Washington Insider-- Thursday

Another Water Rule Coming

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

Vilsack Says No Decision Yet On Appealing Pork Line Speed Decision

USDA has been warning the six hog slaughter plants affected by a U.S. District Court ruling that they should prepare to revert to their old speeds of 1,106 animals per hour at the end of this month.

But USDA Secretary Tom Vilsack told reporters Tuesday that no decision has been made yet by the Department of Justice (DOJ) on whether to appeal a federal district court ruling that struck down a Trump-era rule allowing unlimited line speeds at certain pork processing facilities. The ruling is set to take effect June 29, with USDA announcing last month it would enforce the decision.

Vilsack explained that the six facilities that had been allowed unlimited line speeds under the New Swine Inspection System (NSIS) rule “will have to decide whether or not they want to go back to the 1,106 [head per hour] line speed, or whether they want to make adjustments in terms of adding additional hours, or additional workdays to be able to process the same number of animals that they [currently] process during the course of a day.”

He lamented that the case put the department “in a very difficult position,” forced to balance worker safety, food safety and farmer income interests. “Frankly, I don't think USDA should be put in that position,” he remarked, saying his hope is that parties in the case “will figure out a way to move forward with this.” As for an appeal, Vilsack stressed that the decision rests with the Solicitor General at DOJ, not USDA, adding that the ruling itself does not become final until months' end.

Agriculture Bucked Overall Trade Trend In April

While U.S. exports in general gained against imports during April, trimming the overall U.S. trade deficit compared with March, U.S. agricultural exports declined in April to $14.5 billion from $15.3 billion in March.

Imports, however, held nearly steady at $14.4 billion after being at $14.6 billion in March. That left agriculture with a surplus of $189 million, down from $774 million in March.

That brings cumulative U.S. agricultural exports so far in Fiscal Year (FY) 2021 to $107 billion against imports of $91 billion for a surplus of $15.7 billion.

For FY 2021, USDA forecasts U.S. agricultural exports to total $164 billion against imports of $141.8 and result in a surplus of $22.2 billion. If USDA's forecast is on the mark, U.S. agricultural exports would have to average just $11.4 billion for the five remaining months of FY 2021 and imports $10.1 billion.

A decline of that degree imports would be somewhat surprising since the value of imports has not been that small since September 2017 while U.S. agricultural exports were under $11 billion for the April-July period in 2020.

Washington Insider: Another Water Rule Coming

EPA and the U.S. Army Corps of Engineers will once again seek to come up with a definition of waters of the U.S. (WOTUS) that will replace the Navigable Waters Protection Rule put in place by the Trump administration. But the effort also will not bring back the Obama-era WOTUS rule that was put in place in 2015.

EPA said it will embark on a new rulemaking to generate the new rule after undertaking a review of the Trump-era rule. That review, EPA said, indicated it was causing “destructive impacts” to “critical water bodies.”

The new regulatory effort, EPA said, would be built on protecting water resources consistent with the Clean Water Act, use the latest science and consider effects of climate change, create a rule that can be practically implemented, and reflects the “experience of and input received from landowners, the agricultural community that fuels and feeds the world, states, Tribes, local governments, community organizations, environmental groups, and disadvantaged communities with environmental justice concerns.”

EPA has pledged there will be “meaningful stakeholder engagements” to develop the new rule, which would mean listening sessions or public hearings to generate information for the agency to draft the new regulation.

The fact that we are seeing yet again another regulatory process coming on this topic is from an executive order signed by President Joe Bident his first day in office which directed the EPA and Army “to immediately review and, as appropriate and consistent with applicable law, take action to address the promulgation of Federal regulations [including the Navigable Waters Protection Rule or “NWPR”] and other actions during the last four years that conflict with these important national objectives.”

While touting the review of the NWPR, EPA did not offer much as to that review. They did note that the NWPR did result in several bodies of water in New Mexico and Arizona no longer being subject to the Clean Water Act provisions and that some 300 projects that were conducted after the Trump rule went into effect were ones that would have required some type of permitting or plan under the 2015 WOTUS rule.

“After reviewing the Navigable Waters Protection Rule as directed by President Biden, the EPA and Department of the Army have determined that this rule is leading to significant environmental degradation,” said EPA Administrator Michael Regan. “We are committed to establishing a durable definition of 'waters of the United States' based on Supreme Court precedent and drawing from the lessons learned from the current and previous regulations, as well as input from a wide array of stakeholders, so we can better protect our nation's waters, foster economic growth, and support thriving communities.”

But therein lies perhaps EPA's most difficult task -- a durable rule. Presumably, the are likely intending that the rule they finalize after a rulemaking process will not be challenged in court as both the WOTUS and NWPR were. That will prove to be a tall order for EPA and the U.S. Army Corps of Engineers.

But the replacement for the Trump-era rule will not come immediately. EPA has indicated they will initiate a new rulemaking process. That means we will first see public information gathering done either via public meetings or a request for information via a notice in the Federal Register.

Then will come the process of developing a notice of proposed rulemaking that will also have a public comment period. It will have to first be reviewed by the Office of Management and Budget (OMB) as well. Then will be the process of developing a final rule based on the input and feedback to the proposed version. Then another OMB review will be done before a final rule will be promulgated. In all, that process could take several years.

And even then, expectations are already that whatever that final rule is, there will be court challenges that will come forth.

So we will see. EPA clearly has their work cut out for them to develop a rule that is in their words “durable.” But it will also have to pass muster with the ag community, a constituency that fought the Obama-era plan and so this whole process will need to be watched closely, Washington Insider believes.

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