Washington Insider -- Thursday

Sugar's Fight for Technology

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

McConnell Has Go-Slow Approach to TPP Vote

Senate Majority Leader Mitch McConnell, R-Ky., is dismissing calls from business groups for quick action on President Obama’s push to get congressional approval of the Trans-Pacific Partnership (TPP) agreement. McConnell, who has noted his own criticism of some TPP provisions, is widely seen as wanting to avoid forcing GOP senators vote on the controversial accord prior to Nov. 8 elections.

The National Association of Manufacturers and the Business Roundtable announced their support for the controversial Trans-Pacific Partnership (TPP) this week as part of what some observers say is a choreographed effort to raise pressure on Congress.

McConnell’s office said his position has not changed and that President Obama should not bother to send the TPP to Congress until after the elections, when it might be possible to hold a vote in a lame-duck session.

Lori Wallach, director of Public Citizen’s Global Trade Watch, said the only legally enforceable time requirement is the mandate that the administration must notify Congress 90 days in advance before signing off on the deal. The administration submitted its notice on Nov. 5.

House Speaker Paul Ryan, R-Wis., has called for careful congressional review but has not gone as far as McConnell in his criticism of the deal. “We want to scrub this trade agreement to make sure that it reaches and meets the standards that we call for in TPA,” he told the Wall Street Journal CEO Council in November.

When asked if it could fall beyond 2016, Ryan said, “I don’t know the answer to the question yet,” but added that he has more ability to “control the clock” in the House compared to McConnell in the Senate.

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EPA Moving Forward With Climate Change Efforts

Regulatory actions to reduce carbon emissions, and clamp down on other greenhouse gasses (GHGs) will headline the Environmental Protection Agency’s (EPA) efforts in 2016, EPA Administrator Gina McCarthy said in a Jan. 4 blog post.

“We’ve got a lot more work to do, and we’re not slowing down. [President Barack Obama’s] climate legacy is already impressive, but we will build on it in 2016 by continuing to protect health and opportunity for all Americans,” McCarthy said.

EPA will continue to defend its Clean Power Plan (CPP) in court as it works to implement the plan’s carbon-reducing regulations. New fuel efficiency standards for medium and heavy-duty vehicles, regulations to control methane emissions from oil and gas operations, as well as efforts to reduce the production of hydrofluorocarbons (HFCs) – a potent GHG – are also planned.

Implementation of the recently reached international climate change agreement is also expected to be a major part of the EPA’s 2016 agenda. EPA is planning to provide “technical leadership” to other nations in measuring and reporting carbon emissions, per the requirements of the climate change agreement.

Efforts to implement methane emissions regulations, focused on methane from oil and natural gas operations, are expected to culminate in the first rules being issued for new oil and gas wells this June.

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Washington Insider: Sugar’s Fight for Technology

Capitol Press has focused recently on beet sugar’s tough fight for important U.S. markets, and noted that domestic producers, particularly beet sugar farmers, are not used to the kind of challenges now being encountered. The tussle involves the effort by beet sugar producers to retain their access to biotechnology in the face of the loss of very important domestic markets.

Today, beet sugar accounts for a little more than half of domestic sugar production, just over 5 million tons annually, a level that has grown slowly in recent years. Now beet production depends heavily on biotech plants to improve weed control with less labor and reduce reliance on chemicals.

This shift to biotechnology has developed since about 2006, Capital Press says, and is unique to beets in the United States, since no biotech cane sugar is available. Other producers have similar threats--for example, Minnesota-based American Crystal Sugar, contracts about 400,000 acres of beets and produces 11 million tons of refined sugar per year. It says it has perhaps a single grower that still plants conventional beet seed because he’s had “competitive results,” but his beets are mixed in with the piles of biotech beets.

Now, though there are new discussions since Hershey Co. pulled back from its usual beet sugar purchases in favor of non-biotech cane sugar. Hershey says it makes no claims that its sweets are safer or more healthful now that it’s avoiding sugar made from genetically modified beets. In fact, the Pennsylvania-based confectioner says it agrees with U.S. sugar beet growers that all finished sugar is the same, whether it’s processed from biotech sugar beets or conventional sugar cane.

Perry Cerminara, director of commodities sourcing and procurement at Hershey, said the company started buying mostly non-biotech sugar, including 100 percent GMO-free cane sugar for its key US brands, simply to give customers what they want, even if Hershey doesn’t necessarily share their concerns about biotechnology.

“As a consumer-centric company, we listen to our consumers and work to respond to their interests and expectations,” Cerminara told Capital Press. “Non-GM ingredients are something our consumers are telling us is important to them.” So, the sugar beet industry is starting to take notice of the continued growth of non-GMO niche categories, and increasingly concerned that more corporate buyers will reach the same conclusion as Hershey.

The sector won’t make any such change quietly. Now, nearly all of the sugar beets planted in the United States are genetically modified and contain a gene to resist glyphosate herbicide. For the time being, at least, the sugar beet industry which encompasses 1.2 million acres in 11 states and 56% of U.S. sugar production, says it has no plans to invest in separate infrastructure for processing GMO-free sugar, or to ask growers to return to conventional beet production.

And, it is pushing back on Hershey, and other of similar ilk. “I think you have to characterize Hershey’s choice as an indicator of what consumer goods companies may be thinking,” said Duane Grant, chairman of Snake River Sugar Cooperative, which controls Idaho-based Amalgamated Sugar. “I think it would be wrong to characterize Hershey’s decision as well-reasoned.”

Cerminara, no bridge burner, emphasized that his company’s products have always been safe and high-quality, even when they were made with sugar from biotech beets. And, he argues that “The international scientific community, including the American Medical Association, the World Health Organization, Health Canada, the National Academy of Science and the Food and Agricultural Organization of the United Nations have all examined the health and environmental safety of plant biotechnology,” he said. “These organizations have concluded that these technologies are safe for human consumption.”

Experts also note that a key aspect of beet growers’ interest is the fact that while they used to produce less sugar per acre than cane farmers did, recently trend-line yield gains have doubled since the advent of biotech beets, while cane yields have been declining.

So, will beet producers cave in to consumer pressure? For now, at least they claim science is on their side. Despite the growing niche held by organic and GMO-free sugars, Amalgamated says it has invested $155 million in the past four years to remove production bottlenecks and boost output. “We believe in the end science will prevail,” a spokesman said.

Well, maybe. Consumer preferences are often strong, even if not well supported, and there are whole industries flourishing now to prove that fact. Still, it is likely that this will be a high-level fight, perhaps with marketing razzle-dazzle to emphasize benefits where evidence is slim. Clearly, beet producers will be loath to give up productivity advantages, and cane producers could be forced to give ground if they need biotechnology to fight diseases.

So, the staid old world of food is once again a battleground and the outcome seems clearly in doubt. It is one producers should watch carefully as it unfolds, Washington Insider believes.


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(GH/CZ)