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Conveyor Currents                                  June 22, 2012
Upcoming Dates
                  

2012


October 10, 2012   Safety Training Workshop Joint CGFA/NGFA Event in Fresno, CA

2013

January 16-17, 2013   Grain & Feed Industry Conference, Embassy Suites, Monterey, CA

April 24-27, 2013  CGFA Annual Convention ~ The Hyatt Regency, Huntington Beach, CA

2014

January 15-16, 2014   Grain & Feed Industry Conference, Embassy Suites, Monterey, CA

April 23-26, 2014  CGFA Annual Convention ~ The Sheraton Resort, Maui, HI 

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California
 Grain & Feed Assn.
      www.cgfa.org
 
California Dept. of Food & Ag 
   www.cdfa.ca.gov
 
U.S. Dept. of Food & Ag
    www.usda.gov
 
 
In This Issue
Dairy Supply Lien Bill To Be Heard in Committee
Bills Amending Fish and Game Code Head to Committee
Labor Bills to be Heard in Senate Labor Next Week
Senate Passes Five-Year Farm Bill 64-35
Conrad's Save on Southern Crop Supports Now Candidate for Farm Bill Conference
July 11 New Date for House Farm Bill Markup
House Appropriators Cut, Senate Appropriators Increase CFTC Funding
Obama Delayed Youth Deportation Exec Order Drawing Fire
House Passes Single Package of Energy Bills
Politics Begins to Color New U.S.-Russian Trade Bill
EPA Publishes New Proposed Air Particulate Standard
Energy in Spotlight this Week: Final E15 OK, Sorghum Ethanol, Failed RFS Assault
Dairy Supply Lien Bill To Be Heard in Committee

 

Next Tuesday, June 26, a bill that would update the Dairy Feed Supply Lien will be heard in Assembly Judiciary Committee. This measure, which is the culmination of a 20 month project by the California Grain and Feed Association, will increase transparency, notice and remove significant barriers to the lien process. Specifically, the measure will mirror the Commercial Code by providing a non judicial foreclosure process when an account goes into default. This should drastically reduce the time and costs associated with collecting on accounts in default. CGFA has been working closely with dairy farmers, bankers, the farm credit system and creameries to create a system where there is more notice to all parties when an account is distressed as well as appropriate due process without requiring the time, delays and costs associated with the current measure.


Bills Amending Fish and Game Code Head to Committee

 

Two bills that would make significant changes to the Fish and game code, penalty provisions and the listing of endangered Species are headed to the Senate Natural Resources Committee. AB 2179 (Allen) provides the Department of Fish and Game the authority to impose civil administrative penalties of up to $20,000 for any Fish and Game Code violation, including relatively minor violations. Currently the Department must work with local District Attorneys or the Attorney General to prosecute violations of certain provisions of the Fish and Game Code, providing necessary due process to accused parties. AB 2402 (Huffman) was recently amended with language that would move the California Endangered Species Act listing process from the Fish and Game Commission to the Department.   The bill also makes numerous changes to incidental take requirements, seemingly applying the incidental take requirements to all wild species. The association is opposing these bills and working with a broad coalition.

 

Labor Bills to be Heard in Senate Labor Next Week

Three ag labor bills will be heard in Senate Labor Committee next Wednesday, June 27th. Two bills opposed by a broad coalition of ag interests and employer groups are AB 2346 (Butler) Heat Stress for Ag workers - This bill will place the "Heat Stress" regulation for agricultural field workers into statute and has several other provisions including a death benefit of $1,000,000, a private right of action allowing citizen suits similar to Proposition 65. AB 1313 (Allen) Overtime for Agricultural Field Workers - This measure would require agricultural employers to pay overtime for any employee who works more than 8 hours a day or 40 hours in a work week.

Conversely, the association is supporting AB 1675 (Bonilla) This bill would subject an unlicensed farm labor contractor to penalties and citations from the Labor Commissioner. Farm labor Contractors have been required to seek a license and obtain minimum Labor Code education requirements for the past five years. However, compliance with these requirements continues to be a challenge in some areas. This bill provides penalties for contractors who continue to not be licensed.  

 

Senate Passes Five-Year Farm Bill 64-35

  

On June 21 the full Senate approved 64-35 its version of the 2012 Farm Bill, with most southern Senators voting against the bill based on commodity title provisions. It took two weeks of procedural jockeying and slogging through 73 amendments to get the bill to final passage. The 1,000-plus-page bill carries a 10-year price tag of $969 billion, but shaves $23.6 billion off discretionary spending programs through reinvention, refinements and program substitutions.

 

The five-year bill kills off direct payments to farmers saving $5-6 billion a year, replacing them with a crop insurance-based Agriculture Risk Coverage (ARC) program, a "shallow loss" program that pays producers 15-21% of losses not covered by conventional crop insurance. This program has been attacked by southern rice and peanut producers as favoring large midwestern corn and soybean growers over smaller farmers and crops grown in the South. Those southern interests have turned their attention to the House Farm Bill process in hopes of securing what they consider equity in income support. The Senate bill would consolidate 23 federal conservation programs into just four "fundamental" working programs, and would cut the Conservation Reserve Program (CRP) acreage cap from 32 million acres to 25 million, allowing only highly erodible lands to be recontracted. All in all, these changes save about $6 billion.

 

The package carries an $800-million energy title that seeks to find alternative feedstocks to corn and other feed crops for the production of biofuels, while also promoting on-farm alternative energy generation. The bill also includes a conventional federally funded research title, but also features for the first time the Foundation for Food & Agriculture Research (FFAR), a new program facilitating public/private partnership investment in ag research. Also included is a permanent livestock and supplemental disaster assistance program which maintains a producer cash assistance payment system. This program keeps commercial feed companies in the transaction loop when delivering government disaster feed assistance to producers. No anti-farming animal rights measures were included in the bill.

 

Amendments accepted during floor debate include the following:

  • An amendment by Sens. Tom Coburn (R, OK) and Richard Durbin (D, IL) that raises crop insurance premiums 15% for farmers with adjusted gross income of $750,000 or more, and requires USDA to certify no net increase in the cost of the insurance program
  • An amendment by Sen. Saxby Chambliss (R, GA) tying federal crop insurance participation to conservation program participation
  • An amendment by Sens. Max Baucus (D, MT) and John Tester (D, MT) allowing livestock producers to participate in the non-insured protection program
  • An amendment by Sen. Bob Casey (D, PA) requiring USDA to conduct a technical evaluation of the milk marketing program, and a related amendment by Sen. Olympia Snowe (R, ME) that reforms milk marketing orders
  • An amendment by Sen. Chuck Grassley (R, IA) to cap marketing loan payments.

 

Amendments which failed include the following:

  • An amendment by Sen. Patrick Toomey (R, PA) to cut USDA programs from the energy title
  • An amendment by Sen. Bernie Sanders (I, VT) and Sen. Barbara Boxer (D, CA) to give states the right to mandate labeling on genetically engineered foods, feeds and ingredients
  • An amendment by Sen. Kirsten Gillibrand (D, NY) to restore cuts in food stamps
  • An amendment by Sen. Jim DeMint (R, SC) to convert all mandatory checkoff programs to voluntary programs
  • An amendment by Sen. Mike Lee (R, UT) to kill off the Conservation Reserve Program (CRP) and the Conservation Security Program (CSP)
  • An amendment by Sen. Ron Johnson (R, WI) to send the bill back to committee, and split it into separate nutrition and ag program bills
  • An amendment by Sen. Tom Coburn (R, OK) to cut the Market Access Program (MAP) by $40 million and kill pet food/ingredient export promotion
  • An amendment by Sen. Saxby Chambliss (R, GA) to fully repeal the federal Renewable Fuel Standard (RFS) mandating how much alternative fuels must be blended with gasoline did not make the final 73 amendments accepted for debate on the bill.  

To finally begin floor action, Senate Agriculture Committee Chair Debbie Stabenow (D, MI) and ranking committee member Sen. Pat Roberts (R, KS) fended off over 330 filed amendments to the bill. Once they negotiated the list down to 73 amendments - many were dumped as irrelevant to the bill or were minor changes accepted as part of the package without a vote - Senate Majority Leader Harry Reid (D, NV) and chamber Minority Leader Mitch McConnell (R, KY) blessed the list, and limited debate on each amendment to one minute on each side of the issue and held voting time to 10 minutes. A handful of unrelated amendments were allowed, but needed 60 votes to pass. House Agriculture Committee Chair Frank Lucas (R, OK) said of the Senate action "I commend Chairwoman Stabenow and Ranking Member Roberts on passage of S. 3240...it was a challenge to move this legislation and their efforts made it possible. Although there will be differences between the Senate approach and our own...(the House committee) will consider a balanced proposal that saves taxpayers billions of dollars, recognizes the diversity of American agriculture, respects the risks producers face and preserves the tools necessary for food production." Committee ranking member Rep. Collin Peterson (D, MN) said, in praising Stabenow and Roberts, "It is crucial we finish the farm bill before the current bill expires in September. Waiting until the mess that will be the lame duck session will only make it more difficult, but could also result in several unintended consequences." "I am grateful for the Senate's progress toward providing a reformed safety net for producers in times of need, supporting agricultural research and trade promotion, honoring World Trade Organization (WTO) commitments, furthering the bio-based economy, conserving our natural resources, strengthening local and regional food systems, and promoting job growth in rural America," Agriculture Secretary Tom Vilsack said.


Conrad's Save on Southern Crop Supports Now Candidate for Farm Bill Conference

 

The civil war between midwestern lawmakers and their southern colleagues over how to equitably reinvent the Farm Bill income safety net has a new hero, Sen. Kent Conrad (D, ND), chair of the Senate Budget Committee and a Senate ag committee member, a northern plains liberal who retires at the end of this Congress. A week ago, Conrad joined with Sen. Saxby Chambliss (R, GA), a former Senate Agriculture Committee chair, and leader of the southern bloc of Senators who this week voted against the Senate Farm bill, to develop an alternative to the Agriculture Risk Coverage (ARC) program approved by the Senate ag panel to replace federal direct payment programs. It's the ARC program that Chambliss believes discriminates against southern peanut and rice producers by providing greater support to corn and soybean farmers in the Midwest.  

 

The basic scheme would reinsert target prices as an add-on to the ARC program, increasing them 4-7% from current levels, while paying farmers on a maximum 75% of base acres planted or prevented from planting. Conrad would also create a separate payment limit on countercyclical payments of $65,000 a year. While the Conrad-Chambliss plan was originally to file an amendment to the Farm Bill while it was on the floor - an approach supported by Sens. Max Baucus (D, MT), chair of the Finance Committee and ag committee member, and another ag committee member freshman Sen. John Hoeven (R, ND) - Conrad, a veteran of many Farm Bills, decided against offering the plan, saying he'll save it as a proposal for the conference committee with the House. Insider say Conrad and Chambliss will offer the House-Senate conference committee a substitute commodity title with his target price program approach as a "compromise" to the House commodity title, but likely more closely pegged at target price values determined by the House.  

 

Southern producers OK'd the Conrad/Chambliss approach behind the scenes this week, not as a solution to their complaints, but as a means of getting the bill through the Senate and into conference with a House bill. The House ag panel leadership has said its committee bill will feature a commodity title that will be more generous on the target price side of farm income protection to overcome regional and crop differences.

 

July 11 New Date for House Farm Bill Markup

  

While the House Agriculture Committee had hoped to markup its version of the 2012 Farm Bill beginning next week, committee Chair Frank Lucas (R, OK) said this week he'll hold off on committee action until July 11 when the House returns from its July 4 recess. Lucas said the delay was not because his committee wasn't ready to take up the legislation, but because the FY2013 ag/FDA appropriations bill will be on the House floor next week, and committee members will be working to stave off "onerous amendments" which may be offered and which could complicate his committee's Farm Bill efforts. The delayed markup has some concerned the House will not be able to complete floor action on the Farm Bill before it expires September 30, particularly given House Speaker John Boehner (R, OH) has given no indication he will allot floor time for the debate. The Senate Agriculture Committee, fresh off its passage of its Farm Bill, called on the House leadership to show the same commitment to Farm Bill passage that Senate leaders did in getting the bill to the floor. House members have criticized the Senate bill as lacking "regional balance" and "loaded with negligent food stamp expenditures."


House Appropriators Cut, Senate Appropriators Increase CFTC Funding

   

As House appropriators this week approved a FY2013 agriculture/FDA spending bill cutting the Commodity Futures Trading Commission's (CFTC) budget by $25 million to $180 million, Senate appropriators increased commission funding by a whopping 50% to nearly $310 million. The slashed House CFTC spending level drew a swift threat of veto from the White House, objecting to the overall funding of the ag bill, but taking specific issue with CFTC funding. The Administration said the bill violates the spending/deficit agreement from last fall, a charge the White House has leveled at nearly all of the House appropriations bills. House Democrats acknowledged they have little chance of increasing CFTC funding on the House floor, so are relying on a more generous Senate ag spending bill to give them room to increase commission spending for the next fiscal year, though likely not at the $300 million-plus level of the Senate bill. However, it's unlikely both chambers will approve their respective bills before the fiscal year ends September 30, so a reconciled funding package will likely be rolled into an omnibus spending bill.


Obama Delayed Youth Deportation Exec Order Drawing Fire

   

President Obama's executive order last week to exclude up to 800,000 children and young adults brought into the U.S. from federal deportation proceedings is drawing expected criticism, even though he tried to build off legislative proposals floated by both parties in Congress. The order is similar to the DREAM Act which has failed to pass Congress over the last decade, and the GOP says the order is nothing more than a political end run around Congress to appeal to Hispanic voters in advance of the November election.  

 

The President said he took the action because Congress has refused to act on immigration reform, but critics reminded the White House the President has previously told immigrant groups he lacked the power to issue such an executive order. The so-called "deferred action" order is a two-year temporary action, the White House said, but could be renewed, and Obama said it does not convey legal status, amnesty or immunity to any illegal immigrant. The order will affect immigrants brought into the country as children when they were under the age of 16 and are not yet 30 years old. They must have lived in the U.S. for at least five years and remain in the country, have not committed a felony or "serious crime," and are currently students, high school graduates, GED recipients or honorably discharged veterans. Secretary of Homeland Security Janet Napolitano said the government may also defer action on deporting immigrants under the age of 30 if they don't pose a national security risk, meaning they have not been convicted of a felony, a "significant" misdemeanor or multiple misdemeanors.  

 

Multiple agencies will process deferral applications, and a granted deferral will allow the immigrant to apply for a work permit with those cases judged individually with no guarantee of approval, the White House said. Napolitano said her department would use its prosecutorial discretion in enforcing the executive order.

 

House Passes Single Package of Energy Bills

 

A single bill carrying six other pieces of legislation all dealing with energy production was approved by the full House this week. The Republicans praised the bill as the first significant energy legislation of this Congress, while Democrats called it a "massive giveaway" to oil and gas industries. The bill mandates an increase in oil and gas production that equals any release from the Strategic Petroleum Reserve, and would require the Department of the Interior to ensure that 25% of federal land is eligible for energy leasing each year. Also included in the package is language prohibiting EPA from finalizing new regulations on refinery air emissions, along with language requiring the Interior secretary to develop an energy plan for public lands; stopping the federal government from rescinding leases on federal lands for energy development; streamlining the permitting process; establishing a live Internet auction of Bureau of Land Management leases, and speeding up programs designed to allow drilling in the Alaskan National Petroleum Reserve.

 

Politics Begins to Color New U.S.-Russian Trade Bill

 

A bill to terminate the application of the so-called Jackson-Vanick amendment - trade sanctions imposed in the 1960s on nations, primarily the Soviet Union, which blocked Jewish emigration to Israel - and clear the way for President Obama to grant Russia permanent normal trade relations (PNTR) status just as Russia is set to join the World Trade Organization (WTO) is drawing political fire. Lifting the Jackson-Vanick trade restrictions on U.S. companies translates into $9-28 billion a year in trade for U.S. companies, the U.S. Chamber of Commerce said. Major business groups have endorsed the bill, but it faces major political hurdles primarily due to concerns on both sides of the aisle focusing on Russia's human rights record and policy confrontations between the U.S. and Russia over Syria. A bill by Sen. Ben Cardin (D, MD) to hold Russia to specific human rights standards will be added to the bill, insiders said. Another political hurdle is a House challenge this week from Rep. Dave Camp (D, MI), chair of the House Ways & Means Committee, who said he supports the concept of improved trade relations with Russia - including the lifting of Jackson-Vanick sanctions - but put the onus on the White House to build House support if it wants a vote this summer before Russia joins the WTO.

 

EPA Publishes New Proposed Air Particulate Standard

  

Responding to a federal court order that republication of its controversial proposed air particulate standard must happen this year, EPA last week published its new, more restrictive proposal for "fine particles" and "soot," a move that immediately drew fire from industry and praise from environmental groups. The new standard would set the PM 2.5 acceptable level at 12 micrograms per cubic meter; the current standard is 15 micrograms per cubic meter, a level set in 1997. The existing 24-hour fine particle standard and the coarse particulate standards would not change. GOP members of Congress and business groups said the new EPA levels for regulated particulates emanating from refineries, manufacturing plants and auto exhaust is just another Obama Administration/EPA "job killing regulation," and will cause economic slowdowns and job losses in areas of the country where the new standard can't be met. States have until 2020 to comply. The new rule proposal has also been criticized for not revealing the specific studies EPA used to arrive at the new, tighter particulate standard. Rep. Ralph Hall (R, TX), chair of the House Science, Space & Technology Committee, said the proposed rule "appears to be based on secret data that EPA has refused to make public." The American Chemistry Council (ACC) said there are many questions surrounding the process by which EPA selected studies to be used in its calculations.

 

Energy in Spotlight this Week: Final E15 OK, Sorghum Ethanol, Failed RFS Assault

 

EPA June 15 gave final approval to move ahead with a 15% ethanol/gasoline blend (E15), with USDA Secretary Tom Vilsack praising the move, and anti-ethanol forces contending the blended fuel will cause engine damage and continue the market competition between food, feed and fuel for corn and other feed grains. Meanwhile, EPA proposed that sorghum-based ethanol be designated an "advanced biofuel," a distinction denied other forms of ethanol and one currently enjoyed by only biodiesel and renewable diesel. In a related development, Sen. Saxby Chambliss (R, GA) early this week filed an amendment on the Senate's 2012 Farm Bill to repeal the RFS, the federal government mandate on how much alternative fuel must be blended with gasoline on an annual basis. The coalition supporting the Chambliss move, said this week, "The federal RFS has failed to meet its stated goals, and as it stands, is a de facto mandate for corn ethanol that is damaging our economy, wasting taxpayer dollars and driving up food and feed prices." The E15 action allows the blend to be used in cars built after 2001 now that an objection based on residual fuel left in single hose pumps offering E15 as well as other fuels has been overcome. Retailers now have to register with EPA and must follow misfueling mitigation protocols. If sorghum-based ethanol is given advanced biofuel status, it qualifies as part of a 21-billion-gallon Renewable Fuel Standard (RFS) 2022 blend mandate for the fuel category.