3 July 01 
(Sunup Program to be aired 4 July)  

1.  As noted here last week, the House Ag Committee has issued an outline of their plans for the next farm bill.  What can you tell us?

 –The announced hope of Chair Combest (R-TX) is to have the next farm bill written before August.

–While the committee is lacking in announced details, it recognizes the common themes voiced by most farm/agribusiness groups that have addressed the Committee:

(1)        continue flexibility and choice for producers;

(2)        develop a counter-cyclical income support program that automatically provides additional support in years that the market is down;

(3)        increase annual government funding for agriculture.

(4)        consider maintaining/improving programs for conservation, trade, rural development, nutrition, research & extension.

 

2.         What did the Committee have to say about additional funding?

–Their analysis of 2001-2011 (11 years) starts with the planned baseline of about $10.36 billion/year in government funding.

–They discuss boosting this by about $7.18 billion/year, for a total of about $17.5 billion to respond to continued low prices and high fuel costs.

–This compares to an average of about $15.6 billion/year for the past 6 years, including all government funding to agriculture.

–About $14 billion/year was in direct government payments to producers since 1996.

–The Committee hasn’t yet provided details on issues such as targeting, which counter-cyclical plan is preferred, or how to “improve” or modify the non-commodity programs such as conservation and trade.

 

3.         We talked last week about The Senate Ag Committee  meeting on the farm bill. Are they in support of the House plans and were there any surprises?

–Farm group leadership reiterated their earlier messages to the House Ag Committee.

–Farm Bureau generally wants to stick with Freedom to Farm but provide additional support.

–Farmers Union attacked Freedom to Farm and is pushing for stabilization policy (supply management), counter-cyclical payments and targeting.

–New chair Harkin (D-IA) was very blunt in the central aspects of the current and future farm bills when he said that planting flexibility and increased support for conservation had worked, while the income support program had not.

–He also noted the need for more support of farm-based renewable energy and rural infrastructure.

–He did not make a time commitment to a new bill, but says he will move quickly, and that the Committee will be focusing on a new farm bill over the next several weeks.

–While he didn’t get too specific in the hearing, earlier comments suggest these points are important to him:

–He likes planting flexibility and wants it in the new bill.

–He wants to improve farm income support, which will lead into a discussion of a counter-cyclical program.

–He wants to increase the cap on CRP from 36 to 40 million acres, and increase funding support for conservation programs.

–He wants to add fruits and vegetables for some form of support.

–He’ll push for global school lunch program.

–He’ll want funding for bio-energy alternatives and wind energy.

 

4.         How will this fit with what the House Ag Committee has been working on?

–The devil is in the details, and Harkin will first have to negotiate with members of his own committee.

–The House plans and Harkin’s announced ideas are very similar

–Harkin will be more willing to scrap the AMTA payment system and decoupling.

–Counter-cyclical program plans will differ somewhat, and they may consider a short list of options for producers to choose from, provided they are “green box” for WTO, or deemed as non-trade distorting.

–Both committees will favor increasing funding for conservation programs, but details will differ.           

–Both committees will favor increasing funding for agriculture, and broadening the enterprises that get regular support, possibly including fruits and vegetables and livestock.

 

5.         Ag appropriations for fy 2002 seems to have stalled in the House.  What’s the story?

–The Appropriations Committee made good progress in getting the bill to the floor a week or so ago.

–Some provisions in it and some amendments are derailing progress.

–It will be after the holiday recess before they make another run at getting a bill to the Senate.

–The $74.6 billion funding bill gained some amendments including antibiotics funding for FDA, labelling laws for chocolate products that don’t contain child labor.

–There was also discussion but no action on adding funding for studying GMO foods, and emergency funding for food safety inspections.

 

6.         USDA has announced changes in its livestock mandatory price reporting program.  Give us some background and details.

–Producers had been claiming for years that there needed to be more transparency in the price discovery process for livestock.

–A system was put into place within the past year, but there have been problems.

–NCBA claims that cattle producers lost $42-54 million in late April to mid-May because of government reporting errors for boxed beef carcass values

–USDA’s changes include testing of data, improving data validation, accelerate the audit process, and changing confidentiality provisions to allow more information to be released.

–While USDA’s review suggested that losses were a minimum of $15-25 million, it indicated that there are no compensation provisions in the program.

7.            Congress:

a.            Recent/Current:

–House Ag subcommittee reviews ag research (27 Jun)

–House Ag subcommittee reviews food stamp program (27 Jun)

–Senate Ag Committee reviews next farm bill (28 Jun)

–House Ag subcommittee reviews forestry programs (28 Jun)

–House Ag subcommittee reviews foreign trade programs (28 Jun)

 

b.            Upcoming:

–House Ag Committee plans but not yet scheduled several meetings to begin writing the next farm bill during the summer.

 

c.            Congressional Calendar:

--As of 9 Jul, about 42 weekdays remain in this Congressional session. 

 

                    June 30 - July 8     Independence Day District Work Period

                    August 4 - Sep 4                      Summer District Work Period

                    September 3                 Labor Day

                    September 18               Rosh Hashanah

                    September 27               Yom Kippur

                    October 5                                Target Adjournment

 

                        d.         Key issues for this session of 107th Congress include:

--dealing w/Social Security, Medicare, Medicaid.

–consider debt reduction & appropriations bills

–campaign finance reform

–education reform

–prescription assistance

–moratoria on mergers in agribusiness

–farm income emergency aid

–Endangered Species Act reform

–energy policy reform

–framing the debate for the 2002 (?) farm bill

–Trade Promotion Authority (TPA–formerly Trade Negotiating Authority TNA, formerly fast track authority FTA)

 

 

 

UPDATE (14 JUN 01)

EXCERPT FROM HOUSE APPROPRIATIONS NEWS RELEASE:

 

The House Appropriations Committee approved Ag spending.

Bill Highlights:

×        FY 01 Funding Level: $18.716 billion* (the 01 number included $3.639 b for natural disaster assistance and other emergency appropriations)

×        FY 02 President’s Request: $15.409 billion

×        FY 02 Bill: $15.669 billion

×        The bill includes full funding of 4.6% pay increases for fiscal year 2002, the level contained in the conference agreement on the budget resolution.  This accounts for many of the account‑level increases above the President’s request, which proposed 3.6% increases.

          Major Amendments Adopted in Full Committee: 

(Hinchey):            Provides $150 million in market loss assistance for apple  producers.

                Supporting Farmers and Rural America:

                                    ×           Farm Service Agency salaries and expenses are increased by $119 million over last year, to continue delivery of the farm ownership, farm   operating, and disaster loan programs.  Total funding is $946 million, which is $7 million above the President’s request.

                                    ×           Agricultural credit programs are increased by $765 million over last year.  Total loan authorization level is $3.855 billion, which is the same as the President’s request.

                                    ×           Rural Housing loan authorizations total loan authorization level is $4.471 billion, which is $5.5 million below last year, and which is the same as the President’s request.

                                    ×           Farm Labor Housing is funded at $31.4 million, which is $1.5 million above last year, and which is $3 million above the President’s request.

                × Rental assistance programs are increased by $15 million over last  year.                                      Total funding is $693.5 million, which is the same as the  President’s request.

                × Rural Electric and Telephone loans are funded at a total loan authorization

level of $4.61 billion, which is $1.5 billion over last year, and $1.5 billion above the President’s request.

                × Distance Learning and Telemedicine Program total loan authorization is

$400 million, which is the same as last year and the same as the President’s request.  Within this amount, $100 million is           appropriated, contingent upon enactment of authorizing legislation, for broadband telecommunication loans, as requested.

                × Agricultural Research Service is funded at $1.05 billion, an increase of

$79.4 million over last year, and an increase of $104.2 million above the President’s request.  Funding is provided to initiate construction of a major facility consolidation and modernization project to meet high national priority animal health programs.

                × Risk Management Agency / Federal Crop Insurance Corporation activities to

implement last years Agricultural Risk Protection Act are fully funded.  RMA is funded at $75.1 million, an increase of $9.7            million over last year and an increase of $0.4 million above the          President’s request.  The Corporation (Mandatory) is funded at $3.037 billion, which is an increase of $232.3 million above last year, and which is the same as the President’s request.

                × Conservation Operations activities are increased by $70.2 million over last

year, bringing FY 02 funding to $782.8 million, an increase of            $9.3 million above the President’s request.

 

                Protecting Human Health and Safety:

                × Food Safety and Inspection Service is increased by $25.5 million over last

year, for a total of $720.7 million, which is $5.1 million above             the President’s request.

                × Food and Drug Administration is funded at $1.218 billion, which is $120.4

million above last year and $7 million above the President’s               request.       

 

                Fulfilling Commitments to Important Food and Nutrition Programs

                × Child Nutrition Programs (Mandatory) are funded at $10.089 billion, which is

$554 million above last year, and which is the same as the                 President’s request.   

                × Special Supplemental Nutrition Program for Women, Infants, and Children

(WIC) is funded at $4.137 billion, an increase of $94 million              above last year and the same as the President’s request.    

                × Food Stamp Program (Mandatory) is funded at $22 billion, an increase of

$1.873 billion above last year, and the same as the President’s request.  The funding includes $1 billion in reserves, as               requested, to be available in the event economic projections are not met.

                × Food for Peace Program (PL 480) is funded at a program level of $835.2

million, which is the same as last year and the same as the               President’s request.

 

 

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