Washington Insider -- Friday

The Threat of GMO Labels Begins to Bite

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

Shimkus Renews Call for RFS Reform

Rep. John Shimkus, R-Ill., a senior member of the House Energy and Commerce Committee who is in the running to become the panel's next chairman, called for changes to the Renewable Fuel Standard (RFS) and in a surprise move, welcomed legislation that would cap ethanol's share of the fuel supply. The legislation would cap the maximum volume of ethanol blended into the transportation fuel supply at 9.7% of projected demand as determined by the Energy Information Administration (EIA).

“With EPA set to take over the RFS program entirely in 2022, which should concern everyone, now is the time for us as policy makers to examine how the program can be improved to better reflect an evolving energy landscape,” said Shimkus, who currently chairs the panel's Subcommittee on Environment and the Economy. “Without reform, neither producers nor blenders will have the certainty they need in the years ahead.”

The legislation (HR 5180) was introduced May 10 by Rep. Bill Flores, R-Texas. In a statement, Shimkus said, "It continues the dialogue to help move the debate forward."

The four-page bill's 9.7% limit on ethanol in fuel is significant in that it keeps the amount of biofuels blended into the motor fuel supply below the so-called 10% “blend wall ”— the maximum amount of ethanol in gasoline approved for use in all vehicles on the road.

Flores' bill also would require the EPA to meet its statutory deadlines in setting its annual RFS volume requirements. The agency missed its annual RFS deadlines for the past three years.

The Renewable Fuels Association, a Washington-based trade group that represents biofuels producers, said if enacted, the bill would “gut the RFS and send America's energy and climate change policy back decades.” Bob Dinneen, the group's president and CEO, said in a statement that, “Passage of this bill would represent a complete capitulation to the oil industry that steadfastly refuses to provide consumers higher-octane, lower-cost alternative fuels at the pump.”

Energy and Water Appropriations Bill Approved By Senate

The Senate's $37.5 billion Energy and Water appropriations bill was approved on a 90-8 vote, action that came only after a vote to end debate (invoke cloture) succeeded May 11 after other failed attempts.

“We're back in business,” Senate Minority Whip Dick Durbin, D-Ill., told reporters after the cloture vote May 11. “We have a meeting of the minds on how not to get bogged down.”

The Fiscal 2017 Energy and Water bill is the first appropriations bill to be approved by the Senate. The bill would appropriate $30.7 billion for the Department of Energy and also would fund the Army Corps of Engineers and the Interior Department's Bureau of Reclamation.

The House has its own $37.4 billion version of the Energy and Water bill approved by the House Appropriations Committee Apr. 18, but hasn’t yet been brought up on the floor, as the House has been unable to pass a budget resolution.

Washington Insider: The Threat of GMO Labels Begins to Bite

The clock continues to tick toward the implementation of Vermont’s mandatory GMO labeling law on July 1. And, at the same time, the odds that the Senate will succeed in designing a plan to limit state mandatory requirements as the House has done seem to be declining, as well.

Still, Senate ag Chairman Pat Roberts, R-Kan., and ranking member Debbie Stabenow, D-Mich., continue to insist that they will craft a deal that will please both sides.

Bloomberg is reporting that some major food producers are already changing their production processes in anticipation of the implementation of the Vermont law—an impact that analysts say could reduce production efficiency and affect consumer costs, perhaps significantly.

At the same time, food advocates continue to assert that the cost of the labels would be small, perhaps a few cents for each product. Manufacturing disagree.

“Adding a few words or a symbol to the label will not increase food prices, as labeling opponents contend,” Just Label It – which supports mandatory labeling laws – told Bloomberg. “It's time for Congress to give American consumers the same factual information as consumers in 64 other nations.” The group did not note whether these nations’ consumers spend a greater share of their incomes for food than U.S. consumers do.

Press reports indicate that food producers are already changing their processes. For example, Dannon, one of the largest yogurt makers in the U.S., will stop using ingredients made from genetically modified organisms in some products and begin labeling GMO ingredients in others.

The company said its flagship brands Oikos, Danimals and Dannon, which make up 50% of the company's volume, will drop GMO ingredients starting this coming July. Beginning in December 2017, Dannon will label the presence of GMO ingredients in its other products.

The company also said that it would phase out GMO feed for its dairy cattle over three years. It said it will attempt “to get ahead of a slew of state laws mandating that food producers label GMO products," such as a Vermont law, Bloomberg reported. It also noted that following the March failure of a Senate bill that would have created a nationwide, voluntary labeling system, companies such as Nestle SA said they would remove GMO ingredients in some products, while General Mills, Inc. and ConAgra Foods, Inc. said they would begin labeling foods with GMO ingredients.

“Our ambition is to produce healthy food that is affordable, creates economic and social value and nurtures natural ecosystems through sustainable agriculture,” Mariano Lozano, president and CEO of the Dannon Company told Bloomberg.

It is not clear exactly what alternatives are now under consideration by the Senate, and it seems that the issue has been clarified a little – to the extent that the food industry appears to have generally accepted the idea that companies would provide some information that allows consumers to tell whether a product contains biotech ingredients.

Still, the issue is complicated and controversial in the extreme. For example, food manufacturers believe they need to be able to manage the content of the labels on their products. Food advocates argue, somehow, that they should be in control.

And, there are splinter issues involved, as well, as industry groups attempt to react to individual concerns. For example, the meat and dairy industries want any bill to make clear that meat and milk won’t have to be labeled even if the animals providing those products are fed genetically engineered feed, an issue now before the courts.

So, it is unlikely that this fight will end any time soon, particularly since there is no real clarity regarding what consumers really want to know and how far up and down the production chain that interest extends—and, how much more are they willing to pay to get it. In the previous state fights in California, Washington and Colorado, when scientists and others presented estimates of the economic impact of specific label proposals on the system, they voted them down.

So, now the issue seems insoluble, in part because advocates seem to want to define GMOs broadly and to effectively discourage their use – in spite of the fact that consumers already have a non-GMO alternative in USDA’s certified organic label. Nevertheless, the label battle seems likely to be continued for the foreseeable future, Washington Insider believes.

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