Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.
USDA Starts Making Safety Net, CRP Payments
USDA is in the process of making some $9.6 billion in payments to eligible producers participating in the 2014 Farm Bill safety net programs for commodities and the Conservation Reserve Program (CRP).
USDA said that $8 billion will go to eligible producers under the Price Loss Coverage (PLC) and Ag Risk Coverage (ARC) programs for 2016 crops. In October 2016, USDA said it was making $7 billion in payments to ARC and PLC participants for 2015 crops.
USDA has announced that eligible 2016-crop wheat producers would receive a PLC payment of $1.61 per bushel with oats producers to receive 34 cents per bushel. USDA also announced that corn producers would receive PLC payments based on 34 cents per bushel, $1.16 per bushel for grain sorghum and 3.35 cents per pound for canola producers. Eligible 2016-crop peanut producers are also able to receive a payment of 7.05 cents per pound.
US Leads Growing Opposition to EU-UK WTO Tariff Rate Quota Plan
Opposition to a reported EU-UK agreement on how agricultural import quotas should be carved up post-Brexit is strengthening with a number of key agricultural trade partners, including the U.S., Brazil and Canada, claiming the approach is not consistent with the principle of leaving other World Trade Organization (WTO) members “no worse off”.
In a jointly signed letter, dated September 26, addressed to the UK’s WTO representative Julian Braithwaite and his EU counterpart Marc Vanheukelen, the representatives of Argentina, Brazil, Canada, New Zealand, Thailand, the U.S. and Uruguay, said they could not accept a solution based on splitting Tariff Rate Quotas based on historical averages.
“We would like to record that such an outcome would not be consistent with the principle of leaving other World Trade Organization members no worse off, nor fully honor the existing TRQ access commitments,” it said. “Thus we cannot accept such an agreement.”
Washington Insider: Miles of Algae on Lake Erie
In a somewhat strange story in the front section of the New York Times today, a large picture accompanies a report that a “potentially harmful algae bloom covered more than 700 square miles in the western basin of Lake Erie last week, turning the lake bright green and alarming residents and local officials.” The story then tags agriculture as the cause of the growing pollution in the Maumee River and the lake.
The Times says “scientists say that algae blooms have been a growing problem for Lake Erie since the 2000s, mostly because of the extensive use of fertilizer on the region’s farmland.” The algae blooms contain cyanobacteria, which, under certain conditions, can produce toxins that contaminate drinking water and cause harm to the local ecosystem.
The report notes that “during last week’s bloom, the amount of toxins in the algae remained low at the intake points” where towns draw water from the lake, according to officials. However, the article focuses on the pollution threat and repeats that Lake Erie’s algae blooms are “driven by a landscape dominated by agriculture.”
The report says that “experts conclude that excess nutrients that are transported by the Maumee River can be a good indicator of how severe an algae bloom in the lake will be.” While not all algae blooms are toxic, they can produce a type of toxin called microcystis that can cause serious liver damage under certain conditions. Dangerous levels of the toxin caused Toledo, Ohio, to shut down the drinking water supply of a half-million residents for three days in 2014.
Almost 3 million people get drinking water from the central basin of Lake Erie, and the Times reports that “officials have been testing the intake points in the lake where towns draw water and report that the current toxin levels are low.”
Still, the blooms are hurting the region’s economy. Lake Erie attracts millions of visitors for beaches and recreation like fishing, and many businesses stand to lose money during large algae blooms, according to David Spangler, vice president of the Lake Erie Charter Boat Association, who says “the algae creates a musty-smelling, lime-green skin on the lake’s surface that’s so thick you could write your name in it.”
“An awful lot of money may go someplace else other than Ohio if we continue having these issues in the lake,” Mr. Spangler told the Times. He noted that in 2015, an algae bloom kept boats out of the lake for six to seven weeks. And, since the 2000s, algae blooms in Lake Erie have become much more extensive, the report says, citing a study by the Carnegie Institute for Science and Stanford University that found “most of the increase in the size of the blooms can be attributed to a rise in the amount of dissolved phosphorus flowing into the lake.” In the 1980s, researchers started tracking algae blooms in Lake Erie. They were mostly small, “but changes in farming practices caused them to spike,” the report says.
The blooms are expected to grow more harmful as global warming changes rainfall patterns.
While the Times story does not focus on remedial policies needed to deal with the algae problem, it does highlight a recent letter from the mayor of Toledo, Paula Hicks-Hudson, to President Trump on Sept. 26, calling on the federal government to declare Lake Erie impaired. This would allow the lake’s nutrient loads to be regulated under the Clean Water Act, the Times says.
The Times cites Mayor Hicks-Hudson as telling the President“there is something very wrong with our country when our rivers and lakes turn green. As I look out my office at a green river, I can tell you one thing: The status quo is not working.”
Current administration policies have been focused closely on chopping back EPA regulations and are unlikely to lead to executive action concerning Lake Erie in spite of Mayor Hicks-Hudson’s letter. At the same time, it seems clear that the tone of media reports on pollution problems that affect urbanites in several areas of the country have a much stronger focus on agriculture these days than they once did.
While producers and USDA say they are actively involved in approaches that manage excess fertilizer runoff better than in the past, this seems to be a growing, increasingly sensitive, issue. It seems clear that producers will need to increase their attention to urban water quality issues if unwanted local political intervention is to be avoided, Washington Insider believes.
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