House Ag Committee Approves Farm Bill on Party Line Vote; Future Uncertain

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1 April 20, 2018 by Steve Kopperud SLK Strategies House Ag Committee Approves Farm Bill on Party Line Vote; Future Uncertain In one of the most contentious House Agriculture Committee markups in memory, the panel this week advanced its version of the 2018 Farm Bill on a straight party line vote. Unless committee Republicans and Democrats reach a meeting of the minds in the next several weeks, the vote sets up a likely replay of this week s ugly partisan battles on the floor, and drew a warning from Senate Democrats the panel s action could doom a Farm Bill this year. A copy of the ag committee bill, including an approved en bloc package of 20 or so agreedto amendments, along with backgrounders, formal statements and documents related to this week s markup can be found at H.R. 2, a bill number reserved for the Farm Bill since January, 2017, is hamstrung by political wrangling over primarily so-called welfare reforms included in the nutrition title. At the same time, committee members who criticized the bill also criticized Conaway s process in developing the bill, asking repeatedly why the chair had jeopardized the traditional bipartisan dynamic of the committee by skipping the subcommittee drafting, hearing and markup phase of conventional Farm Bill development. The nutrition section would require more able-bodied recipients of federal food stamps Supplemental Nutrition Assistance Program (SNAP) to train and work to remain eligible. The title also tightens categorical eligibility, authority which allows the states to automatically enroll participants in SNAP at higher benefit levels if they re enrolled in the federal Low-Income Home Energy Assistance Program. Shots were also taken at the bill s relaxation of payment limitations in the commodity title, the combination of conservation programs and reduction in spending on conservation, the shift on energy programs to a new title, and other expected policy differences in a Farm Bill debate. Today s vote was about America s farmers and ranchers, said committee Chair Mike Conaway (R, TX). It was about a better future and greater opportunities for SNAP recipients. It was about fulfilling an obligation to lead, rather than stand on the sidelines. His statement was in reference to the fact no Democrats offered any amendments to the committee bill, rather making public statements and criticizing the legislation and the process.

2 I m disappointed that my Democrat colleagues have turned their backs on America s heartland that they ve chose partisan politics over the three years of bipartisan work in this committee, Conaway said in a statement after the committee vote. Yet despite this turn of events, I remain hopeful. He referenced the bitter political battle in the partisan 2008 Farm Bill over what the GOP said were tax increases, yet Democrats and Republicans were able to hold off hostile amendments in the House and were able to get a bipartisan bill out of conference committee with the Senate. I am hopeful Democrats will not hold the nation s farmers and ranchers hostage in this process over the SNAP work and training requirements, Conaway added. Former committee chair, Rep. Frank Lucas (R, OK), told his colleagues that if they want to get a Farm Bill done in 2018, they need to keep the process on track. The point is, the product we start with now may not look like the version that gets to the president s desk. Let s move forward, let s keep working, Lucas said. Conaway echoed Lucas in explaining he fully expects the committee-approved bill to evolve through the House process and conference committee action with the Senate. He told reporters after the markup he d like to move the bill to the floor as quickly in April or May as we can. He acknowledged the bill must line up for floor time behind the massive must-pass National Defense Authorization Act, but was realistic about timing. I ve also got to find 215 other votes. Part of this process on timing on the floor will be dictated by how well I m able to sell this to my colleagues, he said. The Farm Bill traditionally moves to the floor under an open rule, meaning any member may bring any amendment up for consideration. Whether that process will apply this go around is unknown. Senate Agriculture Committee ranking member Sen. Debbie Stabenow (D, MI) reiterated her call for a bipartisan Farm Bill, one supported by producers, conservationists, nutrition/hunger interests and rural leaders. Unfortunately, the Republican leadership of the House Agriculture Committee has abandoned this coalition and has chosen a partisan path that makes it impossible to pass a five-year Farm Bill, she said. Stabenow and Senate Ag Committee Chair Pat Roberts (R, KS) continue to move forward with their bipartisan, coalition approach, and a committee draft bill is expected to be released sometime in early May. Most major commodity groups with the exception of the National Farmers Union (NFU) generally praised the committee s work given the commodity title of the bill is for once mostly noncontroversial. Secretary of Agriculture Sonny Perdue also commended Conaway and the committee, saying the approved legislation closely aligns with the Farm Bill Principles released by USDA in January. He also said, As the bill heads to the floor, I hope the House recognizes the long-term certainty it provides for America s farmers. House Speaker Paul Ryan (R, WI), calling the Farm Bill his party s next big push, admitted the Farm Bill nutrition title is all about the broader GOP welfare reform agenda. He said the bill will help move SNAP recipients out of poverty and into employment because for too

3 long, vague and unenforceable requirements have discouraged work and left many good jobs unfilled. Conaway sat stoically during the nearly five-hour markup, listening to Democrats in turn attack the Conaway Farm Bill as mean, cruel and deceitful for its nutrition title and the GOP move to increase federal work/training requirements for SNAP recipients. At one point, committee member Rep. Alma Adams (D, NC) said, I don t think the Lord is pleased with what we re doing today. House Minority Leader Nancy Pelosi (D, CA) called the bill radical and harmful, saying it fails America s farmers at a time of great challenge and economic uncertainty. Congressional Black Caucus member Rep. David Scott (D, GA) said the bill exploited what he called a public perception that SNAP recipients are lazy African American men. This is absolutely, without question, the most terrible farm bill that we ve ever had, said the longtime ag committee member. This farm bill is mean. The farm bill you re putting here is hurtful. The farm bill here is deceitful. It is un-american and it filled with racial vicissitudes. Said Conaway, My job is to get a bill across the floor, not respond to individual attacks or insinuations. I m focused on getting this bill across the floor. USDA to Announce Next Week System to Indemnify Producers in Trade War; Dems Object Exactly how the White House and USDA will make good on President Trump s pledge to blunt any economic pain felt by U.S. agriculture producers should a trade war erupt with China will be unveiled by USDA next week, Secretary of Agriculture Sonny Perdue told the House Appropriations Committee during his annual appearance this week. Given China s retaliatory tariff announcements target U.S. agriculture products, Trump and Perdue have repeatedly said the administration is developing a one-time payment system to offset producer losses. During the Farm Bill markup this week in the House Agriculture Committee, the committee discussed authority for up to $2.3 billion in disaster assistance, that would be open for enrollment before July 16. Perdue told appropriators his department may be able to advance up to 50% of the payments to producers in the continental U.S. and Puerto Rico if an applicant can show the majority of income is derived from farming. He said assistance would be limited to those making at 75% of their adjusted gross income from farming. There will be no caps on aid, he said. Committee Democrats objected to USDA using its existing authority to make the one-time payments. In a letter to the White House and Perdue, the lawmakers said more money should be put into Farm Bill income support programs rather than treated as disaster payments. We urge you to consider long-term ways that your administration could ensure an adequate safety net and asked for a lasting solution to this new market reality.

4 The roll-out will detail eligibility requirements, the formula for determining compensation, etc., and given the complexity of devising a program that will address multiple commodities and their programs, USDA said it has to make sure its software programs will handle the expected farmer/rancher applications. White House, Perdue Move to Fill Key USDA Posts; CFTC Nominee Coming The White House announced this week it will nominate James Hubbard, veteran USDA Forest Service executive and former Department of the Interior leader, to be undersecretary for natural resources and the environment. At the same time, Agriculture Secretary Sonny Perdue announced several executive appointments. Also reported this week is the White House acknowledging the president intends to nominate Dean Berkovitz, a Washington, DC, futures/derivatives attorney and former Commodity Futures Trading Commission (CFTC) general counsel from , to fill the open Democrat commissioner slot on the commission. It s expected Berkovitz s nomination will be paired with that of Dawn Stump, a GOP pick who s already been vetted by the Senate Agriculture Committee but awaits a full Senate vote, so that the CFTC will be operating with a full complement of five commissioners. Perdue praised the elevation of Hubbard to the undersecretary slot, citing recent action by Congress to modernize federal forestry programs. Under Jim Hubbard s leadership, we will put these tools to use, restore our forests to health, and get them to work for taxpayers, Perdue said. Also announced this week by Perdue was the appointment of former Dow AgroSciences vice president/general counsel Ken Isley as administrator of the Foreign Agriculture Service (FAS), Martin Barbre, a large mixed-crop farmer and former president of the National Corn Growers Assn. (NCGA), to be administrator of the Risk Management Agency (RMA) and real estate executive Joel Baxley to head the Rural Housing Service (RHS). Long-time Georgia businessman, farmer, GOP lawmaker, Perdue colleague and friend Tommie Williams was named minister-counselor for agriculture, U.S. Mission to the United Nations Agencies for Food & Agriculture (FAO) in Rome. Trade Developments Abe, Trump Talk Trade Treaty, Bolster TPP 2.0 Hope President Trump and Japanese Prime Minister Shinzo Abe announced this week their two countries have agreed to intensify trade talks, the ultimate goal being a potential free trade agreement. Abe acknowledged he and the president agreed to begin talking about a free, fair and reciprocal trade deal. Trump concurred, but Abe didn t shy away from citing major differences in how the two nations come at a possible deal. Abe would like to see the U.S. rejoin the Trans- Pacific Partnership (TPP) that is the best for both our countries. In typical Trump manner, he said, I don t want to go back to TPP, but if they offered us a deal that I can t refuse on

5 behalf of the U.S., I would do it, adding he d rather do a bilateral treaty. Trump tweeted earlier this week that Japan and South Korea want the U.S. to rejoin TPP, but said TPP has too many contingencies and no way to get out if it doesn t work. Meanwhile, Sen. Steve Daines (R, MT) is leading a coalition of 25 GOP Senators who want Trump to return the U.S. to TPP. After the Trump tweet, Daines told a Montana newspaper, Whether it s a bilateral, trilateral or multilateral approach, I will continue working with President Trump to ensure we get the best deal for the folks to feed our nation and the world. U.S., China Agree to WTO Talks Over Tariff Talk Following World Trade Organization (WTO) process, the U.S. and China have agreed to consultations over the dueling threats of tariffs based on the U.S. action to slap duties on steel and aluminum. China challenged the U.S. action at WTO, and the U.S. said it would enter into a consultation over the tariffs. The U.S., however, said the Chinese action was premature because the U.S. tariffs have not taken effect, and because the U.S. took the action for national security reasons, the dispute is outside WTO authority. China Hits U.S. Sorghum with Massive Duty; Perdue Calls Action Ludicrous The first shot by the Chinese in reaction to potential U.S. anti-dumping tariffs on steel and aluminum is action by the government to impose an anti-dumping import duty of 178.6% on U.S. sorghum exports, money which must be posted as a deposit on the value of the shipment arriving in China. While the White House called the Chinese duty unfair targeting, Agriculture Secretary Sonny Perdue called it ludicrous. The international grain market is about the freest there is, and it is ludicrous to even mention dumping because China can buy product from anywhere they choose. This is clearly a political decision by the Chinese and we reject their premise, Perdue said. China has a history of abusing its trade laws, said the U.S. Special Trade Representative s (USTR) office. We will carefully review the China measure on sorghum and take action as warranted, including through a WTO case if appropriate. The National Sorghum Growers (NSG) said the duty action reflects a broader trade fight in which U.S. sorghum farmers are the victim, not the cause. NAFTA Progress Cranking Right Along Two senior House Ways & Means Committee Democrats are asking panel Chair Kevin Brady (R, TX) to hold NAFTA status hearings so they can hear firsthand from the administration how the tripartite talks are going. Reps. Richard Neal (D, MA) and Bill Pascrell (D, NJ) want two meetings one with Ways & Means and the other with the House Advisory Group on Negotiations, a panel set up under the president s trade promotion authority (TPA). The letter sent by Neal and Pacrell said the White House is signaling clear intentions to conclude (NAFTA negotiations) in the very near term. Meanwhile, Vice President Mike Pence this week, speaking from Lima, Peru, where he was leading the U.S. delegation to the Summit of the Americas, said he sees a successfully completed NAFTA 2.0 in the next several weeks. It s not done yet, he told reporters after he met with leaders of Mexico and Canada, but said he s strongly optimistic about the treaty rewrite outcome. Top trade negotiators for the three nations met this week in Washington, and the talks were called intensive. A couple of non-ag chapters of the treaty have been closed, according to reports, and everyone seems to be saying all the right things, but it s likely a conclusion is still several weeks, if not months, in the future.

6 Grassley Calls Pruitt Loose Cannon on RFS, E15, Refinery Waivers Sen. Charles Grassley (R, IA) this week told reporters the White House continues to send mixed signals over fate of the Renewable Fuel Standard (RFS), the Renewable Identification Number (RIN) program, EPA s generous use of small refinery RFS waivers, and whether E15 will be allowed to be sold year-around as the president has pledged. While Grassley is pleased about the president s commitment to E15, when it comes to the actions and words of EPA Administrator Scott Pruitt, Grassley pulled no punches. I believe that Pruitt is a loose cannon, not carrying out the president s wishes. He gives with one hand and takes away with the other, Grassley said. Another letter signed by Grassley and his bipartisan Senate support group was sent to the White House last week, this time urging the president to tell Pruitt to cease issuing small refinery waivers from RFS blending mandates until EPA develops a more transparent and impartial system for deciding which refineries qualify for the waivers. The lawmakers contend the waivers, designed to help out small refiners who face economic pain in trying to meet their obligation to blend biofuels with gasoline under the RFS, are being issued to benefit some of the largest refiners in the nation. Agriculture Secretary Sonny Perdue is on record agreeing with Grassley about EPA s misuse of its waiver authority, and has formally asked Pruitt for details on the EPA process. Japan Says it will Import U.S. Ethanol-based Fuel Additive In good news to U.S. corn-based ethanol refiners, the government of Japan this week said it will open its markets to a fuel additive made from U.S. corn-based ethanol. The move was an update to Japan s 2010 sustainability policy which limited imports of the fuel additive ETBE, an oxygenate, from sugarcane-based ethanol. Japan said the corn-based ethanol ETBE will help it meet its goals for reducing greenhouse gases (GHG), and Growth Energy, an ethanol association, said, for the first time, the U.S. ethanol industry will have the opportunity to compete for a portion of Japan s fuel blending market. The U.S. will qualify to meet up to 44% of the total estimated demand for about 217 million gallons of ethanol used to make ETBE for use in Japan. That percentage translates to about 95.5 million gallons of ethanol, said Growth Energy, the U.S. Grains Council (USGC) and the Renewable Fuels Assn. (RFA).

7 Enviros Sue EPA for Communications with Ag, Chemical Industries; Worker Protection Bill Introduced Two major environmental groups this week sued EPA to force the agency to release communications between EPA and outside industry organizations related to two pending agency pesticide rule rewrites. Farmworker Justice and Earthjustice said the DC federal suit seeks the release of documents reflecting communications between EPA and representatives of the agricultural and chemical industries that occurred after the Trump administration took office, as well as notes from a meeting with EPA s Office of Pesticide Program s federal advisory committee that preceded EPA s decision to revisit crucial protection in the federal Agricultural Worker Protection Standard (WPS) and the Certification of Pesticide Applicators rule, reports Agri-Pulse. The suit comes on the heels of a Freedom of Information Act (FOIA) request filed last December by the two groups, but to which EPA has not responded. In a related development, Sen. Kamala Harris (D, CA) and Sen. Catherine Cortez Masto (D, NV) introduced a bill this week aimed at, in part, giving agriculture workers more information about the hazardous chemicals to which they re exposed. Calling it the Environmental Justice Right-to-Know Act, the bill would require Spanish translations of warning labels and safety information on pesticide containers, including information on toxicity levels and protection equipment. Do You Need a Budget Committee if You Can t Pass a Budget? Sen. Mike Enzi (R, WY), chair of the Senate Budget Committee, may see his committee shut down given how difficult it is to approve annual budget resolutions in the face of mounting federal deficits, reports said this week. Enzi s evaluation came as a bipartisan special committee began its process this week of trying to reinvent the federal budget/spending process. He said in 2016, he d be open to shutting down the committee as part of a larger effort to reinvent the budget and spending process. House Speaker Paul Ryan (R, WI), himself a former budget committee chair, called the congressional budget process irreparably broken. Contact Us Kathy Zander, Executive Director Roxanne Rice, Finance Director Phone: 605/ Fax: 605/ info@sdaba.org Website: