Feb 1, 2017

Ag industry will watch Trump closely

As Donald Trump takes the reins as president of the United States, the agriculture community is looking for clues on how his policies could impact the industry.

Vegetable Growers News asked several industry representatives to consider what the future might hold for the specialty crop sector as the new administration takes over. While not all respondents answered all of the questions – many citing the preliminary nature of the political transition – here is a look at some of the responses.

What does the Trump presidency hold for future trade agreements and international relations involving agriculture, particularly the Trans Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA)?

JIM BAIR, president and CEO, U.S. Apple Association: With more than 30 percent of the fresh apple crop destined for foreign shores, a healthy export market is critical to the health of the industry. We’ve expressed that in small meetings in the White House with the current administration, and we will look for opportunities to do the same with the new one.

Specifically, USApple supports the TPP that would provide immediate duty-free access to Vietnam. We strongly encourage the new administration to review the TPP closely and seek avenues to increase trade with the countries in the agreement that represent the world’s fastest growing region.

We have strongly benefitted from NAFTA. Canada and Mexico are our two largest export markets, with a total value of more than $450 million per year. As the Trump administration prepares to review economic pros and cons of NAFTA, USApple will communicate the benefits of the agreement to our industry and the importance of maintaining those markets.

ROBERT GUENTHER, senior vice president, public policy, United Fresh Produce Association: While the president-elect has stated his intention to pull the U.S. out of NAFTA, others close to him have indicated otherwise. President-elect Trump has called the NAFTA agreement “the worst trade deal maybe ever signed anywhere.” However, recently his transition team has begun backpedaling on this claim. Per The Hill, Anthony Scaramucci, senior adviser on the Trump transition team, recently stated, “I don’t think we’re looking to rip up NAFTA as much as we are looking to right-size it and make it fairer.” He went on to say, “I don’t think anybody in the administration from the top to the bottom is looking for protectionism. We understand the economic harm and the impact that would take.”

United Fresh has supported passage of the TPP and Agriculture Committee to that effect. At this time, TPP looks to be dead on Capitol Hill. However, much of the agriculture community supports the agreement and given the amount of support that the president-elect received from rural, i.e. agricultural areas, there may be future opportunities to address TPP.

United Fresh also supported and continues to support NAFTA. Regardless, United Fresh will work with the incoming administration to ensure they have all the information available regarding the impact, including the benefits, of NAFTA and TPP on the fresh fruit and vegetable industry and work to collaborate on trade policies that enhance the competitiveness of fresh produce providers.

TODD FRYHOVER, president, Washington Apple Commission (WAC): After the election and today my response differs. Since the election, Mexico has announced a willingness to “modernize” the NAFTA agreement, two weeks prior it was total focus on “throwing out” the agreement by Trump. TPP appears to be DOA and will not affect Washington state apple exports tremendously if not passed, but the real story is the leadership role of the U.S. in Southeast Asia and push-back against Chinese “perceived” aggression and expansion.

MICHAEL KAISER, director of public affairs, WineAmerica: The Trump presidency kills any chances of TPP being approved. The incoming administration has also said they may look into revisiting some of the provisions of NAFTA as well. This is disconcerting to us. Canada is the second largest market for wine in the U.S., and there are already a lot of existing barriers in place, but a lot of U.S. wine goes to Canada. It could have a domino effect, as wine not sold in Canada needs to be sold somewhere, so it could create a glut here in the U.S. if that market is damaged.

DESMOND O’ROURKE, president, Belrose World Market Analysts: There will be a lot of uncertainty until Trump articulates his demands for trade in North America, Asia and Europe.

Do you anticipate the Waters of the United States (WOTUS) regulations will go by the wayside? How might future ag water-use regulations look?

BAIR: The agriculture community is united in opposition to the WOTUS rule finalized by the EPA and the Army Corps of Engineers. The rule is a dramatic and unwarranted expansion of federal authority over private lands. USApple individually and through several agricultural industry coalitions has met with congressional committee staff in the weeks since the presidential election to discuss the need to roll back this intrusive rule. With the threat of a presidential veto gone when the current administration ends, USApple is very optimistic that the stage is set for congressional action that will be supported by the new president.

GUENTHER: President-elect Trump has stated that he intends to pursue the withdrawal of EPA’s Waters of the U.S. rule. United Fresh has joined with other industry stakeholders in support of such an action. Furthermore, Trump’s transition website states the following:

“Regulatory reform is a cornerstone of the Trump administration, and the effort will include a temporary moratorium on all new regulation, canceling overarching executive orders and a thorough review to identify and eliminate unnecessary regulations that kill jobs and bloat government.”

KAISER: WOTUS was on shaky ground, but now it will cease to exist. The new administration will scrap the rule. New regulations will be more “business friendly” and very less restrictive, if there are any new ones at all.

O’ROURKE: Expect a big battle over WOTUS. Bureaucrats will fight not to have their expansion of powers thwarted. Will Trump be strong enough to fight bureaucrats on many fronts? The odds are against him.

What do you anticipate to be the outlook for regulatory agencies like EPA that have a direct bearing on agricultural operations?

BAIR: We support congressional oversight of the EPA Office of Pesticide Programs in an effort to increase scrutiny of the agency’s departure from established policy, due process and sound science. Failures in EPA’s current risk assessment process threaten not only the effectiveness and quantity of pest protection tools available, but whether any actual tools are left in that toolbox for growers to use.

Agency evaluation must be returned to a science- based process, along with restoring transparency and predictability to the registration and review of pesticides. Returning to the science-based process called for under the Federal Insecticide, Fungicide and Rodenticide Act could resolve many of our specific concerns, including: pollinator impacts and protections; pesticide registration and re-registration; and other concerns, including attempts by the agency over the past year to create policy by press release instead of following a science-based process.

GUENTHER: United Fresh has joined with a cross- section of agriculture industry stakeholders to advocate for regulatory reform in order to avoid the regulatory overreach we have increasingly seen in agencies that impact agriculture. Our coalition proposes that Congress update and improve the regulatory process to ensure the proper use of scientific and economic data, as well as ensure adequate time for public comment on major proposed rules, as well as provide greater transparency of the regulatory process.

President-elect Trump’s choice to be the next administrator of the EPA, Oklahoma Attorney General Scott Pruitt, has been an adversary of major EPA regulations in the past. This indicates a significant change in the regulatory approach of the agency. We look forward to working with the incoming administration to make needed improvements to the federal regulatory system.

KAISER: From the grape and wine perspective, we were primarily concerned about WOTUS. In terms of USDA and TTB (Alcohol and Tobacco Tax and Trade Bureau), we don’t anticipate much change in relation to our industry.

O’ROURKE: Trump will probably try to reverse some of the more blatant Obama era overreach.

What about alterations, changes to USDA? Farm subsidies? The farm bill, and so on?

BAIR: USApple is a founding member of the Specialty Crop Farm Bill Alliance that worked successfully in the past two farm bills to secure mandatory funding for key specialty crop programs. The apple industry has benefitted greatly from programs, including the Specialty Crop Research program, that has awarded $17.8 million this year to research better rootstocks, IPM, postharvest strategies and stink bug control.

Other bright spots include the Specialty Crop Block Grant program, as well as broader programs such as crop insurance and the Market Access Program. The coalition will begin working early in the year on our priorities for the 2017 Farm Bill. USApple will work closely with key apple members of Congress to craft and pass a “pro- apple” farm bill, and with the Trump administration to implement it.

GUENTHER: The president-elect (was) expected to announce his pick for secretary of agriculture before Christmas, and has yet to release any specifics with regard to provisions of the Farm Bill. It has been said that President- elect Trump will take a keen interest in the 2018 Farm Bill, given the large rural populations which helped to elect him, but other than reducing the influence of government regulatory agencies, no specifics have been given. However, United Fresh will continue to work closely with our industry counterparts in the Specialty Crop Farm Bill Alliance to ensure that the policy advances made by the specialty crop industry are preserved in the next farm bill.

FRYHOVER: The main priority for WAC is the Farm Bill and appropriations and support for the Market Access Program (MAP). WAC competes for MAP dollars that make up approximately 70 percent of our total export promotional program funding. Support and continued existence of the MAP program is critical to our continued need to support exports.

KAISER: We have just started some talk about the next Farm Bill. We want to make sure all of our priorities like Specialty Crop Block Grants, Value Added Producer Grants, Market Access Funding and the Specialty Crop Research Initiative are all fully funded. The new administration has said they may cut farm subsidies for row crops.

O’ROURKE: Trump has expressed no opinions on the USDA monolith. However, unlike most candidates, he did not sell his soul in Iowa to win the rural vote. As a former Midwest governor, Vice President-elect (Mike) Pence could have significant influence on the new administration’s attitude to USDA.

How will the immigration/labor issue be dealt with, and what are the best/worst-case scenarios for agriculture?

BAIR: The apple industry needs an able, reliable and legal workforce. USApple and the other steering committee members of the Agriculture Workforce Coalition (AWC) recently wrote Vice President-elect Pence on the issue. The letter outlines the imperative of improving the antiquated H-2A program, as well as giving work status to those who are already here and working in agriculture.

The AWC fully supports border security, but warns against enforcement-only approaches such as mandatory E-Verify unless it is coupled with reform. USApple and the AWC will be following up with members of the transition team to brief them more fully on our labor needs and challenges.

The best-case scenario would be legislation passed by Congress and signed by the president that addresses our short- and long-term needs with an improved guest-worker program and legal status for those workers already here. The worst-case scenario would be enforcement without adequate reform that could jeopardize the ability of the industry to harvest the crop. The current H-2A program has doubled in the past five years alone. Much of this growth is attributable to the apple industry, but capacity and infrastructure issues plague the program and often result in workers who arrive late or not at all. With costs up to $50,000 in planting and other inputs before a single apple is harvested, that is a lot to gamble on workers who may or may not arrive in time to pick the fruit.

GUENTHER: Obviously, there was a great deal of talk during the campaign about how to deal with our country’s immigration system. Clearly, there will be a significant focus on border security and enforcement of immigration laws as Congress takes up the debate on this issue.

FRYHOVER: The apple industry relies heavily on hand labor, labor that the typical American worker has little or no interest in doing – it’s hard work and short term in nature. A legal, stable work force is our priority. Every apple is hand-picked – so we need up to 60,000 seasonal workers.

KAISER: This is our biggest concern. The best-case scenario, quite frankly, is that there is some incremental reform on some programs like H-2A and E-Verify. The worst-case scenario would be if what was outlined in the campaign comes to fruition.

O’ROURKE: Immigration could be a huge problem for the produce industry. I expect Trump to use ICE (Immigration and Customs Enforcement) to make some highly publicized sweeps of illegals. The fruit industry would be an easy target.

What is your biggest fear of a Trump presidency for agriculture?

BAIR: I’m going to turn that around and say we’re focusing on the positive and looking to leverage every possible opportunity.

GUENTHER: While United Fresh is not opposed to improving border security and enforcement, a policy that focuses only on enforcement could be disastrous for the produce sector. Given that our industry has found time and again that Americans will not take the jobs necessary to harvest fruits and vegetables, we want to be sure that produce providers can secure a skilled, committed work force. We will be working closely and vigorously with our industry partners to reach out to the new administration to share agriculture’s story and work toward a solution that balances security with productivity.

O’ROURKE: Counterproductive immigration policies.

What topics hold the biggest areas of potential and goodwill for the agriculture community?

BAIR: USApple is excited to work with the new administration on common goals and priorities. Regulatory reform is one of the key areas where we see eye to eye with the president-elect.

GUENTHER: United Fresh members have expressed growing alarm at what they feel is an increasingly stringent and anti-business regulatory approach from federal regulators. While our members recognize that regulations affecting such issues as crop protection products are necessary and can be helpful to producers, they are also concerned that too often those regulations are not based on sound science or accurate data.

FRYHOVER: Less regulation.

KAISER: Probably scrapping WOTUS.

O’ROURKE: Rolling back regulations.

What might be the impact on food safety, particularly in light of the ramping up of FSMA in the coming years?

BAIR: Above all, U.S. consumers will continue to enjoy the safest and healthiest food in the world. Production, harvesting and packing techniques are as diverse as the individual commodities that fall under the produce “umbrella” definition, and do not lend themselves to a “one size fits all” regulatory approach. USApple will continue to work with federal and state food regulatory authorities with the goal of making the rule implementation as smooth and predictable as possible.

GUENTHER: The industry – from growers to processors and through distribution – already hold themselves to such high food safety standards that most already meet or exceed regulatory requirements, and the administration has no influence on the continuous improvement we see driving the industry forward.
Customer/buyer requirements are quite stringent, and if our members are associated with a food safety problem the reputational damage is generally greater than the regulatory penalty. Their motivation to do the right thing stems from their desire to feed people safe and nutritious food. It’s true that FDA is imposing many record-keeping requirements upon the industry as a result of FSMA.

Indeed, there are a few areas where it would have been helpful for Congress to be a little clearer in the act, or for FDA to be a little clearer in the rules, so that there isn’t confusion within the industry. Perhaps the new administration could help resolve some of these issues, which often pertain to terminology and which rule members fall under. But at the end of the day, the administration doesn’t set the bar on food safety – society does.

FRYHOVER: The more regulation you put on the orchardists, the more difficult on the smallest growers. Please remember, the grower gets paid last. That said, we are always in support of food-safe product – the regulations need to be executable and realistic.

KAISER: Well, the FSMA is the law, so unless they pass legislation to repeal it, it will not be changed – unless FDA develops regulations to curb it.

O’ROURKE: Again, Trump has not expressed an opinion on food safety. However, since many Republicans voted for FSMA, he may be inclined to leave it alone for now.

Anything else to add regarding the short- and long- term political outlook for agriculture?

FRYHOVER: Today we’re “status quo,” as the playing field is changing with every “tweet.” We remain positive, understand the importance of international trade and will do our best to communicate our needs.

KAISER: I think it is just too early to tell right now.

O’ROURKE: Lower taxes and less regulation could help agriculture. Policies against trade and immigration could hurt agriculture. However, I do not expect agriculture to have much influence in the Trump administration as presently aligned. Little definitive can be said until Trump names his cabinet and completes deals with Congress.

JON DEVANEY, president, Washington State Tree Fruit Association: Trump campaigned on a more enforcement-oriented and restrictive immigration policy, and has expressed his opposition to pending trade agreements such as TPP, and has called for renegotiating existing trade agreements such as NAFTA.

As an industry that relies on seasonal labor and which exports a third of its crops, there is understandable concern about what this may mean. However, our industry has also long recognized that immigration reform that provides legal pathways for willing agricultural workers would also include enforcement and verification provisions. The details of how these policies are pursued will matter a great deal, and so it is more important than ever for members of our industry to remain engaged.

— Gary Pullano, associate editor