Grain News

Agriculture Secretary Johanns Presents Bush Administration Views on Farm Bill, Free Trade Agreements at Farm Progress Show

Date Posted: August 29, 2007

Agriculture Secretary Mike Johanns
The 2007 Farm Bill and the importance of free trade agreements were the topics addressed by Agriculture Secretary Mike Johanns Aug. 29 during the 2007 Farm Progress Show in Decatur, IL.

During a press conference at the show, followed by an hour-long public appearance at an Archer Daniels Midland Co. tent with farm broadcasters Orion Samuelson and Max Armstrong, Johanss presented the Bush administrations views on those topics.

Specifically, Johanns deplored the $2-million-a-year-per-household adjusted gross income cap for eligibility for farm programs and a provision increasing taxes on foreign corporations doing business in the United States.

Both provisions were part of a U.S. House version of the Farm Bill passed earlier in August.

The Senate takes up the Farm Bill debate next month, and Johanns urged senators to dump the tax, pass a more stringent cap on income for eligibility for farm program payments, and restore some programs that the Bush administration had proposed but the House had cut from the bill.

On free trade, Johanns urged Congress to ratify agreements that had been negotiated with Panama, Peru, Colombia, and South Korea.

That may be an uphill battle, since the leadership of majority Democrats in the House have made comments hostile to various aspects of the agreements, particularly with South Korea.

Heat Wave

This is the second time the Farm Progress Show has been held at a permanent site adjacent to Richland Community College in Decatur. The show currently is scheduled to alternate between Decatur and a second permanent site near Boone, IA, through 2025.

The biggest change in the show format is the timing, one month earlier than previous years.

Show planners reported that one reason for the late August timing is to avoid a period when harvest is in full swing across much of the Corn Belt.

The traditional late-September show would be a particular problem this year, with a whopping 92.9 million acres planted to corn in the United States and a relatively early harvest predicted for much of the region.

The 2007 show did manage to avoid occurring during the Midwestern harvest, but the trade off was an unaccustomed heat wave during the show.

According to The Weather Channel On-Line, the daily high temperature for the first two days of the show topped out at 97 degrees in Decatur.

On the first day of the three-day event, about 30 people were treated for heat-related illnesses at the show medical tent, and about 10 of them were transferred to local hospitals, the Decatur Herald & Review newspaper reported today.

Despite the heat, the show appeared to be quite crowded today, with good attendance at various exhibits in the "Progress Village" and out in surrounding corn and soybean fields were harvesting and tillage equipment were being demonstrated.

Show planners had to add an extra "street" to Progress Village to accommodate an increased number of exhibitors.

However, no official figures on attendance have been released as of yet.

Johann Comments

During the show Aug. 29, Secretary Johanns said he was confident that Congress could have a Farm Bill ready for the president to sign into law before the end of the year, but the Senate first would have to make some "improvements" over the House version.

The Bush administration originally had proposed a $200,000 income cap per household to receive farm program payments.

Johanns said the Senate version would have to come a lot closer to that number than the House's $2 million figure before he could recommend that President Bush sign it.

Johanns displayed a map of New York, NY, which has received a lot of media attention in recent weeks, with red dots showing where people were receiving farm subsidy payments.

A lot of the dots were concentrated in a ritzy stretch of Park Avenue known for its millionaire residents.

"High program payments are hard for the government to address," Johanns admitted, "but they must be addressed, or we'll lose public support for farm programs."

Johanns acknowledged talk of extending the 2002 Farm Bill among some members of Congress and farm organizations but said that was not a realistic solution.

He noted that if a Farm Bill isn't passed in 2007, it's not likely to pass in 2008, either, which is a presidential election year, and whoever came to power in that election would have to start from scratch in 2009.

With regard to the tax increase, Johanns noted that no Farm Bill had ever contained a tax increase since the first one in 1933, and the U.S. Supreme Court declared that increase unconstitional.

"Farmers understand that they have to live within their means, and they expect the Department of Agriculture to live within its means, as well," he said.

During today's press conference, Johanns also addressed the importance of rural development.

"More than 80% of all farm income now comes from off-farm sources, and we need the jobs in rural America to provide that income," he said.

During the conference, Johanns presented an $8.8 million check to E.J. Water Cooperative in Effingham, IL, for construction of a new water treatment plant serving seven counties in the central and east central parts of Illinois.

Soybean Transportation

In another media briefing during the show, the newly-formed Soy Transportation Coalition presented its mission to develop a course of action to solve current and impending transportation challenges affecting the soybean industry.

Executive Director Mike Steenhoek said the coalition was formed in February 2007 by seven state soybean associations -- Illinois, Indiana, Iowa, Nebraska, North Dakota, Ohio, and South Dakota -- representing 63% of soybean production in the United States.

These associations, along with the American Soybean Association and the United Soybean Board, have committed resources to establish the coalition.

Also serving as ex officio board members of the coalition are the National Grain and Feed Association and the National Oilseed Processors Association.

"We want the soybean industry to have a seat at the table," said Steenhoek, who identified a number of transportation challenges facing soybean producers, handlers, and processors.

* The cost of domestic transportation of soybeans is beginning to cause foreign buyers to look elsewhere, even traditional U.S. customers in countries like the Philippines.

* The United States spends less than 1% of its gross domestic product on transportation infrastructure compared with up to 9% in China.

* The focus of the rail industry is shifting away from moving U.S.-produced commodities to export terminals and toward carrying imported consumer goods to markets in major U.S. metropolitan areas.

* The decline in service to shippers results in a wider basis for grain. Soybean producers lose an estimated $1 to $2 per bushel due to this basis, and the communities where they live also lose that income, ultimately causing the countryside to be depleted of population.

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