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Farm Bill Update
Stabenow, Roberts File Revised Farm Bill for Floor Action Next Month -- A new 1,009-page version of the Senate Agriculture Committee's approved 2012 Farm Bill was introduced this week by the committee's chair, Sen. Debbie Stabenow (D, MI), and the ranking member, Sen. Pat Roberts (R, KS). The bill reflects modifications negotiated since the committee markup, and is part of preparations for floor action in early June. The bill contains "adjustments" to the crop insurance section that would require farmers who sign up for new supplemental insurance coverage to pay a 10% deductible, a move designed in part to preserve the much-promoted $23-billion savings by inserting an "offset" to other costs. There's also new language benefitting midwestern popcorn producers and a new "terminal lakes program" for desert areas, a move important to Nevada and Senate Majority Leader Harry Reid (D, NV).
The battle between North and South and among commodity groups continues, with southern rice and peanut producers contending the Senate bill continues to favor northern producers by pegging benefits to some form of crop insurance, a product southerners don't use as much as their Midwest colleagues. Roberts said the negotiations continue and there could be a major floor amendment to shift the commodity title coverage to satisfy southern producer groups. Stabenow this week continued to defend the Senate bill even as she continues to "negotiate with southern interests." She said her bill is the more "market-oriented" approach to protecting producer income, explaining her bill protects farmers when revenues drop, not when House-favored target prices kick in. She also argued that for years, southern crops - mainly cotton, rice and peanuts - received disproportionately higher federal farm program support rates than did corn, wheat and soybean producers, justified by higher production costs. Over in the House, ag leaders acknowledged their target for cost savings is now about $34 billion over 10 years, compared with the Senate's $23 billion in savings. Part of that additional savings will come from deeper cuts to nutrition programs than in the Senate, a move Lucas said will balance cuts in farm programs with cuts in food stamps and a move Stabenow opposes. A copy of the revised bill can be found at www.ag.senate.gov/issues/farm-bill.
NMPF Disputes Critics: Consumer Price, Export Impact of Supply Proposal is Negligible -- It's an effective policy, says the National Milk Producers Federation (NMPF) of its supply management scheme in the Senate Farm Bill, and a program that will have "little impact" on consumer prices or exporters. NMPF was referring to its margin protection program and the more controversial "market stabilization" program that critics say is nothing less than federal production/supply management. The House Agriculture Committee asked for an analysis of the so-called Dairy Security Act, and Dr. Scott Brown of the University of Missouri reported the revised dairy support programs under consideration protect farmers economically from low margins based on feed costs, reverse those low margins more quickly and do not "adversely impact consumer prices or exports of U.S. dairy products." Brown analyzed prospective milk production from 2012-2022, and estimated under the NMPF proposal, milk production would only be about one-tenth of 1% less than what would occur if NMPF proposal is not part of the Farm Bill, with the program only kicking in on average about 7.5% of the time studied or 10 months out of the 11-year analysis.
Biofuels Industry Pushing Hard on House to Retain Energy Title Programs -- Saying the Senate got it right, the biofuels industry this week called on the House Agriculture Committee to retain USDA energy programs slated to expire at the end of the fiscal year. The problem is a budget formula issue: If the programs are allowed to expire, the House committee would have to find cuts in other programs to pay for them as they'd no longer be part of the Farm Bill baseline. The Senate Farm Bill carries about $800 million in mandatory funding for energy programs, offset by cuts elsewhere in farm programs. The programs provide loan guarantees, loans, and grants for bioenergy projects, and analysts told the House ag panel these programs will pay for themselves over time. At the last House ag subcommittee hearing held late last week, the Biotechnology Industry Organization (BIO) told the panel that the nation's first commercial cellulosic ethanol plant - made possible by a loan from USDA's biorefinery assistance program - is only "weeks away" from starting operation in Florida, with the feedstock being crop waste and other non-edible plant matter, including corn stalks and wood chips. Another witness said the Biomass Crop Assistance program allowed him to put 225 farmers under contract to raise switchgrass as a feedstock for a bioenergy project. The industry also asked that USDA be allowed to fund programs from concept through viability. Some subcommittee members cautioned, however, that projects dependent on federal funding may never reach commercial viability.
Nearly 70 House Members Call for Specialty Crop Protections -- A letter this week to House Agriculture Committee Chair Frank Lucas (R, OK) and Ranking Member Collin Peterson (D, MN) from 66 House members calls on the ag panel leaders to ensure that "full and fair consideration" is given to fruit and vegetable growers need for enhanced research, pest management and trade assistance. The Senate version of the Farm Bill essentially preserves all existing specialty crop provisions of the current law, and with Sen. Debbie Stabenow (D, MI), chair of the Senate committee, from a specialty crop state, these provisions are expected to survive and could expand once the Farm Bill reaches conference committee reconciliation.
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