Washington Insider -- Monday

Food Industry Political Muscle

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

Syngenta Settles Farmer's Contamination Suit Ahead of Trial

Syngenta AG reached a confidential settlement with a Nebraska farmer who claimed the company mishandled marketing of its genetically modified seed, causing U.S. corn prices to plummet. With the settlement, Syngenta averts a trial that was scheduled to start July 10. Terms were not disclosed, according to Bloomberg.

Almost two weeks ago, Syngenta lost a $218 million jury verdict for a class of Kansas farmers who brought similar claims against the Swiss agrochemical company, which has been acquired by China National Chemical Corp. The Basel-based company completed its $43 billion takeover by ChemChina in June.

Syngenta faces its next class action in a Minnesota court in August, where farmers are seeking more than $600 million. The farmers claim Syngenta rushed its GMO seed to market before getting approval from China to export the grain there. In 2013, China stopped shipments after calling the corn contaminated by the GMO seed, setting off a five-year depression in prices, the farmers claim. They also allege Syngenta misled them on when the Chinese would approve the seed.

Syngenta disputes the damages, or that it did anything wrong. The company did not sell the seed until approved by the U.S. and did not need Chinese approval, Syngenta lawyers have argued.

The federal judge overseeing multiple class actions in Kansas set several trial dates Thursday for additional class actions to be tried in that court. The claims of Arkansas and Missouri farmers will go forward in January, while Illinois and Nebraska go to trial in April.

House Appropriations Panel to Markup Agriculture Spending Bill

Markup of several Fiscal 2018 appropriations bills – including Agriculture – by the full House Appropriations Committee will begin July 12, committee Chairman Rodney Frelinghuysen, R-N.J., said.

Other spending bills set for markup include those for Energy, Interior-Environment and Homeland Security, he reported. Drafts are expected to be released 24 hours before markups.

Meanwhile, the annual Transportation, Housing and Urban Development bill, which is scheduled for July 11 subcommittee markup. A draft of that bill is expected to be released the evening of July 10.

Washington Insider: Food Industry Political Muscle

The Minneapolis Star-Tribune is reporting this week that the food industry is flexing its political muscle in new ways these days and points to the recent decision by the U.S. Food and Drug Administration to indefinitely suspended implementation of new food nutrition labeling rules. It says that the announcement came a year after the rules had supposedly been finalized and a deadline for compliance set.

The Star-Tribune says “the government promises to eventually apply the rules, and the food industry promises to eventually abide by them—but the article suggests that when the food industry balked at a two-year labeling deadline, it received a reprieve that likely will last three years and perhaps longer. Concerns include confusion and cost,” the Star-Tribune says.

The industry estimates that spreading compliance costs over five years instead of two will save companies nearly $2 billion. However, the Star-Tribune also notes that the delay means that “consumers will have to wait to learn things like the amount of sugar added to foods and beverages,” a factor in the nation’s obesity and Type 2 diabetes epidemics.

The article also asserts that the business sector has “sway like it hasn’t had in decades,” according to Steve Billet, a former lobbyist now teaching at George Washington University.

The agency had previously set a deadline of July 26, 2018, for implementation of the new information label, which was intended to make it easier for people to understand how much they're eating but the Star-Tribune says that feedback from industry and others persuaded FDA to delay the compliance date. It suggests that such influence “raises questions.”

It cites a Minnesota administrative law specialist who argues that the public should be asking “who benefits from these kinds of regulatory reversals?”

The nutrition labeling rules were finalized in May 2016 after years of work, the Star-Tribune says, and included the first rewrite of labeling rules in roughly two decades. Portion sizes, calorie counts and large print were among the issues debated in a deliberative process. Food businesses objected to some of the rules and “lost the battle over revealing amounts of sugar added to products, as well as changes in what qualifies as dietary fiber.” The government gave companies until July 2018 to comply with the rules.

The food industry argued that it needed until May 2021 to comply, and that the FDA had not offered enough guidance on the issues of added sugars and dietary fiber.

Food lobbyists also told the Star-Tribune that companies need to coordinate new labels with a separate law that requires products to carry a notice of genetically modified ingredients. However, the connection between updated nutrition facts and the GMO label is unclear, since the two appear in separate locations on food packages. Several food companies, including General Mills, have already begun selling products with the GMO label while awaiting clarification for the nutrition-facts panel.

Despite supporting efforts to delay the compliance deadline, Schwan’s Co. said it is “well along the path to revising all package labels to meet the compliance date of July 26, 2018.” Hormel Foods Corp., also said it is on track to hit the compliance date and several of its products will bear new labels over the next six months—however, it supports the delay.

FDA Commissioner Scott Gottlieb has told the press that he does not plan to sack the nutrition labels nor renegotiate them and will set a new compliance date soon.

“With nutrition facts, companies would like to delay expenses,” said Michael Jacobson, executive director of the Center for Science in the Public Interest. “Some of the companies are embarrassed by the sugar content of their products. So they postpone as long as possible. They have not even started writing the GMO rule, he said.

The delay is “a serious issue,” said Dr. David Heber, founding director of the UCLA Center for Human Nutrition. “We have about 80 million Type 2 diabetics in the United States. That is 95% related to obesity, which results from all of the excess sugar and fat in our diets, combined with a sedentary lifestyle.”

Well, it is no surprise that the current administration is more skeptical about label requirements than the previous administration was, a fact that may also be reflected in the new labels USDA is considering for GMO-containing products when that debate begins in a few months. Nevertheless, the food label debates significantly affect the image of the food industry, and should be watched closely by producers as they emerge, Washington Insider believes.

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