Bill Huffman
Director - Government Relations

The Friday Report

September 11, 2009

The health care reform and climate change debate continues in Washington. Congress is working on both legislative packages which we expect will dominate the news for the next several weeks.

This Week’s Activity

The Senate Agriculture Committee held a hearing Wednesday to gain input from producer groups about the House proposed cap-and-trade climate change legislation and about the cost of the legislation in terms of input costs for farmers. California rice farmer Frank Rehermann, Chairman of the U.S. Rice Producers’ Group testified on behalf of the U.S. rice industry. Rehermann told the committee that the House climate change bill, H.R. 2454, would threaten U.S. rice producers’ economic viability.

“We are confronted with no economic upside under pending climate change legislation and plenty of economic downside,” Rehermann testified.  He expressed USA Rice Federation’s opposition to the House bill because it “will impose burdensome and, perhaps, unsustainable increases in our cost of production.”  He said such a move would result in the loss of thousands of American jobs in rice-producing areas.

Rehermann also noted that U.S. rice producers “can’t help but be severely disadvantaged” in export markets as U.S. grown rice would become less competitive under the House-proposed climate change proposal.

Other witnesses also expressed concern about expected increases in input costs for fertilizer, fuel and chemicals.

Senator Blanche Lincoln Named Chair of Agriculture Committee

Senator Blanche Lincoln, D-Arkansas, is the new Chair of the Senate Agriculture Committee effective immediately.  She replaces Senator Tom Harkin who moves over to be Chairman of the Senator Health, Welfare and Education Committee following the recent death of Senator Edward Kennedy.

This is a real positive development for the U.S. rice industry.

As Chair, Senator Lincoln will be involved in two key issues of interest to our industry.  The first is the proposed climate change cap-and-trade legislation and the second is the expected effort by the Obama Administration to further tighten payment rules through administrative rules being drafted at USDA.

A second-term Democrat from Arkansas, Senator Lincoln becomes the first woman to chair the Agriculture Committee.  She was also the youngest woman ever elected to the U.S. Senate in 1998. 

In a statement this week, Senator Lincoln said “Northerners do not need to be worried that their issues (under her leadership) will get short shrift.”  Citing the 2008 Farm Bill, Lincoln said the committee “will handle them as we always have” by making sure all regions get fair treatment.  She also said, however, that she would defend the payment limitation rules in the 2008 Farm Bill and fight USDA reinterpretation of those rules.  The previous Chairman, Senator Harkin, along with his fellow Iowan Charles Grassley continued to support tighter payment limits.

Senator Lincoln also said she believes reducing barriers to the sale of U.S. agricultural products is the top issue in trade negotiations. She also seems to be less enthusiastic about climate change legislation and the cap-and-trade scheme for trading allowances and carbon credits than her predecessor.  In fact, she has said that she does not believe a climate change bill will pass this year because of the fact that the Senate has so much other work to do before recess this fall.

We wish Senator Lincoln all the best in her new leadership position.

Senator Boxer to Meet With Taiwanese Officials

We have been advised that Senator Barbara Boxer will be meeting with Taiwanese officials next Thursday to discuss a number of troublesome trade issues. Rice will be high on the list of topics. 

Japanese MA Tender