Washington Insider-- Wednesday

Moving Deeper Into the Political Season

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

US Ag Sector Urges Trump to Give China More Time To Meet Phase One Commitments

Scores of U.S. ag interests have written President Donald Trump, urging him to give China time to fulfill Phase One farm purchase commitments.

“As you know, the U.S.-China Phase One Trade Agreement is critical to both the near - and longer-term success and growth of American agriculture — and the millions of American jobs the agricultural sector sustains,” more than 180 organizations and companies said in a 13-page letter to the White House detailing benefits and status of the agreement for U.S. farm products.

“While the current pace of U.S. agricultural exports to China is below the pace needed to meet the Phase One goals, American farmers, ranchers, and rural communities remain optimistic that the purchases under this agreement will accelerate and be fulfilled by China, and that as a result, the American agriculture sector will enjoy important market opportunities,” the letter added.

China has not yet asked for an extension of their purchase commitment timeline, but trade sources have indicated that could become a reality.


Lawmakers Urge USDA to Repeat 2019 Rules for Cover Crops on Prevent Plant Acres

The prospect of an elevate level of prevented planting acres this season in some areas is prompting some farm-state lawmakers to ask USDA to take the same steps they did in 2019 relative to harvesting cover crops planted on prevent plant acres. The 2019 level of prevented planting acres was much higher than usual and took place in several states.

“As you know, there were more than 19 million prevented plant acres across the United States in 2019 due to excessive rainfall and spring flooding,” Senate Majority Whip John Thune, R-S.D., Senate Agriculture Committee Ranking Member Debbie Stabenow, D-Mich., and a slew of their colleagues wrote. “Due to an administrative rule, producers were not allowed to graze or harvest cover crops on these acres prior to November 1 without a reduction in their prevented plant indemnity.”

Last year, USDA “made a one-time administrative change to move up the date on which producers could graze, hay, or chop cover crops on prevented plant acres from November 1 to September 1,” a move the lawmakers said allowed “producers to retain some agricultural value of their prevented plant acres.”

The lawmakers said that at the very least, USDA needs to remove the penalties again this year provided the harvest/use activities happen outside the normal nesting season.

Washington Insider: Moving Deeper Into the Political Season

The Trump administration is preparing a huge new infrastructure proposal as part of its push to spur the U.S. economy back to life. A preliminary version being prepared by the Department of Transportation would reserve most of the money for traditional infrastructure work, like roads and bridges but would also set aside funds for 5G wireless infrastructure and rural broadband, the people said.

In addition, the president is scheduled to discuss rural broadband access at a White House event later this week.

The report notes that an “existing U.S. infrastructure funding law is up for renewal by Sept. 30, and the administration sees that as a possible vehicle to push through a broader package,”

The draft plan is emerging as lawmakers from both parties and the administration debate the timing and scope of additional stimulus for “a U.S. economy plunged into recession by nationwide lock-downs needed to halt the spread of coronavirus.” This is the latest sign of momentum in Washington for some kind of infrastructure spending blitz ahead of the election, Bloomberg said.

House Democrats have offered their own $500 billion proposal to renew infrastructure funding over five years. It’s unclear how long the administration’s draft would provide spending or how it would pay for the programs. The House Transportation and Infrastructure Committee is scheduled to markup that measure today.

Like most things in this election year, the infrastructure effort is controversial. For example, Democratic groups are telling their members to resist the administration’s efforts. Senate Minority Leader Chuck Schumer, D-N.Y. and Sen. Sherrod Brown, D-Ohio, -- the Banking Committee’s top Democrat -- told the new watchdog in charge of overseeing the pandemic corporate bailout fund they’re concerned the proposed effort “won’t be independent from his former employer: The White House.” Brian Miller, the newly confirmed special inspector general for pandemic recovery, most recently served as a White House lawyer and participated in the president’s impeachment defense.

“You must resist influence or pressure, uphold the law, and protect taxpayers’ interests — even if it places your job at risk,” the senators said in a letter delivered this week. “Ultimately, your duty is to the American people, not the president.”

In the meantime, the Fed inserted itself even more deeply into efforts to protect private companies from the fallout of the coronavirus. Bloomberg notes that this effort is “finally” underway but suggests that “the central bank is nervous about managing the long-term risk.” As the Fed chair Jerome Powell prepares to defend these efforts before Congress the back-story of how the central bank became lender of last resort to Main Street shows the extreme lengths to which officials were ready to rewrite their old crisis playbook to confront COVID-19.

In addition, this week, dramatic evidence that everything is focused on politics now can clearly be seen as the president resumes his signature campaign rallies. Bloomberg says the rally planned for June 20 in Tulsa, Okla., is shaping up as a “possible nightmare scenario for public health officials,” as supporters gather in an arena that holds nearly 20,000 people, with no special capacity limits, “despite concerns that crowded, indoor events are ideal for transmitting the coronavirus.” The campaign plans to give a mask and hand sanitizer to everyone who attends — and require them to agree to a waiver absolving the campaign of liability if they get sick.

So, we will see. Clearly, the coronavirus is affecting almost everything this year and events like the Tulsa rally can be expected to play a role — as will the dynamics of the rally itself and its eventually consequences. The infrastructure effort also could be important, at least partly since it has long been promised and proved deeply controversial in the past. This is an effort that should be watched closely by producers as it emerges, 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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