Farm bill programs survived the first round of cuts under the debt ceiling agreement signed into law by President Obama. Now the focus turns to the 12-member Joint Select Committee on Deficit Reduction (three Democrats and three Republicans from both the Senate and the House of Representatives), which is to recommend specific savings of $1.5 trillion. Both federal programs and revenues may be considered by the committee. The committee is to report to Congress by Nov. 23; Congress needs to pass the recommendations by Dec. 23. The House and Senate Agriculture Committees have until Oct. 14 to make their farm bill spending recommendations to the joint committee. No one knows at this time if we are talking $11 billion in cuts over 10 years or $48 billion in cuts for agriculture. If the committee fails to reach an agreement or Congress fails to implement the recommendations of the joint committee, then automatic spending cuts through sequesters kick in. All eyes will be on the special committee for the remainder of the year. Appointments to the committee are to take place by the middle of August.

Ag Groups Urge Action on FTAs – A coalition of 123 agricultural and food organizations and companies have sent a letter to President Obama and members of Congress urging immediate action on the three pending free trade agreements (FTAs) with Colombia, Panama and South Korea. The groups pointed out that U.S. industries have been losing market share in Colombia and South Korea ever since those countries implemented trade agreements with other nations. Since the FTA between the European Union (EU) and South Korea became effective in July, trade volume between the two nations has risen 17.4%. Also, the U.S. share of Colombia’s agricultural imports has fallen to 28% from 78% over the past three years. U.S. agriculture is expected to lose additional market share when the FTA between Colombia and Canada takes effect on Aug. 15. The coalition said, "It's difficult to watch years of market development efforts evaporate in a matter of months because, even as low-cost producers, we are not able to compete on the basis of price. If our competitors pay lower tariffs, we will become a residual supplier – if we supply anything at all." Those signing the letter included American Farm Bureau Federation, American Soybean Association, National Association of State Departments of Agriculture, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Chicken Council, National Corn Growers Association, National Council of Farmer Cooperatives, National Pork Producers Council and National Turkey Federation.

Congress Gone until September – With the debt ceiling behind them, Congress is in recess until after Labor Day. There will be a number of issues for Congress to consider when it returns in September, including fiscal year 2012 appropriations, free trade agreements with Colombia, Panama and South Korea, Federal Aviation Administration reauthorization, highway reauthorization and the deficit reduction committee.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.