April 25-May 2, 2000
1. The Senate returned from Easter recess this week, and the House returns Monday. What’s on their agenda as they settle into their Washington work?
–They’ll be armed with the stories they heard first hand from farms and ranches still in crisis management.
–This will propel the move to increase emergency funds currently earmarked at over $7 billion
–The crop insurance reform conference will need to meet soon to resolve differences and report a bill for passage.
–The China Permanent Normal Trade Relations (PNTR) issue will be discussed in preparation for a vote in late May.
–Budget issues will take on more concern, although the real action likely won’t be until September.
–It is important to keep in mind, however, that the clock is ticking. As of 1 May, Congress has less than 90 scheduled weekdays left in Washington, hoping for a 6 Oct adjournment to go home & wrap up the final weeks of election 2000.
2. Anything new to report on crop insurance reform?
–Congressional reps, including OK Republican Frank Lucas heard an earful about crop insurance reform during Easter recess.
–The House is holding a field hearing in Lexington, KY, next week on the subject.
–Given the time and resource constraints, however, there is little chance for major reform.
–There will be an option of expanded subsidies or a direct payment if implementing risk management strategies, but reforms will be seen as modest and marginal.
3. You also mentioned China & approval of the PNTR. Congress is still moving toward a vote in 4 weeks.
–Yes, and it is still too close to call.
–Some Washington insiders are predicting a close vote that will approve PNTR.
–Ironically, the failure of the trade talks between the EU and China recently, and a Business Week/Harris Poll have raised questions on the subject.
–The breakdown in talks w/EU has increased the likely delay of China coming to the WTO until at least a year from now.
–The poll results showed that, while a majority of Americans favor global trade, they are strongly opposed to PNTR for China until China meets human rights and labor standards.
–This will provide some in Congress with cover to say "Let’s wait & say no for now".
–Still, USDA Secretary Glickman & a delegation are in China this week to show of support for PNTR.
4. You indicated the budget battles are months away. But there was some news this past week that should warm the hearts of Washington politicians on campaign trails.
–That’s right. Analysts reported last week that the federal budget surplus is likely to be $210 billion–$40 billion more than previously estimated.
–The growing economy is the foundation for this marked improvement, & it will be a record budget surplus whether the new or original estimates are met.
–This is remarkable news given that just 8 years ago, the US had a budget deficit of $290 billion, and optimistic projections indicated that, with stringent belt-tightening, the goal of a balanced budget could be achieved between 2002 and 2010.
–Until now, the GOP has been saying the country couldn’t afford the costly new programs the President wants, while the Demos have been saying the country couldn’t afford the substantial tax cuts the Republicans want.
–While that campaign rhetoric will continue, it is now more likely it will be easier to reconcile the differences as Congress attempts to move toward a 6 Oct adjournment.
–Look for more willingness from Republican reps to ok more social program spending (such as Medicare).
–Look for more willingness from Demos to ok more tax cuts, although who is targeted will continue to be contested.
5. It seems as if this will increase chances for more emergency aid to agriculture. How do you see that going?
–There’s no longer any doubt. There will be an aid package.
–The amount earmarked now stands at $7.14 billion. Look for that to grow to $8-12 billion, depending on how markets are doing over the summer. AMTA payments of 57 cents/bu of wheat will likely be doubled.
–Interestingly, a study just released by the Environmental Working Group (EWG) shows that during the 1996-1998 period over half of farm support funds went to the top 10% of farms, with payments averaging nearly $32,000 each per year. The study also showed:
- –the remaining 90% of farms average about $2300 each/yr.
- –some of the very top farms received over $1 million for the 3-yr period(20 in MS); one Arkansas farm received $7 million over 3 years; another received $5.6 million over 3 years.
–Their numbers for Oklahoma show:
- –nearly $627 million paid to over 48,000 state producers 1996-1998
- –while the average payment was about $13,000,
- –the top 10% received average payments of $24,810
- –the remaining 90% received average payments of $2047
–the top 20 Oklahoma recipients received between $260,000 & $747,000 each during the 3 year period.
–This study did not include 1999 funds.
–This information is sure to fuel the fire on who benefits from farm support. Groups like EWG and NFU will continue to push for targeting aid on a needs basis, meaning the lower income producers would get more, and absentee owners should not be profiting from tax support.
–The info will also be used to push for more controls over concentration.
6. While the economy continues its impressive growth, reports this past week indicated the trade deficit isn’t getting any better.
–That’s right. February figures of $29.2 billion broke another record.
–Higher oil prices were the primary contributor to the high numbers.
–There’s also news that the dollar continues to strengthen overseas, setting up for more deficits in the short term as US goods are seen as relatively more expensive than those of foreign competitors with weaker currencies.
–In another economic report, orders for durable goods increased in March. This suggests pressure for the Fed to again raise interest rates soon to slow increased consumer demand and fears of inflation.
7. 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. The Senate Ag Committee is meeting today (27 Apr) to consider a response to concentration in agriculture. Witnesses representing the Justice Dept, academia, NCBA, NPPC, NFU & AFB will speak. There have been several bills introduced to take such actions as placing a moratorium on the perceived merger-mania, giving USDA more power to stop mergers in court, etc.
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 final checks sent in April
–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. A new study by USDA-FNS shows most food stamp support is going to targeted groups including children, elderly and poor. More than half of recipients are children, 39% non-elderly adults, & 8% elderly.
e. USDA has opened an online directory of US food and ag exporters of food, fish, fiber and forest products. Buyers and suppliers may go to the FAS website to access the directory.
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.
8. Congress
a. Recent/Current:
–Congress on Easter Recess (Senate returned 25 Apr; House 1 May)
–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)
–Senate Ag Committee considers nomination of Michael Dunn as member of FCA Board (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 subcommittee field hearing on crop insurance reform, Lexington, KY (3 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. House in recess until 29 Apr & Senate returned 25 Apr; as of 1 May, there are 86 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
- 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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