Policy Updates: House Farm Bill Brings Biting Political Remarks from Democrats

Posted on 04/13/2018 7:28 AM

U.S. pork now available for Argentina



House GOP, Democratic leaders have differing views of House farm bill package. There could well have been two different farm bill plans released by the House Ag Committee Thursday based on the responses from House leaders, particularly on the nutrition program provisions.

House Speaker Paul Ryan (R-Wis.) lauded the plan, noting, "This is exactly the time when we need to pull people out of poverty, off of welfare, into the workforce so they can get good careers, so they can get livelihoods. That's exactly why we are confident that we can get this done and why it's the precise thing we need to do to get people from welfare to work."

House Minority Leader Nancy Pelosi (D-Calif.) slammed the package. "This partisan proposal seals Republicans' betrayal of rural communities and working families across the nation," Pelosi said. "House Republicans are hastily moving to devastate the seniors, veterans, individuals with disabilities and vulnerable communities who rely on SNAP to put food on the table. The GOP's 'workforce requirements' are nothing but a cynical Trojan Horse to take away SNAP from millions of hungry families and push forward new burdensome bureaucracies that fly in the face of evidence-based policy."

Despite that discord, Ryan sounded optimistic on prospects for the House to clear the bill. "I think we can pass it," he said. A veteran House source signals although it definitely will not be easy, there appears to be enough GOP-only votes to clear the House measure. That is a conclusion not shared by many others.

House Ag Ranking Member Collin Peterson (D-Minn.) continued his assault on the House farm bill package, not only with his often-mentioned concerns about the food stamp/SNAP provisions (which were far different from what Democratic members released earlier), but Peterson also call the safety-net provisions deficient, even though he helped negotiate and write that section with House Ag Committee Chairman Mike Conaway (R-Texas). Peterson now wants higher reference prices other than the way the pending House bill allows for them via higher market prices. “It makes no sense to put the farmers and rural communities who rely on the farm bill’s safety net programs at risk in pursuit of partisan ideology on SNAP,” Peterson said in a statement. “Between record low farm incomes, and the escalating threat of a trade war and other market disruptions, farmers have enough to worry about. Breaking up the long-standing, bipartisan, urban-rural farm bill alliance is a dangerous and unproductive step that will only sow division and jeopardize both this and future farm bills.” He said the House bill “also fails to make needed improvements to the farm safety net. American farmers are suffering from the largest drop in farm income since the Great Depression but the farm safety net in this bill is inadequate and won’t help farmers. Our farmers need a safety net that will address their current reality. This farm bill fails to provide the certainty farmers need during uncertain times.”

Conaway responds. "Anybody who eats ought to be really in favor of good agricultural programs, whether you're in a big city or not," Conaway said. He was critical of any Democratic efforts to complicate the farm bill out of opposition to the changes in SNAP. “If they intend to use their [voting] card to punish Conaway, I got it, but they've got to go home and justify it to their folks," he said.

Timeline for House farm bill. House Ag Chairman Mike Conaway (R-Texas) said his panel would mark up the farm bill (HR 2) on April 18, with floor time up to the GOP leaders, but “as soon as possible. “We’re going to get this done," Conaway said, adding that his staff would collect amendments until Monday afternoon. "We'll thoughtfully consider each one," he said.

Conaway said he believes he can persuade members on the policy merits of the farm bill to get the 218 votes he needs for passage. He did not specify when he would bring the bill to the House floor, but congressional sources signal mid-May.

— U.S. pork headed back to Argentina. U.S. pork exports to Argentina will be possible via new rules finalized between the two countries, according to an announcement from USDA and the Office of the US Trade Representative (USTR). The two countries reached agreement on the matter in August and the two sides worked out the technical requirements for the first U.S. pork shipments to Argentina since 1992.

USDA and USTR have been working with Argentina's Ministry of Agro-Industry on new, science-based market access terms that are consistent with international animal health standards, officials said.

Perdue comments. "Once the people of Argentina get a taste of American pork products after all this time, we are sure they'll want more of it," USDA Secretary Sonny Perdue said in a statement.

Impacts. USDA estimates that in the near term, Argentina will buy about $10 million worth of U.S. pork annually, but stresses that there are “significant growth opportunities.”

“Argentina has tremendous potential for U.S. pork exports,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “This is great news for America’s pork producers, who last year exported almost $6.5 billion of pork around the world.”

Facts and figures. Argentina, which had a de facto ban on U.S. pork, has a population of more than 44 million and a per capita income of $17,250 – higher than Mexico’s – making it an attractive market for U.S. pork. Iowa State University economist Dermot Hayes has noted that fresh pork consumption in the country has increased from about 2 lbs. in 2005 to 22 to 26 lbs. today. The Argentine pork industry estimates that by 2020 consumption will increase to 35 to 44 lbs.

“This development demonstrates the Argentine government’s commitment to expanded and more open trade with the United States,” said Heimerl. “And it will help us grow our exports, which the U.S. pork industry is very dependent on. Last year’s exports, for example, added more than $53 – representing almost 36 percent of the $149 average value of a hog in 2017 – to the price we received for each animal marketed.

“The United States can’t sit on its hands when it comes to trade. Opening new markets, such as Argentina, and expanding existing markets is imperative,” the NPPC said in a statement.

Other items of note:

  • The Trump administration, confident in its hardline strategy, reportedly plans to ratchet up pressure on China. The administration may focus on new tariffs and threaten to block Chinese technology investment in the United States, the Wall Street Journal reported. Link to article.

  • Russia targets U.S. food and ag products. Russian lawmakers have drafted legislation in response to new U.S. sanctions. It would ban American food and agricultural products, tech equipment and software, medical products, and tobacco and alcohol. The draft also proposes barring cooperation on atomic energy and aerospace, and stopping U.S. firms from taking part in Russian privatization deals.

  • Definition of a family farm in House farm bill. First cousins, nieces and nephews would be considered a family member for purposes of determining who is eligible for commodity subsidies, which are capped at $125,000 for each person who is actively engaged in the operation of a farm. Under current law, family members are defined as a sibling, spouse, grandparents and grandchildren. The committee said this change would prevent a death in the family from breaking a lineal relationship, which can disqualify living family members from a separate payment limit.

  • House farm bill includes funding for FMD vaccine bank. The House farm bill calls for first-year mandatory funding of $150 million for the foot-and-mouth disease (FMD) vaccine bank, $70 million in block grants to the states for disease prevention and $30 million for the National Animal Health Laboratory Network (NAHLN), which provides diagnostic support to assist in managing diseases in the United States. For the other years of the 5-year Farm Bill, there’s $30 million in mandatory funding for state block grants and $20 million to be used at the Agriculture secretary’s discretion for the vaccine bank, the NAHLN and the states. NPPC is urging lawmakers to provide annual funding of $150 million for the vaccine bank, $70 million for state block grants and $30 million for the NAHLN over the life of the farm bill. According to Iowa State University economists, an FMD outbreak in the United States, which would prompt countries to close their markets to U.S. meat exports — thus creating a surplus of meat on the domestic market — would cost the beef and pork industries a combined $128 billion over 10 years if livestock producers weren’t able to combat the disease through vaccination. The corn and soybean industries would lose over a decade $44 billion and $25 billion, respectively; and economy-wide job losses would top 1.5 million.

  • USTR reviewing GSP for India, Indonesia and Kazakhstan. Whether imports of certain products from India, Indonesia and Kazakhstan should continue to see duty-free treatment via the Generalized System of Preferences (GSP) is being assessed by the Office of the US Trade Representative (USTR). For India, the review is on access to the India market for US dairy and medical products while the review for Indonesia links to their market access related to its compliance with GSP provisions on services and investment. For Kazakhstan, the review is relative to the country not adopting internationally recognized worker rights. “GSP provides an important tool to help enforce the Trump Administration’s key principles of free and fair trade across the globe. The President is committed to ensuring that those countries who receive GSP benefits uphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress,” said Deputy USTR Jeffrey Gerrish. “We hope that India, Indonesia, and Kazakhstan will work with us to address the concerns that led to these new reviews."

  • Cotton AWP jumps; another upland cotton import quota announced. The cotton Adjusted World Price (AWP) will be 74.32 cents per pound, effective today, up from 72.03 cents per pound the prior week and the highest since it hit 75.12 cents per pound effective March 16. This marks seven straight weeks the AWP has been at 70 cents or higher. USDA also announced Special Import Quota #25 for Upland Cotton will be established April 19 for 60,492 bales of upland cotton, applying to upland cotton purchased no later than July 17 and entered into the U.S. no later than Oct. 15.

  • A petition to split California into three separate states has gathered about 600,000 signatures, well more than the 365,880 required to be on the ballot in November. Leading the effort is venture capitalist Tim Draper, who has been lobbying for the initiative since 2014. To go into effect, California would have to certify the signatures, voters will need to pass the measure, followed by U.S. congressional approval. That is unlikely.

Markets. The Dow on Thursday gained 293.60 points, 1.21%, at 24,483.05. The Nasdaq added 71.22 points, 1.01%, at 7,140.25. The S&P 500 rose 21.80 points, 0.83%, at 2,663.99.

China recorded a trade deficit of $4.98 billion in March, well shy of the $27.21 billion surplus that was expected and the first deficit in more than a year. The data was most likely distorted by the timing of the Lunar New Year holiday. Dollar-denominated exports fell 2.7%, while imports rose 14.4%, resulting in a deficit of almost $5 billion. The figures come against a backdrop of growing U.S.-China trade tensions with threats exchanged to impose import tariffs. Of note, China's trade imbalance with the U.S. worsened sharply in the first three months of the year.

Oil hits its best level in over three years. West Texas Intermediate crude oil trades up 0.37% at $67.41 a barrel, its highest since December 2014.

IEA: China-U.S. trade dispute could knock oil demand. The world's robust appetite for oil could be significantly dented by the escalating trade dispute between the U.S. and China, the International Energy Agency (IEA) has warned.

Sears is closing its last Chicago store after 80 years in business. "For more than 120 years, Sears has called Illinois home and that is not changing," the spokesman Howard Riefs told the Chicago Tribune. "Although we are disappointed by this last store closure in Chicago, by no means does this change our commitment to our customers and presence to Chicago's residents." The planned shutdown comes after the company closed nearly a fifth of its U.S. department stores and shed more than 50,000 jobs in 2017. In the past seven years, it's racked up more than $10.8 billion in losses.

 


 

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