After last week’s threats and counter threats of tariffs, things seem to be calmer this week. Chinese President Xi Jinping said at the Boao Forum for Asia that China will open its doors “wider and wider” to the world and China was not wanting to run up a trade surplus, and would be looking at ways to ease foreign ownership limits in the automotive industries.
Xi indicates China would be lowering its tariffs on imported cars this year. President Trump then tweeted “Very thankful for President Xi of China’s kind words on tariffs and automobile barriers.”
Everyone is hoping the United States and China can reach some type of an agreement before the tariffs are implemented. Secretary of Agriculture Sonny Perdue testified before the House Agriculture Appropriations Subcommittee that “our first goal is to negotiate ourselves out of the saber rattling that has occurred and to make sure that these market disruptions do not have a permanent impact.”
Perdue says that if negotiations fail, USDA would use funds to ease the pain American farmers would feel because of a trade dispute. No details were given as to what the plan would be and how it would be administered. Key Senators have questioned implementing this type of approach saying farmers don’t need another subsidy program they need markets.
House farm bill includes a vaccine bank
House Agriculture Committee Chairman Mike Conaway (R-TX) released the 2018 farm bill, H.R. 2, the “Agriculture and Nutrition Act of 2018.” The bill establishes a vaccine bank, maintains trade promotion programs, gives producers flexibility on commodity programs and expands work requirements for the Supplemental Nutrition Assistance Program. The farm bill is for five years.
Highlights of the bill include:
• Animal health: The bill establishes a new National Animal Disease Preparedness and Response Program, designed to protect the health of the nation’s livestock sector. The program is structured from the successful Plant Pest and Disease Management and Disaster Prevention Program. A vaccine bank is established with priority for stockpiling foot-and-mouth disease vaccine.
• Trade: USDA’s highly successful trade promotion programs — Foreign Market Development Program and Market Access Program — are maintained and include mandatory funding.
• Commodity programs: The bill will allow farmers to switch from the Agriculture Risk Coverage program to the Price Loss Coverage program. ARC payments would be based on the county where a farm is physically located and ARC coverage would be based on the Risk Management Agency’s yield data.
• CRP: The Conservation Reserve Program acreage is increased from the current 24 million acres to 29 million acres. Payments are capped at 80% of county rental rates.
• Crop insurance: Crop insurance is maintained.
• Feral swine: A pilot project is established to fight feral swine.
The changes to the SNAP program in the farm bill have become very partisan and are expected to make it more difficult to pass the bill. Republicans argue it will help recipients find work or better-paying jobs while Democrats argue the changes do not work and makes it harder for Americans to access food assistance.
The differences are apparent in the statements by the Chairman and Ranking Member of the Committee. Conaway (R-TX) says, “The farm bill also keeps faith with these families by not only maintaining SNAP benefits but by offering SNAP beneficiaries a springboard out of poverty to a good paying job, and opportunity for a better way of life for themselves and their families.” Ranking Member Collin Peterson (D-MN) in a statement says, “It makes no sense to put the farmers and rural communities who rely on the farm bill’s safety net programs at risk in pursuit of partisan ideology on SNAP” and “Breaking up the long-standing, bipartisan, urban-rural farm bill alliance is a dangerous and unproductive step that will only sow division and jeopardize both this and future farm bills.”
The bill would require able-bodied adults between the ages of 18 and 59, including parents of children over 6 years old to work or be in an approved training program for 20 hours per week. Current law requires able-bodied adults without dependents between the ages of 18-49 to work or be in job training for 20 hours per week. They can be out of work for up to three months out of every three years. States may obtain waivers from the requirements. The bill tightens the waiver requirements making it harder for states to obtain a waiver. SNAP recipients who must meet the work requirements are guaranteed a slot in a state fully funded Employment and Training program.
It is estimated that under the proposed changes 5.5 million to 6.5 million SNAP recipients will be subject to the work requirements compared to the current 3.5 million. The proposed changes are also expected to reduce enrollment by one million.
The House Agriculture Committee will markup the bill April 18.
Members urge increased support for trade programs
A bipartisan group of 44 House members are urging the House Agriculture Committee to reauthorize USDA’s trade and export market development programs — Foreign Market Development Program and Market Access Program. The members in a letter to the House Agriculture Committee’s leadership also ask that these vital trade programs receive increased funding as proposed in H.R. 2321, the “Cultivating Revitalization by Expanding American Agriculture Trade and Exports Act.
The members say, “American agriculture and American workers continue to face increasingly strong international competition supported by government-sponsored activities. A major study completed in November 2017 on behalf of several U.S. agricultural export market development organizations found that 12 countries and the European Union central government alone spent an estimated $943 million on agricultural export promotion for agri-food products in 2016. In comparison, the United States spent an estimated $239 million in total for export promotion through MAP, FMD and other programs in 2016, which was nearly 12% lower than 2011 levels. The United States is being outspent nearly 4 to 1 by these 12 countries and the EU central government — an increase of 70% in real competitive public spending since 2011. While other governments are investing more in global food and agricultural markets, inflation, sequestration and administrative costs are chipping away at U.S. funding.”
A 2016 study by Informa Economics IEG, working with Texas A&M University and Oregon State University found that the FMD and MAP programs generated a return on investment between 1977 and 2014 of $28.30 in export gains for every additional $1 spent on foreign market development. The programs are responsible for 15% of total agricultural export revenue.
The letter was organized by Rep. Dan Newhouse (R-WA) who was one of the original sponsors of H.R. 2321 along with Reps. Chellie Pingree (D-ME), Cheri Bustos (D-IL), Roger Marshall (R-KS), Jimmy Panetta (D-CA) and Tom Rooney (R-FL).
Argentina opens to U.S. pork
USDA and USTR announce today that Argentina has finalized technical requirements that allows U.S. pork to be imported into Argentina for the first time in 25 years. It is estimated that Argentina has the potential of becoming a $10 million per year market for U.S. pork.