Washington Insider -- Wednesday

Senate Ag Hearing in Michigan

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

White House: No Trade War is Emerging With Canada

White House Press Secretary Sean Spicer is disputing the notion that a trade war is emerging between Canada and the U.S. over lumber, dairy and coal. He said existing dispute settlement mechanisms will be used to iron out differences.

Meanwhile, Francois-Philippe Champagne, Canada's minister of international trade, addressed the Conference on the Americas at the State Department. In late afternoon remarks entitled "inclusive trade and prosperity across the hemisphere," the new trade negotiator promoted "Canada’s progressive approach to trade and [highlight] the possibilities that exist to build closer trade, investment and people-to-people ties between our partners in the Americas," according to a release from his office.

“We need to think differently about how we pursue trade," Champagne said in prepared remarks. “If we are not in the business of securing the social license to pursue an ambitious trade agenda then we will succumb to the forces opposed to it.”

Champagne also defended NAFTA, noting the decades-old trade deal now up for renegotiation “has shown that openness will lead to the development of global value chains.”

Democratic Senators Seek Investigation into White House Adviser Icahn on RINs Market

An investigation into whether White House adviser Carl Icahn has violated "insider trading laws, anti-market manipulation laws, or any other relevant laws based on his recent actions in the market for renewable fuel credits" is being called for by eight Democratic Senators.

The letter was signed by Sens. Elizabeth Warren, D-Mass., Sheldon Whitehouse, D-R.I., and six others.

The letter was sent to the Securities and Exchange Commission, Commodity Futures Trading Commission and the Environmental Protection Agency. The lawmakers have previously pressed Icahn and the White House for more information on Icahn's activities relative to his proposal to reconfigure biofuels rules which impacted the prices for Renewable Identification Numbers (RINs).

Icahn is a majority shareholder in CVR Energy, a firm required to show compliance with U.S. biofuels policy.

Washington Insider: Senate Ag Hearing in Michigan

POLITICO is reporting this week that last Saturday’s Senate Ag Committee hearing in Michigan featured many of the expected arguments. It noted that the farmers and ag officials who turned out demanded more investment in international development, better crop insurance and a steady agricultural workforce.

However, the hearing also featured a warning from Senate Ag Chair Pat Roberts, R-Kan., that this time, “lawmakers will be forced to do more with less” when developing the next bill—and, that while he’d like to increase funding for the bill, it will be necessary to find budget savings for most of the programs including money to develop rural America which has been especially scarce while the need is great.

A key priority for the Michigan Corn Growers and U.S. Apple Association and other attendees is increasing funding for the USDA Market Access Program, which shares the cost of promoting American agricultural goods abroad with private industry groups and small businesses. Chris Alpers, a USApple board member, said the program allows producers to compete with countries that have lower production costs, like China and Chile.

Also, even before Roberts austerity warning completely faded away, he took pains to claim credit as the “self-declared godfather of crop insurance,” and panelists like Alpers and Janna Fritz, board members of Michigan Corn Growers, argued that crop insurance is the “top reason” why their farms are viable. Senate Ag Committee Ranking Member Debbie Stabenow, D-Mich., noted that her staff is working with Agriculture Secretary Sonny Perdue to boost support for milk producers who are claiming heavy market pressure and poor performance by the margin insurance program now in effect.

Several producers told the senators that the Conservation Reserve Program and Environmental Quality Incentives cost-shares have helped them plant cover crops that prevent soil erosion and improve water quality. Kyle Rorah, a regional policy specialist for Ducks Unlimited, said voluntary conservation incentives like those programs can defend against unnecessary regulatory action.

In addition to farm issues, farm state Democrats recently took an unusual position opposing a provision in President Trump's 2018 budget proposal that would essentially kill the federal office in charge of leading the government's response to the opioid crisis, which has ravaged rural parts of the country. Sen. Heidi Heitkamp, D-N.D., told the press, “saying you’re serious about this epidemic and then try to save a buck by dismantling the agency that’s tackling it is an absolute joke — and one that’s not at all funny for so many North Dakota families.”

Pro Health Care's Dan Diamond had reported on Friday that Trump's 2018 budget would provide only $24 million for the Office of National Drug Control Policy, which received $388 million in federal funding in fiscal 2017, POLITICO said. Last week Senate Agriculture Committee member Joe Donnelly, D-Ind., wrote to the White House arguing that more money and resources are needed to curb the $70 billion in social and health care costs the epidemic is causing each year. In addition to more funding for the office broadly, Donnelly says more addiction treatment counselors are needed in rural areas.

Also, buried in the health care bill the House passed last week is a 12% cut to the Centers for Disease Control and Prevention’s budget, which could slow state food safety investigations.

Some $890 million would be phased out of CDC’s budget by the end of fiscal 2018 as part of the House bill’s cut to the Affordable Care Act’s Prevention and Public Health Fund. That includes $40 million provided annually since 2011 to help states combat infectious diseases, including foodborne pathogens.

Finally, the U.S. wheat industry is besieged by low prices and damages from a late-spring blizzard that apparently wiped out 43% of the winter wheat crop in Kansas. Last week Chandler Goule, CEO of the National Association of Wheat Growers, told POLITICO that the Trump administration must have a sense of urgency on the trade front.

“Right now we have wheat piled up in every state and, as we continue to withdraw or renegotiate or whatever the new term is going to be with the administration this week, every day that we are not involved in a trade agreement after pulling out of the TPP Russia, Ukraine, France, Argentina and others are just going to continue to fill those gaps that US wheat used to fill.”

Goule also took a shot at the Heritage Foundation, warning the conservative think tank to stay out of farm bill negotiations: “The Heritage Foundation will never come out and tell you this publicly, but they tell members of Congress this: Their longtime goal is to get rid of the farm bill, get rid of nutrition programs and to get rid of crop insurance.”

So, the committee succeeded in highlighting a very broad range of issues, some old and some very new. Certainly, the upcoming farm bill debate will be contentious and extended and should be watched closely by producers as it gets underway, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

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