On June 21, the full Senate approved 64-35 its version of the 2012 Farm Bill, with most southern Senators voting against the bill based on commodity title provisions. It took two weeks of procedural jockeying and slogging through 73 amendments to get the bill to final passage. The 1,000-plus-page bill carries a 10-year price tag of $969 billion, but shaves $23.6 billion off discretionary spending programs through re-invention, refinements and program substitutions.
The five-year bill kills off direct payments to farmers saving $5-6 billion a year, replacing them with a crop insurance-based Agriculture Risk Coverage (ARC) program, a “shallow loss” program that pays producers 15-21 percent of losses not covered by conventional crop insurance. This program has been attacked by southern rice and peanut producers as favoring large midwestern corn and soybean growers over smaller farmers and crops grown in the South. Those southern interests have turned their attention to the House Farm Bill process in hopes of securing what they consider equity in income support. The Senate bill would consolidate 23 federal conservation programs into just four “fundamental” working programs, and would cut the Conservation Reserve Program (CRP) acreage cap from 32 million acres to 25 million, allowing only highly erodible lands to be recontracted. All in all, these changes save about $6 billion.
The package carries an $800-million energy title that seeks to find alternative feedstocks to corn and other feed crops for the production of biofuels, while also promoting on-farm alternative energy generation. The bill also includes a conventional federally funded research title, but also features for the first time the Foundation for Food & Agriculture Research (FFAR), a new program facilitating public/private partnership investment in ag research. Also included is a permanent livestock and supplemental disaster assistance program which maintains a producer cash assistance payment system. This program keeps commercial feed companies in the transaction loop when delivering government disaster feed assistance to producers. No anti-farming animal rights measures were included in the bill.
Amendments accepted during floor debate include the following:
Amendments which failed include the following:
To finally begin floor action, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and ranking committee member Sen. Pat Roberts (R-KS) fended off more than 330 filed amendments to the bill. Once they negotiated the list down to 73 amendments – many were dumped as irrelevant to the bill or were minor changes accepted as part of the package without a vote – Senate Majority Leader Harry Reid (D-NV) and chamber Minority Leader Mitch McConnell (R-KY) blessed the list, and limited debate on each amendment to one minute on each side of the issue and held voting time to 10 minutes. A handful of unrelated amendments were allowed, but needed 60 votes to pass. House Agriculture Committee Chairman Frank Lucas (R-OK) said of the Senate action “I commend Chairwoman Stabenow and Ranking Member Roberts on passage of S. 3240 … it was a challenge to move this legislation and their efforts made it possible. Although there will be differences between the Senate approach and our own … (the House committee) will consider a balanced proposal that saves taxpayers billions of dollars, recognizes the diversity of American agriculture, respects the risks producers face and preserves the tools necessary for food production.” Committee ranking member Rep. Collin Peterson (D-MN) said, in praising Stabenow and Roberts, “It is crucial we finish the farm bill before the current bill expires in September. Waiting until the mess that will be the lame duck session will only make it more difficult, but could also result in several unintended consequences.”
"I am grateful for the Senate’s progress toward providing a reformed safety net for producers in times of need, supporting agricultural research and trade promotion, honoring World Trade Organization (WTO) commitments, furthering the bio-based economy, conserving our natural resources, strengthening local and regional food systems, and promoting job growth in rural America," Agriculture Secretary Tom Vilsack said.
The civil war between midwestern lawmakers and their southern colleagues over how to equitably re-invent the Farm Bill income safety net has a new hero, Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee and a Senate ag committee member, a northern plains liberal who retires at the end of this Congress. A week ago, Conrad joined with Sen. Saxby Chambliss (R-GA), a former Senate Agriculture Committee chairman, and leader of the southern bloc of Senators who this week voted against the Senate Farm bill, to develop an alternative to the Agriculture Risk Coverage (ARC) program approved by the Senate ag panel to replace federal direct payment programs. It’s the ARC program that Chambliss believes discriminates against southern peanut and rice producers by providing greater support to corn and soybean farmers in the Midwest. The basic scheme would re-insert target prices as an add-on to the ARC program, increasing them 4-7 percent from current levels, while paying farmers on a maximum 75 percent of base acres planted or prevented from planting. Conrad would also create a separate payment limit on countercyclical payments of $65,000 a year. While the Conrad-Chambliss plan was originally to file an amendment to the Farm Bill while it was on the floor – an approach supported by Sens. Max Baucus (D-MT), chairman of the Finance Committee and ag committee member, and another ag committee member freshman Sen. John Hoeven (R-ND) – Conrad, a veteran of many Farm Bills, decided against offering the plan, saying he’ll save it as a proposal for the conference committee with the House. Insiders say Conrad and Chambliss will offer the House-Senate conference committee a substitute commodity title with his target price program approach as a “compromise” to the House commodity title, but likely more closely pegged at target price values determined by the House. Southern producers OK’d the Conrad-Chambliss approach behind the scenes this week, not as a solution to their complaints, but as a means of getting the bill through the Senate and into conference with a House bill. The House ag panel leadership has said its committee bill will feature a commodity title that will be more generous on the target price side of farm income protection to overcome regional and crop differences.
While the House Agriculture Committee had hoped to markup its version of the 2012 Farm Bill beginning next week, committee Chairman Frank Lucas (R-OK) said this week he’ll hold off on committee action until July 11 when the House returns from its July 4 recess. Lucas said the delay was not because his committee wasn’t ready to take up the legislation, but because the FY2013 ag/FDA appropriations bill will be on the House floor next week, and committee members will be working to stave off “onerous amendments” which may be offered and which could complicate his committee’s Farm Bill efforts. The delayed markup has some concerned the House will not be able to complete floor action on the Farm Bill before it expires September 30, particularly given House Speaker John Boehner (R-OH) has given no indication he will allot floor time for the debate. The Senate Agriculture Committee, fresh off its passage of its Farm Bill, called on the House leadership to show the same commitment to Farm Bill passage that Senate leaders did in getting the bill to the floor. House members have criticized the Senate bill as lacking “regional balance” and “loaded with negligent food stamp expenditures.”
As House appropriators this week approved an FY2013 agriculture/FDA spending bill cutting the Commodity Futures Trading Commission’s (CFTC) budget by $25 million to $180 million, Senate appropriators increased commission funding by a whopping 50 percent to nearly $310 million. The slashed House CFTC spending level – the committee Democrats referred to the cuts as a “naïve self-regulatory approach” to Wall Street and a blatant political move to slow Dodd-Frank enforcement – drew a swift threat of veto from the White House, objecting to the overall funding of the ag bill, but taking specific issue with CFTC funding. The Administration said the bill violates the spending/deficit agreement from last fall, a charge the White House has leveled at nearly all of the House appropriations bills. House Democrats acknowledged they have little chance of increasing CFTC funding on the House floor, so are relying on a more generous Senate ag spending bill to give them room to increase commission spending for the next fiscal year, though likely not at the $300 million-plus level of the Senate bill. However, it’s unlikely both chambers will approve their respective bills before the fiscal year ends September 30, so a reconciled funding package will likely be rolled into an omnibus spending bill.
In an agreement reached last week, the CME Group agreed to turn over to bankruptcy trustees $175 million in MF Global Holdings Ltd. property, the parent company of MF Global (MFG). Of the total, about $130 million is destined to be returned to former customers. It’s estimated that former clients of MFG have so far received about 72 percent of their lost investment from when the company declared bankruptcy last October. The agreement between the CME and MFG trustees must be reviewed by a bankruptcy court and can’t be implemented until approval is received. The hearing is set for July 11. The $130 million will be split between commodity customers trading on domestic and foreign exchanges, according to reports. About $16.5 million will remain with the CME to deal with MFG claims against the exchange, and the rest of the money will be held in a general fund. MFG trustees continue their battles with MFG’s parent company, and reports indicate those skirmishes are about to escalate based on the trustees’ denial of a claim for $650 million in customer claims from the parent firm. MFG’s parent firm also has general creditor claims of about $1.6 billion against MFG. A court case in the United Kingdom is coming over about $700 million held in that country which U.S. trustees claim is owed to U.S. customers. The trial is set for April, 2013, a timeline which drew harsh criticism from the U.S. judge overseeing the MFG bankruptcy in the U.S.
President Obama’s executive order last week to exclude up to 800,000 children and young adults brought into the U.S. from federal deportation proceedings is drawing expected criticism, even though he tried to build off legislative proposals floated by both parties in Congress. The order is similar to the DREAM Act which has failed to pass Congress over the last decade, and the GOP says the order is nothing more than a political end run around Congress to appeal to Hispanic voters in advance of the November election. The President said he took the action because Congress has refused to act on immigration reform, but critics reminded the White House the President has previously told immigrant groups he lacked the power to issue such an executive order. The so-called “deferred action” order is a two-year temporary action, the White House said, but could be renewed, and Obama said it does not convey legal status, amnesty or immunity to any illegal immigrant. The order will affect immigrants brought into the country as children when they were under the age of 16 and are not yet 30 years old. They must have lived in the U.S. for at least five years and remain in the country, have not committed a felony or “serious crime,” and are currently students, high school graduates, GED recipients or honorably discharged veterans. Secretary of Homeland Security Janet Napolitano said the government may also defer action on deporting immigrants under the age of 30 if they don’t pose a national security risk, meaning they not been convicted of a felony, a “significant” misdemeanor or multiple misdemeanors. Multiple agencies will process deferral applications, and a granted deferral will allow the immigrant to apply for a work permit with those cases judged individually with no guarantee of approval, the White House said. Napolitano said her department would use its prosecutorial discretion in enforcing the executive order. Republicans are already angry over Napolitano’s use of her discretion, saying recent memos to Immigration & Customs Enforcement (ICE) officers ordering them to focus on “high risk” immigrants makes no sense and “ignore the rule of law.”
House Speaker John Boehner (R-OH) again this week warned federal highway re-authorization bill conferees that the clock is ticking down to when he will have to ask his chamber for yet another six-month extension of federal highway and commuter infrastructure funding. The current extension of federal programs which provide funding to the state for highway, waterway and urban commuter systems is June 30. Conferees said this week they’ve almost got an agreement on the “core programs” needing re-authorization, including highway, bridge, consolidation of transportation programs, speeding up environmental reviews and spending on highway “enhancements.” Unresolved, however, are sections dealing with railroads, highway safety and urban mass transit. Senate Majority Leader Harry Reid (D-NV) said he was confident the conferees would wrap up the package in time for floor votes next week thus avoiding another extension. The conferees are trying to reconcile a two-year, $105-billion Senate-passed bill with what effectively is unsuccessful House legislation, a bill calling for a five-year, $260-billion package which passed committee but never saw floor action.
A single bill carrying six other pieces of legislation all dealing with energy production was approved by the full House this week. The Republicans praised the bill as the first significant energy legislation of this Congress, while Democrats called it a “massive giveaway” to oil and gas industries. The bill mandates an increase in oil and gas production that equals any release from the Strategic Petroleum Reserve, and would require the Department of the Interior to ensure at 25 percent of federal land is eligible for energy leasing each year. Also included in the package is language prohibiting the Environmental Protection Agency (EPA) from finalizing new regulations on refinery air emissions, along with language require the Interior secretary to develop an energy plan for public lands; stop the federal government from rescinding leases on federal lands for energy development; streamline the permitting process; establish a live Internet auction of Bureau of Land Management leases; and speed up programs designed to allow drilling in the Alaskan National Petroleum Reserve.
A bill to terminate the application of the so-called Jackson-Vanick amendment – trade sanctions imposed in the 1960s on nations, primarily the Soviet Union, which blocked Jewish emigration to Israel – and clear the way for President Obama to grant Russia permanent normal trade relations (PNTR) status just as Russia is set to join the World Trade Organization (WTO) is drawing political fire. Just lifting the Jackson-Vanick trade restrictions on U.S. companies translates into $9-28 billion a year in trade for U.S. companies, the U.S. Chamber of Commerce said. Major business groups have endorsed the bill, but it faces major political hurdles primarily due to concerns on both sides of the aisle focusing on Russia’s human rights record and policy confrontations between the U.S. and Russia over Syria. A bill by Sen. Ben Cardin (D-MD) to hold Russia to specific human rights standards will be added to the bill, insiders said. Another political hurdle is a House challenge this week from Rep. Dave Camp (D-MI), chairman of the House Ways & Means Committee, who said he supports the concept of improved trade relations with Russia – including the lifting of Jackson-Vanick sanctions – but put the onus on the White House to build House support if it wants a vote this summer before Russia joins the WTO.
Responding to a federal court order that republication of its controversial proposed air particulate standard must happen this year, the Environmental Protection Agency (EPA) last week published its new, more restrictive proposal for “fine particles” and “soot,” a move that immediately drew fire from industry and praise from environmental groups. The new standard would set the PM 2.5 acceptable level at 12 micrograms per cubic meter; the current standard is 15 micrograms per cubic meter, a level set in 1997. The existing 24-hour fine particle standard and the coarse particulate standards would not change. GOP members of Congress and business groups said the new EPA levels for regulated particulates emanating from refineries, manufacturing plants and auto exhaust is just another Obama Administration/EPA “job killing regulation,” and will cause economic slowdowns and job losses in areas of the country where the new standard can’t be met. States have until 2020 to comply. The new rule proposal has also been criticized for not revealing the specific studies EPA used to arrive at the new, tighter particulate standard. Rep. Ralph Hall (R-TX), chairman of the House Science, Space & Technology Committee, said the proposed rule “appears to be based on secret data that EPA has refused to make public.” The American Chemistry Council (ACC) said there are many questions surrounding the process by which EPA selected studies to be used in its calculations.
On June 15, the Environmental Protection Agency (EPA) gave final approval to moving ahead with a 15 percent ethanol/gasoline blend (E15), with U.S. Department of Agriculture (USDA) Secretary Tom Vilsack praising the move, and anti-ethanol forces contending the blended fuel will cause engine damage and continue the market competition between food, feed and fuel for corn and other feed grains. Meanwhile, EPA proposed that sorghum-based ethanol be designated an “advanced biofuel,” a distinction denied other forms of ethanol and one currently enjoyed by only biodiesel and renewable diesel. In a related development, Sen. Saxby Chambliss (R-GA) early this week filed an amendment on the Senate’s 2012 Farm Bill to repeal the RFS, the federal government mandate on how much alternative fuel must be blended with gasoline on an annual basis. The coalition supporting the Chambliss move, said this week, “The federal RFS has failed to meet its stated goals, and as it stands, is a de facto mandate for corn ethanol that is damaging our economy, wasting taxpayer dollars and driving up food and feed prices.” The E15 action allows the blend to be used in cars built after 2001 now that an objection based on residual fuel left in single hose pumps offering E15 as well as other fuels has been overcome. Retailers now have to register with EPA and must follow misfueling mitigation protocols. If sorghum-based ethanol is given advanced biofuel status, it qualifies as part of a 21-billion-gallon Renewable Fuel Standard (RFS) 2022 blend mandate for the fuel category.