Washington Insider: Trade Top Concern for Producers in 2019

To nobody’s surprise, farmers are seen as caught in “the crossfire of a trade war with China and are expected to feel the effects well into 2019,” Bloomberg says. “They will be counting on Congress to devise a solution,” the report says. While the administration announced in December that it will proceed with plans to distribute a second round of payments to farmers, Rob Larew, senior vice president of public policy at National Farmers Union, said it’s unclear whether there will be additional aid in the new year — still leaving uncertainty in farm country. “We’re told trade battles are entrenched, so we’re calling on the administration to work with Congress to come up with a long-term solution,” Larew told Bloomberg, in a recent interview. The article described huge storage filled with soybeans that it says are “caught in the middle of the U.S.-China trade war.” It concluded that America’s soybean farmers are taking a huge gamble — rather than selling the crop right away as they pull it out of the ground — as they do almost every harvest season to pay the bills — they are instead stashing it, Bloomberg says. In fact, producers commonly use a variety of marketing plans boost returns for their crop — including holding out for better seasonal markets — but it is the case that prices of soybeans, especially, are under pressure this winter. Looking forward, now that the five-year, $867 billion farm bill has been enacted into law, the House and Senate Agriculture Committees say they will spend much of their time on other reauthorization bills, including ones dealing with the US Commodity Futures Trading Commission (CFTC) and the Child Nutrition Act. Rep. Collin Peterson, D-Minn., the incoming House Agriculture Committee chairman for the 116th Congress, told reporters in December that CFTC reauthorization will be a top priority in the new year. “We’ll work on it,” said Peterson, who added he will fight Republican attempts to impose new cost-benefit requirements for CFTC rulemaking. Peterson has said the new cost-benefit mandates could roll back consumer protections under the Dodd-Frank law and make it harder for the CFTC to do its job. Outgoing Chairman Mike Conaway, R-Texas, who becomes the panel’s ranking member in the new Congress, agrees that reauthorizing the derivatives market regulator will be a priority now that the farm bill has been passed. “Hopefully I can work with the incoming chairman to see if we can’t move that,” Conaway told reporters. On the Senate side, Agriculture, Nutrition, and Forestry Committee Chairman Pat Roberts, R-Kan., said CFTC reauthorization will also be a goal, but he expects to hold “quite a few” hearings over 2019 on trade. In addition, “We need to monitor [the] farm bill and make sure it does what we think it’s going to do,” Roberts said. On the House side, Peterson said his panel also will focus on farm bill implementation and oppose lobbying efforts to roll back the legislation. Agriculture negotiators worked for months to get the current deal but couldn’t make it happen until the lame-duck session. “We fight this thing through with the lobbyists and come out with a product, then all these groups hire lobbyists and shift it down to the USDA to unchange what we did,” Peterson said. The new farm law, which includes an extension of federal crop insurance, leaves out an earlier, highly contentious, House provision that would have added more work requirements for able-bodied adult food assistance recipients and those with older children. The provision had been included in the House version of the measure and was removed during negotiations with the Senate, where it faced opposition. Then, last December, USDA proposed a rule to limit state Supplemental Nutrition Assistance Program waivers, a plan that Republicans unhappy with the limited changes in the law touted as a way to achieve their objective through regulations. USDA Secretary Sonny Perdue told reporters that he recommended President Donald Trump sign the farm bill “because I knew and I believe we can make improvements to SNAP through the regulatory process.” The proposed rule would eliminate statewide waivers from work requirements for SNAP recipients unless a state qualifies for extended unemployment benefits. Perdue is also scheduled to announce the location to which about 700 employees from two USDA agencies will be relocated from the District of Columbia — including the Economic Research Service and the National Institute of Food and Agriculture, which provides funding for programs that research agriculture-related sciences However, such a move is quite controversial in some quarters, and some members of Congress are trying to halt the move. Democrats on the House Appropriations Committee introduced legislation in December to block the relocation. The bill laid down a marker for legislation they will push for in the new Congress. So, we will see. It likely is true that trade policies will be a continuing, highly contentious issue that will face the Congress for much of the year — fights that producers should watch closely as they emerge, Washington Insider believes.