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Hemp concerns and trade jitters top agriculture appropriations hearing

The Agriculture Department’s request includes cuts to research, rural housing and international humanitarian food programs

Department of Agriculture Secretary Sonny Perdue takes his seat to testify during the Senate Appropriations Subcommittee on Tuesday, June 13, 2017. (Bill Clark/CQ Roll Call file photo)
Department of Agriculture Secretary Sonny Perdue takes his seat to testify during the Senate Appropriations Subcommittee on Tuesday, June 13, 2017. (Bill Clark/CQ Roll Call file photo)

Senate appropriators had trade woes and the promise of industrial hemp on their minds Thursday as they sought assurances from Agriculture Secretary Sonny Perdue of better times for farmers in their states.

Perdue testified before the Senate Agriculture Appropriations Subcommittee on the president’s $15.7 billion request for discretionary funding for the Agriculture Department. The request is more than $4.2 billion lower than the enacted level for fiscal 2019 and includes cuts to research, rural housing, international humanitarian food programs and other areas popular with lawmakers.

Subcommittee members asked about the proposed reductions, but indicated they are likely to ignore the proposals as they have with previous Trump administration budget requests.

Chairman John Hoeven, a North Dakota Republican, said he’ll instead push to increase funding for the department to implement the 2018 farm bill, a priority for farm state lawmakers. Perdue said he would welcome a bump up in the $15 million the farm bill provided.

The farm bill removed hemp from the Controlled Substances Act and opened the door to expanded production of the versatile plant, which is part of the cannabis family that lacks the high of marijuana. A number of states authorized limited production under research provisions of the 2014 farm bill. Hemp seems to have captured the interest of farmers looking for a new cash crop.

Jeff Merkley, an Oregon Democrat and subcommittee ranking member, and Jon Tester, a Montana Democrat, pressed Perdue to expedite the release of regulations for states to follow. He disappointed them with a proposed timetable that aims for release of hemp rules in time for the 2020 crop year rather than 2019

Perdue also said he was unaware of complaints Tester said he has received from Montana farmers that the Drug Enforcement Administration is blocking the importation of Canadian hemp seeds they need for planting. The agency told CQ that it no longer has oversight of hemp because of the farm bill.

Trade worries

But trade was a recurring theme from both Republicans and Democrats, who have called on the Trump administration to lift steel and aluminum tariffs, particularly on North American Free Trade Agreement (NAFTA) partners Mexico and Canada.

“We’re advocating to the president that he can accomplish his goals in revitalizing the steel industry and aluminum industry in the U.S. through a quota system that is combined with a tariff when they exceed that quota,″ Perdue said in a question from Wisconsin Democrat Tammy Baldwin. “Hopefully, he will come to see that is an effective tool to continue to support our domestic steel industry as well.”

Baldwin asked about the status of national security Section 232 steel and aluminum tariffs the United States imposed on the trading partners in 2018. Leaders in Canada and Mexico say their legislatures will not vote to approve the proposed United States-Mexico-Canada trade agreement to replace NAFTA unless the tariffs are lifted.

Congressional lawmakers whose constituents have been affected by retaliatory duties Canada and Mexico have placed on U.S. goods want the U.S. tariffs and retaliatory tariffs ended before they are willing to vote on the agreement. Baldwin said that Mexico’s retaliatory tariffs have cut Wisconsin cheese exports at a time when dairy farmers are struggling with several years of low market prices.

Perdue, a booster of Trump’s policies in general, is considered a pragmatist on trade. He is credited along with other political leaders of convincing Trump in April 2018 to remain in NAFTA until a replacement trade pact is in place. The proposed agreement would replace NAFTA if it is approved by national legislatures in the three countries.

Hoeven asked when U.S.-China talks could wrap up and agricultural exports to China rebound. China has made purchases of soybeans since the trade talks started, but the volume is still below what it was before Beijing cut its purchases in retaliation for U.S. tariffs on Chinese exports valued at $250 billion.

“While we’re negotiating, what about additional sales?” asked Hoeven, who added that farmers are concerned about low prices and lost sales.

“I’m cautiously optimistic, but with China it’s never over until it’s over,” Perdue said. “If we can consummate a deal with China it will be extremely good for U.S. agriculture as well as the U.S. economy.”

Perdue said talks also include non-tariff issues that are important to agriculture such as standardized protocols for inspections of farm goods.

Hoeven suggested that if talks are not resolved soon, “that they continue purchases as a sign of good faith while the negotiations are going on.”

The bill page for the not-yet-introduced fiscal 2020 Senate Agriculture spending measure is here.