Tag Archives: democrats
Farm Bill Defeat Shows Agriculture’s Waning Power
Manuel Balce Ceneta/Associated Press Speaker John A. Boehner failed to draw enough Republican support for a bill last month. By RON NIXON Published: July 2, 2013 WASHINGTON — The startling failure of the farm bill last month reflects the declining clout of the farm lobby and the once-powerful committees that have jurisdiction over agriculture policy, economists and political scientists said this week. Although a number of factors contributed to the defeat of the bill — including Speaker John A. Boehner’s failure to rally enough Republican support and Democratic opposition to $20 billion in cuts to the food stamps program — analysts said the 234 to 195 vote also illustrated the shift in the American population and political power to more urban areas. “There are a small number of Congressional districts where farming continues to carry much sway,” said Vincent H. Smith, a professor of agricultural economics at Montana State University. “Especially in the House, the farm lobby has been substantially weakened.” For much of American history, the agriculture sectors wielded tremendous political power. Farm groups were able to get key farm legislation passed by rallying millions of farmers in nearly every Congressional district. Influential farm state legislators like Representative Jamie L. Whitten of Mississippi, a Democrat who was chairman of the Appropriations Committee and its subcommittee on agriculture, brought billions in agriculture financing to their states and fought off attempts to cut subsidy programs despite pressure from both liberals and conservatives. Mr. Whitten died in 1995 after 53 years in Congress. But as Americans have moved to the cities and suburbs, farmers and lawmakers representing districts largely dependent on agriculture have seen their political muscle steadily decline. Just 2.2 million people now work in farming in the United States, or about 2.5 percent of the total work force. Farming now accounts for about 1 percent of gross national product, down from a high of about 9 percent in 1950. Only 40 lawmakers represent largely farming districts, according to research by Mr. Smith in 2006. He said that number was probably smaller today. Nonetheless, agriculture groups said they continue to have influence and blamed increased partisanship for the inability of Congress to pass the farm bill. “Agriculture used to be a nonpartisan issue that both Democrats and Republicans could support,” said Danny Murphy, president of the American Soybean Association. “Now people are lining up to take sides; it’s nutrition or farm programs,” he said. “For us, it’s a nonissue. We’re farmers, how can we be against food?” Barry L. Bequette, dean of the School of Agriculture, Research, Extension and Applied Sciences at Alcorn State University in Lorman, Miss., said the issue was not a lack of power. “Farmers just haven’t learned how to utilize the power they have,” he said. “All the groups are fractured and focused on their own narrow issues.” But agricultural economists like Mr. Smith said the Congressional response to last year’s drought and this year’s debt talks provide more evidence of the waning political influence of agriculture. Last summer, as the worst dry spell in 50 years was causing widespread damage to farmland and livestock, national farm organizations pushed for the passage of a farm bill that would provide relief. But the groups were unable to muster enough support to even get the bill to the floor for a vote. Representative Frank D. Lucas, Republican of Oklahoma and chairman of the House Agriculture Committee, which did pass a farm bill , made several appeals to House leaders to bring the legislation up for a vote, but they declined. When the Obama administration and Republican leaders worked out a compromise to avert automatic tax increases in January, Mr. Lucas and Senator Debbie Stabenow, the Michigan Democrat who is chairwoman of the Senate Agriculture Committee, tried desperately to get the farm bill included in the talks. Both touted the savings they had achieved in both the House and Senate version of the bills. But their pleas were largely unheeded. The Senate instead chose to include in the tax package a slimmed-down farm bill proposal by Senator Mitch McConnell of Kentucky, the Republican minority leader. Mr. McConnell’s proposal extended only portions of the current farm bill, which was passed in 2008. The extension did not provide disaster assistance for livestock owners, who had to kill thousands of cows, pigs and chickens because of rising feed prices and lack of water. It eliminated money for conservation programs and financing for fruit and vegetable growers and organic farmers, and cut a program that pays milk producers when feed prices increase. The proposal did contain provisions to prevent milk prices from rising and left in place direct payments to farmers or farmland owners, whether or not they grow crops. The payments, which total about $5 billion a year, have long been criticized as examples of wasteful government spending. The bill passed the Senate by 89 to 8, with a reluctant Ms. Stabenow voting for it; it passed the House by 257 to 167. Mr. Lucas also voted for the House bill. Farm groups said they felt equally ignored. An exasperated Ms. Stabenow summed up the feeling of both farm state lawmakers and the farm sector in an interview shortly after the deal was announced. “There is absolutely no way to explain this other than agriculture is just not a priority,” she said. Collin C. Peterson, the Minnesota Democrat and ranking member on the House Agriculture Committee, sent a letter to House leaders involved in the debt talks. “I could not believe that you and your leadership team could treat the committee with such disrespect,” he wrote. Continue reading
Parliament Committee Votes To Prop Up EU’s Ailing Carbon Market
Published 20 June 2013 The European Parliament’s Environment Committee has given its support to a compromise plan to boost the price of allowances on the EU’s carbon market. To become law, the proposal to temporarily remove some of the glut of permits that has weighed on prices still needs to win backing from a plenary session of the parliament next month in Strasbourg, and from EU member states. Traders said the market had already priced in a positive vote and allowances on the EU Emissions Trading System (ETS) fell by 3.6% to €4.53 a tonne short after the vote on Wednesday (19 June). After a defeat of the proposal in a full session of the European Parliament in April, the carbon price fell to a record low of less than €3 a tonne. British MEP Chris Davies, spokesman for the Alliance of Liberals and Democrats for Europe on the committee, indicated that the deal was far from perfect. In a statement after the vote, he said the plan “amounts to little more than a modest regulatory adjustment. It will maintain the operation of carbon trading but it will not provide a driving force to promote long-term low-carbon investments.” “We still need to agree on clear targets for Europe’s CO 2 reductions by 2030 to give investors greater certainty”, Davies said, “and we urgently need to secure a global agreement on measures to tackle climate change.” Green groups welcome deal Campaigners welcomed the yes vote, although environmentalists say the proposal is very weak and will have a limited impact on prices. But they hope it will be a stepping stone towards deeper structural measures, such as the permanent withdrawal of some carbon permits. “With this vote the Environment Committee has sent an important political signal: there is still commitment to the EU’s flagship climate policy,” said Rob Elsworth of the campaign group Sandbag. The carbon market plan was meant to be a quick fix for a market that has hit a series of record lows far below levels of €40 to €50 needed to drive a shift to lower carbon energy. The proposal has met fierce resistance from heavy industry, which complains about anything that drives up the cost of energy in difficult economic times, and from Poland, whose economy depends on coal. Germany has failed to take a stand ahead of elections in September. Carbon prices have reacted to the twists and turns of the debate, which has dragged on for years. Price swings, often in excess of 10%, have been exaggerated by the weakness of the market. POSITIONS: Eurofer , the European steel industry association, voiced scepticism about the vote, saying backloading was an “unnecessary intervention” in the EU carbon market and that greater attention should be paid to industrial competitiveness instead. “The EU emissions trading scheme is working as it should and Europe is well on track to meet its 2020 reduction targets,” says Gordon Moffat , director-general of the European Steel Association. “Instead of artificially raising carbon costs the Commission must address the competitive disadvantages for industry resulting from European climate and energy policies.” There were some modifications brought by the Parliament’s vote which Eurofer welcomed as satisfactory, however. These include provisions to reintroduce carbon allowances that have been withheld from one year to the next and a new financing mechanism to reserve 600 million allowances for the development of innovative low-carbon technologies. “Of course these modifications might be regarded as improvements compared to the original version. It seems that there is less risk now of emissions allowances being removed from the market permanently,” Moffat said. “Still, the proposal represents market interference as well as additional, artificial increases in energy prices. It would have been more helpful if all the political energy that went into meddling with the ETS would have been invested in policies that strengthen the competitiveness of European industry.” Oxfam , the global anti-poverty group, said the Parliament committee vote had “sent a signal to markets that EU climate policy is here to stay”. However, it criticised the compromise deal for weakening the European Commission’s original proposal “substantially”. Lies Craeynest , Oxfam’s EU climate change expert, said: “The upcoming structural reform of the ETS will need to be much more ambitious to help stave off dangerous climate change which threatens the food security of millions around the world. “The proposal for a new fund makes lots of sense but it should be aimed at funding real climate solutions at home and meeting the EU’s promises to help poor countries deal with climate change abroad, rather than propping up energy-intensive industries.” NEXT STEPS: 1-4 July : European Parliament to vote on proposal at a plenary session in Strasbourg. Continue reading
How to Attract Private Investment in Clean Energy
By the Editors Jun 10, 2013 Like a fresh wind setting in motion the blades of a giant turbine, a new idea for encouraging the development of clean energy has blown into the U.S. Congress. It is to allow renewable-energy companies to form master limited partnerships, a business structure that has long worked to attract investment capital to the oil and gas industry. Legislation in the Senate has support from Republicans and Democrats alike, not to mention the White House. We think it’s a neat idea, too. A master limited partnership offers the tax advantages of a partnership (the partners pay the taxes, not the corporation) even as its shares are publicly traded like ordinary corporate stock. The limited partners receive quarterly dividends, and these are typically higher than those paid to corporate shareholders because the business itself pays no taxes. This means the company can raise money from small investors at relatively low cost. Master limited partnerships would open a huge new pool of affordable capital for renewable energy, an industry that needs a lot of upfront investment and takes years to bring a big return. As things stand, clean-energy businesses have trouble attracting affordable financing. A large wind-energy company can turn to the “tax-equity” market to leverage its federal production tax credits. However, this market consists of just a handful of enormous companies (think of Google Inc., Chevron Corp., Honda Motor Co.) whose giant tax bills make it possible for them to take advantage of the wind company’s tax credits. Such investors get returns averaging 8 percent to 9 percent, according to data compiled by Bloomberg New Energy Finance. By tapping into cheaper money from individual investors, renewable-energy companies could raise $3 billion to $6 billion in financing by 2021, according to an analysis by Southern Methodist University. And the companies would pay less for the financing; average dividends paid by master limited partnerships amount to about 6 percent. MLPs have, since 1981, helped the oil and gas industry raise capital for refineries, pipelines and drilling operations. This market now includes about 120 master limited partnerships, and has a total capitalization of more than $440 billion, according to the National Association of Publicly Traded Partnerships. Renewable energy has been left out so far because federal tax law specifies that master limited partnerships must derive their revenue from depletable natural resources. (The law was written in the days before renewable-energy enterprises sought such large amounts of capital.) Expanding the MLP Parity Act to bring renewables into the game is only fair, and could bring new financing to nuclear power, energy storage, carbon capture and other initiatives that less obviously are considered renewable energy. The U.S. government has in the past subsidized clean energy directly. In 2011, some $48 billion went to various projects. This was stimulus spending, though, and stimulus money is drying up — even as the global market for clean energy keeps expanding. Although the government spending was useful, we much prefer a mechanism that makes private investment possible and appealing. According to a Bloomberg New Energy Finance report, by 2030 renewables will generate 50 percent of power globally. And between now and then, clean energy will attract $8.2 trillion in financing. To remain competitive in this growing market, the U.S. clean-energy industry needs the investment that MLPs would allow. To contact the Bloomberg View editorial board: view@bloomberg.net. Continue reading
