Office of Communications (202) 720-8138 AgNews Summary for USDA Executives Friday, Sept. 19, 2008 * * * * * * * * * * * * * * COPYRIGHT NOTIFICATION * * * * * * * * * * * * * * AgNews is intended for use by authorized government personnel only. Redistributing AgNews by any means to any unauthorized person violates copyright on the source material. * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * * * * * * * * * * * * To access AgNews on the USDA Intranet, go to http://agnews.usda.gov FARM & FOREIGN AGRICULTURAL SERVICES HOUSE AG PANEL SUPPORTS PAYMENTS TO SMALL FARMERS (101 CQ Today, Reuters 9/18) The House Agriculture Committee voted Thursday to keep thousands of small farmers eligible for crop subsidies, in the panel’s first step to overrule the Bush administration on its handling of the 2008 farm law. Committee members approved a bill that, for 2008 and 2009 crops, suspends a provision barring payments if growers do not have at least 10 eligible acres on a farm. The panel expedited action on the bill, anticipating that it could be brought to the floor next week. USDA says the law explicitly does not allow farmers to combine tracts to meet the 10-acre threshold. Some 255,000 of the 2.08 million U.S. farms have 10 acres or less in “bases” eligible for grain, cotton and soybean supports. Action on the 10-acre rule is the first move by Congress to countermand USDA on implementation of the farm law. Farm state lawmakers and USDA also disagree on how to set the benchmark for a new revenue guarantee program, which could involve billions of dollars in payments. HARKIN SAYS ACRE PROGRAM IS CURE FOR INPUT JITTERS (102 Reuters 9/19) The new farm revenue program, if implemented properly, would be an antidote to the sharply rising costs of fuel, seed and fertilizer, Senate Agriculture Committee Chairman Tom Harkin said Thursday. Harkin listed the Average Crop Revenue Election program as the first item among several steps to bolster crop prices in coming years. “Most farmers recognize this is going to be a pretty good year,” Harkin said. “The concern is it’s all going to be wiped out because of these high input costs” and the possibility of lower market prices in the future. Harkin and a half-dozen other senators have written to USDA officials to warn that ACRE will be undermined if USDA sets a low benchmark for the guarantee. They say the record-high prices for 2007 and 2008 crops should be used. The law says USDA shall use “the most recent two crop years, as determined by the Secretary.” Harkin said he hopes USDA will heed congressional intent and not force lawmakers to override its decision. RANGEL SAYS TRADE VOTES POSSIBLE IN LAME-DUCK SESSION (103 Reuters 9/18) Congress will not approve any free trade agreements before the Nov. 4 presidential election, but could vote on the pacts afterward if President Bush calls lawmakers back for a “lame duck” session, House Ways and Means Committee Chairman Charles Rangel said Thursday. Many lawmakers are loathe to vote on trade deals just before facing voters at the polls, and pending Colombian and South Korean trade deals have issues that make them particularly controversial. Rangel said he would meet Saturday with Bush and Colombian President Alvaro Uribe. Whether Congress returns and votes on any trade deal depends largely on whether Bush decides “to call us into a lame duck session,” Rangel said. “That doesn’t mean we would have the votes” to approve the trade deals, he added. WTO POWERS SEEK SOLUTION TO FARM DEADLOCK (104 Reuters 9/18) Seven major trading powers are seeking a way out of the deadlock that scuppered ministerial talks at the World Trade Organization in July, diplomats said Thursday. Senior officials from Australia, Brazil, China, the European Union, India, Japan and the U.S. hope to come up with a workable “special safeguard mechanism,” a proposal to help farmers in poor countries cope with a flood of imports. Disagreement between the U.S. and India over the safeguard blocked July’s ministerial talks. “We are exploring some ideas. So far everybody has been constructive in the sense of trying to find solutions, but there are still some things we need to clarify,” said Brazil’s chief negotiator. FOOD, NUTRITION AND CONSUMER SERVICES COLLECTION LETTERS GOING OUT IN LA. FOOD STAMP OVERPAYMENTS (105 AP 9/18) People who received more disaster food stamp aid than they were entitled to after Hurricane Gustav will get letters asking them to repay the money, Louisiana’s social services chief said Thursday. Most of the overpayments were removed from people’s food stamp cards before they were used, said Kristy Nichols, interim secretary of the Department of Social Services. More than $700,000 in duplicate aid already had been spent, however, and that’s what the state will seek to collect. An estimated 22,000 people received duplicate food stamp aid, but it was unclear Thursday how many would get letters. MARKETING & REGULATORY PROGRAMS FLA. CITRUS GROWERS ASK USDA TO BUY $900 MILLION WORTH OF JUICE (106 Palm Beach Post 9/17) Florida’s citrus industry is asking for the biggest-ever USDA purchase of Florida orange juice: 264 million gallons that could cost $750 million to $900 million. Florida growers and industry representatives are in Washington this week, talking to Florida lawmakers about the request, said a spokesman for Florida Citrus Mutual. In a letter to Secretary Ed Schafer, Florid Citrus Mutual officials argue that citrus growers are facing increasing production costs and decreasing revenue. Volume of orange juice sold has declined 4.6 percent from last year, and grower profits are low at a time when production costs are soaring, they said. Without the purchase, growers could take a hit of $1 billion to $3 billion. USDA -- MULTI-MISSION FDA RELEASES GUIDELINES ON GENETICALLY ENGINEERED ANIMALS (107 dailies 9/19, wires 9/18) The Food and Drug Administration on Thursday published proposed guidelines that producers of genetically engineered animals would have to follow to determine whether there are any risks to humans, the environment and the animals themselves. The guidelines bring the decades-old technology of genetic engineering for animals one step closer to the market. The rules would also apply to drugs and other medical materials from such animals. Genetically modified cattle, pigs, fish and goats are being produced for a variety of uses. Some produce pharmaceuticals in their milk or blood. Others are resistant to diseases or produce healthier meat or milk. Consumer groups called the FDA’s action a good first step, but said the guidelines fail to answer several important questions. One concern is the approval process, which would be secretive to protect companies’ proprietary interests. Foods produced from bioengineered animals would not have to be labeled, FDA said, also drawing some ire. The agency is inviting public comment on its proposals until Nov. 18. FARM ECONOMY SIDESTEPS BIG-CITY CREDIT CRISIS (108 Dow Jones 9/18) The article looks at the relative health of agricultural lenders, which have avoided the cash- flow crunch and liquidity crisis experienced by big-city lenders. Standard and Poor’s has applied the best possible AAA/A-1+ credit rating on the consolidated debt obligations issued by the Farm Credit System – a level equal to the U.S. government’s credit rating. The Farm Credit system is a nationwide financial cooperative that lends money and provides financial services to farmers, ranchers, commercial fishermen, agribusinesses and rural home owners. The Farm Credit System held more than $45.3 billion worth of the nation’s agricultural debt load of $211.5 billion at the beginning of 2008, more than any agricultural lender, including commercial banks. Despite the failure of venerable investment banks and the bailout of the world’s biggest insurance conglomerates, USDA still is forecasting record net farm income for 2008, thanks to unprecedented farmland values and historically high commodity prices during the past few months. “The health of the (agricultural) sector is as good as it’s been in nearly 30 years,” says an agricultural finance specialist at Kansas State University. IKE’S REMNANTS BATTERED CROPS IN SOUTH, MIDWEST (109 AP 9/18) From Texas rice farms to Midwest cornfields, some farmers in the path of Hurricane Ike’s remnants saw profits sink as strong winds battered crops. Along with prospects of lower yields, those farmers will have to take more time to harvest as they slowly move equipment through fields to try to scoop up crops knocked down by the storm. That means farmers have to spend more money on fuel to keep combines in the fields longer. “The timing was devastating,” said an Extension agent in Kentucky. “It’s changed the whole complexion of this year’s harvest.” He predicted wind damage would reduce some corn yields as much as 20 percent in his county. Elsewhere, some Midwest crops got a needed soaking. Heavy rains in central and northern Illinois came too late to help the state’s corn crop, but could give a late boost to soybeans after an extended dry spell, said a professor of agricultural economics at the University of Illinois. SCRAPPING BIOFUELS MANDATE SEEN AS UNLIKELY (110 Reuters 9/18) Scrapping the current U.S. biofuel policy is unlikely despite mounting objections to grain-based fuels, seen as the driver of food inflation, a top farm policy analyst said Thursday. “We’ve had this food versus fuel fight going on for many months now, and it’s had a corrosive effect on the support for biofuel policy,” said Gary Blumenthal, chief executive of Washington-based World Perspectives. He spoke on the sidelines of the annual Soyatech oilseed industry conference in St. Louis. Congress enacted a biofuel policy nearly a year ago calling for biofuel production to jump five-fold to 36 billion gallons by 2022. “But I don’t see a wholesale reversal or ending of biofuel policy,” Blumenthal said. “I don’t see that happening under either an Obama administration or McCain administration, despite Sen. McCain’s objections to the subsidies.” He said biofuel policy “has become farm policy,” and that any policy that lifts farm prices is hard to remove from “the domain of Congress.” HOUSE PASSES ANTI-SPECULATION BILL (111 Reuters 9/18) The House passed a bill Thursday intended to prevent excessive speculation in oil and other futures trading, despite a veto threat from the White House. The bill requires the Commodity Futures Trading Commission to set position limits on major oil and agricultural futures and to monitor look-alike contracts traded over the counter. It could set limits on those contracts if need be. FIX SOUGHT FOR ILLEGAL TIMBER PROVISION IN FARM BILL (112 CQ Today 9/18) Lawmakers are scrambling to determine how to keep a farm bill provision intended to combat trafficking in illegally harvested timber from disrupting commerce when it goes into effect Dec. 15. The provision requires importers to identify the genus, species and country of origin of products that contain plant material. That could apply to scented candles and lipstick containing plant resins, clothing made of rayon, which comes from bamboo, and even the paper hang tags on clothes. Rep. Wally Herger of California, ranking member of the House Ways and Means trade subcommittee, said the provision is “turning out to be potentially catastrophic for agriculture, shipping and importers.” CHINA SAYS MORE MILK PRODUCTS MAY BE TAINTED (113 N.Y. Times, AP 9/19) China’s adulterated milk scandal continued to widen Thursday, as authorities arrested a dozen people, fired a senior government official and acknowledged that a wider range of milk products show traces of a chemical used to disguise its poor quality. Officials said a fourth infant had died from tainted baby formula, while health regulators in Hong Kong announced a broader recall of mainland Chinese-made milk, yogurt and ice cream contaminated with the chemical melamine. Central China Television reported Thursday night that melamine had been found in some liquid milk from three major brands. Investigators have discovered traces of melamine in batches of powdered baby formula made by 22 dairy companies, all of which have said they are recalling their milk products. CHINA OFFERS AID, ALLOWS DEBATE IN MILK SCANDAL (114 Washington Post 9/19) The scandal over tainted milk powder in China has fueled such universal outrage that the Chinese government in recent days has thrown out its playbook for how it deals with such incidents. In previous incidents of mass food poisoning, in mining accidents and even in the May 12 Sichuan earthquake, relatives of victims were silenced through bribes, intimidation or both. In this case, parents of victims say they have been offered money, but are still allowed to speak out freely and even organize grass-roots protest groups online – a major concession for a government that is deeply suspicious about organizations it does not control. TAINTED MILK SHOWS RISKS OF FAST, POORLY REGULATED GROWTH (115 AP 9/19) A generation ago, milk powder was so scarce in China that it was one of the top items requested from travelers visiting from overseas. A wide array of dairy products now line supermarket shelves, and analysts say the boom has overwhelmed regulators. The discovery this week of the industrial chemical melamine in baby formula and milk is just one symptom, they say, of unbridled growth in the dairy industry, where poor hygiene reigns and safety standards often go unenforced. The melamine scandal “reflects chaos in the dairy products market and loopholes in supervision and administration,” according to a government Web site’s summary of a cabinet meeting held Wednesday. The article quotes the manager of a consulting firm who says the Chinese dairy industry has been developing too quickly and “they’ve ignored the issue of quality of the raw materials.” JAPAN’S AG MINISTER RESIGNS IN TAINTED RICE SCANDAL (116 AP 9/19) Japan’s agriculture minister resigned today in a widening scandal over rice contaminated with mold and pesticide that was sold as food for thousands of people, including schoolchildren and nursing home patients. Seiichi Ota’s departure only seven weeks after he took office was a further embarrassment to the teetering government of Prime Minister Yasuo Fukuda, who recently announced his own resignation in the midst of a parliamentary stalemate. Chief Cabinet Secretary Nobutaka Machimura will take over as interim farm minister, the government said. Japanese consumers have been horrified in recent weeks over the discovery that rice intended for industrial uses had been distributed as food. The rice, imported from China, Vietnam and the U.S., was tainted with a pesticide at concentrations that exceeded government regulations but that was too low to threaten anyone’s health, officials said. FARM AID TO MAKE FIRST-EVER APPEARANCE IN NEW ENGLAND (117 Portland Press-Herald, Me. 9/18) For the first time in its 23-year history, Farm Aid is coming to New England. America’s longest-running benefit concert series will be Saturday at the Comcast Center in Mansfield, Mass. The day-long concert will include performances by Willie Nelson, John Mellencamp, Neil Young, Dave Matthews and many others. Farm aid, which raises money for family farmers across America, has historically been staged in the Midwest. The move to New England mirrors the growth in the local-food movement, which is flourishing on small farms across New England. EDITORIAL AND OPINION SCHAFER, CONNER DISCUSS IMPENDING ACRE DECISION (118 AgWeb.com 9/18) Columnist Jim Wiesemeyer says Secretary Ed Schafer and Deputy Secretary Chuck Conner “made it clear to me” that the upcoming decision on which crop price years are used to establish the Average Crop Revenue Election program trigger price “is not just following congressional intent, it is a very important budget and farm policy decision.” USDA estimates that by using the 2007 and 2008 price years, ACRE payments would be $10 billion over five years. “Was that the intent of Congress?” Schafer asked “If so, then lawmakers are saying they don’t care about budget deficits.” Schafer added, “This has major, dramatic budget implications. And this is not just whether or not USDA is following the intent of Congress.” Wiesemeyer notes that different figures were compiled by the Senate Agriculture Committee, and he comments that his congressional contacts say it is “a real reach” for the Bush administration to think it can use the average of 2006 and 2007 crop prices for the ACRE calculation for the 2009 crop. HOUSE AG LEADERS MEET WITH INDUSTRY ABOUT COOL (119 AgWeb.com 9/18) Jim Wiesemeyer reports that the chairman and ranking member of the House Agriculture Committee met Wednesday with meat industry officials regarding country-of-origin labeling. Committee Chairman Collin Peterson released a two-page clarifying bill to the meeting participants, which Wiesemeyer says was probably meant as a “wake-up call that action is needed to avert what some believe to be a flaw in USDA’s interpretation of COOL labeling provisions” in the 2008 farm bill. Wiesemeyer outlines concerns raised by the National Farmers Union, R-CALF USA and the U.S. Cattlemen’s Association over reports that large meat processors intend to circumvent both the intent and letter of the labeling law. Peterson’s bill would “take away the flexibility of current COOL language of using animals that meet the definition of U.S. origin...from being used in the multiple country-of-origin category,” Wiesemeyer says. AGRICULTURE AND TRADE PRESS BROWNFIELD 9/18 (120) Iowa hog operation issues statement about PETA video FEEDSTUFFS 9/18 (121) Tyson Foods enters Brazilian poultry industry DTN 9/18 (122) FDA opens public comment period on genetically engineered animal proposal (123) Tropical storms help provide adequate moisture for winter crops AGRIPULSE 9/16 (124) Will agriculture face a liquidity crunch? (125) To aggregate or not to aggregate: the base acre question (126) USDA pilot program to switch food aid from crops to cash (127) Food Animal residue Avoidance databank threatened AND ALSO… POLICE AREN’T BUYING “SECRET AGENT” ALIBI (128 AP 9/18) A Knoxville, Tenn., man called police from his cell phone before dawn Wednesday saying he was trapped in an air conditioning duct at the Knoxville Museum of Art. Extracted from the duct, Richard Anthony Smith told police he was a “special agent from the United States Illuminati” and had rappelled onto the museum’s roof from a helicopter. He said he was under orders to “defuse and confiscate” a nuclear warhead that was hidden in a plastic cow sculpture in the museum’s basement. However, he added that his “agency” had called while he was in the air vent to say it made a mistake and the bomb might be in a Memphis museum instead. Police charged Smith with aggravated robbery, and he was being held on $2,000 bond at the Knox County jail. FRIDAY AG HUMOR: Two hunters are dragging their dead deer back to their truck. Another hunter approaches pulling his along too. He says, "Hey, I don't want to tell you how to do something, but I can tell you that it's much easier if you drag the deer in the other direction. Then the antlers won't dig into the ground.” After the third hunter leaves, the two decide to try it. One hunter says to the other, "You know, that guy was right. This is a lot easier!" "Yeah,” says his pal, “but we're getting farther from the truck." USDA RELEASES Thursday, Sept. 18 0234 SCHAFER LEADS MISSION FOR U.S. AND CENTRAL AMERICAN TRADE AND INVESTMENT OPPORTUNITIES 0233 USDA RESERVES USE OF 840 ANIMAL IDENTIFICATION NUMBERS TO ONLY LIVESTOCK BORN IN THE UNITED STATES 0232 USDA SPEEDS HELP FOR WIC NUTRITION DELIVERY To obtain a USDA release, access USDA’s Home Page at http://www.usda.gov To access AgNews on the USDA Intranet, go to http://agnews.usda.gov * * * * * * * * * * * * * * * * * * * * * * * * ** * * * * * * * * * * * * * * * * * * * * DISCLAIMER -- AgNews content is derived from major wires, news magazines and mass distribution press. Inclusion of an item in AgNews does not imply USDA agreement; nor does USDA attest to the accuracy or completeness of the item. * * * * * * ** * * * * * * * * * * * * * * * ** * * * * * * * * * * * * * * * * * * * * ACCESS AGNEWS ARCHIVES ON THE USDA INTRANET – AgNews archive files are available on the USDA Intranet at http://agnews.usda.gov. 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