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Budget-Climate Change; Livestock Issues; SNAP Program; Peanuts; Cuba; and Senate Approves USDA Nominees
Budget
David M. Herszenhorn reported in Saturday’s New York Times that, “Among the audacious proposals in President Obama’s budget was a plan to save more than $9.7 billion over a decade by putting strict limits on farm subsidies that are disbursed regardless of market conditions or even whether the land is actively farmed.
“But Mr. Obama’s grand ambitions have run into political reality.
“The budget outlines approved by the House and Senate on Thursday night do not include limits on farm subsidies at all, and even champions of change say that if the president’s plan can be revived, it will have to be scaled back so significantly that the savings could amount to just several hundred million dollars.”
The Times article explained that, “While Mr. Obama’s Democratic allies on Capitol Hill adopted much of his budget template, the farm subsidy limits never got off the ground.
“In the House, farm-state lawmakers told the Budget Committee chairman, Representative John M. Spratt Jr., Democrat of South Carolina, that they would not support any budget plan that tinkered with hard-fought agreements they struck in passing last year’s omnibus farm bill.
“And in the Senate, Kent Conrad, Democrat of North Dakota, chairman of the Budget Committee and an ardent defender of agricultural interests in his state, quickly discarded the president’s proposal.”
The article pointed out that, “Other critics of farm subsidies said that the initial White House proposal, while bold, missed the mark.
“‘It cast a cloud over the whole gesture to have something like that,’ said Ken Cook, the president of Environmental Working Group, a nonprofit that has energetically lobbied to reduce farm subsidies.
“Mr. Cook suggested that the administration had done a more careful job in laying the groundwork for initiatives on climate change and health care. ‘In this case,’ he said, ‘it was thrown out there and those of us on the reform side of the agenda really found ourselves in an awkward position.’”
Saturday’s article indicated that, “In the Senate, Mr. Conrad did help with approval of a budget provision that would save $350 million over five years by making modest cuts to crop insurance programs, but it was far short of the $2 billion in cuts to insurance programs that Mr. Obama had proposed.
“As part of his budget plan, Mr. Conrad also expressed a willingness to consider ‘targeted savings in agriculture’ down the line.”
The Times article added that, “In the House, Representative Paul D. Ryan, Republican of Wisconsin, joined Representative Earl Blumenauer, Democrat of Oregon, in offering an amendment to cap eligibility for farm subsidies at $250,000 in family income. Senator Charles E. Grassley, Republican of Iowa, offered a similar amendment in the Senate. Both were defeated.
“In last year’s farm bill, the income eligibility cap was reduced to $750,000 in farm income or $500,000 in non-farm income, from $2.5 million.”
Climate Change- Background: Executive Branch, Legislative Branch Dynamics
Steven Mufson reported in yesterday’s Washington Post that, “But change environmentalists can believe in won’t come about just because of change in the Oval Office. In Congress, Rep. Henry Waxman, the new chairman of the Energy and Commerce Committee, has an ambitious timetable for a climate bill. Senate Environment and Public Works Committee Chairman Barbara Boxer, who wrested the lead on climate policy away from rival committees, isn’t far behind.
“More importantly, two seminal documents changed the balance of power on climate policy before Obama won a single primary. One was the Intergovernmental Panel on Climate Change’s fourth and most frightening report, issued in November 2007, offering new evidence that climate change is real and that human behavior is making it worse. The second was the Supreme Court ruling on April 2, 2007, that carbon dioxide, a common greenhouse gas produced by burning fossil fuels, qualifies as a pollutant under the Clean Air Act. That gave the EPA the authority and responsibility to regulate CO2 without waiting for Congress to issue guidelines. Just recently, in fact, the Obama EPA declared that global warming endangers public health, bringing it a step closer to regulation.
“The Supreme Court’s decision gives the administration tremendous leverage in negotiations over a cap-and-trade bill, offering Obama a sturdy backup if he fails to extract concessions from industry, utilities and recalcitrant members of Congress.”
Climate Change- Agriculture
More specifically with respect to climate change legislation and agriculture, a news release issued on Friday by the National Council of Farmer Cooperatives (NCFC) indicated that, “[NCFC] hosted a meeting today bringing together representatives from a broad range of agricultural and farm organizations to discuss the real world costs that climate legislation will impose on farms, cooperatives and rural households across America.
“Attendees heard presentations from Bob Looney, Vice President of Government Affairs for CHS Inc., who discussed the impact the legislation will have on petroleum refiners across rural America; Kirk Johnson, the Vice President of Environmental Policy at the National Rural Electric Cooperative Association, who looked how the bill would likely raise consumers’ utility bill; and Bill Herz, the Vice President of Scientific Programs at The Fertilizer Institute, who gave an overview of how fertilizer prices are likely to rise under any climate change proposal. Presentations are available on NCFC’s web site at http://www.ncfc.org/ncfc-climate-change-initiative.html.
“‘I believe that agriculture needs to become a much more active participant in the process as climate change legislation begins to move through Congress. As we do this, I think that it is especially important that we look at the impact that this legislation will have on farm and household budgets across rural America,’ said NCFC President Charles F. Conner.”
The release added that, “Among the consequences of climate change legislation discussed were: Climate change legislation could cost the average American family more than $2400 a year in increased utility costs alone; [and] The Environmental Protection Agency predicts that the cost of natural gas—a key component nitrogen fertilizers—will increase by 25% almost immediately under the plan…”
Dan Looker noted on Friday at AgricultureOnline that, “[Representative Stephanie Herseth-Sandlin of South Dakota] also said that she has some concerns about Representative Henry Waxman’s proposed climate change bill that was introduced this week.
“‘We’re still analyzing the Waxman proposal,’ she said, adding that she wants to make certain that rural Americans don’t wind up paying more for electricity, which is a possibility if a cap a trade program doesn’t reimburse consumers for higher costs that would come when coal-fired power plants have to buy carbon offsets. She also wants to make certain that farmers, ranchers and owners of forests will be able to participate in selling carbon credits, she said.
“She emphasized that trying to just oppose climate change legislation completely isn’t realistic, either.
“‘Something’s going to move forward and the alternative to doing nothing is having the EPA come in,’ she said.”
And in a news release issued on Thursday regarding the House passed budget, Rep. Frank Lucas (R-Oklahoma), the Ranking Member on the House Ag Committee, stated that, “No matter what my Democratic colleagues say about what is in and what is not in this budget, make no mistake: this budget is an assault on production agriculture. It will increase energy costs, increase taxes, and devastate rural economies.
“The cap and trade plan envisioned by the Democratic budget will increase input costs like fuel, electricity, and fertilizer.”
Nonetheless, the prospect for passing climate change legislation is anything but certain.
The Wall Street Journal editorial board noted on Friday that, “In a vote late Wednesday, no fewer than 26 Democrats joined all 41 Republicans to insist that any new cap and tax on carbon energy would require at least 60 votes.
“Tennessee Republican Lamar Alexander called it ‘the biggest vote of the year’ so far, and he’s right. This means Majority Leader Harry Reid can’t jam cap and tax through as part of this year’s budget resolution with a bare majority of 50 Senators.”
And Reuters writer Ayesha Rascoe noted on Thursday that, “U.S. lawmakers took a big step forward on climate change legislation this week, but the cratering economy makes it unlikely Congress will approve a controversial cap and trade system this year.”
The article explained that, “Rep. Henry Waxman, chairman of the House Energy and Commerce Committee, hopes his panel approves a bill by the end of May. Legislation would have to pass through several other committees.
“Senate Majority Leader Harry Reid has said he would like a vote on a cap and trade bill this summer. But experts doubt there are enough votes in the Senate given strong Republican opposition and some wavering Democrats.
“The 800-pound gorilla that proponents have to deal with is the economy. Critics say Congress should not impose a program that would raise energy prices and burden businesses in a recession.”
Livestock Issues
An item posted on Friday at Lancaster Farming (Pennsylvania) Online stated that, “Some watching the cattle industry might describe it as being under siege, from animal rights pressures to marketing issues and high input prices.”
The item noted that, “Beef cattle producers gathered in State College last week for their annual Pennsylvania Beef Expo.
“National Cattlemen’s Beef Association representative (NCBA) Mark Wellam shared an update from the national association and challenged the member to get involved in animal agriculture issues.”
“‘The biggest threat we face today is the animal rights activist groups, they are real and they are here,’ [Wellam] said.”
The piece added that, “Animal rights activists, strengthened by their success in passage of Proposition 2 in California, have now set their sights on Ohio as the next state to push through a referendum to restrict animal agriculture practices. Illinois has had similar policy introduced in their state Senate and pressure is being applied in Indiana as well. Animal rights activists are also lobbying to have beef removed from the school lunch programs.”
“‘Their number one goal is to eliminate animal agriculture and they are not afraid to spend money to do it,’ [Wellam] said.”
SNAP Program
Javier Blas reported on Thursday at the Financial Times Online that, “The number of US citizens receiving food stamps jumped in January to a record 32.2m, up 400,000 from December, the US government said on Thursday, in a sign that rising unemployment and persistently high food prices are hurting consumers.”
And a news release issued by USDA on Friday indicated that, “At the Reading Terminal Market in Philadelphia today, Agriculture Secretary Tom Vilsack announced that, on April 1, monthly benefits for the 32.2 million recipients of Supplemental Nutrition Assistance Program (SNAP) increased. The increase was included in the American Recovery and Reinvestment Act of 2009 (ARRA) and will help people purchase nutritious foods and stimulate the economy. SNAP, formerly known as the Food Stamp Program, is at the forefront of combating hunger and improving the nutrition and health of low-income children, individuals and families.”
The release explained that, “Starting in April 2009, most four-person households will receive an $80 increase in their monthly SNAP allotment. States will add the increased amounts to SNAP recipients’ electronic benefit transfer (EBT) cards for clients to use at authorized retailers including grocery stores, supermarkets, and farmers’ markets. The amount of increase varies by the household size.”
Peanuts
Robbie Brown reported in Saturday’s New York Times that, “It is a cardinal rule of Georgia politics never to be on the wrong side of a peanut.
“And this year, with peanut sales struggling after a national salmonella outbreak that was tied to peanut paste, Georgia politicians are lining up to demonstrate unblinking faith in a crop more plentiful in this state than anywhere else in the country.”
The article noted that, “Georgia produces twice as many peanuts as the next-largest grower, Texas, and politics and peanuts have long been joined in the state.”
The Times item added that, “That bond was strained after investigators traced the salmonella outbreak, linked to nine deaths and hundreds of illnesses, to the Blakely plant of the Peanut Corporation of America. The company, which declared bankruptcy in February, had detected salmonella in peanut paste at the plant but shipped the product anyway after further tests that it ordered came back negative.
“In response, Georgia lawmakers passed a bill last month requiring food processors to show the state’s Department of Agriculture any positive test results for dangerous contaminants. State Senator John Bulloch, a longtime peanut farmer who sponsored the bill, which the governor is expected to sign, said one bad company had damaged the reputation of a good crop.
“‘We realize that our industry has been battered,’ Mr. Bulloch said, ‘but it’s not the peanut grower’s fault. It’s not that we’ve got a bad product.’”
Roy Roberson noted in an update posted on Friday at the Southeast Farm Press Online that, “This time last year (early March) it was hard for farmers in this county to figure out what to plant because everything looked good. Grain prices were good, peanut contracts were good, cotton prices were in line with other crops.
“In early March 2009, sitting in the farm house his grandfather built just before the last Great Depression, [Bishopville S.C., grower Pete Player] says this year is so dramatically different than 2008. ‘What I’m going to plant is somewhat dictated by rotation, but with both commodity prices and input costs being so uncertain, it’s hard to know just how far you can go with one crop or another,’ he says.”
The news piece added that, “[Player] started growing peanuts in 2004 and has consistently topped 4,000 pounds per acre. Irrigated peanuts, he says, is a perfect rotation crop in his operation. He hoped it would be a staple crop for many years.
“Now, he says peanuts may not be an option. An over-supply of peanuts, the recent salmonella outbreak from contaminated peanut products and a generally shaky economy has virtually shut down peanut production so far in 2009.
“If peanut contracts are issued, and as of early March that was still a big IF, Player says he expects both dollars and acreage to be cut. Growing peanuts for $355 per ton is a risky farming business, even if a grower can maintain the 5,000 pound per acre production that Player has averaged over the past three years.
“Most South Carolina growers, particularly those who got into production in the past four or five years don’t have a base and aren’t eligible for government support programs,” the article said.
Cuba
Laura Meckler reported in Saturday’s Wall Street Journal that, “President Barack Obama plans to lift longstanding U.S. restrictions on Cuba, a senior administration official said, allowing Cuban-Americans to visit families there as often as they like and to send them unlimited funds;” [however], “President Obama doesn’t intend to call for lifting of the trade embargo against Cuba, which would require congressional action, nor is any specific diplomatic outreach contemplated, the official said.”
Senate Approves USDA Nominees
Reuters news reported on Friday that, “The U.S. Senate approved the nomination of Kathleen Merrigan, who helped develop U.S. organic-food labeling rules, to be deputy secretary of the Agriculture Department.
“Merrigan was confirmed as deputy on Thursday evening, said the Agriculture Committee. Senators also approved Jim Miller as the undersecretary in charge of the farm program and Joe Leonard as assistant secretary for civil rights.
“They are the first senior-level officials to join Agriculture Secretary Tom Vilsack in running USDA, which has a budget of $100 billion a year for national forests, public nutrition, farm supports, agricultural research and export promotion.”
Keith Good
