Washington Insider -- Tuesday

Voluntary Water Quality Program in Iowa Highlights Issues

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

TPP at Top of Agenda as Obama Visits Vietnam, Japan

Discussions surrounding the ratification and implementation of the Trans-Pacific Partnership (TPP) trade deal are at the top of the agenda as President Barack Obama begins a visit to Vietnam followed by one to Japan.

Solutions to the problem of overcapacity in the steel and aluminum industries also are expected to be discussed during the visits.

Obama starts his trip with stops May 23-25 in Hanoi and Ho Chi Minh City, where he is meeting with Vietnamese leaders to discuss TPP and improving bilateral commercial ties, top administration officials told reporters late last week.

Vietnamese officials are hoping to receive assurances from Obama that TPP will not be scuttled after the Nov. 8 elections. The have already made requests on tariffs, technical assistance and a TPP adjustment period.

Next, the president will go to Japan for the May 26-27 Group of Seven (G7) leaders summit in Ise-Shima. A bilateral meeting between Obama and Prime Minister Shinzo Abe is planned for the first day, White House officials said, adding that the president will emphasize that approval of the TPP remains a top priority for his administration.

EU Appeals WTO Ruling on Biodiesel Antidumping Measures Against Argentina

An appeal was filed by European Union (EU) against a recent World Trade Organization (WTO) dispute ruling which found that EU antidumping measures on imports of biodiesel from Argentina violated international trade obligations.

The dispute, filed by Argentina in 2013, alleged that the EU's imposition of duties averaging 24.6% didn't comply with various provisions of the WTO's Antidumping Agreement.

Argentina also challenged a Nov. 2009 EU regulation, which allows EU trade authorities to set the costs associated with the production and sale of products under dumping investigations based on the costs of other producers-exporters, when determining the dumping margin.

The WTO has been receptive to Argentina's arguments and pushed the EU to bring its measures into compliance with the terms of the anti-dumping agreement and the GATT 1994, in its Mar. 29 ruling.

Though the appellate body reviewing the EU request will try to issue a report within 60 days, delays are expected due to a staff shortage on the appellate bench and an increased workload.

Washington Insider: Voluntary Water Quality Program in Iowa Highlights Issues

The Associated Press is reporting that Iowa’s voluntary state program that aims to improve water quality practices at farms around Iowa is entering its fourth year and facing new questions regarding credibility of the voluntary approach, and well as growing differences about the best ways to clean up the state's waterways.

The Iowa Department of Agriculture and Land Stewardship announced this month the sign-up period is open for its cost-share program that allows farmers to offset the expense of implementing water quality practices that reduce farm runoff. The anticipated funding to cost-share the program expected to total about $3.5 million, will be available in July.

The program is one of several initiatives aimed at water conservation, said department spokesman Dustin Vande Hoef. He emphasized there is coordination between federal, state and local officials to work with Iowa farmers and landowners to tackle the bigger issues surrounding water quality.

"All of us working together is how we're going to make significant progress," he said.

However, some people contend a voluntary program for farmers doesn't do enough to ensure long-term water quality benefits. Nearly 3,000 farmers have used the program since it began in 2013, but that's a small percentage of the roughly 87,000 farms the federal government estimates operate in Iowa.

Now, however, questions are being raised whether the program actually succeeds in improving water quality. Craig Cox, senior vice president at the national research and advocacy group Environmental Working Group, said Iowa has received more than $3 billion in federal funding since 2005 for water and soil conservation that includes cost-share programs. Such programs go back several decades, he said.

"There's been money spent trying to get farmers to improve water quality for a long, long time and it's not producing cleaner water," he said.

Cox reported in January a number of flaws in voluntary programs like the one in Iowa. One main issue is that farmers who voluntarily start conservation efforts can stop at any time, halting any lasting improvement in farm practices.

Vande Hoef claims that Iowa's cost-share program is unique because it focuses on reducing nutrients in the water while other federal programs have a broader focus. However, the Iowa program has recently been expanded to increase its funding in an effort to attract more farmers will stick with the effort. The department expects to receive $9.6 million in the next budget year for water quality initiatives, some of which will help fund the program.

There is an increasingly intense focus on Iowa's waterways amid a lawsuit by the Des Moines Water Works, which provides drinking water for about 500,000 people and is seeking to force county officials to reduce farm runoff. Jennifer Terry, the utility's environmental advocacy leader, told the AP that the state needs a targeted, strategic implementation plan for cleaning up waterways, "not just random acts of conservation sprinkled across the state which will have no benefit on water quality."

Cox said the utility's lawsuit has raised a philosophical issue and it's getting harder to ignore.

"What I'm doing on my land is polluting your water but you need to pay me to stop," he said. "That's what voluntary programs mean."

Pat Tekippe, who grows corn, soybean and other crops on his farm in northeast Iowa, said he has used the cost-share program twice and plans to do so again with this new cycle of available funds. However, he claims that farmers are being squeezed by rising costs and declining commodity prices.

Tekippe hopes the program will expand to encourage more participation and education, and he emphasized that farmers want to be active on conservation efforts.

Iowa lawmakers failed this session to agree on a funding plan for water quality initiatives, but the issue is expected to come up again next year. Besides tackling funding questions, legislators also must figure out whether initiatives should be voluntary like the cost-share program. Observers suggest that it would be difficult to approve mandatory requirements through the Legislature.

Nevertheless, the legislators say they see a situation where water consumers—and, their constituents—are facing growing clean-up costs and have opinions of their own about how clean water costs should be allocated. So, this promises to be a difficult issue for some time with hard choices involved. It is one with implications for all of agriculture and should be watched closely by producers as it proceeds, Washington Insider believes.

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