Bill Huffman
Director - Government Relations

The Friday Report

August 6, 2010

Congress wrapped up much of its business this week with several key votes prior to leaving for the traditional August recess. The Senate confirmed the appointment of Elena Kagan to be the newest member of the Supreme Court. They also passed, at the eleventh hour, a funding bill of several billion dollars (with spending offsets) to help states facing large budget deficits pay for teacher salaries, police and other critically important positions that likely would have been laid off because of budget deficits like that facing the State of California. Interestingly, the House of Representatives had already adjourned for the August recess, however, Speaker Pelosi intends to call her members back into session to vote on the multi-billion funding bill for the states which the Senate passed at the eleventh hour.

Congress will return after Labor Day for the fall session. Appropriation bills and other key legislation remains to be acted on. One thing, for certain, is that “climate change” legislation appears to be doomed. Many members of Congress simply do not want to deal with that subject during this election year.

Senate Ag Committee Hearing

The Senate Agriculture Committee held a hearing Wednesday to review U.S. agricultural policy and the trade title of the 2008 Farm Bill. The hearing was for the purpose of gathering information about the current Farm Bill as the Committee begins the process of developing the 2012 Farm Bill.

Much of the testimony dealt with the trade title of the bill. Rice producer Joe Mencer of Arkansas testified on behalf of the U.S. rice industry. Mr. Mencer spoke about the need for congressional action to expand agricultural trade with Cuba and he focused his comments on the importance of the public-private partnership with USDA for promoting rice through the Market Access Program and the Foreign Market Development program. The rice industry utilizes both programs in its efforts to expand exports for U.S. grown rice. Senator Saxby Chambliss, the ranking Republican member of the Committee, urged approval of the pending Free Trade Agreements with Columbia, Panama, and Korea that are pending Congressional approval.

The general tone of the hearing was that more needs to be done to expand exports of U.S. grown agricultural products and that pending trade agreements need to be ratified sooner rather than later.

An Interesting Controversy

There has been an effort underway since last fall by Southern agriculture interests to get a “disaster bill” approved by Congress to cover rice, soybean and corn growers who claim a disaster last fall during harvest because of wet weather and muddy field conditions. Ultimately, yield losses for some producers were reported to be less than 5%. Nearly every effort has been made including a stand-alone disaster bill, amendments to several major pieces of legislation that were not accepted and this week an amendment was pulled from a Senate bill because many members of Congress fail to see that a less than 5% yield loss (and that was for certain producers in Louisiana, Mississippi and Arkansas) wasn’t significant enough to warrant a $1.5 billion disaster appropriation. Toss in the monumental Federal deficit and the political controversy associated with that issue and you can see that it was an uphill battle for those seeking the disaster funding for their region.

The issue took a new turn when the Obama Administration assured Senator Blanche Lincoln of Arkansas this week that USDA would “administratively” find $1.5 billion in its budget to cover the funding for her disaster effort. Interestingly, House Agriculture Committee Chairman Collin Peterson says that his committee staff says there “is no way they (the Obama Administration) can do this administratively. Congress is responsible for authorizing such expenditures and appropriating money to pay for it.

Meanwhile, Senate Budget Committee Chairman Kent Conrad said Thursday that “the permanent farm disaster program that he and Senate Finance Chairman Max Baucus wrote in the 2008 farm bill needs to be “tweaked in the next Farm Bill” so that it works better on a national basis. That provision of the 2008 Farm Bill was supposed to “ever and forever provide a disaster program” in the event of a major agriculture disaster because of weather phenomenon and eliminate the need for Congress to frequently do disaster bills.

Of course all this debate comes during an election year! In the past it seemed like Congress declared a “disaster” every year and would appropriate funds to cover it, that was especially true in election years. We’ll just have to wait to see how this issue plays out!

Political Note

We are very pleased to report that Republican Congressman Jerry Moran of Hays, Kansas won the Republican primary election last Tuesday for the U.S. Senate seat being vacated by Senator Sam Brownback. Since Kansas has not elected a Democrat to the U.S. Senate since 1934, Jerry Moran is expected to be elected to the Senate this November.

Farmers’ Rice Cooperative and the California rice industry became acquainted with Jerry Moran when he was Chairman of the House Agriculture Subcommittee on General Farm Commodities and Risk Management. We invited him to California to learn more about rice production and he subsequently visited our state several times including visits to Biggs and the Yuba-Sutter. He has been a key member of the House Agriculture Committee and was very helpful to the rice industry during the development of the past three farm bills.

We anticipate that Mr. Moran will become a member of the Senate Agriculture Committee once he is elected joining our friend Senator Saxby Chambliss, R-Georgia on that important committee.

It will be nice to work with a member of the Senate who is as knowledgeable about agricultural policy, trade policy, rail transportation and risk management as Jerry Moran is. We wish him well this November!