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House Ag Committee, Two Bills
The editorial board at the Seattle Post-Intelligencer stated on Friday that, “Shut up, keep paying and eat that junky food our richest farmers produce for you. That’s pretty much the message for residents of the Northwest from a powerful block in the U.S. House of Representatives…Some key farm state politicians are digging in their heels against reforms that would provide healthier foods, end unfair subsidies and provide help for huge numbers of farmers who want to grow their crops in ways that are better for the environment. A House Agriculture subcommittee recently voted 18-0 to maintain $10 billion in subsidies for producers of corn, soybean and a few other crops when Congress renews the Farm Bill, possibly later this year.”
I. Farm Bill
II. Doha / Trade
I. Farm Bill
Congressional Quarterly writer Catharine Richert reported on Friday that, “Conservation and fruit and vegetable programs would receive a funding boost under a new version of the farm bill unveiled Friday by House Agriculture Chairman Collin C. Peterson.
“The funding increase is part of one version of the farm bill that the Minnesota Democrat said he will bring to the full committee July 17. During that markup, members also will vote on a second bill that would add another $17.5 billion in spending authority. The extra money would be drawn from a reserve fund created under the fiscal 2008 budget resolution, but it could be spent only if offset with cuts elsewhere. For now, no offsets are included.
“Peterson hopes that debating the two versions of the legislation will help panel members move past some of the budgetary and policy disputes that strained subcommittee deliberations on the various pieces of the bill.”
Brownfield’s Bob Meyer summed up Chairman Peterson’s actions this way in an article form Friday, “Peterson says he will mark-up the farm bill on July 17th with floor action scheduled for July 24th. He also says he will mark-up two bills. One will contain all of the items that meet ‘pay-go’ standards; the other will be the items that still need offsets. That second bill will be voted on by the full committee and then tabled until offsets can be found. The Chairman says he is confident funding will be found, and once it is, the items will be taken from the table and sent to the bill either on the floor or in the Conference Committee.”
Mr. Meyer also noted that, “The Minnesota Democrat says there will most likely be some type of payment caps in the next farm bill. ‘I think there is a sense within the Committee that probably something has to be done otherwise we could end up with something on the floor that’s not workable.’”
To listen to a Brownfield audio segment with Chairman Peterson, just click here (MP3- about three minutes).
Philip Brasher noted on Saturday at The Des Moines Register’s Cash Crops Blog that, “House Agriculture Chairman Collin Peterson has dropped some new clues about where his committee is headed with the farm bill [in July].
“He says he’s going to propose cuts in crop insurance to pay for increases in farm bill spending, including new funds for fruit and vegetable growers.
“Peterson didn’t specify how large the crop-insurance reduction would be. But he says those cuts, plus some tinkering with the timing of farm subsidies, will give the committee an extra $3 billion to put into other programs over a five-year period.
“The cut to the crop insurance program may include a reduction in the payments made to insurance companies for administrative and operating costs. Most of that money goes to the insurance agents who sell the federally subsidized policies to farmers.
“Peterson noted that companies and agents will be making significantly more money on the policies this year simply because commodity prices have risen sharply.
“‘Clearly, there needs to be something done,’ he told reporters.”
Also on Friday, U.S. Representative Ron Kind (D-Wisconsin) issued a statement indicating that, “I appreciate that the Chairman has recognized the unmet need that exists in our conservation and nutrition programs, and his proposals provide some funding increases for these vital needs.
“While I look forward to the two proposals’ final language, I am afraid that neither of them addresses the inherent problems that exist in our farm policies. Under both proposals, we still favor multi-million dollar operations over family farms. We still remain in violation of WTO rules. And we still distort the marketplace.
“Either of these proposals, if adopted, would represent so many missed opportunities. We can do so much more with the Farm Bill to invest in rural communities, advance the biofuels movement that is generating wide optimism in rural America, promote healthier food choices for Americans, and provide cleaner water and air for everyone. But to do this, the Agriculture committee needs to recognize that it is time to reform our out-of-date, depression-era policies that don’t make sense for modern agriculture. I would also emphasize that there is no need for the committee to break PAYGO rules, and hope it would look instead within the Farm Bill to fund America’s priorities.”
The House Ag Committee is scheduled to consider the 2007 Farm Bill on July 17, 18 and 19.
The Senate Ag Committee will be holding a field hearing tomorrow in Great Falls, Montana; this hearing will focus primarily on farm bill policy proposals relating to farm and rural energy issues and rural development. To view the list of hearing witnesses, just click here.
In other farm policy news, Celia Lamb reported on Friday at Sacramento Business Journal Online that, “California farmers generally approve of the Farm Bill but would like to see it expanded to include research, marketing and nutrition programs for the fruit, vegetable and nut crops grown in the state. Lawmakers are likely to see opposition from people who object to the landlords receiving the subsidies instead of the farmers and from groups who oppose subsidies outright.”
The article also expounded somewhat on the concept of “base acres,” noting that, “The top 10 subsidy recipients in the Sacramento region received a total of $2.97 million from 2003 to 2005. The subsidies, authorized by the Farm Security and Rural Investment Act of 2002, pay growers based on ‘base’ acreage, meaning land that grew cotton, grains or oilseeds from 1998 to 2001. Most Sacramento-area subsidy recipients have rice-base acreage and receive payments regardless of whether they still grow rice on that land.
“The system evolved because of World Trade Organization rules against paying someone to grow a specific crop, said Tim Johnson, president and chief executive officer of the California Rice Commission in Sacramento. The commission estimates about 95 percent of the rice base in California has been planted with rice since 2002. But one Sacramento-area grower, who owns rice-base acreage and asked not to be named, said he no longer grows any rice but receives subsidies. The base-acreage system gives him flexibility to choose which crops he grows each year, he said.”
(For more on Base Acres, see this FarmPolicy update from Wednesday).
Ms. Lamb also reported that, “Farm subsidies have a minimal impact to the Sacramento region’s economy, said agricultural economist Daniel Sumner.
“‘In the grand scheme of things, it’s not very much money,’ he said. ‘Much of those payments show up in land prices, so (the value of) rice land is bigger than it would otherwise be…. Nobody could be in the rice business and not get payments while all of their neighbors are getting payments.’
“California farm interests are pushing for more money for programs that would benefit vegetable, fruit and nut growers, the ‘specialty crops’ that don’t benefit from conventional commodity programs.
“An alliance of specialty crop-grower groups that includes Sacramento-based almond cooperative Blue Diamond Growers and at least a dozen other California farm groups has lobbied for marketing and nutrition education programs to increase demand for their crops. They also want more federal money for agricultural research and pest control.
“California Congressional leaders want to expand food-stamp and nutrition-education programs and provide direct-marketing assistance for small-farm owners, organic-crop growers, minority farmers and beginning farmers. Because of budget restrictions, there won’t be enough money for these alternatives without a change in commodity programs, Sumner said. So far, that hasn’t happened.”
In editorial opinion regarding the 2007 Farm Bill, the Orlando Sentinel noted yesterday that, “It’s not too late to come up with a better farm policy that doesn’t waste taxpayers money, squander resources and hinder U.S. trade negotiations. But lawmakers who want to see improvements will need to stand together to overcome a stubborn group who are beholden to the status quo’s vested interests instead of national interests.”
And the editorial board at the Seattle Post-Intelligencer stated on Friday that, “Shut up, keep paying and eat that junky food our richest farmers produce for you. That’s pretty much the message for residents of the Northwest from a powerful block in the U.S. House of Representatives.
“Some key farm state politicians are digging in their heels against reforms that would provide healthier foods, end unfair subsidies and provide help for huge numbers of farmers who want to grow their crops in ways that are better for the environment. A House Agriculture subcommittee recently voted 18-0 to maintain $10 billion in subsidies for producers of corn, soybean and a few other crops when Congress renews the Farm Bill, possibly later this year.
“Despite the unanimous vote, there is a good chance for reforms. Iowa Democratic Sen. Tom Harkin said his colleagues are going to demand reforms this year, which would better serve everyone. That includes the vast majority of farmers.”
The editorial added that, “The House Agriculture Committee would do well to start working on changes before its recalcitrance provokes a floor fight with reformers, who appear to include all of Washington’s House members.”
II. Doha / Trade
Christopher Adams reported at the Financial Times Online on Friday that, “Renewed efforts to broker a global trade deal are to be a key foreign policy priority for Gordon Brown.
“This was signalled by the new prime minister’s appointment yesterday of a close friend, Douglas Alexander, to head an enlarged international development brief.”
The FT article added that, “Senior Whitehall officials said yesterday that the Department for International Development could have its ministerial team doubled in size. It was expected to take the lead in efforts to resolve the Doha round of global trade talks.”
Meanwhile, Dow Jones writer Tom Murphy reported late last week that, “Brazilian President Luiz Inacio Lula da Silva on Friday called for a revitalization of the Mercosur South American trade bloc as a ‘strategic voice’ in world trade talks.
“Lula made his comments in a speech at a summit of Mercosur leaders in the Paraguayan capital of Assuncion. Mercosur consists of Brazil, Argentina, Uruguay and Paraguay. The president’s comments were distributed by the Brazilian government news agency.
“‘The strategic character of Mercosur should be reinforced…. We need to strengthen Mercosur as a voice in international trade negotiations,’ he said.”
And, an Xinhua news item from Friday noted that, “Brazilian President Luiz Inacio Lula da Silva warned on Thursday the Doha round of global trade talks will remain stalled if developed countries keep their high farm subsidies.
“‘There will be no business’ with developing countries like Brazil and the Doha round will remain unaccomplished if the subsidies stay, Lula said at a gathering with agricultural businessmen.”
Similarly, Reuters news reported on Friday that, “Brazilian President Luiz Inacio Lula da Silva has hit back at rich countries who blamed Brazil for the collapse of global trade talks, saying little chance existed for success unless they offered greater access to agricultural imports.
“‘If they don’t open up agriculture, we have nothing to talk about,’ Lula was quoted as saying in the Valor financial newspaper on Friday.
“His comments were the harshest from Brazil since the collapse last week of talks in Germany between Brazil, India, the United States and the European Union that were aimed at narrowing differences in the struggling Doha round of World Trade Organisation talks.”
India, on the other hand, appears to be taking a more nuanced tone in wake of the recent G-4 breakdown.
A news item from Saturday stated that, “Blaming the developed world’s ‘serious gap of attitude’ as the reason behind failed talks, India has said that it is still optimistic about Doha Development round concluding positively.
“‘There is a serious gap of attitude because of which the talks had failed,’ said Indian Commerce Minister Kamal Nath, who is cut up with the hardened attitude of the US on agriculture subsidy issue.
“Nath’s remark comes week after the US, Indian, the European and Brazilian negotiators abandoned talks in Potsdam in Germany.
“The Indian minister, however, said ‘I don’t see Doha Development Round petering out but hope to see it coming to a conclusion.’”
With respect to the United States, Reuters news reported on Friday that, “The United States will look to more regional and bilateral trade deals, including a possible Asia-Pacific trade bloc, if world trade talks fail, U.S. Trade Representative Susan Schwab has told an Australian newspaper.
“Schwab told The Australian paper that a successful Doha round of trade talks was the top priority, but the U.S. was looking to the Asia-Pacific region, and ways to knit together a range of bilateral and regional trade deals, as an alternative.”
Keith Good
