July 2024
The month of July has been a scorcher inside the beltway, both inside and outside the halls of Congress. As a brutal “heat dome” brought unbearable heat – alternating between extreme dryness and humidity – and no rain, the temperature of the 2024 Farm Bill debate has reached new highs.
Halfway through 2024, there is a draft farm bill approved out of the House Agriculture Committee along with two competing frameworks in the Senate – and all sides are digging in on their red lines. Outside the farm bill, Congress is in the midst of another contentious appropriations process and USDA is moving ahead with more rulemakings on the Packers and Stockyards Act.
NFU VICE PRESIDENT KIPPLEY TESTIFIES BEFORE CONGRESS ON EPA
On July 10, NFU Vice President Jeff Kippley testified before the House Agriculture Committee in a hearing titled “Examining the Consequences of EPA’s Actions on American Agriculture.” Vice President Kippley testified alongside the director of the Missouri Department of Agriculture, the Chief Operating Officer of a large independent farm and food company in Ohio, and a senior staff member for the Western Sugar Cooperative.
In his testimony, Vice President Kippley emphasized that the Environmental Protection Agency (EPA) must balance the important goals of protecting the nation’s natural resources while ensuring its regulations are not impractical or overly burdensome for family farmers and ranchers to implement. Kippley covered a range of issues in his testimony, including ongoing regulatory uncertainty about the definition of Waters of the United States (WOTUS) under the Clean Water Act, crop protection, strengthening the Renewable Fuel Standard (RFS), and the Clean Air Act’s support for the Right to Repair farm equipment.
Notable excerpts from Kippley’s testimony include:
– Waters of the U.S. (WOTUS): “The game of regulatory ping-pong over WOTUS has gone on far too long. Like everyone else, we want simplicity and clarity.”
– Crop Protection: “Most farmers don’t have the scientific expertise to evaluate crop protection products for safety, but we know these products are essential for our operations. EPA’s rules, oversight and labeling guidelines help keep us safe.”
– Renewable Fuel Standard (RFS) and Biofuels: “The RFS has been the most successful clean fuels policy in the U.S. by making renewable fuel more affordable, creating jobs and reviving rural economies, and reducing oil imports and air pollution. Future action by EPA should support the program’s growth and success … We also appreciate the administration’s focus on Sustainable Aviation Fuel (SAF). I hope the Committee will support the adoption of agricultural feedstocks for SAF production.”
– Right to Repair: “It is incredibly important that farmers have the option to fix our own equipment or go to independent mechanics of our choosing, just like everyone can with their cars and trucks. But some farm equipment manufacturers believe farmers cannot be trusted to repair their own equipment … EPA Administrator [Michael] Regan affirmed that EPA’s [Clean Air Act] regulations support independent repair, and that independent repair does not facilitate emissions tampering. We urge Congress to ensure the Right to Repair.”
Vice President Kippley’s written testimony can be found here. The full hearing can be viewed here.
PACKERS AND STOCKYARDS ACT: USDA ANNOUNCES “UNFAIR PRACTICES” RULE
In late June, U.S. Secretary of Agriculture Tom Vilsack announced the fourth in a series of ongoing updates to the Packers and Stockyards Act (P&S Act). The proposed rule, titled “Fair and Competitive Livestock and Poultry Markets,” aims strengthen P&S Act enforcement by creating a framework to assess “unfair practices” claims by family livestock producers who are harmed by meatpackers.
Known as the “unfair practices” rule, the proposal puts forth a framework for defining what term “unfair practices” means, under section 202(a) of the P&S Act. It follows the finalization of two other P&S Act rules – the “inclusive competition” and “poultry transparency” rules – and the recent issuance of the “poultry tournament” proposed rules.
Under the “unfair practices” rule, Section 202(a) states it is unlawful for any packer, swine contractor, or live poultry dealer to “engage in or use any unfair, unjustly discriminatory, or deceptive practice or device.” The recently completed P&S Act “inclusive competition” rule deals with discrimination and deception, but “unfair” requires further clarification. The term “unfair practice” is at the center of a long-running problem with P&S Act enforcement regarding whether, for conduct to be considered “unfair,” there needs to be proof of competitive injury – a showing of harm not to an individual or group of individual producers, but to the entire industry.
In the rule’s preamble, USDA addresses this issue and states clearly it is a central reason for this rulemaking:
“…some courts have recently required proof of competitive injury before finding that conduct is unfair. Those courts were not offered an alternative definition for unfair, which this rulemaking would propose. A competitive injury requirement cannot be imposed in a way that abrogates part of a statute. To the degree requiring a “competitive injury” precludes finding conduct is unfair when it satisfies criteria in the proposed rule, such a requirement would unduly limit the reach of section 202(a) and is improper. Moreover, the statute and P&S Act case law make plain that competitive injury under the P&S Act is broader than harm to competition under the antitrust laws.”
In this proposed rule, USDA seeks to settle the “competitive injury” or “harm to competition” issue by defining an “unfair practice” with respect to both “market participants” (individual producers or groups of producers) and to “markets.” Thus, there would be cases where an unfair practice claim is valid based on individual harm, and in other cases where it is valid on the basis of harm to the broader marketplace.
NFU issued a statement in support of the release of the rule and will be submitting formal comments this summer. USDA has set a comment period ending on August 27, 2024.
The announcement came ahead of the fiscal year 2025 (FY25) appropriations action. On July 10, the House Appropriations Committee marked up their FY25 agriculture spending bill, which includes a policy rider that dismantles the P&S Act rulemakings. Just like last year, NFU is working to protect the P&S Act rulemakings and ensure the rider is not included in the final FY25 agriculture spending bill.
NFU issued an action alert in advance of the House markup. Farmers Union members can expect more opportunities to engage on this issue in the months ahead.
2024 FARM BILL: IT’S TIME TO GET REAL
On June 18, the Congressional Budget Office (CBO) published an update of their 10-year budgetary and economic projections, which included new estimates for the farm bill. Arguably the most anticipated estimate concerns CBO’s assessment of USDA’s spending through the Commodity Credit Corporation (CCC), which has been a major target of House Republicans.
CBO has projected USDA’s use of its Section 5 authority under the CCC will total $12 billion from fiscal years 2025 through 2034. Chairman Thompson (R-PA) has touted the CCC restrictions in the House farm bill as a significant “pay-for,” claiming the restrictions will result in $50 billion in savings. CBO’s assessment, coming in significantly lower than Chairman Thompson’s estimates, undercuts the purported cost neutrality of the House farm bill.
For the last few months, House Ag Republicans have been preparing pushback to CBO’s highly anticipated projections on the CCC. Shortly before the May 23 markup, reports surfaced CBO did not concur with Chairman Thompson’s savings estimates. In response to CBO’s publication of the new projections, Chairman Thompson was quick to dispute CBO’s assessment, citing “clear discrepancies between their forecasts and historic realities.”
Chairman Thompson says he intends to work with the House Budget Committee to “rectify CBO’s error,” – i.e., the budget committee could overrule CBO and declare the CCC savings in the House bill to be greater than the CBO projections.
On the Senate side, Chairwoman Stabenow (D-MI) believes It’s Time to Get Real. In a late June blog, Chairwoman Stabenow criticized Chairman Thomspon for using “magic math” and “wishful thinking,” to justify the CCC restrictions in the House farm bill, while also slamming GOP efforts to cut SNAP benefits and restrict the Thrifty Food Plan. The Chairwoman also criticized “more farm in the farm bill for the few,” claiming the House farm bill pits commodities against each other and favors southern crops over northern crops.
During the House Agriculture Committee’s hearing on July 10, Ranking Member David Scott (D-GA) struck a similar tone, asking the chairman why the Committee-passed farm bill has not yet been brought to the House floor: “If you think you don’t need us and have all the Republican support you need to pass this bill, what are you waiting for?”
What comes next for a 2024 Farm Bill is uncertain. But NFU remains committed to passing the right farm bill this year. Farmers Union members will have an important opportunity to make the case during NFU’s upcoming Fall Legislative Fly-In in September.