Benefit cliffs loom large over appropriations

With help from Ari Hawkins

— Congress returns this week needing to reach an appropriations deal by early next year. Potential benefit cliffs loom large over the negotiations.

— American lawmakers and major industry groups are tearing into a USMCA panel decision that rejected a complaint alleging Canada has overly restricted U.S. dairy imports.

— With the farm bill delayed, the Senate Ag Committee will hold a confirmation hearing for Basil Gooden, the nominee for rural development undersecretary. The committee will also hear from Summer Mersinger, who was renominated to serve another term as a Commodity Futures Trading Commission commissioner.

HAPPY MONDAY, Nov. 27. I’m your host, Garrett Downs. Send your tips to [email protected], and follow us at @Morning_Ag.

BENEFIT CLIFFS LOOM OVER APPROPS: Cascading benefit cliffs are looming over the appropriations process as lawmakers return this week.

WIC watch: The chief concern for congressional Democrats is the fate of the Special Supplemental Nutrition Program for Women, Infants, and Children. The White House and advocacy groups are warning a funding shortfall could force the program, better known as WIC, to turn away eligible mothers and children.

To remedy that, Democrats are pushing a $1 billion supplemental to the appropriations package to ensure WIC doesn’t need to impose waiting lists and turn away eligible people. But so far, as Meredith and Marcia reported last week, congressional Republicans are resisting the move.

“If this becomes a problem, that’s because the administration is purposefully making it a problem for not allocating these necessary funds,” said Rep. Robert Aderholt (R-Ala.), who chairs the House Appropriations panel on Labor, Health and Human Services and Education.

A sea of lost benefits: The WIC shortfall comes at a perilous time for recipients of the program and President Joe Biden. As POLITICO reported over the holiday, the expiration of a slew of pandemic-era benefits is already making Biden’s economic message more difficult as he seeks reelection.

Should WIC’s funding shortfall not be addressed, it would mean yet another decrease in benefits and economic blow for low-income people who rely on social safety net programs — a situation Democrats are desperate to avoid.

What’s next: Congress’ next chance to boost WIC for the fiscal year 2024 will be in the Agriculture-FDA appropriations bill, which must be passed by Jan. 19 to avoid a partial government shutdown. Another set of appropriations bills will expire on Feb. 2.

Senate Majority Leader Chuck Schumer on Sunday said in a Dear Colleague letter that the Senate and House must “continue to work in a bipartisan, bicameral fashion so that we can complete the first tranche of appropriations bills … before the January 19 deadline.”

The Democratic chair of the Senate Appropriations Committee, Sen. Patty Murray (D-Wash.), said leaving WIC underfunded is not an acceptable option.

“Failing to fully fund WIC for the first time ever is not an acceptable outcome to me under any circumstances,” she said.

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RAGE BUILDS OVER RULING: American lawmakers and major industry groups are tearing into a landmark decision from the three-member USMCA panel on Friday that rejected a complaint that Canada has overly restricted U.S. dairy imports.

“We are disappointed in today’s announcement and the decision of the dispute panel. It is critical the U.S. encourage and enforce USMCA, and this decision allows Canada to continue their questionable protectionist practices that disallow fair access to Canadian markets,” House Agriculture Chair G.T. Thompson (R-Pa.) and ranking member David Scott (D-Ga.) said in a statement after the panel decision.

Rep. Elise Stefanik (R-N.Y.), shared a similar sentiment on Friday, saying the move would position farmers in New York and North Country at a strategic disadvantage.

Catch me up: The United States in January requested a panel to investigate Canada over their tariff rate quotas used to limit foreign dairy imports to protect domestic industry in 14 categories including milk, cream, butter and cheese.

“Two of the three panelists found that Canada’s measures do not breach … any of the USMCA commitments that the United States cited,” said the Office of the U.S. Trade Representative in a statement, referring to the decision.

Big biz in the fray: “By allowing Canada to ignore its USMCA obligations, this ruling has unfortunately set a dangerous and damaging precedent,” said Krysta Harden, president and CEO of the U.S. Dairy Export Council. The National Milk Producers Federation similarly argued that the panel ruled in favor of trade obstruction. “We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated,” said President and CEO Jim Mulhern.

Admin agrees: USTR Katherine Tai on Friday said she was “very disappointed” with the determination. She added that “despite the conclusions of this report, the United States continues to have serious concerns about how Canada is implementing the dairy market access commitments it made in the Agreement.”

How we got here: The U.S. has launched two dispute settlement panels to fight Canada’s dairy TRQs since the USMCA came into force in 2020. The U.S. claimed victory in the first panel, launched and completed in 2021, after panelists ruled Canada breached its obligations under the deal by reserving TRQs for domestic processors.

Ottawa gloats: International Trade Minister Mary Ng and Agriculture Minister Lawrence MacAulay issued a joint statement saying the Canadian government is “very pleased” with the panel’s conclusion and said its a positive development for “Canada’s dairy industry and our system of supply management.”

Washington’s not alone: Canada’s TRQ policy also faces criticism from trading partners like New Zealand, which initiated a formal trade dispute under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. A panel in September ruled that Canada’s policies were granting preferential access to their own domestic dairy processors.

GOODEN SENATE HEARING: The Senate Ag Committee on Thursday will hold a confirmation hearing for Basil Gooden to become undersecretary of rural development at the Agriculture Department.

Gooden was nominated by President Joe Biden in September to replace Xochitl Torres Small, who Biden elevated to be the department’s deputy secretary.

Gooden was the first Black agriculture secretary in Virginia, and currently serves as the director of state operations for rural development at USDA. He has yet to face any serious resistance to his nomination.

CFTC commissioner also up: The committee will also hear from CFTC Commissioner Summer Mersinger, who Biden renominated for another term.

Mersinger has served as a CFTC commissioner since early 2022, and is a former deputy chief of staff to Senate Minority Whip and Agriculture Committee member John Thune (R-S.D.).

The nomination hearings come as the Senate Ag Committee now has more time to complete a farm bill, with an extension through Sept. 30, 2024.

— An Iowa Black farmers conference seeks to unite a small group in the state, The Gazette reports.

— Little known agriculture stocks are shaping the future of alternative protein, CNBC writes.

— An experiment in Haiti is recovering previously arid land, the Miami Herald reports.

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