Bill Huffman
Director - Government Relations

The Friday Report

April 24, 2009

Congress returned to session this week with most of their work focused on getting the budget plan finalized, hearings and confirmation for several political appointees of President Obama, and holding several hearings on a host of issues including Crop Insurance.

Crop Insurance

The House Subcommittee on General Farm Commodities and Risk Management held a hearing Wednesday to gather information about the Crop Insurance Program, with emphasis on whether the program works for agriculture and whether or not there can be additional savings gained by restructuring the program.

Farm leaders told the Subcommittee that, overall, crop insurance works well for farmers as a risk-management tool, but that there are some gaps such as shallow losses (losses from reduced yields but not a complete crop failure), problems marrying production records for different USDA agencies and USDA delays in implementing a new combination insurance program that could benefit farmers.

The Subcommittee is examining the crop insurance program as budget cuts are being made to the program. The 2008 Farm Bill cut $6 billion over the next decade and the Obama Administration is proposing another $5.2 billion in cuts to the program.

Several of those testifying urged Congress to continue to fund USDA’s efforts to complete its data system project that would allow the Risk Management Agency, Federal Crop Insurance Corp. and the Farm Service Agency to combine and reconcile producer records, reducing the paperwork farmers have to provide to different agencies under different formulas for calculating production and losses.

USDA Appointments

There were several new appointments announced this week for USDA positions.  Among those was Burnham John “Bud” Philbrook as USDA Deputy Undersecretary for Farm and Foreign Agriculture Services, Edward Avalos to be USDA Undersecretary for Marketing and Regulatory Programs and Jay Jensen as Deputy Undersecretary for Natural Resources and Environment. President Obama previously announced the appointment of Michael T. Scuse to be Deputy Undersecretary for Farm and Foreign Agricultural Services.

Haven’t heard these names before? We haven’t either nor have most of the major commodity groups!

Philbrook, a co-founder of Global Volunteers, a St. Paul, Minnesota-based non-profit that sends volunteers each year to 100 communities in 20 countries, to help local citizens on agricultural, education, health care and other challenges facing developing communities. He has some but very limited agricultural experience having served as Assistant Commissioner for the Minnesota Department of Natural Resources, among his other pursuits. He will largely have responsibility for the international side of the Farm and Foreign Agricultural Services agency. He replaces Ellen Terpstra who served in the Bush Administration.

Michael T. Scuse, who we mentioned last week, is now Deputy Undersecretary for Farm and Foreign Agricultural Services. Agriculture Secretary Tom Vilsack said that Scuse will oversee the operations of the Foreign Agricultural Service (FAS), the Farm Service Agency (FSA) and Risk Management Agency (RMA). According to Russell & Barron, our industry’s Washington, D.C. advisors and lobbyists, Scuse will fill the seat previously occupied by Floyd Gaibler, who served so capably in the Bush Administration.

Edward Avalos, who is now USDA Undersecretary for Marketing and Regulatory Programs, has spent 34 years in agriculture marketing, including promoting the sale of chili peppers, sheep, goats and cattle in Mexico and pecans in Japan and China.  He is a native of New Mexico.

Jay Jensen, who will be Deputy Undersecretary for Natural Resources and Environment, has a strong forestry background. He has been Executive Director of the Council of Western States Foresters/Western Forestry Leadership Coalition.  He previously was the lead forestry advisor for the House Agriculture Committee helping develop programs under the 2002 Farm Bill. He is a southern California native with a Masters in Forestry from Colorado State University. Jensen will oversee the U.S. Forest Service among other duties.

We also understand that Doug Carusso, a native of Wisconsin, has been named Administrator of the Farm Service Agency.  He is a former State FSA Director in Wisconsin with a background in dairy.

As one can tell by reading the above list of names, there is no one from production agriculture in California serving in a USDA leadership position.  Is it unreasonable to think that the largest agricultural production state in the nation (California) would have someone serving at a high level in USDA?  

There is going to have to be a major effort to educate these new USDA officials about California agriculture and more specifically about rice production in the Golden State.

Taiwan Rejects Bids Again

Taiwan has again rejected bids for 19,000 metric tons of U.S. rice claiming that the price exceeded their “ceiling price”. So the standoff continues! Taiwan is 193,776 metric tons behind in their obligation to purchase rice under their WTO agreement, of which approximately 96,000 metric tons is supposed to come from the U.S. As we’ve reported before, the U.S. rice industry is trying to get help from the U.S. Trade Representative as well as political pressure from key members of Congress to get the Taiwanese to honor their obligation.

Taiwan will take bids again on April 27th for 25,934 metric tons of medium/short grain.  We’ll let you know next week if anything changes.

The Weather

As I write this week’s Friday Report, it is snowing here in the mountains of Plumas County. We have about three inches on the ground and it is snowing hard!