Capital Update – For the Week Ending January 19, 2024

NPPC voices concerns on environmental justice proposals | Congress approves another CR as new farm bill future uncertain | Tax bill would increase deductions for farmers | Deadline approaching for USDA export promotion funds | Biden offers nominee for deputy U.S. trade representative

NPPC Voices Concerns on Environmental Justice Proposals

What happened: As the federal government continues to expand its focus on environmental justice, NPPC has worked to organize and increase engagement with a diverse and growing coalition of other industry groups impacted by the emergence of new federal regulatory mandates and guidelines. NPPC has worked to ensure business stakeholders have a united voice as the Biden Administration seeks to extensively grow the integration of environmental justice throughout all of government.

This week, the coalition submitted comments that expressed concerns to the President’s Office of Science and Technology Policy (OSTP) over its “Federal Environmental Justice Science, Data, and Research Plan.” In addition, the groups also provided feedback to the U.S. Environmental Protection Agency’s (EPA) Office of Environmental Justice and External Civil Rights on its draft guidance for “Achieving Health and Environmental Protection Through EPA’s Meaningful Involvement Policy.”

NPPC’s take: It is important that the government take into consideration the views and voices of all impacted stakeholders, including pork producers and other industry sectors that will be required to navigate future legal and regulatory decisions for years to come as they are shaped by the Administrations environmental justice priorities and commitments. The coalition recommended the following actions to OSTP to improve its proposed science, data, and research plan, including:

• Improve integration of industry contributions;
• Take a more proactive role in fostering transparent information sharing between industries and communities;
• Promote data quality, integrity, and accessibility;
• Offer flexibility and interoperability to include local data;
• Address data gaps and strengthen data infrastructure;
• Protect confidential business information; and
• Ensure balanced consideration of all data, including potential unintended consequences.

The coalition also recommended the following improvements to EPA’s draft meaningful engagement guidance:

• EPA needs to actively engage trade associations who represent important sectors of the economy in its process and consider them valuable partners;
• EPA should provide adequate time for public comment on proposed rules or guidance documents;
• EPA should ensure the public understands differences in data quality; and
• Efforts to streamline EPA’s information sharing are welcome but need additional modification.

Why it matters: Federal agencies may take different approaches to establishing definitions, processes, data collection, community engagement, and funding. NPPC and other members of the business community are committed to championing responsible development that provides economic opportunities while fostering environmental stewardship and innovation.

Congress Greenlights Another CR; New Farm Bill Future Uncertain

What happened: Congress this week approved yet another short-term funding bill, ensuring the government’s continued operation for the next several weeks. President Biden is anticipated to sign the continuing resolution (CR) into law, allocating funds for select federal programs, including agricultural ones, with varying timelines – some through March 1 and others through March 8.

Congressional lawmakers extended government funding twice last fall, passing CRs in early October for all federal agencies through Nov. 17. Another extension in mid-Nov. for several departments, such as the U.S. Department of Agriculture and the Food and Drug Administration, until Jan. 19, and others until Feb. 2. Notably, in the Nov. CR, Congress also extended the 2018 Farm Bill through the end of fiscal year 2024, on Sept. 30.

Some members of Congress are concerned that having to deal with appropriations bills and/or a possible fourth CR in early March could delay work on the new Farm Bill. House Agriculture Committee Chairman G.T. Thomson (R-PA) would like to finalize the lower chamber’s five-year agricultural blueprint that month.

NPPC’s take: NPPC wants a new farm bill approved as soon as possible. It supports legislation that includes robust funding for foreign animal disease (FAD) preparedness and addresses challenges posed by California’s Proposition 12. NPPC also wants an increase in funds for the Market Access and Foreign Market Development export promotion programs.

Why it matters: The Farm Bill sets farm, conservation, forestry, and nutrition policy and authorizes various agricultural programs, including ones related FAD preparation and prevention and export promotion.

Tax Bill Would Increase Deductions for Farmers

What happened: U.S. Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Jason Smith (R-MO) this week introduced a tax reform bill that would benefit families, farmers, and business owners.

The “Tax Relief Act for American Families and Workers Act of 2024” increases the refundable amount of the child tax credit, changes write-offs for research and development to allow for immediate expensing and restores interest deductions. It includes a provision to allow 100% bonus depreciation for certain assets — including qualified property with as long as a 20-year recovery period — placed into service between Sept. 27, 2017, and Jan. 1, 2026, and extends the depreciation deduction for qualified property with longer recovery periods placed into service between Sept. 27, 2017, and Jan. 1, 2027.

Additionally, the tax measure increases the amount that can be expensed for the 2024 tax year under the Section 179 deduction to $1.29 million, up from $1 million, for qualifying depreciable business assets. The phaseout threshold for this deduction would also increase from $2.5 million to $3.22 million. (For tax year 2023 there are no changes, the deduction was and remains $1.16 million phasing out on purchases over $2.89 million.)  Both the deduction amount and the phaseout would be indexed for inflation.

NPPC’s take: NPPC is analyzing the Wyden-Smith tax relief bill, including the long-term implications of various phaseout dates, but generally supports efforts to ease taxes on farmers.

Why it matters: Allowing farmers to deduct more of their expenses against income can help with cash flow issues, particularly because many farmers have significant funds tied up in farm equipment.

Deadline Approaching for USDA Export Promotion Funds

What happened: The deadline for submitting applications for export promotion funds under the U.S. Department of Agriculture’s (USDA’s) Regional Agricultural Promotion Program (RAPP) is Feb. 2. The USDA program, finalized in Nov. 2023, allocates $1.2 billion over five years to boost U.S. agricultural exports.

Up to $300 million is earmarked for the first year to support eligible projects facilitating entry into new markets or expand market share in existing markets.

In a related matter, U.S. Reps. Jim Costa (D-CA), Dusty Johnson (R-SD), Jimmy Panetta (D-CA), and Adrian Smith (R-NB) formed a new congressional caucus to promote agricultural trade, pressing the Biden administration to negotiate comprehensive trade agreements. So far, the administration has opted for economic frameworks that focus more on climate change, supply chains, taxes, and labor rights issues.

NPPC’s take: NPPC strongly supports USDA’s efforts to boost agricultural trade and urges congressional lawmakers to reauthorize and double the funding in the next farm bill for the trade-promoting Market Access Program (MAP) and the Foreign Market Development (FMD) Program. For fiscal 2023 — and for each of the past 15 years — MAP received $200 million and FMD got $34.5 million. NPPC is advocating for the Biden administration to open new and expand existing markets for U.S. pork through comprehensive trade agreements.

Why it matters: The U.S. pork industry is dependent on exports, which in 2023 are expected to top $8 billion, account for more than 25% of total pork production, and add the equivalent of more than $60 to the price producers received for each hog marketed.

Biden Offers Nominee for Deputy U.S. Trade Representative

What happened: President Joe Biden last week nominated Nelson Cunningham for the post of deputy U.S. trade representative. The trade consultant was a special adviser to the president in the Office of Special Envoy for the Americas during the Clinton administration.

Cunningham has been a longtime supporter of comprehensive trade agreements, including the Trans-Pacific Partnership (TPP). TPP was championed by NPPC before the United States dropped out of the 12-nation trade deal in Jan. 2017.

Democrats on the Senate Finance Committee, which will consider Cunningham’s nomination before sending it to the full Senate, seem to be split on his appointment.

NPPC’s take: Having a deputy U.S. trade representative who will maintain an active trade agenda will benefit America’s pork producers and the U.S. economy. NPPC supports the Office of the U.S. Trade Representative in negotiating comprehensive trade agreements that address market access issues and eliminate tariff and non-tariff barriers to U.S. pork exports.