Behind Biden’s plan to bump up farm subsidies- POLITICO

With help from Meredith Lee and Hannah Farrow

— Lawmakers and ag economists are scratching their heads about President Joe Biden’s proposal to boost farm subsidies as a way to increase U.S. crop production and counteract global food shortages stemming from Russia’s war in Ukraine.

— Top Democrats are pouring cold water on hopes for immigration reform this year, even as some members claim they’re still trying to pass legislation that would help farmworkers achieve a pathway to legalization.

— The EPA has formally moved to allow summertime sales of 15 percent ethanol blends of gasoline, at least for a few weeks, in response to steep gas prices that are causing drivers plenty of pain at the pump.

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BIDEN LOOKS TO BOOST FARM SUBSIDIES: As part of a $33 billion funding request for Ukraine, the Biden administration last week proposed sending $500 million to American farmers with a goal of boosting production of wheat, soybeans, rice and other commodities, in order to make up for some of Ukraine’s food exports that have dried up since the Russian invasion.

But some agricultural economists say they’re unsure why the administration would move to boost subsidies for crops that are already fetching high prices, our Meredith Lee reports.

“I don’t think that this sort of intervention from the government makes any sense, other than to read it in a pure political sense, that this is something they feel like they need to do,” said Joe Glauber, former chief economist at USDA during Agriculture Secretary Tom Vilsack’s previous tenure during the Obama administration.

The funding request includes food aid programs that buy U.S. commodities and send them to countries in need, including many in Africa and the Middle East that relied on Ukraine and Russia for staples like wheat and sunflower oil and are now reeling from shortages and price spikes.

By the numbers: Under the Biden administration’s proposal, $100 million would go toward providing a $10-per-acre payment to farmers who plant a soybean crop after a winter wheat crop in 2023. Another $400 million would fund a two-year increase in loan rates for U.S. producers to encourage them to grow more select food commodities, including wheat, rice and oilseeds like soybeans, sunflowers and canola.

The Agriculture Department claims the proposal would help stabilize rising U.S. food prices and provide food for foreign countries in need, by helping American farmers grow 50 percent of the wheat normally exported by Ukraine, among other things. That plan, however, would probably also require the U.S. to step up funding for federal aid programs that buy and ship U.S. commodities abroad. Otherwise, wealthier countries like China would likely buy up the extra supply on the open market.

Biden’s proposal comes despite prior statements by key White House and USDA officials that high commodity prices alone would encourage U.S. farmers to increase their crop production and help meet global demand in the wake of Russia’s invasion of Ukraine. The president on Thursday described the plan as “good for rural America, good for the American consumer and good for the world.”

USDA said the funding would give farmers access to low-cost credit to cushion the impact of high fertilizer prices and other agricultural input costs that are soaring. The administration is under immense political pressure from farm-state lawmakers and voters to alleviate some of that financial pressure, with months to go before the November midterm elections.

GOP skepticism: Even some Republicans who argue the U.S. needs to increase crop production to fill supply gaps, and who have criticized Biden for not doing more to support farmers facing steep input costs, are wondering how much the new proposal will help. Like Glauber, they’re especially skeptical about the use of loan rates as incentives to increase production.

“I’m not exactly sure how loan rates are going to be helpful,” said a senior Senate Republican aide. “Loan rates really give producers liquidity to hold onto a harvested crop until they market it. I don’t know if they encourage more production.”

Some support: Former North Dakota Sen. Heidi Heitkamp, who has long pushed Democrats in Washington to pay more attention to agricultural policy and rural voters, said she hopes Congress approves the White House funding request. Heitkamp said prices could dip next year and the move would help provide farmers with the “certainty” they need to plan and increase next year’s crop, when global supplies appear most at risk.

But even Heitkamp acknowledged it will be difficult to significantly boost U.S. wheat production, as many of the wheat-growing regions in the West are still recovering from last year’s devastating drought.

DEMS THROW IN THE TOWEL ON IMMIGRATION: Top Democrats who have been working to land some sort of deal on immigration policy are beginning to acknowledge that a breakthrough is all but impossible ahead of November’s midterms, report POLITICO’s Marianne LeVine, Sarah Ferris and Laura Barrón-López.

Sen. Bob Menendez (D-N.J.), a lead sponsor of Biden’s signature immigration bill that would provide a pathway to legalization for farmworkers and enact a slew of workplace reforms in agriculture, told POLITICO that the chances of passing a comprehensive immigration overhaul are “zero.”

Still, bipartisan talks continue: A handful of senators in both parties met last week about a potential immigration package, though participants warned the discussions are in early stages. Among the potential bipartisan bills that could move are reforms for immigrant farmworkers.

Reps. Dan Newhouse (R-Wash.) and Salud Carbajal (D-Calif.) held a press conference on the Capitol lawn last week to encourage senators to pass the House’s bipartisan Farm Work Force Modernization Act. The bill would provide a pathway to legalization for farmworkers and expand access to H-2A visas for producers. It’s also backed by many rural Republicans.

“Urgency in the Senate is growing, I think a lot of people understand the need to get this done,” Newhouse told your host, adding that he had recently spoken with Idaho Sen. Mike Crapo, a potential GOP co-sponsor. Crapo and Sen. Michael Bennet (D-Colo.) are still working towards introducing a Senate version of FWMA, sources familiar with Senate talks told your host.

But, but, but: That’s been the state of play for nearly a year. Republicans are almost guaranteed to insist that border policy ch
anges get added to any legislation moving through the chamber

E15 EMERGENCY WAIVER ISSUED: The EPA on Friday issued an emergency waiver that allows summertime sales of gasoline blends with 15 percent ethanol, as the administration looks to bring down sky-high gas prices inflated by Russia’s war in Ukraine, reports Pro Energy’s Kelsey Tamborrino.

Limited reach: The White House estimates about 2,300 gas stations are equipped to sell E15, largely in the Midwest. That represents less than 2 percent of gas stations nationwide.

A bit of pushback: Oil refiners and some environmental groups had panned the administration’s initial announcement of the emergency waiver, with some refiners calling it a political ploy that won’t do much to lower gas prices. The White House has estimated the waiver could save a driver 10 cents per gallon, on average.

Meanwhile, the EPA reiterated Friday that it does not expect any impact on air quality.

What’s next? The emergency fuel waiver went into effect on Sunday and will last until May 20 — the maximum time allowed for an emergency fuel waiver.

EEL-LEGAL ACTIVITY: American Eel Depot — the largest U.S. importer and distributor of eel meat — and eight of its employees were charged with smuggling millions of dollars worth of European eel into the U.S. It’s been illegal since 2010 to export European eel out of any EU country.

Charges: The defendants also violated the Lacey Act and conspired to violate the Endangered Species Act, according to the Justice Department. (The Convention on International Trade in Endangered Species wildlife protection treaty protects European eel, which the U.S. enforces through the Endangered Species Act.)

“This indictment sends a clear message to individuals and corporations that if they unlawfully profit and decimate wildlife, domestically or abroad, investigators will work tirelessly to seek justice,” Edward Grace, assistant director of the U.S Fish and Wildlife Service’s Office of Law Enforcement, said in a statement.

The crackdown: The government seized six containers of European eel that were mislabeled as American eel to throw officials off the scent. The indictment alleges the smugglers — based in New York, New Jersey and China — intentionally lied to U.S. authorities to avoid detection.

The defendants “conspired to unlawfully smuggle large quantities” of live baby eels out of Europe to a factory in China, according to DOJ. The factory would then grow the eels to maturity, slaughter and process them, and ship them to the U.S. to be sold for sushi. Over the course of four years, the defendants imported about 138 containers full of eel meat, worth about $160 million in market value.

— Jim McGreevy will be vice president of public policy and federal government relations at Coca-Cola. He’s currently president and CEO of the Beer Institute.

— Western Democrats are urging House Appropriators to raise federal firefighter wages to $20 an hour as part of the upcoming fiscal 2023 government spending bills. Read their letter here.

— Sen. Kevin Cramer (R-N.D.) sent a letter to Farm Service Agency Administrator Zach Ducheneaux, asking him to review the pay rate from the Department of Agriculture’s Livestock Indemnity Program. Cramer is concerned that the current rate will not fully compensate producers for their losses from recent natural disasters. Read the letter here.

— Appropriators last week launched negotiations on the defense and domestic spending totals for fiscal 2023, with a goal of reaching agreement on topline numbers before the summer. Pro Budget’s Jennifer Scholtes has the story.

— Global fertilizer shortages are forcing farmers to adapt their crop-growing techniques, pushing the limits of how much they can grow with as little chemical fertilizer as possible. Bloomberg has the story.

— For the first time ever, emissions from a California livestock operation were recorded from space. It’s a significant development toward measuring agricultural emissions of methane, a potent greenhouse gas that contributes to climate change, Reuters reports.

— Illegal cattle ranching is driving deforestation in the Amazon, and meatpacking giant JBS has yet to cut ties from the illicit supply network, according to a Washington Post investigation.

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