As the jockeying for federal dollars continues, it’s apparent that farm state senators are not going to be left out. Any emergency supplemental spending bill to aid victims of Hurricane Katrina will include a “comprehensive” agriculture disaster package, said Senator Saxby Chambliss (R-GA), chair of the Senate Agriculture Committee. Chambliss said the package would cover everything from sugar cane in Louisiana to southern dairies and drought in the Midwest, to tornado damage to Georgia poultry producers and fruits and vegetables in Florida. Senators Dick Durbin (D-IL) and James Talent (R-MO) sent a letter to President George W. Bush asking the White House to make sure farmers get their share of disaster funding, following up that letter with a bipartisan bill to assure just that. Senator Tom Harkin (D-IA) also introduced legislation to help farmers get their share of any disaster monies being allocated.
Representative Marion Berry (D-AR) introduced the “Agriculture Assistance Act of 2005,” a “significant disaster relief package” aimed at not only providing assistance to producers affected by Hurricane Katrina, but also severe drought and other natural disasters. Berry said the aid is needed because farmers have been hit with drought, skyrocketing fuel prices, low crop prices, and “the worst hurricane to ever hit the U.S.” Under Berry’s plan, farmers would receive additional relief if they live in counties declared disaster areas by the U.S. Department of Agriculture (USDA) or the White House. Eligible farmers would receive a choice of either an additional half payment above the amount they received in 2005 under the current Farm Bill, or payment based on yield losses. Supplemental payments will be made on covered commodities, livestock assistance, fruits and vegetables, cottonseed, and additional hurricane assistance.
All of this disaster funding is making the routine approval of the fiscal year (FY) 2006 ag appropriations bill more difficult – still no schedule on whether the Senate will take it up separately or as part of a package – but also it has complicated the mandated need for several committees to find ways to pare back or “reconcile” FY 2005 spending to meet this fiscal year’s budget ceiling approved by Congress. At this writing, it looks as if that reconciliation process will be formally delayed by as long as three weeks.
Ag committee chair Chambliss is still trying to figure out how to approach his committee’s need to trim about $2.3 billion out of current ag spending as directed by budget rules. He stopped short of canceling his committee’s scheduled markup. He said there are three ways he can achieve the mandatory cuts: trim farm subsidies, cut conservation programs, or reduce nutrition spending. He also predicted all the Katrina action will delay Senate consideration of the ag appropriations bill.
In a related and more creative approach to ag and rural community relief, Senator Conrad Burns (R-MT) sent a letter to Matthew Rose, president of the Burlington Northern Santa Fe (BNSF) Railroad in which he not only challenged the rail giant to suspend diesel fuel surcharges for the immediate future, the Montana senator invited the rail exec to Washington, DC, to discuss the railroad’s responses to Hurricane Katrina. Burns said BNSF and the rail industry could contribute “tremendously” to the national recovery from Katrina. Burns cited fuel surcharges for ag shipments of 11.5 percent in September and 13 percent in October, and for coal shipments of 14.5 percent in September and 16 percent in October.
Burns was not the only Senator holding corporate feet to the fire. Senator Byron Dorgan (D-ND) was first out of the box with a bill to set up a national consumer rebate program funded by the “windfall profits” of major oil companies. He was followed by several other Senate and House members with much the same idea as gas and diesel prices continue to soar around the country.
“Major oil companies have seen the price of a barrel of oil climb…to more than $70 in less than 18 months resulting in billions of dollars in windfall profits, without any significant increase in expenses,” Dorgan said. His program would give each consumer a tax rebate check and would be funded through a three-year, 50 percent excise tax on oil company windfall profits, defined as the portion of the price of a barrel of oil exceeding $40. The windfall profit calculation would be reduced dollar-for-dollar by investment in new domestic oil exploration, increased or new refinery capacity, or renewable energy sources.
In related developments, several other House and Senate members have introduced various legislation designed to ease the economic impact of skyrocketing energy costs. One approach contemplated by several bills would suspend the federal gasoline tax of 18.3 cents per gallon for 30 days; another approach would freeze fuel prices.
Expect to see hearings on gasoline pricing, oil supplies, excessive profits, etc., in the weeks ahead. This could make for some good television.
BSE Rulemaking not Resolved
Inside word as of this writing is that the Food and Drug Administration (FDA) has not yet sent the Office of anagement and Budget (OMB) its draft of proposed changes to the feed rule as the agency continues to struggle with several political hot potatoes. One of the most significant areas of contention is the possibility – not official, but generally believed by observers in Washington, DC – that an early version of the proposal would have banned dead and non-ambulatory (downer) animals from rendering and feed regardless of their age unless the brains and spinal cords were removed. This would be similar to the Canadian proposal.
The National Renderers Association (NRA) moved quickly to assemble a team of top industry experts, arranging meetings with high-ranking officials at USDA, Health and Human Services, OMB, and the White House to ensure that the administration understands not just the economic impact of such a dead/downer proposal on renderers, but on downstream companies and related parts of animal agriculture. NRA also pointed out the massive environmental impact of combining an ill-conceived dead/downer policy with a ban on brains and spinal cords from animals over 30 months of age. The association provided copies of its comprehensive economic analysis done by Informa Economics that put hard numbers to this and other scenarios that may be contemplated by the FDA. A copy of the Informa study can be found on the NRA Web site at www.renderers.org.
The American Feed Industry Association (AFIA) also drafted a letter centering on the dead/downer issue. The letter bore signatures from more than half a dozen other concerned groups, including the National Cattlemen’s Beef Association and the American Meat Institute, and was delivered to OMB by AFIA President Joel Newman and Vice President for Feed Control and Nutrition Richard Sellers during a separate OMB meeting arranged by AFIA.
View from Washington - October 2005 Render