Congress is in recess until early September and only a few days remain before Congress breaks until after the election. The Senate may try to pass a disaster aid bill similar to the one passed by the House, but with aid for fruit and vegetable producers added, or they may stick with the contention that moving the five-year farm bill through the House is the way to go. The drought has everyone’s attention so some action in the House or the Senate is possible – but far from certain.

With the election at the top of everyone’s mind, inaction seems like the most likely possibility.

There is increasing pressure on Congress or the EPA to waive or scale back the Renewable Fuels Standard (RFS) ethanol mandate. Livestock industry organizations and more than 150 members of Congress have written to EPA Administrator Jackson asking for some reduction in the mandate. However, EPA is not expected to take any action in the near term. The groups that have requested EPA take action are not considered “obligated parties” in the RFS and they cannot officially petition for a waiver. Once a valid petition is submitted, assuming one is, EPA must hold a 30 day comment period and consult with other government agencies.

If there is a change to the RFS it probably won’t come until after the November elections. A bill that would require the public disclosure of the names of crop insurance subsidy recipients and the amount of the subsidies they receive has been introduced by Representative Jackie Speier (D-CA).

Currently information about people that receive direct payments is available to the public but crop insurance information is not. Under both the House and Senate farm bill proposals, direct payments would end beginning in 2013. The proposal will not reach the House floor as a stand-alone bill, but may be offered as an amendment to the farm bill when or if it comes up for a vote.

In September the House will consider legislation that would grant permanent normal trade relations (PNTR) to Russia according to House Majority Leader Eric Cantor (R-VA). Russia will officially join the World Trade Organization on August 22 but the reductions in tariffs negotiated as part of Russia’s accession protocol will not apply to U.S. products until PNTR is granted. Congress is expected to grant PNTR to Russia but other bills that punish Russia for human rights problems may become law causing further trade problems.

A Study by the Environmental Working Group claims that crop insurance subsidies are a key factor in the conversion of 23 million acres from grassland, wetlands, or shrub lands to crop production between 2008 and 2011. According to the study 11 states had wildlife habitat losses of at least 1 million acres each during the last three years and that losses were greatest in counties that received the largest amounts of federal crop insurance subsidies. The contention is that crop insurance subsidies reduce the financial risks of planting on marginal land encouraging producers to bring new land into production.

Decisions about which government accounts will be exempt from the sequestration budget cuts that are scheduled to take effect January 2, 2013 are being made by the Office of Management and Budget. The budget bill approved last summer calls for cuts totaling $1.4 trillion to kick in automatically next year, with half of the money coming from defense and half from domestic spending. There is still a chance that Congress will change the law and avoid the sequestration, but the administration must be ready in case Congress cannot agree.

USDA has completed the investigation of the cow that tested positive for BSE last April and determined that the animal posed no risk to the food supply. Progeny of the cow were located and tested and no additional cases of BSE were found. This was the fourth case of BSE discovered in the U.S.