Ag Policy Wrap-up - Dr. Larry Sanders, Oklahoma State University

1. Concerns over animal disease and policy continue to be in the headlines, with foot & mouth disease, and mad cow disease. Any policy news to report?

–Elected officials in both Congress and the OK Legislature are reviewing the status of the situation.

–It appears that the US continues to be an island protected from these diseases, thanks to vigilant inspection.

–Some representatives are calling on USDA to do more, but that doesn’t seem to be in the cards at present.

–Sooner or later they will need to address funding support for adequate inspection services, especially at border entry points.

2. Trade and international issues are also making headlines, with the China standoff, WTO trade talks and Congress looking at negotiating authority for the President. Give us the highlights.

–While the standoff w/China is obviously very sensitive and primarily not an agriculture story, it does serve to remind us of the growing importance of China.

–With the Soviet Union gone, China is our primary political nemesis in global affairs.

–While China is still a developing economy, most trade analysts predict China will surpass the US as the largest world economy within 20-25 years.

–As their economic power grows, the US will find it more and more difficult to force its way with China and countries who support China.

–In fact, even as we engage in this heated war of words over the spy plane and crew, the talks to bring China into the WTO continue, without any indication the 2 issues will be linked.

3. You mention the WTO. Any signs that trade talks for a new WTO are getting back on track?

–Yes, member countries have been meeting since last year on low-level talks related to agriculture.

–The group just agreed to move to “phase 2" over the next year.

–There will be several informal talks and 3 formal meetings (Sep & Dec ‘01, Mar ‘02) with the following issues to be discussed:

–amber box subsidies, export subsidies, export credits, export restrictions, & state trading enterprises

–food safety & security

–rural development

–tariffs

4. And, what is Congress doing about trade issues?

–The Republicans want to move presidential negotiating authority up in priority of votes.

--This has been called fast-track or trade negotiating authority in the past, & the President has been without it since 1997.

–However, Sen. Baucus (D-MT), who agrees this is important, wants an agreement to link WTO talks with labor and environmental issues.

–As an example of how other countries perceive such ideas, Belgium has suggested that goods receive a “labor label” that indicates whether the good was produced in accordance with global labor standards.

–The GOP is against any such linkage and President agrees with them.

5. Mixed signals on the general economy. How are you reading the news?

–While the Stock Market continues to stagger, many analysts think the long overdue adjustment has occurred or is near completion.

–Economic reports released in the past week or so, suggest the economy is still slowing, but doing better.

–Manufacturing activity continued to shrink, but at a slower rate.

–Construction spending is up.

–Consumer confidence has stabilized and is up slightly.

–Consumer spending is up slightly.

–Analysts are suggesting that growth in the economy for the first quarter of 01 will be about 1%, the same level as the 4th quarter.

6. What’s the latest of proposals for the next farm bill?

–Recall that the House Ag Committee has invited in most major commodity and farm organizations.

–This past week, the soybean producers presented their wish list to the committee.

–They are looking to increase the base AMTA payments, mostly for soybean producers.

–Also, they favor flex and don’t want the loan rate changed.

–Sorghum and dairy producers are meeting this week and will likely support an increase in federal support.

–Some insiders are suggesting that the House Ag Committee will move quickly in the next few months to draft farm bill support legislation that will meet Budget Committee summer deadlines.

–Lugar, chair Senate Ag Committee, has already said he would like to get the first title of the farm bill done this year.

–So, we may know something about the shape of the next farm bill soon.

7. Now the Administration seems to want out of global warming talks. What’s going on?

–EPA Administrator Whitman met with a European delegation this week and told them what the President said last week: the Kyoto Agreement is dead; a new agreement will need to be crafted that forces the developing countries to also cut back on greenhouse emissions.

–After EPA Administrator Whitman had met w/other countries a few months ago and Bush flip-flopped on the carbon dioxide issue, she now says they’re looking for a way out, that the Kyoto Protocol “is dead”.

–Since the Senate has refused to ratify the treaty, this is a symbolic gesture only, but is alarming the Europeans and Japanese, especially since we are the greatest emitters of greenhouse gasses.

–This may be seen as good news for the farm and industry groups that opposed the accords as too costly.

–However, for environmental groups and producers who were hoping to cash in on carbon sequestration payments it is disappointing.

8. Other farm policy related news:

a. Is this a fox in the hen house story?

–Bush has nominated Linda Fisher to be deputy EPA Administrator. Fisher has been a vice president for Monsanto & was in the elder Bush EPA.

b. Some Ag undersecretary nominations have been made:

–Jim Mosely, Indiana farmer, will be named to be USDA deputy secretary

–Bill Hawks, Mississippi farmer, will be named to be undersecretary for marketing & regulatory programs

Recently:

–JB Penn, farm & ag services

–Eric Bost, food, nutrition & consumer services

–Tom Dorr, rural development

9. Congress:

a.        Recent/Current:

–Senate Ag Committee reviewed Research, Extension & Education title of farm bill (27 Mar)

–House Ag Committee subcommittee reviewed national fire plan implementation (28 Mar)

–Senate Ag Committee reviewed environmental trading opportunities for ag (29 Mar)

–House Ag Committee reviewed farm programs w/soybean industry (29 Mar)

–House Ag subcommittee reviewed USDA domestic food programs (3 Apr)

–House Ag Committee reviewed farm programs w/sorghum industry (4 Apr)

b.        Upcoming:

–House Ag Committee reviews farm programs w/dairy industry (5 Apr)

–House Appropriations Ag Subcommittee FY2002 hearing schedule:

–Budget Overview (25 Apr)

–USDA Secretary (26 Apr)

c.        Congressional Calendar:

--As of 9 Apr, about 79 weekdays remain in this Congressional session.

April 7 ‑ April 23 Spring District Work Period

April 8 Passover

April 15 Easter

May 25 ‑ June 4 Memorial Day District Work