Bill Huffman
Director - Government Relations

January 9, 2009

This has been a busy week in Washington, D.C. with the convening of the 111th Congress on Tuesday, January 6th and the preparations for the inaugural set for January 20th.

Congressional Activity

Congress has spent most of this week settling in for their two-year session that is now underway. Members were sworn in Tuesday including those newly elected. As usual, moving into their offices, especially in the House of Representatives, is a big challenge with newly elected members moving into offices being vacated by more senior members. With seniority, returning members generally get larger office suites and more staff as they ascend into leadership positions.

As for key Agriculture Committee assignments, the House Agriculture Committee will gain three new Democrats giving the Democrats a 28-19 margin. The Senate Agriculture Committee will gain a couple of Democratic members and the margin will be 12-9.  Senator Tom Harkin will chair the Senate Agriculture Committee and Representative Collin Peterson will chair the House Agriculture Committee. The appointment of House Subcommittee chairmen will be announced early next week.  We expect Representative Dennis Cardoza, D-Merced; will chair one of the important subcommittees.

Key Issues

Key issues near term will include the debate over the Obama stimulus package, the debate over the burgeoning Federal deficit, and for agriculture the implementation of the 2008 Farm Bill.

Perhaps our biggest concern is the Federal deficit which is now forecast to be between $1.6 and $1.8 trillion this fiscal year. Will that cause Congress to look for cuts in previously approved programs such as the Farm Bill?  Will there be “budget reconciliation” like we experienced in the 1980’s with the Gramm-Rudman “across the board cuts” to all government expenditures?  So far, there hasn’t been any talk about this, however, at some future point in time, Federal spending will have to be dealt with and the cuts likely could be “severe”.  If the Congress and the Obama Administration are successful in helping restore the economy, there will be a day when the question will be asked “How Do We Pay for All This?”

Obama Administration Appointments

Confirmation hearings will begin the week of January 12th for the cabinet appointments of President-elect Obama.  We expect the hearing in the Senate Agriculture Committee for Agriculture Secretary-designate Tom Vilsack will occur on or before the inauguration on January 20th.  Mr. Vilsack seems to have strong support and we don’t know of any organized opposition to his appointment as Secretary of Agriculture.

In anticipation of his assuming the top position at USDA, California Senator Barbara Boxer is preparing a letter to Mr. Vilsack outlining the key agriculture issues of interest to California and the urgency of these issues. The California rice industry has provided input to Senator Boxer citing trade issues with Japan and Taiwan, the importance of continuity in leadership of the California State Farm Service Agency office, the importance of conservation programs on “working lands” and the importance of tighter GMO controls to prevent another “Liberty Link” catastrophe.

Concluding Thoughts

While we are comfortable with the 2008 Farm Bill and the future of the Federal rice program, we remain concerned about the budget deficit and how that might lead to some of our adversaries attempting to advance even tighter payment limits on agriculture and shifting more funding away from conventional farm programs to new environmental initiatives, conservation and nutrition programs.

It will be an interesting next two years as the Democrats assume power at all levels of the Federal government.