Washington Insider -- Friday

By DTN's Washington Insider

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

China Trade in Focus on Ethanol, DDGs & Fertilizer

U.S. industry complaints on Chinese import duties imposed on U.S. ethanol and distillers' dried grains (DDGs) need to be prioritized, according to the U.S. Renewable Fuels Association, Growth Energy and the US Grains Council.

"China's recent actions are significantly injuring U.S. ethanol producers and farmers, and undermining the substantial investments our industries have made in developing a cooperative and mutually beneficial trade relationship with China," the groups said in Feb. 7 letter to the Trump administration. "We respectfully request that your Administration, and specifically the incoming U.S. Trade Representative, place the Chinese government's injurious trade barriers against U.S. ethanol and DDGS near the top your China trade agenda."

The U.S. shipped more than $300 million of ethanol to China in 2016. In 2015, China bought $1.6 billion of DDGs.

Meanwhile, imports of Chinese ammonium sulfate, a type of fertilizer, are taking a toll on the U.S. industry, the International Trade Commission (ITC) unanimously ruled Feb. 8.

The ruling means that the imports will face antidumping duties of 493.46%, and anti-subsidy duties of 206.72%, in line with rates previously calculated by the U.S. Commerce Department.

The U.S. imported an estimated $62 million worth of ammonium sulfate from China in 2015. According to USDA, annual fertilizer prices paid by U.S. farmers have increased rapidly and have become more volatile since 2003.

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Rural State Transportation Leaders Prefer Direct Federal Funding

Transportation leaders in sparsely populated states told the Senate Environment and Public Works Committee Wednesday that direct federal funding, rather than toll-driven public-private partnerships, is critical to addressing their surface transportation needs.

Officials from Wyoming, West Virginia and other states echoed the skepticism of Sen. John Barrasso, R-Wyo., the committee's chairman, toward President Donald Trump's plan to spend about $1 trillion in infrastructure over ten years, relying primarily on the private sector for the funds. Barrasso noted that Trump's reliance on public-private partnerships to provide the funds would not work for rural states.

Their populations are too small to support toll roads or other revenue-generating projects that are likely to attract investors, Barrasso said. "Funding solutions that involve public-private partnerships, as have been discussed by administration officials, may be innovative solutions for crumbling inner-cities, but do not work for rural areas," Barrasso said.

Barrasso said direct federal spending is crucial to surface transportation. But he added that former President Barack Obama's "so-called stimulus bill" (PL 111-5) was "a major waste and didn't get anything accomplished" even as it increased the federal debt. Barrasso said he would not support a similar plan that involved increasing the deficit.

Wyoming Transportation Director William Panos testified that the most helpful way to build and maintain surface transportation infrastructure in rural areas would be to distribute new money through formulas established in the 2015 highway bill. "P3s (Public-Private Partnerships) and other kinds of borrowing doesn't work in Wyoming, doesn't work in rural states," Panos said. "The formulaic system for delivering dollars to those states works. Yes, there could be improvements... but those systems do work. So enhancing monies to those formulaic delivery systems would be positive."

Trump advisers Wilbur Ross and Peter Navarro, both of whom have been nominated for senior administration jobs, proposed during the campaign about $167 billion in equity to leverage the full $1 trillion. Their plan appears to rely on the private sector for the equity and would attract the money by offering a tax credit.

Barrasso's focus on direct federal spending won support from the panel's Democrats, whose caucus introduced its own $1 trillion infrastructure plan last month. Barrasso said he would work with the Senate Finance Committee toward that goal. He mentioned repatriated corporate income held overseas as a potential source of money for an infrastructure package.

Ranking member Thomas Carper, D-Del., called repatriation a source of "one-time" money for particular projects. He also promoted the idea of raising fuel taxes, the primary source of revenue for the Highway Trust Fund that disperses highways and transit funding by formula.

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Washington Insider: More Activist Activities

Politics at the national level has become increasingly serious business these days and the news that the 2020 campaign has already begun should have caused at least a ripple of anxiety for jaded voters, although likely little surprise. Apparently, President Trump has already registered his 2020 campaign, a strategy that allows more favorable treatment of some types of contributions.

The news also indicates that while the nomination battles over some candidates like Oklahoma Attorney General and Republican Scott Pruitt for the EPA administrator position causes consternation among environmental groups and their members, it also is providing them with a shot in the arm in terms of re-energized donors, Bloomberg is reporting this week.

Bloomberg noted that there are winners and losers from the recent elections, but that at least some of the losers are enjoying something of a win—from a re-energized client base, growing donations and plans for much increased future activities.

The top goal of many environment groups is to thwart the Pruitt nomination, but that seems well out of reach since Pruitt appears to have the votes needed to secure confirmation. Still, a number of groups say this conflict mean brighter prospects for them for much greater future donor support, Bloomberg says.

The environmental groups suggest that this means more capacity to better target and support environmental litigation and policy fights over the coming months and years, Earthjustice, the League of Conservation Voters and other groups told Bloomberg.

"Times like these are what this organization was made for," Marty Hayden, Earthjustice vice president of policy and legislation, said. "If they step out of the bounds of the law, we will see them in court. Just like we did during the Bush era. And we sued the Obama administration quite a bit as well."

Earthjustice saw a 160% increase in fundraising from Election Day to the end of January, compared to that period a year ago, Hayden said. He added that the group would be adding more lawyers to its team to fight the looming environmental agenda "tooth and nail."

Meanwhile, the Sierra Club reported a 700% increase in fundraising from Election Day to the end of January compared to last year, fueled by 30,000 new monthly donors, Trey Pollard, a spokesman for the group, said.

"We've seen an unprecedented surge in membership and support from across the country that is more important than ever as we aim to take on the Trump administration in Congress, in the streets, in the marketplace, and in the courts," he said. The League of Conservation Voters claimed a 100% increase in online fundraising over the same period.

Conservative organizations contend that Pruitt's nomination is also spurring a wave of support among Americans fed up with allegedly overzealous environment policies. "We've raised very little money as it relates to the Pruitt campaign. The money that's come in is mostly small dollar donations and pretty negligible," FreedomWorks National Director of Campaigns Noah Wall told Bloomberg BNA. Still, Wall said FreedomWorks drove over 41,000 grassroots activists to contact Senate offices and show their support for Pruitt.

So, this suggests what many observers already knew, and that is that environmental fights are increasingly permanent features of our political landscape, and that agriculture remains in the crosshairs of efforts to ease pressure on the climate, air and water nationwide. In addition, the increasingly well-funded advocate groups seem to relish their growing role in these fights regardless of which party is in power, a fact that producers need to watch closely as new environmental policy debates evolve, Washington Insider believes.

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