| | Dear Friends:
The past month in Washington has seen substantial steps toward rebuilding the economy, increasing the use of biofuels and other renewable energy sources and reforming regulation of our nation's financial system. In the energy area, President Obama, Secretary of Agriculture Vilsack and EPA Administrator Jackson have all taken significant steps to reduce our dependence on foreign energy sources and promote the use and production of clean sources of homegrown energy that are renewable. This is especially exciting news for our nation's farmers and rural communities, in addition to addressing national energy security and costs. The Administration has committed to making the biofuels industry one of the major players in its overall energy strategy through new rules and even a cabinet level biofuels working group. Please keep reading to learn more about this and other important food, agriculture and rural topics.
Your Senator,  Tom Harkin
In this edition:
- USDA ANNOUNCES AID TO STRUGGLING U.S. DAIRY INDUSTRY
- BEEF TRADE DISPUTE WITH THE EU RESOLVED
- COMMON SENSE ON THE ACRE PROGRAM
- CONSERVATION FUNDING COMING NATIONALLY FOR ORGANIC AGRICULTURE
- PRESIDENT OBAMA AND EPA TAKE ACTION TO EXPAND BIOFUELS PRODUCTION AND USE
- PROTECTING AMERICA'S BIOFUELS STRATEGY
- SENATE EXAMINES PROPOSED BUDGET IMPACT ON AGRICULTURE
- GARY GENSLER CONFIRMED TO HEAD CFTC
- SENATE CONFIRMS NOMINEES TO USDA POSTS
- SENATE AGRICULTURE COMMITTEE EXPLORES BENEFITS OF FARM-TO-SCHOOL FOOD PROGRAMS
- FCC AND USDA RELEASE REPORT AS A STEP TO EXPAND RURAL BROADBAND ACCESS
- SENATE AGRICULTURE COMMITTEE HOLDS HEARING ON FINANCIAL SYSTEM REGULATORY REFORM
USDA ANNOUNCES AID TO STRUGGLING U.S. DAIRY INDUSTRY
On May 22, the U.S. Department of Agriculture (USDA) announced its 2008-2009 allocations for the Dairy Export Incentive Program (DEIP). The program is designed to help U.S. dairy exporters compete against current world prices and foreign subsidies and to develop international export markets. Harkin helped to ensure that the program was continued in the Food, Conservation and Energy Act of 2008, the farm bill.
"As many are all too painfully aware, dairy producers are struggling because of low prices. A decline in overseas sales – caused partially by a direct export subsidy reintroduced by the European Union earlier this year – has hurt our dairy producers here at home," said Harkin. "Federal action needed to be taken and these allocations will help address this issue, all within the bounds of our World Trade Organization obligations. I commend Secretary Vilsack and the Obama Administration for their continued commitment to supporting the U.S. dairy industry."
BEEF TRADE DISPUTE WITH THE EU RESOLVED
On May 13, the USDA and U.S. Trade Representative resolved a long-standing beef trade dispute with the European Union. The dispute had restricted access of U.S. beef in the EU despite a World Trade Organization dispute settlement case in 1997. U.S. farmers and ranchers will now have a much greater opportunity to sell their product in the affluent EU market.
"I am pleased that this long trade dispute over access to the EU beef market has finally reached an acceptable, livable outcome for U.S. farmers and ranchers. There is great demand for U.S. beef overseas and this trade resolution will benefit our producers here at home," said Harkin. I applaud the efforts of USDA and U.S. Trade Representative in resolving this matter, and hope that this agreement is only the first of many future resolutions to long-standing trade disputes that we currently have with the European Union."
COMMON SENSE ON THE ACRE PROGRAM
As planting season and a new crop year unfolds, farmers are encouraged to evaluate farm program options and take a look at the new ACRE program and the potential benefits that go along with it.
Q: What is ACRE?
A: The Average Crop Revenue Election (ACRE) Program is a new and creative alternative to the direct and countercyclical programs (DCP) currently in place, and will be a beneficial safety net for many producers both in Iowa and across the country. ACRE was adopted in the 2008 farm bill and the Farm Service Agency administers it.
Q: What are the basic pros and cons of participating in the ACRE program?
A: The ACRE program is an attractive revenue protection program for many producers and an alternative to the current DCP sought after by many farm groups. For one, the ACRE safety net is not based solely on crop price, rather it is based on farm revenue, so it can pay out as a result of either a price, a yield decrease, or both. Additionally, it is based on state-level yields and not national yields, thus helping participants by reflecting production conditions closer to the individual farm level. ACRE also pays based on a farm's current crop mixture, not the combination of crops planted years ago. However, by participating in ACRE, producers elect to forgo standard counter-cyclical payments and must give up 20 percent of their direct payments and 30 percent of their loan rates. In addition, the decision to enroll in ACRE binds the farm to the program through the 2012 crop year.
Q: How do I sign up for ACRE and DCP?
A: The DCP sign-up process is similar to last year, but you may be asked to provide additional information to verify payment eligibility. The ACRE sign-up requires an election to participate in the program that is agreed to by all producers on a farm and all land owners. After this, the farm is enrolled in ACRE for the 2009 crop year. Once a farm is enrolled in ACRE it must remain in the program through the 2012 crop year. However, if you decide not to sign up for ACRE for the 2009 crop year, you will have the chance to do so for subsequent crop years, or until the current farm bill expires in 2012.
Q-What is the sign up deadline?
A- For the 2009 crop year, the sign-up deadline for farm programs has been moved from June 1 to August 14, 2009. Secretary of Agriculture Vilsack moved the deadline back by 10 weeks in order to give producers additional time to decide whether to participate in ACRE or remain in DCP. Since this is the first year producers can participate in ACRE, the extension will allow farmers extra time to consider program options and to discuss these alternatives with their lenders and with the owners of rented land.
Q-How can I get more information about ACRE, DCP and other income support programs?
A-You can either visit your local FSA county office or simply go to http://fsa.usda.gov.
CONSERVATION FUNDING COMING NATIONALLY FOR ORGANIC AGRICULTURE
USDA announced on May 5 that $50 million in Environmental Quality Incentives Program (EQIP) funds will be released to assist farmers with voluntary conservation practices relating to organic production and the transition into organic agriculture on some part or all of their farms or farming operations. Harkin included an organic subprogram for EQIP in the Conservation, Food Conservation and Energy Act of 2008, the farm bill, and in April sent a letter to Secretary Vilsack urging him to set aside funds to carry out the initiative.
"I commend Secretary Vilsack and the Administration for ensuring EQIP funds will go to help those who are involved with conservation practices related to transitioning into organic production, as enacted in the farm bill," said Harkin. "Organic farmers have not been able to fully utilize federal conservation programs such as EQIP. The 2008 farm bill and the funding announced will support sound conservation among farmers wanting to get in to or expland in organic agriculture."
The 2008 farm bill's organic subprogram in EQIP provides farmers up to $20,000 each year, and $80,000 over a six-year period to support conservation practices related to organic agriculture and the transition into organic agriculture. Organic farmers may request additional funds in EQIP for practices not directly related to organic agriculture. EQIP is a voluntary program managed by the U.S. Department of Agriculture's (USDA) Natural Resources Conservation Service (NRCS).
PRESIDENT OBAMA AND EPA TAKE ACTION TO EXPAND BIOFUELS PRODUCTION AND USE
On May 5, the Obama Administration announced it is forming a cabinet level biofuels working group. On the same day, the EPA also issued a proposed rule to carry out federal law requiring much greater biofuels use in motor fuel. Both are major actions focused on cutting our nation's dependence on imported oil and boosting the economy, jobs and energy security.
"These announcements send a positive message to the biofuels industry and show that the Obama administration is serious about addressing our dependence on foreign oil," said Harkin. "Administrator Jackson and President Obama have made it clear that they are committed to producing clean, green and safe sources of energy."
President Obama is creating a Biofuels Interagency Working Group, which brings together the leaders of the Department of Agriculture, Department of Energy and the Environmental Protection Agency for the purpose of developing the nation's first comprehensive biofuel market development program, coordinating infrastructure policies affecting the biofuels industry, and identifying new policy options to improve the environmental sustainability of biofuels feedstock production. President Obama has also encouraged Secretary of Agriculture Tom Vilsack to take steps to promote biofuels and renewable energy by acting on initiatives that Harkin worked to include in the Food, Conservation and Energy Act of 2008, the farm bill.
"In forming this working group, President Obama is bringing key leaders together to create a new level of focus on aggressive actions that make full use of, and expand on, the biofuels policies we enacted in the farm bill. These include provisions that make loan guarantees for the development of biorefineries; expedite funding to biofuels producers to encourage production of next-generation biofuels and other non-corn feedstocks," said Harkin.
Additionally, EPA Administrator Lisa Jackson signed a proposed Renewable Fuel Standard (RFS) rule, which will take aggressive action towards increasing the supply of renewable fuels to 36 billion gallons by 2022, as required by the Energy Independence and Security Act of 2007 (EISA). The rule would establish new specific volume standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel that must be used in transportation fuel each year, which will reduce foreign dependence by more than 297 million barrels a year. The revised statutory requirements also include new definitions and criteria for both renewable fuels and the feedstocks used to produce them, including new greenhouse gas emission (GHG) thresholds for renewable fuels.
"The Renewable Fuel Standard is essential to breaking our over-dependence on oil. To do that, we need new domestic fuels as well as new vehicle technologies. With the RFS, we put ourselves on a clear path of producing and using steadily increasing levels of a variety of biofuels over the next 13 years," said Harkin. "As to the lifecycle greenhouse gas provisions of the rule dealing with indirect land use impacts, I am skeptical about the science around it and have previously urged the EPA to make sure that the science is sound before enacting such a provision. I am pleased that their announcement recognizes the need for a thorough analysis and review of this issue prior to any final decision."
PROTECTING AMERICA'S BIOFUELS STRATEGY
America's strategy to replace petroleum based fuels with increasing levels of domestic biofuels has been in place for several decades, and has really begun to take off since 2000. In 2007, Congress reinforced that strategy by calling for continuing the strong expansion of biofuels production with a new renewable fuel standard (RFS2) that requires use of 36 billion gallons of biofuels by 2022. However, the biofuels industry is now encountering two problems. The first is that the industry is reaching the market "blend wall" because they are currently producing close to as much ethanol as the nation can use at the normal 10 percent blend level (E10), and there are not enough vehicles and filling stations to sell significantly more ethanol in the form of higher blends. The Environmental Protection Agency (EPA) is reviewing the possibility of permitting somewhat higher blends, up to E15, to be used in all gasoline-fueled vehicles, which would significantly ease this problem while the vehicles and stations for higher blends multiply and those markets expand.
The second problem is that the RFS2 mandate includes a requirement that biofuels meet certain caps on their lifecycle greenhouse gas emissions, including indirect emissions that result from land use changes. In developing regulations, EPA has concluded that these indirect land use changes may make very significant contributions to a biofuels lifecycle greenhouse gas emissions, as might be the case if one can document that biofuels production here leads to rainforest destruction elsewhere. This "indirect land use change" issue is now being hotly debated.
"Increasing biofuels production and use is one of three key components of our national strategy for reducing dependence on foreign oil, along with requiring more efficient vehicles and developing alternatives" said Harkin. "As we pursue this biofuels strategy, we know we'll have to address bumps in the road, such as the blend wall problem and this indirect land use issue. On the blend wall, I urge EPA to approve blends up to E15 quickly as possible while not compromising safety or air quality. Regarding the indirect land use issue, it's clear to me, and I think to EPA and most of the folks who have looked at this issue, that there aren't adequate data or models to identify and quantify land use changes that result from U.S. biofuels production. That being the case, we simply cannot incorporate those indirect land use change effects in our rulemaking at this time. At a minimum, we need to review and reconsider this environmental requirement."
SENATE EXAMINES PROPOSED BUDGET IMPACT ON AGRICULTURE
Recently, President Barack Obama proposed a federal budget to Congress for Fiscal Year 2010. On June 4, the Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies held a hearing to examine the impacts that it would have on our agricultural sector. Harkin is a member of the Committee and made the following statement regarding the proposed budget:
"Today we are facing monumental economic challenges and in order to prevail, it will take the best in all of us. America's farmers, ranchers and rural communities are an enduring part of this nation's strength and they can, and must, play a vital role in our economic recovery. I am pleased the budget reflects President Obama's understanding that the agricultural sector and rural America must play a key role our future energy economy, especially by providing bioenergy and renewable electricity from our agricultural and forest lands. I was also pleased to see that the budget request continued to build off of investments made in the 2008 farm bill for USDA energy programs, which will help accelerate the development and commercialization of advanced biofuels and alternative energy.
"I am disappointed, however, that the President's budget calls for taking money away from funding that was dedicated to initiatives included in the Food, Conservation, and Energy Act of 2008, the farm bill. In fiscal year 2010, the budget would eliminate $786 million in farm bill funding through legislative changes and tightening limitations on mandatory program spending. By far the largest share of the funding reductions consist of the $582 million in proposed cuts to mandatory spending, and most of that is from conservation and environmental programs such as the Wetlands Reserve Program and the Environmental Quality Incentives Program. The balance of investments and funding in the 2008 farm bill stands as a key accomplishment of the 110th Congress and was overwhelmingly supported in both houses of Congress to override President Bush's veto. Cutting back now on the farm bill's funding for conservation would upset the balance in the farm bill and very seriously limit critical initiatives in the overwhelmingly supported 2008 farm bill. While there are many components of the budget that I am pleased with, rest assured I will work to maintain the investments provided in the farm bill for conservation programs and to ensure sure that federal funding continues to support our producers and rural communities."
GARY GENSLER CONFIRMED TO HEAD CFTC
On May 14, the Senate confirmed Gary Gensler as Chairman of the Commodity Futures Trading Commission (CFTC) by a vote of 88 to 6.
"With our current economic crisis, it is painfully clear that our nation's financial system requires a much stronger and more comprehensive regulatory scheme, and it is important that we have a strong leader at the Commodity Futures Trading Commission," said Harkin. "I am hopeful that Chairman Gensler will reform and restore regulation of trading in futures and other derivatives contracts.
"Prior to this confirmation, the Administration outlined a proposal for regulatory reform for over-the-counter derivatives. This was a step in the right direction, but there is still more that needs to be addressed. Earlier this year I introduced legislation to bring these types of financial transactions onto regulated exchanges in order to add openness, transparency and integrity in futures trading to help rebuild our financial system. I look forward to working with Chairman Gensler, other members of the Administration and my colleagues in Congress as we move forward on this critical issue."
SENATE CONFIRMS NOMINEES TO USDA POSTS
On May 7, the Senate Committee on Agriculture, Nutrition on Forestry met to hear from four individuals nominated by President Obama to key positions at the Department of Agriculture: Dallas P. Tonsager for Under Secretary for Rural Development, Krysta Harden for Assistant Secretary for Congressional Relations, Pearlie S. Reed for Assistant Secretary for Administration and Rajiv J. Shah for Under Secretary for Research, Education and Economics. Since the hearing, all of the nominees have been confirmed by the full Senate. Senator Harkin made the following statement at the hearing regarding the nominees and the role of their posts:
"We will look to the new Under Secretary for Rural Development for leadership and skill in helping our nation's rural communities tackle some very big challenges, including economic recession, job loss, lack of services, and aging infrastructure. The new farm bill we passed last year, The Food, Conservation and Energy Act, along with the recent American Recovery and Reinvestment Act, contain important initiatives and investments for USDA Rural Development to carry out.
"Among the key objectives are supporting new and expanding businesses, boosting renewable energy development, upgrading outdated and deficient rural water and wastewater systems, expanding broadband telecommunications, and attracting new public and private investments in rural America. Dallas Tonsager brings a wealth of solid experience and accomplishment to the position of Under Secretary for Rural Development. He is a tireless advocate for rural America and we are proud to have him here with us today.
"We rely on the Assistant Secretary for Congressional Relations to keep the lines of communication open and to supply us with the information we need for crafting legislation and responding to the concerns of the people we serve. Krysta Harden is a very strong nominee for this position. Working most recently as the chief executive officer of the National Association of Conservation Districts, she has the respect of members from both parties and from across the country, and of agricultural producers and the environmental community as well.
"Effective management by the Assistant Secretary for Administration is in practical terms vital to the success of every program and undertaking at the Department of Agriculture. Simply put, USDA cannot function without proper attention to personnel, procurement, and day-to-day operations. Pearlie Reed is an experienced USDA professional, having worked for years at the Natural Resources Conservation Service and beoming its Chief. He also served as Acting Assistant Secretary for Administration from 1997 to 1998, and is now nominated for the position. We congratulate Perlie Reed for being nominated and we look forward to his continued contributions of talent, dedication, and leadership to the mission of USDA.
"The Under Secretary for Research, Education, and Economics is now also the Chief Scientist at USDA with responsibility for carrying out USDA's own in-house research activities; supporting research, education, and extension at our nation's state, land grant, and other institutions; and maintaining USDA's vital economics and statistics functions. The manifold benefits of these activities extend throughout our society, from abundant food and fiber, to renewable energy, biobased materials, and a better way of life for all Americans. Dr. Rajiv Shah brings a unique and impressive background to the position of Under Secretary for Research, Education, and Economics. His experience in managing research grants for the Gates Foundation, coupled with his knowledge of economics and international agriculture, will serve him well as the Chief Scientist of the Department."
SENATE AGRICULTURE COMMITTEE EXPLORES BENEFITS OF FARM-TO-SCHOOL FOOD PROGRAMS
On May 15, the Senate Committee on Agriculture, Nutrition and Forestry, held a field hearing in Ranking Member Saxby Chambliss' (R-GA) home state of Georgia entitled "Benefits of Farm-to-School Projects, Healthy Eating and Physical Activity for School Children." The hearing was one of a series leading to the Committee's writing of legislation to extend and update federal child nutrition programs later this year. Earlier hearings have focused on federal nutrition programs' effectiveness in reaching America's students, quality and cost, as well as mechanisms for improving the nutritional quality and healthfulness of the foods and beverages sold in schools through school snack bars, vending machines and a la carte lines.
At the hearing, Senator Harkin remarked that, "Improving the nutrition and health of our children pays dividends in many ways, many times over. One of these dividends – which we have only recently given proper attention -- is that doing the right thing for our kids by providing healthy, local fresh fruits and vegetables is also good for farmers and for local economies. It's really a twofer, if not more: kids get the good nutrition they need and deserve, and that helps rural communities, which continue to struggle, particularly during the current economic downturn.
"Undoubtedly, a multitude of reasons support our enacting a strong, forward-looking new child nutrition bill this year. In the coming weeks, I look forward to working with Committee members, particularly Senator Chambliss, as we begin actually to craft the legislation and work to secure the added funding proposed by President Obama, and which is so critical to improving federal child nutrition programs."
FCC AND USDA RELEASE REPORT AS A STEP TO EXPAND RURAL BROADBAND ACCESS
On May 27, the Federal Communications Commission (FCC) in conjunction with U.S. Department of Agriculture (USDA) released a report outlining a broadband internet strategy for rural America. The report lays out the need for broadband as well as the existing resources and barriers to the deployment of broadband in rural areas. Additionally, it explains the importance of coordination between agencies of the federal government and the cooperation with local communities that is necessary to bring universal broadband to rural areas across the country.
As part of his overall push to expand access to broadband in rural America, Harkin worked to include broadband assistance in the Food, Conservation and Energy Act of 2008, the farm bill, including requiring the FCC Chairman, in coordination with the Secretary of Agriculture, to submit this report to Congress. More recently, Harkin helped to secure $7.2 billion in the final version of the American Recovery and Reinvestment Act of 2009, the economic recovery package, to extend and improve high speed broadband service in rural communities and across the nation.
"A few years ago, broadband internet was crucial for only some businesses, but today it is a necessary utility for almost all businesses, families and even for students doing their homework. In order for rural communities to thrive and grow, we must make broadband effectively available," said Harkin. "This report is a useful step towards providing broadband internet access to America's rural communities. I am hopeful that this report, along with other initiatives, including funding allocated in the Recovery and Reinvestment Act, will go a long way toward bringing broadband access to those who need it."
SENATE AGRICULTURE COMMITTEE HOLDS HEARING ON FINANCIAL REGULATORY REFORM
The Senate Committee on Agriculture, Nutrition and Forestry held a hearing on June 4 to further explore needed regulatory reform of futures and other derivatives markets. Leading economists have attributed the recent downturn of the U.S. economy in part to the failure of these markets. The hearing addressed what can be done to regulate these markets in order to provide a solid foundation on which to rebuild the nation's economy and prevent another financial system collapse in the future.
This past January, Harkin introduced legislation to bring all over-the-counter futures trading onto regulated exchanges in order to bring transparency and accountability to these financial transactions and to strengthen our financial markets. While many view the derivatives markets as simply a concern for Wall Street, these markets affect every day Americans in a variety of ways, from impacting the price of gasoline to jeopardizing the safety of retirement savings.
Agricultural futures markets – which are a type of derivative - are fundamental to the functioning of every aspect of the agricultural economy. Financial services account for as much as 20 percent of our economy and if those markets are not healthy or properly regulated, our economy suffers. The Commodity Futures Trading Commission plays a vital role in providing oversight in keeping these players honest, and Harkin, much like most leading experts, believes the federal government must invest in regulators and enforcers to strengthen the oversight to the over-the-counter markets or our economy and society will pay a heavy price.
"It is not credible to assert that the markets and present regulatory system have worked when the federal government has had to inject some $4 trillion into the system to stave off a total collapse of the economy," said Harkin. "Recent problems indicate the need for fundamental reform: the 2008 run up in oil prices left our economy bruised and our nation keenly aware of not only its dependence on foreign oil but its struggle with speculation in the markets; volatile agricultural commodity prices, high input costs, and problems with the wheat and cotton markets have exposed vulnerabilities in our agricultual futures markets; and possibly most problematic, our national economy has been held hostage by poorly regulated financial markets and the shockingly irresponsible behavior of some market participants, particularly when it comes to financial derivative products like credit default swaps and other over-the-counter derivatives. It has become obvious that we must restore proper regulatory oversight if we are ever going to get this economy rebuilt on a solid foundation.
"We must protect consumers and lower systemic risk, enhance the price discovery function of these markets, reduce excessive speculation, and give the regulators the authority and information they need to keep the markets free of fraud and manipulation. In doing so we will maximize the economic value of the derivatives markets by making sure they are structured to manage risk rather than magnify risk, and guarantee that bad actors are held accountable." | | | | | | | | |
