New members likely to bring renewed focus on cutting federal budget
By Sara Wyant
With the dust barely dry on the 2008 Farm Bill, it almost seems too early to be thinking about writing another one. But the current Chairman of the House Agriculture Committee, Collin Peterson (D-MN), has made no bones about it: he wants to get started early next year and complete a bill prior to 2012.
In fact, Peterson has been meeting with several farm organization leaders, telling them that he intends to write a “baseline” bill, or one that uses existing funds for programs, rather than trying to find “new” money. Other House Agriculture Committee Democrats have been urging interest groups to get all of their farm bill ideas in by December so they can hold hearings and start drafting new legislation early next year.
There’s only one problem. We won’t know who is going to be in charge of the Committee until after Nov. 2. With many pollsters pointing to a tidal wave of frustrated voters willing to throw out dozens of incumbents, there could be over 100 new lawmakers this fall.
Chairman Peterson’s own seat appears to be safe, but if Republicans pick up at least 39 seats in the House of Representatives, there could be a new Chairman in charge. And that’s likely to be Oklahoma Republican Frank Lucas.
Lucas is not in quite as much of a hurry to write a new farm bill. In an exclusive interview last week, he told me that the fiscal environment will likely be better if we wait a year.
“If we write a Farm Bill a year early, we’ll wind up with less resources to work with and a more difficult environment,” Lucas explained. “Everything of course is subject to what happens in the election in November. Everything is subject to what the majority in the spring will do budget-wise, but from my own perspective, I think we’re better to wait until 2012.”
In the Senate, Agriculture Committee Chairman Blanche Lincoln is more inclined to accept the later time frame for working on a new farm bill. However, there is also a lot of uncertainty about who will be chairman of the Agriculture Committee next year.
Most polls indicate that current Chairman Blanche Lincoln (D-AR) is trailing her challenger, Rep. John Boozman by large margins. If she loses and the Democrats retain control of the Senate, Michigan Senator Debbie Stabenow may take the committee’s helm. If the GOP gains 10 seats in the Senate this fall and regains the majority, ranking member Saxby Chambliss (R-GA) could once again be in charge of the committee and he’s not eager to write a new farm bill next year either.
In most mid-term elections, the party in control of the White House usually loses some seats. But the expectation increases dramatically when the President’s job approval rating hovers below 50%, as is the case with President Barack Obama. In 1993, President Bill Clinton’s approval rating was at 46%, according to Gallup polling data, and the Democrats lost 53 seats to the GOP.
New members
Regardless of who is in the majority, there could be as many as 100 new members of Congress next year and most will have no prior experience with working on farm bills.
“We’ll need to put a great deal of effort in educating these folks early,” says Mary Kay Thatcher, director of public policy at the American Farm Bureau Federation, who noted that a high percentage of the incoming freshmen members will likely represent rural congressional districts.
Rep. Lucas (R-OK), the likely Ag Committee Chairman in a GOP-controlled House, says he expects to spend a huge amount of time in January and February educating new members.
“We’ve got to explain to them what rural America and production agriculture and processing are all about,” he said.
Current Chairman Collin Peterson (D-MN), told us that he fears the election of a lot of Tea Party-leaning Republicans would “be a problem for farm bills and farm policy.”
Chandler Goule, vice president of government relations at the National Farmers Union, offered a more blunt assessment.
“If the Tea Party gets a lot of their members into Congress, I think you kiss a good chunk of the farm bill goodbye,” Goule said, predicting that commodity and even conservation programs would face significant budget cutting pressure.
Fiscal focus
Whether or not the renewed focus on deficit reduction is driven by the Tea Party movement or other newly “reborn” fiscal conservatives, several members tell us there is likely to be a renewed push to cut all federal programs next year. If that’s the case, farm programs will certainly be under the microscope.
Farm and commodity groups will be working to help the incoming lawmakers understand that gutting ag programs alone won’t make a dent in the budget deficit.
While acknowledging that trillion-dollar deficits “do have have consequences,” Sam Willett, senior director of public policy at the National Corn Growers Association, hopes the ag community is able have an adult conversation with the freshman class about the value of a reliable risk management safety net for producers.
“We have a challenge in terms of letting them know where our priorities are and, in some cases, they have may have received different messages during their campaigns,” Willett explained.
At the National Cattlemen’s Beef Association, VP of government affairs Colin Woodall thinks the likelihood of having so many new members of Congress increases the chances for progress on other key issues that are haunting many farmers and ranchers. He cites issues such as regulatory overkill by the Environmental Protection Agency and estate taxes.
“I think we’re going to have a much easier time making the case to them on why the ‘death’ tax needs to be reformed,” he said, adding that depending on how many Tea Party-backed candidates are elected, “the talk of repeal could come up again.”
#30
Showing posts with label agriculture. Show all posts
Showing posts with label agriculture. Show all posts
Monday, October 11, 2010
Wednesday, August 25, 2010
Estate tax debate makes planning for death even more difficult
By Sara Wyant
“My wife and I are trying to do estate planning, but we don’t know how Congress is going to change the law,” lamented an elderly Kansas farmer during a recent meeting. “Do you have any idea of what they are going to do?”
Unfortunately, the estate tax picture, as well as the general tax picture in Congress, is about as clear as mud right now. As you may know, the federal estate tax expired December 31, 2009 after Congress was unable to reach an agreement on either a permanent or short-term extension. There is no federal tax on estates if you die this year, but then the death tax comes back with a vengeance.
The tax will be re-instated on January 1, 2011, with only a $1 million exemption and a 55% tax on amounts over that level--- unless Congress takes action to change the law. As a result, even smaller farms and businesses could end up paying a bucketful of taxes when the owner dies next year.
Several lawmakers have introduced bills to raise the exemption and change the tax rates. But changing the law won’t be easy. The Statuatory Pay-As-You-Go Act of 2010, enacted in February 2010, requires that any changes to the estate tax beyond a two-year extension of 2009 law must be fully offset by cuts in programs or revenue raisers. In 2009, there was a $3.5 million exemption on estate taxes with a 45% top tax rate. An estate tax bill was passed by the House last year that would basically reinstate the 2009 exemption and rates.
In addition to the estate tax, there are a multitude of tax issues that need to be tackled before year’s end. The biodiesel tax incentive lapsed at the end of 2009 and has yet to be renewed. As a result, dozens of biodiesel plants are idling and investors are losing their confidence in renewable energy. Later this year, the Volumetric Ethanol Excise Tax Credit (VEETC), widely known as the "Blenders' Credit" is set to expire. Last, but certainly not least, are the “Bush” tax cuts that you hear about so often about in political debates. If these tax cuts are not renewed, you could see tax increases in individual rates, capital gains, and dividends.
Fiscal war?
Tax issues could brew into a fiscal war of sorts for the country. President Obama wants to allow the Bush tax cuts to expire for individuals making more than $200,000 a year and for couples making more than $250,000. Regarding the estate tax, Administration sources say the president’s position is to restore the estate tax and extend it at the 2009 rates.
Several GOP lawmakers are fighting to reduce the estate tax and continue the previous tax cuts. They argue that, with the economy sagging and millions unemployed, it’s exactly the wrong time to force small business owners to pay more taxes. Doing so will place an additional damper on economic recovery.
Yet, others say that continuing the current tax cuts will be fiscally irresponsible and add to an already alarming federal deficit. The Congressional Budget Office recently forecast that the federal deficit will reach $1.34 trillion for this fiscal year.
Even former Federal Reserve Chairman Alan Greenspan, an influential voice in favor of the first Bush tax cut in 2001, weighed in recently. On NBC's Meet the Press Aug. 1 he said that extending the cuts without making offsetting spending reductions could prove "disastrous."
"I'm very much in favor of tax cuts, but not with borrowed money," said Greenspan.
Tax package ahead?
When the Senate returns in mid-September, lawmakers are likely to consider a small business bill which could include a “fix” for the estate tax problem. The American Farm Bureau Federation is supporting an amendment to the small business bill that was introduced by Sens. Blanche Lincoln (D-AR) and John Kyl (R-AZ.). Their measure would set the estate tax exemption at $5 millionwith a 35 percent maximum rate.
Another bill, introduced by Sen. Diane Feinstein (D-CA), would defer estate taxes on farms and ranches if a number of conditions are met. Her “Family Farm Estate Tax Referral Act of 2010, includes provisions that the farm must be passed on to an individual or family member who has been materially engaged in its management and operation for at least five years, and the heirs must continue to use the land for farming purposes.
A “recapture tax” would be owed if the farm or ranch was subsequently sold outside the family or was no longer used for farming or ranching. The tax due would be based on the value of the estate at the time the property is sold or ceases to be used for farming or ranching.
Yet another measure has been introduced by Sen. Bernie Sanders (I-VT.). His bill is cosponsored by Sens. Tom Harkin (D-IA), Sheldon Whitehouse (D-R.I.), and Sherrod Brown (D-OH). The bill would exempt the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009, and create a progressive rate so the so called “super wealthy” pay more. The tax rate for estates valued between $3.5 million and $10 million would be 45 percent, the rate on estates worth more than $10 million and below $50 million would be 50 percent; and the rate on estates worth more than $50 million would be 55 percent.
The AFBF supports the Lincoln/Kyl amendment because it seeks a permanent forgiveness of estate taxes while the Feinstein bill is a deferral with taxes owed if property were ever sold outside the family or ceased to be used for agriculture.
The National Farmers Union sent a letter of support for the Lincoln/Kyl bill, but their policy actually calls for a $4 million individual exemption. Chandler Goule, NFU’s VP for Government Relations says the Lincoln/Kyl measure is preferable to current law and says a conference between the two chambers could come close to what NFU has been supporting.
Failure to include estate tax reform in the Small Business bill increases the likelihood that estate tax reform will be included in a major tax package that is expected to be considered in a “lame duck” session after the mid-term election, says Patricia Wolff, Director, Public Policy for AFBF.
Where the offsets would come from to pay for estate tax reform or other changes in the tax code is still anyone’s guess.
Sen. Maria Cantwell (D-WA) has circulated an idea that would allow individuals to prepay their estate tax, based on current value. Conceivably, the federal government would receive more money up-front, but could lose money if an individual’s assets appreciate considerably between the time they pay and the time they die.
One relatively piece of good news for those of you trying to plan: There is little opposition to a stepped-up basis on asset values, says Wolff, so any of the proposed “fixes” will likely allow any appreciation of the affected property that occurred during a person’s lifetime to never be taxed.
#30
“My wife and I are trying to do estate planning, but we don’t know how Congress is going to change the law,” lamented an elderly Kansas farmer during a recent meeting. “Do you have any idea of what they are going to do?”
Unfortunately, the estate tax picture, as well as the general tax picture in Congress, is about as clear as mud right now. As you may know, the federal estate tax expired December 31, 2009 after Congress was unable to reach an agreement on either a permanent or short-term extension. There is no federal tax on estates if you die this year, but then the death tax comes back with a vengeance.
The tax will be re-instated on January 1, 2011, with only a $1 million exemption and a 55% tax on amounts over that level--- unless Congress takes action to change the law. As a result, even smaller farms and businesses could end up paying a bucketful of taxes when the owner dies next year.
Several lawmakers have introduced bills to raise the exemption and change the tax rates. But changing the law won’t be easy. The Statuatory Pay-As-You-Go Act of 2010, enacted in February 2010, requires that any changes to the estate tax beyond a two-year extension of 2009 law must be fully offset by cuts in programs or revenue raisers. In 2009, there was a $3.5 million exemption on estate taxes with a 45% top tax rate. An estate tax bill was passed by the House last year that would basically reinstate the 2009 exemption and rates.
In addition to the estate tax, there are a multitude of tax issues that need to be tackled before year’s end. The biodiesel tax incentive lapsed at the end of 2009 and has yet to be renewed. As a result, dozens of biodiesel plants are idling and investors are losing their confidence in renewable energy. Later this year, the Volumetric Ethanol Excise Tax Credit (VEETC), widely known as the "Blenders' Credit" is set to expire. Last, but certainly not least, are the “Bush” tax cuts that you hear about so often about in political debates. If these tax cuts are not renewed, you could see tax increases in individual rates, capital gains, and dividends.
Fiscal war?
Tax issues could brew into a fiscal war of sorts for the country. President Obama wants to allow the Bush tax cuts to expire for individuals making more than $200,000 a year and for couples making more than $250,000. Regarding the estate tax, Administration sources say the president’s position is to restore the estate tax and extend it at the 2009 rates.
Several GOP lawmakers are fighting to reduce the estate tax and continue the previous tax cuts. They argue that, with the economy sagging and millions unemployed, it’s exactly the wrong time to force small business owners to pay more taxes. Doing so will place an additional damper on economic recovery.
Yet, others say that continuing the current tax cuts will be fiscally irresponsible and add to an already alarming federal deficit. The Congressional Budget Office recently forecast that the federal deficit will reach $1.34 trillion for this fiscal year.
Even former Federal Reserve Chairman Alan Greenspan, an influential voice in favor of the first Bush tax cut in 2001, weighed in recently. On NBC's Meet the Press Aug. 1 he said that extending the cuts without making offsetting spending reductions could prove "disastrous."
"I'm very much in favor of tax cuts, but not with borrowed money," said Greenspan.
Tax package ahead?
When the Senate returns in mid-September, lawmakers are likely to consider a small business bill which could include a “fix” for the estate tax problem. The American Farm Bureau Federation is supporting an amendment to the small business bill that was introduced by Sens. Blanche Lincoln (D-AR) and John Kyl (R-AZ.). Their measure would set the estate tax exemption at $5 millionwith a 35 percent maximum rate.
Another bill, introduced by Sen. Diane Feinstein (D-CA), would defer estate taxes on farms and ranches if a number of conditions are met. Her “Family Farm Estate Tax Referral Act of 2010, includes provisions that the farm must be passed on to an individual or family member who has been materially engaged in its management and operation for at least five years, and the heirs must continue to use the land for farming purposes.
A “recapture tax” would be owed if the farm or ranch was subsequently sold outside the family or was no longer used for farming or ranching. The tax due would be based on the value of the estate at the time the property is sold or ceases to be used for farming or ranching.
Yet another measure has been introduced by Sen. Bernie Sanders (I-VT.). His bill is cosponsored by Sens. Tom Harkin (D-IA), Sheldon Whitehouse (D-R.I.), and Sherrod Brown (D-OH). The bill would exempt the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009, and create a progressive rate so the so called “super wealthy” pay more. The tax rate for estates valued between $3.5 million and $10 million would be 45 percent, the rate on estates worth more than $10 million and below $50 million would be 50 percent; and the rate on estates worth more than $50 million would be 55 percent.
The AFBF supports the Lincoln/Kyl amendment because it seeks a permanent forgiveness of estate taxes while the Feinstein bill is a deferral with taxes owed if property were ever sold outside the family or ceased to be used for agriculture.
The National Farmers Union sent a letter of support for the Lincoln/Kyl bill, but their policy actually calls for a $4 million individual exemption. Chandler Goule, NFU’s VP for Government Relations says the Lincoln/Kyl measure is preferable to current law and says a conference between the two chambers could come close to what NFU has been supporting.
Failure to include estate tax reform in the Small Business bill increases the likelihood that estate tax reform will be included in a major tax package that is expected to be considered in a “lame duck” session after the mid-term election, says Patricia Wolff, Director, Public Policy for AFBF.
Where the offsets would come from to pay for estate tax reform or other changes in the tax code is still anyone’s guess.
Sen. Maria Cantwell (D-WA) has circulated an idea that would allow individuals to prepay their estate tax, based on current value. Conceivably, the federal government would receive more money up-front, but could lose money if an individual’s assets appreciate considerably between the time they pay and the time they die.
One relatively piece of good news for those of you trying to plan: There is little opposition to a stepped-up basis on asset values, says Wolff, so any of the proposed “fixes” will likely allow any appreciation of the affected property that occurred during a person’s lifetime to never be taxed.
#30
Tuesday, August 10, 2010
More red tape for your farm?
Congress created new record-keeping requirements that could burden farms, small businesses
By Sara Wyant
A little-known provision tucked into the health care reform bill that President Obama signed into law this spring could have costly and confusing impacts on farmers and small business owners.
The new regulations, which kick in at the start of 2012, require any taxpayer with business income to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services that year and report on forms filed in 2013. That means supplies, parts, or any of the goods that you might purchase to run your farming operation or business.
“A laundromat that buys soap each week would now have to issue a 1099 to their supplier and the IRS at the end of the year. A landscaper who buys lawn fertilizer a couple of times a month will now be forced to issue 1099s to the companies they do business with, and no one is excluded,” lamented Sen. Mike Johanns (R-NE) in a recent speech on the Senate floor where he argued for full repeal of the new regulations.
The Patient Protection and Affordable Care Act (PPACA) provision would apply to businesses of all sizes, charities and other tax-exempt organizations, and government entities. These would include two million farming businesses, 26 million non-farm sole proprietorships, four million S corporations, two million C corporations, three million partnerships, one million charities and other tax-exempt organizations, and probably more than 100,000 federal, state, and local government entities, according to a report released by National Taxpayer Advocate Nina Olson.
The provision has nothing to do with health care, other than to help generate more tax revenue to pay for the mammoth reform package by reducing the “tax gap.” The federal government misses out on over $300 billion each year from tax underpayment, according to a report issued by the General Accountability Office in 2007. Requiring the additional 1099 paper trails are an attempt to help the Internal Revenue Service (IRS) find businesses that may not be paying their fair share of taxes.
But along with additional tax revenues, the new regulations will likely create a paperwork nightmare for farmers and small business owners and yes, even the IRS. Although the rules have not yet been finalized, Olson highlighted a number of the challenges in her report: “National Taxpayer Advocate's FY 2011 Objectives Report to Congress”.
“First, vendors will have to furnish, and businesses will have to collect, TINs (Tax Identification Numbers). If the vendor is a sole proprietor who uses his or her Social Security number (SSN) as the TIN, there could be identity theft concerns, especially if TINs essentially become public through routine printing on receipts. Alternatively, such a vendor could obtain an Employer Identification Number (EIN). If a vendor fails to furnish a correct TIN, the business is required by law to impose back-up withholding at the rate of 28 percent of the purchase price.”
“Second, businesses will now have to keep records of all purchases sorted by TIN. Under prior law, a business may have retained sufficient records to substantiate lump-sum ex-pense deductions. Under the new law, the business will have to segregate its records by vendor TIN to determine whether the $600 annual threshold is met for each vendor.
“Third, businesses will have to produce and transmit information reports, including many not previously required. For this purpose, small businesses may have to acquire new software or pay for additional accounting services, incurring additional costs. Moreover, if a business makes qualifying purchases from at least 250 vendors during the calendar year, it will be required to file Forms 1099 electronically, which may require the business to pay a per-report fee charged by an e-file service provider.
“Fourth, the IRS will face challenges making productive use of this new volume of information reports. In general, the IRS’s document-matching system (known as the Automated Underreporter (AUR) program) compares amounts shown on a taxpayer’s tax return with amounts shown on third-party information reports like Forms W-2, Wage and Tax Statement, and Forms 1099.
For example, it matches wages shown on a Form W-2 with wages reported on a tax return and interest shown on a Form 1099-INT, Interest Income, with interest reported on a tax return.Under the expanded reporting regime, however, the amounts on the information reports and the tax returns will not match under the rules for at least two reasons. First, total annual payments under $600 will not be reported by the purchaser on Form 1099 but must be reported by the vendor. While the $600 threshold existed under prior law, if a significant proportion of a vendor’s proceeds comes from small purchases, PPACA reporting would be underinclusive. Second, the goods market is subject to a high rate of returned items that result in refunds to the purchaser. If a business purchases and then returns goods, the vendor does not have any income. Yet depending on how the purchaser’s record-keeping system is set up, a Form 1099 may be filed showing the purchase (particularly if the purchase occurs in one tax year and the return occurs in the following tax year).”
At any rate,”it will be challenging for the IRS to sort these payments out,” reports Olson in her report to Congress. “In our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort.”
Under a proposed regulation to streamline data collection, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. But even this proposed rule has come under attack from small business groups that want to pay with cash or check to avoid costly credit card fees. The IRS is accepting public comments on the new rule until Sept. 29, 2010.
Will Congress repeal?
Even before the new rules take effect, several lawmakers are trying to repeal this proposal altogether and a key Senate vote is scheduled for mid-Sept. Both Republicans and Democrats want to change the rule, but they differ in their approaches and methods of paying for them.
For example, Sen. Mike Johanns (R-NE) introduced S.3578, the Small Business Paperwork Mandate Elimination Act, which would totally repeal this provision and prevent what he describes as “a massive new paperwork requirement from being imposed on businesses.” This is a companion legislation to H.R. 5141 introduced in May be Rep. Dan Lungren (R-CA).
"This mandate forces businesses to waste staff time and resources on paperwork that even the IRS says will likely be of little value," Johanns said. "One more mandate that stifles small businesses at the same time that Washington urges them to hire workers. For businesses already struggling to emerge from a recession this would be particularly burdensome, requiring government paperwork for common, everyday purchases. It is nothing more than a government-imposed obstacle to economic growth and job creation.”
Co-sponsors include: Sen. Pat Roberts (R-KS), Sen. John Thune (R-SD), Sen. Christopher Bond (R-MO), Sen. Tom Coburn (R-OK), Sen James Inhofe (R-OK), Sen. Kay Bailey Hutchinson (R-TX), Sen. John Cornyn (R-TX), Sen. Mike Enzi (R-WY), Sen. John Barrasso (R-WY), Sen. Mike Crapo (R-ID),Sen. James Risch (R-ID), Saxby Chambliss (R-GA), Sen. Johny Isakson (R-GA), Sen. Richard Burr (R-NC), Sen. Lamar Alexander (R-TN), Sen. John McCain (R-AZ),Sen. Lindsey Graham (R-SC), Sen. Richard Lugar (R-IN), Sen. Lisa Murkowski (R-AR), Sen. John Ensign (R-NV), Sen. David Vitter (R-LA), Sen. George Voinovich (R-OH), and Sen. Scott Brown (R-MA). The lone Democrat to sign on this far is the chairman of the Senate Agriculture Committee: Sen. Blanche Lincoln (D-AR).
To pay for the change, Johanns lowers the affordability exemption for the new individual mandate from 8 percent to 5 percent, making fewer people subject to the individual health insurance mandate. The amendment also proposes that a $15 billion fund for wellness programs not be funded until 2018.
Sen. Bill Nelson (D-FL) plans to offer another amendment that would not repeal the record-keeping measure but would change the reporting threshold to from $600 to $5,000. His alternative is paid for by changing Section 199 of the tax code, which allows the nation’s largest oil companies to deduct six percent of their income from oil and gas production from their tax liability, effective Dec. 31, 2010.
Some of the nation’s largest small business groups and the American Farm Bureau Federation are lobbying for full repeal.
“The only option to address this widely-agreed upon onerous 1099 provision on small businesses is full repeal,” emphasized Susan Eckerly, senior vice president at the National Federation of Independent Business in a statement. “Congress needs to stop speaking out of both sides of their mouth. If they are truly interested in helping small businesses – whatever their size – they will pass legislation that fully repeals this burdensome new requirement.”
#30
By Sara Wyant
A little-known provision tucked into the health care reform bill that President Obama signed into law this spring could have costly and confusing impacts on farmers and small business owners.
The new regulations, which kick in at the start of 2012, require any taxpayer with business income to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services that year and report on forms filed in 2013. That means supplies, parts, or any of the goods that you might purchase to run your farming operation or business.
“A laundromat that buys soap each week would now have to issue a 1099 to their supplier and the IRS at the end of the year. A landscaper who buys lawn fertilizer a couple of times a month will now be forced to issue 1099s to the companies they do business with, and no one is excluded,” lamented Sen. Mike Johanns (R-NE) in a recent speech on the Senate floor where he argued for full repeal of the new regulations.
The Patient Protection and Affordable Care Act (PPACA) provision would apply to businesses of all sizes, charities and other tax-exempt organizations, and government entities. These would include two million farming businesses, 26 million non-farm sole proprietorships, four million S corporations, two million C corporations, three million partnerships, one million charities and other tax-exempt organizations, and probably more than 100,000 federal, state, and local government entities, according to a report released by National Taxpayer Advocate Nina Olson.
The provision has nothing to do with health care, other than to help generate more tax revenue to pay for the mammoth reform package by reducing the “tax gap.” The federal government misses out on over $300 billion each year from tax underpayment, according to a report issued by the General Accountability Office in 2007. Requiring the additional 1099 paper trails are an attempt to help the Internal Revenue Service (IRS) find businesses that may not be paying their fair share of taxes.
But along with additional tax revenues, the new regulations will likely create a paperwork nightmare for farmers and small business owners and yes, even the IRS. Although the rules have not yet been finalized, Olson highlighted a number of the challenges in her report: “National Taxpayer Advocate's FY 2011 Objectives Report to Congress”.
“First, vendors will have to furnish, and businesses will have to collect, TINs (Tax Identification Numbers). If the vendor is a sole proprietor who uses his or her Social Security number (SSN) as the TIN, there could be identity theft concerns, especially if TINs essentially become public through routine printing on receipts. Alternatively, such a vendor could obtain an Employer Identification Number (EIN). If a vendor fails to furnish a correct TIN, the business is required by law to impose back-up withholding at the rate of 28 percent of the purchase price.”
“Second, businesses will now have to keep records of all purchases sorted by TIN. Under prior law, a business may have retained sufficient records to substantiate lump-sum ex-pense deductions. Under the new law, the business will have to segregate its records by vendor TIN to determine whether the $600 annual threshold is met for each vendor.
“Third, businesses will have to produce and transmit information reports, including many not previously required. For this purpose, small businesses may have to acquire new software or pay for additional accounting services, incurring additional costs. Moreover, if a business makes qualifying purchases from at least 250 vendors during the calendar year, it will be required to file Forms 1099 electronically, which may require the business to pay a per-report fee charged by an e-file service provider.
“Fourth, the IRS will face challenges making productive use of this new volume of information reports. In general, the IRS’s document-matching system (known as the Automated Underreporter (AUR) program) compares amounts shown on a taxpayer’s tax return with amounts shown on third-party information reports like Forms W-2, Wage and Tax Statement, and Forms 1099.
For example, it matches wages shown on a Form W-2 with wages reported on a tax return and interest shown on a Form 1099-INT, Interest Income, with interest reported on a tax return.Under the expanded reporting regime, however, the amounts on the information reports and the tax returns will not match under the rules for at least two reasons. First, total annual payments under $600 will not be reported by the purchaser on Form 1099 but must be reported by the vendor. While the $600 threshold existed under prior law, if a significant proportion of a vendor’s proceeds comes from small purchases, PPACA reporting would be underinclusive. Second, the goods market is subject to a high rate of returned items that result in refunds to the purchaser. If a business purchases and then returns goods, the vendor does not have any income. Yet depending on how the purchaser’s record-keeping system is set up, a Form 1099 may be filed showing the purchase (particularly if the purchase occurs in one tax year and the return occurs in the following tax year).”
At any rate,”it will be challenging for the IRS to sort these payments out,” reports Olson in her report to Congress. “In our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort.”
Under a proposed regulation to streamline data collection, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. But even this proposed rule has come under attack from small business groups that want to pay with cash or check to avoid costly credit card fees. The IRS is accepting public comments on the new rule until Sept. 29, 2010.
Will Congress repeal?
Even before the new rules take effect, several lawmakers are trying to repeal this proposal altogether and a key Senate vote is scheduled for mid-Sept. Both Republicans and Democrats want to change the rule, but they differ in their approaches and methods of paying for them.
For example, Sen. Mike Johanns (R-NE) introduced S.3578, the Small Business Paperwork Mandate Elimination Act, which would totally repeal this provision and prevent what he describes as “a massive new paperwork requirement from being imposed on businesses.” This is a companion legislation to H.R. 5141 introduced in May be Rep. Dan Lungren (R-CA).
"This mandate forces businesses to waste staff time and resources on paperwork that even the IRS says will likely be of little value," Johanns said. "One more mandate that stifles small businesses at the same time that Washington urges them to hire workers. For businesses already struggling to emerge from a recession this would be particularly burdensome, requiring government paperwork for common, everyday purchases. It is nothing more than a government-imposed obstacle to economic growth and job creation.”
Co-sponsors include: Sen. Pat Roberts (R-KS), Sen. John Thune (R-SD), Sen. Christopher Bond (R-MO), Sen. Tom Coburn (R-OK), Sen James Inhofe (R-OK), Sen. Kay Bailey Hutchinson (R-TX), Sen. John Cornyn (R-TX), Sen. Mike Enzi (R-WY), Sen. John Barrasso (R-WY), Sen. Mike Crapo (R-ID),Sen. James Risch (R-ID), Saxby Chambliss (R-GA), Sen. Johny Isakson (R-GA), Sen. Richard Burr (R-NC), Sen. Lamar Alexander (R-TN), Sen. John McCain (R-AZ),Sen. Lindsey Graham (R-SC), Sen. Richard Lugar (R-IN), Sen. Lisa Murkowski (R-AR), Sen. John Ensign (R-NV), Sen. David Vitter (R-LA), Sen. George Voinovich (R-OH), and Sen. Scott Brown (R-MA). The lone Democrat to sign on this far is the chairman of the Senate Agriculture Committee: Sen. Blanche Lincoln (D-AR).
To pay for the change, Johanns lowers the affordability exemption for the new individual mandate from 8 percent to 5 percent, making fewer people subject to the individual health insurance mandate. The amendment also proposes that a $15 billion fund for wellness programs not be funded until 2018.
Sen. Bill Nelson (D-FL) plans to offer another amendment that would not repeal the record-keeping measure but would change the reporting threshold to from $600 to $5,000. His alternative is paid for by changing Section 199 of the tax code, which allows the nation’s largest oil companies to deduct six percent of their income from oil and gas production from their tax liability, effective Dec. 31, 2010.
Some of the nation’s largest small business groups and the American Farm Bureau Federation are lobbying for full repeal.
“The only option to address this widely-agreed upon onerous 1099 provision on small businesses is full repeal,” emphasized Susan Eckerly, senior vice president at the National Federation of Independent Business in a statement. “Congress needs to stop speaking out of both sides of their mouth. If they are truly interested in helping small businesses – whatever their size – they will pass legislation that fully repeals this burdensome new requirement.”
#30
Wednesday, March 10, 2010
Vilsack and Holder headline competition workshops
Washington, March 10 – Agriculture Secretary Tom Vilsack and U.S. Attorney General
Eric Holder will participate in the first joint USDA/Justice Department workshop on
agriculture competition issues Friday in Ankeny, Iowa. Attorney General Holder and
Secretary Vilsack will deliver opening remarks for the workshop at 9:30 A.M. CST and
participate in a roundtable discussion at 9:45 A.M. CST. Following the roundtable
discussion, Vilsack and Holder will hold a press conference at 11:00 A.M. CST.
This initial all-day workshop to gather public input is part of a planned series of
workshops across the country designed “to explore competition and regulatory issues in the agriculture industry.” The workshop will be held at the FFA Enrichment Center at Des Moines Area Community College (DMACC) in Ankeny.
The workshops, announced by Holder and Vilsack last August, are the first joint
USDA/Justice Department workshops ever to be held to discuss competition and
regulatory issues in the agriculture industry. The goals of the workshops are “to promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector.” Attendance at the workshops is free and open to the public. The general public and media interested in attending the initial workshop should register at https://go.dmacc.edu/ffa/agworkshop
Holder, Vilsack and Assistant Attorney General for the Justice Department’s Antitrust
Division Christine Varney will participate in the workshop and will be joined by Iowa Lt. Gov. Patty Judge, Iowa Attorney General Tom Miller and Iowa Agriculture Secretary Bill Northey. They will participate in a roundtable discussion with presentations on current issues affecting farmers. Testimony and roundtable discussion by a panel of farmers will follow. The workshop will also feature two panels focusing on the competitive dynamics in the seed industry and trends in contracting, transparency and buyer power. The first day of the workshops will end with an “enforcer roundtable” and public testimony.
The workshop schedule:
Opening Remarks (9:30 a.m. CST - 9:45 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Eric Holder, Attorney General, U.S. Department of Justice
Roundtable Discussion and Presentation of Issues (9:45 a.m. CST - 10:45 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Eric Holder, Attorney General, U.S. Department of Justice
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of Justice
Patty Judge, Lt. Governor, State of Iowa
Tom Miller, Attorney General, State of Iowa
Bill Northey, Secretary of Agriculture, State of Iowa
Tom Harkin, Senator, U.S. Senate (tentative)
Chuck Grassley, Senator, U.S. Senate (tentative)
Leonard Boswell, Congressman, U.S. House of Representatives (tentative)
Invited:
Bruce Braley, Congressman, U.S. House of Representatives
Steve King, Congressman, U.S. House of Representatives
Tom Latham, Congressman, U.S. House of Representatives
Dave Loebsack, Congressman, U.S. House of Representatives
Farmer Testimony and Roundtable Discussion (11:15 a.m. CST - 12:15 p.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of Justice
Ken Fawcett, independent crop farmer, Eastern Iowa
Jim Foster, hog producer, Montgomery City, Missouri
Pam Johnson, farmer, Floyd, Iowa
Eric Nelson, grain and cattle farmer, Moville, Iowa
Todd Wiley, hog producer, Walker, Iowa
Eddie Wise, hog and produce farmer, Whitakers, North Carolina
Seed Competitive Dynamics Panel (1:15 p.m. CST - 2:15 p.m. CST)
Moderator:
James MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic
Research Service, U.S. Department of Agriculture
Panelists:
Ray Gaesser, Soybean and Corn Farmer, Corning, Iowa; Vice President, American
Soybean Association; Former President, Iowa Soybean Association
Neil E. Harl, Charles F. Curtiss Distinguished Professor in Agriculture and Emeritus
Professor of Economics, Iowa State University; Member of the Iowa Bar
Dermot Hayes, Professor of Economics and Finance, Pioneer Chair in Agribusiness, Iowa
State University
Diana Moss, Vice President & Senior Fellow, American Antitrust Institute
Jim Tobin, Vice President, Industry Affairs, Monsanto Company
Agricultural Trends Panel (2:15 p.m. CST - 3:15 p.m. CST)
Moderator:
Phil Weiser, Deputy Assistant Attorney General, U.S. Department of Justice
Panelists:
Brian Buhr, Professor and Head of Department, Applied Economics, University of
Minnesota
Rachael Goodhue, Associate Professor, Department of Agriculture and Resource
Economics, University of California, Davis
Mary Hendrickson, Extension Associate Professor of Rural Sociology, University of
Missouri
John Lawrence, Professor of Economics, Iowa State University
Chuck Wirtz, pork producer, Whittemore, Iowa
Patrick Woodall, Research Director, Food & Water Watch
Enforcer Roundtable Discussion Panel (3:30 p.m. CST - 4:30 p.m. CST)
Moderator:
Mark Tobey, Special Counsel for State Relations and Agriculture, U.S. Department of
Justice
Panelists:
Steve Bullock, Attorney General, State of Montana
Richard Cordray, Attorney General, State of Ohio
Chris Koster, Attorney General, State of Missouri
John Ferrell, Deputy Under Secretary for Marketing and Regulatory Programs, U.S.
Department of Agriculture
Stephen Obie, Director, Division of Enforcement, Commodity Futures Trading
Commission
William Stallings, Assistant Section Chief, Transportation, Energy and Agriculture
Section, Antitrust Division, U.S. Department of Justice
Public Testimony (4:30 p.m. CST - 5:30 p.m. CST)
This is an opportunity for those in the audience to make comments in an open forum.
Closing Remarks (5:30 p.m. CST)
Phil Weiser, Deputy Assistant Attorney General, U.S. Department of Justice
John Ferrell, Deputy Under Secretary for Marketing and Regulatory Programs, U.S.
Department of Agriculture
Additional updates and information will be posted on the Antitrust Division’s agriculture workshop Web site at http://www.justice.gov/atr/public/workshops/ag2010/index.htm.
While no streaming webcast will be available, transcripts will be available for review at a later date on the Antitrust Division’s Web site. Individuals seeking more information on the workshops should contact agriculturalworkshops@usdoj.gov.
Agriculture News, Farm Policy, and Rural Policy
#30
Eric Holder will participate in the first joint USDA/Justice Department workshop on
agriculture competition issues Friday in Ankeny, Iowa. Attorney General Holder and
Secretary Vilsack will deliver opening remarks for the workshop at 9:30 A.M. CST and
participate in a roundtable discussion at 9:45 A.M. CST. Following the roundtable
discussion, Vilsack and Holder will hold a press conference at 11:00 A.M. CST.
This initial all-day workshop to gather public input is part of a planned series of
workshops across the country designed “to explore competition and regulatory issues in the agriculture industry.” The workshop will be held at the FFA Enrichment Center at Des Moines Area Community College (DMACC) in Ankeny.
The workshops, announced by Holder and Vilsack last August, are the first joint
USDA/Justice Department workshops ever to be held to discuss competition and
regulatory issues in the agriculture industry. The goals of the workshops are “to promote dialogue among interested parties and foster learning with respect to the appropriate legal and economic analyses of these issues, as well as to listen to and learn from parties with experience in the agriculture sector.” Attendance at the workshops is free and open to the public. The general public and media interested in attending the initial workshop should register at https://go.dmacc.edu/ffa/agworkshop
Holder, Vilsack and Assistant Attorney General for the Justice Department’s Antitrust
Division Christine Varney will participate in the workshop and will be joined by Iowa Lt. Gov. Patty Judge, Iowa Attorney General Tom Miller and Iowa Agriculture Secretary Bill Northey. They will participate in a roundtable discussion with presentations on current issues affecting farmers. Testimony and roundtable discussion by a panel of farmers will follow. The workshop will also feature two panels focusing on the competitive dynamics in the seed industry and trends in contracting, transparency and buyer power. The first day of the workshops will end with an “enforcer roundtable” and public testimony.
The workshop schedule:
Opening Remarks (9:30 a.m. CST - 9:45 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Eric Holder, Attorney General, U.S. Department of Justice
Roundtable Discussion and Presentation of Issues (9:45 a.m. CST - 10:45 a.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Eric Holder, Attorney General, U.S. Department of Justice
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of Justice
Patty Judge, Lt. Governor, State of Iowa
Tom Miller, Attorney General, State of Iowa
Bill Northey, Secretary of Agriculture, State of Iowa
Tom Harkin, Senator, U.S. Senate (tentative)
Chuck Grassley, Senator, U.S. Senate (tentative)
Leonard Boswell, Congressman, U.S. House of Representatives (tentative)
Invited:
Bruce Braley, Congressman, U.S. House of Representatives
Steve King, Congressman, U.S. House of Representatives
Tom Latham, Congressman, U.S. House of Representatives
Dave Loebsack, Congressman, U.S. House of Representatives
Farmer Testimony and Roundtable Discussion (11:15 a.m. CST - 12:15 p.m. CST)
Tom Vilsack, Secretary of Agriculture, U.S. Department of Agriculture
Christine Varney, Assistant Attorney General for Antitrust, U.S. Department of Justice
Ken Fawcett, independent crop farmer, Eastern Iowa
Jim Foster, hog producer, Montgomery City, Missouri
Pam Johnson, farmer, Floyd, Iowa
Eric Nelson, grain and cattle farmer, Moville, Iowa
Todd Wiley, hog producer, Walker, Iowa
Eddie Wise, hog and produce farmer, Whitakers, North Carolina
Seed Competitive Dynamics Panel (1:15 p.m. CST - 2:15 p.m. CST)
Moderator:
James MacDonald, Chief, Agricultural Structure and Productivity Branch, Economic
Research Service, U.S. Department of Agriculture
Panelists:
Ray Gaesser, Soybean and Corn Farmer, Corning, Iowa; Vice President, American
Soybean Association; Former President, Iowa Soybean Association
Neil E. Harl, Charles F. Curtiss Distinguished Professor in Agriculture and Emeritus
Professor of Economics, Iowa State University; Member of the Iowa Bar
Dermot Hayes, Professor of Economics and Finance, Pioneer Chair in Agribusiness, Iowa
State University
Diana Moss, Vice President & Senior Fellow, American Antitrust Institute
Jim Tobin, Vice President, Industry Affairs, Monsanto Company
Agricultural Trends Panel (2:15 p.m. CST - 3:15 p.m. CST)
Moderator:
Phil Weiser, Deputy Assistant Attorney General, U.S. Department of Justice
Panelists:
Brian Buhr, Professor and Head of Department, Applied Economics, University of
Minnesota
Rachael Goodhue, Associate Professor, Department of Agriculture and Resource
Economics, University of California, Davis
Mary Hendrickson, Extension Associate Professor of Rural Sociology, University of
Missouri
John Lawrence, Professor of Economics, Iowa State University
Chuck Wirtz, pork producer, Whittemore, Iowa
Patrick Woodall, Research Director, Food & Water Watch
Enforcer Roundtable Discussion Panel (3:30 p.m. CST - 4:30 p.m. CST)
Moderator:
Mark Tobey, Special Counsel for State Relations and Agriculture, U.S. Department of
Justice
Panelists:
Steve Bullock, Attorney General, State of Montana
Richard Cordray, Attorney General, State of Ohio
Chris Koster, Attorney General, State of Missouri
John Ferrell, Deputy Under Secretary for Marketing and Regulatory Programs, U.S.
Department of Agriculture
Stephen Obie, Director, Division of Enforcement, Commodity Futures Trading
Commission
William Stallings, Assistant Section Chief, Transportation, Energy and Agriculture
Section, Antitrust Division, U.S. Department of Justice
Public Testimony (4:30 p.m. CST - 5:30 p.m. CST)
This is an opportunity for those in the audience to make comments in an open forum.
Closing Remarks (5:30 p.m. CST)
Phil Weiser, Deputy Assistant Attorney General, U.S. Department of Justice
John Ferrell, Deputy Under Secretary for Marketing and Regulatory Programs, U.S.
Department of Agriculture
Additional updates and information will be posted on the Antitrust Division’s agriculture workshop Web site at http://www.justice.gov/atr/public/workshops/ag2010/index.htm.
While no streaming webcast will be available, transcripts will be available for review at a later date on the Antitrust Division’s Web site. Individuals seeking more information on the workshops should contact agriculturalworkshops@usdoj.gov.
Agriculture News, Farm Policy, and Rural Policy
#30
Friday, February 12, 2010
What else are we missing about Deputy Merrigan?
Before Michael Pollan, and King Corn, the current Deputy Secretary was full of criticism for agriculture as we know it
When the Senate Agriculture Committee held a hearing to consider the nomination of Kathleen Merrigan to be Deputy Secretary of Agriculture, we heard most of the niceties you would expect for someone who used to be a staff member there. Her former boss, Sen. Patrick Leahy (D-VT), offered glowing words of praise, as did most other committee members. Only Sen. Saxby Chambliss (R-GA) seemed to probe a little deeper into her past support for organic agriculture, asking whether or not she could be able to represent all of agriculture if confirmed to be the number two political leader at USDA.
Sitting on the sidelines at that same hearing were folks keeping their fingers crossed, hoping and praying that no one would ask about a little known chapter that Merrigan had written as part of a book, “Visions for Agriculture,” published in 1997. In that highly inflammatory chapter, Merrigan took a stab at almost every traditional interest group in agriculture, as well as the Senate Agriculture Committee, whose members she now needed to vote for her confirmation.
In short, she would have had some explaining to do.
But no one seemed to have read that little known piece of work, and no one asked....at least until now. We published several excerpts from the piece on www.Agri-Pulse.com
Read “This is not your father’s (or your mother’s) USDA,
http://www.agri-pulse.com/DownloadLogin.asp?Name=201002102SW1.pdf (subscriber only) It’s a straight up piece, that you can read and form your own opinion.
“The future of U.S. agriculture depends on reinventing government according to three principles: regulation, diversity, and democratic decision making. These principles will help farmers by ensuring market access and environmental stewardship…….To attain my vision of U.S. agriculture, we must undergo a disruptive period of heavy-handed government reforms, followed by a true partnership between the public and private sectors,” Merrigan wrote while she was a senior analyst for the Henry A. Wallace Institute for Alternative Agriculture, a Washington, DC-based organization which promotes research and education in sustainable agriculture.
She went on to bash almost every traditional commodity and interest group that has influenced agricultural policy for the last several decades and called for major changes in cropping patterns. Hardly any ox remained ungored.
In this week’s Open Mic interview, we asked Merrigan about her focus at USDA and tried to provide a better understanding of her role. To listen, go to www.Agri-Pulse.com or to download on your PDA, click here:
http://www.agri-pulse.com/uploaded/OpenMic020810.mp3
But now, lots of folks are reading that chapter and wondering: What else should we know about the Deputy? And what else don’t we know about the new agenda at USDA?
We have asked our readers to read and react. Let us know your thoughts on how USDA is doing.
Agriculture News, Farm Policy, and Rural Policy
#30
When the Senate Agriculture Committee held a hearing to consider the nomination of Kathleen Merrigan to be Deputy Secretary of Agriculture, we heard most of the niceties you would expect for someone who used to be a staff member there. Her former boss, Sen. Patrick Leahy (D-VT), offered glowing words of praise, as did most other committee members. Only Sen. Saxby Chambliss (R-GA) seemed to probe a little deeper into her past support for organic agriculture, asking whether or not she could be able to represent all of agriculture if confirmed to be the number two political leader at USDA.
Sitting on the sidelines at that same hearing were folks keeping their fingers crossed, hoping and praying that no one would ask about a little known chapter that Merrigan had written as part of a book, “Visions for Agriculture,” published in 1997. In that highly inflammatory chapter, Merrigan took a stab at almost every traditional interest group in agriculture, as well as the Senate Agriculture Committee, whose members she now needed to vote for her confirmation.
In short, she would have had some explaining to do.
But no one seemed to have read that little known piece of work, and no one asked....at least until now. We published several excerpts from the piece on www.Agri-Pulse.com
Read “This is not your father’s (or your mother’s) USDA,
http://www.agri-pulse.com/DownloadLogin.asp?Name=201002102SW1.pdf (subscriber only) It’s a straight up piece, that you can read and form your own opinion.
“The future of U.S. agriculture depends on reinventing government according to three principles: regulation, diversity, and democratic decision making. These principles will help farmers by ensuring market access and environmental stewardship…….To attain my vision of U.S. agriculture, we must undergo a disruptive period of heavy-handed government reforms, followed by a true partnership between the public and private sectors,” Merrigan wrote while she was a senior analyst for the Henry A. Wallace Institute for Alternative Agriculture, a Washington, DC-based organization which promotes research and education in sustainable agriculture.
She went on to bash almost every traditional commodity and interest group that has influenced agricultural policy for the last several decades and called for major changes in cropping patterns. Hardly any ox remained ungored.
In this week’s Open Mic interview, we asked Merrigan about her focus at USDA and tried to provide a better understanding of her role. To listen, go to www.Agri-Pulse.com or to download on your PDA, click here:
http://www.agri-pulse.com/uploaded/OpenMic020810.mp3
But now, lots of folks are reading that chapter and wondering: What else should we know about the Deputy? And what else don’t we know about the new agenda at USDA?
We have asked our readers to read and react. Let us know your thoughts on how USDA is doing.
Agriculture News, Farm Policy, and Rural Policy
#30
Monday, January 11, 2010
Farm Bureau's Stallman Puts Activists on notice: No More Mr. Nice Guy
In a hard-hitting speech, the Texan signals that farmers and ranchers have had enough of those who want to drag agriculture back to the day of 40 acres and a mule
By Sara Wyant
The farmers and ranchers I know are fiercely independent individuals who are willing to do whatever it takes to take care of their families, their animals and their land. But that doesn’t mean they go looking for fights.
In fact, most of them face so many everyday challenges, like bone-chilling weather and tough economic conditions, that they would just like to stay out of the limelight and live in peace.
But there are a growing number of these battle-scarred men and women who have had enough of the attacks from the growing list of critics, environmental groups and even some of their own elected officials. They have had a long couple of years listening to the Michael Pollans of the world, reading incredibly biased coverage in Time magazine and watching pseudo-documentaries like Food Inc.
You can almost hear them say, “Enough Already!” They are mad as hell and they don’t want to take it any more.
American Farm Bureau President Bob Stallman captured that sentiment in his powerful opening speech during the organization’s 91st annual convention in Seattle this week. Stallman, who was elected as the national organization's 11th president in 2000, delivered the most hard-hitting speech I have ever heard him give, and for many of the 4,500 in the audience, it was his best.
It’s been a long time since we have had farm leaders inspire audiences with messages like Mary Elizabeth Lease used to deliver in the late 1800’s, when she reportedly told farmers to “raise less corn and more hell”
Some farmers still remember when the charismatic Oren Lee Staley fired up members of the National Farmers Organization in the early 1960's to fight food processors for higher prices, telling them: "American farmers have retreated as far as they can. We do not intend to retreat any further."
Clearly, there’s been a void in the number of top leaders, both from the public and private sector, who are willing to use the bully pulpit to stand up for American agriculture in more recent years. Stallman indicated that he is ready to take off the gloves and lead the fight. His audience loved it.
(See: “AFBF President calls on farmers and ranchers to unite, fight extremists” http://www.agri-pulse.com/uploaded/20100110S.pdf
It’s not that the Farm Bureau is unwilling to engage divergent interests. As Stallman stood before his convention attendees, an estimated 4,500 farmers and ranchers from all across America, he pointed out:
“As I scan this hall, I see farmers who embrace all the tools of modern agriculture. I see people who choose modern organic production…I see folks who plant conventional seed and those who use biotechnology. I see families who raise livestock in sheltered, climate-controlled conditions. I see feedlot operators. But also among our ranks here in Seattle, I see farm and ranch families who produce grass-fed beef, free-range pork and cage-free eggs.”
And AFBF is actively working with several environmental groups, such as the Environmental Defense Fund, World Wildlife Fund, and The Nature Conservancy on Field to Market: The Keystone Alliance for Sustainable Agriculture.
But enough of that “Mr. Nice Guy” stuff.
“A line must be drawn between our polite and respectful engagement with consumers and how we must aggressively respond to extremists who want to drag agriculture back to the day of 40 acres and a mule,” said Stallman. “The time has come to face our opponents with a new attitude. The days of their elitist power grabs are over.”
Consider yourself warned.
Agriculture News, Farm Policy, and Rural Policy
#30
By Sara Wyant
The farmers and ranchers I know are fiercely independent individuals who are willing to do whatever it takes to take care of their families, their animals and their land. But that doesn’t mean they go looking for fights.
In fact, most of them face so many everyday challenges, like bone-chilling weather and tough economic conditions, that they would just like to stay out of the limelight and live in peace.
But there are a growing number of these battle-scarred men and women who have had enough of the attacks from the growing list of critics, environmental groups and even some of their own elected officials. They have had a long couple of years listening to the Michael Pollans of the world, reading incredibly biased coverage in Time magazine and watching pseudo-documentaries like Food Inc.
You can almost hear them say, “Enough Already!” They are mad as hell and they don’t want to take it any more.
American Farm Bureau President Bob Stallman captured that sentiment in his powerful opening speech during the organization’s 91st annual convention in Seattle this week. Stallman, who was elected as the national organization's 11th president in 2000, delivered the most hard-hitting speech I have ever heard him give, and for many of the 4,500 in the audience, it was his best.
It’s been a long time since we have had farm leaders inspire audiences with messages like Mary Elizabeth Lease used to deliver in the late 1800’s, when she reportedly told farmers to “raise less corn and more hell”
Some farmers still remember when the charismatic Oren Lee Staley fired up members of the National Farmers Organization in the early 1960's to fight food processors for higher prices, telling them: "American farmers have retreated as far as they can. We do not intend to retreat any further."
Clearly, there’s been a void in the number of top leaders, both from the public and private sector, who are willing to use the bully pulpit to stand up for American agriculture in more recent years. Stallman indicated that he is ready to take off the gloves and lead the fight. His audience loved it.
(See: “AFBF President calls on farmers and ranchers to unite, fight extremists” http://www.agri-pulse.com/uploaded/20100110S.pdf
It’s not that the Farm Bureau is unwilling to engage divergent interests. As Stallman stood before his convention attendees, an estimated 4,500 farmers and ranchers from all across America, he pointed out:
“As I scan this hall, I see farmers who embrace all the tools of modern agriculture. I see people who choose modern organic production…I see folks who plant conventional seed and those who use biotechnology. I see families who raise livestock in sheltered, climate-controlled conditions. I see feedlot operators. But also among our ranks here in Seattle, I see farm and ranch families who produce grass-fed beef, free-range pork and cage-free eggs.”
And AFBF is actively working with several environmental groups, such as the Environmental Defense Fund, World Wildlife Fund, and The Nature Conservancy on Field to Market: The Keystone Alliance for Sustainable Agriculture.
But enough of that “Mr. Nice Guy” stuff.
“A line must be drawn between our polite and respectful engagement with consumers and how we must aggressively respond to extremists who want to drag agriculture back to the day of 40 acres and a mule,” said Stallman. “The time has come to face our opponents with a new attitude. The days of their elitist power grabs are over.”
Consider yourself warned.
Agriculture News, Farm Policy, and Rural Policy
#30
Monday, July 20, 2009
Health care reform: Why the rush?
President Barack Obama says Congress needs to tackle health care reform before the August recess, but many members of his own party are asking: “Why the rush?”
The answer is twofold: Most presidents enjoy the typical “honeymoon” with voters during the first six months after their elections and the former Illinois Senator is no exception. His popularity ratings, while slumping in the last couple of months, are still fairly high,
According to an ABC News/Washington Post poll released July 20, 59% of Americans still think Obama is doing a good job, but that’s down from a peak of 72% when he took office.
Moving quickly, therefore, means he can leverage his personal popularity and push otherwise fence-sitting lawmakers into helping him achieve his top priorities. Thus, the need for speed.
But I hope the president also understands another underlying component of this debate. The rest of his term will be the equivalent of a living, governing hell without fixing the rising costs of government-provided health care, primarily Medicare and Medicaid.
The new Congressional Budget Office Director, Doug Elmondorf, explained why health care reform is so important to all of us when he testified before the Senate Budget Committee last week. It read like a version of “Scary Movie,” without the laughs. Here are a couple of excerpts:
“Under current law, the federal budget is on an unsustainable path---meaning that federal debt will continue to grow must faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging population will cause federal spending to increase rapidly under any plausible scenario for current law.”
“For decades, spending on the federal government’s major health care programs, Medicare and Medicaid, has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined, will grow from roughly 5% of Gross Domestic Product (GDP) today to almost 10% by 2035 and more than 17% by 2080.”
“Federal spending on Medicare, Medicaid and Social Security will grow relative to the economy both because health care spending per beneficiary is projected to increase and because the population is aging.”
“CBO estimates that in fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 41% of GDP at the end of fiscal year 2008 to 60% at the end of fiscal year 2010.
Had enough? Let’s hope the Chinese and others who hold the majority of our debt, have not.
But here are two more “nuggets” from his testimony that drive home the threats to every farmer, rancher and business owner in the U.S.
"CBO’s long-term budget projections raise fundamental questions about economic sustainability. If outlays grew as projected and revenues did not rise at a corresponding rate, annual deficits would climb and federal debt would grow significantly. Large budget deficits would reduce national savings, leading to more borrowing from abroad and less domestic investment, which in turn, would depress income growth in the U.S. Over time, the accumulation of debt would seriously harm the economy. Alternatively, if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never seen in the U.S.”
“Policymakers could mitigate the economic damage from rapidly rising debt by putting the nation on a sustainable fiscal course, which would require some combination of lower spending and higher revenues than the amounts now projected. Making such changes sooner rather than later would lessen the risks that current fiscal policy poses to the economy.”
President Obama has said that this expansion of health care coverage to millions of Americans must not drive up the deficit over the next 10 years. That's a worthy goal, but the health care reform packages emerging from House Committees don’t appear to meet that test. Something this big and this important is going to take more time to get it right.
Agriculture News, Farm Policy, and Rural Policy
# 30
The answer is twofold: Most presidents enjoy the typical “honeymoon” with voters during the first six months after their elections and the former Illinois Senator is no exception. His popularity ratings, while slumping in the last couple of months, are still fairly high,
According to an ABC News/Washington Post poll released July 20, 59% of Americans still think Obama is doing a good job, but that’s down from a peak of 72% when he took office.
Moving quickly, therefore, means he can leverage his personal popularity and push otherwise fence-sitting lawmakers into helping him achieve his top priorities. Thus, the need for speed.
But I hope the president also understands another underlying component of this debate. The rest of his term will be the equivalent of a living, governing hell without fixing the rising costs of government-provided health care, primarily Medicare and Medicaid.
The new Congressional Budget Office Director, Doug Elmondorf, explained why health care reform is so important to all of us when he testified before the Senate Budget Committee last week. It read like a version of “Scary Movie,” without the laughs. Here are a couple of excerpts:
“Under current law, the federal budget is on an unsustainable path---meaning that federal debt will continue to grow must faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging population will cause federal spending to increase rapidly under any plausible scenario for current law.”
“For decades, spending on the federal government’s major health care programs, Medicare and Medicaid, has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined, will grow from roughly 5% of Gross Domestic Product (GDP) today to almost 10% by 2035 and more than 17% by 2080.”
“Federal spending on Medicare, Medicaid and Social Security will grow relative to the economy both because health care spending per beneficiary is projected to increase and because the population is aging.”
“CBO estimates that in fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 41% of GDP at the end of fiscal year 2008 to 60% at the end of fiscal year 2010.
Had enough? Let’s hope the Chinese and others who hold the majority of our debt, have not.
But here are two more “nuggets” from his testimony that drive home the threats to every farmer, rancher and business owner in the U.S.
"CBO’s long-term budget projections raise fundamental questions about economic sustainability. If outlays grew as projected and revenues did not rise at a corresponding rate, annual deficits would climb and federal debt would grow significantly. Large budget deficits would reduce national savings, leading to more borrowing from abroad and less domestic investment, which in turn, would depress income growth in the U.S. Over time, the accumulation of debt would seriously harm the economy. Alternatively, if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never seen in the U.S.”
“Policymakers could mitigate the economic damage from rapidly rising debt by putting the nation on a sustainable fiscal course, which would require some combination of lower spending and higher revenues than the amounts now projected. Making such changes sooner rather than later would lessen the risks that current fiscal policy poses to the economy.”
President Obama has said that this expansion of health care coverage to millions of Americans must not drive up the deficit over the next 10 years. That's a worthy goal, but the health care reform packages emerging from House Committees don’t appear to meet that test. Something this big and this important is going to take more time to get it right.
Agriculture News, Farm Policy, and Rural Policy
# 30
Friday, July 10, 2009
ACRE participants trickle in....at least for now
Remember all of those predictions about how the new Average Crop Revenue Election (ACRE) program would attract hundreds of thousands of farmers and potentially be a budget-buster? During the 2008 Farm Bill debate, one USDA analysis suggested that the program would be so attractive that the department would pay out around $16 billion just to corn, wheat and soybean farmers in 2009 alone. But thus far, only 1,426 producers have signed on the dotted line, ranging from a "whopping" 372 in Nebraska to one in Texas. (See state by state numbers, below.) Little wonder that advocates are looking for new ways to promote this innovative new program and also find ways to avoid what may be a last minute rush prior to the August 14th signup deadline.
“I think (ACRE) will grow,” Ron Litterer, National Corn Growers Association Chairman recently told a House Agriculture Subcommittee. “But let me remind the subcommittee that ACRE enrollment didn’t begin until April 27, right in the middle of planting season. A lot of farmers haven’t had the opportunity” to study ACRE. Originally the sign-up deadline was back in June, but because of the time needed to implement the program, the deadline was pushed back to Aug. 14.
Holding off on the decision to participate may be a good thing for producers because it provides more time to assess the latest market prices and how the specific crops in their state and farm are doing. But if all of those folks wait until the last week, local FSA offices could be overwhelmed and unable to process all of the paperwork.
In anticipation of possible work load issues in county offices, Litterer proposed a modification in sign up procedures that makes a lot of sense. He suggested enabling producers and landowners interested in ACRE to file an “Intention” to Elect and Enroll into ACRE now and pull the trigger later.
“This declaration of an intention would encourage producers and landowners to visit their local FSA Offices now and complete all the required paperwork well in advance of the August 14th deadline. If producers and landowners do not notify the FSA Office that they want to continue with ACRE, their ACRE election and enrollment would revert to DCP (Direct and counter-cyclical program). By allowing producers to make a final decision on ACRE after submitting the initial enrollment documents, the signup process would have already been completed thereby alleviating long waiting lines at the FSA county office,” he explained.
Farmers tell me they still have a boatload of questions when it comes to ACRE and they don’t always feel confident that local Farm Service Agency (FSA) offices have all of the answers. But I expect USDA to push out a lot more information in the next few weeks. In the meantime, there are plenty of resources available from USDA, NCGA and many university Extension offices. Here are just a few resources:
http://www.fsa.usda.gov/Internet/FSA_File/acrebkgrd.pdf
http://www.fsa.usda.gov/FSA/webapp?area=home&subject=dccp&topic=landing
http://ncga.com/acre-resource-center
http://www.extension.iastate.edu/polk/farmmanagement.htm
http://www.agmanager.info/
http://aede.osu.edu/people/publications.php?user=zulauf.1
State Number of ACRE Participants (as of July 7, 2009)
Alabama 2
Colorado 3
Delaware 5
Idaho 11
Illinois 225
Indiana 129
Iowa 184
Kansas 45
Kentucky 25
Michigan 3
Minnesota 16
Mississippi 2
Missouri 20
Montana 3
Nebraska 372
New York 1
North Dakota 30
Ohio 148
Oklahoma 10
Oregon 6
Pennsylvania 21
South Dakota 116
Tennessee 5
Texas 1
Utah 1
Virginia 1
Washington 14
Wisconsin 25
Wyoming 2
Total 1,426
Agriculture News, Farm Policy, and Rural Policy
#30
“I think (ACRE) will grow,” Ron Litterer, National Corn Growers Association Chairman recently told a House Agriculture Subcommittee. “But let me remind the subcommittee that ACRE enrollment didn’t begin until April 27, right in the middle of planting season. A lot of farmers haven’t had the opportunity” to study ACRE. Originally the sign-up deadline was back in June, but because of the time needed to implement the program, the deadline was pushed back to Aug. 14.
Holding off on the decision to participate may be a good thing for producers because it provides more time to assess the latest market prices and how the specific crops in their state and farm are doing. But if all of those folks wait until the last week, local FSA offices could be overwhelmed and unable to process all of the paperwork.
In anticipation of possible work load issues in county offices, Litterer proposed a modification in sign up procedures that makes a lot of sense. He suggested enabling producers and landowners interested in ACRE to file an “Intention” to Elect and Enroll into ACRE now and pull the trigger later.
“This declaration of an intention would encourage producers and landowners to visit their local FSA Offices now and complete all the required paperwork well in advance of the August 14th deadline. If producers and landowners do not notify the FSA Office that they want to continue with ACRE, their ACRE election and enrollment would revert to DCP (Direct and counter-cyclical program). By allowing producers to make a final decision on ACRE after submitting the initial enrollment documents, the signup process would have already been completed thereby alleviating long waiting lines at the FSA county office,” he explained.
Farmers tell me they still have a boatload of questions when it comes to ACRE and they don’t always feel confident that local Farm Service Agency (FSA) offices have all of the answers. But I expect USDA to push out a lot more information in the next few weeks. In the meantime, there are plenty of resources available from USDA, NCGA and many university Extension offices. Here are just a few resources:
http://www.fsa.usda.gov/Internet/FSA_File/acrebkgrd.pdf
http://www.fsa.usda.gov/FSA/webapp?area=home&subject=dccp&topic=landing
http://ncga.com/acre-resource-center
http://www.extension.iastate.edu/polk/farmmanagement.htm
http://www.agmanager.info/
http://aede.osu.edu/people/publications.php?user=zulauf.1
State Number of ACRE Participants (as of July 7, 2009)
Alabama 2
Colorado 3
Delaware 5
Idaho 11
Illinois 225
Indiana 129
Iowa 184
Kansas 45
Kentucky 25
Michigan 3
Minnesota 16
Mississippi 2
Missouri 20
Montana 3
Nebraska 372
New York 1
North Dakota 30
Ohio 148
Oklahoma 10
Oregon 6
Pennsylvania 21
South Dakota 116
Tennessee 5
Texas 1
Utah 1
Virginia 1
Washington 14
Wisconsin 25
Wyoming 2
Total 1,426
Agriculture News, Farm Policy, and Rural Policy
#30
Thursday, July 2, 2009
Wanted: People to participate in the Obama Administration’s Rural Tour
Maybe it was the short notice. Maybe it was the location. Maybe farmers and other rural folks in northwestern Pennsylvania were just too busy July 1 to turn out for the Vice President of the United States, Agriculture Secretary Tom Vilsack and a swarm of other heavy hitters for the Obama team.
Or maybe, just maybe, they were more interested in hanging on to their own jobs than learning about billions for new broadband investments that will generate jobs a few years from now. After all, the community gained access to broadband over one year ago.
Whatever the reason, the first stop of the Obama Administration’s new “Rural Tour” fell noticeably flat in terms of attendance.
Columnist Salena Zito of the Pittsburgh Tribune-Review reported in her blog that only around 100 or so people showed up just before Biden was ready to talk. The noon-time event was held in the Seneca High School off Route 8 in Wattsburg, PA., population 378. Vice-President Biden and Vilsack were joined by Commerce Secretary Gary Locke, Federal Communications Commission Chair Julius Genakowski and U.S. Rep. Kathy Dahlkemper, (D-Erie).
“The room looked so sparse that about 30 or so chairs were removed by volunteers to give the illusion of a full house,” Zito wrote. “The effect didn't exactly work.”
By the time the event got started, Zito told me that a few more folks showed up. If you counted the volunteers, the staff and the 40-60 schoolchildren in the room, the turnout could have been as high as 180, she said.
One can only wonder what Rep. Dahlkemper, a Blue Dog Democrat who already bucked the Obama Administration to vote against last week’s climate change bill, must be feeling about the low turnout. Ordinarily, the opportunity to bring even one heavy-hitter into your district would be a big deal. In this case, she had four in tow.
Granted, there were a few “bonus” opportunities for Pennsylvania Democrats. Prior to the event, Vilsack met with some dairy farmers to discuss low milk prices, but apparently, they didn’t hear anything that gave them hope for a turnaround anytime soon. And after the swing through Western Pennsylvania, Biden also managed to squeeze in a Pittsburgh fundraiser.
A White House spokesperson says the “Rural Tour” is not politically motivated, but it’s hard to ignore the key players and the map. The tour opened in Dahlkemper’s district, a Democrat who ousted seven-term Republican Rep. Phil English in the 2008 election.
On July 18, Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack will talk about renewable energy in Ringgold, VA.. Conveniently, Ringgold is part of a southern Virginia district represented by Rep. Tom Perriello, a Democrat who narrowly defeated Republican incumbent Virgil H. Goode Jr. last year.
My guess is that the White House will do a better job working the phones and generating attendance for future stops on the Rural Tour. If not, some members of the advance team may also be looking for new jobs.
I will be especially interested in the turnout on August 12th, when not one, but 5 cabinet members travel to Bethel, Alaska (population 6,356). The town is located 340 miles west of Anchorage and only accessible by air and river. How's that for a "captive" audience?
Secretaries Tom Vilsack Steven Chu, Shaun Donovan, Arne Duncan, and Ken Salazar are scheduled to discuss rural infrastructure, green jobs and a new energy economy, as well as climate change on that day. The topics are good and I hope the crowd is, too. Bring your airplane or boat and you may have a chance to visit, one on one.
Agriculture News, Farm Policy, and Rural Policy
#30
Or maybe, just maybe, they were more interested in hanging on to their own jobs than learning about billions for new broadband investments that will generate jobs a few years from now. After all, the community gained access to broadband over one year ago.
Whatever the reason, the first stop of the Obama Administration’s new “Rural Tour” fell noticeably flat in terms of attendance.
Columnist Salena Zito of the Pittsburgh Tribune-Review reported in her blog that only around 100 or so people showed up just before Biden was ready to talk. The noon-time event was held in the Seneca High School off Route 8 in Wattsburg, PA., population 378. Vice-President Biden and Vilsack were joined by Commerce Secretary Gary Locke, Federal Communications Commission Chair Julius Genakowski and U.S. Rep. Kathy Dahlkemper, (D-Erie).
“The room looked so sparse that about 30 or so chairs were removed by volunteers to give the illusion of a full house,” Zito wrote. “The effect didn't exactly work.”
By the time the event got started, Zito told me that a few more folks showed up. If you counted the volunteers, the staff and the 40-60 schoolchildren in the room, the turnout could have been as high as 180, she said.
One can only wonder what Rep. Dahlkemper, a Blue Dog Democrat who already bucked the Obama Administration to vote against last week’s climate change bill, must be feeling about the low turnout. Ordinarily, the opportunity to bring even one heavy-hitter into your district would be a big deal. In this case, she had four in tow.
Granted, there were a few “bonus” opportunities for Pennsylvania Democrats. Prior to the event, Vilsack met with some dairy farmers to discuss low milk prices, but apparently, they didn’t hear anything that gave them hope for a turnaround anytime soon. And after the swing through Western Pennsylvania, Biden also managed to squeeze in a Pittsburgh fundraiser.
A White House spokesperson says the “Rural Tour” is not politically motivated, but it’s hard to ignore the key players and the map. The tour opened in Dahlkemper’s district, a Democrat who ousted seven-term Republican Rep. Phil English in the 2008 election.
On July 18, Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack will talk about renewable energy in Ringgold, VA.. Conveniently, Ringgold is part of a southern Virginia district represented by Rep. Tom Perriello, a Democrat who narrowly defeated Republican incumbent Virgil H. Goode Jr. last year.
My guess is that the White House will do a better job working the phones and generating attendance for future stops on the Rural Tour. If not, some members of the advance team may also be looking for new jobs.
I will be especially interested in the turnout on August 12th, when not one, but 5 cabinet members travel to Bethel, Alaska (population 6,356). The town is located 340 miles west of Anchorage and only accessible by air and river. How's that for a "captive" audience?
Secretaries Tom Vilsack Steven Chu, Shaun Donovan, Arne Duncan, and Ken Salazar are scheduled to discuss rural infrastructure, green jobs and a new energy economy, as well as climate change on that day. The topics are good and I hope the crowd is, too. Bring your airplane or boat and you may have a chance to visit, one on one.
Agriculture News, Farm Policy, and Rural Policy
#30
Tuesday, May 19, 2009
Farm groups divided over climate change legislation
Most farmers and ranchers are worried about all of the day-to-day tasks of getting a crop in the ground, taking care of livestock and making sure that lenders are getting paid on time, so climate change legislation is probably the furthest thing from their minds. But like it or not, terms like cap and trade, offsets and emission allowances need to be added to farmers' long list of concerns. Understanding these terms could have more to do with long-term farm profitability than decisions like picking the best variety to plant or whether or not to cull some of your cows.
That’s because, believe it or not or like it or not, climate change legislation is moving through the House of Representatives like a steamroller, driven by Speaker of the House Nancy Pelosi and Energy and Commerce Committee Chairman Henry Waxman. The two California Democrats want to demonstrate to the world that they can address global warming, even though they had to cut so many side deals with members from coal and oil producing states that the legislation is a far cry from the original package.
Although the far-reaching climate change bill is still a “work in progress,” Democrats on the House Energy and Commerce Committee told reporters that they expect to have enough votes to move their bill, the American Clean Energy and Security Act of 2009, out of committee by the Memorial Day recess. In what has become typical fashion this year, Waxman released the whopping 932-page bill, (H.R. 2454) on a Friday with a pledge to start marking it up on Monday----providing almost no time to read and comprehend the entire measure.
But thanks to modern technology, you can quickly search the legislation for words like “agriculture.” As expected, the word is barely mentioned.
So is that good news? Many think that agriculture should be a prominent player in any type of climate change legislation because so many agricultural and forestry practices can sequester carbon and be a big part of the solution. According to the USDA, agriculture and forestry have the potential to reduce 15-25 percent of U.S. greenhouse gas emissions and provide new revenue streams for farmers and foresters in the process.
In a letter to Waxman last week, National Farmers Union President Roger Johnson called for the Energy and Commerce Committee to establish a “robust and flexible” offset program and to make sure that agriculture is not subject to an emissions cap. In addition, NFU called for the inclusion of several key provisions, including:
The USDA is granted control and administration of the agriculture offset program;
Early actors are recognized;
No artificial cap is placed on domestic offsets;
Carbon sequestration rates are based on science; and
Producers are permitted to stack environmental benefit credits.
Earlier this year, NFU was one of 12 agricultural groups that signed off on a list of "principles” for greenhouse gas legislation - The American Farmland Trust, American Soybean Association, National Association of Wheat Growers, National Cattlemen's Beef Association, National Corn Growers Association, National Farmers Union and National Milk Producers Federation, National Association of Conservation Districts, National Council of Farmer Cooperatives, National Farmers Union, Public Lands Council, United Fresh Produce Association, and the Western Growers Association. An updated fact sheet on those principles is available here: http://www.wheatworld.org/userfiles/file/Climate%20Response_ALL_4%2021%2009.pdf
But after Waxman started pushing hard to move legislation without incorporating agriculture, some of those same groups came out opposed to the bill.
The National Corn Growers Association (NCGA) sent a letter to Congressman Waxman earlier this week, expressing its concern with the current version and outlining the potential for negative economic impacts to the agriculture sector if a cap-and-trade system is not structured properly.
“After reviewing the legislation, we can see the bill does not clearly provide for a mechanism by which corn growers can sell carbon credits on the market,” NCGA President Bob Dickey said. “We strongly believe the bill will increase input costs without specific opportunities to offset those additions. We cannot support the American Clean Energy and Security Act in absence of the provisions that we have explained in some length to the Committee.”
American Farm Bureau Federation President Bob Stallman struck an even harsher tone in releasing a statement on its opposition to the bill.
“The (bill) is laden with so many policy prescriptions that its impact on the U.S. is almost impossible to measure and evaluate,” Stallman said. “We can be certain of some things, however—it will increase our operating costs and reduce our competitiveness abroad.”
According to Stallman, the measure does not adequately provide for alternative sources of energy that will “plug the hole” created when fossil fuel costs escalate dramatically. Farm Bureau is also concerned about the potential impact on fertilizer prices, given their sensitivity to natural gas costs.
“The bill would effectively lock the United States into these changes regardless of what is done by other countries, such as China and India,” Stallman said. “Such an approach is little more than gambling with U.S. jobs and productivity. Taken as a whole, the bill falls far short of what is necessary for agriculture to survive and grow.”
So the battle lines are drawn. We know that some groups are working hard to have “a seat at the table” in order to influence whatever comes out of Waxman’s committee, while others are working feverishly to stop the legislation altogether. The measure could die a slow death “kill in the Senate, where . But the biggest wild card it that the Environmental Protection Agency (EPA) might attempt to lower greenhouse gas emissions through regulations if no legislation is adopted.
Agriculture News, Farm Policy, and Rural Policy
#30
Thursday, May 14, 2009
Vilsack sends mixed messages on risk management
There have been numerous times in my career when I've asked a fairly innocent question of a Secretary of Agriculture, only to get a rather eye-opening response. My first media briefing with former Secretary of Agriculture Ed Schafer provides a good example. I asked about his position on U.S. sugar policy and he gave me an answer straight from his home state of North Dakota, where he had served as an extremely popular governor. There was a communications staffer in the room, but she failed to understand the implications and intervene.
Schafer was so intent on giving me his perspective, based on his former position as Governor, that he forgot that he was now playing in the big league. The President and U.S. Trade Representative were not amused when they read about his response, which ran basically counter to their international trade policies.
Should he have been given some slack? Perhaps, because it was only his first meeting with reporters. But after awhile, you expect government officials to get the terminology and the policies down, and to not make comments when they don't know the answer.
Now we've got another former Governor in the Secretary's seat and he is unfortunately, making some of the same mistakes---even after he's been serving for more than 100 days.
Secretary Vilsack is definitely trying to walk the line with President Obama's policies, but some of his comments make me wonder whether or not he is shooting comments before he has a chance to really aim. Wednesday’s agricultural appropriations subcommittee hearing on his 2010 budget provides a good example.
As we reported on http://www.agri-pulse.com/, Vilsack sought to reassure lawmakers that "the President’s budget maintains the three-legged stool of farm payments, crop insurance, and disaster assistance.” Problem is, the "three-legged stool" he referred to is “farm bill lingo” for farm program payments: direct payments, counter-cyclical payments and marketing loans---not crop insurance and disaster payments.
Vilsack also went after crop insurance companies for their excessive profits. Now, I understand that big business bashing is in vogue, but his comments represented a very mixed message to the record number of farmers who have been paying for crop insurance.
The Secretary said that, while in the past it was hard to get farmers to sign up for crop insurance, today farmers often have to sign up as a condition of qualifying for bank loans or disaster relief “so there’s now more of a mandate.” Vilsack said the result is that private companies “have seen a huge increase in their market. . . so they are making a tremendous amount of money, billions of dollars. . . There is a tremendous amount of profit. . . We just think that this needs to be a fairer deal for taxpayers.”
Hmmm...Why would lenders require crop insurance? Perhaps because farmers who pay for crop insurance policies, many of which are now based on expected revenue, have a valuable risk management tool that allows them to market a crop prior to harvest and actually repay their lenders. It also makes farmers less likely to go begging to Congress for annual disaster assistance or to rely on the new so-called “permanent” disaster program.
Yes, companies received a lot of money for farmers last year but it was because they were insuring crops that, because of last year’s run-up in commodity prices, were worth billions of dollars. And in places like Iowa, where my family farms, the crop insurance industry paid almost $1.1 billion to the farmers for their losses, according to the most recent summary of business data released by USDA’s Risk Management Agency (RMA).
So what type of situation would these companies be in if they charged less and then had to pay for losses on all of the crops they insured at those higher levels? Probably not too eager to stay in the crop insurance business. At present, there are only 16 firms approved by RMA under their Standard Reinsurance Agreement
And it’s not only the insurance companies that could be impacted. How would farm lenders be faring if they didn't get their loans repaid? How many farmers would be in bad financial straits if they had not purchased crop insurance to cover their crop losses?
It’s unclear to me whether or not Vilsack really wants to create a new three-legged stool. Maybe he wants taxpayers to pay more in subsidies for annual disaster payments and less in subsidies for crop insurance. Maybe he’s just running in so many different directions with so little staff, that he needs more time to get “up to speed” on these issues
Regardless, I hope that he takes a more comprehensive look at what’s working for farmers in terms of crop insurance and what’s not, before taking a stand on this issue. Surely there can be some ways to reduce government costs, while still maintaining a strong risk management system that farmers, lenders and even the crop insurance companies can depend on.
Agriculture News, Farm Policy, and Rural Policy
#30
Schafer was so intent on giving me his perspective, based on his former position as Governor, that he forgot that he was now playing in the big league. The President and U.S. Trade Representative were not amused when they read about his response, which ran basically counter to their international trade policies.
Should he have been given some slack? Perhaps, because it was only his first meeting with reporters. But after awhile, you expect government officials to get the terminology and the policies down, and to not make comments when they don't know the answer.
Now we've got another former Governor in the Secretary's seat and he is unfortunately, making some of the same mistakes---even after he's been serving for more than 100 days.
Secretary Vilsack is definitely trying to walk the line with President Obama's policies, but some of his comments make me wonder whether or not he is shooting comments before he has a chance to really aim. Wednesday’s agricultural appropriations subcommittee hearing on his 2010 budget provides a good example.
As we reported on http://www.agri-pulse.com/, Vilsack sought to reassure lawmakers that "the President’s budget maintains the three-legged stool of farm payments, crop insurance, and disaster assistance.” Problem is, the "three-legged stool" he referred to is “farm bill lingo” for farm program payments: direct payments, counter-cyclical payments and marketing loans---not crop insurance and disaster payments.
Vilsack also went after crop insurance companies for their excessive profits. Now, I understand that big business bashing is in vogue, but his comments represented a very mixed message to the record number of farmers who have been paying for crop insurance.
The Secretary said that, while in the past it was hard to get farmers to sign up for crop insurance, today farmers often have to sign up as a condition of qualifying for bank loans or disaster relief “so there’s now more of a mandate.” Vilsack said the result is that private companies “have seen a huge increase in their market. . . so they are making a tremendous amount of money, billions of dollars. . . There is a tremendous amount of profit. . . We just think that this needs to be a fairer deal for taxpayers.”
Hmmm...Why would lenders require crop insurance? Perhaps because farmers who pay for crop insurance policies, many of which are now based on expected revenue, have a valuable risk management tool that allows them to market a crop prior to harvest and actually repay their lenders. It also makes farmers less likely to go begging to Congress for annual disaster assistance or to rely on the new so-called “permanent” disaster program.
Yes, companies received a lot of money for farmers last year but it was because they were insuring crops that, because of last year’s run-up in commodity prices, were worth billions of dollars. And in places like Iowa, where my family farms, the crop insurance industry paid almost $1.1 billion to the farmers for their losses, according to the most recent summary of business data released by USDA’s Risk Management Agency (RMA).
So what type of situation would these companies be in if they charged less and then had to pay for losses on all of the crops they insured at those higher levels? Probably not too eager to stay in the crop insurance business. At present, there are only 16 firms approved by RMA under their Standard Reinsurance Agreement
And it’s not only the insurance companies that could be impacted. How would farm lenders be faring if they didn't get their loans repaid? How many farmers would be in bad financial straits if they had not purchased crop insurance to cover their crop losses?
It’s unclear to me whether or not Vilsack really wants to create a new three-legged stool. Maybe he wants taxpayers to pay more in subsidies for annual disaster payments and less in subsidies for crop insurance. Maybe he’s just running in so many different directions with so little staff, that he needs more time to get “up to speed” on these issues
Regardless, I hope that he takes a more comprehensive look at what’s working for farmers in terms of crop insurance and what’s not, before taking a stand on this issue. Surely there can be some ways to reduce government costs, while still maintaining a strong risk management system that farmers, lenders and even the crop insurance companies can depend on.
Agriculture News, Farm Policy, and Rural Policy
#30
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