Washington Insider-- Tuesday

By DTN's Washington Insider

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

University Study Sounds Alarm on Growth Hormones

Researchers at the Indiana University School of Public and Environmental Affairs have been looking into the use of potentially harmful growth-promoting hormones given to cattle and the possibility that these drugs will persist in the environment at higher concentrations and for longer durations than previously thought.

In their study, the scientists focused on the environmental fate of trenbolone acetate, or TBA, a highly potent synthetic analogue of testosterone, used to promote weight gain in beef cattle. Researchers say the majority of beef cattle produced in the United States are treated with TBA or one of five other growth hormones approved for use in animal agriculture.

The compound and its byproducts are examples of contaminants of emerging concern called endocrine disruptors. In the environment they are capable of interfering with reproductive processes and behaviors in fish and other aquatic life. Studies by the U.S. Geological Survey (USGS) and other agencies have found endocrine disruptors to be present in many streams, rivers, and lakes, and several similar compounds have even been found in drinking water.

According to IU Assistant Professor Adam Ward, lead author of the study, "When compounds react in a way we don't anticipate — when they convert between species, when they persist after we thought they were gone — this challenges our regulatory system."

The federal regulatory system is likely to take notice of the research conducted by both USGS and IU, meaning that cattle producers may be hearing more about this issue in the future.

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TPP Partners Closely Watching Progress on Trade Promotion Authority

The Asian nations involved in the ongoing Trans-Pacific Partnership (TTP) free trade agreement are worried about the U.S. commitment to the region, says Assistant Secretary of State Daniel Russel, and they are looking to the fate of TPP and related Trade Promotion Authority (TPA) legislation as "litmus tests" of Washington's desire for long-term engagement in the Asia-Pacific. Russel made his remarks during a recent hearing before the House Foreign Affairs Committee.

Russel said that if the negotiations do not conclude successfully, Asian countries would turn to China for leadership on trade issues, and enact low-standards trade agreements among each other. U.S. businesses would face worsening competition from foreign state-owned enterprises, while Asian countries would weaken their labor protections and enact new obstacles to a free and open Internet, he added.

The Obama administration has been using the possibility of increased Chinese influence in Asia as a reason for Congress to approve both an eventual TPP and TPA. The reasoning is that a strong TTP would thwart China's ambitions in the trade arena. However, a significant number of congressional Democrats believe that the TPP itself is likely to pose a greater threat to the United States than would a rising China.

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Washington Insider: Modernizing WIC

The Women, Infants and Children (WIC) supplemental food program that provides food vouchers to pregnant or postpartum women and their young children is generally regarded as one of the most effective programs offered anywhere. The program is up for renewal this year, and is facing proposals that its eligibility rules be tightened because it is "reaching larger numbers than the government once intended." WIC expanded during the recession to a peak of 9.2 million participants in 2010, but has now contracted to about 8.3 million women and children.

The Wall Street Journal reports that the overall growth in the program has made it a money-losing venture for makers of infant formula, the program's largest single expense. The companies say they now make essentially no profit off formula sold to states as part of WIC. Large suppliers therefore are making the rounds on Capitol Hill, calling on lawmakers to change some of the eligibility requirements to limit the pool of recipients.

Providing benefits to more than half of all babies in the United States, WIC is the third-largest food assistance program behind food stamps and school lunches. It provides vouchers for a variety of foods for mothers and their children up to five years of age, including eggs, cheese and bread, and accounts for well over half of all infant formula sold in the United States. Like food stamps, WIC is federally funded but administered at the state level.

Fierce bidding for state contracts has led the three biggest formula makers to offer steadily deeper discounts — well below normal wholesale prices — eroding their profits on WIC sales. But winning a state's contract makes a formula maker the dominant player on a state's grocery store shelves where the companies try to recoup money lost on WIC sales.

To qualify for WIC vouchers, recipients have to make less than 185% of the poverty level — or $44,100 for a family of four. But families automatically qualify for WIC if they also participate in Medicaid, the health program for the poor, where eligibility is set by the states. A Wall Street Journal analysis of Medicaid benefits indicated that 36 states provide benefits to infants whose families' incomes exceed WIC requirements.

Infant formula maker Mead Johnson has been urging lawmakers to look closely at these income thresholds and says it believes that as many as one-fifth of WIC recipients have incomes above the program's threshold, the Journal says. USDA puts the figure at 1.5 percent of recipients.

Republicans say it is too early to talk about specific changes to the law but note that all components of the program are up for review. "The focus will remain on preserving the intent of these programs, which is to ensure low-income children — and, in this case, mothers and infants in need — receive supplemental assistance to help protect against inadequate nutrition," said Senate Agriculture Committee Chairman Pat Roberts, R-Kan., who has a lead role in renewing the WIC law.

Meanwhile, advocates for the poor say the formula company is overstating the problem.

"We're talking about a really tiny window of people who make more than the WIC income threshold," said Douglas Greenaway, president of the National WIC Association, a nonprofit advocacy group. "I think this is really an effort to put a chink in the armor of the program."

So, this will be one more bitter fight over food programs for the poor. In this case, it will involve enormous companies who argue that they are abused because they had to bid competitively to win massive contracts — an argument that may take at least a little interpretation to win wide support. For one thing, it means attacking program operations by states, in spite of the fact that it is close to the model being proposed by the majority for food stamps and other anti-poverty programs. This is a debate producers should watch carefully as it proceeds, Washington Insider believes.

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