Washington Insider--Wednesday

International Food and Ag Trade Policy Council to Close Shop

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

U.S. and Cuba Talks: What's Ahead

While the exchange of speeches and conversations between President Barack Obama and Cuban leader Raul Castro received much notice this week, Congressional leaders also had time with Castro. During the latter discussions, farm leaders pushed for more exports into island nation.

During his Sept. 28 United Nations speech, Obama called for the end of the U.S. embargo, acknowledging for 50 years the U.S. pursued a Cuban policy that failed to improve the lives of the Cuban people. He admitted differences with the Cuban government remain, including human rights, but will address these issues via diplomatic relations and increased commerce. Obama's speech could be interpreted as speaking more to Congress than to Cuba.

Cuba leader Castro had his own demands during his speech: ending the embargo; the return of the land used as the Guantanamo Bay military base; and compensation for decades of economic damages. Those are certainly big hurdles for Congress, especially conservative Republicans.

Meanwhile, Obama dispatched Commerce Secretary Penny Pritzker to Cuba to discuss new rules easing American travel and business between the nations. This is the first such high-level meeting since Obama announced he was normalizing relations. Pritzker will meet with senior Cuban officials on Oct. 6 and 7 to describe recent regulatory changes.

On the Congressional side, in a meeting with Castro on Sept. 25, Sen. Heidi Heitkamp, R-N.D., told the leader of Cuba to buy more U.S. farm commodities. She used face time with Castro to tell him Cuba should import more U.S. legumes, noting her state's crops, like black beans, peas and lentils, are in high demand in Cuba, "making it the perfect market for North Dakota producers whose bottom lines depend on exports."

Heitkamp and Sen. John Boozman, R-Ark., have introduced a bill to try to boost U.S. exports by allowing Cubans to pay for goods with credit from U.S. bankers. Currently, Cuba has to provide cash up front to buy U.S. commodities, a situation that hampers trade, according to some lawmakers and farm groups.


House Clears Bill Renewing Mandatory Livestock Price Reporting

The House by voice vote on Sept. 28 passed legislation to renew mandatory livestock price reporting and the U.S. Grain Standards Act, both slated to expire Sept. 30. The farm marketing rules will be renewed until Sept. 30, 2020 if President Barack Obama signs the bill, which he is expected to do.

The package of bills (HR 2051) includes reauthorization of the National Forest Foundation, a nonprofit organization chartered by Congress to work with the U.S. Forest Service, until Sept. 30, 2018. The legislation authorizes $3 million a year in funding.

The bill does not make livestock mandatory price reporting an essential service that would continue in the event of a government shutdown. The House version (HR 2088) would have done so, but it did not survive committee negotiations between the two houses. Livestock groups said they will push for essential service status in future legislation.

The final version requires USDA to provide more in-depth livestock price reporting to capture more data on sales transactions.

The grains standards law includes a contingency plan if inspections are disrupted at coastal ports, as in 2013 at Washington's Port of Vancouver when state grain inspectors refused to work amid safety concerns during labor protests by union workers.

It took the USDA more than a month to send in federal employees to conduct inspections, causing backlogs and delays in grain shipments. The agriculture secretary would have to act immediately to resume inspections and notify Congress if there is another near-shutdown.

House members wanted to allow shippers to bring in inspectors from another USDA-delegated state agency that oversees grain exports, or a designated agency that oversees grains used in the U.S., if service is disrupted. That provision isn't included in the compromise bill, titled the Agriculture Reauthorizations Act of 2015.


Washington Insider: International Food and Ag Trade Policy Council to Close Shop

A prominent Washington trade advocacy group, the International Food and Agricultural Trade Policy Council, announced this past week it will cease operation. The group may have been little-known outside government and academic circles but its work was widely regarded in the area of agriculture and trade policy for its rigor and objectivity in global discussions. Its focus was "the critical role food and agricultural trade plays in food security and economic development."

The termination was announced by Dr. JB Penn, IPC's chair and chief economist at Deere & Company.

The group's press release indicated that disenchantment with the global trading system's prospects and potential impacts on the group's future was at least one factor in the decision to close shop, but did not elaborate or provide specific details.

Begun in 1987, the organization brought individuals with experience in farming, agribusiness, civil society, trade negotiations, and academia together to address critical issues affecting agricultural trade. It also published numerous policy papers that were widely read by both decision makers and the public.

The group began with institutional support from the Rockefeller Foundation; its first chair was Lord Henry Plumb, former president of the European Parliament. In its early years, IPC played an especially important role in developing recommendations for the Uruguay Round negotiations with the General Agreement on Tariffs and Trade, which achieved substantial trade liberalization of agricultural trade for the first time.

IPC officials emphasized that the group's focus has always been the design and advocacy of pragmatic trade policy recommendations to help solve the major challenges facing the global food and agricultural system in the 21st century. It supported efforts to strengthen global food security, to sustainably increase productivity and to contribute to economic growth and development.

The council's stature allowed it to work closely with influential policymakers, agribusiness executives, farm and civil society leaders, and academics from around the world to explore and clarify complex issues, foster broad stakeholder participation in policy deliberations and build consensus around pragmatic policy recommendations.

"Agricultural trade will be even more critical in the years ahead as we seek to address the food needs resulting from global population and economic growth. The context in which this occurs impacts consumer prices and farmer returns. IPC's contributions will be missed," noted Carlos Perez del Castillo, IPC's vice chair and Uruguay's former representative to the World Trade Organization.

Ellen Terpstra, the president and CEO of IPC, noted that "IPC's papers will remain available on its web site, www.agritrade.org."

Certainly, trade policy has become increasingly controversial in recent years, a trend likely to continue. The fight over the Doha Round trade talks sinks further into disarray; the Trans Pacific Partnership labors against discouraging protectionist headwinds and leaders struggle to decide whether even to begin serious bilateral negotiations over a free trade area with the EU struggle. It is easy to discern reasons that the IPC might have felt "disenchanted by trade policy prospects." Nevertheless, the council's tough, objective views likely will be missed, severely and often, Washington Insider believes.

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