Agriculture Secretary Tom Vilsack assured lawmakers the Biden administration is putting pressure on China over its failure to fulfill “phase one” trade commitments, but he stopped short of saying what steps the administration was prepared to take.
In a wide-ranging, four-hour hearing before the House Agriculture Committee on Thursday, Vilsack also insisted that he has the legal authority to use the Commodity Credit Corp. to fund a series of projects aimed at documenting the impact of climate-smart farming practices.
In addition, he said the Risk Management Agency would be announcing “very, very shortly” a new round of payments to farmers who plant cover crops. USDA provided about $59 million to farmers in 2021 on about 12 million acres of cover crops.
As for China, Vilsack said the Chinese were $16 billion short of meeting their purchase commitments under the “phase one” trade agreement finalized with the Trump administration in January 2019.
He also said seven key trade issues remained unresolved. He specifically mentioned biotech approvals, dried distiller grains and ethanol.
“There are a wide variety of ways we can respond to China … and no doubt we will,” Vilsack told Rep. Tracey Mann, R-Kan.
Vilsack didn’t elaborate on the administration’s options, and he declined after the hearing to answer a question from Agri-Pulse about them. “I’m not going to get into how we respond. I’m going to hope they pick up the pace of purchasing,” he said.
As part of a broader effort to challenge China, the administration last year began building an alliance with Japan, the European Union and the United Kingdom as well as with countries such as India and Vietnam.
Vilsack’s planned use of the CCC to fund the administration’s climate-smart agriculture projects continues to face pushback from congressional Republicans.
“We feel very confident we have the legal grounds, based on the fact that we will be promoting climate-smart commodities,” Vilsack told Rep. Austin Scott, R-Ga.
Vilsack was referring to the fact that USDA has the legal authority to use the CCC account to support agricultural commodities. USDA borrows from the account to make commodity program payments, purchase surplus commodities and address other needs.
Still, the committee’s top Republican, Glenn “G.T.” Thompson of Pennsylvania pressed Vilsack to provide the Office of General Counsel’s legal justification in writing.
“This committee remains skeptical of the legal authority provided to you and your office under the CCC for this program, and looking at the enumerated powers in the (CCC) act, we think that no amount of mental gymnastics could get you there,” Thompson told Vilsack.
Vilsack insisted that the climate-related spending would have no impact on allocation of commodity program payments and other traditional uses of the account.
The projects are aimed at developing ways to help farmers benefit from the sale of lower-carbon commodities. A key part of the program will be to measure the impact of practices to provide evidence for their impact on carbon sequestration, Vilsack said.
In other remarks, Vilsack said farmers would likely see disaster relief payments for 2020 and 2021 losses in April or May. Congress provided $10 billion for the payments in a continuing resolution that passed last fall. He indicated the payments would be provided in two tranches to accelerate an initial round of assistance.
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To speed the first round of payments, USDA is using data from the Livestock Forage Program to determine eligibility for payments to livestock producers. For other farmers, USDA is creating “pre-filled applications” with the use of data from crop insurance and the Noninsured Disaster Assistance Program, he said.
Vilsack also indicated USDA is moving toward approving five waivers requested by pork processors to increase line speeds. USDA offered the waivers after a federal judge blocked USDA from continuing a Trump-era program for increasing line speeds. The judge said USDA had failed to provide data on the impact on worker safety.
He said the department also is creating a similar waiver process for poultry processors.
“The point of this is to make sure that we do a better job of balancing safety, profits and processing line speeds,” he said.
Vilsack vigorously defended his plans to impose restrictions on contracting in the poultry industry, citing the tournament pricing system as unfair to growers. Under the system, producers are paid according to the health of the chickens they raise for companies; Vilsack said farms unfairly lose contracts because of the system.
“This is about fundamental fairness. It’s about giving farmers a fair shake,” he said.
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