FarmPolicy

November 18, 2017

Cuba; Ag Economy; Policy Issues; Immigration; Biofuels; and, Regulations

Cuba- Trade Issues

Karen DeYoung reported on the front page of today’s Washington Post that, “The Obama administration announced new rules easing travel and trade restrictions against Cuba on Thursday, moving quickly to implement steps the president ordered less than a month ago when he said the United States would reestablish diplomatic relations with the island’s communist government.

“Freed from cumbersome requirements to obtain a Treasury Department license, individual Americans will be able to travel to Cuba provided they say the trip is intended to serve religious, educational or other approved purposes under the still-standing U.S. embargo. When they return, they can bring up to $400 in Cuban goods, including $100 worth of alcohol and tobacco.”

Today’s article explained that, “The new rules, which go into effect Friday, are President Obama’s latest use of executive authority to achieve a policy goal without involving Congress. Many lawmakers across partisan lines agree with him that a half-
century of isolation from the American people and goods have failed to move Cuba toward democracy or assist civil society or the still highly restricted private sector there.

“A relative handful, led by Cuban American senators Marco Rubio (R-Fla.) and Robert Menendez (D-N.J.), have called the measures an undeserved gift to Raúl Castro, who took over as president from his ailing brother Fidel nearly a decade ago, and said the moves stretch the embargo laws past the breaking point.”

Ms. DeYoung pointed out that, “Although Cuba has officially welcomed the changes, U.S. officials are unsure how far its government is willing to go in opening its doors to American visitors and trade. Even if Havana decides it wants to buy agricultural and medical goods, build new telecommunications infrastructure to give it greater access to the Internet, and buy construction materials to expand the private sector — areas that have now been newly expanded — the lackluster state of its economy may limit its ability to take advantage of the offer.”

The Post article added that, “Trade restrictions remain on most goods but have been eased to allow increased export of building materials and U.S. telecommunications and other technological goods to Cuba. Agricultural and medical supplies already were allowed, but only with a specific license and on a cash-in-advance basis. Now, specific licenses are not required, and a cash payment will be due only when goods arrive at a Cuban port.”

Reuters writers Anna Yukhananov, Matt Spetalnick and Krista Hughes reported yesterday that, “But the package of regulations issued by the Treasury and Commerce Departments, which will take effect on Friday, will allow U.S. exports of telecommunications, agricultural and construction equipment, permit expanded travel by Americans to the island and open banking relations.

“It was the first tangible U.S. step to implement economic changes Obama pledged on Dec. 17 when he and Cuban President Raul Castro announced plans to restore diplomatic relations between the old Cold War foes.”

The Reuters article indicated that, “In addition, a changed definition of ‘cash in advance’ payments required by Cuban buyers could help businesses, most notably U.S. agriculture, gain greater access to Cuban markets. The largest U.S. meat processor, Tyson Foods Inc, which already does some business with Cuba, hailed the changes.”

In a statement yesterday, House Ag Committee ranking member Collin Peterson (D., Minn.) indicated that, “We have a ready-made market in Cuba, just 90 miles off our coast, yet the current embargo gives this market away to other countries, putting American producers at a disadvantage. This legislation will significantly open the Cuban market for our nation’s farmers and ranchers, who have struggled to get their products to Cuba due to the cash in advance requirement and prohibition of direct transactions. I have long advocated for legislation to expand U.S. trade with Cuba and the Free Trade with Cuba Act does just that.”

And Sen. Jerry Moran (R., Kan.) stated yesterday that, “I am pleased to learn that the Treasury Department is following through on the decision to roll back antiquated polices related to U.S.-Cuba relations. Amending these regulations is not just about increasing commercial ties for agriculture producers in Kansas and across the country – I believe closer ties could help change the nature of the relationship between the Cuban people and their repressive government.”

Senate Ag Committee member Thom Tillis (R., N.C.) tweeted yesterday that, “Strongly disagree w/ the President’s desire to ease sanctions on ‪#Cuba, a gov’t that has not demonstrated commitment to democracy.”

And Alexander Bolton reported yesterday at The Hill Online that, “Sen. Bob Corker (R-Tenn.), Foreign Relations Committee chairman, said Thursday he plans to hold intensive hearings to examine President Obama’s decision to ease sanctions on Cuba.”

Also with respect to trade, Vicki Needham reported yesterday at The Hill Online that, “The nation’s top business leaders are urging Congress to grant President Obama expanded trade powers to help push through an ambitious global agenda.

“The Business Roundtable (BRTsent a letter to House and Senate leaders calling on them to pass trade promotion authority (TPA) legislation early this year as the completion of a massive Asia-Pacific agreement nears the finish line.”

Reuters news reported yesterday that, “Japan’s deputy chief trade negotiator Hiroshi Oe said on Wednesday he got the impression during talks that the United States intends to wrap up overall TPP discussions within a few months.

“Oe, speaking to reporters after talks with his counterpart Wendy Cutler, acting deputy U.S. trade representative, said he felt the United States is seriously trying to find common ground in their discussions.”

And Bloomberg writer Alan Bjerga reported yesterday that, “Russian President Vladimir Putin’s decision to stop grain exports to rein in inflation will boost sales of wheat from the European Union and Ukraine, two political adversaries, an analyst said.

“Putin’s latest economic policy — taxing exports to stem inflation fueled by his 2014 ban on EU imports — will effectively end Russian grain sales, removing a competitor for European producers, said Shawn McCambridge, a grain industry analyst with Jefferies LLC in New York.

“‘Banning exports is the kiss of death’ to customers who want reliable supplies, he said. ‘If the European Union has the quality, they’ll be big beneficiaries of Russia’s policy.’”

Mr. Bjerga added that, “Russian food inflation jumped 44 percent in the year through November, in part because of an August ban on imports from the EU to retaliate against Putin for actions in Ukraine, including the annexation of Crimea and support for continuing conflict in the region.”

 

Agricultural Economy

Bloomberg writer Brian K. Sullivan reported yesterday that, “Most of California will still be in drought in April even though conditions will probably improve across the southern part of the state, according to the latest forecast from the U.S. Climate Prediction Center.

“Seasonal rains and the potential for a weak El Nino forming in the equatorial Pacific have increased the chances for the drought to ease in southern California as it persists or gets worse in the central and northern areas, the center said in a three-month outlook, issued today.

“‘But it must be emphasized that improvement is not elimination, and that most of the state will still be in drought to some degree by the end of April,’ David Miskus, a forecaster at the center in College Park, Maryland, said in an analysis accompanying the forecast.”

The Bloomberg article noted that, “California has suffered three years of drought, and water in the nation’s most productive agricultural region has been rationed.”

See also this graph from the Los Angeles Times showing “California’s drought level mid-January, 2011-2015.”

And a tweet yesterday from the National Oceanic and Atmospheric Administration (NOAA) indicated that, “‪#Calif exceptional ‪#drought ⇧ to 39.15%; 98%+ of ‪#CA still in drought: ‪http://droughtmonitor.unl.edu/data/jpg/20150113/20150113_CA_trd.jpg … via ‪@DroughtGov

 

Policy Issues

AP writer Christine Armario reported yesterday that, “Many of the students at Kingsley Elementary School in a low-income neighborhood of Los Angeles eat breakfast and lunch provided by the school. For the nearly 100 enrolled in the after-school program, another meal is served: supper.

“The nation’s second largest school district is doubling the number of students served dinner, with an eye toward eventually offering it at every school. It’s a growing trend: Nationwide, the number of students served dinner or an after-school snack soared to nearly 1 million last year.”

The AP article stated that, “Thirteen states and the District of Columbia began offering students dinner as part of a pilot program expanded to all states after the 2010 passage of the Healthy, Hunger-Free Kids Act. Schools where at least half the students are low-income and qualify for free or reduced-price lunch are reimbursed for each supper by the U.S. Department of Agriculture, at a rate often significantly higher than the cost of the meal.

In the 2014 fiscal year, 104 million suppers were served to students, up from about 19 million in 2009. Participation is still lower than in the nation’s long-running breakfast and lunch programs, which serve more than 12 million and 31 million students, respectively.

The introduction of dinner to school routines is unique in that it could take the place of what many consider a near-sacred ritual: The family dinner.”

And KJ Dell’Antonia reported this week at the Motherlode blog (New York Times) that, “Does one of your children bring home a nearly full lunch box every day? Or come home ‘starving’ and head straight for the fridge?

Then it’s likely her recess is after lunch, not before — and likely, too, that the reward for zipping your lunch box or dumping the tray is getting to head straight out the door.

“Research has long suggested that students who have recess before lunch rather than after waste less food. A newly published study gets more specific: Students purchasing a national school lunch are required to take either a serving of fruit or vegetables with their lunch. The researchers, David Just of the Cornell University Food and Brand Lab and Joseph Price, an economics professor at Brigham Young University, observed students at seven schools, three of which moved lunch to after recess and four of which continued to serve lunch before recess. Students at the schools that made the change increased consumption of fruits and vegetables by 54 percent and increased the fraction of children eating at least one serving of fruits or vegetables by 45 percent. Moving recess appeared to make a difference.”

Also yesterday, a news release from the American Farm Bureau Federation (AFBF) stated that, “Following the delegate session of the [AFBF’s] 96th Annual Convention, which wrapped up this week in San Diego, the organization’s board of directors set AFBF’s strategic action plan to address public policy issues for 2015.

“The board-approved plan focuses the organization’s attention on: advancing legislation that addresses agriculture’s long- and short-term labor needs; protecting farmers’ abilities to use biotech plant varieties and other innovative technologies; opposing expansion of federal jurisdiction under the Clean Water Act; and advancing legislation that reforms the Endangered Species Act.”

Yesterday’s update added that, “[AFBF President Bob Stallman] said AFBF recognizes that the need for agricultural labor reform is clear.

“‘Farmers need access to a legal, stable and reliable labor supply,’ Stallman said. ‘America can either import our labor or import our food. We recognize the difficulty of passing meaningful immigration reform that addresses the agricultural labor crisis and border issues, but we must get this done. The recent executive action on immigration doesn’t offer a solution to increase the workforce for agriculture and we will work to secure a permanent solution through legislation.’”

 

Immigration

Mores specifically on immigration issues, Burgess Everett reported yesterday at Politico that, “A day later, Republicans still have no idea how to end the immigration fight they picked with President Barack Obama.

“Republicans at the party’s retreat in Hershey struggled Thursday to describe a resolution to their impasse on the House-approved spending bill for the Department of Homeland Security, which cleared the chamber Wednesday with aggressive immigration provisions that stand no chance of getting 60 votes in the Senate. And they have little time to figure it out, thanks to the Feb. 27 DHS funding deadline that conservatives had insisted on imposing in last year’s budget deal.

Needing at least six Democratic votes to pass the House’s confrontational bill, Senate Republicans sense the legislation will fail if their leaders put it on the floor. But some would still like to see the Senate vote on the House $40 billion proposal to prove it can’t pass the chamber, rather than prematurely admit defeat on Obama’s unilateral moves to shield millions of undocumented immigrants from deportation.”

The article explained that, “But nobody seemed to have many ideas Thursday for a strategy that could draw the needed Democratic support in the Senate while satisfying the demands of House conservatives.

“Senate Majority Leader Mitch McConnell (R-Ky.) told reporters his chamber will attempt to pass the House’s hardline bill, adding that ‘if we’re unable to do that, we’ll see what happens.’

“‘The House is going to work its will. The Senate is going to work its will,’ insisted House Speaker John Boehner (R-Ohio). ‘We’ll find some way to resolve our differences.’”

Alexander Bolton and Scott Wong reported yesterday at The Hill Online that, “Senate GOP leaders are using their joint retreat with the House to warn conservatives that they’re not going to be able to reverse President Obama’s executive orders on immigration.”

The Hill update added that, “Sen. John Thune (S.D.), the third-ranking member of the Senate Republican leadership rolled his eyes when asked if the House bill would pass the upper chamber.

‘Good question,’ he said.

“‘Obviously we want to give our members an opportunity to vote to express their opposition to the president’s action but we also realize at the end of the day in the Senate it’s going to take 60 votes,’ he said.”

 

Biofuels

The Food and Agricultural Policy Research Institute (FAPRI) recently released a bulletin titled, “Are RIN prices high enough for E85 expansion?” that “calculates the Renewable Identification Number [RIN] prices that might support E85 expansion.”

The bulletin, which included this interesting figure, as well as this table, stated that, “The prices of crude oil and associated petroleum products have fallen dramatically in recent weeks. In fact, ethanol which for years has been sold at a discount to gasoline blendstock has been selling for a premium lately. RIN prices have also risen. In light of these changes, we return to the question of whether a high-level ethanol blend like E85 can be delivered to consumers at a competitive price.”

 

Regulations

Jacob Bunge reported yesterday at The Wall Street Journal Online that, “The U.S. Department of Agriculture on Thursday approved soybean and cotton seeds engineered by Monsanto Co. to resist a broader range of herbicides.

“The seeds are among a range of products developed by agricultural companies to combat the spread of weeds that have developed resistance to glyphosate, a widely used weed killer marketed by Monsanto under the Roundup brand. Left unchecked, such weeds can choke crops and damage farm equipment.”

And a news release yesterday from Rep. Collin Peterson (D., Minn.) stated that, “[Rep. Peterson] today urged the U.S. Department of the Interior to appeal a recent U.S. District Court decision that reinstates gray wolf protections under the Endangered Species Act in Minnesota.

“In a letter to Interior Secretary Jewell, Peterson said appealing the court decision would return management of Minnesota’s gray wolf population back to the state and help farmers and ranchers facing a difficult decision between protecting their livestock and complying with another federal judicial decision.”

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Lastly today, Iowa GOP Senator and Ag Committee member Joni Ernstis delivering the GOP response to the State of the Union.”

Keith Good

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