With help from Doug Palmer, Leah Nylen and Meredith Lee
— Agriculture Secretary Tom Vilsack has turned down requests from GOP lawmakers and ag industry groups to bring farmland out of conservation programs and back into production as Russia’s war in Ukraine sparks a potential food crisis.
— Antitrust prosecutors want to try one more time to convict former poultry executives of conspiring to fix prices, but a federal judge appeared skeptical of allowing yet another trial.
— California’s shrinking snowpack is raising concerns about the state’s ongoing drought, while USDA has announced a new program that might bring ag producers some relief.
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VILSACK SAYS NO TO ENLISTING CONSERVATION LAND: The ag secretary poured cold water on Republican and industry calls to pull land out of the Conservation Reserve Program and put it back into production, even as the conflict in Ukraine poses food security risks worldwide.
“Quickly converting this land to crop production is clearly unfeasible, even if we were to overlook the negative consequences of increased erosion and reduced water quality, wildlife habitat reduction, and decreased carbon sequestration and storage,” Vilsack wrote in a letter to the National Grain and Feed Association obtained by MA.
Quick recap of CRP: Under the conservation program, ag producers are paid a yearly rate to remove “environmentally sensitive” cropland from production for a decade or longer and take steps to improve the land’s health. They can receive higher payments by adopting certain climate-friendly practices that improve water quality, increase carbon sequestration or protect wildlife habitats (although, as POLITICO reported, the program has significant limitations). Landowners enrolled 5.3 million acres through CRP in 2021.
Following Russia’s invasion of Ukraine, Republicans including Senate Ag ranking member John Boozman (Ark.) urged Vilsack to allow production of various grains on CRP-enrolled land, as a way for the U.S. to help combat global food insecurity caused by the war.
Why Vilsack isn’t on board: The secretary notes that acres enrolled in CRP are largely non-prime farmland, with recent data showing only 1.3 percent is considered “prime,” essentially meaning high-quality land that’s ripe for production. He also notes that “a considerable proportion of currently enrolled CRP acres are in areas experiencing significant levels of drought,” and a majority of land enrolled is grassland or suited for grazing — not crop production.
In other words: “Production on those acres would be marginal at best, and there is no realistic way to convert all CRP acres into cropland in 2022,” Vilsack wrote. “It is critical to point out that if we allow the tillage of CRP acres, the marginal at best benefit to crop production will be coupled with a significant and detrimental impact on producers’ efforts to mitigate climate change and maintain the long-term health of their land.”
Reminder: The fear of a food supply shock stems from Ukraine and Russia’s outsized role as producers and exporters of much of the world’s wheat and other grains. The war has already put Ukraine’s harvest at risk, and as recently as Friday, an ally of Russian President Vladimir Putin threatened to limit the country’s ag and food exports to “friendly” nation’s only, in retaliation to Western sanctions.
The comments came just after Russia’s agriculture ministry imposed a quota on sunflower oil exports and banned exports of sunflower seeds and rapeseed. The U.N.’s food chief recently warned of dire consequences as food shortages in the fall could spark a migration crisis and political turmoil.
DOL KICKS OFF FARMWORKER WEEK: The Labor Department is kicking off “National Farmworker Week” with what the department dubbed a “broad effort by its Wage and Hour Division to improve compliance among the nation’s agricultural employers.”
The effort includes a virtua
l agricultural seminar, “Nourishing Equity and Cultivating Compliance,” from April 5 to 7, with sessions about federal laws governing ag employment and their enforcement.
Discussions of equity, retaliation and human trafficking in the agricultural sector will also be on the agenda this week, according to the department.
Context: In fiscal 2021, the department recovered $8.4 million in back wages for more than 10,300 agricultural employees and assessed employers with more than $7.3 million in civil penalties.
THIRD TIME’S A CHARM? Antitrust prosecutors want to try a third time to convict executives from Georgia-based Claxton Poultry and Pilgrim’s Pride, the U.S. poultry arm of JBS, after the first two price-fixing trials ended in hung juries. But the judge isn’t yet persuaded and has ordered the Justice Department’s top antitrust official to appear in Denver court later this week.
Prosecutors alleged that two of Pilgrim’s former CEOs conspired to fix prices on broiler chickens with eight other executives from Perdue, Koch Foods, Case Foods and Claxton. The company pleaded guilty to the charges and agreed to pay a $107 million criminal fine, but an eight-week trial against the executives last year ended in a mistrial with jurors unable to reach a verdict.
The Justice Department tried again, but a different set of jurors were still unable to reach a verdict for any of the 10 individuals, leading to a second mistrial last week.
After the unsuccessful retrial, prosecutors dismissed charges against five of the executives. But they’ve asked U.S. District Judge Philip Brimmer to let them try again with the remaining five execs: former Pilgrim CEOs William Lovette and Jayson Penn; Roger Austin, a former vice president at Pilgrim’s; and Claxton’s Mikell Fries and Scott Brady.
A repeat retrial is extremely unusual — so rare that no one keeps statistics on how frequently they occur. And Brimmer, a George W. Bush appointee and former federal prosecutor himself, seemed exasperated by DOJ’s request, ordering Assistant Attorney General for Antitrust Jonathan Kanter to appear in person in court on Friday. Kanter had been scheduled to appear alongside other U.S. and European competition enforcers at an antitrust conference Friday but now appears headed to Denver.
CALIFORNIA SNOWPACK YIELDS WATER WARNING: The Golden State’s shrinking snowpack has left the water supply at levels last seen during the worst part of the state’s prior drought, reports POLITICO’s Colby Bermel.
“What we see here today is actually very evocative of 2015,” said Karla Nemeth, the state’s water resources director. “There is growing evidence that suggests that perhaps this drought is actually a continuation of that very dry period we experienced several years ago.”
The backdrop: Drought conditions cost the state’s ag sector $1.7 billion last year alone, per a recent University of California study. Meanwhile, intense wildfires and drought throughout the West have left farmers awaiting federal disaster relief aid for 2020 and 2021 natural disasters — money they have yet to receive.
Lawmakers and USDA officials are pushing for faster disaster relief related to wildfire, smoke and drought damage to be front and center in farm bill negotiations, so that affected producers aren’t spending years waiting for aid.
SPEAKING OF WHICH: The department announced that ranchers approved through the 2021 Forage Disaster Program for losses due to drought or wildfires last year will now receive emergency payments through a new program: the Emergency Livestock Relief Program.
What’s the difference? The new program will assist livestock producers whose grazing or forage acreage was affected due to intense drought levels or wildfire risks specifically for 2021. Unlike WHIP+ (Wildfire and Hurricane Indemnity Program Plus), which would cover the impact of 2020 and 2021 natural disasters beyond just drought and wildfires on additional crops and ag products, ELRP focuses on feed aid for 2021 losses.
How it came to be: A spending bill passed by Congress last September included $10 billion for producers affected by natural disasters including wildfires, droughts, hurricanes, winter storms and other eligible disasters during 2020 and 2021, through the WHIP+ program.
The bill also included $750 million to provide assistance to livestock producers for losses incurred due to drought or wildfires in 2021. Per USDA, the new program is derived from that funding.
By the numbers: The Farm Service Agency received more than 100,000 applications for nearly $670 million in combined payments under Livestock Forage Disaster for the 2021 program year. Payments to eligible producers through the first phase of the new ELRP are estimated to total more than $577 million.
The equity angle: Payments could cover up to 90 percent of losses for historically underserved producers (including beginning, veteran or limited resource farmers and ranchers) and 75 percent for all other producers.
More to come: FSA is developing a two-part process to provide assistance to diversi
fied, row crop and specialty crop operations that were affected by an eligible natural disaster event in 2020 or 2021.
TAI SEES HOPE FOR EU MOVEMENT ON BIOTECH CROPS: U.S. Trade Representative Katherine Tai is expressing cautious optimism about the possibility of the EU opening its market to more U.S. biotech crops. But USTR’s latest annual report on foreign trade barriers shows the extent of the challenge.
“This has been a traditionally difficult area between the United States and European Union,” Tai said on Thursday at a Senate Finance Committee hearing. “Working with Secretary Vilsack, I do believe that the current disruptions to trade created by Russia’s invasion of Ukraine may provide us new opportunities and windows for collaboration with the EU, which we’re also seeking to capitalize on.”
In the queue: The U.S. is currently tracking 49 agricultural biotechnology product applications (including renewals) submitted to the EU, related to corn, soybean, rapeseed and cotton, USTR said in its foreign trade barriers report. Of those applications, 41 are under scientific review by the European Food Safety Authority and eight await action by the European Commission’s political committee process.
Slow going: The EU issued 12 approvals and six renewals for genetically-engineered crops in 2021, compared to one approval in 2020. “While these new authorizations were welcomed, the EU’s average approval time for new GE crops in 2021 was approximately five-and-a-half years,” USTR said. The EU’s legally prescribed approval time for such products is one year: six months for the EFSA review and six months for the political committee process.
— Drought conditions and water supply cuts are weighing on farmers in Arizona as they enter another planting season. CNBC has the story.
— The bird flu continues to infect chicken and turkey flocks across the country, including a significant number of cases in Iowa. Read more from The New York Times.
— Starbucks workers at a roastery in New York City became the latest group of employees to unionize, a trend that could influence other parts of the food industry. Eater has the story.
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