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What does latest election mean for Arkansas agriculture?

State regulatory agencies, trade deals and a new farm bill

Whether you’re happy or not with the latest election results, the impact on agriculture will be profound. A bevy of ag-related issues, both federal and state, are waiting to be tackled.

How might things shake out?

Andrew Grobmyer, executive vice president, Agricultural Council of Arkansas (http://agcouncil.net/) has some thoughts. He spoke to Delta Farm Press the day after votes were cast. Among his comments:

Initial reaction on the election results last night?

There was nothing really surprising in Arkansas. All the congressional seats remain in Republican hands as well as the constitutional offices, which include governor, lieutenant governor and attorney general. The legislative races for the general assembly were also anticipated to remain largely the same — and that’s what we saw.

That means as we move into the (state) legislative session in January, we anticipate the key agenda items being tax reform and relief, government efficiency and transformation — some combinations of state agencies — and some regulatory reforms. Those are items Gov. Asa Hutchinson and many legislative candidates campaigned on and, given (Hutchinson) has super-majorities in the House and Senate, we will need to work closely with them to make sure this agenda meshes well with our policy interests.

At the moment, we feel confident they do. We’ve worked hard to make sure these initiatives cause no harm or improve agriculture. Of course, we have to work on the legislative language and make sure that’s in order — the devil is in the details. That’s going to be a big part of what we do in the coming weeks.

You mention consolidations. Will that mean there will be another attempt to get the Arkansas Plant Board under further control of the state agriculture secretary?

There’s been a lot of confusion on this. But the governor made an effort through the summer months to talk more clearly of what his overall plan is for transformation of state government. It’s all agencies across the board where he’s trying to find efficiencies and cost-savings. He’s trying to find ways to be a better steward of taxpayer dollars — the ag department is just a piece of that.

When the ag department was organized in 2005, the Plant Board, the Livestock and Poultry Commission and the Forestry Commission were all rolled into the department. There’s been some confusion as to how that’s supposed to operate, so the governor has laid out his plans, which include breaking down some of the interagency silos and ensuring each agriculture agency is working together as part of the larger agriculture department.

We’ve had a role in advising in that process over the last several months. At the moment, we’re in general agreement of how that should be constructed and when it comes to Plant Board we want to ensure that it remains intact and focused on serving our industry. We also want to ensure that the board positions continue to be representative of their different ag segments and that the board maintains its authority on rulemaking and enforcement and so on. We also want to ensure special revenues collected from industry are preserved for the agency servicing the industry.

The governor is also proposing to move the Arkansas Natural Resources Commission to the ag department. We support that, as well. It makes good sense. The commission does a lot of work in developing water policy, agricultural conservation initiatives, infrastructure for water, and rural water and waste-water systems.

Back in 2005, we were told one of the main focuses of the new Arkansas ag department would be outreach and trade…

They said in 2005 that a big part of its purpose of the ag secretary is promotion of our industry — all segments. We feel much of that responsibility is internal within government — whether it’s the legislature or to have the governor’s ear. We’re very pleased to have a cabinet-level official and that, as the governor is looking to reduce from 40-plus agencies down to around 15, agriculture fits into that 15. It should be an obvious priority as agriculture is our number one industry.

When it comes to trade, Agriculture Secretary Wes Ward and the governor have been very active in trying to advance agriculture internationally. That’s being done in partnership with the World Trade Center, Arkansas Economic Development Commission, and agricultural organizations like ours. There are good things going on there, good relationships being developed, including with China.

On the China trade dispute impacting Arkansas agriculture…

The China challenge is definitely having an impact. With what’s going on at the federal level, the soybean market is severely disrupted at the moment and we are concerned about the impact on the cotton market as well. But talks are ongoing and we hold out hope that the long-term gain from new agreements will outweigh the near-term pain.

There is some near-term assistance. We believe it’s insufficient for the economic farmer injury that’s resulted from the trade disputes, but we continue working with members of Congress, Agriculture Secretary Sonny Perdue and the Trump administration to ensure that if this persists then the government will offer sufficient remedies for the injury caused to the farmer.

It’s been a very rough year for many commodities — soybeans in particular — with the trade disruption and the impact it’s had on the futures markets and local cash markets. Add on top of the downturn in market prices due to stalled exports that we’ve also experienced damage to the crop, particularly due to abnormally wet weather during harvest. The companies buying these soybeans have adjusted their damage discounts dramatically without much notice, and it’s really stinging those with damage issues. It’s been a very tough year for Arkansas farmers.

The way in which these damage discounts have been applied this year warrant close review and potentially some new laws or regulations to better protect the farmer. We are looking into what actions may be warranted at the state and federal level to address this issue.

On the position of U.S. rice being allowed into Chinese markets and Cuba trade…

I hate to speculate too much on what is being negotiated and where it’s going. We’ve made it very clear our rice should have market access into China. We’ve made a lot of progress over the years. If President Trump and President Xi are negotiating a new agreement, due to the injury to our farmers we want to see rice at the forefront.

We’d also like to see China held to account for its illegal agricultural subsidies, and we’d like to see some reform at the WTO as it relates to China.

The Trump administration made it well known that they wanted to renegotiate the trade deals that were in place. They didn’t feel the U.S. economy was fairly treated in those deals, although agriculture was fairly well-positioned in most of them. Our industry is open to seeing some of the deals repackaged in hopes of not only maintaining previous market share but also finding new opportunities.

The new USMCA deal should allow us to maintain that access. We don’t know where the China deal is heading but are pleased talks are under way and that there’s a meeting scheduled for later this month. Hopefully, that leads to something soon and not further escalation.

But the disruption in the near-term has caused pain. No doubt about that.

On the new farm bill…

We want a new five-year farm bill that provides a meaningful safety net for Arkansas farmers. We hope in the coming weeks (the lame duck Congress) is able to recognize the economic situation for row-crop agriculture, which is dire across the board. It’s something they should come together on for the good of the U.S. economy. We don’t need to let it fizzle and fade into next year.

If they don’t get it done in the lame duck session, they’ll have to start from scratch. That means entirely different bills developed — especially in the (Democratically-controlled) House. I can’t imagine what that process might look like in the environment of the 116th Congress with a presidential election on the horizon in 2020.

On infrastructure needs and immigration…

Obviously, many are saying considering the election, results there will be more gridlock and slowing of legislative activity. But trying to find the silver lining, we do hope some agreements can be made on key things like infrastructure — a key priority for Trump. There seems to be a bipartisan will on making investments on some of those initiatives.

There are needs for highways and bridges. Our ports and navigation systems as well as flood control systems need to be addressed. Things like irrigation infrastructure, including the Grand Prairie and Bayo Meto irrigation projects, have national significance for U.S. rice production.

Immigration, which has been a divisive issue in the latest election cycle, has also seen some bipartisan attempts to seek common ground. We need border security but also have to address work force needs for agriculture and other key U.S. industries. We’re holding out hope those waters will calm and an agreement can emerge.

Note: The Agriculture Council’s board of directors annual meeting will be held Dec. 13 and 14 where policy resolutions will be finalized. The council was founded 80 years ago.

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