KDUZ Radio “Farm Forum”

Dave Ladd, President of RDL & Associates, recently participated in KDUZ Radio’s “Farm Forum hosted by Lester Schuft.  Topics include buffer strips/water quality, land values, international trade, biotechnology and much more.

He was joined by Mark Dorenkamp (Brownfield Ag News),  Kent Thiesse (MinnStar Bank) and Dave Nicolai (University of Minnesota Extension).

Commentary: Deja vu all over again. Crop insurance garners White House attention

It has become an article of faith amongst policy wonks that an administration’s budget proposal is considered “dead on arrival” before it hits the Halls of Congress.  Every year the White House delivers a proposed budget to Capitol Hill and, every year, there is a hue and cry from affected stakeholders.  The release of the Trump Administration’s fiscal year (FY) 2018 budget is no exception.

While it is true that an administration’s budget is the first step in an intricate dance with 535 members of Congress, it does provide insight as to the priorities of the Executive Branch.

The budget recently released by the White House would cut the federal crop insurance program by $28.5 billion—or roughly 36 percent—by capping the premium subsidy and eliminating the harvest price option.

As producers continue to face low commodity prices and weather-related challenges, risk management tools such as crop insurance continue to be a critical component of their marketing plan. Crop insurance protects a producer’s yield and price, as well as providing collateral and a repayment source for operating loans, term loans for machinery, livestock, facilities and real estate loans.

The enhanced coverage provided by higher levels of revenue policy coverage means significantly greater protection for the producer’s revenue stream, as producers have shifted to protecting income rather than yield.

A review of recent history related to the crop insurance program are illustrative.  During deliberations related to the 2008 Farm Bill included reductions to the crop insurance program of approximately $6 billion over a 10-year period.

The 2011 Standard Reinsurance Agreement (SRA) that went into effect July 1, 2010 included an additional $6 billion in estimated funding reductions the crop insurance program over 10 years.

Another part of the equation is the delivery mechanism for crop insurance – crop insurance companies.  The two primary revenue sources for a crop insurance company are Administrative and Operating (A&O) reimbursement and underwriting of gains and/or losses.

During consideration of the 2014 Farm Bill, amendments in the U.S. House related to crop insurance would have reduced the cap of government funding for crop insurance companies from $1.3 billion to $900 million per year and another that would reduce the guaranteed rate of return for crop insurers from 14 percent to 12 percent.

A wide range of strong risk-management tools for producers, including a viable crop insurance program, is more important than at any time in recent memory.  As such, proposed reductions in the crop insurance program would adversely impact producers and hinder their ability to manage risk.

The proposed reductions hold the potential to reduce the number of companies offering risk-management tools such as crop insurance.  Without a viable program, it is likely that lending standards would need to be much more stringent in order to maintain sound credit quality.

It is unclear as to what the aggregate national impact of reductions to producer premium subsidies and A & O reimbursements would be on producers and those entities that currently serve the crop insurance marketplace.  It is likely, however, that lower producer premium subsidies would stifle producer utilization of crop insurance as a risk-management tool.  Likewise, lower reimbursement rates would most likely be passed along to producers in the form of higher premiums or diminished service.

It is important to remember that most producers cannot afford not to have some type of protection.  Therefore, their profit margins would be further reduced if premiums are raised.  In addition, many young and beginning producers (who traditionally have less collateral and equity) would face additional challenges in obtaining financing.

Crop insurance is not immune to the vagaries of the budget process and the issues deserve renewed scrutiny.  Over the course of the past few years the program has emerged as a continuing policy issue for policy and philosophical reasons.  In the end, Congress passes the budget and agriculture has generally been successful in making the case for crop insurance and mitigating proposed reductions.  Each battle, however, expends political capital and emboldens critics – including members of Congress.

Dave Ladd, President of RDL & Associates, is a frequent guest commentator regarding the public policy and the political environment.  He assists clients in achieving their legislative and policy objectives via government relations, strategic communications, and message development.

Trump to target agriculture spending in FY18 budget (via Agri-Pulse Communications)

President Trump releases his full fiscal 2018 budget this week and it’s expected to propose big cuts in crop insurance, conservation assistance and a number of agricultural and rural development programs.

The budget, which expands on the “skinny” budget plan issued in March, will be released on Tuesday. Agriculture Secretary Sonny Perdue will be in the hot seat the very next day when he faces the House Agriculture Appropriations Subcommittee, which writes the annual spending bill for USDA, the Food and Drug Administration and Commodity Futures Trading Commission.

Multiple sources told Agri-Pulse last week that the budget will propose cuts in crop insurance. And the National Sustainable Agriculture Coalition said the budget also would whack rural development programs, including Value-Added Grants, rural housing assistance, and cut $100 million from the National Institute for Food and Agriculture, which funds university research projects.

“The one bright spot in the President’s budget proposal is that it is just that – a proposal,” said Greg Fogel, NSAC’s policy director.

Many, if not most of the cuts, especially to farm bill programs, have little chance of passing Congress, especially with the House and Senate Agriculture committees wanting to maintain funding levels as they prepare to write the next bill. Lawmakers were already downplaying the importance of the proposals even before they were released.

“When the administration sends over their budget they’re looking for programs to cut to try to get their numbers to all add up. We’re not looking to take exactly what they recommend and running with it,” the chairman of the House Agriculture Appropriations Subcommittee, Robert Aderholt, R-Ala., told Agri-Pulse.

Congress has typically trimmed from select farm bill programs – the Environmental Quality Incentives Program being a typical target – to shore up other priorities, but Aderholt said he didn’t expect lawmakers to go beyond that this year.

House Agriculture Chairman Mike Conaway, R-Texas, pledged to continue defending crop insurance and other farm programs. He said it’s no time to cut agriculture spending, given the downturn in the farm economy. “The president wanted a robust farm bill and we intend to get that done. Obviously, resources will be the next big issue to come to grips with,” he said.

The FDA’s new commissioner, Scott Gottlieb, will appear before Aderholt’s subcommittee on Thursday.

The March budget proposal dealt only with “discretionary” spending programs, those whose spending levels are determined by annual appropriations bill. The expanded version will include programs in which the spending levels are mandated by the farm bill and other laws.

Also this week, the House will take up legislation aimed at easing permit requirements for pesticide usage. The Reducing Regulatory Burdens Act would reverse a 2009 appellate court ruling in a case involving the National Cotton Council that forced the Environmental Protection Agency to require pesticide applicators to get permits to spray in or near “navigable waters” as defined in the Clean Water Act.

“My district is home to many hard-working farmers, so I know this issue quite well,” House Majority Leader Kevin McCarthy, who represents a portion of California’s Central Valley, said on the House floor Friday. “This bill will reduce red tape that makes it more costly for farmers to protect their crops and our nation’s food supply.”

Similar efforts to reverse the 2009 court decision have died in the Senate.

Health care reform is likely to join Trump’s budget in dominating the attention of Congress this week as lawmakers prepare to leave for their week-long Memorial Day recess.

On Wednesday, the Congressional Budget Office releases its analysis of the House-passed health care reform bill. GOP leaders have yet to actually forward the legislation to the Senate for consideration while they waited for the CBO report, which will include estimates of how many people would lose insurance coverage under the measure.

EPA Launches “Water of the U.S.” Webpage (via Brownfield AgNews)

The EPA has launched a web page to keep stakeholders up to date on potential changes to the Waters of the U.S. rule.  The EPA says the web page will keep the public informed about EPA’s review of the definition of WOTUS.  President Trump’s February executive order directs the EPA to review the rule and to publish revisions, including changes to what’s considered “navigable water” under the rule.

Redefining “Waters of the U.S.” (via MorningAgClips)

U.S. Environmental Protection Agency and the U.S. Army sent a letter to governors today soliciting input from states on a new definition of protected waters that is in-line with a Supreme Court Justice Antonin Scalia’s opinion in the 2006 Rapanos v. United States case. Scalia’s definition explains that federal oversight should extend to “relatively permanent” waters and wetlands with a “continuous surface connection” to large rivers and streams.

“EPA is restoring states’ important role in the regulation of water,” said EPA Administrator Scott Pruitt. “Like President Trump, I believe that we need to work with our state governments to understand what they think is the best way to protect their waters, and what actions they are already taking to do so. We want to return to a regulatory partnership, rather than regulate by executive fiat.”

“The Army, together with the Corps of Engineers, is committed to working closely with and supporting the EPA on these rulemakings.  As we go through the rulemaking process, we will continue to make the implementation of the Clean Water Act Section 404 regulatory program as transparent as possible for the regulated public, ” said Douglas Lamont, senior official performing the duties of the Assistant Secretary of the Army for Civil Works.

The Clean Water Act asserts federal control over “traditionally navigable waters” without providing clarity or details about the law’s scope. President Donald Trump signed an executive order on February 28, 2017 to direct federal agencies to roll back and replace the Obama Administration’s Clean Water Rule – also known as the “Waters of the U.S.” or WOTUS – to ensure that the nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the States under the Constitution.

To meet the objectives of the executive order, federal agencies are following a two-step process that will provide as much certainty as possible, as quickly as possible, to the regulated community and the public during the development of the replacement rule.

The first step is to revise the Code of Federal Regulations to re-codify the definition of “Waters of the United States” which currently governs administration of the Clean Water Act, in light of a decision by the U.S. Court of Appeals for the Sixth Circuit staying a definition of “Waters of the United States” promulgated by the agencies in 2015. This action will simply make the text of the Code of Federal Regulations reflect the definition currently in effect under the Sixth Circuit stay. This action, when final, will not change current practice with respect to the how the definition applies, which is consistent with Supreme Court decisions, agency guidance documents, and longstanding practice.

The second step will be a public notice-and-comment rulemaking involving a substantive reevaluation and revision of the definition of “Waters of the U.S.” in accordance with the executive order. The letter sent to governors today is seeking input on the second step of the process.

– See more at: https://www.morningagclips.com/redefining-waters-of-the-u-s/?utm_content=articles&utm_campaign=NLCampaign&utm_source=Newsletter&utm_term=newsletteredition&utm_medium=email#sthash.kDgLWLuI.dpuf

Meet Secretary Perdue’s new inner circle at USDA (via Agri-Pulse Communications)

Agriculture Secretary Sonny Perdue hit the ground running in his first two weeks on the job, meeting with President Trump in the White House, traveling to Kansas, Iowa and Arkansas and working on his subcabinet nominees. A number of top-tier names have been sent to the White House, waiting for the president’s approval. In the meantime, Perdue has a small but mighty team of advisors already on the job. Here’s a look at some of the folks you are likely to meet in Perdue’s inner circle and their roles at USDA:

Heidi Green, Chief of Staff

Green is a longtime ally of the former Georgia governor, working with the new Secretary as far back as his gubernatorial transition team in 2002. She shares his “sunny” disposition and “can do” attitude, but – because of her longstanding working relationship – she is also the one most often tapped to deliver any negative news.

The California native first worked on Capitol Hill for Rep. Bill Thomas, R-Calif. Later, she established her Georgia credentials by working for Republican Sen. Paul Coverdell from the Peach State. Since her early days of working with Perdue, she’s served as an advisor on economic development, transportation, and other issues before ultimately rising to the rank of commissioner of the Georgia Department of Economic Development. In a 2007 release, Perdue called Green “an integral member of our team” and cited her “wide range of experience in negotiating difficult policy issues.”

Green was also a founding member of Perdue Partners LLC, the grain trading company founded by Perdue, his cousin David, now a U.S. senator, and Trey Childress, another former Perdue gubernatorial administration official. During Perdue’s time as Georgia governor, Green served as an administration representative with the Southern Governors’ Association, Republican Governors Association, and National Governors Association.

Chris Young, Deputy Chief of Staff

ChrisYoung A native of Fitzgerald, Georgia, Young graduated from the Georgia Institute of Technology, earning a B.S. degree in history and a law degree from the University of Georgia before being tapped by Gov. Perdue as Chief of Protocol and Director of International Affairs in 2005. In that role, he helped grow Georgia’s international footprint, organizing visits for dignitaries and planning gubernatorial and senior official missions to almost 20 foreign countries.

“I tell people that protocol is the science of creating the right conditions for business and diplomacy to succeed,” Young said in a video interview with GlobalAtlanta.com in 2009. Just one year earlier, Young was named to a two-year term as president of the Protocol and Diplomacy International-Protocol Officers Association – the association’s youngest president and current governance chair.

After Perdue completed his term as governor in 2011, Young moved on to serve as executive director of the Protocol School of Washington and as executive director and associate fellow with the United Nations Institute for Training and Research in Atlanta. Now he’s back on the Perdue team.

Brian Klippenstein, Senior Advisor

KlippensteinThe Missouri native is familiar to many in agriculture circles, thanks to his work in the industry and time on Capitol Hill. Most recently, Klip – as his friends call him – served as the executive director of Protect the Harvest, the Lucas Oil-backed initiative “created to preserve the freedoms of American consumers, farmers, ranchers, outdoor enthusiasts, and animal owners.” He’s a high energy guy, whom one long-time friend described as “the Energizer Bunny, working at a pace, both mentally and physically, that wears out his co-workers and colleagues.  It won’t surprise anybody that watches him that he runs marathons.” The George Washington University graduate is known as an experienced straight-shooter, with a wealth of agricultural knowledge.

He also understands Missouri and farm politics like none other, after years of honing his political skills on the staffs of Missouri Republicans Rep. Tom Coleman and Sens. Kit Bond and Roy Blunt. Klippenstein was among the small transition team first at USDA and was initially planning on that experience being the length of his tenure. Now, he’s full-time with USDA, but plans to work out of agency offices near his home in the Kansas City area whenever possible.

Sam Clovis, Senior Advisor

Clovis was a fixture in the ag policy corner of the Trump campaign, serving as a national chief policy advisor who engaged in several different capacities. His responsibilities may not be exactly well-defined at USDA, but sources say his influence can be felt across many different areas of the department, and he remains very well-connected to the White House – an important asset for the agency.

ClovisThe Kansas native served as a surrogate for the president on ag issues and led the transition team at USDA. The former Morningside College economics professor was active in the Iowa conservative scene, even hosting a talk radio show on local radio. Friends describe Clovis as a great spokesperson who’s knowledgeable on a wide variety of issues including agriculture, defense, and foreign policy.

In 2014, he made a run for the U.S. Senate seat in Iowa eventually won by Joni Ernst. Clovis was the Iowa director for Rick Perry’s 2016 presidential bid before leaving that post in August 2015 to join the Trump team. Clovis is a graduate of the Air Force Academy, where he served as a fighter pilot in the 70th Fighter Squadron for 25 years, ultimately rising to the rank of Colonel. Clovis holds an M.B.A. from Golden Gate University and a Ph.D. in public administration from the University of Alabama.

Kristi Boswell, Senior Advisor

K BoswellA former American Farm Bureau director of congressional relations, Boswell was an early hire to Perdue’s team, where she’ll work on farm labor issues for USDA. That was a key assignment for her former employer, and an AFBF coworker told Agri-Pulse that, while they were sad to see her go, “what better place for her to be?”

Boswell grew up on a farm in southeastern Nebraska where her family raised corn and soybeans. She holds a bachelor’s degree from the University of Nebraska-Lincoln and is a graduate of the University of Nebraska’s College of Law.

Before joining USDA and working for five years at AFBF, Boswell practiced corporate defense litigation and worked as a political aide for a Nebraska state senator. One of her first jobs was serving as the Ag Youth Coordinator for the Nebraska Department of Agriculture.

Rebeckah Adcock, Senior Advisor

Adcock An environmental scientist and licensed attorney, Adcock attended the University of Tennessee, Knoxville as an undergraduate and later obtained her J.D. from the University of Kentucky College of Law. Shortly after graduation, she joined the Kentucky Farm Bureau as its director of natural resources. That work led to a job with the American Farm Bureau in Washington in 2002, where she handled environmental and regulatory issues for the nation’s largest farm group.

In 2008, she was selected as counsel to the Senate Committee on Environment and Public Works and two years later, joined CropLife America as senior director of government relations. She has previously served on EPA’s Pesticide Program Dialogue Committee and has chaired the Pesticide Policy Coalition.

Adcock is no stranger to the Trump agenda. She was active during the presidential campaign, serving on the Trump Agricultural Advisory Team and, in at least one debate that was organized by CropLife, served as a spokesperson for the campaign