Ag Policy Update–14 Aug 02       

(Sunup Program to be aired 15 Aug 02)

 

1.        President Bush held a forum on the economy in Waco this week.  What was your take on it?

 

–I thought you wanted to talk about real news.

–Next question.

 

 

 

2.     Let’s stick with the economy.  The Fed met this week.  Any clues about where they’re headed the rest of the year?

 

 

–They didn’t change interest rates, but implied that rates could come down later this year if the economy doesn’t get better.

–We talked a few months ago about how a weak recovery seemed to be underway, but cautioned that if layoffs or the stock market worsened, all bets were off and the Fed would act.

–The Fed doesn’t have much room to drop rates, so it will not likely be as helpful as rate drops were last year.

–Consumer confidence remains the key.

–Consumer reaction to layoffs and stock market woes could reverse this weak recovery.

 

 

3.     Is there any good news here for agriculture?

 

–Besides low interest rates, producers and agribusiness will benefit in the short run if the dollar continues to weaken.

–This will make ag products relatively less expensive for foreign buyers.

 

 

4.     The implementation of the new farm bill is finally underway.  Can you remind viewers of important dates for participation in government programs?

 

–FSA sent acreage letters out this week, and producers will need to provide updated info by the end of the month (Aug 31).

–Final payments for 2002 will be sent by 30 Sep.

–Signup for the 2002 and 2003 Direct and Countercyclical Program payments (DCP) will begin 1 Oct.

–Final DCP payments for 2002 and advance 2002 Countercyclical (CC) payments will be made in Oct after enrollment.

–April 1, 2003, is the deadline for base/yield.

–2 June is the final deadline for signup, but producers need to know that payments will be delayed until signup is completed.

 

–Producers and owners will want to make sure that FSA has current data and that power of attorney letters are updated.

 

–For producers who were counting on a counter cyclical payment this year, the higher wheat price is making that less likely.

 

5.     That raises the issue of another round of emergency aid for farmers.  Is that still likely?

 

–Congress was working on this option before they left for summer break.

–The House is considering a package of about $2 billion, targeting weather-related disasters, mostly using offsets.

–The Senate is considering a much larger package–$4-5 billion, including some market-related aid.

–Bush, however, remains committed to limiting emergency aid to any offsets, and doesn’t want to give market aid outside the farm bill.

–In other words, money has to be taken from other farm programs to satisfy the President.

–It is an open question whether Bush would veto an emergency aid package just before the election.

6.     You mentioned the Congressional break.  When will they be back and what can we expect?

 

–As of their return date of 4 Sep, there are about 23 working weekdays in Washington this session.

–The House & Senate Appropriations Committees have completed the Ag Appropriations bill.

–Of the 13 spending bills, none are complete.

–The House has passed 5, and has 1 ready for the floor.

–The Senate has passed 3, but has the remaining 10 ready for floor vote.

 

–As noted in recent conversations, we’re still seeing much debate and rhetoric around:

--election year grandstanding,

--debate over important new proposals such as homeland security, and

--debate over important issues that have little to do with federal spending.

7.        Congress:

 

a.        Recent activity:

–Congress approved Trade Promotion Authority for the President.

 

b.        Current/upcoming:

–House and Senate Budget & Appropriations Committees working on supplemental spending  appropriations process.

–Senate Ag Committee field hearing on the drought, Grand Island, Nebraska (20 Aug)

–House Ag Committee Chair Combest is sending out a questionnaire on livestock market issues in preparation of upcoming hearings.

–Congress is on recess thru 3 Sep.

 

c.        2002 Schedule:

–As of their return date of 3/4 Sep, there are 23-24 working weekdays in Washington this session.

16 Sep                Yom Kippur

–Target adjournment 4 Oct

–5 Nov is Election Day

 

d.        Key issues:

–Bioterrorism & homeland security

–Healthcare reform

–Prescription drug benefits

–Merger activities, especially in agriculture

–Emergency assistance for agriculture

–Spending bills

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