the FY2013 budget resolution, and Chair Frank Lucas (R-OK) this week met his deadline when his committee approved nearly $35 billion in savings over 10 years, with about $7.2 billion in the coming fiscal year, mostly by rescinding a benefit increase, closing loopholes, cutting waste and changing eligibility and state participation rules in the federal food stamp program, now called the Supplement Nutrition Assistance Program (SNAP). In all, committee changes in SNAP amount to about nearly $35 billion, exceeding the mandated $33 billion over 10 years. Lucas said since the Senate won’t go through reconciliation because there will be no Senate vote on a formal budget resolution, his committee’s action was “an exercise” to demonstrate the GOP achieve savings. He said while the cost of SNAP has increased 270 percent over 10 years, his committee’s cuts represent only about 4 percent. He said once the committee moves to formal markup of a bill, there will be “another food stamp discussion and that one will be legitimate.” Sen. Kent Conrad (D-ND), chair of the Senate Budget Committee and a member of the ag panel, released his committee’s draft FY2013 resolution, and analysts said the draft looks to cut about $14 billion from ag spending through 2022, with the remaining dollars left to the ag committee for “reallocation” among programs.
The Commodity Futures Trading Commission (CFTC) this week released a guidance letter on its expected final rule on swaps dealers – guidance that appears to protect bona fide hedgers and end users – drawing compliments from House Agriculture Committee Chair Frank Lucas (R-OK), but guarded support from industry given the formal details of the rule have not been published in the Federal Register. CFTC Chair Gary Gensler said the rule fulfills the commission’s mandate to further define “swap dealer,” “major swap participant” and “eligible contract participant,” provides guidance on who must register with the commission. The rule will distinguish that swaps between ag cooperatives or cooperative financial institutions and their members do not constitute “dealing” and provides for definition guidance between bona fide hedging and dealing, while providing a specific rule for swaps that hedge price risk on a physical commodity. The swaps threshold is $3 billion, across all asset classes, and subject to a phased in level of $8 billion. Lucas said “from what I can tell there were improvements made to the final rule that will reduce the negative impact on end-users … I want to reiterate that comprehensive regulation of swaps is central to derivative reform and I support those efforts.The National Grain & Feed Association (NGFA) and the American Feed Industry Association (AFIA) were both more guarded in their enthusiasm, though generally encouraged by the guidance description of the final rule. NGFA said it “cautiously supports” the CFTC action, and “while we await publication of the actual text of the regulations before rendering a final judgment, we are encouraged the CFTC acted to increase significantly the de minimus level of swap activity.”
A Food and Drug Administration (FDA) proposal that all companies regulated under the new Food Safety Modernization Act (FSMA) pay a “user fee” to register with the agency – generating about $220 million a year – is stuck in the agency and has made little progress, FDA Commissioner Margaret Hamburg told the Senate Appropriations Committee Ag/FDA subcommittee this week. She told subcommittee Chair Herb Kohl (D-WI) her agency is reaching out to industry on the proposal, that it’s FDA’s intent to impose the fees on both domestic and foreign companies registered under FSMA if she gets such authority, but that absent user fees FDA will “have to prioritize” and there will likely be less money to help out states which work with the agency.
The House this week surrendered on passing a comprehensive highway re-authorization bill, opting instead to approve an extension of current programs through September and go to conference with the Senate in hopes of hammering out a compromise package. Senate leadership immediately called on the House to name conferees, saying they would name conferees as soon as Senate rules allow. The Senate bill is a two-year $109-billion extension of the package of federal programs that fund highways, bridges, infrastructure, waterways and urban commuter systems; the House Transportation & Infrastructure Committee approved a five-year, $260-billion package, but broad chamber consensus has eluded leadership. One wrinkle in the perceived “progress” on re-authorizing the programs is the inclusion in the House-passed extension that would expedite approval of the Keystone pipeline project from the Canadian border to Oklahoma. President Obama said he opposes the provision; House Speaker John Boehner (R-OH) said the opposition shows how “out of touch” the White House is with the nation’s citizens. In a related development, the Department of Transportation announced this week it will undertake a study in partnership with the states on the safety of “overweight” trucks. A coalition of shippers and truck interests had pushed the House transportation committee to give the states the option of allowing 96,000-lb. trucks with six axles and additional brake capacity on their interstate highways; the current limit is 83,000 lbs.
The Humane Society of the U.S., ramping up its attacks on the pork industry, this week filed a legal complaint with the Federal Trade Commission (FTC) against the National Pork Producers Council (NPPC) alleging NPPC engages in “deceptive advertising related to animal well-being.” NPPC responded by saying it would analyze the complaint, and then “vigorously defend against the absolutely false claims made by HSUS.” The complaint targets the NPPC “We Care” initiative, as well as the industry Pork Quality Assurance (PQA) Plus program, for “patently false claims that PQA Plus … helps to ensure the tall animals in the pork industry continue to receive humane care and handling.” NPPC said, “The FTC complaint is the latest attack by animal rights activist on America’s farmers and ranchers, an assault that seems obviously in response to the U.S. pork industry’s strident opposition to congressional legislation that would allow federal bureaucrats to tell farmers how to raise and care for their animals.” HSUS has filed similar FTC complaints against the United Egg Producers (UEP) – prior to its legislative deal on cage size – as well as a number of food retailers.
The USDA Economic Research Service has updated its data sets which provide information on population, income, education, employment, federal funds, organic agriculture, farm characteristics, farm financial indicators, top commodities, and exports, for each State in the U.S. To view the fact sheets, go to http://www.ers.usda.gov/StateFacts/.