Wednesday, July 1, 2020

Democrats’ vision for climate-friendly farming — Western rural development, post-Covid-19 — Welcome to the USMCA era

Delivered daily by 10 a.m., Morning Agriculture examines the latest news in agriculture and food politics and policy.
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2018 Newsletter Logo: Morning Agriculture

By Ryan McCrimmon

With help from Helena Bottemiller Evich

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Quick Fix

— After nearly a year-and-a-half of work, the House Climate Crisis Committee released a 547-page report on how the U.S. can go carbon neutral by 2050, including changes to ag policies like expanding conservation programs and boosting climate-related research.

— Western governors have a blueprint to boost rural communities as they recover from the coronavirus pandemic, including efforts to improve connectivity, food security, water infrastructure and housing.

— The NAFTA 2.0 deal is officially in effect, slamming the door on President Donald Trump's recurring threats to pull out of the North American trade framework. But there's still work ahead on issues like biotech standards and dairy market access.

HAPPY WEDNESDAY, JULY 1! Welcome to Morning Ag, where Christmas tree farmers are using surplus Guinness to fertilize their trees. Send tips to rmccrimmon@politico.com and @ryanmccrimmon, and follow us @Morning_Ag.

 

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Driving the Day

DEMOCRATS DETAIL PLANS FOR CLIMATE-FRIENDLY FARMING: The climate change committee on Tuesday unveiled an ambitious framework for slashing greenhouse gas emissions to net-zero by the century's halfway point. That would be achieved, in part, by ramping up conservation programs for ag producers that are consistently oversubscribed and cover just a fraction of the country's farmlands, Pro Ag's Helena Bottemiller Evich reports.

Among the panel's proposals: Pouring far more money into "climate-smart" ag practices; making climate adaptation and mitigation a specific goal of federal farm policy; creating a "Climate-Based Producer" certification for farmers; and developing feed additives that can lower methane emissions.

Tepid response from ag world: Our inboxes were somewhat quiet as many food and farm groups did not immediately react to the lengthy proposal. But industry groups that did weigh in were not especially enthusiastic.

Beef check: The National Cattlemen's Beef Association, for example, didn't come out swinging against the report, but it said the plan was "unfortunately the product of partisan discussions that failed to encompass important constituent communities across the country."

Three cheers from House Ag: Three House Agriculture subcommittee chairs — Abigail Spanberger, David Scott and Stacey Plaskett — praised the report, saying it was encouraging to see the committee and the Democratic caucus recognize that agriculture can be "a collaborative part of the solution to the climate crisis."

Bottom line: Most pieces of the climate blueprint aren't likely to go anywhere during this Congress, considering Republicans widely oppose the plan and lawmakers are more focused on managing the pandemic and recession. But there's some bipartisan interest in advancing climate-friendly farm policies.

Just last week, the Senate Ag Committee held its first hearing since March on a bipartisan carbon credits bill. And there are signs that the industry itself is starting to take climate issues more seriously.

WESTERN RURAL DEVELOPMENT, POST-COVID-19: The Western Governors' Association today released its Reimagining the Rural West Initiative report with a dozen recommendations for retooling economic development efforts out West, as businesses and towns try to bounce back from the pandemic. The initiative, led by WGA Chair and North Dakota Gov. Doug Burgum, follows a series of workshops hosted by Republican and Democratic governors over the past year.

For context: Rural communities on average were more vulnerable to the public health and economic crisis after a decade of slower recovery from the last recession, compared with more populated areas. They're also more reliant on industries like agriculture, mining and manufacturing that have faced financial headwinds for years.

The WGA suggests rethinking economic development efforts that have long focused on recruiting businesses to rural areas. "Opportunities for that kind of development are shrinking as companies outsource labor or concentrate in places with a high density of skilled workers," the report says.

Instead, it proposes focusing on advantages like better access to outdoor recreation and higher quality of life that "can serve to attract new residents, or entice young people to stay or return to their rural hometowns." That includes changing the metrics and requirements for federal programs that support rural development, including loans and grants from the Agriculture and Commerce departments.

The plan also focuses on improving food and water access in the West, citing the higher distribution costs and logistical hurdles in more spread out communities that can make it harder to supply fresh and healthy foods.

No surprise: Expanding high-speed internet access is a key piece of the report. The so-called digital divide in rural areas remains a roadblock to innovations like remote learning, telework and telemedicine that have been critical during the pandemic.

Speaking of broadband: Rural wireless carriers are complaining that they're caught in the crossfire as the Trump administration cracks down on Chinese tech companies like Huawei and ZTE. A trade group representing the carriers said it was "stunned" at how quickly the FCC cut off subsidies to U.S. companies that used gear from the blacklisted Chinese firms, Pro Tech's John Hendel reports.

 

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Trade Corner

WELCOME TO THE USMCA ERA: After two years of negotiations and another year of wrangling votes on Capitol Hill, the three-way pact entered into force today, replacing the 26-year-old NAFTA and sealing one of Trump's top campaign promises, writes Pro Trade's Sabrina Rodriguez.

Still, there are plenty of disputes to resolve with Canada and Mexico. For one, dairy producers are already raising concerns about Canada's proposed tariff rate quotas on milk products, which the International Dairy Foods Association said don't comply with the terms of USMCA's chapter on agriculture.

Also, Mexico has been slow to approve import permits for agricultural biotech products like GMOs, effectively boxing out U.S. producers — even though Mexican law allows such farm goods to be sold within the country.

As for the broader economic payoff, the benefits could be years away. The new deal isn't projected to boost trade within the continent by a lot, and the pandemic could further delay any major gains from the agreement.

Watch: Sabrina interviewed Martha Bárcena Coqui, Mexico's ambassador to the U.S., about the new trade deal and other issues, and Pro Trade's Doug Palmer caught up with Kirsten Hillman, Canada's ambassador.

 

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Row Crops

— Cities, counties, businesses and trade groups are asking Congress to include financial relief for state and local governments in the next coronavirus relief package, warning in a letter that jobs will be lost, services cut off and infrastructure projects delayed without direct federal aid. The effort is backed by the American Beverage Association, Coca-Cola, Land O'Lakes and about 175 other organizations (h/t POLITICO Influence).

— Farmers planted about 5 million fewer acres of corn this year than the government projected in March, the largest miss in nearly 40 decades, while soybean planting also fell below market expectations, according to USDA data. The lower acreage estimates sent crop futures prices soaring on Tuesday, Reuters reports.

— The Senate on Tuesday evening passed a bill that would extend the Paycheck Protection Program until Aug. 8, just hours before the window to approve small business loans closed at midnight. The legislation also needs to be passed by the House and signed by Trump. Pro Financial Services' Zachary Warmbrodt has the details.

— A projected bumper crop of Costa Rican coffee beans could go to waste because of a shortage of migrant workers, mainly from Nicaragua and Panama, as travel restrictions in Central America have cut off a key source of farm labor. Industry analysts estimate that 74,000 workers would be needed when the coffee harvest peaks later this year. More from Reuters.

— The U.S. and U.K. remain at odds over how to address London's strict food safety standards in a potential trade deal, after officials wrapped up a second round of negotiations without finalizing any chapters, our Pro Trade friends tell MA.

 

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