EPA ethanol decision pushes farm bill toward finish line

Source: By Erik Wasson, The Hill.com • Posted: Wednesday, November 20, 2013

The Environmental Protection Agency’s preliminary decision to reduce renewable fuels blending requirements has increased momentum to get a farm bill done this year, the top House negotiator on the measure said Tuesday.

Rep. Frank Lucas (R-Okla.) argued that the ethanol decision, which is contributing to dropping corn prices, is helping all sides to come together behind a strong farm safety net.

He added an agreement is needed this week to pass a farm bill before the Dec. 13 Christmas recess target date. Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) also told reporters Tuesday she is trying to get a framework agreement with the four top committee leaders this week or early next week.

“That’s been my problem early on, that there was two different camps on how we should proceed and they’re absolute. Suddenly, with the change in weather patterns, production yields and now government mandated demand being adjusted down, suddenly that’s driving all of us together,” Lucas said.

He said that the vulnerability of corn producers is helping resolve regional differences over whether the House or Senate farm subsidy approaches should be used.

The downward prices also mean that the farm safety net as scored by the Congressional Budget Office will be more costly—giving negotiators an added incentive to complete a deal before CBO takes away some of their deficit-cutting bragging rights. The current bill cuts $13 billion to $20 billion from farm programs.

On Friday, the EPA proposed draft 2014 blending volumes under the federal Renewable Fuel Standard that are lower than the 2013 requirements, and far less than called for in a 2007 law that expanded the mandate.

The EPA is proposing to require 15.21 billion gallons in 2014, down from 16.55 billion gallons in 2013, marking the first time the agency has lowered the target from the prior year.

Lucas said that corn drives all other grain prices and the pressure on corn prices hits all commodities.

“The price pressure that is already applying to corn will cascade across all the other commodities,” he said. “It now means we will all be in this common downward trend.”

The House farm bill emphasizes a choice of price-based and revenue-based subsidies and based calculations more on the number of planted acres. The Senate farm bill, favored heretofore by corn growers, focuses more on revenue supports and historic production. Corn growers have argued the House approach distorts production and risks a trade war.

The chairman said that negotiators are still working on the $33 billion difference over food stamps cuts in the bill and he continues to push the stronger work requirements in the House-passed version.

He said that a push to change country-of-origin labeling (COOL) requirements being imposed by the Agriculture Department for meat this week is being left to open conference meetings and is not the subject of closed-door talks right now. The COOL fight pits packers and those worried about tariff retaliation by Canada over the labeling against ranchers and consumer groups.