Washington Insider-- Thursday

Administration Begins Discussion on Water Infrastructure

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

Vilsack Initial Discussion With China Counterpart Yields Little Fresh Information

USDA Secretary Tom Vilsack spoke with Chinese Minster for Agriculture and Rural Affairs Tang Renjian, with the two agreeing that it was “important” for the two sides to “work together and address areas of common concern.”

A USDA spokesperson said that Vilsack did “raise concerns” about Chinese trade barriers, but provided no information on any specific issues that he raised. The two also discussed the “positive role agriculture can play in addressing climate change.”

The two agreed to “discuss these issues further” in the future.

As has been the case with initial readouts of discussions between U.S. and foreign officials early in the Biden administration, there are few details being offered about the specific issues raised and thus it is hard to determine what kind of progress, if any, may have been made.

But these initial sessions are never expected to be ones where significant breakthroughs take place. If anything, they are more of a “meet-and-greet” effort to hopefully set the stage for detailed discussions or resolutions in the future.

USDA To Pursue Rulemaking On RFID Tags

USDA announced it will not finalize a plan put forth by the Trump administration to approve Radio Frequency Identification (RFID) tags as the official eartag for interstate movement of cattle, and the Animal and Plant Health Inspection Service (APHIS) will use the rulemaking process for future actions on RFID tags.

APHIS said his means that all current approved ID methods can be used until further notice. The agency said they will “continue to encourage the use of RFID tags” while rulemaking is pending as they believe the tags provide the “best protection against the rapid spread of animal diseases.”

USDA in July 2020 had issued a notice seeking public comment on making RFID the only ID devices approved for cattle and bison laying out a timeline of no longer allowing the official USDA shield to be used on metal or other tags that did not have RFID components starting January 1, 2022, and would make RFID tags the only official ID tags effective January 1, 2023.

Washington Insider: Administration Begins Discussion on Water Infrastructure

Bloomberg is reporting this week that the proposed Drinking Water and Wastewater Infrastructure Act of 2021 is beginning to be discussed in both chambers. It says that Senate proposals would invest more than $35 billion in water resource development projects across the country.

A major target of the effort is to authorize two critical EPA programs—the Drinking Water State Revolving Fund (DWSRF) and the Clean Water State Revolving Fund (CWSRF) — which provide financial aid to localities' drinking water systems and to state safe water programs, as well as loan financing and assistance for communities for a range of water infrastructure projects.

The legislation would reauthorize the DWSRF at $2.4 billion in fiscal 2022, gradually increasing that amount to $3.25 billion in fiscal years 2025 and 2026 for a total of $14.7 billion. It would increase the minimum percentage of those too be aimed for “disadvantaged communities” from 6% to 12%.

The CWSRF would be reauthorized at the same funding levels between fiscal years 2022 and 2026 as the DWSRF. The legislation also would re-up the Water Infrastructure Finance and Innovation Act through 2026 at the current funding level of $50 million per year.

“Rebuilding our water infrastructure must be at the heart of the ongoing 'Build Back Better' efforts because we will have missed a huge opportunity to improve American lives if we only fix our roads, but fail to repair and upgrade the pipes beneath them,” said lead author of the bill Sen. Tammy Duckworth, D-Ill.

The legislation “begins to bridge the growing gap in federal cost-share of water infrastructure,” wrote Adam Krantz, chief executive officer of the National Association of Clean Water Agencies, in a letter to EPW leadership. “Overwhelmingly, the increasing costs of these essential public services are borne by local ratepayers – with no reliable safety net for households when costs are unaffordable.”

On the House side, the Energy and Commerce and Transportation and Infrastructure panels both have jurisdiction over water issues. T&I Chairman Peter DeFazio, D-Ore., has unveiled legislation that would authorize $40 billion over the next five years for the Clean Water State Revolving Fund. House Energy and Commerce Committee Democrats have introduced a $300 billion infrastructure package that includes $51.6 billion to protect Americans' drinking water “by extending and increasing funding for the State Revolving Loan Fund and other safe water programs and providing substantial new funding for the replacement of lead service lines that threaten public health,” a committee fact sheet said.

Even as Congressional majorities are beginning to discuss new projects, Republicans signaled they “aren't ready to engage in bigger infrastructure discussions.” Democrats say they hope for a bipartisan bill, but advocated for a broad definition of infrastructure that Republicans rejected. House Ways and Means ranking Republican Kevin Brady, Texas, said no Republican members in the committee joined “because Democrats over-politicized the infrastructure process.”

Also this week, USDA said the government should be prepared to support prices farmers receive for carbon credits but “avoid setting up a federally run carbon market that would compete with nascent private markets.” Robert Bonnie, the department's main climate adviser, said a key way the agency can work to reduce greenhouse gas emissions would be by making purchases to bolster prices of the credits, which farmers can sell for switching to practices that reduce emissions or sequester carbon.

In addition, the Federal Reserve said it is planning to make climate change a major part of its Wall Street oversight by creating a new committee that will identify and respond to dangers from a warming planet to the financial system. The Financial Stability Climate Committee will be “charged with developing and implementing a program to assess and address climate-related risks to financial stability,” Fed Governor Lael Brainard said in a speech yesterday.

Also, Idaho Republican Gov. Brad Little told a House Natural Resources subcommittee Tuesday that Democrats' efforts to protect federal land as wilderness and other designations “could prevent states from getting control of climate change-driven wildfires.” Little urged the Biden administration to “scale up” its management to deal with the effects of climate change by allowing workers to log forests to reduce the wildfire threat.

Democrats, however, said land use changes from logging and oil and gas development are driving climate change and their impacts need to be considered in federal land decisions, including wildfire mitigation.

At the same time, some Democrats are continuing to target fracking. Reps. Yvette Clarke, D-N.Y., Matt Cartwright, D-Pa., Diana DeGette, D-Colo., and Jan Schakowsky, D-Ill., plan to reintroduce a package of five bills to hold big oil and gas companies accountable to national standards for water and air protection.

The measures would close the “aggregation exemption” written into the Clean Air Act for oil and gas activities, require increased regulation of waste from production activities, require an Interior study on stormwater runoff, repeal an exemption for hydraulic fracturing in the Safe Drinking Water Act, and require testing of underground sources of drinking water in connection with fracking.

So, we will see. Clearly, the Biden administration is taking concerns about climate change seriously, along with more limited threats to the environment. These are policies and proposals that producers should watch closely as the continue to emerge, Washington Insider believes.

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