House Movement on Extension of Current Farm Bill Possible Next Week
This week offered a glimmer of hope on finding a way forward on the farm bill in the House of Representatives. On Thursday, House Majority Leader Eric Cantor (R-Va.) indicated that a vote was possible next week on a drought disaster package for livestock and specialty crop producers. While the exact details of the plan have not been released, media reports indicate that House leadership is strongly considering including a one-year extension of the current farm bill, set to expire on September 30, in the package.
Such a move would allow the House and Senate to then hold a conference committee over August recess to develop a new, five-year farm bill. It would also avoid bringing the farm bill passed by the House Agriculture Committee to the House floor, where it would be expected to face opposition from both conservatives, who feel that cuts to nutrition programs do not go far enough, and liberals, who feel that nutrition programs have been cut too much.
While such a strategy accomplishes the goal of getting to a conference committee in a fairly expedited manner, it does create some problems for House Agriculture Committee leadership. Most notable is that a straight, one-year extension of current law would make it more difficult to introduce provisions unique to the House Committee passed farm bill—such as the provisions eliminating pesticide permitting requirements or opening the Fruit and Vegetable School Snack Program to all forms of fruit, vegetables and nuts—during the conference. While issues not in the Senate farm bill or the House’s one year extension could be “air dropped” in, they would be subject to objection from other conference members.
The situation remains very much in flux and based on recent events, the House leadership’s plan today may not be their plan next week. NCFC will continue to monitor developments and will provide updates as warranted.
CFTC Should Work With Agriculture Industry as Implementation of Dodd-Frank Reaches Compliance Phase, NCFC President Testifies
NCFC President Chuck Conner this week urged the Commodity Futures Trading Commission (CFTC) to take a collaborative approach to help farmer co-ops comply with the new regulations of hedging activities stemming from implementation of the Dodd-Frank Wall Street Reform Act. The call came during a House Agriculture Committee hearing to review Dodd-Frank implementation and its impact on hedging activities by farmers, ranchers and agribusiness.
“As we have throughout the process, we urge CFTC to continue to work closely with the agriculture industry and take a collaborative approach to compliance,” Conner said. “We hope CFTC will lend a hand and help us. Not as a regulator looking to make an example out of honest mistakes, misunderstandings or oversights, but rather as a partner to help us meet the various requirements.”
Conner also emphasized the leadership on the issue shown by the Agriculture Committee, and the need for continued vigilance.
“This committee’s oversight of CFTC as they have written the rules regulating the over-the-counter swaps markets has been instrumental in ensuring that co-ops and farmers continue to have access to the necessary risk management tools,” he testified. “This continued oversight is as important as ever as the process turns from one of rulemaking to one of compliance.”
Conner also expressed concern over several rules that have not yet been finalized and that continue to cause uncertainty over new costs that will be imposed on farmers and their co-ops looking to offset risk in the marketplace. Getting these pending rules right, Conner emphasized, is essential to ensuring that farmer cooperatives and their members continue to have access to cost effective hedging options through the OTC market.
House GOP Proposes a Path to Tax Reform
House Republicans this week introduced legislation that would provide expedited procedures for enacting comprehensive tax reform. The bill, H.R. 6169 (the “Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012”) would reduce the corporate tax rate to a maximum of 25 percent, repeal the Alternative Minimum Tax, and put in place a territorial system for international taxation.
Under the proposed legislation, the Ways and Means Committee chair would be required to introduce a tax reform bill by April 30, 2013, and an expedited process would be put in place to approve the bill. In order to be considered, the bill must meet certain requirements, including broadening the tax base so that it generates revenues of 18 to 19 percent of GDP.
In addition, legislation to extend the 2001 and 2003 Bush tax cuts was also introduced by House leadership. Among other things, the legislation would renew the estate tax rate and exclusion in place for 2012 (a top rate of 35% and an exclusion of $5 million.) Both House tax measures are expected to be voted on before August recess. Also this week, the Senate voted by a margin of 51 to 48 to extend the 2001 and 2003 tax cuts only for families making under $250,000 per year.
As the tax reform debate takes shape, NCFC is concerned that the proposals may not take into account the unique nature of cooperatives and their treatment under Subchapter T of the tax code. To address the challenge, a working group of the Legal, Tax and Accounting (LTA) Committee has been formed to identify areas of concern and provide support for NCFC’s work on the issue.
Washington Roundup: House Committee Approves Bill Increasing Exemption for On-farm Fuel Containers; Ag Groups Send Letter on Proposed Chesapeake Bay Survey
- House Committee Approves Bill Increasing Exemption for On-farm Fuel Containers: This week, the House Transportation and Infrastructure Committee approved, by a voice vote, H.R. 3158, legislation that would increase the exemption limit for on-farm storage of fuel from 1,320 gallons to 10,000 gallons; currently, the EPA’s Spill Prevention, Control and Countermeasure (SPCC) regulations require that any farmer or rancher storing more 1,320 comply with EPA’s rules.
- Groups Send Letter on Proposed Chesapeake Bay Survey: NCFC joined with other farm groups and non-agricultural trade associations this week in voicing concerns over a proposed EPA survey on water quality in the Chesapeake Bay watershed. The groups outline several reasons why the surveys are deeply flawed, and urge that the EPA abandon their use.
- EPA Removes Permit Requirement for CAFOs: Late last week, the EPA issued a final rule to revise its concentrated animal feeding operation (CAFO) permit regulation to remove the requirement that CAFOs that “propose to discharge” must seek National Pollutant Discharge Elimination (NPDES) permit coverage. This rule revision is in response to a 2011 U.S. Court of Appeals for the Fifth Circuit decision in National Pork Producers Council v. EPA, which vacated portions of the Agency’s 2008 CAFO rule. In addition, this action removed from the CAFO permit regulation the option to voluntarily certify that a CAFO does not discharge or propose to discharge. The voluntary certification provision will be unnecessary if the propose to discharge requirements are removed.
Upcoming Events:
NCFC Meetings
- September 25-26, 2012—NCFC Executive Council Meeting—Liaison Hotel, Washington, D.C.
- October 4-5, 2012—NCFC LTA Subcommittee Chair & Vice Chair Meeting—Hyatt Regency Mission Bay, San Diego, Calif.
- November 14-16, 2012—NCFC Government Affairs Committee Meeting—Vintner’s Inn, Santa Rosa, Calif.
- February 6-8, 2013—NCFC 84th Annual Meeting—Westin Kierland, Scottsdale, Ariz.