April 19-25, 2000
1. We mentioned the question of permanent normal trade relations (PNTR) with China. Are prospects for approval dimming?
–As you noted, there was little interest by Congressional reps last week in going to China.
–While it’s not a favorable sign, it could be less related to support for China, and more related to incumbents feeling the pressure to campaign at home over Easter recess.
–Another event that was negative to the cause was House Minority Leader Dick Gephardt (D-MO) announcing he would not support PNTR.
–This was really no surprise. In fact we mentioned the likelihood of this a few weeks ago.
–What is significant is that Gephardt indicated he will not rally his troops to vote no on PNTR. In other words, there will be no pressure to vote along party lines. This leaves an opportunity for the President & other pro-PNTR interests to attempt to sway undecided reps.
–A survey of House members last week showed 138 respondents favor, 139 oppose, & 134 are undecided.
So what happens next?
–Related to this, the House Ag Committee has scheduled a vote (17 May) just prior to the House floor vote on PNTR in late May. It was clear from Chair Combest’s announcement comments that this committee vote will be to boost support for PNTR. Some other Congressional committees may do the same, hoping for a "bandwagon" effect.
–If Gephardt and some of the key undecided reps can be shown that human rights and environmental concerns can be addressed in a forum other than PNTR, it appears that the Administration could get a slim majority on a favorable vote.
–But that’s still a month away.
–Labor sees lost wages; environmentalists see increased pollution; human rights advocates see exploitation; some farmers see increased competition & lower prices; other farmers and agribusiness see expanded markets & increased opportunity. All of those interests will be lobbying for Congress to vote their way.
2. As you indicated, Congress is on Easter recess. What are our Congressional representatives likely to hear as they visit with farmers in the state?
–For the most part they will likely be told that too many farms and ranches are still in crisis management.
–Recent estimates we have made here at OSU tells a bleak story for much of agriculture. Here are some of the highlights:
- (1) Small to mid-size wheat farms are losing $35-45/acre.
- (2) Cow-calf operations last year lost over $100/head.
- (3) Stockers were the exception, making $38/head.
- (4) The bottom 60% of Oklahoma farms surveyed had negative net farm income last year.
- (5) the top 17% of Oklahoma farms surveyed accounted for 94% of net farm income last year.
- (6) that’s somewhat similar to the national estimate that about 15% of farms account for about 85% of sales.
Hasn’t Washington been sending record-levels of support to farmers in the past few years?
–That’s right. Where direct government payments to farmers was averaging $9-11 billion/year in the years prior to the 1996 Freedom to Farm bill, the average has been over $13 billion since then.
–In spite of this, many farmers continue to lose money. Imagine how dismal the statistics would be without this federal assistance.
–Net farm income is down but not much from pre-1996. If federal assistance had not been increased, there would be many more farms facing bankrupcy or liquidation.
–Congress will likely add at least $7 billion to the planned $5 billion in support for this year.
–Representatives will be discussing over the next several weeks how to distribute that aid, and possibly whether to increase it.
Is that aid likely to keep farmers in business?
–For some, it won’t. For the rest, it’s uncertain at this time. How many years of loss or even low profit can some of these farms sustain?
–Couple this with the uncertainty of global markets and rising interest rates, and the outlook has to look gloomy.
–We are seeing more farmers choosing to sell out while they still have some equity, but for some that will not be a voluntary decision.
3. Congress last week passed the fy2001 conference report. What’s in it for agriculture?
–Emergency aid in the package is $7.14 billion, but keep in mind this has no legal standing. The report is nothing more than a sense of the majority in Congress of what they plan for budget bills to be passed by October.
–The proposal also recommends $8.2 billion for crop insurance reform over the next 5 years (fy2001-5). The conference committee has yet to meet to agree on how to do this.
–Reps will continue to discuss the amount and how to distribute it.
–Also, the Administration will weigh in with their preferences and, of course, the President has veto power, which he used on last year’s budget bills extensively.
4. Other policy-relates news:
a. USDA announced in the 18 Apr Federal Register details of the upcoming Pork referendum. The vote will be on the continuation of the pork checkoff program. Recommended:
- –2 day in-person voting; 4-day absentee ballot
- –voting at local FSA offices
- –importers vote by mail
- –paid by USDA
- Comment period on the proposals is 30 days (18 May), then final rules will be published.
b. Earth Day 2000 is 23 Apr, but many states and local areas are celebrating earlier. The purpose of the noted day is to increase awareness of caring for the environment.
- –USDA announced, as part of the activities, the funding of 11 rural water initiatives totalling $72.6 million. No Oklahoma projects were funded.
- –USDA also announced a new partnership with HUD to promote "greening and revitalization" of US urban areas. Green space will be the focus, especially at public housing developments and other selected urban sites.
c. Emergency farm aid passed in 1999 continues in process:
- –Market Loss Assistance checks distributed to producers
- –Dairy Market Loss Assistance checks being calculated
- –Disaster Assistance checks being calculated
- –Livestock Assistance Program & Livestock Indemnity Program checks distributed (13 Mar)
- –Peanut marketing assistance payments in process
- –Oilseed Payment Program signup ended 31 Mar
- –Crop Insurance premium reduction of an estimated 25% effective for 2000 crop year
- –Step 2 Upland Cotton User Marketing Certificates funded thru July 2003
d. The House passed the Rural Local Broadcast Signal Act (HR 3615) last week. This will extend loan guarantees to companies willing to provide rural areas with satellite access for local television. The Senate has not acted on this issue.
e. The House Ag Committee has formally requested that GAO analyze cost impacts on agriculture and forestry of compliance with additional EPA-proposed water quality regulations. EPA estimates of $25 million/year in costs are at odds with USDA estimating only part of the regs likely to cost over $100 million/year.
f. USDA will begin to regulate feed weighing 5 May. All feed weight scales used by stockyards, market agencies, dealers, packers, and some integrators will require testing twice a year.
g. While most farmers continue to show losses or low gain on net farm income, Cargill reported third quarter earnings of $191 million. Cargill’s fy2000 earnings are $486 million for the first nine months, down from fy99 ($779 million).
h. A new USDA study shows the WIC program, Women, Infants & Children supplemental nutrition program, improves child intake of iron, vitamin B-6 & foliate. Such assistance will likely reduce incidence of anemia, neurological abnormalities, dermatitis & impaired immune function.
i. USDA is providing another $350 million for increased payments in the CRP continuous signup for the next 3 years. Funds will cover signing bonuses ($10/acre) and more money for installing (40% of cost in addition to 50% cost share) & maintaining conservation practices ($2-5/acre additional).
6. Congress
a. Recent/Current:
–Senate Ag Committee hearing on MTBE & renewable fuels (11 Apr)
–Senate Commerce, Science & Transportation Committee conducts hearing on permanent normal trade relations (PNTR) w/China & WTO (11 Apr)
–Senate Foreign Relations Committee conducts hearing on PNTR w/China (11 Apr)
–Senate Ag Committee nomination hearing for C. McLean as administrator of Rural Utilities Service, USDA (11 Apr)
–House Ag Committee reviews federal farm policy (12 Apr)
–House Ag subcommittee reviews HR 1275 to amend the Animal Welfare Act to prohibit interstate movement of birds for fighting (13 Apr)
–House Ag subcommittee conducts hearing on HR 2962, avocado promotion (13 Apr)
–Senate Ag subcommittee field hearing to review ethanol & biofuels issues, Springfield, IL (18 Apr)
–House & Senate conference on crop insurance reform legislation in process
b. Upcoming:
–Senate Ag Committee examines pending legislation on concentration (27 Apr)
–Remaining House field hearings will be conducted on farm policy issues:
–Sacramento, CA (1 May)
–Sioux Falls, SD (2 May)
–Boise, ID (12 May)
–Peoria, IL (13 May)
–House Ag Committee review/vote on PNTR for China (17 May)
c. The budget process & deadlines:
--The Administration began leaking portions during January.
--The President highlighted his budget proposal at the State of the Union Address 27 Jan.
--Feb: House & Senate Budget Committees held hearings w/experts & CBO.
--Mar: Budget Committees draft budget resolution.
--1 Apr: Budget Committees report resolution.
--15 Apr: Budget resolution adopted by Congress.
--15 May: Appropriations bills considered by House.
--10 Jun: House Appropriations Committee reports last bill.
--30 Jun: House completes action on appropriations bills.
--1 Oct: new fiscal year begins.
--6 Oct: target adjournment.
d. Congress reconvened 24 Jan with 131 weekdays scheduled until 6 Oct target adjournment. 17 Apr House in recess until 29 Apr & Senate not in session until 25 Ap; as of 25 Apr, there are 90 weekdays remaining in this session.
Senate Scheduled in session (remaining):
- Apr. 25 - May 26.
- Jun. 5 - Jun. 30.
- Jul. 10 - Jul. 28.
- Sep. 5 - Sep. 28.
- Oct. 2 - Oct. 6.
- Oct. 6 Target Adjournment
House Schedule not in session these days:
- April 17 - 28 Spring District Work Period
- April 20 Passover
- April 23 Easter
- May 14 Mother's Day
- May 29 Memorial Day
- May 29 - June 2 Memorial Day District Work Period
- June 14 Flag Day
- June 18 Father's Day
- July 3 - 7 Independence Day District Work Period
- July 4 Independence Day
- July 31 - September 5 Summer District Work Period
- September 4 Labor Day
- September 30 Rosh Hashanah
- October 6 Target Adjournment
e. Other key issues for this session of 106th Congress:
--Trade Negotiating Authority (TNA), also known as "fast-track" negotiating authority, for President.
NOTE: ADMINISTRATION INDICATED THIS INITIATIVE WILL NOT BE PURSUED THIS SESSION.
–Permanent Normal Trade Relations (PNTR) for China
--dealing w/Social Security, Medicare, Medicaid.
--consideration of tax cut
--Endangered Species Act revision
--consideration of Kyoto global warming agreement
--oversight of WTO Millennium Round (when restarted) & agreement to continue as member in WTO
--consider revision of Food Quality Protection Act
--campaign finance reform
–farm aid package.
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