Bill Huffman
Director - Government Relations

The Friday Report

March 27, 2009

Congressional budget negotiations for FY 2010 were the top issue this week for agriculture. As expected another attempt was made to cut payments to producers but the effort failed in Committee.

Senate Panel Rejects Grassley Amendment

In an unusual twist, three key Democratic Senators joined other members of the Senate Budget Committee this week opposing the effort of Senate Charles Grassley, R-Iowa, to cap farm payments to producers at $250,000 per farmer. Grassley continued his efforts to modify the existing farm program payment cap language (adopted just last year in the 2008 Farm Bill) with his amendment calling for a “hard cap” of $250,000 per producer. His amendment failed by a 10-13 vote. Senators Robert Byrd, D-W.V., Patty Murray, D-Washington, and Ron Wyden, D-Oregon voted against Grassley. Each of them had supported his pay cap proposal last year during budget negotiations.

Senate Budget Committee Chairman Kent Conrad, D-North Dakota opposed Grassley’s amendment, saying he did not want to reopen the Farm Bill. In an effort to provide savings in the agriculture program, Senator Conrad successfully offered an alternative amendment to cut crop insurance funding, which passed on a 14-10 vote.

Notwithstanding this latest setback, Senator Grassley remains poised to offer his payment limit cap again at some future date. He never gives up!

The Senate Budget Committee, by the way, approved its FY 2010 budget resolution, sending it to the Senate floor on a party-line 13-10 vote. The House Budget Committee also approved its budget resolution, which now goes to the House floor for debate and approval.

The budget plan sets the stage for how much money each Committee will have to work with as the FY 2010 appropriation process begins later this spring. We expect there will still be much debate over agriculture expenditures, especially funding for conservation and environmental initiatives and the important market access program. This, of course, will all be resolved when a House-Senate Conference Committee convenes to work out differences between the House and Senate budget plans later this spring.

Congressman Cardoza Targets Taiwan’s Failure to Purchase U.S. Rice

California Congressman Dennis Cardoza, D-Merced, sent a strongly worded letter to President Ma of Taiwan this week about Taiwan’s failure to live up to its bilateral trade agreement with the United States to purchase specific quantities of U.S. rice. The letter is the result of FRC’s efforts and those of the California Rice Commission and the USA Rice Federation to get the U.S. Trade Representative’s office to pressure Taiwan to live up to its trade obligations with the U.S.

As Congressman Cardoza correctly pointed out, Taiwan has been the beneficiary of additional trade with the U.S. as a result of the bilateral trade agreement between the two countries, however, Taiwan has failed to live up to its commitment to purchase specific quantities of rice from this country, most of which would come from California.

Farmers’ Rice Cooperative sincerely appreciates the efforts of Congressman Cardoza in this important matter and would like to acknowledge and thank Congressmen Lincoln Davis, D-Tennessee, Devin Nunes, R-Ca, John T. Salazar, D-Colorado and Marion Berry, D-Arkansas for also signing this letter.

The FRC Board Officers and Senior Staff met earlier with each of these members of Congress asking them to help our industry resolve what is becoming a major trade issue. The next step will be a formal trade complaint if this issue isn’t resolve amicably.

(A copy of Congressman Cardoza’s letter is attached to this report.)

Japan Purchases More California Rice

Japan purchased another 39,000 metric tons of California Calrose rice this week. Farmers’ Rice Cooperative successfully sold 26,000 metric tons (two cargoes) and ADM will supply 13,000 metric tons (one cargo). We believe this was the final Japanese MA purchase for this marketing year.

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