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.

NGFA Urges Appropriators to Focus on Waterways Funding

In letters to House and Senate appropriators, the National Grain and Feed Association (NGFA) asked for continued leadership in support of inland waterways infrastructure, whose locks and dams are in a precarious state of disrepair given most are well beyond their 50-year projected lifespan.

The letters signed by 19 other agricultural groups asked appropriators to build upon their strong investment in waterways funding in fiscal 2016, emphasizing that continued momentum is needed during the fiscal 2017 appropriations process.

“From an agricultural users’ perspective, having access to a modern and efficient inland waterways transportation system is vital to the efficient production, marketing and shipment of agricultural products in international commerce,” the letter states, adding that the United States exports nearly one-quarter of the grain it produces.

Last year was a strong, impactful year for waterways funding, with appropriators allocating far above the administration’s deficient requested budget.

This year, NGFA and other members of the agricultural industry are asking lawmakers to continue that momentum by appropriating the full amount supportable by the diesel fuel tax going into the Inland Waterways Trust Fund, which is expected to be $390 million in Fiscal 2017.

Additionally, NGFA made the case for a minimum funding level of $3.137 billion for the US Army Corps of Engineers operations & maintenance (O&M) account, which represents the same funding that was provided in fiscal 2016. The letter noted that the Corps still has significant progress to make on the project backlog.

“In 2014, 73% of the volume of US agricultural exports and 65% of imports were transported via our waterways,” the letters noted. “Having access to competitive barge transportation also helps discipline rates for other modes of transportation- an important factor given current depressed agricultural commodity values...We believe these facts help make the case for renewed commitment and investment in our waterways and port infrastructure.”

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EU Trade Commissioner Discusses Status of TTIP Talks

Public procurement offers under the Transatlantic Trade and Investment Partnership (TTIP) were exchanged between the U.S. and European Union (EU) at the end of February are currently being reviewed, with a second round of offers possibly to come by summer, EU Trade Commissioner Cecilia Malmstroem said March 10 at the Peterson Institute for International Economics.

The EU isn’t asking for the elimination of the Buy American Act, which requires U.S. government procurement to favor U.S.-made products, Malmstroem said. She suggested that through the use of waivers, Buy American rules can be relaxed to a point agreeable to the EU.

A TTIP chapter on energy is something else being sought by EU trade negotiators, which Malmstroem suggested would be advantageous geopolitically as it would open new energy markets for EU consumers.

The next round of TTIP negotiations is set for mid-April in New York. “I remain confident that we can come to an agreement by the end of the year,” Malmstroem stated. Further, she rejected the idea of a “TTIP light” fallback deal should negotiations sour.

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Washington Insider: More Sustainable Beef

The Omaha World Herald, a paper that is well known as a strong supporter of Nebraska agriculture, reported last week that some industry heavy-hitters are pledging “more sustainability” for beef production--and that such a promise holds both risks and rewards for Nebraska, the nation’s leader in feeding and slaughtering cattle.

Then the paper plunged into really deep water and asked what the term “sustainable beef,” means, and what should producers be doing if they want to raise and sell it?

Turns out that no one really has such an answer, and that there likely is more than one approach. “Ask a dozen people in Nebraska’s beef industry, and you’ll get as many answers,” the World Herald says. These include some who worry about beef’s environmental impact and believe that the term, “sustainable beef” is an oxymoron. Others see “time-tested conventional practices as sustainable and getting more so every day. Big ranches, feedlots and meatpackers wouldn’t still be in business otherwise,” they say.

Nevertheless, the industry tends to agree that it has problems with its image and wants to find an effective way fix that. The effort includes the Nebraska Cattlemen’s Association; major Nebraska employers Tyson Foods, JBS and Cargill; and one of the state’s largest feedlot operators, Adams Land and Cattle, who are part of a national effort to build some consensus on what “sustainable” means. Supporters say they hope to counter the perceptions of some consumers that beef production harms the environment, the World Herald says.

More than 90 groups and businesses are part of the Roundtable including: sustainability advocates such as the Nature Conservancy and the World Wildlife Fund, universities, and big agribusinesses such as Dow and Merck.

It might seem unusual that conventional players in the beef industry are part of the effort. “There are people within our ranks who would be skeptical or nervous about this,” said Pete McClymont, executive director at Nebraska Cattlemen. But when the association considered joining, board members came around, he said.

The Roundtable says it does not involve groups the industry might consider more extreme in their opposition to large-scale beef production, such as the Humane Society of the United States or People for the Ethical Treatment of Animals.

At the same time, the very idea of having to defend their businesses is still hard for some beef producers to get behind, said Nicole Johnson-Hoffman, a Cargill vice president in charge of the company’s business with McDonald’s. “…we’re going to have to explain things we can’t believe we have to explain to people,” Johnson-Hoffman, chairwoman of the Roundtable, told an audience at the Governor’s Ag Conference last week in Kearney.

Criticism of the industry is nothing new, she said, but in the past the biggest concerns were water safety, animal welfare and food safety. Now, consumers worry about beef’s carbon footprint, along with its role in the human diet and the industry’s routine use of antibiotics. “We have a hard time understanding it, but there are people who believe it is socially irresponsible to eat beef,” Johnson-Hoffman said. “This is the narrative that has taken hold. We need to interrupt the narrative.”

So, the Roundtable members intend to focus on consumers and to help define and measure sustainability and to work out ways to verify sustainability and to test and promote sustainable practices. “This may not mean much right away for Nebraska cattle producers…[but] producers who want to sell to certain buyers likely will have to start documenting that they’re using sustainable practices and making progress on sustainability indicators,” the Roundtable says.

Right now, the industry says no single definition of sustainability will do “because it takes so many steps to raise beef and because it is raised in so many different climates and landscapes.”

Amy Staples, Adams Land and Cattle’s director of research and development and regulatory compliance. told the World Herald that “it isn’t just about the environment, or just the animals. It is all those things working in conjunction with one another. This [work] will impact farmers in Nebraska. I promise you it will. Whether or not it’s a good impact for Nebraska or a bad one will depend on how well we do our job.”

In recent months, ag industry officials have become increasingly aware of consumer criticism and sustainability is high on the list of consumer-approved concepts for a system widely seen as resource exploitive. Thus, efforts developed in the Nebraska heartland and involving key players from across the food chain would seem well positioned to make a positive impact on this debate, and especially on the red meat industry and should be watched closely by producers as it proceeds, Washington Insider believes.

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(GH/CZ)

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