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Farm Bill Update
Reuters writer Missy Ryan reported on Saturday that, “U.S. farm groups warned the Bush administration this week against bargaining away growers’ interests as negotiators make an intensified push to broker a new trade deal in coming months…‘Reductions in, and limitations on, U.S. domestic support can only be justified if they yield an important net gain for American farmers and ranchers,’ a coalition of 13 farm groups said in a sharp letter sent late on Thursday to U.S. Trade Representative Susan Schwab”…The article added that, “The missive was signed by associations representing U.S. soybean, corn, sugar, cotton, milk, wheat and other industries.”
I. House Ag Committee Activity
II. Direct Payments
III. Doha
IV. Farm Bill Editorials
V. GMF EU Journalism Study Tour
I. House Ag Committee Activity
A news release issued yesterday by the House Ag Committee stated that, “Today, the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a field hearing in Salina, Kansas, to discuss the state of agriculture in Kansas. Congressman Bob Etheridge of North Carolina is Chairman of the Subcommittee.
“Subcommittee Ranking Member Jerry Moran of Kansas also took part in the hearing. Congressman Moran represents Kansas’s 1st District, which contains Salina as well as much of central and western Kansas. Representatives Nancy Boyda of Kansas, Steve King of Iowa, and Adrian Smith of Nebraska also participated in the hearing, which took place at the College Center at Kansas State University’s Salina Campus.
“‘In the coming weeks, this Subcommittee will begin the hard work of putting together one of the most important pieces of this or any Farm Bill, Title One, the Commodity Title,’ said Chairman Etheridge. ‘Today’s hearing, to review the state of agriculture here in Kansas and neighboring states, provided these witnesses with a unique chance to get the last word in before we begin the heavy lifting that is the Commodity Title.’”
Meanwhile, a publication notice, which was also released yesterday by the House Ag Committee, stated that, “Preliminary discussion drafts for the peanuts and horticulture and organic agriculture sections of the Farm Bill were released today.”
All of the Committee’s “preliminary discussion drafts” have been posted here, some updated section-by-section analysis of the specific proposals have also been posted, just click on the following items to view complete details: Rural Development, peanuts, sugar, horticulture and organic agriculture.
As the debate moves forward regarding these items, House Ag Subcommittee hearings will continue today and tomorrow, the Subcommittee on Specialty Crops, Rural Development, and Foreign Agriculture holds a hearing today at 10:00 am Eastern, while Subcommittee on Horticulture and Organic Agriculture convenes tomorrow at 1:00 pm. Both Subcommittees will be meeting to consider provisions of the 2007 Farm Bill within their jurisdiction.
In addition, the Subcommittee on General Farm Commodities and Risk Management will be holding a public hearing tomorrow at 10:00 am to review the integrity and efficacy of the Federal Crop Insurance Program.
Live audio from all Ag Committee hearings is available here.
Jerry Hagstrom, writing yesterday at DTN (link requires subscription), provided a more detailed analysis of the sugar draft proposal and noted that, “In what appears to be a victory for sugar growers and a rebuke to candy companies and other sweetener users, House Agriculture Committee Chairman Collin Peterson, D-Minn., Monday released a draft proposal of the sugar program for the 2007 farm bill that would continue the current program through 2012.
“The House Agriculture, Specialty Crops, Rural Development, and Foreign Agriculture Subcommittee is scheduled to mark up the sugar program and other titles under its jurisdiction Wednesday.”
Mr. Hagstrom added that, “Analysts and critics have questioned whether that current system can work after Jan. 1, 2008, when sugar and high fructose corn syrup, a sweetener made from corn, are supposed to be traded freely between the United States and Mexico under the North American Free Trade Agreement. Trade in high fructose corn syrup and sugar has been the subject of intense conflict between the United States and Mexico since the two countries signed the NAFTA agreement. While critics of the U.S. program have predicted that Mexican sugar will flood the U.S. market in January 2008, that sugar prices will plummet and that the U.S. government will be forced to buy sugar, U.S. sugar growers have said that the situation is likely to be complicated. Whether free trade in sweeteners really occurs depends on whether Mexico accepts the importation of high fructose corn syrup. The U.S. growers also say they believe they can supply sugar more efficiently to certain sections of Mexico than Mexican producers can.
“Philip Hayes, a spokesman for the American Sugar Alliance, which represents beet and cane growers, said the group was ‘pleased’ with the draft.”
With respect to the Rural Development draft provisions, Catharine Richert of Congressional Quarterly reported yesterday that, “A House panel is expected to debate a new rural development program Wednesday that would focus on supporting the smallest businesses in the most rural areas.”
Ms. Richert added that, “Mandatory funding for such rural development grants was proposed in the Senate version of the 2002 Farm Bill but was cut in conference. Subcommittee Chairman Mike McIntyre, D-N.C., has long supported the proposal; farmers and rural communities in North Carolina would particularly benefit from the grants.”
The CQ item also noted that, “The House draft also would call for the Agriculture Department to redefine ‘rural’ communities.”
Jana Cone reported in Monday’s Moultrie Observer (Georgia) that, “U.S. Reps. Jim Marshall, D-Ga., and Collin Peterson, D-Minn., met with area farmers and agriculture businessmen Monday afternoon at Lewis Taylor Farms to discuss the 2007 Farm Bill.”
“Peterson told the audience, ‘The farm bill is halfway there. We have marked up five of the 10 titles.’ He said he planned for the farm bill to be out of the House Agriculture Committee by July 4.”
The article also added that, “The first question asked of Marshall and Peterson was from a fruit and vegetable farmer asking if they would be included in the farm bill.
“Marshall indicated they would be, but said, ‘It’s like Monopoly money. The programs will be authorized, but there won’t be any money for them.’
“Peterson told the farmer, ‘I want to ask the fruit and vegetable farmers to stick with us and I hope we can find enough money.’
“Peterson said there were 255,000 farmers with 10 acres or less. ‘They are not real farmers,’ he said. ‘They are city people.’ Peterson talked about excluding them as a way of raising $2.4 billion. ‘This might be a way to raise money,’ he said. ‘But it will cause some commotion.’”
II. Direct Payments
Ben Shouse provided broader perspective on the Farm Bill debate in an article published in Sunday’s Argus Leader (South Dakota); “Nobody knows who the winners and losers will be, but a few things are near certain:
“* There will be attempts to cut traditional farm payments, probably a program called ‘direct payments.’
“* Environmental groups and some Democratic lawmakers will try to funnel more money toward payments for on-farm conservation.
“*Energy from agriculture is a growing area of consensus, but the strategy and cost of promoting it still are unclear.”
Mr. Shouse explained that, “Direct payments basically are a flat sum that goes to each farmer based on past crop production. Cotton and rice farmers in the South value the program, but some farmers in South Dakota see it as a double-edged sword – it helps drive up land prices and offers relatively little to producers west of the James River.”
The article also indicated that, “[Dave Gillen of White Lake, chairman of the South Dakota Corn Growers Association], said he hopes that money will stay in the commodity title, which covers traditional farm programs.
“But environmental groups have their eyes on that pot, as do some Democrats and groups that advocate for small and mid-size family farms. The latter group advocates, among other things, stricter caps on payments to any one farmer.
“Environmental groups are relative newcomers but still stand a chance of winning money from Congress, said Bob Burns, chairman of political science at South Dakota State University in Brookings.
“‘They’re very experienced with politics in general, and if you get current and former farm-state senators seeming to be supportive of a shift, they may well succeed,’ Burns said.”
Along these lines, Reuters writer Charles Abbott reported on Monday that, “U.S. farmers will have hefty protection against low crop prices even if the government eliminates $5 billion in guaranteed annual payments to grain, cotton and soybean growers, anti-subsidy advocates said on Monday.
“With corn prices at decade highs, direct payments have come under criticism. Under various proposals, the $5 billion would be spent on land stewardship, disaster aid, specialty crops or public nutrition programs.”
Mr. Abbott added that, “During a briefing for congressional staff workers, Scott Faber of Environmental Defense described direct payments as the ‘vestigial organ’ of farm policy. He said the money could be put to better use in the farm law being written this year.
“‘Farmers would have a true safety net through counter-cyclical and loan deficiency payments,’ said Faber.”
The Reuters article concluded by saying that, “During an impromptu session with reporters, Johanns said direct payments were far less likely to attract challenges under world trade rules than U.S. subsidies, such as price supports, that are linked to growing a particular crop.”
For a more detailed look at direct payments, see “Paying for Farm Bill Priorities,” an update that was posted by Scott Faber on Monday at his new blog, “The Ruminant, a daily update on the farm and food policy debates shaping the 2007 Farm Bill.”
See also “Direct Payments,” an item posted exclusively at FarmPolicy.com on May 12 by Washington Post special correspondent and German Marshall Fund Transatlantic Fellow Dan Morgan.
III. Doha
Reuters writer Missy Ryan reported on Saturday that, “U.S. farm groups warned the Bush administration this week against bargaining away growers’ interests as negotiators make an intensified push to broker a new trade deal in coming months.
“‘Reductions in, and limitations on, U.S. domestic support can only be justified if they yield an important net gain for American farmers and ranchers,’ a coalition of 13 farm groups said in a sharp letter sent late on Thursday to U.S. Trade Representative Susan Schwab.”
The article added that, “The missive was signed by associations representing U.S. soybean, corn, sugar, cotton, milk, wheat and other industries.
“The administration has long focused on tariff cuts. ‘Any change in our current offer is dependent on achieving further market access for America’s farmers, ranchers, businesses and service providers,’ said Sean Spicer, a spokesman for Schwab.”
Last Thursday, Reuters news indicated that, “Brazil’s foreign minister said on Thursday he is ‘rather confident’ a deal will be reached in the Doha round of global trade talks in coming weeks,” while Bloomberg writers Mark Drajem and Jennifer M. Freedman noted on Friday that, “Trade chiefs from the European Union and the U.S. met today in Brussels amid new signs of progress in efforts to revive long-stalled global trade talks.
“European Trade Commissioner Peter Mandelson and U.S. Trade Representative Susan Schwab are trying to capitalize on the desire of political leaders to conclude a deal, as well as U.S. willingness to ease a demand to slash agricultural tariffs by as much as 85 percent and EU promises to be more flexible.”
The article added that, “Today’s talks were a prelude to a weeklong meeting of trade officials from the U.S., the EU, Brazil and India that begins in less than three weeks.
“‘It was a useful meeting and an important part of the preparations for the decisive meeting that starts on June 18,’ Michael Mann, a European Commission spokesman, said by telephone after Mandelson and Schwab met.”
And, the Associated Press reported yesterday that, “The European Union’s top trade official Tuesday called on G-8 leaders to use their authority to help conclude the ailing Doha Round of trade talks on a global commerce pact.
“‘The political stakes are very high. This seems to be leading negotiators, as we approach the deciding moment, to harden their positions rather than offering compromise and flexibility,’ EU Trade Commissioner Peter Mandelson said as leaders of the Group of Eight nations prepared to meet in Germany.
“‘G-8 is critical. If we cannot reach a deal on trade today, what chances do we have to reach a deal on climate change in the future?’ Mandelson told a committee of the European Parliament.”
The A.P. article added that, “Mandelson repeated his warning that if the talks fail now they will not resume before 2010.
“‘I would not be optimistic about reviving the negotiations if they fail in the next two months. It would be 2010 before, realistically, we’d see resumption of these talks if they fail this summer,’ he said.”
IV. Farm Bill Editorials
“End farm subsidies.” The Orlando Sentinel. June 2- “Congress is now working on a new five-year plan for farm policy. It’s an ideal time for lawmakers to commit to phasing out costly and wasteful farm subsidies.”
“Seize chance to end subsidies.” Wisconsin State Journal. June 4- “But it’s time for American farmers to produce for market demands, not to collect a subsidy check.”
V. GMF EU Journalism Study Tour
Charles Michael Ray of South Dakota Public Radio filed a report from Europe on June 1st regarding U.S. and EU farm policy. Charles was a participant in the German Marshall Fund’s EU Journalism Study Tour.
To listen to his story (about five minutes), just click here.
Keith Good
