CURRENT ISSUE ARTICLES

Senate Agriculture Committee Conducts Farm Bill Hearing

Panel Considers Ag Appropriations Bill

Bill Would Delay Dodd-Frank Implementation

Bill Puts Restrictions on Environmental Lawsuits

Lawmakers Express Climate Fund Concern

CCI, Cotton Incorporated Celebrate Cotton Days

Mill Cotton Use Sees Uptick

Sales Still Weak, Shipments Continue Strong

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Senate Agriculture Committee Conducts Farm Bill Hearing

The Senate Agriculture, Nutrition and Forestry Committee held its first ’12 farm bill hearing, “The Role, Risks and Challenges for American Agriculture and the next Farm Bill.”

Members acknowledged the challenges of writing a new farm bill with tight budget constraints and the perception that high prices render the safety net less important. However, Members acknowledged that agriculture is cyclical and noted that current disasters resulting from floods, droughts and tornadoes remind everyone that risk management tools are critical. Most members focused on the need for crop insurance and some expressed support for a permanent disaster program citing times when crop insurance isn’t sufficient to cover widespread disasters.

Members also discussed the challenges that agriculture faces in supplying adequate food and fiber to a growing world population – noting that experts forecasted that demand will increase 70-100% by ’50. Members also cited the importance of funding research designed to improve productivity.

Chairwoman Stabenow (D-MI) said in her opening remarks that the starting focus for discussion would not be on programs, but on principles the farm bill should accomplish. Sen. Johanns (R-NE) noted stakeholders often think from one five-year farm bill to the next, but in drafting the ’12 farm bill, lawmakers must weigh agriculture's long-term role in meeting the needs of a “troubled and hungry world,” which he said is key to the nation's future.

The Senators and witnesses suggested a greater emphasis should be placed on research, conservation and risk management.

However, Sen. Conrad (D-ND) cautioned against cutting too deeply into programs for US farmers, especially when “the playing field is tilted against them.” He said the European Union is “outdoing us in support three to one.”

Sen. Klobuchar (D-MN) and several other Senators asked Agriculture Secretary Vilsack about ethanol. He responded that he supported the need to have a “glide path” for phasing out ethanol subsidies as well as the need to make additional investments in ethanol related infrastructure.

“We hope you don’t provide a cliff,” Vilsack said, citing the devastating blow delivered to the biodiesel industry when subsidies totally stopped last year. “If there is to be an end, there needs to be a glide path and perhaps a redirection to help bolster the industry. At a time when high gas prices are already hurting consumers, the situation would be worse without ethanol. Americans are paying 89 cents a gallon less because we have the ethanol industry.”

Vilsack added that when people hear “farm bill” they immediately think mostly if not entirely of subsidies. The reality is the farm bill is far more expansive than that, and one of the key steps moving forward will be to publicize the key role that research plays in agricultural development and progress. More land is going to non-agricultural uses, yet the world's population is growing. Research and new technologies will be critical to meet future needs. Biotech crops already have increased farmer income. Fortified seeds, drought-resistant crops, and other innovations benefit the United States and developing nations. Vilsack also noted that the ’12 farm bill will be smaller than the ’08 farm bill with the question being how to leverage available funds as cuts will be difficult to make. He said, though, that the present time poses an opportunity for the Agriculture Department to have greater efficiency and flexibility and improved services and delivery.

Former Agriculture Secretary Dan Glickman said that the United States is poised to continue its leadership position in agricultural research. However, he said, “We need a 21st century review of our agricultural research.” A lot of research is important, but also repetitive or routine, he added; and there is not enough generic, basic research.

Sen. Grassley (R-IA) cited the importance of crop insurance and ethanol programs and encouraged Secretary Vilsack to continue to push for tighter limitations and income tests to insure payments “go to those who truly need them.”

Panel Considers Ag Appropriations Bill

One day after releasing a legislative draft – in keeping with new procedures – the House Appropriations Agriculture Subcommittee met to consider the FY12 Agriculture Appropriations bill. The legislation, reported by the subcommittee without amendment, now will be considered by the full Appropriations Committee on May 31, at which time numerous amendments are expected.

Normally, Members withhold controversial amendments at the subcommittee and offer them instead during consideration by the full committee or during floor debate. This year, all appropriations bills will be debated under an open rule, meaning any germane amendment can be offered during floor debate.

Subcommittee Chairman Kingston(R- GA) said, “This subcommittee has begun making some of the tough choices necessary to right the ship. We have taken spending to below pre-stimulus, pre-bailout levels while ensuring USDA, FDA, CFTC, and other agencies are provided the necessary resources to fulfil their duties.”

Overall, the bill proposes to cut USDA and FDA discretionary programs by 13.4% in addition to reductions of a similar amount in the FY11 continuing resolution completed last month. The legislation provides $16 million in cost share funding for boll weevil and pink bollworm eradication programs and authorizes the USDA’s Farm Service Agency to make up to $100 million in loans to the programs. The legislation reduces conservation programs by $1 billion; research by $354 million, and nutrition programs were subject to substantial cuts.

No funds would be provided to administer the Biomass Crop Assistance Program or the Federal Crop Insurance Act to provide a performance-based premium discount in the crop insurance program.The Conservation Stewardship Program (CSP) would be cut by $171 million relative to its farm bill-mandated level and, if enacted, may require USDA to terminate contracts it has signed with farmers across the country. The Environmental Quality Incentives Program would be cut by $350 million. The Wetlands Reserve Program and Grasslands Reserve Program would be cut by 64,200 acres and 96,000 acres, respectively, while the Farm and Ranch Lands Protection Program and the Wildlife Habitat Incentives Program would be cut by $50 million and $35 million, respectively.

The bill fully funds direct operating loans at $1.05 billion and direct farm ownership loans at $475 million. Commodity programs are not affected by thesubcommittee bill but are expected to be the subject of amendments during full committee consideration on May 31. In addition to cutting conservation, credit, rural development, and research programs, the subcommittee’s bill would prohibit USDA from using any money to implement its Grain Inspection Packers and Stockyards Administration (GIPSA) rule on livestock market competition.

Before the bill can become law, the Senate must pass its own funding bill. The House and Senate bills must be reconciled, and the President must sign off on the final package. As such, it is unlikely that all of the cuts proposed by the House subcommittee will make it into a final appropriations bill.

Bill Would Delay Dodd-Frank Implementation

The House Financial Services Committee amended and subsequently passed legislation that would delay implementation of a major portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act, until Sept. ’12.

H.R. 1573, sponsored by Financial Services Committee Chairman Bachus (R-AL), Agriculture Committee Chairman Lucas (R-OK) and others, would maintain the current July 21, ’11 deadlines for the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to finalize rules on the definitions of swaps-related products and participants and rules on reporting and recordkeeping. An amendment approved by the Committee during the mark-up added clearing rules to that list.

The bill, which was previously approved by the House Agriculture Committee on a party-line vote, originally had an extended deadline of Dec. 31, ’12, for Dodd-Frank swaps rulemaking. The Financial Services Committee, on a voice vote, agreed to move up the extension date to Sept. 30, ’12, as the deadline for all other swaps rulemaking under Title VII of Dodd-Frank.

The legislation, as amended, passed the Committee 30-24 along party lines. It now will be taken up by the entire House.

Democrats, led by ranking member Rep. Frank (D-MA), argued that the legislation was an effort to delay implementation of Dodd-Frank. Rep. Frank focused his arguments in opposition to the bill on the fact that it would stop the CFTC from acting on position limits. His argument was addressed by adoption of an amendment offered by Rep. Lynch (D-MA) that would allow the CFTC and SEC to act on speculative position limits before the Sept. ’12 deadline.

Because Republicans hold an overwhelming majority in the House, the legislation should pass, but the outlook for approval by the Democrat-controlled Senate is highly questionable.

Bill Puts Restrictions on Environmental Lawsuits

Western lawmakers introduced legislation aimed at reducing environmental litigation by limiting the ability of plaintiffs to recover taxpayer-funded attorneys’ fees. The legislation, offered by Rep. Lummis (R-WY) and Sen. Barrasso (R-WY), would overhaul the Equal Access to Justice Act -- a ’80 law that allows plaintiffs to recover attorney’s fees when they successfully sue the federal government.

Sen. Barrasso contended that by letting environmental groups recover fees for legal challenges against energy projects and other uses of public land they oppose, the law effectively “pays outside groups to repeatedly sue our federal government.”

The legislation, which is supported by a coalition of more than 85 industry and recreational groups, would amend the law to limit the recovery of attorneys’ fees by non-profit groups with a net worth of more than $7 million. Lummis said the change would end the ability of “giant environmental groups with litigation shops” to recover fees.

The bill also would require plaintiffs to have a “direct and personal monetary interest” in the matter being litigated, which would limit parties without a direct commercial link to the litigation from qualifying for the fees. Lummis said the provision, which reflects language included in the House-passed version of the original bill, would allow for veterans, social security claimants and other plaintiffs the law was “designed” for to continue to employ it. The measure would require judges to reduce attorneys’ fees if parties acted in a “dilatory” manner, or in bad faith. It also would cap the total number and amount of awards an entity may be awarded, the hourly rate of attorneys, and the number of applications an entity can seek in a single year.

Lawmakers Express Climate Fund Concern

Todd Stern, the special envoy for climate change at the State Dept., faced tough questions from members of a House subcommittee over the size of US contributions to an international effort to help developing countries adjust to global warming.

Rep. Rohrabacher (R-CA), chairman of the House Foreign Affairs Oversight and Investigations Subcommittee, offered a blunt assessment of the odds that the United States will be paying a large share of the $100 billion annual fund agreed to during international climate talks last year in Cancún, Mexico.

“With a federal budget in massive deficit and an economy that is still trying to pull itself out of a deep recession, the expectation that the U.S. will be footing a major share of the bill for such a fund is pure fantasy,” Rep. Rohrabacher said.

The United Nations fund — which was one of the few tangible results of the global climate talks in December ‘09 — is aiming for $100 billion in contributions by ’20.

Stern declined to provide estimates of how much the United States would contribute, but downplayed the notion that it would come from the federal government.

“A great majority of it will come from the private sector,” he said. However, the policies he suggested for encouraging such investment - including a cap-and-trade scheme, clean energy standard, or tax incentives - all face uphill fights in the current political environment. Stern called it “vital to U.S. diplomatic leverage generally and to long-term U.S. interests in the world” to be engaged in climate talks, regardless of belief in the phenomenon or the science. “It would hurt us diplomatically,” he said.

The United States currently is preparing for follow-up talks planned for later this year in South Africa, where the funding for developing nations is again expected to be a dominant issue.

CCI, Cotton Incorporated Celebrate Cotton Days

Cotton Council International (CCI) sponsored Cotton Day celebrations across Asia to celebrate the planting season’s start.

Through consumer events and executive interviews, the industry and the end-users celebrated the COTTON USA Mark and US cotton. Initial media results indicate that this year was the most successful to date. Approximately 1,000 industry representatives turned out for the events in Thailand, Taiwan, Korea and Japan, and advertising value is expected to reach well more than $10 million.

Cotton Day Thailand celebrated its sixthannual Cotton Design. Cotton Day Taiwan celebrated music and the COTTON USA Mark. Cotton Day Korea included a contest in which consumers were asked to write and perform lyrics for a television commercial at the event. The Cotton Day Japan “Zutto Issho ni Itai Hito” award theme was the person you always want to keep close. CCI also donated T-shirts to children affected by the Japan earthquake and will auction an autographed cotton shirt from Ken Watanabe and Asaka Seto.

Mill Cotton Use Sees Uptick

According to the Commerce Dept., April (four-week month) total cotton consumption in domestic mills was 132.2 million pounds for a seasonally adjusted annualized rate of 3.58 million bales (480-lb). Last April’s annualized rate was 3.44 million bales.

The March (five-week month) estimate of domestic mill use of cotton was raised by 1.5 million pounds to 167.1 million pounds. The revised seasonally adjusted annualized rate of consumption for March is 3.66 million bales. The previous year’s March annualized rate was 3.39 million bales.

Based on Commerce estimates from Aug. 1, ’10-April 30, ’11, projected total pounds consumed during ’10-11 crop year would be 1.8 billion pounds or 3.65 million bales. USDA’s latest estimate of ’10-11 crop year mill use is 3.8 million bales.

Preliminary May domestic mill use of cotton and revised April figures will be released by Commerce on June 23.

Sales Still Weak, Shipments Continue Strong

Net export sales for the week ending May 19 were -34,000 bales (480-lb). This brings total ’10-11 sales to approximately 15.6 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 12.2 million bales. Total new crop (’11-12) sales are roughly 5.8 million bales.

Shipments for the week were 294,300 bales, bringing total exports to date to 12.5 million bales, compared with the 9.0 million bales at the comparable point in the ’09-10 marketing year.

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