January 20, 2020

Ag Economy; Farm Bill; Biotech; and, Regulations

Agricultural Economy

Reuters writers Tom Miles and Krista Hughes reported yesterday that, “India broke World Trade Organization rules by blocking imports of U.S. poultry and other farm products because of unsubstantiated bird flu fears, a WTO dispute panel ruled on Tuesday, potentially opening up an estimated $300 million a year export market for the United States.

“India had claimed its import restrictions, imposed in 2007, were justified by international rules on animal health, but the panel agreed with the United States and found that India’s measures were not based on international standards and were discriminatory.

“‘This is a major victory for American farmers,’ said U.S. Trade Representative Michael Froman, who termed the poultry decision ‘the fourth major WTO victory’ for the United States this year. ‘Our farmers produce the finest, and safest, agricultural products in the world.’”


Farm Bill; Ag Economy; Budget; Immigration; and, Regulation

Farm Bill Issues

The “Washington Insider” section of DTN reported yesterday (link requires subscription) that, “Political pundits were quick to report last week that passage of the House nutrition measure brings the Congress a step closer to a new farm bill –– an assessment that at least a few others dispute. All agree that it will set up a ‘fierce battle between the House and Senate over social policy.’ But, how that may play out remains to be seen.

“At least for now, last week’s vote does seem to mean the fight is focusing ever more tightly on the supplemental food programs rather than farm policy and safety nets –– although a number of those controversies remain.

“The reason is that many House conservatives, prodded by the Heritage Foundation and a few other conservative groups, say they regard this farm bill fight as their main chance to implement another round of welfare reform, an opportunity they welcome in spite of the fact that it forces them to defend significant cuts in anti-poverty programs while pushing for new, increasingly expensive safety nets for an already prosperous sector.”


Policy Issues; EPA; Climate Issues; Food Safety; and the Agricultural Economy

Policy Issues: Animal Agriculture

Erik Eckholm reported in today’s New York Times that, “Concessions by farmers in this state [Ohio] to sharply restrict the close confinement of hens, hogs and veal calves are the latest sign that so-called factory farming — a staple of modern agriculture that is seen by critics as inhumane and a threat to the environment and health — is on the verge of significant change.

“A recent agreement between farmers and animal rights activists here is a rare compromise in the bitter and growing debate over large-scale, intensive methods of producing eggs and meat, and may well push farmers in other states to give ground, experts say. The rising consumer preference for more ‘natural’ and local products and concerns about pollution and antibiotic use in giant livestock operations are also driving change.

“The surprise truce in Ohio follows stronger limits imposed by California voters in 2008; there, extreme caging methods will be banned altogether by 2015. In another sign of the growing clout of the animal welfare movement, a law passed in California this year will also ban imports from other states of eggs produced in crowded cages. Similar limits were approved last year in Michigan and less sweeping restrictions have been adopted in Florida, Arizona and other states.”


Climate Legislation- A Wide Ranging Debate; Farm Policy Perspectives; and Sugar

Climate Legislation- A Wide Ranging Debate

Elisabeth Rosenthal reported in Saturday’s New York Times that, “Mato Grosso means thick forests, and the name was once apt. But today, this Brazilian state is a global epicenter of deforestation. Driven by profits derived from fertile soil, the region’s dense forests have been aggressively cleared over the past decade, and Mato Grasso is now Brazil’s leading producer of soy, corn and cattle, exported across the globe by multinational companies.

“Deforestation, a critical contributor to climate change, effectively accounts for 20 percent of the world’s carbon dioxide emissions and 70 percent of the emissions in Brazil. Halting new deforestation, experts say, is as powerful a way to combat warming as closing the world’s coal plants.

But until now, there has been no financial reward for keeping forest standing. Which is why a growing number of scientists, politicians and environmentalists argue that cash payments — like that offered to [farmer José Marcolini] — are the only way to end tropical forest destruction and provide a game-changing strategy in efforts to limit global warming.”


Climate Bill; Trade Issues; and Executive Branch Post

Climate Bill- Congress Background

Naftali Bendavid and Greg Hitt reported in today’s Wall Street Journal that, “Lawmakers return to the Capitol on Monday for a five-week blitz that will help determine the fate of President Barack Obama’s agenda.

“The Senate will be occupied for much of the summer with confirmation hearings on Supreme Court nominee Sonia Sotomayor, beginning July 13, followed by a floor debate on her nomination. Democratic leaders also hope to push health plans through the House and Senate before their summer break begins Aug. 8.

“It is a daunting schedule, and Senate Majority Leader Harry Reid (D., Nev.) and House Majority Leader Steny Hoyer (D., Md.) are keeping lawmakers in Washington for five-day workweeks in July, rather than their usual Tuesday-through-Thursday routine.”


Climate Change; Trade Issues; Food Prices; Crop Progress; and USDA News

Climate Change

Mark Peters reported yesterday at The Wall Street Journal Online that, “Climate czar Carol Browner said she wants Congress to establish a broad U.S. greenhouse-gas policy before global climate-change talks near the end of the year.

“Speaking at a conference Monday at the Massachusetts Institute of Technology, Ms. Browner said she is confident Congress can move forward on a climate-change policy, citing hearings scheduled for next week on sweeping legislation proposed by Rep. Henry Waxman (D., Calif.) and Rep. Ed Markey (D., Mass). Ms. Browner didn’t provide a timetable for when she would like to see congressional action, but said advancing climate-change legislation is ‘absolutely essential’ to what the U.S. can accomplish during United Nations negotiations scheduled for December in Copenhagen.”


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.


WTO Cotton Case- Brazil May Seek Sanctions, and Other Issues

Cotton Case

Reuters writers Jonathan Lynn and Missy Ryan reported yesterday that, “The United States lost an appeal on Monday in its long-running dispute with Brazil over U.S. subsidies for cotton farmers at the World Trade Organization (WTO).

“The ruling opens the way for Brazil to seek WTO approval for more than $1 billion a year in sanctions on U.S. imports, which it has suggested it could impose on services or by suspending U.S. intellectual property rights.

“In a 184-page ruling, the appeal body, the WTO’s top court, recommended that the WTO’s dispute settlement body should request the United States to bring its measures into line with international trade rules.”


Brazil Eyes U.S. Ethanol Subsidies at WTO

Yesterday, the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) released their latest Crop Production report.

In part, the NASS report stated that, “Corn production is forecast at 13.3 billion bushels, up 2 percent from last month and 26 percent above 2006. Based on conditions as of September 1, yields are expected to average 155.8 bushels per acre, up 3.0 bushels from August and 6.7 bushels above last year. If realized, this would be the second highest yield on record, behind the 160.4 bushel yield in 2004. Production would be the largest on record as growers expect to harvest the most corn acres for grain since 1933.”


Agricultural Trade Factors

As the Doha talks continue, Financial Times writer Alan Beattie has provided a more in-depth look at issues associated with a potential shift away from negotiation and towards litigation in the context of world trade disputes. Mr. Beattie noted that, “To its defenders, this trend represents rule and reason constraining power politics. To its critics, it means runaway jurists subverting democracy.”

I. Closer Look at Trade Litigation
II. Report on a More Market Oriented Farm Bill
III. Farm Policy Issues: Spending & Ethanol

I. Closer Look at Trade Litigation

Alan Beattie reported today at the Financial Times Online that, “As the so-called Doha round of World Trade Organisation global trade talks sputters, more and more of the work of trade relations has shifted away from negotiation and towards litigation and arbitration. To its defenders, this trend represents rule and reason constraining power politics. To its critics, it means runaway jurists subverting democracy.”

Mr. Beattie indicated that, “A series of cases has highlighted the ability of a country – and increasingly, at the Icsid [International Centre for the Settlement of Investment Disputes, housed at the World Bank in Washington, which rules on disagreements between governments and private foreign investors] and similar ‘investor-state’ tribunals, a company – to force a government to act in politically sensitive areas. A succession of cases brought by WTO members including Brazil, the European Union and even tiny Antigua and Barbuda (population 83,000) has forced the US Congress to rewrite corporation tax law, reform subsidies to cotton farmers and revise bans on internet gambling.”

The FT article explained that, “WTO panels comprise three from a roster of part-time panellists that includes trade officials, diplomats and academics. Some, oddly, are moonlighting from day jobs as national ambassadors to the WTO, meaning they are negotiating over trade deals one day and ruling on their meaning the next. They do not have to be lawyers, though there is a separate appellate body whose members must have legal expertise. Panels rely heavily on advice from the WTO’s small secretariat to interpret legal questions.”