Senate Majority Leader Mitch McConnell says the next big coronavirus relief bill, assuming there is one, would likely provide more funding for payments to farmers. But McConnell is clearly reluctant to include new spending for rural broadband or other infrastructure. 

In an interview with Agri-Pulse’s Jeff Nalley, McConnell reiterated that the Senate won’t consider anything close to the size of the $3 trillion HEROES Act that the Democratic-controlled House passed last month. And he said a new relief bill must include liability protection for businesses to shield them from coronavirus-related lawsuits. Liability protection is “absolutely essential to any effort to get back to normal,” he said. 

The House bill also contained a number of provisions for farmers, including $16.5 billion in direct payments, plus additional aid to pork producers for euthanized animals as well as funding for ethanol plants. 

The House bill, however, would not raise USDA’s spending authority under the Commodity Credit Corp., an issue that McConnell said a Senate aid package would include. “We’ll address that issue and add more money than we were able to get in the CARES Act,” McConnell said. (The CARES Act provided $9.5 billion for direct farm payments, plus $14 billion in CCC spending that becomes available in July.) 

Take note: McConnell is clearly reluctant to use the bill to fund rural broadband expansion and other infrastructure needs. “My view is if there is another bill it needs to be narrowly crafted to deal with the crisis,” he said.

Senate next up for PPP fix

A bill to give businesses more flexibility on how and when they spend their forgivable Paycheck Protection Program loans is on the way to the Senate. 

McConnell was noncommittal on how quickly the Senate would address the issue, but he agreed that some fixes to PPP are needed.

The House bill, which passed 417-1 on Thursday, would increase from eight weeks to 24 weeks the time that businesses have to spend the proceeds of a PPP loan on payroll and other qualified expenses. The bill also would lower to 60% the amount of the loan that must be spent on payroll expenses in order for the loan to be forgiven. The minimum is now 75%. 

Keep in mind: A rival Senate bill would extend the covered period to 16 weeks, not 24 weeks, and doesn’t address the 75% payroll minimum.

US-China tensions rise over Hong Kong

The U.S. and China appear to be heading for another major clash, and the uncertainty of what that means for the “phase one” deal and its benefits for ag trade looms heavy. The Washington Post reports that there are internal discussions in the White House on how to punish China for moving to crack down on political dissent in Hong Kong. 

The U.S., Australia, U.K. and Canada released a joint statement Thursday criticizing China for breaking its international obligations to allow Hong Kong to remain autonomous, and White House Press Secretary Kayleigh McEnany called out the Chinese for imposing the new national security law on Hong Kong.

But, but but: Senate Finance Committee Chairman Chuck Grassley says he was moved to ask President Trump last week if the tensions with China threatened U.S. agricultural trade. The Iowa senator says he was reassured by the conversations, and he warned against conflating the current conflicts with threats to the “phase one” deal.

Brazil predicts big soy growth in in the long-term

Brazilian soybean and corn production are forecast to continue increasing dramatically over the next two decades. According to a report by USDA's Foreign Agricultural Service, Brazil’s Ministry of Agriculture estimates Brazil will be producing 152 million metric tons of soybeans (a 33% increase) and 115 million tons of corn by the 2028-29 marketing year,

Most of the increase in corn planting is expected to come from Brazil’s second crop, usually planted after the soybean harvest and on the same acres. First-crop corn continues to decline as farmers steadily shift to soybeans.

Brazilian soy and corn acres will be pushing into a lot of pasture land, but they’ll also be crowding out rice, dry beans, and wheat. Planted area for soybeans is expected to grow by 109% for soybeans and 30% for corn.

Co-ops seek withdrawal of tax rules

The National Council of Farmer Cooperatives is calling on the Trump administration to kill proposed tax rules that the group says would effectively raise taxes on co-op members. 

The issue stems from Congress' fix of the so-called “grain glitch” in the 2017 tax law. The proposed rules implement the Section 199A deduction and would limit it to patronage income, the business that co-ops do with their own members. Under the old law, co-ops claimed a deduction for both patronage and non-patronage business, which is done with non-members. 

In a letter to the Treasury Department and Office of Management and Budget, NCFC’s executive council says the rules should be “rewritten in accordance with congressional intent to ensure that the tax burden on America’s hardworking farmers and ranchers and their rural communities will not increase.”

Outbreaks undercounted, lawmakers told 

The number of outbreak reports at food facilities “likely underestimates the number of food system workers affected by COVID-19,” the head of the National Institute of Occupational Safety and Health told lawmakers Thursday.

John Howard also noted that “there is no formal reporting or surveillance system indicating to health authorities when COVID-19 affects food facility operations.”

He and Loren Sweatt, principal deputy assistant secretary at the Occupational Safety and Health Administration, were testifying before a House subcommittee. See our coverage here.

Losing Food Box bidders promised another shot

Companies that didn’t receive contracts for the first round of the Farmers to Families Food Box program are being assured they’ll get to try again. 

Agricultural Marketing Service Administrator Bruce Summer said on a Produce Marketing Association webinar that barring a swift economic recovery “you can almost guarantee that there will be a second round,” 

AMS awarded $1.2 billion of the program’s $3 billion in the first round to about 200 companies. The next round “will be a combination of companies with current contracts and ones who didn’t get them,” he said.

AMS has terminated one $40 million contract to a California avocado seller, but that’s the only contract canceled so far, Summers said. 

He said it.  “I don’t want to say what the president said to me in a private conversation, but I was very satisfied with the answer, and I wouldn’t be satisfied with an answer unless I was sure the president would maintain that trade agreement with China.” - Sen. Chuck Grassley, R-Iowa, on whether the president’s criticism of China would affect the “phase one” trade deal. 

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