FarmPolicy

August 22, 2014

Food Safety; Farm Bill; Sec. Vilsack; and Biofuels

Food Safety

William Neuman reported in today’s New York Times that, “The House of Representatives gave final approval on Tuesday to a long-awaited modernization of the nation’s food safety laws, voting 215 to 144 to grant the Food and Drug Administration greater authority over food production.

“The bill, which President Obama has indicated he will sign, is meant to change the mission of the F.D.A., focusing it on preventing food-borne illnesses rather than reacting after an outbreak occurs. The overhaul comes after several major outbreaks and food recalls in recent years involving salmonella in eggs and peanuts, and E. coli in spinach and other leafy greens.

“Under the legislation, food manufacturers will be required to examine their processing systems to identify possible ways that food products can become contaminated and to develop detailed plans to keep that from happening. Companies must share those plans with the F.D.A., and provide the agency with records, including product test results, showing how effectively they carry them out.”

The Times article noted that, “While the legislation contains many changes that advocates had long pursued, many of its important provisions, including the requirement that companies put in place food safety plans, do not go into effect for as long as 18 months. The agency will use much of that time to write rules that it needs to carry out the law.

“In addition, the increased inspection of food manufacturers will happen only gradually, with regulators given up to five years to visit high-risk facilities. After that, high-risk plants must be inspected every three years.”

Today’s article added that, “Ultimately, the agency’s ability to carry out and enforce the law will depend on how much money it has available to pay inspectors and maintain or increase its staff. Republicans will gain control of the House next year and have vowed to cut spending on many domestic programs. Deep cuts could hobble the F.D.A. just as it gains the new authority.”

Philip Brasher pointed out yesterday at the Green Fields Blog (Des Moines Register) that, “How much impact the bill will have is going to depend a lot on whether lawmakers provide the money [to] the agency.”

Meredith Shiner reported yesterday at Politico that, “The Food Safety and Modernization Act cleared the House by 215-144 less than two days after Senate Republicans gave a surprise victory to the legislation’s advocates by allowing Democrats to move the package by unanimous consent. Though the Senate originally passed the bill in November, a clerical error voided the effort and many on both sides of the aisle worried Sen. Tom Coburn (R-Okla.) would keep his word and block the legislation yet again as this Congress came to a close.

“But when the Oklahoma Republican backed off his objections, the pathway opened for the bill that boosts the powers of the Food and Drug Administration to become law.”

Reuters writer Christopher Doering reported yesterday that, “‘This legislation is the product of a flawed process,’ said Frank Lucas, the top Republican on the House Agriculture Committee. ‘It gives the Food and Drug Administration lots of additional authorities with no accountability.’”

(Note: To listen to an extended portion of remarks on the House floor from Rep. Lucas yesterday on this issue, just click here (MP3- 3:48). In addition, related remarks from Henry Waxman, chairman of the House Energy and Commerce Committee, on the food safety bill from yesterday’s House floor debate can be heard here (MP3- 2:09)).

Mr. Doering also indicated in his article from yesterday that, “‘For too long the cornerstone of our food safety system, the FDA, has only had ancient tools and an outdated mandate at its disposal,’ said Rosa DeLauro, chairman of the House Agriculture Appropriations Subcommittee.” (Note: Rep. DeLauro’s complete comments on the House floor yesterday can be heard here (MP3- 5:28)).

The legislation would give the FDA, which oversees 80 percent of the U.S. food supply, the power to order a food recall when a company refuses the agency’s request that it do so voluntarily,” the Reuters article said.

Lyndsey Layton reported in today’s Washington Post that, “The vote marked the final hurdle for a bill that cleared an unusual number of obstacles, despite enjoying bipartisan support and backing from a wide array of groups across the political spectrum, from the Consumers Union to the Chamber of Commerce.”

The Washington Post editorial board stated today that, “Under the legislation, companies will be required to develop and implement written food safety plans that will be subject to inspection by the FDA. The secretary of health and human services will be required to establish a system to track and trace the origins of fruits, vegetables and processed foods to make it easier for the government to pinpoint sources of contamination. Instead of relying on voluntary actions of companies, the FDA will have the authority to order product recalls.”

Sen. Tom Harkin noted earlier this week that, “I look forward to standing with the President as he signs this important measure into law, and in so doing, giving Americans one of the best holiday gifts they can receive this year — the assurance that the foods they are eating are safer.”

The Environmental Working Group noted in part yesterday that, “The nation’s food safety system is responsible for 3,000 deaths each year, and 48 million illnesses annually, according to newly released data from the federal Centers for Disease Control. Landmark federal legislation enacted today by Congress should significantly reduce that terrible human toll.”

United Fresh Produce Association Senior Vice President of Public Policy Robert Guenther noted in part that, “The good in this bill, however, is still accompanied by the bad, and the Food Safety Modernization Act still contains an amendment from Senators Jon Tester of Montana and Kay Hagan of North Carolina that threatens the health and well-being of a nation of consumers by exempting some producers and processors based only on the size of their business, their geographic location, or to whom they sell their products. This inclusion of exemptions based on non-scientific qualifications will limit the ability of the Food and Drug Administration to assure consumers that all foods they purchase, whether at grocery stores, restaurants, farm markets, or elsewhere, have met the same food safety standards.”

And House Ag Committee Member Randy Neugebauer (R-TX) tweeted yesterday that, “‘Food Safety’ bill passed today only broadens the power of the FDA, creates more government intrusion and costs to consumers.”

Farm Bill: Ag Committees

Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “Sen. Pat Roberts, R-Kan., is expected to move into the ranking member spot on the Senate Agriculture Committee as more reports are stating that Sen. Saxby Chambliss, R-Ga., will take over as ranking member of the Senate Intelligence Committee. Sen. Charles Grassley, R-Iowa, said Tuesday that was his understanding of what was happening….[R]oberts is a strong defender of direct payments, having effectively creating the program as House Agriculture Committee chairman for the 1996 farm bill.”

A news update yesterday from the House Committee on Agriculture Republicans stated that, “Today Chairman-elect Frank Lucas of Oklahoma named six members to serve as Subcommittee Chairmen of the House Agriculture Committee and also released the complete Republican roster for the 112th Congress. Additionally, Lucas announced that Rep. Bob Goodlatte of Virginia will serve as Vice Chairman of the full committee.”

“Chairman-elect Lucas designated the following Subcommittee Chairmen and their jurisdictions (listed alphabetically by subcommittee name): Rep. Glenn ‘GT’ Thompson (PA-5): Conservation, Energy, and Forestry; Rep. Jeff Fortenberry (NE-1): Department Operations, Oversight, and Credit; Rep. K. Michael Conaway, (TX-11): General Farm Commodities and Risk Management; Rep. Tom Rooney (FL-16): Livestock, Dairy, and Poultry; Rep. Jean Schmidt (OH-2): Nutrition and Horticulture; and, Rep. Timothy V. Johnson (IL-15): Rural Development, Research, Biotechnology, and Foreign Agriculture.”

A complete list of GOP Members of the House Ag Comm. is available here.

With respect to Rep. Conaway, Dan Freedman reported on Saturday at the Houston Chronicle Online that, “When the harsh reality of cutting the size of government sinks in on incoming House Speaker John Boehner next month, Rep. Mike Conaway, R-Midland, will be among the GOP’s first responders.

“Conaway, 62, a nuts-and-bolts CPA will be in high demand for his auditing and numbers-crunching talent. His ability to follow the governmental money trail and ferret out unnecessary spending may prove crucial to Boehner and his team.”

“‘It’s easy now to talk glibly about cutting federal spending because we’re doing it in the generic form,’ Conaway said. ‘We have to make tough choices, and I’m hopeful the zeal for cutting spending we see today will survive the reality of the cuts.’”

The article added that, “But now, with the deficit spiraling upward, Conaway says that cuts to all subsidies must be on the table in 2012.

“‘We’ll be looking at it through a different prism’ than the last time the farm bill was passed in 2008, he said.”

Farm Bill: Spending- Political Background

In related news on government spending, David M. Herszenhorn reported in today’s New York Times that, “Congress on Tuesday approved yet another temporary spending bill, this one running through March 4, the fourth such stopgap measure since the fiscal year ended Sept. 30.

“The effective spending freeze amounts to a reduction when rising costs are taken into account — a welcome outcome to many Republicans — and disrupts the government’s ability to carry out programs and policy changes.

And with the partisan feud over spending threatening to become an all-out impasse when the Republican majority takes control of the House in January, such temporary spending measures, and the crunch they cause, may continue indefinitely.”

Corey Boles and Martin Vaughan reported in today’s Wall Street Journal that, “The measure effectively kicks the budget debate into the next Congress. Republican lawmakers want to roll back federal spending to fiscal 2008 levels, a move they say would save $100 billion over the next decade. Those efforts could run into stiff headwinds, however, as Democrats retain control of the Senate and White House.”

Farm Bill: Crop Insurance

A recent Congressional Research Service (CRS) report (“Federal Crop Insurance: Background and Issues,” by Dennis A. Shields, Dec. 13), noted at page 15 that, “The intersection between crop insurance and other government programs varies by commodity. For ‘program crops’ such as wheat, corn, and soybeans, eligible producers receive government payments from several programs. These include the direct/counter-cyclical payment program (with fixed payment rates/price-dependent rates, respectively), the average crop revenue election (ACRE) program (revenue-dependent), and the marketing assistance loan program (price- dependent). These programs (except for direct payments) have elements of risk reduction (i.e., reducing the variability of farm income or the ‘effective’ farm price of a commodity). They can also enhance farm income for participating producers. Compared with these national farm programs, with the exception (to some extent) of the ACRE program and its state yield component, crop insurance provides a more exact (i.e., location-specific) benefit to farmers trying to manage price and income risk. For the other major farm programs (direct/counter-cyclical and marketing assistance loan), payments are independent from crop insurance indemnities, but the same market factors may play a role in triggering payments in some instances. For crops not receiving payments under federal commodity programs, crop insurance serves as a primary risk management tool for farmers, particularly with respect to losses in yields.”

The CRS report added on page 19 that, “Both congressional and Administration estimates show that the renegotiation of the Standard Reinsurance Agreement (SRA) in 2010 reduced crop insurance program costs by $6 billion over 10 years. The Administration designated $4 billion of the total for deficit reduction. However, because changes to the SRA, and resultant cost savings, were established through administrative and not congressional action, the implied funding changes were not captured in the budget baseline and hence do not count as budget savings in congressional scoring of future legislation. As a result, if there is a call for reduction in mandatory spending, including funds for agriculture, these cuts made administratively by USDA under the SRA signed in 2010 will not be credited toward any reductions that the House and Senate Agriculture Committees might need to make to agricultural spending.

Insurance companies, farm groups, and some Members of Congress remain concerned that any additional reductions to crop insurance spending will negatively impact the financial health of the crop insurance industry and possibly jeopardize the delivery of crop insurance, particularly in high-risk areas.”

Farm Bill: SNAP

Aaron Smith reported yesterday at CNNMoney Online that, “The use of food stamps [Supplemental Nutrition Assistance Program (SNAP)] has increased dramatically in the U.S., as the federal government ramps up basic assistance to meet the demands of an increasingly desperate population.

“The number of food stamp recipients increased 16% over last year. This means that 14% of the population is now living on food stamps. That’s about 43 million people, or about one out of every seven Americans.”

Secretary Vilsack

Secretary of Agriculture Tom Vilsack was a guest on yesterday’s AgriTalk Radio Program where he discussed a wide range of issues with John Herath, who was sitting in yesterday for Mike Adams.

To listen to portion of yesterday’s discussion on issues associated with biofuels, just click here (MP3- 2:23)

The proposed GIPSA rule, and recent developments regarding economic analysis of the proposed rule, was also discussed yesterday; conversation on this subject from yesterday’s AgriTalk show is available here (MP3- 3:49).

In related developments, Nebraska GOP Sen. Mike Johanns indicated in a news release yesterday that, “[Sen. Johanns] today authored a letter, signed by 11 of his colleagues to U.S. Secretary of Agriculture Tom Vilsack, urging him to follow through on his statements regarding a cost-benefit analysis to be conducted on changes to livestock marketing regulations proposed by the Grain Inspection Packers and Stockyards Administration (GIPSA). Secretary Vilsack pledged in a meeting with meat industry officials last week that the U.S. Department of Agriculture (USDA) would conduct ‘a far more rigorous cost-benefit analysis.’ Johanns’ letter strongly endorses a new analysis.”

Biofuels

Philip Brasher reported yesterday at the Des Moines Register Online that, “The ethanol industry needs to stop its infighting to preserve its government support beyond next year, says Sen. Chuck Grassley, R-Ia.

“‘We can’t stand any more division within biofuels,’ said Grassley, who led a successful fight in the Senate to extend the 45-cent-per-gallon ethanol subsidy and import tariff through next year.

“The industry was split this summer when one trade group, Growth Energy, proposed to phase out the subsidy and shift the money into retrofitting service stations and building ethanol pipelines.”

Daniel Looker reported yesterday at Agriculture Online that, “Senator Chuck Grassley (R-IA) said Tuesday that he believes a lawsuit filed this week to challenge EPA approval of E15 in newer cars will fail.”

And Philip Brasher reported yesterday at the Green Fields Blog that, “Last week, Congress revived the industry’s $1-a-gallon subsidy. Now, refiners have lost their challenge to requirements of the federal mandate for biodiesel usage.

“A ruling today by a federal appeals court means that refiners will have to meet a requirement that they have used 1.15 billion gallons of biodiesel by the end of this year. Under a 2007 energy law, refiners were mandated to use 500 million gallons of biodiesel and 650 million gallons this year, but the Environmental Protection Agency didn’t get the regulation implemented until this year and decided to combine the volume from both years into a single requirement. The National Petrochemical and Refiners Association didn’t like the retroactive mandate and wanted the appeals court to throw it out.”

National Public Radio’s Morning Edition program aired the first of three part series on ethanol yesterday titled, “Ethanol Gets A Boost; Will It Return The Favor?” The second installment, “If Your Meat Prices Rise, You Can Blame Ethanol,” airs on today’s Morning Edition Program.

Keith Good

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