France: Vladimir Putin Moving Towards De-escalating Ukraine Crisis

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Vilsack, USDA provide some details of pilot projects using climate-smart practices

 

                                                In Today’s Digital Newspaper

 


Today’s dispatch is modified as it is a travel day for me as I journey to Missouri, then California, and then North Dakota.


 

• Tardy appropriators kick the can down the road… again. As noted previously, Congress this week will clear another stopgap spending bill to extend funding for fiscal year 2002 (which started Oct. 1) through March 11. The prior Continuing Resolution (CR) runs through Feb. 18. The House will vote today on the measure and the Senate later, but before the Feb. 18 deadline.

• Monday’s equity markets: The Dow edged up 1.39 points, 0.00%, at 25,091.13, after a session that saw it surrender gains late in the afternoon. The Nasdaq lost 82.34 points, 0.58%, at 14,015.67. The S&P 500 declined 16.66 points, 0.37%, at 4,483.87.

• Rising prices are a top concern for small businesses. In a National Federation of Independent Business survey, 22% of owners said inflation was their single most important business problem in January, matching the highest level since 1981. The share of owners raising prices rose to 61%, the highest figure since 1974. “In addition to inflation issues, owners are also raising compensation at record high rates to attract qualified employees to their open positions,” said NFIB Chief Economist Bill Dunkelberg.

    Rising prices

• Vilsack as expected announced a program to fund demonstration projects using climate-smart practices. Farm groups like anything that provides $1 billion, this time tapping USDA’s Commodity Credit Corporation (CCC). But not all lawmakers were happy with the funding mechanism. One of them is Sen. Roger Marshall (R-Kan.), who sent a letter to Vilsack questioning the department’s authority to create the program using $1 billion from the CCC. “It seems USDA is crafting its own farm bill by using the CCC to create its own programs and priorities that haven’t been established by Congress and to fund projects only USDA deems worthy,” Marshall said. He wants answers to his questions by Friday. Vilsack on Monday stressed that using CCC authority for this effort will not jeopardize the primary role of the CCC in terms of funding U.S. farm program and conservation program payments.

     Link to details about the program and its funding opportunity, via USDA.

     Some brief highlights:

  • Initial effort is open to groups, companies, nonprofits and others, but not individual producers.
  • Existing practices and enhancement to existing practices are eligible.
  • Two application periods to be held based on size of proposal.
  • Measuring and quantifying, monitoring, reporting and verification key for farm-level greenhouse gas (GHG) benefits.
  • There are no payment limits associated with the effort.

     Perspective: There is still no definition of a climate-smart commodity. Rather, USDA said one of the outcomes is helping “standardize the definition of a CSAF commodity.” That will become a key definition. USDA said, “Commodities broadly include more traditional agricultural crops like fruits, grains, cotton, peanuts, oilseeds, livestock, dairy, forage crops, and vegetables, as well as timber and other forestry products, and can also include other specialty, organic, or indigenous crops.” Another key: existing practices are going to be included and, in some cases, the notice from USDA indicates that those existing practices could be easier to provide benefits for the effort. The level of farmer payments involved is still not yet known, but that will not stop farmers from repeatedly asking this question. If farmers are going to move to either no-till or minimum-till practices as part of the effort, that will involve the purchase of equipment that is more specialized. USDA said that the projects are to identify that all major equipment is commercially available, and the project needs to justify how this unique equipment is needed to meet requirements of the program. USDA is expecting to see measured benefits within the first year of the program, so that suggests those with existing practices may be able to provide some of the initial information. But there also are some specific mentions relative to those existing practices — that is also combined with mention of carbon offsets.

     Vilsack again sought to downplay the climate efforts as being any type of carbon bank. USDA specifies the projects are to be “focused on generating climate-smart commodities, and not on projects that focus on generating carbon offsets.” But those that do offer projects that provide both climate-smart commodities and carbon offsets have to “ensure there is not double-counting of climate benefits entering commodity supply chains and the benefits being used to generate carbon offsets.” USDA also said that the funds are not to be used for “implementation of the same practice on the same land, but funding may be used to enhance a practice or to further incentivize the climate-smart commodity generated, especially with respect to early adopters.”

     Another key: projects have to report and track GHG benefits “per farm, per project, per commodity produced, per dollar expended, and the anticipated longevity of GHG benefits.”

     Bottom line: Further details will be key for determining adoption or not by farmers.

• CFAP payments hold basically steady. Payments under the Coronavirus Food Assistance Program 1 (CFAP 1) and CFAP 2 programs were virtually unchanged as of Feb. 6, with total CFAP 2 payments at $19.07 billion, with original CFAP 2 payouts at $14.24 billion and the top-up payments at $4.83 billion ($4.82 billion prior). CFAP 1 payments were unchanged at $11.76 billion, including $10.57 billion in original CFAP 1 payments and $1.19 billion in top-up payments. There has been little change in the program payouts over the past two weeks.

• Pandemic Cover Crop Program (PCCP) clears OMB. The Office of Management and Budget (OMB) finished their review of USDA’s final rule for the Pandemic Cover Crop Program (PCCP). The review was short-lived — USDA forwarded it Jan. 26. In finalizing details of the effort for the 2021 crop year, RMA said they would notify producers “through an announcement if the program is continued in future years.” RMA has encouraged farmers to report their cover crop acreage to the Farm Service Agency (FSA) when they file annual acreage reports in the event the effort is continued.

• DMC enrollments extended. Enrollment for the Supplemental Dairy Margin Coverage (SMDC) and the Dairy Margin Coverage (DMC) registration and coverage election deadline has been extended to Feb. 25 from the prior deadline of Feb. 18.

• Remember the Falklands kerfuffle? It’s back and China is involved this time. China has stepped up pressure on Britain over the Falklands, insisting London respond to Argentina’s latest demand that it relinquish control of the islands, known as Las Malvinas in Spanish. The Chinese embassy in Britain reiterated Beijing’s stance, a day after a furious response from London to a joint statement from President Xi Jinping and his Argentinian counterpart Alberto Fernandez which called for Argentina to be given “the full exercise of sovereignty” over the islands. British Foreign Secretary Liz Truss said, “We completely reject any questions over sovereignty of the Falklands.” A statement from the embassy said China’s position on the issue of the Malvinas Islands had been consistent. “We firmly support Argentina’s legitimate claim to full sovereignty over the Malvinas Islands. China has always advocated that territorial disputes between countries should be resolved through peaceful negotiations in accordance with the purposes and principles of the U.N. Charter,” it said. “We hope that the U.K. will respond positively to Argentina’s request, start dialogue and negotiations as soon as possible, and find a peaceful, just and lasting solution in accordance with relevant U.N. resolutions.”

• Russia/Ukraine update comes from the Financial Times (link): “French officials said Vladimir Putin had moved towards de-escalating the Ukraine crisis by promising not to undertake any new “military initiatives” and agreeing to withdraw thousands of Russian troops from Belarus after the completion of planned exercises. If the agreement — brokered during talks with his French counterpart Emmanuel Macron on Monday — is confirmed by Putin, it could ease tensions in the region after Russia amassed more than 100,000 troops on Ukraine’s borders. Kremlin spokesperson Dmitry Peskov told the Financial Times that Putin and Macron were ‘prepared to continue dialogue’ on the French proposals but that the discussions had yet to fully assuage Moscow’s concerns.”

     Putin and Macron met for more than six hours, according to media reports. Macron has now flown to Kyiv to meet with Ukrainian officials. Following his meeting with Zelensky, Macron then travels to Berlin for three-way talks alongside German Chancellor Olaf Scholz and Polish President Andrzej Duda. Macron won’t be the only European official visiting Ukraine, with German Foreign Minister Annalena Baerbock as well as her Czech, Slovak, and Austrian counterparts all spending time in the country today.

• Biden vows to stop natural gas pipeline to Europe if Russia invades Ukraine. President Biden vowed Monday that a major European energy pipeline would be abandoned if Russia sends forces into Ukraine, but he provided no details on how that would occur. Biden issued the threat after talks with German Chancellor Olaf Scholz, whose recently formed government has pledged to take part in Western retaliation should Russia seize more Ukrainian territory, as it did in the 2014 annexation of Crimea. But Germany has stopped short of explicitly promising to halt the $11 billion Nord Stream 2 project, which would bring Russian gas to European consumers. On Monday, Scholz said only that his country was “absolutely united” with the United States and other NATO allies, “and we will not be taking different steps.”

• The U.S. said Monday it has agreed to lift import tariffs on Japanese steel imposed by the Trump administration, removing a longstanding irritant in the bilateral relations between the two allies. The move follows a similar agreement with the European Union in October and comes as the Biden administration accelerates its effort to beef up economic ties with nations in the Asia-Pacific region to counter China’s growing influence. The agreement will allow Japan to ship up to an annual 1.25 million metric tons of steel to the U.S. duty free, a level similar to its exports in 2018 and 2019.

     Japan steel

• A divided Supreme Court (5-4) on Monday restored an Alabama congressional map that creates only one district favorable to a Black candidate and put on hold a lower court’s order that said a second district was necessary to comply with the Voting Rights Act. The court’s ruling was a blow to Democrats after a series of redistricting wins over the past several weeks. Bottom line: The 2022 congressional elections in Alabama will take place under a map drawn by the state’s Republican leaders. Chief Justice John Roberts joined the three liberal justices in dissent. The Supreme Court is scheduled to hear the full case next fall.

• Prime Minister Justin Trudeau took a hard line against trucker protests that have paralyzed Canada’s capital city and have halted commercial traffic to the U.S. at the busiest border crossing between the two countries. The Ambassador Bridge that connects Windsor, Ontario, with Detroit was shut down in both directions late Monday. It’s the most important land crossing for goods between Canada and its largest trading partner and a crucial artery for auto parts suppliers and manufacturers.

• The U.S. is losing patience with China after the nation failed to meet its purchase commitments under their Phase 1 trade agreement reached during the Trump administration, according to American officials. China had pledged to buy an extra $200 billion in U.S. agriculture, energy and manufactured products over the 2017 level in the two years through the end of 2021.

     Officials reiterated their stance that Chin has resisted U.S. urgings to live up to terms of the deal in remarks to Politico, saying the White House is “losing patience” with China and noted China is participating in talks with the U.S. but the U.S. is not interested “in talks for the sake of talking; we seek concrete action.” They also noted that they “inherited” the deal from the Trump administration and cited “limitations” in the deal. U.S. trade officials made similar comments to Reuters earlier this week.

     The China focus will be heightened today with the release of International Trade in Goods and Services data that is expected to show a record trade deficit for the U.S. and show how far China has fallen behind on its purchase commitments under Phase 1 relative to energy, agricultural and manufactured goods and services.

     From the Chinese side, Foreign Ministry spokesman Zhao Lijian said the two sides needed to work together to resolve issues. “For the specific problems which emerge in economic and trade relations between the two countries, both sides should appropriately solve them in the spirit of mutual respect, equality and consultation,” Zhao said at a news briefing. Much of the attention has been on the purchase commitments made by China but there are also other components that have not yet been implemented, including seven commitments on agricultural trade details relative to biotech crops and more. China has implemented 50 out of 57 commitments on agricultural trade matters that it agreed to under the Phase 1 deal. The U.S. officials also indicated that framework of the deal provided little leverage to enforce the purchase commitments.

• Global cases of Covid-19 are at 397,725,281 with 5,752,418 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 76,853,612 with 905,544 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 543,619,492 doses administered, 212,920,278 have been fully vaccinated, or 64.86% of the U.S. population.

• Officials in several Democrat-led states said Monday they would lift mask mandates for schools or other indoor areas in coming weeks as Covid-19 cases fall. The governors of Connecticut and New Jersey said school districts would be able to determine their own masking policies starting Feb. 28 and March 7, respectively. California’s indoor mask mandate will expire on Feb. 15. Similar announcements are expected from other states in the near future as more local leaders consider the shifting tide of mask politics, frustration with continued Covid-related restrictions, as well as higher vaccination rates and a decline in cases since the peak of the Omicron surge.

• NWS weather: Early taste of spring for much of the continental U.S. by midweek; record warmth possible in California; Critical Risk of fire weather in the Central Plains... ...Coastal storm to generate periods of snow across central and northern Maine today, a damp and cloudy Tuesday on tap in Florida... ...A new storm system to produce a mix of rain and snow showers from the Upper Midwest to the Great Lakes by midweek.

     NWS 020822


 

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