SEPTEMBER 2010

September 8

DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “Delivering disaster aid when farmers need it should be a priority of federal emergency aid. But the first-year experiment with the Supplemental Revenue Assistance program (SURE for short) hasn’t accelerated the process, some farmers say, and it’s led to administrative headaches for Farm Service Agency offices that Congress may have underestimated. For example, rules on how to treat some specialty crops like seed corn still haven’t filtered down to county FSA offices, holding up payments for the 2008 crop What’s the fix?

“‘Part of the complexity of SURE occurs because it is a whole crop farm program as opposed to an individual crop program,’ says Carl Zulauf, an Ohio State University economist who monitors risk management strategies for farmers. ‘SURE would be much simpler to administer if it was based on an individual crop basis. In addition, being on an individual crop basis would allow you target the disaster declaration to an individual crop — in other words, the disaster must have happened during the growing season of the crop in the affected county in order for the crop – county combination to be eligible for SURE.’”

Yesterday’s update noted that, “The most common complaint Zulauf has heard about SURE is that its payments are not timely. ‘I think there is an easy solution for this problem, which I see as a very important problem for a disaster assistance program,’ he adds.

“SURE’s ability to meet timely delivery of financial aid would be enhanced if SURE made payments just after harvest (i.e., when insurance makes payments) rather than after the crop year ends, Zulauf says. ‘Moreover, substantial budget savings occur if SURE payments are calculated using the crop insurance harvest prices rather than crop marketing year prices.’ (Right now, SURE’s spring guarantee price is based on futures, but the final season average tally which determines loss is based on cash prices. Based on a study of actual farm records for 1996-2007 from the Illinois and Kansas farm management associations, payments for corn, grain sorghum, soybeans, and wheat growers would run about 35 percent less, but they’d be a fairer measure of loss and a year faster.)”

In other Farm Bill related news, The New York Times editorial board indicated today that, “Early in the last century, the federal government tried to create competition in the meatpacking industry by breaking up the five corporations that controlled it. The result is that four big corporations control it now: JBS, Tyson Foods, Cargill and National Beef Packing. Agriculture Secretary Tom Vilsack wants to try again, and we fully support him. In fact, we’d like to see him go much further.

“New rules proposed by Mr. Vilsack aim to restore the balance between independent livestock producers and the industrial behemoths. The behemoths have screamed, a sign of how entrenched they really are.

“The rules seek more transparency in pricing and less collusion. Right now, it’s all too easy for packers to offer premium prices to favored producers and discounted prices to everyone else. The rules would make this harder, partly by allowing lawsuits by producers who feel they’re the victim of anticompetitive practices.”

The Times added that, “By themselves, these changes will only modestly reduce the concentration in the industry today. Packers argue that a tightly integrated system results in high quality meat. In fact, the current system guarantees only a steady flow of animals, at the lowest possible prices, through the nation’s slaughterhouses, while doing little to address the issues of industrial production: overuse of antibiotics, groundwater pollution, toxic manure waste.

“We hope Mr. Vilsack will be able to make his modest rule changes stick. But we also think it’s time for a larger initiative in preparation for the next farm bill — which could reach Congress in 2012 — to prevent packers from owning animals before they’re ready for slaughter, restore open markets and let small farmers back into the game.”

September 7

Paul Hollis reported on Friday at the Southeast Farm Press Online that, “As time draws ever closer for a new farm bill, peanut producers might want to consider improving a program that hasn’t exactly worked according to plan.

“‘We took a model from other commodities, slapped it on peanuts, and expected it to work,’ says Tiffany Arthur, an economist with the Farm Service Agency’s Economic and Policy Analysis Staff. ‘Peanuts are a different commodity, and maybe we need a more unique program for peanuts.’”

Mr. Hollis explained that, “When the marketing loan concept was first introduced, says Arthur, the intent was to provide farmers with a portion of their expected revenue up front at harvest for the purpose of repaying creditors.

“‘Farmers then have nine months to market their crops and repay loans, allowing them to time their sales to capture higher revenues, rather than selling at harvest, when prices are usually lowest. But peanut option contracts circumvent this process,’ she says.

“Most farmers contract peanuts prior to planting or harvest, making the loan irrelevant to them, and shellers use the marketing loan in their stead, says Arthur.”

The article pointed out that, “Interest in a peanut revenue insurance program appears to be increasing grower support for mandatory reporting requirements, she [Arthur] says. Expected benefits include reduced risk for insurers considering revenue insurance, as well as higher coverage levels under such a program, increased coverage levels under the existing disaster program, a higher price guarantee under ACRE, higher coverage under SURE, and better price information for peanut growers negotiating contracts or cash prices.”

Meanwhile, with respect to the Farm Bill and direct payments, a subject that was highlighted in yesterday’s FarmPolicy.com report, Beth Wischmeyer reported yesterday at the Argus Leader Online (South Dakota) that, “A standing-room-only crowd in the Women’s Building auditorium Sunday at the State Fair watched candidates for the U.S. House debate a fitting topic for the venue: agriculture.

“Democratic candidate Stephanie Herseth Sandlin, Republican candidate Kristi Noem and Independent candidate B. Thomas Marking discussed ethanol subsidies and changes they would make to the farm bill.”

The article stated that, “Herseth Sandlin said in many conversations since passage of the 2008 farm bill, it is increasingly difficult to justify making direct payments to producers to the American taxpayer.”

September 6

DTN Ag Policy Editor Chris Clayton reported on Friday that (link requires subscription) that, “Congress should eliminate direct payments, and the Average Crop Revenue Election program should be based on county, rather than state, yields and revenue, Iowa Farm Bureau delegates stated Friday.

“The group’s two-day policy meeting ended with members backing a resolution that the farm bill should ‘provide a dependable, fiscally responsible safety net for farmers.’ But the group took the major step of proposing the elimination of the $5.2 billion direct payment program. ‘Direct payments should be replaced by using this money for an improved revenue insurance program and risk management and fair trade,’ the resolution stated.

“Further, the group’s policy stated that the risk management program needs to be better coordinated to avoid gaps and reduce redundancy. In particular, the group stated that the ACRE program would work better if it were based on county yields and revenue triggers rather than the current state yield and revenue triggers.”

After more detailed analysis, Friday’s DTN article indicated that, “The Iowans also recognized that they face battles in regional differences over the farm bill with Southern farmers who grow cotton and rice that will surely arise at the AFBF annual meeting [see related graph]. So the group added language that they want programs that improve the safety net for all farmers.”

O. Kay Henderson reported on Friday at RadioIowa Online that, “The Iowa Farm Bureau’s delegate assembly has endorsed the idea of replacing direct government payments to American farmers with a new system that would use government subsidies for a ‘revenue assurance’ program that would provide insurance against crop and livestock losses.

“[Iowa] Farm Bureau president Craig Lang says that kind of risk management could be the new ‘safety net’ for American farmers. ‘The discussion around the Farm Bill lasted nearly three-and-a-half hours and we heard everything from improving the safety net towards what if we took the Farm Bill away and food prices increased and we had amendment after amendment, but during all that discussion, the change on direct payments stayed in,’ Lang says. ‘And I really think that was driven by our farmers’ concern about the growing federal deficit.’”

Ms. Henderson noted that, “Lang admits the idea may not be popular in other areas of the country. Cotton farmers, for example, are ardent supporters of the direct government payment system.”

Dan Piller reported on Saturday at the Green Fields Blog (Des Moines Register) that, “[Iowa Farm Bureau president Craig] Lang said the [direct] payments have become harder to defend, a sentiment echoed by U.S. House Agriculture Committee Chairman Collin Peterson, D-Minn., during the first hearings earlier this year on the 2012 bill.”

(Note that a FarmPolicy.com overview of the House Agriculture Committee hearings on the 2012 Farm Bill can be viewed here.)

An update by Ken Anderson that was posted on Saturday at Brownfield stated that, “Delegates debated the idea of ending all federal farm programs, but those resolutions were rejected. Resolutions passed by the Iowa Farm Bureau will be forwarded to the American Farm Bureau for consideration at the group’s annual meeting in January.”

The Brownfield link also included an audio replay of a discussion between Mr. Anderson and Craig Lang.

To listen to a portion of the Brownfield interview, just click here (MP3- about two minutes).

Meanwhile, Natalie J. Ostgaard reported on Friday at the Crookston Times Online (Minnesota) that, “Youngquist Auditorium on the University of Minnesota, Crookston campus was nearly filled Thursday morning as U.S. 7th District Rep. Collin Peterson and U.S. Sen. Amy Klobuchar hosted a public meeting to address the concerns of constituents in the area, which were primarily geared toward agriculture.”

The article noted that, “Peterson said he has an issue with the government’s broad definition of a farmer, that you could have $1,000 of ag-related sales a year to qualify as one.

“‘So if you have a horse you could sell for $1,000 or more, you’re a farmer,’ he said. ‘I think this misleads the public. We’ve got a lot of hobby farmers who don’t do this for a living. The problem is, programs are geared toward this inflated number of farmers, 2.2 million, when we really only have about 350,000.’

“One of the things he’d like to change is direct payments to farmers, which ‘could be better utilized in crop insurance and a better safety net so that when you have a bad year, you have better protection, but in good years you don’t need money from the government,’ said Peterson.”

Friday’s update pointed out that, “Peterson said he would also like to take pop, candy and other junk food out of the food support program, which would help to address the growing obesity problem in the nation. ‘I don’t think we should be using taxpayer money to buy that kind of stuff for people,’ he said.”

***

With respect to nutrition and obesity as variables in the 2012 Farm Bill debate, recall that Professor Robert Paalberg stated at a May 13 House Agriculture Committee hearing in Washington, D.C. [ see related article, "Ban sugary soda from US food stamps- food expert"] that, “A USDA study in 2008 found that the price of fruit and vegetable products in the United States, if you control for quality and season of the year, had fallen at almost exactly the same rate as the price of chocolate chip cookies, cola, ice cream, and potato chips. Nor is it true that Federal programs make corn artificially cheap for livestock producers. The corn program in the farm bill may lower prices slightly (by less than ten percent), but this effect is more than offset by Federal subsidies and mandates for corn-based ethanol, which drive up the price of corn, and also soybeans. Nor is it true that sweeteners have been made artificially cheap by our commodity programs; our tariff-rate quotas on sugar imports drive up all sweetener prices (and this further boosts feed prices, by diverting corn use to the production of high fructose corn syrup). Nor is it true that HFCS is more obesity inducing in drinks than natural sugar; HFCS in soft drinks consists of 55 percent fructose and 45 percent glucose, not significantly different from ordinary sugar, which is 50/50 fructose/glucose.

“So the alleged links between the farm bill and obesity are largely bogus, but they are nonetheless becoming a more powerful political current, one that could make a business-as-usual farm bill more difficult to enact in 2012.” (See official transcript at page 175).

Dr. Paalberg added that, “Subsidizing food give-aways, even healthy food give-aways, has never been a credible policy response to our obesity crisis. Nor is it any longer sustainable within our new budget limits. In the Senate, recently, the Agriculture Committee passed a child-nutrition bill with an added $4.5 billion in spending that had to be financed in part through cuts in EQIP spending.

“A better approach would be to stop using the SNAP program to subsidize consumption of unhealthy products. Caloric soda, which is not a food, might be made ineligible for purchase using SNAP benefits (along with various other products such as alcohol, cigarettes, and pet food). Removing the soda subsidy from the SNAP program would help correct the impression that our nutrition programs are hostage to the interests of beverage industry.” (See official transcript at pages 175-176).

In a related article regarding nutrition and the Farm Bill, Karen Auge reported yesterday at The Denver Post Online (“Spoiled system: Eating healthier comes with a price for families”) that, “As Revisha Martinez pondered the cost of peaches and watermelon at her local King Soopers recently, she became the last stop in a complicated food-production system that critics believe has turned healthy eating into expensive eating.

“If Martinez wants each member of her household to have one peach, it’ll cost her about $3.

“If she chooses Kraft macaroni and cheese, she can get 18 servings — with 400 calories and 580 milligrams of sodium in each — for the same price.”

The article stated that, “The reasons fresh fruits and vegetables are so pricey compared with processed food in a carton are a complicated stew of government subsidies, politics and the whims of Mother Nature.

“But their combined might, say critics pushing for a change in the way money is doled out, moves us away from fruits and vegetables and toward meat, dairy products and the sugar- and sodium-loaded processed foods for which crops like corn and wheat serve as the raw ingredients.”

The Denver Post article explained that, “But not everyone believes subsidies alone explain the cost of food in the produce aisle.

“‘Commodity supports for soy and corn and wheat, etc., are not necessarily the reason why those commodities are priced lower in the market,’ said Ray Gilmer, vice president of communications for the United Fresh Produce Association, a trade organization that represents fruit- and vegetable-growers. ‘You have to look at the cost of production,’ he said.”

Yesterday’s update noted that, “Unlike corn and wheat, spinach and tomatoes can’t sit in silos indefinitely, he said. Fruits and vegetables destined to be sold as fresh produce often have to be hand-picked.

“Harvests are subject to weather, he pointed out. ‘And a 25-pound carton of tomatoes could be $6 or it could be $20,’ he said.

“His group has focused on gaining support for research that could help lower the costs of growing produce or fighting pests, and for programs to help growers market their product, Gilmer said.”

And in related analysis of the price of food and policy issues, see this recent essay by Ohio State University Agricultural Economist Luther Tweeten, titled, “Is There a High Cost of ‘Cheap Food’ Policies?”

In other Farm Bill related developments, a news release Friday from Rep. Scott Murphy (D-New York) indicated that, “On Tuesday, September 7th, Congressman Scott Murphy and Congressman Collin Peterson, Chairman of the House Agriculture Committee, will host a Farmers Roundtable with farmers and members of Murphy’s Agriculture Advisory Committee at the Kings Ransom Farm in Saratoga County.

“Murphy invited Peterson to once again join him in the 20th Congressional District to hear directly from members of the agricultural community and discuss the upcoming Farm Bill as well as what can be done to help to help farmers in Upstate New York.”

And Marc Heller reported on Thursday at the Daily Courier-Observer Online (New York) that, “The chairman of the House Agriculture Committee will visit a dairy farm and a poultry farm in Northern New York Sept. 7, accompanying Rep. William L. Owens, D-Plattsburgh.

“Mr. Owens’s re-election campaign announced the visit by Rep. Collin C. Peterson, D-Minn., on Tuesday, reflecting the political benefit of bringing the House’s top lawmaker on farm policy matters to the region ahead of next year’s rewrite of federal farm policy.”

September 3

Heather Thorstensen reported yesterday at AgriNews Online that, “While visiting dairy farmers in Fairfax Aug. 24, U.S. Senator Al Franken [D-MN] made it clear he values their opinions and looks to them for guidance on dealing with legislative issues that could help their industry.

“‘You’re the experts,’ he told them.”

The article noted that, “In the question-and-answer session, people expressed concerns about keeping the U.S. dairy industry on a level playing field with other countries, potential future regulations from the Environmental Protection Agency and keeping the cap on farms eligible for MILC payments.

“He was asked if the farm bill could be separated into budgets for agriculture, nutrition and forestry so the general public doesn’t wrongly assume farmers get the entire budget. Franken said it’s important to keep the bill’s components together so it can pass through Congress.

“‘The way you get a congressman in New York City to vote for the ag bill is if you have food stamps in it,’ he said.”

A news release yesterday from Sen. Kirsten Gillibrand (D-NY) indicated that, “As Congress begins debate over the next Farm Bill, [Sen. Gillibrand], the first New Yorker to serve on the Senate Agriculture Committee in nearly 40 years, today met with Finger Lakes region farmers to begin her statewide listening sessions to discuss new efforts to help New York farmers and farming communities.”

With respect to the executive branch, Ken Anderson reported yesterday at Brownfield that, “A recent article in the publication Bloomberg Businessweek insinuated that Ag Secretary Tom Vilsack wants to take the five billion dollars currently spent on direct payments to farmers and put it into ‘rural initiative’ programs, including broadband grants and nutrition programs.

“Vilsack says he was interviewed for the Bloomberg article, but he tells Brownfield at no time did he call for five billion dollar cuts to farm programs.

“‘If you look at the transcript that we provided, there’s no mention of that at all—none at all,’ says Vilsack. ‘It’s an unfortunate circumstance where I think a reporter had basically an idea and a story that he wanted to write, and what I told him wasn’t necessarily consistent with that—but he just decided to write it anyway—which is unfortunate because it gets a lot of misinformation out there.’”

The Browfield link also included an audio replay of Mr. Anderson’s discussion with Sec. Vilsack.

In other policy related news, Bloomberg news reported yesterday that, “The number of Americans receiving food stamps rose to a record 41.3 million in June as the jobless rate hovered near a 27-year high, the government said.

“Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.2 percent from May, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 19 straight months.”

September 1

John Lyon reported earlier this week at the Arkansas News Online that, “A recent spate of editorials in the national press knocking U.S. Sen. Blanche Lincoln’s efforts to secure $1.5 billion in disaster aid for farmers [Washington Post, New York Times, Wall Street Journal] shows how the East Coast media misunderstands the importance of agriculture, Lincoln said today.

“‘It’s certainly nothing new for the East Coast newspapers to be extremely critical of agricultural support, that’s for sure,’ Lincoln said in an interview with the Arkansas News Bureau. ‘I think it’s just another example of how those folks truly, I don’t think, understand production agriculture and how important it is to our economy and how important is to feeding the world.’

“Lincoln, who chairs the Senate Agriculture Committee, won a fight in July to include $1.5 billion in agricultural disaster aid in a bill to aid small businesses, but Republican senators voted to block the bill. The Obama administration, which supported the small-business bill, promised to provide the disaster aid administratively in exchange for Lincoln agreeing to drop the provision from the bill.”

Mr. Lyon explained that, “Critics say the aid package is an end run around the Supplemental Revenue Assistance Payments, or SURE, program, which was included in the 2008 Farm Bill. The program sought to reform farm subsidies by offering formula-based payments to farmers who signed up for federally subsidized crop insurance.

“‘We’ve not had a single farmer sign up for this program in Arkansas because it’s not effective for the crops that we grow and how we grow them,’ Lincoln said. ‘It’s very similar in other Southern states.’”

“Another complaint is that most of the money will go to the wealthiest farmers. Lincoln said the payments follow production,” the article noted.

Meanwhile, the AP reported yesterday that, “A $1.5 billion farm aid package sought by Arkansas Sen. Blanche Lincoln as she faces a tough re-election fight may not be funded by the end of the month as the White House promised, a spokeswoman for the Senate Agriculture Committee said Monday.

“Lincoln, the chairwoman of the Senate Agriculture Committee, had received a commitment from the Office of Management and Budget that the aid package would be funded administratively by Tuesday. Senate Agriculture Committee spokeswoman Courtney Rowe said Monday it’s possible that won’t happen.

“‘She’s continuing to work with the White House and with USDA to find a way forward in delivering the assistance,’ Rowe said Monday. ‘We should have details to announce soon.’”

The article added that, “Rowe said Lincoln still has a commitment from the White House that it will fund the package. A White House spokesman did not respond to a request for comment.”

The disaster aid issue also came up yesterday in tele-news conference with Agriculture Secretary Tom Vilsack: “Q: [T]his is the final day of the month, and Senator Lincoln– Blanch Lincoln indicated that she had expected to hear something from the administration, USDA, regarding how ad hoc disaster assistance, this would be…Has USDA reached a decision on that?”

Sec. Vilsack indicated that, “As far as the ad hoc disaster assistance program is concerned, we’re — you know, I think it’s fair to say that we’re working hard to try to make sure that this is a program that makes sense, that provides help and assistance to those who suffered very serious losses, and that it’s structured in a way that complies with rules and regulations, laws and statutes.

“It is a complicated process. We’re going to try to do it as well as we can, and as soon as we’re certain, we will — we’ll be working with the senator’s office and the White House to — to provide the out — the outline of that program. But we’re not there yet.”

With respect to the SURE program, DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “Recently I reported that the permanent farm disaster aid program made princes and paupers out of farmers in states struck by farm revenue losses when it first launched for the 2008 crop last January. SURE, the Supplemental Revenue Assistance program, rewarded some growers with maximum $100,000 payments while others with equally legitimate losses collected zero because of technical glitches. Equally troubling, why did SURE shower Iowans with aid in a year when statewide farm incomes reached an all-time record high? How good is the SURE formula in compensating revenue ‘losses’?

“Wall Street’s 2008 subprime mortgage panic and farm disaster aid didn’t have much in common, but in politics, timing is everything. Farm aid piggybacked on the emergency economic stimulus bill that year, so Congress increased the coverage level from which the SURE guarantee was calculated. Through Aug. 24, this meant an extra $465 million for 2008 payees, out of a total $1.282 billion in 2008 SURE payments. This economic stimulus ‘super charger’ and related rules actually benefited Texans more than any other state, accounting for $79 million in extra assistance–more than half of the state’s total SURE payouts of $144 million in 2008. For Iowans, the subprime misfortune allowed them to collect an extra $65 million out of $215 million in 2008 aid paid so far.”

Yesterday’s update added that, “Even without the extra 2008 bonus, economists are finding flaws in SURE’s ‘wiring.’ A recent journal article by land grant university economists Gary Schnitkey, Carl Zulauf and Michael Langemeir, ‘ACRE, Crop Insurance, and SURE: Interactions and Overlap for U.S. Midwest Crops,’ in the Journal of Agricultural and Applied Economics (Number 3, 2010), points out a bias in the SURE formula that they think overstates the revenue losses. In laymen’s terms, the spring guarantee price for determining your base revenue uses a future’s price. Revenue losses are scored against a season-average cash price at the end of the crop year.

“The apples-to-oranges price formula ignores basis–the wide spread between futures prices in Chicago and lower local cash prices–and triggers sizable over payments, the economists contend.”

In other news, Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia) was a guest on Monday’s AgriTalk Radio program with Mike Adams. The two engaged in wide-ranging discussion that included issues associated with the Farm Bill; to listen to remarks from Sen. Chambliss on this issue, including budget concerns, just click here (MP3- about two minutes.)

A news release yesterday from Rep. Jerry Moran (R-Kansas) stated that, “Congressman Jerry Moran today requested that House Agriculture Committee Chairman Collin Peterson (D-MN), hold a field hearing in Kansas in advance of the 2012 Farm Bill. Earlier this year, Chairman Peterson began holding field hearings across America to hear directly from farmers and ranchers about U.S. farm policy. Information gathered in field hearings will play an important role in writing the next farm bill. Hearings have been held in the following states: Iowa, Idaho, California, Wyoming, Georgia, Alabama, Texas, South Dakota and North Carolina.”

See this link for a FarmPolicy.com overview of the House Ag Committee Farm Bill hearings, and this link for a recap of Senate Ag Committee Farm Bill hearings to date.

AUGUST 2010

August 30

On Friday, USDA issued a statement indicating that, “U.S. Department of Agriculture Press Secretary Justin DeJong today released the following statement in response to the recent Bloomberg/Business Week story titled ‘Broadband Trumps Farmer Payments in Rural Aid’:

“‘The Obama Administration cares deeply about our farmers and ranchers, and USDA continues to work hard and provide them with the critical support they need to provide this nation with the food, feed, fiber and fuel we rely on. Since becoming Secretary of this department, Secretary Vilsack has advocated fiercely about the need to keep American agriculture strong through farm safety net programs, as well as through efforts to spur economic opportunity in rural America. In recent interviews with a Bloomberg reporter, at NO time did Secretary Vilsack call for $5 billion cuts to farm programs. In fact, he pointed out how USDA already saved $4 billion that was put toward deficit reduction by renegotiating our agreement with crop insurance companies. He also discussed using existing resources more effectively to spur growth and opportunity. As Secretary Vilsack testified before both Senate and House committees regarding the 2012 Farm Bill and he continues to discuss with people throughout the country, rural America continues to face inordinate challenges. As the transcript makes clear, he continues making the case that it is imperative that we keep the farm safety net strong so that the American people can continue to have access to safe, affordable and abundant food.’

“Full transcripts from interviews that took place Thursday, August 5, 2010, and on Tuesday, August 17, 2010 are available.”

Meanwhile, the Washington Insider section of DTN reported on Friday (link requires subscription) that, “There is a line of thinking about agricultural policy that says modern policies are changed fundamentally when producers decide they are no longer worth the trouble — as in the 1980s and 1990s. Now, once again, there is a lot of concern about how well programs are working in this era of higher prices and much greater market volatility, it may be time for fundamental changes.

“For example, in what would be a major shift in policy, the Iowa Farm Bureau is considering a proposal for the 2012 federal farm bill that would end direct payments to farmers in favor of insuring farmers against revenue fluctuations.”

Friday’s update added that, “This development is news at least partly because of Iowa’s role in agricultural safety net programs — the state received just under $500 million in 2008, about 10 percent of the U.S. total and the largest amount of any state. ‘We are looking at alternatives to the direct payments,’ Iowa Farm Bureau President Craig Lang told the press last week following his appearance on an Iowa State Fair panel with Secretary of Agriculture Tom Vilsack.

“‘Direct payments are harder and harder to defend, and we are interested in doing our part to help reduce the budget deficit,’ Lang said. If the delegates support the resolution, it would go to the American Farm Bureau Federation for consideration as a national policy position.”

After additional analysis, the DTN article noted that, “The direct payments are controversial because they are based on historical production rather than current plantings, they favor certain crops, and they often go to the largest farmers. For these and other reasons, they’ve become a favorite target of critics and House Agriculture Committee Chairman Collin Peterson, D-Minn., told a hearing in May direct payments had become too difficult to defend and some change would be needed before the new farm bill could be passed by 2012.”

The August 27 edition of The Kiplinger Agriculture Letter stated that, “If she’s reelected, Senate Ag Com. Chairman Blanche Lincoln (D-AR) promises to fight any cut in direct payments, and several farm state senators will join her. As with past farm bills, the House will likely pass its version before legislation emerges from the Senate, then hold sway on most of its safety net revisions.”

In other news regarding Sen. Lincoln, the AP reported yesterday that, “Lincoln has cited as her biggest accomplishments in her first year as agriculture chairman her work on a portion of the financial overhaul bill regulating derivatives, disaster aid for farmers and child nutrition legislation approved by the Senate.

“But two of those – the disaster aid package and the child nutrition bill – remain in limbo. Lincoln said she’s confident both will become reality and says her chairmanship represents the amount of work she’s put into representing her state.

“‘You work hard to get into places where you know you can be beneficial,’ Lincoln said.”

August 27

Bloomberg writer Alan Bjerga reported yesterday that, “Former Iowa Governor Tom Vilsack knows that Farm Belt protocol requires paying respect to the Butter Cow. During a visit to the Iowa State Fair on Aug. 17, he made the pilgrimage to the 600-pound bovine sculpture carved from pure creamery butter. Now that he is U.S. Agriculture secretary, Vilsack wants to take a chunk out of another sacred cow: $15.4 billion in farm subsidies.

“Record federal deficits and changing priorities are spurring President Barack Obama’s administration to redirect who gets rural aid. The government is shifting payments to broadband providers, land-conservation efforts and nutrition programs, Bloomberg Businessweek reports in its Aug. 30 issue.

“To many farmers, the changes seem designed to satisfy organic-food devotees, first lady Michelle Obama’s anti- obesity cause, weekend duck hunters, and small-town Internet users –everyone, that is, except traditional farmers. Kris Luoma, 55, a cattle rancher and crop- insurance salesman visiting the Iowa fair from Arcadia, Nebraska, blames the ignorance of Washington policy makers.”

Yesterday’s article indicated that, “Vilsack’s USDA in July trimmed $6 billion in payments to crop insurers such as San Francisco-based Wells Fargo & Co. for the next decade. Now he’s looking at cuts of as much as $5 billion a year from an automatic payments program that compensates farmers even if they grow nothing. Vilsack is the chief messenger of this makeover, a turnabout for farmers who have known him as one of their staunchest advocates.”

Mr. Bjerga pointed out that, “Agriculture payments have withstood challenges before. The last real attempt to cut subsidies, in 1996, led to a backlash — and bailout checks for farmers after export declines and heat waves persuaded lawmakers to abandon cost-cutting. This time, the $1.3 trillion annual federal deficit will make changes stick, said House Agriculture Committee Chairman Collin Peterson, the Minnesota Democrat whose district’s $243 million in 2009 subsidy payments ranked it No. 6 out of 435.”

More specifically with respect to executive branch farm policy perspective, the Bloomberg article stated that, “With more farmers relying on small-town jobs to make ends meet, and even then with incomes trailing those in urban areas by 29 percent, rural economies need to diversify, Vilsack said. Done right, government programs will benefit everyone, he added, including crop growers and ranchers who need thriving communities nearby.”

Mr. Bjerga explained that, “While as much as $5 billion in automatic payments to farmers would go to the administration’s new rural initiatives instead, Vilsack said he’s hopeful that deficit-cutting demands will be satisfied by the reductions in crop insurance.

“Still, some growers and lawmakers worry that the White House will force further cuts in automatic payments, which farmers use to finance bank loans. And they’re concerned about unintended consequences from dramatic shifts in land use.”

And the article concluded by noting that, “Frank Lucas, an Oklahoma Republican who will take over the chairmanship of Peterson’s Agriculture Committee if Republicans in November gain the 39 seats they need to control the House, calls Vilsack a ‘nice guy’ drowning in bad ideas. He listens too much to environmentalists and ‘foodies’ who care more about how crops are produced than whether farmers can make a living, Lucas said. Vilsack disagreed.

“‘I might have a slightly different emphasis,’ he said as he ended his fair tour near an exhibit on expanding broadband. ‘But you can’t say I’m not trying.’”

Recall that Rep. Lucas and Sec. Vilsack had a firm exchange regarding farm policy priorities back on April 21 at a House Ag Committee hearing in Washington, D.C.

According to an official transcript (starting at page 37) of that hearing, Rep. Lucas noted that, “If we are in effect, I guess, saying that the production agriculture component of the farm bill is not the relevant part that it used to be, then I almost have to ask the question I think that would be asked in my town meetings: With the focus that you have provided both budget and conceptual-wise, are you talking about turning rural America into a bedroom community?

“Secretary VILSACK. Not at all, Congressman.

“Mr. LUCAS. For people——

“Secretary VILSACK. First of all——

“Mr. LUCAS.—for people to go to work every and drive back?

“Secretary VILSACK. No, no. This is a great question and I appreciate you asking it…”

To listen to the entire spirited exchange on this issue between Ranking Member Lucas and Sec. Vilsack from that hearing, just click here (MP3-9:08).

Ron Smith, writing yesterday at the Southwest Farm Press Online, reported that, “USDA Under Secretary for Farm and Foreign Ag Services Jim Miller said the USDA is focused on building a new framework for rural America and enhancing opportunities for U.S. farms and ranches.

“‘It is a challenging time for all of agriculture,’ Miller said as keynote speaker, via telephone hookup, for the American Cotton Producers/Cotton Foundation Summer Meeting recently in Lubbock.

“‘But we’ve always faced challenging times,’ he said, ‘and we will work through them.’”

The article added that, “He said a key goal for USDA is to insure ‘the next generation has more opportunities in agriculture and more options.’

“He said achieving that goal depends on five key factors, including:

“‘- Commitment to new ways to strengthen farm income with agricultural research [and],

“‘- Expansion and diversification in rural communities to create opportunities for small businesses, even those not directly involved in agriculture.”

The article indicated that, “He said the Brazil WTO case remains a challenge to cotton and other industries. A recent agreement that halts Brazil’s counter measures for the time being is ‘not a permanent solution,’ Miller said.”

Meanwhile, a news release yesterday from Sen. Kirsten Gillibrand (D-NY) stated that, “As Congress begins debate over the next Farm Bill, U.S. Senator Kirsten Gillibrand, the first New Yorker to serve on the Senate Agriculture Committee in nearly 40 years, today met with Lower Hudson Valley farmers to begin her statewide listening sessions to discuss new efforts to help New York farmers and farming communities. Senator Gillibrand plans to focus on key areas of the Farm Bill that will have major influence on New York, including access to financing, new market opportunities, assistance for specialty crops, and investments in renewable energy.”

Following The Washington Post (Wednesday) and The New York Times (Thursday), The Wall Street Journal editorial board offered an opinion today on the farm disaster aid proposal that has been highlighted by Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.).

The Journal noted today that, “Arkansas Senator Blanche Lincoln is down 20 points in the polls, but the Democrat is apparently going to go down swinging—with $1.5 billion of your money. She is the spending problem, in profile.

“Last year heavy rain damaged cotton and rice crops across the South. The 2008 farm bill, passed by a Democratic Congress, created the Supplemental Revenue Assistance Program (SURE) to aid farmers hit by such weather-related disasters. The admirable intent was to stop farm-state Senators from looting the Treasury after every early frost or the like. To qualify for SURE funds, farmers are now required to buy crop insurance (federally subsidized to the tune of about $6 billion a year) and to have lost more than 30% of their crop value.

“Mrs. Lincoln wants to pull an end run around this law and make Arkansas farmers eligible for retroactive taxpayer payments. The payments would be made even if the recipients didn’t buy crop insurance and even if their damages were as little as 5%. Most small businesses in America suffered far more than a 5% fall in revenues during the recession, but few are getting six-figure handouts from Uncle Sam. Rice and cotton prices have recovered nicely this year in any event.”

After additional analysis, the Journal opinion item concluded by saying, “If Mrs. Lincoln gets her $1.5 billion, the White House will have eviscerated the one laudable farm subsidy reform in years. Congress will revert to raiding the Treasury every year to enrich its wealthiest constituents. All of this in a last ditch, and probably futile, effort to help Mrs. Lincoln retain her Senate seat.”

August 26

The New York Times editorial board opined in today’s paper that, “Senator Blanche Lincoln, an Arkansas Democrat and chairwoman of the Senate Agriculture Committee, has been seeking $1.5 billion in disaster relief for rice and cotton growers in Arkansas and other Southern states who were hurt by heavy rains. The White House seems all too eager to oblige an important Democrat who is in a very difficult re-election race.

“Arkansas cotton farmers suffered real crop losses, averaging 30 percent; rice farmers far less, averaging less than 4 percent. Unfortunately, Ms. Lincoln’s proposal makes no distinction, and in many cases the payments would overcompensate farmers.

“Relief payments would be based not on a farm’s actual loss but on the amount it received under the government’s direct payments program, a generous annual subsidy based on a farm’s size regardless of market conditions. Anyone with a loss of more than 5 percent would get a check amounting to 90 percent of the subsidy. This would be a big, unjustified windfall, especially for big farmers.”

The Times noted that, “Meanwhile, Collin Peterson, chairman of the House Agriculture Committee, says ‘there is no way they can do this administratively,’ and thinks authorizing legislation is required.

“Congress and the administration need to work together to come up with a rational aid program to help farmers who are in real trouble. Ms. Lincoln will have to find a better way to save her job.”

August 25

The Washington Post editorial board opined today that, “When last we checked on U.S. agricultural policy, the Obama administration was paying Brazil $147.3 million to settle its international trade lawsuit over U.S. cotton subsidies, thus freeing Washington to continue lavishing taxpayer money on wealthy farmers in Arkansas, home state of politically embattled Democratic Sen. Blanche Lincoln. We thought this might represent policy sausage-making at its least attractive.

“No such luck. As The Post’s Alec MacGillis reported, Ms. Lincoln, who chairs the Senate Agriculture Committee, is now demanding $1.5 billion in ‘disaster aid’ for already-subsidized farmers in Arkansas and other states, mostly in the South. Even the usually farm-friendly Senate balked; the extra spending threatened to sink a $20 billion small-business aid bill that President Obama supports. So White House chief of staff Rahm Emanuel got her to relent in return for his promise to find the money elsewhere by the end of August. Officials are scouring the federal government for cash.”

The Post editorial stated that, “If you think this looks like a back-door plan to almost double almost everyone’s subsidy, we agree with you. Even more dubious is the funding source Ms. Lincoln wants the White House to raid: Section 32, an obscure permanent appropriation within the Agriculture Department. The USDA normally must spend it on food for needy children, but a loophole lets the secretary of agriculture divert some money to shore up ‘farmers’ purchasing power.’ This is the loophole that would have to be exploited now.

“It would not be the first time. As Ms. Lincoln noted, the Bush administration raided Section 32 for $900 million in aid to drought-stricken cattlemen in 2002, and for $423 million for Florida fruit and vegetable growers in 2004 — both election years. But Ms. Lincoln’s request exceeds those two combined. And since when do George W. Bush’s practices constitute precedent for Democrats?

“In fact, the 2008 farm bill, passed over Mr. Bush’s veto, sought to end notoriously recurrent, and notoriously expansive, ‘relief’ demands. It established a fund that farmers afflicted by truly epic events could tap if they bought federally subsidized crop insurance to cover more mundane losses. But most Southern farmers opted out, arguing that insurance was a bad deal for them. Ms. Lincoln, it seems, was their insurance policy.”

In a related item regarding farm spending, Peter Du Pont argued in an opinion item posted today at The Wall Street Journal Online that, “With the huge increases in spending enacted in the last two years, it will be difficult to find a congressional consensus on spending reductions. If we cannot all agree, for example, that it’s time to end federal subsidies for ethanol ($6 billion per year) and all manner of farm crop subsidies ($15 billion per year), we won’t make any progress.

“After November, there is likely to be an opportunity to accomplish some of these goals. The Democrats see their House control slipping, their Senate majority shrinking.”

August 24

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “In order to dampen Republican opposition to a high priority small-business economic package, the White House pressed Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., to pull her $1.5 billion agricultural disaster program, one of the elements of the package that was drawing fire from budget hawks. In return, White House Chief of Staff Rahm Emanuel promised to fund the program through existing USDA authorities.

“Colleagues, including Agriculture Committee ranking member Saxby Chambliss of Georgia, expressed doubts that the administration has authority to, as Chambliss put it, ‘spend taxpayer money without it coming through Congress.’

“Others have been even more critical, suggesting not only that the White House lacks authority to follow up on Emanuel’s pledge, but that it was poor policy to attempt to do so. Sen. Tom Coburn, R-Okla and Rep. Jeff Flake, R-Ariz., wrote the president later in the week urging him to reconsider the commitment to Lincoln. They listed several reasons, suggesting that using an administrative route for a large disaster package would violate the regular funding process and fly in the face of Obama’s public comments about the need for transparency in the budget process.”

The DTN item noted that, “By now, murmurs of disapproval have come from a number of sources, including some normally friendly to disaster aid programs who suggest the Emanuel-Lincoln deal is unseemly and the program itself may be inequitable, as well. At this time, Lincoln seems determined to defend her proposal in spite of the target it provides her — and the administration’s — political opponents.

“Thus, it is likely negative political comments about the program and the political horse trading that has been involved will follow the proposal through the fall elections, Washington Insider believes.”

Meanwhile a news release Sunday from Rep. Earl Blumenauer (D-Oregon) stated that, “Last week Congressman Blumenauer met with local farmers as well as representatives from farming distribution networks, farmers markets, conservation groups, communities of faith, and other interested parties to discuss the 2011 reauthorization of the Farm Bill.”

“Congressman Blumenauer believes that Oregon is dramatically shortchanged by the current composition of the Farm Bill, particularly because we tend to have smaller scale operations and our farmers and ranchers largely produce food rather than heavily subsidized commodities. Here in the United States, the benefits directed to cotton, corn, and sugar are concentrated in the top percentages of farming interests and flow largely to a handful of states. The environmental titles which would benefit Oregon agricultural interests as well as the environment and the rest of the population are profoundly lacking.

“Congressman Blumenauer believes the next Farm Bill should maximize value to the taxpayer, the environment, and especially our Oregon farmers and ranchers.”

August 23

Alec MacGillis reported in yesterday’s Washington Post that, “The Obama administration is seeking $1.5 billion in disaster relief for farmers, a move that could boost the reelection prospects of Sen. Blanche Lincoln (D-Ark.) but that critics say circumvents established procedures.

“Lincoln, the chairman of the Agriculture Committee, has been seeking relief for rice and cotton farmers hurt by heavy rains that struck Arkansas, Mississippi and Louisiana last fall. She sought to include $1.1 billion in aid for those states, along with $400 million for farmers elsewhere, in a small-business bill that Democrats are trying to pass.

“To improve the bill’s prospects, Senate leaders asked Lincoln to withdraw the $1.5 billion, with White House Chief of Staff Rahm Emanuel pledging that the government would provide it separately. Robert L. Nabors II, acting deputy director of the Office of Management and Budget, followed up in an Aug. 6 letter to Lincoln: ‘I want to assure you that the Administration is committed to providing assistance consistent with your legislative proposal by the end of this month.’”

The article noted that, “But the administration is still looking for the money. ‘We are working to identify administrative authorities and funding,’ OMB spokesman Kenneth Baer said last week. And the deal is coming under widespread criticism.

“Black lawmakers note that the administration and Congress have yet to come up with $1.2 billion owed black farmers under the settlement of a major discrimination lawsuit. Republicans say there is no money for the request. And groups opposed to farm subsidies say it would shower money on large farms that suffered few losses and undermine the relief policies established by the 2008 farm bill.”

Mr. MacGillis explained that, “Agriculture Committee spokeswoman Courtney Rowe responded to questions with a brief statement. ‘Chairman Lincoln is actively working with both [the Department of Agriculture] and OMB on the details of the disaster assistance and is confident that she will be able to announce them before the end of the month,’ Rowe said.

“After Lincoln trumpeted the White House’s pledge, her Republican opponent, Rep. John Boozman, who has a wide lead in Arkansas polls, called it an attempt ‘to bail out somebody who’s in a difficult election by somehow coming up with money that there are real questions about whether they have the authority to do it.’

“Underlying the dispute is the effort to make the $20 billion farm subsidy program more need-based and less abuse-prone. The 2008 farm bill sought to replace improvised payments with a new program, Supplemental Revenue Assistance Payments (SURE), under which farmers in disaster areas would receive standard, formula-based payments.”

Meanwhile, AP writer Steve Karnowski reported today that, “The permanent disaster aid program in the 2008 Farm Bill was intended to spare Congress from having to scrape up extra money every time a drought, flood or hurricane struck farm country, but growers in the South claim the plan has failed them.

“They argue the program needs changes, and as proof they point to the situation in Arkansas, where Sen. Blanche Lincoln has for months struggled to secure a special $1.5 billion package of disaster aid for Southern farmers hit by bad weather last year. After Lincoln failed to get the funding through Congress, the Obama administration agreed to provide the money administratively.

“Southern farmers said they need the help because they didn’t buy crop insurance, a requirement to qualify for the permanent disaster aid plan. Crop insurance sign-up is high among Midwest corn, soybean and wheat farmers, but in the South, many rice and cotton farmers complain premiums are too high for the benefits they receive.”

Today’s article stated that, “U.S. Rep. Earl Pomeroy, D-N.D., a member of the House Agriculture Committee, said he and others who crafted the permanent disaster aid program didn’t intend to skew it to the Midwest.

“‘We want a program that is equitable right across the country, because that’s the kind of program that’s going to stand the test of time,’ Pomeroy said.

“Pomeroy said he wasn’t sympathetic when Lincoln, a Democrat who chairs the Agriculture Committee, put her proposal forward because the permanent plan was supposed to end ad hoc, or one-time, aid. But he agreed Southern farmers are hurting.

“‘So maybe this last one is needed while we evaluate what is required to make sure these programs work on a level of regional fairness,’ Pomeroy said.”

A related news release Friday from Senator Kent Conrad (D-ND) stated that, “[Sen.Conrad] met today with North Dakota Farm Services Agency (FSA) officials and USDA Undersecretary for Farm and Foreign Agricultural Services Jim Miller to consider the impact the standing disaster program in the 2008 Farm Bill is having on North Dakota’s producers.”

The release added that, “Senator Conrad stressed that the program pays only when someone truly has had a whole farm loss, where the old ad hoc method paid on a unit by unit basis. He also stressed that the standing disaster program encouraged the purchase of crop insurance as the Supplemental Revenue Assistance Payments (SURE) Program compensates producers based on the level of the insurance they carry.

“As opposed to previous ad hoc disaster programs, this standing disaster program is budgeted for and is paid for, resulting in real reform.”

A similar news release Friday from Rep. Earl Pomeroy stated that, “[Rep. Pomeroy] joined Senator Kent Conrad and U.S. Department of Agriculture (USDA) Undersecretary Jim Miller today in Mandan, North Dakota. The group joined Farm Service Agency (FSA) officials and other members of the local agricultural community to discuss the implementation of the Farm Bill’s disaster assistance program—the Supplemental Revenue Assistance Program (SURE). This permanent disaster program, created in the 2008 Farm Bill, builds on crop insurance protection by paying larger payments for producers with higher levels of coverage.”

“‘Having permanent disaster programs in place helps bring certainty to farmers and their financers,’ Congressman Pomeroy said. ‘In the past, North Dakota producers had to rely on Congress to pass an ad hoc disaster package—I’m glad we’ve been able to work together to improve that system with the SURE program.’”

In more general Farm Bill related news, an update posted on Friday at KFYR-TV reported that, “[Sen.] Conrad says the 2008 Farm Bill was completely paid for. But, he says, because of the current economic climate, spending will likely be cut in the future, and agriculture won’t be exempt from those cuts.”

And Janet Kubat Willette reported on Thursday at at AgriNews Online that, “Direct payments are WTO legal, [Dave Frederickson, ag outreach director for Sen. Klobuchar] said, but he wondered if they will be part of the 2012 farm bill. The main issue will be money. Agriculture has already contributed $4 billion to deficit reduction, part of the renegotiation of the Standard Reinsurance Agreement for federal crop insurance that will save $6 billion over 10 years, Frederickson said. He predicted people would hear ‘we’ve already given’ a lot during the farm bill debate.”

August 20

An update posted last week at the Minnesota Corn Growers Association Online contained several interesting audio clips regarding the 2012 Farm Bill from lawmakers and administration officials that took part in the Minnesota Ag Leadership Conference.

Perspective on the Farm Bill and biofuels from House Agriculture Committee Chairman Collin Peterson (D-Minn.) is available here (MP3- 3:57); while a brief overview from Ag Committee Ranking Member Frank Lucas (R-Oklahoma) can be heard here, (MP3- 1:42).

And comments from Under Secretary, Farm & Foreign Agricultural Services Jim Miller can be found here (MP3- 1:41).

Meanwhile, the Washington Insider section of DTN reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., says he would like to make major changes in the federal support program for the nation’s dairy farmers in the next farm bill. Speaking recently during a dairy farmer event in Minnesota, Peterson said, ‘As chairman of the Agriculture Committee, I was responsible for writing the dairy portion of the current farm bill and I’d be the first to say it isn’t working. We need to get away from the price support system.’

“Peterson did not provide details on how he would modify the current program, but he did indicate that his goals for the industry are not losing current dairy farmers while attracting new young producers into the dairy industry. Developing a support structure that accomplishes both of those goals while keeping dairy prices high enough to allow both groups to make a living from dairying will prove challenging.

“The National Milk Producers Federation already is on record with a proposal to eliminate the current dairy price support and milk income loss contract programs and replace them with a new program that would support producer margins. The vast majority of the nation’s milk supply is produced by the dairy marketing cooperatives that are NMPF members, thus increasing the chances that some type of reform will be included when the next farm law is written.”

With respect to the federal budget situation, one of the key variables impacting the Farm Bill debate, Reuters writers Richard Cowan and Donna Smith reported yesterday that, “The U.S. economy faces difficult times ahead with chronic unemployment and slow manufacturing hurting the pace of recovery, the head of Congress’ budget agency said on Thursday.

“The warning from the non-partisan Congressional Budget Office came on top of more bad U.S. economic data that heightened concerns about a return to recession, roiling markets. The gloomy outlook could also spell trouble for Democrats facing November congressional elections.

“The CBO forecast the U.S. budget deficit will hit $1.342 trillion this year, down slightly from its March projection of $1.368 trillion.”

Yesterday’s article added that, “Anxiety over the economy is likely to punish President Barack Obama’s Democrats in November’s midterm elections because of perceptions of big deficits caused by government spending and high unemployment.”

More specifically with respect to the midterm elections, a video clip and related article posted today at The Wall Street Journal Online indicated that, “Political analyst Charlie Cook tells Jerry Seib that Republicans will win back the House this fall.”

This possibility could also be a factor as the Farm Bill debate unfolds.

Patrick G. Lee reported yesterday at the Boston Globe Online that, “More than two dozen cities and towns in Western Massachusetts will be the focus of a major federal initiative being announced today to increase low-income families’ consumption of fruits and vegetables, as part of the nation’s efforts to combat obesity.

“The Agriculture Department awarded $20 million to Massachusetts and a Cambridge-based research firm to test whether providing subsidies for buying produce will encourage food stamp recipients in Hampden County communities — including Springfield, Chicopee, and Holyoke — to eat more nutritious meals.

“Of the 50,000 households in Hampden County that rely on food stamps, several thousand will be offered a 30-cent discount for every dollar spent on fresh fruits and vegetables, while other families will continue to pay full price. Households will be tracked for 15 months to see whether their eating habits change and health outcomes, including obesity rates, improve. State officials hope to begin the program in fall 2011.”

An update posted yesterday at Farm Futures Online stated that, “The White House has pledged to provide $1.5 billion dollars in disaster assistance for farmers administratively. It’s a promise made to Senate Agriculture Committee Chair Blanche Lincoln, D-Ark., who removed the ag aid provision from the small business bill the Senate considered late last month. That’s raising some eyebrows on Capitol Hill, among them House Agriculture Committee Ranking Member Frank Lucas, R-Okla.

“‘By shifting administratively, that means trying to move money internally around between accounts, they want to spend $1.5 billion on ag disaster,’ Lucas said. ‘The chairman of the House Agriculture Committee Collin Peterson says it just can’t be done. The ranking member of the Ag Committee in the United States Senate, Saxby Chambliss, has lots of questions. I personally have not figured out exactly how they propose to do this.’

“Lucas says he believes USDA is even scrambling to figure out how this shift can legally be done.”

The news item added that, “‘When you start rearranging by administrative edict how monies are handled at USDA, not doing through Congressional action, not doing it through the regular appropriation process, but when the White House chief of staff decides to help someone politically, that potentially sets a pretty frightening precedent,’ [Rep. Lucas said.]

“Lincoln faces a tough re-election battle in November.”

Ken Anderson reported yesterday at Brownfield that, “Agriculture Secretary Tom Vilsack says he will encourage Congress to continue the Volumetric Ethanol Excise Tax Credit, also known as VEETC. But Vilsack hints Congress should also consider a ‘modification’ of the ethanol tax credit in order to put more funding into ethanol infrastructure.

“In comments to reporters at the Iowa State Fair this week, Vilsack said the tax credit is still important to the growth of the ethanol industry.”

The Brownfield update noted that, “But Vilsack also hinted some support for Growth Energy’s recent proposal to trade current government incentives for more assistance in developing the nation’s renewable fuels infrastructure.

“‘I think we have the capacity—with sort of a modification to the credit—to consider ways in which we could direct resources as incentives to help build the tanks and the distribution dispenser systems,’ he says.”

August 19

Elton Robinson reported yesterday at the Delta Farm Press Online that, “The ‘Killer Bs’ could inflict some major whelps on the cotton program during the 2012 farm bill debate, according to National Cotton Council president and CEO Mark Lange.

“Lange’s soubriquet for the impact of budget, baseline and Brazil could first buzz into Washington on the wings of November elections.”

With respect to the budget, the article noted that, “‘There is a good chance that Republicans may take the House in fall elections and if they do, there will be a number of ‘budget hawks’ coming to Congress. If that happens, we may be writing a 2012 farm bill with tremendous pressure on ag spending,’ said Lange, speaking at the Southern Cotton Ginners Summer Meeting in Memphis.

“Lange said there’s also a possibility of a budget reconciliation package in the spring of 2011 ‘that could catch agriculture right in the midst of the debate.’”

And on the baseline, Mr. Robinson reported that, “Lange noted that given current high prices for corn and soybeans, ‘the only price support money built into the Congressional Budget Office’s current baseline — beyond direct payments — is for cotton. When [House Ag Committee Chairman Collin Peterson (D-Minn.)] starts his discussion about a revenue package, where’s he going to find the money? The only place to take money is from direct payments or cotton’s price support system.’”

“Brazil could also challenge the marketing loan, Lange says. ‘I think we’re going to be writing the farm bill with the Brazil case hanging over our shoulder.’

“Brazil has suspended retaliation on U.S. goods and services going into the country, but Lange noted that it still has the right to do so,” yesterdays article said.

A news release from yesterday by the Environmental Working Group (EWG) stated that, “Large agriculture interests across Arkansas are projected to receive more than $210 million in taxpayer dollars under a controversial disaster aid program conceived by Senate Agriculture Committee chair Blanche Lincoln (D-Ark.) and embraced by the White House.

“On Aug. 6, after Lincoln’s plan to compensate farmers for 2009 crop losses ran into trouble on Capitol Hill, the White House moved to salvage it – and boost Lincoln’s reelection prospects — by pledging $1.5 billion in already appropriated funds to underwrite the controversial and unorthodox idea.”

The release added that, “EWG’s analysis shows that beneficiaries of the Lincoln plan would receive a lucrative taxpayer bailout even if they incurred only minor losses.

“Lincoln, who is in a tough fight for reelection, has contended there is nothing partisan or unusual about asking the administration to underwrite her disaster aid program from existing U.S. Department of Agriculture funds.”

A similar EWG release from yesterday pointed out that, “Large agriculture interests across Louisiana are projected to receive more than $98 million in taxpayer dollars under a controversial disaster aid program conceived by Senate Agriculture Committee chair Blanche Lincoln (D-Ark.) and embraced by the White House.”

The Washington Insider section of DTN reported on Tuesday (link requires subscription) that, “Renewable fuels advocates are working now on efforts to regain political momentum lost when the Congressional Budget Office concluded last month that the industry no longer needed the expensive, $0.45 per gallon blender credit it has been receiving. At this time, the industry faces the problem of renewing the biodiesel subsidy that expired in January and extending the ethanol blender credit that will expire at the end of this year. And, it faces continuing uncertainty over the coming decision by the Environmental Protection Agency regarding the proposed lifting of the current 10 percent gasoline blend cap.

“For example, at a recent conference in Minnesota, House Agriculture Committee Chairman Collin Peterson, D-Minn., told the group he is concerned about ‘what is going on regarding energy, especially ethanol and biodiesel.’

“He commented that he believes the administration listens far too much to ‘elements of the environmental movement who have way too much influence.’ He went on to criticize both EPA and the Department of Energy, saying ‘oil industry interests have some ties with Energy Secretary Stephen Chu that a lot of people are not aware of, and Chu has become enamored with drop-in fuels, something the oil companies are behind.’ Drop-in fuels are biofuels that can be used in existing systems.”

The DTN item indicated that, “Peterson said drop-in fuels ‘cost about three to four times more’ to produce than corn- based ethanol and DOE and EPA are not being realistic about the potential of some proposed fuels, especially cellulosic-based fuels.

“Peterson said he is ‘very, very worried’ about the two agencies’ impact on ethanol policy and ‘if we don’t get this straightened out, this could impact corn more than the farm bill because the safety net is inadequate to hold things up…. We could be back to $2 corn.’ The challenge, Peterson said, includes getting extensions for both the ethanol and biodiesel tax incentive programs.

“Renewable energy supporters’ expected strategy in the Senate likely will be to offer an amendment to the bill that Senate Majority Leader Harry Reid, D-Nev., is expected to offer following the current recess. Those proposals would include a mandate for production of flex fuel vehicles, funding for ethanol blender pumps and a loan program for pipeline to expand the U.S. ethanol market, among other provisions. Efforts are under way to urge Reid to allow the amendment. Reid is planning a Clean Energy Summit in Las Vegas in early September.”

August 18

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “As groups look to make their cases about the farm-safety net, the Iowa Farm Bureau is working on a revenue protection plan that would eliminate direct payments.

“Craig Lang, president of the Iowa Farm Bureau, said at a forum Tuesday that his members will consider policies for the 2012 farm bill that would eliminate the $5.2 billion paid to farmers in direct payments ever year [related graph] for a better revenue program that would expand and boost the Average Crop Revenue Election program and likely eliminate the USDA disaster program as well.

“‘We’re saying, would our farmers give direct payments up if they had a safety net, and we’re hoping they say yes,’ Lang said.”

Yesterday’s article noted that, “Lang was one of the panelists discussing ways to revitalize rural America at a forum held by Secretary of Agriculture Tom Vilsack Tuesday. The event was held before a sparse crowd with a downpour dampening moods at the Iowa State Fair.”

Mr. Clayton explained that, “Giving up direct payments would be tough. About 10 percent of direct payments, or $500 million, are sent to Iowa farmers now. But Lang said Iowa Farm Bureau has a fear of the growing federal deficit and worries that the country will not be able to catch up to its growing national debt.”

“To help supplement the loss, a revenue-protection program would boost the gap in crop-insurance protection levels and cover a broader array of farmers not now part of the direct payment program, he said.”

The DTN article also added that, “Addressing the age of farmers is a ‘critical issue’ for rural America, Vilsack said, with the ranks of today’s farmers filled with three times as many people over age 65 than the rest of the nation’s workforce. He acknowledged it will be difficult also to make the case to young people that there are more opportunities, but the farm bill should have ‘a heavy emphasis’ on beginning farmers with ‘real programs and real resources,’ he said.”

Dan Piller reported yesterday at the Green Fields Blog (Des Moines Register) that, “In what would be a major shift in policy, the Iowa Farm Bureau will consider next month a proposal for the 2012 federal farm bill that would scrap the controversial direct payments to farmers in favor of putting insurance protection alongside the government’s ACRE program.

“The so-called ‘Babcock Plan,’ named for Iowa State University professor Bruce Babcock who urged such a concept before a congressional hearing in May, would redirect more than $5 billion in federal payments from farmers to insurance that would cover sudden fluctuations in prices.”

(Note: An overview of testimony on this issue can be found in this official transcript of the May 13 House Agriculture Committee hearing at page 146.)

Mr. Piller added that, “‘We are looking at alternatives to the direct payments,’ said Iowa Farm Bureau president Craig Lang of Brooklyn, who appeared at the Iowa State Fair Tuesday with U.S. Secretary of Agriculture Tom Vilsack Tuesday at a panel on rural development.

“‘Direct payments are harder and harder to defend, and we are interested in doing our part to help reduce the budget deficit,’ said Lang.”

Yesterday’s update added that, “The chairman of the U.S. House Agriculture Committee, Colin Peterson (D-Minn.) said at the hearing in May that direct payments had become too difficult to defend and that some change would be needed before the new Farm Bill could be passed by 2012.”

Recall that a related news release from May 14 by National Crop Insurance Services stated that, “Testimony of Professor Bruce Babcock released in advance of the House Committee on Agriculture hearing scheduled for May 14, 2010, on the 2012 Farm Bill, raised the idea of providing protection to farmers from systemic risk by using an area-based revenue plan. The plan would presumably cover all producers, be 100% subsidized and make a payment when actual county revenue fell below a target county revenue, similar to ACRE. Farmers would use crop insurance to insure their individual risks beyond the risks covered by the area plan.

“Professor Babcock’s idea for a county-level ACRE plan has been around for several years and still leaves many conceptual and operational questions unanswered. One question is how to pay for the substantial additional delivery costs involved in simply giving this program to every producer. Farmers consciously make a decision to manage their risks when they choose to participate financially in crop insurance, which is in great contrast to the Professor’s suggestion. Other major issues with area plans are that they don’t protect farmers from individual losses nor do they work well particularly for farmers who do not grow conventional field crops. Certainly, most lenders wouldn’t accept this program as adequate collateral when providing operating loans to farmers. It is also important to recognize that county-based revenue insurance (GRIP) is already available to many producers through the Federal crop insurance program. Whether an existing program, delivered through the private sector and cost-shared with producers, should become a fully subsidized farm program run by the government is very questionable. It is early in the 2012 Farm Bill process and this idea, like some others now surfacing, needs much more evaluation.”

Meanwhile, Ashley White reported yesterday at the West Central Tribune Online (Minnesota) that, “Managing the risk in agriculture is a common refrain when farmers gather to discuss their ideas for the 2012 farm bill.

“‘Risk management is a moving target,’ said Dave Frederickson, outreach director for U.S. Sen. Amy Klobuchar. ‘(Farmers) want to make sure the next farm bill focuses on risk management. There are a lot of trial balloons being floated around right now.’

“At a forum Monday in Willmar hosted by staff members of Klobuchar, D-Minn., local farmers had the opportunity to voice their opinions and concerns on the 2012 reauthorization of the farm bill — officially the Food, Conservation, and Energy Act.”

The article noted that, “Those in attendance also brought forth concerns about the Supplemental Revenue Assistance Program and Average Crop Revenue Election Program, both of which were introduced in the 2008 farm bill, and both of which were described by attendees as difficult to understand.

“‘I think (ACRE) works if people understand it,’ said Steve Zenk, a farmer and farm management instructor at Ridgewater College. ‘It could be good, but it needs to be simplified.’”

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Secretary of Agriculture Tom Vilsack said USDA hasn’t figured out how the department could implement Senate Agriculture Committee Chairman Blanche Lincoln’s $1.5 billion ad-hoc disaster plan. But Vilsack indicated officials want to ensure any such payments would spur farmers to buy or buy-up crop insurance who have aren’t doing so.

“‘We have been asked to take a look at how that might be implemented and we are in the process of doing that,’ Vilsack said at the Iowa State Fair on Tuesday. ‘Obviously, as you know, it’s a little complicated because there’s not a direct congressional directive. There’s not a law. There’s not a specific program. The question then becomes how, if you were to do what she’s asking us to do, if we were to do it, how would you do it in a way that would reinforce crop insurance and the SURE program? That’s part of what we are trying to figure out right now. I don’t think we quite have it figured out yet.’

“Lincoln, D-Ark., was given assurances from the White House that officials would find a way to fund her disaster package even though the proposal did not get congressional approval. Lincoln also is pushing the plan even though USDA has the SURE program. Lincoln’s plan would pay out supplemental direct payments to farmers who showed a 5 percent crop loss and was located in a disaster county.”

August 16

A July 20 Congressional Research Report (“Measuring Equity in Farm Support Levels”- by Randy Schnepf) stated that, “Federal farm law mandates support for, among others, 21 ‘covered commodities.’ Support for these agricultural commodities, as specified in the 2008 farm bill (P.L. 110-246) includes direct payments, counter-cyclical payments, and marketing loan benefits. Since 1996 a handful of these program commodities—feed grains (corn, sorghum, barley, and oats), cotton, wheat, rice, soybeans, and peanuts (hereafter referred to as the major program crops)—have received over $160 billion or 72% of all U.S. farm program payments, primarily in the form of commodity price and income support benefits.

“Large disparities in the relative levels of benefit among these commodities have led to questions of equity. This report looks at available data for the major program crops and compares support rates per unit, total payments, payments per harvested acre, payments as a share of the value of production, and payments as a share of the total cost of production. In addition, price and income support levels are compared to market prices. By all of these measures there has been little equity across commodities. However, farmers often have argued for equity based on cost of production. Economists, on the other hand, would use trend (or a moving average of) market prices as the basis for setting support prices in order to avoid market distortions and resource misallocations.”

The CRS report stated that, “With respect to commodity price and income support payments, this report focuses its equity analysis on the covered commodities since they are the primary beneficiaries. The author recognizes that fruits, vegetables, tree nuts, ornamental plants, and other minor crops account for nearly half of the value of U.S. crop production but do not receive any direct subsidies. Whether the lack of support for nearly 50% of crop production is equitable is beyond the scope of this analysis.

“With the benefit of hindsight it is possible to compare support prices and actual payments against several standards to address questions of equity. Across these commodities, this report compares (1) support levels in the law, (2) yearly average program payments, [related graph] (3) program payments per acre [related graph], (4) payments as a share of crop market values [related graph], (5) payments as a share of production costs [related graph], and (6) support levels with market price trends.”

The CRS report stated on page 14 that, “To the extent that the January 1997 through May 2010 time period reflects long-run market conditions, this exercise suggests that upland cotton and rice growers receive a disproportionately high level of both CCP and marketing loan support relative to the other major covered commodities. Barley and soybeans receive disproportionately lower CCP and marketing loan support. The situation is mixed for most of the other crops; however, wheat, corn, sorghum, and oats are within +/- 5% of the parity value for both loan rates and target prices, suggesting that they are the closest to achieving policy equity under this somewhat ad hoc analysis.

The August 13 edition of The Kiplinger Agriculture Letter (link requires subscription) indicated that, “The proposed disaster aid for ‘09 crops won’t be paid out anytime soon. Senate Ag Com. Chairman Blanche Lincoln (D-AR), fighting for reelection, is pressing for $1.5 billion in payments. Ark. farmers would pocket the most… over $200 million…with the bulk of the money going to big farms in the state. Other senators, however, are thwarting Lincoln’s efforts to get the payments.

“Though Obama plans to sidestep Congress and tell USDA to pay the aid…

“Court challenges are sure to delay payments if USDA acts unilaterally. Taxpayer groups and many lawmakers would object to the Obama administration grabbing Congress’ power of the purse. Many see the payments as campaign pork. But ag secretaries have often stretched their authority to hand out money.

“Note that the aid is mislabeled and has little relation to actual crop losses. It amounts to a near doubling of the annual subsidies paid for owning cropland, though recipients would have to report ‘09 losses of at least 5% from usual yields. USDA crop insurance data show that some states getting big chunks of the aid… Texas, Okla., Miss…did report high losses on ‘09 crops. But in the two states that would collect the most aid…Ark. and Ill…farmers had only moderate losses.”

August 13

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The White House has refused to respond to questions about why the Obama administration may be able to find $1.5 billion to fund ad-hoc ag disaster aid but cannot find funding to pay a settlement in a discrimination case against black farmers.

“John Boyd, president and founder of the National Black Farmers Association, issued a news release Wednesday wanting to know why the administration can find money for a disaster program, but not the $1.2 billion needed to settle discrimination claims.”

Yesterday’s DTN article indicated that, “In response to emailed questions from DTN on Tuesday asking for comment on the ad-hoc disaster funding and black farmer’s settlement, a White House spokesperson responded, ‘Off the record — you can say that the White House did not respond for comment.’

“DTN tried again on Thursday to get a comment from the White House or USDA, but was unsuccessful.”

Mr. Clayton pointed out that, “A report last week from the Environmental Working Group showed some farmers could gain far more from Lincoln’s proposal than from the Supplemental Revenue assistance program, or SURE.

“Environmental Working Group (EWG) President Ken Cook today wrote to the federal Office of Management and Budget (OMB) challenging the rationale for the White House’s promise to fund an agriculture disaster aid package sought by embattled Sen. Blanche Lincoln, chairwoman of the Senate Agriculture Committee.

“The letter, addressed to OMB’s Acting Deputy Director Robert Nabors, says the White House proposal violates key principles that make for effective and equitable farm disaster aid and threatens to repeat the mistakes of ‘ill-conceived and poorly administered farm disaster aid programs’ of the past that ‘trample sound policy en route to ransacking the Treasury.’ The letter also raises question about the threshold for receiving aid in Lincoln’s plan and what funds will be used.”

The article added that, “OMB Acting Deputy Director Robert Nabors wrote Lincoln that he was following up on the conversation Lincoln had with [White House Chief of Staff Rahm Emanuel] ‘regarding the administration’s commitment to provide much-needed agriculture disaster assistance to rural Americans, specifically our nation’s farmers and the rural economies they support.’

“‘I want to assure you that the administration is committed to providing assistance consistent with your legislative proposal by the end of the month,’ Nabors wrote. ‘OMB and USDA are aware of existing authorities and are currently reviewing the most appropriate manner by which to provide such assistance. We are currently evaluating options to ensure compliance with existing laws, ease of administration, and effectiveness of targeting the assistance to those in need.’

“House Agriculture Committee Chairman Collin Peterson, D-Minn., has questioned whether USDA had the authority to provide the aid.”

Carolyn Lochhead indicated yesterday at the San Francisco Chronicle Politics Blog that, “It truly would be a disaster for Democrats if they lose the Senate. Maybe that’s why Arkansas Democrat Blanche Lincoln, in a tough re-election fight, got a promise from White House chief of staff Rahm Emanuel to ‘find’ $1.1 billion in taxpayer cash to bail out Arkansas rice farmers.

“Ms. Lincoln is hardly hiding the fact. She prominently displayed the promise on her campaign website:

“‘Senate Agriculture Chairwoman Blanche Lincoln today released a letter from OMB assuring her that USDA has the authority to deliver the $1.15 billion in farm disaster aid that White House Chief of Staff Emanuel promised her last week.’

“It’s enough to raise even the eyebrows of farm subsidy king Colin Peterson, chairman of the House Ag Committee, who according to a report in farm press publication DTN, told his Minnesota constituents that the Lincoln plan would make even a 5 percent loss qualify as a disaster.”

Ms. Lochhead added that, “Meanwhile, Democrats are planning to roll back future increases in food stamps they passed as part of the stimulus because they can’t find enough money to pay for an huge new child nutrition bill, by same said Blanche Lincoln, aimed at improving the sorry state of school lunches, among other things. They also tapped food stamps to pay for the state aid and teacher bill they passed this week.”

With respect to funding issues associated with the Supplemental Nutrition Assistance Program (food stamps) Stephen Spruiell indicated yesterday at National Review Online that, “My homepage piece today is on the blowback Democrats are getting for cutting food stamps to pay for the two new spending bills that just passed Congress. What the Democrats’ critics don’t seem to realize is that, as is so often the case in Washington, the Democrats didn’t really cut food stamps. They ‘cut’ them: The 2009 stimulus bill expanded the food stamp programs to make benefits more generous in light of the recession, and these ‘emergency’ expansions were to last through 2015. To fund their latest spending spree, Dems moved up the expiration date — twice — from 2015 to 2014 to fund a child-nutrition measure, then from 2014 to 2013 to fund the state-bailout bill.”

Mr. Spruiell stated that, “What makes this all the more galling is that the offsets were originally supposed to come from real cuts to farm subsidies, not food stamps:

“During committee hearings over the child-nutrition bill, Republicans suggested that Democrats look to the bloated farm bill for offsets. Sen. Richard Lugar (R., Ind.) reiterated his position that cuts be made to the direct-payments program, which is a program that sends checks to farmers based on a historical average of what they’ve produced. In other words, it makes no difference how high crop prices are — and lately they’ve been high — or whether a farmer actually grows any crops at all: He still gets a check from the government. Direct payments cost an average of $5 billion a year. Eliminating the program would have paid for all of the new spending contained in the two bills and then some.

“Even farm-subsidy supporter Sen. Saxby Chambliss (R., Ga.) got in on the action, offering up the Conservation Stewardship Program, a program that pays farmers to idle their land….Sen. Blanche Lincoln (D., Ark.), who is running for re-election, compromised by offering cuts to the Environmental Quality Incentives Program (EQIP), which helps big factory farms buy things like methane digesters to deal with industrial-scale manure. But in the end, election-year pressures must have gotten to Lincoln: The cuts to EQIP didn’t make it into the legislation that passed.”

August 12

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., recently received assurances from the White House that USDA would be able to find $1.5 billion in its administrative budget that it could use to fund Lincoln’s proposed ad hoc agricultural disaster assistance program. Speaking to an audience in his home state of Minnesota, House Ag Chairman Peterson said he told Lincoln he is ‘not a big fan’ of the low threshold for determining eligibility that would require a farmer to have suffered only a 5 percent loss.

“Peterson said that under Lincoln’s proposal, USDA would be ‘making payments to some producers who do not need it and we will get all sorts of criticism over it, especially when people realize producers in over half of the counties in the United States will qualify to get a supplemental direct payment.’”

The DTN item added that, “As for the way the Obama administration will implement the provision, Peterson said, ‘I guess you can do about anything you want via the Commodity Credit Corporation’ charter. His fear, he says, is that the $1.5 billion for the program would be charged to the farm program ‘account’ when the next farm bill is written.

“Neither the White House nor USDA has yet announced where it plans to ‘find’ the new money for Lincoln’s proposed disaster program. But whatever the source may be, the administration will be criticized, and not just by those who traditionally to look askance at farm programs.”

Meanwhile, a news release yesterday from the National Black Farmers Association stated in part that, “Despite the advocacy of [Sen. Blanche Lincoln (D-Ark.)], the US Senate has failed in seven attempts to fund a settlement designed to remedy decades of discrimination suffered by black farmers.

“Yet, the Obama Administration and Sen. Lincoln were able to find and offer $1.5 billion to farmers in Arkansas and around the country coping with natural disasters — a measure that has come under criticism.”

Yesterday’s release added that, “On Aug. 5, Sen. Lincoln said that the time to fund the black farmer settlement was ‘long overdue.’ The Senator went on to say, ‘Time is of the essence, as many Pigford claimants have passed away waiting for closure on this matter. We simply cannot afford to delay this process any further.’

“But the Senate took no conclusive legislative action on behalf of the black farmers.

“Adding insult to injury, according to press reports, and confirmed by a letter dated August 6th, from the Executive Office of the President, Office of Management and Budget, Senator Lincoln sought and received assurances that the White House would find $1.5 billion within its budget to help farmers in Arkansas and around the country who are coping with natural disasters. Press reports indicated that White House Chief of Staff, Rahm Emanuel, ‘promised to provide the assistance administratively to get her to agree to delete $1.5 billion in disaster relief assistance for farmers from small-business legislation.’”

Philip Brasher reported yesterday at the Green Fields Blog (The Des Moines Register) that, “Anti-hunger activists are criticizing Congress by rolling back food-stamp benefits to pay for saving teacher jobs and to fund higher spending on school lunches and other child nutrition programs.

“‘These are real cuts with real impact on low-income households who, for the first time, will see their benefits fall from one month to the next,’ according to the Food Research and Action Center.

“The reduction in benefits through the Supplemental Nutrition Assistance Program, as food stamps are now known, provided $11.9 billion for funding teacher salaries and other state programs.”

Yesterday’s update noted that, “Aides to Sen. Tom Harkin, D-Ia., issued a statement today saying that the reduction was returning benefits to levels where they were before they were increased as part of the 2009 stimulus bill.

“The bill ‘does not ‘cut’ food stamp benefits, but rather returns a temporary increase of benefits that was included in the Recovery Act to normal, historical benefit levels,’ the statement said. ‘Congress always intended for the food stamp increases in the recovery bill be temporary in nature. In fact, they were designed to end over time and revert back to normal levels. Rescinding food stamp increases several years from now is consistent with the original intent of the Recovery Act.’”

Mr. Brasher pointed out that, “There is an additional reduction in food stamps contained in a Senate-passed child nutrition bill. That legislation still must be approved by the House.

“If that cut goes through as well, a family of four would see their benefits fall by $59 in November 2013, according to FRAC.”

In a related item, The Wall Street Journal editorial board opined today that, “Democrats say they’ll restore the food stamp funding once they can find another $12 billion in tax hikes or (less likely) spending cuts to serve as offsets. They’d better hope they keep the House in November. [Representative Rosa DeLauro (D., Conn.)] and her colleagues have clearly put at risk the additional funds they wanted to devote to feeding the poor, at a time when record numbers of Americans are now receiving such assistance.”

August 11

Tom Steever reported yesterday at Brownfield that, “Senator Charles Grassley expects no immediate action on the federal farm payment limit proposal he introduced with Wisconsin Democratic Senator Russ Feingold. The Iowa Republican says the measure was put forward far enough in advance of the 2012 farm bill to let people know he’s not giving up on limiting farm payments to $250,000 per entity. Grassley has tried unsuccessfully in the past to insert such a limitation in farm legislation.

“‘We have nothing against big farmers,’ said Senator Grassley, in a conference call to reporters Tuesday morning. ‘Big farmers can continue to get big if they want to, but we feel that without having a reasonable payment limitation that we’re subsidizing big farmers to get bigger.’”

The Brownfield update added that, “Grassley says that what’s changed since his last attempt to limit payments is the greater public scrutiny of federal spending.

“‘The farm program is one of those many issues where we can save money,’ said Grassley, ‘and people are very concerned about the deficit so this very great concern at the grassroots about the deficit, I think, is going to help us more than anything else.’”

Melissa Stagnaro reported earlier this week at that Evening Sun Online (Norwich, NY) that, “The next Farm Bill won’t be enacted until 2012, but some federal lawmakers – including Senator Kirsten Gillibrand [D, NY]– are already preparing to shape the legislation which will replace the Food, Conservation and Energy Act of 2008.

“Last week Gillibrand, New York’s first representative on the Senate Agricultural Committee in 40 years, announced her intention of hosting ‘listening sessions’ across the state. According to the senator, the purpose of the sessions will be to hear from farmers in agricultural communities about the issues they face.

“‘I want to make sure this next Farm Bill is tailored to New York,’ she said, stressing the importance of the state’s 35,000 farms and the $4.5 billion they contribute to the Empire State’s economy.”

And the New York Times editorial board indicated in today’s paper that, “[I]t was refreshing to hear how Senator Jon Tester, a Democrat of Montana, is spending his summer vacation. While other senators drove the campaign trail, dialed for dollars or lounged on a beach somewhere, Mr. Tester went home to his farm and harvested wheat.

“The senator is the third generation of his family to operate an 1,800-acre farm near Big Sandy, Mont., where the Testers grow organic spring and winter wheat. He is spending the first week of his vacation in his combine, trying to gather the wheat before the sawflies get to it. ‘It brings me back to reality,’ he told a local station, KFBB-TV, this week. ‘The combine doesn’t care if you’re a senator or not. It breaks down whenever it wants to break down.’

“Congress used to be dominated by farmers, and it is unfortunate that Mr. Tester and Senator Charles Grassley of Iowa are the only ones left in the Senate who still actively work the fields. If more members had a life outside of campaigning and lawmaking, it might help put petty political disputes in a little perspective. Sit high up in the cab of a combine, stare out at an endless vista of swaying grain, worry about wheat futures and drought — your opponent a leaf-eating insect — and, suddenly, it should seem a little ridiculous to block an important piece of legislation back in Washington just because it would give the other party a victory.”

A USDA Daily Radio news item from yesterday stated that, “Efforts to avoid layoffs of teachers and to ensure health care to those in need have resulted in a plan to divert funds from the Supplemental Nutrition Assistance Program, formerly known as Food Stamps.”

The one-minute audio news summary included comments on this development from Agriculture Secretary Tom Vilsack who noted that the changes in the SNAP program would not be implemented until sometime in 2013.

August 10

An update posted yesterday at the Oklahoma Farm Report Online reported that, “The White House has promised Arkansas Senator Blanche Lincoln that they can move money around and come up with $1.5 billion in disaster aid that will include 210 million dollars for Arkansas farmers- money that could arrive just days ahead of the November general elections.

“Oklahoma Congressman Frank Lucas, the ranking minority member of the House Ag Committee, says that he agrees with the Chairman of the House Ag Committee, Collin Peterson of Minnesota, that there is no way for them administratively to move this amount of money around within USDA without major problems. He calls it a reaction to Senator Lincoln in dire need of help to win reelection this fall in Arkansas. At the same time, he adds that if the White House forces this through- it will provide some much needed help for Oklahoma farmers because of a variety of weather related disasters from the last couple of years.”

To listen to an interview with Rep. Lucas and Ron Hays on this issue, just click here.

Agricultural disaster aid has become a campaign issue in the U.S. Senate race in Arkansas between Senator Blanche Lincoln (D) and Representative John Boozman (R).

An update posted yesterday at Sen. Lincoln’s campaign webpage stated that, “After blocking flood disaster relief for Arkansas agriculture producers in Congress, Congressman John Boozman is now complaining about Senator Blanche Lincoln’s ultimate solution-securing a promise from the Administration to fund her bill with existing budget authority at no added cost to taxpayers.”

“Senator Lincoln has fought for months to overcome Republican objections in the Congress to her deficit-neutral disaster assistance package. Congressman Boozman voted against the needed aid and watched idly as Senate Republicans blocked it in order to prop up his Senate bid. After Republican Senators, led by Mitch McConnell, blocked Senator Lincoln’s legislation four times, she secured a commitment from the Administration to deliver the aid. Friday, an Administration official announced that Senator Lincoln’s request would be met by the end of the month.

“Both Democratic and Republican Administrations have administered disaster aid on at least 19 occasions over the past decade,” the campaign news update said.

Meanwhile, with respect to existing Farm Bill disaster payment mechanisms, DTN Executive Editor Marcia Zarley Taylor reported yesterday (link requires subscription) that, “Errors in a government computer program mean some growers must repay part of the 2008 disaster payments they received as far back as January, but USDA program managers who oversee the Supplemental Revenue Assistance Program (SURE) maintain that such glitches are the exception, not the rule, in the complex program’s administration.

“‘We take absolutely no pleasure in writing letters’ notifying farmers to refund 2008 overpayments on SURE aid, said Brandon Willis, deputy administrator of the Farm Service Agency in a phone interview with DTN. He and other agency officials who met with DTN called problems such as overpayments and fluctuating policy ‘isolated incidents’ and not representative of how FSA had implemented the first-ever disaster aid program using a whole-farm revenue yardstick.

“Except for its handling of group-risk crop insurance policies, ‘the rules of the game haven’t changed’ since the agency issued final regulations on the SURE program in January, Willis said in response to a DTN feature story published Aug. 2. However, Willis added that Washington had issued multiple directives to state and county offices over the last six months to help them interpret those regulations in complex or special situations.”

The DTN article indicated that, “‘SURE is enormously complex. It’s one of the most complex programs FSA has ever had to administer,’ Willis said. For example, SURE formulas needed to accommodate 32 insurance codes and plans in each application and pull records from the Risk Management Agency’s crop insurance files. In the rush to distribute aid for the 2008 crop, FSA hadn’t fully automated computer programs when 2008 sign-up started last January, and that led to a higher workload in county offices and some overpayments.

“Only after checks had been issued did FSA discover that a software download of farmer records from the Risk Management Agency did not include an appropriate adjustment for prevented planted or replanted acres, an issue with a number of growers in Iowa and Missouri hit by floods during planting season, Willis explained. The demand for refunds is strictly due to FSA’s error, not a policy change, he stressed.”

In a related update posted yesterday at the Minding Ag’s Business Blog, Marcia Zarley Taylor noted that, “Iowa farmer Roger Berg expects to be $60,593 poorer soon, once he receives the official letter. That’s because the Farm Service Agency has indicated it overpaid his 2008 farm disaster payments when it issued him a check last February. The mistake is due to an agency error but it will demand its money back with interest within 30 days. Welcome to another case of the haves and the have nots under the SURE (Supplemental Revenue Assistance Program), the disaster program authorized under the 2008 Farm Act.

“Berg’s case involves land he had recently purchased in Keokuk County, Iowa. As the new operator, he lacked actual production history going back the full four years and so FSA calculated his payments using more than one county average plug yield. Later the agency clarified that it should only have inputted one plug yield, he was told, and substituted disaster yields in the other slots. That mistake means Berg Pork may be the latest in a litany of examples where tiny differences result in monumental differences in disaster pay.

“‘They can call it whatever they want’–a mistake, a change in regulations or new guidance, Berg says. ‘But it’s the difference between getting $60,000 or getting nothing.’ He thinks he’s justified in asking for assistance, since some of Berg’s new farm ground had insurance guarantees of 198 bu. per acre, but actual yields hit only 135 acres that year. Some fields had higher yields on soybeans than on corn, he says. ‘I had a disaster.’”

The DTN blog update added that, “FSA officials who met with DTN by phone last week insisted that such overpayments accounted for less than 1 percent of the $1.15 billion paid out for 2008 claims to date. But they attributed the unfortunate errors to flaws in a computer download from the Risk Management Agency that largely involved prevented planted or replanted acres. Berg had planted all of his crops on time, it’s just that heavy spring rains throughout the Mississippi corridor saturated soils and took a big bite out of corn-on-corn fields that relied on pig manure as fertilizer. ‘Plug yields got me in trouble,’ he says.”

An Inside U.S. Trade article from Friday reported that, “House Agriculture Committee Chairman Collin Peterson (D-MN) said here [Vail, CO] this week that he wants to accelerate work on the 2012 farm bill, such that Congress can pass it and submit it to the president by the end of 2011. He also signaled that he is moving away from his idea that the next farm bill should contain revenue insurance provisions designed to guarantee farmers a certain level of revenue, regardless of the crops they plant.

“‘I’ve gotten a not very good reaction to that [whole farm, revenue insurance proposal] around the country,’ Peterson told the annual meeting of the American Sugar Alliance (ASA) here [Vail, CO] on Aug. 2. While there ‘may be some attempt … to make that kind of option available to people,’ he said he did not think Congress would ‘require a move in that direction.’”

Ron Smith reported on Friday at the Southwest Farm Press Online that, “As a U.S. Congressman Charlie Stenholm never dodged controversial issues but typically found ways to bring disparate factions together to turn dissent into compromise.

“As senior policy advisor with Olsson Frank Weeda, Stenholm is using those same skills to work, sometimes behind the scenes, to bring folks on the right and folks on the left to a place he refers to as ‘the sensible center,’ a political platform he said holds from 60 percent to 70 percent of the American people.

“Stenholm discussed that theory and a far-ranging list of other topics yesterday at the Big County Wheat Conference in Abilene, Texas.”

Mr. Smith noted that, “He said recent House Agriculture Committee hearings may have been criticized as occurring too soon and before the 2008 farm bill was fully implemented. It was the right thing to do, he said ‘because the budget will have more to do with what we do in agriculture than ever before. It’s essential to lock in a baseline and look carefully at what agriculture needs for the future.’”

The article added that, “Recent cuts in crop insurance funding could be detrimental to farmers and ranchers, Stenholm said. ‘I just hope it’s not as bad as some folks say it will be. I know crop insurance is important to agriculture. Farmers have to have an opportunity to insure against catastrophic loss and this will be an emphasis for the ag committee as they consider what they need to replace.’

“He said Congress is likely to provide farmers ‘with a base of support but not profitable support.’

“One of the big challenges facing agriculture is the diminishing number of farmers. ‘We have only 121,000 farmers producing 75 percent of all agricultural production in the United States. That number is not politically significant. But we still have the most abundant, safest food supply in the world.’”

August 9

David Rogers reported on Friday at Politico that, “SNAP, the federal food stamp program, is getting snapped up by Democrats these days, hungry for savings to placate deficit hawks and clear the way for legislation.

“In a matter of hours Thursday, the Senate approved state fiscal aid and child nutrition bills that help pay for themselves by cutting more than $14 billion from food stamps. The savings come from rolling back a benefit increase approved in the giant economic recovery act last year, but with each bill, the cutoff date has gotten closer and closer, alarming anti-poverty groups.”

Mr. Rogers explained that, “Early drafts of the $26.1 billion fiscal aid package, for example, set a spring 2015 target date for the cut. This was then moved up one year to April 2014 in the final Senate bill to achieve total savings of about $11.9 billion.

“The child nutrition bill, approved hours later, goes back to same well and moves the cutoff up to November 2013. This achieves about $2.2 billion in savings, money that helped broker a deal with Senate Agriculture Committee Republicans who had opposed efforts to cut instead from a farm conservation program popular with livestock producers.”

Friday’s article noted that, “In the case of the child nutrition bill, Sen. Blanche Lincoln (D-Ark.), who chairs the Senate Agriculture panel, told POLITICO that in today’s political climate, the SNAP dollars would have been siphoned off by some other panel if she hadn’t acted first.

“‘We were going to lose those dollars anyway,’ Lincoln said. ‘You saw the teachers grab for it. The point being is that at least these dollars are going to feed children just like SNAP dollars would. I certainly think it’s much more practical, if we’re going to rededicate those dollars rededicate them to what they were intended to do.’”

The New York Times editorial board indicated on Saturday that, “Originally, school nutrition was slated to be paid for by cuts in a farm conservation program. But Republicans rated this a high priority for the livestock industry. A deal was struck with Democrats to cut back on the scheduled boost in future food stamp benefits that was part of last year’s economic stimulus. Food stamps took a second hit as lawmakers turned to it like an all-purpose A.T.M. to help cover the cost of state aid.

“Senator Blanche Lincoln, a Democrat of Arkansas who fought hard to get the school nutrition improvements, told Politico.com that the food stamp increase was doomed in any case: ‘You saw the teachers grab for it.’ Her comfort was those dollars would feed children. But this is a pale rationalization that downgrades the hunger of entire families. A companion bill in the House, yet to be paid for, is an opportunity to right this wrong.

“In the crunch of the recession, if Congress lacks the guts to meet vital needs with deficit financing, it should have the decency to chisel some less-humane program than food stamps.”

Walter Alarkon reported yesterday at The Hill Online that, “Liberal Democrats said they will vote for a $26.1 billion state aid bill when the House reconvenes this week but are committed to restoring the food stamps program funding that is being used to pay for it.”

“‘This is a bitter pill to swallow,’ Rep. Rosa DeLauro (D-Conn.) said in a statement to The Hill. ‘I fought very hard for the food assistance money in the Recovery Act and the fact is that participation in the food stamps program has jumped dramatically with the economic crisis, from 31.1 million persons to 38.2 million just in one year.’”

The Hill article added that, “DeLauro oversees annual spending on the food stamps program as chairwoman of the House Appropriations subcommittee for Agriculture. Asked if she would try to restore the food stamps money in future legislation, DeLauro said, ‘Yes, absolutely, I will be fighting for these funds.’”

Alex Daniels reported on Saturday at the Arkansas Democrat-Gazette Online that, “Rebuffed by the Senate last week when she tried to set aside more than $1 billion for farmers hit by floods and other natural disasters, Sen. Blanche Lincoln turned to the White House and got a promise for the cash. The Obama administration confirmed Friday that it was committed to the program but was still unsure how to pull it off.

“Lincoln, a Democrat from Arkansas and chairman of the Senate Agriculture Committee, said she didn’t know exactly how the disaster relief will be funded. But the U.S. Department of Agriculture, she said, had a line of credit at the U.S. Treasury or access to contingency funds from customs duties that are set aside each year.”

The article stated that, “Ken Cook, president of the Environmental Working Group, a Washington organization that is critical of farm subsidy programs, said there isn’t a mechanism in place for agencies to approve such a large chunk of funding without a congressional appropriation.

“‘There has been a big head-scratching exercise in the executive branch about this,’ Cook said. ‘I’ve had USDA officials ask me if I had any ideas [where the money would come from]. I don’t know.’”

Mr. Daniels pointed out that, “Following up on Lincoln’s conversation with [White House Chief of Staff Rahm Emanuel], Robert L. Nabors II, the acting deputy director of the Office of Management and Budget, wrote to Lincoln on Friday that ‘the Administration is committed to providing assistance consistent with your legislative proposal by the end of this month.’”

“He did not say where the funds would come from.”

“Lincoln said that since 1999, the USDA has spent money 19 times on emergencies under an administrative process and without Congress weighing in. For instance, in 2000 the USDA greenlighted $876 million for the Farm Storage Facility loan program.”

Saturday’s article also noted that, “U.S. Rep. John Boozman, a Republican from Rogers who is challenging Lincoln in the November election, said he supports the disaster relief payments. But he said Congress should be in charge of spending taxpayer money.

“‘Does the president have the power to write a check for over $1 billion dollars?’ Boozman asked. ‘That’s a pretty significant amount of money. On the surface, I don’t think he does.’”

As a parallel issue to the disaster issue, the Democrat-Gazette article explained that, “Cook noted that as the Senate tried to get its business done before going on recess Thursday, another spending program similar in size to the disaster relief language – $1.1 billion to settle bias claims against the USDA by black and American Indian farmers – was also blocked in the Senate.

“‘One got dropped and didn’t get picked up, and the other got dropped and got picked up by Rahm Emanuel,’ Cook said.

“The decision to seek funding for relief payments skewed to Arkansas farmers ‘feels like a very significant contribution to a re-election effort, as opposed to something based on the merits,’ he said.

“Lincoln, who spoke on the Senate floor this week in support of the black farmers’ claims, said the promise for disaster funding was ‘absolutely not’ a result of political maneuvering.”

Meanwhile, the AP reported on Friday that, “Republican Congressman John Boozman on Friday accused the White House of trying to boost Democratic Sen. Blanche Lincoln’s re-election odds with a promise to fund a $1.5 billion disaster aid package for farmers.

“Boozman, who is running against Lincoln in November, questioned whether the Obama administration has the authority to administratively fund the disaster aid package backed by Lincoln.”

“‘It looks like they’re just trying to bail out somebody who’s in a difficult election by somehow coming up with money that there are real questions about whether they have the authority to do it,’ Boozman told The Associated Press in an interview.”

The AP article noted that, “Georgia Sen. Saxby Chambliss, senior Republican on the Senate Agriculture Committee, also raised questions about the arrangement.

“‘Sen. Chambliss is aware of the commitment the chairman received from the White House but is interested to see where the funding comes from,’ said Erin Hamm, a spokeswoman for Chambliss.”

“Lincoln’s campaign accused Boozman of watching idly as Senate Republicans blocked the aid and noted that he voted against the package when it was included in a jobless aid bill approved by the House in May,” the article said.

The Washington Insider section of DTN reported on Thursday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., told an audience earlier this week that he plans to complete work on the next farm bill and have it on the president’s desk by the end of 2011. However, if the Senate Agriculture Committee sticks to the schedule outlined by ranking member Saxby Chambliss, R-Ga., that legislation will not make it to the White House until well into 2012.

“Chambliss says Peterson’s schedule does not mesh with that of the Senate Committee. Chambliss is calling on committee chairman Blanche Lincoln, D-Ark., to hold several farm bill hearings around the country during 2011 to gather recommendations from farmers and ranchers. He also would like Lincoln to schedule a series of hearings to determine how good a job USDA is doing in implementing the current farm bill, which was signed into law in May 2008.”

The DTN item added that, “Peterson says one reason for his haste is that he believes the chances for holding spending for agriculture at even current levels are rapidly fading and that waiting until 2012 would only make matters worse. If Peterson is correct, and if that point can be driven home to his colleagues on the Senate Ag Committee, the next farm bill could emerge earlier than expected.”

Alison Sider reported in yesterday’s Arkansas Democrat-Gazette that, “A subsidy program created by the 2008 Farm Bill intended to smooth out payment for declines in revenue is not gaining much traction among farmers in Arkansas and the rest of the country.

“Some economists say the Average Crop Revenue Election, or ACRE, program is better suited to corn growers. The National Corn Growers Association was a leading advocate for it.”

The article stated that, “But farmers are wary of giving up direct payments [related graph].

“‘To give up those payments would really hurt the chances to have any profit at all, said Dow Brantley, who grows rice, cotton and soybeans near England.

“Brantley said marketing loans, which allow farmers to wait for the most advantageous price to sell their crops instead of having to sell them at harvest when prices are typically lower, are probably most important to many farmers.”

In a separate Farm Bill related issue, Marcia Zarley Taylor reported on Friday at DTN (link requires subscription) that, “Crop insurance agent commissions and company overheads have been put on a diet plan since finalization of the federal government’s recent Standard Reinsurance Agreement. But in his first address to agents since approval of the SRA, Risk Management Agency administrator Bill Murphy urged the industry to employ GPS mapping technologies and smarter business practices to adapt.”

The DTN article noted that, “By accepting lower agent commissions and company compensation in the SRA, the industry has already improved its negotiating position going into the next farm bill debate, Murphy said. House and Senate agriculture leaders are taking the pay-go budget constraints seriously, he added. ‘We need to show we’re efficient and we’re lean.’

“New technology may provide real savings, according to Murphy and Deere executives at the conference [a conference in Kansas City of about 350 agents and staff of John Deere Risk Protection]. Starting with the 2011 crop, the RMA will authorize use of yield monitors as acceptable proof for acreage production reports and production claims, Murphy said. Deere has taken the lead in helping RMA automate crop insurance recordkeeping from the cab, but it is working with all manufacturers and software suppliers to help establish protocols for a single software system that allows streamlined record sharing.

“Ultimately, RMA and the Farm Service Agency will also standardize systems, so acreage and yield reporting is identical for both crop insurance and farm program purposes.”

August 6

Abby Phillip reported yesterday at Politico that, “The Senate voted to approve a $4.5 billion childhood nutrition bill on Thursday, which funds food programs in public schools, delivering on a key component of first lady Michelle Obama’s campaign to combat obesity.

“It marks the first legislative victory for [Michelle] Obama, who has addressed the issue of childhood obesity at agencies across the executive branch, in public events and in the private sector.

“‘Over the past few months, this bill has garnered widespread support from both Democrats and Republicans, all of whom care deeply about the health and well-being of our children and are committed to ensuring they have the nutrition they need to learn, grow and succeed,’ the first lady said in a statement.”

The article added that, “In July, Obama issued a statement calling for Congress to act before the current legislation expires in September. And in a Senate speech last week, [Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.)] called for time to offer amendments and approve the ‘Healthy Hunger-Free Kids Act,’ which passed unanimously out of her committee in March.

“Senators found a path forward this week when they funded the reauthorization using a different set of budget offsets from the food stamp or the Supplemental Nutrition Assistance Program, which the Senate also used to fund a $26 billion state aid and education funding bill on Thursday.”

(Note: With respect to the use of SNAP funding for the $26 billion state aid bill, this Politico article from Thursday indicated that, “The biggest single savings comes from an $11.9 billion rollback of increased food stamp benefits first approved as part of the giant recovery bill last year. Democrats had always assumed this 13.6 percent bump-up temporary but had wanted to smooth out the disparity over time. The bill now creates a cruder dropoff, worth about $47 a month for a family of three beginning in April 2014 or $516 over the first 12 months.”)

Ms. Phillip also pointed out in her Politico article that, “SNAP received a funding boost in the 2008 stimulus bill, but has suffered deep cuts this week, with a $19.9 billion used from the emergency state aid bill; the child nutrition bill will siphon off another $2.2 billion from the program. In a conference call with reporters on Thursday, Lincoln said the money cut from SNAP would not have been spent until 2013, ‘so we’ve got time to recoup.’

“‘I think it’s appropriate if these tax dollars are going to be spent that they’re spent on healthy food for kids,’ Lincoln said.”

The AP provided more detail with respect to the funding of the nutrition legislation yesterday: “Part of the deal to move the legislation this week was to change the way it was paid for. While the committee bill partially paid for the legislation by reducing conservation subsidies paid to farmers for using environmentally friendly farming practices, the Senate-passed bill took $2.2 billion out of future funding for food stamp programs instead after some farm-state senators objected to using the subsidy money.

“Hunger advocates who had previously supported the bill said they would now oppose it.”

The AP article stated that, “Lincoln said Democrats used the money for child nutrition because lawmakers had been eyeing that pot of money for other priorities as well. Food stamp money was also used to pay for a jobs bill the Senate passed Thursday.

“‘I think it’s most appropriate if these dollars are going to be spent, that they are spent on nutrition for kids,’ she said.”

Jane Black reported yesterday at The All We Can Eat section of The Washington Post that, “The bill allocates $1.2 billion to increase the number of children receiving food, an effort to meet President Obama’s pledge to end childhood hunger by 2015. The remaining $3.2 billion would be used to improve the quality of school meals. This includes an extra 6 cents per meal per student for schools that meet new, stricter nutrition standards and funding for schools to establish school gardens and to source local foods.

“The bill also would mandate that the Department of Agriculture develop nutrition standards for all foods sold in schools, not just what is served in the lunch line. Standards for so-called ‘competitive foods,’ which have been controversial in previous years. Some school districts argued that the money earned from vending machines and a la carte lines helped to support sports and arts programs. Food companies were concerned about losing access to millions of schoolchildren.”

Ms. Black added that, “The House of Representatives would need to pass its version of the bill in time for President Obama to sign the legislation before Sept. 30, when it is set to expire, or the programs risk losing the newly found funding. Nancy Pelosi has called the chamber back to Washington next week to finish work on a $26 billion plan to prevent the layoffs of tens of thousands of teachers and other public workers. The House is not expected, however, to take up the child nutrition bill until after the August recess.

“Rep. George Miller (D — Calif.), the chairman of the House Education and Labor Committee that drafted the House’s child nutrition legislation, released a statement commending the Senate for its ‘important step forward.’ He did not announce a timeline for a vote in the lower chamber.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln said Thursday there is ample precedent for the White House to administratively fund the $1.5 billion in agricultural disaster aid even as the Environmental Working Group pointed out potential windfalls for farmers compared to the current permanent disaster program.

“Lincoln, D-Ark., spoke to reporters Thursday in a conference call after the child nutrition reauthorization bill passed the Senate. Despite skepticism from other lawmakers about the authority of the White House to approve agricultural disaster aid for 2009 crop losses, Lincoln said such administrative decisions are allowed.

“‘We’ve got a precedent,’ Lincoln said. ‘It’s been done at least 20 times in the last 10 years where they have used a couple of different sections at USDA where they can do interagency transfers and get those resources out in disaster situations or anything else. So there is absolutely the vehicle and the opportunity to do that. I’ve got a commitment from them. I visited with the White House today, and we are working on making it happen.’”

Mr. Clayton added that, “Lincoln, who is behind in polls to her Republican opponent, Rep. John Boozeman of Arkansas, has advocated for ad-hoc disaster aid since late last fall after significant crop losses in her home state. She has argued that SURE is insufficient and would make producers wait more than a year for payments. The original package that Lincoln proposed included $1 billion in supplemental direct payments to farmers who suffered a 5 percent production loss in 2009.

“The Environmental Working Group shows Arkansas, Illinois, Texas, Iowa and Oklahoma would be the five largest recipient states under the Lincoln package, in that order.”

Yesterday’s DTN update indicated that, “Lincoln was asked about whether her plan would unfairly benefit the largest farms.

“‘Some farms are big, some farms are small,’ she said. ‘The payment follows the production.’

“She added, ‘If we are going to feed the 6.6 billion people on the face of the Earth, we need everybody that farms out there.’”

Recall that last Friday, Alexander Bolton reported at The Hill Online that, “African-American lawmakers are irate that the Obama administration has promised Sen. Blanche Lincoln (D-Ark.) $1.5 billion in farm aid while claiming it can’t pay a landmark legal settlement with black farmers.”

The Hill article stated that, “Members of the black caucus say that if the administration can find $1.5 billion within its administrative funds to pay mostly white farmers in Arkansas and other states, it should be able to pay black farmers who suffered discrimination.”

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “Some members of the Congressional Black Caucus are questioning the pledge by the Obama administration to Sen. Blanche Lincoln, D-Ark., that USDA would ‘find’ $1.5 billion in its budget that could be shifted to Lincoln’s proposed ad hoc agricultural disaster assistance package. Their question: why is it that the White House can find $1.5 billion for that effort, but can’t find the $1.2 billion needed to pay off an agreed settlement with black farmers for past discrimination by USDA?

“‘The current hardships experienced by other farmers should not trump hardships placed on African Americans and Native Americans by [USDA],’ says a letter written by six members of the Black Caucus to President Obama. The six also called on the president to take administrative action to pay $3.4 billion the federal government promised to settle claims that it mismanaged Native American trust funds.

“White House Chief of Staff Rahm Emanuel last week promised Lincoln that USDA would find the $1.5 billion ‘in the next two weeks.’ Opposition to that promise is building on both sides of the aisle in both chambers of Congress, as well as from non-governmental organizations. As a result, whether Agriculture Secretary Tom Vilsack will be able to make good on Emanuel’s promise appears doubtful at this time.”

On Wednesday, John Boyd, Founder and President of the National Black Farmers Association appeared on C-SPAN’s Washington Journal morning program and “discussed the latest congressional action in the U.S. Senate regarding settlement of long-standing racial discrimination claims by African-American farmers.”

Meanwhile, an article posted yesterday at the Arkansas Democrat-Gazette Online reported that, “Legislation to finalize $4.6 billion in settlements with black farmers and American Indians stalled in the Senate again Thursday amid partisan bickering.

“Lawmakers from both parties say they support resolving the long-standing claims of discrimination and mistreatment by federal agencies. But the funding has been caught up for months in a fight over spending and deficits, with Republicans and Democrats arguing over how to pay for them.”

The article added that, “For the black farmers, it is the second round of funding from a class-action lawsuit originally settled in 1999 over allegations of widespread discrimination by local Agriculture Department offices in awarding loans and other aid. It is known as the Pigford case, named after Timothy Pigford, a black farmer from North Carolina who was an original plaintiff.

“The government already has paid out more than $1 billion to about 16,000 farmers, with most getting payments of about $50,000. The new money is intended for people — some estimates say 70,000 or 80,000 — who were denied earlier payments because they missed deadlines for filing. The amount of money each would get depends on how many claims are successfully filed.”

In remarks delivered on the Senate floor yesterday on this issue, Chairman Lincoln stated in part that, “Mr. President, I come to the floor to urge my Senate colleagues to support an important piece of legislation to fund the racial discrimination settlement, known as Pigford II, between African American farmers and the United States Department of Agriculture. The time is long overdue to move beyond USDA’s discriminatory past and begin to right the wrongs African American producers have experienced.

“Between 1981 and 1996, African American farmers seeking farm loans and credit were discriminated against, denying them access to government programs and capital. In some cases, these farmers were discouraged from even applying for loans, told they were ineligible or that application forms were unavailable. In other instances, loan applications were intentionally delayed to miss deadlines, continuing to disadvantage these African American farmers.”

A news release issues yesterday by Chairman Lincoln after the Senate failed to pass the Pigford funding measure stated that, “[Chairman Lincoln] made the following statement after efforts to provide compensation owed to African American farmers who have been victims of discrimination were blocked by Republican Senators for the sixth time this year.

“‘I strongly support efforts to see Arkansas farmers who have faced discrimination receive the compensation they deserve. All farmers should receive equal access and treatment in the delivery of USDA’s programs and services. I am disappointed that for the sixth time this year, Republicans have blocked efforts to correct this injustice and close this chapter of discrimination within USDA. I will continue to urge my Republican friends to join me in supporting this legislation until justice is served,’ Chairman Lincoln said.”

August 5

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “[Senate Ag Committee Chairman Blanche Lincoln’s, D-Ark.] push for relief for the 2009 disaster has been a tough sell. For example, in an earlier Senate floor fight, she held up the fiscal 2010 supplemental appropriations package until Majority Leader Harry Reid, D-Nev., agreed to put the funds she wanted in the small-business economic package. However, Reid was forced to pull back from that deal at the end of last month after Republicans complained about its cost. She then agreed to pull her proposal to add $1.5 billion in agriculture disaster assistance return for White House Chief of Staff Rahm Emanuel’s promise to fund the program through existing USDA authorities.”

The DTN item added that, “Political opponents are now crying foul on several grounds. The program Sen. Lincoln is pushing would target disaster assistance through an add-on to farmers who already receive federal subsidies and operate in counties that federal authorities have declared to be disaster areas during 2009. Those who suffered crop losses of at least 5 percent of their crops could receive payments equal to 90 percent of their regular subsidies.

“At least some critics are calling this a windfall. They say that losses of at least 30 percent are normally required to be eligible for special payments, rather than the 5 percent losses required under the Lincoln program.

“And, there is the question of how the Emanuel deal can be done — and, what USDA authorities the White House intends to tap. For example, Georgia Sen. Saxby Chambliss, the top Republican on the Agriculture Committee, expressed displeasure over the move. ‘I don’t think they’ve got a checkbook down there,’ said Chambliss, who wants such payments considered by Congress. ‘If they can spend taxpayer money without it going through Congress — I don’t know how they do that.’”

Yesterday’s update added that, “Lincoln responded that it is not unusual for the executive branch to distribute such disaster aid without congressional action. ‘It’s been done before,’ she said. However, House Ag Committee Chairman Collin Peterson, D-Minn., told the press this week his staff is skeptical that USDA has a mechanism to fund the program.”

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Senate Agriculture Committee ranking member Saxby Chambliss does not favor writing the next farm bill in 2011, a year before the 2008 bill expires, as House Agriculture Chairman Collin Peterson has proposed.

“‘It’s not practical,’ Chambliss, R-Ga., said Tuesday in a videoconference speech to the American Sugar Alliance International Sweetener Symposium in Vail. Chambliss said he agrees with Peterson on most agricultural matters but that he thinks it is premature to begin writing the next farm bill before the 2008 farm bill is implemented. The 2008 farm bill extends until Sept. 30, 2012. Peterson has suggested finishing the next bill early so that the Obama administration would have time to implement it in 2012.”

Mr. Hagstrom added that, “In his speech Monday, Peterson also said he favors moving early on the bill because he fears budget pressures will get worse as time goes on. Peterson, who also favors simplification of some current programs, said, ‘We shouldn’t do any new farm programs until we get this deficit headed in the right direction.’

“Peterson said he favors reforms in all areas of the farm bill, including the Supplemental Nutrition Assistance Program that used to be known as food stamps. Peterson said that given the obesity problem he would favor making it impossible for food-stamp beneficiaries to use the program to buy ‘empty calorie’ items. ‘They can buy them with their own money,’ he said. Peterson said he would also favor using more data mining to make sure the food stamp program is run efficiently without fraud and abuse.

“His idea to shift from crop insurance on individual crops to whole-farm insurance has not proven popular and he will not try to force people to move to a whole-farm insurance system, he said.”

Meanwhile, Mark Steil of Minnesota Public Radio reported on Tuesday that, “Speaking at Farmfest, the annual trade show near Redwood Falls, [Chairman Collin Peterson] the seventh district congressman told a crowd of several hundred farmers that given the demands on federal spending, Congress cannot boost funding.

“‘We’re going to keep this farm bill within the spending; we’re not going to ask for any new money,’ said Peterson, chairman of the House Agriculture Committee. ‘I think we can make it work.’”

And a news release yesterday from Iowa GOP Senator Chuck Grassley stated that, “Senators Chuck Grassley and Russ Feingold today introduced legislation to close loopholes that are being used to game the farm payment system and target payments to actively engaged farmers who need assistance getting over the bumps that come with ensuring a safe and abundant food supply.

“The legislation would set a limit of $250,000 for farm payments in an attempt to better target farm program payments to family farmers. The legislation would save the federal treasury more than $1 billion over 10 years.”

A news release yesterday from Sen. Ag Committee Chairman Blanche Lincoln (D-Ark.) stated that, “[Sen. Lincoln] continued pressing her Senate colleagues today to reauthorize child nutrition legislation before child nutrition programs expire on Sept. 30. In a speech on the Senate floor, she highlighted that the Healthy, Hunger-Free Kids Act is bipartisan, completely paid for and will address the growing childhood obesity and hunger epidemics.”

Yesterday’s update included a transcript and video replay of Chairman Lincoln’s remarks.

A news release from yesterday by the Senate Ag Committee stated that, “U.S. Senator Blanche Lincoln, D- Ark., Chairman of the Senate Agriculture, Nutrition and Forestry Committee, today underscored the need to create thousands of long-term jobs and expand U.S. agricultural exports by relaxing trade and travel restrictions with Cuba. Today’s hearing is the third that Lincoln has held as she leads the Committee in reauthorizing the 2012 Farm Bill. Ambassador Ron Kirk, Joe Mencer of Lake Village, Arkansas, and Dwayne Rhodes of Springdale, Arkansas, were among those who testified.

“‘Agriculture is a sector of our economy where we are proving that we can successfully meet the export demands that will help rebuild the U.S. economy,’ Lincoln said. ‘For every additional one billion dollars of agricultural products we export, we can create 9,000 jobs. These are long-term jobs that we desperately need.’”

A video replay of yesterday’s hearing, as well as opening statements from witnesses, can be viewed here.

Yesterday’s release added that, “Lincoln noted that after 50 years of continued restrictions, our policy with Cuba continues failing to yield results, adding that less restrictive policies will help to usher in an era marked by exponential trade and economic growth.”

To listen to an exchange from yesterday’s hearing between Chairman Lincoln and Ambassador Kirk regarding the Cuba trade issue, just click here (MP3- 3:02).

A news release from yesterday by Senate Ag Committee Ranking Member Saxby Chambliss (R-Georgia) noted that, “Sen. Chambliss also addressed the status of the World Trade Organization Doha Round.

“‘The Doha Round is at an impasse and has been for some time,’ said Sen. Chambliss. ‘It is due in no small part to what Ambassador Kirk notes as the continued resistance of some members to engage in sustained and meaningful negotiations. Let me state unequivocally that the deal on the table is insufficient and unbalanced from the perspective of the Congress. While other countries look to the U.S. to ‘give more’ in order to re-energize the Round, I would suggest unilateral action will harden views in the Senate – and particularly in this Committee – that the Doha Round is fatally flawed. A successful Round is possible, but only when Brazil, China and India recognize that their rising influence in the international economy requires shared sacrifices in order to achieve individual and shared gains.’”

To listen to an exchange between Sen. Chambliss and Amb. Kirk from yesterday regarding the Doha talks, just click here (MP3- 3:48).

Also with respect to yesterday’s Senate hearing, Reuters writer Christopher Doering reported that, “The top U.S. trade official on Wednesday voiced frustration that Russia has not resumed imports of U.S. poultry, despite an agreement to do so, and said the countries were working to iron out the latest rift.

“‘We’re frustrated. We thought we reached an agreement. We had a protocol. We signed it and then, literally at the last minute, there is a new wrinkle,’ U.S. Trade Representative Ron Kirk told reporters.

“Russia, which had been the top export market for U.S. chicken, has banned shipments since January, after Moscow said a chlorine treatment commonly used by U.S. processors did not comply with its food safety regulations.”

A dialogue on this issue between Sen. Chambliss and Amb. Kirk from yesterday’s hearing is available here (MP3- 3:56).

Meanwhile, Senate Finance Committee Chairman Max Baucus (D-Montana) highlighted particular aspects of a free trade agreement with South Korea and expressed concerns about provisions relating to beef. He sought assurances from Amb. Kirk that key provisions on trade relating to beef be included in a final draft and noted that if they were omitted from a final negotiated FTA, he would have to evaluate whether or not to bring the agreement up for a Finance Committee hearing. To listen to this firm exchange from yesterday on the South Korea FTA and beef, just click here (mp3- 4:02).

Nebraska GOP Senator Mike Johanns expressed concerns yesterday about Trade Promotion Authority at yesterday’s hearing, an exchange with Amb. Kirk on this issue is available here (MP3- 2:26).

And a news release yesterday from the American Soybean Association (ASA) stated that, “[ASA] testified today before the United States Senate Committee on Agriculture, Nutrition, and Forestry to present ASA’s views on international trade issues, including the need for Congress to approve pending Free Trade Agreements, extend Presidential Trade Promotion Authority, and normalize financial relations with Cuba.

“‘ASA was pleased with the President’s commitment to double the value of U.S. exports under the National Export Initiative,’ said ASA Vice President Danny Murphy, a soybean producer from Canton, Miss. ‘Efforts to achieve this goal in the agriculture sector will require Congressional approval of the pending Free Trade Agreements with Colombia, South Korea, and Panama, negotiation of new FTAs with key importing countries, and progress on the Asia Pacific Economic Cooperation regional agreement.’ Murphy added that ‘delay in approving the Colombia FTA has caused U.S. soybean producers to lose over 50 percent of their market share.’”

August 4

Chris Clayton and Jerry Hagstrom reported yesterday at DTN (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson said Tuesday he doesn’t see how the Obama administration can administratively approve and come up with $1.5 billion to take care of his Senate counterpart’s disaster aid proposal.

“‘I don’t see how they can do it,’ Peterson said.”

The DTN article explained that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., announced last week that White House officials told her they could find an administrative fix to fund the disaster package, which she has pushed because of massive crop losses last year in Arkansas. Producers in that state say they didn’t want to wait more than a year for payments under the permanent Supplemental Revenue Assistance Program (SURE).”

Clayton and Hagstrom noted that, “Peterson said staff from the House Agriculture Committee called USDA officials ‘and they can’t give us any answer’ as to how such a disaster package could be implemented or distributed. Peterson said he doesn’t think his committee needs to necessarily send a letter opposing the move. ‘I don’t think they can do it,’ he said. ‘They don’t have any framework to make disaster payments.’

“In an interview on the sidelines of the American Sugar Alliance meeting in Vail, Colorado, on Monday Agriculture Undersecretary for Farm and Foreign Agricultural Services Jim Miller said he is ‘in process of conversation with the White House to gain a further elaboration’ of what was promised to Lincoln and is also ‘in conversation with Lincoln in order to have a better [understanding] of what her interest was.’”

Yesterday’s article added that, “Miller said the SURE program is not working in the South as it is requires farmers to buy crop insurance at a higher level to qualify for disaster benefits. Southern farmers do not buy as much crop insurance as northern farmers do. Arkansas rice farmers also asked for help with unexpectedly high production costs, which SURE does not cover. Miller said Congress should consider making the program more national in the 2012 farm bill, but he also noted that SURE’s baseline will expire before the new bill is written.

“And USDA has been cutting both discretionary and mandatory spending to show budget cuts. A $1.5 billion spike in discretionary spending for disaster aid would wreck a lot of those efforts.”

Denise Grady reported in today’s New York Times that, “Americans are continuing to get fatter and fatter, with obesity rates reaching 30 percent or more in nine states last year, as opposed to only three states in 2007, health officials reported on Tuesday.

“The increases mean that 2.4 million more people became obese from 2007 to 2009, bringing the total to 72.5 million, or 26.7 percent of the population. The numbers are part of a continuing and ominous trend.”

Meanwhile, the AP reported yesterday that, “More Illinois families are receiving food stamps than ever before as a result of the deepest recession in decades, state officials said Monday.

“More than 780,000 Illinois families got food stamps in June, up 11.9 percent from a year earlier, the Illinois Department of Human Services reported. Nationally, 40 million Americans — 18.7 million households — use food stamps.”

Jane Black reported yesterday at the All We Can Eat section of The Washington Post Online that, “The number of farmers markets jumped 16 percent in 2010, according to figures to be released [today] by Department of Agriculture. There are 6,132 farmers markets in operation, up from 5,247 in 2009 [related graph].

“The National Farmers Market Directory reported the greatest surges in the Midwest. Missouri saw the number of markets skyrocket 77 percent; Minnesota’s growth was 61 percent; Idaho and Michigan each saw a 60 percent jump. Locally, Virginia counted 152 markets, up 28 percent from 118 in 2009. Maryland has 107, up 18 percent from 91 in 2009. The District had 28 markets in 2010, a 12 percent increase from 25 in 2009.

“There are 886 farmers market open during the off-season. This is the first year the USDA has tracked winter markets.”

The update stated that, “Growing interest in farmers markets is driven by consumer concerns about food safety and a renewed focus on healthful eating;” but added that, “Not everyone agrees, however, that the growth in farmers markets is proof of strong local food systems. Researchers at Franklin and Marshall College’s Local Economy recently released a study that suggested that it is largely wealthier urbanites who benefit from farmers markets.”

August 3

DTN Executive Editor Marcia Zarley Taylor reported yesterday at the Minding Ag’s Business Blog that, “When Congress wrote what rational people would consider the most complex formula yet for farm disaster aid in the 2008 Farm Act, it was supposed to (1) be a fairer system; (2) compensate people who’d experienced whole farm revenue loss, not a yield loss on a single crop as past farm programs did; (3) pay higher rates to those with better crop insurance coverage. In other words, reward farmers who paid the high premiums for higher levels of coverage. But as I reported in a story on DTN today, these principles aren’t working as the Farm Service Agency struggles to administer the 2008 disaster program.

“Just tiny differences between farmers in the same Iowa county with nearly identical circumstances can result in one farmer receiving a disaster payment of $80,000 and the other receiving nothing, a state FSA official told me. A group of about 40 Iowa farmers who purchased so called 90/100 Group Revenue Plans (GRP) are in the ‘nothing’ category now, even though they anticipated receiving up to $245 per acre compensation when they applied for emergency aid last December on their 2008 crop. Farmer Kevin Vierkandt is their spokesperson, and he’s miffed at what he considers are FSA’s unkept promises.

“Part of the reason for confusion is that price guarantees in 2008 crop insurance policies experienced a mind-altering range, given the fireworks in commodity prices that season, so from the start, fair was never going to be equal when calculating aid under the new Supplemental Revenue Assistance Program (SURE). For the 2008 corn crop, GRP policy spring price guarantee was $3.75 per bu.; multiperil (MPCI)’s spring price paid $4.75; all revenue-based products’ spring price was $5.40. Farmers with the deluxe 90/100 GRP policies paid extra to add a 150 percent price multiplier, effectively bringing their price guarantee on lost bu. to $6.25.”

Yesterday’s DTN update added that, “The new disaster program calculated aid based on crop insurance coverage, but Congress gave FSA discretion to implement these county yield indexed policies like GRP. Otherwise, it was possible to overpay group-risk policyholders for losses, Kansas State University economist Art Barnaby tells me in an e-mail message.

“As Washington experts ran the numbers, though, the agency fiddled with the compensation rates on 90/100 GRP policies three times in recent months. When Iowa farmers applied for aid in December 2009, their county offices plugged in $6.25 per bu. as a base price. When new software revised the program, counties found the price changed to $4.75 (the MPCI price); finally in March USDA revised rates again, and dropped the price on GRP to $3.75 (GRP price without the 150 percent adjuster). The season average cash price for corn hit $4.06, so growers with lower level price guarantees would have trouble showing losses.

“That change effectively meant few people with GRP policies qualified for aid, even though MPCI corn policyholders received about $69 per acre in Hardin County, an Iowa State University estimate showed.”

Also with respect to SURE, a USDA news release from yesterday stated that, “USDA Farm Service Agency (FSA) Administrator Jonathan Coppess today announced that producers have until Thursday, Sept. 30, 2010, to submit an application for payment under the 2008 Supplemental Revenue Assistance Payments (SURE) Program. SURE provides financial assistance for crop production and or quality losses due to a natural disaster.”

August 2

First Lady Michelle Obama penned an Op-Ed that was published in today’s Washington Post where she noted that, “Right now, our country has a major opportunity to make our schools and our children healthier. It’s an opportunity we haven’t seen in years, and one that is too important to let pass by.

“The Child Nutrition Bill working its way through Congress has support from both Democrats and Republicans. This groundbreaking legislation will bring fundamental change to schools and improve the food options available to our children.

“To start, the bill will make it easier for the tens of millions of children who participate in the National School Lunch Program and the School Breakfast Program — and many others who are eligible but not enrolled — to get the nutritious meals they need to do their best. It will set higher nutritional standards for school meals by requiring more fruits, vegetables and whole grains while reducing fat and salt. It will offer rewards to schools that meet those standards. And it will help eliminate junk food from vending machines and a la carte lines — a major step that is supported by parents, health-experts, and many in the food and beverage industry.”

And Jane Black reported on Friday at the All We Can Eat section of the Washington Post Online that, “Can Blanche Lincoln improve school lunch? The Arkansas Democrat and chairwoman of the Senate Agriculture Committee is trying mightily.

“First, she rounded up bipartisan support for a bill with an additional $4.5 billion in funding, the first increase in money for child nutrition programs in 30 years. But with the Senate’s crowded legislative schedule, she couldn’t secure floor time for a vote on the bill. So Lincoln did what senators do. She sent a nice letter to President Obama politely asking that he show ‘leadership’ on this issue. After all, Obama did promise on the campaign trail to end childhood hunger by 2015. First lady Michelle Obama has made ending childhood obesity her signature campaign.”

Ms. Black noted that, “Lincoln is right to be concerned about the bill – and not only because she is in a tough election race back in Arkansas, where childhood obesity rates are at crisis levels. If the bill doesn’t pass and get to President Obama’s desk by Sept. 30 – something that’s increasingly iffy with just 20 days of legislative days left – the programs risk losing the new funding in the short term — and possibly for good. (The Agriculture Committee will have to find new offsets when a new bill is introduced next session.)”

“At a press conference on Thursday, Sen. Lincoln called once more for the Senate to pass the bill. She was joined by by Sen. Richard Lugar (R-Ind.), Sen. Patrick Leahy (D-Vt.), among others, and school children dressed as fruit and vegetables,” Friday’s update said.

Sen. Lincoln issued a related news release, which included video clips on this issue, on Friday.

Alexander Bolton reported on Friday at The Hill Online that, “African-American lawmakers are irate that the Obama administration has promised Sen. Blanche Lincoln (D-Ark.) $1.5 billion in farm aid while claiming it can’t pay a landmark legal settlement with black farmers.”

The article stated that, “White House Chief of Staff Rahm Emanuel promised Lincoln, who sponsored the provision, that the administration would find a way to pay out $1.5 million in disaster assistance to farmers while they wait for programs in the 2008 farm bill to be implemented.

“At the same time, the administration has told black farmers it lacks the funds to pay a $1.2 billion agreement they reached with the Department of Agriculture in 1999 to settle the Pigford class-action lawsuit.”

JULY 2010

July 30

A news release yesterday from Senate Agriculture Committee Ranking Member Saxby Chambliss (R-Georgia) indicated that, “[Sen Chambliss] and Sam Brownback (R-Kan.), Ranking Member of the Senate Appropriations Subcommittee on Agriculture, today raised concerns in a letter sent to U.S. Department of Agriculture (USDA) Secretary Tom Vilsack urging the department to take deficit reduction seriously. The Senators questioned USDA’s willingness to target farm safety net programs while protecting discretionary programs despite steady increases in the last two budget cycles. They also stressed that efforts to change rules in the middle of a farm bill only breed uncertainty and affects planting decisions, farm lending, equipment purchases and land values.

“‘We openly question why USDA would require ‘flexibility’ from OMB to cut mandatory farm safety net programs to meet discretionary funding reductions,’ said the Senators in the letter. ‘While the total cost of the discretionary fiscal year 2011 budget request was lower than the fiscal year 2010 appropriations act, the cost savings was largely achieved through increased savings from mandatory programs, not from true discretionary savings. Simply put, honest budgeting requires that discretionary savings come from reductions to discretionary programs. We believe the President’s proposed budget for fiscal year 2012 should be based on honest budgeting.’”

July 29

Yesterday, the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, Nutrition and Forestry, held a hearing to review quality control systems in the Supplemental Nutrition Assistance Program (SNAP).

A House Agriculture Committee news release stated that, “The Subcommittee heard testimony from government officials and advocacy and industry groups about efforts to reduce the error rate in the SNAP program and to combat fraud and abuse in the system.”

Ms. Julie Paradis, the Administrator of USDA’s Food and Nutrition Service, provided a fascinating background and statistical overview on the recent upsurge in SNAP program participation rates. She also indicated that according to a report last month, “The SNAP national payment accuracy rate, for FY2009, had reached an all time high of 95.64 percent.” To listen to a portion of this overview, just click here (MP3- 1:08).

During the discussion portion of yesterday’s hearing, Rep. Kurt Schrader, D-Oregon, inquired about the possibility of reaching a “tipping point,” or point of “diminishing returns” with respect to resource allocation for improving SNAP program payment accuracy. In addition, Rep. Schrader also asked about “unauthorized immigrants” and the SNAP program. To listen to a portion of this dialogue from yesterday, just click here (MP3- 2:38).

Meanwhile, Rep. Kathy Dahlkemper, D-Pennsylvania, asked the first panel of witnesses at yesterday’s hearing about the use of SNAP benefits at local farmers markets, a portion of this exchange is available here (MP3- 1:28). In the clip, FNS Administrator Paradis notes that, “Our goal is to have every farmers market in the country participating in the [SNAP] program.”

Subcommittee Ranking Member Jeff Fortenberry, R-Nebraska, expressed concern about health and obesity rates, and noted that data from the Healthy Incentives Pilot (HIP) would not be available for another two years. He went on to ask the second panel of witnesses yesterday an interesting theoretical question about a potential “new paradigm” in linking SNAP benefits to improved choice. He offered a hypothetical example: “Instead of a SNAP card having $100 on it, a SNAP card would have 100 ‘nutritional points,’ and that would also be measured as you buy certain foods and therefore the market would then respond to develop food products that would fit easily into the nutritional categorizations.” To listen to this interesting discussion on linking SNAP benefits to nutritional health, click here (MP3- 8:12).

An audio replay of yesterday’s Subcommittee hearing on SNAP is available here, while prepared testimony can be found here.

In other nutritional developments, a news release yesterday from Senate Agriculture Committee Chairman Blanche Lincoln, D-Arkansas, noted that, “Today, [Sen Lincoln] returned to the Senate floor for the second time this week to speak on the need to pass ‘The Healthy, Hunger-Free Kids Act’ to reauthorize child nutrition programs before they expire on September 30th. The bi-partisan legislation would make the most historic investment in child nutrition programs since their inception and is completely paid for.”

The release included remarks delivered yesterday by Chairman Lincoln.

July 27

The Washington Insider section of DTN reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., made a bold political move to use what observers suggest was bitter medicine for some of his constituents as a political bargaining point.”

“At issue is USDA’s Crop Insurance program. The agency uses private insurance companies and agents to offer the federal programs under a Standard Reinsurance Agreement.”

The DTN item explained that, “USDA began the renegotiation process late last year, and now has finally determined that payments for administrative and operating costs subsidized by the government would be capped at $1.3 billion next year, with the limit rising to $1.37 billion in 2015. Recently, USDA announced that all 16 companies signed the new SRA that will cut costs about $6 billion over 10 years.

“As the negotiation process wound down, its effect on the ‘agriculture baseline,’ became controversial, especially a decision by the Office of Management and Budget that $4 billion of the reduction would be used to reduce the deficit rather than support other agricultural programs as many agricultural supporters proposed.

“The remaining $2 billion in ‘baseline credit’ is to be allocated for several programs, including expansion of the pasture, rangeland, and forage program; providing a performance discount or refund to reduce the cost of crop insurance for certain producers; increasing conservation reserve program acreage; and, investing in new and amended conservation reserve enhancement program initiatives and CRP monitoring.”

Yesterday’s update added that, “In his recent discussions in his district, Chairman Peterson embraced the administration’s decision, telling constituents that, ‘This is the only government program in the last 20 years that’s actually been targeted to reduce the deficit.’ He pointed out that $4 billion ‘over 10 years in a $12 trillion deficit doesn’t sound like a lot of money, but if everybody took the same percentage of reduction that we just took with this SRA, the federal deficit would be reduced $2.3 trillion over the next 10 years.’”

After additional analysis, the DTN item pointed out that, “Thus, Chairman Peterson is making the case that his committee has taken a significant hit in its agricultural commodity baseline in hopes that this will inoculate agriculture from the next wave of cuts. The committee has succeeded in making similar arguments for years, but will face new, greater pressure in the future and it is far from certain that Chairman Peterson’s strategy will keep the baseline whole, Washington Insider believes.”

Meanwhile, a separate budget issue within the context of the $6 billion SRA cut has emerged.

As yesterday’s DTN item pointed out, OMB indicated that, “$4 billion of the reduction would be used to reduce the deficit,” and that, “The remaining $2 billion in ‘baseline credit’ is to be allocated for several programs.”

The additional budget issue has to do with the $2 billion allocation for “several programs,” including the Conservation Reserve Program.

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Landowners and farmers will have a little less than a month starting next Monday to apply for enrollment in the general signup period for the Conservation Reserve Program.

“USDA is looking to enroll more than 5 million acres, partially to push enrollment to the 32 million acres allowed under the 2008 Farm Bill while also making up for 4.5 million acres expected to expire from the program in September.

“USDA announced on Monday details for the first general enrollment signup for the Conservation Reserve Program since 2006. Enrollment at local Farm Service Agency offices starts Monday, Aug. 2, and will end Friday, Aug. 27. Contracts will begin on Oct. 1, but USDA will give some allowances for farmers to complete harvest on enrolled tracts.”

And DTN Political Correspondent Jerry Hagstrom tied together the budgetary issue and the CRP announcement in an article from yesterday titled, “Ag Chair Questions Money Shift: CRP Signup Tied to Convoluted Fiscal Policies.”

The DTN article (link requires subscription) explained that, “Behind the long-anticipated USDA announcement of a general signup for the Conservation Reserve Program on Monday lies a convoluted tale of Washington budgetary politics going back to the Bush administration that has infuriated House Agriculture Committee Chairman Collin Peterson, D-Minn.

“At a June 17 hearing [unofficial transcript], Agriculture Undersecretary for Farm and Foreign Agricultural Services Jim Miller said that USDA needed part of the $6 billion in savings from the agency’s recent negotiations with crop insurance companies to pay for the CRP signup even though Congress had provided the money in the farm bill.”

Mr. Hagstrom pointed out that, “At the hearing, Peterson learned that OMB had allowed the Bush administration in October 2008 to use $65 million in USDA mandatory Conservation Reserve Program money that was supposed to idle land for soil restoration and wildlife habitat purposes for an initiative to pay landowners to allow hunters on their land.

“When the Bush administration abandoned the idea of a hunters’ initiative, OMB assigned the budget authority to deficit reduction rather than give it back to USDA for its original purpose. When the Obama administration came into office and wanted to extend CRP contracts and hold a signup to put more land in the CRP, USDA found itself financially strapped.

“Peterson is so incensed that he has ordered a Government Accountability Office investigation and is considering holding a hearing to figure out if OMB is engaging in the same practice in other parts of the government.”

Yesterday’s article added that, “‘We are not going to stand for them changing mandatory programs,’ Peterson said in an interview. He added that he is also opposing Agriculture Secretary Vilsack’s recent request to the White House that USDA be allowed to propose cuts in mandatory programs in the fiscal year 2012 budget rather than comply with President Obama’s order that Cabinet agencies cut 5 percent of discretionary programs.”

The article added that, “Miller testified that the Obama administration planned to use some of the money being saved in a renegotiation of the standard reinsurance agreement with crop insurance companies to pay for a new signup for the CRP, which idles land for conservation and wildlife habitat purposes.

“Rep. Jerry Moran, R-Kan., the subcommittee ranking member, told Miller that he could not understand why it was necessary to use the savings for a program that Congress had given mandatory funding.

“Miller explained that USDA wanted to hold a general signup so that the number of acres in the CRP would be as close as possible to the 32 million acres allowed by Congress in the 2008 farm bill, but found that it did not have the budget authority to undertake it even though Congress had mandated it. When the Bush administration did not follow through with its hunters’ initiative and OMB assigned the money to budget reduction, ‘We lost it,’ Miller said.” [See pages 16 and 17 of this unofficial transcript of the hearing].

Mr. Hagstrom noted in yesterday’s DTN article that, “By using the savings from the crop insurance negotiations, USDA will be able to sign up enough land to bring the CRP up to the full 32 million acres allowed under the 2008 farm bill. The exact number of acres to be signed up and the exact costs are impossible to determine before the signup is complete, a USDA spokesman said. At present, there are 31 million acres enrolled in the program, but contracts on about 4.5 million acres will expire this fall.”

Meanwhile, an update posted on Friday at the Western Farm Press Online reported that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., questioned [U.S. Department of Agriculture Risk Management Agency (RMA) Administrator William J. Murphy] about the administration’s decision to use $2 billion of crop insurance funds for the Conservation Reserve Program, money which Peterson said had been included in the 2008 farm bill. Murphy said that he was unfamiliar with the decision. Peterson said he was waiting for an answer from the Office of Management and Budget about the issue.”

To listen to an audio replay of the exchange between Chairman Peterson and Administrator Murphy on this issue, just click here (MP3- 3:50).

An update posted yesterday at CQPolitics reported that, “Sen. Blanche Lincoln ’s effort to advance long-stalled disaster assistance for farmers fell short last week, but she and other Democrats pledge to continue to fight for social safety-net spending they say is being shortchanged.

“But just as other lawmakers’ demands for domestic spending fall on deaf ears amid concern over the budget deficit, a sluggish economy and an angry electorate, Lincoln, of Arkansas, won no guarantee she will get what she wants this week or next.”

July 23

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Groups representing crop insurance companies and agents told members of a House Agriculture Subcommittee that USDA didn’t negotiate in good faith in a new Standard Reinsurance Agreement and that farmers will feel the effects of $6 billion in cuts the industry must absorb over the next 10 years.

“At a hearing on Capitol Hill on Thursday, representatives from the crop-insurance industry questioned USDA’s authority to demand such a steep fiscal cut and said services to farmers would end up being affected by the new contract. DTN/The Progressive Farmer watched the hearing through the House Agriculture Committee webcast.

“Rep. Leonard Boswell, D-Iowa, who chairs the Subcommittee on General Farm Commodities and Risk Management, said he was concerned by the level of cuts in the SRA due to cuts already made when lawmakers chopped $3 billion from the industry and also created a timing shift that will delay up to $3 billion in payments in 2012 as well. ‘We also must acknowledge that the crop insurance industry is a business, and both the companies and agents need to make a profit in order to stay in the market,’ Boswell said.”

Mr. Clayton noted that, “The SRA, which all 16 crop insurance companies signed last week, spells out payment terms to the companies starting next year. The contract cuts about $600 million a year out of administrative and operating (A&O) expenses reimbursed by USDA to companies, as well as makes cuts in underwriting gains.

“Rep. Frank Lucas, R-Okla., ranking member of the House Agriculture Committee, questioned why a hearing was being held a week after companies had a ‘take-it-or-leave-it’ scenario forcing them to sign the contract. ‘The signing of the agreement does not imply that the company agrees to the terms,’ Lucas said.

“Lucas also complained that the $6 billion in cuts end up disappearing from the farm-bill baseline.”

The DTN article added that, “Bob Parkerson [written testimony], president of the National Crop Insurers Service, said he felt the administration had a budget-cutting target for the program ‘and simply staked out an extreme position to the right of it, knowing full well that, in the end, the companies had no choice but to accept the final outcome.’ [Related audio comments by Mr. Parkerson from yesterday can be heard here- MP3- 2:06].

“Stephen Frerichs [written statement] of Rain and Hail LLC, speaking for the American Association of Crop Insurers, said companies had no choice but to sign the SRA or lose their business. He said USDA exceeded the intent of Congress with the cuts. So AACI recommends Congress review the renegotiation authority.

“‘Perhaps it should be repealed or at a minimum modified to include safeguards such as maintaining the integrity of the Agriculture budget baseline,’ Frerichs said. [Related Audio comments by Mr. Frerichs from yesterday can be heard here- MP3- 1:34].

“The Obama administration plans to take $4 billion of the cuts and use that for specific reductions in federal spending. The other $2 billion will be used to prop up spending on some key conservation programs, such as rangeland programs and the Conservation Reserve Program.”

Mr. Clayton pointed out that, “Bill Murphy [written testimony], administrator for USDA’s Risk Management Agency, said the new SRA ‘provides a reasonable rate of return to the companies’ while still ‘having no adverse impact on farmers’ premium costs.’

“Murphy said the new SRA takes away excess and windfall profits that can come through price spikes in commodities. The new agreement limits A&O to about $1.3 billion in 2011, still 40 percent more than what companies received in 2006, but less than the $2 billion paid to the industry during the 2008 price spike.”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “The companies and agents who sell federally subsidized crop insurance said the Obama administration’s cuts to the program may force firms and agents out of the business.”

“Steve Rutledge [written testimony], president and CEO of West Des Moines-based Farmers Mutual Hail Insurance Co. of Iowa, told a House Agriculture subcommittee that today ‘the industry has finally reached the point where many companies are considering leaving the business,’ said.

“‘Many agents are also looking for operations to sell,’ added Rutledge, who was testifying on behalf of an industry trade group, Crop Insurance Research Bureau Inc. He did not name any of the companies that might be reconsidering the business.”

Mr. Brasher noted that, “The hearing came too late for Congress to block the cuts, but it gave the industry a chance to air their gripes. The chairman of the full committee, Rep. Collin Peterson, D-Minn., has defended the cuts and agreed with the USDA that agent commissions had become excessive.

“The cuts will take $6 billion over 10 years from a program that cost the USDA $8 billion last year. The cap on commissions is designed to keep companies from paying agents more than the firms receive from the USDA for expenses.

“Bill Murphy, administrator of the USDA’s Risk Management Agency, said the commission cap was needed to keep companies from getting overextended in trying to compete for agents.”

A news release from yesterday by the Crop Insurance Professionals Association noted that, “Crop insurance agents today told Congress that the U.S. Department of Agriculture (USDA) missed the opportunity to strengthen the nation’s crop insurance program, which has become an essential piece of the safety net for producers of nearly all crops and regions.

“In a hearing before the House Agriculture Committee, California crop insurance agent Jordan Roach [written testimony], who serves as vice chairman of the Crop Insurance Professionals Association (CIPA), testified about the state of the industry—noting the positive growth and increasing importance—but was critical of the USDA’s mishandling of the recent Standard Reinsurance Agreement (SRA) negotiation that shortchanged the agriculture budget and farmers to the tune of $6 billion.”

A news release from yesterday by Rep. Earl Pomeroy (D-ND) stated that, “At a hearing Thursday of the House Agriculture Subcommittee on General Farm Commodities and Risk Management, Congressman Earl Pomeroy discussed the recently finalized Standard Reinsurance Agreement (SRA) renegotiation between the Administration and the crop insurance companies.

“‘It is clear that the crop insurance program remains the most important risk management tool for producers in North Dakota,’ said Congressman Pomeroy. ‘Looking out at the fiscal challenges we have before us in crafting the 2012 Farm Bill, I feared that without action the crop insurance program would have been in danger of unsustainable cuts.’”

[Related Audio comments by Rep. Pomeroy from yesterday, in which he provided additional background regarding crop insurance and the 2008 Farm Bill debate, perspective on a pre-determined negotiated target cut, and budget implications, can be heard here- MP3- 4:38].

At the conclusion of yesterday’s hearing, Rep. Jerry Moran also commented on the concern that a pre-determined negotiated target could drive a future SRA negotiation rather than “a lot of other factors that are very important.” [Related audio available here- MP3- 0:36).

July 22

Yesterday, both the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, and the Senate Agriculture Committee, held hearings in advance of the 2012 Farm Bill.

A news release from the House Agriculture Committee yesterday stated that, “Today, Congressman Dennis Cardoza, D-Calif., Chairman of the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, held a hearing to review specialty crop and organic agriculture programs in advance of the 2012 Farm Bill.

“The Subcommittee heard from producers from operations of various sizes that grow a diversity of products, and they provided insight on U.S. Department of Agriculture (USDA) Farm Bill program implementation at the ground level.

“‘I am once again reminded of the extraordinary diversity of products and practices represented by the specialty and organic sectors of our nation’s agriculture industry,’ said Subcommittee Chairman Cardoza. ‘It is imperative we work together to address health and nutrition issues in this country by increasing accessibility to healthy fruits and vegetables. Based on what I have heard today, it is clear we have work to do but are on the right track.’”

In a news release from yesterday, Subcommittee Chairman Cardoza also indicated that, “Today’s hearing comes on the heels of the first round of field hearings conducted by the full House Agriculture Committee on the 2012 Farm Bill. The Committee convened a hearing on May 3, 2010 in Fresno, CA. To read more, please click here.”

In his opening statement from yesterday, Subcommittee Chairman Cardoza indicated that, “Specialty crop producers have never sought direct subsidies even though their sector represents over half, more than 50 percent, of the total crop farm gate value in the country.” (Related audio- MP3- 0:39).

Similarly, in his testimony at yesterday’s hearing, Ohio producer Robert Jones pointed out that, “Sixty percent of all the nation’s farmers do not raise Farm Bill program crops and therefore do not receive direct subsides. Please let me be very clear on this point, we do not want them. Ohio growers like myself are much more interested in becoming better growers, marketers and promoters.” (Related audio- MP3- 2:22).

Note that all of the opening statements from the witnesses at yesterday’s hearing, which included producers and no USDA officials, can be viewed at this House Ag Committee webpage.

Also at yesterday’s House hearing, Subcommittee Ranking Member Jean Schmidt (R-Ohio) highlighted the increasing federal regulatory burden that U.S. producers are facing. (Related audio- MP3- 1:55). “As we prepare for the next Farm Bill, it is critically important to consider the regulatory pressures are farmers are facing from this current administration,” she said.

Note that an audio replay yesterday’s House meeting is available here and a summary of all of the House Ag. Comm. hearings related to the 2012 Farm Bill can be viewed here.

As the House was conducting its Farm Bill hearing yesterday, the Senate Agriculture Committee was also receiving testimony on issues associated with energy and rural development.

A video rebroadcast of the hearing, and complete witness list is available at this Senate Ag Committee webpage, while an audio replay of yesterday’s meeting is available here.

A news release from the Sen. Ag. Comm. yesterday indicated that, “U.S. Senator Blanche Lincoln (D-Ark.), Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today called for strong energy and rural development Farm Bill programs in order to create jobs and improve Arkansas’s rural economy. Today’s hearing is the second that Lincoln has held as she leads the Committee in reauthorizing the 2012 Farm Bill. [Note that a summary of the first hearing is available here]. General Wesley Clark, Mayor JoAnne Bush of Lake Village, Arkansas, and Dennis Sternberg of Lonoke, Arkansas, were among those who testified.

“‘Arkansans know firsthand that rural America is often the first to feel the impact of economic downturns, and is often the last to reap the rewards of economic recoveries. The development and deployment of renewable sources of energy produced in rural America presents an opportunity to create jobs, put our economy back on track, and reduce our dangerous dependency on foreign oil. The Farm Bill energy programs provide a model which should be the basis of our national energy policy. In May of this year, we sent $27.5 billion overseas to purchase oil – much of that to hostile foreign governments. In Arkansas if we used only a fraction of that money to build just 10 cellulosic ethanol facilities, we would create 2,090 long-term jobs, generate $216 million in economic activity and reduce Arkansas’s need to import oil by 50%. That sounds like a good investment to me,’ said Lincoln.”

As part of her complete opening statement at yesterday’s hearing, Chairman Lincoln indicated that, “Without critical investments in infrastructure, a safe water supply and affordable housing opportunities, it is impossible for rural communities to attract new industries, such as the type of renewable energy production opportunities that we will discuss today.

“Additionally, we are seeing that broadband internet service is a requirement for many businesses when they consider where to locate. Rural America will not be able to compete with the rest of the country without it. I know that there has been tremendous interest in broadband funding, and I plan to hold a hearing specifically on the Broadband Initiatives Program in the near future.”

Interestingly, in very similar comments to those delivered yesterday at the House hearing by Rep. Jean Schmidt regarding federal regulations facing producers, Senator Pat Roberts (R-Kansas) offered his own assessment and analysis of current the current regulatory climate.

A news release from Sen. Roberts yesterday pointed out that he is “concerned with numerous new federal regulations impacting rural Americans.”

In part, Sen. Roberts noted at yesterday’s hearing that, “Your testimony points out that ‘95 percent of rural income is earned off the farm.’ Yet recently proposed government actions threaten the viability of off farm opportunities. Let me name a few: Non-science based standards over particulate matter or what some call ‘rural fugitive dust,’ spray drift, Atrazine, the Environmental Protection Agency’s potential carbon rule, Concentrated Animal Feeding Operations, the definition of ‘navigable waters,’ levee certifications and I could go on and on.

“Mr. Under Secretary, your agency is charged with ‘helping improve the economy and quality of life in rural America.’ With so many rural communities concerned that your sister agencies’ actions result in the direct opposite of your goal, how does the Rural Development Agency work in a ‘multi-agency’ fashion to address these concerns?”

For a more detailed account of the Q and A on federal regulations from Sen. Roberts and Dallas Tonsager, the
USDA Undersecretary for Rural Development, click on this FarmPolicy.com audio clip (MP3- 5:21).

Also testifying at yesterday’s Senate hearing was General Wesley Clark, the Co–Chair of Growth Energy.

Senate Agriculture Committee Ranking Member Saxby Chambliss (R-Georgia) asked General Clark about Growth Energy’s Fueling Freedom plan and ethanol tax credits at yesterday’s hearing, to listen to this very interesting exchange, just click here (MP3- 4:18).

And Senator Chuck Grassley (R-Iowa) asked General Clark about his perspective on ethanol tax credits in the absence of the Senate passing energy legislation, to listen to this exchange, click here (MP3- 2:09).

Also yesterday, Senator John Thune (R-South Dakota) discussed the ethanol “blend wall” with General Clark (MP3- 3:01).

July 21

Two House Ag Subcommittees held hearings yesterday highlighting rural development and livestock programs in advance of the 2012 Farm Bill.

With respect to rural development, a news release from the Ag Committee yesterday stated that, “Today, Congressman Mike McIntyre, D-N.C., Chairman of the House Agriculture Committee’s Subcommittee on Rural Development, Biotechnology, Specialty Crops, and Foreign Agriculture, held a hearing to review the U.S. Department of Agriculture’s rural development programs in advance of the 2012 Farm Bill.

“The Subcommittee heard testimony from Dallas P. Tonsager [opening statement], Under Secretary for Rural Development at USDA and from rural economic development stakeholders utilizing rural development programs across America.

“‘Today’s hearing provided a good overview of the strengths and the weaknesses of our rural development programs given their current resources. I appreciate hearing from Under Secretary Tonsager and the USDA Rural Development administrators about their progress on Farm Bill implementation, the administration of Recovery Act funds, and issues we might consider for the next Farm Bill,’ Chairman McIntyre said. ‘Our second panel of witnesses provided good testimony and helpful suggestions, particularly on the complexity of the loan and grant application process, that I hope USDA will keep in mind as we move forward with the 2012 Farm Bill.’”

An audio replay of yesterday’s rural development hearing is available here.

During yesterday’s hearing, Subcommittee Ranking Member K. Michael Conaway inquired about USDA’s “Know Your Farmer, Know Your Food” program (related audio-MP3- 3:24), and also asked witnesses on the second panel if federal allocations for farmer’s markets were as important as allocations for emergency first responders (related audio- MP3- 2:59).

Chris Clayton indicated yesterday at the DTN Ag Policy Blog that, “USDA’s proposed rules on livestock competition [related USDA news release; related news article] are in jeopardy and will almost certainly have an extension to the public comment period following a hearing Tuesday by the House Agriculture Subcommittee on Livestock, Dairy and Poultry.”

Mr. Clayton indicated that, “Rep. Bob Goodlatte, R-Va., highlighted the complaints from packers and processors about the rules and demanded to know when USDA would make a decision on an extension of the comment period [related audio from the Q and A with Rep. Goodlatte available here (MP3- 7:27)].

“Undersecretary for Marketing and Regulatory Programs Edward Avalos [opening statement] found himself trying to stick to the script by stressing, repeatedly, that the livestock rule ‘is a proposed rule’ and that USDA wants to hear from the industry. Avalos said USDA would make a decision on the extension soon. He also largely deferred to GIPSA Administrator Dudley Butler. Avalos indicated at one point that he personally has not met specifically with any packers or critics of the proposed rule.

“House Agriculture Committee Chairman Collin Peterson, D-Minn., said he had asked Agriculture Secretary Tom Vilsack last week to consider an extension of the comment period. Peterson said producers had expressed concern to him that some of their branded premium programs could be in jeopardy because of the impact of the rule.

“The hearing was supposed to review livestock programs in advance of the 2012 farm bill, but the hearing became a searing bi-partisan criticism of the livestock rules proposed last month by the Grain Inspection Packers and Stockyards Administration.”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “Democrats joined Republicans on the House Agriculture Committee in slamming rules that the Obama administration proposed to restrict the market power of meatpackers.

“Rep. David Scott, the Georgia Democrat who chairs the subcommittee that oversees livestock issues, told Agriculture Department officials today that they went ‘well beyond’ what Congress intended and were trying to impose regulations that lawmakers had specifically rejected when they wrote the 2008 farm bill [related audio, MP3- 1:22]. Another Democrat on the panel, Walter Minnick of Iowa, called the regulations ‘silly.’ Rep. Jim Costa, D-Calif., said the rules would be a ‘lawyers’ field day’ [related audio, MP3- 6:49]. The chairman of the full committee, Minnesota Rep. Collin Peterson, D-Minn., worried that the rules would make it harder to continue branded marketing arrangements between farmers and processors.

“One of the department’s few defenders, Rep. Leonard Boswell, D-Ia., said he believed the USDA had adequate legal authority for the regulations.”

(Note: To listen to a portion of Subcommittee Chairman Scott’s Q and A from yesterday, just click here (MP3- 4:01), while a complete audio replay of yesterday’s hearing can be downloaded here).

Mr. Brasher added that, “The proposed rules would among other things make it easier for producers to prove that the prices that packers were paying them were unfair and would bar packers from selling livestock to one another. The USDA’s undersecretary for marketing programs, Edward Avalos, insisted that the department had the legal authority for the regulations but he struggled to defend specific rules. He repeatedly responded to lawmakers by saying that thousands of farms had gone out of business under the status quo.”

Meanwhile, a release from yesterday by the House Committee on Agriculture Republicans indicated that a bipartisan group of lawmakers have written Sec. Vilsack asking for an extension on the comment period for the proposed rule.

However, a release yesterday from the National Farmers Union indicated that, “National Farmers Union (NFU) President Roger Johnson sent a letter to Secretary of Agriculture Tom Vilsack, urging the U.S. Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA) oppose any extension of time requested beyond the original 60-day public comment period established on the proposed rule, ‘Implementation of Regulations Required Under Title XI of the Food, Conservation and Energy Act of 2008; Conduct in Violation of the Act.’”

A news release yesterday from the National Pork Producers Council (NPPC) noted that, “NPPC, in a July 6 letter to GIPSA Administrator J. Dudley Butler, requested a 120-day extension of the comment period. It said the scope of the proposed rule and the lack of an adequate economic analysis of its impact on the livestock industry warrant an extension.”

Meanwhile, Lorraine Mirabella reported earlier this week at the Baltimore Sun Online that, “The proposed federal [GIPSA] protections, which the 2008 Farm Bill required the USDA to put in place, would give growers more time to fix problems before their contracts are canceled, require processing companies to give growers more notice before suspending delivery of birds to their farms and prohibit companies from retaliating against growers who speak out against their contracts.”

The article noted that, “But a trade group that represents the chicken companies and will be working to shape the new regulations argues that the existing system works to the mutual benefit of growers and production companies.

“‘They need each other,’ said Richard Lobb, a spokesman for the Washington-based National Chicken Council. ‘The companies wouldn’t be able to produce chickens or would have to produce them themselves if they didn’t have the contract growers, and the contract growers would have to take all the market risks if they didn’t have’ processors.”

Also at yesterday’s House Ag Subcommittee hearing, Rep. Steve King (D-Iowa) asked the panel for more perspective and overview on potential new regulations regarding the use of antibiotics in animal production- related audio- MP3- 4:01.

July 16

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., wants Congress to finish the farm bill by late 2011 or early 2012 to make sure the Obama administration implements the bill.

“Peterson had earlier said Congress should be sure to finish the bill before Sept. 30, 2012 when the 2008 bill expires. But in a speech to the National Corn Congress on Wednesday, Peterson said time had been lost in the implementation of the 2008 bill due to the shift between the Bush and Obama administrations. ‘There may or may not be a change of administration but if there is we should have a system in place,’ Peterson said.”

Mr. Hagstrom added that, “Peterson also told the corn growers he understands that ethanol may matter more to them than the farm bill. Peterson said he is troubled by the delays at the Environmental Protection Agency and the Energy Department in approving gasoline with a higher ethanol content. But Peterson praised Agriculture Secretary Tom Vilsack for his work on ethanol. Vilsack ‘really understands ethanol,’ Peterson said. “he is trying to get [White House aide Carol]Browner, [EPA Administrator Lisa] Jackson and [Energy Secretary Stephen] Chu to do what they should.”

“Peterson said that he had brought all the players on ethanol together for a meeting, including the American Petroleum Institute, ethanol groups and convenience store and gasoline station owners. ‘They say they like ethanol but they are headed in different directions,’ Peterson said.”

An update posted yesterday at CQPolitics.com reported that, “A child nutrition bill that would increase spending on food programs for infants and youth by $8 billion over a decade advanced out of a House committee Thursday, although members did not make any headway on paying for the bill.

“The House Education and Labor panel approved the bill by 32-13. It would boost funding levels for school breakfast and lunch, and other nutrition programs over 10 years.”

The CQ update noted that, “Republicans continue to insist that the $8 billion in additional spending must be offset. Chairman George Miller, D-Calif., vowed to address that issue down the road.

“‘It is a requirement that before we get to the floor, we will have in line the offsets for this legislation,’ Miller said. ‘That is the goal of the chair and the members of this committee, and I think it’s going to be key to get access to the floor.’

“The Senate Agriculture, Nutrition and Forestry Committee approved a draft measure in March that would authorize an additional $4.5 billion over the coming decade, partially offsetting the increase by using over $2 billion from the Environmental Quality Incentives Program.”

Washington Post writer Jane Black noted yesterday that, “Both bills now await a floor vote. Child nutrition advocates hope that will happen before the August recess. The current act expires on September 30.”

Both First Lady Michelle Obama and Sec. of Ag. Tom Vilsack applauded the House panel’s passage of the nutrition measure yesterday.

July 15

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Agriculture Undersecretary for Farm and Foreign Agriculture Services Jim Miller on Tuesday joined the call of House Agriculture Committee Chairman Collin Peterson, D-Minn., for a simplification of farm programs.

“In a speech to the American Soybean Association board, Miller said, ‘We may have gotten to the point that the programs are so complex we don’t get the benefits we want.’ Peterson has said that adding farm program on top of farm program over the years has made the system too complicated.”

Mr. Hagstrom added that, “Only 131,000 producers farming 34 million acres have signed up for the new Average Crop Revenue Election program known as ACRE, Miller noted. Many producers and landowners have resisted the ACRE program because it requires farmers to give up their traditional farm program benefits and sign up for the new program for the life of the 2008 farm bill. He also noted that commodity prices have been high enough that USDA does not expect to make significant ACRE payments based on the 2009 crops, while the situation for 2010 is unclear. Miller said ACRE does not seem to work in all parts of the country. ‘Is ACRE appropriate for all parts of the country? Should it be?’ Miller asked.

“The new permanent disaster program, Supplemental Revenue Assistance Payments, known as SURE, he noted, makes payments late and does not seem to work in some parts of the country. But he also noted there may be value in a permanent disaster program because passing weather-related disaster programs on an ad-hoc basis will continue to be difficult in the current fiscal environment. The last farm disaster bill took three years to pass, and after that payments were delayed.”

Meanwhile, a recent Congressional Research Service report (“Farm Safety Net Programs: Issues for the Next Farm Bill,” July 9, 2010) explained that, “Historically, federal programs have primarily benefitted farmers (and landowners) of the major crops, such as wheat, corn, cotton, and sugar, with policy constructed over many decades by modifying or adding programs. As a result, programs sometimes overlap or work at cross purposes, generating criticism that they are not well integrated, cost too much, or do not provide adequate risk protection. Additional potential issues for Congress in the next farm bill debate include the extent of the current commodity coverage, program complexity and its impact on participation and effectiveness, and the effect of biofuel subsidies on agriculture.

“The current federal budget situation is likely to prevent any increase in overall spending on a 2012 farm bill. Thus, the level of funding in the Congressional Budget Office (CBO) baseline budget for agricultural programs will be of paramount importance. Combined outlays for farm safety net programs have averaged $15.7 billion per year during FY2003 to FY2010, with a high of $20.5 billion in FY2006 and a low of $12.2 billion in FY2008. CBO’s projected annual average for FY2011-FY2020 is $14.9 billion. With crop prices relatively high, counter-cyclical support has declined in recent years while crop insurance outlays (which are directly related to crop prices) have increased sharply. The pool of money for any changes to the farm safety net will likely come from the existing baseline for the commodity programs and the crop insurance program.”

The CRS report included some very helpful overview graphics, including this depiction of program allocations and interactions, as well as this overview of program spending. Perhaps most interesting is this graphic in the CRS report which illustrates federal farm spending by commodity.

The CRS report also noted that, “Several issues might shape any potential changes to farm safety net programs in the next farm bill debate.

“Managing farm risk—Crop insurance has very high participation rates, a result driven in part by the high subsidization levels but also because the program in fact reduces both yield and revenue risks. Some Members of Congress and policy observers have wondered if crop insurance might be the only element of the farm safety net that remains in the distant future if farm programs are rationalized and funding is reduced.”

“Biofuels subsidies—The federal government has enacted an increasing number of programs that support the use of agriculture-based biofuels, foremost of which is corn-based ethanol. In the past decade, corn use for ethanol has expanded corn demand by nearly 30%, driving corn prices higher. In 2009, biofuels subsidies totaled nearly $6 billion, and corn has not been the only beneficiary. The increased demand for corn has contributed to an expansion of corn area into non-traditional crop areas, raising prices for other major field crops. Many federal budget watchers argue that the expanding biofuels subsidies should be counted with the pool of agricultural price and income subsidies since this has been one of their major effects.”

With respect to budgetary issues, Jerry Hagstrom reported yesterday at DTN (link requires subscription) that, “Although President Barack Obama wants all cabinet secretaries to cut 5 percent of their discretionary spending, USDA officials are looking at possibly cutting mandatory spending in farm programs rather than take the entire amount out of discretionary programs, Deputy Agriculture Secretary Kathleen Merrigan said Tuesday.

“Merrigan, who manages the USDA budget process, told members of the American Soybean Association board that USDA is expected to spend $149 billion in fiscal year 2011 and that $26 billion of that is discretionary spending, but that Office of Management and Budget expects USDA to propose a $1.5 billion cut in discretionary spending.”

Yesterday’s DTN article added that, “Making cuts at USDA is especially difficult, Merrigan said, because 70 percent of the USDA budget goes for nutrition programs including food stamps, school meals and the special nutrition program for low-income women, infants and children known as WIC. Merrigan noted that WIC, which costs more than $7 billion, is part of the discretionary section of the budget, but it is treated like a mandatory program that no one wants to cut.

“Merrigan also noted that no one wants to cut the Food Safety and Inspection Service, which costs more than $1 billion per year. If the cut comes totally out of discretionary spending, that would leave rural development, research, marketing and regulatory programs and some conservation programs to absorb all the cuts.

“Merrigan later told reporters that Agriculture Secretary Tom Vilsack has sent a letter to the White House Office of Management and Budget requesting ‘flexibility’ in the budget cut. She declined to discuss whether USDA intends to propose cuts in farm subsidies, but she acknowledged that the Obama administration has proposed cuts in the direct payments program and also proposed limiting payments to the biggest farms. Obama also made a campaign promise to impose stricter payment limits.”

On the issue of nutrition spending, Senate Ag. Comm. Chairman Blanche Lincoln, D-Ark., noted in an update posted yesterday at the Huffington Post that, “Hunger and obesity. It might seem odd to find these epidemics mentioned together, but they are two of the greatest threats to the health of America’s children and the future of our nation.

“And Congress is running out of time to do something about it.”

The update added that, “As Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, I have authored the Healthy, Hunger-Free Kids Act of 2010, which addresses these two threats by making strong improvements to our federal child nutrition programs. Funding authorization for these programs expires in 78 days.”

“A bipartisan majority of Senators and House members are already on record supporting reauthorization of our child nutrition programs. We must not squander this historic opportunity to make strong improvements to our child nutrition programs that will put us on a path toward ending childhood hunger and reversing the trend of childhood obesity.”

In related news, an update posted yesterday at the House Education and Labor Committee Online noted that, “On Wednesday, July 14, the House Education and Labor Committee will consider bipartisan legislation to expand access and improve the nutritional quality of meals in schools and child care. The committee examined H.R. 5504, the ‘Improving Nutrition for America’s Children Act’ earlier this month.

“The legislation would help set American children on a path of healthy eating and healthy living at a time when approximately 22 percent of the nation’s children lack access to quality food and one in three children are overweight or obese. Today, over 32 million children rely on federal child nutrition programs.

“H.R. 5504 would dramatically expand access for millions of children to healthy meals year-round in schools, child care, and community based settings, and for the first time, establish nutrition standards for foods sold outside of the cafeteria.”

Chairman George Miller’s opening statement from yesterday’s markup can be viewed here, and yesterday’s update noted that, “The Committee will reconvene on Thursday, July 15, 2010, at 10:00am to consider one additional amendment and take roll call votes.”

In other Farm Bill related news, a USDA news release from yesterday stated that, “Agriculture Secretary Tom Vilsack today launched a new feature on the ‘Know Your Farmer, Know Your Food’ website to highlight local and regional food systems and the multitude of connections being made between farmers and consumers. The new online resource advances a national conversation about food and agriculture and highlights the importance of local and regional food systems – one of the fastest growing segments of agriculture – to American agriculture, the economy, and rural communities.

“‘By developing our local and regional food systems, we can spur job growth in our rural communities and ultimately strengthen American agriculture,’ said Secretary Vilsack. ‘This showcase will serve as a hub of ideas, local success stories, and USDA resources that showcase and strengthen the link between local production and local consumption that benefits producers of all sizes.’

The update added that, “USDA’s ‘Know Your Farmer, Know Your Food’ initiative seeks to create new economic opportunities, to promote local and regional food systems that help keep wealth in rural communities, and to encourage a national conversation about what we eat and where it comes from in order to benefit producers of all sizes.”

With respect to issues associated with biofuels, Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “The ethanol subsidy is running into trouble in Congress.

“Citing a congressional study of the cost of the 45-cent-per-gallon tax credit, the chairman of the Senate energy committee issued a statement today saying that the subsidy should not be ‘reflexively’ extended when it expires at the end of the year.

“Sen. Jeff Bingaman, D-N.M. ‘thinks Congress needs to take a careful look’ at the cost of the subsidy ‘as it decides whether or not to renew it,’ said spokesman Bill Wicker.”

The update explained that, “The study by the Congressional Budget Office evaluated biofuel subsidies by the energy content of the products and found that costs taxpayers $1.78 to reduce gasoline consumption by one gallon using corn ethanol. The cost rises to $3 with ethanol made from crop residue and other forms of plant cellulose, for which there is a $1.01 per gallon tax credit.

“The study’s release comes as some Midwest senators are trying to attach a long-term extension of the ethanol tax credit to an energy bill Democrats are struggling to pass. The Renewable Fuels Association said the congressional study did not fully account for the benefits of biofuels and the ‘clear destruction wrought by fossil fuels.’

“Separately today, the chairman of the House Agriculture Committee, Rep. Collin Peterson, D-Minn., warned members of the National Corn Growers Association that Congress is unlikely to provide a long extension of the ethanol credit and that it could even lapse at the end of the year.”

A related update posted yesterday at the Environmental Working Group (EWG) Blog stated that, “In an bid to garner support for legislation to address the looming danger of climate change, Midwest senators are reportedly pressing to attach a long-term extension of biofuel tax breaks to a Senate energy bill being crafted by Democratic leaders. The Volumetric Ethanol Excise Tax Credit (VEETC), currently set to expire on Dec. 31, pays oil companies $0.45 per gallon in the form of tax credits to blend ethanol with gasoline.

“Word of the senators’ move surfaced as the Congressional Budget Office (CBO) released a sobering assessment Wednesday (July 14) of corn ethanol’s costs and effectiveness.”

The EWG update added that, “Craig Cox, Environmental Working Group Midwest vice-president, had this to say of continued efforts to prop up the corn ethanol industry from EWG’s Ames, Iowa, office:

“In these times of tight budgets, growing deficits and a pressing need to make real progress on alternative energy, it makes little sense to continue lavish government support for corn ethanol, a fuel that has failed to live up to its promise as an environmentally friendly, financially viable alternative to burning oil.

“Corn ethanol is really agriculture policy masquerading as energy policy. The only beneficiaries of extending the ethanol tax credit will be large-scale industrial growers of corn — who already enjoy billions in traditional farm subsidies — and the oil companies that blend ethanol with gasoline.”

July 14

Bloomberg writer Alan Bjerga reported yesterday that, “The crop-insurance industry will be forced to consolidate by a U.S. government plan to spend $6 billion less on subsidizing farmer policies, according to the president of the insurers trade group.

“All 16 companies that provide government-subsidized policies to protect farmers from natural disasters, including Wells Fargo & Co. and Ace Ltd., have agreed to the 20 percent cut in funding over 10 years, the U.S. Department of Agriculture said today.”

Yesterday’s article explained that, “The deal, which companies had to sign to continue to receive subsidies, will drive some companies out of business within two years, said Bob Parkerson, the head of National Crop Insurance Services.

“‘Our hands were definitely tied, and we were marched against the wall’ to sign the agreement, Parkerson said in a telephone interview from the group’s headquarters in Overland Park, Kansas.

“Under the USDA’s proposal announced June 10, payments for government-subsidized administrative costs would be capped at $1.3 billion next year, with the limit rising annually to $1.37 billion in 2015. Two-thirds of the cut will go toward federal- deficit reduction, with the remainder sent to government land- conservation programs, the USDA said.”

Mr. Bjerga added that, “The consent of crop insurers ‘lays the foundation for a more sustainable crop-insurance program, reduces the federal deficit, and improves the farm safety-net,’ Agriculture Secretary Tom Vilsack said in the USDA statement.”

To hear additional comments on this development from Sec. Vilsack, just click here.

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Under the new agreement, crop insurance companies will be paid $6 billion less over 10 years than they would have been paid under the previous agreement. The Obama administration initially proposed cutting their payments by $8 billion, but the administration lowered the cut to $6 billion. RMA officials said the cut was appropriate because higher commodity prices had triggered higher premiums and, in turn, higher payments to the companies to operate the program. The agreement affects the operating payments, not the premiums.

“Vilsack has already announced USDA would put two-thirds of the savings, or $4 billion, toward deficit reduction and USDA has already applied those savings. The other third, or $2 billion, will be used to improve certain risk management programs and to increase the conservation budget.

“Meanwhile, a USDA spokesman responded to questions from 17 senators about whether USDA had the legal authority to include a provision that restricts the commissions that companies can pay crop insurance agents. ‘As a regulator of the crop insurance program, RMA has the authority to take steps to ensure the viability and integrity of the crop insurance delivery system,’ spokesman Justin De Jong stated in an email. The cap on commissions, DeJong stated, will ‘ensure that insurance companies have sufficient funds to pay the other operating expenses in years in which there may be little or no underwriting gain.’”

Emmeline Zhao reported yesterday at The Real Time Economics Blog (Wall Street Journal) that, “More — but smaller — farms across the country generated greater national net income in times of drastically less government support.

“National net farm income in 2008 was $87.3 billion, up from $50.7 billion in 2000, the Census Bureau said last week. Net income was greatest in California, Iowa, Minnesota and Illinois.

“Meanwhile, government payments to farmers in 2008 totaled $12.2 billion, down about 50% from nearly $24.4 billion in 2005. The decrease in funding results from an approximately 90% drop in payments that depend on market prices, including countercyclical payments, according to data from the U.S. Department of Agriculture. Other payments — including those from disaster relief programs and peanut and tobacco buyout programs — decreased about 40%. Agricultural government payments were highest in 2005 in the 10 years between 1998 and 2008.”

Yesterday’s update added that, “The latest agriculture census data also reveals a greater number of farms in the U.S. — just over 2.2 million in 2007, up from more than 2.1 million in 2002 — and about a 52% increase in overall property value, but the average size of farms has fallen to 418 acres from 441 acres over the same period.

“About 59.8% of farms sold less than $10,000 worth of agricultural products in 2007, and only 16.2% sold more than $100,000. That same year, agriculture was one of the largest contributors to GDP growth, alongside construction, professional and business services and real estate, rental and leasing, according to the U.S. Department of Commerce.”

July 13

The AP reported yesterday that, “Forty years ago there were 40 dairy farms in the small town of Rochester, Vt. Now there’s just one.

“‘We are the last one left in our valley. We want to stay there,’ said Beth Kennett, who milks 100 cows with her husband and two sons. Newly introduced legislation aimed at stabilizing milk prices is giving them hope that they will survive, she said Monday.”

The AP article stated that, “The bill, introduced by U.S. Sen. Bernie Sanders, I-Vt., on June 24, would set the amount of milk to be produced quarterly and penalize farmers who produce too much.

“The Dairy Market Stabilization Act, co-sponsored by U.S. Sen. Patrick Leahy, D-Vt., and U.S. Sen. Patty Murray, D-Wash., would ‘bring price stability to the dairy industry and provide family farmers with a fair price for their production — a price that will allow the industry to thrive and family farms to stay in business,’ Sanders said Monday in announcing the bill.

“‘What this says in simplest terms, you have a certain base price in your milk, you produce more, and then you’re not going to penalize everyone else, you’re going to have to pay a fee for it and that’s going to go into a pool,’ Leahy said.”

In other developments, a news release from USDA yesterday stated that, “Agriculture Secretary Tom Vilsack today announced Recovery Act investments for 11 businesses in 9 states to strengthen rural economies by supporting local and regional food systems. Deputy Under Secretary for Rural Development Victor Vasquez made the announcement on behalf of Secretary Vilsack at the annual conference for the National Rural Economic Developers Association.

“‘Our farmers are the most productive in the world, supplying much of the nation’s food, and in so doing, are creating the create jobs that are necessary to strengthen our economy,’ said Vilsack. ‘By connecting farmers and ranchers more closely with consumers of food, we are creating new economic opportunities for producers and helping consumers to access healthy, nutritious food.’

“These announcements come as part of USDA’s ‘Know Your Farmer, Know Your Food’ initiative, which seeks to create new economic opportunities, to promote local and regional food systems that help keep wealth in rural communities, and to encourage a national conversation about what we eat and where it comes from in order to benefit producers of all sizes.”

In a more general and wide-ranging look at a variety of important issues, including the development of the next Farm Bill, Agri-Pulse Senior Editor Stewart Doan recently interviewed Former USDA Chief Economist Keith Collins. The discussion, which also touched on issues such as the Standard Reinsurance Agreement (SRA) and the state of the U.S. agricultural economy, is available for download at the Agri-Pulse homepage.

To listen to a portion of the Agri-Pulse discussion that focused on the Farm Bill, the budget, crop insurance and direct payments, just click here (MP3- 4:52).

In other Farm Bill related news, Carolyn Lochhead reported yesterday at the San Francisco Chronicle Politics Blog that, “There should be no lingering doubt about Michelle Obama’s passion for her ‘Let’s Move’ anti-obesity campaign. This is not some cookie-baking exercise. It’s an effort to change American culture in a way that is simultaneously radical and conservative. Today she gave a funny, warm and deeply serious address to the NAACP, urging the venerable civil rights organization to join her anti-obesity crusade with the same intensity it battled Jim Crow.

“‘We are living today in a time where we’re decades beyond slavery, we are decades beyond Jim Crow,’ the First Lady said, ‘when one of the greatest risks to our children’s future is their own health.’

“She blamed cultural changes that have taken place within her own lifetime that have seen children grow inactive, watching endless hours of television and consuming regular diets of junk food.”

Yesterday’s update added that, “Obesity is as serious a risk to African Americans as bad schools, youth violence and HIV/AIDS she said. Black children are far more likely than white children to become obese, and nearly half are expected to develop diabetes. ‘People, that’s half of our children,’ she said.”

July 12

Brad Swenson reported on Friday at the Bemidji Pioneer Online (Minnesota) that, “‘We had a good farm bill, we fixed a lot of problems,’ [Rep. Collin] Peterson, DFL-7th District, said of the 2008 Farm Bill in a wide-ranging interview Thursday while he was in Bemidji to attend Bemidji Regional Airport groundbreaking for its Aircraft Rescue and Firefighter Facility.

“‘Now the issue is making this all work in 2012 within the baseline,’ he said. ‘We’re not going to spend any more money. I’m not going to go ask anybody for money, I’m going to stay within, which is what I believe we should be doing in all of government.’

“Peterson has held 10 field hearings on the upcoming 2012 Farm Bill, the latest Wednesday near Casselton, N.D., with Rep. Earl Pomeroy, D-N.D.”

The article noted that, “‘In the commodity title, the most important thing is crop insurance,’ he said. ‘It will be good, even though we’re making changes.’”

Mr. Swenson added that, “Direct payments are $5.2 billion a year [related graph] ‘that are given to farmers whether they need it or not,’ he said. ‘When they were making a lot of money, we were making payments, and it caused us trouble.’

“But dropping them will be controversial. ‘The Southerners are addicted to these things,’ Peterson said.

“Peterson said he heard from farmers in North Dakota this week that the direct payment money can be used to improve ACRE, crop insurance and permanent disaster funding.”

Friday’s article indicated that, “‘The idea is having crop insurance that covers all of agriculture, not just the big crops like corn and soybeans,’ the Democrat said. ‘It makes sense to take that direct payment money and redirecting it to a better safety net that follows the need, not just paying people because they own land.’

“Removing direct payments would also make it easier for farmers actually producing the food to enroll in ACRE and other safety net programs, he said.”

The July 8 edition of the “Agriculture Today” radio program, which is produced by the Red River Farm Network, contained additional information from the Farm Bill Forum recently hosted in Rural North Dakota by House Ag Committee Chairman Collin Peterson, D-Minn., and Rep. Earl Pomeroy, D-N.D.

In part, the “Agriculture Today” report indicated that, “While working on the financial reform bill, House Agriculture Committee Chairman Collin Peterson spent a lot of time with his Senate counterpart, Blanche Lincoln. During Wednesday’s Farm Forum in Amenia, North Dakota, Peterson said Lincoln has agreed to a Farm Bill timetable that is similar to the House. ‘One of the problems I had last time, the Senate didn’t want to move; there is a different attitude over there with her and her staff than what we had last time and I’m encouraged by that, I think we’re going to be able to get this thing done.’”

To listen to a related audio clip from the July 8 Red River Radio Network program, just click here (MP3- 1:44).

With respect to Sen. Ag. Comm. Chairman Lincoln, Melinda Alvarado reported on Saturday at Fox 34 News Online (Lubbock, Texas) that, “Senator Blanche Lincoln of Arkansas was in Lubbock on Friday, addressing the Southwest Council of Agri-Businesses during it’s annual meeting.

“The democrat, spoke with area agriculture producers, ranchers and farmers about the 2012 Farm Bill, and how good farm policy is more than just about support for farmers, it’s also about support for the economy. Including all of the businesses in Texas and the southwest.

“Senator Lincoln says agriculture is one of the few places in industry in this country where we still have a trade surplus and a great opportunity to rebuild our economy.”

A video replay of the TV news update regarding this story can be viewed here.

Several recent news items have highlighted nutrition related issues, including the problem of obesity, that have overarching implications for some aspects of the 2012 Farm Bill.

Some of these recent items include the following:

- “Whether a Child Lights Up, or Chows Down,” New York Times. 7.9- “‘Obesity is the new kid on the block, relatively speaking,’ said Kenneth E. Warner, dean of the University of Michigan’s school of public health. ‘Tobacco is old news.’”

- “Kentucky town of Manchester illustrates national obesity crisis,” Washington Post. 7.12- “The national obesity rate for adults is 24 percent; in Manchester and surrounding Clay County, it’s been estimated to be as high as 52 percent. In a study of the healthiness of Kentucky’s 120 counties, Clay County ranked dead last, with 41 percent of the population classified as in poor or fair health.”

- “The best ‘big gun’ against obesity.” San Francisco Chronicle. 7.9- “First, food habits and taste preferences, once formed, are hard to break. It’s time to make forming good food habits in children a national priority. Let’s focus on cultivating Nutritional Intelligence – the ability to recognize and enjoy healthy amounts of good food.”

Steve Kopperud noted on Friday at Brownfield that, “The Obama Administration did a very good thing this week when the President ended nearly 18 months of indecision and named someone to fill the legally mandated ag/food advisor slot on his policy staff. David Lazarus, currently a senior advisor to Secretary of Agriculture Tom Vilsack, got the nod, and, to my mind, the selection makes this a two-fer for the Prez.”

The update explained that, “Lazarus moves to the White House on Monday, July 12. He’s technically a detailee, meaning USDA continues to pay his salary, but in his new gig, he operates as the senior policy advisor to the President for rural affairs and agriculture. While Vilsack may have a friend and former trusted advisor in that slot, the job reports directly to Melody Barnes, director of the Domestic Policy Council.

“Well-respected for being intelligent, analytical, quick on the uptake and pragmatic in his policy work, Lazarus went from a total unknown in the backroom of Sen. Richard Durbin’s (D, IL) office, to Durbin’s ag legislative assistant when the Senator was elevated to majority whip. Almost immediately, Lazarus handled the melamine in dog food issue and the resulting law, but won his stripes as the chief staff architect for Durbin’s bipartisan comprehensive food safety bill, S. 510, a bill enjoying producer, food industry and consumer support, an almost impossible hat trick in this town.”

July 9

The July 7 edition of the “Agriculture Today” radio program, which is produced by the Red River Farm Network, contained an overview summary of the Farm Bill Forum recently hosted in Rural North Dakota by House Ag Committee Chairman Collin Peterson, D-Minn., and Rep. Earl Pomeroy, D-N.D.

In part, the overview included remarks from Chairman Peterson on the USDA’s Standard Reinsurance Agreement (SRA) proposal, a topic that was covered in more detail in Thursday’s FarmPolicy report.

Chairman Peterson highlighted the budget cutting aspect of the agreement, and noted that, “We’re the first part of the government that has actually done a deficit reduction, we’re the only part of the government that has actually done a deficit reduction…and this is going to help us when we get into the Farm Bill. Because as Earl [Rep. Pomeroy] said, we’ve got people after us, there is a lot of pressure for all of the Committees to go in and make changes, and we’re going to be the people that who were out there in front, and we didn’t run, we are standing behind it, and I think that is going to help us.”

To listen to the clip from Wednesday’s “Agriculture Today” program, just click here (MP3- 1:08).

Yesterday on the AgriTalk Radio Program, host Mike Adams interviewed Dr. David Procter of Kansas State University and the two discussed the issue of “food deserts” in parts of Rural Kansas, and throughout Rural America.

To listen to a brief clip of the discussion on yesterday’s AgriTalk Radio Program with Mike Adams, just click here (MP3- 2:55).

In other nutrition related news, Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “The livestock industry fears a scientific panel’s advice that Americans eat ‘only moderate’ amounts of lean meat and eggs could discourage consumption of those products.

“That advice is contained in recommendations made to the Obama administration for revising the government’s dietary guidelines.”

Mr. Brasher indicated that, “She [Chelsie Redalen, director of government relations for the National Pork Producers Council] and representatives of the National Cattlemen’s Beef Association and the United Egg Producers also expressed concern that another recommendation that consumers shift to ‘a more plant-based diet,’ featuring fruits, vegetables, beans, nuts and whole grains.

“‘Urging Americans to shift to a more plant-based diet and consume only moderate amounts of lean meat implies they should decrease consumption of this vital, complete protein,’ she said.”

Yesterday’s update explained that, “The dietary guidelines are revised every five years to reflect the latest scientific findings about nutrition and health. The departments of Agriculture and Health and Human Services will be using the scientific advisory panel’s recommendations to rewrite the guidelines in a form that can be used by health professionals and consumers. The guidelines also will be used to direct changes in school lunches and other federal nutrition programs.

“The departments held a public hearing today on the recommendations.”

July 8

Recall that Jerry Hagstrom recently reported that, “USDA Risk Management Agency Administrator Bill Murphy said June 30 that his agency has sent crop insurance companies a revised final offer of a new standard reinsurance agreement and gives the companies until July 12 to sign it.

“The original deadline was June 30.

“After a Senate Agriculture Committee hearing Murphy said that he had made concessions to the companies on the structure of the agreement, but not made any changes in the proposal to cut $6 billion in the program or to put restrictions on agent commissions.”

A news release from yesterday by Senate Ag Committee Chairman Blanche Lincoln, D-Ark., stated that, “Chairman Blanche Lincoln (D-Ark.) and Ranking Member Saxby Chambliss (R-Ga.), along with 14 Senate colleagues, today announced they sent a letter late last week to the U.S. Department of Agriculture’s Risk Management Agency (RMA) urging further important changes to the final draft of the Standard Reinsurance Agreement (SRA). The Senators previously wrote letters to U.S. Department of Agriculture Secretary Tom Vilsack asking the department to incorporate further modifications. [Note: Related letters to RMA’s William Murphy can be viewed here (January 19) and here (March 29)].

“In the letter, the Senators note that the $6 billion in proposed cuts over the next ten years will severely constrain the CBO baseline for the next farm bill. Additionally, they question the appropriateness of capping commissions paid to crop insurance agents, who are independent contractors. Lastly, the Senators highlight concerns with subparagraph III (a)(2)(K) to the final draft, which limits the legal rights of insurers and agents.”

Robert Pore noted yesterday at Aglines that, “Sen. Ben Nelson, D-Neb., was one of 16 U.S. senators, including the Agriculture Committee’s top Democrat and Republican, scolding the U.S. Department of Agriculture (USDA) for proposing $6 billion in cuts to crop insurance.”

Recall that at the Senate Ag Committee Farm Bill hearing on June 30, Sen. Nelson asked Sec. Vilsack about the SRA.

According to an unofficial FarmPolicy.com transcript of that hearing (page 27), Sen. Nelson noted that, “Mr. Secretary, throughout the efforts on putting together the standard reinsurance agreement, I’m sure I’m not alone, but I’ve heard from a number of agents over the impact of the proposed SRA cuts we’d have on the delivery system. As a matter of fact, some have raised a question about whether or not they would have access and availability, the producers will continue to have access and availability to agents if the new and more rigid cap on agents’ commissions reduces the number of insurance agents providing service, particularly in rural communities, recognizing the space distances between communities and what impact that could have.”

Sec. Vilsack noted in response (page 28) that, “We obviously share with you the concern about the stability and solvency of this very important piece of the safety net, and we understand and appreciate the role that agents play in providing service. I would say that we are confident that this agreement is fair to farmers because it doesn’t necessarily increase cost to them. In fact, many farmers may, as a result of our proposal, see a decrease in crop insurance premiums…The companies suggested that the A&O be about $1.3 billion, and then that number would be adjusted for inflation from this point forward. Interestingly enough, that $1.3 billion number for A&O is roughly the same as the 2010 number would be under the current agreement. So because of the way in which this is structured, we think this is fair to the taxpayers, we think it’s fair to the agents, fair to the companies, and most importantly of all, it maintains the program, expands the program, and offers many producers the possibility of reduced crop insurance premiums.”

Meanwhile, a news release from yesterday by the Crop Insurance Professionals Association stated that, “This [SRA] letter [from Senators] comes the same week that Senate Agriculture Committee Chairman Blanche Lincoln (D‐Ark.) voiced support for increasing and improving crop insurance coverage at the Committee’s first 2012 Farm Bill hearing.

“‘If we could get every farmer in this country to 85 percent revenue insurance that is affordable, we would go a long way in filling the holes of the current safety net,’ she said [page 3]. ‘I know my rice farmers are working toward this goal, and I suspect farmers from other states are doing the same thing.’

“Other lawmakers at the hearing applauded her words, but expanding coverage will prove more difficult if the USDA slashes funding.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Secretary of Agriculture Tom Vilsack dismissed the grumbling Wednesday from a bipartisan group of 16 senators complaining about a $6 billion cut in federal payments to the crop insurance industry over the next decade and a contract proposal to cap commissions to crop insurance agents.”

“Vilsack said Wednesday in a conference call with reporters that a substantial number of crop insurance companies, if not all of them, are preparing to sign the new contract.

“‘Here’s the reality,’ Vilsack said. ‘The vast majority of companies are going to sign the agreement, and are agreeing to the agreement.’”

Mr. Clayton explained that, “The baseline is a 10-year cost projection for legislation such as the farm bill that is scored by the Congressional Budget Office. Given the federal budget challenges, most legislation spending above the baseline level requires cost offsets somewhere in the federal budget through either spending cuts or revenue increases.

“Vilsack said insurance companies recognize there needed to be a more balanced arrangement between USDA, the companies and crop insurance agents. Even though companies have sold fewer policies, profits and agent commissions have doubled in the past couple of years, largely because premiums are tied to commodity prices, Vilsack said. That also drove companies to aggressively sell policies in some areas of the country while ignoring others.” [Related audio from Sec. Vilsack available here].

Mr. Clayton pointed out that, “Another controversial provision in the SRA includes a cap on how much companies can spend on agent commissions. USDA argues that for some companies the agent commissions are so high they outstrip the administrative and operating expenses that are reimbursed by USDA. So the SRA sets hard caps on the percentage of an insurance premium that can be spent on commissions. Senators said agents are a crucial component of delivering crop insurance to farmers. The senators also questioned the logic of a federal agency putting a lid on a private company’s compensation for employees or contractors.

“‘We can think of no precedent for the government restricting how much companies can compensate a specific class of workers, whether they are direct employees or independent contractors, as is the case with most agents,’ the letter states.”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “This [SRA proposal] is a fair deal and it’s reflected in the fact that we’re seeing a number of companies being prepared to accept the terms and conditions,’ Vilsack said on a conference call with reporters.”

Kristen Daum reported yesterday a the Inforum Online that, “North Dakota and western Minnesota farmers and ranchers say they’re happy with recent Farm Bills approved by Congress but they want to see slight improvements as federal legislators begin the early stages of crafting the next one.

“Minnesota Rep. Collin Peterson of the state’s Seventh District and North Dakota Rep. Earl Pomeroy convened a field hearing of the House Agriculture Committee this morning at a farmstead about seven miles north of Casselton [Note: related news release from Rep. Pomeroy].

“Peterson, who chairs the Ag Committee, has hosted a series of similar forums nationwide to gather input from farmers as he moves forward with crafting the 2012 Farm Bill.”

The article added that, “Regional farmers emphasized this morning that they’d like to see more efficiency within federal farm programs and more equitable coverage for all sectors covered by crop insurance, among other suggestions.”

The AP reported yesterday that, “Sugar beet farmers in the Red River Valley of eastern North Dakota and northwest Minnesota say federal sugar policy is working and should not be changed.

“They spoke Wednesday at a forum at a southeast North Dakota farm. Rep. Collin Peterson of Minnesota, the House Agriculture Committee chairman, and North Dakota Rep. Earl Pomeroy held the forum on how the farm bill is working and what changes should be made by the next Congress.”

A news release from yesterday by American Farmland Trust stated that, “‘We don’t produce enough fresh fruits and vegetables in the United States for everyone to eat a balanced and nutritious diet,’ says Jon Scholl, President of American Farmland Trust (AFT). ‘In fact, it is estimated that we need at least another 13 million acres of farmland growing fruits and vegetables just for Americans to meet the minimum daily requirement of fruits and vegetables set by the U.S. Department of Agriculture’s (USDA) 2005 dietary guidelines.’”

Meanwhile, in a radio interview from yesterday, Todd Gleason of University of Illinois Extension spoke with Kevin W. Concannon, the Under Secretary for Food, Nutrition and Consumer Services at USDA. The conversation covered several issues regarding health and nutrition.

In part, the discussion focused on how USDA is working to get more nutritious meals into schools (audio clip (MP3- 2:45)), and on the issue of “food deserts” (audio clip (MP3- 2:06)).

In related news on the “food desert” issue, the AP reported yesterday that, “Last month, Baltimore hired a food policy coordinator, making the city one of the first in the country with a paid ‘food czar.’ While Holly Freishtat’s directive may be straightforward — get more healthy food on the tables of the people who need it — accomplishing it may not be.”

The article stated that, “A study of Baltimore neighborhoods found that nearly a fifth of its 630,000 residents live with little or no access to fresh foods — neighborhoods often described as ‘food deserts.’ Meanwhile, more than two-thirds of adults and nearly half of all high school students are overweight or obese and the death rate from heart disease is 30 percent higher than in the rest of Maryland.

“Freishtat works out of the planning department, and her job is to implement the 10 recommendations for improving the city’s food system made last December by Baltimore’s food policy task force. They include expanding access to farmers markets, community gardens and community-supported agriculture; improving the food served in city schools; and pushing for new zoning laws that remove roadblocks to food production and sales.”

July 6

Ana Radelat of the Capitol News Connection reported on Friday that, “With bare-knuckle fights over ethanol, lawmakers fiercely defensive of local crop programs and the Department of Agriculture in the bull’s eye for budget cutters, Agriculture Secretary Tom Vilsack’s job isn’t easy.

“‘Today’s producers face challenges from many different directions … including their government,’ Sen. Pat Roberts, R-Kansas, complained this week at a Senate hearing on the next farm bill.

“Since taking over the USDA last year, Vilsack, 59, has reached out to organic and other small farmers while trying to soothe the concerns of big producers. He’s also had to defend certain Obama administration policies that have infuriated farm interests — all while promoting a vision of rebirth for the nation’s heartland.”

The article noted that, “Vilsack is now focused on drafting the outlines for the 2012 farm bill and running a massive bureaucracy with a broad reach — from food stamps to wildlife habitats. His real passion is his vision for renewal of rural America.

“Vilsack’s plan is to create jobs in rural communities by luring businesses, including biorefineries, to disadvantaged rural areas. He also wants to spur economic growth through improved infrastructure and Internet access in farming communities and create 100,000 small- and medium-sized farms.

“Vilsack’s plan for agribusinesses is to promote more U.S. farm exports and expand the production of biofuels.”

Ms. Radelat pointed out that, “That’s not enough for many big producers who are concerned about Obama’s plans to cut farm subsidies and other federal aid to large farms. They are also disappointed at the administration’s failure to approve new trade agreements with Colombia, Brazil and other nations that would boost U.S. farm exports.

“A final blow to big agriculture was the selection of Kathleen Merrigan, a specialist in alternative agriculture, as Vilsack’s deputy.”

And Friday’s article added that, “Darrin Ihnen, a corn and soybean farmer in South Dakota who heads the National Corn Growers Association, said his organization ‘had concerns about Vilsack early in his tenure.’ Those subsided after several meetings with Vilsack, who convinced Ihnen the USDA continues to support big farms.

“‘He knows organic and sustainable food have their place in agriculture, but it’s the production farmers who feed the country,’ Ihnen said.”

As Sec. Vilsack has faces concerns about his commitment to “commercial” agriculture, others have expressed frustration that the administration has not sufficiently advocated for “organic” and “sustainable” agriculture.

Heather Rogers reported today at The American Prospect Online that, “When the eco-friendly, food-savvy Obamas rolled into D.C., they sparked hope for a renovation of the nation’s agricultural priorities. The first family promptly ripped up a plot on the White House lawn, and at the urging of Alice Waters, planted an organic vegetable garden. Michelle Obama invited local school kids to collect its first harvest. Wholesomeness and health were the message — eating right, being environmentally responsible, enjoying nature. It looked like non-industrial food was poised to finally reclaim its place at America’s dinner table.

“But, as George W. Bush’s before it, President Barack Obama’s Department of Agriculture is doing little to ensure the survival of Pitts [New York farmer Morse Pitts] and thousands of other holistic local farmers. Obama is making some changes at the USDA, but they’re the type of improvements that appear larger than they really are. Sustainable agriculture proponents don’t want to complain because finally they’re getting something. But these incremental changes won’t be enough to ensure farmers can stay on their land and sell their produce at reasonable rates. Neither will they clear the path for a new generation of farmers to participate in remaking the food system.

“While the public and organic advocates may be wooed by feel-good photo-ops, the fact is Obama has yet to get his hands dirty and truly commit to reforming the industry. The stakes are high: Unless the administration takes immediate steps to remake oligopolistic, fossil-fuel reliant, scorched-earth agriculture, the small farmers meant to lead the way will remain critically endangered.”

Ms. Rogers stated that, “The grim reality for small, unconventional farmers started looking a bit brighter when Kathleen Merrigan, a veteran of sustainable agriculture, joined the USDA as deputy secretary. Merrigan played a central role in drafting the country’s organic laws in 1990, when she was an aide to Sen. Patrick Leahy of Vermont. At the USDA, she has set out to give organic a higher profile at the agency and to beef up oversight.”

“Beyond NOP [USDA's National Organic Program] Merrigan has initiated Know Your Farmer, Know Your Food, an effort to connect farmers and rural communities with consumers and educate people about where their food comes from. In addition, food stamps are now accepted at farmers markets, and the first lady’s Let’s Move initiative vigorously promotes eating fresh vegetables and fruit. Today’s USDA is more receptive than ever to sustainable agriculture, but what does that really mean for unconventional farmers trying to make a living?”

The American Prospect article indicated that, “Obama seems to want to boost visibility and demand for organic food, but his policies don’t offer meaningful support for the people who grow it. Doling out a few million dollars to clean up organic certification or connect local farmers with existing USDA programs is farcical and tragic — at current levels it would take 50 years of USDA organic research spending to match what it laid out for conventional ag research in 2010 alone. Meanwhile, rural farm populations continue to decline. Less than a quarter of all U.S. farmers are under the age of 45.”

Meanwhile, Sara Wyant, publisher of Agri-Pulse, the weekly newsletter on food and farm policy, noted in a recent article (“A closer look at the new ‘middle’ in agriculture”) that, “The Barack Obama administration wants to help develop the ‘mid-size’ farming operation. In speech after speech this year, both Secretary of Agriculture Tom Vilsack and Deputy Secretary Kathleen Merrigan have bemoaned the loss of farming operations in the ‘middle,’ and talked about the need to target assistance to small and mid-sized farmers. So who are they trying to reach?

“‘The Obama administration and USDA care deeply about all our farmers and ranchers, and we are concerned about a trend we describe as ‘the disappearing middle’: a decline of nearly 150,000 farming operations–16 percent of the total–with sales of more than $10,000 but less than $500,000 between 1997 and 2007,’ says a USDA spokesperson. ‘Some have migrated into larger sales categories. But many just went out of business.’”

The article noted that, “To address this situation, USDA officials are forging ahead with a campaign they call ‘Know Your Farmer, Know your Food,’ which aims to target more federal resources to some of those operating in that ‘middle’ range. In their ‘Guiding Framework’ for KYF2, which was obtained by Agri-Pulse, USDA outlined six pages of tactics designed to ‘strengthen the critical connection between farmers and consumers and supports local and regional food systems’ and, among other things, ‘Foster new opportunities for farmers and ranchers.’

“The list includes everything from launching ‘mobile slaughterhouses’ to enable more local meat processing and creation of a fully operational regional food hub model to ‘coordinate the sale of locally grown fresh food products from small and mid-scale family farms.’”

Ms. Wyant indicated that, “The campaign has drawn flak from several Capitol Hill sources who suggest that USDA is trying to promote organic agriculture and niche markets over conventional operations, which produce the bulk of the nation’s food supply.

“‘In the name of promoting local food systems, the department appears to be prioritizing Rural Development grant and loan programs for locavore projects in urban areas, apparently at the expense of rural communities with documented rural development needs,’ complained Sens. Pat Roberts (R-KS), Saxby Chambliss (R-GA) and John McCain (R-AZ) in a letter to Vilsack earlier this year.

“But Vilsack says the department’s approach embraces all of agriculture and is not about choosing sides. Facing similar criticism last fall, he provided an analogy of his own family, saying, ‘I have two sons, and I love them both.’”

With respect to the farm size – farm production method issue, recall that House Ag Committee Chairman Collin Peterson (D-Minn.) stated at a Committee field hearing this spring in Alabama that, “I have been a big promoter of local foods. I had a conference in my district for the last five years promoting local foods, and I think it’s a good thing, because there’s a market and the people that get into it can make money, and that’s great, and I’m all for it. But I don’t like this idea of pitting one against the other. I don’t think it’s right and I don’t think it’s necessary. We need production agriculture and we need as much of it as we can get, and we’re going to have a heck of a time feeding not only this country, but the rest of the world going forward. So I’m for all kinds of farms.

“If you can make a living on 30 acres, God bless you, and people can do that. If it takes 5,000 acres, I’m for that. If it takes 20,000 acres, I’m for that. Whatever makes sense economically, works for the producer, I’m for it. We are not going to get into the business of deciding how big a farm should be because that’s way beyond our expertise. So I would just hope that we don’t get into any kind of conflict between organic and local and commercial agriculture because there’s no reason for it.”

Last week, USDA’s Economic Research Service (ERS) released a report titled, “Taxing Caloric Sweetened Beverages: Potential Effects on Beverage Consumption, Calorie Intake, and Obesity.”

An ERS summary of the report stated that, “The link between high U.S. obesity rates and the overconsumption of added sugars, largely from sodas and fruit drinks, has prompted public calls for a tax on caloric sweetened beverages. Faced with such a tax, consumers may reduce consumption of these sweetened beverages and substitute nontaxed beverages, such as bottled water, juice, and milk. This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Actual impacts would depend on many factors, including how the tax is reflected in consumer prices and the competitive strategies of beverage manufacturers and food retailers.”

Rather than engaging in a policy debate that ensnares the politics of taxes when it comes to sweetened beverages, recall that Dr. Rob Paarlberg, a professor at Wellesley College, noted at House Ag Committee hearing in May that the nutritional debate should be broadened to clear up perceptions about links to obesity, while simultaneously tackling the problem.

Specifically, he indicated that, “Our federal programs do plenty of things that could be criticized, and I’m a critic of many of them, but the one thing you can’t say they do is make sweetened foods artificially cheap or make corn or corn-based foods artificially cheap. Our tariff rate quotas on imported sugar make sweetened foods artificially expensive. And certainly our subsidies and tariffs and tax credits and mandates for corn-based ethanol have driven up the price of corn; it’s artificially expensive, not artificially cheap. Ask the livestock industry. Nonetheless, over the past several years, a stream of dubious studies and popular books and amateur commentary have persuaded most of the American people that the farm bill causes obesity, and that’s a political problem.

“Fortunately, I believe there’s something this committee can do in the 2012 Farm Bill to counter this impression. Sweetened beverages, particularly caloric sodas, are, on the consumption side, perhaps the single most important contributor to our current obesity crisis, so it may be time to look at the federal nutrition programs as a place to address this concern. The nutrition programs currently take up – most critics don’t know they take up about 80% of the farm bill baseline. Maybe this is a more promising place to turn for solutions.

“It may be time for these nutrition programs, particularly the SNAP program, to stop subsidizing the consumption of caloric sodas. I would argue that caloric sodas should be made ineligible for purchase under the SNAP program, a little bit like tobacco and alcohol. This would not be an imposition of a tax. It would simply be the removal of a subsidy, and the total dollar value of SNAP benefits wouldn’t fall. These benefits would simply be deployed away from an obesity inducing product, which isn’t even a food product, after all.”

July 2

DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Agriculture Secretary Tom Vilsack urged Congress on Thursday to reauthorize the child nutrition programs this year with a big increase in spending. He said a cut might be possible in the popular environmental quality incentives program and other USDA programs to pay for it.

“‘If we don’t do this this year, this is not going to get any easier,’ Vilsack told the House Education and Labor Committee. He added that he believes no other legislation is more important this year. Delaying the reauthorization until another year, Vilsack said, would only hurt poor children who should have easier access to meals and all children who should be served healthier food at school.”

Mr. Hagstrom explained that, “The committee is considering a bill that Education and Labor Chairman George Miller, D-Calif., has introduced to make it easier for low income children to qualify for free meals and to improve the quality of the meals. Both steps would cost more money, and the bill provides an additional $8 billion for school meal programs over 10 years, but Miller has not identified offsets to pay for the increased cost.

“The Senate Agriculture Committee has approved a similar bill, but it would only increase spending by $4.5 billion. The Senate bill cuts a food stamp education program, but the larger part of the offset — $2.8 billion over 10 years — would come from the Environmental Quality Incentives Program (EQIP), which farmers and ranchers use to pay for environmental cleanup.”

Yesterday’s DTN article noted that, “Vilsack said that cutting any USDA program is like asking him which of his children he likes more. But he said that an audit of USDA’s Natural Resources Conservation Service showing that spending has ‘outpaced the personnel at NRCS’ may indicate that a cut in conservation might be appropriate. But Vilsack also said he believes that there may be ‘other dollars’ at USDA and outside the department that could be cut. ‘If you give us a target, we will work with you to find that resource,’ he said.” [FarmPolicy.com Note: Related audio and background available in this update yesterday from USDA’s Daily Radio Newsline.]

Mr. Hagstrom added that, “NRCS Chief Dave White, who was testifying before a House Agriculture subcommittee on Thursday, winced when told that Vilsack had mentioned the audit, but said that Vilsack’s comment on personnel referred to the fact that NRCS’ budget has risen 376 percent since 2002 but its staff is the same size. White said the audit had shown NRCS had deficiencies in its accounting practices and found two cases of noncompliance with laws and regulations. He said the agency is trying to correct those problems.

“House Agriculture Committee Chairman Collin Peterson, D-Minn., said in an interview Thursday that the problem stems from Congress’ unwillingness to increase NRCS’s management staff. The result, Peterson said, is that NRCS technicians who are supposed to be providing technical assistance to farmers are also trying to manage the agency.”

In addition, at yesterday’s House Ag Subcommittee hearing, Rep. Jerry Moran (R-Kansas) also brought up the issue of EQIP funding and nutrition. Rep. Moran noted that in Kansas, EQIP money is “over prescribed,” meaning, “there are more applications than funds available.”

It was noted that USDA was on track to use all of the “appropriated” funds for EQIP in the Farm Bill (versus “authorized” funds). Rep. Moran then indicated that, “So the suggestion, at least by [a] Senator, that we can use EQIP funds to pay for food and nutrition programs because there is excess funds in EQIP—there are no excess funds is that true?”

NRCS Chief White replied, “Not at the appropriated amounts.”

To listen to this exchange between Rep. Moran and Mr. White from yesterday’s hearing, just click here (MP3-1:31).

Meanwhile, Allison Winter of Greenwire reported yesterday at The New York Times Online that, “A House spending panel yesterday approved a $23 billion Agriculture appropriations bill that keeps intact major spending boosts for energy and conservation that lawmakers set two years ago, rejecting significant cuts the White House proposed.

“The House Agriculture Appropriations Subcommittee unanimously approved the bill last night after hours of debate over Republican amendments. The panel rejected all of those amendments, including proposals that would have cut spending across the board, eliminated the Conservation Stewardship Program and tied the hands of agencies that could work on oil-spill pollution reporting requirements for dairy farmers.

“Democratic leaders said the future of the spending bill is unclear. Delayed by gridlock over the budget, lawmakers are behind schedule on the annual appropriations measures. The Agriculture spending bill has usually cleared the subcommittee, full committee and House floor at this point in the year.”

The article noted that, “The panel also allotted more than $1 billion in discretionary funding for the Natural Resources Conservation Service, the agency that oversees most farmland conservation programs. That sum is a $3 million boost over current spending levels and nearly $48 million more than the administration requested.”

In other Farm Bill related news, Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “Farm subsidies rose slightly last year both in the United States and in other developed countries as commodity prices slipped from their highs in 2008. However, the U.S. farmers remain among the least dependent on government support among the rich countries. Those findings are contained in the latest analysis of agricultural policies by the OECD, an organization that represents the developed economies.

“In the United States last year, government subsidies amounted to 10 percent of gross farm receipts, up from 8 percent in 2008. In the 27-member European Union, government support for farmers rose from 22 percent to 24 percent of gross receipts.”

A news release yesterday from National Crop Insurance Services stated that, “The crop insurance industry and the program will withstand the $6 billion reduction in funding handed to them by the USDA’s final Standard Reinsurance Agreement (SRA) contract released on June 29, 2010. Companies have until July 12th to sign the agreement.

“‘Our hands are tied,’ said Bob Parkerson, president of National Crop Insurance Services. ‘The companies have no choice but to sign this SRA because, if they don’t, they cease operating and the safety net that America’s farmers and ranchers rely on so heavily would be disrupted.’”

The release indicated that, “Although the industry feels the negotiation process was generally handled reasonably well by USDA, there were terms and conditions added to the agreement very late in the process that gave companies very little time to react and negotiate a contract that was fair to all parties. Constraints on legal recourse of companies and agents are particularly problematic.

“‘I think our definition of ‘negotiate’ was very different from USDA’s,’ said Parkerson. ‘They made a few concessions to some of the technical aspects of the agreement, but they didn’t budge on the $600 million a year cut in funding, despite the damage it will do to the financial foundation of the program.’”

July 1

A Senate Agriculture Committee news release from yesterday stated that, “U.S. Senator Blanche Lincoln (D-Ark.), Chairman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today called for strengthening the safety net for family farmers and ranchers as she led the Committee in its first farm bill hearing. Today’s hearing focused on maintaining a strong U.S. farm policy and was the first of several that will take place this year as the Committee prepares to reauthorize the 2012 farm bill. Secretary of Agriculture Tom Vilsack, and Dow Brantley, an England, Arkansas producer, were among those who testified.

“‘I am proud of our farmers and ranchers that put food on our table, clothes on our back, and fuel in our cars and trucks. As the daughter of an Arkansas rice farmer, I understand the significant challenges that unpredictable weather and competitive global markets present to those who clothe and feed us. As Chairman of the Senate Agriculture Committee, Arkansas farm families and producers throughout the nation can rest assured that I will fight for policies that allow them to continue to provide the safest, most affordable supply of food and fiber in the world,’ said Lincoln.”

The release noted that, “Others who testified at today’s hearing included Bob Stallman, President of the American Farm Bureau Federation [related news release]; Roger Johnson, President of the National Farmers Union [related news release], Thomas Cochran, a Georgia producer; Chris Pawelski, a New York producer; and Mark Watne, a North Dakota producer. Lincoln questioned the witnesses on the success of current farm safety net programs and discussed ways to improve the programs.”

In her opening statement at yesterday’s hearing, Chairman Lincoln noted in part that, “[W]e need to look before we leap. More than anything else, I think most American farm and ranch families simply want steady, predictable, supportive policies coming out of Washington… and for us to otherwise get out of their way. Huge policy fluctuations, mixed signals coming out of Washington, and the uncertainty that these things create make it very difficult for our producers to compete, invest, and plan for the future. So, rather than start from scratch or from some new fangled idea cooked up in Washington or in some college professor’s office, we need to reassure our farmers and ranchers that we will start where we left off: the 2008 Farm Bill. If we can do better by our producers in 2012, great. But, if not, current law serves as the benchmark from which we will work.”

A news release yesterday from Sen. Pat Roberts (R-Kansas) indicated that, “At a hearing of the Senate Committee on Agriculture on the 2008 Farm Bill with U.S. Secretary of Agriculture, Tom Vilsack, Senator Roberts again urged the Secretary and members of the committee to promote the interests of all farmers and ranchers and was critical of new burdensome regulations, cuts to crop insurance and a meager trade agenda. Roberts was also critical of the media’s portrayal of production agriculture.”

In a related item, Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “Agriculture Secretary Tom Vilsack, who’s been criticized by some in agribusiness for his promotion of small-scale farmers, gave a passionate defense of conventional producers at a Senate hearing today and got into a dispute with a cable TV show in the process.

“He told the Senate agriculture committee that the public owes farmers gratitude for how little Americans pay for food, an estimated 10 percent of their income on average.

“‘You may never need a police officer. I hope you never need a police officer. But every day, two or three times a day, you need a farmer,’ the former Iowa governor said in response to a question from Sen. Pat Roberts, R-Kansas.”

To listen to a portion of the exchange yesterday between Sen. Roberts and Sec. Vilsack, click on this FarmPolicy.com audio clip (MP3-7:02).

Mr. Brasher also noted that, “But even as Vilsack defended conventional farming, he also kept up his push to increase the numbers of new small- and medium-scale farmers. He suggested Congress make it a goal to add 100,000 new farmers, an echo of a Clinton-era program to put an additional 100,000 police officers on the streets.”

Senate Ag. Comm. Ranking Member Saxby Chambliss noted yesterday that, “[A]griculture spending is a small share of the federal budget. Over the ten-year projected period of 2011 through 2020, the Congressional Budget Office (CBO) estimates Commodity Credit Corporation outlays as 0.24 percent, less than one half of one percent of all mandatory and discretionary spending. Adding nutrition program spending raises the share to just 2.31 percent of the total federal budget.”

Sen. Chambliss also asked Sec. Vilsack about USDA’s “five pillars” (trade, rural broadband, renewable energy, conservation and research) that will make Rural America stronger; specifically, Sen. Chambliss asked, “Where do production agriculture and commodity and risk management programs fit into that picture of those five pillars?” To listen to this exchange, just click here (MP3-3:06).

Budget and Farm Bill baseline issues were also discussed at yesterday’s hearing.

To listen to a discussion on this issue with Chairman Lincoln and Sec. Vilsack, which included comments about the recently released Standard Reinsurance Agreement, just click here (MP3-2:50).

Nebraska GOP Senator Mike Johanns also asked about the Farm Bill baseline issue in greater detail. As part of this discussion with Sec. Vilsack, Sen. Johanns also asked for analysis from USDA’s Chief Economist on the broader development of the relative share of farm payments going to traditional counter-cyclical commodity payments versus crop insurance payments. Sen. Johanns indicated that he would like more details on “the inter workings” of this payment allocation dynamic. To listen to this exchange, just click here (MP3-5:24).

In related news regarding crop insurance, DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “USDA Risk Management Agency Administrator Bill Murphy said today that his agency has sent crop insurance companies a revised final offer of a new standard reinsurance agreement. RMA gives the companies until July 12 to sign it.

“The original deadline was today.”

Mr. Hagstrom added that, “After a Senate Agriculture Committee hearing, Murphy told reporters that he had made concessions to the companies on the structure of the agreement but did not made any changes in the proposal to cut $6 billion in the program or to put restrictions on agent commissions. The companies and the agents have said the cuts the Obama administration has made using authority given to RMA in the 2008 farm bill may lead to delivery service problems, but the companies are expected to sign the agreement.

“Agriculture Secretary Tom Vilsack told the Senate Agriculture Committee today that he believes the new agreement is fair and that the new commission structure will give agents ‘a fair return for their work.’”

JUNE 2010

June 30

Francis X. Gilpin reported on Monday at The Fayetteville Observer Online (North Carolina) that, “Three congressmen from the Cape Fear region brought the U.S. House Agriculture Committee to Fayetteville on Monday to hear from constituents with wish lists for a 2012 farm bill.”

“Rep. Mike McIntyre, who wielded the chairman’s gavel, reminded those listening to the hearing on the Internet that taxpayer support of agriculture is modest compared with what farmers do for the country.”

The article noted that, “Laurinburg cotton farmer Allen McLaurin sounded a cautionary note about biofuels, which speakers touted as a technological breakthrough that will lessen American dependence on foreign oil while giving farmers another market for fiber crops.

“‘While the cotton industry supports a viable biofuels industry, it must be recognized that benefits are not equally shared by all commodity producers,’ McLaurin said. ‘Renewable fuels mandates and other policies regarding biofuels have changed the competitive balance between commodities, placing severe pressure on cotton infrastructure in certain parts of the Cotton Belt. Mandated demand can result in excessive and harmful market distortions.’

“Clarkton peanut grower Dan Ward criticized a U.S. Department of Transportation proposal to ban bags of peanuts on domestic flights, an accommodation to passengers who are allergic.”

Meanwhile the AP reported yesterday that, “Most parents think childhood obesity is a problem. Just not their kids’ problem.

“An annual obesity report by two public health groups includes more bad news – obesity rates increased in 28 states last year – and also a new survey of parental attitudes about the issue. The survey shows an increasing awareness of obesity and its threat to public health, though that knowledge has yet to translate into results.”

The article stated that, “The new survey shows that 84 percent of parents believe their children are at a healthy weight, even though nearly a third of children and teens are considered obese or overweight.”

Also yesterday, the AP reported that, “American farmers are producing more food than ever, but agricultural research is too focused on increasing production and needs to do better at considering consequences such as water and air pollution, according to a report issued Tuesday by a federal advisory group.

“The National Academies’ National Research Council report found that farmers are being asked to produce more and more food to sustain the world’s population, but with little focus beyond how many bushels of grain or pounds of vegetables or meat they can generate.”

The article added that, “One agricultural economist, however, said he worries that shifting resources or focus away from production could create problems.

“‘We’re still looking at a situation where we have population growth, so we’ve got to meet those needs,’ said Gary Schnitkey, a professor at the University of Illinois. ‘I think there’s too little research on agricultural productivity. We’ve got to keep increasing output from these acres.’”

June 29

The House Agriculture Committee held a field hearing in North Carolina yesterday to review U.S. agriculture policy, as the Committee begins the process of writing the 2012 Farm Bill.

A House Ag Committee news release from yesterday pointed out that, “This is the ninth in a series of field hearings scheduled across the country to consider new ideas regarding federal food and farm policy. Four Members of Congress attended today’s hearing and heard testimony from eight witnesses on a variety of farm policy issues.”

At yesterday’s hearing, North Carolina farmers Frank Lee (audio clip, MP3-1:33) and Allen McLaurin (audio clip, MP3-3:21) provided perspective on the Farm Bill safety net, highlighting provisions that they viewed as important. Their testimony touched on trade, including the WTO cotton case with Brazil, as well as program payment limitation issues.

Opening statements from all of the witnesses at yesterday’s hearing can be viewed here.

Near the conclusion of yesterday’s hearing, Rep. Bob Etheridge (D-NC) pointed out that although Farm Bill debates have historically been bi-partisan, regional and geographic differences often create some stumbling blocks in policy development. In addition, Rep. Etheridge reminded the audience that budget issues would be a concern in developing the next Farm Bill. He specifically noted that in the last Farm Bill, the Ag Committee sought additional funding from the Ways and Means Committee that ended up bolstering funding for some nutrition programs.

To listen to a portion of yesterday’s comments by Rep. Etheridge, just click here (MP3-1:13).

Recall however that at a Farm Bill hearing on April 21 in Washington, D.C., Ag Committee Chairman Collin Peterson (D-Minn.) pointed out that, “We also have to be realistic in terms of our budget situation. I think most of us on this committee are not interested in running up the deficit. In fact, we are probably more interested in trying to get the deficit under control and so, as we move ahead with this Farm Bill, I am not going to be looking for additional resources. I think we have to live within the baseline that we currently have for the Farm Bill. We will proceed in that manner.”

At an April 30 Farm Bill field hearing in Des Moines, Iowa, Chairman Peterson stated that, “I think that last comment kind of ties into something I want to say, and that is that we are not going to have any extra money for this farm bill. We’ll be lucky to hold onto what we got. I saw on some of the testimony people wanting to raise loan rates because they are ridiculously low. If we get down to loan rates, we’re out of business. It ain’t gonna happen. The money it costs to raise the loan rates, you know, I just – it’s not realistic. So one of the reasons we’re starting this hearing process early is to see if there’s a more efficient way, a better way to provide the risk management tools, the safety net, the conservation that we all want to do.”

And in an interview with Minnesota Public Radio’s Tom Crann on Friday, Chairman Peterson reminded listeners again that the Farm Bill budget situation would be tight. Interestingly, he went on to comment on the USDA’s Standard Reinsurance Agreement and the resulting cuts contained in the latest proposal. Chairman Peterson noted that agriculture is already taking deficit reduction cuts and offered an analysis on what the impacts on the national debt would be if other non-agricultural related programs faced similarly proportioned cuts in program spending.

To listen to a portion of Chairman Peterson’s remarks on these issues from Friday, just click here (MP3-2:40).

With respect to the Senate Farm Bill hearings, a news release issued yesterday by Sen. Ag. Comm. Chairman Blanche Lincoln (D-Ark.) noted in part that, “The farm bill is one of the most important pieces of legislation Congress considers on behalf of rural America and our nation’s farmers and ranchers. This first hearing will focus on maintaining a sound U.S. farm policy to protect our most vital resource – our food supply. Our food security, millions of jobs and a good share of our national economy depend on the work our farmers and ranchers do every day. The farm bill is necessary and vitally important to ensure we continue to have a safe, reliable and affordable supply of food and fiber.”

Ag. Sec. Tom Vilsack, producers, and national farm organization leaders are set to offer perspective and analysis at Wednesday’s hearing.

The AP reported today that, “Hungry children looking for a free meal this summer may not be able to find one.

“States and cities have cut funding for summer meal programs as need has skyrocketed, according to a new report from an anti-hunger group that tracked the program in 2009. Budget woes that have left many families hungry are also affecting local governments that find themselves without the needed dollars to feed children while they are out of school.”

Dave Russell reported yesterday at Brownfield that, “Chuck Conner, President and CEO of the National Council of Farmer Cooperatives (NCFC) remembers when writing a Farm Bill only took a few months.

“‘I’ve been involved in the writing of six Farm Bills,’ said Conner. ‘The very first Farm Bill I worked on in 1981 we started the debate on the Farm Bill in March 1981 and we were done by the summer of ’81, it took just a few months.’

“But Chuck Conner also understands things have changed since that 1981 Farm Bill.

“‘The process of getting any type of farm legislation through has just grown so much more difficult,’ Conner said. ‘You just have to allow months, if not years worth of time for it to happen or else you’re going to be too late.’”

June 28

The House Agriculture Committee continues to review U.S. farm policy in advance of the 2012 Farm Bill at a field hearing this morning in North Carolina.

The Committee has been exploring issues regarding the next Farm Bill in a series of hearings that have taken place since late April.

Most recently, on Thursday, the House Agriculture Subcommittee on General Farm Commodities and Risk Management heard from a number of commodity organizations regarding perspectives on U.S. farm safety net programs, an unofficial FarmPolicy.com transcript of this hearing is available here.

Recall that the Senate Agriculture Committee will also hold the first of four hearings regarding Farm Bill reauthorization on Wednesday in Washington, D.C.

With respect to dairy policy proposals and the next Farm Bill, the Food and Agricultural Policy Research Institute (FAPRI) released an “Analysis of NMPF’s Foundation for the Future Program” on Friday.

According to the FAPRI webpage, “There are four major policy changes considered in this analysis: 1) Elimination of the Dairy Product Price Support Program (DPPSP), 2) Elimination of the Milk Income Loss Contract (MILC) program, 3) Introduction of the Dairy Producer Margin Protection Program (DPMPP) and 4) Introduction of the Dairy Market Stabilization Program (DMSP).”

Melissa Healy reported today at the Los Angeles Times Online that, “The U.S. government has just served up a heaping mouthful to people who eat — the Report of the Dietary Guidelines Advisory Committee on the Dietary Guidelines for Americans, 2010.

“It not only squarely addresses the undeniable — that two-thirds of American adults are either overweight or obese and that our children are on a similar trajectory — it also recasts some advice we have heard before: urging Americans, for instance, to shift their diets away from meat and animal protein and fats — foods such as red meat, cheese and butter — toward a more ‘plant-based diet,’ a term that includes not just fresh fruits and vegetables but also foods such as nuts and lentils and olive or canola oil.

“Then the report goes further. It recommends that we slash our salt intake by almost a third. It makes clear that people put their health at risk when they, on a weekly basis, do less than 21/2 hours of moderate physical activity or 75 minutes of high-intensity exercise. And it discusses at length the social and economic forces at work that have made good diets and adequate exercise easy for Americans to achieve.”

The article noted that, “The report — 677 pages long and two years in the drafting — is the first step in the federal government’s effort to (again) shape what, and how, Americans should eat to optimize their well-being. It has embarked on this effort every five years since 1980.”

“Released June 15, the report (available online at http://www.cnpp.usda.gov) will be open for public comment until July 15. It’s a joint product of the U.S. Department of Agriculture and the U.S. Department of Health and Human Services.”

The Los Angeles Times editorial board noted on Saturday that, “Avoid excessive fat, sugar and salt. Boil and bake, rather than frying foods. Eat the good carbohydrates, such as beans and whole grains. Maintain your ideal weight. That’s the advice the U.S. Department of Agriculture and then-Department of Health, Education and Welfare issued in 1980, in their first Dietary Guidelines for Americans. And it’s not much different from the 2010 guidelines offered for public comment this month. In between the two reports, however, most Americans have grown overweight or obese on fats and sugar, while lacking key nutrients such as calcium and potassium. We’ve consumed too much salt, and suffered higher rates of diabetes and cardiovascular diseases that are aggravated by our poor diets. In short, we have been told what to do for 30 years and have done the opposite.”

“The new guidelines recommend that government, business and food experts develop strategies for persuading Americans to eat more moderate portions, exercise and improve their cooking skills, which may encourage them to eat more healthful foods at home. That’s the right prescription, but it still doesn’t address where they’re supposed to find the time. Until that gets figured out, Americans are likely to ignore the USDA’s advice once again,” the LA Times said.

And a USDA news release from Saturday stated that, “The U.S. Department of Agriculture (USDA) today released the Supplemental Nutrition Assistance Program (SNAP) at Farmers Markets: A How-To Handbook. The handbook provides the managers of farmers markets with a step-by-step guide to installing Electronic Benefits Transfer (EBT) machines and accepting SNAP benefits. Agriculture Under Secretary for Marketing and Regulatory Programs Edward M. Avalos made the national announcement at the Asheville City Market.

“‘It is important for people throughout the country to have access to fresh fruits and vegetables and by promoting SNAP EBT’s at farmers markets, we are accomplishing that goal while providing more economic opportunity for America’s farmers and ranchers,’ said Avalos. ‘This new handbook provides critical information to farmers market managers and spurs economic opportunities for local producers and I encourage more markets to take advantage of using EBT machines.’”

In related news, the AP reported today that, “At Wisconsin farmers markets, vendors no longer need licenses to sell pickles, jams and other canned foods, while small farmers in Maine can sell slaughtered chickens without worrying about inspections.

“Federal and state laws require that most food sold to the public be made in licensed facilities open to government inspectors. But as more people become interested in buying local food, a few states have created exemptions for amateur chefs who sell homemade goods at farmers markets and on small farms.

“The exemptions have touched off a debate about how to balance the need for food safety with a dose of regulatory common sense. Supporters say they recognize food safety regulations designed for big commercial food handlers can be a burden for small-time cooks who just want to make a few extra bucks selling canned goods or other specialty products. Opponents say that without regulation, the public is at risk for food-borne illnesses.”

June 25

Bloomberg writer Alan Bjerga reported yesterday that, “Growers of corn, cotton and other crops may have to accept reduced subsidies in the next farm bill as budget-cutting becomes necessary to contain record deficits, House Agriculture Committee Chairman Collin Peterson said.

“‘We’re not going to have any new money; we’ll probably have less money,’ the Minnesota Democrat said today at a hearing in Washington of the House Agriculture subcommittee that oversees commodity programs. ‘We’re going to have to make it work,’ he said.

“The hearing was called to solicit opinion from farmers on U.S. agriculture policy as Congress begins to craft legislation to replace the current farm bill. That measure, passed in 2008, authorized $289 billion over five years for all Department of Agriculture programs, including food stamps for the poor and farm subsidies.”

(FarmPolicy.com Note: To listen to Chairman Peterson’s comments from yesterday in their entirety, just click here (MP3-3:34)).

Mr. Bjerga explained that, “At today’s hearing, Illinois Farm Bureau President Philip Nelson said the structure of the 2008 bill should be maintained even if overall funding is reduced.

“‘We do understand the constraints of this farm bill, but we have real concerns when we start shifting resources from one area to another,’ said Nelson, speaking on behalf of the American Farm Bureau Federation, the largest U.S. farmer group.

“Some adjustments may be necessary, said Gary Murphy, the board chairman of the Houston-based US Rice Producers Association. ‘Rice farmers are certainly not seeing any windfalls’ from farm programs, said Murphy, who grows about 7,000 acres of rice, cotton, corn and soybeans in Missouri. ‘Neither are our brethren who produce other crops.’”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “The fixed annual payments that grain, soybean and cotton farmers have been getting since 1996 are surfacing as a major issue facing lawmakers as they move toward writing the next farm bill. The payments [related graph], which total about $5 billion a year, including $500 million sent to Iowa, offer one of the only significant pots of cash that lawmakers could tap into if they’re going to overhaul commodity programs without any new source of money, which is highly unlikely given the budget deficit. The payments date back to the 1996 Freedom to Farm law, which was supposed to wean farmers off of government support by providing declining amounts of direct payments that would eventually end, which never happened.

“Craig Lang, the president of the Iowa Farm Bureau Federation, told me in May that the payments are hard to defend. Today, a representative of the National Farmers Union echoed that concern in testimony to the House Agriculture Committee. Kent Peppler said the payments are particularly hard to defend in years when commodity prices are relatively high. Rob Joslin, an Ohio farmer who is president of the American Soybean Association, said the money winds up in the pockets of landowners because the payments are factored into land rents.”

Mr. Brasher added that, “However, groups such as the National Cotton Council and the National Association of Wheat Growers signaled strong support for the payments. Minnesota farmer Erik Younggren said the payments provide a ‘reliable cash flow tool’ that enables farmers to obtain operating loans.

“The National Corn Growers Association was silent on the issue in its prepared testimony.”

In an article regarding the Average Crop Revenue Election (ACRE) program, DTN Executive Editor Marcia Zarley Taylor reported yesterday at the DTN Minding Ag’s Business Blog that, “Low signup for the Average Crop Revenue Election program–ACRE for short–has disappointed policymakers: Only about 129,000 farms enrolled in the program after the first two signups, while 1.54 million stuck with traditional countercyclical programs. Yet by most economic analysis, ACRE offers soybean, corn, wheat and sorghum growers better financial protection in periods of low prices than the standard loan rate program would. In fact, USDA expects to pay out $300 million to wheat growers and $65 million for 2009 crops this October, while traditional farm programs paid nothing but direct payments. What gives?”

The DTN item pointed out that, “Last week DTN polled more than 500 corn farmers who had not enrolled in ACRE on any of the land they farmed, and the results explain some of the holdouts:

“Some 28 percent don’t understand the program themselves or find it too hard to explain to landlords;

“Another 17 percent don’t want to give up direct payments or partial use of the loan program;

“State yield triggers don’t seem to correlate well with county data for 16 percent of growers;

“Too much paperwork was cited by 10 percent of non-enrollees;

“Finally, 25 percent didn’t think ACRE was likely to trigger a payment, given what a grower knew at signup.”

In related news, an update posted yesterday at the Illinois Farm Bureau Online reported that, “Even a new, improved ACRE can’t replace current producer crop insurance protections, former USDA chief economist Keith Collins told FarmWeek.

“National Crop Insurance Services (NCIS) President Bob Parkerson noted speculation cutbacks in federal crop insurance spending may be directed in part at promoting revenue-based farm payments as an eventual substitute for private insurance. ‘There is some major concern,’ he said.”

Yesterday’s item stated that, “One focus of early 2012 farm bill discussions is possible retooling of ACRE (the average crop revenue election program) to provide greater individual protection. ACRE guarantees are based on national prices and state yields; lawmakers are eyeing proposals to move to county yields.”

“The economist insists ACRE and crop insurance are ‘fundamentally different’ options.

“‘Can ACRE substitute for crop insurance?’ Collins posed. ‘Can a ‘free’ farm program substitute for a risk management program a farmer has skin in the game with and pays for? The philosophy of turning crop insurance into a farm program is something Congress really needs to think about.

“‘A second issue is, how do you pay for this? The ACRE program doesn’t cost too much, because nobody participates in it. You have 8 percent and 13 percent (respectively) of the farmers and the acres in the program. If you were to scale that up and make it appealing nationwide, so there’d be heavy participation, there would be a substantial cost.’”

The Illinois Farm Bureau news item added that, “Lawmakers also have floated the idea of developing ACRE into more of a whole-farm program, covering a variety of enterprises. Embracing currently non-ACRE-guaranteed crops under the program rather than through expanded insurance policies would further boost federal costs, Collins said.

“Even if Congress incorporated a county-based yield trigger into ACRE, he argued the program would remain of questionable value to growers whose yields on average are ‘not highly correlated’ with their county yields.”

Crop Insurance, the Standard Reinsurance Agreement (SRA) and budget related concerns were key topics of discussion at yesterday’s House Subcommittee hearing.

To listen to some remarks on crop insurance and the SRA from Subcommittee Chairman Leonard Boswell, D-Iowa, just click here (MP3-1:49).

Subcommittee Ranking Member Jerry Moran, R-Kansas, followed up the comments from Chairman Boswell and developed the crop insurance issue and the latest SRA proposal further by highlighting related Farm Bill baseline issues.

To listen to comments on these issues from Rep. Moran yesterday, as well as additional remarks from Chairman Boswell, just click here (MP3-6:38).

Rep. Jim Marshall, D-Georgia, also asked panel participants yesterday more generally about crop insurance and the overall safety net; to listen to this discussion, just click here (MP3-6:33).

Also yesterday, the WTO Brazil Cotton Case was touched upon in both testimony from Eddie Smith, Chairman, National Cotton Council, and in a question from Rep. Larry Kissell, D-NC. To listen to related audio on this issue from yesterday, click here (MP3-1:53).

Meanwhile, a recent article by Mikkel Pates noted that, “Rep. Collin Peterson, D-Minn., says he’s in favor of shifting current direct farm payment funding into an expanded crop insurance plan, and then getting rid of payment limitations in the 2012 farm bill.

“The Minnesota Democrat told attendees of a National Farm Business Management Conference June 14 in Fargo, N.D., that he needed their help in more big policy shifts for the new farm bill. He talked about the need to make sure the safety net for agriculture should ‘fall on production,’ rather than trying to pick winners or losers on the basis of farm size.

“Peterson, chairman of the House Agriculture Committee, earlier had discussed the possibility of getting rid of payment limitations in remarks to local media at a Texas hearing in May. There was little reaction back home, even though some organizations, particularly the state and national Farmers Union, have favored ‘targeting’ payments to smaller, ‘family farmers.’”

June 21

Alan Beattie reported on Friday at the Financial Times Online that, “Brazil said on Thursday that it would suspend sanctions on US imports in retaliation for illegal American cotton subsidies, temporarily defusing one of the most contentious disputes in international trade.

“The deal will extend until 2012 a holding arrangement in which the US pays Brazilian farmers $147.3m a year and promises to cut subsidies in future. In return, Brazil will hold off imposing blocks on imports or ignoring patents and copyrights, which it is entitled to do after a World Trade Organisation panel declared the US cotton support programme illegal.

“Brazilian officials said they expected permanent reforms to be introduced when US agricultural support was revised in the five-yearly ‘farm bill,’ which is next renewed in 2012. ‘This is not a final solution, but it lays out elements that will allow for consultations and reforms to the farm bill that will take place by the end of 2012,’ Roberto Azevedo, Brazil’s ambassador to the WTO, said. ‘Brazil doesn’t rule out taking countermeasures at any moment.’”

The National Cotton Council issued a statement on Friday regarding this development, which noted in part that; “The National Cotton Council today expressed appreciation for the efforts of the Administration to conclude a framework agreement with Brazil in the WTO dispute involving the export credit guarantee programs and certain provisions of the cotton program.”

“‘It is not our intent to distort world cotton prices,’ [Eddie Smith, chairman of the National Cotton Council] said, ‘and, in fact, our program is not suppressing world prices. We will work with Congress and the Administration on the 2012 farm bill in order to develop cotton policy that will continue to provide the safety net needed by U.S. farmers while helping assure our trading partners that U.S. cotton programs do not cause unfair trade distortions in the world cotton market.’”

DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “As USDA officials and crop insurance executives prepared to meet in Kansas City Friday to discuss USDA’s final offer of a new crop insurance contract, Agriculture Undersecretary for Farm and Foreign Agricultural Services Jim Miller and Rep. Jerry Moran sparred Thursday over whether CBO will credit the farm bill baseline with $2 billion the Obama administration intends to repurpose from crop insurance to other programs.

“At a House Agriculture General Farm Commodities and Risk Management Subcommittee hearing on implementation of the 2008 farm bill [unofficial FarmPolicy.com transcript available here], Moran, R-Kan., the ranking member on the subcommittee, said that, while the Office of Management and Budget (OMB) might maintain the $2 billion in its farm bill baseline, he worries that CBO (Congressional Budget Office) will not include the money in its calculations. But Miller said that, because outlays will increase, ‘CBO should reflect that in the baseline.’

“USDA’s Risk Management Agency, which runs the crop insurance program, has announced it plans to cut payments to crop insurance companies by $6 billion over 10 years, sending $4 billion to the Treasury for deficit reduction and using $2 billion to make some improvements to crop insurance programs to increase acreage in the Conservation Reserve Program. How the $2 billion will be apportioned has not been determined. None of these numbers are set in stone, and may change as the dickering on the next farm bill progresses.”

Mr. Hagstrom noted that, “Members of Congress have expressed concern that the cuts in crop insurance will reduce the baseline for the 2012 farm bill, and Agriculture Secretary Tom Vilsack has said he would attempt to avoid a reduction in the baseline.”

(FarmPolicy.com Note: At an April 21 House Ag Committee hearing, Sec. Vilsack indicated in a response to a question regarding crop insurance and the baseline that, “As it relates to the baseline, just simply let me say that our hope is that we can work with the chairman and others on this committee and conserve and preserve these savings so that you all have the flexibility to do what you need to do as you begin to address the 2012 Farm Bill and Rural Development Bill with as much flexibility as you possibly need.” (Unofficial Farmpolicy.com transcript, at page 27)).

William Neuman reported on Friday at The New York Times Online that, “The Obama administration proposed new rules on Friday seeking to increase competition and rein in potentially unfair practices by large meatpackers and poultry processors. The move is aimed at helping small livestock and poultry farmers survive in an industry dominated by corporate giants.

“The rules could give farmers and ranchers new leverage in suing meat companies that they believe have treated them unfairly. They would end practices among cattle and hog buyers that may lower prices paid to farmers and feedlot owners. And they would set new protections for poultry farmers, who often must go deeply into debt to build the chicken houses needed to win contracts from processors.

“‘As this market has become more consolidated and vertically integrated for efficiency’s sake it lends itself to unfair practices and practices that are not particularly transparent,’ the agriculture secretary, Tom Vilsack, said in an interview.”

The Times article noted that, “The regulatory move comes as the Agriculture and Justice Departments have been holding a series of public workshops to discuss allegations of anticompetitive behavior in agriculture.

“The rules apply largely to how the Agriculture Department enforces the Packers and Stockyards Act, a 1921 law governing the livestock and poultry industry. The U.S.D.A. will evaluate public comment before issuing a final set of rules, which could take many months.”

Friday’s article added that, “Groups representing the meat industry criticized the proposed rules.

“‘These rules would require a packer to treat everybody the same regardless of capability, regardless of quality of product,’ said Mark Dopp, a senior vice president and the general counsel of the American Meat Institute, which represents the meatpacking industry. ‘We’re afraid this is going to stifle the progress and innovation we’ve seen over the last 20 or 30 years.’

“Richard Lobb, a spokesman for the National Chicken Council, which represents poultry processors, said the new rules would ‘open the floodgates to litigation.’”

The AP reported on Friday that, “Perhaps the most significant provision in the new rules is one that makes it easier for farmers to file suits under the Packers and Stockyards Act, said Peter Carstensen, a law professor at the University of Wisconsin who has studied agriculture competition law for decades.

“Farmers who now sue under the act must show a company has not only harmed them but that it has hurt competition in the overall meat industry, Carstensen said.

“The new law would change that, making it clear that the law only requires a farmer to show a company has engaged in ‘unfair’ or ‘discriminatory’ acts against the farmer. That sole provision could unleash a wave of litigation, and prompt courts to overturn earlier rulings, Carstensen said.”

Bob Keefe reported on Friday at the Atlanta Journal-Constitution that, “The rules could have a significant impact on farmers in Georgia — the nation’s biggest poultry producer — and potentially affect how much consumers pay for chicken in the future.

“The proposal would change the pricing system used by many farmers and big chicken companies such as Tyson Foods, Pilgrim’s Pride and Perdue and require other changes to contracts between farmers and the big companies.”

The AJC article noted too that, “The proposed rule changes also raised a red flag at the Senate Agriculture Committee, where Republican Sen. Saxby Chambliss of Georgia is the ranking member.

“Erin Hamm, spokeswoman for Chambliss, said the rules proposal ‘appears to go well beyond congressional intent under the 2008 Farm Bill … and contradicts established legal precedent.’ She said committee staff was reviewing the USDA proposal.”

Reuters news reported on Friday that, “Small-farm groups applauded the proposed rule. ‘As long as the companies can arbitrarily cut off deliveries of birds to contract growers or cancel growers’ contracts at any time, we will always be at the mercy of the companies’ whims,’ said Mike Weaver, president of the Contract Poultry Growers Association of the Virginias.

“The rule is scheduled to appear in the Federal Register on Tuesday to open a 30-day comment period that is one of the last steps to issuing a new regulation.”

In other reactions, Sen. Russ Feingold, D-Wis., noted that, “[This] proposed rule, combined with the joint USDA/DOJ agriculture competition workshops and other actions, are putting us back on the path of ensuring farmers, small businesses and consumers are treated fairly.”

Sen. Tom Harkin, D-Iowa, stated that, “I am especially gratified that these proposed regulations will carry out provisions we wrote into the Food, Conservation and Energy Act of 2008 specifically to ensure fairness, nondiscriminatory treatment and open competitive markets for livestock and poultry producers.”

A news release from Friday stated that, “Congressman Earl Pomeroy, D-ND, and Senators Byron Dorgan, D-ND, and Kent Conrad, D-ND, today praised the U.S. Department of Agriculture for a proposed rule that will level the playing field and restore fairness for American livestock producers.”

Sen. Chuck Grassley, R-Iowa, indicated that, “The Department of Agriculture has made a concerted effort to address some of the unprecedented levels of concentration in the agriculture industry. There’s still more work to be done, but these proposed rules are a step in the right direction.”

And Bob Stallman, president of the American Farm Bureau Federation (AFBF), noted that, “The [AFBF] is pleased with the proposed rule issued today by the Agriculture Department’s Grain Inspection, Packers and Stockyards Administration (GIPSA) dealing with competition in the livestock and poultry industries.”

In other livestock related Farm Bill issues, Lyndsey Layton reported in yesterday’s Washington Post that, “Under the Obama administration and the 2008 farm bill passed by Congress, the USDA is shifting attention to small and mid-size farms, encouraging organic and sustainable agriculture, and investing in projects to bring locally grown meat and produce to consumers.

“‘There is unbelievable consumer interest in local agriculture that we haven’t seen in decades,’ said Deputy Agriculture Secretary Kathleen Merrigan. She is overseeing the agency’s ‘Know Your Farmer, Know Your Food’ program, designed to revive the processing, marketing and distribution networks that once made small farming viable but disintegrated in the last 30 years as U.S. agriculture went through a dramatic consolidation.”

The Post article stated that, “‘There are farming operations that are really big and do huge volumes of food and that’s part of American agriculture and that’s good,’ Merrigan said. ‘But there are a lot of people who want to do alternative markets, and we want to find a way to help them find a living and stay in rural America and help those towns and villages thrive. This really is a rural development strategy.’

“The agency is promoting small meat producers in part by funding and approving more mobile slaughter units, staffing each one with a federal inspector, educating farmers and USDA employees about the units, and setting clear guidelines for farmers who want to build one. In December, the department set up a toll-free help line dedicated to small producers.

“Most people in this country are not likely to eat meat processed in a mobile slaughterhouse, but the USDA’s promotion of the units marks a significant cultural shift at the agency, especially since Earl Butz, the agriculture secretary from 1971 to 1976, famously admonished farmers to ‘get big or get out.’

“The change coincides with a backlash against factory farms, fueled by concerns about animal welfare, impact on the environment and quality and safety of meat. Consumers are increasingly demanding grass-fed beef, pork and lamb raised on local pastures by farmers who can vouch for the animals’ diet and treatment. The USDA estimates that the market for locally grown food will be about $7 billion by 2012, up steeply from $4 billion in 2002.”

Alexandra Zavis reported on Saturday at the Los Angeles Times Online that, “With concern growing in Sacramento about the millions of Californians struggling to get sufficient nutrition, advocates for the poor had hoped for progress this year on recommendations to improve access to federal food stamps.

“Gov. Arnold Schwarzenegger and legislators in both major parties have shown interest in cutting red tape that has California lagging far behind most of the nation in obtaining the benefit. But hopes that this would translate into speedy legislative action have dimmed as reform efforts have become caught up in horse-trading to close a $19.1-billion budget gap.”

The article explained that, “Only 48% of eligible Californians — about 2 million people — were enrolled in the food stamp program in 2007, the most recent year for which federal estimates are available. That was well below the national average of 66%. The number of recipients has since increased to more than 3 million, but eligibility for the program has soared because of the recession, so it is not clear whether the participation rate has improved.”

Tom Zeller Jr. reported on Friday at The New York Times Online that, “[P]ower generated by burning wood, plants and other organic material, which makes up 50 percent of all renewable energy produced in the United States, according to federal statistics, is facing increased scrutiny and opposition.

“That, critics say, is because it is not as climate-friendly as once thought, and the pollution it causes in the short run may outweigh its long-term benefits.

“The opposition to biomass power threatens its viability as a renewable energy source when the country is looking to diversify its energy portfolio, urged on by President Obama in an address to the nation Tuesday. It also underscores the difficult and complex choices state and local governments face in pursuing clean-energy goals.”

Mr. Zeller noted that, “Biomass proponents say it is a simple and proved renewable technology based on natural cycles. They acknowledge that burning wood and other organic matter releases carbon dioxide into the atmosphere just as coal does, but point out that trees and plants also absorb the gas. If done carefully, and without overharvesting, they say, the damage to the climate can be offset.

“But opponents say achieving that sort of balance is almost impossible, and carbon-absorbing forests will ultimately be destroyed to feed a voracious biomass industry fueled inappropriately by clean-energy subsidies. They also argue that, like any incinerating operation, biomass plants generate all sorts of other pollution, including particulate matter. State and federal regulators are now puzzling over these arguments.

“Last month, in outlining its plans to regulate greenhouse gases, the Environmental Protection Agency declined to exempt emissions from ‘biogenic’ sources like biomass power plants. That dismayed the biomass and forest products industries, which typically describe biomass as ‘carbon neutral.’”

June 18

A House Ag Committee news release from yesterday stated that, “House Agriculture Subcommittee on General Farm Commodities and Risk Management Chairman Leonard Boswell, D-Iowa, today held the Subcommittee’s first hearing to review U.S. farm safety net programs in advance of the 2012 Farm Bill.

“The Agriculture Committee has begun the process of writing the 2012 Farm Bill, holding field hearings in eight states. Today’s subcommittee hearing is the next step in the process.

“The Subcommittee heard from U.S. Department of Agriculture (USDA) Under Secretary for Farm and Foreign Agricultural Services Jim Miller.”

The release added that, “‘It was good to have the opportunity to continue the Committee’s discussion about how our current farm safety net is working and how we can improve it in the next farm bill. It was also important that members of the Subcommittee had the opportunity to ask questions about the latest draft of the Standard Reinsurance Agreement [SRA] that was submitted last Friday,’ said Subcommittee Ranking Member Jerry Moran, R-Kansas.”

An audio replay of yesterday’s entire hearing can be downloaded here.

A portion of Rep. Moran’s opening statement from yesterday’s hearing, in which he talks about the latest SRA proposal, can be heard here (MP3-2:11). Rep. Moran indicated that, “I do want to express my concern that this subcommittee or the full committee is not having a hearing to review what we are told is the final draft of the standard reinsurance agreement.”

Subcommittee Chairman Leonard Boswell asked Under Sec. Miller about the proposed cuts in the latest SRA proposal in the discussion portion of yesterday’s hearing. Under Sec. Miller provided a general overview of the issue and also briefly addressed potential budgetary baseline implications resulting from the suggested cuts in spending. To listen to this exchange, just click here (MP3-4:03).

The significance of the budgetary baseline impact of the latest SRA proposal was highlighted in much greater detail later in yesterday’s hearing in questioning by Rep. Moran. To listen to an in-depth discussion on some of the budgetary baseline variables associated with the SRA proposal, click here (MP3-7:56).

Julie Harker reported yesterday at Brownfield that, “Concerns about the USDA’s final draft of the Standard Reinsurance Agreement for crop insurance protection cropped up during a House Ag Subcommittee reviewing 2008 Farm Bill safety net programs.

“Kansas Republican Jerry Moran says the third draft released late last week had some surprises, ‘I am particularly concerned about the new method of administering and operating – a new and more rigid cap on agent commissions. And, they have inserted other miscellaneous provisions that have never appeared in previous drafts.’”

An expanded and in-depth discussion of some of the details of the SRA proposal, which were highlighted yesterday by Rep. Moran, can be heard here (MP3-10:18). This detailed discussion included explanations from Under Sec. Miller as well as from Bill Murphy, the Risk Management Agency Administrator.

Meanwhile, Reuters news reported yesterday that, “A comparative handful of U.S. farms — 4,000 — enrolled this year in a new federal program designed to protect grower revenue, said a top Agriculture Department official on Thursday.

“Revenue protection is mentioned frequently as the preferable option in the 2012 farm law to succeed traditional crop subsidies, which are triggered by low prices. Revenue programs shield growers from poor yields as well.

“Enrollment in the Average Crop Revenue Election, a farm program option, is far below projections. Farm groups say the revenue protection plan is too complex and needs revision.”

(FarmPolicy.com Note: Rep. Blaine Luetkemeyer, R-MO, inquired at yesterday’s hearing as to why the participation rate in ACRE was low, to listen to a portion of this discussion, click here (MP3-2:32)).

Yesterday’s Reuters article added that, “It will be mid-August by the time USDA opens enrollment in the land-idling Conservation Reserve, said Jonathan Coppess, head of the Farm Service Agency. Rep. Jerry Moran, Kansas Republican, said a late-summer signup would put winter wheat growers at a disadvantage.

“Some 31.3 million acres are enrolled in the reserve at present. Contracts on 4.5 million acres expire on Sept 30. Maximum enrollment is 32 million acres.”

In other Farm Bill related developments from yesterday, Reuters reported that, “Brazil on Thursday suspended retaliatory measures against U.S. goods over a cotton subsidy dispute, freezing until 2012 a long-running row that has demonstrated the South American nation’s trade clout.

“The government said a deal agreed between the two countries in April to head off up to $829 million in World Trade Organization-sanctioned retaliation against U.S. goods would stay in place until a new U.S. farm bill is passed.”

The Reuters article explained that, “Under the deal, the United States pledged to make some short-term tweaks to its export credit guarantees and give Brazil about $147 million a year in damages for a ‘technical assistance’ fund for cotton growers.

“‘Brazil doesn’t rule out taking countermeasures at any moment,’ Roberto Azevedo, Brazil’s envoy to the World Trade Organization, told reporters in Brasilia. ‘It is just a suspension of this right.’

“He said Brazil could retaliate at any time if the United States did not uphold the agreement, but added that Brazil had no interest in retaliating.”

Dow Jones news reported yesterday (article posted at DTN, link requires subscription) that, “The Brazilian government’s Foreign Trade Commission announced Thursday that an agreement has been reached with the U.S. government on ways to avoid trade retaliation in a case involving alleged U.S. subsidies to cotton farmers.

“In a written statement, the panel, also known as Camex, said: ‘The agreement does not represent a final solution to the problem, but it does set parameters for a final settlement and foresees the gradual and substantial reduction in the harm done by U.S. farm subsidies.’

“The statement indicated that Brazilian officials view, with optimism, the prospects for substantial reductions in U.S. cotton subsidies when the U.S. farm subsidy program again comes up for congressional review in 2012.”

Separately, Sec. of Ag. Tom Vilsack was a guest last week on the Market to Market television program. As part of a discussion on the program, Sec. Vilsack stated that, “I certainly have gotten an earful as I’ve traveled around the country about the disparity between folks who are struggling and folks who are doing quite well and that gets you into the whole discussion of payment limits. I think the Chairman wants to avoid that. I think he wants to get into a system where that’s not the discussion and candidly I want to get in a position where people around this country understand and appreciate that a farm bill is not just simply about subsidies for farmers. It is about maintaining food costs that allow you to have ten to fifteen percent more of your paycheck to spend as you wish as opposed to spending it at the grocery store. I don’t think there’s a full appreciation for that in the rest of America.

“In terms of priorities I think it’s not just a farm bill. I think it’s a rural development including production agriculture but also recognizing that there are probably 58 million people who live in rural America that aren’t necessarily on the farm and they want their schools, their communities to be vibrant great places so they can say to their kids you can pursue the American dream here. You don ‘t have to go to the city or some other place. You have an opportunity right here to make a difference to be a leader.”

In other executive branch news, DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The Obama administration’s initiative to examine antitrust issues in agriculture will not focus on the Capper-Volstead Act, Agriculture Secretary Tom Vilsack said Wednesday.

“The 1922 law allows farmers to organize in cooperatives without violating antitrust laws. Vilsack made his comments before the National Council of Farmer Cooperatives, saying concern about the act had been ‘unfortunately generated’ by statements by other administration officials.

“Earlier this year, USDA and the Justice Department began a series of workshops to address small-farm group concerns that mergers of farm suppliers and commodity buyers have reduced competition at both ends of the food supply chain, resulting in higher input costs and lower sale prices. USDA and Justice have scheduled a workshop in Madison, Wis., on June 25 to examine concentration in dairy, an industry in which co-ops are big players.”

In other executive branch farm related developments, Timothy B. Wheeler reported yesterday at the Baltimore Sun Online that, “Federal officials are launching efforts today in Maryland, Pennsylvania and Virginia to enlist farmers in targeted watersheds in a concerted effort to curb pollution running off their land.

“The upper Chester River, a 23,000-acre swath of mostly rural land on the Eastern Shore, is the Maryland watershed targeted for a special effort by federal, state and nonprofit agencies.

“The aim of the ‘showcase watersheds,’ a U.S. Department of Agriculture official said Thursday, is to demonstrate that voluntary cooperation, aided by generous infusions of federal funds, can help restore degraded bay waters without the need for further government regulation of agriculture.”

June 15

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Crop insurers are upset that USDA officials are not yielding on contract negotiations that would reduce payments to insurers by $6 billion over 10 years, but the leader of a trade association for crop-insurance companies appears resigned to the fact payment cuts are coming.

“Bob Parkerson, president of the National Crop Insurance Services [NCIS], said USDA officials have informed insurers that the new standard reinsurance agreement is USDA’s final offer.

“‘I’m going to have to tell you at this point I believe this is the contract we are going to have to accept,’ Parkerson said, ‘or not accept, up to the individual company.’”

Mr. Clayton added that, “Companies and NCIS are still going through various elements of the contract proposal, which Parkerson said has several provisions that will place more demands on companies, such as new insurance products that require computer upgrades and training costs.

“‘This is going to take a pretty good amount of analysis to figure out what this is going to cost us,’ Parkerson said.

“Insurers will have to sign a contract with USDA to sell crop insurance in 2011. NCIS will meet with officials from USDA’s Risk Management Agency on Friday in Overland Park, Kan., to discuss the latest contract draft and the technical demands such as training, claims adjustment and verification that USDA expects from the companies. Parkerson said companies hope to talk with USDA officials about the overall cuts being proposed as well.”

Bloomberg writer Alan Bjerga reported yesterday that, “The president of the largest U.S. crop-insurance trade group said a government proposal to spend $6 billion less to subsidize farmer policies over 10 years ‘creates new financial risks’ and undermines the industry.

“‘Our concerns for the financial stability of this 30-year program were not adequately addressed’ by the U.S. Department of Agriculture plan unveiled last week, Bob Parkerson, the head of National Crop Insurance Services, an Overland Park, Kansas- based representative of more than 60 insurers, said in an e- mailed statement. The department, which subsidizes industry costs, is meeting with companies in Overland Park, Kansas, on June 18.”

Yesterday’s NCIS press release added that, “The [crop insurance] industry is still experiencing the $6.4 billion cuts that came out of the 2008 Farm Bill and will soon face nine months of no income as part of these cuts.

“‘Now we have to figure out how an additional $6 billion decrease will not seriously undermine the industry’s ability to effectively deliver this program,’ said Parkerson. ‘Unfortunately, USDA seems to have lost sight that this program is in place to provide a sound financial risk management tool for America’s farmers and ranchers.’

“Some of USDA’s proposed financial terms are far more complex than would appear from its side-by-side comparison released June 10th and will take some time to analyze.

“The industry is also disappointed that USDA used a ‘final’ draft to introduce significant terms that did not appear in the first and second drafts, which apparently USDA plans to implement without full industry review and negotiation.”

A news release issued yesterday by the National Farmers Union stated in part that, “National Farmers Union (NFU) President Roger Johnson made the following statement in response to the ‘Improving Nutrition for America’s Children Act of 2010’ unveiled last week by House Education and Labor Committee Chairman George Miller (D-Calif.):

“This draft legislation addresses some of the financial, structural and bureaucratic barriers schools face when providing children with nutritious, safe food by funding competitive grants for farm-to-school programs and school breakfast programs, establishing nutrition standards for foods sold outside of the cafeteria, providing year-round meals for children in low-income rural areas, using existing income data to directly certify children who qualify for free and reduced meals, and increasing the federal reimbursement rate for school meals.

“As congressional leaders continue to work to identify offsets for increases in child nutrition funding, I encourage them to retain all current farm safety net funding to ensure that America’s farmers can continue to provide our nation’s children with the safest, most abundant food supply in the world.”

A statement issued recently by the International Dairy Foods Association President and CEO, Connie Tipton, noted in part that, “On behalf of the members of the International Dairy Foods Association, I commend the board of directors of the National Milk Producers Federation for its commitment to long-term dairy policy change as outlined in its ‘Foundation for the Future‘ plan approved yesterday. Many of the elements of the plan are forward-looking and recognize the need to change existing dairy policies.”

The statement added that, “Unfortunately, not all of the elements of the plan are forward-looking. The plan’s Dairy Market Stabilization Program, which is intended to increase prices and limit growth, will have dire consequences for our industry and consumers. Supply management will decrease demand for dairy products and dairy ingredients, and will drive low-cost non-dairy substitutions in foods and restaurants across the country. Supply management will limit industry growth at a time when demand for U.S. dairy exports is growing, and we have a unique opportunity to innovate and expand to serve global markets.

“As an industry we are much more effective when we work together, and IDFA is pleased that there are many areas where we can work together with NMPF in this plan. We look forward to continued collaboration that will eliminate the programs that prevent our markets from working, provide a better safety net for producers and make sure everyone in the milk market has the risk management tools needed to manage price volatility.”

Dow Jones writer Todd Martinez reported yesterday that, “U.S. officials are optimistic they can reach an agreement with Brazil’s government in a dispute over cotton subsidies by a June 22 deadline and avoid trade retaliation.

“‘Negotiations are going well, thanks to the good faith efforts demonstrated by both countries,’ said Thomas Shannon, the U.S. ambassador to Brazil, on the sidelines of a foreign policy conference in Sao Paulo.”

The article explained that, “The U.S. has already offered $147 million in assistance to Brazil’s cotton industry, a reduction in export loans for U.S. farm goods and recognition that beef from southern Brazil is free from foot-and-mouth disease.

“Contacted by Dow Jones Newswires, a Brazilian Foreign Ministry spokesman declined comment on the cotton talks, saying only that negotiations were ‘ongoing.’

“Shannon emphasized that the dispute did not reflect any worsening of U.S.-Brazil ties, calling it ‘a complex intersection of international obligations and domestic realities.’”

Yesterday’s article pointed out that, “On Thursday, the Brazilian Senate stood its ground on the issue, approving a resolution enabling Brazil to renege on intellectual property agreements, pending the outcome of the negotiations. That cleared the way for the government to impose the $238 million in eventual patent and services penalties against the U.S.

“Jon Hueneman, a former official in the U.S. Trade Representative’s Office, urged pragmatism by both countries, advising the U.S. to respect the WTO ruling and Brazil to understand political realities within the U.S. ‘Brazil will not get everything it wants on this issue and will forgo a valuable opportunity for a more constructive trade relationship [if it proceeds with retaliation],’ he said.

“The cotton dispute has emerged as a crucial episode that could shape the future of the U.S.-Brazil relationship, said Hueneman. ‘A solution would establish a working relationship and get [Brazil and the U.S.] on a better footing to overcome broader obstacles in trade negotiations, especially in agriculture,’ he said.”

An update posted yesterday at the National Sustainable Agriculture Coalition (NSAC) Online stated that, “NSAC has issued a new five page fact sheet on the Conservation Stewardship Program (CSP). The fact sheet reflects changes to the program made under the final rule issued on June 3, 2010 by USDA as well as other administrative changes affecting the current sign up now under way. Farmers and ranchers wanting to enroll in the Conservation Stewardship Program have until June 25th to file a simple application form with their local NRCS office.”

June 14

Carolyn Lochhead reported on Friday at the San Francisco Chronicle Online that, “Rep. George Miller enlisted the help of San Francisco chef Charles Phan as he proposed legislation Thursday that would spend $8 billion more on school lunches and other food programs in the next decade, opening a tug-of-war between farm subsidies and child nutrition as tight budgets force Congress to choose between the two.

“‘One of our goals is to adopt one school and start cooking, because what I see in the school program is so bad, it’s just amazing,’ said Phan, the executive chef of Slanted Door and other restaurants in San Francisco and the father of three young children who attend schools in San Mateo.”

Last week’s article explained that, “The enlistment of chefs is part of first lady Michelle Obama’s Let’s Move campaign against childhood obesity, which is quietly transforming U.S. food policy.

“The coming fight over funding nutrition programs will pit Miller, a liberal 18-term Martinez Democrat who chairs the House Education and Labor Committee, against Collin Peterson, a conservative Minnesota Democrat who chairs the House Agriculture Committee and is a champion of federal aid to corn, sugar, dairy, rice and other commodity crops.

“House Speaker Nancy Pelosi, a close ally of both men, will have to mediate. The three met in her office Wednesday. Because Miller’s committee has yet to come up with cuts to match his proposal to spend an additional $8 billion, it would have to convince other committees, particularly Peterson’s, to help fund the plan.”

The article pointed out that, “Miller’s bold opening move would nearly double the extra money for child nutrition approved in March by the Senate Agriculture Committee whose chair, Sen. Blanche Lincoln, an Arkansas Democrat, is the daughter of a rice farmer.

“Lincoln chose to add $4.5 billion for child nutrition to the Senate version of the bill by cutting money that helps farmers improve the environment, leaving crop subsidies unscathed. Miller supports Lincoln’s approach but said cuts in farm subsidies are also under discussion.

“Miller must find savings somewhere to get the increase he wants for school lunches. The offsetting cuts can come from anywhere, but farm subsidies are an obvious target because they enable companies to produce low-cost, high-calorie foods that are blamed in part for the nation’s obesity epidemic.”

A related editorial on this issue was also posted on Friday at the San Francisco Chronicle Online. The opinion item noted in part that, “Federal support for school-lunch programs should be about assuring healthy meals for students, not subsidizing agribusinesses.

“Rep. George Miller, D-Martinez, is on the right track with legislation that would increase child-nutrition programs by $8 billion over the next 10 years and require stricter nutrition standards for school meals – as well as food sold in vending machines and so-called a la carte lines.”

“One potential way to pay for an increase of the magnitude proposed by Miller would be to reduce federal crop subsidies – a step resisted by the Senate,” the opinion item said.

Marc Heller reported on Saturday at the Watertown Daily Times Online (New York) that, “The largest dairy farmers’ organization called Friday for the restructuring of key parts of the federal safety net that protects farmers from falling milk prices.

“Changes envisioned by the National Milk Producers Federation, which represents farmers’ bargaining cooperatives, would steer federal policy away from a decades-long focus on milk prices and turn instead to the imbalance farmers sometimes face between how much they receive for milk and how much they have to pay for feed to produce it.

“The NMPF will lobby Congress to include the proposal in the 2012 farm bill, a five-year measure that outlines food and farm policy. But the plan is such a sharp departure from current policy that it is bound to generate a spirited discussion both within the industry and on Capitol Hill.”

The article indicated that, “The centerpiece of the proposal, which NMPF officials outlined in a conference call with reporters, is an insurance program that would pay farmers when feed costs approach the price farmers receive for milk. But it includes other measures, such as expanding dairy exports, ending government purchases of excess dairy products through the milk price support program, and reducing farmers’ checks when milk supplies exceed demand.

“‘We were not setting out to disrupt the current dairy marketplace,’ said NMPF Chief Executive Officer Jerome Kozak, who said payments will kick in only when farmers face serious financial peril. ‘It’s not intended to give a payment out every year, and it’s not intended to give a payment when it’s not needed.’”

Bob Meyer reported on Friday at Brownfield that, “The National Milk Producers Federation releasing more details of their Foundation for the Future plan for federal dairy policy. NMPF president and CEO Jerry Kozak, Senior Vice President and CWT Chief Operating Officer, Jim Tillison and Senior VP of Strategic Initiatives, Jaime Castenada explained the plan to reporters on Friday.

“The plan would replace the federal dairy component price support system and the Milk Income Loss Contract with a Dairy Producer Margin Protection Program. Operated by the Farm Service Agency, the program would calculate the margin of milk-over-feed cost on a model dairy farm enterprise including for all milk cows, hospital cows, dry cows and replacement calves and heifers. The calculation will be done monthly using corn, soybean meal and alfalfa hay.

“Margin coverage will be available on two levels, base at no cost and supplemental for a premium. It will cover all producers regardless of size or region. Support will only be for base production, it would not cover expansion.”

The Brownfield link also included an audio recap of the dairy policy proposals.

Meanwhile, Marc Heller reported on Friday at the Watertown Daily Times Online (New York) that, “A dairy-industry-led effort to pay farmers to kill their cows rather than milk them appears to be coming to an end, and dairy farmer groups are not pushing for a government-sponsored herd-retirement program in the 2012 rewrite of federal farm policy.

“The National Milk Producers Federation will announce today that it is reorganizing its Cooperatives Working Together program, which pays for herd retirements and milk exports, to steer away from herd reductions and toward other approaches to support farmers. And cooperatives have been moving away from government-backed herd reduction as a way to manage the nation’s milk supply, said Robert Gray, a lobbyist for the Council of Northeast Dairy Farmer Cooperatives.

“Discussions of federal dairy policy are in early stages, and Congress is only beginning to hold hearings, leaving plenty of time for the political winds to shift. But today’s announcement by the NMPF lays a starting point for talks by the biggest lobbying organization for dairy farmers. Lawmakers generally take the NMPF’s advice as a reflection of dairy farmers’ priorities nationally.”

And Courtney Potts reported on Friday at the Observer-Dispatch Online (Utica, New York) that, “Milk prices are bouncing back from last year’s recession-driven lows, but not quickly enough for some farmers.

“And if nothing changes, New York state could lose 10 percent of its dairy farms over the next six months, county Farm Bureau President Ben Simons said.”

In other dairy related developments, a National Milk Producers Federation (NMPF) news release from Friday stated that, “[NMPF] commends the U.S. Environmental Protection Agency (EPA) for taking a sensible approach to regulating dairy farms under the Spill, Prevention, Control, and Countermeasure (SPCC) regulations by pushing back the deadline for farms’ compliance with those regulations.

“In a letter to NMPF dated June 9th, the EPA committed to finalizing the SPCC exemption for bulk milk storage ‘as expeditiously as possible …to have that process completed by early 2011.’ In addition, EPA will be extending the compliance deadline for dairy producers until that time.”

The U.S. Department of Agriculture’s Economic Research Service (ERS) released a report on Friday titled, “The Farm Act’s Regional Equity Provision: Impacts on Conservation Program Outcomes.”

An ERS summary of the report stated that, “The 2002 and 2008 Farm Acts increased funding for conservation programs that provide financial assistance to farmers to implement conservation practices on working farmland. Along with seeking cost-effective environmental benefits, these programs have a goal of spreading conservation funding equitably across States. The 2002 and 2008 Farm Acts strengthened this allocative goal by setting a minimum threshold for conservation funding for each State—one that exceeds historical funding for some States—for enrolling agricultural producers in specified conservation programs. This study uses conservation program data to examine evidence of the impacts of the Regional Equity provision of the 2002 Farm Act, and explores the tradeoffs that can occur among conservation program goals when legislation gives primacy to fund allocation. The study found that cross-State shifts in funding reduced the acres receiving conservation treatment for many resource problems, but increased the net economic benefits from treatments on some of them. Overall impacts on the types of producers enrolled were small.”

Gary Adams, the vice president of economics and policy analysis for the National Cotton Council of America, penned a letter to the editor in Saturday’s Washington Post, which noted in part that, “The June 3 editorial ‘Cotton brawl’ was quick with inflammatory adjectives but short on facts.

“The editorial cited historical cotton program spending but failed to note that spending on the disputed programs will likely be zero for the 2010 crop. The editorial did not mention the export credit programs, even though the vast majority of possible trade retaliation is associated with these programs.

“By negotiating a modest temporary fund with Brazil that is confined to capacity building and technical assistance projects, the United States has protected manufacturing jobs. And it has suspended retaliation while Congress works to legislate program changes as part of the 2012 farm bill.”

Marc Heller reported last week at the Watertown Daily Times Online (New York) that, “The federal government is moving too slowly to implement biomass energy programs created in the 2008 farm bill, some lawmakers say.

“But the delay is giving Rep. William L. Owens, D-Plattsburgh, more time to plead the case of companies that could turn Northern New York wood into fuel — but have been shut out of the program so far.

“At issue are a few programs Congress created in the farm bill, for which the U.S. Department of Agriculture has yet to issue final regulations, a key step to putting the programs fully in place. Some of the proposed regulations are still in public comment periods and the Obama administration is still reviewing comments.”

Mr. Heller noted that, “Mr. Owens said Wednesday that the program as envisioned at the USDA is not available to companies that are vertically integrated, or control several points in the supply chain. As a result, he said, logging companies in the Adirondacks may have a hard time participating.

“The congressman, who attended an agriculture subcommittee hearing on biomass programs Wednesday, [related news release, FarmPolicy.com audio replay] said his office will write to the Farm Service Agency, asking officials to be less restrictive in deciding what companies are eligible.

“In doing so, Mr. Owens is seizing on the USDA’s slow progress in implementing the programs. Lawmakers on the Agriculture Committee grilled the department’s top official on rural development at Wednesday’s hearing, asking why the administration took until this spring to move on the regulations.”

The article stated that, “‘Something had to go in order. Something had to go first, and something had to go last,’ said Cheryl Cook, deputy undersecretary for rural development, who added that the department has limited staff.

“‘You can’t multitask?’ asked the subcommittee’s ranking Republican, Rep. Robert W. Goodlatte, R-Va.

“Ms. Cook disagreed that the rules for the programs have been held up, something suggested by the panel’s chairman, Rep. Tim Holden, D-Pa. Mr. Holden blamed the White House Office of Management and Budget, which he said delayed several regulations for a month.”

And in related news, Rep. Adrian Smith (R-Nebraska) delivered a one-minute floor speech on the 2008 Farm Bill Energy Title given on the morning of June 10th. To view the presentation from Rep. Smith on this issue, just click here.

An update posted recently at Agri-Pulse Online included a link to an audio interview that Agri-Pulse Senior Editor Stewart Doan had with Ag. Sec. Tom Vilsack.

An overview of the Agri-Pulse interview noted that, “Sec. Vilsack makes a return appearance on Open Mic to explain how the Obama Administration is putting its mark on USDA. The former Iowa Governor, who some say wants to be the ‘Czar of rural America,’ describes his agency as a ‘multi-functioning’ department where agriculture is viewed through a broader rural lens. The Secretary explains why he considers rural development to be an important part of the farm safety net. Vilsack also discusses what the federal government should do to ensure the biofuels industry reaches its full potential and talks about this USDA’s strategy for improving farm exports, including expanding U.S. beef shipments to Japan, and for creating a more viable crop insurance program via a new standard reinsurance agreement, which he confidently asserts will be in place by July 1.”

To listen to a clip of the interview in which Sec. Vilscak talks about rural development, just click here (MP3-2:15).

And to listen to Sec. Vilsack’s comments regarding crop insurance and the Standard Reinsurance Agreement (SRA), just click here (MP3-2:09).

Additionally on the USDA-SRA issue, a news release from Friday by the Crop Insurance Professionals Association indicated in part that, “The U.S. Department of Agriculture (USDA) released its third draft of the Standard Reinsurance Agreement (SRA) yesterday, and with it, the latest set of cuts to crop insurance.”

“From the beginning of this process, we have stressed the importance of putting the farmer first, and, unfortunately, a $6 billion hole in the farm safety net could harm farmers, harm rural economies, and cost jobs.

“Whether or not crop insurance companies will accept the latest proposal is unclear, but what is clear is that agents remain focused on protecting farmers in this process. We continue to believe that the focus of the SRA should be on making policies more accessible while expanding coverage. We remain hopeful that positive changes to the SRA can still happen.”

“The $6 billion proposed cut is nearly three times as large as one overwhelmingly rejected by Congress in the 2008 Farm Bill debate for being too crippling to the safety net.”

June 11

Bloomberg writer Alan Bjerga reported yesterday that, “Wells Fargo & Co., Ace Ltd. and other companies that provide crop insurance to farmers will receive $6 billion less in federal funding over 10 years under a proposal by the U.S. Department of Agriculture.

“Payments for administrative costs subsidized by the government would be capped at $1.3 billion next year with the limit rising to $1.37 billion in 2015, according to the final draft of the USDA’s offer to companies. Insurers have 30 days to negotiate technical details before the plan is adopted, said Bill Murphy, head of the department’s Risk Management Agency.

“The plan, the result of negotiations that began in December, ensures ‘a fair and reasonable return’ for companies while reducing profits the USDA considers excessive, Agriculture Secretary Tom Vilsack told reporters today in Washington. ‘We have the framework for a stronger program.’”

Yesterday’s article added that, “Using money previously set aside for farmers for general deficit reduction is disappointing, said David Graves, manager and secretary of the American Association of Crop Insurers, an industry group based in Washington. Graves would not comment on whether companies would accept the plan.

“‘We’re extremely concerned that agriculture spending is going to take a hit,’ he said.

“Vilsack said he expects companies to accept the proposal, in order to be eligible to offer government-supported policies for 2011 crops. Companies ‘were willing to accept that there needed to be changes’ in response to concerns about excessive profits, he said.”

AP writer Steve Karnowski reported yesterday that, “The U.S. Department of Agriculture released the final draft of a new crop insurance plan Thursday that it said will save the federal government about $6 billion over 10 years.

“Agriculture Secretary Tom Vilsack said $4 billion of the savings would go toward deficit reduction, while $2 billion would be used to expand farm risk management programs and the popular Conservation Reserve Program, which pays landowners to take environmentally sensitive land out of production and convert it into wildlife habitat.”

Philip Brasher reported yesterday at the Green Fields Blog (Des Moines Register) that, “Although crop insurance companies and agents have strongly criticized some of the proposals, USDA officials said they expect to make only small changes to the plan being submitted to the companies Thursday. Industry officials and congressional staffs were getting their first look at the plan this afternoon. Key farm-state lawmakers, including Sen. Charles Grassley, R-Ia., have expressed opposition to earlier drafts, citing its impact on agents and impact on spending levels for the next farm bill.”

Mr. Brasher explained that, “Iowa has more at stake than any other state. Iowa farmers took out nearly 159,000 policies in 2009 worth $9.2 billion in total liabilities, the most of any state. There are more than 7,000 agents in the state licensed to sell the policies, and another 700 people are employed by the companies in underwriting, billing and other jobs. Four of the 16 companies that handle the insurance nationwide are based in Iowa: John Deere Risk Protection Inc. and Rain and Hail LLC in Johnston, Farmers Mutual Hail Insurance Co. in West Des Moines, and Agro National LLC of Council Bluffs.”

And Dow Jones news reported yesterday (article posted at DTN, link requires subscription) that, “The Crop Insurance Professionals Association, a group representing agents, called the cuts too deep and warned they would threaten agents’ ability to provide service to farmers.

“USDA Under Secretary Jim Miller dismissed the criticism and stressed that companies often ‘undermine their own financial stability’ by paying out excessive commissions to agents.

“Bill Murphy, administrator for USDA’s Risk Management Agency, said that agent commissions have risen to ‘ridiculous’ levels in big farming states like Iowa and Indiana.”

A news release from earlier this week by the National Milk Producers Federation stated that, “The National Milk Producers Federation’s Board of Directors overwhelmingly agreed today move forward with a variety of changes in federal dairy policies that will better protect dairy producers, and position them more favorably in an increasingly volatile global marketplace.

“The NMPF Board voted Wednesday to support the package of concepts contained in the Federation’s approach to reforming dairy policy entitled ‘Foundation for the Future.’ NMPF President and CEO Jerry Kozak said that package will be used as the basis for the future direction of the dairy provisions in the next Farm Bill, or in some other form of federal legislation that Congress may consider in the future.”

In part, the release added that, “The Federation’s proposal to revamp the federal safety net involves creating an insurance program tied to the margin between the national average cost of feed, and the national average all‐milk price. After farmers choose to enroll in the base level of the Dairy Producer Margin Protection Program at no cost to them, they would receive indemnity payments during periods when their margins are severely compressed, as they were for most of 2009. In addition, farmers would have the option of purchasing supplemental coverage to protect a higher margin level between feed costs and milk prices.”

In other Farm Bill related developments, Jane Black reported yesterday at The All We Can Eat Blog (Washington Post) that, “With Food Network star Rachael Ray at his side, Rep. George Miller (D-Calif.) unveiled a bill on Thursday that proposes about $8 billion in additional funding over 10 years for child nutrition programs, including school breakfast and lunch.

“The programs have been the main focus of Michelle Obama’s high-profile Let’s Move campaign, which aims to end childhood obesity within a generation. About one-third of American children are overweight or obese, and, in difficult economic times, a growing number of children depend on school meals as a key source of healthful food.

“The bill, dubbed the Improving Nutrition for America’s Children Act of 2010, (pdf) is similar to a Senate bill that is awaiting a floor vote. It mandates that the Department of Agriculture develop strict nutrition standards for foods sold in vending machines and in so-called a la carte lines. It also requires that only low-fat milk be sold in the lunch line.”

Both Sec. of Ag. Tom Vilsack and Sen. Ag. Committee Chairman Blanche Lincoln issued statements yesterday on this development.

June 9

Randy Hascall reported last week at the Argus Leader Online (South Dakota) that, “Input collected during a hearing in Sioux Falls will be part of the testimony that will be used to craft the nation’s next farm bill.”

The article added that, “Gary Duffy, president of the South Dakota Corn Growers Association, said the Federal Crop Insurance Program is the most important program for all producers.

“‘Crop insurance is the greatest risk management tool producers have. No one knows what Mother Nature is going to do and the risk she brings to our industry,’ he said.

“‘Crop insurance is efficient, effective and a program that works for all crops.’”

Meanwhile, a news release from yesterday by the National Sustainable Agriculture Coalition stated that, “A panel of farmers told a Senate Agriculture Committee hearing room full of Congressional staffers today that mid-sized farms connected to local and regional marketing chains offer a tremendous engine for economic growth in rural communities.

“‘Mid-sized farms can produce at a scale and with an agility that is attractive to institutional and wholesale markets particularly when those markets are differentiating their products as local, organic, grass fed or family farm raised,’ said Ferd Hoefner Policy Director at the National Sustainable Agriculture Coalition (NSAC) one of the sponsors of the briefing. ‘These value based supply chains provide much better income opportunities for mid-sized farmers than the raw commodity market.’”

A news release issued on Monday by Idaho GOP Sen. Mike Crapo stated that, “A popular federal nutrition program does not offer white potatoes to women, infants and children, and Idaho Senators Mike Crapo and Jim Risch want that changed. The Idahoans are part of a bipartisan group of 19 Senators who have written U.S. Agriculture Secretary Tom Vilsack, asking him to include potatoes with other fruits and vegetables offered as part of the federal government’s Women, Infants and Children (WIC) Program. The WIC Program makes qualifying foods available for low-income and nutritionally at-risk pregnant women and their infants and children through the U.S. Department of Agriculture (USDA) nutrition program.”

June 7

The Washington Insider section of DTN indicated on Friday (link requires subscription) that, “Even though the 2012 Farm Bill debate is officially far in the future, there is considerable talk about the context — a coming budget crunch, the need to hold programs within the spending baseline and possible policy changes that could make programs more useful in modern, volatile markets. The House ag committee has held several hearings already this year, and this week Senate Ag Committee Chair Blanche Lincoln, D-Ark., announced that her panel would follow suit. Her first hearing will be in Washington June 30.”

The DTN item added that, “And, certainly, politics is never far from the minds of any Congressional or administration leader in election years. For example, House Ag Committee Chairman Collin Peterson, D-Minn., took pains to say nice things to the press about Secretary Vilsack recently, in spite of the fact that he has often been quite critical of administration ag and climate change policies.”

“Peterson then took Vilsack’s side in the issue of USDA’s image, and whether USDA and Secretary Vilsack effectively represent production agriculture. Chairman Peterson commented that he had heard that, ‘But I’m not sure that’s a problem. These guys need to calm down a bit. It’s not all about them. I sponsor a local food conference in my district every year. There’s a big market for local foods. I’m all for it. There’s plenty of room. This is not anything against commercial agriculture. There’s a market there and people want to fill that market there. Great! Organic is fine and there’s room for all of this. It is not one against the other.’”

Friday’s item noted that, “So, the current impression is that the administration and the Congress have sharply differing views on farm programs, trade, the importance of commercial agriculture and rural development and other issues, but, rather than emphasize these differences just now, they are sending the ag committees out to the countryside and holding hearings to demonstrate support for a relatively few issues — effective policies, stronger rural development, more effective conservation programs and bio energy. At the same time, the administration is running its listening sessions on ag competition.

“In this line-up, Chairman Peterson and not Secretary Vilsack is doing most of the tough talking — with his criticisms of producers for not recognizing the need for change, a posture that may not carry much risk for him because of his record as a reliable ag supporter, and possibly because many in his audience believe what he is saying about the need for change is true.

“So, the current hearings appear to have very high levels of political content and likely will have little eventual impact on the difficult task of re-structuring and re-authorizing U.S. ag programs in the 2012 bill. Still, they should be watched carefully because they are setting an important stage for the later debate.”

Meanwhile, Linda Vanderwerf reported on Saturday at the Inforum Online (North Dakota) that, “Revision of the current farm bill will begin next May, but Peterson, chairman of the House Agriculture Committee, said he wants to get started early. Peterson was in Willmar on Friday for a series of meetings with local business leaders.”

The article indicated that, “‘I think we need to change,’ Peterson said. He hopes to find ways to simplify farm program, in many areas. Some ideas are changing the 85-year-old dairy price support program and improving programs for cotton and rice farmers.

“In addition to eight hearings in the past two weeks, he said, he has also met with commodity groups ‘in order to jump-start the discussion.’

“The early start also helped him keep politics out of the discussions, Peterson said.”

“‘If you’re going to make big changes, … it needs to be bipartisan if it’s going to work,’ [Peterson] said.”

Dan Looker reported on Friday at Agriculture Online that, “A stock market that fell more than 300 points Friday and pressured new crop corn down a dime [related article] didn’t make a very good backdrop when Agriculture Secretary Tom Vilsack stopped in Iowa Friday to tout rural economic development as an engine of economic growth.”

“Vilsack was joined by Iowa Governor Chet Culver and Representative Leonard Boswell, both Democrats facing tough races for re-election this fall.”

Mr. Looker noted that, “Vilsack was also asked if the USDA’s new emphasis on rural development is at the expense of its traditional farmer constituency.

“‘Not at all,’ Vilsack said, pointing out that most farms, especially mid-sized operations, rely heavily on off-farm jobs. ‘It’s important for us to have a vital rural economy to help these mid-size farms.’”

Also on Friday, Sec. Vilsack held conference call news briefing with agricultural reporters, Sec. Vilsack joined the tele-conference from Iowa.

As part of this briefing, a Daily Radio News Service item from USDA on Friday indicated that, “Agriculture Secretary Tom Vilsack says he is not ignoring producers at all in his quest to revitalize rural America.”

The following exchange also took place in Friday’s briefing: “Question: Secretary Vilsack, during the time of your rural tour and all the states that you visited there, did you notice a growing realization that economic — rural economic development is much more than providing funds to farmers through the farm bill? Did you see a growing acceptance of that? Or is there still some perhaps division that — you know, that conventional farming is the route to success for rural America?

“SEC. VILSACK: Oh, I think it’s a combination. I think there’s a recognition that at the core is production agriculture and the success of our farm families. Obviously, if the 2.2 million farmers in the country today and the ranchers today are being successful, if their bottom lines are improved, that obviously helps to stimulate the local economy because those folks will purchase items that will help small businesses that are located in their area.

“I think we’re seeing, however, a partnership, if you will, between production agriculture and rural development in the sense that many farm families today require off-farm income in order to keep the farm, in order to have a comfortable standard of living. And so it is necessary and important for those farm families for us to do a better job in rural development, and try to create better-paying jobs in rural areas.”

And yesterday, Sec. Vilsack was a guest on C-SPAN’s “Newsmaker” program where he also appeared from Iowa.

During this interview, Sec. Vilsack was asked again about the intersection of production agriculture and rural development: “Question: Mr. Secretary, you talked about the administration creating a different framework for relating to rural America, and revitalizing the economy. One of the things that some lawmakers have criticized you for is too much emphasis on rural economic development, not enough on productive agriculture. How do you respond to that?”

To listen to a portion of Sec. Vilsack’s answer from yesterday’s C-SPAN program, just click here (MP3-1:49).

In a separate part of yesterday’s C-SPAN discussion, Sec. Vilsack stated that, “But what we hope to be able to do over the course of the next couple of years is make sure that as the Farm Bill is being crafted, that there is an understanding and appreciation for the linkage between rural development and production agriculture. Between the necessity of making sure we have an adequate safety net for our farmers and recognizing that part of that safety net is a good paying job for many farm families.”

Secretary Vilsack also provided some perspective on the development of the 2012 Farm Bill and what Chairman Peterson has done with respect to the recent round of fields hearings on the legislation, click here (MP3-1:50) to listen to these comments.

On Friday, USDA indicated in a news release that, “The U.S. Department of Agriculture and the Department of Justice today announced additional details regarding the June 25 public workshop in Madison, Wis., which will examine competition and regulatory issues in the dairy industry. The workshop will be held in the Union Theater at the University of Wisconsin – Madison, 800 Langdon Street, Madison, Wisc. 53706.

“This is the third in a series of five joint public workshops. The first workshop was held in March in Ankeny, Iowa, with a focus on row crops and hogs. The second workshop focused on issues in the poultry industry and was held in Normal, Ala., last month.”

Recall also that late last month, the Farm Service Agency indicated that, “Agriculture Secretary Tom Vilsack today announced that the second meeting of the Dairy Industry Advisory Committee will be June 3-4 at USDA headquarters in Washington, D.C., in room 104-A of the Jamie L. Whitten Building. The meeting is open to the public.

“The purpose of the meeting is to discuss farm milk price volatility and dairy farmer profitability, review current USDA programs and federal dairy policy, hear proposals from dairy industry groups and hear comments from the public.”

On C-SPAN yesterday, Sec. Vilsack provided additional insight on dairy policy issues; noting that some of the issues impacting the industry will have to be confronted and addressed well before the 2012 Farm Bill. Additionally, he noted the work of the Dairy Industry Advisory Committee- to listen to his remarks on this issue from yesterday, click here (MP3-1:50).

During yesterday’s C-SPAN “Newsmaker” interview, Sec. Vilsack was also asked about the WTO Brazil cotton case and the agreement reached between the U.S. and Brazil back in April: “Question- American taxpayers will be paying $147 million a year to Brazil because the Agriculture Department’s cotton subsidy program has been ruled illegal by the World Trade Organization (WTO). What are you going to do about that in the next Farm Bill?”

Click here (MP3-2:29) to listen to Sec. Vilsacks’s response on this issue. The clip also includes a brief “Q and A” on farm payment limitation issues.

In other trade related news, Russell Berman reported on Saturday at The Hill Online that, “A bipartisan group of House members is urging President Barack Obama to support approval of the U.S.-Colombia free trade agreement.

“In a letter to the president this week, the group of 39 representatives said the pact would open a new market for American goods and help the administration accomplish its goal of doubling U.S. exports over the next five years. The letter pushed for the agreement, which was signed more than three years ago, to be approved before August, when Colombian President Alvaro Uribe leaves office.”

The issue of specialty crops and the 2012 Farm Bill was also discussed on yesterday’s C-SPAN “Newsmaker” interview with Sec. Vilsack, to listen to a portion of this analysis from yesterday’s show, just click here, (MP3-1:47).

In other news on this issue, the AP reported Friday that, “School lunches that are good for kids — and that kids will actually eat? That’s a job for America’s top chefs.

“First lady Michelle Obama recruited hundreds of chefs gathered on the South Lawn of the White House Friday to join her anti-obesity campaign and help schools serve healthier, tastier meals.”

On Thursday, USDA’s Economic Research Service (ERS) issued a report titled, “Promoting Fruit and Vegetable Consumption: Are Coupons More Effective than Pure Price Discounts?”

An ERS summary of the report noted that, “The U.S. Department of Agriculture administers food and nutrition assistance programs that promote fruit and vegetable consumption. But consumption remains relatively low among program recipients as well as among the general U.S. population. The perceived high cost of produce is often cited as a deterrent to more consumption. This study looks at coupons and price discounts, two methods of lowering the cost of fruits and vegetables, and uses household purchase data and a consumer demand model to examine each method. Coupons influence consumer behavior through a price-discount effect and an informational/advertising effect. Because of this dual effect, the use of a coupon to increase fruit and vegetable purchases may be more effective than a pure price-discount policy or other noncoupon promotion. Assuming a coupon usage rate of 10 to 50 percent, lowering prices through a ‘10 percent off’ coupon would increase average weekly fruit and vegetable quantities purchased by 2 to 11 percent, as compared with a 5- to 6-percent effect for a pure price discount.”

On Friday, the U.S. Government Accountability Office (GAO) released a report titled, “USDA Crop Disaster Programs: Lessons Learned Can Improve Implementation of New Crop Assistance Program.”

A GAO summary of the report stated that, “The U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) provides programs to help farmers recover financially from natural disasters. Congress has historically supplemented these programs with ad hoc programs that pay farmers who experienced crop losses. The 2008 farm bill established a program through 2011 to pay farmers who lose crops. To receive these payments, farmers must purchase coverage under federal crop insurance or the Noninsured Crop Disaster Assistance Program, and receive claims payments for losses. GAO was asked to evaluate (1) how FSA administered the crop disaster programs for losses from 2001 through 2007 and the results of payments under these programs and (2) what lessons FSA can learn from the previous crop disaster programs to manage its new crop disaster program. GAO reviewed statutes, regulations, and guidance; analyzed USDA data; and interviewed USDA officials.”

June 4

Robert Rodriguez reported earlier this week at the Fresno Bee Online that, “With the dairy industry still reeling from one of the worst price drops in years, dozens of farmers gathered Wednesday in Tulare to find a potential solution.”

“Rob Vandenheuval, general manager of the Milk Producers Council in Southern California, told the farmers that their best hope is a bill by Rep. Jim Costa, D-Fresno.”

The article explained that, “The bill — H.R. 5288 — is intended to get rid of the boom-and-bust cycles of the industry by creating a system for controlling the flow of milk.

“Dairy operators want to avoid a repeat of last year, when overproduction and declining export markets led to one of the worst milk price drops in 40 years. An 18-month price skid led to dairy closures throughout the nation. Many of those that survived have been forced to pull equity out of their operations to stay afloat.”

Mr. Rodriguez added that, “As part of Costa’s bill, dairy operators have a choice of maintaining their current levels of milk production — including an allowable growth rate based on market conditions — or boosting production. Those who want to grow would have to pay a fee during their first year of expansion. The fee would be distributed as a dividend to producers who stay within their allowable milk production.

“The bill also calls for the creation of a 30-member dairy producers group to advise the U.S. agriculture secretary on adjustments to the program.”

David Bennett reported on dairy related issues in an article that was posted yesterday at the Delta Farm Press Online. The article, which was in a Q and A format, included analysis from Scott Brown, program director with the Food and Agricultural Policy Research Institute (FAPRI), who testified before the House Agriculture Committee during a May 13 hearing.

In part, yesterday’s article indicated that, “What about the debate for the next farm bill? What’s being proposed so far by politicians and dairymen? And where does FAPRI see that shaking out?

“It does seem it’s very early to be thinking about the next farm bill. But it will be here quickly.

“Almost every supply management proposal I’ve ever heard and discussed in the past 20 or 30 years seems to be on the table. There’s a segment of the industry that has gone through such tough times and is ready for a lot less volatility. That segment is willing to consider supply management proposals to help with that.

“There is another set of proposals — of which the National Milk Producers Federation has been out in front of — that are more insurance-related. How can we help protect a producer’s margin? Those have a lot of interest, at this point.”

Dr. Brown continued his answer by noting that, “Of course, when writing a farm bill, the details matter in terms of exactly how these different programs might operate. We’ll have to wait and see on all the proposals because, quite honestly, I haven’t seen the detail needed for almost any proposal.

“There’s also still a camp that thinks MILC should continue along with current programs.

“So there are some very diverse ideas out there. Trying to pick among them is hard because it’s early in the game. A lot will hinge on where dairy markets move in the next 12 to 18 months. Lower prices would, in my mind, mean greater potential for new policy to be enacted.”

Recall that back in April, FAPRI released an analysis titled, “Dairy Policy Issues for the 2012 Farm Bill.”

The AP reported earlier this week that, “U.S. use of [high fructose corn syrup] found in most soft drinks, cereals and a range of other products dropped 11 percent between 2003 and 2008, the most recent year figures were available.”

The article stated that, “Producers blame the decline on a campaign that argues corn syrup is behind rising obesity in the U.S. and that favors sugar over the refined product, although most nutritionists find little difference between the two. They also accuse the sugar industry of pushing a campaign that has helped sugar refining increase about 7 percent from 2003 to 2008.

“As of 2008, high fructose corn syrup makers produced an average of 53.1 pounds a year for every American, compared with 65.7 pounds of sugar produced for use in the U.S., according to the U.S. Department of Agriculture. The agency doesn’t track consumption.”

“Nutritionally, there’s very little difference between the substances, and people digest them in the same way, said Bruce Chasy, a professor of food safety and nutrition at the University of Illinois.”

In a related item regarding corn, an update posted yesterday at the AgMag Blog (Environmental Working Group) stated that, “Starting this week (June 1) in Washington, DC, the National Corn Growers Association and its affiliated state associations are rolling out a $1 million ad campaign to boost corn’s tarnished image. It’s targeted at lawmakers in the nation’s capital, the people who control corn’s fate in terms both of environmental regulation and the lavish and increasingly hard-to-justify federal subsidies for the ubiquitous crop, which have totaled $73.8 billion in taxpayer dollars since 1995.

“With growing public awareness of the toll that America’s massive corn crop takes on human health and the environment, it’s no mystery why the corn lobby would attempt an expensive PR makeover. The ad campaign makes dubious assertions about corn’s environmental benefits as well as the misleading claim that ‘95% of all corn farms in America are family-owned.’”

Meanwhile, Jane Black reported on in today’s Washington Post that, “It was nearly midnight on a bitter January night when a group of Washington’s most celebrated chefs assembled around a long table at downtown hotspot Brasserie Beck to debrief one another on their recent White House mission. Enlisted by the first lady’s office in her war against childhood obesity, each had eaten lunch at a D.C. public school. The unanimous verdict was fairly predictable: no stars.”

The Post article noted that, “In the months since that meeting, the chefs have taken the first steps to make real the lofty goals of Michelle Obama’s Let’s Move! initiative, which aims to end childhood obesity within a generation. [Todd Gray of Equinox] and [Spike Mendelsohn of Good Stuff Eatery] began teaching cooking classes to hundreds of students and parents, and have helped to plant school gardens. [Cathal Armstrong of Restaurant Eve in Alexandria] established a nonprofit catering service with a mission to create healthful, affordable food for public school cafeterias.

“On Friday, they and hundreds of other chefs will gather at the White House to launch a national adopt-a-school program. Dubbed Chefs Move to Schools, the initiative will draw both the brightest stars of the culinary universe — Rachael Ray, Tom Colicchio and Cat Cora — and the unknown soldiers who staff corporate kitchens, food banks and culinary schools.

“Their mission won’t be easy. The lack of funding (the federal government allocates $2.68 per child per lunch) and equipment (many schools don’t have kitchens) stand in the way of freshly made salads or even hand-cut french fries.”

A news release from USDA yesterday stated that, “Agriculture Secretary Tom Vilsack today announced that USDA published the final regulations governing the Conservation Stewardship Program (CSP). Authorized in the 2008 Farm Bill, CSP is a voluntary program that offers payments to producers who exercise good land stewardship and want to improve their conservation performance.”

A more detailed look at the final regulation was posted yesterday at the National Sustainable Agriculture Coalition Blog.

Georgina Gustin reported yesterday at the St. Louis Post-Dispatch Online that, “When most people think of farmland, they think of open fields lined with long, neat crop rows. But some farmers and researchers picture something else: trees.

“The practice of combining farming and trees, known as agroforestry, has caught the attention of more farmers in recent years. And Missouri, with its ample forests and one of the country’s premier agroforestry research centers, is leading the way into the woods.”

The article explained that, “Agriculture Secretary Tom Vilsack has made components of agroforestry part of his agenda to help revitalize America. And last week, at the U.S. Department of Agriculture’s headquarters, the largest-ever gathering of agroforestry-focused groups came together to discuss the future of their particular brand of farming with the hope of getting more farmers involved.”

Yesterday’s Post-Dispatch update stated that, “Today at the Agriculture Department’s ‘Rural Summit’ being held in Hillsboro, farmers and officials will talk about ‘ecosystem market incentives,’ including carbon offsets, which the agriculture secretary has cited as part of his larger plan to help farming communities.

“[Kathleen Merrigan, the Agriculture Department's deputy secretary] explained that other countries have, either historically or more recently, used agroforestry principles in farming. American farmers, though, have long ignored forests.

“Until recently.

“‘I came to the USDA with this perspective that we have under-thought and under-utilized agroforestry as a strategy for diversification for our farmers,’ Merrigan said. But now, she added, ‘The timing is right.’”

With respect to yesterday’s “Rural Summit,” DTN Ag Policy Editor Chris Clayton reported (link requires subscription) that, “The Rural Summit, which drew about 500 people, was a forum for Secretary of Agriculture Tom Vilsack to highlight USDA’s action plan to improve the economy in rural America through renewable energy, boosting farm income, improving the infrastructure and promoting resources through recreation and conservation. One element Vilsack noted during the meeting, however, was a repeated theme that USDA needs to be a more forceful advocate for agriculture.

“‘I certainly take that to heart, but let me make sure that I push back just a little bit on this,’ Vilsack said, wrapping up the day.”

The article noted that, “‘I think we have to speak with a single voice here,’ Vilsack said. ‘There are too few of us. We’re not really in position to have this consistent and constant battle between production agriculture and sustainable agriculture because all kinds of agriculture are productive and all kinds of agriculture are sustainable.’”

Mr. Clayton pointed out that, “While Vilsack has drawn criticism over not highlighting production agriculture enough, [Darrin Ihnen, president of the National Corn Growers Association] said commodity groups have a good, open relationship with Vilsack that allows them to explain their important issues and clarify what is happening on the farm. That has helped change elements of Vilsack’s message, Ihnen said.

“‘He has definitely clarified that, yes, production agriculture is important,’ Ihnen said. ‘We need all aspects of agriculture, including organics, to work together.’

“Still, Vilsack defended the Know Your Farmer, Know Your Food Program, saying there are a lot of misunderstandings about the program. Know Your Farmer isn’t just about organic production, he said, it’s about a need to reconnect America with the food supply. ‘It isn’t about one type of agriculture, it’s about all of agriculture.’”

The AP reported yesterday that, “Agriculture Secretary Tom Vilsack said Thursday that crop subsidies aren’t going to be enough to help revitalize rural economies and he expects the federal government to do to more to help small town America.

“Vilsack laid out the Obama Administration’s plans at a summit on the rural economy, saying he aims to create jobs in rural areas by pushing for new biofuels plants, installing high speed Internet connections and bolstering tourism.”

Meanwhile, the Co-Chairs of the Rural America Solutions Group, Reps. Frank Lucas (R-OK), Sam Graves (R-MO) and Doc Hastings (R-WA), each released a statement yesterday on the Obama Administration’s failure to address the challenges faced by rural America.

Yesterday’s release pointed to an op-ed that the three lawmakers penned in yesterday’s St. Louis Post-Dispatch (“New federal policies threaten the livelihood of people in America’s heartland.”)

In part, the lawmakers noted that, “Today, rural Americans are in the cross-hairs of several job-killing policies that threaten to destroy their livelihoods. One example is the proposed national energy tax. Democrats in Congress have been arrogantly pursuing an ill-conceived cap and trade program that will slam rural families and businesses with a national energy tax. As a result, electricity prices would skyrocket, gas prices would balloon and thousands of jobs in rural America could be lost forever.”

June 3

The Washington Post editorial board opined today that, “American taxpayers owe Brazil and its cotton farmers a thank-you. That may sound odd, given that the Obama administration recently agreed to pay the Brazilians $147.3 million a year to settle their international trade case against U.S. cotton subsidies. Indeed, the net effect of the payoff is to enable Washington to continue supporting American cotton farmers to the tune of about $3 billion per year. So what’s to be thankful for? Brazil’s case laid bare the truth about the U.S. cotton program: Not only is it a wasteful sop to special interests, but it’s also an obstacle to free and fair trade that needlessly complicates U.S. relations with the rest of the world. Reform — or, better, repeal — is long overdue.”

The Post opinion item added that, “As four House members, Democrats Ron Kind (Wis.) and Barney Frank (Mass.) and Republicans Jeff Flake (Ariz.) and Paul D. Ryan (Wis.), put it in a recent letter to the president, the cotton program is ‘quickly becoming a liability for future trade growth. Instead of effectively reforming our programs, we are electing to pay $147.3 million annually to Brazilian agribusiness so that we can continue to pay around $3 billion a year to large U.S. agribusiness.’”

In related news, H.R. 5439, a bill (text available here) that seeks “To require that United States contributions to the fund established by the United States and Brazil to provide technical assistance and capacity building be offset by reductions in direct payments for cotton producers under the Farm Bill,” was introduced on May 27 by Rep. Flake and Rep. Frank.

According to this summary page, the bill was referred to the House Ag Committee.

Additional perspective on the 2012 Farm Bill was offered in an opinion item earlier this week by J. Scott Angle, the dean and director of the University of Georgia College of Agricultural and Environmental Sciences.

The item, which was posted at the Southwest Farm Press Online, stated in part that, “World population is swelling like a slow-moving tidal wave. In the past decade, the world’s population increased by almost 1 billion. Within the next four decades, experts expect the wave to grow by 50 percent, increasing to 9.4 billion people.”

“U.S. food production must increase, and the Southeast can lead the way. It’s an obligation and opportunity. In 2009, the U.S. imported $72 billion of agricultural products while we exported $98 billion of the same. We can widen the surplus even more.

“But past federal policies haven’t always focused on agriculture in the Southeast. This farm bill should.

“Congress is now holding listening sessions for the new farm bill that will see us through the next five years. Federal farm policy can either promote production in the Southeast, meeting the need, or limit production, putting more of the world’s poor in peril. We must explore every avenue for increasing production to keep more people fed.”

Meanwhile, Philip Brasher reported yesterday at the Green Fields Blog that, “Willie Nelson and Farm Aid are getting behind the effort to development of mid-size farms and regional food systems. Farm Aid released a report today calling for government policies to build distribution systems and other infrastructure needed to support farms selling crops to regional markets. Farm Aid is trying to target farms between the commercial-scale operations that sell into commodity markets and the small farms that market directly to consumers through farmers markets and subscription plans.”

With respect to the Senate Farm Bill hearings, a news release issued by Nebraska GOP Senator Mike Johanns indicated yesterday that, “Sen. Mike Johanns today praised Senate Agriculture Committee Chairman Blanche Lincoln (D-Ark.) for the announcement that the Committee will hold several hearings over the next few months on the reauthorization of the farm bill. Johanns additionally encouraged Chairman Lincoln to hold one of the hearings in Nebraska and outlined the significant role Nebraska plays in American agriculture.”

And Julie Harker reported yesterday at Brownfield that, “Senator Chuck Grassley of Iowa says it’s not too early to start hearings on the shaping of the 2012 Farm Bill.”

“Grassley says it’s too early to say what the safety net will look like in a new farm bill, but it shouldn’t be impacted by what happens in the November elections.

“‘I think it’ll be a bipartisan consensus. And, so, from that standpoint I don’t think it makes much difference which party controls because Farm Bills tend to be very bipartisan.’”

And with respect to the executive branch, DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “Secretary of Agriculture Tom Vilsack and other USDA leaders travel to Missouri on Thursday for what they say will be a broad conversation on the economic policies needed to strengthen rural communities.”

The DTN article added that, “In a posting Wednesday on the White House website blog, Vilsack wrote, ‘I know that this Summit will act as an additional springboard to solidify our vision for working with communities to create income opportunities, generate wealth and build a stronger, more prosperous rural America for generations to come,’ Vilsack wrote. ‘We know that when we meet this goal, we will ensure that rural communities across the country will remain the best places in American to live, work, and raise a family.’”

June 2

Reuters writer Charles Abbott reported yesterday that, “The Senate Agriculture Committee will begin a series of hearings ahead of drafting a new U.S. farm law by examining ‘our most vital resource — our food supply,’ said chairman Blanche Lincoln on Tuesday.

“In a statement, Lincoln announced the decision to call hearings on the law due in 2012 and listed topics for four of them. The first, on June 30 is ‘Maintaining our domestic food supply through a strong U.S. farm policy.’”

Mr. Abbott explained that, “The House Agriculture Committee began farm bill hearings in April. Its chairman says a fundamental switch in farm supports may be necessary. Agriculture Secretary Tom Vilsack says the new law should give priority to rural economic development.

“Lincoln, an Arkansas Democrat, and Georgia Sen Saxby Chambliss, the Republican leader on the Senate Agriculture Committee, favor the traditional approach to farm supports.”

Yesterday’s article added that, “Lincoln initially planned to defer work on the 2012 farm bill until next year. But the committee must be prepared if the House committee, with its rapid start, begins writing a bill in early 2011, said a spokeswoman.”

Meanwhile, the Washington Insider section of DTN reported yesterday (link requires subscription) that, “House Ag Committee Chairman Collin Peterson, D-Minn., is once again conducting his no-holds-barred seminar on agricultural policies and how they should be organized and focused. Even though decisions on the next bill are far in the future, Peterson told the press last week the focus of his nationwide hearings is ‘trying to develop, with the money we have, the best risk-management safety net for the average-sized, commercial family farmer. They’re the ones that need this.’

“In the process he’s laying out several key issues and inviting comment. His audience is not just farmers and other ag insiders, but the urban press, among others.

“His first point is that he insists that the primary target for farm programs is the ‘average sized, commercial family farm.’ Then, he comments that the purpose of farm programs must change to ‘risk management rather than serving as part of farmers’ marketing plans’ — a concept, he thinks, that will require a new way of thinking to design the most effective programs.”

After additional analysis, the DTN item indicated that, “Peterson has a long and well-known record as a careful observer of agricultural policies — but, he also commented to the press about the politics involved in the early work on the next farm bill. In response to press questions regarding the impact on the bill if the Republicans take over the House this fall, he said that while he works well with current ranking Member Frank Lucas, R, Okla., it would be ‘harder’ for Lucas to get a farm bill through ‘because of House Speaker John Boehner’s (R-Ohio) views on farm policy.’

“By contrast, he has the support of House Speaker Nancy Pelosi, D-Calif., he says, and, ‘She likes the fact that we’re going out and taking a look at things because of all the pressure she got the last time,’ he said.”

Beyond specific activity of lawmakers and the Ag Committees, David Bennett reported yesterday at the Delta Farm Press Online that, “If they want to get out in front of the debate, farmers should know that not only is jostling over the next farm bill beginning early, so is the building of coalitions that hope to influence the legislation’s direction.

“Proof of this came during a May Environmental Working Group (EWG) press conference — with representatives of the Center for Rural Affairs and, somewhat oddly, the libertarian Cato Institute in tow — to announce an update of its controversial farm subsidy database.”

The article noted that, “Picking up on a theme being pushed by Agriculture Secretary Tom Vilsack, Chuck Hassebrook, executive director of the Center for Rural Affairs, said federal farm policy hasn’t been effective in revitalizing family farming or rural communities. One reason is ‘essentially, we have a farm program that says ‘the bigger you get without limit, the more money you get from the federal government.’”

And with respect to crop insurance, Mr. Bennett stated that, “Crop insurance is also an EWG target.

“‘Any small decreases in subsidy payments experienced because of high crop prices have essentially been wiped out by increases in the cost of crop insurance,’ said [Craig Cox, head of agricultural programs for EWG]. Those ‘go up when crop prices rise.’”

More broadly on the topic of crop insurance, Dan Verel reported on Monday at the North Bay Business Journal Online (California) that, “Proposed cuts to federal crop insurance totaling nearly $7 billion have the potential to reduce services and various safety measures for farms and wineries throughout the state, particularly in the North Bay, according to insurers and the Crop Insurance Professionals Association.”

“California accounts for less than 5 percent of the nationwide crop insurance program, but the cuts would still be acutely felt by the agricultural sector, according to Jordan Roach, vice president of Mary Roach Insurance Agency in Fresno, which provides crop insurance services to about 40 wine grape growers in Sonoma and Napa counties as well as farms in Marin County.

“‘It’s especially important in California because it’s basically the only safety net we have,’ he said. Whereas much of the corn-growing regions in the Midwest receive farm bill benefits, California farmers and grape growers have only crop insurance, Mr. Roach said.”

June 1

Two weeks after the House Agriculture Committee concluded a round of 2012 Farm Bill field hearings, analysis and speculation regarding the next Bill are beginning to emerge.

DTN editor-in-chief Urban C. Lehner indicated at the Editor’s Notebook Blog on Friday that, “With three years left to run on the last farm bill, [House Ag Committee Chairman Collin Peterson (D-Minn.)] has been holding hearings around the country to prepare for the next. More time will be needed, he says, to produce a bill that’s both less costly and still ‘works for agriculture.’ At a hearing in California, he warned farmers to expect ‘fundamental changes’ in the next farm bill because of ‘budgetary pressures’ and public unhappiness with farm programs.”

After additional examination, Mr. Lehner stated that, “[A]n aphorism closer to home says farm policy only changes when farmers are unhappy and crying for change. The House Ag Committee members who sat through the hearings have heard cries for change, but mostly for more spending, not less: Raise loan rates. Make ACRE county-based. Subsidize fruits and vegetables.

“Crop insurance cuts are under discussion, but farm groups oppose them. Payment limitations would be popular with the general public, but Peterson dislikes them, as do many farmers.

“Direct payments defy the ‘safety net’ logic underlying farm programs, as they’re paid in good times and bad alike, to absentee landowners in New York as well as those who sow and reap, but many farmers swear by them — and unlike some of our other farm programs, they’re WTO-legal. You could dress them up as compensation for providing public goods like clean air and water, but the chairman doesn’t like that idea, either.

“You could cut conservation programs like CRP, CSP and EQIP and nutrition programs like food stamps and school lunches, but the farm bill can’t pass even in easy years without support from environmental and hunger groups.”

The DTN item concluded by noting that, “But those seeking fundamental change have their work cut out for them. Chagrined as I am by my poor forecasting track record, I will wait for more convincing signs before predicting major changes in farm programs this time.”

Nonetheless, Farm Bill pressure points are beginning to surface. In particular, recent news items have pointed to two general areas: Food Related Issues, and Trade.

Roger Buddenberg reported on Friday at the Omaha World-Herald Online that, “As work begins on the federal government’s next big piece of agricultural policy — the 2012 farm bill — traditional, large-scale farmers fret that they will be slighted in favor of the ‘locavore’ growers who are the mainstay of upscale grocers and urban farmers markets.

“One focus of big-farmer fears is Know Your Farmer, Know Your Food, a new grant program aimed at ‘better connecting consumers with local producers,’ according to the U.S. Department of Agriculture.”

“On another front, the USDA and the Justice Department continue to investigate whether too few food companies wield too much power over the prices people pay for food. The broad antitrust inquiry includes investigations of the industries that bring you eggs, meat, dairy, candy, citrus, tomatoes and seeds.”

Mr. Buddenberg added that, “Meanwhile, the writing of the next farm bill is set to begin soon, and the battle continues between supporters of large-scale agriculture and those who want to send more federal aid to smaller producers.

“In a recent skirmish, three Republican senators — John McCain of Arizona, Saxby Chambliss of Georgia and Pat Roberts of Kansas — challenged Agriculture Secretary Tom Vilsack over the Know Your Farmer program.”

Friday’s article stated that, “‘These senators,’ Vilsack replied, ‘have not taken the time to understand and appreciate our Know Your Farmer, Know Your Food program.’ He defended it as vital to helping rural America cultivate new kinds of markets.

“‘There’s backlash from traditional agriculture’ to such talk, said Brad Lubben, an assistant professor of agricultural economics at the University of Nebraska-Lincoln. Arguments over what kind of food production to encourage will be the farm bill’s biggest shouting match, he predicted.”

Meanwhile, Patrick Westhoff penned a blog update at The Huffington Post on Friday that also spoke to the general issue of the Farm Bill and food issues (“Do Farm Policies Make Food Too Cheap or Too Expensive?”)

Dr. Westoff noted that, “Critics agree that farm policies have a bad effect on food prices. What they can’t agree upon is whether farm policies make food too cheap or too expensive.

“One camp argues that farm subsidies cause overproduction of crops like corn. The resulting cheap food prices hurt farmers in other countries–that’s why trade negotiations have tried to limit farm subsidies. Michael Pollan and other critics argue that cheap corn results in lower prices for everything from soft drinks to hamburgers, contributing to the nation’s obesity epidemic.”

The update explained that, “[C]orn farmers currently benefit from about $4 billion in annual subsidies, half in direct payments and half in terms of subsidized crop insurance. To put that in context, U.S. corn farmers sold about $40 billion worth of corn in 2009. In other words, U.S. corn producers got about $10 from selling their corn for every dollar they received in direct payments and crop insurance subsidies.”

In summary, the update stated that, “A 10 percent increase in farm-level corn prices would increase consumer prices for corn-containing products by much less than 10 percent. That’s because the cost of corn is only a small fraction of the price charged in the grocery store for soft drinks, corn chips or hamburger. And it is an even tinier fraction of the price a fast food restaurant charges for the same products.

“Casting the net more broadly results in a similar story. Total U.S. farm program, crop insurance, and conservation subsidies total about $20 billion per year. U.S. consumers spend more than $1 trillion on food each year. In other words, farm subsidies are equal to about 2 percent of the value of the food purchased by U.S. consumers.

“Bottom line: farm subsidies probably do make food cheaper, but the effect is not very big. As will be argued in a future posting, biofuel policies may do more to raise food prices than farm subsidies do to lower food prices. Food prices, of course, are also affected by much more than government policies. As discussed in my book, The Economics of Food: How Feeding and Fueling the Planet Affects Food Prices, everything from the weather in Iowa to economic growth in Asia also affects the price of the food we eat.”

Related news items have pointedly discussed nutrition issues, which in some cases, have an overarching implication for U.S. farm and food policy.

The Economist magazine stated last week that, “HFCS [High-Fructose Corn Syrup], which became a common ingredient in processed foods in the 1980s thanks in part to an abundance of subsidised maize, is cheaper than sugar. A rise in the price of sugar in recent years has increased the difference, yet big firms such as Pepsi and Kraft have substituted sugar for HFCS in many of their products. ConAgra, another big foodmaker, announced earlier this month that it had removed HFCS from its Hunt’s ketchup brand, and slapped a prominent label to that effect on the bottles. The move, the firm says, reflects consumer demand.

“The most common complaint about HFCS is that it has helped to make Americans fat. But that idea is hotly disputed.”

The Economist added that, “Another complaint centres on subsidies for maize, which, the theory runs, have warped America’s entire food chain. Yet high tariffs on imported sugar, to the benefit of America’s beet and cane farmers, have also helped to promote HFCS. Mike McConnell of the Department of Agriculture’s Economic Research Service estimates that HFCS and sugar would be roughly comparable in price in a free market. In that respect, at least, the two products are as bad as each other.”

The AP reported on Thursday that, “Food companies that remove high-fructose corn syrup from their products threaten the jobs of farmers in Ohio, the nation’s No. 7 grower of corn, state agriculture leaders say.

“Some nutritionists cite the syrup as part of the country’s obesity problem, though industry scientists and many dietitians say it is no more fattening than sugar.”

The article noted that, “‘Farmers are extremely concerned,’ said Fred Yoder, whose family farm near Plain City sends 80 percent of its corn directly to a corn-sweetener refinery. ‘Not only do farmers lose, but the consumer is the biggest loser because food costs could go up 20 to 30 percent if they continue to switch from high-fructose corn syrup.’”

Michael Moss reported on Saturday at The New York Times Online that, “Since processed foods account for most of the salt in the American diet, national health officials, Mayor Michael R. Bloomberg of New York and Michelle Obama are urging food companies to greatly reduce their use of salt. Last month, the Institute of Medicine went further, urging the government to force companies to do so.

“But the industry is working overtly and behind the scenes to fend off these attacks, using a shifting set of tactics that have defeated similar efforts for 30 years, records and interviews show. Industry insiders call the strategy ‘delay and divert’ and say companies have a powerful incentive to fight back: they crave salt as a low-cost way to create tastes and textures. Doing without it risks losing customers, and replacing it with more expensive ingredients risks losing profits.”

The article indicated that, “Dr. Margaret A. Hamburg, the F.D.A. commissioner, said in an interview that salt was a serious concern her agency would address in concert with other issues, like obesity. ‘We will use a variety of strategies, including education, voluntary reduction and potentially regulation,’ she said, adding that ‘we are really at the beginning of the process of shaping our blueprint for action.’”

An update posted on Sunday at The Answer Sheet Blog (The Washington Post) reported that, “Banning junk food from schools actually does have a beneficial effect on students, a new research study shows.

“Schools that eliminated junk food from a la carte lines during school lunch hours have seen an 18 percent reduction in overweight or obese students, according to a new study from the University of Nebraska-Lincoln.”

The update added that, “The study suggests expanding the Agriculture Department’s current ban on selling so-called Foods of Limited Nutritional Value during school meal times to include all junk food a la carte selections.”

Another percolating variable in the Farm Bill debate is the WTO-Brazilian cotton case.

Jonathan Rauch noted in an article posted on Saturday at the NationalJournal Magazine that, “In 2002, Brazil filed a complaint against U.S. cotton subsidies with the World Trade Organization, of which the United States is a member. The international trade treaty allows signatories to subsidize farmers, and, in fact, they all do. The assistance, however, is supposed to be limited, and trade-distorting subsidies — ones that either subsidize exports or encourage overproduction — are subject to particularly tight limits.

“Brazil argued that Washington’s generous cotton program violated the trade rules. Despite some legislative and administrative efforts by the U.S. to tweak the subsidies, last year the WTO ruled generally in Brazil’s favor. Brazil won the right to levy retaliatory duties on more than $800 million worth of U.S. exports annually, a prospect that manufacturers here reacted to with alarm.”

The article pointed out that, “The Obama administration found itself in a hard spot. Substantially changing farm subsidies requires an act of Congress, but the next farm bill is not due until 2012, and trying to get lawmakers to approve a stand-alone subsidy cut seems out of the question. A trade war with Brazil, however, is the last thing that Washington needs, particularly when the U.S. has been found to be in the wrong.

“So last month the administration announced a deal with the Brazilians. In due course, Congress will change the cotton program. Until that happens, the U.S. government will send Brazil an annual check for $147.3 million (a sum based on estimates of the cotton subsidies’ economic cost to Brazil), which Brazil is to spend on ‘technical assistance and capacity-building’ for agribusiness. Translation: Washington is bribing Brazilian farmers to keep illegal subsidies flowing to U.S. farmers.”

Mr. Rauch concluded his article from Saturday by saying; “The farm programs just might be ripe for some [change]. Fiscal pressure and trade commitments are closing in. Voices as disparate as [Rep. Ron Kind (D-Wis.)] and House Agriculture Committee Chairman Collin Peterson, D-Minn., are predicting a different kind of farm bill in 2012, possibly one that retreats from market-distorting commodity subsidies pegged to prices, and moves instead toward an income-stabilizing safety net for farmers. Former Rep. Charles Stenholm, D-Texas, is an unabashed farm-program champion from a cotton-farming family, but he thinks that even the farm lobbies are resigned to accepting that, as he puts it, ‘we can’t keep spending at the rate we’re spending.’

“Even so, rationalizing the country’s broken farm policy would be a triumph. Old hands say that a business-as-usual farm bill remains the most likely outcome. Whether tea party radicalism can make itself useful in the slow, insidery, and painfully hurdle-strewn process of legislating a smarter farm bill will be a good test of whether the movement can mature into something more than a tantrum.”

Recall that in late April, Rep. Jeff Flake (R-Ariz.) and Rep. Ron Kind (D-Wis.) wrote President Obama a letter regarding the Brazil-WTO-Cotton issue in which they stated that: “We urge you to utilize all of your resources to reform the agricultural subsidy programs, and in particular, the cotton program.”

At a House Agriculture Committee 2012 Farm Bill hearing in Washington, D.C. on May 13, Iowa State University Economist Bruce Babcock noted that, “Cotton programs must change in the next farm bill if the U.S. is to come into compliance with the WTO ruling that Brazilian cotton farmers were harmed by U.S. cotton payments. Perhaps the cotton producers should follow the example of milk producers, who seem poised to propose replacing their longstanding price support program with a new margin insurance program.”

On April 20, the “Washington Insider” section of DTN (subscription) stated that, “House Agriculture Committee Chairman Collin Peterson (D-Minn.) has begun holding hearings to help him build the outline of a new farm bill, a process that will play out over at least the next 18 months. Some observers believe the next farm legislation likely will make a number of changes to federal farm programs, but this is a view that has been voiced frequently over the decades and just as frequently has proven to be wrong.”

“One program that is likely candidate for change is the U.S. cotton program, given the recent agreement between the United States and Brazil that averted sanctions being imposed on a host of U.S. products. Peterson previously said commodity programs as designed in the past may not work in the future. During a news conference last week, he raised the issue of whether it would be better to continue the commodity-by-commodity approach to federal farm supports or to move to a whole-farm approach.”

A well-respected Washington, D.C. based publication indicated late last week that, potential changes to some programs that would bend them towards a “whole-farm” approach could theoretically change the nature of U.S. amber box outlays. This article also noted that some observers indicated it was too early to speculate about future program changes.

With respect to the WTO amber box aspects of ACRE for example, recall that the Food and Agricultural Policy Research Institute (FAPRI) noted in a “Preliminary Analysis of Selected Provisions” of the 2008 Farm Bill in July of 2008 that, “ACRE payments could have important WTO consequences if they are classified as amber box support…While the average level of ACRE payments is relatively modest, the payments could vary dramatically from one year to the next, adding billions of dollars to US amber box support in some years.”

Potential changes to current programs, such as ACRE, could run into their own WTO trade related considerations depending on the nature of the details and the amount of money that could potentially be spent.

With respect to potential changes in farm policy, Jerry Lackey reported on Saturday at the Standard-Times Online (San Angelo, Texas) that, “During the recent U.S. House Committee on Agriculture field hearing in Lubbock, several West Texas farmers who testified expressed a need to strengthen federal crop insurance when the next farm bill is written.”

The article added that, “Dan Smith, a sorghum grower from Lockney, asked the committee to maintain a strong crop insurance program in the next farm bill.

“‘Crop insurance has saved my operation several times in situations where I would have gone out of business without this vital risk management tool,’ he said. ‘It is extremely important across all crops on my farm, and I want to underscore that good sorghum crop insurance is indispensable for me.’”

Ron Smith reported on Friday at the Southwest Farm Press Online that, “Eight House Agriculture Committee members heard testimony from representatives of the Southwest’s major commodity producers at a recent farm bill hearing in Lubbock, Texas, and then questioned panelists on topics ranging from crop insurance to immigration reform.

“Crop insurance comments caught Texas Representative Randy Neugebauer’s attention. He said agriculture needs a more flexible insurance program. ‘The Supplemental Revenue Assistance Payments (SURE) and Alternative Crop Revenue (ACRE) programs are not the answers we thought in the 2008 farm bill,’ Neugebauer said.”

The article noted that, “Rice producer L.G. Raun and peanut farmer Jimbo Grissom said those two crops may need a different insurance approach.

“‘We need some sort of price coverage system,’ Grissom said. ‘We’re working with peanut farmers in the Southeast on the issue.’”

DTN Political Correspondent Jerry Hagstrom reported on Friday (link requires subscription) that, “Claiming that the federal government has prof