Tag Archives: food
Senate Passes Half-Trillion Dollar Farm Bill; Ball’s In House’s Court
Posted: Tuesday, June 11, 2013 12:00 am | Updated: 9:24 am, Tue Jun 11, 2013. 0 comments WASHINGTON (AP) – The last time Congress passed a farm bill, Democrats had control of the House and the food stamp program was about half the size it is today. That was five years ago. Conservatives calling for an overhaul of the domestic food aid program will try to trim the nation’s nearly $80 billion grocery bill when the House weighs in on farm legislation in a few weeks. The Senate overwhelmingly voted Monday to expand farm subsidies and make small cuts to food stamps in a five-year, half-trillion dollar measure. But passage in the House isn’t expected to be so easy – or so bipartisan. House Speaker John Boehner, R-Ohio, said Monday that his chamber will take up its version of the farm bill later this month. He made clear his own dislike for generous farm subsidies included in the bill, saying his “concerns about our country’s farm programs are well-known.” But Boehner acknowledged that the rest of the chamber might not agree with him. “If you have ideas on how to make the bill better, bring them forward,” Boehner said in a statement directed to his colleagues. “Let’s have the debate, and let’s vote on them.” House consideration will come after more than a year’s delay. The Senate passed a similar version of its farmbill last year, but the House declined to take it up during an election year amid conflict over the amount to cut from food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP. One in seven Americans now use the program. The Senate bill would cut the food stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP, by about $400 million a year, or half a percent, and Senate Democrats have been reluctant to cut more. The farm bill approved by the House Agriculture Committee last month would cut the program by $2 billion a year, or a little more than 3 percent, and make it more difficult for some people to qualify. In his statement Monday, Boehner signaled support for the House bill’s level of food stamp cuts, saying they are changes that “both parties know are necessary.” Other Republicans are expected to offer amendments to expand the cuts, setting up a potentially even more difficult resolution with the Senate version. At the same time, Democrats are expected to try and eliminate the cuts. Food stamps were added to the farm bill decades ago to gain urban votes for the rural measure, which sets policy for farm subsidies, programs to protect environmentally sensitive land and other rural development projects. But with the program’s exponential growth during the recent economic downturn, food stamps are now making passage harder. “I expect it to come from all directions,” House Agriculture Committee Chairman Frank Lucas, R-Okla., said last month, acknowledging the complications of moving the bill through his chamber. On the Senate floor, senators rejected amendments on food stamp cuts, preserving the $400 million annual decrease. The bill’s farm-state supporters also fended off efforts to cut sugar, tobacco and other farmsupports. Senators looking to pare back subsidies did win one victory in the Senate, an amendment to reduce the government’s share of crop insurance premiums for farmers with adjusted gross incomes of more than $750,000. Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., said their amendment would affect about 20,000 farmers. Currently the government pays for an average 62 percent of crop insurance premiums and also subsidizes the companies that sell the insurance. The overall bill expands crop insurance for many crops and also creates a program to compensate farmers for smaller, or “shallow,” revenue losses before the paid insurance kicks in. The crop insurance expansion is likely to benefit Midwestern corn and soybean farmers, who use crop insurance more than other farmers. The bill would also boost subsidies for Southern rice and peanut farmers, lowering the threshold for those farms to receive government help. The help for rice and peanuts was not in last year’s bill but was added this year after the agriculture panel gained a new top Republican, Mississippi Sen. Thad Cochran. Critics, including the former top Republican on the committee, Kansas Sen. Pat Roberts, said the new policy could guarantee that the rice and peanut farmers’ profits are average or above average. The House has similar provisions expanding crop insurance and rice and peanut subsidies. Dairy programs could also be contentious on the House floor. Both the Senate and House bills would overhaul dairy policy by creating a new insurance program for dairy producers, eliminating other dairy subsidies and price supports. The new policy includes a market stabilization program that could dictate production cuts when oversupply drives down prices. The program faced little opposition in the Senate but a similar overhaul in the House bill is expected to face resistance in that chamber, where Boehner last year called the new stabilization program “Soviet-style.” Boehner reiterated those concerns in his statement Monday, saying he will support an amendment on the floor to challenge the proposed policy. The Senate bill also would: Overhaul dairy policy by creating a new insurance program for dairy producers, eliminating other dairy subsidies and price supports. The new policy includes a market stabilization program that could dictate production cuts when oversupply drives down prices. The program faced little opposition in the Senate but a similar overhaul in the House bill is expected to face resistance in that chamber, where Boehner last year called the new stabilization program “Soviet-style.” He reiterated those concerns in his statement Monday, saying he will support an amendment on the floor to challenge the proposed policy. Make modest changes to the way international food aid is delivered, a much scaled-back version of an overhaul proposed by President Barack Obama earlier this year. Senators adopted an amendment that would slightly boost dollars to buy locally-grown food close to needy areas abroad. Currently, most food aid is grown in the United States and shipped to developing countries, an approach the Obama administration says is inefficient but that has support among farm-state members in Congress. Consolidate programs to protect environmentally-sensitive land and reduce spending on those programs. Expand Agriculture Department efforts to prevent illegal trafficking of food stamp benefits. Continue reading
An African Setback For The Palm Oil Industry
By Bruce Einhorn 31/05/13 Africa is the next frontier for the world’s producers of palm oil, a food ingredient that environmentalists blame for destruction of rain forests in Southeast Asia. Indonesia is the world’s biggest producer of palm oil but the government there is trying to reduce deforestation by banning development of new plantations on primary rain forest. With the world’s appetite for palm oil increasing, plantation developers are targeting territory in sub-Saharan Africa . That’s alarming some green activists worried about the industry clearing rain forests in order to plant palm trees. “The global palm oil industry is running out of land,” says Filip Verbelen, a Brussels-based senior forest campaigner for Greenpeace. “People look where the land is available and they look for Africa.” The drive into the continent suffered a setback on May 18 when Herakles Farms, a New York-based company developing a 73,000-hectare plantation in Cameroon, announced it was suspending work and laying off 690 workers there following a dispute with the government. The U.S. company needs to get the correct permits before it can proceed with the project, according to Cameroon’s Ministry of Forestry & Wildlife, which says it took action following complaints from the local community. A 2009 agreement between the Cameroonian government and Herakles subsidiary Sithe Global Sustainable Oils Cameroon does not exempt the company from respecting “legal procedure and environmental constraints,” Forestry Minister Ngole Philip Ngwesse said in the statement. Herakles Farms says it had been acting properly. “The Company had obtained permission to proceed and always has and will comply fully and transparently with government regulations in force,” the company said in a statement . “The Company is deeply distressed to see so many of its committed Cameroonian employees being left without jobs for an uncertain period of time,” Herakles Farms added. “The company finds these events especially tragic and will do all it can to achieve a positive outcome.” Greenpeace says the Cameroon project could set a precedent for other palm oil developments in Africa. “If this project isn’t stopped, investors are going to say, ‘Look at what is possible in Cameroon and the rest of the region,’” says Verbelen. “‘You can go for a free ride.’ If we can stop this or create strong safeguards, I think then new investors will become a lot more careful.” The Cameroon standoff is also significant since demand for palm oil continues to grow—thanks in part to health concerns among Americans worried about the dangers of trans fats. As consumers try to avoid unhealthy trans fats in their diets, the global food industry has been trying to reduce its reliance on hydrogenated oil, and palm oil has become an attractive option, according to Eric Decker, a professor at the University of Massachusetts and head of the school’s food science department. “Ever since the awareness that trans fats have negative effects, the food industry has had to find alternatives,” he says. “It used to use solid fats that came from hydrogenated oil, but those are high in trans fats. So they had to find another fat source that was still solid. And so they have switched to palm oil.” Developing countries are big consumers of palm oil, too. The World Bank expects demand to double by the end of the decade, thanks largely to increased consumption in China and India. Palm oil is an inexpensive ingredient in ice cream and cookies, and unlike other vegetable oil sources such as soybeans, the palm fruit produces mostly oil, so growers looking to maximize their oil production can get the most bang for their buck. “Palm is the most efficient,” says Paul Conway , vice chairman of Cargill, a major importer of palm oil from Southeast Asia. “It’s basically all oil.” Palm oil is versatile, with uses not just in food but also in soaps and detergents and, increasingly, biofuels. “Anything you can make from petrochemicals, you can also make from palm oil,” Dorab Mistry, a director of Godrej International, said in an interview with Bloomberg Television. And, he added, there aren’t a lot of big costs involved with making it. “There are very few commodities in the world which are as profitable to produce as palm oil.” Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Continue reading
At The Trough
An awful farm bill faces opposition Jun 1st 2013 | CHICAGO We plough the fields and scatter BRUCE SPRINGSTEEN once sang about “going on the town now looking for easy money”. As easy money goes, it is hard to beat farm subsidies. Handouts for American farmers were a tasty $256 billion between 1995 and 2012. The fattest subsidies went to the richest farmers. According to a study by Tom Coburn, a fiscally conservative senator, these have included Mr Springsteen himself, who leases land to an organic farmer. And Jon Bon Jovi, another rocker, paid property taxes of only $100 on an estate where he raises bees. Taxpayers will be glad to know he is no longer “livin’ on a prayer”. Every five years, Congress mulls a new farm bill. To confuse matters and gin up more votes, the bills typically address two entirely separate problems: the plight of the poor (to whom the federal government gives food stamps) and the unpredictability of farming (which the government seeks to alleviate). Politicians from rural states, which are grotesquely over-represented in the Senate, back farm bills for obvious reasons. Many urban politicians back them, too, not least because some of their constituents depend on food stamps. This time, unusually, the farm bill faces a fight. It will cost around $950 billion over a decade, says the non-partisan Congressional Budget Office (CBO). That’s plenty of potatoes to squabble over. Republicans complain that claiming food stamps has become too easy under President Barack Obama—the number of claimants has risen from 26.3m in 2007 to 47.6m today. They want to trim the programme from $760 billion to around $740 billion over ten years. Democrats retort that the rolls have swollen because the economy is in the doldrums. They insist that food stamps are a vital safety net for the poor and do not want them cut. Oink, oink Handouts to farmers may also be vulnerable. Proponents of the new bill (of which there are two draft versions) boast that it ends “direct payments” to farmers. These are the subsidies paid to producers of wheat, corn, cotton, rice, peanuts, etc, regardless of whether they actually grow these crops—or even plant them. Other plums, such as “counter-cyclical payments” (extra handouts when prices are low) are also to be eliminated. That may sound like a ray of sunshine for taxpayers, but there are clouds looming. Vincent Smith, a professor of farm economics at Montana State University, says the new bill offers a “bait and switch”. Direct payments are the bait, he explains, but they have been replaced by an expanded programme of subsidised crop insurance. The CBO calculates that more than two-thirds of the $50 billion saved by cutting direct payments would be used to boost other farm programmes, such as crop insurance and disaster relief. If crop prices fall, insurance payouts will explode. And crop prices are near historic highs right now. Federal crop insurance is not new; it began in the 1930s. But its cost has already risen from $2 billion in 2001 to $7 billion last year (see chart). It is expensive because taxpayers pay two-thirds of each farmer’s premiums, and most of the claims. During last year’s drought, crop-insurance payouts were a bountiful $17 billion. Uncle Sam shouldered three-quarters of that. Insurance already costs more than direct payments, and there is no limit to how much of it farmers may receive. The bigger the farm, the bigger the trough. (If taxpayers need insurance against misfortune, they must pay for it themselves, of course.) Subsidised crop insurance is also bad for the environment. Craig Cox of EWG, a green pressure group, worries that it spurs farmers to take greater environmental risks, for example by farming on flood plains or steep hills. He fears that a “pumped-up” version will create even more perverse incentives. On May 23rd an amendment sponsored by Mr Coburn, a Republican, and Richard Durbin, a Democrat, passed through the Senate. It reduces by 15% the subsidies for crop-insurance premiums if a farmer makes profits of more than $750,000 a year. Some farms currently receive more than $1m a year in subsidy. Mr Durbin says the amendment will save more than $1.1 billion over ten years—a whopping 1/875th of the total bill. The sugar lobby fought off an attempt to remove Depression-era supports that keep sugar much more expensive in America than in the rest of the world. The industry’s sweetheart was Al Franken, a Democrat from Minnesota and the author of a book called “Lies and the Lying Liars who Tell Them”. He argued that cheap sugar would destroy American jobs. Such as those of Minnesota’s many sugar-beet growers. The bill may face pitchforks in the House of Representatives. John Boehner, the Speaker, fumes that it takes “Soviet-style” dairy supports and makes them worse. A new scheme seeks to protect the margins of milk producers, who are grumbling that the cost of cattle feed has risen. Randy Schnepf of the Congressional Research Service wonders whether this might be because the government also encourages Americans to turn corn into ethanol and burn it in their cars. Mr Boehner’s spokesman says the Speaker would like an open debate on the floor of the House. He expects lawmakers to tussle over crop insurance, dairy supports, food stamps and the food aid that America sends overseas. This last point is important. Congress has traditionally decreed that such aid should be shipped from America, which costs more and ruins farmers in the poor countries that the policy is supposed to help. Mr Obama has urged lawmakers to allow food aid to be bought locally, thus saving more lives. One way of doing this would be via the farm bill, but neither draft allows it. Continue reading
