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May 2, 2008

 

NATIONAL AFFAIRS:

Bush Addresses "Bloated" Farm Bill - President Bush addressed the farm bill during a White House news conference on Tuesday. Bush accused lawmakers of writing a "massive, bloated farm bill that lavished money on multimillionaires without helping consumers cope with spiraling food prices." Regarding whether President Bush will veto the farm bill that makes it to his desk, "they have to keep threatening it at this point," according to Mary Kay Thatcher of American Farm Bureau Federation. Thatcher said she believes there is a 30 percent chance the bill will be vetoed. Bush, at the news conference: "Americans are concerned about rising food prices. Unfortunately, Congress is considering a massive, bloated farm bill that would do little to solve the problem. The bill Congress is now considering would fail to eliminate subsidy payments to multimillionaire farmers. America's farm economy is thriving, the value of farmland is skyrocketing, and this is the right time to reform our nation's farm policies by reducing unnecessary subsidies. It's not the time to ask American families who are already paying more in the check-out line to pay more in subsidies for wealthy farmers. Congress can reform our farm programs, and should, by passing a fiscally responsible bill that treats our farmers fairly, and does not impose new burdens on American taxpayers."

 

Farm Bill Negotiations Continue - Key House and Senate leaders continue their efforts to hammer out the details of a new farm bill. Agriculture Secretary Ed Schafer and Chuck Conner, deputy agriculture secretary, also met with a small number of lawmakers on Capitol Hill, following President Bush's critical comments about the measure earlier in the week. Senate Budget Committee Chair Kent Conrad (D-N.D.), who described the meeting as "sobering," said the administration has a laundry list of demands for the farm bill. Conrad and Senate Agriculture Committee Chair Tom Harkin (D-Iowa) said farm bill negotiators would further limit subsidies and cut other spending in an attempt to try to assuage the Bush team's objections. House Agriculture Committee Chair Collin Peterson (D-Minn.) said Congress could send the farm bill to the White House as soon as next week. The clock on the existing farm bill runs out the end of this week unless another extension is agreed to in the meantime.

 

Ethanol & the RFS Mandate - There remains a great deal of speculation that either Congress or the Bush administration will alter the mandate for the national renewable fuels standard. In the short-run, the answer is no. But if the U.S. corn yield drops below trend for this crop year, a growing push for some changes in renewable fuel policy will accelerate. While there currently is no solid evidence that the Bush administration is actively moving to alter the RFS, some state governors are preparing to seek waivers from the mandate. Once it receives a waiver petition, the Environmental Protection Agency is required to make a decision within 90 days, and would consult with the secretaries of Agriculture and Energy before approving or disapproving the waiver petition. (Beginning Jan. 1, 2009, the EPA administrator has the authority to waive the RFS requirements without a petition first being filed.)

 

Food Prices- As food prices continue to move higher, the odds grow that USDA will allow some landowners who hold conservation reserve programs to exit the program early and without penalty, a decision that would first affect 2009 crops. Any yield problems this year will escalate talk about potential changes in the RFS, more likely from the Bush administration than Congress.

 

Food Safety Reform - While the House could enact a major overhaul of the Food and Drug Administration, including major food safety reforms, the Senate is likely to wait until after the Nov. 4 elections (meaning into 2009) when the Democratic Party believes it will have a Democratic president in the White House and larger numbers in both chambers of Congress. Major food safety reforms are coming, but likely not this year.

 

Free Trade Agreements (FTAs) - Congress thus far has stalled the Bush administration's push for FTAs with Colombia, Panama and South Korea, not by voting down these proposals, but by undertaking procedural moves that stymie voting on the measures. Per the South Korea FTA, Key farm-state senators, notably Finance Chairman Max Baucus (D-Mont.), said they would withhold their approval of the Korea agreement until the country opened its market to U.S. beef. That has occurred, but Baucus now says he wants to see if the actual accord is implemented in a way that benefits the U.S. beef industry. That will take a while. Another stumbling block are those lawmakers close to U.S. automobile lobbyists. For example, Rep. Sandy Levin (D-Mich.), who chairs the House Ways & Means Subcommittee on Trade, said: "The problems with this (FTA) has always been broader than beef. It is the agreement's basic acquiescence to Korea's one-way street in manufacturing trade that is also unacceptable." Eventually a way will be found to temper the auto industry's concerns, but the timeline for approving an agreement some call "too big and important to fail" is still murky. Per the beef trade, now that South Korea has signed a new beef trade protocol with the United States, speculation has shifted to if and when other countries, especially Japan, will alter their current trade policy stances regarding U.S. beef. Pressure will grow for changes by Japan, China, Taiwan and others if the U.S.-South Korea beef trade changes succeed. But that success –– or lack of it –– will take months to confirm.

 

USDA Launches Colombia Trade Ticker - Agriculture Secretary Ed Schafer recently unveiled a tool intended to spur movement on a pending trade agreement with Colombia.

 

The "Colombia Tariff Ticker" will show Americans how much money is being paid to Colombia in tariffs on U.S. products entering that country. By contrast, Colombian products enter the U.S. duty-free. Farm Bureau strongly supports congressional approval of the Colombia trade deal.

 

Details of South Korea Market Opening for U.S. Beef - The recent agreement between the United States and South Korea aimed at re-opening Korea's market to U.S. beef could see U.S. beef start moving back into the South Korea market this month. Under the deal, South Korea will first allow bone-in cuts from animals younger than 30 months. The market eventually will open to animals over 30 months, but this would require the United States tightening its controls on feed.

 

A few other issues raised by the agreement include:

- South Korea plans to introduce a beef-labeling program to distinguish locally produced meat from cheaper U.S. imports. The Agriculture Ministry says it will have all locally raised cattle labeled by June 2009 and that it plans to track the animals through the slaughtering and distribution process. To accomplish this goal, the government plans to assign as many as 1,000 agricultural inspectors at retailers and restaurants across the country. The government also says it will offer financial support to cattle producers as the country opens again to U.S. beef.

- Once the South Korean market is fully re-opened, some analysts believe increased U.S. beef sales could replace some of the pork that has been going to South Korea in larger quantities in recent years. In 2003, before Korea imposed its first ban on U.S. beef due to concerns about mad cow disease, the country imported 246,958 tons of U.S. beef and 28,852 tons of pork. During 2005 and 2006, U.S. pork sales to South Korea jumped to 71,856 tons and 109,198 tons, respectively. Some see this trend possibly reversing over the next few years.

- Australian livestock officials believe they will be able to retain up to half of the South Korean beef import market after the U.S.-South Korean agreement goes into effect. Last year, Australia sold about $840 million of beef to South Korea and currently holds about 75 percent of the import market, up from around 30 percent before U.S. beef was banned in 2003 due to a mad cow disease scare.

 

BSE Feed Ban - The Food and Drug Administration (FDA) published last week in the Federal Register a final rule to revise animal feed regulations to prevent the spread of BSE. The rule takes effect in 12 months to allow industry time to adjust practices to come into compliance. Under the proposal, certain tissues considered at a high risk for carrying the BSE agent will be banned from all animal feed, including pet food. Current feed rules, which have been in place since 1997, only prohibit the inclusion of these high-risk mammalian proteins in ruminant feed. This revised rule was proposed in October 2005 and FDA received more than 840 public comments, including those of Farm Bureau. Materials classified as high risk in the new rule include: the entire carcass of BSE-positive cattle; brains and spinal cords from cattle 30 months and older; the entire carcass of cattle not inspected and approved for human consumption that are 30 months and older, if the brains and spinal cords have not been removed; tallow containing more than .15 percent insoluble impurities; and mechanically separated beef derived from materials prohibited by this rule. Removal of additional high-risk materials from all animal feed will reduce the already low risk of BSE transmission. Taking steps to remove Specified Risk Materials (SRMs) from all animal feed eliminates the need to prohibit the use of poultry litter. It also is consistent with AFBF policy and comments Farm Bureau previously submitted. FDA had also considered prohibiting the use of blood by-products, but did not include that measure in the rule since the World Organization for Animal Health (OIE) has confirmed that these products do not transmit BSE. AFBF strongly supports strengthening the ruminant feed ban in order to eliminate possible loopholes that might allow SRMs to reach ruminants through misfeeding or cross-contamination. However, there are concerns about the practicality of enforcement of some parts of the rule. The rule also fails to address some labeling issues that Farm Bureau believes would help producers with compliance on the farm.

 

PEW Commission Releases Long-Awaited Report - An organization that studied issues related to large animal production facilities for more than two years released its final report and recommendations at a press conference in Washington, D.C., on Tuesday. Staff members of the Pew Commission on Industrial Farm Animal Production said at the outset of the event that the commission was formed to review "problems" in animal agriculture and recommend how to solve those problems. Chairman John Carlin, a former Kansas governor, said his fellow commissioners recognized there will be large animal operations, so their challenge was to "address the problems in their sustainability." American Farm Bureau Federation is one of several organizations that has monitored the progress of the commission throughout its existence. Commissioners made six broad recommendations, including the phase-out of the use of subtherapeutic antibiotics. Improved disease monitoring is the focus of another recommendation, with the establishment of a national trace-back system to ease tracking of all livestock destined for human consumption. The commission also urges the phase-out of confined systems such as gestation stalls and battery cages that restrict the natural movement of animals. Farm Bureau released a response to the report.

 

Farm Bureau Comments on DHS Supplemental No-Match Rule - Last Friday, Farm Bureau filed comments to the U.S. Department of Homeland Security (DHS) in response to the agency's request for comments on a supplemental notice DHS had filed in connection with its no-match regulation.

 

That regulation is still under a preliminary injunction issued by a Federal District Court. While DHS is appealing that ruling, it has simultaneously filed amendments to the rule in an effort to resolve issues in litigation. It is uncertain when the issue will be resolved or the final outcome of the DHS regulation. Comprehensive immigration reform remains a high priority for Farm Bureau. Implementation of a new no-match rule, in the absence of substantive immigration reforms, may exacerbate existing labor shortages in agriculture.

 

STATE AFFAIRS:

Governor Signs Energy Bill - A year to the day after Gov. Ted Strickland annouced his energy proposal, SB 221, he signed the bill into law. The event filled the atrium of the Ohio Statehouse with advocates and lawmakers.

 

Ohio Farm Bureau Federation was the first major organization to annouce support of the governor's proposal back in October of 2007.

 

"Today, I am pleased to say we kept our word to Ohioans," Strickland said, referring to the bill's intention to control electric costs and create jobs for the future.

Ohio farmers stand to benefit from the bill, as it encourages the development of renewable fuels they are in position to provide. In fact, the bill creates an Advanced Energy Standard that requires a minimum of 25 percent of Ohio's electricity come from renewable, clean coal and advanced nuclear sources by the year 2025.

 

House Concurs on Senate Amendments to "Ohio Agriculture" License Plate Bill - On Wednesday the House concurred unanimously on amendments which were added to HB 293 (Goodwin) in the Senate. One amendment created the "Ohio Horse" license plate. Funds from the plate will be used for rescue efforts for horses. The other amendment establishes the "Sustainable Agriculture" license plate. The funds generated by this plate will be used by the Ohio Department of Agriculture to promote all aspects of agriculture and leverage federal dollars for first-time farmers.

Funds from the "Ohio Agriculture" license plate will be used for scholarships for students studying agriculture or a related field at an Ohio institution of higher learning.

Testimony Continues for STOLI Prevention Bill - The Senate Insurance, Commerce & Labor Committee heard testimony this week dealing with the definition of STOLI in HB 404 (Hottinger, Barrett). Testifying as a proponent was Michael Lovenduskey, vice president & associate general counsel of the American Council of Life Insurers. Opponent testimony was given by Doug Head, executive director of the Life Insurance Settlement Association. Head testified that he largely agrees with bill, however, he would like to see some "very minor and logical changes."

 

The bill is designed to prevent transactions in which investors offer to pay aging Ohioans for their life insurance policies. These transactions are referred to as Stranger Originated Life Insurance (STOLI) transactions. With certain exceptions, the bill will pass a five-year moratorium on the transfer of a life insurance policy. The bill sponsors testified these STOLI transactions can have adverse tax consequences for the policy holder, and many times elderly Ohioans are victimized in these types of transactions.

 

Governor Strickland Talks Broadband - Last week Governor Strickland said that efforts are under way to bring broadband service to Ohioans who lack it. Connect Ohio is a public-private partnership launched last December. The first step in Ohio has been to map where the coverage gaps exist in the state, and the initial map is expected to be completed by June 27, said Brent Legg of Connect Ohio.

 

The plan also calls for setting up "e-community leadership teams" in all 88 counties to develop customized plans for broadband service and helping residents who can't afford computers or access get connected. The idea is to show the demand for high-speed Internet access to encourage providers to offer it, as well as to educate residents who aren't taking advantage of the educational and job opportunities that broadband can provide.

 

During a program in which the governor made his comments, he accepted a $200,000 check from the Ohio Telecom Association to supplement the $2.9 million in state money already approved for the first of what's planned as a three-year project. Legg said the annual budget for Connect Ohio is expected to be about $2.3 million, and that other private funding is being sought.

 

Governor Strickland, who grew up in rural Scioto County in a home without electricity for a time, compared the effort to make broadband available to all Ohioans in this century to the move to wire all homes for electricity during the last century. "This will change people's lives for the better," Strickland said. (Source: The Columbus Dispatch)

 

Turkey Hunting Season Starts with a Bang- According to the Ohio Department of Natural Resources Division of Wildlife, incredible spring weather provided a boost to the opening-day kill as hunters checked 2,768 birds the first day of the season, about 8 percent more than the 2,569 gobblers taken statewide on the morning of the 2007 opener.

 

Ashtabula, as it almost always does, led Ohio's counties with 134 birds checked, followed by Coshocton with 91, Guernsey with 87 and Harrison with 83. Finishing in the top 10 were Meigs County with 72 birds, and Licking and Ross counties with 71 each. Licking County's count was up significantly from last year, when 54 turkeys were checked on opening day.

 

During the season, which runs from a half-hour before sunrise until noon daily through May 18, it is estimated that about 85,000 turkey hunters will pursue gobblers in the Buckeye State. The spring bag limit is a single bird, but two turkeys can be taken during the spring hunt if a permit is purchased for each. (Source: The Columbus Dispatch)

 

CONTACT:

Niki Clum

Director of Constituent Action

nclum@ofbf.org