American Soybean Association.

ASA Legislative and Regulatory Outlook for 2016


Source: American Soybean Association.

ASA’s Washington, D.C. office has prepared a look at what’s to come on the legislative and regulatory front this year.

For a number of reasons, prospects for legislative and regulatory action in 2016 are relatively more predictable than in years past.  First, it’s a Presidential election year, meaning Congress will adjourn in mid-July in advance of the nominating conventions, and then won’t consider any major legislation before the November elections. Any FY-2017 appropriations bills that aren’t done by July will wait for a lame duck session after the elections, and a short-term Continuing Resolution will need to be passed in September to keep the government running until then.

The shortened legislative session could also result in efforts to utilize the final appropriations bills as vehicles for policy “riders” to address legislative priorities in 2016.  However, most action will be regulatory, not legislative. The first few months of 2016 will see Executive Branch agencies propose and try to finalize every regulation they care about well before the elections.  These could include the national dietary guidelines, changes to pesticide use labels as part of the President’s pollinator initiative and, hopefully, the Gulf of Mexico Fisheries Management Plan, to name just a few.

Second, the chances for a government shutdown over spending or a default on the national debt are negligible.  The two-year budget deal reached in September locked in the amount Congress will spend in FY-2017, an issue that closed the government in 2013.  A second deal also reached in September will allow the federal debt ceiling to increase until April 2017, when a new President and Congress will have taken office.  There is talk of trying to build a two-year budget, including FY-2018, into next year’s Budget Resolution while maintaining annual appropriations, which could provide some stability in the Congressional spending process.

Third, Congress and the Administration reached agreement on several key pieces of legislation before adjourning in December, so they won’t need to be taken up again next year.  These included a tax package which made several provisions permanent and extended others, such as bonus depreciation, for five years.  The package also included a two-year extension of the biodiesel tax credit, which will now expire at the end of 2016.  Given election year politics and the fact that several drivers of the perennial “tax extenders” package were renewed for five years or made permanent law, it will be more difficult to forge action on the tax credits that expire at the end of 2016.  On the transportation and infrastructure front, Congress completed a five-year highway bill reauthorization this year, removing this issue from the 2016 agenda.

Also on the biodiesel front, while the EPA has set volume requirements for the biomass-based diesel category through 2017, they will be issuing proposals on volume requirements for the overall Advanced Biofuels category, which impacts biodiesel.  The biodiesel industry and stakeholders will also be closely monitoring trade issues, particularly the potential for larger import volumes from Argentina.

Of the issues that remain, the stalemate between Republicans and the Administration over the WOTUS regulations promulgated by the EPA is almost certain to continue, leaving any possible resolution to the courts.  Chances for a major tax reform package will be deferred to no earlier than the lame duck session, which will depend on the outcome of the elections.  There will also be an attempt to restore the traditional two-year reauthorization schedule for the Water Resources Development Act (WRDA).  However, any action would be small in scale and will focus on technical issues and implementation of reforms enacted in 2014.

Items on the agenda for the Agriculture Committees in 2016 include reauthorizations of school nutrition standards and the CFTC.  There is also the unresolved and pressing issue of biotech food labeling, with the approaching implementation of Vermont’s law in July and other states considering similar action.  Secretary Vilsack has announced that he will bring food companies and consumer groups together starting in January in an effort to find common ground, but the endpoint of this process is difficult to foresee.  ASA will push hard for Congressional action on legislation to establish voluntary federal standards to prevent a patchwork of state labeling requirements would that raise food costs and stigmatize foods containing biotech ingredients.

The Agriculture Committees are also likely to hold more hearings on the effectiveness of the Agricultural Act of 2014 and on priorities for the next farm bill.  In addition, the cotton industry is looking for either the Administration or Congress to provide relief from low prices and the limited effectiveness of the STAX program in supporting producer income, a prospect that could require reopening the farm bill.

On the trade agenda, the Administration will need to decide whether to heed Senate Majority Leader McConnell’s warning to not submit the TPP agreement for approval by Congress until after the elections.  The TTIP negotiations are unlikely to be completed by this Administration, and decisions on issues important to U.S. agriculture, including the EU’s biotech approval process and RED requirements, are a long way from being resolved.  While progress on further normalizing relations with Cuba are likely to be delayed until after the elections, efforts will continue to educate Members of Congress on the importance to U.S. agriculture of lifting the embargo.

Finally, just before years-end, we learned that Brazil’s soybean growers association, APROSOJA, has requested that their government consider filing a WTO case against the U.S. soybean crop insurance program.  This issue could become a major focus of attention for ASA in 2016 and future years.

While the outlook for legislation and regulatory activity in 2016 that affect agriculture may now appear to be more predictable, no one should be surprised if and when issues that are not on the table suddenly become urgent priorities.  The recent shift in public attention from income inequality to terrorism is only one example of how priorities can change, almost overnight.  And with the hyper-politicized policy environment caused by the upcoming Presidential primary season and the approach of the general elections, the landscape for federal action can change many times before the end of next year.

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