Washington Insider--Tuesday

By DTN's Washington Insider

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

Surface Transportation Funding Update

A short-term highway funding patch expires Oct. 29. House Ways and Means Chairman Paul Ryan, R-Wis., is working on an international tax overhaul that could be used to pay for a six-year surface transportation bill. However, reaching a deal on international taxes before current highway funding expires is difficult.

Senate leaders have been resistant to Ryan's plan. Also, some key House conservatives have opposed the idea of using so-called repatriation taxes to pay for a highway measure, seeing it as akin to a tax increase.

Passing another short-term extension to the end of December is possible because the funding is in place.

The Senate-passed long-term bill contains a controversial reauthorization of the Export-Import Bank, a finance agency with a charter that expired in June. Such a provision could face fierce opposition in conference with the House.

These major differences complicate the success of any multiyear funding measure. Speaker of the House John Boehner's, R-Ohio, resignation does not make this issue any easier but transportation funding may be on his to-do list before he departs at the end of October.

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Obama Urges End of U.S. Embargo of Cuba

President Obama called for the end of the U.S. embargo of Cuba during an address at the United Nations, noting, "I say this, recognizing that diplomacy is hard. ... That the outcomes are sometimes unsatisfying. That it is rarely politically popular. But I believe that leaders of large nations, in particular, have an obligation to take these risks, precisely because we are strong enough to protect our interests, if and when diplomacy fails."

Obama also said he believes that "to move forward in this new era, we have to be strong enough to acknowledge when what you are doing is not working. For 50 years, the United States pursued a Cuban policy that failed to improve the lives of the Cuban people. We changed that. We continue to have differences with the Cuban government, we will continue to stand up for human rights, but we address these issues through diplomatic relations and increased commerce. And people-to-people ties."

To applause, Obama said as current contacts with the Cuban government yield progress he is confident that embargoes will be lifted. "Change won't come overnight to Cuba, but I am confident that openness, not coercion, will support reforms and better the life of the Cuban people. Just as I believe that Cuba will find its success if it improves cooperation with other nations. Now, if it is in the interests of major powers to uphold the international standards, it is even more true for the rest of the community of nations. Look around the world. From Singapore to Colombia, to Senegal, the facts show that nations succeed when they pursue an inclusive peace, and prosperity within their borders, and work cooperatively with countries beyond their borders."

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Washington Insider: USDA Weighs New Restrictions on Biotech Wheat

A concern regarding experimental genetically engineered seeds is that "rogue," unapproved varieties could escape from test plots and contaminate the commercial crop. That's happened twice in U.S. cereal crops, leading to depressed prices, marketing issues and lawsuits.

Bloomberg BNA and others are reporting that USDA's Animal and Plant Health Inspection Service on Friday issued notice of its plan to strengthen oversight on field trials for genetically engineered wheat. Future trials are to be done only under a USDA-APHIS permit, and will require more stringent post-harvest monitoring for volunteer wheat plants.

In summer 2006, trace amounts of Bayer AG's LibertyLink rice strain were found in the U.S. commercial long-grain rice supply. Market prices collapsed almost immediately. Bayer eventually agreed to settle claims to the tune of $750 million for claims by some 11,000 U.S. farmers who said a strain of the company's GE rice tainted crops and ruined their export value.

Bayer insisted it had acted responsibly in the handling of its biotech rice. Still, that event focused producer concerns over GE testing and the handling of unapproved varieties.

Just over two years ago USDA found unapproved GE wheat in a field in Oregon, a situation that sparked a lengthy investigation, lawsuits and trade disruptions.

Unlike the rice case, USDA emphasized that not only did the GE wheat not pose a food safety concern; it did not even enter commerce. Ultimately, USDA closed the investigation in September 2014, and concluded that the release was an "isolated incident," whatever that may mean. Overall, the USDA track record for reliably tracking down sources of rogue varieties has not been very comforting.

GE, also known as GMO, crops that escape into the wild pose one of the biggest fears of many within agriculture. Because many of them are engineered to resist herbicides, they could be difficult to fully eradicate. A particularly daunting aspect in wheat is that un-germinated seeds can remain viable for years in dry conditions, especially in soil that hasn't been irrigated or tilled. Unapproved varieties could later sprout and grow, unobserved, and theoretically spread or get into commercial wheat supplies.

Domestic and export wheat markets are extremely sensitive to any hint of gene pollution. It certainly seems appropriate for USDA to impose much tougher oversight rules on wheat trials, especially in important wheat production areas. Shortcomings in the USDA approval process need to be remedied quickly if beneficial GE technology is to be made available to this important food crop, Washington Insider believes.

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(GH/SK)

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