C magazine

CHS government affairs team develops ag and energy policy agenda

U.S. capitol building

The CHS government affairs team is developing a 2023 state and federal agriculture and energy policy agenda that will support the future of how cooperatives do business.

Dec 15, 2022

In collaboration with CHS business leaders, the company’s government affairs team is developing a comprehensive 2023 state and federal agriculture and energy policy agenda that helps support the future of how cooperatives do business.

The team is also working to engage more owners as CHS addresses the turnover of legislators at the state and federal level following midterm elections, solidify cooperative relationships and expand interaction with lawmakers beyond the CHS trade territory, since their actions affect CHS stakeholders.

A long list of variables — midterm elections, the economy, labor availability, climate initiatives and more — requires course corrections for cooperative business continuity. Members of the experienced CHS government affairs team use its individual and collective expertise to identify efficient and effective routes for change. Options include policy solutions, rulemaking comments, partnering with facility leaders to host elected officials and contributing to federal candidates through the CHSPAC (CHS political action committee).

One example of those creative solutions was government affairs team assistance on license renewals for seasonal commercial driver’s license (CDL) applicants when state offices were closed during the pandemic, as the team partnered with the Agricultural Retailers Association to address labor availability. Through a provision in the Infrastructure Investment and Jobs Act, the Federal Motor Carrier Safety Administration now allows annual renewals on a calendar year basis and has extended the length of the license from 180 days to 270 days.

Redistricting

Every 10 years, after completion of the U.S. census, states propose new districts for state and federal legislators, incorporating shifts in population density. As a result, every decade there are waves of new members in state legislatures and Congress.

Before the start of the congressional and state legislative sessions, and throughout the year, the government affairs team meets with newly elected officials to help them understand the cooperative system and core policy issues that impact CHS and its owners.

Inflation Reduction Act

Passed in August 2022, the Inflation Reduction Act (IRA) extended energy incentive programs and increased funding for agriculture while reinstating fees. The federal funds put wind in the sails of existing energy businesses that support agriculture and rural communities:

  • Biodiesel, renewable diesel and biodiesel mixture credits, as well as the alternative fuel tax credit, were extended through 2024.
  • A clean fuel production tax credit was established and starts in 2025. Frequently requested biofuel infrastructure funds were passed, which included a boost of $500 million.
  • Expansion of the 45Q tax credit increases momentum for carbon capture and sequestration.

Despite those positive developments, reinstatement of the Superfund tax on crude oil received at U.S. refineries will increase their cost of doing business.

2023 Farm Bill

While it pops up less frequently than El Niño, the Farm Bill is similar to El Niño with its unpredictability and significant influence on the day-to-day operations of agriculture.
The IRA included $19.9 billion in additional funds for conservation programs that will also increase the budget baseline within the Conservation title of the next farm bill. CHS expects the next farm bill will need to be budget-neutral, meaning any additional funding to programs in the bill will have to be paid for by decreasing funding elsewhere. 

An increase in the budget baseline for conservation programs now may help save other programs from receiving less funding in the next farm bill. The 2018 Farm Bill invested about $60 billion in conservation funding over the entire five-year span of the bill, so this would represent a significant increase.

Low-carbon fuel standard

Like the flow of the California Current — a perennial cold-water current moving along the U.S. Pacific Coast — policy proposals to reduce fuel emissions in California and Oregon are being pushed to adjacent states, including Washington and New Mexico. A low-carbon fuel standard (LCFS) uses a standard model to develop a carbon intensity (CI) score for a particular fuel. A lower CI score means that fuel produces less greenhouse gas emissions than other fuels.

In 2023, the CHS government affairs team will use the following points as a framework for future low carbon or clean fuels policy proposals:

  • CHS supports incentive- or market-based policy versus mandates.
  • CHS supports economic and scientific analysis of proposed LCFS legislation provisions including, but not limited to, compliance timeline, impact to rural communities, off-ramp mechanisms and updated fuel pathway modeling for current and future commodities (canola, corn, soybeans, renewable diesel).
  • CHS supports voluntary grower participation in the decarbonization value stream, such as practices that reduce carbon intensity through fuel and crop applications.

CHS recently formed an executive- and government affairs-led liquid fuels group across energy, grain, processing and government affairs to inform policymakers about the importance of liquid fuels in an effort to influence policy that is migrating to the Midwest from West Coast states.

Infrastructure

The type and construction of a vessel to ship grain depends on the body of water in which it operates. In the same way, there are vast differences in the age and type of infrastructure CHS and its owners depend on to move commodities in local, regional and global markets.

An unprecedented wave of federal funding was passed during and after the pandemic through the IRA and the Infrastructure Investment and Jobs Act, also called the Bipartisan Infrastructure Bill. Federal and state agencies are requesting applications for eligible infrastructure projects. The CHS government affairs team is assisting with letters of support for eligible projects and facilitating solutions to help move projects forward despite programmatic barriers, funding needs and labor availability.

One example of that work is efforts by CHS to support the company’s investment at the export terminal in Superior, Wis. CHS leaders are participating in planning modernization of the Blatnik Bridge through careful consideration of the new bridge alignment, the existing bridge footprint and features that will enable CHS business continuity.

Owner engagement

An effective government affairs program must engage internal and external stakeholders. A primary objective of the government affairs grassroots advocacy program is to connect people with policy, providing more opportunities for CHS leaders and owners to engage with federal and state policymakers, regulators and policy influencers. The voices of CHS owners carry immeasurable impact, making CHS one of the leading advocates for the cooperative system.

CHSPAC, the political action committee of CHS, has been an effective pathway for assisting with these efforts and will continue to become more visible and viable with future growth and individual engagement. As an owner- and employee-supported committee, CHSPAC provides clear and transparent opportunities to the government affairs team, enhancing grassroots initiatives and communications with legislators. By fostering a collaborative path for policy development, the work and impact of the government affairs team can provide even more value to CHS owners.

Learn more about the work of the CHS government affairs team.


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