Republicans see a hot political talking point with the fight this week in Congress over the Commodity Credit Corp.
Speaking to agriculture reporters on his weekly call, Iowa Sen. Chuck Grassley was able to get away from the political battle over the Supreme Court to hammer home the case that Democrats are politicizing the Commodity Credit Corp., which the senior Iowa senator said has never been politicized. Grassley said he ran into House Speaker Nancy Pelosi, D-Calif., to make his point that the CCC should be fully funded.
"So I see this as Democrats abandoning farmers across the country, because they say that the CCC is being used as a slush fund by President Trump -- which obviously when you're helping farmers (as) we did in this spring because of the virus -- that doesn't make it a slush fund," Grassley said.
The House was supposed to vote on a funding bill -- a continuing resolution, or CR -- through Dec. 11, but the vote was delayed on Tuesday. That funding bill had removed temporary funding for the Commodity Credit Corp. and funds that were going to the Pandemic EBT Program, which provides funds to families with children who are not getting regular school meals.
Republicans state USDA could have to delay as much as $15 billion in spending on farm bill programs if the CCC fund is not immediately reloaded in the CR bill. Democrats maintain USDA should have available funds to manage the farm program until mid-November. Democrats especially did not like President Trump announcing another $14 billion CFAP 2 aid package at a political rally in Wisconsin.
Wisconsin, Minnesota, Ohio, Iowa and Georgia are among the battleground states where the rural vote could swing the presidency in their states. A Des Moines Register poll just Tuesday showed the presidential race is dead-even right now in Iowa.
Read about the poll here: https://www.desmoinesregister.com/…
Iowa leads all states in payments under the first CFAP at $966.8 million, and a big chunk of the state was hit hard by a windstorm last month. Minnesota farmers also have collected $607.6 million under CFAP and Wisconsin farmers have received $522 million under the program.
Agricultural groups as well as GOP members of Congress -- and a few Democratic House members from rural states -- all have called on House leaders to return funds back to the CCC. The battle over the CCC funds actually began last year when House Democrats proposed a CR without funding for the CCC. Democrats were already raising concerns about the volume of dollars coming out of the CCC for the MFP programs.
Senate Agriculture ranking member Debbie Stabenow, D-Mich., said Monday that the $44 billion in CCC funds and an additional $9.5 billion in direct producer assistance Congress already provided "will give USDA enough money to spend on farm bill programs through October, if managed appropriately -- including additional COVID-19-related disaster programs authorized under the CARES Act."
Stabenow also said, "Under current law, unchanged by the continuing resolution, the Commodity Credit Corporation will receive its normal reimbursement in mid-November after filing financial reports for the fiscal year as required by law."
A source with knowledge of how the CCC works said that Stabenow's statement is correct, but the speed with which the reimbursement becomes available depends on USDA's efficiency in completing an end-of-the-fiscal year report on CCC spending, the audit of that report and the Treasury Department's speed in authorizing the line of credit. Normally, the audit takes place in October and the fresh line of credit is established in November but could stretch into December, the source said.
But after Stabenow's statement, Senate Agriculture Appropriations Subcommittee Chairman John Hoeven, R-N.D., told DTN in an email, "The $14 billion we secured in the CARES Act was expressly intended to assist producers with impacts related to the coronavirus pandemic. USDA is using it to provide CFAP 2 [the Coronavirus Food Assistance Program], which opened (Monday) and already has more than 10,000 applications. These funds are designated for CFAP 2 and are not allowed to be redirected for farm bill programs. Without reimbursing the CCC in the CR, USDA will be delayed in providing farm bill programs in the first quarter. After the annual CCC report is finalized, the CCC annual reimbursement typically occurs near the end of the year."
Hoeven added, "This October, November and December, we expect the CCC will need an additional $15 billion or more to meet their obligations. If we don't provide the money, important farm programs will be delayed, including the Marketing Assistance Loans, which need to go out this fall to help producers market their crops later in the year when they can get a better price. Additionally, the Price Loss Coverage and Conservation Reserve Program payments would be delayed. We need to reimburse the CCC in the CR to ensure that these important farm bill programs aren't delayed at a time when our farmers and ranchers very much need this help."
Stabenow has been upset with the Trump administration over formulas it has used to provide aid to farmers and by rumors that the Trump administration intended to use the CCC to make payments to oil companies that did not get waivers from the Renewable Fuel Standard.
Grassley told reporters Tuesday that if the House doesn't include the CCC provision he hopes the Senate will add it. But he noted that the action would have to be taken so that there is enough time for a conference before the end of the fiscal year.
Of Stabenow's concern that USDA may use the CCC to help oil companies, Grassley noted that Agriculture Secretary Sonny Perdue said on Monday that he doesn't plan to use the CCC to help the oil companies. Perdue acknowledged that Trump wants to help oil companies, but said, "We don't think that qualifies under Charter 5 of the Commodity Credit Corporation Act, and we've informed them of that. So we'll have to see what happens."
Grassley said he has "some sympathy" for Stabenow's statements that the Trump administration's formulas for aid have disproportionately benefited Southern farmers over Midwestern farmers, but Grassley added that disproportionately aiding Southern farmers "didn't seem to bother her when she was one of the two writers of the bipartisan farm bill." The Southerners are "getting away with murder" for the five-year life of the farm bill, he said, adding that "she should have been fighting that battle with me way back then.
Congress restricted the annual CCC appropriation from Fiscal Year 2012 to 2017. The restriction prevented the Agriculture Secretary from using any surplus CCC funds beyond the mandated programs under the farm bill. Republican House members put the restriction on USDA after Agriculture Secretary spent $348 million on aid that largely went to Arkansas farmers in 2010 -- paying farmers mainly because of 2009 crop disasters. Vilsack used the Section 32 authority in September 2010, about eight weeks before the midterm election. A GOP-led House removed the CCC restrictions when the Trump administration took office.
Talking about aid to farmers before the National Farmers Union in September 2016, Vilsack said NFU should ask lawmakers to remove the restrictions placed on him. "So if you're looking for something today that you can do, that doesn't reopen the farm bill because there's an indication from this Congress that they have not appetite for doing that the one thing they could do, is via the appropriations bill, is releasing that restriction so we can more aggressively use CCC," Vilsack said. "That would be helpful."
Grassley also pushed back on questions from journalists about how much aid is immediately needed by farmers.
Some details and history of the CCC fund can be found at: https://www.everycrsreport.com/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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Jerry Hagstrom can be reached at email@example.com
Follow him on Twitter @hagstromreport
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