Washington Insider --Thursday

Climate Policies and Food

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Hoeven: USDA Needs to Follow Up SCO for All Commodities in All Counties

Following the July 29 announcement by USDA’s Risk Management Agency (RMA) that it will begin new Supplemental Coverage Option (SCO) with the 2015 crop year, Sen. John Hoeven, R-N.D., noted he recently sent a letter to USDA Secretary Tom Vilsack urging the timely implementation of SCO for all insurable crops in all counties “in order to provide North Dakota farmers with this important risk management tool.”

The SCO covers spring and durum wheat for all North Dakota counties. USDA is slated to announce the counties selected for other commodities later this summer, and Hoeven is pressing the agency to cover all North Dakota counties.

“Including enhanced crop insurance provisions in the farm bill was important for North Dakota’s farmers and ranchers who need a strong safety net to effectively manage the market and weather volatility. This announcement that SCO will be available for next year’s wheat and durum crops is an important first step; now it needs to be followed up with implementation of SCO in all counties for all commodities.”

The 2014 Farm Bill includes a strong safety net for producers and retains current individual crop insurance. In addition, it enhances crop insurance by helping farmers improve their yield history under the current program and by creating a new SCO. The SCO is designed to help strengthen and expand insurance coverage options for producers, enabling them to purchase a supplemental policy beyond their individual farm-based policy and protecting them from market volatility.

The new SCO will be available for corn, cotton, grain sorghum, rice, soybeans and spring barley.


TPA, Other Elements of Trade Package Needed: Rep. Nunes

House Ways and Means Trade Subcommittee Chairman Devin Nunes, R-Calif., said earlier this week that Congress may need to approve a “trade package” of legislation in 2014 or early 2015, including possible elements of trade promotion authority (TPA), preference programs and tariff suspensions for manufacturing inputs.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Nunes said action on the Africa Growth and Opportunity Act (AGOA), which is authorized through September 2015, is dependent on what takes place in the “larger trade picture,” chiefly concerning TPA. He said action also depends on the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB) that bundles many individual tariff suspension bills. TPA, which sets congressional objectives for trade negotiations in exchange for streamlined voting procedures on strict deadlines, has expired, as have GSP and MTB. While AGOA provides preferential market access to 40 eligible countries in sub-Saharan Africa, GSP is the main US preference program that seeks to assist eligible developing countries worldwide through duty free access to the US market.

“We have so many of these trade issues that are basically standing behind TPA, but we’ve got to get TPA first,” he said. “We really need a trade package either this Congress or next Congress.” Nunes said that these issues are “backed up” and ready to go. The Obama administration is negotiating the Trans-Pacific Partnership (TPP) pact with 11 other Pacific Rim countries and the Transatlantic Trade and Investment Partnership deal with the European Union.

***

Washington Insider: Climate Policies and Food

Earlier this week, the administration rolled out some heavy political artillery aimed at climate change. The effort is part of a much larger climate policy and is intended to stimulate a broad-based cooperative effort focused on food and agriculture among other sectors.

The announcement claimed, somewhat awkwardly, to be “renewing the President’s call to America’s private-sector innovators to “leverage open government data.” And, while that concept was not totally clear, its purpose of recruiting support from big time, high tech folks in ag-related businesses was highlighted. Specific efforts were listed including those of several ag and food companies like Monsanto, Kellogg’s, Nestlé, Coca-Cola, PepsiCo and Walmart. The team also includes academic and advocate groups such as the World Wildlife Fund and the American Red Cross. The idea seems to be to mobilize government data on climate and agriculture to define and measure goals for climate-change reducing practices and greenhouse gas targets.

Just how all this fits together is still unclear but the administration is busy adding details through extensive discussions with top agriculture and business leaders. A series of White House meetings and workshops is planned focusing on the role technology and data can play in agricultural efficiency.

To get an idea of what is planned, among the 27 partnerships and initiatives announced this week were a joint challenge effort by Microsoft and USDA that includes 12 grants focusing on food resilience and climate change as well as an effort by the US Water Partnership that will include a web-based portal, H2InfO to carry water and drought information. Coca-Cola says it will provide corn producers who farm 1 million acres with tools to quantify water, fertilizer and energy use by 2020, and PepsiCo says it will build a 1.7 megawatt solar photovoltaic system to supply renewable energy for the company’s Gatorade manufacturing plant in Tolleson, Ariz.

In addition, the mapping software company, Esri, says it plans to work with USDA and other government agencies to display live feeds across agricultural production, risk and trade; and Monsanto will donate a dataset from a multi-site corn breeding trial in an effort to improve models that track water availability and its impacts on crop production.

Actually, in the White House document regarding the program, the administration notes that its real climate change effort will focus on regulations that will reduce greenhouse gas emissions about 17% below 2005 levels--if other major economies agree to take similar steps.

In that context, the administration pointed to its success in doubling the country’s use of wind, solar, and geothermal energy and in implementing extremely tough fuel economy standards. It also claims these have resulted in “new jobs, new industries, and the reduction of dangerous carbon pollution.” And, it cites progress including declining carbon emissions from the energy sector along with reductions in US oil imports, which reached their lowest level in 20 years as the United States became world’s leading producer of natural gas.

The program and its urgency are being justified by a litany of climate change impacts already being felt, the White House says. Last year was the warmest year ever in the contiguous United States as about one-third of all Americans experienced 10 days or more of 100-degree heat. Last year alone, it cited 11 different weather and climate disaster events with estimated losses exceeding $1billion each--the second-costliest year on record.

Overall, the White House plan has three parts: reducing US carbon pollution through new programs and tougher pollution rules; preparing the United States for impacts of climate change while helping state and local government strengthen infrastructure; and leading international efforts to combat climate change through international negotiations.

What it doesn’t say directly is that much, if not all of these policies are likely to be extremely controversial and that food and agriculture likely will be involved in almost all those fights in important ways.

In the earlier fight to build cap and trade systems to focus incentives for carbon emissions cuts, the administration attempted to convince agriculture that massive programs of carbon capture would mean important new benefits for the sector--an effort that fell far short. This time, it looks like the focus will be agribusiness and the design of services that can help agriculture soften some of the effects of change. It also is using the vulnerability of the food system as a selling point for some of its efforts to regulate emissions and limit impacts.

Selling those ideas to hard-bitten producers who mistrust any effort to change or control weather or climate that will affect their business certainly will be heavy lifting, once again. So far there is little evidence that any heavy-duty carbon capture programs are being aimed at farmland this time. Still, policies and programs that affect energy and its costs will affect agriculture, and should be watched carefully as they emerge, Washington Insider believes.


Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products, on the News Menu on Farm Dayta, and on the News and Analysis Menu of DTN’s newest Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com.

If you have questions for DTN Washington Insider, please email edit@telventdtn.com

(CC)

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x600] M[320x50] OOP[F] ADUNIT[] T[]