The Agriculture Department is rushing to finish a new trade assistance package for farmers hurt by the ongoing trade war with China, while congressional negotiators this week look to pass a long-stalled disaster aid package before the weeklong recess for Memorial Day.
USDA has yet to release critical details of the aid package, expect to say that it will total $15 billion to $20 billion and will include direct payments as well as some commodity purchases. The plan is expected to feature a modified form of the Market Facilitation Program that the Trump administration launched last year after China imposed retaliatory tariffs on imports of U.S. farm commodities.
“There’s legitimate anxiety in the farm community” while the trade war with China remains unsettled, Agriculture Secretary Sonny Perdue said on Fox News. “That’s why President Trump is committed to supporting farmers in the meantime.”
Senate Majority Leader Mitch McConnell, R-Ky., said in an Agri-Pulse Open Mic interview that the trade dispute needs to end as soon as possible and that the trade aid package will never sufficiently compensate for the losses to farmers.
“Whatever amount is settled on you’ll have an argument that it discriminate against some commodities and not others, and you’ll have an overwhelming feeling that it’s a pittance compared to the market share that’s been lost," he said.
The National Corn Growers Association has released a list of proposals to the administration that include significantly increasing the one-cent MFP payment rate for corn. According to NCGA, corn growers are losing about 40 cents a bushel due to the trade disruption with China.
There is fear in the soybean industry that the prospect of trade aid, coupled with the inability of some farmers to plant as much corn as they had originally planned due to planting issues throughout the Corn Belt, could skew planting decisions and further depress soybean prices. One key issue is whether the new MFP payments will be based on 2019 production.
Because of the “large potential impacts on acreage decisions” USDA needs to release details of the trade package “in the next week to 10 days,” University of Illinois economist Scott Irwin wrote on hits Twitter account Friday.
Meanwhile, many producers are just as eager for Congress to pass a disaster aid package to compensate farmers for losses due to last year’s hurricanes and wildfires as well as flooding in the Midwest in March.
House and Senate negotiators have expressed increased optimism that a deal could be struck in time to pass an aid package this week. The White House agreed to increased spending for Puerto Rico, a key demand for Democrats, while Democrats have agreed to include spending for border security in the package.
"We're going to be voting before Memorial Day; hopefully we're voting on a package that will actually become law," McConnell said. "This has been the longest period in modern times between a disaster and a disaster supplemental."
In an exchange with House Majority Leader Steny Hoyer on Friday, GOP Whip Steve Scalise, R-La., said he was encouraged by the progress in the negotiations. “Both sides seem to be willing to get this resolved,” he said.
“Clearly, if we get agreement, and that’s a big if, but hopefully we can. … we want to move as quickly as possible,” said Hoyer, D-Md.
The legislation also is expected to include a provision sought by McConnell to ensure that industrial hemp is eligible for whole-farm revenue insurance policies in 2020. The 2018 farm bill made the farm bill eligible for crop insurance, but it is expected to take USDA’s Risk Management Agency at least two years to develop other types of policies for hemp.
The bill also may include provisions to ensure USDA has adequate spending authority for the trade assistance package using its Commodity Credit Corp. account.
Also this week, a hearing that a House Ways and Means subcommittee will hold Wednesday on enforcement provisions in the U.S.-Mexico-Canada trade agreement that could provide some clues as to how Democrats view the deal now that President Trump has lifted the steel and aluminum tariffs on Canada and Mexico.
The witnesses will include labor representatives as well as Devry Boughner Vorwerk, corporate vice president for global corporate affairs at agribusiness giant Cargill, Inc.
A member of the trade subcommittee, Rep. Ron Kind, D-Wis., said his colleagues will likely insist on some changes to the text of the agreement to address their concerns about the enforceability of labor and environmental standards.
“Chances are he (U.S. Trade Representative Bob Lighthizer) is going to have to open this up a little bit (and) get Mexico and Canada to agree on some limited measures there without a full-blown renegotiation,” Kind said.
Here is a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, May 20
Organic Trade Association’s annual Washington meeting, through Thursday,
Tuesday, May 21
9:30 a.m. — Senate Agriculture Committee hearing on climate change, 328A Russell
10 a.m. Senate Energy and Natural Resources hearing on renewable energy, Dirksen 366
10:30 a.m. — House Appropriations Committee markup of Energy-Water spending bill, 2359 Rayburn
11 a.m. — House Agriculture subcommittee hearing on animal pest and disease prevention, 1300 Longworth
2 p.m. — House Natural Resources Subcommittee hearing on the U.S. Fish and Wildlife Service, 1324 Longworth
Wednesday, May 22
10 a.m. — House Ways and Means Subcommittee hearing on enforcement provisions in the U.S.-Mexico-Canada trade agreement, 1100 Longworth
10 a.m. — House Energy and Commerce Committee hearing on the LIFT ("Leading Infrastructure for Tomorrow's America Act") infrastructure bill, 2123 Rayburn
3 p.m. — Environmental and Energy Study Institute forum, “Biogas: Pro-Economy and Pro-Climate,” 2322 Rayburn.
Thursday, May 23
9 a.m. — House Select Committee on the Climate Crisis hearing, "Creating a Climate Resilient America," 2247 Rayburn.
10 a.m. - House Agriculture Appropriations Subcommittee meeting to vote on its fiscal 2020 spending bill, 2362-A Rayburn.
Friday, May 24
For more news, go to: www.Agri-Pulse.com
