Does not matter: Farm aid reinforcements stuck in limbo — Taking California’s soda tax ban to court

Aug 10, 2020

With help from Helena Bottemiller Evich and Theodoric Meyer

Editor's Note: Weekly Agriculture is a weekly version of POLITICO Pro's daily Agriculture policy newsletter, Morning Agriculture. POLITICO Pro is a policy intelligence platform that combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro .

LET'S TRY THIS AGAIN: Welcome to another week of watching and waiting for a massive, much-needed coronavirus relief bill. It's been the No. 1 issue on Washington's to-do list for months, but somehow Congress and the White House are still far apart on key issues after weeks of high-level talks.

The good news for ag? There's bipartisan support for pouring more money into farm rescue programs, and the Agriculture Department still has plenty of cash on hand to aid producers. (As of last week, USDA had distributed less than half of the $16 billion available for direct payments.)

But, but, but: It's not all smooth sailing for food and farm issues. Democrats have long suggested that extra agricultural aid should be accompanied by an expansion of Supplemental Nutrition Assistance Program benefits for hungry families, but now they're drawing a starker line in the sand. Notably, Senate Agriculture ranking member Debbie Stabenow (D-Mich.) told POLITICO she wouldn't support the former without the latter.

In the meantime, President Donald Trump took executive action on several issues that are central to the negotiations in an attempt to circumvent Congress, such as extending unemployment benefits at a reduced rate, pausing some evictions and extending student loan relief.

Your weekly watchlist: As we monitor efforts to breathe life into the stimulus talks, there are a few other things to keep on your radar. USDA and HHS on Tuesday will hear public comments on the Dietary Guidelines Advisory Committee's scientific report published in July; U.S. trade officials are expected to check in with their Chinese counterparts on the Phase One deal that took effect in February; and Democratic presidential candidate Joe Biden is soon expected to name his running mate.

KEEP UP WITH THE WORLD FROM HOME : Economies and reputations are tanking around the globe. How have countries' responses to the pandemic caused them to lose favor around the world? And how do they reverse the trend? Our Global Translations newsletter, presented by Bank of America, layers global news, trends, and decisions with contextual analysis from the world's sharpest minds. For a unique perspective that you cannot find anywhere else, SUBSCRIBE TODAY.

IT'S MONDAY, AUG. 10, and your host is back from a week off in Maine, featuring lots of hiking, lobster rolls and blueberry-flavored everything. Send tips to rmccrimmon@politico.com and @ryanmccrimmon, and follow us @Morning_Ag .

Driving the Day

Soda is pictured. | GETTY

Bottles of soda on grocery store shelves.

FIRST IN MA: TAKING CALIFORNIA'S SODA TAX BAN TO COURT: A new lawsuit is challenging part of California's controversial ban on sugary drink taxes until 2031 — a move that comes as many local governments are facing extensive drops in tax revenue amid shuttered businesses and the economic slowdown.

"More than ever, in this time of Covid, no one's hands should be tied," said Sarah de Guia, CEO of ChangeLab Solutions, an Oakland-based nonprofit focused on promoting health equity. The group supports the legal challenge, as does the American Heart Association. The lawsuit was filed on behalf of Cultiva La Salud, a health nonprofit in the San Joaquin Valley, and a member of the Santa Cruz City Council.

The fine print: The lawsuit, filed Monday in Sacramento Superior Court, alleges that a penalty provision in the law violates the state's constitution. If this part of the law is struck down, it could be less risky for certain cities to pursue a sugary drink tax and then challenge the law more broadly.

How we got here: In 2018, the California legislature shocked health advocates and local leaders by passing a bill to preempt any new local taxes on sugary drinks for the next 12 years. The move was the result of a deal struck with the beverage industry, which agreed to drop a state ballot initiative that would have made it very difficult for local leaders to raise taxes of any kind.

Cities fight back: Santa Cruz is an example of what's at stake. The city, a surfing hub, approved in 2018 putting a 1.5 cent-per-ounce tax on sugary drinks on the ballot. Polls showed the tax was broadly supported. But days after the city council approved taking the tax to voters, then-Gov. Jerry Brown signed the preemption law. The city dropped the initiative shortly thereafter.

Funding to help the vulnerable during a pandemic: Veva Islas, CEO of Cultiva La Salud, said sugary drink taxes should be a tool that local leaders have at their disposal to help address long-standing health inequities in their own communities, which are only becoming more apparent during coronavirus.

"The conscientiousness about public health has definitely increased," she said. "It's one of the bright spots of the pandemic." Pro Ag's Helena Bottemiller Evich has more this morning.

SEEKING MORE STIMULUS FOR SPECIALTY CROPS, SMALL FARMS: Democrats on the House Agriculture Committee are asking USDA to step up efforts to reimburse specialty crop producers, like growers of fruits, nuts and vegetables, for their financial losses stemming from supply chain disruptions during the pandemic.

In a letter to Secretary Sonny Perdue, the members led by Del. Stacey Plaskett (V.I.) said the department's direct payment program "has failed to provide equitable relief to the specialty crop sector," which has taken in less than $270 million in aid so far. By comparison, livestock producers have received $3.4 billion and farmers of row crops like corn and soybeans have taken in nearly $1.8 billion.

"These funds have been particularly difficult to access for specialty crop farmers who are young, socially disadvantaged or rely on local markets with diversified production practices," the Democrats wrote.

Small farmers also struggling: NBC News reports that the first $5.6 billion of direct payments favored larger farms and sent money to foreign-owned operations, while some small farmers have struggled to access the stimulus program. The top 10 percent of recipients received more than 60 percent of the initial money, according to the report.

ETHANOL ADVOCATES FEEL THE PANDEMIC PINCH: Count the Renewable Fuels Association among the many industry groups that have been hit by the public health and economic crises. Reuters reports that RFA "has cut outside consultants while also reducing advertising spending," and its lobbying revenue dipped slightly in the second quarter. (H/t POLITICO Influence.)

"Our resources are more limited today because of Covid-19 and the impact on the industry," RFA President Geoff Cooper said. The steep drop in travel and fuel consumption during the pandemic has crushed demand for biofuels, forcing companies to shut down half of all production nationwide.

In Case You Missed It

LAST WEEK TODAY — Here's a quick roundup of our top news and notes from last week:

Deep-dive on carbon farming: In last week's edition of The Long Game, Helena and MA alum Catherine Boudreau explored the growing hype around carbon credit markets as a way to pay farmers to battle climate change — and whether such solutions are practical on a large scale.

Trump signs order on rural health care: The president took executive action aimed at boosting cash-strapped health care providers in rural communities, and he proposed to permanently extend certain telemedicine policies that have fueled the boom in virtual health care during the pandemic.

Tit-for-tat tariffs are back, again: Trump announced that he'll bring back tariffs on Canadian aluminum, reigniting trade tensions with Ottawa just a month after USMCA entered into force. Canadian officials called it an "absurd decision" and are threatening to slap retaliatory duties on $2.7 billion in U.S. goods.

EVERYTHING HAS CHANGED: Policy professionals' work has changed drastically since the outbreak of Covid-19. Read what 700+ policy professionals had to say about this "new normal" in POLITICO Pro's 2020 Policy Insider's Report: "Policymaking During a Pandemic."

Row Crops

— House Agriculture Committee leaders are asking USDA and university researchers to examine beef supply chains after months of meatpacking plant closures, fluctuations in cattle and retail beef prices, and bipartisan concern about growing consolidation in the meat sector. Read the letter.

— Brazilian mega-meatpacker JBS' purchase of a lamb slaughterhouse in Greeley, Colo., is under heavy scrutiny from lawmakers and producers who warn that converting the facility into a beef plant would be a severe blow to the lamb sector's processing capacity. The Mountain States Rosen plant is the second-largest lamb processing facility in the U.S. More from Modern Farmer.

— One year after immigration agents arrested about 680 poultry plant workers in Mississippi, the largest worksite raid in a single state, executives at the chicken processing companies have yet to be penalized for hiring undocumented immigrants — while the workers and their families have faced major consequences, the Mississippi Clarion Ledger writes.

— The CDC last week released a study of how Covid-19 spread rapidly in a Smithfield Foods meatpacking plant in Sioux Falls, S.D., accounting for more than 1,100 cases in March and April. The Rapid City Journal has the details.

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