For the Week Ending January 13, 2017

EFFORTS TO RESCIND GIPSA RULE CONTINUE

NPPC is continuing its push to rescind the so-called GIPSA (Grain Inspection, Packers and Stockyards Administration) rule related to the buying and selling of livestock and poultry, urging its pork producer and allied industry members to contact their congressional lawmakers. (Click here to send a message to your senators and representative, asking them to stop the “Farmer Fair Practices Rules.”) A part of those rules that’s set to become final Feb. 21 would broaden the scope of the Packers and Stockyards Act (PSA) of 1921 related to the use of “unfair, unjustly discriminatory or deceptive practices” and “undue or unreasonable preferences or advantages.” Specifically, it would deem such actions inherent violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases. NPPC and other livestock groups are concerned that the regulation would restrict the buying and selling of livestock, lead to consolidation of the livestock industry and increase consumer prices for meat.

SENATE RESOLUTION CALLS FOR WITHDRAWAL OF ‘WOTUS’ RULE

Sens. Joni Ernst, Iowa, and Deb Fisher, Neb., this week introduced a nonbinding resolution calling for the Waters of the United States (WOTUS) rule issued by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers to be withdrawn. NPPC, which supports the resolution, in November joined dozens of other agricultural organizations, businesses and municipalities in asking a federal court to throw out the controversial WOTUS rule, which would give the government broad jurisdiction over land and water. The regulation, which took effect Aug. 28, 2015, was supposed to clarify EPA’s and the Corps of Engineers’ authority under the Clean Water Act 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 WOTUS 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 in October 2015 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.

HOUSE APPROVES BILL TO PROTECT FARMERS WHO USE FUTURES MARKETS

The House yesterday passed a bill that would improve protections for farmers and ranchers (and others) who use the futures markets to manage risk, legislation backed by NPPC and other agricultural groups, which this week urged lawmakers to approve the “Commodity End-User Relief Act” (H.R. 238). The measure includes provisions that would:

• Codify customer protections to help prevent another MF Global situation. The commodities brokerage firm, which comingled customer and company funds, went bankrupt in 2011 and couldn’t repay customers.
• Provide a permanent solution to the residual interest problem that would have put customer funds at risk – and potentially driven farmers, ranchers and small hedgers out of futures markets – by forcing them to put more of their money into hedge accounts.
• Relief from burdensome and technologically unfeasible recordkeeping requirements in commodity markets.
• Require the Commodity Futures Trading Commission to conduct a study and issue a rule before reducing the de minimis threshold for swap dealer registration to make sure doing so would not harm market liquidity and end-user access to markets.
• Confirm the intent of the Dodd-Frank Wall Street Reform and Consumer Protection Act that anticipatory hedging is considered bona fide hedging activity.

ARGENTINA MAKES CASE FOR U.S. PREFERENTIAL TRADE TREATMENT

An Argentine trade official Tuesday testified before the Office of the U.S. Trade Representative, USTR; making the case to reinstate Argentina’s status under the Generalized System of Preferences (GSP), a U.S. preferential trade program. GSP gives duty-free access to countries shipping goods to the United States. NPPC, which is working to open Argentina’s market to U.S. pork, has suggested that in granting countries GSP trade status, the U.S. government should consider the treatment U.S. exports receive in those nations. Currently, fresh, frozen and processed U.S. pork are ineligible to be shipped to Argentina because of unscientific mitigation requirements and other sanitary issues that are not based on science. “Argentina is currently working with the U.S. Agriculture Department on the pork and poultry concerns,” Shunko Rojas, Argentina’s undersecretary for foreign trade, told USTR. NPPC is working with USDA and USTR in negotiating an export certificate with Argentina that would allow U.S. pork exports to the South American country.

NEW MEMBERS JOIN HOUSE, SENATE AGRICULTURE COMMITTEES

The House Committee on Agriculture this week named its Republican members. “This is a great group of incoming and returning members, both for the Agriculture Committee and the Republican conference as a whole” said committee Chairman Michael Conway, Texas. “Their diverse backgrounds will be integral as the committee goes to work – from protecting the farm safety net for producers, to ensuring the Supplemental Nutrition Assistance Program (SNAP) works to help lift families out of poverty, to rolling back burdensome regulations that strangle businesses.” Newcomers to the committee include: Jodey Arrington, Texas; Don Bacon, Neb.; James Comer, Ky.; Neal Dunn, Fla.; John Faso, N.Y.; and Roger Marshall, Kan. They join returning members Vice Chairman Glenn Thompson, Pa.; Bob Goodlatte, Va.; Frank Lucas, Okla.; Steve King, Iowa; Mike Rogers, Ala.; Bob Gibbs, Ohio; Austin Scott, Ga.; Rick Crawford, Ark.; Scott DesJarlais, Tenn.; Vicky Hartzler, Mo.; Jeff Denham, Calif.; Doug LaMalfa, Calif.; Rodney Davis, Ill.; Ted Yoho, Fla.; Rick Allen, Ga.; Mike Bost, Ill.; David Rouzer, N.C.; Ralph Abraham, La.; and Trent Kelly, Miss. Ranking Member Collin Peterson, Minn., has yet to name new Democrats to the committee. Conaway also named subcommittee chairmen:

• Commodity Exchanges, Energy, and Credit – Scott.
• Conservation and Forestry – Lucas.
• Nutrition – Thompson.
• General Farm Commodities and Risk Management – Crawford.
• Biotechnology, Horticulture, and Research – Davis.
• Livestock and Foreign Agriculture – Rouzer.

On the Senate Agriculture, Nutrition and Forestry Committee, Republicans Ben Sasse, Neb., and Thom Tillis, N.C., have been replaced by Steve Daines, Montana, and Jeff Sessions, Ala. – although the latter will need to be replaced if he is confirmed as U.S. attorney general. They join returning members Pat Roberts, Kan., the committee chairman; Thad Cochran, Miss.; Mitch McConnell, Ky.; John Boozman, Ark.; John Hoeven, N.D.; Joni Ernst, Iowa; Chuck Grassley, Iowa; John Thune, S.D.; and David Perdue, Ga. The Democrats added Chris Van Hollen, Md., who won election to the Senate in November, to their ranks, which include: Ranking Member Debbie Stabenow, Mich.; Patrick Leahy, Vt.; Sherrod Brown, Ohio; Amy Klobuchar, Minn.; Michael Bennet, Colo.; Kirsten Gillibrand, N.Y.; Joe Donnelly, Ind.; Heidi Heitkamp, N.D.; and Bob Casey Jr., Pa.

CONFIRMATION HEARINGS CONTINUE

The first round of confirmation hearings for President-elect Donald Trump’s cabinet began this week in the Senate. Attorney General nominee Sen. Jeff Sessions, R-Ala., was pressed on a number of contentious issues, including civil rights, immigration, abortion, terrorism and Russia’s alleged hacking efforts. Secretary of Homeland Security nominee retired U.S. Marine Corps General John Kelly seemed to satisfy most committee members, including with saying he has “high confidence” in the Central Intelligence Agency report claiming Russian cyber activity prior to the election of Trump. Secretary of State nominee Rex Tillerson was questioned the longest, with his hearing lasting more than 10 hours. The former Exxon-Mobile CEO faced harsh criticism from both sides of the political aisle, including a heated exchange with Sen. Marco Rubio, R-Fla., over recent actions by Russian President Vladimir Putin. Tillerson reiterated his stance on the Trans-Pacific Partnership, stating, “I do not oppose TPP. I share some of [Trump’s] views regarding whether the agreement that was negotiated serves all of America’s interests at best.” Secretary of Transportation nominee Elaine Chao faced minimal pushback during her hearing, in large part because of her experience under two previous Republican administrations. CIA Director nominee Rep. Mike Pompeo, R-Kan., named Russia a threat to the United States, along with the Islamic State, Syria and Iran, and faced queries about questionable interrogation techniques. Secretary of Housing and Urban Development (HUD) nominee Dr. Ben Carson stressed the need for equality and morality when evaluating fair housing practices and refused to comment on whether he would block the allocation of HUD grants to strengthen any company associated with President-elect Trump’s business holdings. Two more nominees will face confirmation hearings next week, with Secretary of Education nominee Betsey DeVos set for Tuesday, Jan. 17 and EPA Administrator nominee Scott Pruitt set for Wednesday, Jan. 18. Senate Majority Leader Mitch McConnell, R-Ky., hopes to confirm six to seven nominees on Inauguration Day, the first official day that the Trump administration can send nominations to the Senate.

WHAT’S AHEAD

INAUGURATION DAY NEXT FRIDAY

Donald J. Trump next Friday at noon Eastern time in front of the U.S. Capitol will be sworn in as the 45th president of the United States. In the subsequent Inaugural Parade, NPPC President John Weber, a pork producer from Dysart, Iowa, will ride on a tractor sponsored by RFD TV. Capital Update will not be published next week; the next issue will be Jan. 27.

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.