House next to take on 2012 Farm Bill

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Now that the Senate has passed its version of the farm bill, attention is shifting to the House. Agriculture Committee Chairman Frank Lucas, R-Okla., says mark-up of the bill will begin July 11 with a goal of getting the bill to the full House before the August recess. Lucas says the House bill will cut spending by at least $33 billion over 10 years, $10 billion more than the Senate bill, and that half of the cuts will be in nutrition programs.

The Senate bill cut nutrition programs by about $4.5 billion, so this will be an area of significant difference between the two bills. Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., says that level of reduction “is absolutely unacceptable to me and the majority of those in the Senate”. It is not clear the leadership in the House will bring the Farm Bill to the floor for a vote before the end of the summer.

The farm bill proposal that comes out of the House Agriculture Committee will also include higher target prices and a continuation of a counter-cyclical program, something the Senate bill eliminated.

Lucas says the target price provisions will not only be an important part of the House bill, “but it ultimately has to be an important part of the final bill where we ultimately work out our differences with the Senate.”

The next farm bill is also expected to include a “shallow loss” program that provides money to farmers when their revenue falls below levels determined by the Olympic average over the previous five years. Analysis by the Congressional Budget Office indicated that the costs of this program would be significantly less than the costs of continuing the direct payment, counter-cyclical payment and ACRE programs.

However other analysis shows that this new program will not be a “shallow” cost to the government if crop prices decline and stay low for a few years.

A study entitled Field of Schemes: The Taxpayer and Economic Welfare Costs of Shallow-Loss Farming Programs says the program costs could average $8 billion to $14 billion per year over the five-year period covered by the farm bill. “We are essentially talking about a policy design that ratchets up the level of support when markets are doing well and if we have a decrease in prices it could be potentially very expensive”, said Dr. Barry Goodwin, one of the authors of the study.

Congress is currently working on legislation designed to punish Russia for reported human rights violations. The bill is called the Magnitsky bill. The bill is important because future U.S.-Russian trade relations may hang in the balance.

The press Secretary for Russia’s President Putin warns passage of the bill “inevitably will lead to retaliation” by Russia. Here are the stakes: Once Russia joins the World Trade Organization its soybean tariffs will be eliminated and soybean meal tariffs will be cut in half, according to Agriculture Secretary Vilsack. Tariffs on almost all other agricultural products will also be phased out. However, if the U.S. does not pass permanent trade relations status (PNTR) for Russia, or if Russia retaliates over the Magnitsky bill or other punitive legislation, U.S. agriculture may still face high retaliatory tariffs while products from other countries do not.

The Interior-Environment Appropriations Subcommittee in the House has recommended major cuts for the EPA’s fiscal 2013 budget.

EPA’s budget would be cut by 17 percent compared to funding for fiscal 2012 in the proposed bill, with a 29 percent cut for Climate Change programs and an 80 percent reduction in funds for the Land and Water Conservation Fund. In addition, the bill includes provisions that would prevent EPA from imposing source-specific greenhouse gas emissions standards and stop an effort to broaden the definition of the term "navigable waters" under the Clean Water Act. Many of the provisions of the bill will be opposed by the Senate and by the Obama Administration.



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