Washington Insider - Friday

By DTN's Washington Insider

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Antibiotic Restrictions to Impact Livestock Productivity

Measures to eliminate the use of medically important antibiotics for livestock production purposes are being promoted via a new Food and Drug Administration (FDA) initiative and are expected to result in lower overall livestock productivity, according to the Economic Research Service (ERS).

Productivity increases from the use of antibiotics in livestock production are typically 1% to 3% for hogs and broilers. The elimination of antibiotic use is projected to have a modest effect on productivity and, in turn, production.

Wholesale prices and net production quantities for chicken and pork are expected to increase by 1% and decline by less than 0.5%, respectively, after antibiotic use is curtailed. The increase in prices by a greater amount than the decrease in production quantities suggests that gross revenues will increase slightly.

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Washington Insider: Vermont GMO Labeling Nears

The Associated Press reported this week, to no one’s surprise, that the food industry is turning up the heat on Congress to act on a national labeling rule before the state of Vermont implements its requirement for GMO labels.

The Vermont law takes effect in July, but food companies are already worrying that they are running out of time to develop policies to deal with it. They could make separate food packages just for the state, the report notes; or, they could label all their items as containing genetically modified ingredients or just withdraw from the small Vermont market. In general, the companies don’t like those options and would far prefer that Congress limit the mandatory labeling requirement before it goes into effect.

The food manufacturers argue that GMOs are safe and a patchwork of state laws isn’t practical. Labeling advocates have been fighting state-by-state to force labeling, with the eventual goal of a national standard.

Agriculture Secretary Tom Vilsack brought the parties together twice over the past month to see if they could work out a compromise, AP says, but no agreement was reached. Lawmakers on Capitol Hill are divided, too, but say a compromise needs to be worked out before this summer.

The food industry notes that about 75% to 80% of foods contain genetically modified ingredients. And, there is little scientific concern about the safety of the GMOs on the market. In addition, FDA says these products are as safe as “traditional” foods so mandatory labels are not required. Nevertheless, supporters of labeling continue to argue that labels are needed and that Congress shouldn’t be trying to pre-empt states.

The food industry has been battling mandatory labeling bills in state legislatures for several years, and has generally succeeded in defeating them until recently when a bill passed in Vermont. Maine and Connecticut have passed similar laws that don’t take effect unless neighboring states follow suit. In response, industry-backed legislation that passed the House last year would have blocked any such state laws but that bill has stalled in the Senate.

Secretary Vilsack’s talks haven’t produced compromises, either. In the meantime, he has suggested digital labeling that consumers could access with their smart phones or in-store scanners some proposals floating around the food industry call for similar approaches.

However, labeling advocates oppose digital labels, arguing that they are too complicated and discriminate against some consumers.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., says he wants to take up a bill soon, before Vermont’s law goes into effect. The panel’s top Democrat, Debbie Stabenow of Michigan, and Republican Sen. John Hoeven of North Dakota have been working to find some bipartisan compromise but recently told the press, “We’re not there yet.”

As Congress stalled on the issue, some companies say they are prepared to deal with the Vermont law, AP says. It cites Campbell Soup’s announcement earlier this month that it now supports mandatory national labeling and will stop backing efforts opposing the disclosures.

The company said about three-quarters of its products contain GMOs and released a mock-up of the label it would use if Vermont’s law goes into effect. It says “Partially produced with genetic engineering” in small print, AP notes. Observers predict that the advocate groups will not be happy with the Campbell Soup solution.

The labeling issue is complicated by the fact that it is difficult to characterize. Advocates have frequently said that they are not really worried about GMO health threats but are interested in pushing consumers away from a technology they don’t like. In addition, some are interested in undercutting companies that produce the technology. When scientists have countered advocate group concerns during election campaigns, states have tended to vote them down.

That likely is because while the articulated safety concerns are seen as weak, numerous analysts estimate that at least some of the labels considered would lead to higher food costs, an argument that appears to have resonated in state campaigns and which can be expected to appear in the Congress if the Senator Roberts does produce a bill to limit mandatory labels.

So, the GMO fight continues. It is likely that a national rule will be crafted to require something, perhaps on the order of the Vilsack proposal or the Campbell Soup initiative. And, more companies may decide that it helps their brand to say something although the “partially produced” language doesn’t seem to clear things up much. Certainly, the fight is likely to continue to intensify for some time, and should be watched closely by producers as it develops, Washington Insider believes.

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(GH/CZ)

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