With the current farm bill expiring on September 30 and the evaporating number of legislative days to complete work on the new bill, there will be an all-out sprint to try to complete action as soon as politically possible. To this point, the path to reauthorizing the farm bill has been both tumultuous and unpredictable. It is the most caustic political environment we have ever seen to move a farm bill through Congress.
Once the President receives a conference report passed by both houses, he may sign or veto the bill. The Senate will not pass, and the President will not sign, a farm bill that does not include a nutrition title.
As you can see, there is a great deal of work yet to do over the next two months, and Congress will be out during August on recess. There are lots of theories, but no guarantees how this process will play out.
If you had the opportunity to watch the debate on the House floor, there should be no doubt of the massive political challenges facing any major legislation in the House. When a farm bill is completed, it will be done because of the leadership and the respect and integrity of the two leaders on the House Agriculture Committee. Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) both have the tremendous respect of the vast majority of members and agricultural organizations. The members of the House trust those two dedicated and thoughtful leaders to bring this legislative marathon to a close. There is a certain farm bill fatigue that is rightfully wearing on the members.
The sugar provisions are identical in both the House and Senate bills, and a continuation of current policy. It has been the most difficult battle since the sugar votes on the 1996 farm bill. We defeated an amendment in the House, 221-206, by Congressman Joe Pitts (R-PA) that would have devastated domestic sugar policy. In the Senate, we fought off three amendments over the past two years. This was an all-out battle, and you can thank your members of Congress, industry leaders and representatives for their tremendous work to defeat these vicious and relentless attacks by sugars users, rightwing organizations and members of Congress.
Rebalancing the Market
The USDA took actions on June 17 and 25 to reduce the domestic sugar oversupply and the cost of the CCC Sugar Loan Program. Nearly 300,000 metric tons were removed from the market by retiring credits under the Refined Sugar Re-export Program and Certificates of Quota Eligibility under the U.S.-Colombia free trade agreement. This action cost the CCC $43.8 million, but averted an expected $110.7 million in loan forfeitures — thus saving taxpayers $66.9 million. The question still remains whether this will be enough action to bolster the market and avoid forfeitures that could come as early as the end of July. Given the structural limits to their two previous actions, if USDA needs to remove additional sugar, it may now need to look to the Feedstock Flexibility Program to divert sugar to ethanol. Industry leaders are closely monitoring the situation, with hopes that forfeitures can be averted.
Mexico will send us about 900,000 tons more sugar this year than last year, which is the main cause of the oversupply in the market. The Mexican government has thus far taken no action to help balance the North American sugar market, leaving the burden to do so squarely on the backs of the U.S. government (taxpayers) and injuring the U.S. sugar industry.
2014 ASGA Annual Meeting
For those of you making your winter travel and meeting plans, be sure to reserve February 9-11 in Tampa, Fla. For further information, visit americansugarbeet.org.
ASGA annual meeting program, speakers and online registration will be available in early November.