Congress faces a Friday deadline to pass a $1.3 trillion government-wide spending plan and companies that buy commodities from farmers hope it will include a fix to the Section 199A tax deduction that has rattled the industry.
The must-pass omnibus spending bill offers the chance for enacting changes to the tax provision, but Republicans say Senate Democratic Leader Chuck Schumer, D-N.Y., has been holding up the 199A fix to extract concessions from GOP leaders on the omnibus.
Also this week, ethanol producers are bracing for another possible White House meeting to address refiners’ demands for action by the Trump administration to reduce the prices they’re paying for Renewable Identification Numbers, the biofuel credits used to track compliance with the Renewable Fuel Standard.
Vice President Mike Pence, meanwhile, will give some extra prominence to National Agriculture Day this year by going to the Agriculture Department on Tuesday to commemorate President Trump’s Ag Day proclamation.
On Wednesday, Agri-Pulse will hold its all 2018 Ag and Food Policy Summit with a focus on the future of agricultural trade and technology. The lineup of speakers for the day-long conference includes White House agriculture adviser Ray Starling; the administration’s new agricultural trade negotiator, Gregg Doud; USDA’s undersecretary for trade, Ted McKinney; and the chairman and ranking member of the Senate Agriculture Committee, Pat Roberts, R-Kan., and Debbie Stabenow, D-Mich.
If Congress can’t pass the fiscal 2018 spending package by Friday, lawmakers will have to pass a sixth continuing resolution to keep the government going after the current CR expires. Congress is out of session for two weeks after this week.
Sen. John Thune, a member of the GOP leadership who helped work out the 199A fix, expressed optimism late last week that it would make it into the omnibus even though Schumer was using it as negotiating leverage.
“It’s going to get real ugly, if we don’t get this done,” said Thune, R-S.D., referring to the industry turmoil that could occur if the 199A provision isn’t corrected.
The 199A fix, which was the subject of intense negotiations between farmer cooperatives and grain companies, rolls back some of the benefit of the new deduction to co-op members but still leaves them better off than they were before the tax law was enacted in December.
The tax law was written to allow farmers to deduct 20 percent of the value of their total sales to co-ops, but only 20 percent of net farm income when selling commodities to other buyers. Under the industry agreement, the 199A deduction would be used to reduce net income no matter who farmers sell their commodities to. However, co-op members also would get the benefit of a deduction that cooperatives will pass through to members.
Meanwhile, biofuel producers face continued uncertainty this week as to what Trump may or may not order the Environmental Protection Agency to do about the RIN market. USDA has been analyzing various options since a March 1 White House meeting where Trump floated the idea of a two-year cap on RINs to go with a vapor-pressure waiver that would allow E15 to be sold year round.
Worried that refiners will prevail with Trump, five Senate Republicans from the Midwest are asking him for a meeting to make their case against such a cap.
Also this week, Trump’s trade policy and his proposals to slash spending on the Supplemental Nutrition Assistance Program will come under scrutiny during a series of House hearings.
U.S. Trade Representative Bob Lighthizer and Commerce Secretary Wilbur Ross will appear before the House Ways and Means Committee on Wednesday and Thursday respectively. U.S. farm groups fear that a series of administration trade actions, including the recently announced tariffs on steel and aluminum, will result in retaliation against U.S. exports
Also on Wednesday, Agriculture Secretary Sonny Perdue will appear before House Agriculture Appropriations Subcommittee to defend Trump’s fiscal 2019 budget. Among the issues that panel members say they’ll raise: Perdue’s ongoing reorganization of USDA and the budget proposal to convert SNAP cash benefits to boxes of shelf-stable products that would be delivered to beneficiaries.
Here’s a list of agriculture- or rural-related events scheduled for this week in Washington and elsewhere:
Monday, March 19
National Grain and Feed Association annual convention, through Tuesday, Scottsdale, Ariz. Agriculture Secretary Sonny Perdue is the breakfast keynote speaker.
3 p.m. - USDA releases monthly Milk Production report.
Tuesday, March 20
National Ag Day
10 a.m. - Vice President Mike Pence to speak at USDA to commemorate President Trump's Ag Day proclamation.
10 a.m. - Senate Energy and Natural Resources Committee hearing on the Energy Department budget, 366 Dirksen
1 p.m. - National Ag Day panel, “The Consumer, the Farmer and Sustainability,” and Agriculture Secretary Sonny Perdue speaks, National Press Club.
5 p.m. - Taste of Ag reception, Library of Congress.
Wednesday, March 21
All day - 2018 Agri-Pulse Ag and Food Policy Summit, Hyatt Regency Capitol Hill.
All day - Chicago Council of Global Affairs’ Global Food Security Symposium 2018, through Thursday, Ronald Reagan Building.
9:30 a.m. - House Foreign Affairs Committee hearing on the fiscal 2019 foreign assistance budget with USAID Administrator Mark Green, 2172 Rayburn.
10 a.m. - House Commerce-Justice-Science Appropriations Subcommittee hearing on the National Oceanic and Atmospheric Administration, H-309 Capitol.
10 a.m. - House Ways and Means Committee hearing on trade policy with U.S. Trade Representative Bob Lighthizer, 1100 Longworth.
1:30 p.m. - House Agricultural Appropriations Subcommittee hearing with Agriculture Secretary Sonny Perdue, 2362-A Rayburn
Thursday, March 22
9 a.m. - House Ways and Means Committee hearing with Commerce Secretary Wilbur Ross on the Trump administration’s recent trade actions, 1100 Longworth.
3:30 p.m. - Council for Agricultural Science and Technology releases report, “Regulatory Barriers to the Development of Innovative Agricultural Biotechnology by Small Businesses and Universities,”
Friday, March 23
Fiscal 2018 continuing resolution expires.
9 a.m. - USDA releases monthly Food Price Outlook.
For more news, go to: www.Agri-Pulse.com