Washington Insider -- Friday

Uncomfortable Budget Proposed for Ag

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

GMA Calls for Nutrition Facts, GMO Disclosure Deadlines to be Merged

The Grocery Manufacturers Association (GMA) is urging the Trump administration to coordinate the compliance deadline for the Nutrition Facts labeling update and the GMO disclosure standards.

The focus is on the Trump administration's push to cut back regulations, with GMA filing public comments that the Nutrition Facts deadline be belayed to May 2021, noting that the GMO disclosure standards being developed by USDA will not be finalized until July 2018 and implantation will take several years after that.

Harmonizing the two schedules could save food companies considerable costs, GMA said. "These two required changes will impact virtually all food and beverage product labels on the market today," GMA wrote in its comment letter, adding, "Better coordination of the timing of these two label changes will also allow companies to execute them more efficiently, resulting in industry-wide savings of approximately $1.7 billion."

Currently, food packaging must reflect the updated Nutrition Facts label as of July 26, 2018, though small manufacturers will have one more year to comply.

Commerce's Ross Eyes NAFTA Talks Wrap-Up by January 2018

Getting the North American Free Trade Agreement (NAFTA) renegotiations with Canada and Mexico completed by January 2018 marks the "best window" for the discussions to conclude, according to U.S. Commerce Secretary Wilbur Ross.

The focus on January comes as Ross acknowledged political matters figure to impact negotiations if they move well into 2018 – Mexican and US elections. "Their elections are mid-year. The closer you get to it the more complicated it would become, particularly in terms of getting Mexican congressional approval," Ross said at an event held at the Bipartisan Policy Center. Plus, the US fast-track negotiating authority needs to be reconfirmed in July 2018, as US mid-term elections loom in November. "Those will undoubtedly have some impact on congressional views," Ross said.

The White House issued a denial on any NAFTA timeline. The denial came amid a report in the Mexican press that Ildefonso Guajardo, Mexico’s economy secretary, told a closed-door gathering of business officials that he and U.S. Trade Representative (USTR) Robert Lighthizer agreed on the Dec. 15 date during a bilateral meeting earlier this month. Guajardo was quoted as saying he and Lighthizer had "analyzed calendars" and chosen the mid-December deadline because it would give both countries' legislatures enough time to approve the updated deal before the Mexican presidential election in July 2018.

USTR said no date has been set. "The sooner we can conclude negotiations, the sooner we can address the concerns of the president and the American people with NAFTA,” Emily Davis, a USTR spokeswoman, said.

While tipping his hand little on the administration's focus on the NAFTA talks, Ross said, their first guiding principle will be to "do no harm" in the process. “There were some things that were achieved under NAFTA and under other trade agreements,” he remarked.

A second rule for the talks would be to bring in concessions Canada and Mexico made as part of the Trans-Pacific Partnership (TPP) agreement, Ross observed. "We would view those as a starting point for discussion,” he said. Digital trade issues and gaining access in the services sectors would also be areas where the administration wants to see advances.

In a similar vein, Ross indicated they want to bring into NAFTA some basic areas on trade matters that would be used in future pacts. The goal there is to have "basic principles we would like to have followed in subsequent trade agreements rather than starting each one with a blank sheet of paper."

Washington Insider: Uncomfortable Budget Proposed for Ag

Well, the administration’s FY 2018 budget is now out and is causing angst among stakeholders, as well as in the press. For example, Politico said, “Ag gets dismissed by Trump Budget” and observed that Secretary Sonny Perdue can expect uncomfortable questions from House appropriators over why the administration’s budget proposes to cut or eliminate key farm safety net, nutrition, research and trade programs. The group notes that these are some of the “same initiatives the secretary has said he supports.”

Perdue has spent much of his first month in office making trips to the Midwest to tout the President’s concern for rural America and for farmers. He has also told anyone who would listen about the president’s support for trade and the farm safety net, Politico said.

However, now Politico says that “you wouldn’t know that by reading Trump’s fiscal 2018 budget, which would reduce USDA discretionary spending by 20%, drop the overall budget by 8% and lower spending on USDA programs by roughly $230 billion over a decade — a plan that seems more geared to please the Heritage Foundation than, say, the Farm Bureau.”

The group thinks that the proposed cuts “put Perdue in a tough spot with both lawmakers and farm groups.” For example, the spending plan includes cuts to trade promotion programs and would eliminate more than 230 positions geared toward boosting U.S. exports around the world, despite the secretary’s promise that the administration would focus on expanding foreign market access to help farmers.

And, it argues that “the plan’s proposed $193 billion cut to Supplemental Nutrition Assistance Program spending over a decade…runs counter to Perdue’s remarks about SNAP to the House Agriculture Committee last week. “You don’t try to fix things that aren’t broken,” Perdue said of SNAP during the hearing.

Perdue has already tried to pass the hot potato, Politico says. In a budget briefing with reporters, Perdue did little talking instead passing off questions to acting USDA Deputy Secretary and Budget Director Mike Young, who did his best to argue that the secretary and the department had little role in crafting the budget and that the proposed reorganization of the department was not reflected in the document. “The budget is based on USDA’s current makeup, Young said in explaining the proposed cuts to rural development — reductions Perdue has promised will not be part of the reorganization.”

Politico also says that “Young’s efforts to beat back aggressive questioning didn’t go well.” For example, relative to the secretary’s earlier remarks to lawmakers that no changes were in store for SNAP, one questioner asked, “How reliable is the secretary’s word?” Young responded by repeating that the budget proposal keeps SNAP at current funding levels and that “the deeper cuts would be dependent on legislative changes.”

There’s more. The Secretary issued a statement after the budget briefing, further defending the White House concept. He pointed to Trump’s promise to realign government spending, attempt to eliminate duplication or redundancy and see that all government agencies are efficiently delivering services to the taxpayers of America; “and that’s exactly what we are going to do at USDA,” Perdue said.

He pointed to the plan’s “full funding” of nutrition programs, wildland fire suppression and food safety, and argued that it also calls for “several new initiatives and increases for Rural Development.” However, he concluded that “whatever form the final budget takes, it is my job as Secretary of Agriculture to manage and implement that plan, while still fulfilling the core mission of USDA.”

In the meantime, farm groups are fuming, Politico reports. And they are accusing Trump of “trying to put farmers and rural America into a deeper hole than the one they’re in now.” In addition, the proposals to cut crop insurance, food stamps, rural development programs, trade assistance measures and other initiatives were panned by the American Farm Bureau Federation, American Soybean Association, National Farmers Union, USA Rice, U.S. Wheat Associates, the National Sustainable Agriculture Coalition and National Corn Growers Association, as well as “about every major anti-poverty and anti-hunger group,” Politico says.

“By shredding our farm safety net, slashing critical agricultural research and conservation initiatives, and hobbling our access to foreign markets, this budget is a blueprint for how to make already difficult times in rural America even worse,” said ASA President Ron Moore, an Illinois soybean farmer.

The comment storm was among the harshest treatment the new administration has received from agriculture and rural interests, which overwhelmingly backed Trump last November. “The administration’s budget proposal fails to recognize agriculture’s current financial challenges or its historical contribution to deficit reduction,” AFBF President Zippy Duvall said. “Clearly, this budget fails agriculture and rural America.”

Well, nobody thinks the budget proposal will be passed as presented, since the appropriations committees will have the final say over its shape and substance — and, they are unlikely to even seriously consider the administration plan. At the same time, it is strange that the administration would decide to send up proposals guaranteed to antagonize as many supporters in as many ways as they have done. Certainly, the always important budget debate should be scrutinized more closely by producers than ever before, Washington Insider believes.

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