Touting Trade, Vilsack Taps CCC Fund

OMAHA (DTN) -- Agriculture Secretary Tom Vilsack defended USDA's use of the Commodity Credit Corp. fund, saying a House farm bill provision that would tie the secretary's hands would be a "mistake."

Vilsack on Monday held a call with reporters to highlight $300 million in trade grant awards to 66 organizations under the Regional Agricultural Promotion Program, or RAPP. The goal of RAPP is to expand trade of U.S. products beyond the traditional top four or five markets for individual commodities or products.

The secretary signed off on creating RAPP last fall, authorizing $1.2 billion from the Commodity Credit Corp (CCC) to broaden trade to regions such as African, Latin American and South Asian countries.

Pointing to the demand among commodity groups, Vilsack said the $300 million tranche being released now generated requests topping $1 billion.

"The interest in RAPP was evident and overwhelming," he said.

A provision in the initial House farm bill text released last Friday would restrict Vilsack or a future agriculture secretary from using CCC dollars to only carry out operations specifically authorized by Congress.

Vilsack told reporters that House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., didn't consult him on the provision. Vilsack has called on lawmakers to work with him to use the CCC fund to help bolster commodity programs without forcing cuts in other areas of the farm bill.

Vilsack and congressional Republicans have been at odds over the CCC fund since the Biden administration used $3.1 billion to create the Partnerships for Climate-Smart Commodities pilot projects. The projects' aim is to help farmers market commodities grown with practices that reduce greenhouse gas emissions or sequester carbon. Republicans saw it as USDA using CCC dollars to expand conservation spending without congressional approval.

Without restrictions, USDA is allowed to borrow and spend up to $30 billion out of the CCC, though the dollars must go to help boost farm income.

The Trump administration used the CCC fund to spend $23 billion for trade aid for farmers for the Market Facilitation Program (MFP), but then more funding was needed to help with coronavirus programs for farmers as well. All of that forced Congress to then replenish the CCC fund.

Vilsack defended the Biden administration's use of the CCC dollars, saying it has not needed to be "refilled." Vilsack reiterated he has been responsible in handling the fund.

"We've used it in a very strategic and surgical-like method to address specific needs and specific times to create new and expanding opportunities for producers," Vilsack said.

The secretary added that "artificial constraints" would make it harder for USDA to respond to both crises or opportunities for farmers.

"It would be a mistake to restrain the capacity of any secretary to use the CCC," Vilsack said.

The secretary saw his control over the CCC scaled back in the Obama administration after Republicans took control of Congress, using annual appropriation riders to limit Vilsack's authority. A GOP-led Congress then lifted those restrictions after the Trump administration came into office in 2017.

Vilsack also was asked about provisions in the House farm bill that would cut an estimated $27 billion from spending for the Supplemental Nutrition Assistance Program (SNAP) and use at least some of those funds to bolster other areas of the farm bill, such as trade promotion programs. Democrats and anti-hunger groups have criticized the shift in funds. Vilsack said the debt-ceiling agreement reached last summer between House Republicans and the Biden administration meant there would be no more cuts to SNAP.

"Where I come from, a deal's a deal," Vilsack said.

While RAPP was not "authorized" by Congress, USDA created the program after Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and Senate Agriculture Committee Ranking Member John Boozman, R-Ark., wrote the secretary specifically requesting him to use CCC funds to boost trade promotion.

Part of the rationale for RAPP is that U.S. agriculture is too reliant on a small number of major markets.

Stabenow on Monday praised USDA for releasing the first tranche of RAPP dollars, calling it a "big win" that would help boost U.S. agricultural exports overall. She noted agricultural exports going back to 1996 have gone from $66 billion a year to $175 billion last year. Still, she and Boozman asked for the boost in trade money after exports declined last year while the value of agricultural imports rose.

"Creating new markets is absolutely critical for our producers," she said.

The initial round of grants involves an array of commodities and products, including marketing U.S. olives in Latin America and Hawaiian coffee in Japan. Here are a few of the groups that were awarded grants:

-- The U.S. Meat Export Federation will expand promotions to new markets in Southeast Asia as well as Africa and increase investments in convenience stores in South Korea, Central America and Colombia.

-- The U.S. Dairy Export Council will expand its presence in some African counties to understand and develop dairy import regulations and frameworks.

-- The Cranberry Institute will focus on seminars and other activities in countries such as Brazil, India, Colombia and others in Southeast Asia.

-- The Brewers Association will look to expand craft-beer options in Southeast Asia by participating in a brewing trade show and festival, as well as bringing buyers to the U.S.

Also see "House Plan Boosts Reference Prices and Commodity Support" here: https://www.dtnpf.com/….

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

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