Washington Insider - Friday
US Considers Cases to Reduce Mexico Sugar Imports
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.
U.S. Still Considering Cases to Reduce Mexico Sugar Imports
The Department of Commerce (DOC) is continuing its investigation of dumping and countervailing duty petitions regarding sugar imports from Mexico filed by the American Sugar Coalition and its individual members. The phased-in free trade in sweeteners between the United States and Mexico became effective in 2008 under provisions of the North American Free Trade Agreement. That, in theory, should allow the unrestricted, unlimited movement of sweeteners across the border.
Hoping to influence the process, a bipartisan group of more than 60 House members wrote to Commerce Secretary Penny Pritzker and Agriculture Secretary Tom Vilsack claiming that any agreement to settle the antidumping and subsidy cases could jeopardize U.S. manufacturing jobs and hurt consumers. In their letter, the lawmakers point out the fact that the United States does not produce enough sugar to meet domestic demand and therefore must import sugar to meet that demand.
The preliminary countervailing duty ruling is scheduled to be announced Aug. 26, while the preliminary antidumping determination is expected Sept. 5.
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Canada Continues Improving Rail Safety
Last year's deadly derailment in Quebec of a train carrying highly volatile Bakken formation crude oil has kept the Canada's rail safety regulators focused on ways to improve the transport of oil and other dangerous cargo.
Transport Canada this week began the second phase of consultations on strengthening Canada's liability and compensation system for railway accidents involving dangerous goods. The consultations are focused on enhancing insurance requirements for federally regulated railways and establishing supplementary compensation to ensure that cleanup costs and claims by victims are fully covered in the event of a catastrophic accident, according to Canadian Transport Minister Lisa Raitt.
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"The new regime will ensure that polluters pay, that those who suffer damages are compensated, and that taxpayers do not bear the burden of cost if a serious rail incident should happen," Raitt said. The United States also is considering steps that regulators and the railroads can take to improve rail safety, but Canada appears to be in the lead on this issue.
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Washington Insider: The Modern State Fair
There is a lot going on in U.S. agriculture. There is a continuing squabble with the Environmental Protection Agency regarding future mandates for renewable fuel use; the Russian moves to block imports of U.S. farm products; and, the state fairs are warming up across the country, drawing a nearly endless parade of politicians who come to pander.
A common state fair speech highlight is the "heavy yoke of regulations" that farmers worry about a lot, along with promises to lift that yoke. There also is a lot of press attention on climate change and environmental quality just now, and not much of it is good news for farmers.
For example, there is good news and bad news about the "dead zone" of oxygen-depleted waters in the Gulf of Mexico. A new report says that for 2014, the zone will likely be about average size. The bad news, of course, is its current size is about that of Connecticut.
Press reports commonly link the zone directly to nutrient runoff, primarily from waste water and fertilizer use.
An additional dose of bad news includes threats to drinking water. The Wall Street Journal this week noted that the recent Toledo drinking-water crisis has drawn widespread attention to steps the state of Ohio is taking to help improve water quality, including licensure of farm fertilizer use. The state is concluding that farm runoff is a key cause of the algal blooms in Lake Erie, which are blamed for a two-day "do-not-drink" advisory in Toledo and its suburbs that was lifted Monday.
A big part of Toledo's problem comes from the Maumee River, which drains a broad swath of agricultural land, feeding the bloom on Toledo's end of the lake, the Journal says. Other major cities near the Great Lakes such as Chicago and Detroit haven't experienced similar restrictions, but some are voicing new concerns about the potential threats to their drinking water.
Illinois Gov. Pat Quinn last Sunday signed a bill requiring each community water-supply system to designate an operator who will be directly responsible for supply and distribution. Chicago Mayor Rahm Emanuel on Tuesday echoed calls for mayors of Great Lakes cities to hold a summit on water issues in the wake of the Toledo crisis.
A U.S.-Canadian joint international commission that monitors the Great Lakes recently called for cutting the daily amount of phosphorus flowing into Lake Erie by nearly half by 2022. The report urged states, including Michigan, New York, Ohio, Pennsylvania and Indiana, as well as parts of Canada, to stop farmers from applying fertilizers on snow-covered or frozen ground to help reduce nutrient levels in waterways.
The new Ohio licenses will become mandatory and are intended to directly cut fertilizer use. In addition, the law allows regulators to revoke certifications if problems are found on a farm.
The Journal cites Adam Sharp, VP of the Ohio Farm Bureau Federation as observing, "This is a big deal. We recognize it, and we're going to resolve it." However, environmentalists argue that much more aggressive steps are needed. "This isn't a matter of farmers fine-tuning what they're doing," said Howard Learner, president of the Environmental Law and Policy Center, a Midwest advocacy group. "This requires a substantial rethinking of how nitrogen and phosphorus are used in the agriculture sector."
The Journal reports that nationwide, progress has been made in fertilizer management. It notes that the use of nutrient-efficient products has helped reduce fertilizer loss by an average of 25 percent on half a million acres in six states, including Ohio, while also keeping up or increasing crop yields. "Farmers are already doing the right thing," said Karen Chapman, an Ohio-based program manager for agriculture sustainability for the Environmental Defense Fund.
Still, the response by farmers and regulators in farm states across the Midwest has drawn criticism from other environmental groups that don't see progress. They are fighting in court to force the U.S. EPA to set limits on nutrient levels for lakes, streams and rivers.
"Regulators have been afraid to do something about this problem," said Ann Alexander, a senior attorney at the Natural Resources Defense Council. "We think what is going on in Ohio should serve as a wake-up call."
Over the past several years, Congress has attempted to reduce the EPA "regulatory burden" by cutting appropriations and challenging some rules directly. Producers are well positioned in many state legislatures to push back against anti-pollution rules. However, even the breathless promises of aspiring politicians who trek to state fair political debates likely will find it difficult to back down urban residents who think their drinking water is threatened. This is especially true as activist environmental groups have shown increasing legal muscle in water quality cases.
So, while the Ohio situation can be expected to ratchet up the state fair political debates a little, it should also alert producers to the fact that they may need to consider investing more in controlling farm runoff in the future as urban residents get more involved in the water quality debate, Washington Insider believes.
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