Washington Wrap-Up Report

Steve Kopperud

Energy Battles Continue, CFTC Package Expected Soon
As members returned from the July 4 recess with constituents calling for action to lower energy prices, the battle over how far to go in seeking price relief rages. The House Agriculture Committee already held three days of hearings on how the Commodity Futures Trading Commission (CFTC) regulates energy and agriculture futures markets and whether the CFTC needs new authority to limit speculator influence in the markets.

A statistic bouncing around Congress holds that limiting or ending speculator participation in energy markets would reduce the price of a barrel of oil by as much as 30 percent “over night”; however, no one can substantiate the number.

House Speaker Nancy Pelosi (D-Calif.) is expected to introduce a draft CFTC bill by the end of July—based on the House Agriculture Committee hearing record and parts of more than 40 CFTC bills introduced in recent weeks—legislation she hopes will jump-start control of speculator activity on both domestic and overseas exchanges.

Pelosi also urged President Bush to draw down the Strategic Petroleum Reserve (SPR) by a “small portion,” but President Bush and the GOP have signaled they are not interested.

G8 Endorses Alternative Fuels, Industry Continues to Press for CRP, Import Tariff Relief
The Renewable Fuels Association (RFA) recently praised U.S. endorsement of statements out of the G8 talks on the world’s need to switch to alternative fuels, “welcoming the challenge to increase the sustainable production and use of biofuels,” and embracing the G8 challenge to “move aggressively to second-generation production (of fuel) from wood chips, switchgrass, garbage and other cellulosic materials.”

Meanwhile, the food industry continues its push to get EPA to grant the Texas governor’s petition to waive 50 percent of the Renewable Fuels Standard (RFS) for that state and for Congress to end the import tariff on ethanol, while renewing a call for USDA to allow farmers to release acres from the Conservation Reserve Program (CRP) without penalty for early withdrawal.

With corn prices high and bean prices moving higher, many farmers are already opting to not re-enroll acres in CRP. The RFA, however, continues to tout “the world has enough resources and the right technology to produce enough crops to meet the demand for food and biofuels.”

AFIA in June sent a letter to EPA requesting temporary relief from the RFS and speedier research and development of alternative sources of renewable energy.

USDA Working to Provide More Precise Flood Damage Reports
Midwestern farmers will be surveyed by USDA this month to get a better picture of the degree to which June flooding affected corn and soybean production, with new estimates to be included in the Aug. 12 crop production report. USDA said it will conduct new interviews with 1,200 producers since many have not decided whether to re-plant or await crop insurance payments. USDA also intends to re-interview 9,000 farmers in flood-affected areas and expand the number of corn and soybean fields used for field measurements.

In other USDA news, the department said it’s mailing $1.15 billion in 2008 advance direct payments under new authority granted as part of the 2008 Farm Bill. Sign-up for direct and countercyclical payments began June 25, and USDA’s checks are going out now to those farmers who elected to receive a 22-percent advance payment at enrollment. For information on which crops qualify for advance payments and the rate at which the payments are calculated for individual crops, go to www.fsa.usda.gov.

House Subcommittee Holds Truck Size, Weight Hearing
The highways and transit subcommittee of the House Committee on Transportation and Infrastructure recently held hearings following a call by commercial trucking interests to create a pilot program allowing trucks weighing up to 96,000 tons gross vehicle weight on six axles to operate on federal interstate highways. The hearing is seen as setting the stage for an all-out push next Congress when members confront reauthorization of federal highway legislation.

In the last two congresses, advocates have pushed legislation that seeks permission to operate the longer, heavier trucks. Now, following nearly a doubling of diesel fuel costs, coupled with truck driver protests, previously opposed members are apparently willing to give bigger trucks a second look, especially since commercial trucking moves about 65 percent of U.S. freight.