The National Grange - a New Century

Recently, Leroy Watson, National Grange Legislative Director, expressed concern over Argentina President Cristina Kirchner’s agricultural policies. President Kirchner experienced her most debilitating political loss to date when Vice President Julio Cobos cast the deciding vote against a massive tax increase President Kirchner had been working to implement. This tax increase would have levied a 45% tax on agricultural products exported by Argentina that help feed a world facing food shortages. According to Watson, if this presidency has any hope of succeeding, President Kirchner must adopt significant economic and political policy reforms.

In her first several months as president, Kirchner enforced policies first adopted by her predecessors, including her husband. Those policies included the intentional devaluation of the Argentine peso that, perversely, allowed the Argentine government to give Argentine agricultural exports an unfair price advantage over American farmers in world markets.

In 2001, Argentina defaulted on more than $80 billion in sovereign debt obligations. Following the failed restructuring of this debt in 2005, former President Nestor Kirchner implemented a series of reforms attempting to stabilize the economy, including the intentional devaluation of the peso. Repudiating remaining debt obligations cost international lenders more than $20 billion and had indirect costs of more
than $10 billion for Americans. Watson urged Congress to protect the interests of American farmers as well as international agricultural commodity markets by forcing Argentina to end its currency manipulation, which provides its farmers with a significant export advantage. He stated that President Kirchner and Argentina must not be allowed to get away with failed policies, which hurt not only Argentine farmers, but American farmers, too.

Currently restricted from accessing international capital markets due to its unpaid debts, Argentina could solve its financing needs by honoring the dozens of U.S. court judgments favoring investors that it’s currently ignoring. Instead of addressing its sovereign debt obligations, Kirchner has desperately sought alternative financing arrangements, including billions of dollars in high interest loans from Venezuela’s Hugo Chavez and, most recently, a proposed massive tax increase on agriculture exports. This led to demonstrations by hundreds of thousands of Argentine farmers and consumers. The protests strengthened even as domestic food shortages and higher prices set in.

Expecting to validate her tax increase, President Kirchner put the issue up for a vote before Congress. Argentina’s farmers bravely stood up to their president and strongly opposed the cynical efforts by the Kirchner Administration to profiteer from the outbreak of food shortages around the world to fund the Argentine government. After tense, late-night negotiations the vote resulted in a tie. In a tie-breaking vote, Vice President Cobos stood with farmers and other humanitarian Argentines who don’t want their nation to profit from world hunger or be isolated in the international community in order to oppose President Kirchner and cast the final vote needed to defeat the tax increase.

National Grange Supports FAA Reauthorization

The National Grange wrote to the Senate Committees on Finance and Commerce expressing full support for the Federal Aviation Administration (FAA) reauthorization proposal that is currently being considered by the U.S. Senate. Congress must act now before crucially needed funding expires on September 30th of this year. Recently, the Senate Finance Committee, together with the Senate Commerce Committee, reached a reasonable and common sense compromise that would bring the FAA reauthorization bill to the Senate floor.

In addition to improving air travel over the long term, a multi-year bill would create jobs and generate significant economic activity for our rural communities, including many long-term airport projects in rural and underserved areas. If this legislation is not adopted this year, we will have to start over again with a new Congress and a new Administration. The aviation industry as well as the farming and rural communities that depend on reliable, cost effective general aviation services that operate from our nation’s 2500 community airports simply cannot afford to wait that long.

National Grange Urges Removal of Natural Gas Production Moratorium

The 109 members of the Agriculture Energy Alliance (AEA) including the National Grange wrote to Appropriations Committee members urging them to vote in favor of amendments removing the moratorium on natural gas production in the Outer Continental Shelf.

Experts say that food production will need to double in the next 20 years to meet rising global demand. Today, tight natural gas supplies have driven U.S. farm inputs and energy prices to all time highs, increasing farm production costs. The U.S. farm sector is being weakened by constraints on onshore and offshore natural gas development, even as global demand for food is growing every year. By wisely developing and utilizing our own national resources, Congress can help ensure that farming remains an economically viable occupation. Onshore and offshore natural gas production is a vote for food security. The farm sector depends on significant amounts of natural gas for food processing, irrigation, crop drying, heating farm buildings and homes and the production of crop protection chemicals and fertilizer. We urge you to support amendments allowing for additional offshore natural gas production. Additional supply of American energy resources is critical to maintaining a competitive agricultural sector.

On a related note, the AEA also thanked U. S. Senate members for working together on a bi-partisan energy summit and their willingness to address energy supply through increased domestic production.

Credit Card Fair Fee Act Flawed

The National Grange along with other groups, wrote to the House Finance Committee members expressing grave concerns about H.R. 5546, the so-called Credit Card Fair Fee Act. The legislation seeks to grant a giant antitrust exemption to over 15 million retailers for the purpose of negotiating lower “interchange fees” – the fees charged for the use of credit and debit cards at retail outlets. While the intent of the legislation was to find innovative ways to deliver relief to consumers struggling with high food and gas prices, the group fears that this legislation will provide no such relief. Further, this legislation could do considerable harm to consumers. For starters, the legislation does not include provisions guaranteeing that consumers will benefit in any way should retailers succeed in negotiating lower interchange rates. Instead, this legislation seems to guarantee only higher profits for retailers. Second, the granting by Congress of antitrust exemptions to large numbers of horizontal competitors invites collusion and other abuses which are, after the fact, hard to police and prosecute. Third, credit card services are a critical lifeline for community banks and credit unions that must compete against the larger
financial institutions. Congressional mandates enabling retailers to set interchange rates will likely result in many community banks and credit unions exiting the marketplace for these services. Finally, by giving retailers the unilateral authority to set terms and conditions for retail credit, this legislation will limit the availability of such credit services in many middle and low-income communities where the dollar volume of retail credit card transactions is lower.

National Grange Urges Changes to the Conservation Stewardship Program

National Grange, along with other groups recently wrote to USDA Secretary Ed Schafer with respect to the U.S. Department of Agriculture’s implementation of the Conservation Stewardship Program.

By enacting the 2008 Farm Bill, Congress made substantial changes designed to streamline and improve the former Conservation Security Program. The Coalition urged the Secretary to support a program that will achieve broad participation of farmers and ranchers and substantial, lasting conservation gains on America’s private lands.

The Coalition believes it is very important for America’s farmers and ranchers to have an opportunity to enroll in new Conservation Stewardship Program contracts during the winter of 2008-2009. To the extent farmers have ‘down time,’ it is generally during the winter months, and they will be much more willing and able to navigate new program requirements and handle enrollment paperwork if they can do it before planting season starts in the spring. The Coalition also believes it is in the interest of the Department– from the standpoint of effective use of personnel and effective program delivery – to handle the major contract offer evaluation and participant selection process earlier rather than later in the fiscal year.

The group appreciated USDA’s commitment to meeting the requirements of Section 2904 of the 2008 Farm Bill to promulgate regulations on a 90-day timeline. However, they also recognized that it is a substantial challenge to move through the process of developing rules and seeking public comment. They urged the Secretary to move ahead with this process with all deliberate speed, issuing a proposed rule by September and an interim final rule by December.

National Grange Supports Adoption of Broadband High-Speed Internet Services

The National Grange, in conjunction with 30 other organizations, sent a letter of support to the Senate Commerce Committee and House Committee on Energy and Commerce for their support of Congressional action to promote greater availability and adoption of broadband high speed Internet services.

The leading bills pending before Congress (S. 1492, the Broadband Data Improvement Act and H.R. 3919, the Broadband Census of America Act of 2007) would improve information gathering about current broadband deployment and assist in targeting resources to areas in need of such services. A recent Federal Communications Commission order requires more focused broadband data collection from broadband providers but does not address other important broadband mapping elements contained in the
pending legislation.

The letter calls on Congress to adopt legislation this year that provides federal government support for state initiatives using public-private partnerships to identify gaps in broadband coverage and to develop both the supply of and demand for broadband in those areas. The ability to accelerate deployment and adoption by bringing together government, broadband providers, business, labor, farm organizations, librarians, educators, and consumer groups in public private partnerships is greater than the ability of these diverse players standing alone.

The coalition believes that adopting a national policy to stimulate where it is already available, and deployment where it is not, could have dramatic and far reaching economic impacts. For example, a Connected Nation study released February 2008 estimated the total annual economic impact of accelerating broadband across the nation to be more than $134 billion. In addition to the $134 billion total benefit, the study found that increasing broadband adoption by another seven percent could result in:

$92 billion through an additional 2.4 million jobs per year created or retained;
$662 million saved per year in reduced healthcare costs;
$6.4 billion per year in mileage savings from unnecessary driving;
$18 million in carbon credits associated with 3.2 billion fewer pounds of CO2 emissions per year in the United States; and
$35.2 billion in value from 3.8 more hours saved per year from accessing broadband at home.

“We cannot afford to let another year go by without adopting policies that will stimulate the economy in such ways,” the letter explained, “while expanding use of the networks that are already deployed and providing broadband in previously underserved areas.”

National Grange Supports Commodity Markets Transparency and Accountability Act of 2008

National Grange wrote to members of Congress strongly urging them to vote for H.R. 6604, the Commodity Markets Transparency and Accountability Act of 2008. This important legislation would benefit farmers and the entire economy by ensuring that the nation’s commodity futures markets are utilized for their original purpose– to serve as a marketplace where producers and users of commodities can hedge their commercial transactions free of manipulation.

Production agriculture relies on smoothly functioning futures markets for risk management and price discovery. Unfortunately, in recent months concerns about agricultural futures market performance have grown, and the ability of producers and processors to use those markets for hedging has in some cases been seriously compromised. At the same time, agricultural producers have a strong interest in transparent and efficient energy futures markets, since so many input costs are directly related to U.S. and world energy prices.

H.R. 6604 addresses National Grange concerns about both agricultural and energy markets in a balanced, responsible, and bipartisan way. It will require transparency and improved access to market critical information, as well as establishing reasonable requirements to limit speculative positions. It would require the Commodity Futures Trading Commission (CFTC) to set trading limits for all agricultural and energy commodities, in order to prevent excessive speculation. The bill will strengthen the CFTC with both new legal authority and increased staffing as it grapples with complex and important new issues of oversight, surveillance and regulation.

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