Washington Report for 5-12-14

By Steve Kopperud

Somber news for Ag in National Climate Assessment

The White House has released its third National Climate Assessment as part of President Obama’s climate action plan, and the news for agriculture isn’t good. U.S. and North American climate change in the form of drought, storms, cold and other weather anomalies is already affecting every region of the United States, the report says.

“On the whole, the report finds summers are longer and hotter, with longer periods of extended heat. Wildfires start earlier in the spring and continue later into the fall. Rains come down in heavier downpours. People are experiencing changes in the length and severity of season allergies. And climate disruptions to water resources and agriculture have been increasing,” according to a White House statement accompanying the report.

The report was produced by over 300 experts and overseen by the National Climate Assessment & Advisory Committee, then reviewed by the National Academies of Science. Over 4,000 public comments were reviewed in preparing the report, the White House said.

Ranking member Rep. Henry Waxman (D-Calif.) and former committee chair Rep. John Dingell (D-Mich.) lead a group of 20 of their colleagues in immediately sending a letter to House Energy & Commerce Committee Chair Fred Upton (R-Mich.) urging him to hold hearings on the assessment so that differing views on policies and programs necessary to respond to climate change can be vetted. 

Several members of both parties on Capitol Hill are urging the president to go slow or scale back what they expect to be regulatory actions to come as a result of the assessment. Coal and its use as a fuel continues to be a major political hurdle, and an overall fear the White House will try and pick energy “winners and losers” also signals a major battle. Environmental Protection Agency action to limit coal-fired power plants and recent action on methane reduction/recapture also have lawmakers nervous.

Also controversial is an announced administration plan to take into account “climate change influences” on environmental reviews required by law. A group of Republican senators recently told the White House to back off a stalled proposal to change the manner in which National Environmental Policy Act reviews are evaluated. 

Ag and forestry, the report says, will continue to be hit with adverse climate changes and extreme weather events, but this sector can also contribute to solutions that will moderate climate impact, including renewable fuels, carbon sequestration and land management and cropping practices that reduce greenhouse gases.

There were six key messages for agriculture in the report:

• The climate changes that have increased over the last 40 years will continue for at least the next 25 years, with major impacts on crops and livestock expected “mid-century;”
• Several regions will see productivity in livestock and crop production decline based on “increased stress from weeds, diseases, insect pests and other “climate-induced stresses.”
• Innovative conservation methods are needed to mitigate the impact of soil loss and degradation due to increasing precipitation for both rainfed and irrigated agriculture;
• “Critical thresholds” are already being exceeded when it comes to crop and livestock production and will be exacerbated by continuing weather extremes;
• While ag has been able over recent years to adapt to climate swings, increased innovation will be critical to ensure the rate of adaptation and “the associated socioeconomic system” can keep up with climate change over the next 25 years, and
• Climate change impacts on agriculture will affect food security both here and overseas, because crop yields will change and food prices and the impacts on food processing, storage, transportation and retailing will increase.

A listing of specific state reports is found at http://www.whitehouse.gov/blog/2014/05/06/what-climate-change-means-regions-across-america. The 25-page chapter on agriculture and land use can be found here: http://nca2014.globalchange.gov/report/sectors/agriculture.

Vilsack gives farm bill progress report at Senate ag hearing

Two hours of Senate Agriculture Committee times last week was used for a hearing at which Secretary of Agriculture Tom Vilsack gave a progress report on farm bill implementation. The questions to the secretary were wide ranging during the mostly friendly exchange.

A complete copy of Vilsack’s statement, including a title-by-title, section-by-section progress report on implementation of the 2014 Farm Bill can be found by going to www.usda.gov and following the news media link on the home page.

Vilsack took justifiable pride in reporting the success of his reboot of the now livestock disaster assistance programs. 

“I’m proud to say that on April 15, 2014, USDA began accepting applications for disaster assistance programs restored in the 2014 Farm Bill, including the Livestock Forage Disaster Program, the Livestock Indemnity Program, the Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program, and the Tree Assistance Program,” Vilsack said. “While it took a year to implement disaster relief programs after the last farm bill was passed in 2008, disaster programs were up and running in just 60 days this time around.”

Vilsack said the U.S. Department of Agriculture received about 33,000 applications for these programs in the first two weeks of sign-up, and almost $20 million has gone to producers.

Perhaps the only spirited exchange came when Sen. Charles Grassley (R-Iowa), the Senate’s avenging angel on payment limitations to farmers, as well as the chief proponent for tightening the definition of “actively engaged” when it comes to owners who may qualify for federal program payments. While House and Senate conferees reached agreement on new payment limitations, they punted the redefinition of “actively engaged” to USDA.

Vilsack said there are those who “have been very creative with the law” when Grassley asked him if he agreed some farm owners had used the old definition to maximize USDA payments.  Vilsack said writing the definition is not easy given his authority is narrowed to exclude family farms, but Grassley reiterated the farm bill provision must be strictly administered and that previous farm bills have given USDA ample authority to write the new definition. Committee Chair Debbie Stabenow (D-Mich.) associated herself with Grassley’s remarks.

Also announced at the hearing was USDA’s move to award grants to land-grant universities to develop web-based sites and tools to help producers make farm program decisions. USDA must select a lead institution to oversee the websites’ development.

Six national farm groups have written to Vilsack telling him the selection process must take into consideration institutions that understand the needs of all crop producers, not just those who produce major crops. “Given the complexity of choices in the commodity and crop insurance titles of the farm bill, these tools will be critical for producers in our organizations to make well-informed decisions, (and) it is important that academic institutions representing different regional views on farm programs participate in this work,” the groups wrote.

However, the groups went on to say the lead institution must have both the confidence of producers and strong familiarity with the cropping practices and farm economics of the Midwest and north Great Plains because these regions have the most acres in production. The lead school must also possess “substantial experience” with revenue-based risk management tools and represent a broad-based, national consortium of land-grant universities.

Finance committee vets Vetter for USTR ag negotiator; says ‘Get Japan deal done’

Darci Vetter, U.S. Department of Agriculture deputy undersecretary for farm and foreign agricultural services, supported by 97 national agriculture/trade groups for the job of chief agriculture negotiator at the Office of the U.S. Trade Representative, told the Senate Finance Committee that U.S.-Japan negotiations over trade access are “picking up the pace” but didn't say when or if a deal would be in hand.

Committee Chair Ron Wyden (D-Ore.) called Vetter a “skilled hand” and said “she’s the right person at the right time” during ongoing trade negotiations. Committee member Sen. Debbie Stabenow (D-Mich.), chair of the Senate Agriculture Committee, said “I’m very, very confident in Ms. Vetter’s abilities.”

During a friendly confirmation hearing, committee ranking member Sen. Orrin Hatch (R-Utah), who urged Vetter, a former Finance Committee staff member, to get a Japan deal soon but also cautioned to get a deal done correctly, adding “it is far more important to get this deal done right than to get it done now.”

Vetter fielded questions on the Trans-Pacific Partnership negotiations, talks with the European Union on U.S.-EU negotiations. On the EU talks, she told Sen. Johnny Isakson (R-Ga.) she’d push to resolve issues related to antibiotics and poultry exports, continue to fight against an EU proposal on “geographical indications,” i.e. “Danish ham” or “Parmesan cheese” and would push China to ease its policy on genetically modified ingredients. 

Federal appeals court sides with EPA on oil industry challenge to 2013 RFS challenge

The U.S. Environmental Protection Agency has “wide latitude” to decide where, when and by how much it will modify federal biofuels mandates for mixing with gasoline, a federal court said,  rejecting an oil industry challenge to the agency’s 2013 Renewable Fuels Standard. The petroleum companies allege EPA didn’t adequately consider the use of renewable fuel credits by companies to meet the mandate.

With the final 2014/2015 RFS mandate due from the agency in June, the pending proposal could significantly lower the overall RFS from levels set by law. The decision by the U.S. Court of Appeals for the District of Columbia deflates some renewable fuel advocates’ argument that EPA is acting illegally by lowering the RFS mandate below statutory levels set by Congress.

The credit market referred to by the oil industry is that in which Renewable Identification Numbers are traded among gasoline refiners. Companies accumulate credits for blending sufficient biofuels to meet the mandate; if they don’t hit the target, RINS are used to offset their obligation. One oil company said leftover credits from 2012 should not be a factor considered by EPA in setting the 2013 RFS; the court found this argument meritless and said, “EPA was entitled to conclude, as it did, that it had wide latitude to consider a range of factors as appropriate.”

The oil companies also argued the 2013 RFS should be terminated because it wasn’t made public until nearly eight months after the statutory deadline. The court rejected this argument as well, saying the RFS mandate is well known and there are sources within the federal government, including the Energy Information Agency to which refiners could look to estimate their obligations under the RFS.

46 senators join House members opposing EPA water rulemaking

A couple of weeks ago, more than 200 House bipartisan members called on the White House to rescind the U.S. Environmental Protection Agency's rulemaking to expand its authority under the Clean Water Act. Last week, 46 senators, members of the Congressional Western Caucuses, told the EPA the new water rule is badly written and too vague.

Sens. John McCain (R-Arizo.) and Jeff Flake (R-Ariz.) led 44 of their Senate colleagues writing to EPA Administrator Gina McCarthy, telling her the proposed expansion of the agency’s authority under the CWA to small bodies of water and streams needs to be reworked.

While acknowledging EPA’s exclusion of gullies, rills and swales, the two senators said the rulemaking must be more specific in identifying exactly which new bodies of water will be regulated.  “Unfortunately, the current EPA proposal dramatically expands federal jurisdiction and will likely yield the next step in an unnecessarily iterative process, and create significant regulatory uncertainty,” the Senators wrote.  

The so-called “waters of the U.S.” rule is a particular concern to agriculture groups who believe it would give the agency authority to regulate ponds, ditches and areas which may hold water once in several years. Despite EPA assurances that nothing changes for agriculture in the proposed expansion of water authority – and the National Farmers Union agrees – the American Farm Bureau Federation set up a “Ditch the Rule” website to oppose the rule as currently written.

In a related development, Secretary of Agriculture Tom Vilsack was told by Sen. John Hoeven (R-N.D.) that farmers are concerned about the EPA authority expansion. Vilsack reiterated EPA’s assurance there would be no impact on “normal farming practices” and said he believes the list of EPA-recognized activities to be exempted will be increased.

The House action was led by Reps. Chris Collins (R-N.Y. and Kurt Schrader (D-Ore.). Their letter to EPA and the Corps has a simple request – withdraw the rule. “Under this plan, there’d be no body of water in America – including mud puddles and canals – that wouldn’t be at risk from job-destroying federal regulation,” said Rep. Doc Hastings (R-Wash.), chair of the House Natural Resources Committee.

EU puts tough import restrictions on feed, products with pork; U.S. seeks clarification

Moving to protect European swine herds from an outbreak of porcine epidemic diarrhea virus (PEDv), the European Union has approved new rules that put tough restrictions on the import of pork byproducts, including plasma, from the United States, Canada, Mexico and Japan. The rules were reportedly effective Sunday.

The United States is concerned the restrictions may extend to swine byproducts exported to Europe but not intended for livestock feeding – based on the possibility the products could be diverted to animal feed – as well as how the EU will certify compliance. Exporters have been advised to confirm which shipments will be allowed to enter the EU prior to shipment. There is also the U.S. concern other nations may try to copy the EU restrictions with their own programs and interpretations.

The EU says all pig products imported from the four nations must be treated with heat at 80 degrees Celsius (176 degrees Fahrenheit) and stored for six weeks at room temperature to kill the virus. The EU did not ban swine blood products; U.S. plasma exports total about 2.2 million metric tonnes each year.

Still unknown is what France will do. It had earlier announced it was considering a full ban on swine and swine byproducts from the four countries but would hold its decision until after the EU ruled. However, it also said, “If there is no agreement to ban imports at the meeting, our national authorities will go ahead with their decision.” However, it’s not yet known if the EU decision is enough to make France happy or if it will take a unilateral approach to banning swine product imports.

Over 20 ag groups ask FDA for more time on FSMA transport ‘sanitation’ rule

A 90-day extension of the comment period on Food & Drug Administration's proposed rule on “sanitary transportation of human and animal food” as part of Food Safety Modernization Act implementation was sent to FDA last week by 22 producer, grain production/processing, feed, transport and food retail organizations. Included on the request were the American Feed Industry Association, the National Grain & Feed Association, the Agricultural Retailers Association, the Corn Refiners Association, the National Council of Farmer Cooperatives, the National Oilseed Processors Association, the National Renderers Association and the Grocery Manufacturers Association.

The groups wish to see a new deadline for filing comments of Aug. 29. They say the rule is the first time FDA has tried to regulate the transportation by truck and rail of ingredients and finished products for food safety reasons. The rule is sufficiently complex – and carries the possibility of significant industry disruption and unintended consequences if not handled correctly – that the groups need at least another 90 days to analyze it. Also critical to meaningful comments, the groups said, is adequate time to complete an economic analysis of the rule on various industry segments.

BNSF worries regulatory orders on service will disrupt system

The BNSF told the Surface Transportation Board in an April 29 letter that while the Class I railroad is focused on fixing “overall service velocity,” regulatory orders on how to achieve that goal may actually disrupt the system even more, NITLeague reported. The letter, BNSF said, supplements the line’s testimony at the April 10 STB hearing on service issues and responds to comments filed with the board since the hearing.

The line said short-term solutions that benefit only a few shippers “will have the quite predictable effect of worsening network performance overall and lengthening the time it will take to restore our service to meet customer expectations … we are extremely concerned that any agency service directive would seriously undercut the significant efforts being made to return network velocity and, overall, worsen service for the large majority of BNSF customers.”

The STB said it’s going to hold several confidential meetings with shipper in order to fully understand the continuing service issues. 

Vermont first state to require GM food labeling; federal effort gets chilly reaction

The governor of Vermont last week signed state legislation that will require food sold in the state as of July, 2016 that is the product of genetic modification or contains GM ingredients to be labeled.

The new law does not extend the labeling requirement to animal feeds and pet foods. The food industry is gearing up for a major legal battle, challenging the new law, but with the New York State Assembly moving quickly to pass its labeling legislation – Massachusetts and Maine have passed labeling bills with enactment limits, and currently 29 state legislatures are considering 89 related bills – the ability of the industry to financially sustain legal challenges is in question.

Vermont created a “food fight fund” to defend against the legal challenges that are coming and is taking online contributions to help build the fund. The Biotechnology Industry Organization says the average Vermont household’s food bill could increase by as much as $400 a year because of the labeling mandate.

In Washington, D.C., 35 ag, processing, food and retail associations formed a coalition to get Congress to preempt state GM labeling laws. Rep. Mike Pompeo (R-Kansas) and five bipartisan colleagues introduced legislation last month to give FDA supreme labeling authority, set standards on voluntary labeling for the absence or presence of GM ingredients and create a federal definition of “natural” and related claims on food labels.

However, Congress is reluctant to preempt state laws, and so far the reception on Capitol Hill to the notion of nullifying laws like Vermont’s, is chilly at best.

Secretary of Agriculture Tom Vilsack floated the notion of modifying food product bar codes to list GM ingredients, and the idea is starting to get attention as an alternative to label listings. While not simple because it would require just about the entire food chain to participate, it would also face stiff opposition from labeling advocates.

Conferees get final deal on water bill

While official details won’t be released until next week, word from the conferees on the federal waterways reauthorization is that a final conference report is in hand, clearing the way for final action in the next couple of weeks. The final sticking point was how many projects – and which ones – Congress will write into the law as direction to the U.S. Army Corps of Engineers on how to spend its money and where.

Insiders say the conference report will require a bigger share of harbor maintenance fees to be spent on actual port upgrades, and that “inland waterways resources” will be retargeted to allow lock/dam projects to begin earlier. The key now is what appropriators will do as far as overall funding for waterways/ports projects.

No word on whether the package carries a long-requested increase in the fuel user fee barge operators pay to help fund waterways projects. The industry wants the increase, but House and Senate authorizers said only the tax-writing committees can authorize an increase in the fee.

More than 80 ag shipper and ag producer groups recently sent a letter to Sen. Ron Wyden (D--Ore.), chair of the Senate Finance Committee, and ranking minority member Sen. Orrin Hatch (R-Utah) urging them to back a 6- to 9-cent increase in the current 20-cent-per-gallon barge fuel tax. A similar push is planned for the House, where House Ways & Means Committee Chair Dave Camp (R-Mich.) has introduced a bill to raise the federal user on ag shippers to 26 cents.

Mensah nominated to be USDA undersecretary for rural development

Lisa Mensah has been nominated by President Obama to be the new U.S. Department of Agriculture undersecretary for rural development. Currently the executive director of the Initiative on Financial Security at the Aspen Institute, she formerly worked at the Ford Foundation handling rural poverty, economic development and resource programs. Mensah, who has extensive economics and business experience, will replace Dallas Tonsager who resigned last year.