Farm bill needs sufficient funding

Legislative Watch: Effects of China trade war, supply chain disruptions; Product of the USA; House votes to stop WOTUS rule.

P. Scott Shearer, Vice President

March 17, 2023

5 Min Read
Dollar bill in row of young corn

Approximately 400 national, regional and state agricultural organizations are calling on Congress to provide "sufficient budgetary resources" for the 2023 farm bill. 

The organizations in a letter to the Senate and House Budget Committees leadership cited the effects of the China trade war, devasting natural disasters, supply chain disruptions, non-tariff trade barriers, and rising production costs are having on the agricultural sector.

The organizations said, "During the trade war with China that began in 2018, U.S. agriculture endured significant market impacts, which unfortunately revealed gaps in the farm safety net. If a trade war with our largest trading partner hardly triggered the farm safety net provided in the current farm bill – a Title I safety net that has been shrinking over the past 20 years – it is difficult to envision a scenario that would provide meaningful assistance without significant improvements."

Besides the commodity programs, the organizations said other provisions of the farm bill need adequate funding including crop insurance, rural development, research and voluntary conservation incentives.

Those signing the letter include the American Farm Bureau Federation, National Farmers Union, American Soybean Association, American Veterinary Medical Association, Farm Credit Council, National Association of Wheat Growers, National Corn Growers Association, National Cotton Council, National Pork Producers Council, North American Meat Institute and U.S. Cattlemen's Association. 

House Republicans are in the process of developing a budget that would cut government spending.

Product of the USA
USDA announced a proposed rule that allows for a voluntary "Product of USA" or "Made in the USA" label claim to be used on meat, poultry and egg products only when they are derived from animals born, raised, slaughtered and processed in the United States. This is a major change from current policy, which allows the use of voluntary labels on products from animals that have been imported from a foreign country and slaughtered in the U.S. and meat imported that is further processed.

Secretary of Agriculture Tom Vilsack said, "American consumers expect that when they buy a meat product at the grocery store, the claims they see on the label mean what they say. These proposed changes are intended to provide consumers with accurate information to make informed purchasing decisions. Our action today affirms USDA's commitment to ensuring accurate and truthful product labeling."

The proposed rule goes beyond the previous mandatory country of origin labeling by including processed products and products intended for foodservice which were not subject to COOL.

A key issue is the reaction of Canada and Mexico. The Canadian ministers of trade and agriculture said in a joint statement, "Canada remains concerned about any measures that may cause disruptions to the integrated North American livestock supply chains.

"Canada will closely review the proposed amendments to the labelling of meat, poultry and egg products in the U.S. and will participate in the U.S. rule-making process to ensure that these changes conform to the U.S.' international trade obligations and do not disrupt supply chains.

"Canada will also firmly oppose any proposition from the United States to renew a mandatory country of origin labelling system for pork and beef, a practice which the World Trade Organization allowed Canada to take retaliation measures against the United States."

According to press reports, Mexico said the "proposal, even when it is a voluntary claim, could have implications for discriminating against Mexican exports of live animals and meat products, and would reopen unfortunate incentives for setback, inconsistency and opposition to the obligations of the World Trade Organization to comply with the ruling in the case of country-of-origin-labeling in meat products, of which Mexico reserves its rights."

The two countries successfully challenged mandatory COOL before the WTO and still have the right to impose duties of over $1 billion on U.S. products, including ethanol, chocolate, wine, meat, furniture and jewelry. Congress ended mandatory COOL in 2015.

There was a stark difference of opinion expressed by agricultural groups.  

The National Farmers Union praised USDA for closing loopholes that allow meat from imported animals to be labeled Product of the USA.  NFU said, "This rule is about truth in labeling, plain and simple. For too long, family farmers and ranchers have been competing in a market where imported products were fraudulently labeled as a product of the United States."

The U.S. Cattlemen's Association said, "USCA is pleased to see that the proposed rule finally closes this loophole by accurately defining what these voluntary origin claims mean, something we have been working to clarify since the repeal of mandatory country-of-origin labeling in 2015. If it says, 'Made in the USA,' then it should be from cattle that have only known USA soil. Consumers have the right to know where their food comes from, full stop."

Those stating their concern or opposition said in statements:

The National Cattlemen's Beef Association said, "For the past few years, NCBA's grassroots-driven efforts have focused on addressing problems with the existing label, and we will continue working to find a voluntary, trade-compliant solution that promotes product differentiation and delivers profitable solutions for U.S. cattle producers. Simply adding born, raised and harvested requirements to an already broken label will fail to deliver additional value to cattle producers and it will undercut true voluntary, market-driven labels that benefit cattle producers. We cannot afford to replace one flawed government label with another flawed government label."

The North American Meat Institute said, "Unfortunately, this proposed rule is problematic for many reasons. USDA should have considered more than public sentiment on an issue that impacts international trade.  Our members make considerable investments to produce beef, pork, lamb, veal and poultry products in American facilities, employing hundreds of thousands of workers in the U.S. and with processes overseen by USDA inspectors. This food should be allowed to be labeled a 'Product of the USA.'"

The National Pork Producers Council said, "Today's fully integrated and globally competitive North American market benefits consumers, American farmers and the U.S. economy. It is important that the proposed rule not violate international obligations under the WTO and agreements with our Canadian and Mexican trading partners."

Public comments on the proposed rule are due by May 12.

House votes to stop WOTUS rule
The House of Representatives last week voted to overturn the Biden administration’s proposed Waters of the U.S. rule by a vote of 227-198. This is far short of the necessary two-thirds vote needed to overturn an expected veto by President Biden. The Senate still needs to consider the legislation. 

Happy St. Patrick’s Day!!!

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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