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Ohio Valley Farmers Unsure About New Trump Trade Aid Payments

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Small farms are squeezed by the dairy crisis. Photo: Nicole Erwin/Ohio Valley ReSource

This article was originally published by the Ohio Valley ReSource.

The U. S. Department of Agriculture announced Thursday details of a second round of aid totaling $16 billion for farmers affected by the trade war with China. But some Ohio Valley farmers worry about the ongoing consequences of these payments and tariffs.

As with the first round of tariff relief offered last year, farmers will again be paid extra for the soybeans, pork and dairy they produce. But instead of paying farmers a flat rate, USDA officials said these payments will depend on the assessed “trade damage” and the commodity production of each county.

USDA Undersecretary for Farm Production and Conservation Bill Northey said agency economists first will assess the county-level impact of tariffs. “We then divide that by the acres planted within that county, and then have a [payment] no matter which crops you plant,” he said.

USDA officials say this will more accurately determine the right amount of payments for each farmer. But it also  leaves farmers without specifics about how much they might receive from the payments. Specialty crops including cranberries, grapes and tree nuts were also included to be eligible for relief payments.

The new payments are scheduled to be delivered in three phases, the first in July or August.

West Kentucky soybean farmer Jed Clark said while he appreciates these new payments, he’s worried that payments by county might lead to unintended discrepancies in how much each farmer receives.

“I think it will happen, and I think you’ll probably see some pretty drastic cases of it happening,” Clark said. “It’s hard to cover the diversity of farmers and their practices in a county and throw a blanket over that whole county.”

Clark said because these payments give farmers incentive to grow more, it could potentially increase the already large supply of crops such as soybeans, and that could make depressed crop prices even worse for farmers.

Farmers have been facing financial struggles because of low crop prices, caused in part by  retaliatory tariffs and the overproduction of crops. Most Ohio Valley farmers hope the new payments cover more of their losses than the last round of payments, but more importantly, they hope to see trade deals struck with China and other countries soon.

“Corn farmers only got a penny per bushel [last time], and that certainly didn’t account for the price loss they’ve had,” Ohio Corn and Wheat Growers Spokesperson Brad Reynolds said. “I think those safety nets are there, farmers are glad that they’re there, but they’d rather not rely on programs.”

Central Ohio dairy farmer Chuck Moellendick said for the dairy industry, other trade deals in the works with Mexico and Canada are just as important because of the large supply of milk products that await shipping.

“Mexico’s our biggest exporter,” Mollendick said. “All of those things will disappear a lot quicker without tariffs on them. It makes us a lot more competitive.”

Mexico dropped retaliatory tariffs on U.S. cheese and dairy-based whey products last week after the Trump administration dropped tariffs on Mexican steel and aluminum.

Agriculture

How A Grass Might Generate Fuel And Help Fix Damaged Mine Lands

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West Virginia University Professor Jeff Skousen among giant miscanthus on an old mine site. Photo: Brittany Patterson/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

Down bumpy back roads deep in central West Virginia, a flat, bright green pasture opens up among the rolling hills of coffee-colored trees.

Wildflowers and butterflies dot the pasture, but West Virginia University Professor Jeff Skousen is here for something else that stands above the rest of the Appalachian scenery – literally.

Thick stalks of green-yellowish grass reach up 10 feet into the air like a beanstalk out of a fairy tale, and Skousen is dwarfed by it.

“I just wish we could use these lands in a little bit more productive way,” WVU’s Skousen said. Photo: Brittany Patterson/Ohio Valley ReSource

“These plots I kind of know like my children,” he said. “But you see, you can’t hardly walk through this stuff – it’s worse than a jungle.”

Skousen and a team of graduate students have grown giant miscanthus for close to a decade here near Alton, West Virginia, a place that wasn’t always a pasture.

The site is one of numerous old surface coal mines across the Ohio Valley that was reclaimed, replacing the once barren ground with a layer of rocky topsoil.

The cumulative size of land impacted by strip mines across central Appalachia is roughly the size of the state of Delaware – roughly 1.5 million acres – according to a 2018 Duke University study.

This animation shows the expansion of surface mining’s footprint (displayed in yellow) from 1985 to 2015 for a 31,000 square kilometer sub-region of the study area in West Virginia and Kentucky and has county boundaries visible. Credit: SkyTruth

After land is reclaimed, it remains an open question of how to use these degraded lands, from faltering lavender farms to golf courses. But Skousen, also a land reclamation specialist at WVU, believes a potential answer might be in this towering grass.

While other agricultural crops struggle with the poor soil quality here from past mining, giant miscanthus thrives.

“We’ve never fertilized them. We’ve never done anything to them other than let them grow,” Skousen said. “Which demonstrates their ability to grow on marginal mine land areas at this kind of rate, every year.”

And that rate is rapid: for every two tons of grassy material a regular pasture produces, Skousen estimates miscanthus grows 10 to 12 tons. That grassy material is what is called biomass, which can be turned into value-added products like heating pellets, biofuels like ethanol and more.

A patch of miscanthus towers above other grasses on the former mine site. Photo: Brittany Patterson/Ohio Valley ReSource

“We could grow a crop like this and sell it to an ethanol producer or some other heating agent, and suddenly we have a sort of economy develop for an agricultural community,” Skousen said.

Skousen and other researchers see potential in giant miscanthus not only to create economic opportunity in Appalachia but to revitalize reclaimed strip mines and help reduce the emissions that cause climate change. Yet the commercial market for this “power plant” has yet to bloom, and some wonder whether it’s ultimately the best path for reclaimed mine land.

Root of the Matter

Ohio State University Professor Rattan Lal’s study of soil has spanned five decades and several countries.

“The health of soil, plants, animals and people is one and indivisible,” Lal said. “We need to reclaim these mine lands in one way or the other because they’re an important resource in terms of land area.”

He led a team of researchers in a recent three-year study to grow plots of miscanthus on a former strip mine near Zanesville, Ohio, and he also saw similar biomass growth. Yet the plant’s root system also intrigues Lal.

“At the same time, it sequesters carbon in the soil,” Lal said.

Carbon sequestration is the process of trapping and storing carbon emissions from the air to mitigate the effects of climate change. Lal said giant miscanthus is especially good at doing just that through sucking carbon through leaves and storing the carbon in roots.

“[Miscanthus] could become a sink for greenhouse gases … while at the same time produce biofuel, which is a substitute for fossil fuel,” Lal said. “Once it’s established, I think it should be a carbon-negative technology.”

Not only is there a potential benefit in combating climate change, but Lal said the soil quality could improve after several years, too, as microorganisms eat the extra stored carbon.

“The soil may be improved well enough that it could be used for other things such as corn or soybeans,” Lal said. “Coal mining was the source of emission gases. And now [miscanthus is] a solution. So that is to me, as an environmental researcher, even more critical than the money part.”

Efforts to make a profit from miscanthus in the Ohio Valley also date back a decade, but not all theses efforts were successful.

Aerial view of mountaintop removal in West Virginia. The “lake” in the center is a coal sludge waste impoundment. Credit: Vivian Stockman and Southwings

Unsteady Markets

Jeff Lowe believed he was at the cutting edge of a new industry when he launched his east Kentucky company Midwestern Biofuels LLC in 2009.

“What’s only being talked about in other places is being done right here,” Lowe told the Associated Press at the time, alongside former Kentucky Gov. Steve Beshear and other state officials.

His company had planned to recruit local farmers to grow hundreds of acres of miscanthus to be turned into pellets, which would then be mixed into coal-fired electricity plants in the Ohio Valley.

This machine at the defunct Midwestern Biofuels LLC created fuel pellets, out of miscanthus and other biomass, that could be burned for electricity. Credit: Midwestern Biofuels, LLC

He said several regional utility companies were interested, including Ohio-based FirstEnergy Corp.

First Energy announced in 2009 the utility planned to transition the coal-fired R.E. Burger Power Station in Shadyside, Ohio, to burn exclusively biomass to cut costs and meet state renewable energy regulations. Lowe said a contract was in the works to burn his miscanthus pellets there, but it ultimately fell through.

The company a year later changed directions and decided to retire the plant instead, citing falling electricity prices and falling demand from the 2008 recession. Lowe closed Midwestern Biofuels LLC in 2013.

“We had no sales. We go from having complete capacity from one of the plants to nothing, overnight,” Lowe said. “If you’re not required to do it, then you generally don’t do it.”

The relative lack of commercial appeal for miscanthus is a challenge that entrepreneurs and researchers alike are still trying to tackle.

One company in Ashtabula County, in northeast Ohio, Aloterra Energy, stopped making biofuels from miscanthus because it was too costly.

“You can’t store our stuff outside in pellets because it’ll take water on, and coal is often outside in the elements,” Aloterra Energy Co-founder Jon Griswold said. “I wouldn’t be surprised if we looked at everything.”

Despite those initial market challenges, Aloterra Energy is now using miscanthus to make products including recyclable food packaging and industrial absorbents.

“This is a growth industry. It just takes so long for people to figure out what you’re doing and why they need to be involved,” Griswold said.

Burning Questions

Yet some environmental activists are skeptical regarding the biofuel potential of miscanthus.

Kentuckians for the Commonwealth, a statewide progressive advocacy group, published a report in 2017 detailing how Kentucky could meet and go beyond the energy regulations put forth by the Obama-era Clean Power Plan, which was repealed and replaced last month.

The plan specifically excluded burning biomass as a viable energy option, because the organization didn’t generally consider biomass a carbon-neutral resource.

KFTC member Cassa Herron said while she isn’t completely against the idea of miscanthus as a biofuel, how these emissions are potentially regulated is key.

“The devil’s in the details in how you regulate such activity,” Herron said. “What does burning anything do to our community? And then how are regulatory agencies set up on a level to minimize those impacts?”

KFTC in its reasoning against biomass cited research from Partnership for Policy Integrity, an environmental nonprofit that specializes in biomass policy.

PFPI President Mary Booth said the added fossil fuel costs could be significant in transporting miscanthus from remote reclaimed mine sites and turning it into biofuel or biomass pellets.

“It really does eat into the net carbon emissions. It can really increase the carbon footprint of a pellet made from miscanthus,” Booth said.

Jeff Skousen is well aware that biomass energy has carbon emissions, but he believes the benefits of miscanthus outweigh the potential negatives. And past research has shown the potential for miscanthus being at least carbon neutral — meaning the grass absorbs enough carbon dioxide into the soil to make up for carbon emissions when it’s burned.

Skousen has seen the decline of the coal industry the past decade and various efforts to use the land that’s left behind. Ultimately, he wants to see the potential of that land fulfilled.

“Land is a permanent resource. And it’s always here. Even if it wasn’t reclaimed exactly the way we want it for that post-mining land use, we can change it,” Skousen said. “I just wish we could use these lands in a little bit more productive way.”

ReSource reporter Brittany Patterson contributed to this story.

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House Budget Rejects Trump’s Proposed Cuts for Rural Programs

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Broken Bow Water Treatment Facility in Broken Bow, OK, on Thursday, April 9, 2015. Photo: Lance Cheung/USDA

The budget bill also blocks the Department of Agriculture from moving two research agencies from Washington, D.C., to the Kansas City region. But the Senate has yet to take up any budget legislation.

The budget the House of Representatives passed in June reverses billions of dollars in cuts to rural programs proposed by the Trump administration and halts the relocation to Kansas City of two Washington-based USDA research agencies.

But the Senate has yet to consider any of the 10 budget bills passed by the House this year. The upper chamber will be in session only six weeks between now and the end of the fiscal year on September 30, when the current spending plan expires.

The House budget calls for $155.3 billion in funding for the U. S. Department of Agriculture (USDA), $3.2 billion more than the current USDA budget.

H.R. 3055 passed 227-194 in a partisan vote, with all Democrats but one (Representative Ben McAdams, D-Utah) voting in favor and all Republican representatives voting against the budget.

The chairman of the House agriculture appropriations subcommittee said the committee deals with issues that “touch the lives of every citizen on a daily basis.”

“This is why we rejected the administration’s draconian cuts to programs that assist our rural communities and vulnerable populations, and allocated more than $5.1 billion above the budget request, totaling $24.310 billion,” said Representative Sanford Bishop Jr. (D-Georgia).

The House budget includes many priorities sought by nutrition, farm and rural development advocates that were included in the 2018 Farm Bill.

“The House bill was praiseworthy for its inclusion of increases for sustainable agriculture research, food safety, local and regional food systems, training and outreach for beginning and socially disadvantaged, and other priority food and farm programs,” the National Sustainable Agriculture Coalition (NSAC) stated.

The coalition’s funding priorities included an additional $5 million for the Sustainable Agriculture Research and Education program, as well as $10 million for the Farm and Ranch Stress Assistance Network above the levels included in the bill passed through the full Appropriations Committee.

H.R. 3055 includes $3.9 billion for rural development programs. Funding includes provisions for:

  • Rural infrastructure – The legislation includes $1.45 billion for rural water and waste program loans, as well as more than $655 million in water and waste grants. The House budget includes an additional $6.9 billion in loan authority for rural electric and telephone infrastructure loans.
  • Rural broadband – The House budget expands rural broadband funding by $680 million.
  • Rural housing–The bill includes $24 billion in loan authority for the Single Family Housing Guaranteed Loan Program and $1 billion in direct single family housing loans. Additionally, the House budget includes nearly $1.4 billion in rental assistance for low-income rural residents in need of affordable housing.

The House appropriations bill includes numerous specific provisions that oppose Trump administration changes to current USDA policies and procedures. Most notably, the House bill includes language that blocks USDA’s proposal to relocate the Economic Research Service (ERS) and the National Institute for Food and Agriculture (NIFA) to Kansas City away from the Washington, D. C., region. The House funding legislation also prevents USDA from finalizing self-inspection of swine slaughter by pork processors and preventing USDA from terminating Forest Service Job Corps Civilian Conservation Center.

The bill rejects the Trump administration’s proposed cuts to federal nutrition programs such as the Supplemental Nutrition Assistance Program.

The House has currently passed 10 out of 12 budget bills, while the Senate has yet to pass any budget bills. The next step in the budget process is for the Senate to pass the House budget proposal or draft its own version of the budget plan.

The Senate is expected to make significant changes to the House budget, which would require a negotiation process between House and Senate appropriations leaders.

The budget process must be complete by September 30. If not, Congress can choose to extend the current budget or another government shutdown will be triggered.

This article was originally published by the Daily Yonder.

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Report: Moving Agriculture Research Centers Out of Washington Will Cost More

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Agriculture Secretary Sonny Perdue testifies during a House Agriculture Committee hearing on the rural economy, Wednesday, Feb. 27, 2019, on Capitol Hill in Washington. Photo: Jacquelyn Martin/AP Photo

Ag Secretary Sonny Perdue says moving the Economic Research Service and National Institute of Food and Agriculture out of Washington, D.C., will save taxpayers millions of dollars. A report from an independent association of economists says the move will actually wind up costing more than staying put.

Moving two USDA research institutions from Washington, D.C., to the Kansas City area won’t save taxpayers money, as officials have promised, but will wind up costing more, according to a report from an association of government and academic economists.

The analysis, conducted by the Agricultural and Applied Economics Association (AAEA), states that Secretary of Agriculture Sonny Perdue’s decision to move hundreds of Economic Research Service (ERS) and National Institute of Food and Agriculture (NIFA) employees to Kansas City this fall would actually cost taxpayers between $37-$128 million.

Secretary Perdue released the final relocation details last week, projecting a $300 million savings to taxpayers over 15 years.

The AAEA economists, including two former ERS administrators, criticized USDA for overstating the costs of keeping ERS and NIFA in the capital region while failing to account for lost value of employees who choose to retire or resign rather than move. Analysts also criticized USDA for not making the full cost-benefit-analysis available to the public.

The debate over Secretary Perdue’s ERS and NIFA relocation proposal has been growing in intensity since it was announced last fall. Many members of Congress, along with science and research advocates, have criticized the move. Some Congressional leaders, particularly those representing Kansas and Missouri, have supported Secretary Perdue.

Both agencies’ employees voted overwhelmingly to unionize and join the American Federation of Government Employees (AFGE) in the last two months.

One of the criticisms of the AAEA is that USDA didn’t consider other cost-saving measures that could have kept the agencies in the capital region.

“The USDA calculated real estate savings by comparing the cost of staying in current commercial property in the National Capital Area with the cost of moving to commercial property in Kansas City,” the report says. “The analysis ignored the option of moving to cheaper real estate in the Washington, DC, area.”

USDA owns three buildings in the capital region already, AAEA said in the analysis, and the agency neglected to evaluate the option of eliminating rental payments altogether by moving employees into existing available space.

AAEA criticism of USDA’s projections also included lost value of research by employees. AAEA estimates that between 50-to-70% of ERS and NIFA employees would choose to retire or quit rather than move.

“Because the number of departing employees is so large (250–400) and because most are highly skilled Ph.D. holders, we further assume that USDA will be able to rehire only one quarter of them per year and that the replacement employees will take approximately four years to reach the level of expertise and research productivity of the researchers they replace. Employees who do move suffer a 25 percent reduction in productivity during their first year as they buy and sell homes, find new schools and places of worship, and adjust to new settings,” AAEA wrote.

AAEA’s “bottom line” estimate is that U. S. taxpayers stand to lose from the ERS and NIFA relocation.

“Using the conservative baseline that the agencies stay in market-priced leased space in the National Capital Region and that 50 percent of current ERS and NIFA employees opt to relocate, the overall net loss to taxpayers comes to $83 million ($37 million in constant 2019 dollars). The less conservative assumptions that the agencies are housed in USDA-owned space and that only 25 percent of employees choose to relocate results in a $182 million net loss to taxpayers ($128 million in constant 2019 dollars),” the report concluded.

This article was originally published by the Daily Yonder.

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