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Farm Bill; and, The Ag Economy- Friday

Posted By Keith Good On July 12, 2013

Farm Bill: Farm-Only Farm Bill Narrowly Passes House

David Rogers reported yesterday at Politico that, “The House narrowly passed a pared-back farm bill Thursday after Republican leaders stripped out the nutrition title — impacting food stamps and local food banks — to win back conservative votes.

“The 216-208 roll call avoids a repeat of last month’s embarrassing collapse and for the first time in a year will allow House-Senate talks on a final farm package.

“All but 12 Republicans supported the measure — in contrast with the 62 defections in June. And it was a badly needed, face-saving win for Majority Leader Eric Cantor (R-Va.), whose tactics contributed to last month’s loss and had bet heavily on the new approach to recover.”

Mr. Rogers explained that, “All 196 Democrats voted in opposition, and there was a genuine fury displayed by members of the Congressional Black Caucus, who repeatedly delayed the emotional floor proceedings. The intense partisanship and often tone-deaf management of the past month have fed into doubts in Cantor’s own party over his temperament as a would-be speaker.

“‘Farm bills have been bipartisan for generations and we made it a mess,’ said one senior Republican. In the process, the GOP gave up precious leverage to enact nutrition reforms in talks with the Senate. And dozens of fiscal conservatives, who complained about the high cost of the farm bill last month, were pressured to switch their votes when the only change was removing food aid for the poor.

“‘This is a victory for farmers and conservatives who desired desperately needed reforms to these programs,’ Cantor said in a statement. But a solid phalanx of outside groups, like the Heritage Foundation, Club for Growth and Taxpayers for Common Sense, remained opposed to the level of commodity and crop insurance subsides in the bill.”

The Politico article pointed out that, “At the same time there were two significant revisions to supplant decades-old commodity price and production provisions for grains, upland cotton and milk, for example.

“Dating back to 1938 and 1949, these have been a ‘permanent law’ backstop of sorts for farm bills and source of political leverage for commodity groups. But they are largely impractical today and the new commodity title will now take their place as the new permanent law going forward.

“On the surface, this is a change advocated by conservatives. But it could make it harder to pass farm bills in the future, and it appears sugar, cotton and rice stand potentially to gain.”

Speaking yesterday on the House floor (video replay , transcript) House Ag. Committee Ranking Member Collin Peterson (D., Minn.) stated that, “The other fatal flaw with this bill is the repeal of permanent law from 1938 and 1949 and replacing it by making the commodity title in this bill permanent. If you want to ensure Congress never considers another farm bill and the farm programs as written in this bill remain forever, then vote for this bill.

“In every farm bill, there are things some people like and things some people don’t. The beauty of the ’38 and ’49 permanent laws is that it forces both groups to work together on a new farm bill, because no one really wants to go back to the old commodity programs.

“If you make the new farm safety net programs the new permanent law, then those who got a better result in the commodity title this time have no incentive to work on a new bill. It will make it more difficult to make changes, improvements or reforms that over time we discover are needed.”

Rep. Peterson added that, “For example, one reason I opposed the Goodlatte amendment to the Dairy Security Act was the knowledge that the amendment would likely result in large government payments to milk producers. I lost that argument on the House floor but if I am proven right, making this bill permanent law makes it just that much harder to correct. And for the specialty crop, conservation, rural development, energy, research and farm credit needs, they are not made permanent by this bill.”

Reuters writer Charles Abbott reported yesterday that, “Republican leaders said food stamps, traditionally part of the farm bill, would be handled later and that, for now, they needed a way to start negotiations with the Senate over a compromise bill.

“Democrats said the real intent of the action was to isolate food stamps for large cuts in funding. There is no timetable, so far, for a separate food stamp bill.”

Also, Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “House Rules Committee Chairman Pete Sessions (R-Texas) on Thursday implored Democrats to support a farm bill that does not include a food stamp reauthorization, in order to allow a House-Senate conference to work out language on food stamps.

“Republicans met an angry response from Democrats Thursday morning when they called up a farm bill without food stamp language, H.R. 2642. Dozens of Democrats lined up to argue that by taking out the food stamp title, Republicans were trying to pass a bill that would hurt hungry American families.

“To that, Sessions said Republicans were not trying to avoid reauthorizing food stamps, and were instead trying to pass some version of the bill that could be conferenced with the Senate bill. The Senate-passed bill includes a food stamp title, formally called the Supplemental Nutrition Assistance Program (SNAP)” (related video of Chairman Session’s nutrition explanation here).

Ed O’Keefe noted in today’s Washington Post that, “House leaders and their aides conceded Thursday that they were so consumed by simply passing the pared-down bill that they haven’t figured out what to do next.”

However, Rachel Weiner noted yesterday at The Fix Blog (Washington Post) that, “Food stamps won’t disappear. If the House legislation became law, they would have to be funded separately through appropriations bills.”

Also, Brad Plumer, writing yesterday at the WonkBlog (Washington Post) elaborated on the SNAP issue, and stated that, “The House could try to reconcile its ag-only bill with the Senate’s broader farm bill… The House could pass its own food-stamp bill later this month… Congress might not agree on any food-stamp bill at all.”

Corey Boles reported yesterday at The Wall Street Journal Online that, “House GOP leadership aides said they would work to advance a separate food-stamp bill. But reaching a compromise with the Senate could be tough: Last month’s failed House bill would have reduced food-stamp funding by $20 billion over the next decade, compared with $4 billion in cuts approved by the Senate.

“Now, as House leaders look for Republican votes to pass a stand-alone food-stamp bill, conservatives are expected to push for steeper cuts—something Democrats in both chambers are sure to oppose.”

Jonathan Weisman and Ron Nixon reported yesterday at The New York Times Online that, “Representative Frank D. Lucas, Republican of Oklahoma, the chairman of the House Agriculture Committee, said he would try to draft a separate food stamp bill ‘as soon as I can achieve a consensus.’ But conservatives remain determined to extract deep cuts to the program — cuts that members of both parties in the House and Senate have said they cannot support.

“House and Senate negotiators could produce a compromise measure with the robust food stamp program the Senate wants, but the bill would almost certainly have to pass the House with significant Republican defections.

“Asked if he would allow such a bill to come to a final vote, Speaker John A. Boehner of Ohio shrugged and said: ‘If ands and buts were candy and nuts, every day would be Christmas. You’ve heard that before. My goal right now is to get the farm bill passed. We’ll get to those other issues later.’”

Bloomberg writers Alan Bjerga and Derek Wallbank reported yesterday that, “The Republican measure severing food stamps from farm programs that were linked for decades makes the bill ‘extremely flawed,’ said Senator Debbie Stabenow, chairwoman of the Senate Agriculture Committee and the likely leader of that chamber’s negotiating team.

“The bill ‘is not a real farm bill and is an insult to rural America,’ the Michigan Democrat said in a statement. President Barack Obama’s administration has threatened a veto of the plan were Congress to pass the scaled-back version, which was debated three weeks after the House rejected a more expensive measure.”

And Billy House reported yesterday at National Journal Online that, “It was unclear if House Republicans would put forth a bill covering nutrition programs before going to conference with the Senate.”

Mr. House added that, “Some Democrats the GOP maneuvering is ultimately about political messaging and, possibly, letting funding for food stamps sunset. Minority Whip Steny Hoyer, D-Md., said he believes the split bill was brought to the floor only so Republicans can accomplish one objective—‘to make it appear that Republicans are moving forward with important legislation even while they continue to struggle at governing.’

“And Rep. Peter Welch, D-Vt., also said he doubts that Republican leaders, in fact, really intend to bring back to the House floor any bill that the Senate and House conference might hammer out—especially if the conference report is closer to the Senate bill and has significant Democratic support, but not as much support from Republicans.”

AP writer Mary Clare Jalonick reported yesterday that, “Republicans said the food stamp part of the legislation would be dealt with separately at a later date, and Cantor said after the vote that Republicans would ‘act with dispatch’ to get that legislation to the floor. That bill is expected to make cuts much deeper than the original bill, which trimmed around 3 percent, or about $2 billion a year, from the $80 billion-a-year feeding program.

“Many Republicans had said the cut wasn’t enough since the program’s cost has doubled in the last five years. Democrats have opposed any cuts. The food stamp program doesn’t need legislation to continue, but Congress would have to pass a bill to enact changes.

“Dropping the food stamps drops the cost of the farm bill from $100 billion a year to about $20 billion a year.”

The AP article added that, “But in a floor speech, House Minority Leader Nancy Pelosi, D-Calif., said, ‘You are taking food out of the mouths of your own poor constituents.’”

In a statement yesterday, Rep. Steve King (R., Iowa) noted that, “While I am disappointed the Farm Bill that passed the House today did not contain changes to current nutrition policy, I am hopeful that House Leadership will bring a nutrition bill to the Floor soon so we have the chance to make necessary reforms to bloated nutrition policies.”

In a statement yesterday after the vote, Ranking Member Peterson indicated that, “The House Majority’s decision to ignore the will of the more than 500 organizations with a stake in the farm bill, setting the stage for draconian cuts to nutrition programs and eliminating future farm bills altogether would be laughable if it weren’t true.

“This was not the only option. Following the House failure to pass a comprehensive, bipartisan, five-year farm bill, I repeatedly expressed a willingness to work with the Majority on a path forward. I firmly believed that if we could find a way to remove the partisan amendments adopted during the House farm bill debate we would be able to advance a bipartisan bill, conference with the Senate and see it signed into law this year. Now all that is in question.”

Chairman Lucas noted in a statement yesterday that, “Today was an important step toward enacting a five-year farm bill this year that gives our farmers and ranchers certainty, provides regulatory relief to small businesses across the country, significantly reduces spending, and makes common-sense, market-oriented reforms to agricultural policy. I look forward to continuing conversations with my House colleagues and starting conversations with my Senate colleagues on a path forward that ultimately gets a farm bill to the President’s desk in the coming months.”

A video replay of the Chairman’s closing remarks on the House floor can be viewed here.

Agricultural reporter Christopher Doering tweeted yesterday that, “@USDA Secretary Tom Vilsack says agriculture and rural America “deserved much better than they got today” with House #FarmBill vote”

The New York Times editorial board opined today that, “And, on Thursday, the House passed a farm bill that stripped out the food stamp program, breaking a pact that for decades has protected the nutrition needs of low-income Americans. It was the first time since 1973 that food stamps haven’t been part of a farm bill, and it reflected the contempt of the far right for anyone desperate enough to rely on the government for help to buy groceries.

“These actions show how far the House has retreated from the national mainstream into a cave of indifference and ignorance. House members don’t want to know that millions of Americans remain hungry (in an economy held back by their own austerity ideology)…”

Agricultural Economy

Owen Fletcher and Eric Morath reported yesterday at The Wall Street Journal Online that, “U.S. forecasters slightly raised their expectations for domestic corn supplies next year and reiterated expectations that this fall’s crop could be the country’s largest ever.

“Corn futures prices were mixed after the monthly report, which provided traders with relatively few surprises.

“In the report, the U.S. Department of Agriculture estimated that U.S. corn stockpiles next summer will total 1.959 billion bushels, a 0.5% increase over its forecast last month and above the average analyst forecast of 1.874 billion bushels in a Dow Jones Newswires poll.”

The Journal article added that, “The government increased its supply forecast because it expects weaker export demand for the U.S. crop and for lower use of corn in animal feed by livestock and poultry companies, which would leave the country with more surplus corn.

“The grain markets had a muted reaction, with analysts saying traders are mainly focused on weather forecasts for crops in coming weeks.”

AP writer David Pitt reported yesterday that, “The U.S. Department of Agriculture slightly lowered its estimate of the corn crop on Thursday, a reflection of late planting in the Corn Belt due to the wet spring.

“Farmers are now expected to harvest about 13.95 billion bushels, 55 million fewer bushels than predicted in June. That still beats the 2009 record by about 858 million bushels. A bushel of corn, when on the ears, weighs about 70 pounds.

“The USDA also said farmers are now expected to harvest about 89.1 million acres of corn, down from the 89.5 million acres expected a month ago.”

The article noted that, “Darrel Good, agricultural economics professor at University of Illinois at Urbana-Champaign, said the state’s corn was mostly shaping up well.

“‘In the northern two-thirds of the state, we have crops that in really very good shape,’ he said. ‘Here in the east-central part of the state I would say it’s the best looking crops that I can recall.’”

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Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL

(t) 217.356.2269

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