Washington Report for 2-11-13

By Steve Kopperud

250 National, Regional and State Ag Groups Thank Chrysler for “So God Made a Farmer” Super Bowl Ad

More than 250 national, regional and state groups – including the Ohio AgriBusiness Association – representing just about every aspect of U.S. food production – including farming/ranching, feed, grain, crop chemical, equipment manufacturer, meat/crop processing and other endeavors relying upon farmers and ranchers – sent a letter February 7 to Sergio Marchionne, chairman and CEO of the Chrysler Group LLC, thanking him for a Ram trucks Super Bowl commercial entitled “So God Made a Farmer.” The two-minute commercial features the legendary radio broadcaster Paul Harvey reading his original essay on the importance of farmers and ranchers to America’s quality of life as iconic farming and ranching images are shown. The ad also benefits the National FFA Foundation. Every view, download or share at http://www.ramtrucks.com/en/keepplowing/ will generate Ram trucks financial support for the FFA Foundation’s “Feeding the World – Starting at Home” program. As of February 7, the spot, rated the third most popular Super Bowl commercial by USA Today’s “Ad Meter,” had been viewed by 6 million viewers. Chrysler and Ram trucks, along with corporate partners Farms.com, Case IH, Stihl, Bosch and Mossy Oak equipment companies, also declared 2013 to be “The Year of the Farmer.” The letter was written and signatures were gathered through a joint effort by the Farm Animal Welfare Coalition, an ad hoc Washington, D.C., coalition of ag groups working to ensure state/federal legislation/regulation affecting livestock and poultry production is balanced between animal wellbeing and producer wellbeing, and the Animal Agriculture Alliance. The letter and its list of signatures can be viewed at www.animalagalliance.org. FAWC can be reached at skopperud@poldir.com.

Sequestration Battle is On; House Passes Balanced Budget Bill

Both sides of the political aisle, the White House and both chambers of Congress traded jabs over how to avoid the looming sequestration deadline March 1. The House upped the ante a bit by approving a bill to require the President to submit to Congress a “supplemental budget” that would describe when a balanced budget would be reached if his FY2014 budget does not erase the deficit. The White House missed its deadline of February 4 for submitting its budget to Congress, blaming confusion and uncertainty over sequestration for the delay. President Obama told Congress he’d like to see a short-term “buy-down” of the mandatory spending cuts to give more time for Congress to work out a master plan, but both the House and Senate continue to contend they have plans to avoid $85 billion in across-the-board spending cuts this year. “If Congress can’t get a bigger package done by the time sequestration is scheduled to go into effect, then I believe they should at least pass a smaller package” to forestall cuts for several months,” the President said from the White House, adding all previous Administration budget cutting offers are still on the table, including closing tax loopholes and changes to entitlement programs. From an agriculture perspective, Sen. Debbie Stabenow (D-MI), chairwoman of the Senate Agriculture Committee, confirmed in an interview that $5 billion in conventional farm program payments – still in place with extension of the 2008 Farm Bill – are prime targets for cuts as part of sequestration, and that whatever is done to agriculture as part of sequestration will be credited to her committee as savings as she begins mark-up of a new Farm Bill in April or May. Overall, USDA’s share of the sequestration cuts would be about $2.5 billion over the last six months of the fiscal year. One news report said the Office of Management & Budget pegs farm payment programs for a 7.6-percent cut, or about $470 million. While crop insurance seems to be protected, the Risk Management Agency, which oversees the federal insurance programs, could be in for a $10-million cut. Secretary of Agriculture Tom Vilsack said his department would have to reduce the number of inspections at meat packing plants, but did not give further details. While the President’s offer generated interest on both sides of the aisle, the House Republican leadership said the only way a short-term cut could happen is for them to surrender on their “no taxes” pledge – though the President did not mention taxes – and so far, they’re refusing to do so. House Speaker John Boehner (R-OH) took political advantage of the President missing his budget deadline to hammer the Administration on “the President’s sequester.” Senate Majority Leader Harry Reid (D-NV) said the Senate will take up a still-evolving plan to be rolled out late this week to avoid sequestration, hopefully seeing final action the week of Feb. 25. Sen. John Cornyn (R-TX) said the measure could be part of a new continuing resolution to keep the government running at FY2013 levels through the end of the calendar year. The current continuing resolution expires March 27. Stabenow, also a member of the Senate Finance Committee, said the measure could carry a $112-120-billion price tag and put off the sequestration cuts through the end of calendar 2013. The plan is expected to be “close to evenly divided” between spending cuts and tax increases, but one Senator told the paper a 100-percent revenue package or one that’s 80 percent revenue, 20 percent spending cuts would not get GOP support.

Senate Ag Panel to Hold February 14 Disaster Hearing

The Senate Agriculture Committee announced it will hold a February 14 hearing entitled “Drought, Fire and Freeze: The Economics of Disasters for America’s Agricultural Producers.” Chief witness at the hearing will be Dr. Joe Glauber, USDA chief economist, who’ll be joined by Dr. Roger Pulwarty, director of integrated drought information systems at the National Oceanic & Atmospheric Administration. A separate panel will feature farmers and ranchers from across the country. 

Ethanol/RFS Issue Heats Up; Vilsack Supports Ethanol, Meat Industry, Others Take Shots

Two opponents’ press events calling for “extensive reform” or outright repeal of EPA’s Renewable Fuel Standard, countered by the Secretary of Agriculture reminding the annual meeting of the Renewable Fuels Association that he supports ethanol and the RFS, words bolstered by an Iowa House member’s vow to preserve the RFS, punctuated the escalating political food-versus-fuel debate. RFS President Bob Dineen told 1,100 attendees at RFA’s National Ethanol Conference in Las Vegas that, “The state of the ethanol industry can be summed up in five words: Under siege and fighting back.” Dineen said his group’s priorities are defending federal programs, promoting E15 motor fuels and opening export markets for ethanol. Ag Secretary Tom Vilsack told the RFA, “The biodiesel industry is making us a more secure country … (but ethanol is challenged) by those who perpetuate the falsehood that you are asking this country to choose between food and fuel.” In Washington, D.C., ag economist Dr. Tom Elam, president of FarmEcon LLC, appeared at a livestock/poultry industry press conference on behalf of the National Chicken Council and the National Turkey Federation, and said, “The RFS is broken, but Congress can fix the rule by acting now and opening an inclusive, robust debate that leads to extensive reform.” Referring to 2007, the first year the RFS mandated ethanol – currently mostly refined from corn – be blended with gasoline, as a “game changer,” Elam crystallized industry’s concern by saying, “We did not then and still do not today, have the volume of agricultural raw materials, or the required cellulosic ethanol technology to met the 2007 RFS goals. Nearly six years later, it’s still not a commercial reality.” A second coalition of RFS opponents, lead by the Environmental Working Group and the American Petroleum Institute told reporters the RFS is causing higher food prices in developing countries, is forcing U.S. fuel prices to move higher and is causing automobile engine damage. Rep. Steve King (R-IA), still contemplating a run for the Senate in 2014 to fill the seat being vacated by retiring Sen. Tom Harkin (D-IA), said he opposes changing or eliminating the RFS, saying the government must play a “vital role” in helping the biofuels industry attract investment capital. “There’ll be a fight in here in Congress and I’m going to be on the side of protecting, preserving and defending the RFS. If you open up the standard, you open up a can of worms.” King was responding in part to a statement made earlier this week by Rep. Ed Whitfield (R-KY), chairman of the energy and power subcommittee of the House Energy & Commerce Committee. Whitfield wants to hold hearings to see if the RFS can be modified to benefit all stakeholders. “We’ll get all sides of the issue and proceed in a cautious way,” he said.

USDA, EPA Release Climate Change Reports; NFU Likes Bicameral Task Force

USDA released an interagency report on climate change and its effects on agriculture, projecting that by 2050, the impacts of climate change, while mixed, “are expected to have a generally detrimental effect on most crops and livestock.” EPA also released its “Climate Change Adaptation Plan,” asking for public comment on the report which states change is happening at “an increasingly rapid rate.” Control costs will go up, with livestock production being negatively impacted by heat stress, along with an increase in insects and disease under warmer, more humid conditions, USDA said. A separate USDA report on the impact of climate change on forests was also released, and that report basically said much the same as the ag report. USDA has also released its “2012 Strategic Sustainability Performance Plan” as well as a “Climate Change Adaptation Plan.” All reports can be found at www.usda.gov and www.epa.gov. Meanwhile, the National Farmers Union sent a letter this week to Rep. Henry Waxman (D-CA) and Sen. Sheldon Whitehouse (D-RI), cochairs of the House/Senate task force on climate change, thanking them for their efforts, saying climate change is “a significant concern to our membership, and will be a defining trend that shapes the world.” The NFU letter was in response to a Waxman/Whitehouse request of the group to provide input to the task force.

Baucus Wants Missouri River Water to Stay Where it Is

During a Senate Environment & Public Works Committee hearing this week on re-authorization of federal water resources projects, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, said he wants the U.S. Army Corps of Engineers to continue to enforce the Missouri Compact on redirecting, during winter months, Missouri River water to watershed reservoirs and waterways. “We didn’t build dams on the Missouri to benefit our friends lower down on the Mississippi,” he said, referring to calls by Mississippi River watershed Senators for the White House to allow Missouri River water to flow to the Mississippi to raise shipping levels. So far, calls to release the Missouri River water have been ignored.

House Committee Wants Enviro Compliance Cost Data

The House Natural Resources Committee wants the Government Accountability Office, the investigative arm of Congress, to prepare a report on how much it costs government agencies to comply with the National Environmental Policy Act. The report would look at such agencies and departments as EPA, Energy, Defense, Interior and Health & Human Services. The committee said it’s concerned because in addition to compliance costs, there are costs related to litigation, and delays to industry in regulatory approvals. NEPA, enacted in the 1970s, requires the federal government to assess the environmental impact of its programs and regulations. NEPA also created the White House Council on Environmental Quality, but critics say it creates duplicative requirements for agencies and unnecessarily delays permits and approvals.

AFIA, FEFAC Announce First Livestock Product Chain Feed Enviro Guidelines

An international consortium of feed organizations, dedicated to reducing the impact of feed as part of the livestock product chain on the environment, announced it will publish its first version of “Feed LCA Recommendations” and guidance this year. The group – the American Feed Industry Association, the European Feed Manufacturers Federation and the International Feed Industry Federation – are working cooperatively as part of a United Nations Food & Agricultural Organization, a partnership on benchmarking and monitoring the environmental performance of livestock supply chains. The interim version of the FEFAC/AFIA Feed LCA Recommendations will be presented at the 4th Global Feed & Food Congress organized by IFIF in South Africa in April.

Swedes Want to Tax Meat to Meet Enviro, Climate Goals 

The Swedish government’s Board on Agriculture recommended a tax on meat, a move it says will cut consumption, reduce international production and have a positive impact on climate change and environmental challenges in the livestock industry. However, Sweden acknowledged it can’t go it alone. “Regulation, environmental taxes and subsidies can lead in the right direction, but it’s crucial that this is at an international level. Else we risk moving the production somewhere else where the tax burden is lower, not where the production is sustainable,” said a Swedish Board of Agriculture spokeswoman, according to meatingplace.com.