Washington Insider-- Thursday

Sparks Over Ag

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

US To Lower Tariffs On Moroccan Fertilizer Maker OCP

The U.S. Department of Commerce reduced the subsidy rate that Moroccan fertilizer manufacturer OCP would face on phosphate exports to the U.S., lowering it to 16.88% from 23.46%, according to a memo from the agency.

"On November 30, 2020, we received timely ministerial error allegations that Commerce made significant ministerial errors in the Preliminary Determination with respect to OCP's subsidy rate," the document says. "As a result, we have amended the OCP's Group preliminarily ad valorem rate."

However, Commerce noted that it disagreed with other contentions made by OCP in the information they provided to Commerce.

RFS Exemption Requests Rise

Data released by the Environmental Protection Agency (EPA) showed another increase in small refinery exemptions (SREs) for blending requirements relative to the Renewable Fuel Standard (RFS).

After remaining static for several months, there are now a total of 20 SREs that have been requested for the 2011-2018 compliance years, an increase of three from the November data.

EPA also now shows that a total of 46 SREs have been requested for the 2019 and 2020 compliance years combined, 32 for the 2019 compliance year and 14 for the 2020 compliance year.

Washington Insider: Sparks Over Ag

The New York Times is reporting this week that the politics of U.S. agriculture are as complicated as ever — and that despite President-elect Joe Biden's victory, Democrats were again defeated resoundingly in rural America.

This month, Biden nominated Tom Vilsack tapping him to reprise the role of agriculture secretary that he held for eight years in the Obama administration. But the pushback against Vilsack has been fierce, laying bare divisions within the Democratic Party and "resistance to corporate influence that is simmering among progressives," the Times said.

If confirmed, Vilsack, a former Iowa governor, will retake the helm of the Agriculture Department at a time when America's farmers have been battered by trade wars and the effects of the coronavirus pandemic. He also faces challenges from progressive and environmental groups who warn that he is too friendly with big industrial agriculture businesses.

Farm states have been a stronghold for Republicans over the past decade and — despite frustration by some over Trump trade policies — the president still dominated rural areas in 2020. (Editor's Note: Questions asked as part of the recent DTN Agriculture Confidence Index showed more than 60% of farmers voted for Trump, with another quarter of farmers surveyed choosing to not answer that question. Only 11.8% of those surveyed said they voted for Biden.)

Eager to make inroads in rural America, some Democrats fear that Vilsack is not the ideal ambassador, especially since he recently earned $1 million a year as a lobbyist for the dairy industry. Environmental and agricultural policy groups see him as too cozy with "Big Ag," pointing to the rapid consolidation in the farm sector that occurred under his watch when companies such as Monsanto and Bayer merged.

Food safety and labor advocates also criticize his decisions as secretary to allow significant increases in slaughter line speeds in poultry plants along with a revamp of the chicken inspection process to allow meatpacking employees to perform some duties previously carried out by government inspectors.

Food and Water Watch, a consumer and environmental watchdog group, said it opposes Vilsack's nomination. Ken Cook, president of the Environmental Working Group, said "I think he'll fold under pressure from the ag lobby, the subsidy lobby and big agriculture." EWG is a nonpartisan organization that is critical of industrial agriculture.

While many farm groups such as the National Farmers Union and Feeding America have expressed support for his nomination, some farmers are wary that the Biden administration could herald new and onerous regulations.

Vilsack has faced criticism for the fading fortunes of Black farmers who have long complained of discrimination when it comes to land and credit access. Vilsack was at the center of a racial firestorm when in 2010 he hastily fired Shirley Sherrod, a Black USDA official, after a conservative blogger released a misleading video clip that appeared to show her admitting antipathy toward a white farmer. He later apologized and tried to rehire her.

"Because of the experience of the pandemic, there are different expectations for the secretary of agriculture than there were during Vilsack's prior service," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which represents poultry workers at plants across the South. "There must be heightened priority given to the safety and needs of the workers who produce our food supply as well as all to those Americans who face food insecurity."

Early in the Obama administration, Vilsack vowed to address the struggles of smaller farms and to help lift the broader rural economy. At the time, Charles Grassley, a fellow Iowan and powerful Republican senator, praised Vilsack's efforts, which he thought were "badly needed." In the end, Vilsack and the Justice Department did not mount an antitrust effort.

Sen. Grassley has expressed support for Vilsack's nomination.

"The next couple of years the priority will be getting the economy on its feet," said Marc Perrone, president of the United Food and Commercial Workers union, which represents thousands of meatpacking workers and has expressed support for Vilsack's nomination.

Vilsack has frequently made clear his opposition to policies that would break up corporate agriculture conglomerates. "There are a substantial number of people hired and employed by those businesses here in Iowa," Vilsack said. "Telling those folks, 'you might be out of a job,' is not a winning message."

Vilsack is expected to be a sharp contrast with the current ag secretary who was criticized within the department for sidelining career staff and politicizing research by moving the agency's economic research unit from Washington to Kansas City, Mo., leading to a wave of departures and stalling its work.

To those who have worked with Vilsack, the notion that he is merely an ally of industrial farming is seen as unfair, said Anne McMillan, the former USDA deputy chief of staff. She argued that her onetime boss was always mindful of the plight of small farmers but that he needed to also look out for the broader industry.

"His job required him to advance rural America and the ag industry and feed people," she said. "You can't not engage with the entire spectrum."

So, we will see. Vilsack generally got high markets from the sector during his previous terms, and many expect that to happen again — although a number of key issues have sharpened significantly over the past few years and the job may actually be tougher these days — trends producers should watch closely if they appear, Washington Insider believes.

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