AgricultureLaw.com

Farm Bill; and the Ag Economy- Thursday

Posted By Keith Good On May 23, 2013

Farm Bill- Sugar

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “A push in the U.S. Senate to repeal current sugar policies failed again on Wednesday as senators moved ahead with votes on amendments.

“Senators seeking to overhaul sugar policies argued in vain that food-processing and confectionary jobs are lost to Canada because of import restrictions and tariffs that protect a small number of domestic sugar growers. Sen. Jeanne Shaheen, D-N.H., the lead sponsor of the amendment, argued that sugar was the only commodity in the farm bill that wasn’t seeing reforms.

“‘Sugar remains the most tightly controlled commodity market in this country,’ Shaheen said.”

A video replay of arguments in favor of the amendment from Sens. Shaheen and Pat Toomey (R., Pa.) made yesterday on the Senate floor can be seen here and here. In addition, the American Sugar Alliance released a short video outlining arguments supporting current policy principles.

On a roll call vote, the Shaheen reform measure (amendment #925) to change the sugar program was not agreed to by a vote of 44-54.

Mr. Clayton noted that, “Senators in the Red River valley answered the challenge to defend their sugar growers. Countering Shaheen’s figures, Sen. Heidi Heitkamp, D-N.D., said rolling back the current sugar program would threaten 142,000 jobs tied to the industry. The amendment also would have allowed countries to trade U.S. import quotas on the international market. Heitkamp said that would risk fraud and abuse. ‘I think that’s a formula for interjecting a factor that has never been used before in the sugar bill,’ she said.

“Heitkamp also cautioned, ‘When you single out one commodity, you threaten the overall effectiveness of the farm bill.’

“Heitkamp’s Republican counterpart from North Dakota, Sen. John Hoeven, also noted that sugar prices are currently low compared to the international market. Sugar prices have collapsed lately, reaching levels comparable to 1985 levels. ‘So because of the sugar program we have, American consumers benefit,’ Hoeven said.”

David Rogers reported yesterday at Politico that, “Helped along by a run of relatively low prices, sugar interests won a Senate farm bill vote Wednesday evening, defeating efforts at reform sought by a coalition of candy-makers, conservative activists and the U.S. Chamber of Commerce…[I]n the sugar showdown, Wednesday’s 54-45 roll call closely mirrored a 53-46 vote in June last year on the same issue.”

A news update yesterday from the National Council of Farmer Cooperatives (NCFC) noted that, “The [NCFC] today expressed its strong opposition to Senate Amendment 925 to the farm bill (S. 954) being debated on the Senate floor today. The amendment, offered by Senator Jeanne Shaheen (D-N.H.), would change, and effectively dismantle, current federal policies with regards to sugar.”

The National Farmers Union also opposed Sen. Shaheen’s amendment.

Sen. Heidi Heitkamp (D., N.D.) indicated in a statement yesterday that, “Today the U.S. Senate stood with sugar producers and the 142,000 Americans whose jobs are supported by the industry…[W]orking to defeat this was another step forward in crafting a Farm Bill that works for North Dakota.”

The American Sugar Alliance noted in a statement yesterday that, “In short, this amendment represented bad policy for the United States, which is why it was defeated once again.”

Farm Bill- SNAP

AP writer Mary Clare Jalonick reported yesterday that, “The Senate on Wednesday rejected a Republican bid to turn the federal food stamp program over to the states.

“Known as the Supplemental Nutrition Assistance Program, or SNAP, the food stamp program is administered by the Agriculture Department and federal dollars are unlimited as long as recipients qualify. The program cost $78 billion last year, more than double the price in 2008.

“A proposal by Sen. James Inhofe, R-Okla., to a wide-ranging farm bill would have converted the program into grants to states, which could decide how to use the money, with certain restrictions. The Senate rejected the amendment 60-36.”

A video replay of Sen. Inhofe’s presentation in support of the amendment can be seen here. In part, the Oklahoma Republican implored his colleagues to vote to turn the Farm Bill into a “Farm Bill” instead of a “Charity Bill.”

The AP article pointed out that, “Democratic Sen. Debbie Stabenow of Michigan, who heads the Senate Agriculture, Nutrition and Forestry Committee, said Inhofe’s plan would mean ‘devastating results for millions of families who are trying to feed their children.’”

Ramsey Cox reported yesterday at The Hill’s Floor Action Blog that, “Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) urged senators to oppose Inhofe’s amendment because it would cap the supplemental nutrition at half the current levels.

“‘I rise in strong opposition to block granting and cutting the food assistance program,’ Stabenow said. ‘We have a value system that says we’re going to make sure when families are hit on hard times to no fault of their own, that they’re not going to starve. … I think that’s the best about us.’”

Chairwoman Stabenow’s remarks on this issue, which included a back and forth discussion with Sen. Inhofe, can be seen here.

Yesterday’s Hill update added that, “After the vote on Inhofe’s amendment failed, the Senate unanimously consented to passing an amendment from Sen. Al Franken (D-Minn.), which would allow grocery delivery services for seniors and people with disabilities on food stamps.”

Farm Bill- Crop Insurance

Also on the Senate floor yesterday, Chairwoman Stabenow spoke about conservation and specifically highlighted the policy principle of linking conservation compliance measures to the federal crop insurance program.

In an attempt to avoid the potential unintended consequences of complying with conservation practices after direct payments are eliminated, Chairwoman Stabenow noted that, “It’s important for us to continue protecting wetlands, which help prevent flooding, and are important wildlife habitats for ducks and other water fowl.”

Chairwoman Stabenow added that commodity and conservation groups, “with a little compromise and a lot of hard work,” came up “with a plan that conserves soil and water resources for generations to come – and protects the safety net our farmers rely on.”

She noted that, “I know a number of my colleagues today are planning to talk about amendments on crop insurance – and I know a number of my colleagues voted for some of those amendments last time around. But this conservation agreement puts us in a very different situation this year…[A]mendments that weaken crop insurance would reduce the number of farmers participating in crop insurance – raising premiums for family farmers and reducing the environmental benefits of this historic conservation agreement.”

Illinois Democratic Senator Dick Durbin is among the lawmakers who, along with Sen. Tom Coburn (R., Okla.) will be offering a crop insurance amendment.

“Our amendment would reduce the level of premium subsidy for crop insurance policies by 15 percentage points for farmers with an adjusted gross income over $750,000,” Sen. Durbin said yesterday in a lengthy presentation on the Senate floor.

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Durbin, D-Ill., spoke for an amendment both he and Sen. Tom Coburn, R-Okla., offered last year which would reduce the premium subsidy by 15% for people or legal entities with more than $750,000 adjusted gross income. That amendment got 66 votes last year in the Senate.

“Durbin said he supports crop insurance. Crop insurance is a better safety net than direct payments and more defensible, but there should be limits in what a person received.”

Mr. Clayton explained that, “Durbin wants a vote again this year on the amendment as a coalition of more than 30 groups sent a letter to every senator explaining the agreement reached in the Senate Agriculture Committee to link conservation compliance to eligibility for the crop insurance premium subsidy. In return for the compliance measure, farm groups were able to get the coalition supporters to agree to drop the means-testing language form the committee bill. Thus, the farm and conservation groups oppose any changes to their agreement.

“The Durbin-Coburn amendment obviously would rock that boat.

“Durbin said he supports tying conservation compliance to crop insurance premium subsidies anyway.”

Meanwhile, Janet Patton reported yesterday that at the Lexington Herald-Leader that, “Kentucky tobacco growers are up in arms over a new proposal to eliminate federal crop insurance programs for tobacco.

“On Monday, Sen. Dianne Feinstein, D-Calif., and Sen. John McCain, R-Ariz., introduced an amendment to the 2013 Farm Bill to drop the eight USDA tobacco insurance programs.

“The Council for Burley Tobacco notified farmers of the proposed change Tuesday and asked them to contact Sen. Rand Paul, R-Bowling Green, to urge him to oppose the amendment. Sen. Mitch McConnell, R-Louisville, opposes the change, the council said.”

And McClatchy writer Renee Schoof reported earlier this week that, “The U.S. Senate this week has started to fine-tune the huge, new five-year farm bill, working through votes on a series of amendments that will include a proposal to eliminate federal subsidies for tobacco insurance.

“North Carolina is the nation’s No. 1 producer of tobacco, and the state’s senators, Democrat Kay Hagan and Republican Richard Burr, said on Tuesday that they’d fight the amendment.”

Farm Bill- GMO Labeling

Ben Goad reported yesterday at The Hill’s RegWatch Blog that, “Lawmakers long intent on increasing the regulation of genetically engineered food are turning to the farm bill as a potential vehicle for the effort.”

Mr. Goad explained that, “Sen. Barbara Boxer (D-Calif.), the author of pending legislation that would require all genetic food to be labeled as such, filed two amendments intended to increase scrutiny of the industry’s practices. One would require the Food and Drug Administration (FDA) and the U.S. Department of Agriculture to study the 64 countries around the world that already require genetically engineered food labeling.

“The second is meant to express the sense of the Senate that labeling should be mandatory.

“Another amendment, submitted by Sen. Bernie Sanders (I-Vt.), would make clear that states have the right to enact their own labeling laws. At least 26 states have taken up consideration of such a statute.”

A similar amendment offered last year by Sen. Sanders failed by a vote of 26 to 73.

A recent update at the Senate Democrats webpage noted that the chamber will reconvene this morning and after other business, “The Senate will then resume Legislative Session and consideration of S.954, the Farm bill. There will then be a roll call vote on the Sanders amendment #965 (GMO foods)(60 affirmative-vote threshold).”

Farm Bill- Other Issues

Ron Nixon reported yesterday at The Caucus Blog (New York Times) that, “One of the world’s largest food companies offered its support on Wednesday for changes to the way the United States provides food aid to developing countries, adding critical agribusiness backing for President Obama’s plans to overhaul the program.

“While not explicitly endorsing the proposals advocated by Mr. Obama, which include buying some food from local producers rather than from farmers in the United States, Cargill, based in Minnesota, said that changes needed to be made to the program because conditions have evolved since it was created in 1954. Not the least of those changes is that there are now more than 870 million people worldwide who lack sufficient food.”

Agricultural Economy

Reuters writer Sam Nelson reported yesterday that, “U.S. farmers should begin winding down corn plantings over the next week to 10 days despite occasional showers and storms that will cause temporary delays, an agricultural meteorologist said on Wednesday.

“‘Overall it looks like they’ll make decent progress, more so in the lower Midwest than in the Dakotas though,’ said Andy Karst, meteorologist for World Weather Inc.”

Andrew Johnson Jr. reported yesterday at The Wall Street Journal Online that, “U.S. corn futures settled higher Wednesday amid concerns that strong demand could shrink already tight domestic supplies.”

“The market received a boost after the U.S. Energy Information Administration reported U.S. ethanol production rose 2.1% to 875,000 barrels a day last week, the highest level since June. U.S. ethanol stocks fell 1.2% last week to 16.2 million barrels from 16.4 million barrels the prior week, continuing a recent decline that reflects healthier demand,” the article said.

And University of Illinois Agricultural Economists Scott Irwin and Darrel Good posted an interesting update yesterday at the farmodoc daily blog titled, “Rapid Corn Planting Progress, But Well Below the Record Pace.”

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

(t) 217.356.2269

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