Budget; Farm Bill and Policy; Regulations; MF Global; and
the Ag Economy
Categories:
Agricultural
Economy /Audio /Budget /Farm Bill
Budget- Payroll Tax- Policy
Agenda
Pete Kasperowicz
reported yesterday at The Hill’s Floor Action Blog that, “The House on
Thursday evening approved the first of up to 10 budget reform bills House
Republicans hope to consider on the floor in the coming weeks…The bill
requires the Congressional Budget Office (CBO) to provide economic analyses of
bills with major budgetary impacts — those that have an effect of 0.25 percent
of GDP or more, or about $38 billion last year. The analysis would
describe the economic impact of the bill, including on GDP, business
investment, employment and other economic variables.”
Meanwhile, Bernie Becker reported yesterday at The Hill’s On
the Money Blog that, “Democrats and Republicans both said Thursday they want
to keep extraneous measures out of a package to extend the payroll tax cut.
“They just don’t agree on
what constitutes extraneous.
“At their second meeting in
as many days, lawmakers on a House-Senate conference committee sparred over
whether to include initiatives on issues ranging from boiler regulations to
supplemental welfare programs to recently expired tax provisions.”
The update added that, “With
less than four weeks until the payroll tax cut for 160 million Americans
expires, Thursday’s meeting continued to feed the perception that
negotiators still had major obstacles to overcome.”
As contrasts and political
rhetoric between the executive branch and Congress unfold this election year,
Senate and House GOP leaders are each working to establish a political strategy
and policy agenda that members can coalesce around.
In the Senate, Manu Raju reported
yesterday that, “President Barack Obama has made no secret about his
plan to run against Republicans in Congress. But Republicans in the Senate
are still trying to figure out the best way to run against him.
“With no nominee yet to spell
out the party’s agenda, Senate Minority Leader Mitch McConnell (R-Ky.)
is locked in a behind-the-scenes debate with other Republicans over their strategy
for winning back power.
“The divide within the party
is sharp. McConnell and other influential senators believe the party should avoid
putting out a detailed platform and focus squarely on Obama’s record, while
a range of junior senators — and some veterans like Sen. John McCain —
think the conference should lay out a Contract with America-type agenda. Others,
such as Sens. Roy Blunt of Missouri and Ron Johnson of Wisconsin,
want to more aggressively push House Republican bills in the Senate in
order to speak with one voice coming out of Congress.”
And in the House, Jennifer Steinhauer and Jonathan
Weisman reported in today’s New York Times that, “Unpopular and
divided, the once mighty House Republicans are laboring to repair their image
and frame a new agenda.
“Absent for now is a big,
contentious docket similar to last year’s, which included the goal of writing
new health care legislation to replace the Obama administration’s law. A
long-promised overhaul of the tax code seems out of reach. When Representative Eric
Cantor, the Virginia Republican and majority leader, issued a memo this
week laying out the body’s initial legislative agenda, a centerpiece was a
modest tax cut for small businesses.”
The Times article noted that,
“Many of the more conservative members, particularly some freshmen, want to continue
taking the good fight to Democrats…Others desperately want to find bipartisan
compromises that can become law.”
And Billy House reported yesterday at National
Journal Online that, “House Speaker John Boehner, R-Ohio, on Thursday
sought to downplay talk of testy relations between himself and Majority Leader Eric
Cantor, R-Va., but he did say there are ‘rumbles’ between their staffs at
times.”
Farm Bill and Policy Issues
DTN Political Correspondent
Jerry Hagstrom reported yesterday (link requires subscription) that, “Four hearings will be held in February and March
in hopes of bringing a farm bill to the Senate floor before the House acts,
Senate Agriculture Committee Chairwoman Debbie Stabenow told DTN on
Wednesday.
“Stabenow, D-Mich., said she
does not know when Senate Majority Leader Harry Reid, D-Nev., would
bring a farm bill to the floor, but said that she and Senate Agriculture
ranking member Pat Roberts, R-Kans., ‘want to be able to move it as
soon as we can so [House Agriculture Committee Chairman Frank Lucas, R-Okla.]
has the time he needs in the House.’”
Mr. Hagstrom
added that, “Even though the supercommittee on
deficit reduction failed to complete its work, Stabenow said the work she
and Lucas did preparing the proposal they submitted to it ‘was a very important
process for us, very clarifying.’
“‘I really feel like we have
developed a lot of good work already,’ she said. ‘We developed relationships
that are positive. We know where we still need to work.’
“The commodity title
‘is the area where we have the most work to do,’ Stabenow acknowledged. Noting
that commodity groups are meeting this week to discuss their differences and
try to reach consensus, she said, ‘I have been urging them to get together.’”
The DTN update stated that,
“Reacting to Lucas’s statements that it would be hard to develop a single
program that will work for all commodities, Stabenow said she has heard
‘loud and clear,’ including at the farm bill hearing she held in Lansing,
Mich., that crop insurance is ‘the No. 1 management tool,’ but crop
insurance is not available for all crops.
“‘That is where the challenge
comes in,’ she said. ‘I am very confident we can come together on a set of
tools.’”
DTN Ag Policy Editor Chris Clayton
reported yesterday that, “After a two-day powwow in Washington this week,
roughly 40 leaders from 13 farm organizations put out a statement on Thursday that effectively said
they met and they like working together.”
The article pointed out that,
“Commodity groups have leaned toward the shallow-loss programs that
provide a revenue guarantee. The American Farm Bureau has argued such programs
offer too much protection on smaller losses and would prefer more focus on catastrophic
losses.”
“Everyone expects commodity
programs will undergo an overhaul with the likelihood that direct payments are gone and will be replaced
with another program. The problem farm groups face
is the same one facing lawmakers: They don’t know exactly how much has to be
cut from the farm bill. The supercommittee figure
was $23 billion over 10 years, but congressional leaders haven’t committed to
keeping that dollar figure,” Mr. Clayton said.
The DTN item explained that,
“House Agriculture Committee Ranking Member Collin Peterson, D-Minn.,
said the House Agriculture Committee will follow the lead of the Senate,
partially because House members are waiting for direction from Republican leadership.
Peterson said House Ag Chairman Frank Lucas, R-Okla., also continues
working with House leaders to see when there would be time to move a bill and
get floor time.
“‘Always, the idea was
that the Senate was going to move first anyway,’ Rep. Peterson said in a
phone interview Thursday.”
And on budget related
variables, Mr. Clayton indicated that, “Looming out there is the lack of
clarity on the mandatory sequestration cuts passed by Congress last
August that are expected to take effect Jan. 1. Those cuts were expected to be
around $16 billion in agricultural spending; however, specifics are not
controlled by Congress, but by the White House Office of Management Budget. The
OMB could give instructions to the Congressional Budget Office to
build the sequestration cuts into the March baseline, which would effectively
lower the money to spend on a farm bill, Rep. Peterson said.
“A more likely scenario
is that the House leadership will demand a higher level of budget cuts from the
Agriculture Committee, especially after the House Budget Committee wanted $48 billion in cuts from agricultural programs last year.
Rep. Peterson said he can work with Lucas, but he worries about the
demands the leadership will place on trimming programs.
“‘As long as it’s a
reasonable number, I’ll be able to work with them. If they go off the deep end,
then I won’t be able to work with them.’”
Gary Truitt reported earlier this week at Hoosier
Ag Today (HAT) Online that, “Indiana Congressman Marlin Stutzman, one of the few working farmers in Congress,
told HAT at the Ft. Wayne Farm Show a few weeks ago, that there was a 50/50
chance work would be done on the Farm Bill this year. This week he
told HAT things in Washington have declined so
much that there is little if any chance action will be taken this year.”
Meanwhile, Bloomberg writer Alan Bjerga reported
yesterday that, “U.S. food-stamp use in November fell for the second
straight month as the unemployment rate declined, the government said.
“About 46.134 million
Americans received aid, down 0.2 percent from a revised 46.228 million in
October, the U.S. Department of Agriculture said today in an e-mail.
Participation was 5.8 percent higher than a year earlier. Monthly spending on
the program was $6.22 billion in November, 6.9 percent more than a year
earlier.”
Also on nutrition, an Op-Ed
published in today’s Los Angeles Times by David R. Just and Brian Wansink
stated that, “Last fall, Los Angeles took a hard line on school nutrition.
In an attempt to mold better eating habits in kids, the Los Angeles Unified
School District eliminated flavored milk, chicken nuggets and other
longtime childhood favorites. But instead of making kids healthier, the changes
sent students fleeing from school cafeterias. There have been reports of a
thriving trade in black-market junk food, of pizzas delivered to side doors and
of family-sized bags of chips being brought from home. Garbage cans are
filling up with the more nutritious food, even if kids aren’t.
“The
lesson? We
cannot simply bully kids into eating healthful foods and take their lunch
money.”
In policy issues regarding
animal agriculture, a news release yesterday from the United Egg
Producers noted that, “Congress only has to look at what’s happening in the
European egg industry right now to understand the benefits to American farmers,
grocers, and consumers of the proposed amendments to the Egg Products
Inspection Act (H.R. 3798) introduced last month in Congress.
“Contrary to the proposed
legislation in the United States, egg farmers in Europe were given a single
deadline (January 1, 2012) with no phase-in period to abandon the use of conventional
cage housing for egg-laying hens with no specific alternative housing proposed.
The result was a legal morass, confusion and chaos for European farmers,
retailers and consumers that contributed to reported egg shortages and higher
prices.”
The release added that,
“‘Earlier estimates of higher egg prices in the U.S. were based on the fear of
a patchwork of state mandates for cage-free production which involves
dramatically higher costs. This federal legislation is what is best for
consumers, retailers and egg farmers to avoid the catastrophe that is occurring
all across Europe right now,’ [Chad Gregory, senior vice president
of United Egg Producers] added.”
Regulations
Chris Clayton reported
yesterday at DTN (link requires subscription) that, “Changes to
a child labor rule that give farm kids special permission to work for their
families aren’t enough to satisfy members of a House Small Business Subcommittee,
who said they want the rule pulled completely.
“In a Subcommittee on
Agriculture, Energy and Trade hearing on Capitol Hill Thursday, a Department of
Labor official defended the need to update child-labor laws for farms, but
highlighted changes made to ensure children can work for family members. Still,
lawmakers criticized the proposal with one congressman saying he would block
any funding to implement it.”
Sen. Jerry Moran (R.,
Kans.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where they
discussed issues associated with the Dept. of Labor child labor rule, to listen
to a this conversation from yesterday’s AgriTalk
program, just click here (MP3- 4:00).
And an update yesterday from the House Ag Committee
stated that, “This week during The Ag Minute [MP3], guest host Rep. Scott
Tipton [R., Colo.] discusses the U.S. Department of Labor’s (DOL) move to
reconsider a portion of a proposed labor rule that relates to children working
on family farms. The decision to reconsider the rule is a positive
development, but there are still concerns within the agricultural community.
Farming families must be allowed to continue the long tradition of teaching
their children the skills required to grow into the next generation of
farmers.”
MF Global
Scott Patterson reported in today’s Wall Street
Journal that, “Even as MF Global Holdings Ltd. was telling investors and a
credit-rating firm it was in good shape, the company was girding itself
internally with a ‘break the glass’ emergency plan in the weeks before its
collapse, according to testimony at a congressional hearing Thursday.
“In the second hearing by a House Financial Services
Subcommittee on MF Global’s downfall, lawmakers
quizzed two of the firm’s former risk managers about the dangers posed by a
massive bet on European debt that eventually led to a series of rating-firm
downgrades and a devastating credit crunch that brought down the firm.”
The Journal article noted
that, “Lawmakers focused on an internal MF Global document that laid out
extreme financial stress scenarios the firm could face in the near future. Those
concerns apparently contrast with upbeat comments the same month from
former Chief Executive Jon S. Corzine and the firm’s former chief financial
officer, Henri J. Steenkamp, lawmakers said.”
In a video update from yesterday, Rep. Randy Neugebauer (R., Tex), the Chairman of the House
Financial Services Subcommittee on Oversight and Investigations, provided a
summary of some of the key points from yesterday’s hearing.
Jacob Bunge and Dan Strumpf
reported in today’s Wall Street Journal that, “CME Group Inc. launched a
fresh effort to rebuild market confidence damaged by the collapse of MF Global
Holdings Ltd., creating a $100 million insurance fund to protect
farmers and ranchers.”
The Journal article added that,
“The Family Farmer and Rancher Protection Fund would indemnify individual
farmers and ranchers for as much as $25,000 of losses incurred from the
collapse of a brokerage used to place trades on the CME. Farmer cooperatives
could claim up to $100,000.”
Reuters writer Christopher Doering
reported on Wednesday that, “The head of the Commodity Futures Trading
Commission has ordered an extensive review of how futures brokerages are
regulated, following the collapse of MF Global three months ago, a CFTC
official told Reuters on Wednesday.
“CFTC Chairman Gary Gensler ordered the review after questions emerged
about whether the CFTC or exchange-operator CME Group, whose self-regulatory
arm served as MF Global’s front-line regulator, could
have done more to prevent the firm’s collapse and safeguard customer money.”
Agricultural Economy
A Voice of America article from this week reported
that, “The world will need to double food production within the next three
decades in order to feed a rapidly growing and increasingly affluent population.
A United Nations report says reaching that goal will require major increases in
intensive, high-efficiency livestock operations for both meat and dairy
production.”
With respect to U.S. crop
production, University of Illinois Agricultural Economists Scott Irwin and
Darrel Good provided a closer look at issues associated with domestic corn
production in an update posted yesterday at the farmdocdaily
blog (“The Historic Pattern of U.S Corn Yields, Any Implications
for 2012?”)
A summary of their analysis
stated that, “For any particular year, including 2012, history suggests a 60
percent chance of an average U.S. corn yield above trend and a 40 percent
chance of an average yield below trend value. Those arguing that 2012
yields cannot be below trend because both 2010 and 2011 were also below trend
ignore the actual pattern of historical corn yields. The odds slightly favor
a corn yield above trend in 2012 but there is certainly precedent for another
year below trend. More specific expectations about the 2012 average yield
will depend on how the planting and growing season unfolds.”
Keith Good
