FCA changes director election rules

The Farm Credit Administration (FCA) Board has approved a final rule on director elections for Farm Credit System institutions. The purpose of this rule is to strengthen stockholder involvement in the management, ownership, and control of System institutions by increasing stockholder participation in the director election process.

The final rule would revise Farm Credit bank and association director election and voting rules, the requirements associated with holding stockholder meetings, clarifying the duties of nominating committees, and making and accepting floor nominations. The rule also enhances annual meeting and election notices to stockholders.

The final rule will be effective 30 days after publication in the Federal Register.

Read more details from FCA;

Basic Food Flavors knew about salmonella contamination

The Food and Drug Administration says Basic Food Flavors knew of salmonella contamination at its Las Vegas, Nevada plant back in January but kept shipping product anyway. To date, more than 100 products have been recalled but thousands of products could be affected by the contamination of a popular flavor enhancer HVP (hydrolyzed vegetable protein). HVP is often blended with spices to make seasonings used in a variety of food products including hot dogs, soups, salad dressings, chili, sauces, stews, gravies, chips and dips.

According to the FDA, Best Food Flavors had learned that samples from the plant tested positive for salmonella on January 21st. The company tested for and found salmonella twice in January and once in February but never issued a recall or took steps to minimize the risk of contamination. They kept manufacturing and shipping HVP through February 15th.

FDA was notified by a Best Food customer of possible contamination and began investigation of the plant on February 12th. FDA does not have the authority to order a recall so they began negotiating with Best Food Flavors to initiate a voluntary recall of the products which the company did on February 26th.

So far, no illnesses have been linked to the HVP and FDA says the risk is low because most of the products it is used in are cooked at some stage at temperatures high enough to kill the salmonella. The main concern is with ready-to-eat snacks.

FAPRI ‘10 baseline “depends on recovery”

Members of Congress were given the FAPRI 2010 Baseline Report Tuesday and authors say the outlook for agriculture depends a lot on the general economy.

“So if we get recovery in the overall economy that should let people have a little more money to spend on things like meat and dairy products and that might help us to see at least a mild recovery in the overall farm economy after a very bad 2009,” says Pat Westhoff, co-director of FAPRI, the Food and Agricultural Policy Research Institute at the University of Missouri. He net farm income is expected to increase somewhat over the next two years mostly due to stronger livestock prices, assuming demand increases. The FAPRI report also projects more corn acres this spring and an increase in corn demand for ethanol production. Slightly lower prices for soybeans and fewer wheat acres are expected this year.

Westhoff says crop insurance will be a more important part of government expenditures on agriculture, “By the end of our 10-year baseline outlook, we’re spending almost as much on the crop insurance program as we are on the basic farm programs funded by the Commodity Credit Corporation.”

Over the next 10 years, the FAPRI report says, direct payments make up the bulk of government payments.

AUDIO: Pat Westhoff, co-director, FAPRI, University of Missouri (5 min., MP3)

Senate passes biodiesel extender, disaster aid

A one year retroactive extension of the biodiesel tax incentive passed the Senate Wednesday, part of the jobs bill.

National Biodiesel Board Federal Affairs Vice President Manning Feraci says the lapse in the tax credit at the end of 2009 has been disruptive to the biodiesel industry.

The incentive is designed to make biodiesel price competitive with conventional diesel fuel. Since its lapse, the US biodiesel industry has seen a dramatic drop in demand and production.

The House and Senate now have to reconcile differences between the two versions. Both provide for a one year retroactive extension of the biodiesel tax incentive.

Senate Ag Committee and Ranking Finance Committee chair Charles Grassley of Iowa voted against final passage of the Senate Tax Extenders Act on Wednesday. In a statement following the passage of the bill, which restores the biodiesel tax incentive, Grassley said he opposes the contingency to include more deficit spending to fund it. Grassley faults congressional leaders for what he calls “irresponsible and even offensive” actions. The bill, which also extends unemployment benefits, passed 62 to 36.

The American Soybean Association applauds the passage of the legislation and is urging quick reconciliation and retroactive restoration of the dollar per gallon tax credit on biodiesel which Congress allowed to lapse on December 31st.

The bill also includes Senate Ag Chairman Blanche Lincoln’s 1.5 Billion dollar disaster aid for Arkansas farmers affected by weather related disasters. Counties that received a primary disaster declaration in 2009 are eligible.  Producers in Lincoln’s home state of Arkansas, as well as Mississippi, were especially hard hit.

Brownfield’s Tom Steever contributed to this report

Light utility vehicles now legal for ag use on Wisconsin roads

Wisconsin Governor Jim Doyle signed Assembly Bill 574 into law on Wednesday. Authored by Representative Amy Sue Vruwink, the bill allows farmers to use light utility vehicles like Gators, Rangers and Mules on roadways for agricultural purposes. “You have to have headlights, taillights, a slow-moving-vehicle sign, you have to be 16-years-old and you have to be in agriculture to drive them on the road,” says Vruwink.

Animal care proposal advances in MO House

A move in the Missouri legislature to protect livestock care practices has gained some traction. A resolution supported by the Missourians for Animal Care Coalition passed the Missouri House last week. Missouri Farm Bureau’s legislative director Leslie Holloway says the intent is, “To try to ensure that additional restrictions on raising animals, whether it be livestock or dogs or whatever the case may be, are under the jurisdiction of the General Assembly rather than interests that might come in from out of state such as the Humane Society of the United States.”

If passed by the Senate, the animal care constitutional amendment would go before Missouri voters in November when an HSUS-backed ballot proposal cracking down on dog breeders is expected to also be in front of voters.

AUDIO: Leslie Holloway, Missouri Farm Bureau Director of State and Local Governmental Affairs (7 min., MP3)

Pork producers wary of HSUS bill in Congress

Pork producers will be keeping a close eye on that HSUS-backed animal rights bill introduced in the U.S. House of Representatives.

The bill proposes to set rules around confinement of animals used to produce food purchased by the federal government.  According to Dr. Jen Greiner with the National Pork Producers Council, it’s the first time legislation addressing animal housing—gestation stalls, veal crates and laying hen cages—has been introduced in Congress. 

Greiner doesn’t expect the proposal to gain much traction by itself—but she is concerned its backers might try to tie it to reauthorization of the Child Nutrition Act later this year.

“(It’s) the bill that gives USDA the ability to go out and purchase food products to go into the school lunch program, the school breakfast program, and the Women, Infants and Children—or WIC—program,” Greiner says, “and so, as we look at that, obviously those foods are going into federal programs and this legislation could get swept into it.  So, clearly, we’re concerned about that.”

HSUS has been successful with animal rights initiatives at the state level and, to this point, has not shown much interest in pursuing federal legislation.  We asked Greiner if she’s surprised with this move in Congress.

“We did pick this year—an election year for the House of Representatives and part of the Senators—we did pick this year as being a year of potential mischief,” she says, “but (we) really hadn’t seen a whole lot of movement in that direction until last week.  So I guess while we are maybe a little bit surprised that it came this early, (we’re) definitely not shocked.”

The federal government spends more than one billion dollars buying animal products for a variety of programs and agencies, including the national school lunch program, the armed services and federal prisons.

AUDIO: Jen Greiner (4 min MP3)

Amish farmer wins Wisconsin premises challenge

An Amish farmer has won his court case challenging Wisconsin’s livestock premises registration law. Clark County Circuit Judge Jon Counsell ruled the law violates Emanuel Miller Jr’s religious beliefs. The judge said the state failed to prove its need to protect food safety and animal health could not be achieved by adopting something less restrictive. Counsell cited several flaws in the state law noting it was impossible to keep the register current because farmers only have to sign up every three years and it does not require the farmer to have a telephone so in the case of an outbreak officials would still have to go door-to-door.

Clark County was the site of a pseudorabies outbreak in 2007 and state officials spent days going door-to-door looking for hogs in two quarantine areas.

Wisconsin Assistant State Veterinarian Paul McGraw expects his agency will appeal the ruling.

Thanks to Thom Gerretsen, Wheeler News Service.

Crop reinsurance agreement caps agent commissions

Crop insurance agent commissions will be capped if the Federal Risk Management Agency has its way. The second draft of the standard reinsurance agreement says crop insurance agent commissions are to be no more than 80 percent of what the RMA provides to the company in administrative expenses for the policy.

Some reinsurers are currently paying as much as 27 percent in commissions to agents, says Bill Murphy, administrator of the Agency.

“How they’re making this work is that they’re betting that they’re going to have an underwriting gain in order to offset that cost,” Murphy told Brownfield Tuesday. “Well, what happens if we have another [year as bad as] ’93, say in Iowa?”

 AUDIO: Bill Murphy (8 min. MP3)

With that level of commission, Murphy says a bad year would put a financial strain on a company. As a concession, the RMA is proposing that agents be compensated with profit sharing, but he says agents aren’t buying it and Murphy says he’s surprised by their attitude.

“I have to question the logic,” says Murphy. “Would [agents] prefer that a company go out of business? You can just imagine in today’s environment, with the amount of insurance we’re now carrying, what kind of market disruption would occur if one of these major carriers went out of business.”

Murphy says the agreement is being renegotiated to control underwriting gains along with administrative and overhead costs. Combined, he says they went from $1.8 billion in 2006 to $4 billion in 2009.

“This is taxpayer money,” says Murphy. “There are better ways to spend this money.”

Murphy says the purpose of renegotiating the reinsurance agreement is to get control of costs.

“We’d like to make sure the companies get a reasonable rate of return [and] that the agents get a good amount of money to deliver the program,” says Murphy. “They are key to the success of this program.”

ASA urging quick passage after Tuesday’s vote

The U.S. Senate voted to end debate on the tax extenders bill today and the American Soybean Association is urging quick passage by the full Senate to restore vital jobs lost in the biodiesel industry. ASA is urging the Senate to find agreement with the House on a final bill that can be passed and signed into law as quickly as possible.

ASA President Rob Joslin of Ohio says the extension is desperately needed to save the 23-thousand jobs in the biodiesel industry because layoffs have already begun and most biodiesel plants are at a standstill since the credit was allowed to expire at the end of last year, “The major ones, the ones that actually contribute and produce a lot of biodiesel, virtually, I’m pretty sure, about all of them have shut down. So, the vast majority of the production capability has shut down and idled.”

ASA communications director Bob Callanan says remaining biodiesel production varies a lot by state, “You know, some states where there’s a mandate, they still have to produce the fuel to meet their in-state mandate so there’s still SOME production going on.”

Joslin told reporters that restoring the biodiesel tax credit retroactively is the number-one issue among many issues for the ASA. Joslin and Callanan made their comments at the ASA news conference at Commodity Classic in California last Friday.

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