Shortly before heading into August recess, House Agriculture Committee Chairman Collin Peterson spoke to reporters for nearly an hour. Happy to have completed the House version of the next farm bill, the Minnesota Democrat spoke on how the legislation was crafted, crop insurance, the need to keep Southern agriculture in the fold and how best to pay for more inspections of imports. Among his comments:
On the Senate's farm bill progress.
“We'll have a meeting with (Senate Agriculture Committee Chairman Tom) Harkin to see where he is and bring him up to speed on what we've done. From his remarks, it appears he's getting a chance to look through the bill. It seems he's seeing some things he likes and I'm hopeful (the Senate Agriculture Committee) will have a process to get them fairly close to where we are. That would mean the conference wouldn't be so difficult.
“We've got ag (appropriations) on the floor shortly and we wish the Senate well. We hope they look at our bill closely. There's a lot of good policy work in there and we've blazed a trail for them.”
Sen. Harkin has said he doesn't expect loan rates to change. Also, what about payment limits?
“He'll have to have the same discussions I had with the Southerners. Frankly, I think we've gotten them as far as they'll go on payment limits. I know others are out there pushing political-type deals in that area. Generally, if you're on a political or ideological (bent) what you end up with is nothing.
“We now have a $500,000 hard cap on people that aren't farmers. That's a big deal. It isn't as far as some wanted. We got rid of the triple entity rule and this is real reform. But you can't do everything at once. You've got to work through things.
“And there's a lot of money invested in agriculture. There's a lot of concern by people who have a lot of money on the line that we not screw things up. I think we've gone as far as we can on payment limits.
“The direct payments are political reality. The South doesn't want to go there and (Harkin) will have to deal with the politics of his committee.”
More on the elimination of the three-entity rule and how new legislation would help agriculture policy reformers.
“It'll make it easier for (payment reformers like the Environmental Working Group) to trace payments. It'll make things more transparent. And that's a good thing.
“They put out this information and the big-city editorial writers and others that weigh in have no clue about what's going on. These payments follow production agriculture and I have no apology for that.
“That's what it's supposed to do, how it's designed. It isn't a social welfare program. It's a risk protection safety net that production ag needs to operate.
“If there's not a viable net and crop insurance program (farmers) can take to the bank to get their financing, we'll end up vertically integrating crop ag like we have meat ag. That's not what I want and isn't what we should do.
“We've answered the critics and they won't like that answer. But they're on some social engineering/money-raising deal. It isn't helpful to agriculture, in my opinion.
“As I said in the response (an) editorial the other day: those of us in farm country don't know about the big city and we aren't about to tell them what to do. But these big-city editorial writers and others don't have a clue about agriculture and they should keep out of our business. We'd all be better off.”
If it takes until October to complete the new farm bill, will a short-term extension of the current farm bill be needed?
“No. It's happened before. We've even gone into the next year without having to extend. The real issue is the farmers need to know what the program is in order to make planting decisions and to get financing from their bankers.
“If we get this done by November, it's still early enough for the Southerners to make planting decisions and work with bankers. Beyond that, problems are created for people in the South.”
On crop insurance.
On (July 30), I spent one and a half hours with (USDA's Risk Management Agency, which oversees the crop insurance program). We'll immediately do some oversight, looking into crop insurance. There is more information we need to know.
“Now that the House Agriculture Committee has the farm bill passed and is waiting on the Senate, we won't be sitting around. We'll be getting to work on oversight, as we said we would. We'll spend August looking into crop insurance and getting on solid ground so everyone can agree on the facts and implications of the changes in the farm bill. It's fair to say none of us are totally sure if the number is right — too high? Too low?
“Crop insurance comes up for authorization next Congress. The work we're doing now will be the foundation for reauthorization next year.
“Premiums have gone up significantly in certain parts of the country. The way the system works, we've seen a significant increase in compensation to agents and companies with what appears to be not much change in the amount of work they have to do. That's what's at issue and we're trying to figure out what the facts are.
“There are folks that think we ought to look at the whole (crop insurance) system and potentially change the structure. I'm not sure I'm there yet but there are people looking into it. That discussion may be better left to reauthorization.”
On the recent WTO case brought against U.S. cotton.
“We don't agree with the decision. Again, it's countries manipulating things by picking dates that make us look bad and aren't tied to reality.
“Some of us have some real problems with how the WTO is operating by allowing this sort of thing to happen. They'd better be careful because there's less and less support for the whole WTO trade regime. Not only is that in Congress, but in the ag committee.
“If they keep going and the WTO allows (such) manipulation, they could blow this whole thing up. At some point, if this WTO thing isn't a straight-up deal, they'll have a big problem with me. People need to understand that.”
On some senators' unenthusiastic reaction to the House farm bill making tax provisions on foreign corporations an offset.
“The House has a bill that's paid for and has passed. If they don't like the way we're doing that, we'll talk about it in conference. I'll say the same thing I've said to the Republicans: if you don't like what we're doing, offer an alternative.
“I happen to think this shouldn't have been done in the first place, that we shouldn't have U.S. government employees negotiating treaties with foreign corporations allowing them to pay less taxes than people in the United States. I have a real problem that we're doing that in the first place and I have no problem ending it.
“As an old CPA that used to rail against this stuff when I wasn't in politics, I'm very much in favor of getting rid of a lot of the manipulation allowed in the foreign trade arena. And it's a (continuation) of the problem I have with the whole regime of the USTR and State Department, Treasury (Department), WTO and all those that want to put us at a disadvantage.”
On standards of Chinese imports and how to pay for ramped up inspections.
“Now that we're freed up a bit, I've instructed my staff to look into this. We don't have jurisdiction over the FDA. We feel the USDA is doing a pretty good job because they inspect a plant before allowing imports to come over. That isn't the case with the FDA.
“Some people are looking into trying to beef up (import and plant inspections). We'd have to add inspectors at the border. That would cost money and some suggest it should be paid for by U.S. taxpayers. I am totally, unalterably opposed to that outrageous idea.
“What I'm interested in is placing a fee on imported goods at whatever level would pay for the inspections. If no one else does it, I'll put a bill in to do this.
To bolster his claim that farmers won't stand for a tax increase to pay for farm programs, USDA head Mike Johanns said he's the most in-touch with farmers in history. Peterson's reaction?
“(Johanns) needs to get out and talk to farmers a little more. I haven't found a single farmer that has a problem with the loophole closing we put in the bill. In fact, once they understand what it is they say, ‘Why haven't we been doing this in the first place?’
“I do know there are number of Republicans that have caught holy heck back home from their farmers because they voted against the bill and using the tax offset as an excuse.
“I think (Johanns) is totally misreading this. He's coming to my district on (and, from what I'm hearing he'll get an earful. “I'd have to respectfully disagree with (Johanns). In my opinion, he isn't in touch with farmers if that's what he thinks.”