Bill Huffman
Director - Government Relations

The Friday Report

May 28, 2010

Congress was preoccupied most of this week with the Gulf of Mexico oil spill, financial reform legislation, a new jobs bill and extension of unemployment benefits, and the “don’t ask-don’t tell” issue involving the U.S. military. There was virtually no activity involving agriculture or farm and trade policy.

Peterson Discusses His Farm Policy Goals

House Agriculture Committee Chairman Collin Peterson was interviewed this week by Washington, D.C. agri-business writer Jim Wiesemeyer, who writes for Informa Economics, Inc. The chairman talked about farm bill timing, simplifying the farm bill, whole farm revenue assurance, the ACRE program, payment limits and a host of other farm policy related topics.

Peterson said that one of the things he picked up from the recent series of field hearings by his committee was that farmers and ranchers think the Farm Bill is “too complicated” and various programs are not well coordinated within USDA. He mentioned various overlapping programs such as SURE (Supplemental Revenue Assistance Program), crop insurance, and direct and countercyclical payments which he said were “all trying to do the same thing” (provide a safety net to producers). Rhetorically, he asked the question “Is there a better way to provide a safety net for agriculture?”

Chairman Peterson reiterated what we’ve reported before that “We’re asking commodity groups to look at these different programs and direct payments to see if there is a better way to deliver the safety net for farmers and ranchers”. Mr. Peterson told Reporter Jim Wiesemeyer that “There’s a real division between the south and the north. The guys up north are not all that wedded to ‘direct payments’ but the guys in the south are.”

As Wiesemeyer reported in his column, “Peterson suggested many farm program payment issues would go away if direct payments ended”. He noted what generates opposition to the farm program is that “We (the Federal government) make payments to people that aren’t farming – people that own land that live in New York City and elsewhere”.

As we’ve reported before the payment limit issue just doesn’t seem to go away! It is obvious that the subject will become a major issue again when the real work begins on drafting the next Farm Bill next year.

Tax Extenders

There have been some questions recently from growers about the extension of the Bush tax cuts adopted during the Bush Administration. The latest information on that is the House of Representatives has delayed action on what is known as the “tax extenders” bill, legislation that would extend many of the tax cuts (such as the Federal estate tax cut) approved during the Bush years in the White House. One of the issues is that fiscal hawks are demanding that any legislation be offset with budget cuts so as to not add to the Federal deficit. We expect the House of Representatives will be able to move legislation to extend many of the tax cuts; however, it remains uncertain if the Senate will be able to garner the 60 votes needed to advance the package.

Pressure is clearly on lawmakers to act as some major benefits and programs that that tax extenders bill seeks to extend will lapse at the end of this month.

Other News

There was a report out of Australia this week that rice production there is expected to be about 200,000 tons this year; about triple that of a year ago, but not at the historic levels of 1 million plus tons that Australian growers produced in the decade of the 1990’s.

Bloomberg News Service cited cuts in water deliveries because of the extended drought and the sale by some producers of their water entitlements as two of the reasons for the continued production shortfall in the country.

Memorial Weekend

We wish all of our members and their families a wonderful, fun, and safe Memorial Day weekend. Hopefully the weather will be nice! For those growers still working to get their 2010 crop planted, we wish you the best for the next few days and hopefully the weather will begin to warm so that the rice will begin to grow after the many weeks of cold weather.