For the Week Ending June 19, 2020

June 19, 2020

NPPC, AFBF FILE PROPOSITION 12 APPEAL
On Wednesday, NPPC and the American Farm Bureau Federation jointly filed an appeal, challenging California’s Proposition 12, which imposes arbitrary animal housing standards that reach outside of California’s borders to farms across the United States. By attempting to regulate businesses outside of its borders, California’s Proposition 12 violates the commerce clause of the U.S. Constitution. The appeals challenge, filed in the U.S. Court of Appeals for the Ninth Circuit, asks the court to strike Proposition 12 as invalid. It is unconstitutional and seeks to allow a single state without any commercial hog production to regulate how farmers across the country operate, imposing prohibitive costs with no benefits. Beginning Jan. 1, 2022, Proposition 12 prohibits the sale of pork not produced according to California’s highly prescriptive production standards. The proposition applies to any uncooked pork sold in the state, whether raised there or outside its borders. Currently, less than one percent of U.S. pork production meets Proposition 12’s requirements. To comply with Proposition 12, U.S. hog farmers need to start making investment decisions today to be ready by the implementation date.

USTR OUTLINES TRADE PRIORITIES TO CONGRESS
In testimony before two Congressional hearings on Wednesday, U.S. Trade Representative Robert Lighthizer outlined a number of trade-related achievements, including agreements with China and Japan, as well as the U.S.-Mexico-Canada (USMCA) deal which goes into effect on July 1. On China, Lighthizer said he anticipates the country will meet its phase-one commitments, which includes the purchase of $40 billion in agricultural products, including pork. “I expect them to live up to the agreement. They have indicated they will,” he said. Speaking about the upcoming USMCA agreement, which will provide much-needed certainty for U.S. pork producers, he indicated the United States would take action “early and often” to challenge any violations. The United States is currently in trade discussions with the UK and the EU, but Lighthizer indicated that deals were not likely before the November election and reiterated a commitment to ensuring U.S. agriculture exports are sold in both regions. “We either have fair access for agriculture, or we won’t have a deal with either one of them,” he said. Lighthizer also spoke of upcoming trade talks with Kenya, as well as “phase two” agreements with both China and Japan. 

SBA ISSUES REVISED PPP LOAN FORGIVENESS APPLICATION 
The Small Business Administration (SBA), in consultation with the Treasury Department, posted this week a revised Paycheck Protection Program (PPP) loan forgiveness application, as well as a new EZ version of the forgiveness application that could be used by agricultural borrowers. Specifically, the EZ application applies to borrowers who are self-employed and have no employees; or did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25 percent. For more information, visit here

WHAT’S AHEAD?

SENATE AGRICULTURE COMMITTEE SCHEDULES HEARING ON CARBON CREDIT MARKET
On Wednesday, June 24, the Senate Agriculture Committee is holding a hearing on legislation, S. 3894, which would direct USDA to create a program that would help the agriculture sector gain access to revenue from carbon credit offset markets. The program would provide transparency, legitimacy and informal endorsement of third-party verifiers and technical service providers that help private landowners generate carbon credits through a variety of agriculture and forestry related practices. S. 3894 was recently introduced by Sens. Mike Braun (R-Ind.), Debbie Stabenow (D-Mich.), Lindsey Graham (R-S.C.) and Sheldon Whitehouse (D-R.I.). Those testifying at the hearing including representatives from the Environmental Defense Fund, the American Farm Bureau Federation, the National Farmers Union and Land O’Lakes. The hearing begins at 10am ET and will be webcast at www.ag.senate.gov.