Washington Insider -- Friday

Organic Check-off Rejected

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

House Panel Clears Spending Bill for Agriculture

A Fiscal Year (FY) 2019 appropriations bill for USDA, FDA and the Commodity Futures Trading Commission was sent to the House floor after being approved Wednesday by the House Appropriations Committee by a vote of 31 to 20.

The bill would provide $23.27 billion in discretionary funding and has a combined total of discretionary and mandatory funding of $145.1 billion. One approved amendment would stop USDA from disallowing the use of potatoes in school breakfasts. Another amendment would require genetically engineered salmon to be covered by the GMO disclosure standard enacted in 2016.

The panel also approved a spending bill for the Army Corps of Engineers that includes a repeal of the Waters of the US (WOTUS) rule.

Meanwhile, EPA Administrator Scott Pruitt told a congressional panel that he expects a finalized proposed withdrawal of WOTUS rule "sometime in the third quarter of this year," and then propose a "replacement" of the rule by end of the year.

That is a more expedited timeline than the early 2019 timeframe that was signaled in the regulatory agenda released earlier by the Trump administration.

Case Being Filed In Court Of International Trade on US Biodiesel Import Duties

Argentine biodiesel producer Vicentin is challenging the U.S. duties on imports of the product from Argentina of up to 86.41%, filing a case in the Court of International Trade.

However, Vicentin has not yet detailed portions of the determination made by the U.S. Commerce Department they are going to challenge in the case, and the matter has not yet been assigned a judge.

The court is designed to make sure that duties, etc., are uniform throughout the United States, and it makes sure there are expeditious procedures, avoids jurisdictional conflicts among federal courts and provides uniformity in the judicial decision-making for import transactions.

Washington Insider: Organic Check-off Rejected

USDA has long operated a number of programs designed to boost consumer demand under the Commodity Promotion, Research, and Information Act of 1996. These programs have both fans and critics, including producers who don’t want to pay for commodity-wide research and promotion. Food Safety News says this week that USDA seems to have concluded that “fractious groups don’t go very well anymore with the check-off programs.”

Federal judges have ruled that messages from commodity groups participating in checkoff programs are “government speech” and can be allowed even over some producer opposition as long as they receive majority support from the producers of the commodity affected. About 20 ag commodities currently have such programs. Some have used the funds to sponsor food safety and marketing research to benefit their industry, FSN says.

Recently, the membership-based Organic Trade Association proposed an organic check-off. Even the consideration of such a program stirred backlash to the extent that USDA has announced in the Federal Register that it will not pursue the OTA proposal because of “uncertain industry support and outstanding substantive issues.”

The OTA check-off was to be financed by an assessment on certified organic products with the purpose of strengthening “the position of certified organic products in the marketplace, supporting research to benefit the organic industry, and improving access to information and data across the organic sector.”

When the proposal was published in the Federal Register, it attracted almost 15,000 comments during a 90-day period in early 2017. “The comments revealed that there is a split within the industry regarding support for the proposed program,” the agency said.

The OTA responded with a media statement of its own, saying the termination “reflects a pattern of holding back forward progress on organic by USDA.”

“The $50 billion organic sector offers opportunities for US organic farmers and businesses,” the OTA statement continued. “It makes no sense that the agency is continuing to take steps to cut it off at its knees.” To counter claims that the organic industry is too factionalized for a check-off program, OTA said it had support from 1,230 certified organic operators.

Some comments, USDA noted, also expressed concerns about check-off assessments and the likelihood that organic promotions would disparage other agricultural commodities along with other issues.

Organic farmers with revenues under $250,000 would have been exempt from the check-off.

Well, it certainly is not surprising that “conventional” producers would be suspicious of a government-supported effort to strengthen “organic’s place in the marketplace.” In fact, the fight over use of technology in food production has been long and difficult, and frequently involved assertions of many kinds of benefits, as well as some dubious claims of quality and safety. So, a proposed promotion program might have been expected to encounter some political bumps along the way.

In addition, the benefits of the whole checkoff system continue to be questioned in some quarters, in spite of supportive court rulings.

So, we will see. Advocates of organic production have grown their industry in spite of efforts by some to define their production process so narrowly that they have widened the cost gap between organic and conventional foods. And, while the organic industry has grown, so has the demand for other filmy, undefined social concepts including natural, healthful and regenerative among others.

Certainly, the market for food is more dynamic than ever as the population changes and the social role of food expands. Both USDA and FDA likely will be increasingly hard-pressed in the future to insure that marketing claims are based on reality and that the system is increasingly credible to consumers—a process producers should watch closely as it proceeds, Washington Insider believes.

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