Washington Insider -- Tuesday

Bi-partisan Farm Bill Prospects

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

Commentary on Possible RFS Changes Continues

Thomas Landstreet, founding partner of N3L Capital Management and founder of Standard Research, writes in the Wall Street Journal that, "The political tide may be turning against the corn ethanol mandate. The Renewable Fuel Standard, which forces oil refiners to mix corn-based fuel into gasoline, is one of history’s great policy boondoggles.” He notes that even ex-Rep. Henry Waxman of California, a key sponsor of the original legislation establishing the standard, said that he favors phasing out the mandate.

“There’s bipartisan support in Congress for such a move... but it will have to get past Iowa’s GOP senators... Iowa’s Republican senators, Chuck Grassley and Joni Ernst — otherwise solid conservatives — are in thrall to this corporate welfare program and will fight to the death to keep it. But the time has come to modify the ethanol mandate before the costs to the economy and the environment grow steeper.”

Perdue Relieved After Tariffs Exclude NAFTA Partners

Count USDA Secretary Sonny Perdue among those expressing relief on the duties announced by President Donald Trump on steel and aluminum imports. Perdue told North Dakota farmers over the weekend that the tariffs were not as bad as he feared because President Donald Trump decided to exempt Canada and Mexico, according to AgWeek.

Perdue also said that during a meeting on March 8 with Trump, he pointed out how parts of the country that turned out to vote for him also have the deepest anxiety over NAFTA negotiations and other trade policies.

Washington Insider: Bi-partisan Farm Bill Prospects

One of the key questions about the coming farm bill debate is how deep bi-partisan support for reauthorizing the programs may be. So, a new Bloomberg report attracted farm press attention when it reported that the House Ag Committee chair told the press that the coming farm bill will be “bipartisan” in spite of recent Democratic concerns.

That comment came in spite of another report that the Ranking Democratic member Collin Peterson has hinted that it could become a partisan bill in response to administration efforts make major changes in the nutrition programs--changes that he thinks would mean that such a bill would be unlikely to get any Democratic votes in committee.

More recently, House Ag chair Mike Conaway, R-Texas, told Bloomberg that he has worked with ranking member Collin Peterson, D-Minn., every step of the way on the 2018 farm bill draft. “I have always intended and continue to hope that this Farm Bill will be a bipartisan bill. There is no reason that it should not be and every reason it should,” said Conaway.

Peterson was not so confident and even sees the proposal as “partisan at this point,” Bloomberg says.

“We kind of hit an impasse last night. I don’t exactly know where this is going, but at this point I think we could be on a path to having a partisan farm bill and I don’t know if they’ll actually be able to pass it with just Republican votes,” Peterson said recently.”

“There will not be one single vote on the Democratic side in committee for this bill if what they have currently in the bill is in there,” he said.

Conaway has told Bloomberg in the past he would like a mark-up and a vote on the bill by the end of March.

However, the clock is ticking on that, Bloomberg says. the House is out for a two-week break after March 22. “He claims he’s going to have a mark-up a week from Tuesday. I don’t know how that’s possible, given all the things that are open and this food stamp problem,” said Peterson.

Peterson said he met with Chairman of the Senate Agriculture Committee Pat Roberts, R-Kan., last week and Roberts told him he’s 10-15 votes shy without Democratic votes.

“I think they can get it out of committee that way, but at the end of the day the Senate’s not going do any of this this stuff,” said Peterson, “The Senate won’t make any significant changes in SNAP — they’re not going to do it.”

With regard to the Nutrition programs, Democrats argue that the administration’s proposed fiscal 2019 budget sets the tone for the coming debate. It aims for more than $213 billion in savings from food aid over the next 10 years by replacing half of Food Stamp’s recipients’ benefits with a package of U.S. grown and produced food, along with stricter work requirements for recipients.

USDA says it likes the food box idea and would use it to achieve $129 billion of the administration’s proposed $213 billion in cuts.

Certainly, the proposal would mark a huge change for a program whose recent growth was seen by many Republicans as proof Democratic economic policies weren’t working.

Conaway is downplaying any deep conflict over the program. He earlier characterized the issue as concerning reforms to the program that are “necessary and they will move forward.” His more recent comments indicate that he does not expect a protracted fight that would prevent bipartisan support for the bill.

Meanwhile, Roberts told Bloomberg enrollment in the SNAP program was declining because of a strong economy, but that changes are still needed. He thinks “there will be more targeting for those who really need it.”

Now, the administration proposal suggests that sharp challenges to the nutrition programs is a scenario that many ag program supporters had hoped to avoid but which seems to be looming somewhat larger and nearer. So, it will be important to watch this debate closely to see what it implies for other farm bill programs, ranging from those affecting trade to conservation, and beyond, Washington Insider believes.

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