For the Week Ending January 27, 2017

TRUMP REGULATORY FREEZE PUTS HOLD ON ‘GIPSA,’ ORGANIC LIVESTOCK RULES

Shortly after he was sworn in as the 45th president of the United States, Donald Trump issued an order freezing federal regulations still in the rulemaking process and delaying for 60 days beyond their effective date those that recently took effect. Among the regulations put on hold are two of particular concern to NPPC: the Farm Fair Practices Rules and the organic livestock and poultry rule. NPPC wants the rules, issued by the U.S. Department of Agriculture, to be rescinded. One of the regulations in the Farm Fair Practices Rules – also known as the GIPSA Rule (after USDA’s Grain Inspection, Packers and Stockyards Administration) – 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. It was set to take effect Feb. 21. The organic rule adds animal welfare standards to the nation’s organic food production law. It would strictly dictate how organic producers must raise livestock and poultry, including during transport and slaughter, and specify, without scientific justification, which common practices are allowed and prohibited in organic livestock and poultry production, thereby eliminating producers’ discretion to make sound decisions about animal care. It also would establish unreasonable indoor and outdoor space requirements for animals. NPPC, which in July submitted comments in opposition to the regulation, said the welfare standards are not based on science and are outside the scope of the organic food production law, which limits consideration of livestock as organic to feeding and medication practices. Additionally, the organization pointed out, animal welfare is not unique to organic production. Some of the standards even could jeopardize animal and public health, said NPPC in its comments to USDA. The provision on outdoor access, for example, is in conflict with best management practices to prevent swine diseases that pose a threat to animal and human health. The regulation was set to take effect March 20.

‘WOTUS’ LAWSUIT PUT ON HOLD WHILE SUPREME COURT DECIDES JURISDICTION

The U.S. Court of Appeal for the 6th Circuit in Cincinnati this week granted a motion from NPPC and dozens of other agricultural organizations, businesses and municipalities to hold in abeyance its decision on a lawsuit against a Clean Water Act regulation until the U.S. Supreme Court rules on a jurisdictional issue related to the case. The high court last week agreed to consider whether jurisdiction rests with the federal district or appellate courts to hear the lawsuit over the Waters of the United States (WOTUS) rule. The regulation, 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 Supreme Court decisions – had included “navigable” waters and waters with a significant hydrologic connection to navigable waters. But the WOTUS rule 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 6th Circuit in October 2015 issued a stay on implementation of the regulation pending disposition of numerous lawsuits filed in U.S. district courts around the country. Last year, the appeals court consolidated the suits under its jurisdiction. NPPC and other groups in November submitted briefs to the 6th Circuit, 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. (With just days left in the administration, the Obama EPA filed its brief in defense of the rule with the 6th Circuit.) The groups also argued that 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 regulation and to rebuke its critics and illegally lobbied against congressional efforts to stop implementation of the rule.

NPPC WILL WORK WITH TRUMP ADMINISTRATION TO IMPROVE TRADE WITH CANADA, MEXICO

NPPC this week committed to work with the Trump administration to preserve tariff-free market access for U.S. pork exports to Canada and Mexico. The administration is planning to pursue trade discussions with the two countries. NPPC pointed out that the existing free trade agreement among the United States, Canada and Mexico has been tremendous for U.S. pork producers. It did recognize that other sectors have some concerns with the trade deal and said it would work with the Trump trade team to improve U.S. trade relationships with Canada and Mexico. Through November, U.S. pork exports to Mexico in 2016 were nearly $1.2 billion, up 21 percent from the same time last year, and to Canada they totaled $731 million, making those countries the No. 2 and No. 4 export markets, respectively, for U.S. pork. Since the U.S.-Canada-Mexico trade agreement went into effect Jan. 1, 1994, U.S. trade north and south of the borders has more than tripled, growing more rapidly than U.S. trade with the rest of the world. Canada and Mexico are the two largest destinations for U.S. goods and services, accounting for more than one-third of total U.S. exports, adding $80 billion to the U.S. economy and supporting more than 3 million American jobs, according to data from the Office of the U.S. Trade Representative. In fact, U.S. manufacturing exports to Canada and Mexico have increased nearly 260 percent over the past 23 years, and U.S. farm exports to the countries have grown by more than 150 percent. NPPC said it needs to ensure that access for U.S. pork to the Canadian and Mexican markets is maintained or even improved; disruptions in exports to either market could hurt U.S. producers’ ability to compete.

BILLS TO PERMANENTLY ELIMINATE ‘DEATH’ TAX INTRODUCED

Legislation to permanently repeal the estate tax was introduced this week in both houses of Congress. NPPC strongly supports the measures, known as “The Death Tax Repeal Act of 2017” and sponsored by Sen. John Thune, R-S.D. and Reps. Kristi Noem, R-S.D., and Sanford Bishop, D-Ga. Earlier in the month, Rep. Mac Thornberry, R-Texas, introduced similar legislation. The estate tax is levied on the net value – less an exemption – of an owner’s assets transferred at death to an heir or heirs. For the 2016 tax year, the exemptions for the estate tax is $5.45 million for an individual and $10.9 million for couples. Transferred estates valued at more than those figures are subject to a maximum tax rate of 40 percent on the amount of assets above those levels. According to Congress’s Joint Economic Committee, for every $1 of tax revenue raised from the estate tax, which accounts for less than 1 percent of federal revenues, $1 is wasted in compliance and tax planning costs. A 2015 study from the Tax Foundation found that repealing the estate tax would “gradually increase U.S. capital stock by 2.2 percent, boost GDP, create 139,000 jobs and eventually increase federal revenue.”

PERDUE ‘GOOD FOR AMERICA’S FARMERS AND RANCHERS,’ SAYS NPPC

Then-President-elect Donald Trump last week tapped former Georgia Gov. George “Sonny” Perdue to be his secretary of agriculture. NPPC hailed the pick – the final Trump cabinet post to be filled – as “very good for America’s farmers and ranchers.” Perdue, who is a veterinarian, was governor of Georgia from 2003 to 2011. Prior to that, he served in the Georgia Senate for 10 years. A part of Trump’s agricultural advisory team, Perdue grew up on a row crop farm in central Georgia and owned agricultural businesses. In his two terms as governor, Perdue presided over the state’s top-performing agricultural economy. Georgia is perennially ranked in the top two for producing cotton, eggs, peanuts and poultry and near the top in the production of fruits, including blueberries, cantaloupes, peaches and watermelon. Other top crops include cabbage, sweet corn, onions, bell peppers and tomatoes.

NPPC BACKS PRUITT FOR EPA ADMINISTRATOR

Calling him a champion for American agriculture and a strong advocate for sound science and the rule of law, NPPC last week endorsed Oklahoma Attorney General Scott Pruitt for administrator of the U.S. Environmental Protection Agency. Pruitt, who as Oklahoma’s top law enforcement officer sued the EPA over its controversial Waters of the United States (WOTUS) rule and investigated the fund-raising practices of the Humane Society of the United States, last month was nominated for the EPA post by then-President-elect Donald Trump. In 2015, Pruitt sued EPA over the WOTUS rule, saying the regulation appeared to be “another attempt by federal agencies to implement an agenda through regulations to affect land-use decisions that should be left to the states and private property owners.” The attorney general also joined a lawsuit related to California’s 2008 Proposition 2 initiative, which banned certain housing methods for egg-laying hens, pigs and veal calves. The California Legislature subsequently approved a law that prohibits the sale in the state of eggs, pork and veal from animals raised in the banned housing outside of California. In late 2014, Pruitt and five other state attorneys general filed suit over the law, claiming it restrains interstate trade, a violation of the Constitution’s Commerce Clause.

IOWA SUPREME COURT ISSUES RULING IN DES MOINES WATER WORKS CASE

In a case with potential implications for other farm states, the Iowa Supreme Court this week ruled that state law immunizes county drainage districts from legal claims sought by the Des Moines Water Works (DMWW), another government entity. The drainage districts were instituted in Iowa to allow wetlands to be turned into productive farmland by moving water off of fields. DMMW, which provides drinking water to about half a million people, sued the drainage districts of Buena Vista, Calhoun and Sac counties, claiming they allowed nitrates from agricultural lands to get into the Raccoon and Des Moines rivers. DMWW is required to meet certain federal water-quality standards, including a maximum level of nitrates. Relying on 100 years of Iowa law, the state high court ruled that the drainage districts have “a limited, targeted role – to facilitate the drainage of farmland in order to make it more productive” – and are, therefore, immune from damages claims and from injunctive relief claims other than ones to compel it to perform a statutory duty. The court’s decision, however, did not deal with claims DMWW has brought under the federal Clean Water Act or the state’s water pollution control law. Those are being considered by the U.S. District Court for the Northern District of Iowa.

EU-CANADA TRADE DEAL CLEARS FIRST HURDLE

The European Parliament’s trade committee Tuesday voted in favor of the ambitious Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada. CETA next must be approved by the full Parliament; a vote is set for Feb. 15. EU leadership hopes to show support for global trade in the face of rising protectionism. “Those who, in the 21st century, think that we can become great again by rebuilding borders, re-imposing trade barriers, restricting people’s freedom to move, are doomed to fail,” said the EU’s top trade negotiator, Commissioner Cecilia Malmström, after the vote. If CETA passes Parliament in February, it could be implemented as early as March.

UK SUPREME COURT SAYS NO ‘BREXIT’ WITHOUT APPROVAL OF PARLIAMENT

The Supreme Court of the United Kingdom this week by a majority of eight to three held that the UK government does not have the power to trigger the process of withdrawal from the European Union – the so-called Brexit – without first obtaining Parliamentary approval in the form of an Act of Parliament. The decision is largely aligned with the November ruling of the Divisional Court of England and Wales, which declared that the UK Secretary of State did not have the power to give notice of withdraw without Parliament’s prior authority. Great Britain in June voted to leave the EU, the 28-member economic bloc that was formed after World War II with the goal of promoting economic growth and avoiding conflict among the member countries. British members of Parliament are expected to examine a bill over triggering Article 50, the EU clause to exit the bloc, Jan. 31 and vote on it Feb. 1.

NPPC PARTICIPATES IN MEETING ON COMBATING ANTIBIOTIC-RESISTANT BACTERIA

NPPC Chief Veterinarian Liz Wagstrom this week attended the Presidential Advisory Council on Combating Antibiotic-Resistant Bacteria; Wagstrom serves as a liaison member of the advisory council. The meeting focused on two areas: the prevention and control of infections in human healthcare settings; and the needs, priorities and incentives for new therapeutic products, diagnostic tests and vaccines for diseases. The discussions not only considered human and veterinary medicine separately but also where they overlap, a “One Health” approach. Recommendations developed during the meeting, for use by agencies such as the U.S. Department of Agriculture and the Department of Human and Health Services, will be finalized when the advisory council reconvenes in September.

NPPC PARTICPATES IN RADIO TOUR DISCUSSING FDA GUIDANCE 213, FEED DIRECTIVE

Dr. Liz Wagstrom, NPPC’s chief veterinarian, last week discussed the U.S. Food and Drug Administration’s new veterinary feed directive (VFD) and Guidance 213 on 19 radio programs on stations around the country. Joining Wagstrom on the radio tour was Katie Reed, a dairy farmer from Wisconsin. The VFD brings feed and water uses of medically important antibiotics given to livestock under veterinary supervision; Guidance 213 prohibits the use in food animals of medically important antibiotics labeled only for growth promotion. Both took effect Jan. 1. Wagstrom and Reed talked about the new FDA directives, including what they mean for farmers and consumers, on radio stations in Baltimore, Cleveland, Dallas, Indianapolis, San Jose and Tampa and on ones that broadcast nationally.

WHAT’S AHEAD

SENATE AGRICULTURE COMMITTEE TO HOLD FARM BILL HEARING IN KANSAS

The Senate Agriculture Committee will hold the first in a series of field hearings on the next Farm Bill Feb. 23 in Manhattan, Kan. Committee Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich., are expected to hold several hearings on the five-year blueprint for policies and programs that support agriculture, including farm credit, crop insurance and payments, agricultural trade, marketing, conservation and rural development. The current Farm Bill expires next year. NPPC will be urging lawmakers to adopt farm programs that will help pork producers reduce or control the costs of production, increase the price they receive for pork products and improve the quality of U.S. pork.

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.