Alan Bjerga, NMPF: Hello and welcome to the Dairy Defined podcast. The phrase October surprise is a Washington cliche. Maybe the surprise this October is that we don’t know if we’ll have one. The infrastructure and reconciliation bills at the heart of President Biden’s domestic agenda are still in limbo and with it policies that would advance dairy farmers. But there is reason for hope and reason for excitement if you’ve been following Dairy’s Net Zero Initiative at all. Climate-smart agriculture may be on the way. Showing us how it all fits together is NMPF Senior Vice President for Government Relations, Paul Bleiberg. Good having you here, Paul.
Paul Bleiberg, NMPF: Thanks for having me on.
Alan Bjerga, NMPF: So tell us about the budget reconciliation package being developed in Congress and how it has potential to advance some key dairy priorities supporting the Net Zero Initiative.
Paul Bleiberg, NMPF: Sure. So the budget reconciliation package being developed right now is a large, or likely large piece of legislation that’s going to cover quite a few different policy areas ranging from healthcare to childcare, a number of different tax issues, and of course, as you touched on, agriculture and climate change policy as well. The excitement here for us in the agriculture space, in particular for dairy, is the possibility of new funding, increased funding for conservation programs over time, really with an emphasis on those practices, those climate-smart ag practices that can generate and yield meaningful environmental benefits, whether that be sequestering carbon in soil, reducing greenhouse gas emissions, better emphasis on the newer management, feed management, things like that. So we see a tremendous amount of potential in that element of what’s being entertained for this package.
Right now, the House and Senate are still working out the large top-line question of how large the bill is going to be. Obviously, folks have seen the number 3.5 trillion floated in the press for some time. It seems pretty likely that the bill will be less than that overall amount. So right now, as work is done both in Congress and at the White House to figure out, okay, what’s going to be the overall size of the package, different members of Congress and, of course, different constituencies are fighting to make sure that their kind of areas are prioritized within that likely smaller number.
So that’s kind of the sausage-making process that’s playing out right now. And I think there’s still a fairly high likelihood that a package will be done before the end of the year.
Alan Bjerga, NMPF: And of course, if you’ve been following the Dairy Net Zero Initiative, which is to become carbon neutral or better by 2050, and you hear the phrase climate-smart ag, you have to think these two things fit together somehow. How do they?
Paul Bleiberg, NMPF: Well, they fit together because the push for climate- smart ag funding is really a push to help reposition, in some ways, conservation programs to better enable dairy farmers to do more of what they’re trying to do. We’ve long supported farm bill conservation programs. We’ve always supported robust funding for them. But over the course of many different administrations in both political parties, they’ve not really emphasized some of the stewardship areas that we think could be really, really beneficial to helping dairy farmers reduce their footprint.
Couple of great examples here. One is feed management. Enteric emissions account for roughly a third of a dairy farm’s greenhouse gas footprint, but USDA hasn’t done a lot of work in recent years reviewing and updating its Feed Management Practice Standard, taking a look at what can be done as far as using innovative feed additives to reduce enteric emissions. So that’s a major priority area for us. Another area is nutrient management. This is a resource concern for us in a lot of different parts of the country, and we think a lot could be done within conservation programs to increase the options for producers to implement advanced nutrient management plans, looking at nutrient recovery, separating out nitrogen and phosphorus from manure, things like that. And of course, improving water quality in that context.
So the push for climate-smart ag funding to not only increase funding for conservation programs but also to emphasize some of these areas that are really key for dairy are critical priorities for us because it can help realize the Net Zero Initiative that you referred to.
Alan Bjerga, NMPF: So what has NMPF been doing to advance this effort?
Paul Bleiberg, NMPF: You know, we’ve been working very closely with Senate Ag Committee Chairwoman Debbie Stabenow from Michigan on this effort for several months now. She’s really been leading the effort in Congress to increase this funding in this package, which will not only provide the benefits I just described from a policy standpoint but it frankly will benefit all of agriculture going forward, as you have a larger conservation baseline than the farm bill.
We’ve been trying to build support for this within the ag community. We did a letter two months ago with a dozen different ag and conservation organizations. We’ve been in touch with different members of Congress on this, going back to what I said in an earlier question, as the conversations go on trying to shape the now smaller than $3.5 trillion package, making sure that this area, this funding for climate-smart ag really is prioritized in that process.
Alan Bjerga, NMPF: Following on this, we finally had some movement this year on a related investment tax credit proposal to cover some of the upfront costs of technologies. That’s been a big NMPF push, and it can play a larger role in sustainability efforts. But is it likely to make it into the package?
Paul Bleiberg, NMPF: I feel optimistic right now. To your point, we’ve been working on this proposal for quite a while. I’ve been working on this since I joined National Milk almost six years ago, so I’m very eager to see this one through to completion. It’s a bill called the Ag Environmental Stewardship Act that you’re referring to. And it would create a 30% investment tax credit to cover the upfront costs of nutrient separation technologies as well as methane digesters for a variety of different uses. I’m optimistic right now that we’ll be able to get this enacted as part of the larger package we’re talking about here. We’ve already had very good progress in the Senate Finance Committee, as they included it in a energy tax bill they moved earlier this year. And we continue to hope that that larger bill will be the basis for what’s done on energy tax in this current package. And the House Ways and Means Committee has included some of the proposal in a package they moved last month.
So we’re continuing to work with our sponsors in both the House and the Senate on this effort. Congressman Ron Kind is the lead bill sponsor from Wisconsin. Senator Sherrod Brown from Ohio are the two Democratic sponsors. Now, I’d note this is a bipartisan bill. Congressman Tom Reed, Republican from New York, and Senator John Thune, from South Dakota, are both co-authors of this investment tax credit bill, and so it does have that broad support. But it may be able to be included in this package here. And obviously, given the urgency of some of these issues for us, we need to grab any opportunity we can.
Alan Bjerga, NMPF: You were talking earlier about enteric emissions and some of the efforts on feed additives. Outside of the budget reconciliation measure, what sort of headway have we had on this? And is this an issue that could be resolved also this year?
Paul Bleiberg, NMPF: That’s a great question. And it gets at feed additives from a different lens than I was speaking about earlier. You know, in the USDA space, we’re trying to put greater emphasis on the Feed Management Practice Standard for the reasons I discussed, but the Food and Drug Administration, which actually plays the role of approving different additives for bringing them to the market, has long approved many of these innovative additives as drugs rather than foods, even though they move through the digestive tract. So we’ve been making the argument to FDA for some time now that they should be approved and treated as food.
So we’ve had some success on this already this year in both the House and the Senate. In their annual appropriations bills for the upcoming fiscal year, for the one that just began really, 2022, we’ve got language in both accompanying reports looking at how we can get FDA to really classify these additives the way we think they should be classified. And frankly, in both bills, we were able to get funding provided on a bipartisan basis to help them get the job done. It’s always one thing to get good policy language in a bill, but if you don’t have the money to go along with it to make it happen, you may not be able to get very far.
So given that we’ve made some headway, both on policy and on funding in both the House Ag Appropriations Bill and the Senate Ag Appropriations Bill, I’m optimistic that by the end of the year or whatever point in the coming months that Congress wraps up the fiscal year 22 appropriations process, we will make some really good headway and get this into law.
Alan Bjerga, NMPF: The Growing Climate Solutions Act, that would seem to play into this all as well. The Senate passed that legislation back in June. The vote was 92 to eight. That’s unheard of in Washington today. What’s the latest on this bill?
Paul Bleiberg, NMPF: You’re right, it is unheard of. Very little legislation moves with that kind of a vote, especially not legislation on a topic like climate change that Congress hasn’t frankly done a lot of legislating on. So hats off to Senate Ag Chairwoman Debbie Stabenow and Senator Mike Braun, Republican from Indiana, for working together to build the support that was needed to get this bill through the Senate.
The House Ag Committee is now looking at the legislation. They held a hearing last month on carbon markets in general in agriculture to kind of give members the opportunity to learn more about how these markets work and what some of the barriers to entry are. And of course, that’s one of the issues that the Growing Climate Solutions Act is meant to help solve, right? Some of the barriers to entry to environmental markets.
So right now, the House Ag Committee is looking at the bill. I think we’re hopeful that there’s a path forward to getting that bill done this year following the very strong vote in the Senate.
Alan Bjerga, NMPF: You’ve talked today about a number of different sustainability initiatives that are moving on separate tracks. Heading into the next farm bill, due in 2023, how do all of these initiatives end up shaping that piece of legislation, which agriculture is always following so closely?
Paul Bleiberg, NMPF: That’s a really good question. And it’s interesting because as I think about all the work we’re doing this year, I’m saying to myself, you know we’re making all of this headway as we’re talking about here, as we’ve written about, and we’re not even in the farm bill yet. We’re in a pre-farm bill situation right now. But I think to sum up, it really comes back to the climate- smart ag funding.
And the reason for that is the funding that’s being proposed for the reconciliation package is over a 10- year period of time. It’s not just for this year and next year. And what that means is in two years, in 2023 when Congress takes up the farm bill again, the baseline for conservation programs will be larger than it is today. And this is important. And it hearkens back to the 2018 farm bill. Folks who listen to this podcast will recall that prior to work on the farm bill, we were able to do the bipartisan budget act a few months earlier to increase the baseline for dairy policy, which made it much, much easier for us to complete the work that we did in the farm bill.
I see a similar scenario here. Getting this funding in in the reconciliation package now is really key to enabling us to build on that in the farm bill with the policy changes that we want to see, I talked about this a bit earlier, as far as emphasis in conservation programs. And some of that may be able to be done now, focusing on enteric emissions and some things like that. But really, the farm bill is a five-year piece of legislation that gives Congress its chance to put a longer-term stamp on things. I think what’s going on right now really sets the stage nicely for that.
Alan Bjerga, NMPF: And it’s always interesting to talk to you, Paul, because we always hear of all of these efforts that are so important for dairy and they’re beyond the headlines. What else is going on on Capitol Hill right now regarding dairy that our listeners should know about?
Paul Bleiberg, NMPF: You know, this is really the main issue for right now. When I say this, I really mean the broader discussions around budget reconciliation. And I think what we’ve talked about here today is the hot opportunity for us. I’ll give one sneak preview though. Once these bills are done, once they’ve just finished the process on reconciliation and the companion infrastructure bill, they’ll turn to the government funding appropriations process. And we already talked a little bit about what we’re doing there on feed additives. But we are also going to be looking in that process to build on some of the work that we’ve done with the USDA this year on pandemic assistance. Obviously, a number of different programs have been rolled out, including the Pandemic Market Volatility Assistance Program. We’re already talking with members of Congress in both parties about how we can enhance that program in appropriations legislation, not only to fill the funding gap that needs there but also to deal with the issue of providing equitable relief to farmers of all sizes.
Some of the challenges that hit farmers during the pandemic, that we’re still reeling from now, really did hit farmers on all of their milk. And that’s a key priority for us representing dairy farmers in all regions, of all sizes, making sure that we can account for that. So that’s an area we’re going to be working on more over the coming weeks.
Alan Bjerga, NMPF: We have been speaking with NMPF Senior Vice President for Government Relations, Paul Bleiberg. Paul, thank you for your time today.
Paul Bleiberg, NMPF: Thank you for having me on.
Alan Bjerga, NMPF: And that’s it for today’s podcast. For more on NMPF’s policy priorities, visit our website at nmpf.org. And for more of this podcast, Dairy Defined is on Apple Podcasts, Spotify, SoundCloud, and Google Play under the podcast name Dairy Defined. Thank you for joining us.