For The Week Ending April 11, 2014
SENATE, HOUSE AGRICULTURE COMMITTEES MOVE ON CFTC NOMINEES, REAUTHORIZATION
The Senate Agriculture Committee Tuesday approved nominees for the Commodity Futures Trading Commission (CFTC). Nominees for commissioner include Timothy Massad of Connecticut, who also would serve as chairman; Sharon Bowen of New York; and J. Christopher Giancarlo of New Jersey. Committee Ranking Member Thad Cochran, R-Miss., said he supports Giancarlo’s confirmation because of his knowledge of swaps markets but expressed concern with his and Bowen’s lack of experience in agriculture and futures markets. Committee member Saxby Chambliss, R-Ga., expressed opposition to Bowen’s nomination because of his lack of agriculture experience. Committee member John Hoeven, R-N.D., said he wants all of the nominees to learn more about agriculture before serving on the CFTC. The three nominees now are ready for consideration by the full Senate. Click here to watch the hearing. In related news, the House Agriculture Committee Wednesday passed H.R. 4413, “To reauthorize the Commodity Futures Trading Commission, to better protect futures customers, to provide end users with market certainty, to make basic reforms to ensure transparency and accountability at the Commission, to help farmers, ranchers, and end users manage risks to help keep consumer costs low, and for other purposes.” NPPC was instrumental in getting included in that bill language that would further prevent comingling of customer funds, which was the key issue in the MF Global disaster. NPPC also worked closely with other agricultural organizations to prevent language that would have required producers to “pre-fund” margin call accounts. NPPC was supportive of the House Agriculture Committee-passed bill.
SMALL BUSINESS TAX BREAK LEGISLATION INTRODUCED, AGRICULTURE GROUPS APPLAUD
NPPC, along with 36 other agricultural organizations, Monday signed onto a letter applauding the House Ways and Means Committee for addressing expired tax provisions. The groups offered support and advice as to why it is important for Congress to renew certain areas of the expired tax code, with specific focus on the Section 179 small business expensing and bonus depreciation. Section 179 allows producers to write off capital expenditures in the year that purchases are made (rather than depreciate them over time). Click here to read the letter. In related news, the Ways and Means Committee Tuesday held a hearing to examine the worth of implementing a permanent tax policy for employers and difficulties caused by tax policies that often expire and are extended for short periods of time. Click here to read testimonies. One day after the hearing, Reps. Pat Tiberi, R-Ohio, and Ron Kind, D-Wis., introduced legislation that would permanently let small businesses immediately deduct up to $500,000 of investments in equipment and property. The bill would permanently renew the expanded Section 179 expense thresholds that expired at the end of 2013 and would modify those levels for depreciation.
USDA ISSUES RULE FOR EMERGENCY LIVESTOCK ASSISTANCE
The U.S. Department of Agriculture this week issued a rule implementing requirements for the Emergency Assistance for Livestock Program (ELAP), which was authorized by the 2014 Farm Bill. ELAP losses must have occurred on or after Oct. 1, 2011, to be eligible for payment. The rule specifies how payments are calculated, what losses are eligible and when producers may apply for payments. NPPC is currently working with USDA and Congress to include losses from Porcine Endemic Diarrhea Virus under ELAP for eligible producers. Click here to read the rule.
SENATE HOLDS HEARING ON RFS
The Senate Agriculture Committee Tuesday held a hearing titled “Advanced Biofuels: Creating Jobs and Lower Prices at the Pump” to survey the role of advanced, non-food-based biofuels in the rural economy. The committee also collected information to persuade the U.S. Environmental Protection Agency not to follow through on its proposal to cut the Renewable Fuel Standard (RFS). Much of the hearing’s focus was on EPA’s proposed changes to the volume requirements under the 2014 RFS, on the petroleum industry and hurdles to the success of the renewable fuel industry and on guarding the RFS. Witnesses included Richard Childress of Richard Childress Racing LLC, Jan Koninckx of DuPont Industrial Biosciences, Brooke Coleman of the Advanced Ethanol Council, Dr. Sumesh Arora of Innovate Mississippi and Nancy Young of Airlines for America. The EPA is expected to announce its proposal to adjust RFS levels for 2015 by June 2014. Click here to read testimony and watch the hearing.
NPPC BRIEFS CAPITOL HILL STAFF ABOUT ANIMAL ANTIBIOTICS, FDA REGULATIONS
Representatives from NPPC, the American Veterinary Medical Association and the Animal Health Institute Thursday held separate briefings for House and Senate staff on “The Impact of FDA’s New Policy on Antibiotic Use in Food Animals.” The Food and Drug Administration’s recent finalization of Guidance 213 and release of proposed rule regarding Veterinary Feed Directives (VFDs) establish, respectively, a three-year timeframe for phasing out growth promotion uses of antibiotics important in human medicine and phasing in veterinary oversight of these products. The panel included NPPC Chief Veterinarian Dr. Liz Wagstrom, Animal Health Institute Vice President of Regulatory, Scientific and International Affairs Dr. Richard Carnevale and American Veterinary Medical Association Assistant Director of the Division of Scientific Activities Dr. Christine Hoang. Click here for a photo.
USTR’S FROMAN TRAVELS TO JAPAN
U.S. Trade Representative Michael Froman this week traveled to Japan to meet with his Japanese counterpart, Akira Amari, in an effort to close the remaining issues in the Trans-Pacific Partnership (TPP) trade talks before President Obama’s state visit to the island nation later this month. Ambassador Froman reported, “We made some progress, but we still have gaps between us.” The TPP is a regional negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global GDP. Japan is still demanding special treatment for its agriculture sector, including exemption from tariff elimination of certain “sensitive” products. Japan is an important market for U.S. agriculture – the fourth largest – which shipped $12.1 billion of food and agricultural products to the island nation in 2013. It wants exemptions for 586 tariff lines, or 11 percent of its tariff schedule. In the 17 free trade agreements (FTAs) the United States has concluded since 2000, only 233 tariff lines combined have been exempted from going to a zero tariff. If the United States meets Japan’s demands, NPPC has pointed out, it would open the door to tariff line exemptions from other countries in the TPP and in future U.S. trade deals, establishing a dangerous precedent and denying growth opportunities worth billions of dollars and tens of thousands of U.S. jobs.
JAPAN AND AUSTRALIA REACH FINAL TRADE AGREEMENT
Japan and Australia came to a final agreement on a basic Bilateral Trade Agreement this week, cutting import tariffs on many products. Both countries are members of the Trans-Pacific Partnership (TPP) negotiations, a regional negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Although tariffs on Australian frozen beef were halved, the concessions made by Japan in the Japan-Australia deal to cut tariffs on sensitive agricultural products are not deep enough for the ambitious goals of the TPP. In a press release this week, NPPC again called on Japan to eliminate all tariff and non-tariff trade barriers for U.S. agricultural products as part of the ongoing TPP negotiations. NPPC President Dr. Howard Hill, a pork producer from Cambridge, Iowa, said U.S. farmers and ranchers likely would agree with House Ways and Means Committee Chairman Dave Camp, R-Mich., who last week said that if Japan is not ready to participate in a high-standard, 21st century agreement, which means elimination of tariffs, it needs to exit the negotiations. National Cattlemen’s Beef Association (NCBA) President Bob McCan said in a press release, “NCBA is deeply concerned that the Bilateral Trade Agreement between Japan and Australia does not call for full tariff elimination. This Bilateral Agreement undermines the long-standing goals and principles that are the base of the Trans-Pacific Partnership (TPP).” U.S. Trade Representative Michael Froman also stated on Tuesday that a higher level of trade liberalization must be achieved in the TPP than was agreed upon in the Japan-Australia deal. Japan wants to protect its tariffs on five farm product categories – rice, wheat, beef and pork, dairy products and sugar – while the U.S. is pushing for further tariff elimination. In 2013, the U.S. exported 424,857 metric tons of pork, valued at $1.9 billion, to Japan. A final TPP agreement that does not eliminate all tariffs and non-tariff barriers on U.S. pork products will negatively affect U.S. pork exports for the next 20 years, meaning billions of dollars less in U.S. pork sales and tens of thousands fewer U.S. jobs.
NO CAPITAL UPDATE NEXT FRIDAY
Congressional lawmakers began a two-week recess today; they return to Washington April 28. Capital Update will not be published next week.
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