No one knows what provisions will come out of a farm bill-related House-Senate Conference Committee, if one is even convened. But House Ranking Member Collin Peterson, D-Minn., is talking about what he thinks a compromise might look like.
Peterson says there will be target prices and they will be based on planted acres, not base acres. He says 90 percent of farmers will opt for the price loss (target price) program instead of the shallow loss program that is featured in the Senate bill.
He also thinks a conference committee might agree to cuts of $6 billion to $8 billion in funding for the food stamp program over 10 years. That is very different from the $40 billion cuts that the House plans to vote on in early September.
Unless Congress acts, tax incentives for capital investments will end at the end of this year.
Right now farmers can deduct as much as $500,000 from their federal income taxes for equipment purchases, which is double the deduction allowed in 2009 and four times as large as the allowance in 2007. The deduction limit drops back to $25,000 next year unless the law is changed.
The jumbo depreciation program is also set to expire at the end of 2013.
Other news from Washington:
- Canada has officially requested the establishment of a WTO compliance panel to rule on the Validity of the U.S. Country of Origin Labeling (COOL) law. The WTO (World Trade Organization) has already ruled that the law, as originally implemented, violated world trade rules. USDA modified the implementation earlier this year, but officials in Canada have responded that “the recent amendments will further hinder the ability of Canadian cattle and hogs to freely compete in the U.S. market.” However, Canada will withhold the imposition of retaliatory measures until after the WTO compliance panel issues a ruling and that will be many months into the future.
- U.S. and Japanese officials have been meeting to discuss reducing trade barriers over the past week and both sides say progress has been made. However, the U.S. Trade Representative Michael Froman says Japan must open its auto and insurance markets to U.S. companies. Froman adds that the U.S. will have to make changes to our sugar, dairy and textile sectors. The U.S., Japan and other countries involved in the Trans Pacific Partnership talks began their 19th round of negotiations this week, with the goal of reaching a trade agreement by the end of this year.
- The European Union announced in April that it would temporarily ban three types of neonicotinoid pesticides. The U.S. EPA hasn’t gone that far but it has released new pesticide labels limiting the use of these products. The changes are part of an effort to protect bee populations, which have declined sharply in recent years. Unless reversed, the trend has alarming implications for agriculture with bees’ crucial role in pollination. The new labels will include information regarding routes of exposure and spray drift precautions. (USDA and EPA released a report last spring that cited many causes for the decline in bee populations, including the use of certain pesticides.)
- India’s subsidized grain program provides low cost grains and other staples to help support 400 million rural villagers and urban slum dwellers. But the program is about to get a lot bigger and more expensive. Under a proposal being considered by Parliament, the government would guarantee that 2/3rds of India’s population (nearly 800 million people) have a legal right to food. This program will be the most costly food entitlement program in the world and may not be sustainable.
- The Mexican government claims the U.S. is not living up to its promises to allow Mexican trucks to deliver goods to U.S. markets. The U.S. was supposed to allow this access as a part of NAFTA, but access has been blocked for decades. The U.S. Department of Transportation approved a pilot program but implementation of the program is being held up in courts. Mexico has been granted permission to impose tariffs but so far has declined to do so.