Dairy checkoff reports MIA at USDA

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With help from Catherine Boudreau, Megan Cassella, Jenny Hopkinson, Helena Bottemiller Evich, Doug Palmer and Christine Haughney

DAIRY CHECKOFF REPORTS MIA AT USDA: It has been four years since the USDA published legally required annual financial reports on a $400 million dairy research and promotional fund — one of the largest pots of cash among federal checkoff programs, Pro Agriculture’s Catherine Boudreau reports. The missing reports add to the controversy surrounding federal checkoffs, fueling renewed arguments from farmers and advocacy groups who have long demanded greater transparency in the checkoff universe.

Just a little bit longer: The reports on the dairy checkoff, which is funded by taxes on producers of milk products, should be posted within the month, a USDA spokeswoman told POLITICO. She said they are in the final clearance stage, and the 2016 installment is still in the works. She declined to explain the reason for the years-long delay.

Prior to 2012, the dairy checkoff was one of the most transparent, regularly filing annual financial reports that often topped 100 pages. The reports were then sent to Capitol Hill. Only the dairy checkoff’s evaluations must be sent to Congress, because of the way its authorizing statute was written. Catherine explores the background and the back-and-forth over what may have caused the change. Pros, full story here.

HAPPY THURSDAY, SEPT. 14! Welcome to Morning Ag, where your host would like to say hello for the first time (I usually edit this space.) and let you in on a little POLITICO news: Pro Ag’s newest member, Christine Haughney, has landed! We’re very excited, and hope you are too. So give her a follow on Twitter ( @chaughney) and stay tuned for her first MA byline. Otherwise, you know the deal: Thoughts, news, tips? Send them to [email protected] or @jmlauinger. Follow the whole team at @Morning_Ag.

ROBERTS TO SPOTLIGHT SNAP ERROR-RATE ISSUES: The political landscape upon which the Supplemental Nutrition Assistance Program will be debated in the farm bill reauthorization could be altered this morning. The Senate Agriculture Committee today holds its one and only hearing on SNAP ahead of the effort to renew the sweeping farm legislation, and Chairman Pat Roberts (R-Kan.) plans to zero in on how USDA calculates the error rate for the food stamp program.

Oversight and witnesses: The hearing’s first panel is scheduled to examine whether USDA’s quality-control process ensures states are reporting accurate error rates for SNAP, committee aides said. Expected to testify is Brandon Lipps, acting deputy undersecretary and administrator of Food, Nutrition and Consumer Services at USDA’s Food and Nutrition Service, as well as two witnesses from the department’s Office of the Inspector General: Gil Harden, assistant inspector general for audit, and Ann Coffey, assistant inspector general for investigations.

Accurate error rate? OIG began probing the error rate in March 2013. In September 2015 it issued a lengthy report on its findings: States had purposefully weakened the integrity of the quality-control process in order to lower error rates. FNS then began its own review, and has since directed 42 states to develop corrective action plans. As a result, the agency didn’t issue error rates for 2015 or 2016. In the meantime, FNS has taken numerous steps to fix this mess, so expect to hear lots about that this morning.

The scalpel, not the sledgehammer: Senate Ag staff are careful to note Roberts is not interested in making drastic cuts to the program, but instead wants to take a much closer look at how it is being administered, especially if taxpayer savings could be the result. “This is not about pushing people off the program; this is about how the program is run,” a committee aide told MA. More here.

USTR FLOATS IDEA OF ‘SUNSET’ PROPOSAL IN NAFTA 2.0: Heading into the next round of the NAFTA renegotiation, the Office of the U.S. Trade Representative is considering a so-called “sunset” proposal — a provision that would effectively implement an automatic termination of the deal after five years unless all parties agree before then to renew it, sources tell Pro Trade’s Megan Cassella.

Late last week USTR began circulating the idea among U.S. government agencies, seeking clearance in anticipation of tabling the text during the third round of talks, set to begin next weekend in Ottawa, sources said. But at least two agencies — USDA and the State Department — voiced opposition.

“Termination of NAFTA would be devastating for the U.S. agricultural economy, and making such termination automatic substantially increases its likelihood,” a USDA official argued in an emailed reply to USTR, per a source who viewed the email. The USDA official went on to argue that the primary benefit of a trade agreement is the certainty it provides, and “a sunset provision removes any such certainty and will significantly dampen investment and trade.”

TODAY: GOTTLIEB, ROSS AT PRO SUMMIT: This morning POLITICO debuts its first Pro Policy Summit, featuring a packed schedule of interviews with leading Washington newsmakers, including FDA Commissioner Scott Gottlieb talking about FDA policy in the Trump era. Pro Ag’s Helena Bottemiller Evich and Pro Health Care’s Sarah Karlin-Smith will question Gottlieb on his regulatory philosophy and how it fits in with the Trump administration’s deregulatory agenda.

Which areas of FDA regulation does Gottlieb think can be revised? Which regulations need to stay or be augmented to protect public health? How does he determine when the government should intervene and when it must back off?

How to tune in: Pro subscribers can watch the full summit here and view the daylong agenda here. Not a PRO subscriber? Watch select events on the main stage via politico.com/live. The Gottlieb panel starts at 11:45 a.m.

Lunch with Ross: Commerce Secretary Wilbur Ross will sit down at 12:35 p.m. with POLITICO Editor-in-Chief John Harris, where he’ll likely face questions on everything from China to NAFTA to foreign investment.

NAFTA at 2 p.m. Pro Trade’s Doug Palmer will moderate a session with the Mexican and Canadian envoys to the U.S. on their views of the NAFTA renegotiation. Doug will question Canadian Ambassador David MacNaughton and Mexican Ambassador Gerónimo Gutiérrez for roughly 45 minutes, so expect treatment of agricultural trade and anything from rules of origin to labor and environmental provisions. Follow along on Twitter with the hashtag #ProSummit.

WHO IS STEPHEN VADEN? There has been a lot of attention on Agriculture Secretary Sonny Perdue’s picks for undersecretary and deputy, but his nominee for general counsel has gone under the radar. Stephen Vaden was nominated on Sept. 1, at the same time as Iowa Agriculture Secretary Bill Northey was announced to head farm services and Nebraska Agriculture Director Greg Ibach was tapped to lead regulatory and marketing programs. In a statement, Perdue described Vaden as a “keen legal mind” with “a firm grasp of the legal issues facing American agriculture, and very importantly, understands the breadth and complexity of the regulatory burdens placed on our producers.”

He knows his election law: His resume, part of a trove of documents on USDA’s political appointees that Pro Ag’s Jenny Hopkinson revealed on Wednesday, shows his recent practice of law has focused on political matters. Vaden was part of the Trump transition’s USDA beachhead team, a gig he took after two-and-a-half years as a government regulation attorney for the firm Jones Day. While there, he said on his resume, he worked on election law and advised clients on federal campaign finance laws and “successfully defended corporate client before the Federal Election Commission from charges of illegal coordination and corporate contributions, and earned unanimous dismissal of the complaint.” Vaden further touted that he worked to defend voter ID laws in Ohio and Virginia.

Prior to his tenure at Jones Day, Vaden worked for the firm Patton Boggs LLP, where in addition to election law he focused on “defense of political figures from inquiries before congressional committees, the Department of Justice and Federal Election Commission.” He is a 2008 graduate of Yale Law School, where he was editor of the Yale Journal on Regulation, and later clerked for two federal judges in Memphis, Tenn., before going to Patton Boggs.

THE FARM BILL SOIL-HEALTH PUSH: As farm groups and lawmakers ramp up for the 2018 farm bill, it seems soil health is on the mind. While past installments have included grants and technical assistance geared toward soil health, groups such as the National Sustainable Agriculture Coalition want lawmakers to require that farmers who receive premium crop insurance subsidies also implement holistic soil management practices and other conservation measures. Such a connection already exists for farmers who have highly erodible land — which USDA’s Economic Research Service says has been especially successful in preventing erosion from rainfall — but the requirements and the land to which they apply must be expanded, said Alyssa Charney, a policy specialist for NSAC.

“The next farm bill is definitely an opportunity to be taking this seriously,” Charney said. “There’s a pretty significant need on the conservation compliance side of things.” POLITICO’s The Agenda has more here on the move to replenish America’s soils.

That’s not all: NSAC is also asking lawmakers to provide support and funding for the Conservation Stewardship Program, which furnishes producers with technical assistance and grants that in many cases help to improve soil health. In a blog post on Wednesday, the group said it plans to push for expanded offerings under the program, incentives for farmers to do more on their land, and greater opportunities for grazing.

ORGANICALLY MAD: The organic industry will have much to talk about when it gathers today in Baltimore for the Organic Trade Association’s All Things Organic Conference at the Natural Products Expo East. Likely on the agenda: The group’s challenge to USDA’s delay of the organic animal welfare rule.

OTA sued USDA in federal court on Wednesday, arguing the department is violating the Administrative Procedure Act in holding up the rule, and would need to consult the National Organic Standards Board if it wants to scrap or make changes to the measure — which it is proposing to do. The rule, which has ruffled feathers because of provisions that set space and outdoor-access requirements for egg-laying hens, has been panned by large egg producers despite support from the industry as a whole. Brush up on the issue here.

Also on the conference agenda are an update on the state of the industry, recent regulatory moves, and a session on accessibility for consumers.

ROSS READIES FOR CHINA TRADE MISSION: As the Trump administration seeks to boost exports to Asia, Commerce Secretary Ross is gearing up to lead a trade mission to Beijing later this year. The trip — slated for mid-November in conjunction with President Donald Trump’s first visit to China since taking office — is aimed at finding ways to promote U.S. exports and help American companies “construct a firm foundation” for doing business with Beijing, according to an advisory sent to the business community and posted on the Commerce website. To get ready for the mission, Ross will head to Beijing later this month, a Commerce official confirmed to our Pro Trade colleagues.

Throw your hat in the ring: Commerce is accepting online applications from U.S. companies and trade associations that would like to participate in the mission. It is looking specifically for firms whose participation will likely lead to increased exports or business interests in China. Applications will be accepted through Sept. 29.

HEITKAMP IN FOR 2018: Sen. Heidi Heitkamp (D-N.D.) cited agricultural trade as one of the top six reasons she is running for re-election, an announcement she made on Wednesday. “Who will fight to make sure policies support farmers and ranchers who need to export their products?” the Democrat said on her campaign Twitter feed after revealing the news on her brother’s radio show.

Remember when: Back in June, POLITICO profiled Heitkamp as she toured North Dakota, and she expressed a degree of ambivalence about running for re-election in a state Trump won by 36 points.

MA’S INSTANT OATS:

— USDA is giving farmers and ranchers who lost crops or livestock during Hurricanes Harvey and Irma extra time to file claims, Pro Ag reports.

— The Wall Street Journal has the colorful tale of the arrest of JBS SA CEO Wesley Batista and his brother, former chairman Joesley Batista, who are accused of illegally making bank from the earlier plea deal that spared them prison time for bribing politicians.

— Tomatoes, oranges and watermelons all took a beating during Hurricane Irma, USA Today reports.

— The cost of shipping grain down the lower Mississippi River could rise and have a “ripple effect” on the agricultural sector if the Trump administration were to place restrictions on steel imports, according to a new report prepared for the American Institute for International Steel.

— The fishing industry is bracing for regulatory steps that could follow sentencing next month of New Bedford, Mass., fishing magnate Carlos “The Codfather” Rafael, South Coast Today reports.

THAT’S ALL FOR MA! See you again soon! In the meantime, drop your host and the rest of the team a line: [email protected] and @ceboudreau; [email protected] and @jennyhops; [email protected] and @hbottemiller; [email protected] and @chaughney; [email protected] and @jmlauinger; and P.J. Joshi, at [email protected] and @pjoshiny. Follow @POLITICOPro and @Morning_Ag on Twitter.