18 July 01 
(Sunup Program to be aired 19 July)  

1.                  As mentioned here last week, the House Ag Committee has produced a “concept paper” with draft farm bill proposals.  What can you tell us about the details?

 

–The major points are these:

1.         A multi-year farm bill is being proposed; 10-year baseline causing some to suggest a 10-year farm bill.

2.         A counter-cyclical program that returns us to target prices.

3.         Fixed, decoupled payments (flex payments) will continue at 2002 levels & the $40,000 payment limit, adding oilseed crops and allowing participants to update payment acres.

4.         Marketing loan provisions continued, but soybeans adjusted down to $4.92, minor oilseeds at $0.087/lb, & sorghum at $1.89.

5.         Price tag for the proposals is $168 billion over 10 years.

 

2.         A return to target prices sounds like a big change.  Give us some explanation.

–Keep in mind they want to keep the flex payments as the base, regardless of what happens to prices.

–The proposal is to also return to 1995 target prices. 

–When market prices adjusted for the fixed payment fall below these target prices, a counter-cyclical payment would automatically kick in.

–For example, the wheat target price is $4, the fixed payment is $0.46. & the loan rate is $2.58.

–The proposed payment rate would be the cash difference between the target price and the sum of:

a.            the national 12-month season average price received by producers, or

b.            the national average loan rate

c.            and the fixed decoupled payment rate.

–If the average price is $3, then the counter-cyclical payment would be $4 minus $3.46, or $0.54.

–The bottom line is the proposal insures that wheat producers could count on getting at least $4/bu on 85% of program acres (base), whether from the market or the government.

–In the example above, the participating producer gets $3 from the market, $0.46 flex payment, and $$0.54 counter-cyclical payment.  This sums to $4.

–Program crop payments are estimated to be about $49 billion for 10 years.

–One of the major failures of the 1996 farm act was that, when prices went down, agriculture had to knock on the door of Congress every time & beg for emergency aid.

–This changes that need to an automatic provision.

3.         What’s in the draft proposals for other crops?

 –Sugar: eliminate marketing assessment for $440 mil over 10 years.

–Dairy: extend milk price support program at $9.90/cwt for $773 mil.

–Wool & mohair: nonrecourse loan program $164 mil

–Peanuts: $3.4 billion for program to be specified.

–Fruits/vegetables: give Secretary authority to use emergency funds.

 

 4.         What about some of the other provisions normally in the farm bill, such as conservation and trade?

 

–Conservation gets $15 billion over 10 years, claimed to be a 75% increase.

1.            Continue CRP, increasing cap to 40 mil. Ac. & biomass pilot acreage.

2.            Continue EQIP, adding funds for ground water & irrigation issues.

3.            Continue WRP, WHIP, FPP

4.            $150 mil. For Small Watershed Dam Restoration.

5.            Combine Forestry Incentive Program & Stewardship Incentive Program, funding at $100 mil for 10 years.

 –Trade provisions for $1 bil over 10 years:

1.            Continue MAP & FFP, each w/increased funds.

2.            Continue EEP, DEIP & Cooperator Programs.

 

5.         Other key provisions?

–Research gets $700 million for 10 years.

–Nutrition has $300 mil for Emergency Food Assistance, & a request of $2 billion to simplify & improve the Food Stamp Program.

–Rural Development has $785 million in funds over 10 years for

–Emergency Drinking Water Grants

–Strategic Planning Initiative

–Broadband Direct Loans

–Value Added Grants Program

6.         And the House still plans to have the farm bill written by the first of August, doesn’t it?

 

–I’ve spoken to committee staffers & they remain committed to Chair Combest’s goal.

–Public hearings are scheduled to do just that this month.

–The motivation is this: 

–The fy02 budget resolution provided for $73.5 billion for extra/emergency spending for agriculture for 2002-2011

–The wrinkle is that 90% of those funds can’t be allocated to the committee until they report out a bill.

–Combest figures that there will be plenty of demands for that emergency slush fund, and the sooner ag’s portion is allocated, the more certain it is there for use.

–The Senate Ag Committee is also gearing up & holding meetings this month, but they’re not as far as long.

–Since there are only 32 weekdays in this session as of next Monday 23 Jul, it is unlikely the Senate will be ready to complete action this year.

–Odds are in favor of a 2002 farm bill, as originally planned.

 

 

7.         Other policy-related news for the ag sector:

 

a.         HJ Res 50, the proposal to deny China a 1-year extension of NTR, is being debated in the House this week.  Most expects it to be defeated.  House Ways & Means Committee earlier this week approved the extension.

 

b.         The trade meeting scheduled between China & Mexico was postponed.  Mexico is the last WTO member that hasn’t completed bilateral trade talks w/China as a necessary step in moving China to membership.

 

c.         South Korea began this week to impose tougher GMO labelling on products containing corn, soybeans.  Japan’s Ministry of Ag has approved adding potatoes to their GMO labelling list.

8.            Congress:

a.            Recent/Current:

–House Ag Committee last week began considering proposals in its farm bill “concept paper”

–House Ag subcommittee public hearing to review school pesticide provision (18 Jul)

–Senate Ag Committee meets to approve J. Jen undersecretary for research & economics, & J. Moseley for deputy secretary of ag (12 Jul)

–Senate Ag Committee hearing to consider the next farm bill (12 Jul)

–Senate Ag Committee hearing on next farm bill, w/reps from cotton, wheat, rice, sugar & peanuts (17 Jul)

–Senate Appropriations Committee marks up the ag appropriations bill for fy 02 (17 Jul)

 

b.            Upcoming:

–House Ag Committee public hearings on “Draft Farm Bill Concept Paper”

–17 Jul

–18 Jul

–19 Jul

–20 Jul (tentative)

–House Ag Committee reviews farm policy w/Secretary Veneman (24 Jul)

–Senate Ag Committee continues hearing on next farm bill w/focus on nutrition (19 Jul)

 

c.            Congressional Calendar:

--As of 23 Jul, about 32 weekdays remain in this Congressional session. 

 

                    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:

–completing/continuing progress on the next farm bill

--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

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

 

 

 

 

 

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