Washington Update

February 10, 2012 12:36 AM
Untitled Document

via a special arrangement with Informa Economics, Inc.

FSA | Farm bill | Biodiesel tax credit | RFS2 | U.S. sugar import quota

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

-- Single-digit odds that Farm Service Agency (FSA) will take over all crop insurance duties. Taking a program from the private sector to the government-run level is rare, and any push to move the delivery of crop insurance programs into USDA's Farm Service Agency (FSA) faces substantial hurdles, contact advise. The hurdles include many if not most farm-state lawmakers, and farmers. Some FSA personnel are worried about job security in the years ahead, sources say, as the US government downsizes. The fact that some in FSA are even talking about taking over some crop insurance functions, sources advise, is proof that many in FSA are underemployed, and will be more so in the years ahead if farm policy moves away from direct payments and instead moves to a revenue assurance safety net. However, some farmers think FSA should take over the reporting details for the program from the Risk Management Agency (RMA).

-- Some say the farm bill provisions which were discussed late last year will have to be significantly revised in order to pass the House and Senate chambers. It's one thing to get an omnibus farm bill through the House and Senate Ag panels, but such legislation will face far more scrutiny and challenges when it gets to the full House and Senate, observers note. That is one reason why some believe getting the farm bill through Congress could be a 2013 timeline rather than 2012.

-- Soybean group pushes biodiesel tax credit retroactive reinstatement as part of payroll tax holiday extension package. The biodiesel tax credit lapsed on Dec. 31, 2011. Retroactive extension of the biodiesel credit is a top priority for the American Soybean Association (ASA), which is urging it be part of the payroll tax relief package currently being negotiated by a Senate-House conference committee. In December, Congress passed a two-month extension of the payroll tax reduction, which expires on Feb. 29, 2012. Senate Finance Committee Chairman Max Baucus (D-Mont.) and other members have called for the conferees to add the biodiesel tax credit to the package.

-- EPA to make decision soon on RFS2 volume increase for biodiesel for 2013. The Environmental Protection Agency (EPA) PA had initially proposed in June 2011 to raise the requirement from 1 billion gallons in 2012 to 1.28 billion gallons in 2013. In December, EPA and the Office of Management & Budget (OMB) postponed making a decision on the 2013 volume requirement and indicated that they intend to make a final decision in the very near future. In 2011, the U.S. biodiesel industry produced 1.1 billion gallons, 300 million gallons more than the 800 million gallon RFS2 volume requirement for 2011. The RFS2 volume requirement for 2012 is 1.0 billion gallons. The American Soybean Assn. and the National Biodiesel Board strongly support the 1.28 billion gallon level for 2013, which the groups say would support approximately 74,000 jobs.

-- USDA mulls announcing tranched increases for US sugar import quota. A decision is expected soon by USDA officials regarding a possible announcement in April that would unveil a series of sugar import quotas for several months. The possible move, contacts advise, would give countries exporting sugar additional time to lock in transportation and other details. The Philippines, sources advise, is one of the countries urging such a move. (For perspective, USDA on April 11, 2011, announced an increase in the US sugar import quota for FY 2011.) The 2008 Farm Bill required USDA to set the WTO sugar TRQ commitments at the minimum levels at the beginning of the quota (i.e., marketing) year, and laid out the factors to be considered to increase quota imports if there is an emergency sugar shortage before April 1 of each year, and further detailed what import actions USDA can take before and after April 1.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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