Washington Insider - Tuesday

Perdue Backs Keeping Nutrition Programs in Farm Bill

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

Infrastructure Plans Coming In January

The White House is preparing to finally release a much-delayed infrastructure rebuilding plan in January. Trump’s advisers are nearly finished on details of direct federal spending of $200 billion or more — funds it would propose to offset with cuts elsewhere in the federal budget — to leverage hundreds of billions more from local governments and private investors to pay for road, rail, water and utility upgrades. Expectations are that $200 billion in federal funds over 10 years would be expected to spur at least $800 billion in spending by states, localities and the private sector.

"Infrastructure is an issue through which we can move people into the president’s job approval column and win support for future policy initiatives," deputy press secretary Lindsay Walters said. But some congressional Republicans are pushing back against the coming proposal, citing growing deficit concerns and other factors. The White House in January will release a series of "principles" for the infrastructure policy push that will be transmitted to Congress before the January 20 State of the Union address.

Lots of Trade Attention This Week

Not only is the latest WTO Ministerial meeting underway in Argentina but there are also technical-level discussions going on via NAFTA in Washington.

With the WTO session, the top trade officials from the U.S., Canada and Mexico will not be taking part in the NAFTA meetings this week and the agriculture portion of the discussions will not unfold until either this weekend or early the following week, presumably on the WTO sessions regarding agriculture keeping the technical-level negotiators from all three countries busy in Argentina. Hopes are high for gains in non-controversial areas via NAFTA but not so for the WTO Ministerial relative to agriculture portions of those discussions.

Washington Insider: Perdue Backs Keeping Nutrition in Farm Bill

Bloomberg is reporting this week that Ag Secretary Sonny Perdue reiterated recently that the main USDA nutrition programs “should remain linked to the farm bill when the latter comes up before Congress in 2018, despite past efforts to decouple the two,” Perdue told Bloomberg.

While that statement may be somewhat more defensive than many producers had hoped for, it still should be considered good news that Perdue sees no momentum for weakening the alliance between nutrition program advocates and farm supporters and that it is “still holding together.”

In 2013, before farm programs were last reauthorized, some members of the House Republican conference pushed to separate the two issues, in hopes of making cutbacks in nutrition support. Not this time, Perdue says. “I don't see a lot of interest in calling that question right now.” “I believe the administration is sending sufficient signals it will deal comprehensively with overall welfare issues in a comprehensive method that lessens the incentives to do it in the farm bill.”

The Supplemental Nutrition Assistance Program, formerly known as the food stamp program, provides benefits to low-income households on electronic benefit transfer cards. The more than $70 billion program was re-authorized by the 2014 farm bill, which is set to expire by the end of the 2018 fiscal year.

Perdue said he would like to see a farm bill enacted into law by the summer of 2018 so “we can get all of our people in the field trained up on what the provisions are and implement those by the end of the year.”

He predicted the legislation would go through Congress pretty quickly because the 2018 farm bill will be “more evolutionary than the sweeping 2014 bill.” He said there aren't major changes to make in payment schemes, but there would be marginal tweaks and fixes to issues with cotton and dairy programs.

Additionally, specialty crops will be getting some assistance and could be added as commodity crops under crop insurance, he said. However, he also noted that, “we need to make sure there is a safety net for food security at the right level” but not so high that it encourages farmers to make decisions based on farm programs instead of the market.

There will be tweaks to the nutrition programs, particularly dealing with adults without disabilities and/or dependents, said Perdue. The USDA said on Dec. 5 that it would give states “greater flexibility” over how they administer nutrition assistance, and F&NS administrator Brandon Lipps sent a letter to state human services officials Nov. 30 saying the “flexibilities” would address self-sufficiency and customer service.

“We have able bodied adults, both men and women, without dependents who are using this,” said Perdue. “I don't believe it's the ultimate purpose.”

Still, there are several areas of the sector that need strengthening, Perdue said, and used the citrus industry with its hurricane losses and losses to citrus greening disease as an example. Orange growers were hurrying to harvest their crops as Hurricane Irma hammered Florida in August and September. USDA estimated fruit losses up to 100% in some areas, along with the increased spread of citrus greening, a bacterial disease.

“Congress has been somewhat loath to do direct disaster payments since the farm bill came out because safety nets were there to take that up,” said Perdue.

The White House sent Congress a request for an additional $44 billion in disaster relief aid on Nov. 17, but the request was not added to the House's continuing resolution to keep the government funded. Rep. Tom Rooney, R, Fla., grilled USDA officials about the lack of assistance to Florida citrus growers during a hearing Nov 29.

“We have a crop insurance problem and that needs to be fixed in the next farm bill, but that doesn't help us now,” said Rooney during the hearing.

Because citrus isn't considered a large commodity crop, farmers have minimal crop insurance coverage. As for the “citrus greening” disease, producers only receive “catastrophic” level of coverage through the USDA Risk Management Agency. Although many growers have the coverage, it is only applicable if the loss is enormous.

Perdue said he expected disaster recovery for citrus and cotton farmers will take a full year, but he was hopeful by fall of 2018 “people would long forget the hurricanes.”

The Secretary is hoping to keep the ag safety net coalition strong, but seems to be preparing producers for later partisan attacks from several directions. Certainly, trade and trade policy will sooner or later be on the list, depending on the administration’s near-term posture in the NAFTA talks.

A key issue in the debate will be how active a role USDA chooses to take in the coming fight over scarce dollars—which likely will be much more drawn out and less placid than Secretary Perdue expects. So, as always, the coming farm bill debate will be one producers will need to watch closely as it emerges, Washington Insider believes.

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