If you have questions about how the government’s work will affect your farm in the year ahead, you are in good company. But while the politicos will wring their hands over elections all year long, business as usual will continue in much of the government complex, and we can provide some solid analysis on how that action may affect your bottom line.

The farm economy and trade aid

The financial challenges facing the agricultural community will continue to garner considerable attention in 2020. Fiscal year 2019 saw the highest number of farm bankruptcies since FY11, according to calculations by the American Farm Bureau. The number of farms filing for Chapter 12 bankruptcy increased by 24 percent from FY18 to FY19.

The Market Facilitation Program (MFP), or trade aid, went a long way toward keeping many farms afloat with nearly $20 billion paid out to farmers over the last two years. Already, there are murmurs about an additional round of MFP payments in 2020, even as China and the U.S. have reached a tentative truce in the trade war.

China Phase I offers some tariff relief

Meanwhile, December saw an encouraging de-escalation of tensions between China and the U.S. after months of a punishing trade war. All sides admit the latest deal is just the first step in a larger negotiation, but sorghum producers will welcome the tariff relief after months of market loss.

Before the U.S.-China trade dispute began, China was a $1 billion market for U.S. sorghum. We are optimistic that 2020 may be marked by a return to these levels and greater. The sorghum industry has continued its strong advocacy in markets around the world, even as the trade wars waged on, and we trust that those strategic efforts will pay off now that U.S. sorghum growers have regained access to this critical market.

NAFTA 2.0 breakthrough

December was a big month for trade negotiations in the U.S., as Congress broke months of deadlock and passed the U.S.-Mexico-Canada (USMCA) trade agreement, or NAFTA 2.0, with bipartisan support. USMCA makes a number of changes to North American agricultural trade, including increasing U.S. dairy exports to Canada. After passing the House in December, we anticipate the final passage of USMCA in the Senate yet this winter.

Watch for Senate action in 2020

The Farm Workforce Modernization Act of 2019 is intended to bring some labor certainty to the agricultural workforce. It creates a program for agricultural workers to gain legal status over time and aims to reform the H-2A visa program by making it more flexible for employers and by providing opportunities to use the program in agricultural sectors that require year-round employment. The bill passed with broad bi-partisan support in the House in December but the prognosis in the Senate, particularly in a presidential election year, is unclear.

USDA reorganization tensions may flare again

In June 2019, UDSA announced Economic Research Service (ERS) and National Institute of Food and Agriculture (NIFA) would relocate to Kansas City. This highly controversial move was especially reviled by career staff in Washington, D.C., who had to decide whether to move with the agencies or change jobs. While the books on this move are almost closed, we anticipate some animosity will continue.

There has been some talk in the Administration of combining the Animal & Plant Health Inspection Service (APHIS) headquarters with the Agricultural Research Service (ARS) headquarters. While the agencies would remain in the Washington, D.C., area, the concept of shrinking their respective footprints may cause some on the Hill to recoil and use this consolidation as a proxy for their lost battle over ERS and NIFA relocations. Expect fireworks.

Renewable Fuel Standard disputes

In August, the EPA approved 31 waivers for small oil refineries, exempting them from biofuel blending requirements under the Renewable Fuel Standard (RFS).

This prompted backlash from biofuel producers, so the Trump Administration responded by proposing a supplemental rule in October that would increase blending requirements for larger refineries. Biofuel producers argue the supplemental rule does not go far enough since it bases blending requirements on the estimated amount exempted rather than the actual amount.

Finding it difficult to make everyone happy, this month EPA decided to withdraw the proposed rule and go back to the drawing board. National Sorghum Producers and its ethanol partners continue to watch this issue closely.

Waters of the United States gets an overhaul

In October, the Environmental Protection Agency (EPA) finalized its repeal of the 2015 Clean Water Rule, which changed the definition of “waters of the United States” (WOTUS) to include some isolated waterways, causing huge headaches for farmers in the normal course of business. A coalition of environmental groups is now suing the EPA, and the case could determine the fate of the 2015 rule. While the debate will rage on in the courts, at least for now, we should see a proposed new definition of WOTUS from EPA before spring 2020. For you, this means more flexibility and less legal exposure as you steward your land and waterways in the best interests of your farm and future.

Critical new breeding technology rule

Access to new breeding innovations through biotechnology has been an emphasis area for sorghum producers in recent years. Being able to quickly develop new sorghum varieties that require fewer inputs would be immensely attractive to the sorghum industry.

Multiple administrations have tried and failed to update the 30-year-old biotechnology regulations at USDA, but it appears that Trump’s USDA under Secretary Purdue is mere months away from finalizing a rule that will make new breeding technologies, like CRISPR and other gene editing techniques, available to sorghum breeders. The new rules would provide fewer regulatory hurdles and rightly avoid the requirements associated with breeding transgenic, or GMO crops.

We know that the work we do in D.C. has long ranging impacts for your farm, but from the outside the Beltway it can be hard to measure those effects. While the country is focused on the debate stage over the coming months, we will stay focused on how everyday policy work in D.C. impacts your farm.

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