New administration promise pro-agriculture policies for U.S. governmentWritten by Emilee Gibb
Laramie – “As I look back at a Reagan quote, Reagan said, ‘As government expands, liberty contracts.’ I think what we’ve seen over the last eight years is the expansion of the federal government,” said American Farm Bureau Federation (AFBF) Director of Congressional Relations Ryan Yates.
He continued, “When we’re looking at how can we interact with this next Congress and with this next administration, we’re going to be looking for ways to come up with smarter government, not bigger government.”
Yates presented an analysis of the presidential election and future implications for the agricultural industry during the Wyoming Farm Bureau Federation’s 97th annual meeting on Nov. 10-12.
He noted that the AFBF is “hopeful that we will ensure agricultural and rural resource issues will be front and center within the first 100 days of the election cycle.”
Against the predictions of pollsters across the nation, Donald Trump won several swing states in the Electoral College.
“Looking at just a week before the election, we saw Hillary Clinton favored to win in Pennsylvania, Wisconsin, North Carolina and Florida. These were states that the pollsters got wrong,” commented Yates.
He noted that while the pollsters were incorrect prior to the election, the data collected about why voters made their voting decisions is useful for determining how the outcome occurred.
“We had a very deeply pessimistic electorate. While we had some very unpopular candidates, the majority of people believed that the country was going in the wrong direction, with only one of three voters thinking that this country was going in the right direction,” Yates continued.
In late October, there was an announcement for ObamaCare, or the Affordable Care Act, that the premiums for next year showed dramatic increases for families that would be enrolling in the exchanges.
“There were several states with over 100 percent increases in those premiums. There was a lot of concern moving into this election cycle concerning the campaign about the Affordable Care Act and the fact that the Act was ultimately not affordable,” said Yates.
He noted that many voters were searching for a change, with it being a top priority over terrorism and the economy.
“Going back to the belief now that the country is going in the wrong direction – people just wanted something different. Donald Trump proved to be that different type of a candidate,” explained Yates.
“Looking at who showed up to vote, ultimately this election cycle was about the base,” said Yates.
It was predicted that there would be an increase in certain demographics including women voters, new voters and Latino voters.
“Ultimately, there was an understanding or a thought that we would see big surges in certain demographics that just didn’t occur,” he explained.
Only 10 percent of voters were new voters this election cycle, with the majority of those voting for Hillary Clinton, and other demographics did not see any major changes.
“The female turnout in this election cycle went down from four years about by about one percent, and Latino turnout only managed to go up by one percent,” said Yates.
The silent voters who tipped the election in Trump’s favor were the rural voters.
“In rural and blue collar parts of the country, Donald Trump did very well. I think that was discounted in some of the early models that the polls looked at,” he continued.
When compared to campaigns in the past two cycles, Trump was more successful with minority groups.
“Trump did better with Hispanic voters than we saw in years past,” said Yates.
AFBF anticipates that President-elect Trump will be a conventional Republican in terms of tax policies.
“He’s come out very strongly in favor of rolling back regulatory pressures that we’ve seen in the last eight years under President Obama’s Administration,” said Yates.
Trade and opening new trade agreements is a critical element of the agricultural industry.
“In terms of Donald Trump’s position on the Trans-Pacific Partnership (TPP), the current TPP, for all intents and purposes, is dead to the extent that new negotiations will come forward,” explained Yates. “Likely, things will be slowed significantly on the trade front.”
The Trump Administration has indicated to AFBF that it is understanding of the challenges facing agriculture in terms of farm labor and immigration.
“We hope to work with the Trump Administration on comprehensive immigration reform,” said Yates.
Federal overreach through regulations such as the Clean Water Act and Waters of the U.S. that have caused significant harm to agriculture and natural resource development is a top concern for the western states including Wyoming.
“The Trump campaign has been very positive in terms of our requests for changes on the regulatory front, so we are excited about the opportunities that we’ll have there,” he explained. “He has been very clear that he will appoint pro-agriculture appointees to these key cabinet positions, and we’re going to hold him to it.”
New policy: Economist analyzes trends, looks to upcoming farm billWritten by Natasha Wheeler
Montana State University Economics Professor Vince Smith expects the next Farm Bill to be released in 2019, although it is scheduled for 2018.
“We have not had a farm bill at its scheduled time since 2002,” he noted, adding, “2018 is also an election year for congress, and in general, the House and Senate Agricultural Committees prefer to see bills passed in non-election years for a whole variety of reasons.”
Smith discussed current programs and addressed possible discussion for future farm bill legislation in an April 19 webinar hosted by Ag in Uncertain Times.
He believes that the 2014 Farm Bill continues a 25-year shift in subsidies toward crop insurance and other farm safety net programs. There has been almost a complete shift away from traditional price support subsidy programs at the same time.
“Over the past 15 years, U.S. farm lobbyists, particular USDA administrators and congressional Agriculture Committee members, have increasingly chosen to describe Title I and Title XI programs as risk management and farm safety net programs. While those programs increase farm incomes and reduce participating farm’s risk of going out of business, they do anything but reduce overall risk taken by the farm sector,” he explained.
The programs incentivize risk, he noted, and they transfer the consequence of risk away from the individual farm or ranch and onto the taxpayer.
From 1996 through the current farm bill, traditional payment programs have decreased, conservation spending has increased, and crop insurance programs have increased significantly.
Addressing expected points of discussion for the upcoming farm bill, Smith said, “Budget will always be an issue, and the baseline will be the initial focus of the discussion. The baseline for the farm bill is close to $100 billion a year, of which the majority is allocated to nutrition programs.”
Despite the Republican push to separate nutrition from the farm bill, Smith does not expect the issue to be a subject of debate for 2018.
“Another issue concerns Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Those programs were put in place to replace direct payments, which were roughly $5 billion a year. The claim was that the programs would cost roughly $2 billion less,” he remarked.
Current indications suggest that ARC and PLC could cost nearly $1.5 billion more than direct payments, and that figure will likely be a point of concern in discussions regarding the next farm bill.
“ARC and PLC are likely to cost about 90 percent more than what was claimed by the House and Senate Ag Committees prior to the passage of the 2014 Farm Bill. That has not gone unnoticed by interest groups critical of farm spending, some of whom are influential,” he said.
Although they are sometimes referred to as crop insurance programs, Smith also noted that ARC and PLC programs do not include premiums, and payments are not associated with production.
“Those programs raise World Trade Organization (WTO) issues that are far more severe than those associated with the now defunct direct payments program, which they essentially replaced,” he said.
Smith also noted, “The ARC-PLC choice has been widely viewed as overly complicated by many farmers, and the structure of the program may be revisited.”
Crop insurance continues to be the largest budget item, and interest groups from both the left and right have criticized the Harvest Price Option revenue contract, claiming it to be an expensive waste of money.
“Farmers don’t have that view because it suddenly pays out nicely for them on a net basis, but it has been identified on the left and right as an essentially heavily subsidized call program,” he stated.
The Obama Administration has argued over the last several years that the Harvest Price Option should no longer be subsidized, and it appears that the message is resonating in some areas of congress.
“Conservation programs may also be revisited,” Smith predicted.
Commodity prices that remain at current or more moderate levels may encourage farm groups to push for a more expansive Conservation Reserve Program (CRP), and Smith guesses the money could be transferred from the Conservation Stewardship Program (CSP).
“Beyond the farm sector, CSP is being criticized as a subsidy program targeted at states like Iowa,” he commented, adding that the original proposer of the program was a congressman from Iowa. “We could see a reallocation of funds between the CRP and CSP.”
Lastly, Smith mentioned that environmental issues will also be included in farm bill policy discussions progressing toward 2018, as environmentalists and farm groups talk about expansion and production in potentially fragile areas of land.
Congressional panel addresses issues affecting western states at grasslands meetingWritten by Natasha Wheeler
Newcastle – Congressional staff from three western states spoke on a panel in Newcastle on Sept. 14 at the Association of National Grasslands annual meeting. They reviewed relevant issues in North Dakota, South Dakota and Wyoming.
“One of the things Sen. Hoeven (R-N.D.) has been involved in recently is acknowledging that it’s important for the Forest Service to utilize existing science when building biological capability studies,” noted Sen. John Hoeven’s western North Dakota Regional Director John Cameron.
Recent fires in the state have sparked conversations about how range and grazing areas should be managed.
“He is also trying to increase communication between the Forest Service and the grazing associations when environmental assessments and records of decision are being made,” Cameron continued.
Daryl Lies, district representative for Congressman Kevin Cramer (R-N.D.), added, “There are also concerns about science dealing with the Bighorn sheep and domestic sheep issue.”
In South Dakota, freshman Senator Mike Rounds (R) has been tackling issues concerning the Environmental Protection Agency’s (EPA) waters of the U.S. rule, President Obama’s Clean Power Plan and the sue-and-settle tactics often used in environmental policy cases.
“These are three examples of areas where Sen. Brown is really committed to addressing our government’s over-regulation problem,” stated Sen. Rounds’ staffer Katie Murray.
Sen. John Thune’s (R-S.D.) field representative Mark Haugen addressed budget concerns related to fighting wildfires and protocols for listing endangered species.
“In the Black Hills, we are facing the potential listing of the northern long-eared bat,” he said. “They are dying from a disease called white-nosed syndrome. They are not dying because their environment is being destroyed.”
Representing Wyoming Sen. Mike Enzi (R), DeAnna Kay noted that Sen. Enzi is concerned about many of the same issues discussed by other congressional staff representatives and echoed statements supporting better science backing federal policies.
“Sen. Enzi is the lead sponsor on a bill that would require the federal government to consider science prepared by state, local and tribal biologists and wildlife experts when making a determination under the Endangered Species Act,” she remarked.
Some of the main concerns for Wyoming Congresswoman Cynthia Lummis (R-Wyo.) include controlling government spending and public lands issues.
“Congresswoman Lummis and Congressman Rob Bishop (R-Utah) recently held a field hearing near Evanston, mainly concerning H-2A visas and having to pay sheepherders more money, which would have huge impacts on the wool market,” commented Congresswoman Lummis’ field representative Matt Jones.
He also stated, “As a rancher and a person who has worked the land, public land issues are a passion of hers.”
In conclusion, Jones reiterated the sentiments of the congressional panel as attendees of the Association of National Grasslands annual meeting. He noted that it provided a good opportunity for federal officials to gain insight about the real issues affecting the people of the western states.
“Being here, I have heard some good things discussed. I want to thank everyone, including the local elected officials for being here,” he said.
Department of Labor releases final H-2A ruleWritten by Saige Albert
On Oct. 13, the Department of Labor (DOL) announced their Final Rule on the employment of foreign workers in jobs related to herding of livestock on the range, including the herding of sheep and goats.
“The regulation, the H-2A Herder Final Rule, implements a methodology to address wage stagnation and prevent adverse effects on U.S. workers,” said DOL in their release.
“The rule is better than we anticipated, but there are a lot of details to look at and sort through,” said Wyoming Wool Growers Association (WWGA) Executive Director Amy Hendrickson. “We are grateful that DOL has listened to the industry. They took industry comments to heart and really tried to shape the program to meet their goals but also to not put sheep producers out of business.”
The American Sheep Industry Association (ASI) commented that the work of ASI, Mountain Plains Agriculture Service and Western Range Association led to the submission of nearly 500 comments.
“The rule followed much of the sheep industry’s proposed methodology concerning two critical issues that arose in the original DOL proposal earlier this year – open range and wages,” ASI said.
Inside the rule
Among the concerns with the initial rule, the definition of “open range” was a big concern for sheep producers.
Sheep producer Shaun Sims of Evanston, who testified at a congressional hearing about the rule in August, commented, “They did away with the language about fencing, but they added ‘cultivated land.’ That might be problematic for producers in California or producers who bring their lambs and sheep into field in the fall.”
Former ASI President Clint Krebs of Oregon added that federal officials also greatly modified their proposal specifying ranches would be eligible to hire sheepherders under the H-2A program provision.
“We estimated 40 percent of the ranches that have hired sheepherders for decades would not have been eligible due to a proposed definition involving fencing where sheep graze,” Krebs said.
The wage rate was also addressed in the final rule, and Hendrickson said, “The wage rate in the rule is very similar to what was proposed by the industry as a solution.”
DOL stated, “Under the final rule, employers must pay a wage that equals or exceeds the highest of a monthly pay rate, a collective bargaining agreement wage or an applicable minimum wage set by court or law. Under the rule, the monthly pay rate for all range occupations will use the federal minimum wage of $7.25 per hour and a 48-hour workweek.”
“The Department will implement a wage formula tied to the federal minimum wage similar to our recommendation, and while it is a significant cost increase that won’t fit all ranches, the modification at least provides most farms and ranches the opportunity to sustain their sheep operation,” said ASI Executive Director Peter Orwick. “The proposal of the department in April to triple monthly wages would have put the majority of sheep producing families out of business.”
The wage rate will be phased in over three years, with full implementation beginning in 2018.
“Although it isn’t as drastic as had been proposed, the wage will change operations,” Sims explained. “Some operations will not be able to afford labor at the new rates, but it is considerably better than what was proposed.”
The rule also establishes housing standards, including water requirements and circumstances where heat must be provided.
“Another highlight of the rule was a requirement of 4.5 gallons of water per man per day, which is not a big deal,” Sims said. “The enforcement will be important, though.”
For example, Sims posed that, if he hauls enough water to herders to last a week, and they have two gallons left on the day he delivers, will he be in violation of the rule?
“How they interpret the rule will be important and could set people up for non-compliance,” he continued.
Another aspect of concern is the requirement to provide cold weather clothing.
“I think there is a lot of interpretation that could be interpreted poorly for producers,” Sims said.
Delving into details
Hendrickson and Sims both noted that there are many aspects of the rule that are unclear, but as they comb through the details and as implementation begins, a clearer picture on the impacts will emerge.
“The devil is in the details,” Sims said. “The rule is not as bad as it could have been, but there will be significant impacts.”
“This rule will have an impact, and the wages will go up quite high in some cases,” Hendrickson adds, “but we haven’t fully analyzed the rule yet.”
The final rule will become effective 30 days after the date of publication in the Federal Register.
Trans-Pacific Partnership agreement reached with finalized negotiationWritten by Saige Albert
Washington, D.C. – On Oct. 5, USDA Secretary Tom Vilsack announced that negotiations on the Trans-Pacific Partnership (TPP) have concluded, representing the announcement of a groundbreaking step in global trade efforts.
“Agreement on the TPP negotiations provides a more level playing field in trade for American farmers,” Vilsack commented. “Countries in the TPP currently account for up to 42 percent of all U.S. agricultural exports, totaling $63 billion.”
The agreement and removal of unfair trade barriers, Vilsack continued, opens further opportunities for agricultural products from across the nation.
“This is the largest, multi-lateral trade agreement of its kind,” he said. “This is a 21st century agreement. It is a high value, high standards agreement that will also allow the U.S. and member states to counter the Chinese influence and make sure everyone is encouraged to step up their game to the higher standards of the TPP.”
As a major contribution, Vilsack mentioned that the agreement includes elimination or reduction of tariffs across a broad spectrum of America’s agricultural products, including beef, pork, poultry, dairy, horticulture products, rice, grains, soybeans, wheat, cotton, processed products, alcohol and wine.
“Virtually every commodity group will see elimination or reductions in tariffs or expanded preferential access,” Vilsack noted.
A release from USDA said Japan’s beef tariff, currently as high as 50 percent, will be reduced to nine percent. Japan will eliminate duties on 75 percent of tariff lines, including processed beef products. Vietnam will eliminate tariffs and Malaysia will lock tariffs in at zero percent.
USDA Economic Research Service data from 2013 listed that beef and veal was Wyoming’s top ag export, followed by hides and skins, feeds and fodder, pork and wheat. Wyoming exports totaled $389 million in 2013, and 2,900 jobs were supported by exports in the state.
U.S. Meat Export Federation Senior Vice President Thad Lively commented, “The big prize here, I would say, for the meat industry is Japan and then after that probably Vietnam. Those are two markets where we historically faced very high duties.”
Among the benefits seen in the TPP, Vilsack said, “The agreement would deter non-science based sanitary and phyto-sanitary (SPS) barriers that have put American agriculture at a disadvantage in TPP countries in the past.”
Agriculture products, Vilsack said, have a history of being excluded from markets based on SPS rules not based on risk or science. Historically, biotechnology has been included in those SPS rules.
“The agreement also includes a significant nod to organic ag and the desire to be engaged in discussion about equivalences so we can reduce barriers to organic exports that may occur,” he added.
The agriculture industry largely commended USDA for their work in the agreement.
National Cattlemen’s Beef Association President Philip Ellis of Chugwater said, this agreement will boost U.S. exports.
“While the full details of the partnership will not be released until the President presents it to Congress, cattle producers are assured this is a true 21st century agreement,” said Ellis. “The TPP will immediately reduce tariffs and level the playing field for U.S. beef exports to these growing markets. TPP is a major win not only for the beef industry, but for all U.S. export products, growing the economy while supporting jobs and investments in agriculture and technology.”
American Farm Bureau Federation’s President Bob Stallman added, “The Trans-Pacific Partnership has promised to open restricted markets for American business around the Pacific Rim. The American Farm Bureau Federation looks forward to reviewing the details of the agreement reached today to guarantee it fulfills that promise for the nation’s farmers and ranchers.”
Though many in the ag industry were overall positive on the deal, some Congressmen expressed concerns.
Sen. Orrin Hatch (R-Utah) commented, “While the details are still emerging, unfortunately I am afraid this deal appears to fall woefully short.”
Sen. Bernie Sanders (D-Vt.) echoed concerns, adding, “Wall Street and other big corporations have won again.”
Sen. Sanders also said the agreement would hurt consumers and the American jobs market.
With an agreement reached, there are still several steps before the TPP is complete.
The final text of the TPP will be available in the next 30 days. Currently, teams of lawyers are reviewing the text of the document to ensure the language conforms with the intent of the agreement.
Congress has the power to either ratify or reject the agreement with an up-or-down vote, but they cannot amend the TPP.
U.S. Trade Representative Michael Froman told reporters on Oct. 5, “This is really a 2016 issue for Congress to consider, not a 2015 issue,” explaining that deliberations on the agreement would take months.
“There will be a process by which stakeholders, members of Congress and the general public will be provided information about the specifics of the agreement,” Vilsack said. “I think it is fair to say that agriculture is a winner, and we will do everything we can to make sure folks understand the historic nature and opportunity of this agreement.”