D.C. Watch: Apply for disaster assistance by April 15

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From disaster assistance to tax reform, here is a look at the latest news from Washington:

  • Crop farmers won’t be able to sign up for new farm programs until next fall, according to Agriculture Secretary Vilsack. It will take that long for USDA to write rules and regulations to implement the complicated new programs. That gives producers more time to weigh the options before making a one-time decision about enrolling in the new ARC (shallow loss) program or the PLC (counter-cyclical) program. Producers that choose the PLC can then buy the Supplemental Coverage Option to enhance their crop insurance protection. Any payments under these new programs won’t be made until late in 2015.
  • Livestock producers should be able to begin applying for disaster assistance by April 15. The new farm bill reinstituted some key livestock programs retroactively to 2011. USDA hopes to be able to make payments under these programs soon after the claims are filed.
  • The World Trade Organization dispute panel is expected to issue a confidential interim report about the U.S. Country of Origin Labeling law on June 20 of this year. The final report is expected to be issued a month later on July 22. The panel heard oral submissions about the law last week. House Agriculture Committee Chairman Frank Lucas predicts that the U.S. will lose the case.
  • A tax reform plan that would have significant implications for agriculture has been proposed by House Ways and Means Committee Chairman David Camp (R-MI). The bill, which is nearly 1,000 pages long, would eliminate income averaging and 1031 exchanges. It would set Section 179 write-offs at $250,000, up from the current $25,000, but well below the $500,000 of the last few years. Accelerated depreciation would be eliminated. Seventy percent of the earning for taxpayers who materially participate in an S corporation or partnership would be subject to self-employment tax. The proposal will probably not be passed this year, but tax reform is a real possibility in 2015.
  • The president released his budget plan for fiscal 2015 last week, but the proposals are not expected to get very far with Congress. The new farm bill restricts USDA’s ability to negotiate cuts in crop insurance as part of the farm bill, but the president’s budget proposal calls for cutting rates of returns to insurance companies from 14 percent to 12 percent. The budget proposal also reduces premium subsidies for some insurance policies. Under the proposal USDA’s budget would total $140 billion – with $106 billion for nutrition programs, $15.4 billion for commodity programs, and $11.2 billion for conservation programs.
  • Closing 250 Farm Service Agency offices around the country is another proposal in the president’s budget. Agriculture Secretary Vilsack said 31 FSA offices have no full-time staff. Several others have one or two full-time employees but are located within 20 miles of a larger office. Even if the these are closed, there would still be 2,100 local FSA offices in the country. Closing FSA offices has been proposed before but members of Congress usually object if any of the closures would affect their constituents.
  • There is little evidence that the crisis in Ukraine is affecting that country’s grain exports, at least so far. Major agricultural trading companies have spent tens of millions of dollars on ports, grain facilities and processing plants in the regions and so far the facilities are operating normally. However, the pace of export sales may slow as buyers look for sources where the risk of shipment disruptions is lower. USDA’s Chief Economist Joe Glauber says world grain markets may have reacted prematurely to recent events. Glauber said there are no signs that grain buyers are shifting away from the region looking for more stable suppliers.

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