Washington Insider - Wednesday

By DTN's Washington Insider

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

House Republicans Prepare Package of Previously Passed Jobs Bills

House Republican leaders are expected soon to bring to the floor a massive bill that they say would promote job growth and that Democrats are denouncing as a largely symbolic gesture that won't create any new jobs and that has no chance of being signed into law.

The White House issued a statement Tuesday announcing it opposes the bill, H.R. 4, the Jobs for America Act.

The draft bill deals with everything from forest management to the registration requirements of private equity fund advisers and, according to one anti-deficit budget group, it likely would add to the national debt if enacted. For the most part, the proposal is a compilation of 15 bills that previously passed the House but failed to be considered by the Senate. The measure also includes two new provisions, one intended to boost access to capital for small- and medium-sized businesses, and another that would repeal a tax on medical devices.

The House is scheduled to be in session the rest of this week and, perhaps, Sept. 29 through Oct. 2. With the exception of the continuing resolution that is needed to keep the government funded beyond Sept. 30, there is little expectation that the House will approve much of any consequence in the remaining few days before adjournment.

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Vilsack Predicts This Year's Corn Ethanol Standard Will be 15 Billion Gallons

The Obama administration will be coming forward with a plan to ensure that the corn-based ethanol component of the Renewable Fuels Standard reaches the 15-billion-gallon level spelled out in the Energy Independence and Security Act of 2007, according to Agriculture Secretary Tom Vilsack.

Vilsack told participants at a Growth Energy event this week that the eventual 2014 final RFS levels will be above those initially proposed by the Environmental Protection Agency. Other administration officials, including EPA Administrator Gina McCarthy, have signaled that the final 2014 RFS for corn-based ethanol would be above the 13 billion gallons that EPA outlined when it first issued the proposal last November.

It took EPA from last November until early August 2014 to move its Renewable Fuels Standard proposal to the White House Office of Management and Budget for final approval. Many believe it could very well take OMB another seven weeks before it approves the proposal for public release, a date that would put it safely after the November elections.

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Washington Insider: What Are Land Grant Analysts Paid For?

There is an interesting little kerfuffle building up now around the role of land grant university economists and national agriculture policy. After creating an extremely complicated set of farm programs with the help of some land grant university experts, the congressional Ag Committee leaders wrote in an earmark of almost $6 million to pay a few universities and, apparently, one private firm and some Extension economists to come up with spreadsheets to help farmers decide which safety net to choose.

The ag leaders apparently felt this was needed since they had earlier decided to offer program choices regarding several extensive, ultra-complex subsidies rather than trim programs to fit a single structure as had been done in the past.

Still, the idea of offering special analyses was a jaw-dropper from the beginning, since it inevitably leads to the question of whether such decision tools and advice are not already part of the land grants' job — and, on and on. If explaining farm policy is not the land grants' job, what is?

Another embarrassing question starts by noting that after earlier farm bills, universities and extension services wrote studies, charts, comparisons sheets, etc. to help farmers and others understand the programs. Why not now?

And, what about the feds themselves, including economists and other analysts within several USDA agencies, including the Economic Research Service, Farm Service Agency, and the Risk Management Agency, among others? Traditionally, these have produced the last word in information and analyses following each farm bill. Not this time, however.

And, will all these analyses agree? What if they don't?

Congressional sources say they have requested the successful winners of the funding to keep close track of their spending, as if that makes things clearer. Wouldn't they require that anyway — for any federal grant? They probably are not going to calculate what they would have spent without the earmark.

Proponents of the $6 million program argue that educating farmers, including dairy and livestock producers, about the farm bill provisions is a key component of implementing the nearly $1 trillion measure (ten-year estimate). However, that figure includes major nutrition programs that likely are not included in the new extension tools. So, the program they are explaining is more modest than billed, but perhaps more complicated.

The debate also laps against earlier programs that faltered for lack of participation, suggesting that the extension efforts then were too feeble. Others argue, however, that not all complex programs can be bailed out by extension. Critics of the ACRE program, for example, told the press, "If farmers thought it was an attractive program, they would have signed up for it. But at the time, they did not...."

Right now, it seems there are several themes to this squabble. The first asserts that the land grants already are paid plenty to do the analysis and it was unnecessary and embarrassing to pay twice — or more — for that work.

The second is that the special analysis programs were bad policy by the Congress because all or most of the work would have been done gladly without the program — or the feeding frenzy it inspired with its "competitive bidding" effort.

Then, of course, there is the lingering question of whether such complex programs with their need for special analysis were really sound, necessary policy to begin with.

So, the explanatory programs are a modest thing but an embarrassing one that seems to damage both the Congress and the land grant institutions a little. Considering the cost of the overall bill, the $6 million certainly is tiny.

Cynics note, however, that there are many other questions about the Farm Act, including its skyrocketing costs, longer-term effects on and consequences for the sector's structure, implications for trade policy and many others. Perhaps these will lead to other special congressional explanatory earmarks, Washington Insider hears cynics muttering.

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