Congress has approved another continuing resolution. This one will fund government operations for three weeks, while cutting spending by an estimated $6 billion. Congress takes a week-long break next week, and will then have another two weeks to hammer out a bill to fund the government for the rest of the fiscal year through the end of September. While the new continuing resolution prevents a government shutdown for now, the real contentious disagreements between Democrats and Republicans remain and the chances of working out a plan for the rest of the fiscal year are uncertain. The new continuing resolution will fund the government through April 8.
The biggest monthly jump in food prices since November 1974 will get considerable press coverage. They were up 3.9% in February. Most of the increase was the result of sharply higher prices for vegetables, which rose by nearly 50%. Prices for meat and dairy products were also higher. Energy prices also increased significantly last month and they have continued to rise in March. The overall producer price index jumped 1.6% last month, double the size of the increase in January.
The EPA cannot require livestock operations to obtain Clean Water Act permits unless they are discharging manure into a waterway in the U.S. by a unanimous decision in the U.S. Court of Appeals of the 5th District. This overturns an EPA rule that required concentrated animal feeding operations (CAFOs) to apply for permits if they might discharge. The court decision could have implications for other EPA rules in place and being considered where permits are or will be required for events that might happen.
USDA is planning to provide grants and loans to help retail gasoline outlets purchase and install blender pumps for ethanol. In making the announcement, Agriculture under-secretary Dallas Tonsager says that without some government assistance or incentives, retailers will be slow to make the required investments and the availability of E-15 will remain very limited. However, members of the House of Representatives have already voted against government funds for ethanol infrastructure, so USDA will probably only be able to provide the assistance if they can move the necessary money from other programs.
Republicans will play hardball on free trade agreements (FTAs). GOP senators have said they will block the confirmation of the next Commerce Secretary and any other trade-related nominees until the Obama administration takes action on the three long-stalled FTAs. The administration says it will submit the FTA with South Korea to Congress for approval in the next few weeks, but has not said when the agreements with Colombia and Panama will be submitted. Government officials met with representatives from Colombia last week, but there is still no word on where the FTA with that country stands. Farm groups are strongly in favor of all three free trade agreements. The agreements would ease import restrictions on most agriculture commodities and should lead to higher U.S. exports. The administration was unable to significantly reduce South Korea’s restrictions on beef imports, but pork exports to South Korea would almost certainly increase. Some key members of Congress say they will oppose the FTA with South Korea because of the restrictions on beef trade.
Congress may scale back the CRP and reduce direct payments to farmers when the 2012 farm bill is written, says House Agriculture Committee Chairman Frank Lucas (R-OK). “Lawmakers will have billions of dollars less to spend on the so-called farm bill than they did in 2008”, according to Lucas, “and Congress will have to make some tough decisions.” Lucas has suggested the possibility of big changes to the Conservation Reserve Program (CRP) several times since the republicans gained control of the House of Representatives in last fall’s election.