Stabenow, Roberts File Revised Farm Bill for Floor Action Next Month – A new 1,009-page version of the Senate Agriculture Committee’s approved 2012 Farm Bill was introduced this week by the committee’s chairwoman, Sen. Debbie Stabenow (D-MI), and the ranking member, Sen. Pat Roberts (R-KS). The bill reflects modifications negotiated since the committee markup, and is part of preparations for floor action in early June. The bill contains “adjustments” to the crop insurance section that would require farmers who sign up for new supplemental insurance coverage to pay a 10 percent deductible, a move designed in part to preserve the much-promoted $23-billion savings by inserting an “offset” to other costs. There’s also new language benefitting midwestern popcorn producers and a new “terminal lakes program” for desert areas, a move important to Nevada and Senate Majority Leader Harry Reid (D-NV). The battle between North and South and among commodity groups continues, with southern rice and peanut producers contending the Senate bill continues to favor northern producers by pegging benefits to some form of crop insurance, a product southerners don’t use as much as their Midwest colleagues. Roberts said the negotiations continue and there could be a major floor amendment to shift the commodity title coverage to satisfy southern producer groups. Stabenow this week continued to defend the Senate bill even as she continues to “negotiate with southern interests.” She said her bill is the more “market-oriented” approach to protecting producer income, explaining her bill protects farmers when revenues drop, not when House-favored target prices kick in. She also argued that for years, southern crops – mainly cotton, rice and peanuts – received disproportionately higher federal farm program support rates than did corn, wheat and soybean producers, justified by higher production costs. Over in the House, ag leaders acknowledged their target for cost savings is now about $34 billion over 10 years, compared with the Senate’s $23 billion in savings. Part of that additional savings will come from deeper cuts to nutrition programs than in the Senate, a move Lucas said will balance cuts in farm programs with cuts in food stamps and a move Stabenow opposes. A copy of the revised bill can be found at www.ag.senate.gov/issues/farm-bill.
NMPF Disputes Critics: Consumer Price, Export Impact of Supply Proposal is Negligible – It’s an effective policy, says the National Milk Producers Federation (NMPF) of its supply management scheme in the Senate Farm Bill, and a program that will have “little impact” on consumer prices or exporters. NMPF was referring to its margin protection program and the more controversial “market stabilization” program that critics say is nothing less than federal production/supply management. The House Agriculture Committee asked for an analysis of the so-called Dairy Security Act, and Dr. Scott Brown of the University of Missouri reported the revised dairy support programs under consideration protect farmers economically from low margins based on feed costs, reverse those low margins more quickly and do not “adversely impact consumer prices or exports of U.S. dairy products.” Brown studied milk production from 2012-2022, and said under the NMPF proposal, milk production would only be about one-tenth of 1 percent less than what would occur if NMPF proposal is not part of the Farm Bill, with the program only kicking in on average about 7.5 percent of the time studied or 10 months out of the 11-year analysis.
Biofuels Industry Pushing Hard on House to Retain Energy Title Programs – Saying the Senate got it right, the biofuels industry this week called on the House Agriculture Committee to retain U.S. Department of Agriculture (USDA) energy programs slated to expire at the end of the fiscal year. The problem is a budget formula issue: if the programs are allowed to expire, the House committee would have to find cuts in other programs to pay for them as they’d no longer be part of the Farm Bill baseline. The Senate Farm Bill carries about $800 million in mandatory funding for energy programs, offset by cuts elsewhere in farm programs. The programs provide loan guarantees, loans and grants for bioenergy projects, and analysts told the House ag panel these programs will pay for themselves over time. At the last House ag subcommittee hearing held late last week, the Biotechnology Industry Organization (BIO) told the panel that the nation’s first commercial cellulosic ethanol plant – made possible by a loan from USDA’s biorefinery assistance program – is only “weeks away” from starting operation in Florida, with the feedstock being crop waste and other non-edible plant matter, including corn stalks and wood chips. Another witness said the Biomass Crop Assistance program allowed him to put 225 farmers under contract to raise switchgrass as a feedstock for a bioenergy project. The industry also asked that USDA be allowed to fund programs from concept through viability. Some subcommittee members cautioned, however, that projects dependent on federal funding may never reach commercial viability.
Nearly 70 House Members Call for Specialty Crop Protections – A letter this week to House Agriculture Committee Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) from 66 House members calls on the ag panel leaders to ensure that “full and fair consideration” is given to fruit and vegetable grower need for enhanced research, pest management and trade assistance. The Senate version of the Farm Bill essentially preserves all existing specialty crop provisions of the current law, and with Sen. Debbie Stabenow (D-MI), chairwoman of the Senate committee, from a specialty crop state, these provisions are expected to survive and could expand once the Farm Bill reaches conference committee reconciliation.
Sen. James Inhofe (R-OK), ranking member of the Senate Environment & Public Works Committee, this week moved to limit or end military spending on renewable energy and biofuels. Inhofe said the Administration’s “green agenda” is allocating too much money to alternative energy, money that could better be spent on other defense projects. He pledged to offer several floor amendments to a defense authorization bill to thwart the so-called “green agenda.” The Senate move is similar to a House action that would exempt the Department of Defense (DOD) from Administration requirements to purchase alternative fuels under the so-called energy independence act and would limit the amount of money available to DOD to buy bioenergy. Inhofe said the federal government has spent $86.4 billion on global warming activities since 2008, citing a Congressional Research Service (CRS) report.
Citing JP Morgan’s $2-billion-plus trading losses, Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler this week told a futures industry audience he opposes any legislative move to loosen derivatives regulation. Gensler said a House bill – HR 3283, which would exempt overseas subsidiaries of U.S. banks from clearing and margin requirements – “would substantially reduce transparency and increase risk to our financial system and the economy.” At the same time, the House Agriculture Committee postponed for the second time a planned hearing/markup on the bill after JP Morgan’s trading losses – based on trades made by its London office –caused a political and regulatory uproar. The House Financial Services Committee approved the bill on a party line vote in March. The ag panel postponement signals many watching the bill that a compromise bill is likely to emerge, one that includes a proposal by Rep. Barney Frank (D-MA) that would give regulators authority to set protections on U.S. company trades with non-U.S. clients based on systemic risks. Gensler said if the bill is enacted U.S. financial institutions would likely move swaps trades to overseas to avoid the new requirements, with losses “coming back into the U.S.”
The Commodity Futures Trading Commission (CFTC) this week approved a proposed rule that would change the commission’s aggregation rules for limits on speculative positions. The new rule would permit any person with a greater than 10 percent ownership or equity interest in a company to “disaggregate” the owned entity’s position, provided there are “protections and firewalls” in place to make sure trading decisions are made independently of each other. The new rule is in response to a petition from the Working Group of Commercial Energy Firms seeking relief from the aggregation provisions.
The U.S. Department of Agriculture Natural Resources & Conservation Service (USDA-NRCS) will spend nearly $32 million in direct financial and technical assistance for five water quality projects and wetlands improvement programs in seven Mississippi River basin states, Secretary of Agriculture Tom Vilsack said this week. The projects are designed to prevent sediment and nutrients from entering waterways, decrease flooding and improve fish and bird habitats by restoring 11,400 acres to wetland habitat. The projects are located in Arkansas, Kentucky, Louisiana, Missouri, Mississippi, Tennessee and Iowa, and are funded through NRCS’s Wetlands Reserve Enhancement Program. This investment is in addition to $17.8 million in USDA investment in long-term easements in the river basin negotiated with 47 landowners since 2010.
Official laboratories in Canada and the United Kingdom have confirmed the U.S. Department of Agriculture’s (USDA) diagnosis of atypical BSE in a cow tested and discovered in Tulare County, California, the department’s Animal & Plant Health Inspection Service (APHIS) said this week. At the same time, APHIS said investigation of feed records at the primary dairy – the one on which the cow lived – show no violations of the federal BSE feed rule, and audits of all feed suppliers show them to be in compliance with the federal rule banning the feeding of mammalian proteins to bovine animals. The two California dairies quarantined after the discovery have been released from those quarantines following inventory and records reviews. All progeny of the BSE cow have been located and tested, with none testing positive for BSE, APHIS said. The department continues to trace 10-12 animals which resided on the primary farm while the BSE cow was alive and for which records exist to allow them to be traced. All other “cohorts” of the BSE cow are dead or have been eliminated from tracing.
Late this week the Federal Motor Carrier Safety Administration (FMCSA) issued regulatory guidance on its definition of a tank vehicle. A year ago, FMCSA said a “tank vehicle” is a vehicle moving cargoes of bulk (greater than 119 gallons) tanks that were permanently or temporarily attached to the vehicles chassis and with an aggregate capacity of more than 1,000 gallons. The guidance issued this week says that definition does not include intermediate bulk containers, and any tank that is properly secured in a vehicle should be considered “attached to the chassis” regardless of how it’s secured. Finally, the guidance says that bulk tanks that are manifested as empty or as residue do not count toward the 1,000-gallon threshold to be a tank vehicle. The clarification and guidance was the result of an American Trucking Association petition. Details can be found by going to http://www.dot.gov/ and searching FMCSA.
Sen. Dianne Feinstein (D-CA) and six colleagues introduced this week the controversial laying hen cage size bill, the product of an agreement proposed by the United Egg Producers (UEP) and agreed to by the Humane Society of the U.S. (HSUS). The bill is supposed to bring consistency back to state laws governing whether cages can be used to house egg-laying hens, and if so, how big those cages have to be.
The Association of California Egg Farmers endorsed the bill, which amends the Egg Products Inspection Act (EPIA) to set a national housing standard for egg-laying hens. The bill is similar, but not identical, to a House bill introduced earlier this year by Rep. Kurt Schrader (D-OR).
The UEP-HSUS bargain – and the federal legislation – is strongly opposed by nearly every national farmer, livestock and poultry organization, primarily because it seeks for the first time to give the federal government authority to regulate on-farm animal production practices. Several national animal rights groups oppose the bills because they say HSUS “surrendered” its historic “no-cage, no-way” position for short-term political gains. Farm groups say the UEP-HSUS deal sets a dangerous precedent for other commodity groups, and that animal rights organizations, while they may be silent on cages for now, will ultimately seek to further restrict on-farm production.
The bill recognizes the so-called “enriched colony system,” cages larger than those currently used, and which provide “nesting” areas. One study says feed costs are higher in the enriched systems, but the California group says hens are more productive in the bigger cages.
However, a Congressional Research Service (CRS) report on the issue of federal standards for egg cages says enacting the UEP-HSUS deal “would accelerate consolidation in the egg industry because of the capital costs required to overhaul barns.” While costs would vary from farm to farm, some producers would have to build larger barns to accommodate the new cages, along with new heating systems because birds are spaced farther apart. CRS cited an Iowa State University study that said some medium-size producers – those with fewer than a million birds – would expand, while others will go out of business.
The U.S. Department of Agriculture (USDA) announced this week that it has accepted 3.9 million acres for enrollment in the Conservation Reserve Program (CRP) general sign-up just completed. During the five-week extended signup, the department received 48,000 offers on more than 4.5 million acres. Since President Obama was elected, USDA has enrolled nearly 12 million acres in the program, bringing the current total number of acres enrolled to 29.6 million. The cap on CRP is 32 million acres. This enrollment, USDA said, will allow the department to continue targeting CRP acres through continuous sign-up programs, such as the one announced earlier this year on highly erodible land, grasslands and wetlands. The two new continuous sign up initiatives will target an additional 1.75 million acres.