February 27, 2017
There is a lot going on in Washington, D.C. Four agricultural issues to keep an eye on are:
• Trade. Every commodity group in the Dakotas seems rightly to be worried about trade agreements. A vast majority of South Dakota’s and North Dakota’s corn, soybean and wheat crops are sold overseas. Mexico is the leading importer of U.S. corn. China is a leading importer of soybeans. Within his first month in office, President Donald Trump seemed to tick off both countries. Mexico immediately announced it would stop buying corn from the U.S. and sent a trade team to Brazil and Argentina. Bill Wilson, North Dakota State University agricultural economist and grain trade expert, says Trump’s idea that he can negotiate better deals with individual countries may not pan out. Multilateral agreements have worked best for agriculture, Wilson says.
Reopening trade with Cuba seems to be on hold, which is disappointing. For a while it looked as if North Dakota might be able to re-establish markets for wheat, edible beans and potatoes.
• Immigration. Many dairy and hog producers in South Dakota and North Dakota rely on immigrant workers. If corn and soybean exports fall due to trade disputes, expanding livestock feeding will be one way to pick up the slack. But there may not be enough workers in the Dakotas to milk cows and farrow and feed pigs. Agriculture needs Congress and the administration to approve balanced measures to retain members of the existing workforce and to create a workable guest worker program, according to the National Potato Council, which also has a stake in immigration policy. These enhancements must be signed into law and fully implemented before any mandatory enforcement program is required, the NPC said. I agree.
• Tax reform. The positive news is that there is support, perhaps even bipartisan support, to pass a major tax reform package. It could be an opportunity to eliminate the estate tax and make accelerated depreciation permanent. But the package may include import taxes. Depending on the structure of a border tax, there could be negative repercussions for export-oriented industries like agriculture.
• Conservation. While most farmers will welcome a reduction in regulations, most will probably be disappointed if Congress and the president cut funds for popular voluntary programs such as the Conservation Reserve Program, Environmental Quality Incentive Program and the Conservation Stewardship Program. Other programs for conservation, small farms and beginning farmers may be hard to maintain if the federal budget is reshaped.
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