Ag Policy Update–17 APR 02        

(Sunup Program to be aired 18 APR 02)

 

 

1.     Last week, Congress returned from Spring Break indicating they were committed to completing action on a new farm bill. Since then, we’ve had one public meeting after another postponed. What’s going on?

 

 

–The conferees decided to be serious about finding compromise, meeting day and night over the past week.

–But they apparently found they could get more done in private, closed meetings.

–Though they’ve said little in public statements, unofficial comments that much progress has been made.

 

 

 

2.     So, what are you hearing about progress?

 

–Senate Majority Leader Daschle himself has supervised evening meetings in his office.

–Senate Ag Committee Chair Harkin now indicates they will have a new bill completed by 1 May.

–Others are saying it could be completed within the next 5-10 days.

–It has been rumored that loan rates will be increased 4-5%.

–Most of the Research Title is completed.

–The packer ownership ban may be replaced with a study.

–Harkin has admitted that the votes are not there to pass the ban.

 

–As we noted last week, break, some of the less controversial issues have been agreed to:

(1)    a renewable energy program

(2)    a rural development equity fund

(3)    preferential treatment for biobased products purchased by the feds

(4)    grants for value-added businesses and co-ops

(5)    rural community water/sewer projects

(6)    guaranteed loan pilot program for beginning farmers

(7)    developing country food aid expansion

(8)    rural firefighter grants

(9)    rural broadband service

 

3.        What issues remain?

 

–Before we identify these, understand that there may be unofficial agreements to resolve these issues, but no public statements have been made to indicate such.

 

–Earlier, to hold funds for commodity programs and conservation, the amount for trade, research, rural development, energy, forestry and credit were cut from $5+ billion to $3.3 billion over 10 years.

–Now, there are major lobbying efforts to restore funds for trade and research.

–Payment limits have yet to be resolved, as does country-of-origin labelling, and, as just noted, the packer ownership ban.

–There’s a relatively minor dispute over whether pulses will be added as program crops.

–Dairy has yet to be resolved, as well as whether Harkin’s Conservation Security Program will be adopted.

–Trade with Cuba is also unresolved.

4.     And, pressure from the outside does seem to be mounting.

 

 

–Senator Roberts (R-KS) has announced that he’ll seek a vote on emergency aid for 2002 crops if the conference doesn’t have a compromise by next week.

–We noted here a few weeks ago that the Roberts bill calls for another year of emergency ad hoc payments using the $7.35 billion that would likely be allotted if the farm bill were passed in time to implement–in short, its an insurance policy to guarantee aid this year.

 

–Senate Budget Committee Chair Conrad (D-ND) has made it know the budget resolution that promises the additional $73.5 billion to ag programs is at risk if this debate is delayed much more.

 

–If not postponed, there will be more conference meetings this week that could clarify how close the final compromise is to becoming reality.

 

5.     Can you give us some detail on the Roberts bill?

 

–$5.047 billion for a Market Loss Assistance payment equal to the 2000 AMTA payment received by producers. On a crop‑by‑crop basis, this is:

               Wheat   58.8 cents/bu

               Corn   33.4 cents/bu

               Sorghum   40 cents/bu

               Barley   25.1 cents/bu

               Cotton   7.33 cents/lb

               Rice   $2.60/cwt

               Oats   2.8 cents/bu

–Other provisions include:

$466 million for oilseed payments

                $55.21 million for peanut producers

                $93 million for recourse loans to honey producers

                $186 million for specialty crop commodity purchases, with at least $55 million used for school lunch program purchases.

                $16.94 million to wool and mohair producers.

                $93 million for cottonseed assistance

                LDP eligibility for crops produced on non‑AMTA ac.

                LDP graze‑out for 2002 wheat, barley, oats

                Extension of the dairy price support program

                $20 million for payment to producers of pulse crops

                $44million for CRP Technical Assistance

                $200 million for the Wetlands Reserve Program

                $300 million in additional funds for EQIP

                $161 million for the Farmland Protection Program,

                $500 million for LAP losses  suffered in 2001 and 2002.

 

6.        Other policy-related news:

 

a.     Bush wants Congress to act this month on TPA.  It is unclear, however, if the Senate will act.  The energy bill seems to be taking up most of their time.  Most farm groups have indicated support for TPA, while the NFU has made public statements this month formally opposing TPA.  Labor and environmental groups also have concerns.  The hold up in the Senate relates to attempts to pass TPA with strings to link talks to labor and environmental standards.

 

b.     In related trade news, WTO negotiators were unable to decide how and when to structure talks on non-ag market access.  Some developing countries are reluctant to establish market access agreements.

 

c.     The Senate continues consideration of energy policy.  The GOP wants to provide incentives for exploration and expansion of domestic oil supplies, and some support for biofuels.  The Demos want to provide incentives for conservation, protection of environmentally sensitive areas, and expanded support for biofuels.  Mideast strife and Iraqi decisions to use oil  as a weapon have “fueled” the debate.

 

d.     A group of nations meeting on biodiversity in the Netherlands this week will adopt guidelines on access to genetic resources and benefit sharing.

 

e.     US- Chile trade talks began this week, with plans to focus on ag issues, including Chilean access to US markets.  Labor, environment and investment provisions will likely be delayed.

 

f.      Fed Chair Greenspan comments on the economy and economic reports continue to indicate the economy is improving.  Factory output and utility output increased, if slightly, in March.  Consumer prices were up very slightly, with energy prices up about 4% and gasoline up about 8%.  Housing starts were down for March, but the first quarter starts were the highest since 1998.  Wall Street continues to show mixed signals.

 

 

 

 

7.        Congress:

 

a.        Recent activity:

–House-Senate Conference Committee on farm bill continues

 

b.        Current/upcoming:

–House-Senate conference on farm bill continues

–House and Senate Budget & Appropriations Committees working on budget resolution and the beginnings of appropriations process

c.        2002 Schedule:

–As of Monday 22 Apr, there are 89 working weekdays in Washington this session.

27 May-2 Jun        Memorial Day Break

1-7 Jul                Independence Day Break

5 Aug-2 Sep        Summer Break (Senate)

29 Jul-3 Sep        Summer Break (House)

16 Sep                Yom Kippur

–Target adjournment 4 Oct

–5 Nov is Election Day

 

d.        Key issues:

–Trade Promotion Authority

–New farm bill

–Bioterrorism & homeland defense

–Healthcare reform

–Prescription drug benefits

–Merger activities, especially in agriculture

 

 

 

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