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Articles from 2007 In January


Johanns Calls for Farm Bill Change - But Only Minimal

For the full article, click on the headline above.

After months of anticipation, Secretary of Agriculture Mike Johanns finally introduced his long-awaited farm bill proposal. But it did not contain any sweeping changes, as some expected. The proposal makes deep surgical cuts to the existing structure of current farm policy. It does present a significant change to its safety net - built on a national revenue assurance countercyclical program based on both price and yield.

His proposal would save about $10 billion over the cost of the current farm bill, excluding disaster aid given over the past five years, but is $5 billion more than if the 2002 Farm Bill was extended, Johanns explains.

Demian Moore, senior policy analyst for Taxpayers for Common Sense, said, "It's unclear where the Administration's $5 billion in savings come from, adding that the 2002 Farm Bill was probably the most expensive in history." The budget watchdog group is concerned, "that in the face of record-setting prices for many cash grain crops, any type of 'revenue assurance' plan might become a taxpayer funded retirement plan for wealthy landowners."

The revenue proposal was first introduced by the National Corn Growers Association, and a topic featured in Farm Futures magazine nearly two years ago. Johanns told reporters Wednesday morning it provides a better safety net. Members of Congress and National Farmers Union President Tom Buis aren't convinced the revenue assurance program is the way to go. In essence, it would eliminate the need for disaster aid payments. However, Buis said a permanent disaster aid program better addresses disaster rather than basing payments on how people farm. House Agriculture Committee Chairman Collin Peterson is also supportive of a permanent disaster program.

Currently producers can purchase crop insurance that covers 70% of losses. Part of USDA's proposal provides supplemental gap insurance to cover the remaining 30% of losses.

Payment limits are always a divisive matter in farm bill debates. Johanns proposed a slightly different approach to limiting payments in his proposal. The USDA proposal would eliminate those with an adjusted gross income of more than $200,000 from eligibility from commodity programs -- although not from conservation programs.

Some 80,000 farm program participants would be affected by that change according to a USDA official. To close loopholes the Bush Administration will also press Congress to eliminate the three-entity rule and tie payments to an individual at a total of no more than $360,000 any participant -- although the generic certificate program, which allows for addition payments, remains in the USDA proposal.

Even large producers are unable to compete with 1031 exchange money funneling into the countryside, pushing land values and cash rents higher. Johanns proposed to eliminate commodity payments on land acquired on 1031 exchanges. This is the first idea I've heard personally on addressing 1031 exchanges. It also has the potential to significantly increase 1031 exchange purchases before the next farm bill goes into effect if the idea takes on in Congress.

Increase direct payments, decrease marketing loans

Johanns didn't call for a complete elimination of any major component of the 2002 Farm Bill. However, many of his suggestions do take a significant step away from government involvement in the market.

The USDA proposal adjusts marketing loan rates down. The current law provides loan rates or price floors for corn, wheat, cotton, rice, soybeans and other major crops. USDA says these price floors are set in law at high levels which have encouraged production and resulted in lower market prices. The new proposals set loan rates for each commodity at 85% of the 5-year Olympic average (average of last five years excluding the high and low year). This change minimizes market distortions and encourages farmers to plant crops based on market prices instead of the level of subsidy payment, USDA says.

Overall USDA called for a $5.5 billion increase in commodity direct payments. Cotton payments would increase 65%, while other commodities currently experiencing strong prices would see an increase of 7% in the third, fourth and fifth years of the bill. 

Conservation boosted

Johanns proposed to increase conservation funding by $7.8 billion. However, he only suggested a $500 million increase in the popular Conservation Security Program. Senate Ag Committee Chairman Tom Harkin authored the program in 2002 and after retaking over the helm of the committee again, he will likely push for a broader-based program in the upcoming farm bill debate.

Overall the conservation title includes $7.8 billion more in total conservation funding. The Environmental Quality Incentive Program (EQIP) will experience the biggest funding jump at $4.2 billion.

If producers choose to forgo loan deficiency payments and countercyclical payments, they could have a 10% increase in direct payments to implement conservation measures.

Ten percent of all conservation funding is reserved for beginning and socially disadvantaged farmers.

Biofuels focus on research

According to the administration's proposals, they are seeking to provide $1.6 billion in new funding for renewable energy research, development and production, targeted for cellulosic ethanol, which will support $2.1 billion in guaranteed loans for cellulosic projects and includes $500 million for a bio-energy and bio-based product research initiative.

Specifically, the proposals include:

  • Providing $500 million for a Bioenergy and Biobased Product Research Initiative;
  • Providing $500 million for renewable energy systems and efficiency improvements grants program;
  • Providing $210 million to support an estimated $2.1 billion in loan guarantees for cellulosic ethanol projects in rural areas. 

Whether this proposal goes far enough, is still unknown. Critics are already saying more needs to be done to push biofuels to the next level.

Specialty growers get $5 billion

There isn't much more of the piece to go around, but specialty growers will come out on top if Congress implements Johanns' provisions included in his proposals. To become WTO compliant, it does eliminate the fruit and vegetable planting restrictions on commodity acres.

It also targets nearly $5 billion in funding to support specialty crop producers by increasing nutrition in food assistance programs, including school meals, through the purchase of fruits and vegetables, funding specialty crop research, fighting trade barriers and expanding export markets.

Congress Tepid on Farm Bill Proposals

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One thing is certain in farm bill writings - Congress writes them. Secretary of Agriculture Mike Johanns did what few secretaries, if any, have done before Wednesday when he offered a thorough proposal on all ten titles of the upcoming 2007 Farm Bill. It'll take weeks, if not months, for everyone to sort through all of the details of the proposal. At first glance, Congressional members were welcoming of his suggestions, but they'll take them only as ideas to start the long debate ahead.

House Ag Committee ranking member Bob Goodlatte said the process of compiling the next farm bill is still in its early stages and the committee "will consider the proposal offered by the Administration just as we will consider the feedback we gathered from farmers and ranchers throughout the Committee's own farm bill hearing series."

Senate Ag Committee Chairman Tom Harkin, D-Iowa, said he will take careful consideration of Johanns' proposals, although he isn't a fan of everything proposed. "There are a number of good ideas, along with others that raise serious questions. I'm especially concerned about the idea to put even more money in the old Freedom to Farm type of payments," he said.

Minnesota Sen. Norm Coleman supports the overarching policy goals outlined in the proposal with support of maintaining marketing loans, countercyclical support and direct payments. "Unfortunately, there are deep cuts and harmful changes to every commodity under the farm bill safety-net, as well as to the Federal Crop Insurance Program, that would hurt Minnesota's rural communities and cost our state jobs," he said.

Harkin's Republican counterpart Sen. Saxby Chambliss, R-Ga., said he values the Secretary's recommendations, however, "ultimately it is up to Congress to write comprehensive farm policy. Congress will have the final say and set the final spending limits on the farm bill."

Chambliss added the proposal should not be seen as a revision of the U.S. offer in the Doha Round. "It would be unproductive for our trading partners to assume otherwise."

Sen. Chuck Grassley, R-Iowa, a long-time advocate of payment limitations, said he is appreciative of the administration's effort to address the inequitable farm payment situation. "It appears that they have the same philosophy as I do, but this is a new approach so we're going to have to see if it's workable."

Harkin criticized USDA for not calling for more money in the Conservation Security Program - a program he championed in the last farm bill debate. "I was disappointed that the proposal fails to remedy the budget damage to the Conservation Security Program since the 2002 farm bill. It does not restore CSP to a nationwide program so every producer at least has an opportunity to apply. That should be the goal," Harkin said.

Grassley said the energy title proposals provide a "good starting point for our debate in the Senate." Harkin's words were less flattering, saying, "On energy, the proposal is not enough to meet the ambitious goals the President laid out in his State of the Union speech for increasing production of alternative and renewable fuels. While I support the rhetoric, I do not see adequate resources dedicated to backing it up."

 

Yale Study Supports Virus as Encephalopathy Cause

The alternative view that a virus causes spongiform encephalopathies of the brain, such as bovine spongiform encephalopathy and Creutzfeldt-Jakob disease, rather than prion proteins, which are normally produced throughout life, was bolstered today in a new study by Yale School of Medicine researchers.

The report published online January 29 in the Proceedings of the National Academy of Sciences provides evidence that a virus causes these diseases, which are manifested by devastating holes, or sponge-like spaces, in the cerebral cortex. The conclusions counter the now conventional view that abnormally folded prion proteins are infectious, and instead suggests that abnormal prion proteins are late stage footprints left by the virus.

The lead author, Dr. Laura Manuelidis, professor and section chief of neuropathology, infected cell lines with either scrapie or CJD agents. Examining the cultures using electron microscopy, Manuelidis and her co-authors found an abundance of 25 nm virus-like particles. They also found that the particles did not bind antibodies for the prion protein, indicating they were not composed of prion protein.

The development of the particles was independent of pathological changes or neuronal specialization, and preparations with an abundance of these particles correlated with high levels of infectivity, whereas the presence of prion proteins did not.

Source: Feedstuffs

Imagine 2025

The Agriculture Council of America is calling upon seventh- to 12th-grade students to submit an original essay of 450 words focused on the theme, "American Agriculture in 2025."

Students are encouraged to write essays on the potential landscape of American agriculture in 2025 based on where we are today and the opportunities that lie ahead. The deadline for entries is Feb. 19.
This year's national winner will receive a $1,000 prize and roundtrip ticket to Washington, D.C., to be recognized during the March 15 Ag Day Luncheon held at the National Press Club. At the luncheon, the winning essayist will have the opportunity to join with industry representatives, members of Congress, federal agency representatives, media and other friends in a celebration of agriculture. Statewide winners of the contest also will be selected. Each will receive a $100 prize.

This is the 34th anniversary of National Ag Day. The goal of the ACA is to provide a spotlight on the agriculture, food and fiber industry the first of each spring (National Ag Day), to help consumers understand not only how food and fiber products are produced, but to celebrate accomplishments in providing safe, abundant and affordable products.

FYI
All entries should be sent to: Ag Day Essay Contest, Agriculture Council of America, 11020 King Street, Suite 205, Overland Park, KS 66210, or submitted by e-mail to essay@agday.org.  
Entry applications and official rules for the contest can be found at www.hpj.com/agdayessay.

Gov's Ag Conference Explores Biofuels and Rural Development

Gov. Dave Heineman has announced plans for the 2007 Governor's Ag Conference Feb. 28 and March 1 at the Holiday Inn Convention Center in Kearney. The theme is "Agriculture – Nebraska's Rural Development Opportunity."

"The new investments made in Nebraska's agriculture industry during the past year have opened a new door in terms of providing opportunities for rural development in Nebraska," Gov. Heineman says. "With the latest expansion in renewable fuels production taking place here in Nebraska and new opportunities to explore stronger trade relationships in foreign markets, it's important we consider ways for our state to continue to build on the successes we've achieved. This conference is an opportunity to look closely at the relationship between biofuels, grain and livestock production, and to get an update on how policy changes at the federal level could influence these important segments of Nebraska's agriculture industry."

Pre-conference activities will begin at 6 p.m. on Wednesday, Feb. 28, with the "Celebrate Nebraska Agriculture" reception, featuring foods produced by Nebraska farmers and ranchers.

The conference itself will convene at 9 a.m. March 1. Mark Keenum, USDA undersecretary for Farm and Foreign Agricultural Services, will deliver the keynote address during this year's conference, focusing on USDA positions on Farm Bill reauthorization and trade opportunities.

The conference will also feature presentations on the relationship between livestock and grain production and development of renewable fuels. Speakers on this topic are: Dan Dye, president of Cargill AgHorizons; Sally Schuff, a Nebraska native and senior staff writer for Feedstuffs; Walt Armbruster, president of The Farm Foundation; and a representative from the Renewable Fuels Association, the national trade association for the U.S. ethanol industry.

In addition, Galen Erickson, UNL beef feedlot specialist, will talk about ways producers can apply findings from research conducted on using corn by-products for feed to their operations, and Karen Flournoy with the Environmental Protection Agency's Region 7 Office will talk about regulatory issues impacting farmers and ranchers.

The conference is open to anyone interested in learning more about the issues facing Nebraska agriculture. A $50 registration fee covers participation at both the conference and the Wednesday night reception.

Registration information is available online at www.agr.ne.gov. You can also call the Nebraska Department of Agriculture toll-free at 800-831-0550.

Harsh Weather May Have Lingering Effect on Cattle Herds

This winter's harsh weather will subside, but its effect on Plains-area cattle herds will linger long after the ice and snow have melted away, says Kansas State University Research and Extension veterinarian Larry Hollis.

"The weather this winter has certainly resulted in some death loss in cattle, but the real problems are going to be much harder to get our arms around," Hollis says.

Winter storms prompted Kansas Gov. Kathleen Sebelius to request federal assistance for 44 counties. In turn, President Bush declared a major disaster in Kansas, making federal funding available to state and local governments in those 44 western Kansas counties.

Hollis says that although the death loss already tallied from this year's snow and ice storms could have been even worse, he is concerned about what he called "secondary losses" – weak calves at birth, cows that are in poorer condition than usual during calving season, and the possibility that cows' poor condition at re-breeding time could impact fertility and, ultimately, conception rates.

A lot will depend on how many days these cattle went without feed, which varies from one operation to another, he says. Those animals that went without feed for one or more periods over the last several weeks used up body reserves, which will make them even more vulnerable to cold snaps.

In an instance like that, when a cow was already stressed and lost body condition, a cold snap can sometimes spark spontaneous abortions – usually within 48 hours of the drop in temperatures, Hollis says.

"The key to keep that from happening," he adds, "is to feed well and start getting body condition back where it should be. Winter feed costs are out of sight this year, so that's a hard pill to swallow, but feed is the best medicine in this case."

He acknowledges that that could be especially challenging this winter, given that high quality feed may not be available in the quantities and areas where it's needed most.

"I expect that in some herds, we will have more neo-natal death loss this winter if we can't get some condition back on these cows between now and when they calve," Hollis says. "It might help to get calves in a warming box if the lack of calf vigor is due to the cold. And this year, it may be especially important to give cows a warmer, dry place to calve."

The effects of the recent wintry weather could last all the way until time to re-breed cows.

"We will have a lot of cows that aren't cycling at breeding time. Don't look at the hair – look at the cow – try to determine what she needs to make sure she is in the best condition at breeding time as possible," Hollis says.

USDA Announces Farm Bill Proposals

Agriculture Secretary Mike Johanns unveiled USDA's 2007 farm bill proposals Wednesday. A revenue-based assurance countercyclical program, based on both price and yield, is a central component of the proposals, which also included increased conservation spending, billions of funding and loans for renewable fuels research, and more support for specialty crop producers.

"These proposals we believe are more equitable," Johanns said while unveiling the proposals. "These proposals are market-oriented. They provide support when revenue is low despite high prices."

Johanns defends the proposals' new version of a "safety net" for farmers. "This safety net will actually work better across the commodities to provide a true safety net," he says.

Some highlights of the proposal, as detailed in a USDA press release, include:

  • Increase conservation funding by $7.8 billion, simplify and consolidate conservation programs, create a new Environmental Quality Incentives Program and a Regional Water Enhancement Program
  • Provide $1.6 billion in new funding for renewable energy research, development and production, targeted for cellulosic ethanol, which will support $2.1 billion in guaranteed loans for cellulosic projects and includes $500 million for a bio-energy and bio-based product research initiative
  • Target nearly $5 billion in funding to support specialty crop producers by increasing nutrition in food assistance programs, including school meals, through the purchase of fruits and vegetables, funding specialty crop research, fighting trade barriers and expanding export markets
  • Provide $250 million to increase direct payments for beginning farmers and ranchers, reserve a percentage of conservation funds and provide more loan flexibility for down payment, land purchasing and farm operating loans
  • Support socially disadvantaged farmers and ranchers by reserving a percentage of conservation assistance funds and providing more access to loans for down payments, land purchasing and farm operating
  • Strengthen disaster relief by establishing a revenue-based counter-cyclical program, providing gap coverage in crop insurance, linking crop insurance participation to farm program participation, and creating a new emergency landscape restoration program
  • Simplify and consolidate rural development programs while providing $1.6 billion in loans to rehabilitate all current RuralCriticalAccessHospitals and $500 million in grants and loans for rural communities to decrease the backlog of rural infrastructure projects
  • Dedicate nearly $400 million to trade efforts to expand exports, fight trade barriers, and increase involvement in world trade standard-setting bodies
  • Simplify, modernize, and rename the Food Stamp Program to improve access for the working poor, better meet the needs of recipients and States, and strengthen program integrity

In total, the proposals would spend about $10 billion less than the 2002 farm bill spent over the past five years, and would provide $5 billion more than the projected spending of an extension of the 2002 farm bill.

The proposals are available at www.usda.gov/farmbill.

FFA Announces Grant Winners

The National FFA Organization announces six state grant winners for the Living to Serve State Grant Program that funds FFA chapters and rural youth engaged in service learning activities. They are Ohio (Federal Hocking, Miami East, Wauseon, and Carrollton FFA chapters); Kansas (Columbus and Marysville FFA chapters); Wisconsin (Ithaca, Prairie du Chien, Sauk Prairie and Wittenberg FFA chapters); New York (Letchworth, Hamilton, and Springville FFA chapters); Louisiana (Ponchatoula, Bell City, Starks and Northeast FFA chapters; and Montana (Shields Valley, Browning and Beaverhead FFA chapters).

Each FFA chapter received from $2,250 to $5,000 each for a total of $102, 314, and their projects will be completed by early May 2007. Funds are provided through a grant from the United States Department of Agriculture, Cooperative State Research, Education, and Extension Service Rural Youth Development program.

Source: FFA release

U.S. Trade Rep to Deliver Commodity Classic Keynote Address

The 2007 Commodity Classic General Session will feature a keynote address by U.S. Trade Representative Susan Schwab.

The event, which takes place March 1-3 in Tampa, Fla., will bring together American Soybean Association President Rick Ostlie, National Corn Growers AssociationPresident Ken McCauley and National Association of Wheat Growers President Dale Schuler. In a roundtable hosted by U.S. Farm Report's John Phipps, the presidents will discuss strategies for communicating agriculture's success stories to the American public.

"Trade issues are vitally important to agriculture, and we are interested in hearing Ambassador Schwab's update on the Doha negotiations and the potential effects on our ability to trade and our future farm programs," Schuler says.

The General Session will take place at 9:15 a.m. on Friday, March 2. For more information and to register, visit www.commodityclassic.com.