Washington Insider - Monday

By DTN's Washington Insider

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

Oregon Prepares for Second Vote on GMO Labels for Food

Oregon voters go to the polls in four weeks where, among other things, they will be asked once again to consider whether to require foods sold in the state that contain biotech ingredients to be labeled as such. In 2002, Oregon was the first state to vote on genetically engineered food labels, a measure that was defeated.

In preparation for the November vote, supporters and opponents of the proposition now are arguing about what the cost of labeling might be for the average Oregonian. A study commissioned by Consumers Union, the organization that publishes Consumer Reports, and released last week concludes that Oregonians' food costs would increase about $2.30 per person per year as a result of GMO labeling. And, in pre-election advertising, supporters of the labeling requirement point out that in the more than 60 countries that have adopted GMO labeling requirement, there is no evidence that food prices have increased significantly as a result.

Those claims differ from those made by labeling opponents who say that passing the measure would drive up grocery costs by hundreds of dollars per family per year.

So far, the two sides say they have received a combined total of nearly $3 million in campaign contributions and so far have spent more than $2 million. With just over four weeks remaining before the Nov. 4 election, Oregon voters can expect to hear quite a bit more about the issue in the coming days.

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California Allowed to Implement Egg Production Regulations

California's law governing the conditions under which layers must be kept if their eggs are to be sold within the state last week survived a legal challenge from six states that argued their producers would be unable to sell eggs in California.

A U.S. District Court judge for the Eastern District of California ruled that the states lacked standing to sue California because the lawsuit was aimed only at protecting their egg producers, not their citizens.

The states argued that the hen-housing standards, which apply to out-of-state as well as California farms and take effect in January, will drive up costs for farms and may create a price-depressing glut of eggs, forcing some non-California producers out of business.

The issue of whether a state could mandate that its livestock producers adopt specified animal welfare standards was brought up several times during congressional discussions regarding the 2014 farm bill. In the end, Congress declined to legislate away state standards, and it is looking increasingly likely that California's layer hen provisions will be able to survive court challenges as well. (Also see longer item below.)

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Washington Insider: Midwestern Egg Case Dismissed

Six states’ attorneys general are being described as having egg on their face after a federal judge dismissed their lawsuit intended to block California from imposing production standards on eggs shipped there. The judge, U.S. District Judge Kimberly Mueller of the Eastern District of California ruled last week that the six states did not even have standing to sue California because their lawsuit was aimed only at protecting their states’ egg producers, rather than their states’ citizens.

Midwestern AGs had argued that hen-housing standards, which are being applied to out-of-state as well as California suppliers, will drive up costs and could lead to a price-depressing glut of eggs. The regulations that are to go into effect in January will prohibit eggs from being sold in California unless they are produced according to the new housing standards.

The judge found the cost-shifting argument unpersuasive and concluded that “Plaintiffs here have presented no allegations concerning the effects of California’s shell egg laws on the states’ general populations beyond fluctuating egg prices that may in fact result in lower egg prices for consumers in the Midwest,” the judge wrote.

The history of the case includes a considerable amount of confusion, and a large measure of pure politics. Missouri Attorney General Chris Koster filed the lawsuit in February, arguing that the California regulations were preempted by a federal inspection law. Iowa, the nation’s largest egg producer, later joined the case along with Alabama, Kentucky, Nebraska and Oklahoma.

The Association of California Egg Farmers and the Humane Society of the United States both asked the judge to dismiss the lawsuit. The United Egg Producers, worked with HSUS in hopes of establishing national standards for hen housing that would have preempted the California regulations but other livestock sectors simply wanted to handcuff the California effort and successfully lobbied to keep the rules out of the farm bill.

Some argue that the ruling does not appear to preclude a future suit by out-of-state egg farmers claiming economic harm from a protectionist measure, although that is an unusual definition of protections since the law's expensive rules apply immediate to local producers.

However, Bruce Wagman, a lawyer for HSUS said he isn’t too worried about the prospects of a suit by private citizens. “I don’t think they’d get very far,” Wagman said. He said the 2008 ballot measure, Proposition 2, which set new standards for confinement of farm animals in California, has survived three lawsuits by California egg producers, one of which is now before a federal appeals court.

A spokesman for Missouri AG Attorney General Koster said he was reviewing the ruling.

Prop. 2, intended to take effect in 2015, requires that farm animals have enough room to lie down, stand up, extend their limbs and turn freely. For egg-laying hens, the measure outlawed the cramped quarters known as battery cages, which animal-rights groups said were both inhumane and potential sources of disease.

There is an economic side to the issue. California poultry farmers, facing increased costs that their out-of-state competitors may not be required to absorb, supported the 2010 legislation. That prompted producers and officials in states with competing production to salivate at the prospect of reduced competition from the locals who attempt to push litigation on the grounds that they would be unfairly excluded from the California market. The current ruling appears to give short shrift to that argument, Washington Insider believes.

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