Washington Insider - Tuesday

By DTN's Washington Insider

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

China Launches Probe into Imports of US Sorghum

China's Commerce Ministry announced on Feb. 4 it has launched an investigation into U.S. sorghum imported from January 2013 through October 2017. The probe is to be completed by February 4, 2019, but could be extended by six months.

Corn futures rose on China's Dalian Commodity Exchange after the investigation was announced as it spurs expectations for more corn demand. While some have indicated it could boost China's imports of corn, most believe it is another effort to bolster demand for China's huge supplies of state-owned corn that are estimated around 200 million metric tons. Others, however, believe the action a "tit-for-tat" response to U.S. investigations or announced sanctions against various Chinese goods.

The investigation was not requested by Chinese sorghum producers but rather by the Commerce Ministry, as the agency noted it launched the investigation as sorghum producers in China are small-scale producers and that makes it difficult for them to provide documentation.

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White House Withdraws Controversial Environmental Nominee

The withdrawal of Kathleen Hartnett White's nomination to head the White House Council on Environmental Quality was announced in a statement by the nominee released February 4.

According to the document, Hartnett White requested her nomination be withdrawn from further Senate consideration effective immediately. President Donald Trump had re-nominated Hartnett White for the position this year after the Senate failed to act on her nomination during its 2017 session.

"I want to thank President Trump for his confidence in me and I will continue to champion his policies and leadership on environmental and energy issues of critical importance to making our nation great, prosperous and secure again,” Harnett White said in the statement. Her nomination had drawn fierce opposition from Democrats who questioned her lack of scientific background and positions on environmental issues.

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Washington Insider: Secretary Perdue’s Tough Job

Politico is reporting this week what almost everybody knows, and that is that Secretary Perdue has a tough job as the administration’s rural envoy. The group says that ag secretary Sonny Perdue has kept up a steady travel schedule, visiting more than 30 states in the nine months since being confirmed.

Along the way, Politico says, farmers and business leaders have consistently raised many of the same questions like: Where does President Trump really stand on trade, particularly NAFTA?

Although trade is the most visible question that the secretary faces, the former governor of Georgia also must deal with questions about how farm and nutrition programs could change—especially in response to critiques by budget hawks.

Politico says the “inherent conflict in Perdue’s job,” of promoting the president’s agenda while also trying to address the worries of farmers, ranchers and rural Americans -- was on display as he persevered through an 11-hour tour through the heart of Pennsylvania last week. Politico reporters traveled with him and witnessed firsthand how disarming he can be when asked about thorny issues.

“Twenty-five percent of all the beans go to China,” a soybean farmer told Perdue, during a stop at a family-owned flour and feed mill in New Oxford, Penn. “I guess my only comment would be: Please be careful, OK?”

The secretary turned on his down-to-earth Southern charm and assured this audience, and others, that in the end “trade deals will be resolved in ways that work for farm country.”

And, then there is the “fuzziness on farm bill,” Politico says. When it came to crop insurance and nutrition programs, Perdue delivered less-specific answers. He said, as he often does, that farmers prefer to plant for the market rather than for a government program. He also argued crop insurance can’t be so “rich” that it becomes a lifestyle.

The secretary also said he supported “stricter work requirements for able-bodied adults without dependents” who receive food stamps--but he declined to endorse cuts to the key nutrition programs, Politico said.

The group also reports that farmers are keeping a close eye on the NAFTA talks. Farmers fear that the uncertainty surrounding the talks has already prompted Mexico — one of the largest customers of U.S. agriculture goods in many respects — to seek other suppliers of feed grain, wheat and other commodities.

“The statements by ministers in the near future are going to be important and just seeing how they characterize the progress, and that’s something to watch carefully,” said Darci Vetter, a former senior trade and agriculture official in the Obama administration now advising a group called Farmers for Free Trade that is promoting the importance of NAFTA for agriculture.

The U.S. has given some signals that it is open to alternative ideas presented by Canada and Mexico, Politico says. Although the President has been fickle on his support for NAFTA, he told farmer-members of the American Farm Bureau Federation this month that he still had their backing, so he may not abandon a policy that is important to a crucial constituency that overwhelmingly supported him in the 2016 election, Politico concludes.

Robert Guenther, senior vice president of public policy for United Fresh Produce Association, told Politico that the large ag presence at the sixth round of negotiations showed the widespread ag support for the continuation of NAFTA. U.S. ag industry leaders in Montreal – including Guenther – who has said that he thinks that the negotiations are visibly moving in the right direction.

“It is critical that our negotiators be able to discuss key NAFTA issues with such a diverse group representing many different sectors of United States agriculture,” Guenther said.

So, we will see. NAFTA has meant significant market growth to many farmers who tend to prize such deals highly. Experience has shown that producers tend to have long, vivid memories regarding politicians who undercut markets, as the 1980 Russian sales embargo was seen as doing, in spite of Carter administration efforts to protect the sector from such impacts,

Senate ag committee chair Pat Roberts likely remembers that time, as do many producers--even if some in the administration do not. So, Politico is right, the Secretary has a tough job that he seems as well equipped by both training and experience as anyone around to take on, Washington Insider believes.

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(GH/BAS)

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