How the America COMPETES Act of 2022 Could Impact U.S. Farmers
The America COMPETES Act of 2022 includes measures to increase American competition in the global marketplace—and agriculture plays a role.
While the America COMPETES Act is a multifaceted bill that focuses on the U.S. economy as a whole, it includes provisions that specifically target American agriculture. The bill was passed by the House in February 2022. The COMPETES Act places particular focus on China and aims to increase American competition with:
- Semiconductor funding in response to the computer chip shortage;
- Support for science and technology research; and
- Policy changes to alleviate shipping bottlenecks.
Continue reading to learn more about the America COMPETES Act of 2022 and its impacts on U.S. agricultural trade.
How Would the America COMPETES Act Impact American Farmers?
If passed, the America COMPETES Act would affect U.S. agricultural exports, foreign ownership of American farmland, and farmers who are negatively impacted by imports.
1. Increasing Ag Exports with the Ocean Shipping Reform Act
While the Senate released a separate Ocean Shipping Reform Act (OSRA), the House included this bill within the America COMPETES Act. The Ocean Shipping Reform Act aims to alleviate shipping bottlenecks, increase American ag exports, and reduce shipping fees. According to Agri-Pulse, many ships that go to China to import goods are not arriving with U.S. agricultural exports in order to expedite the time China’s exports arrive to the U.S. As a result, the U.S. ag industry has incurred losses. For example, according to president and CEO of the National Milk Producers Federation Jim Mulhern, the dairy industry lost more than $1.3B in exports during the first three quarters of 2021 due to logistical bottlenecks in the supply chain.
To address this issue, the bill prohibits unreasonable refusal of U.S. agricultural exports by other countries. Specifically, the bill prohibits ocean carriers from refusing to load containers of American dairy, pork, beef, poultry, tree nuts, wine, hay, rice, and produce.
The bill also gives authority to the Federal Maritime Commission to address shipping bottlenecks and reduce shipping costs by regulating price-gouging by carriers.
Jaime Casteneda, Executive Vice-President of Policy Development and Strategy for the National Milk Producers Federation, is in favor of OSRA, feeling it would help alleviate shipping bottlenecks.
“It will put some additional teeth into the Federal Maritime Commission as well as additional resources. So, once the president signs we hope there’s going to be immediate changes.”
American farmers and ranchers have a significant impact on global trade and food production, making legislation that supports their efforts critical.
2. Mandatory Reporting of Foreign Land Ownership
As foreign land ownership continues to pose a threat to American farmers and ranchers, the bill requires the USDA to maintain a public database of foreign-owned agricultural land. According to the USDA, an estimated three percent—35.2 million acres—of U.S. agricultural land is foreign-owned as of 2019.
While the USDA currently relies on foreign landowners to report their owned acreage to the USDA, this bill would allow the USDA to fine these landowners up to the full value of the land for failing to report their acres or filing inaccurate reports.
“Millions of acres of American farmland have been purchased by foreign investors, and at the same time food prices have increased and small and local farmers and ranchers have struggled. This amendment would strengthen current law and give the American public access to good data about future increases in foreign-owned farmland, protecting our food, our farms, and our future.”
This bill would help increase transparency in foreign land ownership and monitor changes to ensure our domestic food system stays secure.
3. Renewal of Trade Legislation
The bill would renew both the Trade Adjustment Assistance provision and the Generalized System of Preferences legislation. It would also increase funding for the Trade Adjustment Assistance legislation. The Trade Adjustment Assistance program provides farmers with funding who are adversely affected by increased imports. The Generalized System of Preferences legislation reduces some tariffs for developing nations in the event that they adhere to new environmental and labor requirements.
“It’s long past time for Congress to modernize these programs and ensure they are inclusive, reflect our nation’s values, and align with our current trade policies.”
Overall, the renewal of these two programs would positively impact both farm finances and U.S. agricultural trade with developing nations.
Next Steps for the America COMPETES Act
After passing in the House in February 2022, the Senate passed a revised version of the bill in March 2022. Both chambers will need to agree to a finalized version through a conference committee. If the finalized package is passed in both the House and the Senate, the bill will be ready to go to the White House to be signed into law.
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