Washington Insider -- Friday

The Spud is Transformed

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

Democrats to Block Customs Bill

Plans by Senate Majority Leader Mitch McConnell, R-Ky., to bring a final customs bill to the Senate floor and pass it were dealt a blow when Senate Minority Whip Richard Durbin, D-Ill., suggested that Democrats may not lend their critical support to the bill due to changes made by the House in conference.

The bill is the last of four trade-related items which were introduced last year in an effort to win support for Trade Promotion Authority (TPA). Democrats had demanded a customs bill be brought to a vote, but now oppose passage of the bill due to provisions inserted by the House when the bill was in conference.

Provisions which drew the most ire of Democrats include those which discourage trade agreements from including environmental clauses which address global warming, as well as provisions which are seen as watering down human trafficking protections in the bill. The inclusion of an Internet-tax freedom language was has also been cited as a point of contention.

Republicans are still hopeful they can muster the requisite 60 votes to defeat the point of order, with Senate Commerce, Science and Transportation Committee Chairman John Thune, R-S.D., telling reporters “Right now, I think the vote count is probably fairly close on that. There are a lot of groups who are interested in that that are whipping it, and it could be a close vote, but I think in the end there will be 60 votes for keeping that in the bill.”


Vilsack on Key Issues President Obama Addressed in SOTU Address

President Barack Obama during his State of the Union address commented on several issues important to the agricultural industry, including the proposed Trans-Pacific Partnership (TPP) agreement, the trade embargo on Cuba, and climate change. USDA Secretary Tom Vilsack later noted the following on the topics:

On TPP: Vilsack said not getting a deal done wouldn’t only deprive U.S. farmers of the deal’s benefit, it would put the country at a competitive disadvantage against China. “If we don’t get this done, if Congress decides for some reason not to be supportive of this, it’s not that the status quo remains,” he said. “The reality is that China has been negotiating with Asian countries for an all-Asian agreement” that would exclude the US, he said.

On Cuba: President Obama called for an end to the embargo against Cuba, which USDA research shows could boost U.S. farm exports by $1 billion. “This is an area where, from poultry to rice and other products, we can sell in great abundance,” said Vilsack, who visited Cuba in November. Congress’s unwillingness to end the embargo, in effect since the 1960s, complicates any further opening, Vilsack said. U.S. competitiveness in Cuba is a situation “the president has begun to untangle, but is not in a position to completely untangle until the embargo has lifted,” Vilsack said.

On Climate Change: “Agriculture in the U.S. is doing its part by doubling the rate of emission reductions over the next 10 years,” Vilsack said.


Washington Insider: The Spud is Transformed

It has been a long—but not forgotten—time since millions of U.S. GI’s made a close acquaintance with the lowly spud, an experience that left a lasting impression of things good and bad about the important tuber. It became appreciated for its nutrition, if not necessarily for its taste, as well as for its threat to dieters everywhere--although experts deny that’s the spud’s fault. Still, among foods it has long been extremely, critically, important.

It also is highly vulnerable to diseases that can destroy an abundant crop in days, and which, experts say, caused the Irish potato famine in the mid-19th century. Disease threats have worried producers in most areas over centuries.

Recently, though, the march of technology has signaled a path to better potatoes. The Associated Press is reporting that this week that FDA wrote to Idaho-based J.R. Simplot Co., to say that their new GMO variety is not substantially different in composition or safety from other products already on the market. The agency added that the new technology does not raise any issues that would require the agency to do more stringent premarket vetting.

“We’re pleased and hope that consumers recognize the benefits once it’s introduced into the marketplace next year,” Doug Cole, the company’s director of marketing and communications, told the AP.

Still, before the potato is marketed to consumers, it must be cleared by EPA, Cole said. That’s expected to happen in December. USDA approved the potato last August.

So, it remains to be seen how the markets reacts to the new technology. Concerns about threats to health seem to be dwindling, although consumers in general are suspicious of this particular technology, perhaps for a couple of reasons. Some believe that altering the genetic code of foods presents an ethical issue, although fundamental alterations have been made in most food crop genetics for many, many years.

In addition, biotechnology is associated with large agribusiness firms that many consumers hate. And, the technology has also been associated with increased reliance on pesticides by some, often incorrectly. So, it will be important to note that this technology comes from a fairly modest producer, and aims to reduce pesticide use. But, will that matter?

The food industry has faced growing pressure from retailers as consumer impressions of genetically modified foods have sharpened, and as retailers have attempted to create no-biotech “brands.” For example, Whole Foods plans to label genetically modified products in all its U.S. and Canadian stores by 2018. And some companies have decided to remove the ingredients altogether, AP says.

Another thing may be happening with this new technology as food producers now attempt to build in “consumers values” that were not present in the earlier GMO products that focused on making production more efficient. Thus, the Russet Burbank Generation 2 is the second generation of Simplot’s “Innate” brand potatoes. It includes the first version’s capacity to reduce bruising and will reduce capacity to produce an unwelcome chemical at high temperatures that some studies indicate could have negative health effects.

The second-generation potato also includes an additional trait that the company says will allow potatoes to be stored at colder temperatures for longer time to reduce food waste.

Haven Baker, vice president of plant sciences at Simplot, said late blight, the cause of the Irish potato famine, remains the No. 1 pathogen for potatoes around the world. “This will bring 24-hour protection to farmers’ fields and, in addition, has the potential to reduce pesticide spray by 25% to 45%,” Baker said.

“There are 4,000 species of potatoes,” Baker said. “There is an immense library to help us improve this great food. By introducing these potato genes we can bring sustainability and consumer benefits.”

The company already has been selling its first generation of Innate potatoes and consumers have completely bought out its 2014 crop.

Still, retailers often prove hard to charm when changes are in the offing, and one of the company’s oldest business partners, McDonald’s, is rejecting use of any of Simplot’s genetically engineered potatoes. Cole told the AP that the company plans to introduce the potatoes to other restaurants and hotel convention centers as precut and pre-peeled potatoes, where he said the resistance to bruising makes them a good product.

So, we will see. For now, nothing has been said about the relative cost Simplot has in mind for the new product, and that likely will be important to retailers. And, having additional consumer attributes could help complement the existing producer benefits. Still, the struggle to protect consumers from GMO’s is powerful and likely long lasting. As a result, the effort to create and market consumer benefits is important and should be watched carefully as it proceeds, Washington Insider believes.

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