Washington Insider -- Friday

By DTN's Washington Insider

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

EPA Still Considering Final Rule on Biofuel Requirements for 2014

The Environmental Protection Agency still has under consideration the amount of corn-based ethanol and other biofuels that it will require to be blended into the nation's transportation fuel supply this year. In fact, the rule covering the mandatory Renewable Fuels Standard has not yet been sent to the White House Office of Management and Budget, which has the final sign-off on federal regulations.

The Energy Independence and Security Act of 2007 aims to require 14.4 billion gallons of corn-based ethanol to be included in the RFS this year, a figure than few believe will appear in the final EPA rule. Instead, a number of analysts are predicting the agency will require around 13.8 billion gallons, which would be unchanged from 2013.

EPA officials have said repeatedly that the RFS announcement will come in June, but whether that means early or late in the month is not known. And regardless of what the final figure turns out to be, the expectation is that the oil industry will challenge agency's decision in court.

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Senate Could Consider Package of Energy Tax Incentives by Mid-May

The Senate reportedly could take up legislation in the next couple of weeks that would retroactively extend a number of expired tax incentives, including one for biodiesel producers. Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., are said to be in discussions about amendments to the bill, which usually is a sign of progress.

Reid has said he hopes to complete floor action on the measure before a week-long recess at the end of May. The most likely option would be for floor action on the week of May 12, or the following week, according to congressional aides.

In the House, things aren't so clear cut. Majority Leader Eric Cantor, R-Va., says he plans this month to bring up a bill that would make permanent a number of research and development tax credits. But Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee that oversees tax policy, says he remains committed to examining the expired tax credits one by one rather than take them up in a bundle.

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Washington Insider: Unintended Consequences of Biotech Labels

While there have been many, many studies of biotech crops and their safety and environmental impacts, there have been relatively few that focused on consequences that could result from mandatory biotech labels. As a result, a recent study of the issue by the Council on Agricultural Science and Technology is attracting considerable attention. The nonprofit organization focuses generally on food and agricultural issues, with membership including scientific and professional societies as well as individual scientists.

The new study's key finding is that mandatory labels of food products that contain ingredients from biotech crops — especially at the state level — carry with them a number of likely, but unintended, consequences.

The study says there are many state labeling initiatives, "suggesting to some" that there are remaining food safety concerns, as well as concerns that biotech products are intrinsically different because they would not have occurred in nature. The authors rejects this view and note that "no material differences in composition or safety of commercialized GM (genetically modified) crops have been identified that would justify a label based on the GM nature of the product."

The authors suggest that while "this conclusion will not satisfy those who consider the insertion or manipulation of genes in a laboratory a material difference per se, the science of food safety does not support mandatory process-based labeling of GM food." And neither does U.S. Food and Drug Administration, they note.

In general, the authors note that all domesticated crops and animals have been genetically modified in some way and that there is strong evidence that biotechnology is just as safe as conventional breeding.

Also, there are voluntarily labeled non-biotech products available to consumers, including those produced under USDA's organic certification program that provides consumers non-biotech choices.

The authors also note that labeling at the national level would carry significant trade implications and would need to be harmonized with international trade agreements. Mandatory labels for production processes when there is no scientific evidence that the process relates to food safety typically face litigation by trading partners, the report notes.

The report also concludes that mandatory labeling would increase U.S. food costs, depending on the legal requirement imposed. If, as in other countries, sellers respond by shifting to non-biotech products, the "loss" of access to food technology could mean significant cost increases that create significant burdens for low-income families.

If, by contrast, food suppliers simply choose to label nearly all products as containing GE without testing or segregation, increases in costs might be minimal but so would any potential assistance for consumers.

Finally, the authors are extremely critical about the state of information available on the issue, especially for lawmakers, but also for voters. They also call for much better communication with independent objective information developed "to help move the national discussion from contentious claims to a more fact-based, informed debate."

While CAST considers itself objective and well informed, the group has support from some agribusiness members and likely will be seen as biased in favor of the "farm establishment." Nevertheless, there is a real issue here, and that is the inability of advocacy groups to specify any single health or safety basis for the proposed mandatory labels. As long as no real consumer choice is promoted and the program costs are significant, there seems to be little possibility of net benefits from requiring new labels, Washington Insider believes.

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