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June 15, 2012
 

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Farm Bill Amendment Votes Delayed

Senate leaders announced there would be no votes on amendments to the '12 farm bill (S. 3240) before June 18.

In prior action, the Senate tabled an amendment which would have terminated the sugar program and another that would have converted the SNAP program to block grants to the states. Throughout the week, there were intense negotiations in an effort to develop a package of amendments that would be considered under a time agreement before proceeding to a vote on final passage. Negotiations included discussion of amendments that are germane to the legislation and amendments that are not germane.

Minority Leader McConnell (R-KY) has publicly stated that the list of amendments to be debated must include amendments that would prohibit promulgation of any regulations prohibiting youth from working on family farms, prohibit any regulations on nuisance/farm dust, prohibit changes in the definition of waters of the United States, and one addressing implementation of certain provisions of Dodd-Frank. Among other non-germane amendments that have held up the process is a proposal from Sen. Paul (R-KY) to cut off aid to Pakistan due to that country's prosecution of a doctor who helped US forces locate Osama Bin Laden in '11.
As debate continued, there were reports that Sens. Conrad (D-ND) and Chambliss (R-GA) were working on an amendment to create a new countercyclical payment program as a way to address concerns from peanut and rice growers that the pending legislation doesn't provide them with a safety net.

Senators had filed more than 250 amendments by June 14 when votes were postponed on an amendment by Sen. Coburn (R-OK) to eliminate the Conservation Stewardship Program and the Environmental Quality Incentives Program, and an amendment by Sen. DeMint (R-SC) to convert all funding in the farm bill from mandatory to discretionary.

Chairwoman Stabenow (D-MI) said in floor remarks that she is "very optimistic as we move forward in this process."

Crop insurance has been a point of contention and with the elimination of certain commodity programs in the Senate farm bill, including direct payments and counter-cyclical payments, crop insurance has become the key component of the safety net.  The Congressional Budget Office (CBO) has estimated that the Senate farm bill would cost $969 billion over 10 years, with crop insurance programs accounting for about 10% of total costs. Although there has not been agreement on which of the more than 250 amendments may be considered, it appears two bipartisan proposals on crop insurance subsidies to limit eligibility and premium subsidies could be difficult to defeat.

An amendment by Sens. Shaheen (D-NH) and Toomey (R-PA) would set a $40,000 limit on premium subsidies farmers can receive from the government. According to a Shaheen spokesman, the $40,000 limit was chosen because it is the limit currently applied to direct payments. The CBO estimated the amendment would save $5.2 billion over 10 years.

An amendment proposed by Sens. Coburn (R-OK) and Durbin (D-IL) would reduce premium subsidies by 15% for farmers with an adjusted gross income greater than $750,000. According to Coburn's office, CBO estimates the amendment will save $1.2 billion over 10 years. A Coburn spokesman told the Bureau of National Affairs that the 15% limit was decided on in order "to generate a reasonable amount of savings."
In anticipation that the Coburn-Durbin amendment could pass, Sen. Thune (R-SD) has filed an amendment to delay implementation of applying the income test unless USDA can certify that the results would not increase the program's cost, would not reduce participation, or result in higher premiums for remaining participants.

Other amendments that are a concern include a proposal by Sen. Coburn to cut Market Access Program (MAP) funds by $40 million per year and prohibit certain promotion programs, and an amendment by Sen. DeMint to convert all commodity check off programs from mandatory to voluntary. Other amendments include a proposal by Sen. Cardin (D-MD) to tie conservation compliance to crop insurance eligibility and an amendment by Sens. Begich (D-AK) and McCain (R-AZ) that would require disclosure of subsidy recipients. An amendment by Sen. Gillibrand (D-NY) would cut subsidy payments to insurance companies and restore a $4 billion funding cut to nutrition programs.

The NCC is actively working with various coalitions in opposition to amendments that would: limit or restrict eligibility for crop insurance, reduce or restrict MAP, and modify existing research and promotion programs.

 
Sen. Hagan Offers H.R. 872 Amendment

Sen. Hagan (D-NC), in conjunction with Senator Mike Crapo (R-ID), filed an amendment to the Senate farm bill which essentially includes the language of H.R. 872 – a bill that was passed by the House in March '11 and also was passed out of the Senate Agriculture, Nutrition, and Forestry Committee.

The amendment would overturn a '09 federal appeals court ruling requiring the agency to issue permits for pesticides sprayed over water. It also includes a requirement for EPA and USDA to submit a report to Congress on the effectiveness of regulating pesticides under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), rather than the Clean Water Act (CWA).

NCC President & CEO Mark Lange has sent a letter to Sen. Hagan thanking her for her efforts on this important issue and stating that the NCC looks forward to working with her to ensure its adoption on the Senate floor.

The letter noted that the requirement for producers to obtain a National Pollutant Discharge Elimination System permit for certain pesticide applications, as mandated under National Cotton Council v. EPA, adds unnecessary, duplicative and costly requirements for farms already operating on the margins and which are already in compliance with FIFRA pesticide use restrictions. Since the inception of the CWA in '72, water quality concerns from pesticide applications have been addressed during the registration and labeling process under FIFRA.

 
Brazil Retaliation List Being Updated

Brazil's Foreign Trade Chamber (Camex) announced it has reactivated a group charged with updating a suspended '10 retaliation list against the United States in Brazil's dispute over selected provisions of the US cotton program and the export credit guarantee program. Brazil has announced it will impose countermeasures in the form of prohibitively high tariffs on a list of US exports if it is not satisfied with the cotton provisions in any new farm law.

Brazil won a dispute before the World Trade Organization (WTO) in Aug. '09, and the WTO authorized Brazil to impose retaliatory sanctions against the United States. In March '10, Brazil published a list of 102 US products that would be subject to the counter-measures that would double or triple tariffs. Officials at the time said that Brazil also would impose $238 million of sanctions in the area of services and intellectual property, including the breaking of patents on drugs purchased by Brazil's public health system from American pharmaceutical firms. In June '10, Brazil announced it had entered into a Framework Agreement and would suspend retaliation while the '12 farm bill was debated and would base future decisions on the cotton provisions in any "successor legislation."

As part of the Framework Agreement, the United States agreed to transfer  $147 million annually to the newly created Brazilian Cotton Institute to be used for certain mutually approved programs but could not be used to provide direct support to Brazilian farmers or for research. The Framework Agreement also created a schedule of consultations and set terms for operation of the US export credit guarantee program which also was the subject the WTO ruling.

A Brazil Ministry of Development and Trade statement said, "The preliminary agreement will lose its validity when the U.S. puts into effect its new agriculture law. After this, Brazil can consider itself satisfied with the changes and close the case, or resume the retaliation or negotiate a new agreement with the United States."

 
USDA Sees 17 Million US Bales in '12-13

For the '11-12 marketing year, USDA, in its June report, gauged US cotton production at 15.57 million bales, unchanged from the previous month. Mill use was unchanged from last month at 3.40 million bales, while exports increased 200,000 bales to 11.60 million bales. The estimated total offtake now stands at 15.00 million bales, generating ending stocks of 3.20 million bales and a stocks-to-use ratio of 21.3%.

USDA projects US '12-13 production to be 17.00 million bales. Mill use is projected at 3.50 million bales while exports are projected at 11.80 million bales. The estimated total offtake stands at 15.30 million bales. With beginning stocks of 3.20 million bales, this would result in US ending stocks of 4.90 million bales on July 31, '13, and a stocks-to-use ratio of 32.0%.

For the '11-12 marketing year, world production was estimated to be 123.07 million bales, up 30,000 bales from the May report. World mill use was lowered 370,000 bales to 106.12 million bales. Consequently, world ending stocks are estimated to be 67.32 million bales with a stocks-to-use ratio of 63.4%.

USDA projected world production for the '12-13 marketing year at 115.29 million bales. Mill use is set at 109.01 million bales. With beginning stocks at 67.32 million bales, this would result in world ending stocks of 74.51 million bales on July 31, '13, and a stocks-to-use ratio of 68.4%.

 
FSA County Committee Nomination Period Begins

Agriculture Secretary Vilsack announced that the nomination period for local Farm Service Agency (FSA) county committees began on June 15.

To be eligible to serve on an FSA county committee, a person must participate or cooperate in a program administered by FSA, be eligible to vote in a county committee election and reside in the local administrative area in which the person is a candidate.

Farmers and ranchers may nominate themselves or others, and organizations representing minorities and women also may nominate candidates. To become a candidate, an eligible individual must sign the nomination form, FSA-669A. The form and other information about FSA county committee elections are available online at www.fsa.usda.gov/elections. Nomination forms for the ’12 election must be postmarked or received in the local USDA Service Center by close of business on Aug. 1, ’12. Elections will take place this fall.

While FSA county committees do not approve or deny farm operating loans, they make decisions on disaster and conservation programs, emergency programs, commodity price support loan programs and other agricultural issues. Members serve three-year terms. Nationwide, there are about 7,700 farmers and ranchers serving on FSA county committees. Committees consist of three to 11 members that are elected by eligible producers.

FSA will mail ballots to eligible voters beginning on Nov. 5. The voted ballots are due back to the local county office either via mail or in person by Dec. 3. Newly elected committee members and alternates take office on Jan. 1, ’13.

 
California Biotech Labeling Initiative Certified

California Secretary of State Debra Bowen certified the controversial mandatory biotech labeling referendum for the state's Nov. 6 general election ballot. The initiative needed 504,760 valid petition signatures, which is equal to 5% of the total votes cast for governor in the Nov. ’10 election.

She quoted the Attorney General's official title and summary of the initiative as follows: “If approved by voters, the biotech labeling ballot measure would require labeling or reformulation of thousands of grocery products and specifically prohibit advertising processed foods including biotech crops as ‘natural.’”  The proposition allows for multiple exemptions; up to two thirds of foods commonly eaten would not be labeled including those sold at restaurants or for immediate consumption, those that are certified organic, or those that are produced unintentionally with biotech crops.

A broad coalition of agriculture, food, consumer and business groups is opposed to the measure because it would change FDA’s long-standing policy on mandated labeling and could be viewed by consumers as a warning label. The World Health Organization, American Medical Assoc. and the National Academy of Sciences have confirmed that foods made with ingredients from biotech seeds are as safe as, and in some cases safer than, foods with non-biotech ingredients.

Currently, voluntary labeling is permissible under federal law and policy -- allowing food companies to advertise their products with labels like “non-GMO.” However, federal law prohibits labeling that is misleading, including mandatory labeling of biotech-derived food products that are no different than non-biotech foods.

Government officials have estimated a potential increase in state administrative costs of up to $1 million annually to monitor compliance with the labeling requirements. The initiative also would likely generate lawsuits that will be fought at taxpayer expense, which California officials say could be significant.

 
"Naturally Color Your Life" Campaign Concludes

Cotton Council International (CCI) China and Hong Kong's COTTON USA " Naturally Color Your Life" Campaign successfully concluded with the "Cotton & Patchwork Exhibition" held in 798 Art Bridge Gallery in Beijing. COTTON USA's "Naturally Color Your Life" campaign was inspired by the colorful American quilt.

CCI launched a mini-website, www.uscottonlife.com, to showcase all of the ways cotton fits into a natural lifestyle. CCI also implemented a progressive series of campaigns to engage licensees, consumers, celebrities and the media throughout the program's duration. The "Cotton and Patchwork Exhibition" featured a collection of unique patchworks and fiber arts designed by renowned quilters. Celebrities, as well as 108 journalists from 90 media outlets, attended the event. More than 3,600 visitors attended the Cotton and Patchwork Exhibition, which ran until June 10. Since the campaign began in Beijing last November, a series of progressive promotions took place in five cities across China that generated public relations value of more than $9 million and third party contributions of $2.1 million.

The campaign effectively reached target consumers by displaying a COTTON USA "Designer T-Shirt" series and outfits from COTTON USA licensees. A "COTTON USA Cabin" complemented the activities to highlight 100% cotton products produced by COTTON USA home textiles licensees in China.

 
Sales Surge, Shipments Stay Strong

Net export sales for the week ending June 7 were 823,500 bales (480-lb). This brings total '11-12 sales to approximately 13.5 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.4 million bales. Total new crop ('12-13) sales are 1.9 million bales.

Shipments for the week were 249,900 bales, bringing total exports to date to 10.1 million bales, compared with the 13.2 million bales at the comparable point in the '10-11 marketing year.

 

 
Effective June 15-21, ’12

Adjusted World Price, SLM 11/16

 62.00 cents

*

Fine Count Adjustment ('11 Crop)

 0.27 cents


Fine Count Adjustment ('12 Crop)

  0.47 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 0.00 cents


Import Quotas Open

13


Special Import Quota (480-lb bales)

875,958


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 

Five-Day Average




Current 5 Lowest 3135 CFR Far East

82.00 cents


Forward 5 Lowest 3135 CFR Far East

82.01 cents


Coarse Count CFR Far East

NA


Current US CFR Far East

85.80 cents


Forward US CFR Far East

80.25 cents


 

'11-12 Weighted Marketing-Year Average Farm Price  
 

Year-to-Date (Aug.-April)

91.13 cents

**


**Aug.-July average price used in determination of counter-cyclical payment