Washington Insider - Tuesday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Trade Issues Figure Prominently in This Week's U.S.-India Meetings

Indian Prime Minister Narendra Modi is in Washington this week for meetings with President Obama, with a number of outstanding trade issues between the two countries high on the agenda.

Modi's Bharatiya Janata Party rose to power in May after promising to reform India's economy, and Modi has promised to make it easier to conduct trade and investment in India. Yet New Delhi and the United States remain embroiled in disagreements on various trade and investment issues, including intellectual property, steel imports and a global trade facilitation deal.

Washington and New Delhi are also at a crossroads about India's stance over the World Trade Organization's Trade Facilitation Agreement. In July, India refused to support a consensus to open the trade agreement for domestic ratification, citing concerns that the WTO was not making sufficient progress on the issue of food security.

Trade officials in both countries are hoping for some sign of progress on key issues this week. But even if only small steps result from the bilateral meetings in Washington, U.S. and Indian officials will have another opportunity to address pressing trade issues later this year, at the next ministerial-level meeting of the Trade Policy Forum.

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Boehner Confident GOP Would Back Immigration Overhaul

House Speaker John Boehner, R-Ohio, has spent much of the time since Congress adjourned on Sept. 18 telling the press what the House may accomplish when it returns in November. Last Sunday, he appeared on ABC's "This Week," and said that it is "still time to do an immigration overhaul." And, Boehner added for emphasis, "I said the day after the 2012 election it was time to do immigration reform. I meant it then and I mean it today."

And he most likely does mean it.

The biggest problem Boehner faces in moving immigration reform through the House is the opposition he faces from House Republicans. The GOP holds an overwhelming 233-199 majority in the House (there are three vacancies), meaning that Republicans can pass any legislation they choose, and Democrats cannot block them.

As Boehner correctly notes, "Big things in Washington take bipartisan majorities. Issue of immigration, only way to do it, and frankly the right way to do it, is to do it in a broad bipartisan way." Translation: We can't pass immigration reform if we rely only on Republicans to do so. Therefore, we will need help from House Democrats and the White House if immigration reform is to happen.

The next problem for Boehner will be to develop a legislative proposal that will be sufficient to attract a good number of Democratic votes without alienating even more Republicans. That is not likely to happen during the lame duck session in November and December.

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Washington Insider: New Organic, Local Support from USDA

Suspiciously close to the fall elections, USDA has announced a $52 million program to support local and regional food systems like farmers' markets and food hubs. It also says it will spur research on organic farming.

So, the urban press like the New York Times has been fawning over the announcement with suggestions that the local food movement has been one of the fastest growing segments of the business. Consumers, they argue, are seeking to know more about where, how and by whom their food is grown. Maybe so, but at the same time, the foodists manage to suggest that it all is not working, somehow.

In spite of a continuing push from supporters, the Times says local farmers still struggle to market their food. This is because food distribution systems are intended to accommodate the needs of large-scale commercial farms and growers. And, consumers, one might add. It thinks that grocery stores and restaurants largely rely on big distribution centers and are only beginning to figure out how to incorporate small batches of produce into their overall merchandise mixes.

However, the Times emphasizes the idea that farmers' markets are proliferating around the country, increasing 76% to 8,268 since 2008. But, at the same time, these producers have trouble marketing themselves — at prices they like, one might add. And few consumers are aware of a website the department created to help them find a farmers' market in their area.

Agriculture Secretary Tom Vilsack is even more ambitious. "These types of local food systems are the cornerstones of our plans to revitalize the rural economy," he asserts. "If you can connect local produce with markets that are local, money gets rolled around in the local community more directly compared to commercial agriculture where products get shipped in large quantities somewhere else, helping the economy there."

The $52 million will be the first outlay to local and organic enterprises of the farm bill signed into law by President Obama in February, which tripled the amount of money aimed at that sector to $291 million. The organic business, which has long complained that USDA does not support it financially, will get $125 million over the next five years for research and $50 million for conservation programs.

The department will also be putting $30 million a year into marketing programs for farmers' markets and promotion of locally grown foods. It also has an additional $70 million available as a block grant to support more research on so-called specialty crops, or fruits and vegetables.

"These are significant increases over what it was before I became secretary and certainly over the 2008 bill," Vilsack said, referring to the previous omnibus farm bill.

Still, Vilsack says he thinks local food systems are good investments for government. "Small and medium-sized operations end up helping to generate more employment than commercial operations because of their different distribution systems and their local natures," Vilsack said. "And food hubs hire about 20 people on average."

Vilsack said there were about 300 food hubs around the country, and he is eager to see more. These enterprises, like Appalachian Sustainable Development in Virginia and La Montañita in New Mexico, help small farmers market and distribute their products and offer a variety of other services, he said.

It will be interesting to see what commercial food producers think of Vilsack's initiative. It is weird to suggest that the U.S. food system doesn't work, or that it is inefficient and needs the help of government programs since U.S. consumers spend a smaller share of their disposable income on food than anywhere else in the world. And, commercial food producers are unlikely to take kindly to the idea that the government should spend tax dollars to promote production systems that are more costly but have been unable to demonstrate that their products deliver higher quality or are more healthful.

However, they are likely to note and understand the link between support for popular food fads and the upcoming elections and with Democratic candidate struggles in several key regions. And, overall, one could suppose a few bucks spent supporting organic and local foods is no worse than other time-honored forms of electioneering.

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