The Hagstrom Report

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Agricultural interests start to rumble over future of farm bill in super committee

By JERRY HAGSTROM

Fights began breaking out today among agriculture interests over what the super committee might do with the farm bill, even though no one knows what the leaders of the agriculture committees are planning to do with the proposal that they sent to the super committee on Monday.

Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., Senate Agriculture ranking member Pat Roberts, R-Kans., House Agriculture Chairman Frank Lucas, R-Okla. , and House Agriculture ranking member Collin Peterson, D-Minn., sent the super committee a letter Monday saying that they would agree to up to $23 billion in farm program cuts over 10 years, and that they will send the super committee a more detailed proposal by Nov. 1 on what they are seeking.

The four principals did not say that they want to write a new five-year farm bill within the super committee process, but lobbyists say that they are planning to do just that.

The process through which the four principals may lead the farm bill discussion remained a mystery. One Capitol Hill aide said he believes the farm committee leaders are waiting “to see if the super committee gains traction” before announcing any plans, but that it is unlikely they would hold hearings or markups before finalizing a proposal.
Ken Cook, Environmental Working Group

Ken Cook, Environmental Working Group
Environmental Working Group President Ken Cook said he is afraid that writing the farm bill through the super committee process, which does not allow amendments on the floor of the House or Senate, will mean the bill gets written without input from “healthy food reformers.”

“Fear of floor action is fear of democracy, and democracy hasn't been kind to the industrial agriculture establishment this year,” Cook said in a news release Monday. “The agri-lobby has had to endure close or losing votes on many issues including crop subsidy limits and corn ethanol policy.”

Sen. Charles Grassley, R-Iowa

Sen. Charles Grassley, R-Iowa

Grassley numbers


Sen. Charles Grassley, R-Iowa, told rural reporters in a telephone call today that Stabenow, Roberts, Lucas and Peterson plan to achieve the $23 billion in savings by cutting $15 billion from direct payments and $4 billion each from conservation and nutrition programs, Reuters reported.

Roberts and Lucas have said they believe savings can be achieved by cutting waste and fraud in the food stamp program and by creating efficiencies in administration.

But Jim Weill of the Food Research and Action Center, the anti-hunger group, told The Hagstrom Report that “there is not money to be squeezed out on the administrative side,” and that reducing money provided to the states for staff to administer the program would mean it would be harder for hungry people to qualify quickly for food stamps.

Noting that the food stamp budget was cut to pay for teacher salaries and the child nutrition bill, Weill said that the super committee should follow the Simpson-Bowles Commission and the Gang of Six proposal, both of which protected food stamps and the child nutrition program from cuts.

Sen. Pat Roberts, R-Kans.

Sen. Pat Roberts, R-Kans.

Roberts crop insurance statement


One hour and 15 minutes after Stabenow, Roberts, Lucas and Peterson put out their joint statement on Monday, Roberts issued his own statement that included a new twist.

“While I have strong concerns that this agreement disproportionately favors some programs over others, I have long stated that the most important program to our farmers and ranchers in managing their risk is crop insurance,” Roberts wrote.

“I am pleased this agreement protects the crop insurance program by keeping its baseline whole, regardless of any interactions from other programs,” Roberts said. “We have consistently heard from producers, lenders and agriculture industries that crop insurance programs are the cornerstone to agriculture’s foundation and their top risk management priority. This agreement protects that foundation while contributing to the overall effort of deficit reduction.”

Today a commodity lobbyist said Roberts’ statement that there would be no cut to the crop insurance baseline “regardless of any interactions from other programs” could create both budgetary and programmatic difficulties with proposals to write a new crop program that covers the “shallow losses” that are not covered by crop insurance.

There are several competing proposals to cover shallow losses. All the proposals would mean that some farmers would be less likely to buy the highest level of crop insurance, and those decisions would result in somewhat lower government costs for crop insurance.

The lobbyist maintained that the interaction with the other programs would result in $3.5 billion in budget savings over 10 years, although that estimate is questionable because the different programs would be likely to have somewhat different budgetary impacts.

The lobbyist questioned why money should stay in the crop insurance baseline if the estimated costs would go down, but speculated there might be an effort to reverse the reductions in payments to crop insurance companies for administrative and operating expenses that Congress and the Obama administration have made in recent years.

But a knowledgeable Capitol Hill aide said that Roberts, who co-authored the main crop insurance bill with then-Sen. Robert Kerrey, D-Neb., may be signaling his opposition to any farm program that creates a disincentive to buy crop insurance.

Roberts’ office did not return an email seeking comment on the intent of his statement, and the Stabenow, Lucas and Peterson offices did not return emails asking if the other agriculture committee leaders agreed with Roberts.

Farm Bureau letter


The American Farm Bureau Federation sent the members of the House and Senate agriculture committees a letter questioning the development of any farm bill proposal that covers “shallow losses.”

Farm Bureau said “a shallow loss program is a drastic departure from any previous farm policy design” and that “our biggest concern is that by reducing the risk of shallow losses, farmers may be encouraged to take on more risk than they would in responses to market signals alone.”

Farm Bureau said that creating a shallow loss program would increase moral hazard because “insured individuals may engage in riskier behavior with only a $250 deductible, they may drive faster or in more extreme weather conditions than if they purchased a high deductible policy.” See link below

Farm Bureau’s choice of a comparison led one commodity lobbyist to ask, “What are they drinking or smoking over there?” The letter puts Farm Bureau at odds with cotton, corn and soybean groups that have all proposed new crop programs.

Grassley-Johnson payment limits

Sens. Charles Grassley, R-Iowa, and Tim Johnson, D-S.D., announced today that they had written the super committee on Friday, telling the committee it should include the farm payment limits that they previously proposed.

Their legislation would have placed a hard cap on farm payments of $250,000 per married couple ($125,000 per individual) and would save $1.5 billion, they said.

Lugar-Stutzman proposal


Sen. Richard Lugar, R-Ind., and Rep. Marlin Stutzman, R-Ind., announced Saturday that they had sent their farm bill proposal to the super committee, noting that it would save $40 billion, $17 billion more than what the chairmen and ranking members of the agriculture committee had recommended.

Sen. Kirsten Gillibrand, D-N.Y.

Sen. Kirsten Gillibrand, D-N.Y.

Gillibrand dairy proposals


The final proposal to the super committee is expected to contain a rewrite of the dairy program proposed by the National Milk Producers Federation and introduced by Peterson and others.

But today, Sen. Kirsten Gillibrand, D-N.Y., announced she had introduced two new alternatives to the Peterson bill because “dairy farmers should not have to pay extra for what they are getting now for free.”

The first bill uses the Peterson/National Milk framework, but guarantees a $6 margin for farmers, equivalent to the protection they currently receive under the Milk Income Loss Contract Program.

A Gillibrand spokeswoman also said, “We found a problem in the Peterson bill – it repeals MILC before new margin insurance program would be in place. This would leave producers out in the cold while USDA develops the new program. We corrected this problem in our legislation by requiring USDA to develop and implement new program within 270 days but even if they take longer, producers will have MILC until the new program is in effect.”

The second bill would extend the current MILC program but with a bolstered trigger price pegged to inflation through 2015.

A Gillibrand spokeswoman said the senator hopes the dairy title will not be included in the super committee bill.

“We think that the dairy title needs a lot more debate.,” the spokeswoman said. “We should not make a wholesale change of the dairy safety net without any hearings or analysis of the impact on small and medium sized farms.”

Lorelei DiSogra, United Fresh Produce Association

Lorelei DiSogra, United Fresh Produce Association

United Fresh fruits and vegetables


The United Fresh Produce Association, the group which is lobbying to maintain the fresh fruit and vegetable snack program in schools, noted Monday that the Agriculture Department had released an independent evaluation showing that the program increases the consumption of fresh fruits and vegetables by children at participating schools by one quarter of a cup per day, or 15 percent. See links below.

“We are thrilled that this comprehensive evaluation confirms what we have seen in our visits with students, parents and school officials in FFVP schools over the last 10 years,” said Lorelei DiSogra, vice president of nutrition and health for United Fresh.

“The FFVP is effective in its mission to increase children’s total fruit and vegetable consumption and expose them to a wide variety of fresh fruits and vegetables, while at the same time replacing other less healthy snacks,” DiSogra said.

Local and regional appeal


The National Sustainable Agriculture Coalition announced an appeal to its supporters to raise money to bring small farmers to Washington to lobby for a continuation of programs supporting local and regional food production.

American Farmland Trust analyses


The American Farmland Trust announced it had hired Ohio State University economist Carl Zulauf to analyze 10 proposed alternatives to the current Title I farm safety net programs, and that the side-by-side analyses are available on its website.