The congressional agenda for 2015 is daunting, to say the least. While the last Congress was one of the least productive in history, the new Congress has some catching up to do. A big issue will be how to move away from sequestration (across-the-board spending cuts)—which everyone agrees was the worst policy option to cut government spending—to targeted reductions or elimination of some government programs.
The debt limit will be another major debate, but no one is going to shut the government down over it because both political parties lose when that happens. Budget reconciliation is a key area to watch. This is where changes in the large entitlement programs—the biggest drivers of our future budget deficit—can be forced. The targets will be cuts in mandatory spending or taxes, with a focus on Medicare, Medicaid, Obamacare, SNAP (food stamps), etc.
We could also see efforts to move forward on tax reform, which is long overdue. We will work to get another extension of the Section 179 small business expensing and bonus depreciation for the ability to write off capital expenditures in the year that purchases are made, rather than depreciate them over time. This is a very important issue for all growers, which is why ASGA joined 40 other farm groups in asking for an extension for 2014. Rail congestion in the upper Midwest will continue to grab the attention of lawmakers.
Of course, we will have to be vigilant to fight any direct or indirect attempts to undermine U.S. sugar policy in the appropriations process.
Trade
International trade will take center stage for our industry in 2015. The newly-negotiated antidumping and countervailing suspension agreements with Mexico need to be implemented and enforced. This is no simple task, and it will require constant oversight to make sure that both governments are living up to the agreements. When you dig deep into the complexities of producing and delivering sugar to American consumers, most people would be shocked as to how it all works. The successful implementation of the suspension agreements puts the control of managing the market back into the hands of USDA where it belongs, and not in the hands of Mexican exporters. If the agreements address the core problems, we will see stronger raw and refined sugar prices, no threats of forfeitures and better returns for producers.
Completion of the Trans-Pacific Partnership (TPP) trade negotiations is expected in the first half of this year in order for all of the mandatory reviews to take place prior to congressional consideration by the end of the year. Legislators typically do not want to vote on a trade agreement in an election year, so there will be a push for final passage by the end of 2015. We will be in the negotiating trenches early this year to make sure that our delicately-balanced U.S. market is not overrun by additional imports under agreements like this one. With both the U.S. and Japanese national elections behind us, there will be political breathing room for both countries to tackle the tough issues in the negotiations between them. It is believed that once the U.S. and Japan can find a path to an agreement, the rest of the countries should be able to resolve their differences. Complicating factors are the possible May elections in Canada, which could slow those negotiations.
Cuba
Don’t worry about it any time soon. The Cuban sugar industry is not what it once was, given its collapse after the former Soviet Union stopped being the major sugar purchaser years ago. The global competition from countries like Brazil that subsidize and dump into the world market, along with the deplorable physical condition of Cuban sugar mills, means that Cuba will not be the threat that it once was. The embargo will not be lifted any time soon, since it requires an act of Congress to do so. In the meantime, we will be monitoring the very polarizing debate in the months and years to come.
Biotech labeling debate
With the defeat of labeling initiatives in Colorado and Oregon last November, American agriculture needs to work very hard this year to pass federal legislation that will provide national uniformity on any labeling standards or requirements. You will hear a great deal more about this effort in the weeks to come. It is essential that everyone in the value chain work hard to get a bill passed.
The nation cannot afford to have a patchwork of various state labeling regulations, and fighting each of these state battles costs an outrageous amount of money by both opponents and proponents. These battles, as important as they are, are not a good long-term use of resources. Growers, seed industry, grain companies, grocery manufacturers, retailers, biotech companies, etc., need to work hard to fix the problem at the national level. If you want to maintain your biotech tools for all crops for years to come, you need to engage on this issue. While we may have many disagreements with our customers on U.S. sugar policy, this is one critical area where we need to work together.
In late February and early March, your grower leaders will be walking the halls of Congress to talk to members and staff about U.S. sugar policy, Mexico and biotechnology. This is a valuable opportunity to educate staff about our industry and the issues that are before Congress that are critically important to us. We thank these growers for their time and effort to do this good work.
2015 Cleavinger Internship
Applications for the 2015 internship in the ASGA office are available online at www.americansugarbeet.org. Applications must be received no later than March 31. It is a tremendous experience and opportunity to help prepare agricultural leaders for the future.