For the Week Ending November 4, 2016

November 4, 2016

NPPC, OTHER ORGANIZATIONS ASK COURT TO THROW OUT ‘WOTUS’ RULE

NPPC this week joined dozens of other agricultural organizations, businesses and municipalities in asking a federal court to throw out a Clean Water Act rule that would give the government broad jurisdiction over land and water. The Waters of the United States (WOTUS) rule, which took effect Aug. 28, 2015, was proposed in April 2014 by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers to clarify the agencies’ authority over various waters. That jurisdiction – based on several U.S. Supreme Court decisions – had included “navigable” waters and waters with a significant hydrologic connection to navigable waters. But the regulation broadened that to include, among other water bodies, upstream waters and intermittent and ephemeral streams such as the kind farmers use for drainage and irrigation. It also covered lands adjacent to such waters. The U.S. Court of Appeals for the 6th Circuit in Cincinnati last October issued a stay on implementation of the regulation until disposition of numerous lawsuits against it. Those suits were consolidated in the 6th Circuit, where NPPC and the other groups now are arguing that: the agencies promulgated the WOTUS rule without following federal rulemaking procedures; the regulation is arbitrary and capricious or contrary to law; and the agencies exceeded their authority under the Clean Water Act and the U.S. Constitution. While it could be more than several months before the court renders a decision in the case, in issuing the stay last October, it found there was a substantial likelihood that in writing the WOTUS rule EPA and the Corps of Engineers failed to comply with the Supreme Court’s instructions in previous Clean Water Act cases and that the agencies’ actions in the rulemaking process were “facially suspect.” On the latter point, the groups in their brief to the court said EPA and the Corps of Engineers failed to reopen the public comment period after making fundamental changes to the proposed rule and withheld until after the comment period closed the scientific report on which the rule rested. The agencies also refused to conduct required economic and environmental analyses, engaged in a propaganda campaign to promote the rule and rebuke its critics and illegally lobbied against congressional efforts to stop implementation of the rule. (Click here to read the brief.)

 

NPPC BEGINS PUSH FOR TPP VOTE; OTHER COUNTRIES LOOKING AT ASIA-PACIFIC REGION

Things are heating up on the Trans-Pacific Partnership Agreement – at least outside the halls of Congress. This week, NPPC activated its grassroots, asking its members to contact their congressional lawmakers to urge them to bring up and vote to pass the TPP before the end of the year, and the organization joined the American Farm Bureau Federation and the National Cattlemen’s Beef Association in a social media campaign, asking the public to do the same. NPPC strongly supports the 12-nation TPP, which includes the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which account for nearly 40 percent of global GDP. If implemented, the deal is expected to significantly boost U.S. pork exports to the Asia-Pacific region, creating 10,000 U.S. jobs tied to those exports. Thursday, the TPP Special Committee of the lower house of the Japanese Diet approved bills to implement the trade agreement. The Japanese House of Representatives is expected to consider the TPP measures next week; they still would need to be approved by the upper house. Also this week, opponents of the TPP got indications of the consequences of not approving the trade pact when 22 meat and poultry boards and processors from the European Union and an EU business delegation travelled to Hong Kong, Indonesia and Vietnam to explore trade opportunities in those southeast Asian markets. Additionally, the trade officials from the 16 countries that are part of the Regional Comprehensive Economic Partnership (RCEP) talks this week met in the Philippines to discuss progress on the deal. The RCEP negotiations, which members hope to conclude by the end of this year, include Australia, Brunei Darussalam, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam. NPPC has cautioned that failure to ratify the TPP not only will result in foregone benefits of expanded trade to the Pacific Rim but loss of existing market share in the 11 TPP partner countries as other nations fill the void, negotiating their own trade agreements.

 

‘ENHANCED’ PORK CUTOUT NOW IN EFFECT

A new regulation from the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) related to the pork carcass cutout took effect Oct. 31. The pork cutout is an estimated value for a hog carcass based on current wholesale prices paid for sub-primal pork cuts. AMS added muscle cuts (insides, outsides and knuckles) to the ham primal as a way to more accurately reflect today’s marketing environment and to capture more product to be included in the weighted average calculation. According to analysis from AMS, the “enhanced” cutout is expected to lower the overall carcass cutout value by an average of $1.41. Producers who utilize the cutout calculations for pricing should keep that in mind when negotiating contracts with packers. (For more information, click here.)

 

AG GROUP CRITICIZES COMPANY PLEDGE AGAINST BIOTECHNOLOGY

The U.S. Farmers and Ranchers Alliance (USFRA), a broad coalition of agricultural groups, including NPPC, last week asked the Dannon Company – maker of Dannon, Oikos and Danimals yogurt – to revise its “Dannon Pledge” so that it recognizes the “sustainability, safety and environmental benefit of food biotechnology.” Dannon in April announced that it eventually will use ingredients in its yogurt from “more sustainable agriculture.” In a press release, the company said it will work with its “dairy farmer partners and their suppliers to progressively implement the use of sustainable agriculture practices and technology that leads to better soil health, better water management, an increase in biodiversity and a decrease in carbon emission.” It added that the feed of its farmers’ cows will be non-genetically modified within three years. In a letter to company President and CEO Mariano Lozano, USFRA said it was “dismayed with your company’s attack on the livelihood and integrity of our farmers” contained in the “Dannon Pledge.” The organization said such marketing gimmicks could “force farmers to abandon safe, sustainable farming practices that have enhanced farm productivity over the last 20 years while greatly reducing the carbon footprint of American agriculture.” USFRA pointed out that the reason the vast majority of American farmers grow crops improved with biotechnology such as genetically modified organisms (GMOs) is because those crops are more sustainable than the ones they used to grow. The organization also pointed out that conventional crops required extensive and intensive pesticide use and more water and didn’t yield as much as crops grown using biotechnology. (With conventional crops, more land would need to be cultivated to produce the yields needed to meet current demand.) “In short,” said USFRA in its letter, “the Dannon pledge is the exact opposite of the sustainable agriculture that you claim to be seeking. Why then, when you repeatedly acknowledge the well-established science affirming the safety of agricultural biotechnology, would you require farmers to go back to old, inefficient and less effective cropping practices?” (Click here to read the USFRA letter.)

 

NPPC WORKING TO STRENGTHEN U.S., ARGENTINA TRADE TIES

NPPC Vice President of Global Government Affairs Nick Giordano and NPPC Deputy Director of International Trade Maria Zieba this week traveled to Argentina to promote market access for U.S. pork, meeting with U.S. and Argentine government officials, importers and Argentine pork producers, among others. The United States and Argentina are working toward closer commercial ties, a move that would bode well for the U.S. pork industry. NPPC continues to look for opportunities to expand exports in Latin America, and, among the non-FTA partner nations there, Argentina presents the best opportunity for expanding U.S. pork exports. NPPC already has been working with the U.S. Department of Agriculture in negotiating an export certificate with Argentina that would open that country’s market to more U.S. pork. Compared with other nations in the Southern Hemisphere, Argentina has a high per capita income and a large population, and it has experienced a very significant increase in pork consumption over the past 10 years, with future increases expected.

 

NPPC REQUESTS FUNDING FOR USDA AGRICULTURE AND FOOD RESEARCH INITIATIVE

NPPC this week joined more than 15 other agricultural organizations on a letter to congressional appropriations leaders, urging the lawmakers to increase funding for the U.S. Department of Agriculture’s Agriculture and Food Research Initiative (AFRI) for fiscal 2017, which began Oct. 1. AFRI is the nation’s premier peer-reviewed competitive grants program for fundamental and applied agricultural sciences. Over the past 15 years, funding for agricultural research has been flat and has fallen as a percentage of GDP behind the research spending of U.S. competitors such as Brazil and China. (Click here to read the letter.)

 

EU-CANADA TRADE DEAL HAS A LONG ROAD AHEAD

The Belgian region of Wallonia last week agreed to accept the Comprehensive Economic Trade Agreement (CETA) between the European Union and Canada, with new guarantees for farmers and a corporate dispute settlement system. The lifting of Wallonia’s objection to CETA does not guarantee an efficient approval process for the deal, though. The European Parliament and the national legislatures of all 28 EU member states must now vote to apply the agreement, a process that could take several months. According to top EU officials, the messy decision-making process is the result of a dispute among the European Commission – the EU’s executive body – and certain member states over the interpretation of the 2009 Lisbon Treaty. France, some German officials and a couple of smaller member states argue that the treaty gives member states a voice on investment issues. The European Commission argues that the EU has exclusive jurisdiction over trade and investment. Next summer, the European Court of Justice is expected to rule on the issue in a case related to the implementation of the EU-Singapore Agreement, effectively resolving the question of which entity has the right to approve all future trade agreements.

 

NPPC COMMENTS ON USDA RESPONSE PLAN FOR EMERGING ANIMAL DISEASES

NPPC this week submitted to the U.S. Department of Agriculture comments on the agency’s proposed plan for responding to emerging animal diseases. Being developed by the USDA Animal and Plant Health Inspection Service’s Veterinary Services (VS), the plan is supposed to outline efforts by VS, states and the livestock industry to respond to new and emerging diseases in ways to minimizing their economic impact. In its comments, NPPC suggested that the proposed plan’s top-down decision making be modified to be more inclusive of the states and the livestock industry. The organization also expressed concern about a lack of incentive for producers to report suspicions of a disease given that doing so could result in an order to stop movement of animals or to depopulate a herd without compensation. NPPC suggested that USDA seek new authority to pay indemnity to producers in such situations. It also recommended that the agency seek new resources to implement the disease response plan so that funds won’t be taken from existing USDA programs. Recognizing that industry-specific plans may be developed, NPPC urged USDA to consider adopting the emerging diseases response plan already developed by the pork industry.

 

NPPC’S BROWN AND FORMICA HIT THE ROAD

NPPC Assistant Vice President and Legal Counsel, Domestic Policy Michael Formica this week traveled to Bentonville, Ark., for a meeting of the Agricultural Nutrient Policy Council, a coalition of farm groups. The council, on which Formica serves as cochairman, met to better understand the science of agricultural nutrient losses and to help state agricultural groups in the development of successful nutrient loss reduction strategies. The meeting included tours of local poultry and dairy operations as well as sessions with representatives from state and federal water quality agencies. Also this week, NPPC Domestic Policy Adviser Corey Brown attended the National Fire Prevention Association’s 150 Committee on fire and life safety in animal housing facilities meeting in Warwick, R.I. The NFPA 150 Committee develops standards that establish life and safety requirements for humans and animals in all types of animal housing facilities, where animals are kept for any purpose, including for food and commodity production purposes.

 

 

WHAT’S AHEAD

 

 

GET OUT AND VOTE

Next Tuesday, Nov. 8 is Election Day, when contests for the presidency, 34 U.S. Senate seats and all 435 seats in the House of Representatives – as well as thousands of state and local races – will be decided. Please exercise your franchise: vote. Check future Capital Updates to see how the incoming administration and new Congress will affect the U.S. pork industry.

 

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 For questions, comments and suggestions or to subscribe, contact: Dave Warner, Director of Communications, NPPC, at (202) 347-3600, or via e-mail at warnerd@nppc.org.