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House & Senate Ag Committee Hearings Focus on Broad Nature of Farm Bill

As a reminder of the broad-based nature of U.S. farm policy and the 2007 Farm Bill, the House and Senate Ag Committees this week have held hearings on topics beyond Title I commodity payments and have highlighted organic agriculture, as well as the structure of the livestock industry. In addition, Secretary of Agriculture Mike Johanns this week has focused on policy proposals to assist young farmers and on issues associated with U.S. food aid programs.

I. Legislative Hearings / Farm Bill News
II. Doha
III. Energy
IV. Seeds

I. Legislative Hearings / Farm Bill News

As a reminder of the broad-based nature of U.S. farm policy and the 2007 Farm Bill, the House and Senate Ag Committees this week have held hearings on topics beyond Title I commodity payments and have highlighted organic agriculture, as well as the structure of the livestock industry. In addition, Secretary of Agriculture Mike Johanns this week has focused on policy proposals to assist young farmers and on issues associated with U.S. food aid programs.

A news release issued yesterday by the House Ag Committee stated that, “Today, Congressman Dennis Cardoza, Chairman of the House Agriculture Committee’s Subcommittee on Horticulture and Organic Agriculture, held a hearing to review the economic impacts of organic production, processing, and marketing of organic agricultural products [witness list and opening statements available here].

“Organic food is currently a $14 billion industry, accounting for about 2 percent of total retail food sales in the United States. That number is projected to grow to as much as $23.8 billion and 3.5 percent of the U.S. food market by 2010.”

The release indicated that, “‘This is a historic hearing,’ said Subcommittee Chairman Cardoza. ‘Today marks the first hearing ever in the House Committee on Agriculture dedicated to a substantial discussion of the challenges and opportunities facing organic agriculture. It was clear from the testimony that, while organic agriculture is certainly flourishing, we must ensure a steadfast commitment to the integrity of the program. I look forward to working with the organic community as we continue our work on the upcoming Farm Bill.’”

Michael Doyle reported in today’s Sacramento Bee that, “Organic farming advocates Wednesday urged the House subcommitte on horticulture and organic agriculture to step up the federal government’s role in the $14.5 billion industry.

“‘The lack of research and education in organic agriculture is inhibiting growth,’ said Mark Lipson, policy program director of the Santa Cruz-based Organic Farming Research Foundation. Lipson and others spoke during what was billed as the first hearing Congress has devoted solely to the subject of organic agriculture.”

The article noted that, “The federal government spends less than $20 million a year on organic farming research. Organic farming advocates want this increased in the new farm bill to $120 million annually.”

Also yesterday, the Senate Ag Committee held a hearing entitled, “Economic Challenges and Opportunities Facing American Agricultural Producers Today,” which focused on livestock, poultry and competition issues. Recall that the House Subcommittee on Livestock, Dairy, and Poultry held a hearing on a similar subject on Tuesday of this week when Members heard testimony regarding the market structure of the livestock industry.

An archived video of the yesterday’s Senate hearing can be viewed by clicking here, while a list of witnesses and their opening statements can be found here.

A statement on yesterday’s Senate hearing released by Senate Ag Committee Chairman Tom Harkin (D-Iowa), noted that, “The Economic Research Service at USDA estimates the value of U.S. livestock and poultry production in 2007 will be $125.7 billion. The new farm bill can play a role in this. The farm bill will be critically important for expanding access to conservation programs, developing much needed research on distillers dried grains and for animal diseases, promoting market access, rural development, cellulosic ethanol and ensuring fair and competitive markets. As with any farm bill, there will be many different perspectives on all of these issues, so I look forward to listening and learning from the witnesses here today.”

In a separate statement on the hearing, Sen. Saxby Chambliss (R-Georgia), the Committee’s Ranking Member, indicated that, “‘Everyone who is concerned with agriculture understands the need for cattle, pork, poultry and other producers to have every fair option at their disposal to market and sell their animals,’ said Sen. Chambliss. ‘I am hopeful that as we construct a farm bill that will affect the entire livestock industry, we will include the input of all stakeholders including the producers who raise the animals to the retailers who ultimately sell the finished product. Every stage of the process is critical to a competitive, thriving livestock industry and marketplace.’”

In related news regarding Senators Harkin and Chambliss, Chris Clayton pointed out yesterday at the DTN Ag Policy Blog that, “Sen. Saxby Chambliss, R-Ga., ranking member of the Senate Agriculture Committee, made it clear speaking to agriculture reporters Tuesday morning that he isn’t thrilled about Secretary of Agriculture Mike Johanns’ staff drafting legislative language for the farm bill. It’s just ‘not appropriate,’ he said.

“‘I’ve argued against that with them,’ Chambliss said. ‘I don’t think it’s the function of the administration to draft a farm bill.’

“While Republican Chambliss isn’t happy about the administration from his own party stepping so deep into the farm bill, Democratic Sen. Tom Harkin, chairman of the Agriculture Committee, is encouraging Johanns’ involvement,” Mr. Clayton said.

Recall that earlier this week U.S. Secretary of Agriculture Mike Johanns highlighted the administration’s 2007 Farm Bill proposal and focused specifically on items that would assist young or beginning farmers.

Interestingly, an update posted earlier this week at the CAP Health Check Blog indicated that EU policy makers were also devoting attention to young farmers.

Specifically, Jack Thurston, a Transatlantic Fellow at the German Marshall Fund, noted on Monday that, “Today, in Brussels, the Commission is hosting a special day for European young farmers. The day is being billed as part of the consultation in the run-up to the CAP [Common Agricultural Policy] health check, after which this blog is named. What is unlikely to be discussed at the meeting are the very real reasons why the current system of farm subsidies are overwhelmingly bad for young farmers and new farmers seeking to make a start in agriculture in the European Union.

“For a start, the principal effect of current blanket and untargeted farm subsidies is to increase the price of farm land, by as much as 40 per cent, by some estimates.”

Mr. Thurston added that, “High land values are one of the main reasons why European farmers face higher costs than farmers elsewhere in the world. And it’s not just land that is more expensive. Farm equipment companies, agri-chemical companies and other suppliers drive up prices because they know their customers are getting handouts from the government.”

In a related article regarding the Common Agricultural Policy, BBC writer Lucy Ash reported earlier this week that, “With farms disappearing and concern about waning subsidies, many worry rural France is in crisis. Along with unemployment, race relations and a sluggish economy, the future of the French countryside is a key, and highly emotive, issue in the presidential election campaign.”

The BBC article noted that, “Some might wonder why the mood in the countryside today is so despondent. After all, France is the world’s second largest agricultural exporter after the US; it is also the biggest single beneficiary of the Europe’s Common Agricultural Policy or CAP.

“Every year, over $10bn, more than a fifth of European subsidies, go to French farmers.

“But one problem is that most of the European money is not going to the small farmers who are often seen as guardians of the countryside. Instead, the lion’s share goes to the giant agribusinesses and cereal farms in northern France, renowned for their heavy dependence on fertilisers and pesticides.”

Ms. Ash went on to explain that, “France’s post-war leader, General de Gaulle, said that a country that cannot feed itself is not a great country. And still today food self-sufficiency, like France’s nuclear deterrent, is seen as crucial to France’s geopolitical independence.

“‘What is the point of being the second biggest European country – geographically speaking – after Germany if we just turn our land into a desert?’ asked right-wing candidate Nicolas Sarkozy, addressing a meeting of farmers and fishermen.

“Meanwhile Segolene Royale, the socialist party candidate, has spoken of the ‘strong internal serenity’ of her childhood in a small village in eastern France.

“The image of fallow land and empty villages strikes fear into many French hearts. La France Profonde – rural France – is as important to the country’s identity at home and abroad as the Louvre and the Eiffel Tower.”

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Meanwhile, the Associated Press reported yesterday that, “The United States could have difficulties responding to future food emergencies around the world if it does not change how it operates and starts buying food aid from abroad, U.S. Agriculture Secretary Mike Johanns said Wednesday.

“During a speech at the International Food Aid Conference in Kansas City, Johanns said America’s agricultural system will have to make changes if the U.S. wants to continue being successful in its food-aid efforts.

“Under the current system, the USDA can only purchase American commodities to send as aid to other countries.”

The AP article indicated that, “[Sec. Johanns] said he believes farmers will go along with a proposal to allow U.S. officials to use emergency food supplies from outside the country when necessary to deliver aid faster.

“Under the proposed 2007 farm bill, up to 25 percent of the food aid provided by the U.S. in a crisis could be purchased from countries near those where the aid is needed.

“‘The ability to purchase food near the scene of a crisis — instead of waiting additional days, maybe weeks, maybe longer it can take to load and ship it from the United States — would almost certainly save lives in some situations,’ Johanns said.”

Peter Shinn of Brownfield reported yesterday that Sec. Johanns also commented on the Iraq War supplemental and farm disaster payments.

Mr. Shinn noted that, “Even if Congress removes its timeline for U.S. troop withdrawal from Iraq, the emergency war spending bill with billions in ag disaster aid could still face a veto. That’s one issue addressed Wednesday by U.S. Ag Secretary Mike Johanns in Kansas City.

“Johanns spoke to the USDA-USAID annual International Food Aid conference here Wednesday morning. At a press conference afterward, he told Brownfield removing conditions to funding for the Iraq war won’t guarantee President Bush would sign the measure, which contains an ag disaster aid provision worth around $4 billion.

“‘The President wants a clean bill,’ said Johanns. ‘I can tell you that that’s what the President has articulated many, many times over the last days and weeks, and my hope is that we get a clean bill.’”

II. Doha

The Associated Press reported earlier this week that, “The final ‘window of opportunity’ for a new global free trade deal might just have slammed shut, according to analysts closely watching the World Trade Organization negotiations.

“Having already missed countless deadlines in six years, top trading powers have now set themselves a year-end date for completing the Doha round of commerce liberalization talks aimed at adding billions of dollars (euros) to the global economy and lifting millions of people worldwide out of poverty.

“But for analysts, the most significant result of last week’s meeting of the WTO’s six most powerful members in New Delhi was how little attention was paid to a much more serious deadline only weeks away — the expiration of U.S. President George W. Bush’s authority to send trade deals to Congress for a simple yes-or-note vote without amendments.”

The article stated that, “Another problem the U.S. faces concerns its proposed new farm bill, which several countries have criticized for failing to make significant cuts in the billions of dollars in subsidies that help American farmers sell cheaper agricultural goods in the global market.

“The U.S. stance has prompted the EU to resist further cuts in tariffs that protect its own farmers from foreign competition. Both the U.S. and the EU have been stymied in their attempts to secure greater market access in emerging economic powers like Brazil and India.

“Jagdish Bhagwati, an economist at the Council on Foreign Relations in Washington, said the U.S. was very aware of its own negotiating constraints, but needed to recognize the difficulties faced by negotiators from countries with sensitive farm lobbies such as France and India, where Prime Minister Manmohan Singh reached power partly thanks to a campaign championing the interests of Indian farmers.”

Dow Jones writer William Echikson reported yesterday that, “European Trade Commissioner Peter Mandelson Wednesday said the next two months were ‘crucial’ for a new global trade deal to be reached and he was considering joining the U.S. legal actions against Chinese trade practices.

“Mandelson was speaking at a press conference where he announced the creation of a new push to break down unfair trade barriers to European exports.”

The Dow Jones article also noted that, “If the WTO talks are to succeed, Mandelson said major developing countries would need to open their markets. He singled out Brazil, saying it would have to make a major effort.

“Brazil would benefit from opening up its market, Mandelson said. Wherever countries like Brazil have opened economies and liberalized trade, ‘they have achieved a major boost in living standards.’”

III. Energy

An update posted yesterday at The Energy Roundup Blog (The Wall Street Journal), indicated that, “In an apparent bid to downplay rising friction with regional powerhouse Brazil, Venezuelan president Hugo Chavez has abruptly U-turned away from his weeks-long anti-biofuel tirade to exclude criticism of Brazil’s sugarcane-based biofuel, report Reuters and the Associated Press.

“‘We aren’t against biofuels,’ Chavez told Brazilian President Luiz Inacio Lula da Silva at South America’s first energy summit, even as he continued to slam U.S. corn-based ethanol for increasing world hunger and monopolizing arable lands. ‘Lula, I ask you to sell it to us at the best price possible.’

“Tensions between Brazil, the world’s largest ethanol exporter, and Venezuela had heated up pre-summit, as Chavez – an avowed supporter of eco-fuels just two months ago – veered toward harshly critiquing the practice of using foods for fuels in the wake of a U.S.-Brazil ethanol agreement last month.”

Dow Jones writer Mari Iwata reported yesterday that, “In an apparent shift, the chairman of Japan’s petroleum association said Wednesday that the refining industry would prefer to buy domestically produced ethanol rather than imports due to energy security concerns.

“Instead, its members will buy all of the 50,000 kiloliters of expected annual bio-ethanol production from a major plant to be set up in Hokkaido, said Fumiaki Watari, chairman of both the Petroleum Association of Japan and Nippon Oil Corp. (5001.TO), Japan’s largest refiner by capacity, at a monthly press briefing.

“The refiners need ethanol to make ETBE, or ethyl tertiary butyl ether, produced by mixing ethanol and isobutylene, and which is believed to make gasoline burn cleaner than that when mixed with straight ethanol. Roughly half of ETBE is ethanol.

“Currently, Japan imports and produces some ethanol for purposes other than bio-fuels, but the Hokkaido plant would be the first major domestic facility for fuel-related production.”

In a focus beyond ethanol, Scott Kilman reported in today’s Wall Street Journal that, “The huge Cargill Inc. biorefinery here turns 60 million bushels of corn a year into a torrent of sweeteners and ethanol.

“Now the giant facility — whose overhead pipes snake between 50-foot-tall tanks and metal buildings over a square mile — is also cranking out what could be the next big thing in farming: a new generation of renewable chemicals.

“Although most petroleum-based chemicals remain substantially cheaper, high oil prices have bolstered the economic rationale for making plastics, foam and lubricants from plants grown in the Midwest.

“Soybeans and corn are showing up in carpets, disposable cups, salad bags, AstroTurf, candles, lipstick, socks, surfboards, cooling fluid in utility transformers, and even the body panels of Deere & Co. harvesting combines. There has also been growing demand from retail giants like Wal-Mart Stores Inc., newly sensitive to environmental pressure, for packaging made from renewable plastic,” the Journal article said.

IV. Seeds

Andrew C. Revkin reported in today’s New York Times that, “Scattered around the world in jars, fields, freezers and vaults are tens of thousands of endangered varieties of wheat, yams and 19 other crops that underpin the global food supply.

“With disturbing regularity, experts say, this agricultural bounty is eroding as war, storms, scant money or bad management, particularly in the world’s poorest places, cause unique seed varieties to deteriorate or disappear.”

The Times explained that, “Now, the first international effort to restore, organize and safeguard scattered seed banks holding some 165,000 varieties of the 21 crop plants will receive a $37.5 million infusion, people involved in the project said yesterday: a $30 million grant from the Bill and Melinda Gates Foundation and $7.5 million from Norway.

“The project, undertaken by the Global Crop Diversity Trust and the United Nations Foundation, will focus particular attention on ‘orphan’ crops — like cassava, coconut and taro — that are staples in poor countries but have not been the focus of commercial plant breeders.”

-Keith Good

 Email This Post Posted by Keith Good • April, 19, 2007 • 5:10 am