Washington Insider- Monday

By DTN's Washington Insider

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

USDA Maintains 2015, 2016 Food Price Forecasts

The US consumer price index (CPI) for food is still forecast to rise 2% to 3% in both 2015 and 2016, unchanged from the month-ago outlook issued by USDA’s Economic Research Service (ERS).

While food at home (grocery store) prices are expected to rise 1.5% to 2.5% in 2015, ERS noted that level is slightly lower than the average over the past 20 years. However, combined with a 2% to 3% outlook for food away from home prices, the overall 2% to 3% change should be expected. The rise in 2015 reflects beef prices that are forecast to rise 5.5% to 6.5%, due to “the effects of the Texas/Oklahoma drought. Farmers’ decisions on calving and herd sizes will be felt down the line due to the 16- to 18-month production process.”

Egg price increases are still forecast at 12.5% to 13.5% for 2015 due to the impacts of Highly Pathogenic Avian Influenza (HPAI) on table-egg-laying flocks, ERS said.

In 2016, USDA’s forecast of 2% to 3% for the increase in food prices at the supermarket is in line with historical averages, ERS said. As has been the case for several months, ERS cautions the 2016 outlook could still be altered. “The ongoing drought in California could have large and lasting effects on fruit, vegetable, dairy, and egg prices” could provide an upside revision factor, ERS noted, while if oil prices “continue to remain low throughout 2015 and 2016, subsequent decreases in production and transportation costs may be passed on to the retail level.”

As for shifts in the outlook on beef and veal, USDA noted that beef and veal prices decreased 0.6% from August to September, but are still 2.3% above year-ago. ERS revised its beef price increase forecast for 2016 down to 1.5% to 2.5% compared to their September outlook for a 2% to 3% rise – also a downward revision from the prior month.

The shift in forecast sugar price inflation takes the 2015 forecast to 2% to 3% compared to 1.5% to 2.5% in September. “Higher prices in 2015 are primarily the result of relatively fewer supplies and a price floor from a key foreign supplier,” ERS said, noting their forecasts are now 2% to 3% for both 2015 and 2016.

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APHIS to Deregulate Certain Monsanto GE Corn Varieties

USDA's Animal and Plant Health Inspection Service has announced a decision to deregulate Monsanto Company genetically engineered corn with protection against rootworm and resistance to glyphosate, better known as Roundup.

A determination and finding of No Significant Impact under the National Environmental Policy Act for the corn variety, was also announced by APHIS.

The findings were based on APHIS determining that the GE variety corn is unlikely to pose a plant pest risk to agriculture and other plants in the United States and that deregulation is not likely to have a significant impact on the human environment. Under the Plant Protection Act if APHIS finds through rigorous scientific review that a GE plant is unlikely to pose a plant pest risk, it is deregulates the GE plant.

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Washington Insider: EU’s Turn Against Science

With all the foodies it has on its staff, it is a little surprising that the New York Times published an Op Ed by Mark Lynas over the weekend. Lynas makes the case that the EU’s anti-science policies are having severe negative impacts in both Europe and the developing world.

Lynas’ views are not exactly surprising since he is the political director for the Cornell Alliance for Science at Cornell University and a well-known writer. However, his focus is somewhat unusual; the new EU rules and policies and the “worrying reality about how far Europe has gone in setting itself against modern science.”

He sees a “chilling effect” on biotech science: Why would anyone spend years developing genetically modified crops in the knowledge that they will most likely be outlawed by government fiat?” he asks.

After Scotland prohibited cultivation of genetically engineered crops last month, “signatories from numerous scientific organizations and academic institutions wrote to the Scottish government to express grave concern about the potential negative effect on science in Scotland.”

The appeal went unheeded, Lynas says. “Without a trace of embarrassment, a spokeswoman for the Scottish Nationalist Party leader, Nicola Sturgeon, admitted that the first minister’s science adviser had not been consulted because the decision wasn’t based on scientific evidence.” Instead, the priority was to protect the “clean green image” of the country’s produce, according to the secretary for rural affairs, food and environment.

Lynas is concerned not only about ag technology, but worries that European willingness to ignore their experts may undercut efforts to control climate change at the upcoming Paris talks. He thinks the scientific consensus on the safety of genetic engineering is “as solid as that which underpins human-caused global warming.” Still, politicians are willing to ignore this “inconvenient truth when ideological interests are threatened.”

As a result, Lynas says, the European crop biotech sector is dying. The European Academies Science Advisory Council, the leading voice of science in Europe, lamented in 2013, “The EU is falling behind international competitors in agricultural innovation and this has implications for EU goals for science and innovation.”

In addition, the council is worried that Europe’s biotech phobia may slam the door on future new technologies. For example, the gene-editing tool known as Crispr is on the brink of revolutionizing the field of genetics internationally, he thinks.

One aspect of this situation, Lynas says, is the hypocrisy it supports. “Europe imports over 30 million tons per year of corn and soy-based animal feeds, the vast majority of which are genetically modified, for its livestock industry. Imports are preferred to European crops partly because biotech traits make them cheaper. Yet these same traits, such as herbicide tolerance and insect resistance, are now widely barred from domestic use.”

As a result of its rules, Europe will not be able to reduce fungicide applications by adopting genetically modified blight-resistant potatoes nor can it cut down on insecticide sprays, since it won’t allow genetically modified insect-resistant crops to be grown. He says one study found that biotech cultivation has led to a 40% reduction in insecticide spraying worldwide.

He also sees a spillover effect in Africa, where, he says, he is often asked why Africans should risk eating foods that Europe bars. “Following Europe’s lead, no country in sub-Saharan Africa except South Africa currently permits the cultivation of GMO food crops, in spite of the fact that many biotech traits are available “that could quickly improve the livelihoods of poorer African farmers.”

Lynas says that “the faces of the hungry children come to mind every time I hear European politicians boast about their country’s GMO ban and demand that the rest of the world follow suit, as Scotland’s minister did in August.”

His charges are stark and bitter. “Europe’s stance, if taken up internationally, risks marginalizing a critically important technology that we must surely employ if humanity is to feed itself sustainably in an increasingly difficult and challenging future, he says.”

Well, that’s a theme not often heard in the Times and it is one that should be taken seriously by political observers in this country, including the advocates who are interested in doing as much as possible to restrict technology use here. Clearly, the fact that most US consumers are willing to disregard the opinions of scientists on biotech safety should both startle and alarm observers. Also, the willingness of the food elites on both sides of the Atlantic to impose “a historic injustice by the well fed on the food insecure” deserves to be considered widely as part of our own ongoing food debate, Washington Insider believes.

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(GH/SK)

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