Congressional Quarterly’s Catharine Richert reported on Friday that, “The fragile lobbying alliance between conservation groups and fruit and vegetable growers will be put to the test next month, when lawmakers release their draft of the 2007 farm bill…Last September, specialty-crop growers and land-preservation groups rallied behind a $5 billion, bipartisan initiative called the EAT Healthy America Act. The plan, reintroduced in the House this year (HR 1600) by Democrat Dennis Cardoza of California, would boost funding for farmland preservation and produce growers in the rewrite of the 2002 farm law (PL 171-107)…But with money expected to be tight in the farm bill, lobbyists say the alliance may splinter if one group fares better than the other in a manager’s mark that House Agriculture Chairman Collin C. Peterson, D-Minn., plans to unveil before the Memorial Day recess.”

I. Farm Bill Focus
II. Disaster Aid
III. US / EU- DDA
IV. “Who Owns Biofuels Inc.?”- Des Moines Register Series
V. Food Safety

I. Farm Bill Focus

Congressional Quarterly reported this morning that, “Democratic leaders would like to appoint conferees on the budget by the end of the week, with the aim of adopting a completed budget next week. To date, neither chamber has appointed conferees, even though both chambers adopted their budgets in late March.”

Jerry Hagstrom, in an article published in this morning’s Ag Week, picked up on the importance of the budget issue in the 2007 Farm Bill debate; “[House Agriculture Committee Chairman Collin Peterson, D-Minn.] also said he is continuing to work with the House leadership to try to find offsets that would allow up to $20 billion in additional spending for renewable fuels, conservation and the fruit and vegetable industry. He said he also is talking with Reps. Ron Kind, D-Wis., and Earl Blumenauer, D-Ore., ‘who want more money for their districts’ and Rep. Jeff Flake, R-Ariz., ‘who wants to get rid’ of the farm bill.

“Peterson said he thinks the farm bill deserves the $20 billion reserve fund in the fiscal year 2008 House budget resolution because the 2002 farm bill has cost $60 billion less than projected because of high commodity prices.”

More specifically, Mr. Hagstrom noted that, “Peterson said he is unwilling to take money out of the commodity title that benefits producers of crops such as cotton, wheat, corn and soybeans for other sections of the bill because the spending in the commodity title is 43 percentbelow the CBO projection in 2002, while spending on conservation has risen 9 percent and on nutrition programs, 53 percent. Peterson noted that spending on conservation would have risen more if the appropriators had not limited spending on the wetlands reserve program.

“‘There is no money in the commodity title to shift to some other place,’ Peterson said.

“But he added that it’s hard for Farm Belt legislators to explain why they are sending farmers direct payment checks when prices are high and crops are good.”

The editorial board at The New York Times today also offered some insight into the budget process by highlighting subtle differences in the “pay-go” budgetary rules that have been implemented by the House and Senate.

“‘Pay-go,’ which was abandoned in 2002, is vital to restoring budget discipline. It would require Congress to pay for new spending on entitlements, like Medicare, either by raising taxes or cutting other entitlements. It would also require legislators to make up forgonerevenue from new tax cuts by raising other taxes or cutting spending,” the Times noted.

“There are differences, however, in the chambers’ approaches to pay-go. The House’s approach is better because it has no tricky escape hatches. In contrast, the Senate’s version of the budget contains an amendment that would make it all too easy to sidestep the rule. For example, 60 senators would be able to pass a bill today to extend Bush-era tax cuts set to expire in 2010, claiming that the resulting revenue losses would be ‘paid for’ by a budget surplus projected for 2012.”

And on the issue of direct payments, the April 27 edition of The Kiplinger Agriculture Letter reported (page one) that, “Here’s a peek at the drafts coming from [Senate Ag Committee Chairman Tom Harkin (D-Iowa)] and Peterson: Direct crop payments to farmers will be slashed. The aid is paid on each crop’s historical acreage and costs USDA about $5 billion a year.”

The Kiplinger Ag Letter also noted that, “Countercyclical crop supports are to be retooled. Higher payments will give farmers more help when both crop yields and prices are poor…Long-term disaster relief is a sure bet, replacing ad hoc plans, which have averaged $1.8 billion a year in recent years. The new program will complement crop insurance. But farmers will have to sign up for it and pay a premium. That’ll hold costs down to perhaps $1 billion or so while giving farmers another way to limit losses to weather and disease.”

The tight budget situation and eventual spending allocations also hold the potential to splinter some political alliances in the 2007 Farm Bill debate.

Congressional Quarterly’s Catharine Richert reported on Friday that, “The fragile lobbying alliance between conservation groups and fruit and vegetable growers will be put to the test next month, when lawmakers release their draft of the 2007 farm bill.

“Last September, specialty-crop growers and land-preservation groups rallied behind a $5 billion, bipartisan initiative called the EAT Healthy America Act. The plan, reintroduced in the House this year (HR 1600) by Democrat Dennis Cardoza of California, would boost funding for farmland preservation and produce growers in the rewrite of the 2002 farm law (PL 171-107).

“But with money expected to be tight in the farm bill, lobbyists say the alliance may splinter if one group fares better than the other in a manager’s mark that House Agriculture Chairman Collin C. Peterson, D-Minn., plans to unveil before the Memorial Day recess.”

Ms. Richert also noted in her CQ article that, “Cardoza, who chairs the Agriculture subcommittee with jurisdiction over fruit and vegetable growers, acknowledged concerns about the delicate coalition.

“‘I’ve told the conservation and specialty-crop groups, ‘Don’t start fighting,’’ he said. ‘If people get greedy, they will destroy the entire bill.’

“Still, Cardoza said, no farm bill that shortchanges conservation and specialty crops can win the votes of enough California, Florida and Texas lawmakers to pass.

“‘If we want a farm bill this year, we’re going to have to fund specialty crops,’ he said.”

With respect to specialty crops, DTN’s “Washington Insider” column stated on Friday (link requires subscription) that, “[W]hen powerful officials make their thoughts known, they often attract attention — as was the case when Sen. Tom Harkin, D-Iowa, told members of Senate Agriculture Committee this week that more federal resources should go to specialty crop groups. Harkin said he wants the new farm bill to include initiatives to encourage fruit and vegetable consumption and help producers make a profit and succeed against foreign competition.”

The DTN item indicated that, “Lawmakers did not commit to including specialty crops under the federal subsidy programs, but most members acknowledged a need to provide more support for that growing industry.

“Actually, much of the Senate committee’s discussion about specialty crops appeared to be already behind the curve. Proposals from most groups, including the administration, the American Farm Bureau Federation, and others, would end the current constraint on specialty crop plantings on commodity program base acreage. And, they would provide a number of research, conservation and market development programs to specialty crop producers in return.

“Still, supporters of ‘mostly conventional’ commodity programs such as the Farm Bureau likely are looking over their shoulders as the new coalitions of environmentalists, food program advocates and specialty crop producers take shape in the early rounds of the debate.”

In other Farm Bill news developments, the editorial board at the Los Angeles Times opined today that, “American consumers pay about twice the world market price for sugar, thanks to a complicated system of price supports and import quotas. It isn’t just sugar prices that areaffected — any food or beverage maker that uses a sweetener faces higher manufacturing costs, which they pass on to their customers. That’s why such a vast collection of corporate interests is lining up against the government subsidies.

“Congress is negotiating the 2007 farm bill, which will set U.S. agricultural support levels for the next five years. So far, the bill is not shaping up to be much of an improvement over the 2002 version, a $20-billion-a-year extravaganza of agribusiness welfare. Despite the heavy damage that sugar policy has inflicted on consumers and the environment, the odds of reform this year are slim. That’s because, for the anti-sugar lobby, this is just one concern of many; for sugar growers, it’s a life-and-death battle. Sugar is grown in 19 states, and growers contribute heavily to congressional campaigns.”

The LA Times indicated that, “But even if Congress can’t find the courage to beat sugar growers, it might be able to buy them out. Not long ago, peanuts and tobacco enjoyed similar protections — the government artificially inflated their prices by restricting imports and setting quotas on how much domestic producers could grow. But in 2002, the government bought back production quotas from peanut farmers, then made a similar deal with tobacco growers in 2004. In essence, these farmers gave up all market protections in exchange for set payments overa finite number of years.”

For more on the broader “buy-out” concept, see this report from the Cato Institute, “Freeing the Farm: A Farm Bill for All Americans,” which was released on April 16. To view an interesting presentation and discussion regarding this paper which featured David Orden, International Food Policy Research Institute; Clayton Yeutter, Former Secretary of Agriculture and United States Trade Representative; and Sallie James, Trade Policy Analyst, Cato Institute from last Thursday, just click here.

To listen to an explanation of the buy-out principle, see this FarmPolicy interview with David Orden from last month.

II. Disaster Aid

The editorial board at The Forum (North Dakota) noted on Friday that, “The votes in the U.S. House and Senate – mostly along party lines – to compel President Bush to begin withdrawing troops from Iraq will be vetoed. Since there are not enough votes in either chamber to override, the legislation, which contains $124 billion to fund the war, will go nowhere. The president’s policy will remain in effect.

“But despite the quixotic nature of the legislation, there was another problem with the measure: It was festooned with all sorts of non-war-related goodies, including a $3.5 billion farm disaster relief package. While that might be business as usual in Washington, it’s the kind of stunt that erodes Congress’ credibility.

“The ag provision had the enthusiastic support of Rep. Earl Pomeroy, D-N.D., and House Agriculture Committee Chairman Collin Peterson, D-Minn. They should have pulled it out of the Iraq bill for two reasons.

“First, there was no chance the Iraq pullout legislation would be successful. Second, if the farm disaster provision has merit, it should stand on its own.”

Concluding, the editorial stated that, “Don’t misunderstand. The disaster money is needed, and has been needed for some time. Pomeroy and Peterson take second place to no one in Congress when it comes to supporting farmers and agri-business. But attaching a farm disaster provision to legislation they know has no chance of becoming law makes no sense. It seems to be little more than a political move designed to remind their constituents they are advocating for agriculture.”

III. US / EU- DDA

John D. McKinnon and Marcus Walker reported in Saturday’s Wall Street Journal that, “With British Prime Minister Tony Blair set to leave office this summer, President Bush has found a new international ally in German Chancellor Angela Merkel. But while the two leading conservatives are cooperating on security issues such as Iran’s nuclear program, they have yet to achieve big breakthroughs on tough economic and environmental issues.

“Their wary courtship continues Monday as the German chancellor, who also currently holds the European Union’s rotating presidency, visits Washington for a one-day U.S.-EU summit.

“While Ms. Merkel and other EU leaders had hoped to announce U.S. movement on addressing climate change at the summit, the prospects for a meaningful deal have all but vanished, EU officials say. Progress on a global trade deal through the Doha round of talks also has been slow.”

The Journal added that, “So, instead of big breakthroughs, Ms. Merkel is likely to be left with a few consolation prizes. The main deal is expected to be an agreement to promote closer economic integration between Washington and Brussels by eventually harmonizing standards in areas such as biodiesel fuel, accounting and intellectual-property rules. That is expected to include the establishment of a trans-Atlantic economic council, which will look at existing regulatory differences in such areas as autos and medical devices, and at ways to improve coordination of future regulations.”

Reuters writer Noah Barkin reported this morning that, “Separately on Monday, the EU and United States will express a desire for prompt agreement on the Doha round of world trade talks, according to the draft” [a draft of a joint statement between the U.S. and EU which was viewed by Reuters news].

IV. “Who Owns Biofuels Inc.?”- Des Moines Register Series

The Des Moines Register began a series yesterday that will focus on investments in biofuels production in Iowa.

Specifically, a reporter’s note on the series from Jerry Perkins indicated that, “Some argue the state will not fully benefit from the boom without attracting more outside investment. Others say rural communities will benefit more if Iowans invest — and hold on to — more of a stake in the growing industry.

“How people, companies and the government invest in biofuels will determine whether the state realizes its full potential to become an energy producer.

“In this continuing series of stories in The Des Moines Sunday Register, we look at those issues and try to weigh the pros and cons.”

Here are excerpts from some of the stories that were published in yesterday’s paper,

* “Biofuel industry branches out, outside investors flow in,” by Paula Lavigne (4.29) – “Iowa may be the nation’s renewable fuels leader, but Iowans won’t see most of the profits from the state’s biofuel plants….Out-of-state investors already own a majority of projected ethanol and biodiesel production in Iowa and they’re likely to acquire more….Though farmers triggered much of the state’s ethanol boom, plants primarily controlled by out-of-state or foreign investors account for at least 57 percent of Iowa’s renewable fuels, an analysis by The Des Moines Sunday Register show.”

* “Does the industry still need financial assistance?” by Paula Lavigne (4.29)- “More than 47 percent of the economic development incentives awarded by Iowa have gone to companies that are primarily owned by non-Iowans. About 44 percent has gone to companies in which at least a majority is owned by Iowans. The remaining money was distributed to Broin Companies, now known as Poet. That company has refused to identify who owns the plants they built and operate.”

* “Biofuel fuels change in Iowa Falls.” by Jerry Perkins (4.29)- “Biofuel producers, livestock feeders and crop producers have generated change that could repeat in other cities across Iowa with new plants. There’s more jobs, increased traffic, higher tax revenues, farmland values and corn prices, and more sales on Main Street.”

* “Biofuels Money 101: Mixing public, private.” Q & A (4.29)- “Q. What’s the right balance between local and outside ownership?

A. Experts disagree. Some say the industry shows better promise of expanding with a mix of investors. But research at Iowa State University also shows rural economies benefit more when an ethanol plant is owned by local investors, because those investors reinvest their earnings locally.”

V. Food Safety

David Barboza and Alexei Barrionuevo reported in today’s New York Times that, “As American food safety regulators head to China to investigate how a chemical made from coal found its way into pet food that killed dogs and cats in the United States, workers in this heavily polluted northern city openly admit that the substance is routinely added to animal feed as a fake protein.

“For years, producers of animal feed all over China have secretly supplemented their feed with the substance, called melamine, a cheap additive that looks like protein in tests, even though it does not provide any nutritional benefits, according to melamine scrap traders and agricultural workers here.

“‘Many companies buy melamine scrap to make animal feed, such as fish feed,’ said Ji Denghui, general manager of the Fujian Sanming Dinghui Chemical Company, which sells melamine. ‘I don’t know if there’s a regulation on it. Probably not. No law or regulation says ‘don’t do it,’ so everyone’s doing it. The laws in China are like that, aren’t they? If there’s no accident, there won’t be any regulation.’”

The Times added that, “The link to China has set off concerns among critics of the Food and Drug Administration that ingredients in pet food as well as human food, which are increasingly coming from abroad, are not being adequately screened.”

-Keith Good

The recent ethanol phenomenon has had a variety of impacts on the U.S. agricultural economy and farm policy. In particular, higher market prices for program crops such as corn have significantly altered the federal budget baseline as lawmakers begin early work on drafting the 2007 Farm Bill.

In addition to budgetary issues, relatively higher market prices for some key commodities have caused stakeholders to focus and speculate about food inflation, renewable and alternative fuel mandates, cellusioc ethanol production, conservation policy and rural development.

An important short-term part of this overall debate is the potential size of this year’s corn crop, which will be a substantial factor in establishing an equilibrium market price for corn and other program crops in the coming months.

Recent news reports have provided some additional details and insights into the potential size of this year’s corn crop.

Jerry Perkins, writing in yesterday’s Des Moines Register, reported that, “Farmer Mark Nissen hasn’t planted any corn yet on his farm near Audubon because of wet weather, but he isn’t worried. Not yet.

“‘I’ve been looking at our trees and they aren’t leafing out yet. We’ve got a late spring coming this year,’ said Nissen, who busied himself Thursday painting inside the house.

“Nissen plans on planting 150 acres of conventional corn and 60 acres of organic corn this spring, but he thinks it will be a week before he gets in the field.”

Mr. Perkins went on to add some context to the importance of this year’s corn crop, “Sky-high demand for corn to make ethanol has sent corn prices to their highest levels in more than a decade.

“Seeking to cash in on those higher prices, U.S. farmers said they intended to increase their planting of corn this year to 90.5 million acres, the most since 1944 and 12.1 million acres more than a year ago, according to the U.S. Department of Agriculture’s planting intentions report issued last month.

“Iowa farmers said they intended to increase their corn acres by 1.3 million acres this year, up from 12.6 million acres a year ago.

“A big crop is important to keep prices low for ethanol makers, livestock producers and grocery shoppers.”

With respect to current planting progress, Mr. Perkins added these details in yesterday’s Register article, “Just 8 percent of the acres that Iowa farmers intend to plant to corn had been planted as of Sunday, according tothe Iowa Crops and Weather report issued Monday.

“‘That means 92 percent of the corn remains to be planted because we haven’t turned a wheel since then,’ said Roger Elmore, Iowa State University Extension corn specialist.

“Elmore said it will be five to seven days before the sodden fields in the state are dry enough to plant.”

Meanwhile, the local public radio station here in Champaign, Illinois, WILL-AM 580, aired a program today entitled, “Commodity Week,” which also focused in part on the 2007 corn crop.

During today’s program, host Todd Gleason of the University of Illinois Cooperative Extension Service and program panelists Pete Manhart of Bates Commodities and Dale Durchholtz, AgriVisor Services interviewed University of Illinois Agricultural Economist Darrel Good.

In part, their interview centered on trend yields and weather, as well as early planting and planting delay issues.

To listen to this part of today’s WILL radio program, just click here (MP3- five minutes).

-Keith Good

Steven R. Weisman reported in today’s New York Times that, “A trip on Air Force One and a talk between President Bush and Representative Charles B. Rangel as they traveled to Mr. Rangel’s home district in Harlem this week has suddenly lifted prospects for bipartisan agreement on trade legislation in Congress, officials on both sides said Thursday…The officials said that negotiations had resumed between teams led by Susan C. Schwab, the United States trade representative, and Mr. Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, and that a deal was in sight, clearing the way for approval of the trade legislation.”

I. Farm Bill Hearings
II. War Supplemental – Disaster Aid
III. Doha
IV. Food Safety

I. Farm Bill Hearings

Yesterday, the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a hearing to review proposals to amend the program crop provisions of the 2002 Farm Bill.

A news release issued yesterday by the House Ag Committee stated that, “‘Today, we heard in detail from agricultural processors and major farm groups about what kind of commodity title provisions they would like to see in the next Farm Bill and what their members think about the current farm safety net structure,’ said Representative David Scott of Georgia, who chaired the hearing in placeof Representative Bob Etheridge. ‘Given the tight budget baseline we are facing for farm programs, their testimony and insight will be helpful to us as we write a Farm Bill that works for all sectors of American agriculture.’

“‘Much of what we do in Congress directly impacts the actual commodity producer, but it also has a profound affect on the agricultural processing industry,’ said Subcommittee Ranking Member Jerry Moran of Kansas. ‘We must be cognizant that as we develop a farm safety net for the next five years, we do not implement policy that curtails growth and investment in the agricultural processing industry because this is where many farmers and ranchers turn to market their crops.’

“The Subcommittee heard testimony from two panels of witnesses representing commodity users and processors, as well as the heads of two major farm organizations, the American Farm Bureau Federation and the National Farmers Union.”

A complete list of witnesses and their opening statements can be viewed by clicking here.

Yesterday, FarmPolicy.com highlighted the Senate Ag Committee’s commodity title hearing that took place on Wednesday.

In an update posted at one of the Cato Institute’s blogs earlier this week, Sallie James, a trade policy analyst at the Cato Institute, noted that, “The Senate Agriculture Committee continues their hearings today with a focus on Title I — that’s the part of the farm bill that deals with farm subsidies. In the list of witnesses (available here), you will see significant representation from the main commodity groups (corn, soybeans, wheat, rice and a few others) and farmer groups (American Farm Bureau Federation, National Farmers Union). From what I can see, only two witnesses (out of the list of sixteen due to appear) could be expected to give a different take on farm programs: the North American Millers Association, as a user of commodities, might speak up about the damage commodity programs do to markets, and Bread for the World are rightly concerned about the effect of American farm subsidies on poor people around the world.”

With respect to testimony from Bread for the World, Rev. David Beckmann indicated in his opening statement at the Senate hearing on Wednesday that, “This year, Bread for the World members are asking Congress to modify the farm bill in ways that would provide more help and opportunity to poor and hungry people. A large and growingshare of the religious community is working with us. Many people in this room have worked and lived U.S. farm policy for many years. I’m a preacher – and I am grateful for your attention to the perspective I bring to your work. I only hope that the churches where I preach don’t pick up on this system of green and red lights. Bread for the World has worked for many years on the nutrition and food aid titles of the farm bill. They are obviously important to hungry people. For this farm bill, too, Bread for the World urges an expanded nutrition title and an expanded and reformed food aid title. But after the 2002 farm bill went into effect, we started hearing from church leaders in Africa that it was causing problems for many poor and hungry families in their countries. We spent the next four years studying the farm bill, and we came to the conclusion that the current farm bill is not working very well for farm and rural families of modest means in our country either. We think it is possible for you to modify the farm bill in ways that would be better for rural America, better for hungry people throughout our country, and better for hungry and poor people in the developing world.”

And DTN’s Chris Clayton picked up on the theme of different voices in the Farm Bill debate in an update from yesterday, where he noted that, “It’s a little hard to go against a group announcing that its farm-bill proposal is ‘inspired by Jesus.’ More than a dozen major U.S. churches and faith-based organizations have come together as the Religious Working Group on the Farm Bill to urge major changes in agricultural policy aimed at reducing hunger and poverty, and promoting the livelihood of farmers and rural communities in the U.S. and around the world.

“The group, which includes Christian denominations, major faith-based organizations and the National Council of Churches USA, has developed a statement of legislative principles for farm-bill reform. Members of the group currently are in the process of visiting congressional offices and sharing those principles.

“The religious groups want broad reform of U.S. food and farm policy, including adjustments to the commodity payment programs, which they see as important to progress against hunger and poverty in this country and around the world. The current system should be changed in ways that would strengthen communities in rural America, ensure all Americans an adequate, nutritious diet, provide better and more targeted support for U.S. farm families of modest means, and conserve the land for present and future generations. In addition, such changes are necessary to unlock the ability of small-holder farmers in developing countries, who comprise the majority of the world’s hungry people, to improve their livelihoods and escape poverty.”

Meanwhile, Dan Looker, writing yesterday at AgricultureOnline, reported on Farm Bill perspectives offered recently by House Ag Committee Chairman Collin Peterson (D-MN).

Mr. Looker noted that, “If there was any doubt before today, it’s becoming clearer that the next farm bill is unlikely to have more money for commodity programs. Several commodity groups have asked Congress for changes in the 2002 farm bill safety net that would all cost a little above or below $1 billion in extra funds each year.

“On Thursday, House Agriculture Committee chairman Collin Peterson said bluntly that it’s not going to happen. ‘I’ve told them no,’ Peterson said, referring to his response to meetings he’s had with commodity group lobbyists recently.”

The article pointed out that, “The Congressional Budget Office baseline would allow 43% less spending on commodity programs for the 2007 farm bill than was available in 2002, he said.

“‘There really is, in my judgment, there is no money in the commodity title to shift to some other programs,’ Peterson told reporters.

“He also said that the projections for less moneyneeded for commodities could turn out to be wrong if current high crop prices don’t continue. That’s another reason he’s reluctant to shift funds out of the commodity title of the next farm bill. Congress cut spending on commodity programs in the 1996 farm bill, then had to pass annual emergency spending bills when crop prices fell.”

The AgricultureOnline article continued: “That doesn’t mean Peterson won’t work to change the commodity title. He said he’s interested in using funds from direct payments to help pay for a new permanent disaster program in the farm bill. And he said that his staff is also looking at an American Farm Bureau Federation proposal for a revenue protection program [pages 18-25].

“Senate Agriculture Committee chairman Tom Harkin suggested that he may be interested in using funds from the direct payment program for other programs, including rural development and green payments that reward farmers for how they grow crops, not what they grow.

“Harkin made the point that direct payments are getting harder to defend when his committee held a hearing on commodity programs Wednesday.”

II. War Supplemental – Disaster Aid

Congressional Quarterly reported yesterday that, “The tussle between congressional Democrats and President Bush over the direction of the Iraq war intensified today as the Senate voted 51-46 to clear a war spending measure that seeks to withdraw most U.S. troops from Iraq by the end of March 2008.

“The $124.2 billion conference report (HR 1591, H Rept 110-107 ), which would fund the war and assorted other priorities, such as hurricane recovery, agriculture disaster relief and a children’s health insurance program, was adopted Wednesday by the House.

“Bush opposes the bill a for variety of reasons — mostly for the timetable for Iraq troop withdrawal, but also because billions of dollars in spending was added beyond his initial request. He has repeatedly vowed to veto the measure.”

On Wednesday, the Republican Caucus of the House Budget Committee released a paper, which stated that, “The supplemental spending bill for operations in Iraq and Afghanistan adds $21.1 billion in spending not requested by the President, not needed for U.S. troops overseas, and not required for other urgent demands. The added spending has been designated as an ‘emergency’ to exempt it from budget limits – thought hardly any of the additions qualify under the emergency definition in the current budget resolution. The measure – the conference report on H.R. 1591 – violates House budget rules governing emergency spending, and breaches the limit on overall appropriations for the current year.”

On page three, the document stated that, “The conference report adds $3.5 billion in agriculture disaster assistance for crop years 2005, 2006, and part of 2007. These crops already receive Federal production subsidies through the 2002 farm bill. In addition, disaster assistance for the losses is subsidized through Federal crop insurance and related programs. Because this spending is mandatory, eligible producers have already received disaster assistance for these losses. This funding requirement is neither sudden nor unforeseen, and therefore does not qualify as true emergency spending under criteria established in the budget resolution currently in force.”

In an item from today, Congressional Quarterly noted that, “In addition to $2.4 billion over 10 years that would result from a one-month extension of the MILC program (thereby restoring it to the farm bill budget baseline), the bill includes $1.4 billion in livestock aid and $1.85 billion in crop disaster aid.”

However, Peter Shinn reported on Wednesday at Brownfield that, “An emergency war spending bill with nearly $4 billion in droughtaid is expected to land on President Bush’s desk by early next week, and he’s expected to veto it. The main issue is that Congress wants to include a timeline for withdrawing U.S. troops from Iraq. But including drought aid and other domestic spending in the measure has also raised the President’s ire. U.S. Ag Secretary Mike Johanns last week told Brownfield President Bush ‘wants a clean bill.’

“But Nebraska Senator Ben Nelson (D) told Brownfield Wednesday that President Bush will likely have to accept drought aid as the price of getting an emergency war spending bill without targets for U.S. troop redeployment. Nelson, who left Wednesday on a Congressional fact-finding mission to Kuwait and Iraq, as a member of the Senate Appropriations Committee, is part of the House-Senate Conference Committee on the emergency war supplemental.

“‘Well, look - I can consider a clean bill one that considers other disasters,’ Nelson said. ‘As long as the White House is going to continue to have emergency spending bills, they’re going to have to put up with the Congress having other emergencies as well.’”

III. Doha

Reuters writer Doug Palmer reported on Wednesday that, “Key U.S. lawmakers appear willing to do their part to keep world trade talks alive if negotiators can achieve a long-awaited breakthrough soon, the head of the World Trade Organization said on Wednesday.

“‘I delivered to them a message which is roughly the following one: We’re nearing crunch time in the Doha round’ after more than five years of talks, WTO Director General Pascal Lamy said near the end of three days of meetings with business groups, lawmakers and Bush administration officials.

“At this critical stage in the negotiations, some countries are waiting for a signal from the United States that it will remain engaged in the talks, Lamy said.

“They have doubts because the White House’s trade promotion authority (TPA) expires at the end of June, he said.

“They ‘interpret the expiry of TPA as a possibility for the U.S. to sort of move from riding gear to parking gear’ in the Doha negotiations, Lamy said.”

In a related item, Steven R. Weisman reported in today’s New York Times that, “A trip on Air Force One and a talk between President Bush and Representative Charles B. Rangel as they traveled to Mr. Rangel’s home district in Harlem this week has suddenly lifted prospects for bipartisan agreement on trade legislation in Congress, officials on both sides said Thursday.

“The officials said that negotiations had resumed between teams led by Susan C. Schwab, the United States trade representative, and Mr. Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, and that a deal was in sight, clearing the way for approval of the trade legislation.

“‘They are talking, they are making progress, and they are hopeful of wrapping this up,’ a Rangel aide said. But he said the talks could spill into next week.”

Ian Swanson reported yesterday at The Hill webpage that, “U.S. trade officials are coming under pressure from the U.S. financial services industry and agriculture groups dueling for influence over the multinational trade talks that the administration hopes to close by the end of the year.

“‘For too long we’ve played second fiddle to agriculture,’ said Ekrem Sarper, director of financial services for the Coalition of Service Industries. ‘We’re trying to show we’re a sector that matters and that needs attention paid to it.’

“The complaint from financial services, and to an extent from some manufacturing groups, is that the stalemated farm talks put at risk a negotiation that could provide huge benefits to U.S. banks, insurance companies and securities firms, as well as U.S. exporters of goods.”

Interestingly, Reuters news reported yesterday that, “A group of developing world charities, unions and nonprofit groups urged U.S. Democratic lawmakers on Thursday to withdraw their support for world trade talks, which they say could deepen global poverty.

“Congressional action on trade ‘must include rejection of the current attempts to expand the failed World Trade Organization through the Doha round,’ a coalition of more than 200 groups said in a letter to Congress’ Democratic majority.

“The letter, sent earlier this week to Democrats in both houses, was signed by more than 200 groups ranging from the Africa Trade Network to ActionAid International, a South Africa-based aid and advocacy organization, to smaller national or local groups in countries like Peru, Angola and Sri Lanka.”

The Reuters article added that, “It is also unclear how much support Democrats will give the round and whether they’ll renew the Bush administration’s trade negotiating powers, which expire this summer. Those powers, called fast track, are seen as crucial for a world trade deal.”

IV. Food Safety

Rick Weiss reported in today’s Washington Post that, “Federal and stateauthorities have identified 6,000 hogs in seven states that may have consumed contaminated pet food or pet food byproducts, the Food and Drug Administration said yesterday.

“A maximum of about 300 of the animals may have already entered the human food supply, but the rest of the hogs have been quarantined and are slated to be euthanized, Agriculture Department officials said.

“Officials said they are also looking into the possibility that some chickens may have eaten chow contaminated by the pet food, which they believe was tainted with chemicals imported from China.

“The disclosures are the latest in a string of recent surprises that have brought home to many Americans how complex and interconnected are the supply chains linking imported pet food ingredients, farm animal chow and food for human consumption.”

To view a USDA news release from yesterday regarding this issue, just click here. To view a transcript of a tele-conference with USDA and FDA officials on this development, just click here.

-Keith Good