Legislative-Budget
Outlook; Ag Policy Issues; Ag Economy; Biofuels; and MF Global
Posted
By Keith Good On January 2, 2012
Legislative
– Budget Outlook
Mark
Landler reported in yesterday’s New York Times that, “President Obama is
heading into his re-election campaign with plans to step up his offensive
against an unpopular Congress, concluding
that he cannot pass any major legislation in 2012 because of Republican
hostility toward his agenda.”
More
specifically with respect to the legislative outlook, the Times noted that,
“Winning a
full-year extension of the cut in payroll taxes is the last ‘must-do’ piece of
legislation for the White House, [Joshua R. Earnest, the
president’s deputy press secretary] said.”
Similarly, David
Nakamura reported in yesterday’s Washington Post that, “White House
aides said that [Pres.] Obama is willing to work with Congress if lawmakers
refrain from ‘partisan attacks’ but
that after the February fight to extend the payroll tax holiday through the end
of the year, the president will not engage in any more high-stakes showdowns to
advance his policies before the election.”
Nonetheless, Rachel
Leven reported on Saturday at The Hill Online that, “Lobbyists expect 2012 to be
‘surprisingly busy’ compared to the normally lethargic pace of a presidential
election year.”
The Hill
update noted that, “[Nick Allard, a partner at the law and lobby firm Patton
Boggs] emphasized that both
parties have a common interest in passing legislation and
proving to the public that they can address the nation’s problems.”
Saturday’s
article added that, “More than a half dozen lobbyists contacted by The Hill
generally agreed
that 2012 will break the pattern of slow election years, but provided different
explanations for why. Some cited the potential for a long
battle for the Republican presidential nomination, while others noted the need
for Congress to clear the legislative backlog that built up during the spending
fights of 2011.
“Holland
and Knight partner Rich Gold said lawmakers
would stay focused on legislation until the Republican nominee is set.”
Ms. Leven
indicated that, “A
flurry of activity could also happen in the lame-duck session after the
election, which will be the last chance for Congress to pass a
debt-reduction plan, change the sequestered spending cuts and extend the George
W. Bush-era tax rates. Gold said that ‘holy trilogy’ of issues could
provide a jolt to the ‘anemic’ Congress.”
“The full-year extension of the
payroll tax cut, unemployment benefits and the Medicare ‘doc fix’ will also
need to be resolved quickly. H. Stewart Van Scoyoc, president
and chief executive officer of Van Scoyoc Associates, said the need to pass a
yearlong package by February would
have Capitol Hill humming early in the year.”
With
respect to the payroll tax conference committee, the Senate
Democrat negotiators include: Max Baucus (Mont., Ag Comm. member), Ben Cardin (Md.), Jack Reed (R.I.),
and Bob Casey (Pa., Ag Comm. member).
The House
Democratsinclude: Sandy
Levin (Mich.), Henry
Waxman (Calif.), Chris Van Hollen (Md.), Xavier Becerra (Calif.),
and Allyson
Schwartz (Pa.).
The GOP
Senate negotiators are: Jon
Kyl (Ariz.), Mike
Crapo (Idaho), and John Barrasso (Wyo.). And
the House
GOP members of the conference committee are: Kevin Brady (Tex.), Dave Camp (Mich.), Renee Ellmers (N.C., Ag Comm. member), Nan Hayworth (N.Y.), Tom Price (Ga.), Tom Reed (N.Y.), Fred Upton (Mich.),
and Greg Walden (Ore.).
Meanwhile,
The Wall Street Journal editorial
board indicated on Saturday that, “Amid this month’s payroll tax fracas, few noticed that
Congress passed a 1,200-page, $1 trillion omnibus spending bill for fiscal 2012.
Maybe no one in Washington boasted because it’s a victory for spending as
usual. Republicans—in the House and Senate—need a better strategy.
“The news
is that after accounting for last-minute unemployment insurance extensions,
‘emergency’ spending and higher Medicare physician payments, total federal outlays are estimated
to be $3.65 trillion in fiscal 2012, up slightly from $3.6 trillion in 2011.
The last year has seen no major reforms in any of the big entitlement
programs—Medicare, Medicaid or Social Security. Spending on food stamps [SNAP] alone is scheduled to reach $80 billion in
2012, more than double the amount as recently as 2007.”
The Journal
added that, “Many readers will look at all this and blame House Republicans,
and there’s no doubt they failed to meet expectations. Yet believe it or not, a flat
overall budget is a vast improvement over the years 2007 to 2011, when overall
spending increased 32%, or $868 billion. (See
the nearby table).”
In a
separate opinion item regarding SNAP benefits, The New York Times editorial
board indicated today that, “Five
years ago, New York State stopped requiring that all applicants for food stamps
be electronically fingerprinted. Recently, California and Texas
ended their requirement, leaving New
York City and Arizona the only jurisdictions to continue the
stigmatizing requirement.
“Especially
at a time when so many families are struggling, the Bloomberg administration
should drop the requirement that leads too many New Yorkers to forgo help. If
it does not, Gov. Andrew Cuomo should issue an executive order ending the
city’s exemption.”
In other
budget news, David
Nakamura reported in Saturday’s Washington Post that, “The Obama administration has delayed
a request to raise the nation’s borrowing limit by $1.2
trillion after congressional leaders objected to a timeline that would have
made it difficult for lawmakers to vote on the measure.”
However, Jonathan
Allen reported on Friday at Politico that, “The House is expected to
vote in January on whether to disapprove of the next phase of a multi-step debt-limit
increase that Congress and the president agreed to in August, and the White
House agreed Friday to make that possible.
“While the vote carries symbolic
significance for some fiscal hawks, it won’t have a substantive impact:
Republicans in the House and Senate don’t have the two-thirds necessary to
override the president’s veto in the unlikely event that a resolution of
disapproval made it to his desk.”
Agricultural
Policy Issues
David
Murray writing on Friday at the Great Falls Tribune Online (Mont.)
reported that, “The
first thing that people unfamiliar with federal agricultural policy should know
about the farm bill is that only a minor portion of the broad legislative
package has anything to do with financial assistance to farmers growing food.”
“According
to the Congressional Budget Office, by
far the largest component of the farm bill is its nutrition programs.
The Supplemental Nutrition Assistance Program and the Women, Infants and Children supplemental
food program are both included in the bill. These programs, plus a handful of
other nutrition programs, accounted
for nearly two-thirds of the $162 billion in farm bill expenditures between
2009 and 2010.”
On Friday
at the Iowa Farmer Today Online, Gene
Lucht posted a “Q and A” interview with Craig Hill, the new
president of the Iowa Farm Bureau Federation.
In part,
Mr. Hill noted that, “We’ve [Iowa Farm Bureau] supported eliminating them [direct
payments]. Nationally, there’s a difference of opinion. We had a discussion about tying
conservation compliance to crop insurance (if the direct payments are
eliminated). I’m concerned that in that case if something
happens — if you get a cattail in your field — you could lose all your
insurance. If you
lose your crop insurance, it just unravels a lot of confidence of lenders. The
risk becomes too big. It’s just such a big step. I’m not sure we’re prepared to
go there.”
In an audio
update on Friday, Agri-Pulse Senior Editor Stewart Doan included clips from a
discussion with Nebraska GOP Senator Mike Johanns who also brought up
issues associated with direct payments, crop insurance, and Farm Bill
timing. The complete Agri-Pulse report can be heard here (about
one minute).
Meanwhile, Elisabeth
Rosenthal reported in Saturday’s New York Times that, “To carry the Agriculture
Department’s organic label on their produce, farms in the United States and
abroad must comply with a long list of standards that prohibit the use of
synthetic fertilizers, hormones and pesticides, for example.
But the checklist makes few specific demands for what would broadly be
called environmental
sustainability, even though the 1990
law that created the standards was intended to promote ecological
balance and biodiversity as well as soil and water health.
“Experts
agree that in general organic farms tend to be less damaging to the environment
than conventional farms. In
the past, however, ‘organic agriculture used to be sustainable agriculture, but
now that is not always the case,’ said Michael
Bomford, a scientist at Kentucky State University who specializes in
sustainable agriculture. He
added that intense organic agriculture had also put stress on aquifers in
California.
“Some
organic standard setters are beginning to refine their criteria so that organic
products better match their natural ideals. Krav, a
major Swedish organic certification program, allows produce
grown in greenhouses to carry its ‘organic’ label only if the buildings use at
least 80 percent renewable fuel, for example. And last year the Agriculture
Department’s National Organic Standards Board revised
its rules to require that for
an ‘organic milk’ label, cows had to be at least partly fed by grazing in open
pastures rather than standing full time in feedlots.”
The Times
article added that, “But
each decision to narrow the definition of ‘organic’ involves an inevitable
tug-of-war among farmers, food producers, supermarkets and environmentalists.
While the United States’ regulations for organic certification require that
growers use practices that protect water resources, it is hard to define a
specific sustainable level of water use for a single farm ‘because aquifer
depletion is the result of many farmers’ overutilizing the resource,’ saidMiles McEvoy, head
of the National Organic
Program at the Agriculture Department.”
In other
policy news, Ken
Anderson reported on Friday at Brownfield that, “Several livestock and
poultry groups have sent a joint letter to Congress, urging it to reject the
agreement on hen housing reached by the Humane Society of the United
States (HSUS) and the United Egg Producers (UEP).”
“However, the immediate past chairman
of UEP defends the agreement made with HSUS. Indiana egg farmer Bob
Krouse, president of Midwest Poultry Services, says it was of interest to both
groups.
“‘It’s one of the rare instances where
their goals and our goals intersected,’ Krouse says, ‘and we
thought we had a much better chance of seeing this become law if we worked
together on it, than if we continued to fight each other.’”
Recall
that Gene W.
Gregory, the President of the United Egg Producers,
recently penned a
letter on this issue to the Members of the House and Senate
Agriculture Committees.
Agricultural
Economy
A.G.
Sulzberger reported in Saturday’s New York Times that, “Across much of the Midwest the sharp
increase in farm earnings has driven the price of farmland to previously
unimaginable — and, some say, unsustainable — levels. But in
the process, to much less fanfare, the financial rewards have also encouraged
farmers to put
ever more land into production, including parcels that until
recently were too small or too poor in quality to warrant a second glance.
“As Iowa
marches toward the Republican caucuses, much of the politicking has been set
against the timeless backdrop of open farmland. These agricultural vistas are
expanding across the Corn Belt, where the fertile and increasingly profitable
soil has helped this state weather the nation’s economic storms.
“Farmers
are taking down the old barn or the grove of trees that shaded a corner of the
family farm to squeeze in a few more rows of crops. They are plowing up areas previously
used for grazing cattle or set aside for conservation because they had been
deemed too wet, too sandy or too hilly for farming.”
Dennis
Anderson noted yesterday at the Minneapolis Star Tribune Online that,
“‘What has happened here in the past four years is unprecedented,’ [John
Cooper, the retired director of South Dakota's Game, Fish and Parks Department]
said as he and I [Dennis Anderson] climbed into my pickup and rumbled over a
dirt two-track. ‘Anyone
who thinks South Dakota can continue to produce the pheasants, ducks and other
wildlife it has in the past just doesn’t know what’s going on here. You’re
quite possibly witnessing the end of an era. Some of the nation’s last, best
prairies and potholes are going away.’’
“Responsible
for the changes is what farmer, rancher and hunting outfitter Steve Halverson
of Kennebec, S.D., calls a ‘perfect
storm’ of high commodity prices, rising land values, breakthroughs in crop
engineering, a seemingly feverish desire by some eastern South Dakota farmers
to drain their lands of water, and relatively paltry federal farm bill
conservation incentives.
“‘I
honestly think that unless something unexpected happens, we may never see the
high pheasant populations again that we’ve seen in recent years,’’ Halverson
said.”
More
specifically on commodity prices received by farmers, the USDA’s National
Agricultural Statistics Service noted in its monthly Agricultural
Prices report on Friday that: “The corn price,
at $5.44 per
bushel, is down 40 cents from last month but 62 cents above December 2010 [related graph],
the soybean price,
at $11.10 per
bushel, decreased 60 cents from November and is 50 cents below December 2010 [related
graph], and the December all
wheat price, at $6.45 per bushel, is down 81 cents
from November but 1 cent above December 2010 [related graph].
And Rick
Barrett reported on Saturday at the Milwaukee Journal Sentinel Online
that, “Wisconsin’s
dairy industry is on the mend after a dark period in which thousands of farms
failed and farmers burned through their retirement savings to remain in
business.
“Lately,
the $27 billion industry has been in recovery mode, [Wis.] Agriculture
Secretary Ben Brancel said in an interview last week.
“Farmers
who were able to get through the worst year, 2009, have been rebuilding their
equity and paying down debt.”
Biofuels
Robert
Pear reported in today’s New York Times that, “A federal tax credit for ethanol
expired on Saturday, ending an era in which the federal government provided
more than $20 billion in subsidies for use of the product.
“The tax
break, created more than 30 years ago, had long seemed untouchable. But in the
last year, during which Congress was preoccupied with deficits and debt, it
became a symbol of corporate welfare. Fiscal conservatives joined liberal
environmentalists to kill it, with help from a diverse coalition of outside
groups.
“In the
United States, most ethanol is produced from corn. The demise of the subsidy is
all the more remarkable because it comes at the peak of the political season in
Iowa, where corn is king.”
The Times
article noted that, “As
Congress begins work on a new farm bill, ethanol companies and gasoline station
owners want to expand a federal program that helps pay for pumps and other
equipment needed to dispense gas with higher concentrations of ethanol.”
MF
Global
In
Saturday’s Wall Street Journal, writers Aaron Lucchetti and Mike Spector penned
a detailed article on MF Global titled, “The
Unraveling of MF Global: With $1.2 Billion Still Missing, Corzine’s Desperate
Strategy Comes Into Focus.” The complete article is available
here.
--
Keith Good
President
FarmPolicy.com, Inc.
Champaign, IL
(t) 217.356.2269
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