Washington Insider- Thursday

Organic Rules Increasingly Controversial

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

Trump Should Renegotiate TPP, Not Withdraw: Rep. Brady

Renegotiation of the Trans-Pacific Partnership (TPP) pact should be pursued by President-elect Donald Trump rather simply withdrawing from it, House Ways and Means Committee Chairman Kevin Brady, R-Texas, said November 14 at an event hosted by Politico.

If the U.S. abandons TPP, as Trump has proposed, China would be the beneficiary, Brady said, noting that the Asia-Pacific region represents a critical market for the U.S. "If we abandon that field completely, we lose and China wins in a major way," Brady argued, adding that with the election result TPP ratification "is clearly on hold until the president-elect can lay out his trade priorities."

Brady stressed he is still a "champion" of tree trade, which is significant given his position as head of Ways and Means, which has jurisdiction over trade issues.

The incoming administration could renegotiate TPP provisions that remain of “strong” concern to lawmakers, such as the term of intellectual property rights protections for biologic drugs and on the right of TPP countries to impose in-country data storage requirements on financial services firms from other TPP countries, Brady said.

Brady also pledged to defend the 1994 North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico. During the campaign Trump threatened to tear up NAFTA, and his rhetoric against China raised doubts about the future of BIT.

However, Brady said he is open to renegotiating parts of NAFTA, with the aim of modernizing the pact. "I would encourage the president [elect] to take a look at the parts of NAFTA that looked right in the 1990s that can be modernized today," Brady noted. "My advice always is that if you're going to renegotiate an agreement make it more free, be bolder about reducing tariffs in all directions."

Congressional Leadership Mostly Set for New Congress

Senate Democrats voted to elect Sen. Chuck Schumer, D-N.Y., as the next minority leader as was widely expected. Schumer will take over from Sen. Harry Reid, D-Nev., who opted not to seek reelection to the Senate.

Schumer has been vice chairman of the Democratic Conference since 2006, the number three position in the Democratic leadership.

Senate Republicans, meanwhile, selected currently Majority Leader Mitch McConnell, R-Ky., to lead the party in the chamber as he has for the past four Congresses.

House Democrats, however, delayed selecting a leader. While Republicans nominated Rep. Paul Ryan, R-Wis., to serve as House Speaker, House Democrats have opted to delay their leadership selection to Nov. 30.

The election results have created unrest in the party, signaling a potential challenge looms for current House Minority Leader Nancy Pelosi, D-Calif. The Wall Street Journal is reporting that Democrats may draft Rep. Tim Ryan, D-Ohio, as a potential challenger to Pelosi.

Similarly, there is also turmoil in the party over who will lead the Democratic National Committee, with Rep. Keith Ellison, D-Minn., mentioned as a potential candidate.

Washington Insider: Organic Rules Increasingly Controversial

More than two decades ago, Congress told USDA to set up a national organics program that would regulate and certify certain production processes to qualify products for an “organic” label.

As you might expect, USDA set up advisory boards and committees and developed such a process. However, the agency is still in the business of deciding what should be allowed to be labeled and what should not. For example, certain biotech products were originally eligible, but that was changed after a storm of protest.

USDA depends on recommendations of a 15 member Organic Standards Board that hammers out recommendations over which production methods are acceptably organic. The current Board is meeting this week, and at least one question on the agenda is “roiling the world of organic farming,” the New York Times says. It thinks that the answer could redefine “what it means to farm organically.”

On one side are the growing number of big and small growers raising fruits and vegetables in hydroponic systems who argue that their production methods are not basically different from those of farmers who grow plants in dirt. They also think their approach makes organic farming more sustainable by, for instance, reducing water use.

“Soil to me as a farmer means a nutrient-rich medium that contains biological processes, and that doesn’t have to be dirt,” Marianne Cufone, an aquaponic farmer and the executive director of the Recirculating Farms Coalition, which lobbies for aquaculture, told the Times.

Not so, say many farmers who have spent years developing practices to draw nutrients from the soil. They argue that organic production is first and foremost about caring for the soil, which produces environmental benefits that go beyond growing plants.

“Soil has always been the basis of organic production,” Steve Sprinkel, an organic farmer in Ojai, California told the Times. “...taking care of the soil is the bedrock of organic farming.”

The answer will be important, because the market for organic products is large and growing, worth $40 billion last year the Times says. “Keeping up with the demand is difficult and expensive, and financiers and entrepreneurs, many of them from Silicon Valley, have started pouring money into these alternative systems.”

“It’s like using an intravenous needle to administer exactly what we think the plant needs instead of allowing the plant to get what it needs in the amount it needs out of the ground,” Dan Barber, a chef in New York and author of “The Third Plate,” told the Times.

In 2010, the Board recommended that hydroponic systems be ruled ineligible for organic certification because they excluded “the soil-plant ecology intrinsic to organic farming systems.” At that time, there were only 39 hydroponic growers with organic certification.

USDA has not yet acted on the board’s recommendation, so organic certification of crops grown in hydroponic systems is continuing. The number of hydroponic growers with organic certification dropped to 30, but there were 22 certified aquaponic growers and 69 certified operations growing plants in containers lined with things like peat moss and coconut husks.

So, once again USDA is caught in the middle. “The recommendation did not adequately address the diversity of practices and systems in the industry,” Miles McEvoy, the official who oversees the USDA’s organic program, said. USDA even assigned a task force to report on current practices, but that group split into two camps, mirroring the current debate, the Times says.

Some 24 countries in Europe – including England, the Netherlands and Spain – as well as Mexico, Canada, Japan and New Zealand, do not allow organic certification for hydroponically grown produce.

Colin Archipley’s farm, Archi’s Acres, grows kale, herbs and other produce hydroponically in greenhouses in San Diego. “The reason this has become such a big deal is that systems like ours are becoming more popular because they’re more efficient, which means farmers are more sustainable and profitable,” he told the Times. “That’s put competition on farmers, specifically in Vermont, and so what this really is about is market protection.”

So, the issue continues to simmer and, once again and it will be interesting to see what the Board and USDA decide to do. Still, consumers may have a word in the outcome of the debate—especially, if hydroponic products are significantly cheaper to produce and their quality is high. The USDA Board’s deliberations should be watched closely as they proceed, Washington Insider believes.

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