Agriculture Secretary Tom Vilsack says he’ll make sure the Treasury Department understands the importance of stepped-up basis to farm groups. Vilsack was pressed about that issue during an appearance Wednesday before the House Ag Appropriations Subcommittee.

The panel’s Democratic chairman, Georgia Rep. Sanford Bishop, pointed out that preserving the stepped-up basis was a major concern of the American Farm Bureau Federation.

Vilsack noted that under current law, stepped-up basis is only an issue for heirs of a farm “when and if you want to sell the farm.” With stepped-up basis, heirs don’t have to pay capital gains taxes on the increase in value that occurred while the parent or other decedent held the property.

Why it matters: Biden proposed during the campaign to eliminate the stepped-up basis. A Senate Democratic proposal that AFBF is fighting would go a step farther and tax all intergenerational transfers of property over $1 million, with no step-up in basis.

USDA starting over on organic livestock rule

The department will “start from scratch” and rewrite a rule to set new animal welfare standards for organic poultry and livestock, Vilsack said. “We need to make sure we have the strongest possible legal basis for whatever it is we decide to do.”

But the department is moving forward with a second rule on the origin of organic livestock. “We're going to provide additional opportunity for input on a couple of tweaks and changes that we've made,” Vilsack said. The rule is intended to prevent dairy farms from taking cows in and out of organic production.

USDA moving on equity reviews

Vilsack provided an update on USDA’s plans to weed out vestiges of discrimination and systemic racism in the department’s programs. USDA will be asking for nominations to a new equity commission that will be set up under procedures of the Federal Advisory Committee Act.

“We see this as an external, expert-led review of various programs at USDA, starting with those that are customer-facing, where we've had the most significant issues with reference to program complaints,” Vilsack told the lawmakers.

In the meantime, the department is proceeding with an internal review led by USDA staff, with working groups now established in every area of the department.

Food box program gets ax

Vilsack’s decision to end the Farmers to Families Food Box program is getting a mixed reaction from farm groups. Vilsack told the House appropriators that USDA is replacing the program with expanded use of the Emergency Food Assistance Program, or TEFAP, and a new Dairy Donation Program.

The American Farm Bureau Federation was surprised by the decision, said President Zippy Duvall. “More than 150 million food boxes were produced and helped America’s families suffering from the hardships caused by COVID-19. The need is still there,” he said.

National Milk Producers Federation CEO Jim Mulhern said the Food Box program was “very helpful last year in responding quickly to both last year’s food supply chain disruptions and the dramatic rise in the number of Americans experiencing food insecurity,” but he noted that the program “also had its challenges.”

The United Fresh Produce Association has welcomed USDA’s new plan to include fresh produce boxes in TEFAP for distribution to food banks. But the group wants the department to set up a new produce box program as part of a “fundamental realignment” of USDA feeding programs.

Stabenow sets Bronaugh hearing

The Senate Agriculture Committee has scheduled a confirmation hearing for Jewel Bronaugh, President Joe Biden’s pick as deputy agriculture secretary.

Biden announced Bronaugh’s selection back in January before he took office. In February, nearly 60 food and ag groups endorsed the nomination of the Virginia ag commissioner.

Her hearing will be next Thursday.

Study highlights farm consolidation

A new study from the Union of Concerned Scientists uses USDA census data to put some numbers on the extent to which mid-size farms have disappeared, especially in the Midwest.

The number of farms nationwide between 50 and 1,000 acres in size dropped in half, or by about 700,000 farms, between 1978 and 2017. The consolidation was especially sharp in Illinois, Iowa, Indiana and neighboring portions of surrounding states.

Conversely, an additional 100 million acres are now part of farm operations of more than 1,000 acres in size.

By the way: UCS says the analysis justifies efforts to assist minority farmers in securing more acreage. The group suggests, among other things, creating a national fund to help minority farmers buy land from retiring farmers interest-free.

Philippines demand for soymeal drops on ASF

The Philippines is the largest foreign market for U.S. soymeal, but demand has been dropping there as the country contends with African swine fever, according to a new analysis from USDA’s Foreign Agricultural Service.

With less swine to feed as the virus continues to spread, soymeal imports are projected to fall 5% to just 2.75 million metric tons for the 2020-21 marketing year and remain relatively flat in 2021-22.

An ASF silver lining for U.S. pork producers is that the Philippines is importing a lot more of the meat to make up for lost production. The country this month raised its import quota for pork and slashed tariffs.

NPPC rallies Hill support for better trade ties with Vietnam

Four GOP and Democratic lawmakers have penned a letter to U.S. Trade Representative Katherine Tai, asking her to work with Vietnam to cut trade barriers to U.S. pork and an industry group is asking others on Capitol Hill to sign it.

“Vietnam’s domestic pork production industry is struggling with African swine fever, yet unwarranted tariff and non-tariff barriers restrict the United States from supplying this major pork-consuming nation with affordable, high-quality pork,” National Pork Producers Council President Jen Sorenson said at the group’s legislative action conference.    

A draft letter signed by Reps. Ron Kind, D-Wis., Darin LaHood, R-Ill., Dusty Johnson, R-S.D., and Jim Costa, D-Calif., stresses that the U.S. is at a disadvantage when it comes to exporting pork to Vietnam because the U.S. is not part of the Comprehensive and Progressive Trans-Pacific Partnership.

The European Union and CPTPP members “are well-positioned to take advantage of this tremendous opportunity given their free trade agreements with Vietnam,” the lawmakers say.

He said it. “We'll make sure that they understand it in the context of the farming community.” – Ag Secretary Tom Vilsack, assuring lawmakers USDA will raise the stepped-up basis issue with the Treasury Department.

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