Washington Insider -- Thursday

By DTN's Washington Insider

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

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.

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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.

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Washington Insider: The Administration Aims at Food Stamps, Yet Again

Much of the urban press is reporting a new effort this week by the administration to reduce access to the federal nutrition programs, in this case the long-standing “food stamp” program now called Supplemental Nutrition Assistance Program, or SNAP. For example, the New York Times says that more than three million people would no longer be eligible for benefits under a rule proposed Tuesday by USDA.

Agriculture officials say they are “fixing a loophole” that some states use to provide food stamps to people who have a certain amount of savings and other assets. Critics say the rule will punish the working poor and stymie their ability to accumulate assets. SNAP now provides benefits to more than 38 million low-income Americans, the Times says.

Under the current law, 39 states, the District of Columbia, Guam and the Virgin Islands ease some administrative restrictions for participants if they already qualify for another federal aid program, Temporary Assistance for Needy Families. The new rule would greatly reduce the ability of those jurisdictions to use that approach.

Republican advocates of the change say it would limit abuses by people who do not need the benefits. For example, a Minnesota critic of the program, Rob Undersander, claims he received food stamps for 19 months even though he had significant assets.

Representative Mark Meadows, R-N.C., told the press, “As a member who personally met with a millionaire that took advantage of the food stamp program to prove a point, I can tell you: Reform is certainly needed.”

Robert Rector, a research fellow at the conservative Heritage Foundation, said the proposed rule “removes an obvious abuse of the system by state governments and it basically would restore confidence in the food stamp program.”

Democrats were outraged. “The administration’s latest act of staggering callousness would steal food off the table of working families and hungry children and dismantle proven pathways out of poverty for millions,” Speaker Nancy Pelosi, D-Calif., said in a statement. “The administration’s proposal is both cruel and counterproductive.’’

Senator Chuck Schumer, D-N.Y., the Democratic minority leader, called the proposed rule “cruel, ideological and inhumane,” and told reporters that Democrats would work to beat back this effort to restrict food stamps, as they had in the past.

To qualify for food stamps, a family’s assets and income must fall below certain limits—those with an elderly or disabled family member must have assets of $3,500 or less. Incomes must be at or below 130% of the federal poverty level.

But those requirements are sometimes waived by states who see modest amounts of assets as a buffer against food insecurity. Some allow food stamps for people with incomes as high as 200% of the poverty line, the Times said. The proposed rule would make it much harder for people above the basic asset limits and income levels to qualify.

The proposal would still allow some families with assets or incomes above the limits to be eligible for food stamps in cases where they have been receiving help under the Temporary Assistance for Needy Families program for more than six months. It would also restrict the kind of noncash assistance received under the program that qualifies families for food stamps and limit eligibility to those who are receiving aid like job training and child care help.

The idea behind the requirement, agriculture officials said, was that it would help demonstrate which families were truly in need of help and weed out fraud.

Program advocates counter that the new rule would cut off families most in need of support. “It’s exactly the kinds of households that the administration is interested in supporting,” said Elaine Waxman, a senior fellow at the Urban Institute.

Democrats view the proposed rule as another attempt to dismantle the food stamp program. In 2018, the House tried and failed, despite support from President Trump, to impose work requirements on able-bodied adults seeking food stamps. Conservatives had also hoped to close a loophole that allows states to waive the requirements in areas with high unemployment.

“This proposal is yet another attempt by this administration to circumvent Congress and make harmful changes to nutrition assistance that have been repeatedly rejected on a bipartisan basis,” Senator Debbie Stabenow, D-Mich., the top Democrat on the Committee on Agriculture, Nutrition and Forestry, said.

There will be a 60-day public comment period before the Agriculture Department can move forward with the rule, the Times noted.

So, we will see. While budget hawks frequently oppose the nutrition programs because of their cost, many producers traditionally have seen them as part of the “three-legged farm policy foundation” that has successfully supported expensive programs for decades, including those that provide food assistance, especially in urban areas; conservation programs that protect the soil; and the farm programs themselves.

This promises to be another of a long series of fights against those programs that will be both highly controversial and long lasting and which producers should watch closely as it proceeds, Washington Insider believes.

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