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.

Brazil, U.S. Meet on Farm Bill's Cotton Provisions

U.S. and Brazilian officials met yesterday in Washington and will continue today in what is being described as a last effort to resolve a long-running dispute over U.S. cotton subsidies, and concerns among some Brazilian government and cotton industry officials about the 2014 U.S. farm bill.

U.S. officials claim that changes to the cotton program have resolved a World Trade Organization ruling that affirmed the illegality of some previous U.S. cotton program provisions. However, Brazilian cotton growers argue that new crop insurance provisions (STAX) actually are more trade-distortive than the direct payments that the new farm bill rescinded.

Brazil reportedly is weighing whether to request a WTO compliance panel, as soon as next month to rule on its view of the farm bill. But sources say most Brazilian government officials want to settle this matter, perhaps through a payoff.

Under an earlier agreement, the United States pledged to provide $147 million annually to the Brazilian cotton industry in return for being allowed to keep the cotton program that the WTO ruled illegally disadvantaged Brazil. Those payments stopped last September when USDA ran out of appropriated funds for the program. There have been suggestions that if the United States were to get current on its payments and agree to continue them in the future, Brazil would relent on its plans to continue the case before the WTO.

Whether the problem will be resolved during the current round of meetings remains to be seen. But the fact that the two sides are still talking and not making incendiary public statements are good signs that an end may be in sight.

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GAO Report May Help Congress Reform Chemical Storage Regulations

The three federal agencies responsible for regulating the production, transportation and storage of the explosive chemical fertilizer ammonium nitrate have created overlap that could allow unsafe facilities to continue operation and poor planning to persist, according to a new Government Accountability Office report.

The GAO report highlighted holes in the system for tracking facilities with ammonium nitrate, lack of data sharing between oversight agencies and regulations that are outdated and ineffective. GAO investigators were unable to even identify the number and location of facilities storing ammonium nitrate.

The report comes as the Obama administration's chemical safety working group prepares its status report for the president detailing proposed reforms. The working group — led by the Environmental Protection Agency, Occupational Safety and Health Administration and Department of Homeland Security — has said it will present the report this month.

The White House created the working group in August 2013 as a response to the April 2013 explosion at a Texas fertilizer facility that killed 15 and injured more than 200. The blast destroyed about 150 homes, three schools, a nursing home and an apartment complex.

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Washington Insider: Kids, School Lunches and Politics

The National School Lunch Program is a large federally assisted feeding program that operates in perhaps 100,000 public and nonprofit private schools and residential child care institutions. It currently reaches nearly 32 million children nationwide. The concept of providing hot lunches in schools grew rapidly in the 1930s and became a nationwide program as part of the National School Lunch Act, signed by President Harry Truman in 1946. The program's federal role is managed by USDA and has never been a placid one.

Because the program is so large, it has almost constantly attracted the attention of industries that wanted their products to be included — as well as advocates who wanted specific products excluded for nutritional or other reasons. Recently, the president pushed the program as an opportunity to improve children's diets in the fight against childhood obesity. Democrats say stemming the epidemic will cut healthcare costs and improve national health. And they are promoting the Healthy, Hunger-Free Kids Act of 2010 that requires lunch programs that receive federal dollars to provide "healthier meals." The new standards began to go into effect in 2012 but have not been universally popular.

Part of the reason is that healthier meals tend to cost more, so the new rules are seen as "too intrusive, and too costly" by some. However, this debate is different because it involves kids, and some of those involved are simply saying they don't like the new lunches and won't eat them and have the money to make that choice. Press reports this week suggest that more than a million children have "opted out" of the program, and USDA notes that "the number of school children in the National School Lunch Program dropped from 31.8 million in 2011 to 30.7 million in 2013.

Now, the problem of getting students to eat lower-fat, lower-sodium meals is escalating into something of a food fight between House Republicans and first lady Michelle Obama and other Democrats as increasing numbers of school boards are requesting Congress to allow them to opt out. Some schools say they are being required to use funds budgeted for teaching to cover the costs of foods that are largely wasted, especially fruits and vegetables, Lucy Gettman of the National School Boards Association told the press.

As a result, a House spending bill approved by a subcommittee on Tuesday would force USDA to give a temporary waiver to school lunch programs that can show they were operating at a net loss for the last six months. That provision is supported by the National School Boards Association, as well as the School Nutrition Association. These groups also support other efforts, including a bill by Rep. Kristi Noem, R-S.D., to stop the imposition of more stringent standards that are expected to be proposed by USDA.

House Agriculture Appropriations Subcommittee Chairman Robert Aderholt, R-Ala., told the press the temporary waivers are needed because some school districts are losing too much money and need more time to adjust to the requirements. He said a big problem is that students are refusing to eat the healthier foods.

So, while it clearly is a good idea to include more nutritious foods in the feeding programs, even well-motivated efforts to force kids to make better food choices are not likely to succeed easily — or, much better at school than similar efforts do at home. It seems that as long as kids can attract attention by refusing to do as they are told, no one should be surprised when they follow that path and that politicians promote the resulting conflict.

Still, while the school feeding programs are generally regarded as strong successes in their main objectives, perhaps the time has come to ease back a little on the many objectives and rules local feeding programs face, Washington Insider believes.

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