Washington Insider--Thursday

By DTN's Washington Insider

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

State Department Reviewing Cuba's Designation as a State Sponsor of Terrorism

The State Department is conducting a review of Cuba's inclusion on the list of State Sponsors of Terrorism, a study that Deputy National Security Adviser Benjamin Rhodes says could be completed before a scheduled Summit of the Americas meeting scheduled for April 10 through 11 in Panama. For the first time, Cuba will attend the summit, and it is expected that President Obama and Cuban President Raúl Castro will be "interacting," according to Rhodes.

The United States and Cuba have had three rounds of talks on reopening embassies since the Dec. 17, 2014, announcement that the two countries would seek to normalize relations. However, Cuba's continuing inclusion on the terrorism blacklist has emerged as a stumbling block in the discussions.

Regardless of the progress the two countries are able to make on normalizing relations, it will take an act of Congress to roll back the Cuban Assets Control Regulations that were put in place in July 1963 under the Trading With the Enemy Act. There remains significant opposition in Congress to relaxing the half-century-old economic embargo on Cuba, but that opposition appears to be softening somewhat as commercial interests and public opinion shift in favor of more normal relations.

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Administration's Rule on 'Waters of the U.S.' in Final Clearance

The White House Office of Management and Budget has begun reviewing a final a rule that would clarify which waters and wetlands fall under the protection of the Clean Water Act. The final clean water rule, also known as the "waters of the U.S." rule, was jointly proposed a year ago by the Environmental Protection Agency and the U.S. Army Corps of Engineers.

EPA Administrator Gina McCarthy has said the final rule will narrow the definition of tributaries and clarify that only ditches that function like tributaries and can carry pollution downstream will be included. Roadside and irrigation ditches will remain uncovered under the final rule, she said.

Republican lawmakers remain unconvinced by McCarthy's statements that farming and ranching activities will remain exempt under the final rule. They also are concerned that the two agencies will regulate land-use decisions by dictating that any dredging and filling and discharging of pollutants in any small stream would be subject to federal permits and associated conditions.

Sen. James Inhofe, R-Okla., and Rep. Bob Gibbs, R-Ohio, have indicated that they plan to introduce legislation that would send the proposed rule back to the agencies for a rewrite. Those bills are expected to be introduced shortly after Congress returns next week from its current recess. The measure should move easily through the House and also could pass the Senate, where a number of Democrats have indicated some apprehension about the proposed rule.

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Washington Insider: Fight Over GMO Label Costs

The Washington Post maintains a service it calls the "fact checker" that mainly follows politicians around and awards "Pinocchios" for clunker statements (the more Pinocchios, the bigger the clunker). This is actually very hard work, it turns out, because "facts" can be pretty elastic things. So, WaPo is now tangled up in the question of what the GMO labels some activists want might cost the average consumer.

It seems that the WaPo fact checker fell into the same trap that has troubled this fight all along: no one knows for sure what reactions the labels might cause.

The fact checker starts by using a fairly tight question; Would GMO labeling requirements cost $500 more in groceries per family a year as has been claimed by some? Thus, the process stumbles quickly because the question it posits requires answers to a broad set of assumptions that tangle everybody.

The fact checker's issue appeared on a web site by the Coalition for Safe Affordable Food that cited a Cornell University study. This, it says, is part of the "… buzz over GMO labeling." The issue is that a huge portion of commonly grown crops are modified but that safety is not "generally" an issue — even though most consumers think it is and want labels for products have "genetically modified" ingredients. Sounds easy, right? But, what other consequences would follow? That depends on broad assumptions about commercial behavior, some very tall weeds, indeed.

Professor William Lesser of Cornell University examined these issues and concluded that mandatory labels would sharply change product supply and demand. Demand for GMO products would fall while demand for non-GMO products would grow because the labels would be perceived as a warning. To remain competitive, companies would need to find and incorporate new products without GMO ingredients and these would cost more, Lesser says.

Because the industry has narrow margins, these costs would be paid by customers and could amount to $500 more each year for a family of four, the professor thinks. He backs up his assumptions by citing surveys and other studies and consumer polls.

WaPo also offers various background facts concerning what consumers want and notes enormous dissonances between consumers' and scientists views. For example, an August 2014 Pew Research survey found 57% of Americans think it is "generally unsafe" to eat genetically modified foods, while 88% of scientists believe the opposite.

USDA avoids the issue even more, the newspaper says by concluding that consumers don't read labels, or notice them, mostly, and that they are just as likely to overlook GMO labels as other labels, or fail to understand them.

So, how does the Post come out on the cost debate? It thinks there could be costs and that consumers would respond to GMO labeling even though they largely don't understand GMOs. And, the fact checker concludes that "consumers could decide not to buy products labeled as such." If they did, companies will have to act accordingly. "Ultimately, that could result in costs trickling down to consumers — even if it's not as high as $500 per year."

The fact checker is pretty badly sidetracked at this point. The question actually is not what would happen if there were mandatory labels, but what label advocates who want to change consumer behavior want to happen, as the label is interpreted as the warning they intend. So, what would be the likely cost of such a push-back against technology? And, how could that be defended?

Since the advocates are spending money to be sure they change consumer behavior, the risk the fact checker must measure is, what if they succeed? The Post is wrong to duck the challenge of measuring how much that would be. There are, it seems, significant facts left unchecked here.

Prof. Lesser has a cost estimate, and the fact checker stopped short of evaluating it in any detail. This is a cut-and-run if there ever was one and the Post deserves perhaps a Pinocchio or two for such a lapse.

Actually, there are not many winners in this debate, especially USDA with its conclusion that consumers don't really read. What if they did?

Given the high level of consumer confusion about food safety, the Post seems to have uncovered a real need for food and nutrition communication and not much about Prof. Lesser's cost question, Washington Insider believes.

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(GH/CZ)

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