Does not matter: Historic ag spending on the line

Nov 15, 2021

Presented by NTCA–The Rural Broadband Association

Quick Fix

— Some $90 billion for agriculture-related programs is up in the air as House Democrats struggle to pass their roughly $2 trillion spending bill before Thanksgiving recess. More on Congress' year-end scramble below.

— The Senate is expected to vote this week on a key Agriculture Department nomination , which has been held up for months now. Meanwhile, the Senate Agriculture Committee will consider two other nominees for top USDA jobs.

— President Joe Biden meets virtually with China's president Xi Jinping tonight. Catch up on the ongoing U.S.-China trade talks, what to expect from the meeting and what it could mean for farmers and ranchers.

HAPPY MONDAY, NOV. 15! Welcome to Morning Ag, where your host is digging into the year in review for U.S. farmers as the harvest finishes up. Have thoughts or stories to share? Send along those and your news tips to meredithlee@politico.com, and follow us @Morning_Ag.

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Local, community-based broadband providers have long worked to connect their neighbors to fast, reliable internet. Drawing on deep experience and a strong entrepreneurial spirit, they are perfectly positioned to help nearby rural communities enter the digital age. With the upcoming broadband infrastructure investment, small rural operators–whether commercially-owned or cooperatively-organized–are eager to deliver access by deploying future-proof fiber technology. Leveraging these small businesses will ensure that our country's investment in broadband will pay off.

Driving the Day

CONGRESS UPDATE: All eyes are on the House this week as Democrats struggle to pass their $2 trillion climate and social spending package and send it over to the Senate before the Thanksgiving recess. That means the chamber won't turn to the spending bill until at least December now, Senate Majority Leader Chuck Schumer told Democrats in a letter on Sunday.

White House National Economic Council Director Brian Deese and Rep. Pramila Jayapal (D-Wash.), who chairs the Congressional Progressive Caucus, both said Sunday that they're hopeful the House will pass the massive legislation this week. The White House was aiming for the bill to clear both chambers and be headed to the president's desk by Thanksgiving, but here we are.

As MA has reported, the roughly $2 trillion bill would fund around $90 billion in ag-related programs, including historic investments in conservation, forestry and rural development. Once the House passes the legislation, the Senate is expected to amend the bill to get moderate Sen. Joe Manchin (D-W.Va.) on board.

Schumer told Senate Democrats it's "likely" the chamber turns to the national defense reauthorization bill this week as it waits for the House to pass the reconciliation package. Senate teams are also working with the parliamentarian to ensure the bill meets Senate budget rules. Read more from POLITICO's Burgess Everett.

So far, there's no talk in the Senate of trimming any ag pieces. Manchin has indicated he might want to cut down the package even further, or even significantly delay it. We're keeping our ears to the ground on that.

IN THE MEANTIME: Biden will sign the bipartisan infrastructure bill into law during a White House ceremony later today. Administration officials want to start doling out the funding as soon as possible, as Republicans are widely expected to win a majority in the House next fall. The package includes roughly $130 billion in spending that will directly impact agriculture.

But White House officials acknowledge it will take months for some Americans to feel the benefits of the new law — especially regarding the $65 billion to connect rural and underserved communities to high-speed internet.

Karen Lightman, who is leading rural broadband research and development projects at Carnegie Mellon, tells MA the funding is "a once in a lifetime opportunity, without a doubt."

But the process for states to plan out suggested project maps will take time, Lightman said. Some of the hardest-to-reach places, like rural areas historically cut off from broadband and other services, might not see new projects for several years.

Commerce Secretary Gina Raimondo tried to keep expectations in check during a White House briefing last week: "Not everybody is going to have broadband a year from now," she said when asked about potential progress ahead of the 2022 midterms.

Leading the effort: Biden is tapping former New Orleans Mayor Mitch Landrieu to coordinate implementation of the infrastructure law, the White House announced Sunday.

VOTE EXPECTED THIS WEEK ON KEY USDA CLIMATE NOMINEE: Several Senate Democratic staffers tell MA that they expect a full Senate floor vote this week on Robert Bonnie's nomination for undersecretary of farm production and conservation at USDA. As MA has reported, a pair of senators has been holding up Bonnie's nomination for the key post that oversees sweeping farm subsidies, crop insurance and other programs.

ICYMI: Bonnie was nominated for the role back in April. He currently serves as deputy chief of staff and senior climate adviser at USDA. Republicans have raised concerns that the department is overstepping its authority in its efforts to address climate change — and Bonnie has been a key force behind those efforts.

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Trade Corner

Also on the Hill this week: The Senate Agriculture Committee will hold a hearing on Wednesday to consider two other USDA nominees: Chavonda Jacobs-Young to be undersecretary for research, education and economics and Margo Schlanger to be assistant secretary for civil rights.

BIDEN-XI MEETING TONIGHT: Biden and Chinese President Xi Jinping will finally meet face to face tonight — well, virtually, that is.

What does it mean for ag? A White House official tells MA not to expect much as far as tangible results from the meeting. That includes any breakthroughs on tariffs that are still in place from the Trump administration, as well as retaliatory tariffs from Beijing that have targeted the U.S. ag sector. At this point, the official said they don't even expect tariffs to be a topic of conversation during the meeting.

But, the official adds, it's a positive step to have direct leader-to-leader communication as the U.S. tries to work through a host of trade issues with Beijing. Notably, China is lagging behind on its commitment to buy an additional $200 billion in goods from the U.S. over the course of 2020 and 2021 (compared to 2017 import levels), including soybean and other agricultural purchases. Read more about what to expect from the Biden-Xi meeting from POLITICO's Phelim Kine.

Reminder: U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He are currently engaged in discussions over China's implementation of the Phase 1 trade agreement, which took effect last February. But Tai said in October that the Biden administration would keep the existing tariffs in place as the Biden administration presses China on what the U.S. claims are unfair trading practices, as well as on intellectual property theft and other disputes.

The agriculture community is closely watching the ongoing trade talks, hoping China makes good on its agreement to purchase more American products without additional retaliation against the U.S. farm sector — especially on soybeans, which made up the majority of U.S. ag exports to China in 2020.

"If they're going to push a button, soybeans are usually first," Kevin Scott, president of the American Soybean Association, tells MA.

One interesting nugget from Treasury Secretary Janet Yellen on CBS Sunday: Asked if the Biden administration lifting some tariffs on China — as Xi has called for (and which in theory would lead to Beijing lifting some retaliatory tariffs on American goods) — would help ease rising inflation in the U.S., Yellen replied: "It would make some difference. Tariffs do tend to raise domestic prices."

Yellen added that Tai is exploring ways to approve requests from U.S. companies to ease some tariffs.

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SPEAKING OF U.S.-CHINA TRADE RIPPLES: A bipartisan group of southern lawmakers is looking to boost U.S pecan producers who have been hit by China's retaliatory tariffs. Rep. Austin Scott (R-Ga.), a senior member of the House Agriculture Committee, and 23 other lawmakers pressed Tai to prioritize reducing India's own duties on American pecans in a letter to the U.S. trade chief last week.

India has a 36 percent tariff on American pecans, far higher than the 10 percent tariff on other American tree nuts like pistachios and almonds, the lawmakers say.

More headwinds: Trade disputes with Mexico and damage from the recent hurricane that devastated much of Louisiana and the surrounding region are also weighing on pecan producers.

"Gaining access to new markets for pecans will help ease the pain while orchards are replanted and as we push China for full implementation of its obligations under the U.S - China Economic and Trade Agreement," the lawmakers wrote.

POLITICO SUSTAINABILITY SUMMIT TOMORROW: Join us Tuesday, Nov. 16, for a virtual summit exploring sustainability solutions with a lineup of voices from Washington, statehouses, city halls, civil society and corporate America. The program begins at 9:40 a.m. EST. Register here to watch the virtual summit live.

Our Helena Bottemiller Evich will lead a conversation on building the food system of the future with Deputy Agriculture Secretary Jewel Bronaugh at 1:15 p.m.

Sustainability Pro's Catherine Boudreau will then host a panel on the food system of the future at 1:50 p.m.

A message from NTCA–The Rural Broadband Association:

Row Crops

— The European Commission has added locusts to its list of foods authorized for sale in the EU, The Washington Post reports. The insects will be considered a "novel food" when sold in frozen, dried and powdered forms.

— Rev. Douglas Greenaway, president and CEO of the National WIC Association for over 31 years, announced today that he plans to retire in January. Greenaway has worked to protect and expand funding for WIC over the past several decades.

— Black farmworkers in a federal lawsuit say they were asked to train white guest-workers from South Africa before losing their jobs to them, The New York Times reports.

— Betsy Huber has been reelected for a fourth term as president of National Grange, the oldest agricultural and rural advocacy organization in the U.S.

— Grain companies are scrambling to refill their supply of crops after a widespread drought led to a smaller-than-expected harvest in Canada, Bloomberg reports.

THAT'S ALL FOR MA! Drop us a line: xbustillo@politico.com; hbottemiller@politico.com; meredithlee@politico.com; gmott@politico.com and pjoshi@politico.com.

A message from NTCA–The Rural Broadband Association:

Local Broadband Providers Offer Proven Solutions for Connecting Rural America

Local, community-based broadband providers have worked for years to connect their neighbors in rural America to fast, reliable internet. With this deep experience, a strong entrepreneurial spirit, and local presence, they are perfectly positioned to help nearby rural communities enter the digital age and realize the benefits of broadband. As an historic investment in broadband infrastructure takes shape, small operators based in rural America – whether commercially-owned and cooperatively-organized – are eager to deploy future-proof fiber technology that will stand the test of time and deliver on our country's mission of universal service.

Leveraging these small businesses will further ensure that our country's investment in broadband will pay off now and over the long haul. Learn more.