Farm Bill Workshop & GOVERNMENT Affairs Meeting

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NATIONAL COUNCIL OF FARMER COOPERATIVES 2 0 WASHINGTON 1 7 CONFERENCE JUNE 26-28, 2017 HYATT REGENCY WASHINGTON, DC

Farm Bill Workshop & GOVERNMENT aFFAIRS mEETING Farm Bill Workshop: Agenda

NCFC Washington Conference Farm Bill Workshop Hyatt Regency Hotel Washington, DC June 26, 2017

AGENDA Columbia A/B Room

7:30 AM Registration Open & Breakfast Served

8:00 AM Welcome & Introductions

8:05 AM Balancing Priorities Against a Challenging Baseline

Guest Speaker: Jonathan Coppess Clinical Assistant Professor University of Illinois

8:50 AM Crop Insurance & Risk Management

Guest Speaker: Tara Smith Torrey & Associates

9:20 AM Priorities for Commodities, Specialty Crops & Livestock

Guest Panelist: Sam Willett National Corn Growers Association

Reece Langley National Cotton Council

Ben Mosely USA Rice Federation

John Hollay National Milk Producers Federation

Robert Guenther United Fresh Produce Association

Bill Davis National Pork Producers Association

Representing the Business Interests of Agriculture

10:45 AM Break

11:00 AM Nutrition – Not a slush fund!

Guest Speaker: Julian Baer Committee on Agriculture, Nutrition & Forestry U.S. Senate

11:30 AM Conservation, Energy & Research – Areas for Refocus

Guest Panelists: Jason Weller Land O’Lakes, Inc. Former Chief, Natural Resources Conservation Service, U.S. Department of Agriculture

Bobby Frederick National Grain & Feed Association

Josh Maxwell Committee on Agriculture U.S. House of Representatives

John Goldberg Science Based Strategies

12:30 PM Lunch

1:00 PM Trade, Rural Development & Credit – Opportunities for Market Access Program Expansion and Infrastructure Investment

Guest Panelists: Steve Mercer U.S. Wheat Associates

Melissa Kessler U.S. Grains Council

Todd Van Hoose Farm Credit Council

1:45 PM Break

2:00 PM Reflecting on Farmer Co-op Farm Bill Priorities

3:00 PM Workshop Concludes (NCFC Government Affairs Committee Business Meeting to follow at 3:30 PM)

Farm Bill Workshop: Background Materials Farm Bill Primer

Information Compiled for NCFC by National Journal The farm bill was created after the devastating impacts of the dust bowl and has expanded ever since

Evolution of jurisdiction of the farm bill

Timeline

1933 1960s 1973 1985 1990 1996 2002 2008

Economic Great Society The first New Organic Research The farm bill Horticulture depression and reforms draw omnibus bill conservation agriculture is programs are includes and local dust bowl attention to that included programs are included for new bioenergy food systems prompt the first food issues and reauthorization added to the the first time additions to programs become a farm bill create and tailor for food stamps farm bill the farm bill part of the commodity bill subsidies What is covered in the latest farm bill?

The twelve titles (sections) of the 2014 farm bill

Commodity programs – Provides farm Research, extension and related matters – 1 payments when prices or revenues decline for 7 Offers a wide range of agricultural research major commodity crops. and extension programs.

Conservation – Encourages environmental Forestry – Supports forestry management 2 stewardship and improved management 8 programs run by USDA’s Forest Service. practices. Trade – Provides support for agricultural Energy – Encourages development of farm and 3 export programs and international food 9 community renewable energy systems through assistance. grants and loan guarantees. Nutrition – Provides nutrition assistance for Horticulture – Supports specialty crops 4 low-income households. 10 through a range of initiatives including market promotion and public research.

Credit – Offers direct gov’t loans to farmers Crop insurance – Enhances the permanently 5 and ranchers and guarantees loans from 11 authorized federal crop insurance program. commercial lenders.

Rural development – Supports rural business Miscellaneous – Covers other types of 6 and community development programs in 12 programs including livestock and poultry collaboration with local and state programs. production.

1 Negotiations over the 2018 farm bill are expected to be complicated and lengthy

Preparing for the 2018 farm bill

The most contentious issues to be Key Agricultural Committee members discussed for the 2018 farm bill House Chairman: K. Michael Conway (R-TX) 1. Demands to reduce SNAP spending Ranking member: Collin Peterson (D-MN) Vice-chairman: Glenn Thompson (R-PA) 2. Low commodity prices across the board

3. Cotton and dairy program fixes are expensive Senate Chairman: Pat Roberts (R-KS) Ranking member: Debbie Stabenow (D-MI)

Analysis • Ranking member of the House Agricultural Committee, Collin Peterson, has said if the problems in the farm economy reach crisis proportions in 2017, Congress’s only option may be to enact a new farm bill a year ahead of schedule • Farm-state lawmakers are holding out hope that the current (2014) farm bill can carry producers through a period of low commodity prices, weak global demand, and soaring production of grains and other commodities; there is also a hope that the markets will turn around on their own • Other key negotiators of the current bill are skeptical about the prospects of getting the bill ready early even if that was deemed necessary because of the extra year it took to pass the last farm bill when it was time to update it in 2013

1 Nutrition programs account for more than three-fourths of farm bill spending

Costs of programs under the farm bill for FY 2014-2023 In billions of dollars

■ Food stamps and nutrition ■ Crop insurance ■ Conservation ■ Commodity programs ■ Everything else

Analysis • The biggest part of the farm bill is a 10-year funding allocation for food stamps and nutrition • At $756 billion, the 2014 farm bill reduced spending by $8 billion over 10 years • The 2014 bill took away direct payments, which would provide funds to the farmer regardless of how much they planted • The farm bill authorizes either mandatory or discretionary programs, but mandatory programs tend to dominate the debate surrounding the farm bill Outlays under the 2014 farm bill are projected to decrease for nutrition spending, but crop insurance will increase

Actual and projected outlays for the 2014 farm bill In billions of dollars

■ Food stamps and nutrition ■ Crop insurance ■ Conservation ■ Commodities and disasters Projected Outlays under the 2014 farm bill are projected to decrease for nutrition spending, but crop insurance will increase

Funding and share of total bill for the nutrition title In billions of dollars

■ Nutrition ■ Rest of the farm bill

Share of the farm bill Funding amounts

2008 farm bill 2014 farm bill Outlays under the 2014 farm bill are projected to decrease for nutrition spending, but crop insurance will increase

Funding for farm bill titles, without nutrition In billions of dollars

■ 2008 farm bill ■ 2014 farm bill Farm bill – Legislative Forecast

Timeline of key recent federal actions on the farm bill

2014 Farm bill passes two years late: Provisions included an $8 billion cut to SNAP and a loosening of th restrictions on growing industrial hemp Potential actions in 115 Congress Witnesses at the initial farm bill hearings have July 2016 Hearing on fraud and errors in SNAP: The House Financial Services Committee passed the • Financial CHOICE Act by a vote of 30 to 26 supported the current insurance and conservation frameworks, but have suggested Nov. 2016 Hearing on innovation in SNAP: The House Committee on Agriculture held a hearing to evaluate some technical changes the innovative strategies retailers are utilizing to improve access to nutritious food and on how they can integrate these systems into SNAP •If cotton and dairy receive support prior to the farm bill, it would bode well for permanent Feb. 15, 2017 Hearing on “Setting the Stage for the Next Farm Bill”: The House Committee on Agriculture updates in the 2018 Farm Bill held a hearing on the state of the American farm economy with testimony by the USDA chief •The process of renegotiating NAFTA was kick- economist and academics from major agriculture research institutions started by bipartisan uproar against Canadian Feb. 16, 2017 Hearing on the “Pros and Cons of Restricting SNAP Purchases”: The House Committee on dairy pricing Agriculture heard about limiting SNAP benefits with testimony by researchers from AEI, Brookings •Trump’s tax proposal eliminates the estate tax and the Food Marketing Institute •With Secretary Perdue now in office, ag will Feb. 23, 2017 First Senate field hearing on the farm bill in Kansas: Senate Ag Committee Chairman Pat have a stronger voice in debates and media Roberts led a hearing with producers and agribusiness representatives at Kansas State •Insurance subsidies and SNAP benefits may Feb.-April Hearings on “The Next Farm Bill”: House Committee on Agriculture subcommittee hearings on: come under fire from budget hawks in the 2017 conservation policy; rural development and energy programs; specialty crops; livestock and dairy; Freedom Caucus commodity markets; SNAP; and the Farm Credit System •17 posts in USDA that require Senate approval remain unfilled Mar. 16, 2017 President Trump’s budget requests for FY2018: If enacted, the USDA would lose funding for some research and certain programs would be completely eliminated •President Trump’s budget request for FY2018 would cut the USDA’s research grants by $25 April 25, 2017 Sonny Perdue sworn in as secretary of agriculture: He immediately attends a roundtable with million and would eliminate the McGovern- the president and a group of farmers to discuss ag issues, including the Farm Bill Dole international aid program May 6, 2017 Second field hearing on the farm bill in Michigan: Ranking Member Stabenow (D-MI) will host the second hearing at Michigan State University with a focus on specialty crops Main takeaways from the February 23rd Farm Bill hearing in Kansas: Panel 1 Panel 1 focused on farmers from the grain, livestock and dairy industries Panelist details • David Clawson: cattleman and farmer; president, Kansas Livestock Association • Lynda Foster: dairy farmer; member, National Dairy Research and Promotion Board • Amy France: grain and cattle farmer • Lucas Heinen: soybean farmer; president, Kansas Soybean Association • Tom Lahey: cotton, grain and cattle farmer; vice-president, Kansas Cotton Association Panel 1 • Kent Moore: corn, soy and wheat farmer; board member, Kansas Corn Growers Association • Cameron Peirce: vice-chairman, Kansas Sunflower Commission • Michael Springer: pig and grain farmer; member, National Pork Producers Council • Kenneth Wood: grain farmer; president, Kansas Association of Wheat Growers • Kent Winter: grain farmer; president, Kansas Grain Sorghum Producers Association

Four main topics were discussed

Support for safety net Support for USDA Support for Aversion to regulation programs research programs conservation program • Multiple panelists • The difficult market • All supported USDA funding argued for the environment requires research as a beneficial • Entire panel had certification of the continued support of use of funds positive views of both herbicide atrazene and farmer safety nets CSP & EQIP condemned WOTUS Main takeaways from the February 23rd Farm Bill hearing in Kansas: Panel 2 Panel 2 focused on agribusinesses serving the farming community Panelist details • Shan Hanes: CEO, First National Bank; member, American Bankers Association • Catherine Moyer: CEO, Pioneer Communications; member, NTCA – The Rural Broadband Association • Kathleen O’Brien: general manager, Nemaha‐Marshall Electric Cooperative • Gena Ott: financial officer, Frontier Farm Credit, Farm Credit System • Derek Peine: CEO, Western Plains Energy; chairman, Renew Kansas Board (ethanol) Panel 2 • Greg Ruehle: CEO, Servi-tech Laboratories; member, Kansas Cooperative Council • Clay Scott: grain farmer and rancher; member, National Water Resources Association • Cherise Tieben: city manager, Dodge City, Kansas

Three major topics were discussed

Support reviews of Support for subsidized Support for Farm Bill regulations loans programs conservation programs • Cited problems with • Loans and financing for • Cited the EQIP program Clean Power Plan, farmers as well as as helpful even during WOTUS and the lesser utilities such as down years prairie chicken broadband Key takeaways from the Senate Ag Committee’s Farm Bill field hearing in Michigan Witnesses represented specialty crops, the dairy industry and beneficiaries of USDA programs

Decrease spending Increase market access Broaden farm insurance • Chairman Roberts said that • Michigan Corn Growers and • Ranking Member Stabenow programs will have to “do US Apple Association want is seeking to make dairy a more with less” increased USDA Market separate commodity from • Stabenow cited 2014 savings Access Program funding livestock

Strengthen ag workforce Support conservation Reaffirm aid programs • Farm orgs are seeking • Multiple witnesses cited the • Some witnesses spoke about increases in temporary work CRP and EQI as beneficial the benefits produced by visas to meet a labor programs for farmers SNAP and research programs shortage in the 2014 Farm Bill House Agriculture Committee farm bill hearings underway; listening sessions in the countryside likely Thus far 7 full committee hearings and 13 subcommittee hearings with a farm bill focus • Each title of the farm bill has been reviewed by the relevant subcommittee. • Full Committee hearings have focused on the rural economy, SNAP, dairy policy, the Farm Credit System, Food Aid/Ag Development and Research. • Last Congress, the Committee completed a comprehensive review of the • Supplemental Nutrition Assistance Program (SNAP) to gain a better understanding of the program and the population it serves, and to examine ways the program can be improved. • Chairman Conaway supports SNAP but hopes to reform the program to cut out fraud and make it more flexible to promote healthy eating and lifestyles.

Analysis • The farm bill reauthorization process is not set, but a number of hearings held so far this year. • After a year of hearings on SNAP, it does not appear that the program will face extreme pressure or be divided out of the farm bill • With little news of Trump’s ag policy, it is unknown how the administration will interact with the House on farm and nutrition issues • The ag community supported TPP, but the trade plan was harshly criticized by Trump during the campaign • Chairman Conaway now also oversees the House Permanent Select Committee on Intelligence’s investigation into Russia's meddling in the 2016 presidential election, which could divert his attention from farm bill activities temporarily. How Has Your State Fared Under the 2014 Farm Bill?

Posted on June 19, 2017 by brentgloy

by Brent Gloy and David Widmar

The 2014 Farm Bill made several changes to U.S. farm programs. The most notable was probably the elimination of Direct and Counter Cycle Payment (DCP) and Average Crop Revenue Election (ACRE) programs and the development of the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. While work is already underway on developing another farm bill, we thought it would be a good time to examine how producers in different regions have fared under the current and previous farm bills.

The Differences Between Payment Mechanisms in 2008 and 2014

Fixed direct payments were by far the largest source of farm program payments under the 2008 farm bill. These payments were made based on a fixed price and yield for most commodities. For example, corn producers received $0.28 per bushel on the farm’s direct payment yield on 83 to 85% of base acres. The direct payments were reduced by 20% for farms that chose to participate in the ACRE program.

During the signup period for the 2014 farm bill, producers of most commodities were faced with a choice of signing up for the Agricultural Risk Coverage (ARC- with county or individual options) or the Price Loss Coverage (PLC) programs. The ARC-CO program proved to be the most popular choice for corn, soybean, and wheat producers. For instance, 93% of corn and 97% of soybean acres were enrolled in ARC-CO. In the case of wheat, PLC attracted some attention with 42% of base acres enrolled in that program (several other commodities also have significant acres enrolled in PLC).

We have discussed the current program payment structure numerous times (here, here and here, for instance), so we won’t go into detail in this post. Rather, we will just reiterate that the ARC-CO program makes payments on the basis of county level yields and current market prices in relation to an Olympic Average benchmark revenue.

Comparing Payments Under Each Program

To compare the payment rates under the programs we calculated the average direct program payments made from 2010-2013 and compared it to the payments made under the ARC/PLC programs from 2015- 2016. The national level data for the programs were obtained from ERS.

In aggregate, the average annual payments under the ARC/PLC program have been larger than the direct program payments. At the national level, direct program payments averaged $4.6 billion from 2010- 2013. The Economic Research Service estimated nationally that the ARC/PLC program made payments of $5.2 and $7.8 billion in 2015 and 2016.

ERS is expecting ARC/PLC payments to rise to $8.6 billion in 2017. However, it is worth noting that this further increase is being driven by the rapid rise of payments under the PLC program, while payments under ARC begin to decline. The decline in ARC program payments are likely to accelerate further in 2018 as the Olympic Average revenue guarantees continue to fall.

Although the ARC/PLC programs have made larger payments than direct program payments at the national level, if you talk to many farmers you will soon find that payments for some producers have been relatively small.

State Level

State level payments made under the ARC/PLC program were obtained from the Farm Service Agency (FSA). Because the ARC/PLC program makes payment roughly a year after the commodity is harvested, the ARC/PLC program payments cover the 2014 and 2015 crop years, but were received in 2015 and 2016 respectively.

Figure 1 shows how the average payments received under the ARC/PLC program from 2015 to 2016 compare to the average payments under the direct payment program from 2010-2013 at the state level[1]i. While it would be nice to compare these values at the county level, the necessary data do not appear to be publicly available. Also keep in mind that this only compares ARC/PLC to the DCP payments, thus excluding all other types of payments.

Figure 1. Ratio of Average ARC/PLC Payments (2015-2016) to Average Direct Fixed Payments (2010- 2014) by State. Based on the map above, one can see why there are such large differences of opinion about the merits of the ARC/PLC program. In some states (those colored green) the ARC/PLC program payments have averaged at least 150% of direct program payments. In several (FL, GA, NE, OH, WI, NY, RI), the payments have averaged 200% of the direct program payments. However, one will quickly see there are many states that didn’t fare as well (those in orange and red).

Wrapping it Up

As one travels the country it is not hard to find mixed feelings toward the current farm bill. In some areas producers are quite happy, and in others they are very dissatisfied. While the total amount spent on ARC/PLC has exceeded that of direct program payments under the previous farm bill, the payments have been distributed differently across the country.

While our analysis examined this at the state level, it is also true that the distribution can vary dramatically within states. For instance, this map from the FSA shows several counties in KS, NE, IA, MO, CO (and others) with $0 corn payment rates that border counties with payments that averaged over $70 per acre, per year of the program. Those kinds of differences tend to cause dissatisfaction among neighbors.

To date, it appears that most of the states in the Corn Belt have received slightly larger payments under the ARC/PLC program than the amount that they had received from direct payments alone. In the other camp, several states throughout the Central and Western U.S. have not received as large of payments to date.

It is important to note that there are a few years of payments yet to be received. One of the reasons that ERS forecasts such a dramatic rise in PLC payments is that many wheat and sorghum producers enrolled in PLC will likely receive large payments this year. This will likely help change the situation in many of the states that are shaded orange and yellow. Further, it is likely that payments under ARC will start to decline and reduce the amount by which ARC/PLC payments have exceed direct payments in those shaded yellow and green.

All these and other factors are likely to shape and influence opinions about the program. As work begins on the new farm bill there are sure to be lots of differing attitudes about the current programs. It will be interesting to see how the debate unfolds.

i [1] The data for state level ARC/PLC payments is from the FSA payments made for the 2014 and 2015 crop years. The data for the direct program payments is from ERS. ERS did not provide an estimate of state level ARC/PLC payments. The ERS estimates of national payments from ARC/PLC differs slightly (but in our opinion, negligibly) from FSA’s reported payments.

Honorable Pat Roberts, Chairman Honorable Debbie Stabenow, Ranking Member Senate Agriculture, Nutrition, and Forestry Senate Agriculture, Nutrition, and Forestry Committee Committee United States Senate United States Senate Washington, DC 20510 Washington, DC 20510

Dear Chairman Roberts and Ranking Member Stabenow:

The Specialty Crop Farm Bill Alliance consists of 120 organizations across the United States that represent virtually all specialty crops that are produced in the United States, as well as all aspects of specialty crop production. While the overall proposal for funding for USDA was disappointing, specifically we are writing to express our profound disappointment with certain provisions of President Trump’s recent budget proposals for Fiscal Year 2018. As you work to develop final funding proposals for FY 2018, we urge you to support those specialty crop programs which the President recommended be either drastically cut or eliminated completely. We are happy to elaborate on why these programs are so vital to specialty crop production in this country.

Specialty Crop Block Grants

Among the programs the President slated for elimination was the Specialty Crop Block Grant Program (SCBG), a cornerstone of U.S. federal specialty crop policy. According to USDA’s Agriculture Marketing Service, which administers the program, its purpose is to solely enhance the competitiveness of specialty crops. Specialty crops are defined as “fruits, vegetables, tree nuts, dried fruits, horticulture, and nursery crops (including floriculture).”

As AMS states in guidance documents related to the program, “The Agricultural Act of 2014 (Farm Bill) includes $72.5 million per year in funding for the Specialty Crop Block Grant Program (SCBGP) from 2014-2017, and $85 million for 2018 and thereafter to solely enhance the competitiveness of specialty crops defined as fruits, vegetables, tree nuts, dried fruits, horticulture, nursery crops, including floriculture. The Farm Bill also proposes a new multi-state project set-aside for projects that solely enhance the competitiveness of specialty crops involving food safety, plant pests and disease, research, crop-specific projects addressing common issues, and any other area as determined by the Secretary. USDA may use no-year funding of $1 million in 2014, increasing $1 million per fiscal year to $5 million in 2018 to support multi-state projects.”

Since its inception, SCBG have funded nearly 7,400 projects that span a variety of needs categories that specialty crop providers are unable to address completely on their own. The projects funded by SCBG enable producers to be more competitive in the marketplace, and address issues such as pest mitigation and plant health, education about the benefits of specialty crops, food safety practices, and research. However, the President’s FY ’18 budget calls for the elimination of this program on the grounds that there is “no federal purpose” for it. But most Americans would agree that ensuring a safe, abundant supply of food is a matter of national security. SCBG plays a vital role in that effort.

Market Access Program

Another program that was targeted for elimination in the President’s budget was the Market Access Program (MAP). We strongly urge that MAP be funded at no less than $200 million for FY 18, as authorized by the 2014 Farm Bill. MAP has been funded annually at this level since 2006. We greatly appreciate the strong support annually expressed by Congress in fully funding this vital export promotion and market development program and urge that you strongly oppose any efforts that would either eliminate or reduce funding for it.

MAP, which is administered by USDA’s Foreign Agricultural Service (FAS), forms a highly successful partnership between non-profit U.S. agricultural trade associations, farmer cooperatives, non-profit state-regional trade groups, small businesses, and USDA to share the costs of international marketing and promotional activities such as consumer promotions, market research, trade shows, and trade servicing. MAP is a program that addresses different aspects of market development and promotion and is an example of a successful public- private partnership.

IR-4

Another specialty crop program that would suffer tremendously under President Trump’s budget proposal is IR- 4. Interregional Research Project No. 4 (IR-4) is a federally funded program established in 1963 to conduct the research necessary for obtaining registrations of pest control agents needed to grow minor crops – essentially all crops except cotton, corn, soybeans, and grain crops such as wheat, oats, and rice. IR-4 works with farmers, agricultural scientists, and extension personnel to conduct research and petition the Environmental Protection Agency (EPA) for tolerances for specific pesticides. The IR-4 program has grown to include biological pest control agents and biochemicals that are important in the implementation of Integrated Pest Management (IPM). IR-4 is still relevant today because companies that register pest management products often focus their development resources on major crops that provide adequate return on investment. Specialty crop markets are often considered secondary. IR-4 has facilitated over 18,000 use registrations on specialty food crops and 37,500 uses on ornamentals.

IR-4’s federal funding is less today than it was in 2009. During this time, expenses have steadily increased. This has led to IR-4 doing fewer new studies to answer grower pest management needs. As IR-4’s research capacity diminishes, the need to use IR-4 has expanded for a variety of reasons. Making matters worse, the President’s proposed funding for fiscal year 2018 eliminates ten USDA Agriculture Research Service research projects that develop approximately 20% of IR-4 regulatory data.

Crop Insurance

Fruit and vegetable producers are interested in using crop insurance to mitigate against risk and we have for years tried to fine tune the program so it works better for us and the market circumstances we operate in. While that goal has not been fully achieved, the President’s proposals regarding crop insurance would work to undercut crop insurance and tend to make that risk management tool unusable. Regarding crop insurance, the President’s budget sets premium assistance caps at $40,000. The plan also sets an adjusted gross income (AGI) limit for crop insurance of $500,000. While imposing a means test on crop insurance may sound like a good idea to some, it would be highly detrimental. Because fruits and vegetables are a high value crop, a significant proportion of growers would be affected by one or both means tests standards. This potentially means the acreage currently covered may not be covered because of the much higher cost of insurance. With the

reduction in acres covered, those growers left would also face higher premium costs because the risk is distributed over fewer acres.

No crop insurance program will make a grower devastated by a natural disaster financially “whole,” but it will allow them to survive. For example, modern apple plantings cost upwards of $50,000/ac before a single apple is harvested (5-7 years later). The availability of crop insurance enables growers to take risks with new plantings, expand their operations, and grow the economy. Compounding the problem is that we know when larger producers- those that would be impacted by the caps- leave the insurance pool then risks rise for everyone else who remains. By driving out larger farmers the President’s proposal thus makes crop insurance risk pools less stable and hence costlier on a per policy basis. Changes that arbitrarily exclude as many as half of growers currently covered will put agriculture in the “bad old days” of unpredictability and dependence upon ad hoc disaster legislation in response to crop disasters.

Plant Pest and Disease

Fruit and vegetable production in our nation faces extraordinary challenges in the safeguarding of U.S. agriculture from harmful pests and disease. As such, the role of the Animal and Plant Health Inspection Service (APHIS) to assist in the prevention, preparedness, and protection of the agricultural sector from plant and animal health threats is critical. As noted in the President’s budget, APHIS programs, “improve agricultural market competitiveness for the overall benefit of consumers and producers of American agriculture” while advancing science, and promoting safe agricultural trade and marketability.

Toward this end, we share strong concerns that the President’s budget includes a 14% reduction in APHIS Plant Health programs, including crucial initiatives for Pest Detection, Plant Protection Methods Development and Specialty Crop Pests, from a total funding level of $314 million to $270 million, a reduction of $44 million. Specialty Crop Pests programs alone would suffer a program cut of $16 million, or 10%. Similarly, Safeguarding and Emergency Preparedness programs face a proposed reduction of 11%, for a proposed reduction to the overall APHIS budget of 9%.

These vital APHIS programs help inform decisions in plant protection to identify high risk points of entry for invasive pests and prevent their introduction, understand exotic pest movement, and optimize means for early detection to help keep U.S. agriculture free from damaging pests. As such, please assist therefore in maintaining these sound and essential APHIS program resources.

Value-added Producer Grants

Value-added Producer Grants encourage innovation by assisting producers entering into value-added activities related to the processing or marketing of new products. The mission of this program is to foster the creation of new products and provide expanded market opportunities.

Separately, these programs serve vital needs within the specialty crop producer community who play a critical role in the survival of rural America. Together, these programs demonstrate that our nation’s government understands the value of specialty crop production to the overall safety, security, and well-being of the United States. It is essential that you reject any proposal to cut or eliminate these programs and we strongly urge your support for each of them. The development of new value-added uses and markets for specialty crops not only makes producers more resilient, but also creates new jobs and industries in rural areas. We look forward to working with you to the continuation and adequate funding of these and other programs that support America’s specialty crop producers.

Sincerely,

Specialty Crop Farm Bill Alliance Steering Committee Members Florida Fruit & Vegetable Association, Co-Chair National Potato Council, Co-Chair Western Growers Association, Co-Chair United Fresh Produce Association, Secretariat American Mushroom Institute American Nursery & Landscape Association American Pistachio Growers California Association of Winegrape Growers California Citrus Mutual California Fresh Fruit Association California Table Grape Commission Florida Tomato Exchange Georgia Fruit & Vegetable Growers Association Idaho Grower Shippers Association, Inc. Idaho Potato Commission National Council of Farmer Cooperatives National Grape and Wine Initiative National Watermelon Association, Inc. Northwest Horticultural Council Produce Marketing Association Sunkist Growers, Inc. Sun-Maid Growers Texas Produce Association U.S. Apple Association Washington State Potato Commission Wild Blueberry Commission of Maine

CC: Senate Agriculture, Nutrition, and Forestry Committee

Attachment

Specialty Crop Farm Bill Alliance Organizations

Cranberry Institute Cherry Marketing Institute Driscoll’s Leafy Greens Council National Berry Crop Initiative National Grape Co-op Association National Onion Association National Peach Council North American Blueberry Council North American Bramble Growers Association North American Raspberry & Blackberry Association North American Strawberry Growers Association Ocean Spray Cranberries, Inc. United Potato Growers of America Wine Producers Commission WineAmerica Winegrape Growers of America Alabama Watermelon Association Arizona Winegrowers Association Western Watermelon Association Buy California Marketing Agreement California Canning Peach Association California Dried Plum Board California Fig Institute California Fresh Fig Growers Association California Strawberry Commission California Tree Fruit Agreement California Walnut Commission California-Arizona Watermelon Association Grower-Shipper Association of Central California Colorado Potato Administrative Committee Colorado Wine Industry Development Board Rocky Mountain Association of Vintners & Viticulturists Connecticut Farm Wine Development Council Connecticut Vineyard & Winery Association California Association of Nurseries & Garden Centers Wine Institute Maryland-Delaware Watermelon Association Florida Citrus Mutual Florida Citrus Packers Florida Strawberry Growers Association Florida Sweet Corn Exchange Florida Watermelon Association Indian River Citrus League

Miami-Dade County Peace River Valley Citrus Growers Association Tropical Fruit Growers of South Florida Georgia Watermelon Association Winegrowers Association of Georgia Idaho Grape Growers and Wine Producers Commission Potato Growers of Idaho United Fresh Potato Growers of Idaho Indiana-Illinois Watermelon Association Northern Kentucky Vintners & Grape Growers Association New England Vegetable and Berry Growers Maryland Wineries Association Maine Potato Board Michigan Apple Committee WineMichigan Minnesota Area II Potato Growers Research and Promotion Council Minnesota Grape Growers Association Northern Plains Potato Growers Missouri Wine & Grape Board North Carolina Blueberry Council North Carolina Grape & Wine Council North Carolina Potato Association North Carolina Strawberry Association North Carolina Watermelon Association New Mexico Wine Growers Association Empire State Potato Growers New York Apple Association New York Wine & Grape Foundation Fruit Growers Marketing Association Ohio Wine Producers Association Oklahoma Grape Growers & Wine Makers Association Oregon Potato Commission Oregon Raspberry & Blackberry Commission Oregon Strawberry Commission Oregon Wine Advocacy Council Oregon Winegrowers Association Peerbolt Crop Management South Carolina Watermelon Association Tennessee Farm Winegrowers Association Texas Citrus Mutual Texas Vegetable Association Texas Wine & Grape Growers Association Texas Watermelon Association Virginia Apple Growers Association Virginia Wineries Association Washington Association of Wine Grape Growers Washington Red Raspberry Commission Washington State Apple Commission

Washington State Tree Fruit Association Wisconsin Potato & Vegetable Growers Assn., Inc. Wyoming Grape & Wine Association

March 13, 2017

Dear Secretary-Designate Perdue:

Congratulations on your nomination to serve as the 31st Secretary of Agriculture. We look forward to working with you to address the many challenges and opportunities facing rural America, and we would like to take this opportunity to remind you of the importance of crop insurance to rural economies.

The 2014 Farm Bill made a multitude of cuts to the farm safety net. In addition to these cuts, the Congressional Budget Office (CBO) is now projecting that crop insurance will come in more than $20 billion under budget as compared to the costs projected at the time of passage of the 2014 Farm Bill. However, an overreliance on savings from the agriculture community in the future will greatly undermine rural economies that have faced an almost 50% decline in net farm income from over the past three years. In these challenging economic times, it is federal crop insurance that offers lenders the assurances they need to continue to provide capital to America’s hard-working farmers and ranchers.

The 2014 Farm Bill placed greater emphasis on risk management than previous farm bills and in doing so protects the interests of the American taxpayer. Farmers spend approximately $3.5 to $4 billion per year of their own money to purchase insurance from the private sector. On average, farmers also must incur losses of almost 30 percent before their insurance coverage pays an indemnity.

Crop insurance allows producers to customize their policies to their individual farm and financial needs. Federal crop insurance is based on fundamental market principles, which means high risk areas and high value crops pay higher premiums for insurance. This emphasis on crop insurance and risk management has replaced the constant demand for ad hoc disaster assistance, which is subject to the whim of Washington, is paid for entirely by the taxpayer, and is not delivered in a timely manner.

All told, the 2014 Farm Bill is a careful balance of priorities and should not be reopened before its expiration in 2018 to achieve additional budget savings. Moreover, even in the 2018 Farm Bill, cuts to crop insurance during this difficult time for rural America should be viewed avoided. Farmers and lawmakers agree that crop insurance is a linchpin of the farm safety net and is crucial to the economic security of rural America. We urge you to continue to be a voice for America’s farmers and ranchers and oppose cuts to crop insurance during budget discussions as well as during the 2018 Farm Bill process.

Sincerely,

American Agri-Women American Association of Crop Insurers American Bankers Association American Farm Bureau Federation American Farmland Trust American Insurance Association American Malting Barley Association American Seed Trade Association American Sesame Growers Association American Society of Farm Managers and Rural Appraisers American Soybean Association American Sugar Alliance American Sugarbeet Growers Association Association of Equipment Manufacturers Association of Fish and Wildlife Agencies California Association of Winegrape Growers Corn Refiners Association Crop Insurance and Reinsurance Bureau Crop Insurance Professionals Association Ducks Unlimited Farm Credit Council Florida Sugar Cane League Independent Community Bankers of America Independent Insurance Agents & Brokers of America National Association of Mutual Insurance Companies National Association of Professional Insurance Agents National Association of State Departments of Agriculture National Association of Wheat Growers National Barley Growers Association National Corn Growers Association National Cotton Council National Council of Farmer Cooperatives National Farmers Union National Grain and Feed Association National Oilseed Processors Association National Peach Council National Potato Council National Rural Lenders Association National Sorghum Producers National Sunflower Association National Young Farmers Coalition Panhandle Peanut Growers Association Pheasants Forever Quail Forever Reinsurance Association of America Rio Grande Valley Sugar Growers Rural & Agriculture Council of America Southern Peanut Farmers Federation Specialty Crop Farm Bill Alliance Theodore Roosevelt Conservation Partnership United Fresh Produce Association US Apple Association US Canola Association US Dry Bean Council US Rice Producers Association USA Dry Pea & Lentil Council USA Rice Western Peanut Growers Association Wildlife Mississippi

REBUILD

#RRURALebuildRural

HEALTHCARE AG RESEARCH • 80 rural hospitals closed since 2010, 673 • Federal government should continue its facilities are vulnerable, making up 1/3+ history of supporting agricultural research. of facilities. • Cutting-edge research is being conducted • Funding needed for 77% of rural counties in outdated agriculture research in Primary Care Health Professional infrastructure. Shortage Areas. • $8.4 billion in total deferred maintenance • Telehealth, combined with broadband, outstanding in Ag Research building and facilitates early diagnosis & treatment in rural infrastructure. areas that can lead to lower health care costs.

BROADBAND HOUSING • Broadband is vital to economic development, • Low income rural Americans depend on education, agriculture, health care & public multifamily housing loans through safety activities USDA Rural Development. • The High-Cost Universal Service Fund lacks • Need to modernize housing programs such su cient resources to reach rate/service as MPR and Sections 538 and Section 521 parity for rural & urban areas • Rural communities need senior care. • Less federal regulatory burden for permits & access to government lands would boost facilities, higher proportion of population investment in rural broadband. over 50 years old.

ENERGY TRANSPORTATION • RUS loan program helps modernize the grid, combat cyber threats & integrate renewable • Locks and dams built in the 1920s and energy. 1930s have a 50-year design lifespan. • RUS loans produce net income for the • 25+ waterway projects are backlogged, Treasury–approximately $300 million in 2016. estimated repair costs of $8.75 billion. • Reducing the regulatory burden on RUS loans • Rates of fatalities on rural roads are & infrastructure siting would increase 2.6 times higher than urban roads. development.

FINANCING WATER • Access to aordable and long-term financing • 94%+ of U.S. drinking water utilities supply options is critical for rural infrastructure communities with fewer than 10,000 persons. projects. • USDA Water and Waste Water program • Rural infrastructure facilities often are smaller, backlog is $2.5 billion, with 995 pending don't attract major financial institutions. applications. • Federal funding often is limited for rural • Aging & deteriorating systems beyond useful projects, private sector financing partners life/with have the greatest public health needs are needed. need priority.

REBUILD RURAL COALITION 50 F Street, NW, Suite 900 . Washington, DC 20001 . 202.626.8710

Farm Bill Workshop: Draft NCFC Framework

NCFC Farm Bill Framework

Rural America is characterized by individual initiative and self-reliance – the bedrock of our nation’s culture and character. It’s how American agriculture became the envy of the world. That spirit of working together lives and thrives today in the 2,500 farmer co-ops that are providing for America.

Farmer-owned cooperatives are central to America’s abundant, safe and affordable food, feed, fiber and fuel supply. Through their cooperatives, farmers are able to improve their income from the marketplace, manage risk, and strengthen their bargaining power, allowing individual producers to compete globally in a way that would be impossible to replicate as individual producers. By pooling the buying power of hundreds or thousands of individual producers, farmer cooperatives are able to supply their members—at a competitive price—with nearly every input necessary to run a successful farming operation, including access to a dependable source of credit. Furthermore, farmer cooperative members also are able to capitalize on new marketplace opportunities, including value-added processing, to meet changing consumer demand.

Public policy should continue to protect and strengthen the ability of farmers and ranchers to join together in cooperative efforts that maintain and promote the economic well-being of farmers, ensure access to competitive markets, and help capitalize on market opportunities.

General Principles

Farm bill programs serve a variety of purposes including: meeting the food, fuel and fiber needs of consumers worldwide, strengthening farm income, improving our balance of trade, promoting rural development and creating needed jobs here at home. NCFC will continue to work with farm and commodity groups and other allied interests in support of farm legislation, together with needed funding, that builds on the success of the 2014 farm bill.

NCFC strongly recommends that the next farm bill strengthen the nation’s farmer cooperatives by:

• Promoting the continued viability of the Capper-Volstead Act and other cooperative statutes;

• Promoting farmer cooperatives and their abilities to enhance competition in the agricultural marketplace by acting as bargaining agents for their members’ products; providing market intelligence and pricing information; providing competitively priced farming supplies; and vertically integrating their members’ production and processing.

June 2017 Page 1

• Supporting the cooperative Farm Credit System;

• Ensuring farmer cooperatives remain eligible under federal programs for the benefit of their farmer members.

• Expanding U.S. agriculture exports and global competitiveness, including through substantially improved access to foreign markets.

• Supporting of a responsive safety net, together with adequate funding, that incorporates improved, comprehensive risk management tools and programs for producers and their cooperatives.

• Ensuring our farmers and ranchers have access to labor so they can continue to harvest our crops and care for livestock here in the United States.

• Supporting responsible and cost-effective regulatory policies that provide a safe and productive work environment while promoting our economic competitiveness.

Additionally, trade is vital to the continued prosperity of co-ops and their farmer and rancher members—with over 95 percent of the world’s population living outside of the United States, our agricultural producers need foreign markets to grow demand and the programs that serve as catalysts to increased market access.

As was the case with the 2014 farm bill, the upcoming farm bill debate will be presented with the challenge to be fiscally responsible. Farmer co-ops are mindful of this challenge. At the same time, it is imperative that Congress recognize the continued importance of farm bill policies that promote a healthy and competitive U.S. agricultural sector. That recognition starts with providing adequate resources to support policies in the next farm bill that will preserve the productive capacity of our farms in times of poor production or prices.

Finally, recent estimates by the United Nations show world population growing to 9.7 billion people by 2050; a vibrant, productive U.S. agricultural economy will be key to feeding and clothing a growing world. The next farm bill must be written to ensure that American farmers and ranchers have the tools and technologies needed to meet this challenge.

Title I and XII - Commodities and Risk Management

• Maintain and strengthen the ability of farmers to participate in federal farm and other programs, including commodity purchase programs, by preserving the ability of farmers to access these programs through their cooperatives.

June 2017 Page 2

• Support of a responsive safety net, together with adequate funding, that meets the varying needs of U.S. producers while ensuring the long-term viability, health and competitiveness of U.S. agriculture.

• Support continuation of the current sugar program.

• Support dairy policy that reduces extreme volatility and establishes a viable and effective domestic safety net for producers with a focus on protecting the operating margin experienced by producers as reflected by milk price and input costs.

• Provide improved risk management tools and programs for farmers, including crop insurance, and ensure that farmer cooperatives are able to be part of the delivery system.

• Seek improvements in the scope, availability and delivery of crop insurance for the specialty crop industry.

• Support polices that enhance the ability of U.S. farmers to produce food, feed, fiber and fuel using technologies that are based on proven science, including biotechnology.

Title II - Conservation

• Support the continuation of voluntary, locally-led programs which recognize the uniqueness of the agricultural community and which operate under the parameters of the nationally determined general priorities.

• Maintain mandatory funding at the current authorized levels for USDA working lands conservation programs, including the Environmental Quality Incentives Program.

• Strengthen working lands conservation programs to place greater emphasis on helping producers meet their pressing federal and state regulatory compliance needs, especially as agriculture’s nexus with environmental laws continues to grow and become more burdensome.

• Seek improvements to the application and ranking processes for conservation programs, creating a less burdensome signup process and encouraging greater participation.

• Support improvements and funding for technical assistance programs for public and private providers, allowing NCFC member cooperatives to provide technical service to their service areas.

• Strengthen USDA Natural Resources Conservation Service’s (NRCS) science-based data collection abilities through programs like the Conservation Effects Assessment Program

June 2017 Page 3

(CEAP) to help show how conservation measures are working to improve environmental conditions.

• Support changes in the Conservation Reserve Program (CRP) to ensure it maximizes environmental benefits for the most environmentally sensitive lands such as field borders and filter and buffer strips, and other areas needed for conservation, and has the flexibility to be used for agricultural production.

Title III - Trade

• Enhance USDA international programs and provide the resources necessary to meet current and projected needs over the life of the 2012 farm bill.

• Advocate the importance of USDA’s Foreign Agricultural Service and export programs to enhance our ability to expand agricultural exports. This includes increased funding beyond the $200 million for the Market Access Program (MAP) and $34.5 million for the Foreign Market Development Program annually.

• Continue to advocate preferences for cooperatives in USDA’s export programs and ensure continued eligibility for farmer cooperatives to access MAP directly.

• Expand market analysis and other research activities at USDA with the goal of increasing the agricultural trade surplus.

• Advocate the continuation of viable USDA Export Credit Guarantee Programs, consistent with existing WTO obligations.

Title IV – Nutrition

• Support USDA food and nutrition programs, including Section 32 and commodity purchase programs, together with needed funding, to help achieve their important objectives.

• Maintain the ability of farmers who cooperatively market their products and their cooperatives to continue to be eligible under USDA commodity purchase programs.

• Encourage USDA’s food and nutrition programs to provide all forms of fruits, vegetables, and tree nuts as outlined in the Dietary Guidelines.

Title V and IV - Credit and Rural Development

• Reauthorize USDA’s Value-Added Producer Grants Program.

• USDA rural development programs should prioritize modern production agriculture as essential to rural development. June 2017 Page 4

• Farmer cooperatives should receive preference in recognition of their abilities to aggregate producers and deliver the greatest benefit broadly.

• Improve USDA farmer cooperative programs, including research, education and technical assistance. Provide additional direction to USDA’s Rural Business Cooperative Service program area in support of farmer cooperatives.

• Encourage expansion of broadband service to rural areas through programs that ensure rural telecommunications providers, especially cooperatives, are not disadvantaged.

• Coordinate with the Farm Credit Institutions as they develop system-wide priorities for the next farm bill.

Title VII – Research

• Support robust funding and coordination for agricultural research.

• Support funding for specialty crop research to improve crop characteristics; address threats from pests and diseases; improve production efficiency; promote innovation and technology, including mechanization; and reduce food safety hazards.

• [Animal pest and disease research]

Title IX - Energy

• Support expanded federal fleet requirements and use of biofuels and procurement programs for biobased products.

• Support USDA loan and grant programs, including special provisions for farmer cooperatives, to encourage production, innovation, utilization, distribution and market stability of renewable energy, including from crops and livestock.

• Support increased research relating to production, utilization and distribution of renewable energy, including from biomass, animal waste and byproducts, etc.

• Support voluntary policies promoting the development of technologies to further utilize manure as a feedstock to produce gas, fuel, or electricity, especially if these projects are cost-effective and provide an economic benefit to farmers and/or farmer-owned cooperatives.

• Support federal programs to enhance public awareness, education, and promotion efforts to encourage utilization of renewable fuels.

June 2017 Page 5

Title X - Specialty Crops

• Support funding and increased coordination between federal, state, and local government agencies and industry stakeholders, including farmers and their cooperatives, in the prevention and treatment of plant pests and diseases that could harm domestic production and/or international trade.

• Support the use of technologies and advances in science to treat plant pest and disease.

• Support funding for specialty crop promotion, both domestically and abroad.

Title XII – Animal Agriculture

• Support policies that enhance the ability of cooperative members to raise animals for food and fiber using practices and technologies that are based on proven science, are economically sound, provide for the proper care and well-being of the animals, and ensure the safety of animal agriculture products to provide the American consumer with a high- quality source of protein.

• Support policies to enhance business opportunities for livestock and poultry producers as well as their farmer-owned livestock marketing associations by providing the freedom and flexibility to engage in new market innovations.

• Oppose federal policies that negatively impact producer-owned livestock marketing associations by limiting the marketing options of the cooperative and its members.

June 2017 Page 6

The Farm Bill

NCFC Position: NCFC strongly supports federal policies provided by the farm bill which promote an economically healthy and competitive U.S. agriculture sector. Farm bill programs serve a variety of purposes including: meeting the food, fuel and fiber needs of consumers worldwide, strengthening farm income, improving our balance of trade, promoting rural development and creating needed jobs here at home. Overview: American farmers and ranchers and the co-ops they own must have the certainty of a comprehensive five-year farm bill that provides the flexibility, resources, tools and technologies needed to meet the challenges of a growing world. Farm bills need to be forward looking, ensuring that we plan for today and tomorrow. Of primary importance, the farm bill must preserve the long-standing rural-urban alliance that reinforces the fact that food security, investment in rural America and a safety net for those in need are priorities benefitting the entire nation. Key to our success will be emphasizing those issues that unite producers, regardless of commodity or location, rather than those issues that divide agriculture. This begins with preserving the productive capacity of our farms by supporting a meaningful and equitable safety net for producers across all commodities. This also includes preserving a strong crop insurance program that is not arbitrarily constrained by payment limits or means testing of those who can participate. Farm bill programs serve a variety of purposes including: meeting the food, fuel and fiber needs of consumers worldwide, strengthening farm income, improving our balance of trade, promoting rural development and creating needed jobs here at home. In fact, there are over 21 million jobs tied directly to the U.S. agriculture industry. Action: NCFC strongly recommends that the next farm bill strengthen the nation’s farmer cooperatives by: • Promoting the continued viability of the Capper-Volstead Act and other cooperative statutes; • Promoting farmer cooperatives and their abilities to enhance competition in the agricultural marketplace by acting as bargaining agents for their members’ products; providing market intelligence and pricing information; providing competitively priced farming supplies; and vertically integrating their members’ production and processing. • Supporting the cooperative Farm Credit System; • Ensuring farmer cooperatives remain eligible under federal programs for the benefit of their farmer members. • Expanding U.S. agriculture exports and global competitiveness, including through substantially improved access to foreign markets.

• Supporting of a responsive safety net, together with adequate funding, that incorporates improved, comprehensive risk management tools and programs for producers and their cooperatives. • Supporting the continuation of voluntary, locally-led programs which recognize the uniqueness of the agricultural community and which operate under the parameters of the nationally determined general priorities. • Ensuring our farmers and ranchers have access to labor so they can continue to harvest our crops and care for livestock here in the United States. • Supporting responsible and cost-effective regulatory policies that provide a safe and productive work environment while promoting our economic competitiveness. Additionally, trade is vital to the continued prosperity of co-ops and their farmer and rancher members—with over 95 percent of the world’s population living outside of the United States, our agricultural producers need foreign markets to grow demand and the programs that serve as catalysts to increased market access. As was the case with the 2014 farm bill, the upcoming farm bill debate will be presented with the challenge to be fiscally responsible. Farmer co-ops are mindful of this challenge. At the same time, it is imperative that Congress recognize the continued importance of farm bill policies that promote a healthy and competitive U.S. agricultural sector. That recognition starts with providing adequate resources to support policies in the next farm bill that will preserve the productive capacity of our farms in times of poor production or prices. Finally, recent estimates by the United Nations show world population growing to 9.7 billion people by 2050; a vibrant, productive U.S. agricultural economy will be key to feeding and clothing a growing world. The next farm bill must be written to ensure that American farmers and ranchers have the tools and technologies needed to meet this challenge.

June 2017

NCFC Position: Market development and promotion is vital to maintaining and expanding U.S. agricultural exports. Programs such as the Market Access Program (MAP) and the Foreign Market Development (FMD) program, both administered by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service, help achieve this goal while at the same time protecting American jobs and strengthening farm income. Action: NCFC urges Congress to continue funding MAP and FMD at $200 million and $34.5 million annually, respectively, through the remainder of the 2014 Farm Bill. However, an increase in those levels is warranted in the 2018 Farm Bill as sequestration and the use of program funds to cover USDA/FAS administrative costs has reduced the funds available for market development. The programs have not received an increase in authorized spending levels since the 2002 Farm Bill. Current Status: Programs like MAP and FMD are essential to building on the success of expanding exports of U.S. agricultural products, increasing farm income, and spurring the creation of jobs in the United States. Funding for market development is especially important since many of our foreign competitors are spending much greater sums than the U.S. in promoting their agricultural products overseas. For instance, in its latest WTO declaration, the European Union has indicated that it spends $1.4 billion annually in agricultural export promotion, nearly six times what the U.S. spends on MAP and FMD. MAP and FMD also represent a sound return on the taxpayers’ investment. A 2016 Informa Economics study funded by USDA determined that the U.S. agricultural export value increased by $24 (2002-2014) for every dollar invested in export market development. It also shows that as a result of MAP and FMD funding, average annual farm cash income was $2.1 billion higher, and annual average farm asset value was $1.1 billion higher over 2002 through 2014. The programs increased total average annual U.S. economic output by $39.3 billion, GDP by $16.9 billion and labor income by $9.8 billion over the same time. The study results also showed that the economic lift created by these programs directly created 239,000 new jobs, including 90,000 farm sector jobs. Our nation is facing many challenges as a result of the current budget environment. Given the economic activity generated by agricultural exports and the direct benefit to farmer and ranchers, programs that have such a positive impact in creating jobs and supporting rural communities, and that have such a strong return on investment, should be sustained.

Background: With over 95 percent of the world’s consumers living outside of the United States, foreign markets are critical for U.S. agriculture to expand sales and boost incomes. Exports account for about one-third of all farm cash receipts, making U.S. agriculture about twice as reliant on overseas markets as the economy overall. The ability of farmer cooperatives to use MAP funding allows their individual farmer-owners to have a direct stake in the global marketplace. Individual producers, who do not have the resources or production volume to export on their own, are able to use co-ops to leverage strength in numbers. For example, farmer co-ops are able to build brands that differentiate products and build consumer loyalty overseas. Co-ops then use the earnings from these overseas sales to increase the patronage dividends paid to farmers. In this way, individual producers can capture more of the food dollar from beyond the farm gate. USDA’s market promotion programs are instrumental in maintaining and expanding U.S. agricultural exports, increasing farm income and offsetting government-subsidized market development activities afforded to our international competitors. Our continued competitiveness in the global marketplace depends on having these market development programs. Governments of many competitor countries, including the European Union, Australia, Canada, Chile, South Africa and India, operate their own agricultural export promotion programs to capture market share, including in the U.S. Both MAP and FMD are administered on a cost-share basis and are among the few export tools specifically not capped under World Trade Organization (WTO) rules. Both programs have been tremendously successful and extremely cost- effective in helping maintain and expand U.S. agricultural exports, which totaled $130 billion in FY 2016.

June 2017

NCFC Washington Conference Government Affairs Committee Hyatt Regency Hotel Washington, DC June 26, 2017

AGENDA Columbia A/B Room

3:30 PM – 5:30 PM Government Affairs Committee Business Meeting

3:30 PM Welcome & Meeting Overview • Approval of the Minutes

3:35 PM NAFTA Renegotiation: Opportunities and Challenges for Agriculture

Guest Speaker: Darci Vetter Former Chief Agricultural Negotiator at the Office of the U.S. Trade Representative

4:05 PM NCFC Roundtable Discussion on NAFTA

4:45 PM Policy Lightening Round • Tax Reform • Product Labeling Initiative • USDA Reorganization • Regulatory Reform • Environmental Issues • Immigration Reform • CFTC Issues • Biotechnology

5:30 PM NCFC CO-OP/PAC Report

5:40 PM Farmer Co-op Sustainability Initiative – Status Update

5:50 PM Future Meetings & Other Business

6:00 PM Adjourn

6:30 PM – 9:00 PM Opening Reception (500 North Capitol Street NW)

Representing the Business Interests of Agriculture

Government Affairs Committee: Meeting Minutes NCFC Government Affairs Committee Meeting Fort Lauderdale, Florida February 15, 2017

Minutes

CALL TO ORDER Committee Chairman, Chuck Spencer, called the meeting to order, giving an overview of the meeting and supporting materials.

APPROVAL OF THE MINUTES A motion to approve the November 2016 meeting minutes was made by Rich Hudgins and seconded by Ronnie Moore.

BUSINESS MEETING The Committee proceeded with its business meeting to discuss several additional items of importance to farmer cooperatives, including:

• NCFC CO-OP/PAC Report. On behalf of Kelsey Billings, Lisa Van Doren reported that NCFC CO-OP/PAC began the year and the second half of the 2015-2016 Election Cycle with a balance of $26,403.48. As of December 31, 2016, contributions to the PAC totaled $112,686.00. Individual and member PAC contributions accounted for $77,686.00 and $35,000.00 of the total, respectively. The annual goal for the PAC, agreed upon by the NCFC CO-OP/PAC Steering Committee, is $275,500. Mrs. Van Doren said the PAC reached 41 percent of its goal of $275,500 for the year.

Mrs. Van Doren announced that the PAC will host the 6th Annual NCFC CO-OP/PAC Live & Silent auction fundraiser later that evening and expressed appreciation for the many live and silent auction item donations that were received.

Finally, Mrs. Van Doren reported that in 2016, the PAC supported 29 members of Congress for reelection for a total of $64,500.00 in contributions to candidates. Other expenses incurred by the PAC include a combined total of $2,164.18 for account analysis and merchant service fees and $13,262.67 1/3 rule reimbursement to NCFC for silent and live auction at the annual meeting. As of December 31, 2016, the PAC had an ending balance of $59,162.63.

• Immigration Reform Outlook. Mary Nowak reported on activities of the Agricultural Workforce Coalition (AWC), of which NCFC is a founding and steering committee member. The AWC has engaged with the Trump Administration’s transition team as well as with members of Congress to educate them on the issue. While most of the agriculture workforce related actions have been administrative through executive orders, the AWC steering committee has been steadfast in their advocacy of a legislative solution that would provide a new guest worker visa program that would work for all of agriculture, including those with year round labor needs, and a stabilization of our current workforce. Ms. Nowak also gave a brief summary of the immigration related executive orders.

• Nutrition Legislation: What will 2017 hold? Mary Nowak reported on the status of various nutrition related legislation including child nutrition reauthorization (CNR), the nutrition title of the farm bill, and Buy American legislation intended to increased domestic food products in the school meals program. Ms. Nowak reported that CNR would likely not occur this Congress, as the Senate Agriculture Committee has already transitioned to farm bill and the House Education and Workforce Committee has different priorities for the Congress. While statutory changes to the Buy American requirements would naturally fall within CNR, with the President’s ‘America First’ toned Administration, it might be possible to address through alternative vehicles. Questions were raised about restrictions of product items within the Supplemental Nutrition Program (SNAP) and Ms. Nowak and Mr. Conner went through various pros and cons of such policy.

• Trade Outlook. Chuck Conner and Kevin Natz reported on the Trump administration’s views on international trade and how their policies might be a concern for farmer co-cops and agriculture. The issues of highest concern are the withdrawal from the Transpacific Partnership (TPP) agreement as well as possible renegotiation of the North American Free Trade Agreement (NAFTA) renegotiations. Mr. Natz said that President Trump prefers bilateral agreements and speculated that Japan could be the best candidate for an agriculture trade deal. Mr. Natz spoke on the need for an agriculture trade representative in the U.S. Trade Representative’s (USTR) office as well as filling trade positions at USDA given the focus on protecting the steel industry by President’s Commerce Secretary and others advisors in the White House.

• Legal, Tax & Accounting Update. Marlis Carson reported on developments in a case involving cranberry growers. A U.S. District Court judge refused to certify a class of plaintiffs who brought suit against Ocean Spray Cranberries in a dispute over the cooperative’s dual cranberry pools. The judge concluded that questions regarding actual injury to the growers made it a poor case for the plaintiffs, who had sought a judgment of roughly one billion dollars. She noted that the judge had previously dismissed the plaintiffs’ claims that the cooperative violated the “mutual benefit” requirement under Capper Volstead, ruling that the Act is an affirmative defense and does not create a cause of action.

• Review & Update NCFC Priorities & Policy Resolutions. Chairman Spencer facilitated discussion with the help of NCFC Staff to review the revised NCFC Priorities & Policy Resolutions for 2017. The committee moved to approve for Council consideration the 2017 NCFC Priorities & Policy Resolutions. The motion was made by Chuck Adami and seconded by Lorrie Merker.

• Future Meetings & Other Business. Mr. Spencer announced that the next meeting will be Washington Conference held in Washington, D.C. at the Hyatt Regency June 26-28. Staff will circulate meeting materials in advance.

USDA Staff-Up and Ag Outlook in President Trump’s First 100 Days Chuck Conner outlined expectations for the Trump administration as cabinet appointments undergo the hearing and confirmation process. Mr. Conner viewed President Trump’s nomination for Secretary of Agriculture, Mr. Sonny Perdue of Georgia, as a good choice for American agriculture saying he is “one of us.” On the regulatory front, Mr. Conner stressed the need for much-needed relief and reform.

Rebuilding Rural Infrastructure The Committee welcomed Paul Rohde, Vice President, Midwest Area, Waterways Council, Inc. and Bruce Blanton, Director, Transportation Services Division, U.S. Department of Agriculture to speak about the implications for transportation and infrastructure funding, and advocacy under a new administration and Congress. Mr. Rohde spoke specifically of the inland waterways system and of the recent Congressional attention and support for transportation and infrastructure funding; while noting what was needed to upgrade the locks and dams. Mr. Blanton also spoke more broadly on the importance of infrastructure to U.S. agriculture. He made mention of an infrastructure package worth $1.1 trillion over a 10-year investment period that the administration was working on. Mr. Blanton wrapped up by saying how crucial state involvement is in developing funding priorities.

Biotech Labeling: From Legislative Victory to Getting Implementation Right Chuck Conner spoke briefly on the legislative victory in agriculture on GMO disclosure and the process for implementing the law by the U.S. Department of Agriculture (USDA).

Regulatory Reform: What to Expect from the Trump Administration The Committee welcomed David Chung, Partner, Crowell and Moring to review possible regulation reform efforts in Congress as well as those pursued by the Trump administration in through recent executive actions. Finally, Mr. Chung reviewed the judicial challenges to Obama-era agency actions such as the Department of Labor’s overtime rule, the Environmental Protection Agency’s waters of the U.S. rulemaking (WOTUS), and USDA’s Farmer Fair Practices Rule.

The Outlook for Corporate Tax Reform and Its Impact on Famer Co-ops The Committee welcomed Joe Mikrut, Partner, Capitol Tax Partners, to discuss tax reform and prospects for action in the new Congress. He reviewed Trump administration priorities, the steps needed to address tax reform and possible “pay-fors.” Mr. Mikrut gave an overview of the House Republican Blueprint for Tax Reform, cost of principal components, including the Border Adjustment Tax (BAT) as well as possible alternatives to the House Blueprint.

ADJOURN. Mr. Spencer adjourned the meeting.

Government Affairs Committee: New Administration, 115th Congress & Ag Outlook Tel: 202-626-8700 Fax: 202-626-8722 50 F Street, NW Suite 900 Washington, DC 20001 www.ncfc.org

MEMORANDUM

TO: NCFC Council CC: NCFC Government Affairs Committee FROM: NCFC Staff DATE: June 19, 2017 RE: “The Fox Who Had Lost His Tail” A fable by Aesop

“A doubtful friend is worse than a certain enemy.” Aesop

So much has happened in Washington, D.C. during the first six months of 2017 yet there is little to show in the way of accomplishment. In part, the investigation of Russian tampering in the election and the circumstances surrounding the firing of former FBI Director James Comey have robbed the president’s legislative agenda of momentum.

Just as important to remember, though, are that early missteps are common in any new administration. This administration—with a president who has never held elective office or a military command—has faced an especially steep learning curve. The president has never been particularly familiar with many policy issues on a granular level and has had to learn more in less time than any previous president as a result. This has given rise to several policy “u-turns.”

Complicating matters further, the administration is considerably behind compared to previous administrations in filling key positions. In fact, with over 400 sub-cabinet positions left vacant, there are fewer people to make sure the government runs smoothly.

Thus far, the GOP Congress (with some exceptions) has given the administration the benefit of the doubt as they learn the ropes. However, the patience of many GOP faithful in Congress is wearing thin. They want to move forward on a number of legislative priorities, namely repeal of the Affordable Care Act (aka Obamacare) and they need the leadership of the president along with his bully pulpit to help carry such an effort across the finish line. Yet, there is very little political capital in the bank to pull from for such a monumental effort with the president’s approval rating hovering in the mid- to upper-30s. President Trump entered office with the lowest approval ratings of any incoming president, and has had difficulty building support beyond his voter base since his inauguration. Though Trump’s general approval ratings are low, his voter base remains extremely loyal.

It is fair to say that the GOP in Congress is holding its breath when it comes to the actions of the administration. Should the president’s approval rating continue to slide or additional missteps occur that further damage his ability to govern, the GOP Congress will look to protect their

Representing the Business Interests of Agriculture

Government Affairs Report June 19, 2017 Page 2 of 4 interests (i.e. re-election) and jettison their defense of the president. These challenges do not mean Trump won’t or can’t succeed, and only that it’s likely to be a steep, uphill climb.

All drama aside, there are several significant matters that must be addressed this year. Our federal debt ceiling must be raised once again to allow us to borrow the operating funds necessary to manage our government and maintain faith and trust in the world financial markets. Congress will need pass some sort of fiscal year 2018 appropriations legislation as well. In both cases, Congress will muddle through because it must but it will be exceedingly painful and dangerous process, politically. This all raises doubt on the ability of Congress to tackle other major initiatives on the table like tax reform, infrastructure needs, immigration reform, or perhaps even stab at the ACA.

“After all is said and done, more is said than done.” Aesop

Given the above discussion, we find the chances of significant or major tax reform legislation in 2017 to be quite slim. While we may see congressional hearings and possible legislation acted on at the committee level, the levels of disagreement amongst the GOP (House and Senate are not on the same page and then there’s the White House) and the relatively organized opposition from Democrats will make major reforms impossible. That said, modest tax cuts are not out of the question, given that many Democrats will support such changes, allowing the House GOP to assemble a working majority to get something passed. It’s hard to see a path forward for major tax reform—perhaps not until after the 2018 House and Senate campaigns and elections. Should members campaign on the need for tax reform and then be returned or sent to Congress on the basis of that platform, momentum could be created for a major push heading into the 2020 election.

The same could be said for immigration reform. NCFC and the other members of the AWC are being proactive toward our common goal of addressing agriculture’s labor crisis. The AWC recent sent a letter to the Trump administration reiterating our plight and calls for a solution. We also continue to meet with members of Congress, educating new members and re-energizing our supporters.

Several Members of Congress have introduced legislation addressing various components of reforming the current H-2A program or have identified singular issues within the program. However, the bills that have been introduced so far have not addressed all of the components needed to gain support from the agricultural community at large. NCFC and the AWC applauds members for their engagement and find the outreach thus far to be encouraging. More and more GOP members are running toward this issue instead of away from it. That said, it is hard to see this issue being debated on the House or Senate floor in 2017.

What does this mean for other policy matters impacting production agriculture?

1. Appropriations

• Fiscal Year 2018—President Trump’s budget proposal offered what many in Congress from both parties have characterized as draconian and excessive. As a

Government Affairs Report June 19, 2017 Page 3 of 4 result, we do not expect most budget recommendations to be accepted. In the words of Senate Agriculture, Nutrition and Forestry Committee Chairman Pat Roberts of Kansas when asked about the budget, “The president proposes and Congress disposes.”

At the same time, that budget only adds to the ongoing pressure to reduce federal spending in general while increasing defense spending. Certain unpopular federal agencies like the U.S. Environmental Protection Agency will then almost certainly be cut relative to 2017 levels, although not as heavily as proposed by the President. In the case of USDA, while some cuts are likely, they will be far more modest. Pressure could come in the form of “pay-fors” for any type of modest tax cuts this year, should they happen. However, mandatory, entitlement spending will NOT be cut. Support for those programs is simply too broad, deep and highly organized. To summarize, coupling together a general sentiment to reduce federal spending, a desire to increase defense spending and to reduce tax burdens, and an unwillingness to leave entitlements alone, all point in one direction; to some level of cuts in discretionary spending. Agriculture appropriations will have to share in that pain.

2. Farm Bill

• There will be significant pressure as we head into farm bill reauthorization in 2018 to reduce the level of baseline spending for the farm bill mandatory programs in Title I (farm program safety net), Title II (conservation programs), Title IV (food assistance programs; primarily SNAP) and also to reduce spending on crop insurance premium subsidies. Agriculture and the food assistance groups are highly mobilized and organized to fight these efforts.

• With a united front, we expect the efforts to cut the agriculture baseline spending levels to be stopped. At the same time, new mandatory spending initiatives in the 2018 farm bill that do not simultaneously cut mandatory spending in other farm bill areas may be hard to come by. The proponents for baseline cuts may not be able to push those baseline cuts through, but they will almost certainly be able to stop a farm bill that increases spending relative to the baseline. That should not stop us from trying, though. If you don’t ask; you don’t get.

3. Regulatory Reform

• The Trump Administration has initiated a major, focused effort to rollback or moderate some of the most aggressive environmental rulemaking initiatives of the Obama Administration, including: the Clean Power Plan; regulations governing methane emissions from natural gas mining operations; stream protection rules associated with surface mining of coal; and most relevant to agriculture, the Waters of the U.S. (WOTUS) rulemaking.

Government Affairs Report June 19, 2017 Page 4 of 4 • These are very difficult undertakings that will require a large number of highly skilled staff resources involving scientists, policy experts and lawyers. This work has to be overseen by skilled and experienced senior political appointees who are not yet in place. The challenge is that it the Administrative Procedures Act makes it unlawful to simply declare that a rule is no longer valid. Such decisions cannot be made in an arbitrary and capricious manner and withstand a legal challenge.

• This means that in the instance of the WOTUS rule, for example, a well-crafted and thoughtful rulemaking is going to be needed in order to withdraw the Obama EPA’s rule. Even then, the final product will be subject to legal challenge. We expect in the case of the WOTUS rule that we are 3-5 years or more away from having the current rule withdrawn and replaced with a new rule that has withstood the subsequent legal challenges. There is no doubting, though, the seriousness of the Administration’s intentions to see the WOTUS rule withdrawn and replaced. Nor is there any doubting the level of expertise and commitment that EPA Administrator Scott Pruitt brings to this task. Mr. Pruitt cannot do it alone, though, and so we must wait to see how his EPA gets staffed up before we can offer a more detailed assessment of what and when the WOTUS rule reforms will entail.

“United we stand, divided we fall.” Aesop

In closing, the shocking and tragic shooting last week at a baseball field in northern Virginia has shaken many in Washington, D.C. to their core. Those members of Congress, staff, and innocent bystanders who witnessed the events are forever changed by them. By extension, this event has impacted the D.C. agricultural community as one of our own, Matt Mika, was one of the victims severely injured and who remains in serious condition. To borrow from Speaker Paul Ryan’s remarks in response to the shooting, “if you go after one of us, you go after all of us.” So, it comes as no surprise that our agricultural family has rallied around Matt in dramatic fashion.

Beyond the personal impact for many of us, there is a sense of comity and unity across party lines. The question is how long it will last? The cynic’s answer, “unfortunately, not very.”

Congressional Farmer Cooperative Caucus

Membership: Rep. Sam Graves (R-MO), Co-Chair Senator Amy Klobuchar (D-MN), Co-Chair Rep. Jim Costa (D-CA), Co-Chair Senator John Thune (R-SD), Co-Chair House (44): Senate (16): Rep. Rod Blum (R-IA) Rep. Kristi Noem (R-SD) Senator Thad Cochran (R-MS) Rep. Cheri Bustos (D-IL) Rep. Devin Nunes (R-CA) Senator Michael Crapo (R-ID) Rep. Mike Bost (R-IL) Rep. Collin Peterson (D-MN) Senator Tammy Duckworth (D-IL) Rep. Mike Conaway (R-TX) Rep. Todd Rokita (R-IN) Senator Dick Durbin (D-IL) Rep. Jim Costa (D-CA) Rep. Gregorio Sablan (D-MP) Senator Michael Enzi (R-WY) Rep. Joe Courtney (D-CT) Rep. Bill Shuster (R-PA) Senator Deb Fischer (R-NE) Rep. Kevin Cramer (R-At Large ND) Rep. Michael Simpson (R-ID) Senator Al Franken (D-MN) Rep. Rick Crawford (R-AR) Rep. Adrian Smith (R-NE) Senator Charles Grassley (R-IA) Rep. Henry Cuellar (D-TX) Rep. Mike Thompson (D-CA) Senator Heidi Heitkamp (D-ND) Rep. Rodney Davis (R-IL) Rep. Fred Upton (R-MI) Senator Amy Klobuchar (D-MN) Rep. Jeff Denham (R-CA) Rep. David Valadao (R-CA) Senator Jerry Moran (R-KS) Rep. Bill Flores (R-TX) Rep. Greg Walden (R-OR) Senator Michael Rounds (R-SD) Rep. Jeff Fortenberry (R-NE) Rep. Tim Walz (D-MN) Senator Charles Schumer (D-NY) Rep. Bob Gibbs (R-OH) Rep. Kevin Yoder (R-KS) Senator Debbie Stabenow (D-MI) Rep. Sam Graves (R-MO) Rep. David Young (R-IA) Senator John Thune (R-SD) Rep. Vicky Hartzler (R-MO) Senator Roger Wicker (R-MS) Rep. Bill Huizenga (R-MI) Rep. Lynn Jenkins (R-KS) Rep. Marcy Kaptur (D-OH) Rep. Ron Kind (D-WI) Rep. Steve King (R-IA) Rep. Adam Kinzinger (R-IL) Rep. Rick Larsen (D-WA) Rep. Dave Loebsack (D-IA) Rep. Billy Long (R-MO) Rep. Frank Lucas (R-OK) Rep. Blaine Luetkemeyer (R-MO) Rep. Roger Marshall (R-KS) Rep. Betty McCollum (D-MN)

I. Purpose: Provide a forum for Members of Congress interested in working together in support of public policy and programs to protect and enhance the ability of farmers to join together to form cooperative associations to improve their income from the marketplace, manage risk, and strengthen their bargaining power, allowing individual producers to better compete globally.

II. Goals: Promote greater awareness and understanding of farmer cooperatives and their importance as a proven tool to help individual family farmers and ranchers through the ups and downs of weather, commodity markets, and technological change and provide timely analysis and other information on economic and market trends, including existing and proposed laws and regulations impacting farmer cooperatives and the ability of farmer to form cooperative associations.

III. Membership: Bicameral and bipartisan.

IV. Officers: Co-Chair: Senator Amy Klobuchar Co-Chair: Senator John Thune Co-Chair: Representative Sam Graves Co-Chair: Representative Jim Costa

V. Designated Employee(s): Anne Knapke (Office of Senator Klobuchar) (202) 224-3244 Lynn Tjeerdsma and Ty Littau (Office of Senator Thune) (202) 224-2321 Nick Christensen (Office of Representative Graves) (202) 225-7041 Ben Goldeen (Office of Representative Costa) (202) 225-3341

Regulatory powers, organizational structure & key decision-makers for agencies impacting NCFC members

Information Compiled for NCFC by National Journal Understanding the Agency Staff Tracker

The Agency Staff Tracker is a tool to help navigate the transition period in the new administration. Each deck corresponds to a federal department and tracks presidential appointments and nominations through the entire confirmation process. Use the Agency Staff Tracker as a resource to quickly identify the key decision-makers in federal agencies.

Roadmap • Brief overview of department: mission, history, regulatory powers • “Day one” issues for the administration • Organizational chart • Nomination tracker + in-depth nominee profiles • Key decision-makers at the agency level + brief profiles

What to expect The initial round of Agency Staff Trackers will be published for each cabinet department before expanding to independent agencies (EPA, SBA, etc.). Current organizational charts and nomination lists will be expanded as the decks are updated. Department of Agriculture

Overview The United States Department of Agriculture (USDA) is a cabinet- level federal department responsible for agriculture, nutrition, food safety and international agricultural trade policy. Mission To support the American agricultural economy to strengthen rural communities; to protect and conserve our natural resources; and to provide a safe, sufficient and nutritious food supply for the American people. Resize & align image here: 1.86” x 2.98” History Congress established the Department of Agriculture in 1862, under President Lincoln, at a time when about half of all Americans lived on farms. The department started mainly as a statistical and scientific organization to improve farming practices and seed quality. During the Great Depression and Dust Bowl, the USDA Department of Agriculture developed crop insurance and preservation programs. As part of 1400 Independence Ave., S.W. the Johnson administration’s “War on Poverty,” the President Washington DC 20250 enacted a permanent food stamp program which has evolved into 1-202-720-2791 the current Supplemental Nutrition Assistance Program (SNAP), a www.usda.gov $70 billion program. Many of the USDA’s programs are authorized through an omnibus bill known as the “farm bill,” which is renewed every five years and is slated to be renewed in 2018.

Sources: Department of Agriculture Department of Agriculture

Regulatory powers

Some of the main laws that grant regulatory authority to the Department of Agriculture are:

• The Federal Meat, Poultry Products, and Egg Products Inspection Acts • These three acts give authority to the Food Safety and Inspection Service to quality test and demand the recall of most animal products • The Animal Health Protection Act • A 2002 law that consolidates and updates all the quarantine authorities given to the Animal and Plant Health Inspection Service • The Animal Welfare Act • Allows for the Animal and Plant Health Inspection Service to regulate the well-being of most animals used for research and other non-agricultural uses • The Food Stamp Act • Authorizes the national food stamp program, currently called the Supplemental Nutrition Assistance Program (SNAP), which funds the purchase of certain foods by impoverished families • The Farm Bills • Omnibus bills that occur every 5 years and re-authorize and fund most of the USDA’s programs

Sources: Department of Agriculture Department of Agriculture

“Day one” issues for the new administration GIPSA “Farmer Fair Practice” rules In mid-December 2016, the Obama administration issued an interim final rule and two proposed rules on contract farming originally mandated by the 2008 farm bill. Processors dislike the rules while farmers’ groups support them. President Trump must decide to keep, revise or throw the rules out. Organic Rules On January 19, 2017, the Obama administration issued more stringent requirements for the “organic” label for meat and eggs. President Trump must decide whether to keep, revise or throw them out. Farm bill reauthorization preparation The last farm bill was passed a year late, so early preparation will be needed to get all of the different parts of the omnibus bill straightened out before the September 2018 deadline.

Sources: Department of Agriculture. Oliviu Stoian, The Noun Project. Kelsey Gee, “USDA sets tougher animal-welfare standards for organic eggs and meat” Wall Street Journal, Department of Agriculture

Not yet nominated* • Rural Utilities Service Assistant Secretary for • Rural Housing Service Nominated* Organizational chart Chief Economist Rural Development • Rural Business Confirmed* Cooperative Service Not yet appointed National Appeals Division Inspector General Appointed Office of Small and Secretary of Office of Tribal Relations Disadvantaged Business Agriculture *Requires Senate Utilization confirmation Deputy Secretary Office of the Chief Director of Financial Officer Communications Office of Budget and Office of Advocacy and Program Analysis Outreach Assistant Secretary for Chief Assistant Secretary for Information Congressional Relations Officer Administration Assistant Secretary for Civil Rights

Under Secretary for Under Secretary for Under Secretary for Under Secretary for Under Secretary for Under Secretary for Under Secretary for Natural Resources Farm Production and Trade and Foreign Food, Nutrition, and Research, Education, Marketing and Food Safety and Environment Conservation Agricultural Affairs Consumer Services and Economics Regulatory Programs

• Farm Service Agency • Agricultural Research • Agricultural Marketing • Food and Nutrition • Risk Management Service Service • Foreign Agricultural Service • Food Safety and • Forest Service Agency • National Institute of • Animal and Plant Service • Center for Nutrition Inspection Service • Natural Resources Food and Agriculture Health Inspection Policy and Promotion Conservation Service • Economic Research Service Service • Grain Inspection • National Agricultural Packers and Stockyards *Boxes corresponding to divisions, rather than positions, refer to the head of said division Statistics Service Administration Sources: Department of Agriculture Department of Agriculture

Nomination tracker

Position Obama Administration Trump Administration Status

Secretary of Agriculture Tom Vilsack Sonny Perdue Nominated (1/1/17) (Confirmed 1/20/09) Confirmed (4/24/17)

Deputy Secretary of Agriculture Michael Scuse (acting) Nominated (N/A) Confirmed (N/A)

General Counsel Jeffrey Prieto Nominated (N/A) (Confirmed 7/30/15) Confirmed (N/A)

Chief Financial Officer Jon Holladay Nominated (N/A) (Confirmed 11/20/14) Confirmed (N/A)

Under Secretary for Farm and Foreign Michael Scuse Nominated (N/A) Agricultural Services (Confirmed 4/12) Confirmed (N/A)

Under Secretary for Food Safety Brian Ronholm (acting) Nominated (N/A) Confirmed (N/A)

Under Secretary for Food, Nutrition and Kevin Concannon Nominated (N/A) Consumer Services (Confirmed 7/09) Confirmed (N/A)

Under Secretary for Marketing and Edward Avalos Nominated (N/A) Regulatory Programs (Confirmed 10/08/09) Confirmed (N/A)

Sources: Department of Agriculture Department of Agriculture

Nomination tracker

Position Obama Administration Trump Administration Status

Under Secretary for Natural Resources and Robert Bonnie Nominated (N/A) Environment (Confirmed 8/01/13) Confirmed (N/A)

Under Secretary for Research, Education Catherine Woteki Nominated (N/A) and Economics (Confirmed 9/16/10) Confirmed (N/A)

Assistant Secretary for Rural Development Lisa Mensah (undersecretary) Anne Hazlett Appointed (6/12) (Confirmed 11/20/14)

Inspector General Phyllis K. Fong

Assistant Secretary for Administration Gregory Parham (Confirmed 6/13)

Assistant Secretary for Civil Rights Joseph Leonard Jr. Nominated (N/A) (Confirmed 4/06/09) Confirmed (N/A)

Assistant Secretary for Congressional Todd Batta Nominated (N/A) Relations (Confirmed 6/17/14) Confirmed (N/A)

Sources: Department of Agriculture Environmental Protection Agency

Overview The Environmental Protection Agency works to ensure that national efforts to reduce environmental risk are based on best available scientific information, that federal laws protecting human health and the environment are enforced fairly and effectively and that environmental protection is an integral consideration in U.S. policies concerning natural resources, human health, economic growth, energy, transportation, agriculture, industry, and international trade. Mission The EPA’s mission is to make sure that all Americans are protected from significant risks to their human health and environment where they live, learn, and work. History Born in the wake of elevated concern about environmental Environmental Protection pollution, the EPA was established on December 2, 1970 to Agency consolidate in one agency a variety of federal research, monitoring, 1200 Pennsylvania Ave. NW standard-setting and enforcement activities to ensure Washington DC 20004 environmental protection. Since its inception, the EPA has been 1-202-564-4700 working for a cleaner, healthier environment for the American people. www.epa.gov

Sources: Environmental Protection Agency, 2017. Environmental Protection Agency

Regulatory powers

The EPA is called a regulatory agency because Congress authorizes the EPA to write regulations that explain the technical, operational, and legal details necessary to implement laws.

Some of the main laws that grant regulatory authority to the Environmental Protection Agency are:

•The Clean Air Act •The Clean Water Act •The Toxic Substance Control Act (TSCA) •The Energy Independence and Security Act (EISA) •The National Environmental Policy Act (NEPA) •The Federal Food, Drug, and Cosmetic Act (FFDCA) •Comprehensive Environmental Response, Compensation, and Liability Act (Known as CERCLA or, more commonly, Superfund)

Sources: Environmental Protection Agency, 2017. Environmental Protection Agency

“Day one” issues for the new administration

New Source Performance Standards rule This rule, enacted by the Obama administration, creates methane emissions standards for new and heavily modified oil and gas operations and has been criticized heavily by the industry

Clean Power Plan The Clean Power Plan provides standards for each state's energy mix that will help them to meet an overall standard for climate reduction goals

Sources: Environmental Protection Agency, 2017; NounProject, Creative Stall, Iconothon. Environmental Protection Agency

Organizational chart

Office of the Executive Office of Administrative Secretariat and Executive Services Not yet named Nominated Office of Homeland Office of Children’s Confirmed Security OfficeOffice ofof Secretary the Secretary of EPA Health Protection Appointed of EPA Office of Policy Office of Civil Rights Administrator Immediate *Boxes Office of Public Affairs Office Office of Congressional corresponding and Intergov. Affairs to divisions, rather than Office of Public Engagement Science Advisory Board positions, refer and Environmental Education to the head of Office of Small and said division Disadvantaged Business Utilization

Office of Office of Office of Office of the Office of Administration Office of Air and Chemical Safety Enforcement and Office of General Chief Financial Environmental and Resources Radiation and Pollution Compliance Council Officer Information Management Prevention Assurance

Office of Office of Office of Land Office of Research Regional Offices Inspector International and and Emergency Office of Water and Development 1-10 General Tribal Affairs Management United States Trade Representative

Overview The Office of the United States Trade Representative (USTR) is a cabinet-level office within the Executive Office of the President responsible for developing and recommending trade policy to the president of the United States, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government through the interagency Trade Policy Staff Committee (TPSC) and Trade Policy Review Group (TPRG). Mission To coordinate trade policy, resolve disagreements, and frame trade issues for presidential decision. History In the Trade Expansion Act of 1962, Congress called for the President to appoint a Special Representative for Trade Office of the United States Negotiations. The Act provided for the Special Trade Representative Trade Representative to serve as chair of a new interagency trade organization 600 17th Street NW established to make recommendations to the President on trade Washington, DC 20508 agreements. In 1963, President Kennedy created a new Office of 1-202-395-3406 the Special Trade Representative (STR) in the Executive Office of the President. Subsequent laws and international agreements have www.ustr.gov expanded the powers and responsibilities of the USTR.

Sources: Office of the United States Trade Representative. United States Trade Representative

Powers and responsibilities

The USTR monitors and secures US trade rights and benefits under international agreements using a variety of tools including consultations, negotiations, and litigation in formal dispute settlement proceedings.

The USTR derives its authority both from US laws and international trade agreements: • The Trade Act of 1974 provided a legislative charter for the USTR as part of the Executive Office of the President, making it responsible for the trade agreements programs under the Tariff Act of 1930, the Trade Expansion Act of 1962, and the 1974 act. • Reorganization Plan No. 3 of 1979 and Executive Order 12188 of the next year centralized U.S. government policy-making and negotiating functions for international trade under the USTR. • The 1994 Uruguay Round Agreements Act gave the USTR lead responsibility for all US negotiations under the auspices of the WTO. • Major trade agreements such as the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) expanded the scope and task of USTR's efforts to implement and enforce U.S. trade agreements.

Sources: Office of the United States Trade Representative. United States Trade Representative

“Day one” issues for the new administration

NAFTA USTR nominee Robert Lighthizer will be heavily involved in the NAFTA renegotiation talks expected to take place later this year.

Anti-dumping and countervailing duties Lighthizer has worked on several high-profile anti-dumping cases and will likely push for stronger protections and countervailing duties in future trade negotiations.

Sources: Office of the United States Trade Representative. United States Trade Representative

Organizational chart

Not yet nominated (S) *Boxes corresponding Public and Media Affairs Congressional Affairs Nominated (S) to divisions, rather than positions, refer to Confirmed (S) US Trade Interagency Trade Textiles the head of said Not yet appointed Representative Enforcement Center division Appointed General Counsel Administration (S)—requires Senate confirmation Monitoring & Chief of Staff FOIA Enforcement

Intergovernmental Affairs & Trade Policy & Economics Public Engagement

Deputy USTR Chief Agricultural Negotiator Deputy USTR (Geneva) Deputy USTR

Southeast Asia & Western Japan. Korea & Labor Affairs the Pacific APEC Affairs Hemisphere Agricultural Affairs & WTO & Multilateral Commodity Policy Affairs Central & South China Affairs Services & Intellectual Property Asian Affairs Investment & Innovation

African Affairs Beijing Small Business, Market Europe & the Access & Industrial Competitiveness (GSP) Middle East

Environment & Natural Resources Department of Commerce

Overview The Department of Commerce (DOC) is a cabinet-level federal department responsible for promoting economic growth and sustainable development in the United States. It is comprised of 12 divisions that work together to drive progress in the areas of trade and investment, innovation, environment, data and operational excellence. Mission To promote job creation, economic growth, sustainable development and improved standards of living for Americans. History Congress established a Department of Commerce and Labor in 1904, which became the Department of Commerce in 1913 after the creation of the Department of Labor. Since then, the DOC has undergone numerous changes. Subsections such as the Bureau of Department of Commerce Public Roads and the Maritime Administration have been removed 1401 Constitution Ave. NW while new offices were added, including those that later evolved Washington DC 20, 20230 into the Federal Aviation Administration, the Federal 1-202-482-2000 Communications Commission and the Department of www.commerce.gov Transportation. In 2012, the Obama administration unsuccessfully proposed reorganizing the Department and creating a new cabinet- level position to oversee business and trade.

Sources: Department of Commerce Department of Commerce

Regulatory powers

The Department of Commerce’s 12 divisions draw regulatory authority from hundreds of federal laws and executive orders that the DOC has the responsibility to enforce.

Some of the laws that grant regulatory authority to the Department of Commerce and its divisions are: • Public Works and Economic Development Act (EDA) • Census Act (Census Bureau) • America Invents Act (USPTO) • National Climate Program Act (NOAA)

Additionally, the department is authorized by "enabling legislation" to promulgate regulations that implement, explain or prescribe law or policy. According to the Administrative Procedure Act, the DOC must publish proposed rules in a notice of proposed rulemaking (NPRM), allow a period for comments and participation from stakeholders, and eventually publish the final rule on the Federal Register if it is adopted.

Sources: Department of Commerce Department of Commerce

“Day one” issues for the new administration

NAFTA Commerce Secretary nominee Wilbur Ross has stated that renegotiating NAFTA is a top priority for the department under the new administration.

Trade with China The Commerce Department under Trump is also expected to play an important role in trade talks with China, including potential tariffs or trade restrictions.

Sources: Department of Commerce Department of Commerce

Organizational chart

Not yet nominated (S) Office of Public Affairs General Counsel *Boxes corresponding to Nominated (S) Secretary of divisions, rather Office of Business Liaison Inspector General Confirmed (S) Commerce than positions, refer to the head Not yet appointed Chief Financial Officer and Assistant Executive Secretariat Secretary for Administration of said division Appointed Office of White House Deputy Secretary Assistant Secretary for Legislative (S)—requires Senate Liaison and Intergovernmental Affairs confirmation Office of Policy and Strategic Chief of Staff Chief Information Officer Planning

NOAA Under USPTO Director and Secretary and ITA Under Secretary BIS Under Secretary ESA Under Secretary NIST Under Secretary Under Secretary for Administrator Intellectual Property

Director General for US Assistant Secretary and Foreign Commercial Assistant Secretary Director EDA Assistant for Conservation and Service and Assistant for Export Chief Economist National Technical Secretary Management Secretary for Global Administration Information Service Markets

Assistant Secretary for Assistant Secretary and Assistant Secretary Environmental Deputy Assistant Director for Export MBDA National Observation and Secretary for Industry Bureau of the Census Director Prediction and Analysis Enforcement

Assistant Secretary and Deputy Assistant Deputy Under Director Chief Scientist Secretary for Secretary for Industry Bureau of Economic NTIA Assistant Enforcement and and Security Analysis Secretary Compliance Department of Transportation

Overview The top priorities at the Department of Transportation (DOT) are to keep the traveling public safe and secure, increase their mobility and have our transportation system contribute to the nation's economic growth. DOT employs almost 55,000 people across the country, in the Office of the Secretary of Transportation (OST) and its operating administrations and bureaus, each with its own management and organizational structure. Mission To serve the United States by ensuring a fast, safe, efficient, accessible and convenient transportation system that meets our vital national interests and enhances the quality of life of the American people, today and into the future. History Congress established the Department of Transportation in 1966 in Department of Transportation order to combine several existing organizations including the 1200 New Jersey Ave. SE United States Coast Guard, Federal Aviation Administration and the Washington DC 20590 Federal Highway Administration. At the creation of the new 202-366-4000 department, two new administrations were also established: the www.transportation.gov Federal Railroad Administration and the National Highway Traffic Safety Administration. The department has grown since and is now composed of 12 administrations addressing different aspects of America’s transportation infrastructure. Sources: Department of Transportation Department of Transportation

Regulatory powers

The Department of Transportation derives its authority from the Department of Transportation Act of 1966, legislation that created the new Cabinet-level department by combining new and existing federal agencies.

Some of the laws that grant regulatory authority to the Department of Transportation are: • The Saint Lawrence Seaway Act • The Urban Mass Transportation Act • The Rail Passenger Service Act • The Airline Deregulation Act

Additionally, the department is authorized by such "enabling legislation" to promulgate regulations that implement, explain or prescribe law or policy. According to the Administrative Procedure Act, the DOT must publish proposed rules in a notice of proposed rulemaking (NPRM), allow a period for comments and participation from stakeholders, and eventually publish the final rule on the Federal Register if it is adopted.

Sources: Department of Transportation Department of Transportation

“Day one” issues for the new administration

Trump’s infrastructure plan One of Donald Trump’s major campaign promises was to implement a large-scale infrastructure plan with a price tag nearing $1 trillion. Very few details have surfaced about the plan since Trump won the election in November.

What we know: • Revenue neutral plan based on public-private partnerships • FAA and TSA reform 3 • Regulatory reform with the goal of streamlining permitting P and approvals to lower costs • Promotion of private sector energy infrastructure projects • Special focus on updating drinking water and wastewater infrastructure

Sources: Department of Transportation

June 13, 2017 Department of Transportation

Organizational chart

Under Secretary for Policy *Boxes corresponding to divisions, rather than Office of the Secretary of positions, refer to the head of said division Transportation

Not yet named Office of the Deputy Chief of Staff Nominated Secretary Confirmed Appointed Office of Drug and Alcohol Policy and Compliance

Office of Small and Office of Office of the Chief Executive Board of Contract Office of Civil Disadvantaged Office of Public Intelligence and Information Secretariat Appeals Business Rights Officer Affairs Utilization Security

Assistant Secretary Assistant Secretary Assistant Secretary Assistant Secretary Office of the for Aviation and for Budget and Assistant Secretary General Counsel for Transportation for Governmental Inspector International Programs/Chief for Administration Policy Affairs Affairs Financial Officer General

St. Lawrence Research and Pipeline and Federal Federal Federal National Federal Federal Motor Seaway Maritime Innovative Hazardous Aviation Highway Railroad Highway Traffic Transit Carrier Safety Development Admin. Technology Materials Admin. Admin. Admin. Safety Admin. Admin. Admin. Corporation Administration Safety Admin.

Sources: Department of Transportation Department of the Interior Overview The United States Department of the Interior (DOI) is a Cabinet- level agency that manages America’s vast natural and cultural resources. The department employs 70,000 people, including expert scientists and resource-management professionals, within nine technical bureaus and a number of offices such as the Office of the Secretary; Assistant Secretary for Policy, Management and Budget; Solicitor’s Office and Office of the Inspector General. Mission Protecting America’s great outdoors and powering our future. The DOI protects and manages the nation’s natural resources and cultural heritage; provides scientific and other information about those resources; and honors its trust responsibilities or special commitments to American Indians, Alaska Natives and affiliated island communities. U.S. Department of the Interior History 1849 C Street, NW On March 3, 1849, the last day of the 30th Congress, a bill was Washington DC 20240 passed to create the Department of the Interior and take charge of the America’s internal affairs. In 1873, the secretary of the interior (202) 208-3100 gained oversight of U.S. territories. Its responsibilities were further www.doi.gov expanded in 1879 with the creation of the U.S. Geological Survey, in 1916 with the signing of legislation for the National Park Service and in 1940 with the establishment of the U.S. Fish and Wildlife Service. Sources: Department of the Interior Department of the Interior

Regulatory powers

The Department of the Interior has the responsibility to enforce laws that protect and manage the nation’s natural and cultural resources as well as laws that honor its trust and responsibilities towards native communities.

Some of the main laws of the Department of the Interior are: •The Endangered Species Act •The Energy Policy Act of 2005 •Indian Self Determination Act •Surface Mining Control and Reclamation Act of 1977

Furthermore, the department is authorized to conduct Indian trust management, regulate commercial filming on public lands, protect and repatriate Native American graves, regulate gaming on Indian reservations, protect the bald and golden eagle, approve energy projects on federal land, and protect archeological sites and cultural artifacts. Because of the department’s disparate interests it has a wide range of responsibilities.

Sources: Department of the Interior Department of the Interior

“Day one” issues for the new administration

Methane flaring and venting The Obama administration created new regulations to reduce waste and the environmental impact by limiting flaring and venting during oil and gas production on public and Native lands. In his Senate committee hearing, Trump’s nominee for secretary of the interior, Ryan Zinke, said he would try to roll back this rule and reduce waste by improving infrastructure.

Maintenance of parks Zinke also asserted in his hearing that one of his priorities would be to address an estimated $12.5 billion backlog of maintenance and repairs within the national parks system.

Sources: Department of the Interior Department of the Interior

Organizational chart

Asst. Sec. Policy, Management & Budget Solicitor and CFO Secretary of the Interior Director, Office of Civil Rights Inspector General Deputy Secretary Deputy Secretary Special Trustee for American Indians Chief Information Officer

Director, Office of Small and Disadvantaged Business Utilization

Assistant Assistant Secretary Secretary Assistant Secretary Assistant Secretary Assistant Secretary Land and Minerals Fish, Wildlife and Indian Affairs Water and Science Insular Areas Management Parks

Director of Director of Bureau of Safety Director of U.S. Bureau of Indian Office of Insular National Park Bureau of Land & Environmental Geological Affairs Affairs Service Management Enforcement Survey

Director of U.S. Director of Bureau of Ocean Commissioner of Bureau of Indian Surface Mining, Fish and Wildlife Energy Bureau of Education Reclamation and Service Enforcement Management Reclamation

Sources: Department of the Interior Department of Homeland Security

Overview The United States Department of Homeland Security (DHS) is a cabinet-level federal department responsible for defending and securing the U.S. and its citizens. The third-largest cabinet office, DHS responds to a variety of threats, including terrorism, natural disasters, cyberattacks and border security. Mission To prevent terrorism and enhance security; secure and manage U.S. borders; enforce and administer U.S. immigration laws; safeguard and secure cyberspace; and ensure resilience to disasters. History Established as the White House Office of Homeland Security 11 days after the terrorist attack on September 11th, 2001, DHS was elevated to a cabinet-level department in November 2002 by the Homeland Security Act. Envisioned as a central hub to coordinate DHS among various federal departments and agencies relevant to 3801 Nebraska Ave. NW homeland security, DHS was formed through the consolidation of Washington DC 20016 22 existing agencies. 202-282-8000 https://www.dhs.gov/

Sources: Department of Homeland Security Department of Homeland Security

Regulatory powers

The Department of Homeland Security’s regulatory authority is based on federal laws, executive orders and presidential policy directives.

Some of the main provisions that grant regulatory authority to DHS include: •The Homeland Security Act of 2002 •The Administrative Procedure Act •Homeland Security Presidential Directives

According to the Administrative Procedure Act, DHS must publish proposed rules in a notice of proposed rulemaking (NPRM), allow a period for comments and participation from stakeholders and eventually publish the final rule on the Federal Register if it is adopted.

Sources: Department of Homeland Security Department of Homeland Security

“Day one” issues for the new administration

Cybersecurity President Trump has vowed to take action in the cybersecurity realm, and in May he signed an executive order on protecting federal networks, updating outdated systems and asking for reports on how prepared agencies are to defend themselves against cyberattacks. The National Protection and Programs Directorate, housed within DHS and dedicated to defending U.S. critical infrastructure from cyberattacks, will play a prominent role in any efforts by the administration to address cybersecurity. A long-stalled plan to reorganize the NPPD into a new Cybersecurity and Infrastructure Protection Agency might also be on the agenda.

Border security and immigration Trump’s central campaign promises of building a wall on the Mexican border, implementing extreme vetting and addressing illegal immigration would involve U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection and U.S. Citizenship and Immigration Services, all of which are DHS entities.

Sources: Department of Homeland Security; Rebecca Savransky, “Trump team turns focus of Russia report to cybersecurity holes,” The Hill, January 8, 2017; Mark Rockwell, “DHS still waiting on NPPD reorg,” FCW, November 3, 2016; Images by Chameleon Design and ProSymbols, The Noun Project, January 2017; David Jackson and Elizabeth Weise, “President Trump signs cybersecurity executive order,” USA Today, May 11, 2017. Department of Homeland Security

Organizational chart

*Boxes corresponding to divisions, rather than Executive positions, refer to the head of said division Secretary Secretary Chief of Staff Not yet nominated Nominated Confirmed Deputy Secretary Military Not yet appointed Appointed Advisor

National Science & Office of the Office of Office of the Management Protection & Office of Office of Technology General Legislative Inspector Directorate Programs Policy Public Affairs Directorate Counsel Affairs General Directorate

Citizenship & Chief Financial Office of Office of Office of Office of Office for Civil Immigration Officer Health Partnership & Intelligence & Operations Privacy Office Rights & Civil Services Affairs Engagement Analysis Coordination Liberties Ombudsman

Domestic Federal Law Nuclear Enforcement Detection Training Office Center

Federal U.S. Citizenship U.S. Immigration Transportation U.S. Customs & Emergency U.S. Secret & Immigration U.S. Coast Guard & Customs Security Border Protection Management Service Services Enforcement Administration Agency Sources: Department of Homeland Security Department of Labor

Overview The United States Department of Labor (DOL) is a cabinet- level federal department responsible for occupational safety, wage and hour standards, unemployment insurance benefits, reemployment services and some economic statistics. It administers and enforces more than 180 federal laws and thousands of regulations on workplace activities. Mission To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights. History Congress established a Bureau of Labor Statistics in 1884 to collect information about labor and employment. The Bureau began Department of Labor collecting economic data in 1884 and published its first report in 200 Constitution Ave. NW 1886. After several reorganizations, President William Howard Taft Washington DC 20210 made it a cabinet-level department in 1913. Frances Perkins 1-866-4-USA-DOL became the first US female cabinet member when she was 1-866-487-2365 appointed secretary of labor in 1933. The DOL celebrated its centennial in 2013. www.dol.gov

Sources: Department of Labor Department of Labor

Regulatory powers

The Department of Labor’s regulatory authority is based on over 180 federal laws, which the DOL has the responsibility to enforce.

Some of the main laws that grant regulatory authority to the Department of Labor are: •The Fair Labor Standards Act •The Occupational Safety and Health (OSH) Act •The Employee Retirement Income Security Act (ERISA) •The Migrant and Seasonal Agricultural Worker Protection Act

Additionally, the department is authorized by such "enabling legislation" to promulgate regulations that implement, explain or prescribe law or policy. According to the Administrative Procedure Act, the DOL must publish proposed rules in a notice of proposed rulemaking (NPRM), allow a period for comments and participation from stakeholders, and eventually publish the final rule on the Federal Register if it is adopted.

Sources: Department of Labor Department of Labor

“Day one” issues for the new administration

Overtime rule This rule, enacted by the Obama administration, will raise the salary threshold for eligibility for overtime from $455/week to $913/week ($47,476 per year). Implementation of the rule is currently on hold as a result of an injunction issued by a US District Court in Texas.

Fiduciary rule This new rule requires investment advisers to meet a “fiduciary” standard to put the interests of their clients ahead of any others.

Sources: Department of Labor Department of Labor

Organizational chart

Office of Administrative Executive Secretary Office of the Secretary Law Judges Not yet nominated Center for Faith Based & of Labor Nominated Neighborhood Benefits Review Board Partnerships Confirmed Office of the Deputy Office of the Ombudaman for the Secretary Employees’ Compensation Not yet appointed Energy Employees Occupations Illness Progams Appeals Board Appointed Office of Public Administrative Review Engagement Board

Office of Office of the Office of the Office of the Employee Congressional & Assistant Secretary Office of the Office of Public Chief Financial Assistant Secretary Benefits Security Intergovernmental for Administration Solicitor Affairs for Policy Affairs & Management Controller Administration

Veterans’ Office of Federal Employment & Office of Labor- Office of Workers’ Employment & Contract Wage & Hour Training Women’s Bureau Management Compensation Compliance Training Service Programs Division Administration Programs Standards

Office of Occupational Mine Safety & Bureau of Office of Pension Benefit Disability Bureau of Labor Safety & Health Health International Inspector Guaranty Employment Statistics Administration Administration Labor Affairs General Corporation Policy Sources: Department of Labor *Boxes corresponding to divisions, rather than positions, refer to the head of said division Department of Justice

Overview The United States Department of Justice (DOJ) is a cabinet- level federal department that enforces federal laws, prevents crime, protects the public’s safety from all threats, including terrorism, and operates the federal prison system. Key figures and agencies that perform these duties include the FBI, DEA, US Marshals, US Attorneys and the Attorney General. Mission To enforce the law and defend the interests of the United States according to the law; to ensure public safety against threats foreign and domestic; to provide federal leadership in preventing and controlling crime; to seek just punishment for those guilty of unlawful behavior; and to ensure fair and impartial administration of justice for all Americans Department of Justice History 950 Pennsylvania Ave. NW Congress established the Office of the Attorney General in 1789 as Washington DC 20530 a one-person position. The Attorney General had the jurisdiction "to prosecute and conduct all suits in the Supreme Court in which 202-514-2000 the U.S. shall be concerned, and to give his advice and opinion www.justice.gov upon questions of law when required by the President, or when requested by the heads of any of the departments.” Later the DOJ was expanded due to the high volume of cases.

Sources: Department of Justice Department of Justice

Regulatory powers

The Department of Justice’s regulatory authority has grown significantly since 1789 and it employs more than 100,000 attorneys, special agents, other law enforcement personnel and various staff.

Some of the main laws that grant regulatory authority to the Department of Justice are: •The Judiciary Act of 1789 •The Act to Establish the Department of Justice (1870) •Interstate Commerce Act of 1887

The Department of Justice (DOJ) enforces federal laws, prevents crime, protects the public’s safety from all threats, including terrorism, and operates the federal prison system. The DOJ was not initially responsible for federal law enforcement and was granted that power in 1887. The component of enforcing federal law led to the eventual creation of the FBI along with many of the other law enforcement agencies within the Department of Justice.

Sources: Department of Justice, allgov.com Department of Justice

“Day one” issues for the new administration

Russian involvement in the 2016 election The FBI (along with the CIA, NSA and Treasury Department) is investigating whether several former Trump campaign aides had improper contact with elements of the Russian government. The DOJ Inspector General’s agency is also conducting multiple probes into alleged Russian interference in the election, which potentially involves investigating FBI Director, James Comey’s role in the FBI’s investigation and his handling of its probe into Hillary Clinton’s private email server.

Role of DOJ in civil rights At his confirmation hearing, Jeff Sessions argued the federal government does not need to be heavily involved in prosecuting crimes against women or gay people that were already being prosecuted locally. He said, “I am not sure women or people with different sexual orientations face that kind of discrimination. I just don’t see it,” as he was explaining why he is not anti- gay or anti-women.

Sources: Nikita Biryukov, “James Comey to remain on as FBI Director,” NBC, January 24, 2017; Matt Apuzzo, “Under Trump, approach to civil rights law is likely to change definitively,” New York Times, January 19, 2017 Department of Justice

Organizational chart

Attorney General Not yet nominated Nominated Confirmed Solicitor General Associate Attorney Deputy Attorney General General Not yet appointed Appointed

Office of the Solicitor General Office of Legal Office of Public Office of Office of Legal Office of Tribal Office of Justice Policy Affairs Legislative Affairs Counsel Justice Programs

Executive Office for U.S. Civil Rights Division National Security Office of Federal Bureau Professional Trustees Criminal Division Division of Investigation Responsibility Community Oriented Civil Division Policing Services (COPS) Office of the Office of the Inspector General Pardon Attorney Drug Enforcement Bureau of Office of Information Antitrust Division Administration Prisons Policy Justice U.S. Parole Management Div. Commission Executive Office U.S. Marshals Foreign Claims Settlement Tax Division for U.S. Attorneys Services Commission Civil Rights Exec. Office for Division Organized Crime Office for Access to Environment & Natural Interpol Drug Enforcement U.S. Attorneys Justice Resources Division Washington Task Forces

Office on Violence Against Community Relations Bureau of Alcohol, Tobacco, Firearms & Professional Responsibility Advisory Women Service Explosives Office Sources: Department of Justice *Boxes corresponding to divisions, rather than positions, refer to the head of said division Department of State

Overview As the lead U.S. foreign affairs agency, the Department of State represents the United States at more than 270 diplomatic locations around the world, including embassies, consulates and missions to international organizations. Equivalent to the foreign ministry of other countries, the Department of State negotiates treaties and agreements with foreign entities, represents the U.S. at the United Nations and issues passports and visas to U.S. citizens and foreigners who wish to travel to and from the U.S. Mission The Department's mission is to shape and sustain a peaceful, prosperous, just and democratic world and foster conditions for stability and progress for the benefit of the American people and people everywhere. This mission is shared with the USAID, ensuring the U.S. has a common path forward in partnership as the nation Department of State invests in shared security and prosperity. 2201 C St NW, History Washington, DC 20520 Since its creation in 1789, the Department of State has grown (202)-647-4000 significantly. The first secretary of state, Thomas Jefferson, oversaw www.state.gov a small staff and only maintained diplomatic posts in London and Paris. To address changing global circumstances, the number of domestic and overseas employees has steadily climbed, with a Foreign Service Corps of about 13,000 employees and a Civil Sources: Department of State Service totaling more than 11,000 employees. Department of State

Legal authority

The Department of State’s legal authority is based on sections of the U.S. Constitution, Code of Federal Regulations, the U.S. Legal Code and tenets of international law. In addition, the Foreign Affairs Manual (FAM) and associated Handbooks (FAHs) are the comprehensive source for the Department's organization structures, policies, and procedures that govern the operations of the Department of State and the Foreign Service.

Some of the main sources of domestic and international sources that grant legal authority to the Department of State are: •22 CFR Part 1810 •11 FAM 700 •1 U.S.C. 112a •Delegation of Authority 311: Negotiation, Signature, and Termination of Treaties and Other International Agreements •The Vienna Convention on the Law of Treaties (VCLT)

Sources: Department of State; Foreign Affairs Manual Department of State

“Day one” issues for the new administration

Reevaluate contributions to international organizations The Trump administration is reportedly drafting an executive order with the aim of reducing the U.S. role in the UN and other international organizations, as well as beginning the process of reviewing and potentially abrogating certain multilateral treaties.

“America First Foreign Policy” The White House website highlights peace through strength as a core principle of a foreign policy that will prioritize American interests. Since winning the election, Trump has expressed a willingness to recalibrate U.S. relations with a number of key nations, including China, Taiwan, Mexico, Israel and Russia.

Combatting “radical Islam” At his confirmation hearing, Rex Tillerson said that addressing the threat of “radical Islam” and thwarting ISIS will be a key priority Sources: Department of State Department of State

Organizational chart (1 of 2) Not yet appointed (S) Nominated (S) Confirmed (S) Not yet appointed Appointed (S) — requires Senate confirmation Secretary of State Counselor (C) (S) Chief of Staff (S/COS) United States Agency for United States Mission to Boxes corresponding to International Development the United Nations divisions, rather than positions, refer to the head of said division Deputy Secretary of State (D) Deputy Secretary of State (D-MR) *Offices further broken down on Executive Secretariat (S/ES) Office of U.S. Foreign Assistance (F) next chart

Under Secretary Under Secretary Under Secretary Under Secretary for Under Secretary for Economic for Arms Control for Public Under Secretary Civilian Security, for Political Growth, Energy and Int’l Security Diplomacy and for Management* Democracy and Affairs* and Environment* Affairs* Public Affairs* Human Rights*

Leg. INR Office of Office Office of Office of Office of Office of US Global Special Envoys & Affairs Office of Global Assistant the Legal of the Policy Chief of Civil AIDS & Health Special Assistant Women’s Issues Secy Advisor IG Planning Protocol Rights Diplomacy Representatives Secy Sources: Department of State Department of State

Organizational chart (2 of 2) Not yet appointed (S) Nominated (S) Confirmed (S) Not yet appointed Appointed Boxes corresponding to Secretary of State divisions, rather than (S) — requires Senate confirmation (S) positions, refer to the head of said division

Under Secretary Under Secretary Under Secretary Under Secretary for Under Secretary for Economic for Arms Control for Public Under Secretary Civilian Security, for Political Affairs Growth, Energy and Int’l Security Diplomacy and for Management Democracy and and Environment Affairs Public Affairs Human Rights

Budget & Conflict & Stabilization European & Economic & Arms Control Education & Admin. African Planning Operations Eurasian Business Verification & Cultural Affairs Affairs Affairs Compliance Affairs Consular Diplomatic Counterterrorism & Affairs Security Countering Violent Energy Int’l Security & Int’l Extremism Information Foreign Office of South & Resources Nonproliferation Int’l Programs Service Foreign Central Asian Democracy, Human Orgs Oceans and Institute Missions Affairs Rights, & Labor Political-Military Int’l Environ. Comptroller, Affairs Office of Int’l Narcotics and Law & Scientific Public Affairs Global Medical Enforcement Near East Asian Affairs Financial Eastern and Pacific Services Office of the Services Population, Refugees & Affairs Affairs Chief Migration Economist Human Info. Resource Western Resources Management Office to Monitor & Hemisphere Office of the Combat Trafficking in Office of Persons Affairs Science and Overseas Mgmt Policy, Tech Adviser Building Rightsizing & Office of Global Criminal Ops Justice Sources: Department of State Innovation Department of the Treasury

Resize & align logo here: Overview The United States Department of the Treasury (DOT) is a cabinet- 1.79” x 2.98” level federal department responsible for promoting economic prosperity and assuring the financial security of the United States. Mission Maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the Resize & align image here: financial system, and manage the U.S. Government’s finances and 1.86” x 2.98” resources effectively. History Congress established the Department of the Treasury in 1789 and inaugurated Alexander Hamilton to be the first secretary of the treasury. Hamilton’s first act as secretary was to submit a report Department of the Treasury outlining the foundation of the nation’s fiscal health. In 1989, the 1500 Pennsylvania Ave. NW Department of the Treasury celebrated its bicentennial anniversary Washington DC 20220 202-622-2000 www.treasury.gov

Sources: Department of the Treasury Department of the Treasury

Regulatory powers

The Department of the Treasury’s regulatory authority is based on numerous federal laws, which the department has the responsibility to enforce.

Some of the main laws that grant regulatory authority to the Department of the Treasury are: •The Dodd-Frank Wall Street Reform and Consumer Protection Act •The Federal Reserve Act •The Revenue Act of 1862

Additionally, the department is authorized by such "enabling legislation" to promulgate regulations that implement, explain or prescribe law or policy. According to the Administrative Procedure Act, the department must publish proposed rules in a notice of proposed rulemaking (NPRM), allow a period for comments and participation from stakeholders, and eventually publish the final rule on the Federal Register if it is adopted.

Sources: Department of the Treasury Department of the Treasury

“Day one” issues for the new administration

Financial moratorium The Trump administration has signed an executive order that would place a moratorium on all new financial regulation. During the campaign, Trump promised to put in place a rule that “for every one new regulation, two old regulations must be eliminated.”

Fiduciary rule This new rule requires investment advisers to meet a “fiduciary” standard to put the interests of their clients ahead of any others.

Sources: Department of the Treasury Department of the Treasury

Organizational chart

*Boxes corresponding to divisions, rather than Inspector General positions, refer to the head of said division Office of the Secretary of the Treasury Treasury Inspector General Office of the Chief of Staff for Tax Administration Deputy Secretary of the Treasury Special Inspector General, Not yet nominated Nominated Confirmed Troubled Asset Relief Program

Not yet appointed Appointed Withdrew

Office of International Office of Terrorism and Office of the Treasurer Office of Domestic Finance Affairs Financial Intelligence

Office of Office of Office of Office of Financial Financial International Intelligence Institutions Markets Finance and Analysis

Office of Office of Terrorist Office of Office of Fiscal Financial Financing and Intelligence Financial Crimes Service Stability and Analysis

Office of Office of General Office of Office of Office of Tax Chief Risk Economic Legislative Counsel Management Public Affairs Policy Officer Policy Affairs

Sources: Department of the Treasury Government Affairs Committee: NAFTA Discussion

Issue Update

TO: NCFC Government Affairs Committee FROM: NCFC Staff DATE: 06/01/2017

ISSUE: NAFTA Renegotiation

OVERVIEW: On May 18th, the Trump Administration formally notified Congress of its intent to renegotiate the North American Free Trade Agreement (NAFTA). That notification begins a 90-day congressional consultation period and lays the groundwork for the start of negotiations with Canada and Mexico, which can begin no sooner than August 16.

The May 18 notice does not outline specific negotiating objectives, but says the U.S. will seek “new provisions to address intellectual property rights, regulatory practices, state- owned enterprises, services, customs procedures, sanitary and phytosanitary measures, labor, environment, and small and medium enterprises.” The Trade Promotion Authority law requires the Administration to publish a detailed summary of its negotiating objectives and expected positive outcomes on the Office of the U.S. Trade Representative’s (USTR) website at least 30 days prior to initiating negotiations. The earliest these objectives will be published in July 17, 2017.

Last week, USTR issued a Federal Register notice “seeking public comments on matters relevant to the modernization of NAFTA in order to inform development of U.S. negotiating positions.” That notice can be found at: https://www.regulations.gov/document?D=USTR_FRDOC_0001-0413 Public comments are due June 12, while trade advisory committee reports are due by June 30. A hearing will be held on Tuesday, June 27 at the U.S. International Trade Commission.

It is also our understanding that USTR is scheduling individual meetings with U.S. agriculture commodity specific organizations to receive additional input on their positions and priorities.

BACKGROUND: Attached are two documents for your information. The first is a white paper commissioned by the National Pork Producers Council. While it focuses on Mexico, it contains some general information on trade flows between the two countries since the inception of NAFTA, as well as impacts specific to the U.S. agriculture sector. The second document contains a list of NAFTA renegotiation priorities that has been produced by the U.S. Food and Agriculture Dialog for Trade, which represents a broad cross section of U.S. agricultural interests. You will see that the list of recommendations largely reflects provisions that were contained in the Trans-Pacific Partnership Agreement.

NCFC ACTION: We have scheduled time at our Government Affairs Committee meeting during our Washington Conference to discuss NAFTA renegotiation. Darci Vetter, former Chief Agricultural Negotiator at USTR, will join us to outline the process and procedures, as well as discuss her perspectives on the issues that surround the negotiations. We will then have time for NCFC members to express their views concerning NAFTA renegotiation.

That meeting is scheduled for 3:30 p.m., June 26th.

# # #

This communication is for use by the intended recipient and contains information that may be privileged, confidential or copyrighted under applicable law. If you are not the intended recipient, you are hereby formally notified that any use, copying or distribution of this e-mail, in whole or in part, is strictly prohibited. Please notify the sender by return e-mail and delete this e-mail from your system. U.S. Food and Agriculture Dialogue for Trade

North America Priorities

The U.S. Food and Agriculture Dialogue for Trade consists of a broad cross-section of U.S. food and agricultural companies and associations engaged in and supporting America’s farms, ranches and related businesses.

Why North America Food and Agricultural Trade Matters:

• U.S. food and agricultural exports, which are heavily reliant upon the North American market, support over 15 million jobs from coast-to-coast.

• The North American market has been a bonanza for U.S. farmers, ranchers and food processors. Over the past 20 plus years, U.S. food and agricultural exports to Canada and Mexico have quadrupled. In 2016 the U.S. exported nearly $43 billion worth of food and agriculture goods to its NAFTA partners.

• Based on a U.S. Department of Agriculture estimate, for every $1 of agricultural exports, another $1.27 is generated in business activity. That is, in 2016 U.S. food and agricultural exports to Mexico and Canada supported $54.6 billion in additional business activity.

Priorities for U.S. Competitiveness in North America:

We are focused on improving the U.S. position in the North American market and look forward to working with the Trump Administration on ways to modernize the North American Free Trade Agreement (NAFTA) that preserve and expand U.S. competitiveness. Among these opportunities we find are:

1. Maintaining and expanding upon current market access, tariff concessions and other provisions that have enabled economic integration and supported farm income. Specific areas for improved market access include, but are not limited to: a. Resolving nontariff Canadian policies designed to negatively impact dairy trade, and obtaining significantly greater market access for U.S. dairy and poultry exports to Canada. b. Ending the NAFTA prohibition on duty drawback and deferral on wine. c. Ending the discriminatory market access benefits provided solely to Canadian beer and wine producers. d. Adopt consistent standards for animal health certification that follow the World Organization for Animal Health standards. e. Provide for strong yarn-forward rules of origin for textiles and eliminating exemptions, such as tariff preference levels (TPLs). f. Preventing country of origin labeling requirements that will subject U.S. made products to billions of dollars of tariffs and make American beef and pork less competitive in international markets. g. Opposing the adoption of WHO Guidance restrictions on milk products, and related WHO references in Codex standards.

continued

U.S. Food & Agriculture Dialogue for Trade – North America Priorities 1

2. Improving regulatory coherence and cooperation by: a. Implementing complete SPS-plus and Rapid Response Mechanisms. b. Strengthening TBT requirements to prevent non-tariff barriers that lack scientific merit. c. Increasing transparency and cooperation on activities related to agricultural biotechnology and other technologies. d. Aligning standards, including product and ingredient registration, fortification, and certification requirements. e. Providing for trade-facilitative origin requirements. f. Preventing the misuse of geographical indications to erect de facto non-tariff barriers to common agricultural products. g. Providing for coherent national renewable fuels standards. 3. Enhancing intellectual property rights to: a. Protect lawfully registered and legally trademarked brands, brand names, icons, logos, mascots, and other identifying marks and labels, and to prevent marketing, promotion and branding restrictions that lack scientific merit and substantive evidence on products proven to be of nutritional significance to the diet. b. Ensure that the protection of geographical indications does not restrict the ability of U.S. companies to use common food names. 4. Maintaining or improving upon protections for investments by way of the dispute-settlement processes and rules including those governing antidumping and countervailing duties. 5. Adopting provisions unique to the modern economy (e.g., e-commerce).

U.S. Food & Agriculture Dialogue for Trade – North America Priorities 2

International trade

Timeline of key recent federal actions on international trade Jun 2015 Trade Promotion Authority enacted: Congress passed fast-track authority, giving the White Potential actions in 115th Congress House authority to negotiate trade agreements and send them to Congress for a simple up- or-down vote. TPA lasts until 2018 and can be extended by Congress until 2021. •NAFTA renegotiations are expected to begin Feb 2015 Trans-Pacific Partnership signed: The twelve member nations signed the historic trade deal, in late-August agreed to after 8 years of negotiations, beginning a two-year ratification period. At least six countries must approve the deal during this time before it will be implemented. •Trump has the power to negotiate tariffs on specific goods without Congress’ approval, but Feb 2016 Trade Facilitation and Trade Enforcement Act of 2015: Congress passed a reauthorization of more substantial changes to NAFTA may have the Trade Facilitation and Trade Enforcement Act and it was signed into law. to pass through Congress May 2016 President Obama visits Vietnam: TPP was at the top of the President’s agenda for Vietnam. •President Trump has indicated a willingness While in Vietnam, President Obama announced the lifting of the weapons embargo. to withdraw the United States from the trade Jan 2017 President Trump withdraws from TPP: On his fourth day in office, President Trump signed an agreement if negotiations are unable to executive order withdrawing the United States from the Trans-Pacific Office. produce a satisfactory agreement •Trump is also expected to withdraw from the Feb 2017 President Trump begins special trade dialogue with Japan: Trump met with Japanese Prime TTIP negotiations with the EU Minister Shinzo Abe to begin a formal dialogue between the two countries on trade. Trump’s advisers hope to negotiate a bilateral trade deal with Japan, which was the only country to ratify the TPP agreement.

Mar 2017 Trade policy executive orders: President Trump signs a pair of executive orders aimed at identifying foreign trade abuses. One order commissions a 90-day study of US trade deficits and the other orders stricter enforcement of anti-dumping laws. Apr 2017 Steel probe executive order: Trump signed an executive order expediting an investigation of steel imports initiated by the Commerce Department.

May 2017 Trump launches NAFTA renegotiation: The administration sent a letter to Congress officially starting the 90-day waiting period before NAFTA renegotiations can begin.

Source: Burgess Everett, “Democrats yield in Senate trade deal,” Politico, May 13, 2015; Congress.gov, “H.R. 1295 – Trade Preferences Extension Act of 2015,” June 29, 2015; Office of the United States Trade Representative, “Transatlantic Trade and Investment Partnership,” 2015; GovTrack.us, “H.R. 2146: Defending Public Safety Employees’ Retirement Act,” June 23, 2015, GovTrack.us, “H.R. 1314: Trade Act of 2015,” June 15, 2015; Alisha Chang, “8 Things Congress Actually Did This Year,” NPR, December 30, 2015; Rebecca Howard, “Trans-Pacific Partnership trade deal signed, but years of negotiations still to come,” Reuters, February 4, 2016; George E. Condon Jr., “Obama Goes to Vietnam to Make Trade, Not War,” National Journal, May 20, 2016; Megan Cassella and Brent Griffiths, “Trump signs executive order to withdraw from Trans-Pacific trade deal,” Politico, January 23, 2017; Ben White, “Trump’s trade war with corporate America,” Politico, February 15, 2017; Zeeshan Aleem, “Trump is ready to renegotiate NAFTA. Here’s what that might look like,” Vox, February 9, 2017l Adam Behsudi, “U.S., Japan to start special trade dialogue,” Politico, February 10, 2017;; Julia Manchester, “Trump walks out before signing executive orders,” CNN, March 31, 2017; Doug Palmer, “Probe could lead to duties on all steel imports,” Politico, April 20, 2017; Doug Palmer, “Trump backs off NAFTA withdrawal,” Politico, April 26, 2017. Government Affairs Committee: Policy Lightening Round

LEGAL, TAX AND ACCOUNTING COMMITTEE REPORT

TO: NCFC Council FROM: Marlis Carson DATE: June 27, 2017

Tax Reform Developments

White House Tax Reform Plan. On April 26 the White House released a one-page overview of its plan for tax reform: “Tax Reform for Economic Growth and American Jobs: The Biggest Individual And Business Tax Cut In American History.” The overview did not include any details on the tax provisions and no mention was made of Subchapter T, Section 199, or the border adjustment tax.

Key business reform provisions in the plan include a fifteen percent corporate tax rate, a territorial tax system, a one-time tax on assets held overseas, and the elimination of tax breaks for special interests. Individual reform provisions include three tax brackets of 10 percent, 25 percent, and 35 percent, doubling the standard deduction, eliminating the deduction for state and local taxes, and eliminating the alternative minimum tax, the estate tax, and the Affordable Care Act tax on investment income. White House officials said they will hold “listening sessions” and will work with House and Senate leadership to develop legislative language and pass tax reform this year.

In a recent speech, Treasury Secretary Cohn said President Trump is “200 percent committed” to achieving tax reform this year. However, tax experts agree that the rate cuts cannot be achieved without the border adjustment tax (BAT) and strong opposition to the tax remains. House Ways and Means Chairman Brady has acknowledged the opposition and has suggested that the controversial proposal (which would effectively tax imports at a 20 percent rate) could be phased in over five years.

In the meantime, Senate Finance Committee Chairman Orrin Hatch is seeking comments on tax reform by July 17. NCFC will submit comments to the Committee.

House Agriculture Committee Considers Impact of Tax Reform. The House Agriculture Committee held a hearing on April 5 to study the potential impact of tax reform on agriculture. Of note, committee members criticized the House Republican proposal to eliminate the tax deduction for net interest expense. They also questioned

LTA Committee Report June 27, 2017 Page 2 of 3 witnesses about the cash method of accounting and elimination of the estate tax. NCFC’s written testimony, which was submitted for the hearing record, can be found here.

Section 199 Update. Senate Finance Committee member Debbie Stabenow (D-MI) has introduced legislation that would clarify who may take the Section 199 deduction in cases in which a taxpayer uses contract manufacturing. S. 638 states that a person with an economic risk of loss of more than 50 percent of the direct material costs necessary to the manufacture, production, growth, or extraction of the qualifying production is eligible for the deduction. It is extremely unlikely that a stand-alone tax bill will gain any traction while tax reform is under consideration, but perhaps the 199 bill will be considered in the context of tax reform. NCFC submitted comments to the IRS on this issue in 2015.

President Trump Orders Review of Recent Tax Regulations. President Trump on April 21 signed an executive order instituting an immediate review of “all significant tax regulations" issued since January 1, 2016. The Treasury Department had 60 days to provide an interim report of its findings. The report will identify regulations that impose an undue burden on taxpayers, add undue complexity to the tax laws, or exceed the statutory authority of the Internal Revenue Service, according to the White House.

NCFC Action. NCFC staff continue to meet with the Administration and with members of the House Ways and Means and Senate Finance Committees to convey the concerns of farmer cooperatives and the agriculture industry. At a recent meeting with Ways and Means staff, NCFC was asked to provide more information on the workings of Subchapter T, Section 199, and the effects of the elimination of the deduction for net interest expense.

Accounting Developments

House Oversight Committee Reviews FATCA. The House Oversight and Government Reform Subcommittee on Government Operations held a hearing on April 26 entitled “Reviewing the Unintended Consequences of the Foreign Account Tax Compliance Act.”

Congress enacted FATCA in 2010 to combat international tax evasion. The Act requires U.S. taxpayers holding foreign financial assets to report information about those assets on Form 8938. Failure to report can result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Underpayments of tax attributable to non-disclosed foreign financial assets are subject to an additional penalty of 40 percent.

Sen. Paul, who introduced a bill to repeal FATCA, told the subcommittee, “I oppose FATCA for two reasons: first, it violates our privacy rights. And second, I think the compliance costs actually exceed the revenue it brings in.” He said estimates of initial compliance costs with the law reach into the “tens of billions of dollars globally,” and

LTA Committee Report June 27, 2017 Page 3 of 3

costs U.S. companies alone more than $160 million a year. Sen. Paul pledged to work with Subcommittee Chairman Mark Meadows (R-NC), who introduced a companion bill in the House, to secure passage of the legislation. Sen. Paul said he would like to see the bill be included in broader tax reform legislation.

Antitrust Developments

Potato Cooperative Sues Attorneys. United Potato Growers of America has sued its former attorneys, alleging they received faulty legal advice on supply management practices. The cooperative and its members are seeking $30 million in damages from their former law firm, Jones, Waldo, Holbrook & McDonough. The case was filed in Idaho District Court.

In 2010, purchasers of potatoes brought suit against the cooperative and its members, claiming they illegally agreed to reduce the supply of potatoes in order to raise prices. The case was settled in 2015.

Human Resources Developments

NCFC’s Annual Human Resources Conference will be held October 26-27 at the Westin O’Hare Hotel. The conference will provide legal and regulatory updates and conference attendees will be the first to receive the results of NCFC’s compensation and benefits survey, which is now underway.

The program will be submitted to the HR Certification Institute for review for PHR/SPHR credits. Registration is available here.

Tax Reform Priorities

NCFC Position: NCFC supports the continuation of Subchapter T of the Internal Revenue Code (the basis for cooperative taxation) and related regulations. NCFC also supports the continuation of the patronage dividend deduction for farmer cooperatives. The deduction is critical for the continued viability of farmer cooperatives. Action: NCFC urges Congress and the administration to take into account the unique tax status of farmer cooperatives when developing tax reform proposals. NCFC is concerned that several reform proposals would negatively impact farmer cooperatives, and that a lowered corporate rate would not help to offset those impacts. Current Status: Farmer cooperatives are owned and governed by their farmer members. Earnings from business conducted with or for a cooperative’s members are subject to single tax treatment as income of farmer members, provided the cooperative pays or allocates the earnings to its members. If the earnings are used to support the cooperative’s capital funding or other needs, the earnings are taxed at regular corporate rates when retained and taxed a second time when distributed to the farmer members. Earnings from sources other than business, with or for the cooperative’s members, are taxed at corporate rates. Issues of Concern: NCFC Supports Maintaining the Patronage Dividend Deduction. Patronage refunds are paid out based on the amount of product delivered or business done by the member with the cooperative. For example, a cooperative receives product grown by the farmer-member and makes an advance payment. Following the sale of the product, the cooperative makes an additional payment reflecting the profit made on the sale. Under well-accepted tax principles, the total business expense deduction taken by the cooperative should include both the advance payment and the patronage dividend. Under long-held principles of tax fairness, the patronage dividend deduction should remain in the IRS Code. Patronage Dividends Should Not Be Taxed at a Higher Rate than Other Pass-through Income. For cooperatives to continue to thrive, tax reform should provide that a farmer’s transactions with a cooperative should not be taxed at a higher rate than the farmer’s transactions with other business entities. Specifically, if a lower rate of individual tax applies to the pass-through income of a farmer, a lower rate should also apply to patronage dividends received from a cooperative. NCFC Opposes Repeal of the Section 199 Deduction for Domestic Production Activities Income. The Section 199 deduction was enacted as part of The American Jobs Creation Act of 2004 as a jobs creation measure. The deduction applies to proceeds from agricultural or horticultural products that are manufactured, produced, grown, or extracted by cooperatives, or that are marketed through cooperatives, including dairy, grains, fruits, nuts, soybeans, sugar beets, oil and gas refining, and livestock. Cooperatives may choose to keep the deduction at the cooperative level, or pass it through to

NATIONAL COUNCIL OF FARMER COOPERATIVES 50 F Street NW, Suite 900 Washington, DC 20001 Tel: (202) 626-8700 Fax: (202) 626-8722 www.ncfc.org | facebook: www.facebook.com/FarmerCoop | twitter: @FarmerCoop Tax Reform Priorities their farmer members, making it extremely beneficial to both. Section 199 benefits are returned to the economy through job creation, increased spending on agricultural production and increased spending in rural communities. Some have suggested lowering corporate rates to offset the impact of the loss of the deduction. However, because farmer cooperatives’ income is passed through to farmer members, a corporate rate reduction would not benefit cooperatives and their members. NCFC Opposes Repeal of the Deduction for Interest on Debt. Farmers do not have the resources to satisfy all of their cooperatives’ capital needs. As a result, cooperatives in many cases rely on debt to finance growth. The repeal of the deduction for interest on debt would cause harm to farmer cooperatives that are attempting to expand operations. Repeal of the deduction would prevent cooperatives from new hiring, expansion and new product development. NCFC Opposes Repeal of LIFO Accounting Method. The last-in, first-out (LIFO) accounting method is a widely accepted accounting method and is used by some farmer cooperatives. Taxpayers using LIFO assume for accounting purposes that inventory most recently acquired is sold first. If LIFO is repealed, farmer cooperatives and other businesses would be taxed as though they had sold all of their inventory assets, even though they would have received no cash. Obtaining the funds necessary to pay the tax on this deemed sale would cause severe strain on cooperatives’ capital budgets. Taxation of LIFO reserves would be the equivalent of a retroactive tax on the savings of a cooperative. “Border Adjustability” Should Not Disadvantage Agricultural Production. The House GOP’s proposal to disallow a tax deduction for imported goods would place a great disadvantage on businesses rely on goods that are not available in the U.S. For instance, farmer cooperatives that manufacture fertilizer must import potash. Those that refine petroleum also rely on importing and would be harmed by the disallowance of the deduction, which is essentially a 20% tax on all imported goods. With regard to the treatment of exports, cooperatives should be allowed to pass the benefit of tax-free exports through to their members. Reinstate the Alternative Fuel Mixture Credit. NCFC supports reinstating the alternative fuel mixture credit, which expired on December 31, 2016. The credit incentivizes use of propane, a clean-burning, low-carbon, domestic, and economical alternative to gasoline and diesel.

June 2017

Timeline of key recent federal actions on tax reform Feb 2014 Tax Reform Act of 2014: A comprehensive draft proposal for tax reform which was released Potential actions in 115th Congress by then-House Ways and Means Committee Chair, Rep. Dave Camp (R-MI); the bill would have lowered corporate and individual tax rates and simplified the tax code, but faced wide opposition and was only ceremonially put to the floor at the end of 2014. •The House Ways and Means Committee is drafting tax reform legislation, expected to Sep 2014 Treasury actions on inversion: Treasury Secretary Jack Lew put forward a series of measures designed to reduce benefits of tax inversions, including blocking inverted companies from emerge in September transferring assets to parent companies and accessing foreign earnings. •Paul Ryan will need to reconcile the differences between the House GOP plan and Jan 2015 Senate Finance Committee tax working groups: The Senate Finance committee created five tax reform ‘working groups’ on different issue areas to create proposals for tax reform in President Trump’s recently released proposals; the 114th Congress. These reports were presented in July 2015; however, there was no without the White House’s blessing, any tax consensus or clear plan for reforms. legislation would likely lack the votes to pass Congress Jul 2015 Portman-Schumer plan: Sens. Portman (R-OH) and Schumer (D-NY) proposed a framework to tax all US corporate profits abroad regardless of repatriation, but at a significantly lower •Senate Majority Leader Mitch McConnell (R- rate. The plan is supported by Rep. Paul Ryan (R-WI), but opposed by Senate majority KY) has stated that tax reform will likely need leader Mitch McConnell (R-KY), who prefers comprehensive tax reform. to be passed through budget reconciliation rather than as a bipartisan bill Dec 2015 Consolidated Appropriations Act, 2016: Lawmakers dealt with a package of expiring tax credits known as “tax extenders” by making some provisions permanent. The deal was •National Economic Council Director Gary attached to a must-pass spending bill, ensuring swift passage. Cohn says the White House prefers comprehensive tax reform but would consider Feb 2016 President’s FY17 budget request: The request proposed international tax reform in passing a separate bill of only tax cuts exchange for increased infrastructure spending; a similar provision was in last year’s request •The White House is expected to release a June 2016 House Republicans’ tax blueprint: Ways and Means Chairman Kevin Brady released the detailed tax reform plan to Congress in House GOP’s tax reform platform, part of Speaker Ryan’s “A Better Way” plan. September April 2017 Trump administration’s tax plan: The White House released an outline of a tax reform plan, featuring three tax brackets and a 15% corporate tax rate

Source: Seung Min Kim, “Funding bill becomes immigration battle,” Politico, September 18, 2014; Steve Vladek, “National Security and the 2014 Midterms: A Preview of Monday’s CQ Roll Call/Just Security Event,” Just Security, September 21, 2014; Billy House and Sarah Mimms, “Spending, Immigration, and Tax Fights Will Dominate Final Days of Session,” National Journal, November 30, 2014; Squire Patton Boggs, “A Better Way or a Conversation Starter: The GOP Tax Reform ‘Blueprint,’ Lexology, June 29, 2016; Margaret Talev, “White House: Cohn-led tax plan is real and it’s phenomenal,” Bloomberg, February 10, 2017; Rachael Bade and Josh Dawsey, “Ryan likely to get rolled on tax reform,” Politico, April 25, 2017; Aaron Lorenzo, “White House to give detailed tax reform plan to Congress in September, Cohn says,” Politico, June 2, 2017.

Information Courtesy of National Journal **FOR INTERNAL USE ONLY**

Ensuring Consumer Confidence in Labeling

Issue:

Consumers have a right to high quality, meaningful information about the products they buy. But a growing number of states are requiring warning labels or ingredient requirements go beyond what scientists at federal agencies including the FDA, USDA, EPA or Consumer Product Safety Commission currently require, without looking at the science or legitimate risk.

As of February 2017, seven states are considering legislation to mandate various ingredient disclosure or warning label requirements related to cosmetics, sugar or cleaning products all based on limited or suspect information, meaning that product labels may become even more complex, potentially misleading, and possibly contradictory in the future. Examples include:

Proposed

• Legislation has been introduced in several states and localities to require warning labels on sugary beverages. • Legislation has been introduced in California, Montana, and New Jersey to require cleaning ingredient product disclosure labels.

Enacted

• As part of California’s Prop 65 warning label requirement, coffee and other baked foods must be labeled to acknowledge the presence of Acrylamide.

Solution:

The proposed solution would amend the Fair Packaging and Labeling Act to require that state labeling laws be based on credible scientific evidence and real world circumstances. The proposal would accomplish this by establishing specific criteria that states must meet if they want to require ingredient disclosures or warning label programs that go beyond national requirements. The criteria would ensure information given to consumers is reliable and accurate and provide consumers with relief from the current chaos and confusion caused by numerous labels that can leave them wondering why products are considered hazardous in one state or locality but safe in another. All labeling information currently required by the FDA, USDA, EPA and Consumer Product Safety commission would remain in place and the proposal would not affect standard information regarding common allergens such as peanuts, tree nuts, dairy, eggs, soy shellfish or wheat.

Report to Congress

Report on the Proposed 2017 Reorganization of the Department of Agriculture to Establish an Under Secretary for Trade and Foreign Agricultural Affairs

U.S. Department of Agriculture May 11, 2017

Updated Appendices June 16, 2017 Executive Summary

This report identifies actions we are taking at the Department of Agriculture (USDA) to meet the challenge of advancing agricultural trade, improving service delivery to agricultural producers, and addressing the needs of Rural America. These steps are part of a broader on-going review of the Department based on the President’s March 13, 2017; Executive Order 13781 entitled “Comprehensive Plan for Reorganizing the Executive Branch.”

These steps are the down payment on improving the efficiency, effectiveness and accountability of the Department. Over the next several months we will be working with Congress, our stakeholders and our employees to listen to ideas about how to make the Department even more responsive to the needs of our customers.

Section 3208 of the Agricultural Act of 2014, Pub. L. 113-70 (7 USC §6935) requires the Secretary of Agriculture (“Secretary”) to propose a reorganization of international trade functions for imports and exports, including a plan for the establishment of the Under Secretary for Trade and Foreign Agricultural Affairs (U/Sec TFAA). The Secretary is required to submit to the Congressional committees specified in Section 3208 (a) a report that includes the results of this proposal and provides a notice of the reorganization plan.

Specifically, Congress required the USDA to do the following as described in the 2014 Farm Bill:

SEC. 3208. 7 USC 6935 UNDER SECRETARY OF AGRICULTURE FOR TRADE AND FOREIGN AGRICULTURAL AFFAIRS

(a) Definition of Agriculture Committees and Subcommittees.--In this section, the term “agriculture committees and subcommittees” means-- (1) the Committee on Agriculture of the House of Representatives; (2) the Committee on Agriculture, Nutrition, and Forestry of the Senate; and (3) the subcommittees on agriculture, rural development, food and drug administration, and related agencies of the Committees on Appropriations of the House of Representatives and the Senate.

(b) Proposal.-- (1) In general.--The Secretary, in consultation with the agriculture committees and subcommittees, shall propose a reorganization of international trade functions for imports and exports of the Department of Agriculture. (2) Considerations.--In producing the proposal under this section, the Secretary shall-- (A) in recognition of the importance of agricultural exports to the farm economy and the economy as a whole, include a plan for the establishment of an Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs; (B) take into consideration how the Under Secretary described in subparagraph (A) would serve as a multiagency coordinator of sanitary and phytosanitary issues and nontariff trade barriers in agriculture with respect to imports and exports of agricultural products; and (C) take into consideration all implications of a reorganization described in paragraph (1) on domestic programs and operations of the Department of Agriculture.

1 (3) Report.--Not later than 180 days after the date of enactment of this Act and before the reorganization described in paragraph (1) can take effect, the Secretary shall submit to the agriculture committees and subcommittees a report that-- (A) includes the results of the proposal under this section; and (B) provides a notice of the reorganization plan. (4) Implementation.--Not later than 1 year after the date of the submission of the report under paragraph (3), the Secretary shall implement a reorganization of international trade functions for imports and exports of the Department of Agriculture, including the establishment of an Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs.

(c) Confirmation Required.--The position of Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs established under subsection (b)(2)(A) shall be appointed by the President, by and with the advice and consent of the Senate.

This report presents the Secretary’s proposal to reorganize USDA’s international trade functions and includes a plan for the establishment of the U/Sec TFAA. This report provides notice of the reorganization plan and how it will be implemented once consultations with the committees are completed. This reorganization will improve the efficiency by which USDA helps connect growing U.S. production with growing global demand by establishing an Under Secretary with the sole responsibility for coordinating USDA’s agricultural trade policy.

This plan also details additional reorganizations that improve the effectiveness of USDA efforts to meet the needs of agricultural and forest managers and demonstrate increased accountability to the American taxpayer. USDA intends to create an Under Secretary for Farm Production and Conservation and realign the Farm Service Agency (FSA), the Risk Management Agency, and the Natural Resources Conservation Service (NRCS) under that mission area. In addition, USDA intends to realign the Rural Development agencies to report directly to the Secretary.

 The growth in U.S. agricultural productivity has been unparalleled over the past 100 years. This reorganization will help improve the effectiveness of USDA to provide the customer service needed and expected by U.S. farmers. Allowing for an Under Secretary for Farm Production and Conservation to oversee farm services, crop insurance, and conservation programs will ensure that farmers’ interactions with USDA are not duplicative. That focus will also streamline our data systems for farm program implementation.  By combining farm conservation programs with farm safety net programs, the Under Secretary for Natural Resources and Environment will be able to focus more attention on the crucial task of managing our national forests and to ensure federal land managers are good and helpful neighbors to surrounding private land owners.  Lastly, this reorganization recognizes and promotes the importance of rural development by placing it under the direct oversight of the Secretary. Placing rural development under the direct supervision of the Secretary will ensure the Secretary is also able to leverage USDA’s expertise with rural communities and new Administrative initiatives to focus on infrastructure investments in rural America.

We know that ultimately taxpayers are our consumers. They expect a safe and secure food supply, and USDA will continue to serve in a critical role to ensure the food we put on the table

2 to feed our families meets the strict safety standards to which we've established and are accustomed. Other proposals at reorganizing the Department around the trade mission would have combined food safety with other mission areas, potentially distracting USDA from its critical role in ensuring a safe and secure food supply. The creation of the U/Sec TFAA and the designation of this position as the lead USDA trade policy coordinator significantly strengthens USDA’s ability to address SPS and nontariff barriers affecting U.S. exports, while ensuring domestic stakeholders and trading partners continue to view USDA regulatory functions as objective and science-based.

3 Report on the Proposed 2017 Reorganization of the Department of Agriculture to establish an Under Secretary for Trade and Foreign Agricultural Affairs

Agricultural trade is critical for the vitality of the U.S. farm sector and economy as a whole. U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity. Every $1 billion in U.S. agricultural exports requires approximately 8,000 American jobs throughout the economy. Agriculture has run a positive trade balance since the 1960s and exports have nearly tripled since 2000. However, the rise of new barriers to trade and preferential trade agreements that exclude the United States could jeopardize growth and negatively affect the U.S. farm economy.

Therefore, the U.S. Department of Agriculture (USDA) must be positioned to effectively address trade barriers that impede or disadvantage U.S. agricultural exports and actively open new markets for U.S. farm products. The proposed reorganization of USDA’s trade functions will substantially enhance the Department’s ability to quickly respond to sanitary and phytosanitary (SPS) and other nontariff trade barriers when they arise and to actively open new markets to create a level playing field for U.S. farmers and ranchers.

In recognition of the importance of agricultural exports to the farm economy and the U.S. economy as a whole, the proposed reorganization of USDA’s international trade functions will:

1) Create the position of an Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs (“U/Sec TFAA”)

2) Designate the U/Sec TFAA as USDA’s multiagency coordinator for agricultural trade policy, including SPS issues, nontariff trade barriers, and other trade policy matters.

The Foreign Agricultural Service (FAS) will report to the U/Sec TFAA. The Secretary will delegate to the U/Sec TFAA the authority for the international trade functions specified in 7 CFR Part 2, Subpart C, §2.16(a)(3).

The creation of the U/Sec TFAA and the designation of this position as the lead USDA trade policy coordinator significantly strengthens USDA’s ability to address SPS and nontariff barriers affecting U.S. exports. As the USDA multiagency coordinator for agricultural trade policy, the U/Sec TFAA will chair an inter-agency committee that includes FAS, the Animal Plant Health Inspection Service (APHIS), the Food Safety Inspection Service (FSIS), the Agricultural Marketing Service (AMS), and the Federal Grain Inspection Service (FGIS). The U/Sec TFAA will also meet regularly with the Under Secretary for Food Safety and the Under Secretary for Marketing and Regulatory Programs regarding trade issues that require regulatory involvement and support.

In addition, the change from the status quo would lead to many other possible factors that would be expected to increase exports. For example, the more focused trade mission area could support more trade missions, provide greater support for the Office of the U.S. Trade Representative

4 (USTR)-led trade negotiations, or respond more quickly when trade flows are interrupted by concerns over product certification or safety.

In addition, in order to create a customer-focused culture of public service and improve service delivery to agricultural producers the Department will create an Under Secretary for Farm Production and Conservation (U/Sec FPC). This structure will streamline program delivery to U.S. farmers and ranchers and enhance resource efficiency. To the extent to which domestic programs directly relate to import programs, the U/Sec TFAA will consult with the U/Sec FPC to ensure program and policy coherence. Rural Development agencies will report directly to the Secretary.

The current USDA organization chart and the proposed reorganization are in Appendix A of this report. Data on FY 2016 actual staff years and 2016 enacted budget authority for the affected agencies and mission areas is in Appendix B of this report. Appendix C includes a letter to President Trump, dated February 22, 2017, from 29 U.S. farm groups in support of the creation of the Under Secretary for Trade.

This report officially serves as notice of the reorganization of trade and international functions at USDA as described in the previous section. The reorganization plan is as follows:

 The Secretary will consult with the Congressional committees and subcommittees as defined in subsection (a) of 7 U.S.C. §6935.

 Using the Secretary’s authority in the Reorganization Plan No. 2 of 1953 (5 U.S.C. § app; 7 U.S.C. 2201 note), the Secretary will: . Issue a memorandum implementing the Under Secretary for Trade and Foreign Agricultural Affairs position and associated organizational changes with delegated authorities and name changes. . Publish final delegations in the Code of Federal Regulations.

 The position of Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs established under subsection (b)(2)(A) shall be appointed by the President, by and with the advice and consent of the Senate.

The Secretary and USDA staff will continue to work closely with the Committees and subcommittees to ensure an orderly and expeditious implementation of the reorganization plan.

5 Appendix A

Current USDA Organization

Secretary

OGC Dep. Sec.

CFO U/S U/S U/S U/S U/S U/S U/S Food Safety MRP NRE FNCS RD FFAS REE OCE

AMS APHIS NRCS CNPP RHS RUS FAS FSA ERS NASS FSIS GIPSA USFS FNS RBCS RMA ARS NIFA OBPA

A/S OC A/S A/S Congressional Civil Rights Administration Relations OAO

OASCR OES DM OTR OSDBU CIO

Proposed Reorganization of USDA Trade Functions and the Creation of an Under Secretary for Trade and Foreign Agricultural Affairs (TFAA) and Elevation of Rural Development

RHS RUS Asst. to the Secretary

RBCS Sec. for RD OGC Dep. Sec.

CFO U/S U/S U/S U/S U/S U/S U/S Food Safety MRP NRE FNCS FPC TFAA REE OCE

AMS APHIS CNPP FSA RMA ERS NASS FSIS USFS FAS GIPSA FNS NRCS ARS NIFA OBPA

A/S OC A/S A/S Congressional Civil Rights Administration Relations OAO

OASCR OES DM OTR OSDBU CIO

Updated June 16, 2017

6 Acronyms AMS Agricultural Marketing Service APHIS Animal and Plant Health Inspection Service ARS Agricultural Research Service CFO Chief Financial Officer CIO Chief Information Officer CNPP Center for Nutritional Policy and Promotion DM Departmental Management ERS Economic Research Service FAS Foreign Agricultural Service FFAS Farm and Foreign Agricultural Services FNCS Food, Nutrition and Consumer Services FNS Food and Nutrition Service FPC Farm Production and Conservation FSA Farm Service Agency FSIS Food Safety and Inspection Service GIPSA Grain Inspection, Packers and Stockyards Administration MRP Marketing and Regulatory Programs NASS National Agricultural Statistics Service NIFA National Institute of Food and Agriculture NRCS Natural Resources Conservation Service NRE Natural Resources and Environment OAO Office of Advocacy and Outreach OBPA Office of Budget and Program Analysis OC Office of Communications OCE Office of the Chief Economist OASCR Office of the Assistant Secretary for Civil Rights OES Office of the Executive Secretary OGC Office of the General Counsel OSDBU Office of Small and Disadvantaged Business Utilization OSEC Office of the Secretary OTR Office of Tribal Relations RBCS Rural Business Cooperative Service RD Rural Development REE Research, Education and Economics RHS Rural Housing Service RMA Risk Management Agency RUS Rural Utilities Service TFAA Trade and Foreign Agricultural Affairs USFS United States Forest Service

Updated June 16, 2017 7 Appendix B: Estimated Staff Years and Budget Authority

Current Organization

2016 2016 Enacted Mission Area/Agencies Staff Years $mil.

Farm and Foreign Agricultural Services Farm Service Agency (Federal and non-Federal) 12,191 29,703 Risk Management Agency 429 4,943 Foreign Agricultural Service 926 2,250 TOTAL FFAS 13,546 36,896

Rural Development Rural Development 4,847 3,078

Natural Resources and Environment Natural Resources Conservation Service 10,018 4,125 Forest Service 32,012 7,031 TOTAL NRE 42,130 11,156

Updated June 16, 2017

8 Proposed Reorganization

2016 2016 Enacted Mission Area/Agencies Staff Years $mil.

Trade and Foreign Agricultural Services Foreign Agricultural Service 926 2,250

Farm Production and Conservation Farm Service Agency (Federal and non-Federal) 12,191 29,703 Risk Management Agency 429 4,943 Natural Resources Conservation Service 10,018 4,125 TOTAL 22,638 38,771

Natural Resources and Environment Forest Service 32,012 7,031

Office of the Secretary Rural Development 4,847 3,078

Updated June 16, 2017 9 Appendix C: Letter to President Trump to Support the Establishment of the Under Secretary for Trade

February 22, 2017

Dear Mr. President, International trade is critically important to the economic vitality of the U.S. agriculture and food industry and a major engine of U.S. economic growth. Trade currently accounts for more than 25 percent of U.S. farm receipts, and the production from one out of every three acres planted is exported. Our vast and efficient export system, including handling, processing and distribution of our food and agriculture products, creates millions of U.S. jobs and helps feed hundreds of millions all over the globe. Our $17 billion net trade balance in agriculture and food products in 2016 represented the single largest contribution to our balance of payments.

Despite this enormous success, the trade organizational structure at the U.S. Department of Agriculture (USDA) has remained unchanged since it was last reorganized in 1978. Over this period, the value and nature of U.S. agriculture exports has changed dramatically. In 1978, U.S. agriculture exports totaled $29 billion whereas in 2016, they reached $130 billion. In 1978, grains and oilseeds amounted to 60 percent of all U.S. agriculture exports while meat and poultry accounted for 3 percent and produce 6 percent. Now grains and oilseeds account for 36 percent of all agriculture exports while meat and poultry constitute 15 percent and produce 13 percent. Meanwhile, over the last nearly 40 years the challenges that U.S. agriculture faces in global markets have increased and markedly changed from primarily tariff barriers to phytosanitary and other non-tariff trade barriers.

The U.S. agriculture and food industry is ideally positioned to experience significant growth in the decades ahead given projected population growth of an additional 2.5 billion people by 2050. Yet with these opportunities will also come significant changes to keep existing foreign markets open and gain access to new emerging markets for U.S. farm and food products. It is precisely for this reason that we, the undersigned organizations – representing farmers, ranchers, food processors and exporters – support the provision contained in the 2014 Farm Bill requiring the Secretary to establish an Under Secretary for Trade and Foreign Agricultural Affairs. Such a position will bring unified high level representation to key trade negotiations with senior, foreign officials and within the Executive Branch. It will also allow the Administration to recruit an Under Secretary who has extensive experience in international trade negotiation and policy issues. Furthermore, the creation of this Under Secretary position would help modernize USDA’s trade structure, streamline management, create greater efficiencies and enhance emphasis in the Office of the Under Secretary responsible for key domestic programs.

We believe it is vitally important for U.S. agriculture to fully capitalize on the long-term, increased global demand for farm and food products in an increasingly competitive marketplace. Overseas markets represent 73 percent of the world’s purchasing power, 87 percent of the economic growth, and 95 percent of the world’s customers. We can take a major step towards that goal by ensuring that the trade structure at USDA is effectively positioned to address the trade challenges and enormous opportunities that await us in the decades ahead. To this end, we strongly urge the Department to move forward with establishing the Under Secretary for Trade and Foreign Agricultural Affairs.

Sincerely, American Farm Bureau Federation National Renderers Association American Feed Industry Association National Sunflower Association American Frozen Food Institute National Turkey Federation American Soybean Association North American Meat Institute Animal Health Institute United Fresh Produce Association Corn Refiners Association U.S. Apple Association International Dairy Food Association U.S. Canola Association National Barley Growers Association U.S. Cattlemen’s Association National Cattlemen’s Beef Association U.S. Dry Bean Council National Chicken Council U.S. Meat Export Federation National Corn Growers Association USA Dry Pea & Lentil Council National Council of Farmer Cooperatives USA Poultry & Egg Export Council National Oilseed Processors Association USA Rice National Pork Producers Council Western Growers Association National Potato Council 10

May 15, 2017

U.S. Environmental Protection Agency Washington, D.C. 20004

RE: Docket EPA-HQ-OA-2017-0190

The undersigned organizations commend the Environmental Protection Agency [the agency] for opening this docket and are pleased to submit the attached comments in response to the agency’s request.

Our organizations represent individuals engaged in agricultural production, both for crops and livestock. Requirements imposed by the agency through its regulations can have significant impacts on our members; many of these impacts can be felt in the areas outlined by the agency for review1 In the attached comments, we have sought to meet the agency’s request to be as specific as possible. In some instances, where information responsive to the agency’s request for “supporting data or other information such as cost information” is not available, we have attempted to quantify the impact of the regulatory burden as concretely as possible and to “provide specific suggestions regarding repeal, replacement or modification.” We welcome questions from your office or the Task Force if these comments need further amplification and will do our best to respond in as prompt and comprehensive a manner as possible. We greatly value this effort and hope the agency succeeds in alleviating unnecessary and costly regulatory burdens on the agriculture community.

In this context, we wish to make a brief preparatory remark. As of mid-May, the docket exceeded 17,000 comments, the overwhelming majority of them anonymous. These are presumably submitted from well-intentioned individuals but they preponderantly assume that the agency’s initiative is to undo, weaken, rescind or otherwise impair the nation’s environmental safeguards. We see nothing in the Federal Register notice that supports such an inference. We wish to state for the record that the undersigned organizations are not requesting that the agency engage in, nor would we expect the agency to pursue, an effort to impair, rescind, weaken or in any way retreat from health or environmental safeguards that have been authorized by Congress. Nothing in Executive Order 13777 would have the agency ignore its statutory obligations to administer the environmental laws Congress has passed. We are not asking the agency to weaken its commitment to health and the environment. We have identified regulatory obligations that can be modified or repealed consistent with the laws Congress has enacted and we strongly encourage the agency to consider these recommendations.

1 In its notice, EPA has specifically asked for recommendations that address regulations that, inter alia, “(i) eliminate jobs, or inhibit job creation; (ii) are outdated, unnecessary, or ineffective; (iii) impose costs that exceed benefits; (iv) create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies; (v) are inconsistent with the requirements of section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision in particular those regulations that rely in whole or in part on data, information, or methods that are not publicly available or that are insufficiently transparent to meet the standard or reproducibility…”

We appreciate your consideration of these comments. If you have questions or wish to discuss any specific issue in this submission, please contact Paul Schlegel at the American Farm Bureau Federation at (202) 406-3687 or [email protected].

Sincerely,

Agri-Mark Dairy Cooperative, Inc. American Dairy Coalition American Farm Bureau Federation AmericanHort American Soybean Association American Sugarbeet Growers Association American Sugar Cane League California Specialty Crops Council Dairy Cares Dairy Farmers of America Dairy Producers of New Mexico Dairy Producers of Utah Exotic Wildlife Association Federal Forest Resource Coalition GROWMARK, Inc. Idaho Dairymen’s Association Missouri Dairy Association National All-Jersey National Aquaculture Association National Association of State Departments of Agriculture National Association of Wheat Growers National Cattlemen’s Beef Association National Corn Growers Association National Cotton Council National Council of Agricultural Employers National Council of Farmer Cooperatives National Peach Council National Pork Producers Council National Milk Producers Federation National Sorghum Producers National Turkey Federation Northeast Dairy Farmers Cooperatives Panhandle Peanut Growers Association Professional Dairy Managers of Pennsylvania Select Milk Producers, Inc. Society of American Florists South East Dairy Farmers Association Southwest Council of Agribusiness St. Albans Cooperative Creamery

Upstate Niagara Cooperative, Inc. US Apple Association USA Rice US Cattlemen’s Association Washington State Dairy Federation Western Peanut Growers Association Western United Dairymen

I. ‘Waters of the US’ (WOTUS) Rule (80 Fed. Reg. 37054, June 29, 2015)

On February 28, President Trump signed Executive Order 13778 directing EPA to review the WOTUS rule and to publish a proposal rescinding or revising it. We strongly support the President’s EO and urge EPA to pursue this effort aggressively.

Recommendation: We recommend that the agency: (a) repeal the existing rule (80 Fed. Reg. 37054). (b) in a separate rulemaking, propose a revised rule that more closely adheres to the language of the Clean Water Act and Supreme Court decisions in Riverside Bayview, SWANCC and Rapanos.

II. Spill Prevention Control and Countermeasures (SPCC) Rule (40 CFR 112)

While EPA attempted to address concerns of the agriculture community raised by the SPCC rule, the program presents nearly insurmountable difficulties for agricultural producers. That assessment is borne out by the agency’s own Regulatory Impact Analysis (RIA). EPA examined the Clean Water Act violation data from 2001 to 2006. In over 10,000 violations in that time period, only 292 involved oil spills of any type, and only one of those involved a farm. Many other estimates in the RIA were incorrect as well. EPA estimated an approximate figure of 152,000 affected farms based on USDA numbers. Nowhere did EPA mention the USDA numbers presented in the 2005 round of proposals that numbered potentially affected farms closer to 400,000. Yet despite these facts, EPA moved to place a costly and burdensome rule on the agricultural industry with no data to show a risk justifying the cost. EPA included other incorrect assumptions to bolster the cost-savings analysis. They estimated a savings of $3.6 million due to exempting pesticide application equipment but that cost was only based on a report from one state. They estimated $2,000+ savings from not regulating home heating oil tanks but those tanks were exempted in the original 1973 rule and no one has ever applied SPCC to those tanks anyway. While Congress granted the agency flexibility to address any concerns on farms, the agency rejected this approach and imposed the strictest limit possible.

Recommendation: The SPCC for farms should be repealed.

III. CERCLA/EPCRA

(a) On April 11, 2017 the US Court of Appeals for the DC Circuit issued a ruling in long running litigation that struck down a 2008 rule providing an exemption from federal reporting of emissions from livestock farms and providing a partial exemption from state/local reporting of such emissions. As a result of the DC Circuit ruling, in late May or early June 2017 livestock farmers will be responsible for calculating the rate of various chemical emissions associated with the storage of manure for use as a fertilizer, and treat and report these emissions as “emergency releases” to state and local authorities under 42 U.S.C. § 11004 (EPCRA § 304) and to the Coast Guards National

Response Center under 42 U.S.C. § 9603 (CERCLA § 103). These reports provide little emergency planning/response benefit to regulators or the public, and in fact could have a detrimental impact on emergency response programs (and the public’s reliance on them) because the receipt of hundreds of thousands of reports of livestock odor will overwhelm a system designed for responding to true emergencies. Failure to file the reports will subject livestock farmers to expensive citizen suit litigation filed by eco and animal rights activists.

(b) In recent years, efforts have been made to extend the liability provisions of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980 and the Emergency Planning and Community Right-To-Know Act (EPCRA) of 1986 to livestock and poultry operations for emissions or discharges from manure produced in those operations. Animal agriculture operations are already regulated under the Clean Water Act, the Clean Air Act, and various state laws to protect the environment; these statutes provide for permitting, enforcement and, if needed, remediation. Manure is not a superfund waste and was not intended by Congress to be regulated as such.

Recommendation: EPA should promulgate regulations confirming that manure is not regulated under CERCLA or EPCRA.

IV. Worker Protection Standards (WPS) rule (40 CFR Part 170)

(a) Designated Representative. In the WPS rule promulgated November 2, 2015, EPA included a provision that permits anyone claiming to be a ‘designated representative’ (DR) to gain access to a farmer’s proprietary records relating to pesticide use.2 This provision provides farmers with no protection from fraudulent or counterfeit claims; does not assure that records released by the farmer will actually be shared with workers; and imposes no constraints on what DR’s may do with documentation once it is obtained. EPA has never cited any data or facts that demonstrate that such a provision would improve worker safety. Thus, the regulation imposes an unnecessary regulatory burden and cost, while exposing farmers to legal liability, with no discernible benefit.

Recommendation: EPA should repeal 40 CFR § 170.311(b)(9) and related provisions.

(b) Application Exclusion Zone (AEZ). In the final WPS, EPA inserted a final articulation of the Application Exclusion Zone (AEZ) that unduly burdens state agencies and the regulated community.3 As finalized, the AEZ goes beyond the Agency’s stated intent

2 The specific requirement is at 40 CFR 170.311(b)(9). 3 WPS provision at 170.405(a)(1) establishes the applicable AEZ distances, and WPS provision 170.405(a)(2) establishes a requirement for the agricultural employer not to allow any worker or other person in the AEZ within the boundaries of the establishment until the application is complete. Provision at 170.505(b) establishes a requirement for the handler to suspend the application if any worker or other person is anywhere in the AEZ. Thus,

to create a one-hundred foot buffer surrounding the application equipment that, according to the regulations now in place, extends beyond the agricultural establishment, arguably jeopardizing a grower’s ability to manage all his land and prohibiting appropriate pest mitigation activities if there is any kind of structure, permanent or otherwise, inhabited or vacant within one hundred feet of the agricultural establishment. Furthermore, any individual, structure, or a passing vehicle within one hundred feet of the property can effectively cease the grower’s application activity. After the final rule was promulgated, EPA’s Office of General Counsel (OGC) was working to issue interpretive guidance clarifying the Agency’s intent under the final regulation; however, Agency guidance does not carry the weight and authority of a codified federal regulation and does not provide the necessary clarity to assist state regulatory agencies or the grower community with compliance and enforcement activities. In short, both EPA and the state regulatory agencies are still uncertain on how to enforce or deliver compliance assistance on the AEZ.

Recommendation: EPA should revoke the Application Exclusion Zone (AEZ), which goes beyond EPA’s original intent and creates an unworkable and unenforceable provision that does not provide any additional regulatory protections beyond those already required under law.

V. Resource Conservation and Recovery Act

In 1979, EPA promulgated regulations that reflect Congress’ intent that the agency not regulate manure or crop residue under the Solid Waste Disposal Act (42 U.S.C. § 6903(27)). Certain court decisions, however, have injected uncertainty in this area of the law. Legislation is now pending in Congress (the Farm Regulatory Certainty Act) to provide legal certainty for farmers.4 The legislation would also amend Section 7002 of the Solid Waste Disposal Act (42 U.S.C. § 6972(b)(1)) to clarify that farmers are not to be targeted twice if they are engaged in legal action with a federal or state regulatory entity to address identified issues.

Recommendation: EPA should continue its policy of not regulating agricultural nutrients under RCRA. The EPA also should vigorously defend existing regulatory actions should a farming operation be targeted with a third-party lawsuit for an alleged violation that is already being addressed by a federal or state legal or administrative proceeding.

VI. “Normal farming” activities under § 404(f) of the Clean Water Act (33 CFR § 323.4)

Sec. 404(f)(1) of the Federal Water Pollution Control Act (33 U.S.C. § 1344(f)(1)) provides an exemption from 404 “dredge and fill” permitting for a wide range of normal farming,

the AEZ goes beyond the boundaries of the establishment in question and applies to any area on or off the establishment within the AEZ while the application is ongoing. 4 The Farm Regulatory Certainty Act would amend Section 1004(27) of the Solid Waste Disposal Act to codify EPA’s existing regulations.

ranching and silviculture activities, including plowing, seeding, cultivating, harvesting for the production of food, fiber, and forest products as well as construction or maintenance of farm or stock ponds or irrigation ditches and for the maintenance of drainage ditches. Even though this broad language is written in the statute, the Corps’ regulation (33 CFR § 323.4) and EPA’s and the Corps’ guidance and information interpretations have narrowed the scope of ‘normal’ farming, ranching and silviculture activity.5 Thus, even some explicitly exempt activities (i.e., plowing) have come under enforcement action. Congress has included appropriations riders directing EPA and the Corps to eliminate funding for the so-called “recapture” provision at Sec. 404(f)(2), which the agencies use to sweep otherwise exempt activities back into the regulatory program, yet EPA and the Corps have ignored Congress’ directives.

Recommendation: EPA and the Corps should undertake a rulemaking that supersedes the Corps’ existing regulation as well as prior guidance from the agencies and codifies the normal farming, ranching and silviculture exemption under § 404(f)(1) of the Clean Water Act consistent with the text of the statute.

VII. Total Maximum Daily Loads (TMDLs) (40 CFR Part 130)

EPA has used guidance and informal interpretation of sparse statutory text (Clean Water Act Sec. 303(d)) and ambiguous decades-old regulations to create a regulatory mechanism that puts EPA bureaucrats and technocrats in the role of land use planners. This has blurred the lines of authority between the Federal and state governments and robbed state environmental agencies of the ability to devise and adapt their own plans to most effectively and efficiently achieve water quality standards. This EPA overreaching raises the cost of achieving water quality goals, inhibits adaptive management and unlawfully puts EPA in the role of regulating farming practices. EPA’s existing rules also fail to ensure that established water quality goals are in fact achievable before burdensome or even economy-breaking implementation measures are imposed. This is of particular concern where water quality impairment results largely from naturally occurring “pollutants.”.

Recommendations: EPA should revise its TMDL regulations to provide clarity and certainty to the regulated community and state and local governments by assuring that: (a) States, not EPA, have the authority to set pollutant “allocations” for waters within their borders and incorporate the allocations into state implementation plans. This provides states and localities with the flexibility they need to change allocations when needed. (b) EPA’s TMDL authority is limited to approving or setting the total maximum load for a particular pollutant, as required by the statutory term “total maximum daily load.”

5 For example, while the Act itself does not restrict the exemption, the agency has seemingly used the recapture provision in 404(f)(2) to claim that the exemptions for normal activities only apply to ‘established, ongoing’ operations. It has further extended this interpretation to claim that changing an operation from one agricultural activity (e.g., grazing cattle) to another (e.g., planting, cultivating and harvesting crops) constitutes a ‘change in use’ and therefore negates the exemption provided in the law. See https://efotg.sc.egov.usda.gov/references/public/NM/CWA_404(f)_Ag._Exemptions.pdf

VIII. Prior Converted Cropland (33 CFR § 328.3(b))

In 1993, EPA and the Army Corps of Engineers promulgated a regulation that clarified that wetlands converted before 1985 into farmland were ‘prior converted croplands’ (PCC) and therefore, not “waters of the US.” The preamble to the rule clearly provided that land remains as PCC regardless of the use to which the land is put. Yet, in 2005, the Army Corps of Engineers issued guidance eroding this exemption by proclaiming that land is no longer PCC if it is put to a non-agricultural use. A federal court found the guidance is unlawful because it conflicts with the 1993 rule,6 but the Corps ignored the court’s decision and continues to implement the guidance in order to re-regulate land.

Recommendation: EPA should undertake a rulemaking to clarify the 1993 rule that PCC lands are not subject to CWA regulation as jurisdictional wetlands regardless of the use to which the land is put.

IX. Army Corps of Engineers 1987 Wetlands Delineation Manual and Regional Supplements

In 1993, Congress prohibited the U.S. Army Corps of Engineers from using appropriated funds to delineate wetlands under the 1989 Wetlands Delineation Manual.7 Congress further stated that no funds shall be used to implement any subsequent manual adopted without the public notice and comment procedures of the Administrative Procedure Act (APA). In the meantime, Congress authorized the Corps to use the 1987 Wetlands Delineation Manual, but only until the adoption of a final delineation manual.

Almost 25 years later, the Corps has failed to propose, much less adopt, a final wetlands delineation manual. Instead, the Corps continues to use the 1987 Manual, adding regional “supplements” to modify the very same delineation criteria Congress disallowed in 1993. Rather than placing the Manual and regional supplements through the rulemaking process, the Corps has used the supplements to avoid the Congressional directive to formally promulgate a final Manual.

Recommendation: We recommend that EPA clarify that no regional supplements should be used in making determinations of what constitutes “navigable waters” and/or initiate a joint

6 New Hope Power Company and Okeelanta Corporation v. U.S. Army Corps of Engineers and Stockton 2010 WL 3834991 (S.D. Fla. September 29, 2010)

7 See Energy and Water Development Appropriations Act, Pub. L. No. 102-377, 106 Stat. 1315: “None of the funds in this Act shall be used to identify or delineate any land as a "water of the United States" under the Federal Manual for Identifying and Delineating Jurisdictional Wetlands that was adopted in January 1989 or any subsequent manual adopted without notice and public comment. Furthermore, the Corps of Engineers will continue to use the Corps of Engineers 1987 Manual, as it has since August 17, 1991, until a final wetlands delineation manual is adopted. PUBLIC LAW 102-377—OCT. 2, 1992 106 STAT. 1325 None of the funds in this Act shall be used to finalize or implement the proposed regulations to amend the fee structure for the Corps of Engineers regulatory program which were published in Federal Register, Vol. 55, No. 197, Thursday, October 11, 1990.”

rulemaking with the Corps that subjects the wetlands delineation manual through the rigors and transparency of the APA’s public notice and comment process.

X. EPA’s proposed revision regarding objection to administratively continued permits (40 CFR § 123.44) (Docket ID No. EPA-HQ-OW-2016-0145c)

EPA has proposed granting to itself the power to object to administratively continued permits by providing EPA Regional Administrators the discretion to change the status of an administratively continued permit to “proposed permit,” an outcome that would trigger the robust federal review process outlined in 81 Fed. Reg. 31344, 31372 (May 18, 2016).

This proposed revision marginalizes a valuable tool afforded to states with authorized NPDES permit programs – the ability to administratively continue an existing NPDES permit in lieu of permit reissuance. This tool is important because it allows states to prioritize limited resources and limited personnel to ensure the most efficient management of their state NPDES program. This revision, if finalized, further erodes State authority to manage their own programs and will discourage unauthorized states from assuming NPDES authority.

Denial of an administratively continued permit, which this rule revision entails, would leave agricultural producers who hold NPDES permits without permit coverage and vulnerable to citizen lawsuits. It also raises a constitutional concern due to the lack of due process considerations given that there is no procedure to challenge the EPA’s decision to change a permit’s status to “proposed.” The revision raises additional concern because it exceeds EPA’s statutory authority. Clean Water Act § 402(d) grants EPA the authority to review proposed permits and to object to them, which if objected to prohibits the permit from issuing. The revision here would replicate this administrative power and apply it to administratively continued permits, a step that goes beyond the power Congress granted to EPA in the Clean Water Act.

Finally, this effort by EPA is not needed because EPA already manages a largely successful effort that resolves the underlying issue. The Priority Permit Measure provides an avenue for EPA to target state-issued NPDES permits to undergo the reissuance process by designating them as “priority permits”.

Recommended: EPA withdraw its proposed revision regarding objection to administratively continued permits (40 CFR § 123.44) (Docket ID No. EPA-HQ-OW-2016-0145c)

XI. National Ambient Air Quality Standards (NAAQS) for Coarse Particulate Matter (PM10)

The NAAQS and definition for coarse particulate matter are overly broad and do not take into account naturally occurring sources like dust found on farms.

Recommendation: EPA should clarify its NAAQS regulations to ensure that agricultural producers are not found to be in violation of the Clean Air Act for conditions beyond their control when operating under general farming practices.

Immigration Reform

NCFC Position: Agriculture must be supported by federal programs that allow for their labor needs to be met. Federal policies now and in the future must recognize the unique nature of agricultural work and our international competitiveness issues that require access to a flexible workforce. NCFC strongly supports long-overdue reforms to our immigration laws in order to meet the unique needs of all segments of agriculture. NCFC will oppose any efforts to apply mandatory E-Verify without a workable, legislative solution for agriculture’s current and future workforce. Action: NCFC and the Agriculture Workforce Coalition (AWC) have put forward three critical components of reform that must be addressed. First, legislation must address the current workforce. With over half of agricultural workers estimated to not have proper work authority, suddenly losing the majority of agricultural workers would place significant, irreparable harm on the agricultural economy. Agricultural employers must have continued access to trained, high-skilled farm workers through work authorization status to remain working in agriculture-related jobs. Secondly, legislation must ensure future workforce demands are met through a new program that will admit a sufficient number of willing and able workers in a timely manner. Lastly, this visa program must have the flexibility to meet the needs of producers, including those with year-round labor needs, such as dairy and livestock. Due to the nature of dairy and livestock operations, these sectors have not been able to participate in the current H-2A program. A 2012 Texas A&M study 2012 focused on dairy found that farms using immigrant labor supply more than 2/5 of the milk in the country. Without these employees, economic output would decline by $22 billion and 133,000 workers would lose their jobs. We cannot continue to limit farmers and rural America’s economic potential due to labor instability; therefore, Congress must act now. Current Status: Instability in the agricultural labor force has reached critical levels. Farmers face a critical shortage of legally authorized and experienced workers each year and the cumbersome H-2A visa program cannot serve as a safety net to meet the workforce demands. Farmers are left with few options in times of labor shortages, either crops have rotted in the fields or farmers have attempted to access the only program that exists to admit foreign workers in agriculture: the H-2A visa program. While workable for some in the industry, the H-2A program’s inflexibility and bureaucracy make it very difficult to access and utilize for most of agriculture. In addition, current program interpretation on seasonal work prohibits its utilization for many segments of agriculture, including dairy and livestock.

The shortage of agricultural labor negatively impacts our economic competitiveness, local economies, and jobs. In fact, every farm worker engaged in high-value labor intensive crop and livestock production sustains two to three off-farm but farm dependent jobs. The activities that occur on domestic farms support not only farmworkers, but also an entire supply chain of transportation providers, input suppliers, processors and consumer retail functions. Several Members of Congress have introduced legislation addressing various components of reforming the current H-2A program or the current workforce. NCFC applauds members for recognizing the need for reform and willingness to lead on the issue. However, the bills introduced so far have not addressed all of the components needed to gain support from the agricultural community at large. With increased enforcement actions and Congress soon turning to immigration enforcement-related legislation, we must work together to ensure agriculture is considered during this debate. When mandatory e-verify proposals and other enforcement-only approaches are considered by Congress, we must demand an agriculture workforce related bill that incorporates the functions outlined below are moved in conjunction with the enforcement legislation. Without these tied together, agriculture will not be able to support the enforcement related bills.

June 2017

Below is a summary of the agriculture workforce/immigration related legislation introduced so far this Congress. While we appreciate many of these bills (except Grassley’s mandatory e-verify without a solution for agriculture), NCFC and the AWC have not endorsed any of these measures as none of them provide stabilization of our current workforce AND a new visa program that meets the needs of all of agriculture.

Bill Number Bill Summary Sponsorship Status

HR. 281 – The Directs the Department of Agriculture (USDA) Authored by Rep. Elisa Introduced Family Farm to establish a process for receiving H-2A Stefanik and cosponsors Relief Act of nonimmigrant visas which shall ensure that include Rep. Chris Collins, 2017 that petitioners may file such petitions over Rep. Mark Amodei, Rep. the Internet or in paper form. John Faso, Rep. Dan The bill: (1) includes year-round livestock Newhouse, and Rep. workers, including dairy workers, in the H-2A Daniel Donovan. category with a maximum three-year period of admissions, which may be renewed three months after the end of each such period; and (2) revises H-2A certification provisions. H.R. 639- Amends the Immigration and Nationality Act Sponsored by Rep. Ralph Introduced Electronic to provide for electronic notification of H–2A Abraham. Cosponsors Notification and H–2B visa petitioners upon receipt of the include Rep. Trent Franks, Improvement petitions, and for other purposes. The Rep. Eric Crawford, Rep. Act secretary will provide electronic notification Ann Wagner, Rep. Roger upon receipt. Marshall, Rep. Charles Dent, Rep. Dan Newhouse, Rep. Kristi Noem, Rep. Ted Yoho, Rep. Chris Collins, Rep. Tom Rice, Rep. Bob Gibbs, Rep. Andy Harris, Rep. Fred Upton, and Rep. Barbara Comstock. H.R. 2087- Amends the Immigration and Nationality Act Sponsored by Rep. Sean Introduced Defending the to expand the H–2A worker program to Duffy Agricultural include certain additional laborers, and for Industry’s other purposes. This act would allow Requirements “sheepherders or dairy workers” to work in Year-round the US for 18 months in an agricultural labor Act of 2017 service, and apply for an additional period of 18 months. H.R. 641- Revises the H-2A nonimmigrant agricultural Sponsored by Rep. Rick Introduced Better worker visa program, including with respect Allen. Cosponsors include Agriculture to: (1) agricultural labor and services, (2) Rep. Mike Bost, Rep. Earl Resources application requirements, (3) wages, (4) Carter, Rep. Kevin Now Act period of authorized nonimmigrant status, Cramer, Rep. Luke (BARN Act) (5) housing, (6) legal assistance, and (7) Messer, Rep. Tom Rice, violations. This act transfers some Rep. John Moolenaar, administrative power from the Secretary of Rep. Dennis Ross, Rep. Bill Labor to the Secretary of Agriculture. It also Huizenga and Rep. Mike alters housing requirements that employers Coffman. must provide. H.R. 2690- Establishes alien farm workers “blue card” Sponsored by Rep. Luis Introduced Agriculture status after meeting certain requirements. Guitierrez. Cosponsors Worker This act gives aliens the opportunity to apply include Rep. Pete Aguilar, Program Act for blue card status upon completing Rep. Ted Lieu, Rep. John of 2017 qualified work, passes national security/ law Garamendi, Rep. Ann enforcement clearances and pays the Kuster, Rep. Julia necessary fees. An alien granted blue card Brownley, Rep. Jamie status is not eligible for public benefits under Raskin, Rep. Bobby Rush, section 403 of the Personal Responsibly and Rep. Linda Sanchez, Rep. Work Opportunity Reconciliation act of 1996. Dwight Evans, Rep. Doris Workers must perform at least 100 days of Matsui, Rep. Hakeem agricultural work per year to be eligible. Jeffries, Rep. Vicente Under certain circumstances, spouses and Gonzalez, Rep. Jerrold children are granted permanent resident Nadler, Rep. Adriano status as well. A work day is considered 5.75 Espaillat, Rep. Albio Sires, hours or more of agricultural work. Rep. Grace Napolitano, Rep. James McGovern, Rep. Bradley Scott Schneider, Rep. Nanette Diaz Barragan, Rep. Earl Blumenauer, Rep. Lucille Roybal-Allard, Rep. Darren Soto, Rep. Raul Grijalva, Rep. Ruben Gallego, Rep. Pramila Jayapal, Rep. Mike Thompson, Rep. Salud Carbajal, Rep. Peter Welch, Rep. Filemon Vela, Rep. Tony Cardenas, Rep. Judy Chu, Rep. Juan Vargas, Rep. John Conyers Jr, Rep. Michelle Lujan Grisham, Rep. Zoe Lofgren, and Rep. Jimmy Panetta. S. 1034 Establishes alien farm workers “blue card” Sponsored by Sen Dianne Introduced Agriculture status after meeting certain requirements. Feinstein. Cosponsors Worker This act gives aliens the opportunity to apply include Sen. Patrick Program Act for blue card status upon completing Leahy, Sen. Michael of 2017 qualified work, passes national security/ law Bennet, Sen. Mazie enforcement clearances and pays the Hirono, Sen. Kamala necessary fees. An alien granted blue card Harris, Sen. Kirsten status is not eligible for public benefits under Gillibrand, Sen. Tom Udall section 403 of the Personal Responsibly and and Sen. Al Franken. Work Opportunity Reconciliation act of 1996. Workers must perform at least 100 days of agricultural work per year to be eligible. Under certain circumstances, spouses and children are granted permanent resident status as well. A work day is considered 5.75 hours or more of agricultural work. S. 179 Amends the Illegal Immigration Reform and Sponsored by Sen. Chuck Introduced Accountability Immigrant Responsibility Act of 1996 to make Grassley. Cosponsored by Through the E-Verify program permanent. The bill Sen. John Boozman, Sen. Electronic requires: (1) federal agencies, contractors, Bob Corker, Sen. Tom Verification and critical employers to participate in E- Cotton, Sen. Michael Enzi, Act Verify; (2) all U.S. employers to participate in Sen. Mike Lee, Sen. E-Verify within one year of enactment of this Richard Shelby, Sen. John Act; and (3) employers using a contract, Thune, Sen. Roger Wicker, subcontract, or exchange to obtain labor to Sen. Shelly Moore Capito, certify that they utilize E-Verify. The Sen. Thad Cochran, Sen. Department of Homeland Security (DHS) shall Joni Ernst. require the E-Verify participation of an employer or class of employers if DHS has reasonable cause to believe that the employer is or has been in material violation of the employment eligibility verification process under the Immigration and Nationality Act (INA). An employer’s failure to use E-Verify shall be treated as a violation of the INA requirement to verify employment eligibility and creates a rebuttable presumption that the employer knowingly hired, recruited, or referred an illegal alien. The bill: (1) increases civil and criminal penalties for specified hiring-related violations, and (2) establishes a good faith civil penalty exemption/reduction for certain hiring-related violations.

Transportation

NCFC Position: Improving our nation’s transportation infrastructure must be a national priority that deserves urgent attention. Capacity constraints, structurally deficient bridges, deteriorating roads and locks and dams that are long past their expected useful life require the necessary investment to efficiently move the country’s freight now and into the future. Action: NCFC strongly urges Congress to establish proactive transportation policies that foster investment to improve our nation’s aging infrastructure. Additionally, we support: • Maintaining the agricultural hours of service exemption • Passing long overdue trucking productivity improvements, including increased allowable weights for hauling agricultural commodities • The Water Resources Development Act (WRDA) • Improvements in rail capacity, competition, service and accessibility in rural America • Measures that increase U.S. port efficiencies and prevent port disruptions Current Status: Congress passed a five-year highway bill reauthorization in December 2015. Fixing America’s Surface Transportation Act (FAST Act) provides for $305 billion in spending, and maintains the federal government’s current spending level of about $50 billion per year for transportation projects, adjusted for inflation. However, in future reauthorizations, Congress will still need to address the approximately $16 billion per year shortfall in revenues generated from the federal gas tax. The U.S. has almost 4 million miles of public roads. Most of the road mileage is located outside the National Highway System (NHS) and on highways other than federal-aid highways. This is true nationwide, but more pronounced in rural areas with populations less than 5,000. Only 4.3 percent of rural roads are located on the NHS and 8.3 percent of urban roads are on the NHS. According to federal data in 2012, 74 percent of bridges, 73 percent of the 4 million miles of public roads, and 33 percent of all vehicle miles traveled (VMT) are in rural areas. Only 44 percent of rural road mileage is eligible for federal grants; the rest is maintained by state and local funding. Increases in federal funding, and/or reclassification of rural roads and bridges to be eligible for funding, should be a priority in any infrastructure package. Identifying adequate long-term funding sources would provide certainty, enable better long-term planning, and improve efficiency in road maintenance and construction. Special consideration should be

NATIONAL COUNCIL OF FARMER COOPERATIVES 50 F Street NW, Suite 900 Washington, DC 20001 Tel: (202) 626-8700 Fax: (202) 626-8722 www.ncfc.org | facebook: www.facebook.com/FarmerCoop | twitter: @FarmerCoop Transportation given for the prioritization of rural roads and bridges by States and local rural and agricultural stakeholders to better meet the needs of farmers, ranchers and the rural communities in which they live. America’s inland waterways and ports long have provided U.S. farmers, ranchers and agribusinesses with a strong comparative advantage, enhancing our ability to efficiently and competitively serve domestic and global markets, as well as to secure essential crop inputs for production of grains, oilseeds and other agricultural commodities. However, the inland waterways system now risks becoming a potential detriment rather than a comparative strength. To immediately address inland waterways infrastructure issues, priority should be given to: • There currently exists a backlog of 25 critical inland waterways modernization projects that need to be funded to bring the system into the 21st Century ($8.75 billion total investment). • Of utmost importance to American agriculture, the Navigation and Ecosystem Sustainability Program (NESP) already is congressionally authorized and includes construction of seven top-priority 1,200-foot locks (LaGrange, Peoria, Upper Mississippi River Locks 20, 21, 22, 24 & 25) at the most congested locations on the Upper Mississippi River System (representing $2.8 billion of the $8.75 billion backlog). • Major rehabilitation projects ready for construction (including Brandon Road, Dresden Island and T.J. O’Brien) also should be prioritized (representing $368 million of the $8.75 billion backlog). • The Harbor Maintenance Trust Fund has a $9 billion surplus, and efforts should be made to unlock more of these funds for the intended uses of maintenance, including dredging. Meanwhile, comprehensive rail reform legislation has long been needed to address many of the concerns of rail shippers, including competition, service and capacity issues. NCFC supports legislative rail provisions that would take modest steps to contribute to a better balance between shipper and carrier interests in rail policy deliberations at the Surface Transportation Board and make the agency more accountable, transparent and effective. Thus, NCFC supported the Surface Transportation Board Reauthorization Act of 2015 (S. 808), which Congress passed in December 2015. The bill makes important reforms to better equip the STB to handle today’s freight rail challenges, such as giving the STB investigatory authority, creating a voluntary arbitration system, and requiring the Board to maintain a simplified and more efficient rate review mechanism when a full “stand-alone cost” review is too burdensome. Furthermore, S. 808 calls on the rail industry to invest appropriate resources to maintain rail service levels to prevent the types of service breakdowns such as were experienced in 2013 and 2014.

June 2017

NCFC Position: Farmer-owned cooperatives use over-the-counter (OTC) derivatives (commodity swaps) to hedge the commercial risk of their own operations and to provide customized risk management tools to farmers and ranchers. Increasingly, producers are depending on their cooperatives to provide them with tools to manage price risk and lock in margins as volatility in commodity markets has increased in recent years. Action: NCFC encourages Congress to take an active oversight role as the Commodity Futures Trading Commission (CFTC) develops regulations implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). It is imperative that regulations maintain the ability for farmer-owned cooperatives and their producer-owners to effectively manage their commercial risk in the future. Current Status: As regulations to implement the Dodd-Frank Act are put in place, NCFC is working to ensure that the CFTC takes into account the unique nature of cooperatives and their continued ability to provide risk management products and services to their members. Farmer cooperatives must not be subjected to the same level of regulation as the Wall Street financial institutions that the Dodd-Frank Act is intended to cover. While NCFC’s focus primarily has been on who will be regulated as a “swap dealer,” excluding forward contracts from the definition of a swap, the end user exception to mandatory clearing of swaps, position limits and other issues that would affect farmer co-ops have cropped up during the process – such as the potentially burdensome recording and recordkeeping requirements for futures and hedging transactions. NCFC is supportive of legislative initiatives in the 2017 reauthorization of CFTC, including: clarifying the definition of a bona fide hedge; codifying a CFTC provision to allow for margin funds to be transferred to a customer’s futures commission merchant (FCM) within one full business day of market close; and, reducing recordkeeping requirements in the cash commodity markets. Those provisions are included in the House-passed H.R. 238, the Commodity End User Relief Act. It is unclear as to whether the Senate will take up CFTC legislation in 2017. Background: As processors and marketers of commodities and suppliers of farm inputs, cooperatives are commercial end-users of commodity swaps. Cooperatives use swaps to effectively minimize risks associated with price movements in commodities such as grain, dairy products, livestock, energy and fertilizer. In addition, swaps give cooperatives the ability to offer customized tools to producers, helping to better manage risk and returns and provide more predictable profitability.

In order to provide risk mitigation services, cooperatives must have affordable access to the OTC market with other commercial counterparties, allowing the cooperative to “aggregate” the risk of offering forward contracts and swaps to farmers. Farmer and Cooperatives’ Use of Swaps to Hedge Commodity Price Risks Outlined below are several examples of how cooperatives in different sectors of U.S. agriculture participate in the swaps market and provide valuable risk management services to their farmer members. Many of the examples only trade one to five contracts at a time, and thus are not set up to be centrally cleared. NCFC is working to ensure that regulatory requirements on these types of transactions do not become cost prohibitive under the Dodd-Frank Act, thereby enabling the continued use of these increasingly important risk management tools for farmers and cooperatives. • Dairy: Co-ops provide customized hedging solutions to dairy farmers, allowing them to lock in positive margins. To guarantee those margins, farmers buy financial futures on corn and soybean meal, while selling Class III milk futures. However, many farms are not large enough to utilize Chicago Mercantile Exchange (CME) contracts. Due to their size and scale, co-ops have the ability to facilitate hedging for farmers through the use of swaps. For other milk producers, co-ops help to greatly reduce cash flow risk with swaps as the farmer is not subjected to daily mark-to-market (margin) requirements put forth by the exchanges. This encourages risk management strategy implementation and helps ensure future profitability. • Grain: Local co-op elevators will offer farmers a minimum price for future delivery of a specific volume of grain and may also give the farmer the right to the average market price over the time period if it is better than the guaranteed price. The local elevator will then offset that risk by entering into a swap with a cooperative in a regional or federated system. The larger cooperative will then aggregate its exposure to the swaps with local elevators and enter into an offsetting swap with a dealer or other commercial counterparty. • Livestock: Co-ops assist livestock producers by offering customized contracts at non-exchange traded weights while also reducing producers’ financial exposure to margin calls. Because exchange contracts are traded in 40,000-50,000 pound sizes, producers can better match the corresponding number of head they have to the swaps offered by the co-op (20,000-25,000 pounds). These contracts are based off the CME for live cattle, lean hogs and feeder cattle. The co-op offsets its risk of those contracts with producers by entering into a corresponding swap with a predetermined counterparty (through a broker). • Fertilizer: Large inventories of fertilizer are necessary to provide farmers with timely service as fertilizer is produced year round and there are only seasonal applications. However, fertilizer producers and distributors do not have access to exchange-traded fertilizer contracts. A growing OTC market for fertilizer products helps co- ops hedge away inventory and price risk during volatile times, such as those experienced in 2008. • Fuel: Customized solutions are developed by the co-op to assist individual farmers with their fuel hedging needs as individual farmers do not have the fuel demands necessary to consume a standard 42,000 gallon monthly NYMEX contract. A co-op can offer swaps to farmers in 1,000-gallon increments, depending on their specific needs, while offsetting the risk of offering those contracts with swap counterparty. • Small Producers: A co-op can aggregate its members’ small volume swaps or forward contracts and transfer that risk to a swap partner. A swap dealer or other commercial counterparty would otherwise not have the interest in servicing such small entities.

June 2017

Timeline of key recent federal actions on financial regulation Jan 2017 Bye-bye Dodd Frank: Rep. Jeb Hensarling (R-TX) announces that one of the main priorities of Potential Actions in 115th Congress the House Financial Services Committee will be to repeal Dodd-Frank

Jan 30, 2017 Trump’s executive order: President Trump signs the executive order that establishes a new •While many expect House Financial Services set of “core principles” designed to dismantle Dodd-Frank Chairman Hensarling’s (R-TX) Financial CHOICE Act to pass the House, analysts are not as Apr 4, 2017 Mnuchin you’re hired!: Steven Mnuchin is confirmed by a vote of 53 to 47 to serve as the optimistic that it will pass in the Senate. Not next Secretary of the Department of the Treasury only do Senate Democrats oppose dismantling Dodd-Frank, but some Senate Republicans are Apr 11, 2017 CHOICE Act 2.0: Chairman of the House Financial Services Jeb Hensarling (R-TX) released concerned that the repeal would go too far. details outlining the second version of the Dodd-Frank replacement plan •With Mnuchin and Clayton leading two of the major financial regulators, financial analysts Apr 21, 2017 Trump’s executive order part 2: President Trump signs two executive memoranda and one executive order that examines the role the OLA plays in financial stability, reviews the Fed’s expect that these institutions will start passing authority regarding non-finance SIFI authority and reviews the current tax system rules that are deregulatory in nature •Financial analysts are also interested in May 2, 2017 Chairman Clayton: The Senate voted 61-37 to confirm Jay Clayton as next chairman of the whether or not the administration's tax plan SEC and infrastructure package will move forward and be passed. The two bills are expected to May 4, 2017 CHOICE Act 2.0 passes Committee: The second version of the Financial CHOICE Act passes the have a significant impact on small business House Financial Services Committee with a vote of 34 to 26 growth and could determine whether or not the US reaches Trump’s target growth rate of May 25, 2017 CFPB in crisis?: The US Court of Appeals for the DC Circuit is hearing a case that could 3% potentially impact the overall structure of the CFPB

Jun 8 2017 CHOICE Act 2.0 part 2: The House passes the Financial CHOICE Act by a vote of 233 to 186 with 11 members not voting on it

Jun 2017 Flood reform: The House Financial Services Committee passes the National Flood Insurance Program Policyholder Protection Act of 2017 and the 21st Century Flood Reform Act of 2017 Sources: Reuters, “US consumers financial watchdog’s chief makes case for embattled agency,” May 31, 2017; ACA International, “Financial CHOICE Act expected on house floor for vote in early June,” May 31, 2017; CNN Money, “Senate ok’s Jay Clayton, Trump’s pick for SEC chairman,” May 2, 2017; DavisPolk, “Financial CHOICE act 2.0 passes House Financial Services Committee,” May 8, 2017; CNBC, “Watch: Treasury Secretary Mnuchin addresses Senate Banking Committee,” May 18, 2017.

Information Courtesy of National Journal Biotechnology

NCFC Position: Crops enhanced through biotechnology currently on the market bring value to agriculture, consumers and the environment. For example, some traits protect against harmful insect pests and diseases (e.g. ongoing efforts to develop immunity to citrus greening in oranges), thereby reducing the need for chemical spraying. Other traits can increase the nutritional value of the harvested crop such as pineapples with higher levels of lycopene, or they have the potential to eliminate life-threatening allergens such as those found in peanuts. NCFC supports the use of biotechnology in agriculture and the ongoing research and development of new seed traits. The development and adoption of biotech products makes possible the continued availability of safe food, feed and fiber products to consumers in the U.S. and worldwide. Action: NCFC urges the Administration and Congress to maintain the integrity of the biotech regulatory and approval process for the benefit of U.S. growers and our consumers. The U.S. government has consistently supported and defended science- based regulatory regimes. In many international forums, U.S. policy is the standard for science- and risk-based regulation. The U.S. successfully argued against the European Union in a World Trade Organization dispute over the approval of biotechnology products. The interests of growers, businesses and consumers depend on trade agreements with countries that import commodities and products that we produce. The injection of non-science-based criteria into our government’s regulatory process will only serve to undermine those international efforts. Current Status: In the U.S., roughly 90 percent of all the corn, soybeans and cotton are grown using biotechnology. The acceptance of biotech crops would not have been possible without the existence of a risk-based regulatory process built on sound scientific principles. That process has been in place since the adoption of the Coordinated Framework for Regulation of Biotechnology by the U.S. was announced in 1986. Through the Coordinated Framework, agricultural biotechnology products in the U.S. are regulated by three agencies: the U.S. Department of Agriculture (USDA), the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA). Every biotechnology crop on the market today has successfully completed review under the Framework and has been found to be safe. On July 2, 2015, the Office of Science, Technology and Policy (OSTP) launched a one-year initiative to review and assess the Framework with the objectives of ensuring public confidence in the regulatory system and preventing unnecessary barriers to future innovation and competitiveness, while continuing to protect health and the environment. In an effort, independent of the OSTP initiative, USDA’s Animal and Plant Health Inspection Service (APHIS) announced in the Federal Register on February 5, 2016, its notice of intent (NOI) to review the existing regulations, 7 CFR Part 340 (Part 340), for biotechnology through an environmental impact statement (EIS) and consider a range of options for updating its regulatory review process. The four options APHIS proposed for updating the process ranged from status quo

NATIONAL COUNCIL OF FARMER COOPERATIVES 50 F Street NW, Suite 900 Washington, DC 20001 Tel: (202) 626-8700 Fax: (202) 626-8722 www.ncfc.org | facebook: www.facebook.com/FarmerCoop | twitter: @FarmerCoop Biotechnology to transformational. NCFC submitted comments in April on the range of proposed alternatives for APHIS to consider in the EIS along with recommendations for defining the term biotechnology for use in the statement. In response to the comments received following the NOI, APHIS issued a proposed rule on January 18, 2017, to revise its Part 340 regulation regarding the importation, interstate movement, and environmental release of certain genetically engineered organisms. The proposed rule acknowledges the advances in genetic engineering and an understanding of the plant pest and noxious weed risks by genetically engineered organisms. It also recognizes that some products of gene editing result in essentially identical products as those that could be achieved through traditional breeding techniques. The proposed rule is aimed at reducing the burden for regulated entities whose organisms pose no plant pest or noxious weed risks. Despite the many positive aspects of the proposed rule, uncertainties exist for products that will require pre-market regulatory review. NCFC is working with a coalition of agricultural entities to formulate a coordinated response to the proposed rule. Public comments on the proposed rule were collected through June 19. NCFC submitted comments and signed onto group comments with the Agricultural Biotechnology Alliance. Background: Under the authority of the Plant Protection Act implementing regulations, APHIS is the agency that reviews all biotechnology crops before they can be field tested or commercialized. APHIS has overseen tens of thousands of field tests that have made it possible for over 70 biotechnology crops to reach the market through its deregulation process. In making deregulation decisions under the Plant Protection Act, APHIS has consistently relied upon its independent evaluation of the potential for new products that could pose a plant pest risk. Under its authority, it considers factors that are relevant to a plant pest risk determination. Though the National Environmental Policy Act (NEPA) must be addressed in making a deregulation decision, it is important to remember that NEPA is a procedural statute. NEPA directs APHIS to assess potential environmental impacts of its actions, but that is where NEPA’s authority ends. NEPA does not give USDA any authority beyond the Plant Protection Act and APHIS’s implementing regulations. The EPA is responsible for ensuring that pest-resistant biotech varieties are safe to grow and consume. It regulates environmental exposure to these crops to ensure there are no adverse effects to the environment or any beneficial, non- targeted insects and other organism. The FDA imposes on foods developed through biotechnology the same regulatory requirements used to safeguard all foods in the marketplace. The FDA has both pre-market and post-market authority to regulate the safety and labeling of all foods and animal feed. The FDA’s evaluation of a biotechnology food focuses on its characteristics, not the method used to develop it. American agriculture has long been at the forefront of meeting the world’s ever expanding needs for food, feed and fiber. When Congress created USDA over 150 years ago, it recognized in law the value of improving seeds and plants for the benefit of American farmers. The 1862 law that established the Department served as a key foundation for generations of improved agricultural innovation and productivity in the U.S. Better seeds give farmers new choices to cope with new challenges, such as difficult weather conditions and plant diseases, and to increase productivity to help feed, clothe, and provide energy to a rapidly growing global population in an environmentally sustainable way. By improving crops and farm productivity, modern biotechnology delivers significant economic, environmental, health and consumer benefits. The introduction in 1995 of modern biotechnology has made a significant contribution to meeting the global needs for food and feed, and to improving farmers’ economic and environmental sustainability. Rapid adoption of the technology reflects farmer satisfaction, including more convenient and flexible crop management, lower cost of production, higher productivity and/or net returns per acre, health and social benefits, and environmental benefits including decreased use of pesticides. June 2017

NCFC Position: NCFC opposes mandatory labeling of food products containing biotech ingredients. The technology behind genetically modified organisms (GMO) in agriculture is proven safe for the environment and consumers, and is key to increasing food production necessary to feed a rapidly growing global population. Acceptance by consumers depends on a continued effort to better inform the public about the environmental and health benefits this technology provides. Action: NCFC calls on the United States Department of Agriculture (USDA) to expeditiously conduct a formal public comment and rulemaking process to implement the National Bioengineered Food Disclosure Standard by July 1, 2018, as directed by Congress. Current Status: Following passage of the National Bioengineered Food Disclosure Standard and approval by the President, USDA drafted an Advanced Notice of Public Rulemaking (ANPR) late last year but has yet to release the notice given the transitioning state of the administration. However, USDA plans to move forward in seeking public comment to direct the rulemaking process and expects to publish public questions before August recess. USDA is also in the process of conducting a third-party study to identify potential technological challenges that may impact whether consumers can access disclosure provided by a digital code or link on food packaging. The study is proceeding and the results are expected to be provided to USDA by the end of the month and made available to the public shortly after. Once the ANPR public comments and results of the third-party study are analyzed, the Department plans to release a proposed rule by November 2017. The bill directs USDA to establish a final bioengineered food disclosure standard by July 1, 2018 but USDA does not expect food companies will need to comply with the new rule by that date. The Coalition for Safe Affordable Food (CFSAF), which NCFC co-chairs, is working closely with USDA during the implementation process and will provide coordinated food and agricultural industry comments throughout the rulemaking process. Background: For two years, the CFSAF, co-chaired by NCFC and the Grocery Manufacturers Association, worked closely with members of the House and Senate to produce a bill that preempts state mandated GMO labeling laws while providing more information for consumers wanting to know more about biotechnology-derived food ingredients.

Over the past decade, the prospect of a state-by-state patchwork of varying, often conflicting, mandatory GMO labeling laws threatened the food and agriculture industry. The 2012 defeat of California’s ballot initiative, Proposition 37, to mandate the labeling of food products containing biotech ingredients was only the beginning of an onslaught of similar legislative state initiatives. Almost a year later, a comparable proposal in Washington State was on the ballot and also defeated by a narrow margin. Yet, some states were successful in mandating the labeling of genetically modified products including Maine, Connecticut and Vermont, increasing the urgency for a national solution. GMO labeling also was the subject of debate during consideration of the farm bill in 2013. Several amendments were filed in support of GMO labeling, and one requiring labeling of all GMO products was voted on. The amendment offered by Sen. Bernie Sanders of Vermont failed by a vote of 27 to 71, sending a clear signal that this issue was not supported by an over-whelming majority of the United States Senate. On July 23, 2015, the House of Representatives passed H.R. 1599, the Safe and Accurate Food Labeling Act, which preempted state laws and established a voluntary labeling program overseen by the U.S. Department of Agriculture (USDA). With a looming deadline of July 1, 2016, when the state of Vermont’s mandatory labeling law was set to take effect, attention was shifted to the Senate to pass similar legislation. Senators Pat Roberts (R-KS) and Debbie Stabenow (D-MI), Chair and Ranking Member of the Senate Agriculture Committee, worked closely over the next year to come up with their own agreement to garner 60 votes in the Senate. After consideration of several iterations of a bill, on July 7, 2016, the Senate passed the National Bioengineered Food Disclosure Standard (S. 764) with a strong bipartisan vote of 63 yeas to 30 nays. A week later, the House of Representatives took up the same measure and passed it by a vote of 306 yeas to 117 nays. The President signed the bill into law on July 29, 2016. Key provisions of the final agreement include: • Pre-emption: immediately prohibits states or other entities from mandating labels of food or seed that is genetically engineered. • National Uniform Standard: the U.S. Department of Agriculture establishes through rulemaking a uniform national disclosure standard for human food that is or may be bioengineered. • Disclosure: requires mandatory disclosure with several options, including text on package, a symbol, or a link to a website (QR code or similar technology); small food manufacturers will be allowed to use websites or telephone numbers to satisfy disclosure requirements; very small manufacturers and restaurants are exempted. • Meat: foods where meat, poultry, and egg products are the main ingredient are exempted. The legislation prohibits the Secretary of Agriculture from considering any food product derived from an animal to be bioengineered solely because the animal may have eaten bioengineered feed.

June 2017

This is not a solicitation. The National Council of Farmer Cooperatives supports the operation of NCFC CO-OP/PAC as authorized by and in accordance with federal law. NCFC members desiring additional information about the activities of the Committee may contact Kelsey Billings ([email protected] or 202-626-8700)

FINANCIAL STATEMENT MAY 2017

Beginning Balance $ 59,162.63

Receipts Contributions from Individuals $ 65,218.00 Contributions from Federal PACs $ 22,500.00 Refunds Other Receipts

$ 87,718.00

Disbursements Contributions to Federal Candidates $ 43,000.00 Operating Expenses $ 1,212.84 Cleared Disbursement from 2016

$ 44,212.84

Ending Balance $ 102,667.79

2017 Disbursement List Date Amount Committee Name State Election Period Party 2/7/2017 $ 2,500.00 CONAWAY FOR CONGRESS TX PRIMARY 2018 REPUBLICAN 2/10/2017 $ 1,000.00 BOB CASEY FOR SENATE INC PA PRIMARY 2018 DEMOCRATIC 2/28/2017 $ 1,000.00 TAMMY BALDWIN FOR SENATE WI PRIMARY 2018 DEMOCRATIC 3/1/2017 $ 5,000.00 TEAM RYAN WI PRIMARY 2018 REPUBLICAN 3/13/2017 $ 2,000.00 PETERSON FOR CONGRESS MN PRIMARY 2018 DEMOCRATIC

3/13/2017 $ 1,000.00 COMER FOR CONGRESS KY PRIMARY 2018 REPUBLICAN 3/13/2017 $ 2,500.00 VALADAO FOR CONGRESS CA PRIMARY 2018 REPUBLICAN 3/15/2017 $ 1,000.00 KANSANS FOR MARSHALL KS PRIMARY 2018 REPUBLICAN 3/15/2017 $ 1,000.00 CONAWAY FOR CONGRESS TX PRIMARY 2018 REPUBLICAN 3/16/2017 $ 2,500.00 CRAMER FOR CONGRESS ND PRIMARY 2018 REPUBLICAN 3/16/2017 $ 1,500.00 TIM WALZ FOR US CONGRESS MN PRIMARY 2018 DEMOCRATIC 3/17/2017 $ 1,000.00 DAVID ROUZER FOR CONGRESS NC PRIMARY 2018 REPUBLICAN 3/20/2017 $ 2,500.00 JIM COSTA FOR CONGRESS CA PRIMARY 2018 DEMOCRATIC 3/23/2017 $ 2,500.00 GIBBS FOR CONGRESS OH PRIMARY 2018 REPUBLICAN 3/23/2017 $ 1,000.00 ROBERTS FOR SENATE KS PRIMARY 2020 REPUBLICAN 3/27/2017 $ 2,500.00 RODNEY FOR CONGRESS IL PRIMARY 2018 REPUBLICAN 3/27/2017 $ 1,000.00 DEVIN NUNES FOR CONGRESS CA PRIMARY 2018 REPUBLICAN 4/5/2017 $ 2,000.00 ROBERTS FOR SENATE KS GENERAL 2020 REPUBLICAN 4/25/2017 $ 1,000.00 STABENOW FOR U.S. SENATE MI PRIMARY 2018 DEMOCRATIC 5/2/2017 $ 2,500.00 LUCAS FOR CONGRESS OK PRIMARY 2018 DEMOCRATIC 5/15/2017 $ 1,000.00 FRIENDS OF GLENN THOMPSON PA PRIMARY 2018 REPUBLICAN 5/15/2017 $ 1,500.00 PETERSON FOR CONGRESS MN PRIMARY 2018 DEMOCRATIC 5/15/2017 $ 1,000.00 FRIENDS OF CHERI BUSTOS IL PRIMARY 2018 DEMOCRATIC 5/22/2017 $ 2,500.00 LOFGREN FOR CONGRESS CA PRIMARY 2018 DEMOCRATIC TOTAL $43,000.00

NATIONAL COUNCIL OF FARMER COOPERATIVES NCFC CO-OP/PAC

SOLICITATION APPROVAL FORM

NCFC CO-OP/PAC is the political action committee of the National Council of Farmer Cooperatives. It helps make sure you have a strong and effective voice on legislative and regulatory issues affecting your cooperative and its farmer owners.

PLEASE COMPLETE AND RETURN BY FAX 202-626-8722 or E-mail to [email protected]

YES. As a member of NCFC, I hereby authorize NCFC CO-OP/PAC to solicit voluntary contributions on behalf of its activities for the following calendar year(s) as indicated by my signature below. I understand solicitation requests will be directed to me and/or any other eligible personnel as I may designate.

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This form is not a solicitation. Federal Election Commission regulations require your prior written approval as a corporate member before we can solicit you or any of your eligible personnel on behalf of NCFC CO-OP/PAC. Your approval does not obligate you or anyone in your organization to contribute to NCFC CO-OP/PAC. It also does not limit your activities in support of your own PAC, political candidates or parties. Eligible personnel may include your executive and administrative personnel, stockholders/members, including directors, and their families. Approval may be provided for multiple years. A corporate member may approve only one trade association federal PAC per year. Contributions to NCFC CO-OP/PAC are strictly voluntary.

SUPPORT THE NATIONAL COUNCIL OF FARMER COOPERATIVES

NCFC is the ONLY trade association organized and dedicated to represent and promote the interests of America’s farmer-owned cooperatives!

YOU CAN NOW JOIN NCFC AS AN INDIVIDUAL MEMBER IN ADDITION TO YOUR COOPERATIVE FOR JUST $25 ANNUALLY

When you join NCFC you gain a powerful voice on issues affecting your business. Individual membership allows participation in exclusive events at the Annual Meeting and Washington Conference, including NCFC CO-OP/PAC auction and sweepstakes events. As a member, you will receive NCFC’s weekly e-newsletter -- the NCFC Update -- which is sent out every Friday and recaps the important events happening here in Washington and across the country pertaining to farmer cooperatives. Additionally, you will receive the NCFC Annual Report, updates on legislative and regulatory issues, and advance notice of NCFC meetings and events. To be eligible for individual membership, you must be an employee, director or farmer-member of an NCFC member organization. ------

___ YES! I WANT TO SUPPORT NCFC AS AN INDIVIDUAL MEMBER (You must be an Employee, Director or Farmer Member of an NCFC Member Organization)

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Return to: National Council of Farmer Cooperatives 50 F St. NW, Suite 900 Washington, DC 20001 Fax: (202) 626-8722

NCFC CO-OP/PAC cordially invites you join us for Breakfast in support of HON. BILL SHUSTER Republican, Ninth Congressional District of Pennsylvania Chairman, House Transportation and Infrastructure Committee House Armed Services Committee

Tuesday, June 27th Requested Contribution: 8:30 AM PAC: $2,500 Host / $1,000 Attend Hyatt Regency Capitol Hill Personal: $1,000 Host / $500 Attend 400 New Jersey Ave. NW

Please RSVP to Matt Van Blargan at: (703) 998-4217 or [email protected]

Paid for by Bill Shuster for Congress

" Please return to Matt Van Blargan 5827 Colfax Ave Alexandria, VA 22311 or [email protected]

☐I look forward to attending ☐ I cannot attend I would like to contribute: Donor Information: ☐ $5,400 ☐$2,700 ☐$1,000 ☐ $500 ☐$_____ Name: ______Payment Method: Employer: ______☐ Enclosed Check made out to “Shuster for Congress” Occupation: ______☐ Online at www.BillShusterforCongress.com Phone: ______☐ Credit Card: ☐ Visa ☐ Mastercard ☐ Amex e-mail: ______Card #: ______Address: ______Expiration: ______Security Code: ______City: ______State: _____ Zip: ______I authorize this transaction, and declare that it is within federal regulations as outlined below. Signature: ______Date: ______Your contribution is not tax-deductible as a charitable contribution for Federal income tax purposes. An individual may contribute up to $5,400 per election cycle – that is, $2,700 for the primary, and $2,700 for the general election. A multi-candidate PAC may contribute up to $10,000 per election cycle – that is $5,000 for the primary, and $5,000 for the general election. Individual contributions must be made from the donor’s own funds. Contributions from corporations and foreign nationals are prohibited. Not printed at government expense.

Please Join

NCFC CO-OP/PAC

For a reception with Senator Joe Donnelly

Tuesday, June 27, 2017 12:00pm-12:30pm

At Hyatt Regency Capitol Hill 400 New Jersey Ave NW Washington, DC

Suggested Contributions: $5000 $2500 $1000 $500

RSVP to: Kelly Norton at (317) 513-1497 or [email protected]

Donnelly for Indiana 303 Massachusetts Ave NE Washington, DC 20002 FEC: C00393652 www.joeforindiana.com

Contributions or gifts to Donnelly for Indiana are not tax deductible. Federal law requires us to use our best efforts to collect and report the name, mailing address, occupation, and name of employer of individuals whose contributions exceed $200 in an election cycle.. Federal contractors and foreign nationals who are not admitted for permanent residence in the United States are prohibited from making contributions. All contributions must be from personal funds and may not be reimbursed or paid by any other person.

Paid for by Donnelly for Indiana. NCFC CO-OP/PAC

Cordially invites you to a breakfast benefitting

REP. GREG WALDEN Republican, Second Congressional District of Oregon

Wednesday, June 28th, 2017 8:30 AM – 9:30 AM

Hyatt Capitol Hill 400 New Jersey Ave NW Washington, DC

Requested Contribution: $5,000 Per PAC Host, $2,500 Per PAC Attendee, $1,000 Per Individual

Please RSVP to Aaron Poe at (202) 546-1763 or [email protected]

NAME: TITLE: COMPANY: ADDRESS: CITY: STATE: ZIP PHONE: FAX:

Please make checks payable to: Walden for Congress 213 Ashby Street Alexandria, VA 22305 Paid for and authorized by Walden for Congress • 202-546-1763 Individuals may contribute a maximum of $5,400 per election cycle ($2,700 for the primary election and $2,700 for the general election). Couples may contribute up to $5,400 for each election; joint contributions require the signature of both spouses. Multicandidate federal PACs may contribute a maximum of $10,000 per election cycle ($5,000 for the primary election and $5,000 for the general election). Contributions from corporations, labor unions, federal contractors, foreign nationals (without green cards) and other federally prohibited sources are not permitted. Contributions must be made from personal or PAC funds and may not be reimbursed by any person or entity. Federal law requires us to obtain and report the name, mailing address, occupation and name of employer for each individual whose contributions aggregate in excess of $200 per election cycle. Contributions to Walden for Congress are not deductible for federal income tax purposes. Not printed at government expense.

Government Affairs Committee: Farmer Co-op sustainability initiative status update NCFC SUSTAINABILITY

TO: NCFC COUNCIL CC: NCFC GOVERNMENT AFFAIRS COMMITTEE FROM: NCFC STAFF SUBJECT: SUSTAINABILITY UPDATE DATE: JUNE 27, 2017

To build upon the launch of NCFC’s Field Guide for Sustainability Programs, NCFC is launching an initiative to highlight the unique commitment that co-ops have to the sustainability of the communities in which they and their members live and work. This program will enable NCFC and its member cooperatives to communicate with stakeholders in the supply chain, key influencers, and co-op members about the impact that co-op sustainability efforts have in their communities.

This summer, NCFC will compile examples from member cooperatives that illustrate what co- ops are doing to further “Community well-being – Conducting our businesses responsibly, maintaining a safe, healthy and respectful workplace for our employees, and fostering vibrant rural communities.” We will then work with those co-ops to develop a portfolio of co-op sustainability work, videos and feature stories that can be used by NCFC and member cooperatives on web sites, feature stories, media outlets and in presentations.

NCFC will send out a request for information mid-July and encourage member co-ops to submit brief descriptions about their community efforts. Then, NCFC will conduct interviews with its members and others to develop profiles to highlight the extensive and diverse sustainability activities. In coming years, we hope to focus on communicating about other areas in which co-op sustainability programs have been active such as energy efficiency or water quality.

The information collected through this initiative will be highlighted in various ways at NCFC Annual Meeting in February.

The Sustainability working group will meet in-person October 3-4, in Little Rock, Arkansas. The group will tour Riceland Foods and meet with rice producers to learn more about sustainable rice production. Members of the working group will also meet to discuss the utilization of the Field Guide’s Self-Evaluation tool and plans for the sustainability outreach and communication effort.

We hope you will encourage your staff to submit information about your co-op’s community involvement and to attend the in-person meeting this October. Please contact Kelsey Billings ([email protected]) for more information.

Government Affairs Committee: Future Meetings NCFC Future Meetings Schedule

2017 Executive Council Meeting September 20 – 21 • NCFC Office • Washington, DC LTA Subcommittee Chairs-Vice Chairs September 27 – 29 • The Lodge at Ballantyne • Charlotte, NC Sustainability Working Group October 3 – 4 • Little Rock Marriott • Little Rock, AR Human Resources Conference October 26 – 27 • The Westin O’Hare • Chicago, IL Government Affairs Meeting November 8 – 10 • The Fairmont Georgetown • Washington, DC

2018

2018 Annual Meeting February 7 – 9 • Hilton New Orleans Riverside • New Orleans, LA 2018 Washington Conference June 25 – 27 • Hyatt Regency • Washington, DC

2019

2019 Annual Meeting February 13 – 15 • Westin Kierland • Phoenix, AZ 2019 Washington Conference June 24 – 26 • Hyatt Regency • Washington, DC Government Affairs Committee: NCFC Staff List

Tel: 202-626-8700 Fax: 202-626-8722 50 F Street, NW Suite 900 Washington, DC 20001 www.ncfc.org

NCFC Staff Issues List

Marlis Carson, Senior Vice President & General Counsel, Legal, Tax & Accounting, ([email protected]) Policy Areas: • Capper-Volstead • Tax • Accounting/Finance • Concentration/Competition • General legal

Lisa Kelley Van Doren, Vice President & Chief of Staff, Government Affairs, ([email protected]) Policy Areas: • Farm Bill (lead staff) • Farm Commodities • Crop Insurance • Conservation & Environmental • Appropriations/Budget • Health Care

Kevin Natz, Vice President, Government Affairs, ([email protected]) Policy Areas: • International Trade • Risk Management (CFTC) • Credit • Rural Development • Transportation • Pension

Kelsey Billings, Director, Government Affairs & PAC Treasurer, NCFC CO-OP/PAC ([email protected]) Policy Areas: • Sustainability • Biotechnology • Energy • Labor & Workplace Safety/OSHA • DHS Chemical Security • Livestock • Lobby Disclosure Compliance

Mary Nowak, Director, Government Affairs ([email protected]) Policy Areas: • Immigration • Specialty Crops • Nutrition • Food Safety • Food Labeling • Research

Government Affairs Committee: Notes NOTES

NOTES

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