One U.S. packer trying to circumvent the Japanese ban on U.S. beef may have succeeded. Since 2004, Creekstone Farms, has been battling the USDA over the company's desire to test all of its cattle for mad cow disease. Late last week, a federal district court ruled it was unlawful for USDA to restrict the packer from conducting the tests.
The decision paves the way for Creekstone to honor requests by its Japanese customers to test every animal processed in its Kansas plant for mad cow disease. USDA officials have until June 1st to decide if they will appeal.
The case is demonstrative of the government's influence on the way business is conducted in farm country. Nevertheless, rural policy often is coupled with disparate issues in hopes of winning pet projects on Capitol Hill.
A case in point occurred last week, when funding for the war in Iraq was paired with government farm programs. As Andrew Batt explains, the legislation became a lightning rod for criticism.
On its surface, the Iraq war and U.S. agriculture may have nothing in common. How can a war in the Middle East affect corn farmers in Iowa or cattle ranchers in Montana? The easy answer is money.
President George W. Bush: "Here's the bottom line: The House and Senate bills have too much pork, too many conditions on our commanders, and an artificial timetable for withdrawal."
Political pork, a term most often used to label excessive spending on "pet projects" was rampant in two Iraq spending bills on Capitol Hill. Speaking before the National Cattlemen's Beef Association last week, President Bush immediately denounced the proposed legislation…
President Bush: "…the House bill would add billions of dollars in domestic spending that is completely unrelated to the war. For example, the bill includes $74 million for peanut storage, $25 million for spinach growers. These may be emergencies, they may be problems, but they can be addressed in the normal course of business. They don't need to be added on to a bill that's supporting our troops."
While Bush pledges to veto the legislation, the bills point out a growing problem for commodity groups in the coming months. While some attempt to ride war spending into support for commodity funding, an ever-increasing group of farm interests are reaching for a bigger piece of the 2007 farm bill.
Substantial appropriations earmarked for agriculture have become a consistent sighting on Capitol Hill. But when Democrats re-claimed control of the U.S. House and Senate last November, they pledged to curb spending and installed strict pay-as-you-go rules.
In recent weeks, both houses passed budget resolutions calling for increases in agriculture spending. Senator Kent Conrad, a North Dakota Democrat, has proposed $15 billion in strictly Ag-related funding.
Mary Kay Thatcher, AFBF Policy Expert: "The biggest news is in essence we've finished the Senate and House budget resolutions and we know that Congress gave agriculture about $3 or $4 billion in additional spending a year. But that's really pretty miniscule and we figure it has to be split between nutrition and conservation and commodity programs. And to make our life even worse it has to be offset somewhere else in the budget."
While the American Farm Bureau claims an additional $3 or $4 billion in funding is insufficient, a wide array of proposals from lawmakers and USDA claim to have an answer for farm programs.
A proposal from so-called urban and suburban lawmakers hopes to tap into more under-represented commodities. The Healthy Farms, Foods and Fuels Act of 2007, sponsored by Wisconsin Rep. Ron Kind, already has more than 80 co-sponsors.
The bill looks to pump funds away from traditional commodities and into conservation, fuels, and fruit and vegetable growers that according to Kind have been neglected in previous farm bills.
But few proposals in Washington are without their detractors…the American Farm Bureau has blasted the plan, calling it "scary," "devastating," and "crippling" for traditional commodities like corn, soybeans, and cotton.
Aspects of Kind's plan are similar to proposals by Republicans like Sen. Charles Grassley and the Bush Administration that seek to limit the government's funding of "multi-million dollar" farm operations.
Sen. Charles Grassley: "This is an opportunity to show to the people of this country that we're not going to subsidize the biggest farmers getting bigger. Wasting taxpayer money and keeping young people out of the farming profession."
During budget debate in March, Grassley re-introduced his proposal to cap individual farm payments at $250,000. A farmer himself, Grassley estimates the payment cap could generate nearly $500 million in savings over five years that could then be spread to other farm-related interests. But the Iowa Republican pulled his amendment for the second time in two years to appease Southern lawmakers, who favor higher farm payments. Grassley vows to raise the issue of payment limits again this fall.
"Sec. Mike Johanns, USDA: "…if you have an Adjusted Gross Income of $200,000 or more, your participation in the commodity programs under Title I of the Farm Bill would cease. That is, in the top 2.3 percent of Americans if you look at the statistics of the Internal Revenue Service."
This past January, the Bush Administration unveiled its blueprint to slash farm subsidies to the country's richest recipients. The proposal received cautious optimism by proponents of farm bill reform. But support for the plan and the Administration's projected budget is eroding among key framers of the 2007 farm bill.
Denouncing the Iraq war, Senate Agriculture Chairman Tom Harkin claims the conflict will cost U.S. taxpayers $100 billion in the next year. The Iowa Democrat says the war has siphoned money away from rural America and could potentially "hamper Congress' effort in creating a strong, forward-looking farm bill." The Bush Administration disagrees…
President Bush: "I'm interested in a farm bill that enhances conservation, that recognizes the contribution our ranchers make, that is fair, that is reform oriented, and will help us compete in the global marketplace."
The President vows to veto the Iraq War Spending Bill immediately, much to the disappointment of spinach growers and peanut farmers.
As the Iraq War drags into its 5th year, those hoping for subsidies in rural America face their own battles at home…fighting for a piece of the 2007 farm bill.
For Market to Market, I'm Andrew Batt.