For the Week Ending December 16, 2016

December 16, 2016


NPPC will work with the Trump administration and the new Congress to repeal an “unnecessary, destructive and illegitimate midnight rule,” issued this week by the Obama administration, that could restrict the buying and selling of livestock, lead to consolidation of the livestock industry and increase consumer prices for meat. Written by the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA), the “interim final” rule broadens 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, the regulation would deem such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases. (Such actions currently are state court matters.) USDA in 2010 proposed a number of PSA provisions – collectively known as the GIPSA Rule – which Congress mandated in the 2008 Farm Bill. But the agency was blocked by lawmakers through amendments to annual agricultural spending legislation from implementing a regulation that would eliminate the need to prove a competitive injury to win a PSA lawsuit. In fact, Congress considered and rejected such a “no competitive injury” provision during debate on the 2008 Farm Bill. Additionally, eight federal appeals courts have held that harm to competition must be proved for an action to be a violation of the PSA. When a rider wasn’t included in the fiscal 2016 agricultural funding bill, Agriculture Secretary Tom Vilsack vowed his agency would move forward with the blocked regulation. A recent update of a study conducted by Informa Economics of the proposed 2010 GIPSA Rule found that today it would cost the pork industry more than $420 million annually, with the majority of the costs related to PSA lawsuits brought under a “no competitive injury” provision. The PSA regulation – and two related proposed rules – will be subject to a 60-day public comment period, which extends the rulemaking process into the Trump administration. NPPC, as it did following issuance of the proposed 2010 GIPSA Rule, will urge America’s 68,000 pork producers to submit comments in opposition to the new regulation. Thousands of producers weighed in against the 2010 rule.



In a big victory for agriculture, a federal court Thursday dismissed a lawsuit by environmental activists that would have forced the U.S. Environmental Protection Agency to impose stringent nutrient standards on farmers in the Mississippi River Basin, the world’s second largest, draining nearly 2 million square miles in 31 states. Environmental groups wanted the agency to impose regulations on the amount of nitrogen and phosphorous that could be in waters in the basin. (The Clean Water Act assigns responsibility for such pollution control to the states. EPA did set so-called Total Maximum Daily Loads (TMDL) for the Chesapeake Bay and its 64,000-square-mile watershed, regulating mostly farm and agricultural storm water runoff. NPPC, the American Farm Bureau Federation and other agricultural groups and business organizations challenged the regulation in federal court, but it was upheld.) EPA declined the environmentalists’ petition for a regulation for the Mississippi River Basin, explaining that the most effective way to address water pollution in the basin would be to build on its earlier efforts and to work cooperatively with states. The environmental groups claimed the agency’s denial was arbitrary, capricious and not grounded in the [clean water] statute, arguing that EPA was required to make a determination on whether to promulgate a regulation based on scientific data. The U.S. District Court for the Eastern District of Louisiana disagreed and granted EPA’s motion to dismiss the case. NPPC organized and lead a coalition of 44 state and national agricultural groups that intervened as parties in the litigation to defend EPA’s initial denial of the rulemaking petition and prevent a backroom, sweetheart “sue-and-settle” agreement between the Obama administration and environmentalists such as the kind that lead to the Chesapeake Bay TMDL regulation. In addition to NPPC, the coalition of intervenors included the Illinois Pork Producers Association, Indiana Pork, the Iowa Pork Producers Association, the Minnesota Pork Producers Association, the Missouri Pork Association, the Tennessee Pork Producers Association and the Wisconsin Pork Producers Association.



Included in the Continuing Resolution (CR) legislation approved last week by Congress to fund the government through April 28, 2017, was a provision that eliminates a troublesome trucking rule. NPPC and other agricultural organizations and businesses supported the language in the CR. The U.S. Department of Transportation’s 2003 “34-hour restart” provision let drivers, who are allowed to drive 70 hours in a week, “restart” the week by taking a 34-hour break, including two, back-to-back periods of rest between 1 and 5 a.m. But a 2013 regulation limited restarts to once a week and required drivers to be off duty at least two nights from 1 to 5 a.m. In December 2014, Congress suspended that rule until Sept. 30, 2015, and required the DOT’s Federal Motor Carrier Safety Administration to conduct a study to determine if the regulation actually decreased driver fatigue. NPPC and other groups got language included in the Senate’s fiscal 2017 transportation funding bill that would have retained the 2003 restart provision regardless of the outcome of the FMCSA study, which is being conducted by the Virginia Tech Transportation Institute. The language in the CR permanently repeals the 2013 regulation.



The European Parliament Employment Committee Thursday voted to reject the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada. The 27-24 vote advises the EU Parliament against approving CETA on a claim that 204,000 EU job would be lost. Opponents of the deal also want a system to protect foreign companies’ investments against state intervention. Though the leading committee responsible for the deal is the Parliament’s trade committee, the foreign affairs and environment committees are also expected to weigh in. The agreement hit rocky waters earlier this year when Belgium’s Wallonia region held up the approval process. Parliament is expected to hold a vote in February on the agreement and, if approved, will need the approval of each of the EU’s 28 member states and Belgium’s regions. CETA has been equated to a test model for the passage of the even more controversial EU-U.S. Transatlantic Trade and Investment Partnership. NPPC supports TTIP but is skeptical of progress being made on it based on the intransigence of the EU on various issues.



Talks this week on the 16-nation Regional Comprehensive Economic Partnership (RCEP) accelerated following President-elect Donald Trump’s pledge to withdraw from the Trans-Pacific Partnership (TPP). China, which was not involved in the TPP, is pushing ahead with the Asia-focused RCEP without the United States. Negotiators meeting in Jakarta, Indonesia, neared an agreement on protections, small enterprise assistance and competition policy, with intellectual property rights and trade in goods and services yet to be resolved. The next round of talks are expected to be held in Japan in February. RCEP has the potential to create the world’s largest free-trade bloc, covering half the world’s population and 30 percent of the global economy. For some countries, the TPP is not dead. Japan approved the deal this week, and Australia is still pushing ahead with ratification. Vietnam also has shown interest in proceeding. However, China sees RCEP as an opportunity to integrate into the global economy and engage the Asian region in trade liberalization. “This is an opportunity for RCEP members to drive the process,” said Carlos Kuriyama, a senior trade analyst with the Asia-Pacific Economic Cooperation secretariat, giving his personnel view. “If TPP doesn’t go through, they can try and cover that hole.”



A quote critical of research findings on antibiotic-resistant bacteria from the Ohio State University included in a story in last week’s Capital Update was incorrectly attributed to the National Pork Board. The statement – “To draw the conclusions this study draws without further validation, replication and research is an overreach from the data and, in the worst case, is sensational in nature.” – should have been attributed to NPPC.





The staff of the National Pork Producers Council wish all a very merry Christmas and a prosperous New Year. Capital Update next will be issued Jan. 6.


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