Does not matter: Resistance to USDA carbon bank rises — The farm belt land grab

Mar 29, 2021

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Quick Fix

— The Biden administration is forging ahead on plans to set up a carbon bank through the Agriculture Department that helps pay producers for climate-friendly farming. But even farmers who stand to benefit from the multibillion-dollar effort are skeptical.

— The sharp rebound in crop prices is driving up farmland values across the Midwest. Grain growers are rushing to snap up any available acres, tempted by the potential for profitable harvests after years of decline.

— Washington apple growers have resumed exports to India of Red Delicious and Granny Smith apples after a trade stalemate over new GMO restrictions implemented by the South Asian nation, but the U.S. is bracing for other potential export spats.

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Driving the Day

A tractor plows under what would have been Spring Mix.

Brent Stirton/Getty Images

DON'T BANK ON IT: Agriculture Secretary Tom Vilsack has his sights set on creating a massive carbon credit bank, aiming to confront climate change in a way that also boosts farmers' bottom lines. But the USDA chief faces a difficult task of bringing both the right and left flanks of the agriculture sector on board, POLITICO's Zack Colman, Liz Crampton and Helena Bottemiller Evich report.

Doubts abound: A carbon bank is one of Washington's most ambitious attempts to curb global warming by making certain changes. One could involve paying farmers to plant extra crops (for instance, products like cereal rye and clover) that suck carbon dioxide out of the atmosphere and bury it in soil. Some environmentalists, however, doubt it would make a big enough dent in climate change, especially compared to existing conservation programs.

Farmers and ranchers worry that big agribusinesses and financial institutions will reap most of the monetary benefits from the carbon market. The industry also remains generally wary of any action on climate change that could affect producers' bottom lines.

The timeline: USDA is planning to take some action by the end of 2021, according to a senior official, who told POLITICO that the department aims to strike a balance between "moving really quickly and also being deliberate enough that we can bring folks along with us."

Convincing Congress: There's an ongoing debate between Vilsack and top Republicans, including Senate Agriculture ranking member John Boozman (Ark.), as to whether USDA has authority to create a carbon bank through the Commodity Credit Corporation. The loosely restricted $30 billion fund, intended to bolster the farm economy, was used to pay producers burned by the Trump administration's trade war and supply chain disruptions during the pandemic.

"USDA believes they have the legal authority," said Andrew Walmsley, director of congressional relations for the Farm Bureau. "I don't know if they have the political authority. That's important."

Also happening: Separately, President Joe Biden has invited leaders from 40 nations to his Climate Summit on April 22, Zack reports.

LAND GRAB IN THE FARM BELT: The cost to buy or rent farmland in the Midwest continues to climb higher, fueled by high commodity prices, unprecedented federal aid and low interest rates, The Wall Street Journal reports.

Farmers are placing larger and larger bids on parcels, according to brokers in the region, in a rush to acquire valuable property and ramp up production after years of pain in the industry, caused by trade headwinds, crop gluts and the pandemic.

— Some farmland is even selling for a higher price than during the agricultural boom nearly a decade ago, when land values more than tripled in top farm states like Iowa and Nebraska.

The downside: Many farmers, especially younger producers, don't have the resources to compete for available land that's selling for a premium. It's not just higher demand: America's farmland has shrunk by 25 percent since 1950, according to USDA data.

Large agricultural operations now dominate most of the remaining 900 million acres. Just 13 percent of farms control 75 percent of farmed croplands, per USDA. The steep prices only accelerate consolidation by preventing smaller farmers from expanding.

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Trade Corner

APPLE SALES TO INDIA SLOWED BY GMO DISPUTE: Washington state agriculture officials have started certifying shipments of non-genetically modified apples to India, after trade was halted by a new Indian law requiring stricter documentation of such imports, POLITICO's Anna Kambhampaty reports this morning.

The restrictions took effect on March 1 and effectively shut U.S. apple growers out of the market. That's because USDA doesn't issue non-GMO certificates, nor did the Washington Agriculture Department — until now. The state quickly cobbled together a new certification program to maintain market access to India.

U.S. growers are questioning the motivations behind the law, which disrupted a trade relationship that was already fraying due to retaliatory tariffs.

India was the No. 2 importer of U.S. apples in 2018, most of which come from Washington. More than 90 percent of American apples shipped to India are Red Delicious — a variety that is not genetically modified.

"We're being regulated and asked to certify for something that in reality doesn't commercially exist," said Mark Powers, president of the Northwest Horticultural Council, a nonprofit trade group for tree fruit producers in Idaho, Oregon and Washington.

The law also required plum, pepper, tomato and melon shipments to be certified. Indian officials say the decision was made to prevent GMO food crops from entering the country, but it was not intended to ban American apples.

U.S. Trade Representative Katherine Tai has told Congress that she understands "the detrimental effects that India's tariffs have had on Washington apple exports."

Row Crops

— The White House is not prepared to lift tariffs on Chinese imports anytime soon, but it's open to trade talks with Beijing, Tai said in an interview with The Wall Street Journal. The newly confirmed trade chief warned that "yanking off tariffs" could reduce Washington's negotiating leverage and harm the U.S. economy, unless it's done carefully.

— Biden is still on a "journey" to pick a nominee for FDA administrator, with no timeline for making a selection, White House Press Secretary Jen Psaki said Friday. Longtime drug regulator Janet Woodcock is leading the agency in the interim. Pro Health Care's David Lim has more.

— Products with Delta-8 THC, a close cousin of the psychoactive compound in marijuana, are rapidly taking over store shelves as retailers market the goods as a "legal" way for consumers to get stoned. Hemp producers fret the compound violates the spirit, if not the letter, of the 2018 farm bill provision that made hemp legal, writes Pro Cannabis' Mona Zhang.

— New York Gov. Andrew Cuomo and state lawmakers reached a deal on Saturday to legalize cannabis use for adults, setting up a vote in the coming days that would create the nation's second-largest recreational marijuana market, POLITICO New York's Shannon Young reports.

— As many as 9 million feral swine are running wild across the country, causing billions of dollars in damage each year to crops and infrastructure. Landowners, hunters and wildlife managers have tried to wipe them out with grenade launchers, airborne assault rifles and illegal poisons, but the wild hogs continue to spread. National Geographic has a closer look.

— The U.S. and Canada could move in tandem to slap tariffs on carbon-intensive imports, but action is not likely for several years, Canada's environment minister said last week. Trade groups are concerned about the impact on small businesses and farmers. Pro Canada's Maura Forrest has the details.

— Coming redistricting in battleground states is prompting many House Democrats to consider running for statewide office, instead of seeking reelection in swing districts redrawn by Republican legislators in states like Florida, Ohio, Pennsylvania and Wisconsin. More from POLITICO.

Congress is in recess for two more weeks. President Joe Biden travels to Pittsburgh on Wednesday to unveil initial details of his multitrillion-dollar infrastructure plan.

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

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