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Outlook for Agriculture and Canola Under the Biden Administration

January 27, 2021

By Tom Hance

President Biden comes into office with an immediate focus on managing the COVID-19 pandemic and enacting response and relief measures to mitigate its impacts. Some aspects can be achieved through executive orders, while others – such as providing additional assistance to individuals and hard-hit entities – will require legislative action by Congress, which is an uncertain proposition. Aside from managing the pandemic, Biden’s focus will be on restoring stability (both domestically and with trade and foreign affairs), enacting a major infrastructure initiative (which dovetails into coronavirus response and recovery), and addressing climate change on numerous fronts. What does this mean for agriculture and canola?

For agriculture, the biggest question and impact will likely center on Biden’s actions on trade issues. He has indicated that existing tariffs will remain in place for the near-term as he assesses the dynamics and best path forward. China has been purchasing significant volumes of U.S. agricultural products recently, but it is uncertain if or how long that will continue, especially if Biden maintains a hardline stance on its technology transfer practices as well as labor and human rights and military interests in the Pacific region. While Biden would like to restore trade and relationships with the European Union, issues such as steel and aluminum tariffs, ongoing stand-off over Boeing and Airbus, EU’s digital tax proposals on American companies and Biden’s planned “buy American” initiative are significant obstacles to overcome. Without a compromise and agreements on these numerous fronts, retaliatory tariffs and market barriers will remain on many U.S. agricultural products. Our trade with neighboring Canada and Mexico is also not immune to problems as various conflicts threaten implementation of the new United States-Mexico-Canada Agreement. It seems likely that uncertainty and volatility will remain on the agricultural trade front, at least in the near-term.

The infrastructure initiative on the Biden agenda could have significant beneficial impacts for agriculture and rural communities. Improving roads, bridges, rail, waterways and ports would improve efficiency and competitiveness of U.S. agricultural exports. A broad infrastructure initiative could also address rural broadband and connectivity, healthcare capacity and overall economic development.

Climate change initiatives raise both questions and opportunities for agriculture. The potential for widespread monetization of carbon markets could provide new revenue for farmers that employ practices to sequester carbon or reduce emissions. A focus on reducing emissions could also provide significant demand for biodiesel and renewable diesel, which are markets for canola oil.

To lead the U.S. Department of Agriculture (USDA), Biden has nominated Tom Vilsack, who served as Secretary of Agriculture for all eight years of the Obama Administration. Like the overall Biden Administration, the USDA will focus on stabilizing agricultural markets and internal operations following a period of trade market disruptions, unprecedented amounts of direct assistance to farmers through the Market Facilitation Program and Coronavirus Food Assistance Program , and reorganization and relocation of some USDA functions. The agency will place a heavy focus on diversity among farmers (minority and beginning), farms (small, organic and urban ), and crops (fruits, vegetables and plant proteins). The USDA will also be actively engaged in climate change issues and developing carbon markets for farmers. Efforts to promote crop diversity, sustainability, emission reduction and emerging markets like plant-based proteins could present great opportunities for the canola industry.

The U.S. Canola Association will renew relationships with Secretary Vilsack and his team at the USDA and convey the importance of canola and the role our association can play in support of their priorities.

Tom Hance is a policy expert with Gordley Associates in Washington, D.C.

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