Washington Insider -- Thursday

Awaiting EPA's Lake Erie Strategy

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

Lingering US-Mexico Sugar Tssues Even As Agreement Announced

Top officials from the U.S. and Mexico Tuesday announced a tentative accord. But the American Sugar Alliance has some concerns about a “major loophole” dealing with additional U.S. needs. Alliance spokesman Phillip Hayes said, “Mexico could exploit this loophole to continue to dump subsidized sugar into the US market and short US refineries of raw sugar inputs.”

Hayes said the U.S. sugar industry wanted to work with Commerce Secretary Wilbur Ross on the provision that gives Mexico the right of first refusal to fill 100 percent of any additional sugar USDA determines is necessary to meet commercial demand for sugar that is used for everything from candy to beverages and processed foods.

The agreement will be finalized over several days, but removes one contentious issue from the table when the U.S., Mexico and Canada begin formal talks to renegotiate the North American Free Trade Agreement.

The U.S. corn industry expressed support for the deal. John Bode, president and CEO of the Corn Refiners Association, said the agreement once finalized would protect a $500-million-a-year market in Mexico for the industry. The National Corn Growers Association also welcomed the agreement, noting that Mexico is the top export market for U.S. corn overall.

FSMA Agricultural Water Quality Compliance Dates Delayed

While not providing a new compliance schedule, the Food and Drug Administration (FDA) announced the agency has pushed back the compliance dates for agricultural water quality rules created under the Food Safety Modernization Act (FSMA).

The delay is an effort to further work with stakeholders to address concerns about the regulations, the agency said announcing the delay. Farm groups are seen benefitting from the delay as they expressed great concern about the complexity of the rules under the tougher standards for preventing the contamination of crops.

"I've heard from many farmers concerned with the rules and struggling to figure out how and when they have to comply with FSMA rules and regulations,” House Agriculture Committee Chairman Mike Conaway, R-Texas, said in a statement. “This extension provides producers the time necessary to come into compliance while still protecting public health.”

FDA did not set a new compliance schedule, noting the length of the extension is under review. The agency finalized the water rules in November 2015 and first issued a compliance extension in August 2016.

"Agricultural water can be a major conduit of pathogens that can contaminate produce, which is why FSMA's produce safety rule sets microbial quality standards for agricultural water, including irrigation water that comes into contact with produce," the FDA said. "FDA remains committed to protecting public health while implementing rules that are workable across the diversity of the food industry."

The rules require farmers to establish a baseline "microbial water quality profile" after collecting samples and then adjust their farming practices to lower the potential to contaminate produce. Those profiles have to have 20 water samples collected over a period between two and four years, the length of which is determined by farm size.

Washington Insider: Awaiting EPA’s Lake Erie Strategy

While EPA emphasizes its progress in pushing back its own regulations, some producers are awaiting the agency’s approach to Lake Erie, Bloomberg says. Farmers near Lake Erie are especially anxious EPA administrator Scott Pruitt will take to enforcing a U.S.-Canada agreement designed to restrict fertilizer runoff into the lake.

It appears that an agreement reached last year may force state and federal officials to impose new limits on the amount of fertilizer that can be applied by farmers in parts of Ohio, Indiana and Michigan. The two countries are seeking to halve the amount of nutrients, mostly from farms, that wash into Lake Erie. High levels of nutrients can cause algae blooms that contaminate the lake, an important drinking water source.

Some Lake Erie farmers already use voluntarily measures to reduce fertilizer use and prevent soil erosion. But, depending on how the binational process plays out, adopting those types of soil conservation measures may no longer be voluntary, something that deeply worries the local agriculture industry.

“Farmers are not big fans of regulation,” Joe Cornely, a spokesman with the Ohio Farm Bureau, told Bloomberg. He argues that “decisions are best made locally.” Farmers may be required to install more efficient drainage systems like those that that allow them to store water under their fields, extensive tillage may be curbed on the grounds that it promotes erosion, and utilizing cover crops to hold the soil in place and infuse it with nutrients after they decompose may be needed to further reduce the amount of fertilizer used.

As a part of the Lake Erie agreement with Canada signed less than a year before the end of the Obama administration, each country has to develop a set of actions to meet the agreed 40 percent nutrient reduction target by February 2018.

While nutrients can come from many sources, including sewers that carry human waste and phosphorus-rich detergents away from homes and businesses, farms contribute the overwhelming majority that winds up in Lake Erie and other bodies of water. More than 65 percent of the phosphorus in Lake Erie comes from farms, according to the Ohio Sea Grant.

Lake Erie is the shallowest of the Great Lakes, and the lake is at its shallowest in its western third near Toledo, Ohio. That often means that rising late summer air temperatures can more easily warm the water there, creating optimal conditions for algae growth. Additionally, even though farmers have become more efficient in applying fertilizer over the years, storms have also become more intense, washing more topsoil into the lakes.

The Trump administration will not be able to avoid these facts when creating its plan to get to 40% nutrient reduction, said Gail Hesse, head of the National Wildlife Federation's Great Lakes program. “There's no way to achieve those targets without putting restrictions on agriculture in the western basin,” she told Bloomberg.

With the recent deregulatory push undertaken by EPA, it might seem as though the agency will have little appetite to take measures that dictate to farmers when and how they can apply fertilizer, Bloomberg says. The new administration has consistently staked out pro-business positions on nearly every environmental issue. Bloomberg notes that EPA's Pruitt received three standing ovations when he spoke at an American Farm Bureau Federation conference shortly after taking office.

However, there is no evidence thus far that EPA is abandoning the Lake Erie agreement. Wendy Carney, a deputy director in the EPA's Great Lakes regional office, said the agency is collaborating with the five states in the Lake Erie watershed to come up with an action plan. She said they are on track to release a draft version this summer and then finalize it before the end of this year, several months ahead of schedule. “Agricultural runoff is the top priority for management efforts, particularly in the Maumee River basin,” Carney told Bloomberg in a recent email.

So, there is little doubt that EPA is considering just how to apply its no-regulation policy to the Lake Erie watershed, but also that residents sensitive to the region’s long-standing water quality problems are also following development there very closely—and that the coming fight likely will be controversial and long lived. This certainly is a battle producers will need to watch closely as it proceeds, Washington Insider believes.

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