CQ TODAY ONLINE NEWS
July 20, 2012 – 10:18 p.m.
Drought Tests House GOP Leaders
By Ellyn Ferguson, CQ Staff
With more than half the continental United States caught up in the worst drought since 1956, pressure is building for some sort of congressional action to aid those suffering from the exceptionally dry and hot weather.
The best bet legislatively would be the farm bills currently making their way through the process. The House and Senate versions both include disaster aid provisions. But House leaders are showing little interest in bringing that chamber’s measure to the floor anytime soon. The current farm bill (PL 110-246) expires Sept. 30.
Sen.
Also, livestock groups are reviving the food-versus-fuel argument after the Agriculture Department lowered its estimate on corn yields because of the drought. Cattle, dairy, chicken, turkey and poultry groups say the drought could prompt them to move forward their campaign to end or modify federal energy policies they say increase animal feed costs and put them in competition with the ethanol industry for corn.
It is unclear how much progress any of them will make before Congress leaves for the August recess, or even in September or the expected lame-duck session after the elections.
So far, Speaker
“That’s why our government subsidizes the cost of crop insurance to encourage farmers to buy that,” he said last week. “And in most cases it should be sufficient to deal with this problem.”
But Vilsack says crop insurance is not available for everyone. He raised the issue’s profile last week with a visit with the president and a press briefing at the White House. In that appearance, he noted that disaster aid programs for livestock, honey, aquaculture, trees, nursery crops, and hay and forage producers expired last year. Provisions in the House measure and the Senate-passed bill (
As of last week, the Agriculture Department had designated nearly 1,300 counties across 29 states as disaster areas eligible for low-interest loans and aid. But Vilsack said he can do only so much without a farm bill or specific legislation to give him greater flexibility or provide disaster aid.
In the past, the Agriculture Department has used authority under a 1935 law to make special payments to producers who have been hurt by drought and other disasters. It is barred from doing that this time because of a provision in the agency’s fiscal 2012 appropriations bill (PL 112-55).
Vilsack told White House reporters that the most important thing is “for Congress to take action to provide some direction and assistance so that folks know what’s going to happen, what kind of protection they’re going to have.”
A day after Vilsack delivered his briefing, Baucus and three other Democratic senators sent a letter to Majority Leader
The legislation by Baucus and Sens.
Drought Tests House GOP Leaders
Increasing Feed Prices
Neither farm bill would continue SURE, although the Senate bill incorporates elements of it in its revenue protection plan that provides farmers’ payments for yield or revenue losses of 11 percent to 21 percent.
“Not only is the heat choking major commodities and food crops like wheat, corn and soybeans, it is also disrupting forage and feed supplies, forcing ranchers to either purchase feed at rising prices, or sell off their herds,” the senators wrote.
Reid and McConnell face the same time constraints as Boehner for moving legislation and have not indicated that the disaster aid proposal is on their to-do list. Baucus has not said how much the legislation will cost or identified potential budget offsets to pay for what is expected to be a multibillion dollar tab.
Meanwhile, livestock groups are seizing the opportunity for a legislative challenge to the Renewable Fuel Standard, the federal mandate created by energy legislation (PL 109-58) in 2005 and expanded in 2007 (PL 110-140).
The EPA sets commercial-use quotas for several categories of renewable fuels, but ethanol — most of it produced from corn — constitutes the largest category.
Livestock organizations argue the mandate has created an artificial market that has made the ethanol industry a competitor for corn and has raised the price of feed for animal operations. A smaller harvest will translate into higher prices for corn-based feed and force meat producers to cull herds and flocks.
For consumers, it should mean stable or lower meat prices until the surplus works its way through the supply chain. For livestock producers, it means their operations shrink as they face higher production costs. Distillation of grain, a product of ethanol, does not fully replace animal feed, they said.
At a July 19 briefing on Capitol Hill, Thomas Elam, president of the Indiana-based FarmEcon LLC, released his findings that the federal mandate is a significant factor in higher corn prices and higher animal feed costs for livestock and poultry producers. He also said the renewable fuel produced has not greatly reduced gasoline prices or oil imports.
The livestock groups said the report and the drought could help build momentum for legislation (
While the farm groups hope to gain ground this session, Goodlatte said he is looking ahead to the next Congress for possible action.
The ethanol industry and its allies in other segments of agriculture promise to fight any efforts to change the ethanol mandate.
“Many in the livestock industry are saying that we must choose between food and fuel as the drought continues and production estimates decline, but this is a false choice,” said Roger Johnson, president of the National Farmers Union.
Drought Tests House GOP Leaders
Philip Brasher contributed to this story.