House Takes up Ag, Food and Fuel Bill

OMAHA (DTN) -- The U.S. House of Representatives is looking to compress meatpacker issues, year-round E15, conservation aid for precision agriculture and new funding to help smaller packers and other processors into one bill.

The legislation comes under the title of H.R. 7606, the "Lower Food and Fuel Costs Act." The House Rules Committee will take up debate on the bill Monday afternoon, which could lead to a floor debate and vote as early as Tuesday.

Also Monday, the House is expected to vote on S. 3580, the Ocean Shipping Reform Act, as President Joe Biden has pressed on high shipping costs and wants a bill to sign. The House will take up the Senate bill as a means to get legislation to the president's desk quickly. The bill would give more authority to the Federal Maritime Commission to investigate delays and fees charged by ocean carriers. It also prohibits shippers from refusing cargo space or discriminating against exporters of goods such as agricultural products.

COUNTERING INFLATIONARY PRESSURES

The House votes reflect moves by both Congress and the Biden administration to show they are looking at ways to counter current inflationary pressures at levels Americans haven't seen in 40 years. Last Friday's Consumer Price Index for May showed broad inflation at 8.6%, the highest since 1981. Food inflation year-over-year hit 10.1% -- the highest increase since 1981. On top of all that, the average unleaded gas price nationally tops $5.01, the highest on record, according to AAA. Diesel prices have hit $5.77 on average, also a record.

As the Washington Post reported Monday, Biden is increasingly frustrated with soaring prices. The Post article cited the president privately venting to his staff after an April visit to an Iowa ethanol plant in which he touted year-round E15 as a way to help reduce fuel costs. "But privately, Biden dismissed the policy as ineffective and questioned the value of the trip, according to two people familiar with the conversations," The Post reported, adding the president worried about the E15 announcement, but Agriculture Secretary Tom Vilsack and others encouraged Biden to go as the White House "was desperate for ways to lower gas prices."

See, "President Biden Announces Emergency E15 Waiver to Sell Fuel Year-Round" at https://www.dtnpf.com/….

HR 7606 PACKER DETAILS

The bill leads with a plan to install a special investigator for competition at USDA to beef up enforcement of the Packers and Stockyards Act. The office of special investigator would have subpoena power to look at competition and fairness issues involving meatpackers. The office would also serve as a liaison between the Department of Justice and the Federal Trade Commission. The special investigator would have authority to bring civil actions against packers.

The House Agriculture Committee advanced the bill in mid-May. The North American Meat Institute, which lobbies for the packing industry, has criticized the bill, calling the special investigator redundant, and arguing the office and staff "would feel emboldened and obligated to bring as many cases as possible," which would result in "legal uncertainty and market chaos."

The Senate has an identical bill, which so far has not advanced out of committee.

The bill also includes the "Butcher Block Act," which would provide more loan guarantees to expand livestock and poultry processing through loans of up to $50 million for new construction, expansion or new equipment for private entities and up to $100 million for cooperatives. The provisions also include grants for smaller processors.

YEAR-ROUND E15

While the president signed an emergency waiver for year-round E15 this year, the bill would grant a long-standing request from the biofuels industry to codify 15% ethanol by dealing with the Reid Vapor Pressure limitations that have hung over year-round E15 for decades. The bill would simply insert the words "or more" after "10 percent" in law.

Along with that, the bill also includes $200 million for 2022 and 2023 for USDA to provide competitive grants for up to 75% of the costs for companies to install or upgrade fuel pumps to allow higher blend volumes of both ethanol and biodiesel.

PRECISION AG AND NUTRIENT MANAGEMENT

Farmers with existing or new contracts under the Environmental Quality Incentives Program (EQIP) could receive up to 100% of the costs to implement new nutrient management practices or adopt precision agricultural practices. The bill would provide USDA up to $500 million during 2022 and 2023 to boost this funding for EQIP.

Separately, the bill includes the "Providing Responsible Energy and Conservation Incentives and Solutions for the Environment (PRECISE) Act" as well. This would provide loans to farmers to buy technology for precision agriculture practices, including up to 90% of the costs of the equipment.

Under the Conservation Stewardship Program, the bill would also boost payments for conservation crop rotations and advanced grazing management practices. The bill also encourages USDA to use more outside contractors as third-party advisers to provide technical assistances to farmers for cover crops, precision conservation practices and nutrient management.

RESILIENCY TASK FORCE

USDA would create a Food System Supply Chain Resiliency and Crisis Response Task Force to examine domestic food challenges and both prepare for and respond to "shocks to agriculture and the food system supply chain" as well as promote competition. USDA, along with Commerce and Transportation would provide a report to Congress on bottlenecks in the system, workforce challenges and other related issues.

Text of H.R. 7606 https://rules.house.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(c) Copyright 2022 DTN, LLC. All rights reserved.