Busy Agenda for Senate Ag Committee

October 29, 2009 07:00 PM

The following information is a Web Extra from the pages of Farm Journal. It corresponds with the article "New Senate Ag Committe Chair Has a Packed Agenda” by Roger Bernard. You can find the article on the Policy Journal page in the November 2009 issue.


Now in the role of Senate Ag Committee Chair, Sen. Blanche Lincoln (D-Ark.) has a busy agenda lined up for the panel, including climate-change legislation, farm bill implementation oversight, financial reg reform and more. Farm Journal Policy & Washington Editor Roger Bernard sat down with Sen. Lincoln in the U.S. Capitol building and gathered her views on a host of topics. The Senate's schedule was particularly busy the day of the interview -- with a series of votes scheduled throughout that early October afternoon. But Lincoln insisted on making sure the interview took place, even leaving to vote on the Senate floor and coming back to finish up answering questions on key topics. Following is a slightly edited, near-verbatim transcript of the session:

FJ: Climate change is a big item for agriculture. Now as Chair of the committee, you've signaled you don't back the House bill. Does that apply to just the House approach or the entire concept of climate-change and cap-and-trade?

Lincoln: "Agriculture has a tremendous role to play on climate change. Lowering our carbon output and the ability to sequester and capture carbon is something agriculture has been doing for decades... centuries. I have mentioned I don't support the House bill. I think that agriculture does not get the fair shake that it needs in that bill and I'll work hard to make sure that whatever does happen, agriculture does have a fair say. It cannot withstand a disproportionate share of the burden of the bill without getting a commensurate amount of allowances of support. In the House bill it is disproportionate -- the House bill has chosen winners and losers and I don't think that's our job. I think our job is to set principles and priorities. Lowering our carbon output should be one of those; lowering our dependence on foreign oil should be one of those; and moving ourselves from an old-energy economy to a new-energy economy and creating good green jobs should also be a priority. I think there are ways to get there.

"The Senate Energy Committee did a good job in a bipartisan way that really reinforced all of those things. I think if you were to companion that with a tax-incentive bill from the Senate Finance Committee you could have a really good first step toward meeting all those priorities. So my hope is we'll move forward on those priorities.

"I'm not completely sold that a cap-and-trade mechanism is something that is going to work. I think there's still a lot of questions there, such as how is it going to be designed. Obviously the Ag Committee would have jurisdiction over the regulatory body -- the CFTC (Commodity Futures Trading Commission) -- who would oversee those carbon-credit markets that would exist or would be created. And how those markets would work, and if they would work is still a question in my mind."

FJ: You expressed concern in July about food prices and the impact that climate-change legislation would have on those. Have you gotten any answers on that from USDA, CBO or anybody?

Lincoln: "They haven't given me any answers. I think that's real question that we all have to ask ourselves -- in these economic times, what are the consequences for consumers in terms of increased food prices. If agriculture producers see a real hardship in terms of an increase in input costs without the corresponding allowances, it's not going to be cost-effective."

FJ: Do you have a climate-change hearing schedule in mind?

Lincoln: "We hope to have several more hearings, at least a couple more hearings in the Agriculture Committee focusing on issues like that. What's the positive aspect that agriculture produces from climate change and what are the downfalls -- what are they -- possible increases in input costs and how does it minimize agriculture's competitiveness globally and truly how does it affect consumers in terms of the price of food. American growers -- farmers and ranchers... for every one American mouth they feed, they feed about 20 mouths globally. So it's not just an issue for us, but it's an issue globally."

FJ: Biofuels dovetail into climate change in that some say this potentially lines up a food vs. fuel vs. carbon debate. Do you support current mandates and incentives for biofuels or have they gone too far?

Lincoln: "The critical part of any of this is that we don't pick winners and losers but that we include everybody at the table in a fair way. I think biofuels have real role to play. I think biodiesel can be a great part of a Renewable Fuels Standard, and I think that there are other fuels too, like cellulosic ethanol. Just putting all our eggs into one basket as we've done in the past is not going to get us to where we need to be with renewable fuels. We need to look and think outside the box.

"I know there are already farmers in my state that are entering into contractual agreements to grow different crops than they're used to -- things like rapeseed, things like sunflowers that can be used (for biofuels). There are crushers going in that are going to go for those types of oilseeds that are important. Important not only that they don't put pressure on food sources, but they also have a higher energy conversion. So looking at how we get the biggest bang for the buck, for our crops, will be critical when we look at renewable fuels, too."

FJ: On dairy policy, do you favor going back and looking at the dairy policy safety net in the 2008 Farm Bill as it's clear that hasn't been able to address what is going on?

Lincoln: "I think there have been several steps that have been taken, obviously the outreach from the Secretary of Agriculture in terms of the exports, and certainly the extra dollars in the Ag appropriations bill for the MILC (Milk Income Loss Contract) program that can be helpful in particular to our small dairy farmers, and looking at the government programs that can be escalated a bit. I think these are all good, common ways to try to assist our dairy farmers. They are in dire straits now, there is no doubt, and we've got to be there to help them and work with them.

"I think there are things that are available to us right now that we can do that will really get them back on the right track. In terms of opening up the farm bill again, I think it's important to use the tools that we have at hand -- I think the Secretary has some and we have some. I was very supportive of Sen. (Bernie) Sanders' (I-Vt.) amendment to the appropriations bill and we need to make sure we get those dollars out there in efficient way. We've seen those programs many times for other commodities and other growers. Getting them out there efficiently and in an expeditious way is very critical."

FJ: What other issues do you think your committee is going to need to address now, or is this enough?

Lincoln: "The plate is full, but without a doubt, we've got the child nutrition bill which expired Sept. 30. We've got an extension and we'll be spending a good bit of our time working on getting that reauthorized. I've already spoken to (House Education and Labor Committee) Chairman (George) Miller (D-Calif.)... on moving something forward on that." (NOTE: After this interview was conducted, Lincoln successfully worked for a one-year extension of the child nutrition programs as an add-on to the Fiscal 2010 Ag appropriations bill which President Obama signed into law.)

"Rural development will be another issue in these economic times. Again, the ability for folks in rural America to be able to access capital and resources to make the kind of investments for them to grow their economies. Rural Development is essential.

"We'll also be working on farm bill implementation. You've mentioned a couple issues but there no doubt there will be many more. We need to make sure that the 18-plus months we spent negotiating that bill and coming up with a bill that was extremely balanced regionally, demographically and politically -- all of those ways. We got over 80 votes... nothing gets 80-plus votes in the Senate anymore! So making sure that we implement that with the intent that we negotiated that is critical.

"And of course, financial reg reform. We have jurisdiction over the CFTC. That has the oversight and regulation of derivatives. So we will be writing Title VII of the financial reg reform bill. I've already visited with (Senate Banking, Housing and Urban Affairs Committee) Chairman (Chris) Dodd (D-Ct.) about that and working with members on the committee to figure out. Here we are 13 to 14 months after much of the financial crisis we saw happen in this country, and we still haven't done anything for a part of those obscure financial instruments that are out there that nobody understands that much. So we have got to work on that and I think you'll see us working with Chairman Dodd to come up with what we need. I noticed his comment the other day that he hoped we could this by the end of the year, but it may be into 2010 that we find ourselves acting on that bill. But the Ag Committee will play a tremendous role in that as well."

FJ: Direct payments are something that when the eventual focus on deficit reduction returns, some may eye for cuts as that is about a $5 billion pool of money. Would you guard against that?

Lincoln: "What I would do is remind my colleagues and others is that we were unbelievably frugal in the 2008 Farm Bill. We had tremendous reforms as well as an unbelievable effort to be as fiscally responsible as we could be. If you look at the money that was spent towards producers, it was minimal. I think it is right around 11% of the whole bill -- maybe 13% of the entire bill -- actually went to producers. The rest went to other things like food programs, conservation, rural development -- a whole host of other things.

"As far as those direct payments are concerned, we already ratcheted down some of that. The other thing to remember is that when you have difficult economic times or you find times when it is very difficult to obtain credit and capital, it's those direct payments that allow those growers to get into the crop year when they need to get into the crop year. Without those resources, my farmers say sometimes they couldn't plant the crop -- they couldn't begin to design their budget and figure out what that year's crop is going to be and how they're going to be able to finance it. It's that startup seed money often times -- those direct payments -- that allows them to be able to do that."

FJ: You're from Arkansas and the panel's ranking Republican, Saxby Chambliss, is from Georgia. What can you tell growers from the Midwest or other areas of the country about whether their concerns will be focused on by the Committee?

Lincoln: "I tell people all the time, and certainly members of the (Agriculture) Committee, that if you represent a farm state, farm communities, rural communities... if you represent children or producers -- no matter what they produce -- you will be at the top of the list of the Ag Committee. My objective at the committee is to make sure that all of the members are at the table when we start to look at these issues and challenges we face such the economy and the role that rural America and agriculture has to play. We still are the only area that has a trade surplus and we want to maintain that so we're going to focus on trade and be very engaged on that even though we don't have authorizing initiatives there, we'll be working with (Senate Finance Committee Chairman Max) Baucus (D-Mont.) on that.

"And without a doubt, one of my priorities is that we highlight agriculture, we highlight the hard working families across this country that produce the safest, most affordable and abundant supply of food and fiber in the world, and they do it with respect to the environment, with respect to the community, with respect to clean water and a whole host of other things -- they do the best job that anybody could. We want to make sure that as a nation, we're proud of them and grateful."

FJ: You mentioned trade. The prior administration negotiated trade deals with Panama, Colombia and South Korea and left them in the hands of this administration to present for a up or down vote. But US Trade Rep. Kirk has said the deals are not ready to present to Congress. Do want to see those trade deals move forward?

Lincoln: "I think if they're not ready for prime time, they're close to it. I think in terms of Colombia and Panama, you realize that we have opened our markets to their products at no tariff and we're still subject to tariffs in their market. This is a one-way street to their benefit, and we should make it a two-way street and that's up to us. I certainly have been supportive of both the Panama and Colombia agreements and I hope we will move forward them and open up that two-way street. On Panama, I know they're getting ready to enlarge the Panama Canal and that presents opportunities for us.

"Then there is Cuba. It is 90 miles from the U.S. border. These are great opportunities for our ag commodities and products. We could do a tremendous job. And we've got to be a player in the global economy and in global trade initiatives, and these great ways to work within our own hemisphere with countries that need our products and we should be trading with them.

"Korea is a little bit different. I think there are some issues there that probably need to be worked out further. I think having visited with Ambassador Kirk, I think he is dedicate to working through those agreements. and getting them to a prime-time state so they can come before the Congress. I know the President has really focused more on implementation of our trade agreements and trade laws, and I think that is very important. I hope he will continue to focus on that as well. But I think we can do both -- focus on implementation and enforcement and I think we can create a better environment our products and opening up those markets.

"One other other things that is critical to remember, is that if and when the Doha Round continues or picks back up, it is imperative that we do not start with the same framework. There is an understanding that President Bush put as part of that framework that would be carried over --that would be a part of the framework when we begin again -- that the U.S. would be willing for greater access to take a pretty heavy cut in our subsidy programs without competitors taking similar cuts. None of our competitors have followed suit. The idea was the last administration would make the offer with the idea that others would follow... that we would have greater market access and they would reduce their subsidies. Neither of which has happened. So I think it's really important to be clear that if and when we go into those talks, that we start with a clean slate as far as agriculture is concerned, that we don't have the same framework as we did in the last negotiation."

FJ: You've given assurances to other growers, now what about your growers or those in south who put a lot of emphasis on issues like payment limits. What's your message to them?

Lincoln: " Arkansas growers know that I've always been fair and have fought for fairness. I'll be honest with you, when you look at these safety net programs and you look at the demographics of our farms in the south, they're older farms which means they are larger farms. We farm what we're suited to grow, which is what farmers do, and those are capital-intensive crops like rice and cotton. When you have capital intensive crops, you have to farm at economies of scale so you can mitigate your risk. And so our farms are bigger because of both of those reasons. Payments follow production. So if you have large farms and you have large production, you're going consequently have probably larger payments. It doesn't mean those larger payments are going into the pockets of growers, it just means they can be more efficient and effective and more competitive in a capital-intensive crop and that is absolutely critical in the global marketplace.

"We put more reforms in that bill than ever before so that my colleagues and others growers across the country would really understand that we're not asking for anything that is above and beyond, we just want to make sure that our specific circumstances -- the capital-intensive crops that we grow, the size of our farms and age of our farms -- is something that people understand we have to do. We eliminated with reforms that we put in there any of the possible loopholes that exist for abuses of the programs to ensure that those payments follow production and with large production, that's what happens. But that money goes back in to buy seed, fertilizer, utilities to pump water on rice, major equipment needs that are very vital to those capital-intensive crops."

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