US agricultural policy has a considerable impact on global markets for agricultural commodities given the US’ position as one of the top producers and consumers of food and agricultural products. US agricultural policy shapes market dynamics for a host of commodities. As the world’s largest agricultural exporter, US agricultural trade policy priorities, which include an emphasis on reducing tariff and non-tariff trade barriers, have considerable influence in negotiations at the World Trade Organization (WTO) and have shaped many major multilateral trade agreements.Key facts about US agricultural policy
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Key themes affecting US agricultural policy
US agriculture is faced with several key issues ahead, including shifts in trade policy which will translate back through to potential changes in US agricultural policy. But, with many other budget areas, the sizable US budget deficit – forecast at $1 trillion per year – at some point will become a constraint for US lawmakers as they seek to write farm policy in the future. While the true crunch of that budget pressure has not been felt, the budget baseline – the pool of money to write new US farm policy – has not expanded by a great deal. More focus will come on subsidies paid to farmers, especially for things like crop insurance where the government foots 60% of the farmers’ insurance premiums. Trade policy has pressured prices and that has put constraints on US farm income and forced farmers to greatly draw on working capital to maintain their operations. That drain will become a negative for the agriculture sector in the near future. And that will force an even harder look at how US farm policy is constructed. The US economic situation will also factor into the equation as more than 75% of the US Department for Agriculture’s budget is for food and nutrition programs in what is commonly called a “farm bill.” Should a US economic downturn come, that would increase the usage of federal government programs and create another demand on funding for the US agriculture and food policy process.
| US Agricultural Policies currently under debate | |
| US 2021 biofuel/2022 biodiesel volumes. | Expected laterin 2020. |
| USDA’s hemp production rule. | Public comment period closed, agency weighing feedback. |
| USDA/FDA efforts to lead onregulationofgeneedited animals. | Debate throughout 2020. |
| Implementation of the Phase One US-China trade agreement. | Continues throughout 2020. |
| EPA replacement WOTUS rule. | Takes effect in March2020, legal challenges expected. |
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