Following a 15-hour markup session, the House Agriculture Committee reported, on a 35-11 bipartisan vote, the Federal Agricultural Reform and Risk Management Act (H.R. 6083) with a recommendation that it be passed by the House. The Committee’s action was the latest step in the process of developing new farm law.
More than 100 amendments were filed by Committee Members to a discussion draft released by the Committee leaders. During the marathon session, the Committee considered more than two-thirds of the 100 amendments that had been filed. Early in the mark-up session, it became clear that Committee leaders had the support of a majority of members when an amendment to significantly reform sugar policy was defeated 36-10 and an amendment to make changes to a carefully crafted compromise on dairy policy was rejected 29-17.
As expected, there were a number of highly controversial amendments to the nutrition title, with some making an effort to restore cuts considered too deep and others proposing deeper cuts. There also were a significant number of proposals to tighten administration of the Supplemental Nutrition Assistance Program and to ensure recipients are qualified to receive benefits and are using the benefits for the intended purpose. The Committee made no substantive changes to the commodity title. There were no amendments to STAX or the cotton specific provisions of the discussion draft.
Rep. Fortenberry (R-NE) offered and withdrew an amendment to reduce payment limitations to $50,000, to impose a $75,000 limit on marketing loan program benefits, and to change actively engaged in farming criteria to require a contribution of active personal labor.
The Committee approved an amendment authored by Reps. Crawford (R-AR) and Boswell (D-IA) establishing additional criteria before the Secretary can close a Farm Service Agency office. The Committee also approved an amendment by Reps. Cardoza (D-CA) and Rooney (R-FL) to add an Under Secretary for Foreign Agricultural Services at USDA with an emphasis on trade promotion and policy.
The legislation reduces -- over 10 years -- projected spending on commodities by $16.5 billion, conservation by $6 billion and nutrition by $16.5 billion for total budget reductions of $36.5 billion.
“These programs should not guarantee that the good times are the best, but rather that the bad times are manageable,” House Agriculture Committee Chairman Lucas (R-OK) said.
Three regulatory provisions of interest to the NCC that were retained: 1) H.R. 872, legislation which clarifies that pesticides applied in accordance with the FIFRA would not require a Clean Water Act permit; 2) a provision that imposes a temporary stay on EPA from modifying or canceling a pesticide registration based on consultations under the Endangered Species Act until an unbiased, external scientific peer review of the consultation results is conducted; and 3) a provision for the reauthorization of the Pesticide Registration Improvement Act, which authorizes EPA to collect user fees from registrants in return for a predictable pesticide registration process.
Committee leaders and farm organizations immediately called for House leaders to schedule the bill for floor consideration before the August recess but no time has been officially set for debate.
A summary of the House Committee’s bill, including adopted amendments, is in the Farm Bill section on the NCC’s home page, www.cotton.org.
NCC Commends Committee's Action
The NCC congratulated House Agriculture Committee Chairman Lucas (R-OK) and Ranking Member Peterson (D-MN) for their success in moving new farm legislation through the Committee with no significant changes and with a strong bipartisan vote (35-11) to recommend the legislation to the full House.
The NCC is especially grateful to the Committee for including the Stacked Income Protection Plan (STAX) with provisions consistent with the industry's proposal and the new Supplemental Coverage Option enhancement to crop insurance in the final package. The NCC also commended the Committee for not: 1) accepting any amendments to further restrict program eligibility, 2) reducing payment limitations or 3) imposing limitations on marketing loan benefits.
NCC Chairman Chuck Coley said, "In an environment where a single piece of equipment costs in excess of $650,000 and where price volatility requires access to capital and risk management tools, our growers and their lenders need the certainty that they will be eligible for programs without regard to organizational structure or income."
Coley also expressed appreciation to Committee leaders and members for addressing the interests of the entire cotton industry by including provisions to assist US textile manufacturers, extending the marketing loan and adjusted world price redemption process, extending the Market Access Program and the Foreign Market Development Program that provide seed money for important promotion programs, and extending the extra-long staple program.
In underscoring the bill's importance, the Georgia producer said, "Given the diversity of U.S. agriculture, we are pleased that the legislation reported by the Committee provides choices that offer a balanced safety net for all commodities and regions while facilitating market-driven cropping and marketing decisions."
While acknowledging the daunting challenge of maintaining a reasonable safety net given current budget constraints, Coley also commended the Committee's cotton provisions for providing a basis to resolve the long-standing Brazil WTO case.
Coley said, "We commend the Committee leaders and the members of the Committee for acting in a timely way to move this important legislation to the next step. We urge the House leaders to promptly schedule time for the House to consider and pass the legislation reported by the Agriculture Committee. The rural economy is one of the few bright spots and it is essential that long term policy be enacted before the expiration of current law to allow farmers and agribusinesses to plan for the future. We look forward to working with the House leadership to move the bill reported by the Committee."
Disaster Extension Legislation Introduced
Sens. Baucus (D-MT), Tester (D-MT), Conrad (D-ND) and Johnson (D-SD) introduced legislation to extend for one-year several disaster assistance programs in the '08 farm law that expired in '11.
Their legislation would reauthorize the Supplemental Revenue Assistance Payments (SURE) program;Livestock Indemnity Program (LIP); Livestock Forage Program (LFP); and the Emergency Livestock Assistance Program (ELAP).
Agriculture Secretary Vilsack, meanwhile, released a package of program adjustments that include: a final rule that accelerates the procedure for designating counties as disaster areas; a reduction in the interest rates for emergency loans in disaster counties to 2.25%; and a reduction of rental payments by producers on Conservation Reserve Program land that is qualified for emergency haying and grazing.
In its July report, USDA projects US '12-13 production to be 17.00 million bales. Mill use is projected at 3.40 million bales, 100,000 bales less than last month, while exports are projected to increase 300,000 to 12.10 million bales. The estimated total offtake stands at 15.50 million bales. With beginning stocks of 3.30 million bales, this would result in US ending stocks of 4.80 million bales on July 31, '13, and a stocks-to-use ratio of 31.0%.
For the '11-12 marketing year, USDA gauges US cotton production at 15.57 million bales, unchanged from the previous month. Mill use is projected to fall 100,000 to 3.30 million bales, while exports remained unchanged at 11.60 million bales. The estimated total offtake now stands at 14.90 million bales, generating ending stocks of 3.30 million bales and a stocks-to-use ratio of 22.1%.
In July's report, USDA projects world production for the '12-13 marketing year at 113.81 million bales. The 1.48 million bale decline is due to lower production estimates for India (-1.00 million bales), Pakistan (-300,000) and other cotton producing countries. Mill use is projected to be 108.98 million bales, 30,000 bales lower. With beginning stocks at 66.68 million bales, this would result in world ending stocks of 72.39 million bales on July 31, '13, and a stocks-to-use ratio of 66.4%.
For the '11-12 marketing year, world production was estimated at 122.71 million bales, 360,000 bales less than the June report total. World mill use increased 470,000 bales to 106.59 million bales. Consequently, world ending stocks are estimated to be 66.68 million bales with a stocks-to-use ratio of 62.6%.
Environmentalists Sue EPA Over Mississippi River Nutrients
In March, environmental groups, led by the Natural Resources Defense Council, filed suit in New Orleans to require EPA to reduce nutrient runoff – nitrogen and phosphorous in particular – from farms and cities in the Mississippi River Basin (MRB).
The litigants say that nutrients in the Mississippi River cause toxic algae blooms and the hypoxic zone that occurs every summer in the Gulf of Mexico. In the Mississippi, the majority of the nitrogen and phosphorous loads comes from farms while urban runoff accounts for roughly 10% of the load, according to data from the US Geological Survey. Approximately 60% of the fertilizer used in the United States is in the MRB. It is the world's fourth largest watershed and covers more than 1,245,000 square miles including all or parts of 32 US states and two Canadian provinces.
EPA has set a goal of reducing nutrients in the Mississippi by 40% by working with farmers and state governments. Environmentalists claim that those efforts have failed to seriously to reduce the nutrient load in the river. The suit would expand the agency's authority over nutrients under the Clean Water Act, which prohibits the agency from regulating non-point source pollution that includes most agricultural operations. EPA is saying it favors continuing the current system of working collaboratively with states because it would be too time consuming and costly to undertake such an unprecedented and complex set of rulemakings.
EPA imposed standards in Florida after settling a lawsuit that similarly sought the establishment of numeric criteria for Florida waters. These criteria rules for Florida freshwater systems are estimated to carry a Florida-wide implementation price tag of $298 million to $4.7 billion per year. Another study calculated that Florida sewer utility bills would have to increase $570 to $990 per year to fund the substantial capital projects required to achieve EPA's nutrient water quality criteria.
In order to inform affected parties of the implications this suit could have on the future of agriculture in the MRB, the National Agricultural Law Center, part of the U. of Arkansas Division of Agriculture, is hosting a free hour-long webinar on July 24, beginning at 11 am CDT. To learn more about this webinar, go to www.nationalaglawcenter.org/outreach/CWAEPA/.
Sales Slip, Shipments Steady
Net export sales for the week ending July 5 were 15,500 bales (480-lb). This brings total '11-12 sales to approximately 13.0 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.1 million bales. Total new crop ('12-13) sales are 2.6 million bales.
Shipments for the week were 213,900 bales, bringing total exports to date to 10.9 million bales, compared with the 13.8 million bales at the comparable point in the '10-11 marketing year. With less than one month remaining in the marketing year, weekly shipments must average roughly 227,000 bales to reach the USDA projection of 11.6 million bales.
Effective July 13-19, ’12
Adjusted World Price, SLM 11/16
62.83 cents
*
Fine Count Adjustment ('11 Crop)
0.65 cents
Fine Count Adjustment ('12 Crop)
0.85 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
861,130
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
82.83 cents
Forward 5 Lowest 3135 CFR Far East
80.89 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
85.55 cents
Forward US CFR Far East
80.45 cents
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-May)
90.61 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
