Washington Insider -- Tuesday

Free Advice for USDA Nominee Perdue

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

Trump's Regulation Freeze May Impact USDA Proposed Rules

President Donald Trump on Friday asked the heads of federal departments and agencies to stop advancing regulations until his own appointees are able to review them. The memo was issued by White House Chief of Staff Reince Priebus on Friday night and is a usual occurrence when a new party takes the White House. Priebus said regulations include so-called guidance documents. He said department and agency heads should notify the Office of Management and Budget director if they want anything excluded from the freeze.

The memo appears to impact a final rule published January 19 setting animal welfare standards for poultry and livestock. It was scheduled to take effect March 20, with portions phased in through 2018. The rule is meant to enable USDA to certify products as organic.

Requirements to carry out a mandatory labeling law could also be impacted by the regulatory freeze. A pre-rule, a very preliminary regulatory step, pending at the OMB is an initial attempt by the department toward establishing a framework for identifying food products subject to the law.

The pre-rule is among four USDA regulations by the Obama administration in review by OMB. The oldest is a proposed rule to set standards for organic aquaculture or fish farming. It has been under review since August 2015.

Also impacted are multiple livestock marketing rules. One is an interim rule that would allow farmers to sue a poultry processor and pork and beef meatpackers for unfair practices if they can show that the company's actions had adverse consequences.

One proposed rule would address the poultry tournament payment system in which a poultry farmer's birds are ranked in comparison to other farmers' birds. Payments to growers are increased or reduced based on the performance outcomes.

The second proposed rule would clarify what the Grain Inspection, Packers and Stockyards Administration (GIPSA) defines as unfair practices and preferences that violate the Packers and Stockyards Act of 1921 governing livestock and poultry marketing and sales. The rule would establish criteria to protect the legal rights of farmers.


Trump Signs Order to Withdraw from Trans-Pacific Partnership

President Donald Trump took action today to cancel an agreement for a sweeping trade deal with Asia as one of his first official White House actions.

After meeting with business executives to discuss the US manufacturing industry, Trump headed to the Oval Office to sign an executive order formally ending the United States' participation in the Trans-Pacific Partnership (TPP). The agreement faced a big hurdle making it through Congress, but signals that Trump's aggressive talk on trade policy matters during the presidential campaign will carry over to his new administration.

Trump drew a hardline on trade during his campaign, and Majority Leader Mitch McConnell, R-Ky., acknowledged last year that TPP was dead for the foreseeable future.

"That doesn't mean we don't trade because we do trade," Trump said earlier today at the beginning of a White House meeting with executives from companies including U.S. Steel Corp., Lockheed Martin Corp. and Dow Chemical Co. "What we want is fair trade."

"We've been talking about this for a long time," Trump said after signing the order in the Oval Office, adding that leaving the 12-nation pact is a "great thing for the American worker."

Rather than the multilateral approach taken via the TPP, Trump and his top trade officials favor bilateral agreements instead, believing the US can garner a fairer agreement for U.S. businesses rather than the concessions made to reach an agreement with several nations.

Washington Insider: Free Advice for Nominee Perdue

Well, Governor Sonny Perdue has yet to face Congress for his confirmation, but he is already getting advice from many quarters. For example, Food Safety News says that the governor presided over one of the worst food safety crises, the deadly 2009 outbreak of foodborne illness from Georgia peanuts, and "there was not much he could do about it." Still, FSN is positive about the steps that were taken.

After King Nut peanut butter made by Peanut Corporation of America was implicated in the deadly nationwide outbreak of Salmonella Typhimurium state and federal investigators "found multiple possibilities for Salmonella contamination. The governor found that state laws did not cover what happened at PCA where the company knowingly shipped products after tests found they were contaminated with a potentially deadly pathogen. The outbreak caused by the contaminated peanut butter sickened thousands and killed at least nine people.

Perdue shifted his attention and that of Georgia's legislators away from the current case and "focused on preparing for the future with a first-of-its-kind state law that requiring food makers to notify the state within 24 hours when tests show products are tainted. Failure to provide such notice became a criminal offense when Perdue signed a bill into law a couple months after the PCA plant was inspected." The resulting legislation gave the state agriculture commissioner numerous new powers, especially in terms of being able to demand records and access to various properties.

FSN also notes that the U.S. Justice Department filed indictments with 76 federal felony counts against five executives and managers involved with the peanut company involved including owner Stewart Parnell. They were convicted a year later and are all currently in federal prisons serving a total of 62 years.

The FSN notes that "if confirmed by the US Senate…Perdue will become responsible for a number of USDA entities, including the Food Safety and Inspection Service with its $1 billion budget and 10,000 employees. Most of the FSIS employees work inside private processing plants around the country," FSN said. USDA is responsible for the safety of the nation's meat, catfish, poultry and eggs.

FSN also notes that reaction to Perdue's appointment is turning out to be pretty positive with mainstream farm and agricultural groups. And it presents favorable comments from several including the American Soybean Association which invests heavily in market development and says it looks forward to working to "helping expand our markets overseas" and investing in agricultural research.

At the same time, Governor Perdue is getting some advice from the Humane Society of the U.S. (HSUS). It thinks that of all federal cabinet secretaries, "none impact the lives of animals more than the Secretary of Agriculture." This includes that "nearly 10 billion animals raised for food" as well as "laws and regulations that protect vulnerable animals in puppy mills, zoos, and research labs, and helps bring animal fighting to a long overdue end." HSUS says it hopes that as Secretary, Perdue will prioritize the wellbeing of these animals and build upon recent animal welfare gains at the USDA.

HSUS says it applauds the "long-awaited" set of animal welfare standards announced recently for "farm animals raised under the organic label," and notes that it appreciates "Perdue's commitment to animal welfare during his terms as Governor of Georgia, including efforts to make dog fighting a felony and to outlaw the use of gas chambers by animal shelters."

HSUS says it also looks forward to working with Perdue him and the Department on a variety of other animal welfare "touch points." Among these, it mentions the highly controversial issue of "horse slaughter plants in the U.S." which now cannot operate—at the same time, the issue of providing care for large numbers of unwanted horses has become a burden for tribes and producers in a number of range areas.

Still, it seems that Gov. Perdue has generated significant political momentum in a job that certainly has its share of political challenges. His next hurdle will be the Senate confirmation hearings, which also are expected to go well, although significant time bombs on trade and immigration likely may be discussed, along with ideas about the coming farm bill debate—discussions producers should watch closely as they emerge even though the administration may have imposed internal "fences" on the more toxic topics by then, Washington Insider believes.

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