Washington Insider - Thursday

Administration Farm Bill Principles

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

Commerce Hits Spanish Olives with Duties

Preliminary antidumping duties of 14.6% to 19.7% will be applied to imports of Spanish ripe olives, the U.S. Department of Commerce (DOC) announced Tuesday. While lower than levels requested by the U.S. industry of 78% to 223%, the antidumping duties are in addition to preliminary countervailing duties announced earlier.

"The U.S. values its relationships with Spain, but even friendly countries must play by the rules," Commerce Secretary Wilbur Ross said in a statement. Spain shipped an estimated $70.9 million in ripe olives to the U.S. in 2016, according to a DOC fact sheet.

South Korea to Launch WTO Complaint over New US Tariffs

South Korea will launch a World Trade Organization (WTO) complaint challenging new U.S. tariffs on imported solar components and washing machines, Trade Minister Kim Hyun-chong announced January 23 during a meeting with industry officials.

"The U.S. decision to impose tariffs on Korean washers and solar panels is excessive and apparently constitutes a violation of WTO agreements," the minister said. He vowed that South Korea will strongly oppose the U.S. measures. "The U.S. government took actions in consideration of its domestic political situation, rather than abiding by international regulations. If we file the suit with the WTO, we will win the case."

The U.S. did not make a sufficient case for the duties, Kim argued. "The ITC failed to show a clear link between increased imports of Korean products and serious harm to U.S. industry, but the Korean-made washing machines are forced to face import restrictions, which is contrary to agreements," he said, adding that, "It does not make sense that Korean companies have built or are building factories, but the U.S. government is damaging those that have promised to support his trade policies."

Washington Insider: Administration Farm Bill Principles

Well, it is early in a farm-bill year and the administration is offering an outline for reauthorization, Bloomberg says. And, to no one’s surprise, the administration is proposing to “push some food-stamp recipients back to work,” Bloomberg says.

It is reporting that a four-page document released by the USDA on Wednesday calls for supporting “work as the pathway to self-sufficiency, well-being and economic mobility for individuals and families” on food stamps. The administration didn’t specify how it would change the law or whether it wants to cut funds for the program.

The department said it wants to discourage “subsidies that make farmers dependent on the government.” And, it also called for cutting regulations, as well as improved monitoring of how other countries may impede agriculture exports. The outline was released Tuesday in advance of a trip by Agriculture Secretary Sonny Purdue to Pennsylvania, where he’ll discuss the proposals.

The bill, whose cost has topped $100 billion in previous years, re-authorizes programs overseen by USDA, including payments to growers of corn and soybeans and funds to prevent forest fires, among many other things. The current law ends Sept. 30, after which current programs begin to phase out.

The outline--described by the administration as a statement of principles--is intended to guide legislation being considered in Congress, Perdue said. He also noted that the White House is “ready” to get more deeply involved if lawmakers veer far from the administration’s approach.

"You will see more of an evolution than a revolution" in this year’s law, Perdue said. "There are some things that we can do and will propose to do in the farm bill that can be helpful."

Recommendations for the Supplemental Nutrition Assistance Program are being watched especially closely because the expensive bill requires broad support for passage, and because a partisan dispute over that issue nearly derailed the previous farm law that ultimately passed in 2014. Nutrition initiatives, including SNAP, account for most of the bill’s costs.

"The only ugly issue on the scene is the food fight between the nutrition people and the crop-agriculture people," said Harwood Schaffer, an agricultural economist at the University of Tennessee at Knoxville. "If we don’t have to steal from nutrition to make the commodity programs work, we may be able to avoid any major problems."

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said that while some food stamp rules may be tightened, changes to the program aren’t likely to be dramatic, given a need to attract Democratic votes in the Senate. Perdue also has said the administration wouldn’t be pushing for radical change to the program.

Many people who receive food stamps already work, Bloomberg notes. In 2015, USDA found that 57% of working-age adults in the program either had a job or were looking for one; another 22% did not work because of a disability.

Farm-bill leadership has traditionally fallen to Congress, with the USDA in an advisory role, though different administrations have tried different approaches. George W. Bush’s administration advanced a very detailed policy statement in 2002 which was largely ignored. Bush vetoed Congress’s final plan in 2008, but that veto was overridden.

President Barack Obama’s administration played little role in drafting the 2014 law. Trump recently told the American Farm Bureau Federation that he will work with Congress "to pass the farm bill on time so that it delivers for all of you."

Bloomberg added a note of caution concerning the $1.5 trillion tax cut Congress passed last month which may make approval of farm legislation more difficult. In addition, cotton and dairy farmers “likely will seek larger subsidies,” Bloomberg says, and may argue there’s more money that could be made available to them as spending on food stamps falls because of an improving economy. In 2017, spending on food stamps fell 15%, to $68 billion, from its peak four years earlier.

Roberts and House Agriculture Committee Chairman Michael Conaway, R-Texas, have both said they’d like a bill in their chambers early this year. Neither has revealed a plan.

So, we will see. Farm bills typically are costly and nowadays involve economic and social issues far beyond agriculture. The result has increasingly been bitter, prolonged national debates and this year is unlikely to be an exception. It will, of course, be yet another debate producers should watch closely as it emerges, Washington Insider believes.

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