Ag has trade questions for the new administration

Let’s go ahead and talk trade headlines from the latest edition of the National Association of Farm Broadcasting News Service headlines:

Trump Election Leaves Agriculture Awaiting Clarification on Issues

rabobank-logo-squircle-jpgA new report from Rabobank says the election of Republican Donald Trump as President of the United States has the food and agriculture sector awaiting clarification on his policies and positions. The Rabobank Food and Agribusiness Research and Advisory group authored the report on the possible implications of the election. Rabobank analysts say Republican-controlled Executive and Legislative branches could “mean swift action when the new administration takes office.” Rabobank notes the advisory group is watching trade, labor and farm bill talks for potential policy changes that could have longer-term implications on the industry. The report says while President-elect Trump’s policies are yet to be clearly defined, his statements during the campaign suggest drastic changes from current policy could be on the horizon. Finally, the report predicts agriculture markets may be impacted by foreign exchange volatility in the short term as Trump takes office in January.

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New Zealand Wants to Talk Trade with Trump

Trade

New Zealand Prime Minister John Key wants to talk trade with President-elect Donald Trump as he prepares to take office in 2017.

New Zealand’s Prime Minister John Key wants to talk trade issues with U.S. President-elect Donald Trump. In a phone call between the two this week, Key told Trump he wished to talk further about trade and the Trans-Pacific Partnership. Key told Radio New Zealand that TPP was “worthy of a much fuller discussion,” adding that Trump needs the chance to get a proper assessment before seeing how “we can move things forward.” The Prime Minister said Trump was not rejecting the notion. New Zealand indicated the nation would give the new U.S. administration time to fully consider its trade agenda. That comes after New Zealand’s Parliament approved legislation last week allowing the nation to join TPP, despite the likelihood the trade deal will not proceed.

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Canada Cattle Producers urge Trade Fight if Trump Revives COOL

country-of-originCattle producers from Canada will urge the nation to retaliate against the United States, should U.S. President-Elect Donald Trump revive the U.S. Country-of-Origin meat labeling program (COOL). An internal memo within Trump’s transition team detailed how the new administration would immediately initiate changes to the North American Free Trade Agreement with Canada and Mexico, according to Reuters. That could include measures on COOL, which would reignite a six-year trade battle between the U.S. and Canada. U.S. lawmakers repealed COOL last December after the World Trade Organization approved more than $10 billion in trade retaliations by Canada. Canadian Cattlemen’s Association spokesperson John Masswohl says: “We’re watching, and if we think it discriminates against our cattle, our recommendation is going to be that tariffs go into place immediately.” However, he added that until it’s clear how Trump might approach COOL, no action is necessary.

One of the bigger post-election questions is the North American Free Trade Agreement. President-elect Trump feels it needs to be renegotiated with Canada and Mexico. Cuba is another country that agriculture groups want to open up to free trade opportunities. A group of US farmers and congressmen went to Cuba to lobby for agricultural trade about a year ago:

Farmers Union conversation: Part 2

Agriculture has officially said goodbye to 2015.

As we continue to look ahead, Doug Peterson, the President of the Minnesota Farmers Union, said it’s important to look back at some of the lessons learned from 2015. One of the key policy items Farmers Union fought for was Country of Origin Labeling (COOL). Thanks to a lawsuit brought by Canada and Mexico, COOL has been repealed in by Congress.

“I don’t think it’s a dead issue necessarily,” said Peterson. “We believe people have a right to know where their food comes from, no different than where their shoes or shirts come from. Now, thanks to Congress’s wisdom, we have no ability to ask that question about where our food comes from.”

Farmers Union believes it boils down to safety.

Farmers Union

Country of Origin Labeling, pictured here, was recently repealed by Congress after the US was successfully sued by Canada and Mexico in world court. (photo from foodsafetynews.com)

“When it comes to China and other countries that may not have the same safety standards, be it with workers, food additives, or even testing, not have COOL is something we shouldn’t be allowing.

“If it’s coming from places like India and China, given the track record of some of these countries that had poison in dog and cat food, called melamine, a protein additive that also sickened children, you start to think maybe not having labels isn’t such a good idea,” Peterson said.

Peterson said the verdict against the USA and its Country of Origin Labeling was questionable.

“We lost Country of Origin Labeling, and we couldn’t even keep it voluntary because of the retribution of the world court,” Peterson said. “There are 36 other countries that currently have a Country of Origin standard in place. Canada has a very strong one, and they’re the people that brought the lawsuit against us, along with Mexico.”

He added, “You have to wonder if some of these international companies lobbying our Congress against Labeling Laws aren’t in these other countries too? Plus, if you don’t want labels on foods, what are you trying to hide? I guess that’s my question.”

Waters of the US and the Environmental Protection Agency are going to be another big concern in 2016.

Farmes Union and WOTUS

The Minnesota Farmers Union has opposed the EPA’s Waters of the US Rule, calling it government overreach, and a burden on farmers and non-farmers alike. (photo from farmfutures.com)

“I’ve always said the EPA is run by bureaucrats,” Peterson said. “The other thing no one seems to get a handle on is the Corps of Engineers holds final say on a bunch of permitting processes, and that’s just a morass of red tape. Whether you’re doing something good or trying to make improvements, they don’t have the ability within the EPA or the Corps to make good judgments.”

He said the Farmers Union saw that firsthand on their last Fly-In to Washington.

“I asked EPA counsel a question about the Corps permits, and what I got back was ‘well, the Corps doesn’t have a lot of speed and they’re not expediting some things as fast as they should,’ and that’s kind of bothersome. You end up blaming everybody else.”

Will WOTUS ever be officially adopted?

“I don’t think so,” Peterson said. “They’re going to be challenges. Minnesota Farmers Union opposed WOTUS right out of the block because we have our own wetlands conservation act. That’s even more stringent than the EPA.

“When I met with Gina McCarthy, EPA Administrator, there seemed to be a lack of clarity even as they were trying to define what they wanted to do. Roughly 36 of the current farming practices are exempted, so you can do things like tiling, ditching, and drainage.

“The issue is when you start looking at adjacent wetlands and how they work ecologically in a system,” Peterson said, “and that’s what they couldn’t answer for people. That’s a problem for the EPA, and the bureaucratic mumbo-jumbo is just going to get worse.”

He added, “That’s a terrible prediction for 2016. Another one is not much is going to get done because it’s an election year. It’s going to be a waiting game to see who controls Congress and who takes the White House.

“Think about it,” said Peterson. “What did Congress really get done? “They passed a continuing resolution and went home.

On the state level, Farmers Union will have its eye on property taxes.

Farmers Union and property taxes

The Minnesota Farmers Union will go before the Minnesota Legislature to lobby for property tax relief for farmers in rural areas, who they say carry to much of the burden of school district funding. (photo from agweb.com)

“People are going to ask for property tax relief,” Peterson said, “ because the burden falls on family farmers in rural school districts. That has to be addressed at some point with a new formula. They’ve worked at it, but we still don’t have a tax bill.

“Then, we move into another election cycle,” Peterson said, “so get your earmuffs out and try to figure out who’s going to promise the most and see where the mud sticks.”

 

Editors note:  I thought you might enjoy this explanation of WOTUS, and how the EPA was recently accused of breaking the law in an attempt to “promote” their idea.

 

 

 

 

 

 

National beef checkoff discussions hit snag

A push to increase the national beef checkoff from 1 dollar to 2 dollars per head of cattle sold is approaching its fourth year of discussion, and recently took a step forward. Several of the nation’s largest Ag organizations came together in a USDA-sanctioned Beef Checkoff Enhancement group, with the goal of putting together a proposal on increasing the checkoff in a manner they could support.

The discussion on how to proceed has been controversial. Several major Ag groups signed a Memorandum of Understanding on how to proceed with the change. However, 3 of the original Ag groups withdrew from the discussions, citing concerns over the checkoff structure and how the money is allocated to different groups.

“The working group has sat down for formal meetings roughly 19 times over 3-plus years,” said Dale Moore, the Public Policy Executive Director for the American Farm Bureau Federation. “It’s largely been a work of a number of groups that represent folks who pay into the beef checkoff.”

The discussions actually involve more than just raising the checkoff dollar amount.

“It’s got a number of facets too it,” said Moore. “Fundamentally, we at the Farm Bureau support an increase in the checkoff because there’s always more work to do, and we need the resources to do it. Discussions also included some potential changes on how those dollars are spent, but by and large, it’s been about how to reach a consensus on moving forward to facilitate increasing the checkoff.”

Dale Moore is the Executive Director of Public Policy for the American Farm Bureau Federation, based in Washington, D.C. (Photo from fbvideos.org)

Dale Moore is the Executive Director of Public Policy for the American Farm Bureau Federation, based in Washington, D.C. (Photo from fbvideos.org)

The talks on changing the process of spending checkoff dollars are where the discussions bogged down.

“The Beef Promotion Act was passed in 1985, and it was one of the most descriptive pieces of legislation I’ve ever read,” said Chandler Goule, the Vice President of Programs for the National Farmers Union. “It literally says who can sit on what committee, who has what authority, how many people from the Federation (of state Beef Councils) are on the Beef Operating Committee, and how many other people sit on the BOC too.”

“There’s only 20 people on the BOC,” said Goule, “and 10 seats go to the Federation of State Beef Councils. Since the Federation is a subsidiary of the National Cattlemen’s Beef Association, all you need is one more person from NCBA and they control all of the authorization requests.”

Goule added, “That’s why you’ve seen NCBA get anywhere from 93 to 95 percentof the checkoff dollars. Over the last ten years, that adds up to half a billion dollars. Because of them executing a large number of contracts, they have an indirect financial benefit that frees up other resources to lobby against things like Country of Origin Labeling, the RFS, and even the Farm Bill.”

Chandler Goule is the Vice President of Programs for the National Farmers Union in Washington, D.C.  (Photo from CommodityClassic.org)

Chandler Goule is the Vice President of Programs for the National Farmers Union in Washington, D.C. (Photo from CommodityClassic.org)

In a recent press release, the Ranchers-Cattlemen Action Legal Fund (R-CALF USA) called the new proposal to increase the national Beef Checkoff “window dressing.”

“It’s designed to deflect attention away from the NCBA’s misappropriation of over $216,000 in producer money,” said R-CALF USA President Bill Bullard, “as well as Ag Secretary Tom Vilsack’s failure to maintain the integrity of the program.”

Bullard ads, “The checkoff has become a USDA-supported cattle tax that helps NCBA to fight policy proposals that support independent farmers and ranchers across the nation. It’s exemplified by NCBA’s ongoing litigation and lobbying effort to eliminate the widely popular country of origin labeling for beef.”

Bullard said the new proposal doesn’t eliminate the conflict of interest in which the NCBA houses and controls the Federation of State Beef Councils, and the Federation in turn controls half the votes needed to consistently award the lion’s share of the checkoff dollars to NCBA.

Bill Bullard is the President of RCALF-USA, one of the organizations that didn’t sign the recent MOA on raising the national beef checkoff from 1 to 2 dollars (Photo from oklahomafarmreport.com)

Bill Bullard is the President of RCALF-USA, one of the organizations that didn’t sign the recent MOA on raising the national beef checkoff from 1 to 2 dollars (Photo from oklahomafarmreport.com)

“The process is a little confusing,” said John Schaefer, a beef farmer from Buffalo Lake, and a former member of both the Beef Board and the Beef Promotion Operating Committee.

“One of the provisions of the national checkoff is the Beef Board and the Operating Committee cannot do any programs themselves,” said Schaefer, a Minnesota Beef Board member from 2007-2013. “They are required to contract with national non-profit industry organizations. By far, the biggest amount of money goes to NCBA. It states right in the Beef Promotion Act that the Federation of State Beef Councils is an eligible contractor.”

Schaefer adds, “That’s where most of the controversy lies at. The organization that gets most of the contracts also has ten of the votes guaranteed on the organization that decides how to spend the checkoff dollars.”

The way the structure is set up is part of the problem.

“Ever year, legal counsel instructed the Operating Committee to maintain an arm’s length relationship with the contractors,” said Schaefer, who spent 5 years on the Beef Promotion Operating Committee. “You have ten representatives of a contracting organization, including their chairman and vice-chairman who are making that decision, and it’s a difficult task to serve to masters.”

“That said, the people I worked with on the Beef Board were conscientious people, and were diligent in carrying out their responsibilities,” said Schaefer. “They were good people put in a rather tough situation.”

Despite the way the checkoff is set up, Schaefer feels it’s still efficient.

“While it’s easy for outsiders to get the wrong impression, it’s operates very efficiently,” said Schaefer, “and the programs by-and-large are well run. It’s not perfect and there’s always room for improvement. The program staff is top notch and doing a good job too.”

More transparency in the process could be a key to clearing up the controversy.

“When you have a structure like that, what you also need is transparency,” said Schaefer. “People need to see that there’s nothing irregular going on, and, in my opinion, that’s where NCBA has fallen down a little. They’ve been a little too secretive about how things are done.”

What’s next in the process?

“Our next steps are making sure our members across the country know what’s in the agreement,” said Dale Moore of the American Farm Bureau. “Then we’ll start laying out the next steps of the process, specifically as it relates to educating the public and what we’ll need to do on Capitol Hill to build support for it.”

Chandler Goule of the National Farmers Union said just because their organization didn’t sign the MOU, it doesn’t mean they’re not keeping an eye on the issue.

“We are still very much engaged,” said Goule. “We only withdrew because NCBA kept walking it in a circle. NFU spent thousands of dollars and staff resources to listen to NCBA reject every proposal we put forth. We put a total of 14 options on the table to make it a more fair and balanced program, and they rejected every one because it took NCBA out of the driver’s seat.