Washington Insider -- Thursday

Agriculture and the Budget

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

USDA Seeking Input from Public on GMO Labeling

Public input is being sought by USDA's Agricultural Marketing Service (AMS) on the national standard and procedures for the GMO labeling effort called for under the National Bioengineered Food Disclosure Standard enacted on July 29, 2016.

"AMS has two years to establish a national standard and the procedures necessary for implementation" of GMO labeling, the agency said in posting 30 questions for stakeholders to answer. "USDA will use this input in drafting a proposed rule."

The is a broad range of information AMS is requesting feedback on, including terms that should be used in the labeling effort, specifics of electronic information, how to write the rule so that future technology advances can be addressed and more. Link to read the questions

AMS said the effort is aimed at meeting the statutory 2018 deadline for establishing the final rule.

Feedback related to the questions should be submitted to GMOlabeling@ams.usda.gov by July 17, 2017.

USDA appears to be trying to meet a July 29 deadline to have a study done on the issue and also to meet the 2018 deadline to get a final rule in place. Key in the outlook will be the potential court challenges that could arise if some component of the food/agriculture industry find fault with what USDA finalizes on this topic.

Federal Agencies Approve California Water Infrastructure Update

Approval of a plan to re-engineer California's primary water conveyance system was given by two federal agencies, moving the state's proposed $17.1 billion project forward.

Construction and operation of two massive tunnels to move water from the north to the south would not jeopardize salmon, sturgeon, steelhead, delta smelt and other endangered fish and wildlife in the Sacramento-San Joaquin River Delta, according to biological opinions from the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration's (NOAA's) National Marine Fisheries Service.

The issuance of the scientific and technical documents marks the end of the environmental review process, but additional regulatory hurdles are ahead for the proposed California water infrastructure update. California's State Resources Water Control Board is conducting hearings on the project's potential harm to water users and it must certify the environmental impact analysis. The hearings are expected to go through December. State fish and wildlife officials must make decisions on permits for the project and the U.S. Bureau of Reclamation also has to certify the environmental report.

The Metropolitan Water District of Southern California, Westlands Water Districts, other water agencies that will finance the project if it is built and the state all say the project is needed to provide a reliable source of water for the state's growing population. "The release of the biological opinions is a major step toward a long-term solution to improve water conveyance infrastructure in the Delta,” Association of California Water Agencies Executive Director Timothy Quinn said in a written statement.

Delta farmers, recreational businesses, environmentalists and many others oppose the project, which would build new water intakes on the Sacramento River. “I guarantee you, the environmental documents will be challenged,” George Hartmann, an attorney representing delta reclamation districts, farmers and others told Bloomberg BNA June 26.

Washington Insider: Agriculture and the Budget

Informa Economics is reporting today that ag spending is at the center of what has become a protracted effort by House Republicans to produce the budget resolution that could kick off the “reconciliation” process that can pass legislation with only a simple majority vote.

The main issue concerns proposed cuts totaling $50 billion from mandatory programs like the Supplemental Nutrition Assistance Program that the ag committees oversee. In the House, committee chair Mike Conaway, R-Texas, has repeatedly argued his panel needs to be exempt from the potential $50 billion nutrition program reduction. The overall cuts in the budget would total $200 billion over 10 years, Informa says, but even that figure is in question, according to some.

The situation has already resulted in House Budget Committee Chairwoman Diane Black, R-Tenn., holding up the introduction to the budget resolution in the committee this week for a vote Thursday. Resistance from Conaway and House Energy and Commerce Committee Chairman Greg Walden R-Ore., are preventing Black from sealing a deal to move the resolution ahead.

Informa says committee contacts say that Black has the votes to move forward but that she is unwilling to proceed until she can convince committee chairs to come up with the spending reductions being proposed.

In the meantime, Conaway, whose committee is beginning the process of writing the next farm bill, argues his panel can “ill afford to make $50 billion in reductions at this stage. I've been making our case as to why leaving us alone ... makes the most sense for the struggles that we face during the farm bill and ... the horrible circumstances that production agriculture finds itself in right now,” Conaway recently stated.

Still, the committee’s move to fend off proposed cuts may not succeed, Informa says. In fact, the current proposal for $200 billion in cuts may not be enough, according to House Freedom Caucus Chairman Mark Meadows, R-N.C., He has proposed $295 billion in cuts over 10 years that he insists moderates will agree to or be comfortable with. He wants changes to welfare beyond that level that would push the total close to $400 billion in reductions.

"There was never agreement on $200 billion," Meadows told reporters. "That was an offer put out there."

Later this week, the Congressional Budget Office is scheduled to release updated 10-year government spending projections, including the baseline cost of farm programs and food stamps. The updated estimates are expected to play a role in the debate and program costs of a new farm bill, Informa says.

Current weak prices and farm income, Conaway believes, provide a good case for keeping his panel from facing additional cuts before completing the farm bill. He knows his panel will be under pressure to produce savings, and even to remove its jurisdiction over the nutrition programs when it writes the plan under a still-to-be-determined baseline. The outlook is that Congressional rules almost certainly will not allow the same level of funding as the current legislation does, Informa says.

During the last farm bill debate, the sector was in better financial shape than other parts of the economy and a number of proposals were criticized on that basis. This time around, that problem has gone away although political pressure against expensive farm programs likely has intensified, suggesting the outlook for a long and bitter debate and one producers need to watch closely as it proceeds, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com