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.

House Likely to Block EPA's WOTUS Rule

It is increasingly likely that the House will take up legislation to block the Environmental Protection Agency from issuing a "waters of the United States"rule to clarify the scope of the Clean Water Act, a step that could give EPA and the U.S. Army Corps of Engineers greater regulatory reach over a greater number of acres.

The proposed legislation to block the rule would prohibit EPA and the corps from "developing, finalizing, adopting, implementing, applying, administering, or enforcing" the proposed rule or any associated guidance that attempts to clarify the scope of the Clean Water Act.

The joint rule by EPA and the Corps, would bring under federal jurisdiction all tributaries of streams, lakes, ponds and impoundments, as well as wetlands that affect the chemical, physical and biological integrity of larger, navigable downstream waters.

The rule does not sit well with a number of lawmakers on both sides of the aisle and stands a fair chance of being blocked by the proposed legislation which could be taken up after Congress returns to Washington next week. EPA's Science Advisory Board has scheduled two days of meetings on the scientific underpinnings of the waters of the U.S. rule for Sept. 26 and 29. However, those meetings may take place after the House votes on the blocking measure.

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OECD Calls for Greater Cuts in Global Subsidies for Agriculture

Government support for agriculture in Organization for Economic Cooperation and Development (OECD) countries remained on a downward trend in 2013, yet much of this support is still in a form that distorts markets, according to OECD's latest agricultural policy monitoring report.

The report finds that total support to producers in OECD countries in 2013 equaled approximately 18% of gross farm receipts, down slightly from 2012 and compared with around 30 percent two decades ago. However, half of the $258 billion total in 2013 was spent on initiatives that distort production and trade, says OECD.

The report notes that Australia, Chile and New Zealand limit themselves to safety net measures, disaster relief and R&D, and transfer less than 3% worth of gross farm receipts in support to their agricultural producers. This contrasts with Iceland, Japan, Korea, Norway and Switzerland, all of which provide producer supports estimated to be above 40% of gross receipts. The United States remains at the low end of OECD subsidizing nations at around 7.5%, while the European Union provides agricultural supports equal to nearly 20% of gross farm receipts.

The annual OECD report card is interesting from an academic standpoint, but it does not appear to have much effect on governments that choose to continue subsidies to their agricultural producers.

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Washington Insider: Big vs Small Farms

Tamar Haspel raises oysters on Cape Cod and has undertaken to weigh in on farm policy as it relates to farm size and organization. She tells Washington Post readers that nowadays the food-conscious want their suppliers to be "relatively small" and accessible. They should be diverse, growing different kinds of crops and often incorporating livestock. They may or may not be organic, but should incorporate planet-friendly crop rotations, minimal pesticide use and composting.

She says she talked with a "passel of people" who either study or live this issue as farmers do, and that she found a "few ideas" that generated "enough consensus that I'm willing to call them facts."

Fact 1, she says is the reality that "small, diversified farms are less efficient than large ones," That means her ideal farm must sell more costly food, if is to hang around. How much more expensive is tough to estimate, she says. Skeptics say she could have consulted a deep literature on that topic.

Next, she argues that small, diversified farms bring benefits to their communities — and, by this she means having a place where a kid can come face to face with a pig. She thinks everyone needs reminding that food doesn't just appear and that it's because somebody else is growing it that others are free to be accountants or scientists. However, she neglects to mention that analysts think that some pretty large operations offer all that, and do so more efficiently.

Then, she announces that local market shares of the food system are very small. It is not clear what her point is on this, but maybe she's just saying that the iron laws of economics make surviving on "local sales" almost impossible to do.

Her fourth point is that selling directly to consumers rarely provides a "living return," and only very small producers try. So, she thinks that perhaps that is not the best pattern on which to plan the future of our agriculture.

So, her first five points are aimed at showing how hard it is to make ends meet if your operation looks like her ideal farm, a fact most farmers know all too well. But, then she takes on "pollution," and asserts that farms pollute and large intensive commodity farms "have damaged the environment," and here her facts get very, very thin. She says, "When you have tens of thousands of acres of a two-or three-crop rotation, with chemical fertilizers and pesticides as standard operating procedure, there are bound to be problems."

Then she concludes that while small farms are inefficient they are more likely to grow healthful foods and might be more environmentally friendly, while large farms are sometimes environmentally unfriendly even though they raise large amounts of food efficiently and affordably. So, she suggests that rather than replace large, polluting farms with small, diversified ones, what is needed is policies to get the large farms to stop polluting. Well, yes, but what has that to do with farm size?

Well, she says she knows some farmers who "combine the best of small and large operations, practice no till and plant grass strips in low-lying areas to filter run off. And, these farms run cattle out in the fields to eat the cornstalks and provide manure and crop residue to build organic matter in the soil."

So, she advises smaller farms to work on efficiency and maybe switch to organic and maybe, down the road, shift to genetically engineered crops that are disease and drought resistant. And, she appears to be recommending requirements for conservation practices as a pre-requisite as eligibility for federal benefits.

Well, skeptics likely think Haspel may be a passel or two short of a credible advice package — even if much of what she says is not wrong. Organic production is well understood, and producers recognize that it is expensive to introduce and may not pay if markets are not nearby and robust. These things, she says, are "just economics 101."

It is hard to know why the Post published this column — it is not like producers are looking to the newspaper for farm management advice, or for policy recommendation. In the past, the paper seems to have largely confined itself to suggestions that policies were too costly and too interventionist and it seems fair to suggest that Haspel's "pull up your socks" ideas risk falling into the same pattern.

The suggestion that she can talk with a few people, and then advise the rest of the more than 2 million U.S. farmers, big and small — and, do so more efficiently than their professional advisers can –– likely stimulated spectacular eye-rolling among aggies this week, Washington Insider believes.

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