FarmPolicy

November 21, 2014

EPA Pesticide Issue; Mexico Trade Issues; Peanuts; Poultry Issues; and USDA Personnel

EPA Pesticide Issue- Background

Recall that back in January, the United States Court of Appeals for the Sixth Circuit issued a ruling regarding pesticides and the Clean Water Act that had important implications for U.S. farmers. The ruling in the case, The National Cotton Council of America, et at., v. United States Environmental Protection Agency, which was handed down on January 7, 2009, can be viewed in its entirety by clicking here.

Specifically, the Sixth Circuit Appellate Court decision stated that, “These proceedings involve a final regulation issued by the Environmental Protection Agency (the ‘EPA’) under the Clean Water Act, 33 U.S.C. § 1251 et seq. The Clean Water Act regulates the discharge of ‘pollutants’ into the nation’s waters by, among other things, requiring entities that emit ‘pollutants’ to obtain a National Pollutant Discharge Elimination System (‘NPDES’) permit. Id. §§ 1311(a), 1342. On November 27, 2007, the EPA issued a Final Rule concluding that pesticides applied in accordance with the Federal Insecticide, Fungicide, and Rodenticide Act (the ‘FIFRA’) are exempt from the Clean Water Act’s permitting requirements. See 71 Fed. Reg. 68,483 (Nov. 27, 2006) (the ‘Final Rule’). Two different groups of Petitioners—one representing environmental interest groups and the other representing industry interest groups—oppose the EPA’s Final Rule as exceeding the EPA’s interpretive authority. The EPA defends the Final Rule by arguing that the terms of the Clean Water Act are ambiguous and that the Final Rule is a reasonable construction of the Clean Water Act entitled to deference from this Court. We cannot agree. The Clean Water Act is not ambiguous. Further, it is a fundamental precept of this Court that we interpret unambiguous expressions of Congressional will as written.”

This EPA Agriculture webpage provided additional perspective on the January 2009 court ruling, stating that, “On January 19, 2006, EPA received petitions for review of the Aquatic Pesticides rule from both environmental and industry groups. The case was assigned to the Sixth Circuit Court of Appeals. On January 7, 2009 the court held in National Cotton Council, et al, v. EPA, that the final rule was not a reasonable interpretation of the [Clean Water Act] and vacated the rule.

“The court’s decision, which applies nationally, is effective when the mandate takes effect. The mandate takes effect seven days after the deadline for rehearing expires or seven days after a denial of any petition for rehearing. Parties have until April 9, 2009 to seek rehearing. The [EPA], working with [the Department of Justice], is reviewing the opinion and considering next steps. Pending the effective date of the court’s decision, the final aquatic pesticides rule remains in effect and permits are not required for the application of pesticide products in accordance with the product’s Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) label.”

More currently, an update posted late last week at the EPA Agriculture webpage stated that, “On April 9, 2009, the Department of Justice (DOJ) chose not to seek rehearing on an opinion issued by the U.S. Court of Appeals for the 6th Circuit in National Cotton Council v. EPA. DOJ instead filed a motion to stay issuance of the Court’s mandate for two years to provide EPA time to develop, propose and issue a final NPDES general permit for pesticide applications, for States to develop permits, and to provide outreach and education to the regulated community.

“Reversing EPA’s November 2006 Aquatics Pesticides rule, the 6th Circuit held that [Clean Water Act] permits are required for all biological pesticide applications and chemical pesticide applications that leave a residue in water when such applications are made in or over, including near, waters of the U.S. EPA estimates that the ruling will affect approximately 365,000 pesticide applicators that perform 5.6 million pesticide applications annually.

“EPA plans to work closely with states and the environmental and regulated communities in developing a general permit that is protective of the environment and public health.”

EPA Pesticide Issue- Stakeholder Opinion

As the April 9 deadline for a rehearing on this issue approached, policymakers from the legislative branch and within the Obama administration made their concerns known. However, these concerns regarding agricultural production were apparently not persuasive, as the Department of Justice did not file a rehearing on the opinion before the court.

In a letter to EPA Administrator Lisa Jackson and Attorney General Eric Holder on March 19, 2009, House Agriculture Committee Ranking Member Frank Lucas (R-Oklahoma) stated that, “On January 7, 2009, the 6th Circuit Court of Appeals vacated EPA’s 2007 rule exempting certain pesticide applications that are compliant with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) from the National Pollution Discharge Elimination System (NPDES) provisions of the Clean Water Act (CWA). Due to the Court’s actions, farmers and the commercial applicators that serve them will enter into future growing seasons with threats of legal action unless the EPA takes appropriate legal action to appeal the decision before an en banc panel of the 6th Circuit Court of Appeals.”

Rep. Lucas added that, “Due to the potentially significant ramifications of this Court decision to U.S. agriculture, I strongly urge you to file a petition for rehearing before the deadline of April 9.”

On March 6, Secretary of Agriculture Tom Vilsack sent a letter to Administrator Jackson, which stated that; “The court’s adverse decision will have profound implications for American farmers. The panel’s ruling effectively broadens the potential application of the CWA to reach agricultural activities that the EPA has never regulated under the provisions of the CWA. By broadening the Act’s reach, the court burdens American agriculture with a newly minted NPDES permit requirement for the application of all FIFRA- compliant biological pesticides whenever those pesticides might find their way into waters of the United States, and for all FIFRA-compliant chemical pesticides whenever the residues of those pesticides find their way into the waters of the Untied States.”

On April 3, Senate Ag Committee Chairman Tom Harkin (D-Iowa) and Ranking Member Saxby Chambliss (R-Georgia) sent a letter to Administrator Jackson, which stated that, “The recent decision in National Cotton Council of America et.al. v. United States Environmental Protection Agency , 553 F.3d 927 (6th Cir., 2009) has far reaching implications for agriculture and forestry, critical sectors of the economy. Secretary Vilsack has asked that you seek further review by the Sixth Circuit. We would support your taking this action. Should the court’s ruling stand, we believe that the Environmental Protection Agency (EPA) must take into account the substantial impact it would have on farmers using pesticide products. We ask you to make any regulatory changes as smooth and seamless as possible, consistent with your obligations under statute and the protection of natural resources.”

A news release issued on Friday by the National Association of Wheat Growers (NAWG) stated that, “NAWG and 21 other agricultural organizations asked Thursday that the full Sixth Circuit Court of Appeals rehear a landmark pesticide case, even as the Environmental Protection Agency (EPA), a party to the case, declined to do so. (See the friend of the court brief here).

The NAWG release added that, “It is unclear when the Sixth Circuit Court will decide what to do next. The court’s options include a full-Circuit rehearing of the case, declining to rehear the case or issuing a stay, like the EPA has requested. The only option to appeal whatever decision the court makes is to advance the case to the Supreme Court.

The decision as it stands is a clear threat to agricultural production; EPA estimates that the ruling would affect approximately 365,000 pesticide applicators that perform 5.6 million pesticide applications annually.

“NAWG counsel has prepared a detailed article on the case and its potential implications, which is accessible in full at http://www.wheatworld.org/html/news.cfm?ID=1551

An American Farm Bureau Federation (AFBF) news release from Friday stated that, “Because of the potential impacts, AFBF expressed disappointment that the EPA has stated it will not seek a rehearing on the matter, requesting instead a delay of two years before the new permits for legal, label-approved applications would be required.

“‘Farmers should not need a permit under another law when they already are following an existing law,’ said AFBF President Bob Stallman. ‘We are disappointed that EPA has decided not to seek a legal remedy for this situation. The decision made by the three-judge panel in January will complicate farmers’ ability to farm, and raise their expenses without improving the environment.’”

EPA Pesticide Issue- Political Dynamics and Perceptions

The administration’s actions regarding the EPA pesticide issue follow two other executive branch actions that have not been particularly well received by some in the agricultural sector: The executive branch agricultural budget proposal, which sought to sharply curtail some farm support payments; and the administration’s proposed EPA budget outline, which included a costly and controversial cap and trade carbon reduction program, which could substantially increase energy costs.

For a glimpse into the philosophical perspective that the executive branch may hold with respect to agriculture, recall that in an interview with Time Magazine writer Joe Klein in October of 2008, President Obama stated that, “I was just reading an article in the New York Times by Michael Pollen about food and the fact that our entire agricultural system is built on cheap oil. As a consequence, our agriculture sector actually is contributing more greenhouse gases than our transportation sector [Note: alternative view here]. And in the mean time, it’s creating monocultures that are vulnerable to national security threats, are now vulnerable to sky-high food prices or crashes in food prices, huge swings in commodity prices, and are partly responsible for the explosion in our healthcare costs because they’re contributing to type 2 diabetes, stroke and heart disease, obesity, all the things that are driving our huge explosion in healthcare costs.”

Meanwhile, the Financial Times recently noted that, “Almost unnoticed behind the economic crisis, a combination of lower growth, rising unemployment and falling remittances together with persistently high food prices has pushed the number of chronically hungry above 1bn for the first time.”

And a separate FT article from last week reported that, “The world faces the prospect of a permanent food crisis endangering international stability if countries do not take ‘immediate interventions in agriculture’, according to the policy document for the first Group of Eight ministerial meeting on agriculture.

The report, entitled ‘The global challenge: to reduce food emergency’, warns that global food production needs to double by 2050 to feed a surging population while at the same time dealing with ‘pronounced climate changes’ and higher input costs.”

At a time when “food production needs to double by 2050,” it is likely that executive branch perspectives on agriculture may be scrutinized even more closely than normal.

In a related news article from last week, Reuters writer Carey Gillam included this quote from Agriculture Secretary Vilsack regarding food production: “‘We will constantly be challenged as world populations grow,’ Vilsack said. ‘The amount of land capable of producing food is not going to grow. With growing communities — expanding communities — it may actually shrink.’

“‘That dynamic will always constantly challenge us to figure out ways to produce enough food and enough nutrition for people to be cared for,’ Vilsack said.”

Mexico Trade Issues

Hailey R. Branson reported in Saturday’s San Francisco Chronicle that, “California agricultural groups, stung by retaliatory tariffs resulting from a U.S. trucking dispute with Mexico, are stepping up pressure on the Obama administration to quickly resolve a budding trade war that could cost them more than $200 million this year.”

The Chronicle article explained that, “More than two dozen California agriculture organizations joined forces recently to send a letter to Obama and his staff asking them to take the lead in resolving the monthlong impasse.

“‘The longer we wait, the more economic harm can be done to the agriculture industry,’ said Ken Gilliland, director of international trade and transportation for Arizona and California’s Western Growers Association, which signed the letter. ‘It’s pretty united that we need to resolve this as soon as possible.’

Though the dispute is not on the official agenda for Obama’s meeting with Mexican President Felipe Calderón in Mexico City on Thursday and Friday, it is likely to be brought up.”

The article noted that, “Agriculture advocates are pushing for Congress to swiftly grant Mexico full driving access in the lower 48 states, with the hope that doing so would cause Mexico to lift the tariffs.

But a quick fix may not be all that easy, according to Speaker of the House Nancy Pelosi, D-San Francisco, who is caught between her allies in organized labor and her home state’s economic interests.

“‘I don’t see a change coming,’ Pelosi said earlier this month. ‘The president may have some other views, and we’ll see what he has to say about it. But I don’t see any change.’”

Saturday’s article also indicated that, “During her visit to Mexico City last week, Secretary of State Hillary Rodham Clinton promised that the two countries would ‘work this out.’

“For now, California growers are crossing their fingers and hoping the fight is resolved soon, before Mexico can add more items to its list.

“‘I think we’re at the beginning of it,’ Western Growers’ Gilliland said. ‘We’re just waiting now to see what the impact is going to be.’”

And The Wall Street Journal editorial board noted on Friday that, “Mr. Obama acquiesced in Congress’s unilateral rewriting of Nafta earlier this year, despite warnings of potential retaliation. Well, last month Mexico responded with a 20% tariff on select U.S. products, including pears, cherries, apricots and Christmas trees. The Capital Press agriculture Web site reports that pear exports to Mexico have already ‘ground to a halt’ as importers stop buying them because of the cost and uncertainty. That’s a potential annual loss of $50 million to $60 million in U.S. pear exports alone. ‘If we have that 20% tariff and Argentina enters the market, it could hurt our ability to ship fruit the rest of the season,’ said Jeff Correa, of the Pear Bureau Northwest.”

Peanuts

Matthew McGowan reported on Friday at the Odessa American Online (Texas) that, “As they gear up to plant this year’s crop, for many peanut farmers in Gaines County it’s time to cast the dice and hold their breath because the fate of the region’s industry could depend on October’s harvest.

“Last year’s so-called ‘perfect storm’ left many of the area’s peanut farmers on the verge of bankruptcy, and that was before the salmonella outbreak at the end of 2008 that killed at least nine people and winded much of the state’s $1 billion industry.

Another bad year in 2009 could push those farmers over the edge, devastating the peanut agricultural industry and trickling down to local businesses that rely on local farmers’ income.”

The article explained that, “The 2008 meltdown for West Texas growers resulted from a deadly mix of several factors – bad weather, unfavorable market speculation that pulled the rug out from underneath farmers’ profits, drought and skyrocketing prices of fertilizers and diesel fuel.

“‘All those things just made a perfect storm,’ said Jimbo Grissom, president of Seminole’s Western Peanut Farmers Association and a third-generation peanut farmer with 30 years under his belt. ‘I’ve lived in West Texas since 1984, and this is the hardest time I’ve seen for the peanuts.’”

Friday’s article added that, “For peanut farmers like [Grissom] who have been in the industry for years and have managed to establish decades worth of equity, loans are still possible to come by.

Younger farmers, like Grissom’s son, on the other hand, are finding it much more difficult to secure the money they need to plant this year’s crop.

“Even for industry veterans like Grissom, the financial clock is ticking. He said he doesn’t know how much longer his credit will hold out. Another year or two on this path, and it could spell the end of the Grissom family’s peanut-farming dynasty.

“‘If things continue like they are, it’ll break a lot of farmers,’ he said. ‘I just don’t know what will happen then. I just don’t know.’”

Poultry Issues

David Zucchino reported in today’s Los Angeles Times that, “The worst recession in decades has hammered all types of businesses across the country, farming included. But among the hardest hit are contract chicken farmers in the South and especially in North Carolina, the nation’s second-leading poultry producer, where it is a $3.3-billion industry.

Last winter, the economic crisis created ‘pretty much a catastrophe’ for contract farmers, said Dan Campeau, a North Carolina State University poultry specialist and extension agent.

“Demand for chicken nose-dived as beleaguered consumers cut back. The industry’s two biggest foreign markets, Russia and China, drastically trimmed their orders. Fuel prices surged, driving up the cost of chicken feed as some grain crops were diverted to produce ethanol.”

The article stated that, “Nationally, 800 to 900 chicken farmers have lost contracts since last fall, almost all of them in the South, said Gary McBryde, an economist with the Department of Agriculture. Chicken production is down 7% since April 2008, the National Chicken Council said.”

USDA Personnel

The U.S Department of Agriculture noted on Friday that, “Agriculture Secretary Tom Vilsack today announced the appointment of Cheryl Cook as Deputy Under Secretary for Rural Development.” Also on Friday USDA indicated that, “Agriculture Secretary Tom Vilsack today announced the appointment of Doug O’Brien as Chief of Staff to Deputy Secretary Kathleen Merrigan.” And a separate USDA announcement on Friday stated that, “Agriculture Secretary Tom Vilsack today announced the appointment of Janey Thornton as Deputy Under Secretary for Food, Nutrition and Consumer Services (FNCS).”

***

An article in today’s Washington Post by Shailagh Murray, which highlighted the operational style of White House chief of staff Rahm Emanuel, included the following illustration: “The White House legislative strategy blends Obama’s vision and salesmanship with Emanuel’s granular political expertise and dealmaking skills. One of Emanuel’s targets in the run-up to the budget vote was Rep. Marion Berry, an Arkansas Democrat who opposed Obama’s proposal to save nearly $10 billion over 10 years by cutting federal payments to large farms.

“Berry still seemed agitated after a brief session in Emanuel’s office, so the chief of staff played his trump card. ‘I walked him down to the Oval’ and introduced Berry to Obama, Emanuel recalled. The two traded farm jokes and agreed to talk later in the year about a comprehensive review of federal agriculture policy. Berry, a longtime Clinton ally, said he ‘really did appreciate’ the attention and was relieved that Obama appeared willing to back off the cuts, at least for now. When the House voted, he was a yes.

“‘I was never a big Obama guy, but when I heard on the news that Rahm was going to be chief of staff, I thought, of all people I’ve known in my life, he was born to be chief of staff to a great president,’ Berry said. ‘He’s young and tough and smart, and can be mean when necessary. He doesn’t waste energy on foolish things.’

“In Berry, Emanuel saw a veteran lawmaker ‘who felt like his voice wasn’t being heard,’ something he understood from his combined Hill and White House experience. ‘I know these guys; I know what makes them tick. I know their districts. It’s not the first time I’ve ever talked to them,’ Emanuel said.”

Keith Good

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