Does not matter: Biden prepares his ag budget priorities

Mar 28, 2022

Presented by Daily Harvest

With help from Leah Nylen and Helena Bottemiller Evich

QUICK FIX

— The White House will release its next budget proposal this morning, on the heels of a new omnibus spending package that included a significant boost for food, agriculture and rural programs.

— Federal antitrust regulators will hear from farmers, grocers and other groups today on how consolidation has affected the food and ag industries, as the administration considers new merger guidelines.

— A group of Black farmer advocates has won the right to intervene in a Texas lawsuit that, among others, is blocking the Agriculture Department's debt relief program for farmers of color.

IT'S MONDAY, MARCH 28. Dearest readers, welcome to Morning Ag, where your host spent her windy weekend viewing all of "Bridgerton." Consider your host the Lady Whistledown of Ag, and be sure to pass along any insight or tips during what will surely be a buzzing week to xbustillo@politico.com and @ximena_bustillo — and follow us @Morning_Ag.

A message from Daily Harvest:

A Sustainable Future Begins with Our Food. At Daily Harvest, we believe in the power of organic farming. It's why we partner with farmers to help make the transition from conventional to organic agriculture a little easier. Because when farmers are empowered to use practices that regenerate soil, sequester carbon, and keep chemicals out of our land, food, and water–it's a win for our bodies and the planet. LEARN MORE.

DRIVING THE WEEK

BIDEN'S NEW BUDGET PLAN LANDS TODAY: President Joe Biden will release his second budget request today, laying out his funding wishes for fiscal 2023, which begins in just six months.

So soon? The new White House budget comes just two weeks after Biden signed a government-wide spending package for the current fiscal year that began in October. The Agriculture Department, FDA and other related agencies are slated to receive $25.1 billion under the newly signed law, a 6 percent increase from the previous year, per a House Appropriations fact sheet.

Congressional leaders and top appropriators have already started discussing their plans for moving quickly to write the 12 annual spending bills for fiscal 2023. Today's budget release will set the stage for that work to begin in earnest.

Reminder: Biden's last budget called for record-high spending for USDA — a 16 percent increase from fiscal 2020 spending levels — with a particular focus on rural development and climate spending. Those are likely to be major themes once again.

Anti-hunger advocates will also be watching closely, after this year's omnibus package did not include an extension of USDA waivers that have allowed schools to serve universal free meals to students during the pandemic. As POLITICO first reported, Senate Minority Leader Mitch McConnell drew a hard line against extending the waivers for another year, something that shocked and angered school groups and Democrats.

Join us today at 3:30 p.m. as some of POLITICO's policy reporters, including Morning Money author Kate Davidson, discuss President Joe Biden's budget request and prospects for fiscal 2023. Register now.

AG TECH: THE NEXT ANTITRUST FRONTIER? The Federal Trade Commission and Justice Department will hear from farmers, ranchers, grocers, restaurateurs and other groups today on how mergers have affected the food and agriculture industries, ahead of the administration's planned revamp of merger guidelines — an effort that could help shape fast-growing sectors like agricultural biotech and precision ag technologies.

The backdrop: The food and agriculture industries have seen a wave of mergers since 2015. For example, one corner of agribusiness today is dominated by BASF, ChemChina (which bought Syngenta in 2017), Bayer (which acquired Monsanto in 2018) and Dow-Dupont, which merged in 2019 and then split into three companies.

Meatpacking, of course, has its own handful of dominant corporations. And DOJ is currently reviewing a merger between Sanderson Farms and Continental Grain's Wayne Farms, two of the largest U.S. chicken processors.

The food retail sector has seen its own consolidation: The FTC okayed Albertsons acquisition of Safeway in 2015 on condition that the company sell off a number of stores in the Pacific Northwest. But Albertsons promptly rebought those stores the next year, after the buyer filed for bankruptcy. Online commerce giant Amazon also joined the grocery business in 2017 by acquiring Whole Foods.

Ag tech trends: The agencies' new merger guidance, expected later this year, could play a key role in the future of emerging technology focused on improving farming and crop yields through software, biotech and robotics, among other efforts.

Population growth and climate change are two of the biggest drivers pushing investment in agricultural technologies, which saw a record $10.5 billion in investment last year, according to a report last week from research company PitchBook.

The majority of startups — about 60 percent — are based in North America, with ag biotech aimed at boosting crop or animal yields and precision ag among the areas with the highest number of new companies. (Read on for more on food tech.)

Today: More than 30 people are expected to provide comments at the virtual listening session this afternoon.

SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.

Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories.

FOOD TECH STARTS TO THINK MORE ABOUT WASHINGTON: Throngs of food tech leaders and investors gathered in San Francisco late last week for Future Food Tech, the industry's biggest annual gathering (and the first in person since the start of the pandemic) — and policy issues came up a fair amount for a burgeoning sector focused squarely on disruption.

Pro Ag's Helena Bottemiller Evich was on the ground to get a sense of how Silicon Valley and beyond is thinking about food and ag policies at a time when the startup world is attracting record levels of venture capital.

By the numbers: In 2021, investments in agrifoodtech (a bucket term that includes both the ag and food side) totaled nearly $52 billion, according to a new report from AgFunder. That's an 85 percent increase over the group's tally from 2020.

Alternative topics: There was special interest in cell-cultivated meats (or cell-based, cell-cultured, etc. — the name remains a sticking point), including plenty of buzz about what might be next from FDA and USDA.

MA readers will recall the two agencies a few years back agreed to share jurisdiction over the matter. In January, the FDA said that issuing draft guidance on pre-market consultation for "animal cell foods" (a.k.a. path to market) is "possible" this year.

A bullish outlook: Josh Tetrick, founder and CEO of Eat Just (formerly Hampton Creek, a company that's generated plenty of controversy), told the audience last week that he's hopeful that FDA is moving ahead in a timely and smart way. Tetrick said he sees "lots of positive momentum on the regulatory front."

"I think sometimes on the outside [looking] in, it seems like things are not moving fast enough, or maybe it seems like things aren't moving," he said. "Things are moving."

He noted that the company is in talks with officials in Singapore, Qatar and the U.S., and that "regulators in those jurisdictions get it. They're asking smart questions."

Scale remains an obstacle: Tetrick further argued that the biggest barrier for bringing cell-cultivated meat (or whatever we end up calling it) to market will likely be the technical and infrastructure barriers to producing enough of the product to get it to retail nationally.

Scale was a major theme that several founders brought up during the conference, indicating that massive investments are needed to make these and other futuristic products mainstream.

Get in touch: Are you in this space? Have thoughts about how FDA and USDA are going to handle this wave of innovation coming down the pipeline? Shoot Helena an email for a story to come: hbottemiller@politico.com.

A message from Daily Harvest:

In the courts

BLACK FARMERS ALLOWED TO JOIN DEBT RELIEF CASE: A group of Black farmers have won the ability to intervene in the Miller v. Vilsack lawsuit in Texas, one of 13 legal challenges to USDA's $5 billion debt relief program for farmers of color authorized by the March 2021 Covid-19 relief package.

Let's recap: The Federation of Southern Cooperatives/Land Assistance Fund in October filed a motion to intervene in the case, including designations from six farmers alleging discrimination from USDA and Farm Service Agency loan programs, as your host and Josh Gerstein previously reported.

The farmers argue that debt relief is key to their businesses' survival and that Agriculture Secretary Tom Vilsack and DOJ attorneys can't be counted on to defend the debt relief program as vigorously as the Black farmer federation will.

Now, a federal appeals court has reversed a previous lower court ruling and allowed the group to enter the case . The decision notes that "a U.S. Secretary would likely heartily deny that their agency is currently discriminating against people based upon race" and therefore groups like the Federation of Southern Cooperatives/Land Assistance Fund might receive inadequate representation.

"This is a critical decision," said Dania Davy, the group's director of land retention and advocacy. "By guaranteeing the Federation's right to intervene, the Court ensured that the ongoing, race-based discrimination our member-farmers continue to face can be entered as evidence in the litigation, which will significantly strengthen the defense of this program's constitutionality."

Long road ahead: Although the new decision is a win for Black farmer advocates, there's still a long way to go before the program could be deemed constitutional. The Biden administration has been apprehensive to appeal to higher courts for fear of endangering other affirmative action programs. Meanwhile, injunctions and temporary restraining orders are still in place in other cases.

"We are contesting those cases," Vilsack said during USDA's inaugural Equity Commission meeting last month. "We are working through the system, and eventually, probably in the near future, we may very well be faced with one or more of those cases being decided. We will obviously do what we can to make sure that we pursue this debt relief opportunity."

DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE.

Row Crops

— First Lady Jill Biden will attend a U.S. Citizenship and Immigration Services naturalization ceremony and deliver remarks at the National Chavez Center. USCIS Director Ur Jaddou will administer the Oath of Allegiance and present a national award to United Farm Workers President Teresa Romero as an Outstanding American by Choice and Cesar Chavez President Paul F. Chavez will also deliver remarks.

— The race to be Florida's new agriculture commissioner is underway between Senate President Wilton Simpson and Chuck Nadd, a former Black Hawk pilot and Afghanistan veteran. POLITICO Florida's Gary Fineout has the story.

— High levels of PFAS "forever chemicals" were found in the packaging of popular fast-food restaurants, according to a Consumer Reports investigation. CNN has more.

— After intense drought and heat hampered potato farmers in Idaho and Washington last year, Maine is stepping up its potato production again to help meet the demand. The Wall Street Journal has the story.

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

A message from Daily Harvest:

If you believe in organic farming, drop us a line organic@daily-harvest.com

This year Daily Harvest took our mission to support organic farming a step further. We partnered with American Farmland Trust (AFT) and California Certified Organic Farmers (CCOF) to provide historically underserved farmers with resources and opportunities to successfully make the transition. Food can either fuel our climate and health crises or be the solution. Which side of history will you be on?

LEARN MORE.