When the Senate returns from Memorial Day recess next week, the Senate Agriculture Committee-approved Farm Bill could be up for a floor vote as early as Wednesday, June 6. Two things are certain: Ag Committee Chairwoman Debbie Stabenow (D-MI) continues her assertion that she has 60 votes for ultimate approval, and floor amendments are mounting up. Southern crop producers – particularly rice and peanuts – remain fundamentally unhappy with the commodity title of the Senate bill, and staffs privately admit floor action will not be easy if the southern bloc of Senators opposed to the current commodity title decide to force target prices and countercyclical payments back into the legislation or vote against the bill. Also key is whether Senate Majority Leader Harry Reid (D-NV) allows any and all amendments to be offered or whether he’ll seek an agreement with Sen. Mitch McConnell (R-KY) to limit the number of amendments which can be offered on the floor. Both Stabenow and committee ranking member Sen. Pat Roberts (R-KS) are meeting with members to head off concerns, but committee discussions and press reports indicate there are a number of known amendments being drafted. It’s expected a group of Senators will offer an amendment to include in the Farm Bill legislation approved last year by the full House and the Senate ag panel to fix the NPDES permit system that forces farm chemicals used near water into double-permitting. Sens. Tom Coburn (R-OK) and Richard Durbin (D-IL) will very likely offer an amendment to cap federal subsidies on crop insurance premiums, and some expect a group of southern Senators to offer separate amendments to cut the crop insurance program overall. On the insurance cap idea, Rep. Collin Peterson (D-MN), ranking member of the House Agriculture Committee, said this week such a concept is “dead on arrival” in the House committee. Sen. Kirsten Gillibrand (D-NY) said in committee she’d offer an amendment to restore cuts in food stamps, and Sen. Mike Bennett (D-CO) is expected to follow through on his committee statements and offer an amendment to excise language from the dairy title that he believes unfairly caps per-farm dairy production. Sen. Charles Grassley (R-IA) has said more than once he’ll move to set new caps on farm payments, and may offer an amendment to ban packer ownership of livestock. There could also be blood on the Senate floor should Sen. Dianne Feinstein (D-CA) seek to amend the Farm Bill with changes to the federal Egg Products Inspection Act backed by the United Egg Producers in an alliance with the Humane Society of the U.S. (HSUS) to set a first-ever federal standard for egg laying hen cage sizes. The bill Feinstein introduced last week is strongly opposed by not only all national livestock and poultry producer organizations, but by most of the animal rights community as well.
Heritage Action and Club for Growth, two highly conservative national political organizations, said this week they’ll “key vote” the Senate Farm Bill and urge Tea Party members of Congress to defeat it. “The fiscally conservative resistance will be high,” said Club for Growth Vice President Andrew Roth in one newspaper interview. Heritage Action said it will target the Farm Bill because the new Agriculture Risk Coverage (ARC) program replacing direct payments costs too much, and the bill does not cut spending on food stamps enough. Michael Needham, head of Heritage Action, this week told The Hill, a newspaper covering Congress, that “conservatives should not be distracted by the end of direct payments in the Senate Farm Bill. Not only does the bill funnel millions to specialty crops while creating new and potentially costly subsidy in shallow loss insurance, it also fails to make necessary structural reforms to the SNAP (food stamps) program.” Some speculate the two groups have more political clout in the House than in the Senate which could complicate getting a House Agriculture Committee bill to the floor.
Confirming the Senate Agriculture Committee’s estimate, the Congressional Budget Office (CBO) this week said the panel’s approved Farm Bill, which could see floor action as early as next week, saves a net $23.6 billion over 10 years. The 10-year cost of the Senate package: $969 billion. The House Farm Bill, because that chamber approved a FY2012 budget resolution, is challenged with finding $32 billion in savings over the next 10 years. However, the way the Senate bill is constructed, any substantive change to the commodity title or any significant restoration of monies cut by the committee during markup leave Senate agriculture leadership little room for negotiation once the bill hits the floor. Both committee chairwoman Sen. Debbie Stabenow (D-MI) and ranking member Sen. Pat Roberts (R-KS) pledged their bill would save at least the $23 billion in savings reached in last fall’s debt reduction draft farm program rewrite. However, some economists continue to allege the bill really only saves about $17 billion over the next decade. CBO said cutting direct payments saves $44.6; part of that savings goes to fund the Agriculture Risk Coverage (ARC) plan devised by the committee to cover 11-21 percent of a farmer’s loss based on price and help span the gap between ARC and conventional crop insurance protection. ARC is expected to cost about $28.5 billion over 10 years.
Two ag economists, hosted by the conservative American Enterprise Institute (AEI), told House and Senate staff this week that a study they conducted – “Field of Schemes” – shows if prices drop to “average” levels, the Senate Farm Bill will cost a lot more than previously assumed. At the same time, a study done by the Food & Agriculture Policy Research Institute (FAPRI) at the University of Missouri shows that all commodities are treated fairly in the Senate bill. Economists Vincent Smith with Montana State University and Barry K. Goodwin with North Carolina State University said the Agriculture Risk Coverage (ARC) program that replaces direct payments in the Senate bill could cost more than the annual $3 billion the Congressional Budget Office (CBO) estimates, and depending on the options chosen by farmers, could cost closer to $5 billion a year if prices stay at current levels, or as much as $7.5 billion if prices drop to averages of the last 15 years. Smith and Goodwin also speculated the program could make U.S. agriculture a target for World Trade Organization (WTO) complaints by Canada, Australia and China. Bruce Babcock with Iowa State University also contributed to the report. AEI has long been critical of farm bills and calls the series of bills enacted over the years “the American Boondoggle.” FAPRI, on the other hand, says the elimination of direct payments and countercyclical payments and the ACRE program, the new ARC program, the STAX program favored by cotton growers and capping the Conservation Reserve Program (CRP) at 25 million acres, will reduce government outlays, farm income and ag land values, but would have only modest impact on markets. The American Soybean Association says the FAPRI work is evidence that all crops are treated equitably in the Senate Farm Bill because ARC reflects actual farmer plantings not a historic “base acres” kind of program. The decline in spending is proportionally larger for rice, peanuts and wheat than it is for other crops, and soybean spending increases reflect higher soybean production. ARC benefits for all commodities would be closer to 2 percent of the market value of all commodities, but ARC payments are proportionally larger for corn and wheat, FAPRI said.
The Environmental Working Group (EWG) – the group that collected, consolidated and put up a searchable Internet database on every individual receiving farm program payments – announced this week it will release an analysis of more than a million U.S. Department of Agriculture (USDA) Risk Management Agency (FMA) records that show that in 2011 alone, more than 10,000 individual farms received federal crop insurance premium subsidies ranging from $100,000 to $1 million apiece. EWG said 26 farms received subsidies of $1 million or more last year. EWG is pushing Congress to at least cap the level of federal premium subsidies on a per-farmer basis at no more than $40,000 per year. EWG tracked subsidies across 686,273 insurance policies issued to 486,867 policyholders last year when total cost exceeded $11 billion for the premium subsidy program. EWG, however, could not get the names of policyholders because the law protects them. EWG said the federal government picks up the cost of about 62 percent of crop insurance premiums, increasing from $1.5 billion in 2002 to $7.4 billion in 2011. “The subsidies go to large operators with conservation strings attached to protect water and soil, no means testing, and no payment limit on how much a farm business can collect,” EWG said. Examples given by EWG include a tomato and pepper grower with operations in five Florida counties who receive $1.9 million in subsidies; a Minnesota farm insuring corn and soybeans in eight counties which received a $1.7-million subsidy, and 10 percent of the farms in Texas getting the most in insurance subsidies, with 63 percent of all crop insurance subsidies paid to Texas operations.
Sen. James Inhofe (R-OK), ranking member of the Senate Environment & Public Works Committee, and Sen. Chris Coons (D-DE) will head a new Senate “study group” to examine issues surrounding the Renewable Fuel Standard (RFS), the increasingly controversial federal program which mandates how much and which alternative fuels must be blended with gasoline on an annual basis, a mandate critics say creates an artificial demand and pushes prices higher for food/feed commodities, but which supporters say is critical to building a U.S. alternative fuels industry. Issues to be examined by the study group include market effects and challenges, feedstocks, infrastructure and environmental impacts. A series of staff-led briefings will occur between June and September.
How to pay for whatever version of federal highway program re-authorization emerges from a House-Senate conference committee continues to elude conferees as staffs indicate progress within the conference is much slower than hoped. Sen. Barbara Boxer (D-CA), chairwoman of the Senate Environment & Public Works Committee, said late last week that conferees had found a “sweet spot” to pay for part of the bill, but that assertion was quickly debunked as “overly optimistic.” Conferees are trying to reconcile a two-year, $109-billion Senate-passed bill that funds federal highway and waterway infrastructure spending, with a House-preferred five-year, $260-billion re-authorization. The current temporary extension of federal highway programs expires June 30. On how to pay for the program, House Transportation & Infrastructure Committee Chairman Dan Mica (R-FL) said he wants conferees to adopt a House proposal – the House never voted on its committee-approved bill – that would tie highway funding to expected new revenues from oil and gas drilling, including the Keystone pipeline, but the Congressional Budget Office (CBO) said this week that even with the new exploration revenues, the bill would still be $500 million short by 2016.
In the continuing saga over how to accommodate the impact of government-issued reports on the new 22-hour commodity market trading days, the Chicago Board of Trade (CBOT) said it has asked the Commodity Futures Trading Commission (CFTC) for permission to open trading 10 minutes before the U.S. Department of Agriculture (USDA) issues major commodity/supply-demand and other reports. At the same time, reports indicate USDA is considering shifting release times on major reports to accommodate the new market timeframes, and Secretary of Agriculture Tom Vilsack confirmed this week that his department is looking at shifting report release times, but USDA will seek public comment before any action is taken. If the CFTC approves, CME – which owns CBOT – said it would open grain and oilseed futures and options markets at 7:20 a.m., central time, on days when USDA releases reports at 7:30 a.m. The early open would apply on the days USDA releases the World Agricultural Supply & Demand Estimates, Crop Production, Prospective Plantings and Acreage reports, and the early openings would apply to CBOT corn, soybeans, wheat, soybean meal, soybean oil, oats and rough rice futures and options.
In comments to the Food & Drug Administration (FDA) on its pending guidance on records access for firms covered by the new Food Safety Modernization Act (FSMA), the National Grain & Feed Association (NGFA) said it wants the agency to change its public draft guidance document because “FSMA clearly does not provide FDA with unlimited records access authority.” NGFA wants FDA to limit access to records unless inspectors have been authorized by an FDA official “with appropriate seniority and expertise;” FDA should have “valid evidence” that adulteration of a product has occurred and poses a risk as defined in FSMA before expanded records access is granted; the draft guidance needs to be changed to reflect that expanded access is limited to those records needed to “assist” the agency; FDA should maintain the confidentiality of protected commercial and trade-secret information as a result of its expanded access, and should develop strict procedures and redundant safeguards to comply with all legal obligations to prevent disclosure of company secrets, and the guidance document should be focused on inspectors.
In an “industry reminder” issued this week by the Food & Drug Administration (FDA), the agency is prompting the animal feed industry to remember to label feeds with contain ethoxyquin, an approved food additive. If added to a feed product, the label must say one of the following: “Ethoxyquin, a preservative” or “Ethoxyquin added to retard the oxidative destruction of carotene, xanthophylls, and Vitamins A and E.” The label declaration is necessary, FDA said, because there are established tolerances for the additive and a maximum use rate.
A U.S. Department of Agriculture (USDA) advisory committee on biotechnology – charged with coming up with a system in which both biotech and non-biotech crop production can “coexist” – has agreed that a USDA education initiative and “mitigation strategy” is necessary for farmers, but failed to find a consensus on any form of compensation plan to cover economic losses due to the unintended presence of genetic material in non-biotech crops. “The Advisory Committee on Biotechnology & 21st Century Agriculture,” also known as AC21, is comprised of farmers, academics, biotech company representatives and consumer groups. The advisory panel has been charged with coming up with a so-called coexistence plan for biotech and nonbiotech crop production, and while the nonbiotech – mainly organic producers – want biotech companies to pay them if their crops are “contaminated” the most the AC21 group would say is that if some type of compensation program is developed, it should following a federal crop insurance model. The group also agreed on the premise of “seed purity” and that farms using biotech seed need to reduce the drift of genetic material at the farm level. Secretary of Agriculture Tom Vilsack told AC21 this week he doesn’t want excuses, he wants action on coexistence because “our regulatory system and our government are a step and a half behind and I’m asking you to get a step ahead” of the coexistence issue. AC21 is expecting to provide Vilsack a final set of recommendations by September 30.
The Nebraska congressional delegation wants the Environmental Protection Agency (EPA) to explain why it uses helicopters in Region 7 surveillance of feedlots for Clean Water Act compliance. These members want to know if the aerial surveillance is new, if it is unique to Nebraska, if there are privacy protections, and how the photos and videotape are being used and protected. “As you might imagine, this practice has resulted in privacy concerns among our constituents and raises several questions for us,” the delegation wrote to EPA Administrator Lisa Jackson this week. EPA, releasing a statement out of its Region 7 office, said it’s used helicopters in compliance surveillance for nearly a decade, and called “the over-flights” a “cost-effective tool that helps the agency and our state partners minimize costs and reduce the number of onsite inspections … as the agency concentrates on areas of greatest concern.” The agency said it never takes enforcement action based solely on the helicopter observation.
It isn’t just national farm, livestock and poultry organizations opposing the Humane Society of the U.S. (HSUS)-United Egg Producers (UEP) cage size bill introduced by Sen. Dianne Feinstein (D-CA) last week, but now the opposition includes an array of national animal rights groups who say they’re “outraged” by what they call “the rotten egg bill.” In release from the Humane Farming Association (HFA) – an animal rights group headquartered in San Francisco, National Director Bradley Miller said the animal rights community is “vehemently opposed” to both the Feinstein bill and a House version of the UEP-HSUS deal introduced by Rep. Kurt Schrader (D-OR). Miller called the bills “a direct assault upon egg laying hens, voters and states’ right.” Miller is also alleging in national ads HFA has bought that UEP is seeking the national housing standard for laying hens to get out from under court actions accusing the egg group of price fixing and supply maniputlation. Other animal rights groups opposing the bill include Friends of Animals, Veterinarians for Animal Rights, United Poultry Concerns, Last Chance for Animals, Action for Animals, Northwest Animal Rights Network, Defend Animals Coalition, Political Animals, Canadians for the Ethical Treatment of Food Animals, Sunnyskies Bird And Animal Sanctuary, SAFE, Animals Unlimited, Massachusetts Animal Rights Coalition, Chicken Run Rescue and Associated Humane Societies.