Washington Insider -- Friday

Tracking FY 2017 Spending Bill

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Rep. Conaway Blasts Sens. Stabenow, Leahy over Cotton Aid

Sens. Debbie Stabenow, D-Mich., and Pat Leahy, D-Vt., are being labeled ‘reckless’ for stopping aid to cotton producers by House Agriculture Chairman Mike Conaway, R-Texas. He said the top Democrats on the Senate Agriculture and Appropriations committees were “reckless” in requiring that the budget deal also include aid for dairy producers.

Stabenow and Leahy proposed to pay for the dairy aid by reducing the cotton payments rather than coming up with budget offsets for their requested dairy program language. Pitting one commodity against another “is a terrible thing to do, unless you want it to fail, and that’s what happened,” Conaway told members of the National Association of Farm Broadcasting.

Ranking Democrat on the House Agriculture panel, Collin Peterson, D-Minn., said he hoped Stabenow and Leahy “learned their lesson... This is not the way to do things, to come in at the last minute and demand things, just because you’ve got a lot of power. That has got to end,” Peterson said.

As for Stabenow, she said it was not fair to provide aid to cotton producers but not dairy. And she said that both issues should be part of a broader debate over the next farm bill. But veteran farm bill watchers say she wanted to keep cotton at bay in order to use that as leverage to get what she wants via the upcoming farm bill debate.

EPA Begins Process of WOTUS Repeal and Replace

EPA submitted the first portion of its rewrite process of the Waters of the U.S. (WOTUS) rule for federal interagency review. Sen. John Barrasso, R-Wyo., chairman of the Senate Environment and Public Works Committee, said the draft rule would withdraw the WOTUS rule, which is currently stayed by the courts.

The second part of EPA's process to comply with an executive order issued Feb. 28 involves coming up with new regulations to replace the rule.

The White House Office of Management and Budget received a proposed rule May 2 that seeks to reinstate the old policies, which are based on 1986 regulations and subsequent changes shaped by three seminal US Supreme Court rulings on what are considered “waters of the US” subject to federal Clean Water Act protections.

EPA said “great uncertainty” exists as a result of the legal challenges to the 2015 rule, which remains stayed nationwide pending a court review. “Therefore, we are recodifying the rules as they existed before, in an effort to provide more clarity” to the regulated industry, which includes miners, farmers and home builders, EPA spokeswoman Liz Bowman said. With the WOTUS officially gone, courts would likely dismiss pending legal challenges to the regulation.

Washington Insider: Tracking FY 2017 Spending Bill

POLITICO spends time this week tracking the new spending bill, and notes that Congress clinched passage of the omnibus package, including authority to keep the government running for the last five months of FY 2017. The Senate voted in bi-partisan fashion on Thursday to approve the bill.

Part of the focus was some unexpected results, including some for agriculture. For example, “overall, Congress allocated $153.4 billion in mandatory and discretionary spending for programs at USDA and FDA, up some $12.8 billion above fiscal 2016 levels.” The Appropriations Committee said the increase is related to mandatory spending outside of its jurisdiction, and notes that discretionary ag spending is down $623 million from levels enacted last year.

It also notes that proposals for controversial triggers for additional subsidies under the 2014 Farm Bill for cotton and dairy farmers did not make it into the bill. Instead, included in a list of congressional directives accompanying the spending deal is a request that the agriculture secretary within 60 days issue a report on administrative options for providing financial relief to cotton growers, and also offer immediate assistance to dairy producers.

Negotiations over how to change a margin insurance program for dairy producers had extended into the weekend as House and Senate Agriculture committees worked on with appropriators like Sen. Patrick Leahy, D-Vt., hoping to include a rider that would designate cottonseed as an “other oilseed” so it can qualify for inclusion under the Price Loss Coverage program. But in the end the provision was not included in the final package.

Also, lawmakers delivered additional funding to fight wildfires in the West and to allow the Farm Service Agency to make more direct and guaranteed loans to producers who are requesting additional access to credit during a period of low commodity prices.

The Animal and Plant Health Inspection Service’s budget also got a $51.8 million boost to help address citrus greening and to prepare the agency for emergency outbreaks, like avian influenza.

The rural water and waste-water loan and grant program, which Trump targeted for elimination in his “skinny budget,” is funded at $1.25 billion — the same as last year.

In addition, rules were changed to allow states to apply for a waiver to opt out of whole-grain school lunch requirements if they demonstrate financial hardship and they may be granted exemptions to serve flavored low-fat milk in school meal programs.

The bill also distributes $1.5 billion in new border security spending aimed at repairing existing infrastructure and increasing technology, POLITICO reports.

In a somewhat odd aside, as DTN reported Sunday, Commerce Secretary Wilbur Ross is urging producers not to scale back their planting plans this year just because administration intends to renegotiate NAFTA and potentially other trade pacts. “If I were a farmer, I would plant as much as I can logically plant under today’s environment. And I certainly wouldn’t shrink my production just because there’s going to be some renegotiation. I think that would be silly,” Ross said.

The administration’s goal in the NAFTA talks is to expand exports, “not to try to truncate them,” said Ross who argued that world agricultural markets are so tight that if the U.S. loses sales in one country, it can easily make it up through increased sales to another country. “The fact is that most of the rest of the world is incapable of feeding itself,” Ross said.

Well, it seems likely that Secretary Ross will get some pushback from aggies over this view, including a possible earful from their new Secretary, noting that producers are in fact worried about what’s up with trade talks. Apparently, Secretary Perdue talked the President out of pulling out of NAFTA by presenting a map that showed areas of damage to ag producers from such a policy. The tone of most USDA reports these days suggests continued price and income pressure, including some weakening of land values.

As a result, it would seem that the Ross view of the ag world will be seen as dangerous to the sector, and one they would want to talk seriously about, and, possibly even review the “impacts” map the President saw before, Washington Insider believes.

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