| | | | |  | | By Garrett Downs | With help from Marcia Brown and Meredith Lee Hill
| | — Congressional leaders agreed on a stopgap government funding measure expiring in March, adding yet another challenge to House Ag Republicans’ hope to move the farm bill that month. — The Iowa caucuses have come and gone, but your host took a deep dive into how President Joe Biden and former President Donald Trump delivered for farmers ahead of the big night. — Advocates are warning that a proposed fertilizer deal in Iowa could be the canary in the coal mine for the Biden administration’s efforts to shore up industry competition. HAPPY TUESDAY, Jan. 16. I’m your host, Garrett Downs. As always, send your tips to gdowns@politico.com, and follow us at @Morning_Ag.
| | | | Tune in on Wednesday, Jan. 10, as POLITICO explores Taiwan's upcoming presidential election. Hear from our panel on the potential outcomes to the race and the profound implications for U.S.-China relations depending on who wins. REGISTER HERE. | | | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories.
| | |  House Agriculture Committee Chair G.T. Thompson. | Francis Chung/POLITICO | SHUTDOWN SHOWDOWN RISKS FARM BILL, AGAIN: Congress will vote this week on a third continuing resolution to keep the government funded through March, potentially derailing Rep. G.T. Thompson’s (R-Pa.) optimistic plans to move the House version of the farm bill that same month. Thompson last week told reporters that he was still planning to move the more than $1 trillion agriculture and food bill in March when there are three consecutive weeks of session. But he told MA that “these funding bills always can be an issue for other good legislation,” when asked about a CR ending in March. Some GOP lawmakers are starting to privately expect that a farm bill won’t move until after the November elections, if it does at all this Congress. A lame duck farm bill however is a heavy lift. The new approps schedule: The new stopgap agreed to by appropriations leaders over the weekend maintains Speaker Mike Johnson’s “laddered” approach, with two pots of funding for two sets of agencies expiring about a week apart. Under the new proposal, the Agriculture Department and Food and Drug Administration would run out of cash on March 1. A number of other agencies would be funded through March 8. Without a stopgap or a full-year spending bill signed into law, USDA and FDA will shut down on Saturday morning. Notably, the CR does not include additional funding for the Special Supplemental Nutrition Program for Women, Infants, and Children, kicking the issue of an imminent funding shortfall down the road. The long(ish) game: The new CR comes after Johnson and Senate Majority Leader Chuck Schumer announced a topline deal to fund the government through the rest of the fiscal year. The appropriations committees are working to rewrite full appropriations bills per that pact, but Congress is resorting to a CR to avert an imminent government shutdown at the end of this week. A short, partial shutdown is still possible if lawmakers object to fast-tracking the CR this week.
| | | | 
President Joe Biden's USDA has authorized nearly $57 billion in direct federal payments to farmers. | Luis M. Alvarez/AP | A TALE OF TWO PRESIDENTS: Trump makes hay in farm states like Iowa by reminding farmers of how much money the federal government paid them during his presidency. “Look I did get you $28 billion, in all fairness, right? Who the hell else would get you $28 billion from China?” Trump asked a crowd in Sioux Center, Iowa last week, part of his final campaign push ahead of the state’s GOP caucuses Monday. Setting aside that the money he referenced did not come from China but rather from the federal government as a salve for his trade war that tanked agricultural exports, your host reports that there is a ready answer to his question of who else could get that much money for farmers: President Joe Biden. By the numbers: Over the first three years of their presidencies, Biden and Trump’s payments to farmers are virtually identical: A POLITICO analysis found that both men authorized nearly $57 billion in direct federal payments to farmers over that time span. Nearly half of Trump’s total $109 billion in direct payments were delivered in his final year, 2020, when USDA paid farmers more than $52 billion, an unprecedented sum since USDA began recording farm payment data in 1933. Those tallies don’t include billions in other types of farm support, like crop insurance and loan financing — traditionally the largest types of ag subsidies. By other measures, Biden has been better for farmers than Trump: Net farm income has actually gone up since the Democrat entered the White House. On average, net farm income has totaled $165 billion between 2021 and 2023, compared to $94 billion between 2017 and 2019. Farm income reached a record high of nearly $189 billion in 2022. And while it is projected to drop off in 2023 (USDA is still tallying receipts from December 2023), it remains above the 20-year average for receipts. Why it matters: With Trump running to supplant Biden in 2024, he is proposing a universal tariff on nearly all goods. Biden, meanwhile, is telling farmers that his administration is working to distribute the recent surge in ag profits to farmers across the spectrum, not just the largest ag conglomerates. Joe Glauber, the former chief economist at USDA, warned that Trump’s tariff move could bring another trade war and “really hurt U.S. agriculture.” He also said it might not be a good bet for farmers to rely on another record-setting bailout. “Maybe farmers think that Congress or the administration would be willing to come up with another $20 billion in payments,” Glauber said. “I think that’s taking a big leap of faith. … Those were big, extraordinary payments, and I think it may be naive to think that they would be there year in and year out.”
| | | | IOWA FERTILIZER DEAL: In mid-December, OCI Global announced it was selling its subsidiary Iowa Fertilizer Co. for $3.6 billion to Koch Industries, one of the nation’s top fertilizer producers. The Iowa Fertilizer plant has received millions in state and local taxpayer-funded subsidies and tax abatements, the Des Moines Register reported. Now, some critics are warning that the deal, which is subject to antitrust review by federal regulators, could diminish competition for fertilizer, as farmers have endured high prices related to the war in Ukraine and other supply chain tangles, Marcia writes. Without that competition, critics say, domestic fertilizer prices could be pushed even higher and taxpayer-funded investments to juice competition in agricultural markets could be wasted. “The more than half a billion in taxpayer dollars offered to build the plant was intended to create jobs, increase competition, and drive down costs,” wrote Scott Syroka, a former city council member in Johnston, Iowa in December. “Permitting the Koch deal to go through would achieve exactly the opposite.” Likewise, the anti-monopoly group Farm Action warns that the deal demonstrates the need for safeguards for federal grant money. “These corporations are robbing farmers of their profits and driving up food prices for consumers,” the group warned in a recent blog. “They shouldn’t benefit from the very government projects meant to curb their industry power.” The Biden administration has made it a priority to expand domestic fertilizer production, making up to $900 million available for the Fertilizer Production Expansion Program. OCI Global and Koch Industries did not immediately respond to requests for comment. USDA response: Asked about the OCI-Koch deal, a USDA spokesperson pointed to the USDA’s FPEP, which is intended to bolster competition for domestic fertilizer production and expand domestic supply, making the critical input more affordable for farmers. “When dominant middlemen control so much of the supply chain – such as in the fertilizer sector – it undermines economic resiliency and robust competition, with both producers and consumers bearing the brunt of these consequences,” said USDA spokesperson Allan Rodriguez. “Developments like these underscore the importance of President Biden’s whole-of-government effort to promote competition in the American economy.” FPEP also includes some safeguards for taxpayer dollars. If a facility is sold or has a change of ownership within 10 years, for example, USDA will review the sale to determine if the change is no longer consistent with FPEP’s purpose and may require partial or full return of grant money.
| | | | GLOBAL PLAYBOOK IS TAKING YOU TO DAVOS! Unlock the insider's guide to one of the world's most influential gatherings as POLITICO's Global Playbook takes you behind the scenes of the 2024 World Economic Forum. Author Suzanne Lynch will be on the ground in the Swiss Alps, bringing you the exclusive conversations, shifting power dynamics and groundbreaking ideas shaping the agenda in Davos. Stay in the know with POLITICO's Global Playbook, your VIP pass to the world’s most influential gatherings. SUBSCRIBE NOW. | | | | | | | | — Washington state filed a lawsuit to block the $25 billion proposed merger between Kroger and Albertsons Monday. We covered the plan to sue last week. — The European Union’s farm imports are feeding Russia’s war machine. (POLITICO Pro) — The Federal Trade Commission’s antitrust lawsuit against pesticide makers Syngenta and Corteva survived a motion to dismiss. (MLex) — USDA’s Federal Milk Marketing Order hearing reconvenes today in Carmel, Indiana. THAT’S ALL FOR MA! Drop us a line: gdowns@politico.com, meredithlee@politico.com, marciabrown@politico.com, mmartinez@politico.com, abehsudi@politico.com and ecadei@politico.com. | | | | Follow us on Twitter | | | | Follow us | | | | |
