Congressional agriculture committees have had a really difficult time coming up with the structure of farm programs to submit to the Joint Committee for Deficit Reduction (the super committee).
Time is running out. Leaders of the Committees in the House and the Senate had promised to provide details that would reduce agriculture department spending by $23 billion over 10 years to the super committee by November 1. But as of this writing, no plan had emerged. Policymakers are having a hard time coming up with plans that would be fair to producers of all the various crops all across the country.
Time is also running out for the super committee itself, with a deadline to deliver its full recommendations for deficit reduction across all facets of government (not just agriculture) to Congress by November 23.
While no agreement has been reached by Agriculture Committee leaders, the conversation mostly revolves around some form of revenue protection. The idea is to provide producers with “shallow loss” protection that would kick in when revenue declines below insured levels, but not by enough to trigger crop insurance payments. However, policy makers from outside the Midwest say the plan is good for corn and soybean producers but is not fair to producers of other crops, especially cotton and rice.
Senate Agriculture Committee Chairman Debbie Stabenow said this week the next farm bill will save money and will make more land available for crops by reducing the size of the Conservation Reserve Program. Meanwhile, the super committee is having serious problems of its own, not just waiting on recommendations from the Ag Committees for cuts to ag spending described above. There is increasing skepticism that the group will be able to deliver a plan that reduces future deficits by at least $1.5 trillion over the next decade.
Reports indicate that the Republican stance against increases in taxes as a part of the plan is the biggest stumbling block. Senator Patty Murray, co-chairman of the committee says “I have yet to see a real credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal”. A deal is still “possible”, but time is running out and there are few signs that either side is willing to compromise enough for the super committee to reach a successful conclusion.
The U.S. Supreme Court has rejected a petition that challenged the EPA on its Renewable Fuels Standard. The American Petroleum Institute and the National Petrochemical Refiners Association had charged that RFS2 "violated the statutory requirements setting separate biomass-based diesel volume requirements for 2009 and 2010, that it was inappropriately retroactive without proper lead time and compliance provisions." This latest ruling should be the end of the line for efforts to derail the renewable fuels standard.
USDA has forwarded a stripped-down version of new Grain Inspection, Packers & Stockyards Administration (GIPSA) rules to the White House Office of Management and Budget (OMB) for review before final implementation. The rules forwarded to OMB retain the provisions on poultry production and marketing, but leave out major provisions strongly opposed by meatpackers and several beef producer groups. The new proposed rule does not include the ban on packer-to-packer sales and competitive injury language that would have made it much easier for producers to sue processors.
Further changes to the proposed rule are possible before it is finally implemented. It appears that Russia will be able to join the World Trade Organization by the end of this year. For a country to join the WTO, every member of the organization has to approve. Russia and Georgia signed an agreement on trade this week, which had been one of the key impediments facing Russian admittance. Under an agreement to join the WTO, Russia would be allowed to increase spending on trade-distorting farm subsidies to $9 billion in 2012 and 2013, and the support would decline to $8.1 billion in 2014 with further reductions in following years reaching the final limit of $4.4 billion in 2018.