For the Week Ending September 17, 2021
HOUSE TAX PANEL RELEASES REVENUE PACKAGE FOR RECONCILIATION MEASURE
The House Ways and Means Committee this week released a tax package for the $3.5 billion budget reconciliation plan, and it includes several provisions that could be detrimental to pork producers, according to NPPC. Omitted from the package, however, was a widely-circulated proposal from the White House to eliminate the step-up in basis while levying a capital gains tax on assets transferred at death. But Senate tax writers still intend to push for eliminating the decades-old tax rule, which allows heirs for inheritance tax purposes to use the difference between the value of an asset at transfer and the current value rather than the difference between the original price and the current value. Among the problematic provisions, the House revenue bill would lower the exemption amount for the estate tax to an inflation-adjusted amount equal to $5 million in 2010 – double that for married couples – from its current $11.4 million, starting Jan. 1, 2023. Under then-President Trump’s 2017 tax cut, the exemption amount was increased, indexed for inflation and effective through 2025. The new tax measure also calls for increasing the top marginal tax rate on individuals to 39.6 percent from its current 35 percent, raising the capital gain tax rate to 25 percent from 20 percent and adding a 3 percent surcharge on adjusted gross incomes greater than $5 million. It also would lower the maximum deduction for IRS Section 199A pass-through income subject to tax to $400,000 for individuals. Currently, it’s the lesser of 20 percent of a taxpayer’s “qualified business income” or 20 percent of taxable income, less any net capital gains. The measure does make a beneficial change to IRS Section 2032A, which usually establishes for farmland a productive value that’s less than the fair market value, which means a lower estate tax bill. Currently, the reduction in value from fair market to productive is capped at $750,000. The House tax plan would raise that reduction to $11.7 million.
USDA SUSPENDS MOVEMENT OF HOGS IN PUERTO RICO, U.S. VIRGIN ISLANDS
Although African swine fever (ASF) has not been detected on either U.S. territory, USDA’s Animal and Plant Health Inspection Service (APHIS) today suspended the interstate movement of all live swine, swine germplasm, swine products and swine byproducts from Puerto Rico and the U.S. Virgin Islands to the U.S. mainland until it can establish sufficient mitigations to authorize such movement. It’s the final action in a series of safeguards needed to establish an ASF protection zone for the island territories. In late July ASF was confirmed in neighboring Dominican Republic. Last month, APHIS announced its intent to establish a World Organisation for Animal Health (OIE)-recognized foreign animal disease protection zone around Puerto Rico and the U.S. Virgin Islands to prevent ASF from being introduced there or into the United States. When the protection zone is established, APHIS will have processes in place to:
- Prohibit movement of live swine and products out of the protection zone.
- Conduct surveillance within the protection zone to quickly detect diseases.
- Conduct a public education campaign on biosecurity on farms and other establishments, prohibitions on movement of live swine and products outside the region, contacting authorities to report clinical cases and similar actions.
Those efforts will be detailed to the OIE. Once that organization recognizes the protection zone, APHIS will work to get individual countries to recognize and accept the zone, which will allow the continued flow of U.S. pork and live swine exports.
HOUSE LAWMAKERS ASK PELOSI FOR MORE FUNDS FOR USDA TO ADDRESS ASF
House members Thursday sent a letter to House Speaker Nancy Pelosi (D-CA), urging her to prioritize funding for USDA’s Animal and Plant Health Inspection Service (APHIS) to address an outbreak in the United States of African swine fever (ASF), a move hailed by NPPC. The hog-only disease recently was detected in the Dominican Republic, the first time in 40 years ASF has been in the Western Hemisphere. Funds are necessary “to ensure that pork producers in our districts and across the country do not suffer the severe consequences of a potential ASF outbreak in the United States,” the lawmakers said. Signed by Agriculture Committee Chairman David Scott (D-GA), panel members Cindy Axne (D-IA), Cheri Bustos (D-IL), Jim Costa (D-CA), Angie Craig (D-MN) and Abigail Spanberger (D-VA) and G.K. Butterfield (D-NC) – whose district includes a significant amount of pork production – the letter asked the speaker to include in the next continuing resolution or supplemental appropriations bill $75 million for:
- The National Veterinary Stockpile for large animal depopulation and disposal equipment. If ASF were detected in the United States, large-scale euthanasia or depopulation of animals would be necessary for emergency control and eradication of the disease.
- Additional staff for APHIS Veterinary Services (VS) field force to respond to and address an outbreak of ASF or other foreign animal disease.
- The National Animal Health Laboratory Network (NAHLN), which provides disease surveillance and diagnostic support.
The letter followed an Agriculture Committee debate earlier in the week on an amendment offered by Rep. Dusty Johnson (R-SD) to the budget reconciliation bill, requesting the same funding.
NPPC, OTHER GROUPS WANT ACTION ON OCEAN CARRIER PRACTICES, PORT ISSUES
NPPC this week signed onto two letters urging action on shipping and port issues that are affecting pork and other agricultural exports. The organization joined more than 70 other agricultural associations – as part of the Agriculture Transportation Coalition – in asking President Biden to immediately address the problems, including unfair, anti-competitive and illegal business practices by some ocean carriers, such as charging unreasonable fees and refusing to accept cargo bookings for U.S. exports. There have been many reports of shippers choosing to quickly send empty containers back to the Asia-Pacific region to refill them with foreign exports. Separately, NPPC and more than 150 companies and trade associations Monday sent a letter offering “strong support” for legislation introduced by Reps. John Garamendi (D-CA) and Dusty Johnson (R-SD), the “Ocean Shipping Reform Act of 2021,” to update the Shipping Act and the Ocean Shipping Reform Act. Among other measures, the bill would:
- Require ocean carriers or marine terminal operators to certify that any late fees – known as “detention and demurrage” charges – comply with federal regulations or face penalties.
- Shift the burden of proof for proving the reasonableness of “detention or demurrage” charges from the invoiced party to the ocean carrier or marine terminal operator.
- Prohibit ocean carriers from unreasonably declining to take U.S. exports, as determined by the FMC in new required rulemaking.
In June, NPPC President Jen Sorenson testified before Congress about shipping delays at U.S. ports disrupting exports, warning that if not addressed, they could lead to serious bottlenecks for pork and other agricultural exports. Click here to read the letter to President Biden; click here to read the letter to Reps. Garamendi and Johnson.
FMC TO TAKE ACTION ON ‘DETENTION, DEMURRAGE’ ISSUES
The Federal Maritime Commission (FMC) Wednesday voted to take action on two demurrage- and detention-related initiatives. The agency will provide guidance on the scope of the prohibition against carrier retaliation, when attorney fees may be imposed on a non-prevailing party, and who may file a complaint with the commission alleging unreasonable conduct when shippers, truckers and other exporters seek reparations for conduct that violates the Shipping Act, including conduct related to demurrage and detention. FMC also will issue an Advance Notice of Proposed Rulemaking, soliciting public comments, on whether it should require ocean common carriers and marine terminal operators include certain minimum information on or with demurrage and detention billings and on whether the commission should require carriers and marine terminal operators to adhere to certain practices regarding the timing of demurrage and detention billings. FMC also will hire additional staff for its Office of Consumer Affairs and Dispute Resolution Services, including an “exporter advocate.”
PRODUCERS URGED TO PLAN NOW TO ENSURE ADEQUATE SUPPLIES OF PROPANE
With concerns about propane availability during the winter months seemingly a perennial problem, and supply chain disruptions that continue to pop up throughout the economy during the COVID pandemic, NPPC is urging pork producers to take steps now to ensure they have adequate supplies of propane or the ability to get them. NPPC is working with the National Propane Gas Association (NPGA) to keep open lines of communication “to better facilitate service among propane providers and consumers.” In a recent memo to NPPC, NPGA pointed out that while there is no shortage of propane, supplies are less plentiful in the Midwest, “which makes consumer communication [with suppliers] and logistical planning more important than ever.” Should producers experience propane issues, they are encouraged to communicate with NPPC staff about them. (For more information, visit propane.com/agriculture.)
NEW DEADLINE TO APPLY FOR PANDEMIC LIVESTOCK INDEMNITY PROGRAM
USDA extended the deadline for livestock and poultry producers to apply for the Pandemic Livestock Indemnity Program (PLIP). Producers who suffered losses during the COVID pandemic because of insufficient access to processing facilities now may apply for assistance for those losses and the cost of depopulation and disposal of animals through Oct. 12. The original deadline was today. PLIP is part of USDA’s Pandemic Assistance for Producers initiative. PLIP provides payments to producers for losses of livestock or poultry depopulated from March 1, 2020, through Dec. 26, 2020. Payments are based on 80 percent of the fair market value of the livestock and poultry and for the cost of depopulation and disposal of animals. Click here for more information on and to apply for the PLIP.
CALIFORNIA ALMOND ALLIANCE’S TREVINO NOMINATED AS USTR CHIEF AG NEGOTIATOR The Biden administration this week nominated Elaine Trevino as chief agricultural negotiator for the Office of the U.S. Trade Representative. NPPC praised the pick of Trevino, who is president of the Almond Alliance of California and formerly served as a deputy secretary at the California Department of Food and Agriculture under governors Arnold Schwarzenegger and Gray Davis. At CDFA, she was responsible for oversight of the international export and trade programs, specialty crop block grant funding, division of marketing services, plant health and pest prevention and the statewide county fair network. She currently serves on USDA’s Agricultural Policy Advisory Committee. Said Nick Giordano, NPPC vice president and counsel, global government affairs: “Once confirmed, we look forward to working with Elaine Trevino to enhance market access for one of our nation’s most competitive agricultural export products, one that consistently helps offset our nation’s trade deficit.”