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.

House Budget Stalls, Will Not Go to Floor Until After Easter at Earliest

A House Fiscal 2017 budget plan will not be moving to the floor before the Easter recess, House Majority Leader Kevin McCarthy, R-Calif., said on March 18.

Meanwhile, House Speaker Paul Ryan, R-Wis., told reporters in his weekly press conference that interparty talks must decide whether or not to proceed with the House budget. The House Budget Committee advanced the budget plan on a 20-16 vote, with two House Freedom Caucus members, Reps. Dave Brat, R-Va., and Marlin Stutzman, R-Ind., joining Democrats in opposition.

Freedom Caucus members have demanded spending-cut offsets to bring down the total budget spending level to $1.040 trillion, as stipulated under the so-called sequester. The proposed budget has a spending level of $1.07 trillion in regular appropriations, following the levels agreed to under the Bipartisan Budget Act of 2015 (BBA).

Both House and Senate budgets have a target date of April 15 for providing a common plan to appropriators and tax writers. Though Speaker Ryan said he is striving to have a House budget adopted by April 15, the Senate has not indicated when it hopes to markup a budget plan. It is unlikely that either a House budget plan, let alone a common blueprint, will be ready by the target dates, sources advise.

The 12 annual appropriations bills are still on track and the House Budget Committee is aiming to mark them up on March 23, according to comments by the committee’s chairman, Hal Rogers, R-Ky., to Bloomberg BNA. “We’re basically done with our hearings now and we’re getting ready to start markups next week,” Rogers said.

Rodgers noted that the appropriations bills will follow the $1.07 trillion discretionary spending level, which is in line with the Bipartisan Budget Act and in contrast to Freedom Caucus demands for lower spending levels. Senate appropriations bills will also follow the $1.07 trillion level, Senate Majority Leader Mitch McConnell, R-Ky., has said.

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Canadian Ractopamine-Free Pork Certification Program to be Closely Monitored

Canadian pork producers are being advised that compliance with the Canadian Ractopamine-Free Pork Certification Program will be much more closely monitored in the future. The Canadian Ractopamine-Free Pork Certification Program is an industry-driven program to assure international customers their pork is free of ractopamine. Ractopamine is a feed additive to promote leanness in animals raised for their meat.

Dr. Egan Brockhoff, an Alberta based swine veterinarian, said producers need to be aware of just how critical this program is to maintaining the Canadian pork industry’s access to global markets.

According to Brockhoff:

“We received word from China that they are going to be pushing harder on how they are auditing and supervising these programs. Previously when countries have violated it they have ended up losing market access to China for a year. It’s my understanding that that potential number could be much longer this time so it’s critical that we take this as serious as anything we’ve ever done. We really want to do everything we can to ensure you don’t go through a major deviation. A minor deviation is a fairly straight forward corrective action and we can deal with those very simple. If you don’t have a letter of guarantee, that’s a minor deviation. If your feed invoices don’t say this diet was ractopamine-free, that’s a minor deviation. If ractopamine arrives on your farm, that’s a major deviation. If you have a farrow to finish farm and ractopamine arrives at your site and gets fed to the grower pigs, unfortunately every pig in that barn goes off the ractopamine-free certification program. Our international trading partners look at the program and say, if there was Ractopamine introduced to the barn then the whole barn is taken off the program.”

Dr. Brockhoff said ractopamine-free access adds $300 to $500 million per year to the volume of Canadian pork sold and is a critical component for the pork industry.

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Washington Insider: Vermont Wins Early Senate Round on GMO Labels

Last week, the Senate blocked efforts by Sen. Pat Roberts, R-Kan., to preempt Vermont’s GMO label law by making GE labeling voluntary.

Ahead of the vote, General Mills had said it would begin putting labels on its products that contain genetically engineered ingredients even before required by the Vermont law. A spokesman for General Mills, Mike Siemienas, told the press that the labels will appear on products over the next several weeks and in the meantime, people can search its website to see which products have ingredients from genetically modified crops.

“Vermont state law requires us to start labeling certain grocery store food packages that contain GMO ingredients or face significant fines,” General Mills said on its company blog. “We can’t label our products for only one state without significantly driving up costs for our consumers and we simply will not do that,” executive vice president and chief operating officer Jeff Harmening said. “The result: consumers all over the US will soon begin seeing words legislated by the state of Vermont on the labels of many of their favorite General Mills products,” he said. The Vermont law takes effect July 1.

The company said it still wanted a “national solution,” but that “we look forward to moving beyond this divisive topic.”

The Grocery Manufacturers Association, which represents the nation’s largest food companies, said in a statement that the decision by General Mills underscored the need for a national law. “One small state’s law is setting labeling standards for consumers across the country,” the association said.

Jean Halloran, Director of Food Policy Initiatives for Consumers Union, said, “Consumers have made it overwhelmingly clear that they want to know whether the foods they eat contain GMOs. We commend General Mills for understanding that consumers care about whether their food is genetically engineered and deciding to provide that information. This is an important step forward and we hope other companies will follow their lead and that of Campbell Soup.”

So, the Grocery Manufacturers Association’s years-long campaign has failed, at least for now. The biotech labeling bill that went down in the US Senate hinged on getting top Ag Democrat Debbie Stabenow on board as a co-sponsor, but she never signed on. The measure was opposed by seven Republicans and backed by just three Democrats and failed 48-49. Democrats who want required labels joined with Republicans who think states’ rights applies to food-labeling too and that coalition carried the day.

Ag spokesmen generally expressed outrage at the outcome. “To say we are angry with those senators who abandoned farmers and ranchers and turned their backs on rural America on this vote is an understatement,” said Zippy Duvall, president of the American Farm Bureau Federation, the largest U.S. farmer group and a proponent of pre-empting state biotech labeling laws. Duvall told lawmakers the fight isn’t over, and that they will “have a chance at redemption” later.

Senator Stabenow told the press at week’s end she still believes compromise is possible before the Vermont labeling law goes into effect. Observers suggested that there was some chance that the failure of Roberts’ bill would strengthen Stabenow’s hand. She wants a national label in return for state pre-emption.

Part of what happens next depends on the specifics of the Vermont label requirements. Campbell Soup has been talking about a very general soup label along the lines of “partly produced with GMOs,” that companies might find inoffensive but that advocate groups would seem unlikely to love.

But if the goal here is no GMO labels, the Senate does not seem appear to be moving in that direction. However, if a wave of state label laws appears to be in danger of severely discouraging use of key ag technologies, then perhaps the issue will attract the attention of the Democrats. In the meantime, it will be important so follow what the Vermont—and other—labels actually say, Washington Insider believes. Certainly, this is a high stakes issue for producers and should be followed closely as it emerges.

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