| | | | |  | | By Garrett Downs | Presented by Organization for Competitive Markets | With help from Meredith Lee Hill and Ari Hawkins
| | — The House will hold a hearing on Chinese influence on U.S. agriculture. Meanwhile Ag Secretary Tom Vilsack will testify before the House Appropriations Agriculture Subcommittee. — Mexico threatened to challenge the Agriculture Department’s “Product of USA” labeling rule for animal products. — Robert Bonnie, the USDA undersecretary for farm production and conservation, expanded on his comments around the agency’s expanding definition of practices that qualify as climate-smart under the Inflation Reduction Act. — FIRST IN MA: House Ag members Mark Alford (R-Mo.) and Jim Costa (D-Calif.) are leading a resolution to recognize National Agriculture Day tomorrow. HAPPY MONDAY, March 18. I’m your host, Garrett Downs. Send tips to gdowns@politico.com and follow us at @Morning_Ag.
| | | | A message from Organization for Competitive Markets: In 2013, the Shuanghui Group purchased Smithfield with a loan from the Chinese Communist Party (CCP). Today, Smithfield owns one in every six sows in the U.S. This week, the House Agriculture Committee is holding a hearing on China’s Ag grab. Urge Congress to reject any China attack on states’ rights that nullifies Prop 12 in the Farm Bill and to oppose any Farm Bill that contains language like the Hinson-Marshall EATS Act. Congress can prevent China's increasing domination of American agriculture. | | | | | | | 
Rep. Mike Gallagher (R-Wis.) will be a witness at the House Ag Committee's China hearing. | Alex Brandon/AP | TARGETING BEIJING: The House Ag Committee’s Wednesday hearing on “the danger China poses to American agriculture” is the latest move by House Republicans to target Beijing’s influence on the U.S. ahead of November. Lawmakers, including rural Democrats, have frequently expressed concern about Beijing-linked entities buying U.S. farmland and major pieces of America’s critical food supply chain. 2024 outlook: The House is fresh off its move to force the sale of the social media app TikTok by its Beijing-linked parent company, or face a ban in the U.S. And the issue of Chinese ownership of U.S. farmland is a hot-button campaign issue in key 2024 races, including for former President Donald Trump as he threatens a new trade war with Beijing. But even Republicans are divided about Trump’s plans, given the financial fallout for the U.S. agriculture sector. The hearing will allow members of the committee — including those facing tough reelection bids — a platform to take a stand on the issue. Some Democrats, especially progressives, have warned that the move by federal and state lawmakers to crack down on China risks fueling discrimination against Asian Americans and Asian immigrants. Witnesses: Rep. Mike Gallagher (R-Wis.), who chairs the Select Committee on the Chinese Communist Party, is set to testify. South Dakota GOP governor and Trump veepstakes candidate Kristi Noem is also a witness. Vilsack is back: Meanwhile, Vilsack will appear on Thursday before the House Appropriations Ag-FDA Subcommittee to answer questions on the president’s budget request for fiscal year 2025. President Joe Biden requested a nearly $3 billion increase to USDA’s budget from the fiscal year 2024 package Congress just passed — and Vilsack will likely trade barbs with Republicans on the committee targeting spending cuts. Vilsack will face Rep. Andy Harris (R-Md.), the hardline Freedom Caucus member who heads the subcommittee. Harris is a key critic of some of USDA’s recent spending. He also notably pressed to include a series of spending cuts and conservative policy changes for nutrition programs in the troubled FY 2024 Ag-FDA spending bill that Congress only managed to pass earlier this month. With little negotiating leverage, Harris and House Republicans failed to secure many of the items they wanted. But, they now have another chance to try again.
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| | |  Mexico is threatening to challenge USDA’s “Product of USA” labeling rule, which Mexico and Canada argue could potentially violate terms under USMCA and the WTO. | Brendan Smialowski/AFP via Getty Images | MEXICO SHARPENS TONE IN U.S. LABELING DISPUTE: Mexico is threatening to challenge USDA’s “Product of USA” labeling rule, which Mexico and Canada argue could potentially violate terms under USMCA and the WTO, fueling strain between the North American trading partners ahead of a mandatory six year review, our colleagues at Morning Trade report. Details: USDA announced last week that starting in 2026 animal products would need to be born, raised, slaughtered and processed in the U.S. to use "Product of USA” or “Made in the USA” labeling. The provision addresses a so-called loophole that allows cattle born and raised in Mexico, but slaughtered and packaged in Texas, to be labeled “Made in the USA,” which critics say undermines the U.S. beef market and cuts into ranchers’ paychecks. Mexico’s view: The Mexican economic ministry blasted the rule as “discriminatory to Mexican producers” and said the measure could create barriers to Mexican exports of cattle and beef. The statement warned the measure “contravenes” on economic integration principles central to the USMCA, according to a translated release dated Thursday. Mexico said it would prefer resolving disputes with the United States through “constructive dialogue” but said the government would consider “using the mechanisms available in both the [USMCA] and the WTO with the objective of guaranteeing that the United States comply with its commitments regarding Technical Barriers to Trade,” the statement said.
| | | | A message from Organization for Competitive Markets:   | | | | | BONNIE ON CLIMATE-SMART: Bonnie expanded on his comments regarding USDA expanding eligibility of climate-smart ag practices, days after acknowledging that the “requirement that it be climate-smart is not particularly narrow.” Remember: The IRA, Democrats’ marquee 2022 climate and tax law, included about $20 billion for USDA conservation programs to fund practices that will help fight climate change through agriculture. The department expanded those practices last year. Progressive fury: The move invoked the ire of key progressive Democrats who argue some of the newly green-lighted practices are wasteful, subsidize “factory farming” and aren’t targeted enough to reducing greenhouse gas emissions, which many Democrats have long argued should be the focus of the taxpayer-funded effort in order to meet Biden’s ambitious goal to halve U.S. emissions by 2030. What he said: In an email to MA, Bonnie defended the expansion and said the agency “added more practices that qualify as climate smart, not because we’ve loosened our standards, but because we have determined from the science that there are real climate mitigation benefits from the adoption of those practices.” Bonnie acknowledged some of the additions are provisional, saying “these are practices where we believe they provide mitigation benefits but we are still evaluating quantification methodologies.” Political ramifications: The climate guardrails Bonnie references are at the center of the Senate fight over the stalled farm bill.
| | | FIRST IN MA: Alford, Costa and a bipartisan group of more than 40 lawmakers are backing the push to recognize National Agriculture Day, including House Ag Chair G.T. Thompson (R-Pa.). “The men and women that represent the agriculture industry work 365 days a year, sunup to sundown, to feed, clothe, and fuel the world,” Alford told MA. “Their work is the foundation of our great nation and deserves to be celebrated.” “For years, this industry has recognized a National Agriculture Day. Just like years past, my colleagues and I are once again calling on Congress to officially do the same,” Alford added. “Agriculture is part and parcel of America’s national security,” Costa added. “America’s producers are the backbone of our nation. They work tirelessly 365 days a year to provide food, fuel, and fiber to consumers at home and abroad,” Thompson told MA. “National Ag Day recognizes the essential impact the industry has on our everyday lives.” ON THE HILL: Rep. Jamie Raskin (D-Md.) and more than four dozen House Democrats are pressing the Biden administration to increase the number of vegetarian and plant-based food options at federal facilities, citing both climate and health benefits. “Making more nutritious options available to federal workers and visitors will improve peoples’ health and lead to overall cost savings for our government,” the group writes, citing findings from the Harvard T.H. Chan School of Public Health.
| | | | DON’T MISS AN IMPORTANT TALK ON ACCESS TO AFFORDABLE PRESCRIPTION DRUGS IN CA: Join POLITICO on March 19 to dive into the challenges of affordable prescription drugs accessibility across the state. While Washington continues to debate legislative action, POLITICO will explore the challenges unique to California, along with the potential pitfalls and solutions the CA Legislature must examine to address prescription drug affordability for its constituents. REGISTER HERE. | | | | | | | | — Sens. Angus King (I-Maine) and Marsha Blackburn (R-Tenn.) led a bipartisan letter to U.S. Trade Representative Katherine Tai to express concern about the potential effects of the European Union deforestation-free regulation. “We ask that USTR encourage the EU to recognize that the United States has robust regulatory standards to protect the long-term health of U.S. forests,” the senators wrote. — A Minnesota farmer defends Inflation Reduction Act conservation funds. (Star Tribune) — Polish farmers block a key highway near the German border. (Bloomberg) THAT’S ALL FOR MA! Drop us a line: gdowns@politico.com, meredithlee@politico.com, marciabrown@politico.com, mmartinez@politico.com, abehsudi@politico.com and ecadei@politico.com.
| | | | A message from Organization for Competitive Markets: No one wants China to emerge as the winner from Congress passing the 2024 Farm Bill, but that’s unfortunately what House Ag Committee Chairman Glenn Thompson working toward with language similar to the EATS Act (H.R. 4417/S. 2019). They say it will eliminate “burdensome” regulations. But these state level safeguards effectively deter wholesale further takeover by foreign conglomerates. EATS-like language is a gift to China’s multinational corporations, like “万洲国际/WH Group,” which in 2013 acquired Smithfield, the largest pork producer in the U.S.
By eliminating state laws, EATS Act or language like it will enables China to more rapidly takeover American agriculture. It sets a precedent that’s rattling other corners of agriculture, too. Take it from Mike Schultz, founder of the Kansas Cattlemen’s Association: “The EATS Act will put family farmers out of business and give multinational conglomerates like the Chinese-owned Smithfield an even greater advantage to run the table on us than they already have.” | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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