Farm Bureau's Duvall Stresses Importance of USMCA Ratification

Ratification of the U.S.-Mexico-Canada Agreement (USMCA) remains a key issue for the U.S. ag sector, American Farm Bureau Federation President Zippy Duvall stressed in a July 24 column.

Approval of the trade pact, which updates the 1994 North American Free Trade Agreement (NAFTA), would be an important signal to other trade partners, Duvall wrote. "Approval would set off a positive domino effect of successful trade negotiations and agreements around the world," he argued, noting the continued push to ink new trade deals with partners like "China, Japan, the European Union, Great Britain and potentially other nations and regions."

Duvall suggested that ratifying USMCA would push those other partners "to belly up to the negotiating table, and go back to their farmers, industries and legislative bodies with a message of determination to make the compromises necessary to secure a deal with the world’s largest economy."

As lawmakers return to their districts for the August recess, Duvall urged producers to make their views on USMCA clear. "We have the opportunity ??? the imperative ??? to send those members of Congress back to Washington in early September with the backbone to do the right thing for agriculture and the economy," he argued.

USDA Releases First DMC Enrollment Update

Enrollment in the new Dairy Margin Coverage (DMC) program has already exceeded one third of licensed US dairy operations, according to USDA's first weekly update on signups for the new program.

Of the nation's 37,468 licensed dairy operations, 13,240 had enrolled in the program as of July 22. Among states, Wisconsin led enrollments with 4,121 farms, followed by Minnesota with 1,511, New York with 1,397 and Pennsylvania with 1,137. So far, farms enrolled in the program have qualified for $145 million in payments, $41 million of that going to Wisconsin operations.

DMC was established under the 2018 Farm Bill. Dairy groups have encouraged farmers to enroll in the program, stressing the major improvements under DMC compared with its predecessor, the Margin Protection Program (MPP).

Lawmakers crafted the new program with help from dairy groups to avoid many of the shortcomings of MPP, which saw poor enrollment and never lived up to expectations. Farms that enrolled in MPP between 2014 and 2017 are eligible for a partial refund of premiums they paid – up to 50 percent for cash refunds or 75 percent if applied toward DMC premiums.

Trade, Disaster Aid, Coming to Farmers Quickly

Farmers can expect trade aid this week and disaster aid next month. Agriculture Secretary Sonny Perdue says the Market Facilitation Program payments will be announced yet this week and will offer producers at least $15 an acre for those who qualify. However, payments rates will vary, as USDA used county-level production data to create its formula for payment rates. So, counties with higher production, naturally, will likely receive higher payments. The first round of three expected payments will represent roughly 50 percent of the funds available to farmers from the $16 billion Market Facilitation Program. Cover crops grown on acres prevented from planting this year will qualify for the payments. Meanwhile, $3 billion in disaster funds for agriculture should launch next month. The disaster package includes funds for farmers impacted by hurricanes, wildfires, tornadoes and flooding since last year. Politico reports that since 2018, roughly $33 billion in disaster funding has been set aside for agriculture. The new package also includes nutrition funding for Puerto Rico.

China Tax Cuts Could Offset Trade War Harm

Tax cuts in China could offset trade war harm and support economic growth. A China International Capital Corporation economist told CNBC tax cuts in China could provide growth needed to offset economic losses from the trade war. However, the economist says more tariffs from the U.S. poses risks to the growth potential. President Trump still holds a proposed round of additional tariffs against China, if trade talks don't make progress. China launched a personal income tax cut in March, which led to an increase in retail sales, up 9.8 percent from a year ago. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to China next week to continue negotiations with China. The White House says the discussion will “cover a range of issues,” including agriculture. The negotiations stalled in May when China backtracked on previously agreed-to provisions of a potential agreement. Retaliation against U.S. tariffs by China have focused on U.S. agriculture, slowing China purchases of U.S. ag products.

Senate Committee Advances Food Supply Protection Bill

The Senate Homeland Security and Governmental Affairs Committee has approved a bill to protect the nation’s food supply. The committee unanimously approved The Protecting America’s Food & Agriculture Act of 2019, introduced by Senate Agriculture Committee leaders Pat Roberts and Debbie Stabenow. The bill would authorize U.S. Customs and Border Protection to hire additional inspectors to fully staff U.S. airports, seaports and land ports of entry. Stabenow called agricultural inspectors the “first line of defense against threats” to agriculture. The Department of Agriculture and Border Patrol work together to facilitate the safe and secure entry of agricultural goods into the country. Agricultural specialists and canine units conduct inspections to detect products and prevent the entry of disease, including African swine fever, to the United States. The bill authorizes the annual hiring of 240 agricultural specialists a year until the workforce shortage is filled. The legislation has received support from a broad coalition including the U.S. Chamber of Commerce, and the American Farm Bureau Federation.

Energy Department Says EPA Issued RFS Exemptions Against DOE Advice

Senator Chuck Grassley of Iowa says small refinery waivers are being granted to refineries facing little or no “hardship.” The waivers, approved by the Environmental Protection Agency, exempt refiners from Renewable Fuel Standard regulations due to economic hardship. However, Grassley says the waivers are being issued to large refineries. Grassley also points out that the Energy Department in at least one occasion recommended no exemption, yet the EPA granted the waiver. The Energy Department says it has not changed how analyses are applied or scored from the prior administration. Still, the number of small refinery waivers issued by EPA has skyrocketed the last two years. Grassley says Trump “delivered on E15,” but says the EPA is “undermining the president’s commitment” to farmers. Grassley is calling on the White House to “put an end to these handouts to big oil.” The National Corn Growers Association says the waivers have reduced the RFS by 2.6 billion gallons, and called on the President to end the waivers last week.

Hyde-Smith Proposes Fisheries, Aquaculture Disaster Funding

A Senate bill proposed this week would create a disaster program for commercial fishing and aquaculture operations. Introduced by Mississippi Senator Cindy Hyde-Smith, the Commercial Fishing and Aquaculture Protection Act of 2019 would authorize a risk-management tool for the sector. Hyde-Smith says the bill would help commercial fisheries, farm-raised catfish, and other seafood producers mitigate losses associated with market, weather, and other disaster conditions. An influx of freshwater from months of record rainfall and flooding decimated oyster, shrimp, and crab harvests in the northern Gulf Coast this summer. Other hardships continue to threaten farm-raised fishing operations. Hyde-Smith’s legislation would establish a permanent revenue-based disaster program to either replace or serve as an alternative to the “ad hoc” fishery disaster assistance provided by the U.S. Commerce Department. The new assistance program would begin with the 2019 calendar year and be subject to the availability of appropriated funding, such as the $150 million provided for fishery disaster assistance in the FY2019 Supplemental Appropriations Act enacted on June 6, 2019.