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Will Congress pass bills to encourage Cuba trade, farm labor changes?

Water flows through a rice levee
The view from the Louisiana Secretary of Agriculture

With crop prices low and too many rural communities economically sluggish, recent news out of the White House hasn’t helped disperse lingering dark clouds. The Trump administration put forth a budget that would slash USDA programs, has made rumblings that trade advances made late last year with Cuba would be rolled back and hasn’t seemed to focus on continuing calls from the U.S. agriculture sector for more foreign farm labor.

Louisiana Agriculture Commissioner Mike Strain – who also heads the National Association of State Departments of Agriculture (NASDA) – admits the cuts to USDA are troubling but something the White House is open to revisit.

“If you look at the budget cuts to USDA, those are slated at 20 percent discretionary and 8 percent overall. We’re just starting the discussion on some of the things like the Market Access Program (MAP) and the program for farm market development. We’re going to work to have money put back into these programs. If you look at MAP, for every dollar spent we get back almost $50 in sales. That’s all about trade.

“So, we’ll be working with (Agriculture Secretary) Sonny Perdue on that. We already visited on this about two weeks ago when I was in Washington. That was a topic of intense discussion along with Ray Starling, the president’s advisor on agriculture and trade. Starling and I will talk again (June 8).” 

At the end of the day, “especially since the commodity section of the agriculture budget is such a small portion of the overall federal budget, we’ll make significant strides in putting some of those dollars back. When you look at the value of those programs, they spur rural economic development and that enhances the overall commerce of the entire United States.

“Look at the Office of Rural Development. Producers will remember when a number of offices were shut down a few years back. Right now, the offices have to be within 30 miles of each other on average. Get farther apart than that and people won't take advantage of their services. They don’t want to have to drive an hour.

“They’re also talking about cutting 970 positions from the Farm Services Agency. But this is only where the discussions begin and the next farm bill will likely take more than a year to draft. We all understand our money must be invested wisely because the farm bill impacts agriculture, which is the largest industry in America.”

As for Cuba, Kurt Guidry, an LSU agricultural economist, says there is “definitely potential for trade impacting the Mid-South. For fiscal year 2014/2015, Cuba’s total agriculture imports were at $1.9 billion. The United States had about a $300 million share of that, mostly in poultry. We sold them about $30 million each of soybeans and corn.”

While no U.S. rice was sold to in 2014 “if you look at it historically, we used to sell a lot to Cuba. In 2014, of that $1.9 billion in Cuban imports, about 11 percent of that was rice. That would mean about a $200 million to $250 million market for our rice. That’s significant and would mean a nice opening for Mid-South rice growers.

“If you take the ag commodities we were exporting in the late 1950s and consider it in current dollars, it would about a $600 million market for us. The credit restrictions are really hampering our export efforts. We can’t sell to them on credit so they go elsewhere to find what they need.”

Strain’s belief agricultural trade with Cuba won’t be pushed back is buoyed by action in Congress. “There has been a potential compromise reached with (Arkansas) Rep. Crawford’s bill. That would allow private institutions, not government, to enter into agreements and more normalization of trade with Cuba.

“In return, there would be a 2 percent surcharge or export tariff or duty paid for by the seller. That would go into a fund at the U.S. Treasury for reparation claims to draw from. That’s on the table and both sides are working on it.

“If we can start trade through that mechanism then I’ll support it. My understanding is that is gaining strength in Congress.”

What about immigrant farm labor?

“There’s also a bill in Congress introduced by (Louisiana) Rep. (Clay) Higgins addressing farm labor,” says Strain. “It would provide for a three-year returning guest worker. The first year, the worker would count against the cap (on numbers of workers allowed into the country) and the last two years they wouldn’t count.

“I’m a supporter of that approach. I’ve long been an advocate of a returning guest worker provision where you would have to go through all the red tape only one time.”

Is the White House amenable to greasing the skids for farm labor?

“I think so. I don’t think it’s the White House’s intent, at all, to restrict labor for agriculture. I think the White House understands that without those laborers the work simply won’t get done. We all know that. Those returning guest workers actually protect American jobs. They average guest worker protects four American jobs.”

TAGS: Outlook
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