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.

Australian Beef Exporters Have Possible Advantage over U.S. in Japan

Implementation of the Japan-Australia Economic Partnership Agreement (JAEPA) gives Australia’s beef exports a “significant competitive advantage” over U.S. beef in the Japanese market, according to a USDA Economic Research Service (ERS) report. The Japan-Australia agreement could significantly boost Japanese imports of beef from Australia while causing U.S. beef imports to Japan to drop, the authors conclude.

However, the report cautions that the decline could be halted by similar tariff reductions granted by Japan to Australia and the U.S. under the pending Trans-Pacific Partnership (TPP). “The extent of Japan’s tariff reforms for U.S. relative to those that benefit Australia under JAEPA will be a central factor in the ongoing competitiveness of US beef in the Japanese market,” the report noted. The Japan-Australia agreement, which took effect early in 2015, phases in Japan tariff reductions for beef from Australia over 15 years.

Japan, Australia and the U.S. are part of the 12-nation TPP, which has yet to be ratified. The ERS analysis was based on the agreement’s tariff reductions.

Under the TPP, tariffs on chilled and frozen beef would fall to 9% for both the U.S. and Australia, the report said in a footnote. “The implications of the results in this report are still the same; similar reductions granted to the United States and Australia could eliminate the decline in U.S. imports due to JAEPA and even deliver a net increase in the Japanese market for both the United States and Australia,” the authors said in the footnote.

During the 2004-2006 ban on U.S. beef imports due to the North American mad cow disease scare, Australia’s share of Japan’s market for frozen, chilled beef, and beef offal “skyrocketed.” the report said. “The readiness of this substitution suggests that lower tariffs on Australian beef directly challenge US market share,” the report said. Australia and the U.S. account for the bulk share of Japan’s beef imports.

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DOJ Says GAO WOTUS Lobbying Report Not Needed in Court Record

A report by the Government Accountability Office (GAO) on Environmental Protection Agency (EPA) lobbying via social media to promote its Waters of the U.S. (WOTUS) rule is not relevant to the administrative record for an upcoming court challenge to the rule, a Department of Justice (DOJ) brief said.

The GAO report found that the EPA violated anti-lobbying restrictions in two appropriations bills, when it initiated a social media campaign to promote the WOTUS rule. The DOJ brief said the court should reject a bid by the states challenging WOTUS to include the GAO report in the administrative record, for a legal challenge that will be heard by the US District Court for the District of North Dakota.

“This one-sentence argument and citation to an opinion letter from the GAO, an agency within the legislative branch, are not relevant to the States’ motion to complete the record,” the DOJ noted in its filing.

The states brief which had cited findings by the GAO report claimed that the report demonstrated EPA’s “bad faith and other exceptional circumstances in their promulgation of the Rule, as evidenced by the recent report by the GAO that found EPA violated federal law in its use of social media to promote the Rule.”

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Washington Insider: Tightening Food Stamp Work Rules

The Associated Press reported last week that more than 1 million low-income residents in 21 states could soon lose their government Supplemental Nutrition program benefits if they fail to meet work requirements expected to begin to kick in this month. The program is enormous in size and provide roughly 46.5 million Americans with food assistance in 2014. It is widely seen as a critical component of the social safety net for low-income Americans.

The work requirements are not new, but are being newly applied in several areas. The change is being triggered by falling unemployment. However, it continues to emphasize the difficulty in defining human “need” the program aims to serve. The coming changes are raising concerns among the poor, social service providers and food pantry workers, who fear a sharp increase in numbers of hungry people.

While program critics argue that the work rules are easy to meet, analysts note that recent experience in other states indicates that most of those affected are unable to do so and will be cut off from food stamp benefits, the AP concluded.

The so-called work-for-food requirements were first inserted in the program as part of the 1996 bi-partisan welfare reform law signed by President Bill Clinton and sponsored by then-Rep. John Kasich, who is now Ohio’s governor and a Republican candidate for president.

The provision applies to able-bodied adults ages 18 through 49 who have no children or other dependents in their home. They are required to work, volunteer or attend education or job-training courses at least 80 hours a month to receive food aid.

If they don’t, their benefits are cut off after three months, a provision USDA can waive either for entire states or certain counties and communities when unemployment is high and jobs are scarce. Almost every state was granted a waiver during the 2008 recession but the statewide waivers ended this month in at least 21 states, the largest group since the recession.

The AP conducted an analysis of food aid figures that estimated that nearly 1.1 million adults stand to lose their benefits in those 21 states if they do not get a job or an exemption and in some states, the potentially affected beneficiaries are numerous--about 300,000 in Florida, 150,000 in Tennessee and 110,000 in North Carolina. The numbers in those three states reflect the fact that the states did not seek any further waivers for local communities. In states that already have implemented the work requirements, many recipients have ended up losing their benefits, the AP says.

For example, Wisconsin began phasing in work requirements last spring. Of the 22,500 able-bodied adults who became subject to the work rules between April and June, two-thirds were dropped from the rolls three months later for failing to meet the requirements.

Some states could have applied for partial waivers but chose not to do so. North Carolina’s Republican-led government enacted a law last fall accelerating implementation of the work requirements and barring the state from seeking waivers unless there is a natural disaster. State Sen. Ralph Hise said the state was doing a disservice to the unemployed by providing them long-term food aid.

In Missouri, the GOP-led Legislature overrode a veto by Democratic Gov. Jay Nixon to enact a law barring the state from waiving work requirements until at least 2019. The three-month clock started ticking Jan. 1 for 60,000 people in that state where unemployment is now down to just 4.4%. “We were seeing a lot of people who were receiving food stamps who weren’t even trying to get a job,” said the law’s sponsor, Sen. David Sater, a Republican. “I know in my area you can find a temporary job for 20 hours (a week) fairly easily. It just didn’t seem right to me to have somebody doing nothing and receiving food stamps.”

At the same time, numerous observers are criticizing the work rules. “Policymakers often don’t realize a lot of the struggles those individuals are dealing with,” said Mariana Chilton, director of the Center for Hunger-Free Communities at Drexel University in Philadelphia, told the AP. Some are dealing with trauma from military service or exposure to violence and abuse, she pointed out. Others have recently gotten out of prison, making employers hesitant to hire them. Some adults who are considered able-bodied nonetheless have physical or mental problems, she said.

A study of 4,145 Franklin County, Ohio, food stamp recipients who became subject to work requirements between December 2013 and February 2015 found that more than 30% said they had physical or mental limitations that affected their ability to work. A similar percentage had no high school diploma or equivalency degree. And 61% lacked a driver’s license.

This debate is not new, or course. At the same time, the fight is important for producers whose markets are affected, and whose farm safety nets depend on political support from urban nutrition advocates for expensive farm bills. As budget crunches intensify and all programs face criticism, producers need to watch nutrition program debates carefully as they intensify, Washington Insider believes.

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