Washington Insider -- Friday

By DTN's Washington Insider

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

Stabenow Seeks Info on Farmer, USDA Impacts From Shutdown

The current partial government shutdown is halting much of the activity at USDA, and Senate Ag Committee Ranking Member Debbie Stabenow, D-Mich., wants USDA Secretary Sonny Perdue to spell out the impacts that are being felt by the agency and farmers alike.

She raised several issues in a Jan. 9 letter to Perdue on the topic, saying she is "deeply concerned that the shutdown is having a devastating impact on USDA's operations, hurting many American farmers and families."

Because of the shutdown, Farm Service Agency (FSA) county offices are currently closed, "prohibiting farmers from getting information necessary for farming operations, signing up for Farm Bill programs, and getting needed loans," she wrote. "The shutdown has also delayed tariff relief payments that were supposed to be provided to compensate producers for losses caused by retaliatory tariffs."

With regard to the new Farm Bill, Stabenow highlighted the legislation's "significant improvements and premium refunds for dairy farmers are effective at the beginning of 2019." But with the partial government shutdown, implementation of those new provisions has been delayed. "Dairy farmers will be asked to select coverage levels that could trigger payments as soon as USDA is able to implement the provisions," she noted, and asked, "Does USDA anticipate any ability to make up for the lost time for implementation caused by the shutdown?"

Meanwhile, she also wants USDA to provide details on how USDA Rural Development activities have been impacted. As with farm lending, she asked for data on rural development "direct loans, guaranteed loans, and grants" that have been affected.

Finally, she noted that due to the shutdown "USDA's employees are not being paid, hindering them in paying their bills and causing personal financial hardships," adding those public servants "deserve better than this."

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Trade Officials from US, EU, Japan Focus On Non-Market Oriented Economies

Top trade officials from the U.S., European Union (EU) and Japan discussed the issue of non-market policies and practices by other countries and their plans to engage fellow World Trade Organization (WTO) members on that and other subjects, during a Jan. 9 trilateral meeting in Washington.

Alliance concept - two businessmen put blank puzzle pieces together

U.S. Trade Representative (USTR) Robert Lighthizer, EU Trade Commissioner Cecilia Malmström and Japanese Trade Minister Hiroshige Seko met for the fifth time as part of ongoing trilateral trade policy discussions.

During the gathering, the ministers discussed their shared goal of addressing "non market-oriented policies and practices of third countries," according to a joint statement.

Those non market-oriented practices "lead to severe overcapacity, create unfair competitive conditions for their workers and businesses, hinder the development and use of innovative technologies, and undermine the proper functioning of international trade, including where existing rules are not effective," the ministers wrote.

Specifically, they looked at ways to identify "additional criteria indicating market-oriented conditions," and reiterated that "market-oriented conditions are fundamental to a fair, mutually advantageous global trading system." The three trade partners pledged to continue work to finalize a trilateral text on the topic of industrial subsides by this spring meant to "engage other key WTO members."

One impetus for the establishment of the trilateral meetings was the issue of global overcapacity in certain markets, particularly steel. China has never been cited specifically by the group, but the emphasis on overcapacity and the issue of industrial subsidies get to the heart of criticisms the three have leveled at China over its steel sector policies.

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Washington Insider: Food Safety and the Shutdown

Politico said this week that FDA is “working to restore some food-safety inspections for products deemed high-risk, such as seafood and raw fruit,” that have been suspended or delayed because of the government shutdown.

"We’re taking steps to expand the scope of food safety surveillance inspections to make sure we continue inspecting high risk food facilities," FDA Commissioner Scott Gottlieb said Wednesday on Twitter.

He argues that “it’s unlikely,” that a large number of inspections for high-risk foods have been missed or delayed since the shutdown began shortly before the holidays.

Several types of food fall under FDA's high-risk category, including seafood, soft cheeses, fresh fruits and vegetables, spices, shell eggs, infant formula and medical foods. A food facility can also be considered high-risk if it has a history of food safety problems.

Shutdown guidance from the Department of Health and Human Services, released late last year, directed that FDA would cease most of its routine food-safety inspections during a lapse in appropriations. Also, some employees are excepted from the shutdown and remain on the job – without pay – to continue operations that are considered critical for human safety or protection of property, such as continuing food-borne illness investigations and handling dangerous recalls.

"We should have the mechanisms in place next week," Gottlieb said, regarding high-risk inspections. He noted FDA had stopped or delayed only a small number of the roughly 8,400 inspections the agency routinely conducts each year.

"It may be a few dozen but not much more," the commissioner said of the postponed inspections.

High-risk food facilities are typically not inspected very often, even when the government is fully funded, Politico said noting that the Food Safety Modernization Act requires FDA to inspect all high-risk food facilities every three years.

Food-safety advocates have long argued that they should be inspected more frequently as a routine practice, but FDA has a limited number of inspectors while there are roughly 20,000 food facilities that are considered high-risk in the US out of the more than 88,000 registered food facilities in the United States in 2016.

The commissioner said in his Wednesday comments that the agency typically conducts about 160 routine facility inspections per week with perhaps 31 percent of those considered high-risk.

Routine food safety inspections for food facilities not deemed high-risk, such as bakeries, will continue to be suspended during the lapse in funding, Politico said. "We’re still doing ALL of our regular foreign food inspections," Gottlieb said.

"We assess risk based on an overall, cross-cutting risk profile," the commissioner added. "The primary factors contributing to a facility’s risk profile include: the type of food, the manufacturing process, and the compliance history of the facility."

However, in spite of Gottleib’s optimism, a number of groups have been highly critical of FDA’s performance. For example, The Alliance for A Stronger FDA, a non-profit organization that has been “rattling the fiscal cages in Washington, D.C., for more than a decade,” isn’t buying the line that the partial government shutdown is a “no harm, no foul” event for federal food safety.

As the partial shutdown continues, this group says that three federal agencies involved in food safety are continuing key operations. The Centers for Disease Control and Prevention are not shut down, nor is USDA’s Food Safety and Inspection Service which is so far providing uninterrupted inspection services at more than 6,200 meat and poultry facilities. And many employees at the Food and Drug Administration are not furloughed because of their essential functions, from investigations to imports.

Further, local health departments have increasingly become the front line agencies when it comes to looking out for foodborne illnesses. Those 2,700 agencies are funded by various local governments and the states.

But if the shutdown continues through the end of this week, and becomes the longest in history, it might not be that simple. In a five-page “toolkit” for the media, the Alliance suggests food safety is being eroded.

And, the group notes that while “essential employees” at USDA, FDA, and at other unfunded agencies are working, they won’t get paid until the shutdown ends.

FDA furloughed 7,053 employees or about 41 percent of the agency’s 17,397 employees. In addition to outbreaks and high-risk recalls, FDA is continuing to do criminal and civil investigations, import screening, and responding to critical public health issues. The U.S. Public Health Service Commissioned Corps, about 1,100 FDA employees, are not subject to furlough and will work through the shutdown.

Another 6,900 FDA employees at the beginning of “the lapse period” were able to continue working because of “user fee” coverage that will exist for a while. Both the FDA and USDA websites are not getting much in the way of new material, but both agencies are publishing recalls.

So, the partial shutdown of government services likely is reaching more broadly across the economy than many believed. The fight to reopen the closed offices and services is increasingly important and should be watched closely by producers as it proceeds, Washington Insider believes.

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(GH/SK)

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