The U.S. Labor Department officially withdrew proposed rules that would have prevented many young people from working on farms and ranches.

“The Obama administration is firmly committed to promoting family farmers and respecting the rural way of life, especially the role that parents and other family members play in passing those traditions down through the generations,” said the department in a press release. “Instead, the Departments of Labor and Agriculture will work with rural stakeholders — such as the American Farm Bureau Federation, the National Farmers Union, the Future Farmers of America, and 4-H — to develop an educational program to reduce accidents to young workers and promote safer agricultural working practices.”

The Labor Department said it received “thousands of comments” against the proposal rule regarding youth in agriculture and made it clear that the “regulation will not be pursued for the duration of the Obama administration.”

The rule ideally would have included an exemption for children of farming families, but once that door was opened it would only be a matter of time before they would have been included under it as well. It could have prevented the next generation of farmers and ranchers from acquiring skills and passion for the profession and definitely would have kept urban kids from working on farms and learning from the solid worth ethic found in this industry.

This is a great victory for farmers and ranchers and truly shows the strength of American agriculture and grassroots action. Thanks to the administration for using some common sense!

Senators Kent Conrad (D-ND), Max Baucus (D-MT) and John Hoeven (R-ND) unveiled what they are calling the “Revenue Loss Assistance and Crop Insurance Enhancement Act of 2012″ which they say reduces farm program complexity and duplication, strengthens the federal crop insurance program, permanently extends livestock disaster assistance, and would serve as a major component of a new Farm Bill.

The senators say the legislation would maintain a strong safety net for producers and still contribute to deficit reduction. “This proposal complements crop insurance, is much easier to administer than current farm programs, and gives our family farmers the support and flexibility they need to succeed,” Senator Conrad said.

Senator Baucus says the concept is one that agriculture interests have indicated they will support. “This bill is written with the direct input of the farmers and ranchers out there getting dirt under their nails every day to keep food on our tables,” he said. “I look forward to working with our colleagues to roll these priorities into a larger Farm Bill we can all be proud to support.”

In other action, Senators Tom Harkin (D-IA), Kent Conrad (D-ND), Amy Klobuchar (D-MN) and Al Franken (D-MN) introduced legislation to reauthorize and fund the primary energy programs included in the current Farm Bill. The Rural Energy Investment Act would include a mandatory total of $1.275 billion over 5 years to strengthen the biobased markets program, fund the Biorefinery Assistance Program, reauthorize and fund the Rural Energy for America Program (REAP) and more.

“We can and we must transition to cleaner, more sustainable energy systems, and rural America will play a crucial role in this transition,” said Sen. Harkin. “As we are formulating the next farm bill, it is even more critical that we include strong programs that encourage production and use of biomass feedstocks for advanced biofuels and biomaterials, as well as assisting farmers and ranchers with adoption of energy efficiency and renewable energy technologies to replace their aging energy systems.”

The annual commemoration of the importance of agriculture is traditionally celebrated on the first day of spring to recognize the start of planting season, but the event in the nation’s capitol is held a little earlier in the month when Congress is in session so lawmakers can attend.

Among those who attended the festivities on Thursday was Congressman Collin Peterson (D-MN), Ranking Member of the House Agriculture Committee, pictured here chatting with National Corn Growers Association Chairman Bart Schott of North Dakota during the Ag Day Meet and Mingle Luncheon.

During brief remarks, the Congressman talked about his desire to do what he can to support the effort to communicate the importance of agriculture to the general public and those who implement policies in the nation’s capitol. “People think that they know better than farmers how to do things. Most of them have no clue what they’re doing,” he said.

Peterson also talked about how the agriculture committee worked together across party lines to try and get a farm bill as part of last year’s “super committee” process. “Unfortunately, we were the only committee in Congress that did what was required and that is to come together with a bill that would actually reduce our budget,” he said. “No other committee even tried to do it and the super committee fell apart.”

He says the farm bill process will begin in earnest over the next few weeks. “Our goal is to try and get this done by May or early June. It will not be easy, given the climate around here.” the congressman said. “We’re determined to work together and try to do what’s best for agriculture and for America.” He added that agriculture is “the only part of the economy is working.”

Listen to remarks from Congressman Peterson here: Remarks from Congressman Collin Peterson

2012 National Agriculture Day Activities Photo Album

When President Obama mentioned clean energy, however, I started paying attention to him, in spite of the 2-year-old. “We have subsidized oil companies for a century. That’s long enough,” the president said. “It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.”

My jaw hit the ground. It was a theme I had heard repeatedly at the summit during the day, starting with the opening address by Iowa Renewable Fuels Association (IRFA) executive director Monte Shaw. “Today the oil industry enjoys billions of dollars in tax subsidies while the renewable fuels industry has none,” said Shaw, proceeding to name off all of the subsides unique to the oil industry.

It’s a long list that requires a high-price accountant to understand – not a problem for the oil industry! Percentage depletion allowance, marginal oil well incentives, enhanced oil recovery credits, intangible drilling costs expensing, deduction for tertiary injectants, exception from passive loss limitations for oil and gas, etc. According to a DTN analysis, the total comes to about $17.9 billion a year.

All of it goes back to the inception of the tax code in 1913. What that means is simply that these subsidies, unlike the meager tax credit that helped the ethanol industry for a fraction of that time, are EMBEDDED in our tax code. They are never going to expire.

So, that begs the question of whether Congress will ever do anything to get rid of those subsidies. It will not be an easy process. But, like the president said, a century is long enough. If the ethanol industry is now mature enough after about 20 years to stand on its own, surely the oil industry can do so.

Calling the overall plan a Blueprint for Stronger Service, Vilsack said it was born out of necessity.

“Since 2010, Congress has reduced our discretionary operating budget by more than $3 billion – a roughly 12% cut,” said Vilsack. “We understood this day of reduced budgets was coming and we have been proactive.”

Part of the plan includes closing 259 domestic offices, facilities and labs across the country, as well as seven foreign offices and consolidating over 130 county Farm Service Agency offices in 32 states. “Of the 131 offices on the list, 35 currently have no employees,” Vilsack said. “Our choice was either to maintain these offices or reduce our effort at improved technology to better serve producers and furlough workers, disrupting service to many, many people. We’ve invested millions of dollars and thousands of hours in an effort to get technology that should allow us to better serve producers with reduced staff.”

Overall, it should save about $150 million a year, which is really just a fraction of USDA’s $145 billion per year budget, but in an atmosphere of increasing spending all the time, it is at least a start.

So far, there seems to be surprisingly little grumbling out in the countryside about the office closings, although the national media has been trying hard to find people willing to complain about it. Of course there will be some people who are inconvenienced initially by the changes, but ideally using technology (internet, cell phones, etc.) will result in way better, more flexible and more efficient service in the long run.

Listen to Vilsack’s comments to AFBF annual meeting here: Ag Secretary Tom Vilsack at AFBF annual meeting

“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”

The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The original filing notes that “the LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security. One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS.”

On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. The judge also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

The California Air Resources Board (CARB) is expected to automatically appeal the ruling to the U.S. Court of Appeals for the 9th Circuit and the industry is prepared to continue the fight to provide clean corn ethanol for all Americans.

Both former Governor Mitt Romney and former Senator Rick Santorum expressed their support for the federal renewable fuels standard while campaigning in Iowa. In addition, both candidates were 4-for-4 on other important ethanol issues, including a fair and equitable energy tax policy; the attempt to ban E15; and consumer fueling choice through programs to increase the number flexible fuel vehicles (FFVs)and blender pumps in the nation. The other two candidates who scored well in all those categories were Newt Gingrich and President Obama.

“Despite scant attention on agriculture issues by the national media, both Governor Romney and Senator Santorum prioritized rural and ag issues,” said Iowa Renewable Fuels Association Past President Walt Wendland, CEO of Golden Grain Energy near Mason City. “It came as no surprise to us that friends of ethanol fared well in the Iowa Caucus.”

Ron Paul, Michelle Bachman and Rick Perry all were opposed to the RFS and increasing FFVs and blender pumps, while only Rick Perry was against E15 and a “fair and equitable energy tax policy” that would “create a level playing field for energy taxes” by revising the permanent tax benefits enjoyed by the petroleum industry.

The voter guide was mailed to approximately 10,000 Iowa households with residents who are directly involved in Iowa ethanol refineries and was also promoted to all of Iowa’s 250,000 agricultural households via email, the Internet and social media. An electronic version of the guide can be viewed at: www.IowansFueledwithPride.com.

“We had a lot of things that came together and pushed prices up for a wide variety of products the last couple of years,” said Patrick Westhoff, Director of the Food and Agricultural Policy Research Institute (FAPRI) during a visit at the St. Louis Agribusiness Club. “We expect a lot of volatility in the year ahead.”

One of the main reasons is an “ordinary garden variety one” – the weather. “People tend to forget that sometimes,” said Westhoff. On top of that, the biggest factors to consider are land markets and what Congress will decide to do with farm policy. No surprises there!

He notes that tight stocks will continue to keep corn prices particularly volatile. “Every little piece of news, either positive or negative, can make the market move around a lot,” Westhoff added.

Westhoff believes that the spending cuts presented to the “super committee” by the House and Senate agriculture leadership should help start the conversation for a new farm bill in 2012, “but it certainly won’t be the end of that conversation.”

Listen to Chuck Zimmerman’s interview with Patrick Westhoff here: Patrick Westhoff Interview

Now it’s time to play catch up to gain market share lost due to the slowness in getting those agreements ratified. “Earlier this year, NCGA provided testimony to the Senate Finance Committee citing Panama as an example of lost market share,” says National Corn Growers Association president and Illinois farmer Garry Niemeyer. “Corn exports to the country peaked in 2008 and have since dropped 20 percent. This market erosion was due in part to a lack of progress on the Panama FTA. As a farmer, it has been frustrating to see other nations achieve access to markets over U.S. corn and corn products.”

Colombia has been importing more corn from Argentina, Brazil and Paraguay because of an import duty preference. From marketing year 2007-08 through 2009-10, U.S. corn exports to Colombia dropped 78 million bushels, an estimated loss of $475 million. Under the Colombian FTA, U.S. corn producers gain immediate access to the Colombian market for 2.1 million metric tons of corn at zero percent duty.

The new agreement with Panama eliminates 50 percent of tariffs immediately and is estimated to mean a $46 million gain in U.S. agriculture exports to that country. The Colombia agreement will bring a $370 million gain in agriculture exports and will eliminate 80 percent of tariffs, and the Korea agreement could mean a $1.9 billion gain for U.S. agriculture exports by eliminating two-thirds of tariffs immediately. Under the Korea FTA, imports of U.S. corn for feed and distillers grains are guaranteed to enter duty free immediately.

What this means in a word is jobs. “Farm exports help support more than 1 million American jobs, said Agricultural Secretary Tom Vilsack upon the signing of the FTAs. “These three agreements will increase farm exports by an additional $2.3 billion—supporting nearly 20,000 American jobs—by eliminating tariffs, removing barriers to trade and leveling the playing field for U.S. producers.”

American Farm Bureau estimates that the trade agreements will create more than 22,500 jobs when fully executed. Now that’s a real stimulus for the economy. Let’s get back in the game and play catch up.

Legislation called the Renewable Fuel Flexibility Act has been introduced in the House that would change the requirement for ethanol in the motor fuel supply under the RFS2 whenever corn stocks are tight. While this might seem like a good idea to some on the surface, it’s really a very bad idea.

The intent of bill sponsors Bob Goodlatte (R-VA) and Jim Costa (D-CA) is to give relief to livestock producers, dairymen and consumers. Here’s what Rep. Costa said introducing the bill:

“The Renewable Fuel Standard has been incredibly successful in replacing a portion of the oil we import with home-grown energy, and I continue to support RFS. While ethanol is not the only factor I am convinced it is a factor in the high prices farmers pay for feed and consumers pay for food.”

So, even though the RFS is helping reduce our dependence on foreign oil, and even though it is only one factor of many in the price that livestock producers pay for feed, these lawmakers want to tamper with a standard that basically has been doing what it was intended to do since it was first implemented in 2005 and expanded in 2007.

All of the ethanol organizations and a number of farm organizations – including American Farm Bureau and National Farmers Union, both of which have livestock producers as members – are opposed to changing the RFS2 for a number of reasons. First and foremost is that the corn stocks-to-use ratio can vary tremendously from month to month. The Goodlatte-Costa bill would determine the amount of change in the RFS based on the stocks at the time EPA sets the RFS standards for the following year. The problem with that is the stocks-to-use ratio is just an estimate and has varied by 4-8% between USDA’s first prediction to the final for the last three years. Geoff Cooper of RFA has an excellent analysis of this on the E-xchange Blog where he has the following table:

The Goodlatte-Costa bill would require a reduction in the RFS when the stocks-to-use ratio drops below 10 percent, up to a 50 percent reduction if the ratio falls below 5 percent. Under the estimates for the 2010-11 year, if the RFS was set at the first estimate, there would have been no change. If it were set later, at the 5% low estimate, then the RFS would have been cut by at least 25%.

Another reason not to mess with the RFS is that it would likely result in increased gas prices. A study done earlier this year by economists at the University of Wisconsin and Iowa State University found that the increase in ethanol use between 2000 and 2010 reduced gasoline prices by an average of $0.25 per gallon, or 16 percent. In addition, the report determined if ethanol production ended, gas prices would increase, depending on a range of conditions, from 41% to 92%.

So, if the Renewable Fuel Flexibility Act were passed and the RFS2 were changed in the coming year to require 25-50% less ethanol in the fuel supply, gas prices would probably go up as a result. And since energy costs are one of those other factors in the price of food and feed (actually the biggest factor, but whatever) the result would be …. higher food and feed costs!

Bottom line, the RFS2 is doing what it was intended to do by cutting our dependence on foreign sources of petroleum – don’t mess with it now that we are actually making progress.