Washington Insider -- Tuesday

Ag Producer Angst as Congress Seeks RFS Changes

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

Farm/Agribusiness Groups Urge Trump to Continue Progress on Cuba

Continuing progress seen under the Obama administration relative to relations with Cuba in the coming Trump administration is being urged by a group of U.S. farm and agribusiness groups.

"As a broad cross-section of rural America, we urge you not to take steps to reverse progress made in normalizing relations with Cuba, but also solicit your support for the agricultural business sector to expand trade with Cuba," the groups said in a letter to President-elect Donald Trump. "It's time to put the 17 million American jobs associated with agriculture ahead of a few hardline politicians in Washington."

The groups also cited the declining farm income situation as another reason to expand trade with Cuba. The American Farm Bureau Federation, American Feed Industry Association and grower organizations representing soybean, corn, rice, wheat and other commodities signed the letter.

However, in testimony to a Senate panel this week, Rex Tillerson, President-elect Donald Trump's nominee for Secretary of State, said he would advise Trump to veto any measures to lift the trade embargo, and would not want to change restrictions on travel to the island nation until the Trump administration completes a review of executive orders with regard to Cuba.

Meanwhile, the Obama administration is ending the "wet foot, dry foot" policy that allowed Cubans who arrived in the US without visas to pursue residency after one year. The move comes about a week before President Obama leaves office and is likely the last major change he will make to his overhaul of the U.S. relationship with Cuba.


Mexico Announces New US Ambassador With Strong Trade Policy Credentials

Mexico's new ambassador to the U.S. has a strong North American trade resume. Geronimo Gutierrez, currently the managing director of the North American Development Bank and the former undersecretary for North America, will become the next Mexican ambassador to the U.S., Mexico's Foreign Ministry announced in a written statement January 13.

The departing ambassador, Carlos Manuel Sada Solana, will become the undersecretary for North America, as further support for trade negotiations.

The personnel change comes just one week after the announcement that the former Treasury Secretary Luis Videgaray, who resigned last August after orchestrating the controversial visit of then-candidate Donald Trump, will be the incoming secretary of foreign relations.

Washington Insider: Ag Producer Angst as Congress Seeks RFS Changes

Ag producers are counting on a strong ag secretary nominee to fight for their interests in a number of areas including trade and renewable fuels, but others, as well.

As a result, they say they are becoming increasingly worried as time goes without a nomination. Informa Economics reported this week that outgoing USDA Secretary Tom Vilsack joined others in U.S. agriculture, including farm group lobbyists and others, who in recent weeks have repeatedly asked "why it has taken so long for President-elect Donald Trump to nominate Vilsack's replacement," despite the importance of rural voters in the recent election.

Vilsack, during a visit to the Wall Street Journal on Wednesday, said that the absence of an Agriculture Secretary pick so late in the Cabinet-selection process reflects a "lack of appreciation" for what his agency does. It is among the last Cabinet-level posts to be filled. "Why is that the last one?" Vilsack asked.

A spokeswoman for Trump said an announcement will be made soon. "The future growth of the U.S. agriculture sector is of critical importance to President-elect Trump, which is why he is taking time to meet with experts and interview numerous qualified individuals." Vilsack's last day was Friday, January 13.

Trade is only one looming ag issue. Bloomberg highlighted the re-emergence of a Republican led effort to overhaul the biofuel mandate. Bloomberg reported last week that House Republicans are moving to overhaul the Renewable Fuel Standard by appointing a critic of that program to lead the House Energy and Commerce Committee.

The new committee chairman, Greg Walden, R-Ore., told Bloomberg "reforming the RFS is a priority for the committee" but added that the subcommittees with jurisdiction will be allowed to devise their own strategies. A Walden spokesman said RFS overhaul would be on the committee agenda this year.

Bloomberg also noted that "an RFS overhaul in the House would more likely target an ethanol blending cap rather than outright repeal and that the issue faces tougher odds in the Senate."

The Walden statement came the day after House Majority Leader Kevin McCarthy, R-Calif., called for RFS changes. "I don't want to dictate what will come out of committee, but I would sit down with the new chairman, Greg Walden," McCarthy told the Hoover Institution January 12. "There's been discussion for quite some time, but I think it needs reform."

A bill in the last 114th Congress, the Food and Fuel Consumer Protection Act of 2016, garnered 119 total sponsors but never received a full committee vote. Andre Castro, a spokesman for lead sponsor Bill Flores, R-Texas, told Bloomberg that the congressman is aiming to reintroduce the bill in the first quarter of this year to require the Environmental Protection Agency to cap overall ethanol blends in the U.S. transportation fuel supply at 9.7%.

That would likely prevent nationwide use of 10% ethanol, referred to commonly as E10. Oil groups such as the American Petroleum Institute have long supported such restrictions. Biofuel producers and supporters staunchly oppose it.

The administration's seeming reluctance to name an Ag Secretary is somewhat surprising, except for possible administration concerns that the new Secretary will face considerable pressure to join the number of appointees who appear to be bucking the party line on a wide range of issues. Certainly, agriculture and rural voters in general did provide strong support for the president elect, and will provide continuing support for many issues down the road—but, they also will have some disagreements, including on key issues like immigration, trade and energy.

By now, the president-elect has interviewed many potential candidates and surely has a clear idea about what his options are. It also is clear that pressure is building to make his call, if for no other reason to prevent critics from digging in even deeper as time passes, 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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