NFU News Clips May 7, 2012
PLEASE NOTE - Contents in the NFU News Clips are presented from their original sources. National Farmers Union & California Dairy Campaign (CDC) does not have editorial control over the content. NFU & CDC does not endorse the views and issues contained in these articles and they do not necessarily represent NFU's nor CDC's official policy and positions. The News Clips are intended to provide news stories as they are presented by the media.
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In this edition:
House Republicans Target Social Cuts to Shield Military
May 7, 2012
Republicans in the House of Representatives on Monday will fire their first shots of the next deficit-reduction battle, advancing legislation to cut nearly $380 billion largely from social programs while protecting defense spending.
The cuts to food stamps, child tax credits and Medicaid healthcare for the poor, among others, are certain to stall in the Democratic-controlled U.S. Senate. But they stake out Republicans' negotiating stance on replacing $1.2 trillion in automatic, across-the-board spending cuts that are due to take effect in January.
The "Sequester Replacement Act" authored by influential House Budget Committee Chairman Paul Ryan and expected to be approved by the panel on Monday, also will underscore the deep differences between Republican and Democratic spending priorities as campaigns for November's elections gain momentum.
Already, House Democrats are pouncing on the effort as hurting the poor, claiming that $35.8 billion in food stamp reductions over 10 years will cut off 1.8 million people from the nutrition assistance program.
"Democrats will continue to draw a strong contrast between the lopsided Republican plan to protect tax breaks for powerful special interests at the expense of the rest of America, and the Democratic plan that takes a balanced approach to deficit reduction," said Chris Van Hollen, the top House Budget Committee Democrat.
The automatic spending cuts, of which $600 billion would come from defense through 2022 - were part of last summer's eleventh-hour deal to avert an historic debt default and raise the federal borrowing cap. Congress agreed to $900 billion in immediate cuts, but a bipartisan "supercommittee" failed in its task to find $1.5 trillion in additional cuts over a decade.
As a result, the automatic cuts will launch in January 2013 in what many lawmakers call a "meat axe" approach to deficit reduction. Democrats and the Obama administration agree with Republicans on the need avoid this in favor of more thoughtful measures. But they differ on how to do it.
Under the Republican plan, defense spending would actually be $8 billion higher than levels agreed last August, rising to $554 billion in 2013. The Republicans also want to exempt veterans' health care and other benefits from automatic cuts.
The Republicans would make the rest of the required $1.2 trillion in required cuts through further cuts to discretionary spending at a later date, presumably after November's elections.
Daniel Werfel, controller for the White House budget office, told Ryan's committee recently that President Barack Obama would only consider signing a replacement measure that offers "balance," meaning spending cuts combined with new revenues such as those proposed in Obama's February budget plan.
But the tax increases for the wealthy proposed by Obama, along with some spending increases, make that budget a non-starter for House Republicans.
"Unfortunately, it does become about the campaign," said Marlin Stutzman, a freshman Republican congressman on the House Budget and Agriculture committees. "The Republican Party is going to go to the American people and say, 'We are already showing that we're willing to tighten Washington's belt. The Democrats are not.'"
BIGGER SAVINGS ESTIMATE
Ryan prescribed the plan to divert military spending cuts to domestic spending in his controversial budget plan passed by the House in March. He directed six House committees to come up with $18.35 billion in savings for 2013 and $261 billion through 2022.
The Congressional Budget Office has since estimated these savings to be lower initially -- $17.6 billion next year -- but higher over the decade, at $379.7 billion.
In addition to the food stamp savings, the six committees have proposed to eliminate social services grants to states and kill tax credits associated with Obama's healthcare overhaul law. Child tax credit refunds would be denied to those who cannot produce a valid Social Security number - a move targeting immigrants without U.S. work permits. And government employees would have to contribute more to their pensions.
The Ryan bill also takes aim at financial reforms, eliminating the government's powers to shut down large financial institutions, as well as cutting funding for the new Consumer Financial Protection Bureau. A tort reform plan to end frivolous lawsuits included in the measure would lead to lower health care costs, according the CBO.
Representative Tom Cole, a Republican on the Budget and Appropriations committees, said he is willing to consider some defense reductions, but the automatic cuts in January would put a "disproportionate" burden on the military, requiring some cuts to be shifted to domestic programs.
"There can be no sacred cows with a debt this massive," he added.
Groups Want Quick Farm Bill Debate in Senate
May 5, 2012
DTN/The Progressive Farmer
In a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., this week, the American Soybean Association and stakeholder groups from across agriculture urged the Senate to bring the "Agriculture Reform, Food and Jobs Act of 2012," more commonly known as the farm bill, to the floor for consideration as quickly as possible.
"Last week, Chairwoman Stabenow, Ranking Member Roberts and the entire Senate Agriculture Committee took a huge step forward in advancing this key legislation for America’s farmers. We commend them for their work and we look to the Senate to keep the progress moving by bringing the bill to the floor," said ASA President Steve Wellman, a soybean farmer from Syracuse, Neb.
"The stakeholders we represent need to know details of the programs which will be in effect in 2013 as soon as possible," the letter stated. "Timely action will also enhance prospects for completing new legislation this year rather than needing to extend current program authorities."
The groups noted that the proposed legislation’s impact will not be limited to farm communities. "This is one piece of legislation upon which all Americans depend, urban as well as rural," said the groups.
Additionally, the groups underscored their collective goal of passing a farm bill this year, expressing a balanced desire to achieve organizational goals while also succeeding as a larger agricultural community. "With limited time remaining before expiration of current program authorities, time is of the essence," wrote the groups. "While each of our respective organizations will continue to work to accomplish our key priorities, the farm bill must move forward."
Black Farmers’ Quest for Justice Draws to a Close
May 5, 2012
After decades of discrimination and years of legal wrangling, black American farmers are rushing to beat a May 11 deadline to file racial discrimination claims against the U.S. Department of Agriculture over its lending practices.
Many of them missed an earlier deadline to file claims for part of what has become a $1.25 billion settlement resulting from a 2008 federal farm bill and subsequent congressional action.
For those filing claims to shares of the settlement fund before the new May 11 deadline — as many as 40,000 farmers and their heirs — there is a sense of relief, if not of justice.
"Justice is a very personal thing," said the farmers' co-lead counsel, Gregorio Francis of Florida-based Morgan & Morgan PA.
"Many of these farmers lost their land and their livelihoods. With the settlement, there seems to be a sense that finally there's at least an acknowledgement of what was done. In that sense, there's gratitude. Is there justice? I don't know."
The Department of Agriculture has conceded that some of its local offices engaged in persistent, racially discriminatory denial of farm loans and other financial aid, mainly in the South, and roughly tracing the contours of the so-called Black Belt, named not for its large African-American population but for its rich, ebony soil.
"Ninety percent (of the claimants) are in the South, in Mississippi, Alabama, Tennessee, North and South Carolina, and in Georgia," Francis said.
The $1.25 billion settlement received final approval in October 2011 after years of litigation in which black farmers accused the Department of Agriculture of ignoring their complaints about discriminatory lending practices throughout the 1980s and 1990s.
The department is relieved to put the case to rest.
"Agriculture Secretary (Tom) Vilsack has made it a priority to resolve all claims of discrimination against the department," said USDA spokesman Justin DeJong. "The closing of this claims process marks another milestone in (the department's) efforts to correct the wrongs of the past."
It is also aimed at ending the legal skirmish, which dates to 1997 when a black North Carolina farmer named Timothy Pigford sued then Secretary of Agriculture Dan Glickman, accusing the department of racial discrimination in its lending practices.
That litigation and a related class-action suit were settled in 1999. But tens of thousands of black farmers who similarly alleged discrimination missed a subsequent deadline to file claims for redress.
Among those filing in the run-up to the deadline was Mississippi state Representative Tyrone Ellis, a former House speaker who lost his dairy farm outside Starkville to bankruptcy in 1983, several years after he first took office.
"I first applied for a $250,000 loan (through the department) in 1978," Ellis said. "I only received $125,000. My second loan request also was for $250,000, in 1981. I was denied altogether. I was told to ‘make do with what I have.'
"With $125,000, we knew it was only a matter of time until we'd be in trouble. When you're undercapitalized going in, you have just enough to hang yourself."
When his fears played out and he was forced into bankruptcy, he said, "I just thought, 'Come and shoot me now.'"
Adjudicating the claims will take months and no payments will be paid until all claims are decided.
Ellis figures his farm's bankruptcy cost him "in excess of $500,000." Worse still, he said, "I lost my livelihood."
Ellis now augments his statehouse income through real estate and other ventures. His claim against the Department of Agriculture is for $50,000, the maximum allowed in the claims tier he has filed under. It is a sum he described as "symbolic."
The reality, he said, is that "if I were to receive $500,000, it wouldn't be enough."
Pauline Haynes filed a claim last week on behalf of her mother, a North Carolina farmer who died in January 2003, having been denied an operating loan.
"They gave her no explanation, none at all," Haynes said. "We had a mule pulling a plow and we could see the white farmers on their new tractors. It was heartbreaking."
She shares Ellis's sense of resignation. "If (the claim) is denied," she said quietly, "it won't be nothing we had anyhow."
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USDA Pulls Trigger on Infrastructure Spending
May 7, 2012
A lot of people forget that USDA has access to loan funds used by rural communities to enhance infrastructure in a number of ways. But late last week the public got a dose of how much money the agency can release - in loans - that can help communities achieve specific goals.
In this case, USDA, through its Rural Development Rural Utility Service, will offer $334 million in loans to utilities in 10 states. The loans will be spent developing smart grid technology and for improvemenst in generation and transmission facilities.
Says Tom Vilsack, Secretary of Agriculture: "A 21st Century electric grid is essential to America's ability to create jobs in the clean energy economy of the future. These investments enable consumers and businesses to better manage their use of electricity and help maintain affordable rates. Building transmission infrastructure that employs smart grid technologies will make it easier to add renewable sources of electricity into the grid, and also improve reliability."
Smart grid technology actually monitors electric loads and balances the load to avoid blackouts and other issues, will also enhancing electric transmission capability. As more power grids communicate, there is enhanced use of existing power nationwide.
This latest round of loans will help Vilsack hit his goal to fund more than $250 million for the smart grid tech, and this latest round of funding includes $20 million for the new tools. A complete list of the new loans and the projects they will fund follows:
Jackson Electric Membership Corporation - $102,800,000. Funding will be used to serve 8,656 consumers, build and improve 855 miles of distribution line, and make other system improvements. The loan includes $7,218,525 in smart grid projects.
Nolin Rural Electric Cooperative Corporation - $12,000,000. Funding will be used to construct and improve 102 miles of distribution line and make other system improvements. The loan also includes $543,087 for smart grid projects.
Cumberland Valley Electric, Inc. - $17,608,000. Funding will be used to build and improve 100 miles of distribution line and make other system improvements. The loan includes $2.2 million in smart grid projects.
Minnesota Valley Electric Cooperative - $18,450,000. Funding will be used to build and improve 101 miles of distribution line and make other system improvements. The loan also includes $5.9 million in smart grid projects.
Missouri Rural Electric Cooperative - $3,000,000. Funding will be used to build and improve 44 miles of distribution line and make other system improvements.
Missouri, Iowa and Nebraska
Atchison-Holt Electric Cooperative - $5,000,000. Funding will be used to build and improve 62 miles of distribution line and make other system improvements.
Panhandle Rural Electric Membership Association - $7,839,000. Funding will be used to serve 113 consumers, build and improve 49 miles of distribution line, and make other system improvements. The loan amount includes $1,823,200 in smart grid projects.
North Carolina Electric Membership Corporation - $33,822,000. Funding will be used to finance capital improvements at the Catawba nuclear Station Units 1 and 2.
Southeastern Electric Cooperative, Inc. - $4,787,000. Funding will be used to build and improve 26 miles of distribution line and make other system improvements.
Northern Neck Electric Cooperative - $14,337,000. Funds will be used to build and improve 88 miles of distribution line and make other system improvements. The loan includes $1.1 million for smart grid projects.
Public Utility District No. 1 of Jefferson County - $115,507,000. Funding will be used to build and improve 825 miles of distribution line and make other system improvements. The loan amount includes $99,000 in smart grid projects.
Gov: Report Fracking Chemicals
May 4, 2012
DTN/The Progressive Farmer
Energy companies would have to report chemicals used in hydraulic fracturing operations to extract oil and natural gas on public and tribal lands under a proposed rule released Friday by the U.S. Department of the Interior's Bureau of Land Management.
There are growing concerns in recent years about the way fracking operations might affect water quality in rural areas, including private wells used by farmers for drinking, irrigation and livestock.
Fracking involves injecting water and chemicals at high pressure into rock layers underground as a way to fracture rocks and access previously unreachable natural gas reserves.
The American Farm Bureau Federation has come out in support of additional access for exploration and production of oil and natural gas, including the use of fracking. The National Farmers Union, on the other hand, supports mandatory disclosure of materials used in drilling and fracking.
Groundwater contamination from fracking has become a concern in states like Wyoming and Colorado. In Wyoming, EPA has been investigating alleged chemical contamination from fracking in a case that has drawn concern from environmental groups.
In places like Colorado, some farm and environmental groups are concerned that as fracking expands it will take more water away from farmers in the northeast part of the state. Water used in fracking is not recovered. Colorado has a similar reporting law on the books, that requires energy companies to report the chemicals used.
Currently there is no specific requirement for operators to report chemicals used on federal and Indian lands, according to the Bureau. About 90% of the wells drilled use fracking. The proposed rule would require public disclosure of chemicals used during fracking after operations are completed.
The proposed rule would apply to BLM-managed lands including 700 million subsurface acres and 56 million subsurface acres of Indian land.
Amy Mall, senior policy analyst for the Natural Resources Defense Council, said in a statement that the rules are needed as fracking operations expand across the country.
"We need BLM to be a leader when it comes to protecting our lands, water and ultimately our health from fracking pollution, yet several states already have stronger protections in place than what the agency proposed today," she said. "This is a critical first step, but so much more needs to be done.
"Oil and gas operations are expanding rapidly with new technologies and into new areas, including closer and closer to where families live and children go to school, but federal safeguards have not caught up. And industry does not inspire confidence when it balks at the notion of sharing chemical ingredients upfront."
American Petroleum Institute Upstream Director Erik Milito said in a statement that regulating hydraulic fracturing should be done at the state level.
"The states have proven time and again that they are the best place for responsible regulation of drilling operations," he said.
"While it appears constructive changes have been made, we are still reviewing the new proposal to see how the agency addressed the various concerns that we've raised. The administration should exercise deference to the robust and comprehensive state regulations that already exist. Energy production on federal lands has a history of driving job creation, and creating significant revenue for the government.
"But this potential could be stifled by a federal regulatory program that duplicates existing state regulations. This could have a chilling effect on investment and jobs."
Milito said companies that do fracking already provide information about what is used in the process.
"Through the efforts of the industry to promote transparency, companies now voluntarily disclose the contents of fluids on FracFocus.org, run by the Groundwater Protection Council," he said. "The typical fracturing fluid is 90% water and 9.5% sand, with the rest being additives to aid well production."
In the draft guidance companies would be required to verify that fluids used in wells during fracking are not escaping. In addition, oil and gas operators would have to confirm that they have water management plans in place for handling fracturing fluids that flow back to the surface.
Once the proposed rule is published in the federal register, a 60-day public comment period will begin.
As Prices Rise, Farmers, Feds Back Off Conservation Program
May 4, 2012
It was springtime, and the rocky sod Justin Downs sought to bust turned to shale just beneath the surface. His backhoe bucked across the rocky slab. The Molt farmer made some adjustments and the blade trundled on.
“I took the backhoe to it, tried to put a scratch in it, but only went down four inches before hitting solid rock,” Downs said.
Two decades earlier his grandfather, frustrated with this earth, signed a 10-year contract with the U.S. government agreeing not to farm it in exchange for a check. Thousands of farmers did the same with their untillable and vulnerable land, conscripting it to the Conservation Reserve Program. Grain prices were low and the CRP assured at least some profit. By letting the land go to grass, the government also created wildlife habitat, and in some cases avoided problems like soil erosion into waterways.
Commodities prices are now sizzling. Farmers like Downs are taking land out of CRP and the program is being cut back from 39 million acres nationwide in 2008 to 25 million acres. The Senate version of the 2012 farm bill would give the program a $6 billion trim. That version passed out of the Senate Agriculture Committee last week. Similar cuts are expected in the House version that is progressing more slowly.
“These acres have been in CRP since I was 12 and I’m 36 now,” Downs said. “Most of it is rocky ground that had been farmed for I don’t know how long, as long as my great-grandfather was out here farming in Molt. When it was put into CRP the price of wheat wasn’t that good. CRP made sense.”
The conservation program doesn’t make as much sense now, Downs said. Payments haven’t kept up with market prices. And with the national debt ballooning, there’s a sentiment among farmers that CRP might not be around at all if it weren’t for wildlife conservation, strongly supported by urban lawmakers whose votes are critical to getting a farm bill passed.
Wildlife groups, like Ducks Unlimited, are cautiously praising new conservation steps in the farm bill that favor habitat. But declining CRP acres are still a concern, particularly in areas like the Prairie Pothole Region, of Montana, the Dakotas, Minnesota and Iowa. Nicknamed the “duck factory,” the region produces half of North America’s waterfowl.
“DU remains very concerned about the accelerated loss of CRP acres across the Prairie Pothole Region and its impact to waterfowl populations and other wildlife. CRP also provides critical soil and water protection on these highly erodible lands,” said Eric Lindstrom, of Ducks Unlimited’s Great Plains Regional Office. “We’re continuing to work with landowners, partners and elected leaders to ensure there’s a strong CRP component in the next Farm Bill that’s not alone good for wildlife, but is also attractive to many landowners still interested in the program.”
Not all CRP acreage is prime wildlife habitat, or even workable cropland. Downs’ rototilled acres came out of CRP for a house and lawn for his young family, themselves a rare sight in a profession dominated by men in their late 50s and 60s with kids who years ago moved to town. Downs is pulling another rocky tract out to raise crops.
New farm practices and technology have made some of these rocky acres productive for the first time, Downs said.
Old-timers, such as Carl Mattson of Chester, see CRP’s shrinking influence as a good thing because it opens up acres for young farmers like Downs. Although the program was popular, many fault it for keeping a generation of farm children out of the profession essentially by locking up the land for 10 years at a time.
“One of the most horrible fallouts of the CRP program in the first place was the young guys it put out of business,” said Mattson, who farms and also works as the conservation and farm program associate for the Montana Stockgrowers Association.
Mattson testified before the Senate Agriculture Committee in March about the value of some federal conservation programs like the Conservation Stewardship Program, which rewards farmers for farming in ways that protect soil, water and air but doesn’t prevent them from farming. Programs like CSP and the Environmental Quality Incentives Program, which helps farmers with conservation projects, survived the Senate version of the farm bill. The broader Conservation Reserve Program was trimmed and 23 conservation programs were reduced to 13.
U.S. Sen. Max Baucus, D-Mont., said he advocated for “working programs” like the ones Mattson testified about because that’s what Montana farmers support.
“The No. 1 thing I heard over and over again is that Montana producers want a greater emphasis on working lands programs, so they can take advantage of conservation tools while continuing to ranch and farm and the same time,” Baucus said.
The cuts to other conservation programs were expected. The 25-million-acre conservation limit in the Senate version of the 2012 farm bill doesn’t have to be reached until 2017, the final year for the bill’s policies. But the U.S. Department of Agriculture estimates that farmers lured from the program by strong commodities prices will opt not to renew contracts on 6 million acres of CRP land this fall as they expire.
If the USDA estimate proves true, CRP acres would be down to 25 million acres by October. New acres will continue to be enrolled, but the trend is downward.
In Montana, over the past four years, CRP acres have decreased roughly 789,000 acres, with just over 2.5 million acres remaining, according to Dick Deschamps, acting state executive director of the Montana Farm Service Agency. But the number of acres coming out has accelerated every year from just under 90,000 in 2009 to 350,000 in fall 2011.
When Downs and Mattson talk about CRP declines, they talk about the growing global demand for food and the often-cited statistic that world food production will need to double by 2050 to meet growing demand.
But there’s still some trepidation about leaving a program that for many years provided an income when woefully low crop prices wouldn’t. An entire generation of retired farmers now use CRP for retirement income and won’t again work the land.
Once land comes out of CRP, there’s no turning back.
“It’s a jump out of the boat and farming is changing. It’s so much more global,” Downs said. “We woke up in the morning in ‘85 or ‘88 and maybe we heard about the rain in Texas or Kansas and prices moved up or down. Now we wake up and find out Brazil had a frost, or Australia has grasshoppers and prices move.
“I think the people that take acreage out are going to be the younger generation like me that are optimistic about the future.”