Does not matter: Biden’s $30B agriculture arsenal — Fixing the food aid pipeline

Feb 01, 2021

Presented by OCP North America

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DRIVING THE WEEK

HAPPY SNOWY MONDAY! Democrats this week are poised to take a major step toward pumping another $1.9 trillion into pandemic relief programs — by adopting budget resolutions in each chamber that lay the groundwork for passing a new stimulus package without the need for Republican votes in the Senate.

They're not the only ones eyeing unilateral action to confront the economic crisis: The Agriculture Department is sitting on a $30 billion (for now) warchest that President Joe Biden could tap to prop up struggling restaurants, pay farmers to implement climate-friendly production and potentially much more.

As our Liz Crampton explains, the Biden administration is poring over its options for using USDA's Commodity Credit Corporation to quickly launch its ambitious food and farm agenda without relying on appropriations from a closely divided Congress.

— How it works: The Depression-era agency is authorized to borrow $30 billion from the U.S. Treasury for the purpose of stabilizing the farm economy. (Some lawmakers and industry groups want to raise the cap to $60 billion or beyond, since the current borrowing limit was set decades ago.)

— Former President Donald Trump used the CCC to send trade bailout checks and coronavirus relief payments to farmers, leaving Biden a blueprint, plus wide political cover, to aggressively enlist the fund for his own agenda.

— One option that's gaining traction: Enlisting the agency to create a carbon bank that effectively pays farmers and ranchers for storing greenhouse gases in their soil. More Covid-19 relief is also likely, for ag producers and potentially the battered restaurant sector.

What to watch next: Agriculture Secretary-nominee Tom Vilsack, who's set for his confirmation hearing on Tuesday, is likely to face questions about such plans. The former and future USDA chief already indicated that he wants to use executive authority to kickstart climate programs that could be built into the next farm bill, which is due in 2023.

WELCOME TO WEEKLY AGRICULTURE, and welcome to February. Stay warm out there, folks. Send your tips to rmccrimmon@politico.com and @ryanmccrimmon, and follow us @Morning_Ag.

A message from OCP North America:

Recent developments in Washington could spell trouble for American farmers. The U.S. Department of Commerce and International Trade Commission are considering imposing tariffs on imports of phosphate fertilizer. Such tariffs could drastically cut supply, raise costs, and even reduce yields. Farmers are already struggling – they can't afford harmful fertilizer tariffs. Visit https://www.standwithusfarmers.com/ to learn more.

UNCLOGGING THE FOOD AID PIPELINE: Even before Vilsack is sworn in, Biden's USDA has taken a series of actions to expand food assistance for low-income Americans, especially families with children. That includes a new policy to fix bureaucratic potholes that derailed roughly $2 billion in aid from reaching needy families each month, Pro Ag's Helena Bottemiller Evich reports.

The Pandemic EBT program was created last spring to help low-income families buy extra groceries to replace the subsidized meals that their children would have received at school. But most eligible households still haven't received any payments for the current school year, even though Congress re-upped the program in September.

Details: On Friday, USDA released guidance allowing states to simplify how they determine which children are eligible for benefits, including how to assist kids who are below school age, a change that was requested by Congress.

— The new guidelines essentially make it easier for state officials to distribute the money, and at a higher payment rate than before. USDA is also encouraging states to retroactively apply the boosted rate of benefits from the start of the school year.

Big picture: The changes mark a significant ideological shift from the Trump administration, which preferred stricter limits on eligibility for nutrition benefits. Under Biden, USDA's mandate is to err on the side of pumping out more aid to as many low-income households as possible, even if it means accidentally including some kids who have access to in-person school meals, Helena writes.

On your radar: Sen. Tammy Duckworth (D-Ill.) on Friday asked the Biden administration to address food insecurity among military families, including loosening income requirements to qualify for the Supplemental Nutrition Assistance Program. (The New York Times has more on the military hunger crisis in this December deep-dive.)

THE UNOFFICIAL GUIDE TO OFFICIAL WASHINGTON: Washington hasn't slowed down in 2021. A new administration and Congress are off and running, and our new Playbook team is two steps ahead of the pack to keep you up to speed. The new Playbook foursome of Rachael Bade, Eugene Daniels, Ryan Lizza and Tara Palmeri is canvassing every corner of Washington, bringing you the big stories and scoops you need to know—and the insider nuggets that you want to know—about the new power centers and players. "This town" has changed. And no one covers this town like Playbook. Subscribe today.

TRACKING BIDEN'S EXECUTIVE ACTIONS: The new president has flexed his unilateral authority since the inauguration, issuing a steady stream of executive orders mostly aimed at confronting the pandemic and offering economic relief to the hardest hit workers, students and families. But there's only so much he can accomplish with the stroke of a pen, POLITICO's Megan Cassella reports.

"It's on the margins," Diane Swonk, chief economist at Grant Thornton, said of the impact of Biden's executive moves. Many economists say what the country needs most is an injection of cash from Washington — something that Biden is almost entirely dependent upon Congress to provide.

On the flip side: One potential action conspicuously absent from Biden's first few weeks is withdrawing Trump's executive order that meatpacking plants continue operating during the pandemic despite concerns about worker safety, writes POLITICO's Rebecca Rainey.

While Biden has tightened workplace safety guidelines, labor advocates are pushing the White House to reverse the order along with other safety measures. Trump's action stemmed from initial fears of meat shortages early in the pandemic, when Covid-ridden slaughterhouses were shutting down across the country. The order has been cited in court by major meatpacking firms facing lawsuits over worker illnesses and deaths.

A message from OCP North America:

Trade Corner

BACK TO PHASE ZERO? The partial trade agreement with China is on the table as Biden launches a broad review of national security measures put in place by Trump — an assessment that has major implications for farm exports and tariffs between the U.S. and one of its largest agricultural trading partners.

White House Spokeswoman Jen Psaki said Friday that the new administration is approaching China issues "from a position of strength, and that means coordinating and communicating with our allies and partners about how we're going to work with China," Reuters reports.

"Everything that the past administration has put in place is under review, as it relates to our national security approach, so I would not assume things are moving forward," Psaki added.

For context: While China's purchases of U.S. products fell short of its 2020 targets in the Phase One agreement, there has been an uptick of farm exports in recent months that's fueling an agricultural rebound after years of trade headwinds, low prices and supply chain disruptions. (S&P Global has some new analysis here on the broader trade recovery.)

Doug Barry, a spokesman for the US-China Business Council, downplayed concerns about any imminent cancellation of the current agreement, which also lays out trade targets for 2021.

— "We don't read too much into the process at this point," Barry told Reuters. "China has 11 more months to fulfill its promises to purchase an additional $200 billion in U.S. products."

A message from OCP North America:

The largest phosphate fertilizer producer in the U.S. has asked the government to impose tariffs on imported fertilizers. American farmers rely on these high-quality imported fertilizers to meet demand, ensure ample coverage and generate profitable yields. New tariffs could stop American farmers in their tracks. The announcement of preliminary tariffs has already reduced supply and increased input costs, hurting not just farmers, but consumers as well. It's no wonder that numerous leading agriculture groups and several U.S. Senators have spoken out against tariffs. The imposition of costly, restrictive tariffs would only compound the many challenges farmers face trying to supply the needs of our nation and remain competitive on a global scale. Visit https://www.standwithusfarmers.com/ to learn more.

Row Crops

— Rep. Chellie Pingree, who will chair the House Appropriations subcommittee in charge of the EPA and Interior Department budgets, is pledging to rebuild agencies that were depleted under the Trump administration. The Maine Democrat is also an active member of the Agriculture-FDA Appropriations subcommittee, as well as House Ag, and she was a vocal critic of Trump's disruptive relocation of two USDA research agencies from D.C. to Kansas City.

— House lawmakers last week asked Biden's security officials to prioritize ag supply chains when imposing travel restrictions, which have been tightened in recent weeks as the global pandemic worsens. Following appeals from the bipartisan group and farm organizations, the administration declared that H-2A visa recipients from South Africa might qualify for "national interest exemptions" allowing them to work in the U.S., DTN reports.

— Oil trade groups are looking to make peace with corn growers and biofuel producers to work together against Biden's push for more electric vehicles. Ethanol and oil interests have long sparred over the Renewable Fuel Standard, including bitter fights during the Trump administration over the EPA's expansive blending waivers, and biofuel groups so far have been cool to the outreach from oil refiners. Reuters has the story.

— The Center for Food Safety filed a legal brief against the FDA's 2019 approval of Impossible Foods' soy leghemoglobin, or heme, a genetically engineered additive that makes the company's plant-based burgers appear to bleed like traditional meat. CFS said the agency should have required more extensive testing for long-term health effects

— Virginia lawmakers are scrambling to legalize cannabis before the end of their 30-day legislative session, which would mark a dramatic shift in state policy and marijuana reform's deepest incursion into the South, writes Pro Cannabis' Mona Zhang.

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THAT'S ALL FOR MA! Drop us a line: rmccrimmon@politico.com; hbottemiller@politico.com; lcrampton@politico.com; jyearwood@politico.com and pjoshi@politico.com.