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'FARM BILL BLUES': Peterson et al. coming strung out over bill

WASHINGTON -- Rep. Collin Peterson, D-Minn., isn't singing the "Farm Bill Blues" yet, but he's in high dudgeon about why others can't dance to the same tune so the bill can be passed by its April 18 deadline.

WASHINGTON -- Rep. Collin Peterson, D-Minn., isn't singing the "Farm Bill Blues" yet, but he's in high dudgeon about why others can't dance to the same tune so the bill can be passed by its April 18 deadline.

Peterson was a key attraction on the schedule for the North American Agricultural Journalists annual meeting April 7 and 8 in Washington. He also was the entertainment when his "Second Amendments" band of rocking congressmen took the stage April 7 at the National Press Club to play for a dinner-dance and scholarship fundraiser that drew such luminaries as Secretary of Agriculture Ed Schafer and Deputy Secretary Chuck Conner and their wives.

Some 150 journalists, agricultural advocates and congressional staffers who attended the event organized by NAAJ officials including former president Jerry Hagstrom, a contributor to Agweek and a staff writer for Congress Daily. Part of the gala was a fundraiser for a scholarship in memory of Sonja Hillgren, a former correspondent for Agweek who went on to be editor at Farm Journal magazine.

Peterson's band -- all Republicans except him -- played for an hour and a half, but Peterson mysteriously withheld his playing of his updated version of the "Farm Bill Blues," which he'd indicated he'd sing.

Placing blame

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In a press briefing the next day with the NAAJ, Peterson seemed serious about his music lyrics. While he enjoyed the evening, he says, he hinted that he was peeved that his audience wasn't paying enough attention for him to sing his "Farm Bill Blues," which presumably is his comment on why the bill isn't passing. He says he's been highly irritated that some stories have falsely pinned blame on House Speaker Nancy Pelosi, D-Calif., for holding up progress.

Pulling out the lyrics of the song he'd chosen not to sing, Peterson read part of Verse 3:

"According to some, who are ginning up 'the' (delay culprit), it can't be the Senate, it's Miss Pelosi," Peterson said, looking up at reporters in the room. "That is the biggest bunch of baloney I've ever read. There's been nobody -- nobody in this town -- that has been as rock-solid and helpful to me as Nancy Pelosi, and it irritates the hell out of me that people are trying to go after her, because that is totally baloney."

At the NAAJ briefing, Peterson unveiled his recent plans to help find spending offsets for the bill by cutting crop insurance subsidies. He says this should be possible in areas of the country where premiums have risen the most from 2002 to 2007, but where "mean crop loss ratios" have been low. Peterson has found potential cuts in government outlays for crop insurance administrative and operating, which subsidizes crop insurance companies for servicing and delivering coverage.

Peterson says the cuts in subsidies could save $500 million over the five-year projections of the Senate version of the bill. Peterson says he is frustrated that when a budget savings is achieved, others -- particularly senators -- "will dream up some damn way to spend it."

He emphasizes he's comfortable leaving matters of how to finance the farm bill with Ways and Means Chairman Charlie Rangel, D-N.Y., to solve the financing issues. Pelosi named House conferees April 9, although Peterson says a "de facto" conference committee has been doing work behind the scenes to get the farm bill completed by an April 18 deadline.

One problem is that all of the conferees for the Senate have been appointed for all aspects of the bill. In the House, conferees are only designated for certain parts of a bill. He says that's because the farm bill includes interaction with House Ways and Means/Finance; Energy/Commerce and others.

In short supply

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Besides the farm bill, another major topic at the event was international food shortages. While farmers enjoy the effects of high grain prices, NAAJ members heard from experts raising increased concerns over the effects of higher grain prices around the world. Panelists reported that 33 countries are deemed prone to unrest because of food price increases. Two dozen nations have imposed price controls or have limited exports in some way.

Ephriam Liebtag, an economist with the U.S. Department of Agriculture, says the nation can expect 30 percent to 50 percent increases in corn prices in 2008, as well as rises in wheat prices.

"Wheat prices have doubled in six months," he says, adding that the effect on U.S. consumer is blunted by the fact that a considerable amount of our food prices are a result of marketing and packaging costs. This is not the case in developing countries, where the retail price of food is much closer to the raw price.

In the United States, Liebtag says, more than half of the corn is used as animal feed. Less than a third of retail food consumption is of corn-related products.

But Mark Cohen, research fellow at the International Food Policy Research Institute, says U.S. consumers use 7 percent of their disposable income on food, while lower income people in the country use up to 25 percent on food. Meanwhile, consumers in developing countries can consume 50 percent, 75 percent or 80 percent of their income on food

"Food price inflation cuts more deeply" for them, Cohen says.

He says the current run-up in grain prices has caused the "death of conventional wisdom," especially in the maxim, "the cure for high prices is high prices." That's not been the case with this market, which while often blamed on ethanol is much more complicated than that.

"We think we're in for an era of higher food prices," Cohen says, noting that the price trend from the 1900s has been declining farm prices. He says the drivers for the increasing food prices include the rising incomes in Asia and China, and the changing lifestyles in those countries -- urbanization -- which lead to more convenience foods.

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Also, the population in general still is growing. Also, the cost of transporting food to consumers is increasing. Other increased costs tend to be related to fertilizer.

Barring a technological breakthrough, prices are going up. One of the causes of this is global changes in climate, with North America influenced by droughts and floods, and places like Africa being the hardest hit.

"Ten days ago, the price of rice went up by one-third in one day -- March 28," Cohen says. At the same time, U.S. food assistance aid is "flat," which means less help than the hungry could use.

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