May 17, 2013
Senate, House Ag Committees Approve Farm Bills; Senate Bill on Floor Next Week
As the saying goes, the House writes a Farm Bill; the Senate writes a Farm Bill, and then they rewrite the Farm Bill in conference. That process is well underway as both Senate and House Agriculture Committees this week approved 2013 five-year comprehensive farm legislation, with both bills closely resembling legislation written in 2012, and both bills representing significant budget savings. Both bills carry about a $100 billion-per-year price tag, but nearly 80% of that is the cost of nutrition programs including federal food stamps. Overall, most national agriculture organizations praised the committees for moving bills forward, and while each group was not 100% happy with both bills, relief at the progress and apparent speed with which the bills are moving generated optimism. These groups know the heavy lifting will be in conference committee.
Senate Farm Bill: The Senate vote was 15-5, with four senior Republicans and a lone Democrat voting against the bill. Senate Majority Leader Harry Reid (D, NV) says the bill will be on the floor for full chamber action early next week. The Senate’s ag program package – estimated to save $24.4 billion – was the trickier to get through committee as GOP leadership changed this session with the ascension of Sen. Thad Cochran (R, MS) to the ranking member slot. This forced Chair Debbie Stabenow (D, MI) to rewrite the commodity title of the bill, which kills off $5 billion in direct and countercyclical payments, to reflect Cochran’s desire to provide greater payment protection to southern crop producers to balance out last year’s shallow loss income protection program which his producers alleged favored large, Midwest farmers. That program option pays producers the 12-22% of the difference between losses covered by crop insurance and total calculated loss, and caps payments at $50,000 per farmer. New to this year’s Senate bill is the Adverse Market Payments (AMP) program option, essentially keeping 2008 target price levels in place for most crops. Sens. John Thune (R, SD) and Pat Roberts (R, KS) opposed the new program, with Thune unsuccessfully trying to amend the language to kill off the target prices for all crops but peanuts and rice. Both Thune and Roberts argued the target price notion was a step backward as the committee moved to eliminate direct payments altogether. The marketing loan program for wheat, rice and other crops was retained. Roberts, who voted against the final committee product, said, “I do not believe this is a reform bill. I believe it is a rearview mirror bill.” Sen. John Boozeman (R, AR) declared the House wouldn’t accept the new target price program. Dairy support programs are replaced by a margin protection program, similar to the House approach. Program payments are capped at $750,000 per farm, and other payments. Federal crop insurance is expanded in the bill by about $5 billion by creating new supplemental coverage option allowing producers to buy more coverage above that normally purchased for crop losses. Cotton producers get their own insurance program. An agreement between environmental groups and farmers to resolve the issue of forcing farmers to enter conservation programs in order to qualify for crop insurance was reflected in the bill, but Sen. John Hoeven (R, ND) unsuccessfully tried to kill the provision. Twenty-three conservation programs are consolidated into 13, and caps the Conservation Reserve Program at 25 million acres. The bill provides nearly $800 million for a number of existing and new alternative energy programs at USDA, preserving programs designed to find alternative feedstocks to corn in producing ethanol. Federal food stamps are cut by $4.1 billion. The full Senate bill can be found at www.agriculture.senate.gov.
House Farm Bill: The House Agriculture Committee approved its bill on a 36-10 vote, with Chair Frank Lucas (R, OK) reporting the bill will save nearly $40 billion over 10 years, including $6 billion in sequestration cuts. “This is an adventure that began two years ago and we have an adventure ahead of us in June,” Lucas said, referring to expected House floor action. While votes to support action were narrower than last year, most were strong enough to demonstrate bipartisan support for the package. The House bill kills off most direct payments, establishes full planting flexibility, and creates a producer choice between a Price Loss Coverage (PLC) program and a Revenue Loss Program (RLP). PLC is analogous to the Senate shallow loss program in that it provides a “complement” to existing crop insurance coverage. RLC requires a farmer to have at least a 15% loss, is based upon county-wide coverage based on broad losses, and uses yields and indexing of below-cost of production prices as its benchmark. Both apply up to the total base acres of each farm. Dairy supports are replaced by a voluntary “basic-level” margin coverage program, similar to the Senate, but this program is controversial among some producers as it requires supply control through the Dairy Market Stabilization Program. On crop insurance, the House creates a Supplemental Coverage Option (SCO), an “area-wide group risk policy,” designed to cover losses not paid by individual crop policies. Like the Senate, the House rolls 23 conservation programs into 13, saving about $6 billion. The CRP cap is lowered to 24 million acres. Energy program renewals save about $500 million, but all biomass and biofuels programs – including research and commercialization assistance for non-food crop feedstocks – are reauthorized. Accepted during markup was an amendment by Rep. Steve King (R, IA), same as one accepted last year, to make it illegal for states to ban the sale of foods from other states where livestock/poultry production practices are different. The amendment is aimed at California where it’s illegal to sell eggs from hens not raised under standards identical to those in California; King says his state is the nation’s largest egg producer and the California law – as well as laws in Oregon, Washington and Maine – are illegal and interfere with interstate commerce. Where the Senate cuts about $4 billion from federal food stamp assistance, the House bill cuts a whopping $20 billion over 10 years, even more than the $16 billion approved in the 2012 bill. Full details of the House bill can be found at www.agriculture.house.gov.
Floor Prospects for Farm Bills
The tougher part of writing a new Farm Bill is about to begin as both House and Senate committees start the task of getting their respective chambers to bless committee-approved bills. The Senate will begin debate as early as next week if Senate Majority Leader Harry Reid (D, NV) gets through the procedural process efficiently. Two bills – the Farm Bill and the Water Resources Development Act (WRDA) – are Reid’s must-pass legislation in May so he can move to immigration reform in June. WRDA was approved this week. The Senate bill is expected to be approved relatively quickly, though not without amendment battles even though Reid and Senate Minority Leader Mitch McConnell (R, KY) will limit the number of amendments to be considered. The House Farm Bill will not see floor action until June, but as Rep. Steve Fincher (R, TN) said this week, that battle will be “a dog fight.” House Speaker John Boehner (R, OH) will likely move the bill to the floor under a modified open rule. While not all amendments will be allowed, it’s expected there could be as many as 100 or more ruled in order for debate and vote. The biggest battles for the House bill will be the cost of its commodity title and why doesn’t the bill 1) cut food stamps more, or 2) cut food stamps less. Further, Boehner personally doesn’t like the House dairy program substitutes and may work to eliminate them. The biggest hurdle for the Senate Farm Bill will be the rewrite from 2012 of the bill’s commodity title. While last year, the Senate ag panel killed off direct payments, replacing them with a shallow loss income protection program, this year’s bill carries target prices at 2008 levels, a move to appease southern producers who felt last year’s program favored big Midwest corn and soybean producers. Sens. Pat Roberts (R, KS) and John Thune (R, SD) are expected to try and rewrite through amendment the target price language, preserving those payments for peanuts and rice only. Sen. Kirsten Gillibrand (D, NY) is expected to try and remove $4.1 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP) – federal food stamps – but her chances are slim given she tried last year and was unsuccessful. SNAP cuts will be a major conference committee issue given the House bill cuts that program by over $20 billion, and several House budget hawks are signaling a floor fight over what they feel is a program that needs to be cut even more. Democrats contend the cuts mean 1 million are left without food assistance and will work to restore the funds. The United Egg Producers (UEP) and the Humane Society of the U.S. (HSUS) are expected to bring to the floor of both chambers an amendment to the Egg Products Inspection Act to create federal regulations for “enhanced environment” cages for egg laying hens. The amendment, opposed by nearly all of agriculture, egg producers not members of UEP and a large percentage of the animal rights community, is not expected to survive. Another controversial amendment both chambers will likely debate is whether or not to make USDA-inspected horse slaughter illegal in the U.S. Rep. Michelle Lujan Grisham (D, NM), a freshman, offered and withdrew the amendment during the House ag panel markup after Rep. Kristi Noem (R, SD) took her on. USDA is expected to provide the first grants of inspection to new horse slaughter facilities in Iowa, Missouri and New Mexico soon.
Senate Immigration Reform Markup Continues; House Unveils Bipartisan Approach
The marathon Senate Judiciary Committee markup of comprehensive immigration reform continued this week, with the committee dodging a bullet on guest worker visas as its Chair Patrick Leahy (D, VT) expressed frustration over the number of outstanding amendments and lack of formal votes taken so far. At the same time, members are awaiting the Congressional Budget Office (CBO) “score” on how much the Senate package will cost now and after all amendments have been accepted and a final committee package is in hand. The House “gang of six” bipartisan members said this week the Senate’s bill “an amnesty bill” and unfair to immigrants here legally. They called for securing the borders before any discussion of immigration reform. House Judiciary Committee Chair Bob Goodlatte (R, VA), has said his committee will not address a comprehensive bill, but rather smaller, more focused bills that can be rolled into a package on the House floor. Plaguing both the Senate effort and that in the House are issues of how many visas in each category should be allowed for guest workers; how to treat health insurance coverage for undocumented workers – should workers buy their own insurance if not covered by a company plan or be covered under the new health care law – and payment of back taxes by those granted new immigrant status. In the House, immigration reform negotiators are quickly nearing a make-or-break deadline in developing legislation, and critics of the House GOP approach see this as an opportunity for pressure to be brought on House Speaker John Boehner (R, OH) to simply bring a Senate-passed bill to the House floor, with divisions to be bridged in conference committee. There’s House conservative frustration with deals worked out between the AFL-CIO and the U.S. Chamber of Commerce that would green light about 200,000 unskilled workers to enter the country each year. This provision is a keystone to the Senate package. On the health insurance front, this may be an issue for the respective chamber’s tax writing committees, along with provisions requiring the payment of back taxes to qualify for new legal status. On the Senate side, the Judiciary Committee opted this week to postpone action on rewriting the law on H-1B visas – those for high-skill workers – to see if Sen. Charles Schumer (D, NY) and Sen. Orrin Hatch (R, UT), ranking member of the panel, can work out a deal Hatch wants to allow more science, technology, engineering and math (STEM) workers into the U.S. each year. The bill currently caps the number of STEM visas a 65,000; Hatch wants that raised to 110,000. The issue is whether there’s a U.S. citizen who could do the job, and how to get companies to demonstrate “good faith” efforts to recruit a citizen before bringing in an alien. Hatch plays a pivotal role in the evolution of the bill as he also sits as a senior member of the Senate Finance Committee. He’s carrying amendments developed by Finance that would require the IRS to set up a benchmark for undocumented immigrants to hit to show payment of owed taxes.
Senate Approves WRDA
With Sens. Mary Landrieu (D, LA) and David Vitter (R, LA) dropping their controversial amendment to the Water Resources Development Act (WRDA) to freeze federal flood insurance premiums for five years, the way was cleared this week for final action on the bill. The full Senate approved the $12.5-billion package 84-13. The Louisiana Senators dropped the amendment when consideration was blocked by Sen. Patrick Toomey (R, PA) who said the amendment would derail flood insurance modernization. The underlying bill provides authority and funding to the U.S. Army Corps of Engineers for river and harbor maintenance and modernization, including harbor dredging, locks and dam projects and storm damage prevention. The bill increases dredging and port improvements by $100 million a year for six years, and then dedicates future revenues from fees levied on shipping to a Harbor Maintenance Trust Fund. One amendment accepted by the Senate this week was offered by Sen. Amy Klobuchar (D, MN) that would close the locks and dam at St. Anthony Falls in Minneapolis if Asian carp are found in the river. She says the action protects the upper Mississippi River from being overrun by the invasive carp; barge operators say it will cost jobs since it closes a major inland shipping route. In the House, the Transportation & Infrastructure Committee watched Senate progress closely, but said it will not rubberstamp the Senate bill. Barge operators are hoping the House will include in its bill a call ignored by the Senate to increase the per-gallon diesel tax they pay to the Inland Waterways Trust Fund, dedicating the increase to maintenance and improvements.
Monsanto Wins Supreme Court Case on GE Seed Patent Protection
The U.S. Supreme Court this week ruled an Indiana farmer violated Monsanto Corp.’s patent rights by planting genetically enhanced (GE) soybean seeds and did not buy new seed. The farmer argued he bought “cheap soybeans” from an elevator and alleged they were not covered by Monsanto’s patent. The court said he planted the seeds “solely to make and market replicas of them, thus depriving the company of the reward patent law provides.” The Environmental Working Group (EWG) says the ruling “tightens the seed giant’s stranglehold on American agriculture,” and said the ruling is also a major reason why all food products coming from GE technology must be labeled.
After Contentious Delays, Senate Panels Clear EPA, Energy, Labor Nominees
President Obama’s nominees to lead EPA and the Departments of Labor and Energy were cleared by the panels of jurisdiction, but not before contentious delays and concerns were overcome. In the case of the nomination of Gina McCarthy to head EPA, Republican members boycotted the Senate Environment & Public Works Committee hearing to consider her nomination because of her “lack of transparency” and her failure to answer four out of five questions from the panel posed to her in writing. McCarthy’s nomination was finally voted out last this week, but will face an equally contentious floor consideration. The full Senate approved the nomination of Ernest J. Moniz, an MIT professor to head the Energy Department, and the Senate Health, Education, Labor & Pensions Committee (HELP) voted to approve the nomination of Thomas E. Perez to head the Department of Labor. Senate Republicans have targeted the Perez nomination because, they say, when he headed the Justice Department Civil Rights Division he allowed his office to become too partisan and ideological.
USDA Appointments Announced
USDA announced a number of personnel appointments this week. Patrice Kuresh was appointed deputy undersecretary for rural development. She previously served as an attorney on Indian affairs at the Interior Department. Anne Alonzo has been named administrator of the Agricultural Marketing Service (AMS), and previously was vice president for global public policy at Kraft Foods. Judy Canales has named the Texas state executive director for the Farm Service Agency. Canales previously served as administrator of the Rural Business-Cooperative Service (RBS).
USDA Urges Farmers to Enroll in DCP/ACRE
Producers need to enroll in the Direct and Counter-Cyclical Program (DCP) and the Average Crop Revenue Election Program (ACRE) before the June 3 deadline for ACRE sign-up, and the August 2 deadline for DCP enrollment, USDA said this week. “It’s best to complete the paperwork now rather than stand in line that day before the deadline,” said Farm Service Agency (FSA) Administrator Juan M. Garcia. Full information on enrollment can be found at www.fsa.usda.gov.