Washington Insider -- Thursday

Fight Over Organic Livestock Rules

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Commerce Sec. Ross Lays Out NAFTA Renegotiation Timeline

The Trump administration is pledging to complete its proposed renegotiation of NAFTA as quickly as possible, including by pushing for "a far more aggressive meeting schedule than has been the norm," according to Commerce Secretary Wilbur Ross. The administration will “work to conclude the talks as soon as possible," Ross said at a State Department event. Noting that Mexican Foreign Minister Luis Videgaray has said he hopes to wrap up talks before the end of the year, Ross added: "Once we get going, I promise you this administration will not be a source of delay."

Ross said he hopes this week to resolve delays in Congress that will allow the White House to give formal notification of the intent to renegotiate NAFTA with Canada and Mexico, which would start the 90-day clock before the talks could begin. The administration has not yet decided whether to keep NAFTA as a three-country deal "or to pursue two matching bilaterals," Ross said. NAFTA is "at best out of date and at worst did not accomplish some of its most important goals," Ross said of the trade pact that President Donald Trump calls a disaster for the United States. And "any agreement can be updated to reflect changes in all the various economies, and to correct unintended oversights" from the original deal, he said.

As for the Trans-Pacific Partnership (TPP) agreement, Ross noted that many conference attendees — largely business and government officials from throughout the Americas — had "expressed reservations" about the administration's withdrawal from the TPP. "The fact is there simply was no political will on either side of the aisle for the TPP, so its demise was inevitable," Ross said. But, he added, the administration does want to keep some "good aspects" of the deal, "particularly as they pertain to market access."

Canada Continues To Consider Retaliatory ‘Options’ Regarding US Trade Skirmish

The Trump administration’s decision to place tariffs on Canadian softwood lumber is leading Prime Minister Justin Trudeau and his Cabinet to explore ways to push back against the U.S. Asked on Tuesday to respond to what Commerce Secretary Wilbur Ross called “threats” coming from U.S. northern neighbor, Canadian Trade Minister Francois-Philippe Champagne responded: “I call them options.” Champagne said, "We've been clear: We've been proactive in our engagement but firm in our position to defend Canadian industry and Canadian workers."

The remarks come after Trudeau over the weekend said he is considering "carefully and seriously" a request from British Columbia Premier Christy Clark to ban U.S. shipments of thermal coal through Canadian West Coast ports.

Champagne said earlier during a speech that Canada was “working hard to realize an ambitious agenda of trade diversification.” He added that, “This includes pursuing new markets for softwood lumber given the recent U.S. duties. We believe those duties to be unfair and unwarranted, and we are taking steps to defend our industry,” he said, adding the government will take similar steps to protect Canadian dairy producers. “While the U.S. will always be a natural market for Canadian exports, there are lucrative opportunities around the world for Canadian companies.”

Washington Insider: Fight Over Organic Livestock Rules

Bloomberg is reporting this week that USDA is once again pushing back implementation of an Obama-era rule tightening living standards for organic poultry and livestock. In addition, the agency is now asking whether the USDA should move forward with the regulations at all.

In a pair of announcements, the USDA said May 9 that it will delay implementing the final rule for organic animal welfare from May 19 to Nov. 14. It cited a federal freeze on new regulations until the administration conducts further review. The move gives more time for the public to comment on the sweeping new regulations on raising, housing and processing certified organic chicken, pigs and other animals.

Finalized in the waning days of the Obama administration, the rule has come under fire from some trade groups and congressional Republicans, who say the tighter standards would force farmers to make expensive modifications to existing animal enclosures and drive up costs for consumers.

In filings to the Federal Register, the USDA said the delay will allow the public to weigh in on four possible actions on the welfare rule: let it go into effect; suspend it indefinitely during more reviews: delay the effective date further; or withdraw the rule entirely. Public comments are due 30 days after publication in the Federal Register on May 10.

This actually is the second round of delays for this rule. It was originally set to come into effect March 20, but the USDA in February pushed that date back.

The rule would create new standards for raising organic livestock, such as limiting tail docking and beak clipping, and many others. Livestock would be required to have year-around access to the outdoors, and indoor space must be large enough for them to stand up and stretch their limbs.

Non-ambulatory animals, such as those with broken limbs or those too sick to move, must be medically treated, even if doing so would remove their “organic” status. Animals must also be able to walk on their own before they are transported to buyers, auction houses or processing facilities.

During the original comment period, some agriculture groups such as the National Pork Producers Council argued that the rule had nothing to do with the concept of organic, and that it would only add to the complexity of the organic certification process and increase costs for farmers.

Dave Warner, director of communications for the NPPC, told Bloomberg that his group plans to submit additional comments asking the USDA to scrap the rule altogether. “NPPC is pleased that the Trump administration has further delayed the Organic Livestock and Poultry Practices Rule,” Warner said. “We will submit comments, urging USDA to scrap this ill-advised, costly and largely unworkable regulation, which is not science based and would present real challenges to protecting animal and public health.”

Egg and poultry producers would be some of the most affected by the new standards. In 2015, sales of organic eggs topped $670 million, while sales of organic poultry were $494 million. In that report, the USDA estimated that annual compliance costs would be between $8 million and $31 million over five years for organic egg and poultry farmers.

“United Egg Producers opposes the organic rule,” Chad Gregory, president and CEO of the trade group, said. “We will evaluate this new decision in collaboration with our egg farmer-members, and then determine whether we will provide additional comment to USDA.”

Senate Ag Committee Chair Pat Roberts, R-Kan., a long-time critic of the rule, applauded the delay. “As I've heard time and time again from organic livestock and poultry producers—the folks who are most affected by its implementation—this rule is bad news for farmers, ranchers, and consumers,” Roberts said in a statement.

However, not all producers oppose the rule, Bloomberg says. Though the regulations would affect major chicken processors and retailers who have organic product lines, at least one company, Perdue Farms Inc., came out in support of the regulations when they were released in draft form in mid-2016. The regulations also were supported by more than 300 organic farmers and the Organic Trade Association who called on USDA to implement the rule.

“We are frustrated that a final rule having gone through such extensive public and industry feedback and official scrutiny is now being stopped,” Maggie McNeil, spokeswoman for the OTA, told Bloomberg. McNeil said that her organization will be submitting additional comments supporting a quick implementation of the rule.

Animal rights groups also opposed the delay and said they would fight to preserve the rule. Wayne Pacelle, president of the Humane Society of the United States told Bloomberg that, “Our members are particularly fired up about this issue, and they'll make their views known to USDA and lawmakers.”

So, tougher organic rules are a hot potato for the new Secretary. Not only would they raise standards for production by organic producers — which many organic producers want — but they also make it tougher for conventional producers to engage in sidelines of certified organic animals. In many cases, these fights over organic standards are battles for control of the rapidly growing organic sector; fights that should be watched closely as they continue, Washington Insider believes.

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