Washington Insider -- Wednesday

House Plan Would Pass Farm Bill This Month

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

White House Official Says No Progress in China Talks, But They Continue

White House trade adviser Peter Navarro said on Tuesday that multiple rounds of talks between US and Chinese officials had not yielded progress over a growing trade dispute, spurring tariffs that he said were needed to defend US interests.

China's offers shrunk throughout the US/China talks, Navarro said. Beijing did offer to buy $200 billion in US products over three to four years, he said, a key comment from a top Trump official regarding the Beijing-held talks. But Navarro adds, “Our phone lines are open, they have always been open.”

Meanwhile, Chinese leader Xi Jinping is hosting North Korea leader Kim Jong Un on a two-day mission that started today, his third such visit since March — reportedly to detail Xi about the results of his summit with President Donald Trump last week in Singapore. China Central Television reported Xi as saying after today’s meeting that he hoped both North Korea the US can implement the outcome of the summit, and that relevant parties can work together to advance the peace process on the peninsula. China will continue to play a constructive role, he said. North Korea remains a key bargaining chip for Xi.

Key now is whether Xi's continued help on North Korea and US talks get Trump to at least postpone threatened tariffs to take place July 6.

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NGFA Backs Bill to Exempt Ag Haulers from ELD Requirements

Legislation to completely exempt ag businesses from the electronic logging device (ELD) requirements and allow them to use either paper logs or ELDs to comply with hours of service regs is being backed by the National Grain and Feed Association (NGFA).

The group represents several stakeholders in the ag industry and said the bill by Rep. Collin Peterson, D-Minn., and Greg Gianforte, R-Mont., the Agricultural Business Electronic Logging Device Exemption Act of 2018, would address what NGFA said are costly and impractical requirements.

"The NGFA believes the ELD rule is unnecessary for this segment of the trucking industry, and will provide no new safety, economic, or productivity benefits," said NGFA Director of Economics and Government Relations Max Fisher. "If farmers and agricultural shippers are not relieved from the ELD rule, its implementation will add to freight costs and make US agricultural products less competitive in the highly competitive global market in which it operates."

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Washington Insider: House Plan Would Pass Farm Bill This Month

Roll Call is reporting this week that if everything goes according to plan this month, House leaders will round up the necessary Republican votes to pass a 2018 farm bill — following an unexpected defeat on the floor that put the legislation on hold.

However, it is too early to tell if the road ahead will be smooth or rocky for the House and Senate Agriculture committees in negotiating a final compromise bill, Roll Call says. But recent history indicates new troubles for both parties in navigating political and regional differences to hash out an expensive new bill that will cost taxpayers nearly $430 billion over five years, according to the Congressional Budget Office.

This year, the House fight over the GOP effort to restructure the Supplemental Nutrition Assistance Program (SNAP) has overshadowed other potential disputes that are likely to emerge, including whether or not big farm operations or extended family members on farms should get government subsidies.

What is clear, however, is that lawmakers have two options before Sept. 30, when the current Farm Act expires: a compromise deal between the two chambers; or an extension of current law through an expected lame-duck session in late fall or into 2019.

Both options carry risks in setting policy and funding levels for farm, conservation, nutrition and other programs.

In the absence of a new bill, agriculture policy is programmed to revert to 1938 and 1949 farm bill laws, ending many current farm programs and setting crop and dairy subsidy levels higher than current levels and far above market prices.

The threat of a “snap back” to permanent law is viewed as an insurance policy against a failure by Congress to deliver a bill approximately on time. The option is considered extreme, with commodity or farm programs primarily affected.

Thus, if Congress does nothing at all on the farm bill, crop insurance, which is permanently authorized, would continue. Some nutrition programs, which are reauthorized under the farm bill, would continue through appropriations.

However, such an extension would be complicated because 39 programs in the farm bill, including several that are popular with urban and suburban lawmakers such as organic agriculture and farmers market programs, would lose funding after Sept. 30 and would require some $2.8 billion over five years to save them.

Carl Zulauf, an Ohio State University agricultural economist who has tracked farm bills since 1981, said it’s likely there will be an extension of some kind before there is a new bill.

“In terms of an extension versus a new bill by Sept. 30, it’s probably 50-50. I think you will have major differences between the House and Senate beyond SNAP,” Zulauf said.

If negotiations stall and the rest of Congress gets caught up in the election year calendar, an extension could last for one year or possibly two years, Zulauf said.

The 2018 House bill foundered on the floor after a mix of moderate Republicans and conservative Freedom Caucus members rejected the promise of a vote on a tough GOP border and immigration measure, which was to be scheduled after the House finished with the farm legislation.

The bill emerged from the House Agriculture Committee on a party-line vote and House Agriculture Chairman Mike Conaway, R-Texas, and House ranking member Collin Peterson, D-Minn., will also be part of the “Big Four” conference on the bills. Relations between Peterson and Conaway have been strained since April, when committee Democrats raised concerns over SNAP and accused Conaway of shutting them out of the farm bill process.

Things seemed to thaw during floor debate on the bill when Peterson joined Conaway to successfully oppose an amendment to revamp the sugar price support program proposed by House Education and the Workforce Chairwoman Virginia Foxx, R-N.C.

The contentious SNAP provisions in the House bill are not part of the Senate version.

Senate Ag Committee Chair Pat Roberts, R-Kansas, said many Senate Democrats oppose the House bill’s expanded food stamp work mandates that able-bodied adults ages 18 to 59 must meet to keep food benefits, and its tighter eligibility requirements, changes in monthly benefits calculations and the shift of billions of dollars from food benefits into state bureaucracies.

House Speaker Paul Ryan, R-Wis., with his long-standing interest in anti-poverty programs, sees progress — but Democrats see money being pumped into bureaucracies that will push some current participants out of the program. Senate Democrats say they will not support a farm bill with House SNAP provisions.

Roberts spoke of the House amendment’s prospects at a farm bill forum on May 30. As is, he said, “I can’t introduce it to the Agriculture Committee.”

Roll Call also notes that fiscal hawks in the Senate could mine the Trump administration’s fiscal 2019 budget request for possible amendments to reduce a number program costs.

The House bill exempts some forms of federal payments from counting toward the $125,000 cap, but Sen. Charles Grassley, R-Iowa, and senior Agriculture Committee member, sees those provisions as a hollowing out of what he already considers to be weak payment limits that he has vowed to fight.

Grassley was bitterly disappointed when the final 2014 Farm Bill did not include the more stringent payment limits that he got in the Senate bill and Rep. Jeff Fortenberry, R-Neb., got in the House version.

So, it seems likely that the coming farm bill fight will be contentious, and likely long. However, it also is complex and should be watched closely by producers as this fight emerges, Washington Insider believes.


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(GH/BAS)