FarmPolicy.com

TPA (“Fast-Track”) Still Alive

Dan Looker reported yesterday at AgricultureOnline that, “The chairmen of the House and Senate agriculture said Tuesday that they want to start writing the farm bill soon, probably in early May. But their views and those of ranking members are still apart on some issues…Senate Ag Committee Chairman Tom Harkin still wants to make his Conservation Security Program bigger and easier to sign up for. House Ag Commitee Chairman Collin Peterson said he favors a program offered by a coalition of conservation, hunting and environmental groups that would increase conservation funding slightly, but would put more emphasis on older programs such as the conservation reserve and EQIP, the environmental quality incentives program.”

I. TPA
II. Energy
III. Ag Production / Farm Bill

I. TPA

Reuters writer Doug Palmer reported yesterday that, “A senior U.S. Democratic lawmaker said on Tuesday he believed Congress would give the Bush administration a limited extension of fast-track trade negotiating authority to finish current world trade talks.

“‘We are prepared to give a restricted fast-track, limited to the Doha convention,’ House of Representative Ways and Means Committee Chairman Charles Rangel, a New York Democrat, said in remarks at a National Press Club luncheon.

“The White House’s trade promotion authority expires at the end of June, creating a difficult situation for U.S. trade negotiators trying to conclude the Doha round of trade talks with the 150 members of the World Trade Organization.”

Mr. Palmer indicated that, “Last week, Senate Finance Committee Chairman Max Baucus, a Montana Democrat, told reporters he saw no urgent need to renew trade promotion authority because the Doha round was still a long way from a successful conclusion.

“President George W. Bush called for renewal of the legislation — also known as fast track because it puts trade pacts on an expedited path through Congress — in January.”

The article noted that, “Rangel also made clear he does not want the White House to frame its request in a way that blames Congress for the death of Doha if fast track is not renewed.”

An Associated Press article from yesterday reported that, “A top Democrat in Congress said U.S. lawmakers may help revive the World Trade Organization’s Doha Round of multinational talks – with some conditions attached.

“Rep. Charles Rangel, a Democrat who chairs the key Ways and Means committee that deals with trade issues, said lawmakers may renew so-called ‘fast-track’ authority for the White House negotiating international trade deals.”

The AP story noted that, “‘We are prepared to give a restricted fast track, limited to the Doha convention,’ Rangel said at a speech to the National Press Club. The lawmaker said any such authority would have to be bipartisan, meaning it would address his party’s concerns about overseas labor conditions.”

Meanwhile, Bloomberg news reported this morning that, “Chief executives of the biggest Wall Street firms Tuesday urged President Bush to make greater access to overseas markets for U.S. financial services a higher priority than it is now.

“Such a shift could come at the expense of manufacturers and farmers, groups that also are lobbying the White House on trade.

“The Financial Services Forum, a lobbying group of banks, securities firms and insurance companies, warned Bush in a letter that ‘the continued growth and vitality’ of their businesses hinged on the administration’s ability to negotiate trade agreements that lower barriers to investment.”

The article indicated that, “The letter says the U.S. financial services industry is much larger than the American farm sector and almost as large as the U.S. manufacturing industry.”

In other Doha related news, Reuters writer Sil Khan reported yesterday that, “Leading agriculture exporting countries began formal talks in Pakistan on Tuesday to push for deeper cuts in farm subsidies and removal of trade barriers in a global treaty currently under negotiation.

“The meeting of the Cairns Group of 19 member states in Lahore comes a week after the Group of Six (G6) major trading powers — Australia, Brazil, the European Union, India, Japan and the United States — said in New Delhi that they would push for a new global free trade treaty by the end of this year.

“The trade ministers meeting in the eastern Pakistani city struck a similar note.

“‘They expressed commitment to complete the Doha Development Agenda (DDA) round by the end of the year,’ said Manzoor Ahmed, Pakistan’s Permanent Representative to the World Trade Organization (WTO).”

In a broader note on trade, Michael S. Derby indicated yesterday at the Washington Wire Blog (The Wall Street Journal) that, “Despite the reality of a strong global and domestic economy, Federal Reserve Bank of New York President Timothy Geithner warned today that broad public skepticism remains over the economic value of free trade and global financial integration. Policy makers, he said, can do more to address those fears.”

The update stated that, “In comments prepared for delivery before a New York Fed conference on the dollar and euro, Geithner argued that open trade and strong policies that promote flexibility deliver the most economic return, and he reiterated that flexible exchange rates offer the most economic benefit. Policy makers, Geithner said, need to ‘direct more political capital to the challenge of developing the economic and institutional infrastructure’ that will aid the public in adapting to a changing economic landscape.”

II. Energy

Antonio Regalado and Bernd Radowitz reported in today’s Wall Street Journal that, “Last month, President Bush flew to this sprawling city [Sao Paulo, Brazil] to sign a largely symbolic agreement with Brazil to promote the production and use of ethanol. The same night, a group of Japanese executives flew home from here with the framework for a major ethanol deal in hand.

“The events that day highlight the different approaches industrialized countries like the U.S. and Japan are taking to the renewable fuel at a time of increasing concern about the future of oil supplies. Because the U.S. produces its own corn-based ethanol, it keeps a stiff tariff in place on imports of less-expensive Brazilian ethanol, which is made from sugar cane. That is a major reason that U.S. talk of a partnership with Brazil on ethanol has yet to produce concrete results.

“But Japan has no domestic ethanol market to protect and is looking to Brazil as its major source of the alternative fuel. The upshot: Japan could lock up a sizable chunk of future ethanol supplies from Brazil, the world’s cheapest producer of the fuel.”

The Journal article noted that, “Japan’s big worry has been supply. Brazil and the U.S. produce and consume most of the world’s ethanol, meaning it isn’t yet an easily traded commodity. Japan worries whether Brazil’s fragmented sugar-cane industry could guarantee supplies. Brazil has more than 300 sugar-cane mills, most of which produce both sugar and ethanol. In the past, when sugar prices were high, ethanol production slumped, provoking fuel shortages.

“Addressing Japanese concerns is the reason for Petrobras’s aggressive entry into ethanol production, says Paulo Roberto Costa, the Petrobras executive who oversees all refining and distribution. ‘The Japanese have made very clear that once we start supplying ethanol, there needs to be a continuous supply,’ he says.”

In a related article, the Associated Press reported yesterday that, “Brazil could double its ethanol production in the next 10 years and meet increased demand without causing environmental damage, the country’s agriculture minister said Tuesday.

“Reinhold Stephanes said in a statement ‘there are about 6 million hectares (15 million acres) of sugar cane plantations and about 150 million hectares (370 million acres) still available for agriculture.’

“He said Brazil’s current annual production is at 17.5 billion liters (4.62 billion gallons).

“‘[If] we are intelligent we can increase the cultivation area 10 percent each year in a sustainable way,’ Stephanes said. ‘All without causing any environmental damage.’”

In other news regarding Brazilian ethanol production, Benedict Manderon reported yesterday at the Financial Times Online that, “Tension between Venezuela and Brazil over ethanol policy threatens to overshadow a regional energy summit being hosted by Venezuela this week, despite attempts to play down differences and promote Latin American integration.

“Hugo Chávez, Venezuela’s president, has condemned a US push to boost ethanol production which Fidel Castro, of Cuba, has called ‘genocidal’. However, the US initiative last month resulted in an agreement between Washington and Brazil, the world’s largest producers of ethanol, to promote regional production of the fuel.

“Mr Chávez, in an apparent U-turn after having spoken out in favour of ethanol in the past, now argues that the more land that is used for ethanol production – which is made from crops such as sugar cane and corn – the less there is for growing food to combat poverty.”

III. Ag Production / Farm Bill

Reuters writer Bob Burgdorfer reported yesterday that, “For U.S. farmers needing to plant a lot of corn and plant it fast, Rick Light has what they need — monstrous machines that can sow 300 acres (120 hectares) in a day.

“The machines, costing $100,000 or more, are attracting attention this year because planting corn in a hurry is on nearly every farmer’s mind. A wet, cold spring has slowed the start of field work and with corn prices hitting 10-year highs in February, farmers intend to plant the most acres since World War Two.

“‘We’ve probably had the best year we’ve had for planters. I think that is directly related to commodity prices,’ said Light, who manages the Hogan Walker implement dealership in Watseka [Illinois].

“While there is an urgency to plant corn this year due to high prices and weather issues, farmers are also looking at machines that are bigger and more powerful than in recent years, and that require less maintenance. Some of the new planters can run nearly all day, without the need to refill the seed bin.”

The article added that, “U.S. machinery maker Agco Corp., whose brands include White, said planter sales have been robust. ‘Year to date we are up 30 percent on planter sales,’ said Gary Hamilton, marketing specialist for White.

“At Hogan Walker sits a model 1790 seed planter made by Deere & Co. that can plant 24 rows of corn in a single pass, and can keep doing that all day long. If that is not enough, a DB-90 model is available that can plant 36 rows per pass.”

In recent Farm Bill news, a USDA news release from yesterday stated that, “Agriculture Secretary Mike Johanns today described in greater detail a broad package of proposed changes to several titles of the farm bill that will help future generations of farmers and ranchers become established in production agriculture.

“‘The future strength of American agriculture depends in part on the ability of young men and women to overcome the challenges associated with entering production agriculture,’ said Johanns, while addressing the state FFA convention in Iowa. ‘This sentiment was echoed across the nation during our Farm Bill Forums, and I believe very strongly that our proposals would help to address those challenges and support the success of the next generation of farmers and ranchers. Our proposals provide tangible benefits and help in leveraging assets to purchase or expand farm and ranch operations.’”

Jerry Perkins, writing in today’s Des Moines Register reported that, “U.S. Secretary of Agriculture Mike Johanns on Tuesday touted his 2007 farm bill proposal’s beginning farmer assistance programs, saying that if enacted, they would do more than any other farm bill in history to help young farmers get established.

“‘If you go back over the entire history of farm policy, you’ll never find anything as forward-looking for beginning farmers,’ Johanns said of the proposals.

“The assistance programs include increased direct government payments in a farmer’s first year, easier access to loans for beginning farmers who want to borrow from the government and a 10 percent set-aside of conservation funds earmarked especially for beginning farmers.”

A news release from the House Ag Committee yesterday noted that, “Today, the House Agriculture Subcommittee on Livestock, Dairy, and Poultry held a hearing to review the market structure of the livestock industry. Congressman Leonard Boswell of Iowa is Chairman of the subcommittee.

“‘Today, we gathered a wealth of information on both sides of the issue on market structure, which will be extremely helpful as we move forward on the farm bill,’ said Chairman Boswell. ‘I was, however, very disappointed by the testimony presented by USDA officials and their inability to answer specific questions regarding packer control in the cattle industry.’

“‘I strongly believe that existing authority must be strictly enforced to ensure a fair, orderly and transparent livestock market function,’ said Subcommittee Ranking Member Robin Hayes of North Carolina. ‘I appreciate the testimony from today’s witnesses, but it is clear there is not a consensus on how Congress should move forward on these issues. Before there is any discussion of including these provisions in the farm bill, more work needs to be done on each of the proposals discussed today.’”

In other farm policy news, Bob Meyer reported yesterday at Brownfield that, “U.S. Deputy Secretary of Agriculture, Chuck Conner spoke to the Theodore Roosevelt Conservation Partnership conference on Tuesday. ‘I spoke with the Partnership primarily about the conservation title of the 2007 farm bill.’ Conner says USDA has been working closely with the conservation group in developing that title. He says both parties are interested, ‘In having a strong conservation title as part of this next farm bill.’

“For most of the past year, talk has been that the next farm bill would be much more conservation-oriented but recently the surging renewable fuels industry has overshadowed conservation. Conner says everyone acknowledges the need for conservation but some tough decisions will need to be made. The Administration’s farm bill plan has a $7.8 billion increase over the baseline for conservation spending and the Deputy Secretary thinks that can work in conjunction with the growth in renewable fuels.

“‘Our Conservation Enhancement Option Payment Program would give producers some added financial incentive to grow the crops the market is demanding but then, at the same time, agree to do some important conservation measures on that land,’” the article said.

With respect to Farm Bill timing, Dan Looker reported yesterday at AgricultureOnline that, “The chairmen of the House and Senate agriculture said Tuesday that they want to start writing the farm bill soon, probably in early May. But their views and those of ranking members are still apart on some issues.

“Senate Ag Committee Chairman Tom Harkin still wants to make his Conservation Security Program bigger and easier to sign up for. House Ag Commitee Chairman Collin Peterson said he favors a program offered by a coalition of conservation, hunting and environmental groups that would increase conservation funding slightly, but would put more emphasis on older programs such as the conservation reserve and EQIP, the environmental quality incentives program.

“There are differing view, too, of Agriculture Secretary Mike Johanns announcement that he’s having the USDA write its own version of the farm bill.”

Mr. Looker noted that, “‘I see nothing wrong with it,’ Harkin told North American Agricultural Journalists Tuesday. ‘I welcome it. I don’t know that I’ll agree with all of it but if somebody wants to do the work for me, I’m all for it. My staff is busy enough.’

“Georgia Senator Saxby Chambliss, the ranking Republican on Harkin’s committee took a different view. ‘I don’t think it’s the function of the Administration to draft a farm bill,’ he told the ag writers at their annual meeting in Washington.”

Lastly, Bill Hord, writing in today’s Omaha World-Herald reported that, “The nation should establish demonstration farms to experiment with the kind of crops that would feed the cellulosic ethanol refineries of the future, Sen. Tom Harkin, D-Iowa, said Tuesday.

“The farms, which would be partially funded by a new farm bill, could be situated in all regions of the country to provide new knowledge about how to grow crops – such as switchgrass – that have never before been a farm commodity, Harkin said

“Harkin, chairman of the Senate Agriculture Committee, explained the concept in a meeting with agriculture reporters at the Capitol.

“The demonstration-farm idea also was mentioned in a separate meeting by Rep. Collin Peterson, D-Minn., chairman of the House Agriculture Committee.

“Peterson previously said he wants a pilot farm in his Minnesota district, with the hopes of later attracting a cellulosic ethanol plant.”

-Keith Good

 Email This Post Posted by Keith Good • April, 18, 2007 • 5:05 am