Washington Insider - Thursday

Farm Group to Boost Water Quality

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

OMB Conducting Final Review of 2014 Renewable Fuels Standard

The Environmental Protection Agency has forwarded its proposed Renewable Fuels Standard to the White House Office of Management and Budget for a final review, and many industry observers say they doubt that OMB will make many substantive changes to the proposed rule.

The renewable fuels industry and its representatives in Congress are said to be lobbying for the administration to increase EPA's proposed 15.21 billion gallon RFS for 2014, but most analysts predict that increases, if they come at all, will be modest. The Energy Independence and Security Act (EISA) of 2007 sets the 2014 RFS at 18.15 billion gallons.

While OMB technically has up to 90 days to complete its review of the rule — a scenario that would put its publication in the Federal Register after the November elections — most analysts say they expect it to be published in late September or October.

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New Farm Income Figures Not Dire for Industry

USDA's Economic Research Service this week issued its projections for farm income this year, and some –– especially in the urban press –– are focusing on the report's estimate that 2014 net farm income, at $113.2 billion, will be down 13.8% from year-earlier levels. It is just as important to recall that 2013 net farm income was up 15.4% from 2012.

And while producers are forecast to see a drop off in receipts from their crops, livestock producers are expected to see a significant boost in their receipts, from $181.8 billion in 2013 to $209.6 billion in 2014, an increase of more than 15%. Overall total cash receipts from crops and livestock this year actually are expected to climb 3%.

Another year of farm income above the $110 billion level is no reason for gloom among farmers or those who sell to them. Over the past several years of high income, good farm managers set aside money that now will help them ride out a period of lower crop prices. And no one with any sense of history could reasonably have expected that record high prices would become the new norm.

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Washington Insider: Farm Group to Boost Water Quality

DTN and the Des Moines Register reported last week that several major Iowa farm groups have united in a new water quality alliance, and received heavy duty scrutiny almost immediately.

Several things are underway. Farm groups are saying that they are well aware that they need to find a better way to reduce farm erosion in order to protect the soil and to meet increasingly specific water quality goals, although the measurements are almost all in dispute. And, in many cases, farmers argue that they already are achieving many of these objectives, but worry that they are not getting credit from regulators.

So, last week, as the Iowa groups announced their new alliance, they said its focus would be on accelerating, "the pace and scale of quantifiable water quality improvements," according to the Register. The groups claim this challenge is a new kind of goal for agriculture.

The groups includes several heavy hitting farm groups, including the Iowa Corn Growers and the Iowa Soybean and Iowa Pork Producers associations, each of whom are providing $200,000 annually to support the Iowa Agriculture Water Alliance, Kirk Leeds, CEO of the Iowa Soybean Association told the press.

Iowa politicians including Gov. Terry Branstad, Lt. Gov. Kim Reynolds and Bill Northey, Iowa's secretary of agriculture spoke approvingly to the press about the Alliance, but it ran into skeptics almost immediately. Iowa Citizens for Community Improvement, a group that advocates for stricter regulation of livestock operations, almost immediately criticized the initiative, not because it is a bad idea, but because it may not go far enough.

"The Iowa Nutrient Reduction Strategy will not lead to real improvements in Iowa's polluted water quality unless and until it is strengthened with measurable and enforceable water quality standards and tougher and more effective public oversight," Larry Ginter, a Rhodes, Iowa, farmer and member of the community improvement group told the Register. "That's the bottom line, and all the corporate ag PR campaigns in the world aren't going to change that very basic fact," he said.

The groups tapped Sean McMahon as their executive director, an individual who is seen as holding substantial environmentalist creds. These include directing the Nature Conservancy's North American agriculture program and past leadership in national land stewardship campaigns at the National Wildlife Federation.

The alliance says it will work to increase farmers' awareness of the Iowa Nutrient Reduction Strategy and boost adoption of practices that have measurable environmental benefits. And, the group expects to support Iowa State University and other partners' efforts in developing additional environmental performance metrics, especially as it works to attract "significant funding from public and private sources" to the state's water quality improvement initiative.

Leeds commented that funding will present a challenge, but that he expects to attract "tens of millions of dollars" annually to conservation, research and developing water quality improvement metrics. The alliance will look to large agriculture and food corporations, private foundations and government programs to accelerate water quality issues in Iowa, Leeds said.

Leeds attempted to counter the criticism that this is, "just another campaign about how farming is important. Iowans understand that," he said. "This is about those practices, based on science and data, that lead to environmental and conservation improvement that's also economically and agronomically positive as well."

He commented that he believes that farmers are beginning to adopt conservation efforts to improve water quality. "But we have to do better," he said. "If we just have farmers continue what they're already doing, we're not going to see the improvements in water quality and conservation practices that we want to see. Farmers need to become more aware that consumers and the public are watching and there's an increasing concern about the quality of water in Iowa and the impact that Iowa agriculture might have on it," he said.

He might have added that the group no doubt is well aware of the recent environmental disaster in Ohio when water drinking was banned temporarily in Toledo — and, where the state is now busy designing new constraints on farmers' fertilizer use and likely other practices.

So, the Iowa farmer alliance may well be a big deal, especially if it convinces skeptical farmers to modify their management practices and skeptical conservationists that the farmers have both the guts and muscle to effectively reduce farm run-off and increase water quality.

Clearly, the challenge is real and the public, at least in Iowa, is watching. Whether the new group can meet the challenge remains to be seen. Certainly, the stakes are high for producers across the Midwest, 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.

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