Following on the heels of the House Agriculture Committee, which held its first Farm Bill hearing earlier this month, the Senate Ag Committee of the 115th Congress convened its first Farm Bill discussion on Thursday in Manhattan, Kansas. Committee Chairman Pat Roberts (R., Kan.) explained that, “We start the journey to a successful and timely 2018 Farm Bill in the Heartland, because that is where it matters most..” Also on Thursday, House Ag Committee Chairman Mike Conaway (R., Tex.) addressed attendees at USDA’s Agricultural Outlook Forum in Arlington, Virginia.
Today’s update provides a brief overview of testimony provided during last week’s Senate Ag Committee discussion, with a specific focus on trade issues and crop insurance; as well highlights from Chairman Conaway’s speech.
Senate Ag Committee Hearing- Trade
Morgan Chilson reported on Thursday at the Topeka Capital-Journal Online that, “At a news conference before the [Senate Ag Committee] event, [Chairman] Roberts honed in on multiple challenges facing agriculture.
“‘Times are tough today in farm country,’ he said. “This is different than when we considered the past farm bill. We’re in a rough patch. The credit situation’s tightening. Prices are at historic lows, the lowest in the last 16 years. Over-regulation is still running rampant.
And trade — trade is on the minds of every farmer, every rancher. And I can assure you that trade is on the minds of my Senate staff and myself.
“‘I know the president wants to concentrate on bilateral, good trade agreements. I don’t know anybody that’s against that. But with TPP (Trans Pacific Partnership) in the past, NAFTA, I’m not sure what kind of operation wants to be done on that — that’s terribly important for us. Both of us [Chairman and Ranking Committee member Sen. Debbie Stabenow (D., Mich.)] are committed in trying to work with this administration on strong bilateral trade agreements. But the time is now.'”
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The article added that, “[Chairman Roberts] re-emphasized the importance of trade in response to a question about the biggest danger to the farm industry, which he had termed as on the verge of crisis.
“‘Trade,’ Roberts answered emphatically. ‘We need to sell the products. I think that’s the one area where we can quickly turn things around.'”
About 20 Kansans from various sectors of the agricultural sector testified at the Senate Ag Committee hearing on Thursday at Kansas State University.
Lynda Foster, a dairy farmer who spoke on behalf of the National Milk Producers Federation and Dairy Farmers of America, pointed out that, “Fifteen years ago we were exporting roughly five percent of our milk production, now we are at three times that level, even as overall U.S. milk production has continued to grow. That means the equivalent of one day’s milk production each week from the entire U.S. dairy industry ultimately ends up overseas, making exports integral to the health of my farm and our dairy industry at large. It is critical that Congress protects the progress we have made as the Administration updates trade agreements like the North American Free Trade Agreement (NAFTA).”
Testimony from Michael Springer, on behalf of the National Pork Producers Council (NPPC) indicated that, “The U.S. pork industry in 2016 exported nearly $6 billion of product, which supported more than 50,000 jobs. It is estimated that U.S. pork prices were $50.20 per hog higher last year than they would have been in the absence of exports.”
The NPPC testimony added that, “But the downside of growing exports is, of course, the larger economic impact on producers and the U.S. economy should there be any disruption in trade. Pork producers understand this dynamic and recognize that it would be devastating for the U.S pork sector.”
Kent Moore, who spoke on behalf of the Kansas Corn Growers Association, indicated that, “The growth potential for ag exports is greater than any other demand sector today. We believe it is time to increase our efforts to provide access to these growing markets around the world. We’ve produced bumper crops, and we need the ability to aggressively pursue trade to sell American grains and American meat to other countries. Programs like MAP [Market Access Program] and FMD [Foreign Market Development Program] are critical in building export markets for our ag products, but these two programs have had stagnant funding levels for a number of years. We support the efforts of the agriculture trade community to increase funding for MAP and FMD.”
As a side note on trade and the Trump administration, Binyamin Appelbaum reported in Saturday’s New York Times that, “President Trump keeps firing verbal broadsides at Mexico and China, but so far his new administration has not acted to keep specific campaign promises about trade policy.”
The Times article noted that:
“‘There’s definitely a huge gap between rhetoric and reality,’ said Chad P. Bown, a senior fellow and specialist on trade policy at the Peterson Institute for International Economics.”
Saturday’s article added that, “But the absence of clear action on China and Mexico is striking, both because Mr. Trump’s language remains so bellicose and because the administration has moved quickly to keep many of the other campaign promises that it made.”
And recall that on February 15th, Wall Street Journal writer Jacob Bunge reported that, “The flow of basic foodstuffs from U.S. farms to overseas markets has yet to be disrupted by President Trump’s talk of trade overhauls, according to the chief executive of commodity trading giant Bunge Ltd.”
Senate Ag Committee Hearing- Crop Insurance
Mike McGinnis reported on Friday at Successful Farming Online that, “In the 2014 farm bill, crop insurance emerged as the lynchpin of the farm safety net. According to this week’s hearing in the Plains state, producers and agribusiness leaders still are relying on the lawmakers to include a robust crop insurance plan in the new farm bill.”
Farmer Kenneth Wood, who serves as President of the Kansas Association of Wheat Growers, noted that, “A budget exercise in the fall of 2015 showed how crop insurance is continually under attack. It was only after heavy pushback from the ag community and our champions on the Hill when Congressional leadership agreed to reverse the cuts as part of a highway bill a couple of weeks later. We are always on notice that when Appropriations bills reach the floors of the House or Senate, it’s very possible that we’ll see anti-crop insurance amendments being offered. In the past, efforts to cut crop insurance have come after the federal share of premium support, either through hard caps or through establishing AGI limitations on eligibility. Such caps would limit participation and make crop insurance more expensive for all producers.”
Family farmer Amy France indicated that, “Without question, the most important USDA program is federal crop insurance.”
Ms. France added that, “Crop insurance offers risk protection to many agricultural commodities and when disaster strikes, the indemnity check is in our bank account much sooner than any other USDA program.”
Lucas Heinen, the President of the Kansas Soybean Association stated that, “First, the crop insurance program needs to be protected. For many soybean producers, crop insurance is their most important risk management tool.”
Shan Hanes, the President & CEO of First National Bank of Elkhart, speaking on behalf of the American Bankers Association (ABA) stated that, “One success of the 2014 Farm Bill was the continued support of crop insurance programs. Agricultural lenders use crop insurance as a guarantee to help secure financing for operating credit. With crop insurance, a lender has the ability to provide support based on individual producers’ proven crop yields. This allows lenders to tailor a loan to a producer’s operation and allow for year-to-year adjustments within that operation. Without crop insurance acting as a safety net, producers would be in a much more challenging financial situation in the event of disaster. Crop insurance has allowed lenders to provide the best possible terms for operating loans because it helps to lower the risk for the lender. ABA has been a long-time supporter of crop insurance programs and would like to see the programs expanded to help as many producers as possible.”
Chairman Conaway Addresses USDA Forum
Bloomberg-BNA writer Casey Wooten reported on Friday that, “House Agriculture Committee Chairman Mike Conaway (R-Texas) gave a broad outline on how his panel will tackle the upcoming five-year policy vehicle, digging into key policy proposals during a keynote speech at the Department of Agriculture’s 2017 Agriculture Outlook Forum on Feb. 23.
“Conaway called for minor changes to farm aid programs created as part of the 2014 farm bill, along with an overhaul of the Supplemental Nutrition Assistance Program, commonly called the food stamp program. Conaway said he expects Congress to complete the legislation by its deadline of late 2018 and to work past the divisions over SNAP that kept the 2014 farm bill from passing on time.”
More specifically on SNAP, the article noted that, “While benefits for the elderly and disabled will remain, House Republicans will focus on transitioning able-bodied recipients with no dependents out of the program, [Chairman Conaway] said. The plan might also include stronger work requirements and employment training programs…[T]he Agriculture Committee recently completed a two-year study of SNAP, concluding that while there is no need to ‘gut’ the program, there is room for change.”
With respect to cotton, the BNA article pointed out that, “Conaway supports including cotton under the list of commodities supported by Title 1, the section of the farm bill that covers price and income support programs like ARC [Agriculture Risk Coverage] and PLC [Price Loss Coverage].
“‘I believe there’s a path forward to make that happen,’ Conaway said.
“Congress removed cotton from Title 1 commodities in the 2014 farm bill in part because of a trade dispute with Brazil.”
On Tuesday morning, the House Ag Subcommittee on Conservation and Forestry will hold a Farm Bill hearing on conservation policy; and, on Tuesday afternoon the House Ag Subcommittee on Livestock and Foreign Agriculture will hear Farm Bill testimony regarding international market development.