Here’s a quick update on ag policy happenings this week. The most up-to-date information from NAWG is always available online at www.twitter.com/wheatworld.
Agriculture Community Reacts to Farm Bill Expiration
The 2008 Farm Bill became a thing of the past on Monday, expiring with no replacement law on the books. NAWG and 14 other stakeholder groups released a statement early in the week summarizing the impacts of the lapse on agriculture programs, pointing out that “it has terminated a number of important programs and will very adversely affect many farmers and ranchers, as well as ongoing market development and conservation efforts.” Sectors most affected include dairy, trade and conservation. The full stakeholder statement is online at http://www.wheatworld.org/news-events/2012/10/group-statement-on-expiration-of-the-2008-farm-bill/.
Congressional Democrats reacted fiercely to the farm bill’s expiration, saying it is being held up by inaction on the part of the House Republican leadership. Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) released a statement on Monday demanding that the House take up a new, five-year farm bill on the “first day of the November lame-duck session.” House Minority Leader Nancy Pelosi (D-Calif.) said later in the week she would support an ongoing discharge petition to bring the pending House bill to that chamber’s floor. Secretary of Agriculture Tom Vilsack shared similar frustrations in a statement from the Department saying the expiration left “USDA with far fewer tools” to do its work. NAWG continues to work with USDA officials and other commodity groups to understand the growing impacts of the farm bill’s expiration on farmers and vital agriculture-related programs.
Conservation Programs Affected by Farm Bill Expiration, CR Funding
Farm-focused conservation programs are among those experiencing the immediate effects of the 2008 Farm Bill’s expiration and the new continuing resolution. Many conservation programs including the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP), the Wildlife Habitat Incentives Program (WHIP) and the Farmland Protection Program (FPP) are continuing but under reduced funding levels outlined in the recently-passed continuing resolution that extended federal spending until March of 2013. For example, funding for EQIP is expected to be reduced by some $350 million, and funding for CSP is restricted to prevent new contract sign-ups, although all existing contracts will continue to be honored.
Funding authority for the Conservation Reserve Program (CRP) expired on Sept. 30, but existing contracts and agreements under the program will remain in effect and payments will continue as scheduled. Contracts on some 6.5 million acres of CRP land are set to expire in 2012, with an additional 3 million acres coming out of the program in 2013. The gradual drawdown of CRP acreage is consistent with NAWG’s 2012 Farm Bill recommendations, which suggested an overall CRP program size of approximately 25 million acres versus the present program authorization of 32 million acres, though an automatic draw-down would not prioritize re-enrolling expiring acres that are most sensitive or highly-erodible.
Foreign Market Development Program Shuts Down With Farm Bill
The Foreign Market Development (FMD) program, a highly successful public-private partnership program used to help domestic industries build markets abroad for American products, is no longer issuing funds to cooperator organizations due to the expiration of the 2008 Farm Bill. Within the wheat industry, FMD is a critical source of funding U.S. Wheat Associates (USW) uses to promote exports in more than 100 countries. USW is continuing operations in the short term using other sources of funding, but FMD’s inactivity means the organization and others like it will have to cut back activities, which will hurt farmers because demand for their commodities around the world will decline. NAWG strongly believes funding for FMD and other export market development programs must be restored quickly for the benefit of the wheat industry and the larger economy. Studies have shown that every dollar spent on market development programs increases ag exports by $35; within the wheat industry, the ROI is about $115 to $1 through a direct effect on wheat prices and wheat farmer income.
National Campaign Launched to Urge Preservation of Renewable Fuels Incentives
NAWG and other stakeholder groups launched the Fuels America coalition last week, focusing on defending the renewable fuel standard (RFS) from calls to waive all or parts of the mandate. The RFS requires the volume of renewable fuel blended into transportation fuel to increase from nine billion gallons in 2008 to 36 billion gallons by 2022, with the goal of reducing imported petroleum and greenhouse gas emissions while encouraging development and expansion of the nation’s renewable fuels sector. NAWG and others in the agriculture sector have an interest in the development of renewable fuels because many potential alternative fuels utilize agriculture residues, such as wheat straw, as a fuel feedstock. However, a waiver of the RFS would send a signal to the investment community that the U.S. is not going to stand by its support for the renewable fuel industry. A full list of Fuels America members and more about the coalition is at http://www.fuelsamerica.org/.
Federal Judge Tosses New CFTC Position Limits
Rules on commodity trading position limits put in place by the Commodity Futures Trading Commission (CFTC) were thrown out late last week by a federal judge who ruled they do not reduce speculation in the markets as claimed. Position limits have been in place for certain agricultural commodities such as wheat for some time, but the Dodd-Frank regulation reform law mandated that position limits include other commodities, such as gold and natural gas. The new limits, which were added to the Commodity Exchange Act, would only apply if they were found to reduce excessive speculation in the marketplace, which the district judge ruled that CFTC has not clearly proven. CFTC is reportedly examining administrative and legal options to reinstate the position limits.
Extra Credit: White Bread Isn’t White Trash
This week we are recommending readers who want a little bit more dig in to “Why demonizing white bread falls flat” by Elena Ferretti at FoxNews.com. This approach to a hot food debate provides the history of “white bread,” an overview of its nutritional perks and a balanced view of the importance of both white and whole grain products. The full story is at http://www.foxnews.com/leisure/2012/10/01/white-bread-isnt-white-trash/.