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.

WATERS OF THE UNITED STATES INTERPRETIVE RULE TWEAKS COMING

EPA and the Army Corps of Engineers announced unspecified steps will be taken by the Obama administration to clarify that USDA will not have a regulatory role in deciding what farming practices are exempt from Section 404 permitting Waters of the United States (WOTUS) rules.

The agencies contacted others. Ellen Gilinsky, senior policy advisor at EPA's Office of Water, said the focus has been on "how we can take a look at the interpretive rule and see how we can clarify both that it's OK to use other standards for these practices and that we're not expecting anybody to come out and certify the practice. Expect to see some clarification on that."

Gilinsky did not say what clarifications would be made when she appeared on a webinar sponsored by the American Soybean Association (ASA). However, Stacy Jensen of the U.S. Army Corps said that the two agencies would soon release a new series of questions and answers on the interpretive rule.

Farmers and other ag interests have expressed concern at the interpretive rule as it signaled the practices spelled out in the rule were to be implemented in "conformance" with technical standards set for by NRCS. Their interpretation of that passage is that it would effectively make the NRCS voluntary standards into a regulation.

EPA head Gina McCarthy has acknowledged the concerns created in farm country by the interpretive WOTUS rule and even suggested the agency could pull that interpretive rule back due to the concerns. This would appear to be the closest thing to withdrawing the rule that has been seen from the administration so far. The clarification will shift the focus to whether or not ag interests feel the updated questions and answers ally their concerns or not.

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SENATORS OPPOSE POSSIBLE U.S. SUGAR DEAL WITH MEXICO

A suspension agreement settling unfair trade cases targeting sugar imports from Mexico is a possibility that has caught the attention of some U.S. lawmakers. They say it would violate the U.S. commitment to free trade with Mexico.

"We are concerned by reports that the Department of Commerce may resolve the recently filed antidumping and countervailing duty cases on imported sugar from Mexico by imposing import quotas on Mexican sugar via a suspension agreement with the Mexican sugar industry and Government of Mexico," the senators said in a July 29 letter to Commerce Secretary Penny Pritzker.

"Any managed trade agreement between the United States and Mexico, whether in the form of a suspension agreement or other mechanism, will raise sugar prices in the United States. This will cost American jobs, hurt consumers and encourage retaliatory trade actions to the detriment of both the United States and Mexico," the senators said.

Sens. Jeanne Shaheen, D, N.H., and Pat Toomey, R, Pa., led the bipartisan coalition opposing a managed trade deal with Mexico, which the lawmakers said would raise sugar prices in the U.S.

Commerce is investigating dumping and countervailing duty petitions on sugar imports from Mexico filed by the American Sugar Coalition and its individual members.

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WASHINGTON INSIDER: DEFINING PRODUCERS' RIGHTS IN MISSOURI

The boundary between farming practices and urban sensibilities has always been vague -- and those relationships are often uneasy. Farmers tend to be prominently represented in state legislatures and there are many state laws limiting corporate and foreign ownership, for example. This is true even though foreigners have not shown much interest in owning U.S. farms and most corporate farm owners consist of family members looking to solve generational issues.

Nevertheless, Missouri farmers were stung by the successful effort led by the Humane Society of the U.S. recently to regulate "puppy mills." Apparently, HSUS raised more than $4 million to support state passage of "Proposition B," The Missouri Dog Breeding Regulation Act which limited breeders to 50 dogs.

Observers indicate that the ag establishment in Missouri was especially concerned by the way the Act was passed. It failed in 103 of Missouri's 114 counties but won by less than 2 percentage points statewide -- solely on the strength of large margins in the St. Louis and Kansas City metropolitan areas. Opponents, including many of the state's agriculture organizations, were outspent roughly 9 to 1," said Dan Cassidy, Missouri Farm Bureau's chief administrative officer. "It came as no surprise HSUS and their East and West Coast contributors focused on the metro areas where their large advertising budget could replace a non-existent ground game."

Now, following that defeat, Missouri farm organizations are looking to North Dakota's successful ballot initiative that protects farmers "right to farm." The proposition is headed for a vote Aug. 5 in Missouri. However, it faces strong opposition from the HSUS, which now is framing the debate as an attack on small family farms, among other things, apparently an effort to win traction in the cities.

"The language of the amendment is a constitutional promise for farming practices," said Blake Hurst, Missouri Farm Bureau president. "We have seen in Missouri, and across the nation, attempts to stop farming practices within the crop and livestock sectors, even though they are safe and environmentally sound."

The amendment would recognize the importance of agriculture in the State, and asserts that "the right of farmers and ranchers to engage in farming and ranching practices shall be forever guaranteed in this state, subject to duly authorized powers, if any, conferred by article VI of the Constitution of Missouri." The expectation is that farm group representatives would be in a strong position to participate in the definition of the practices to be guaranteed.

Opponents of the amendment include some local household names, including Joe Maxwell, a former lieutenant governor of Missouri and now vice president for outreach and engagement for HSUS, and Wes Shoemyer, a former state representative and now the president of Missouri's Food for America and an HSUS adviser. "This is my children's future," Shoemyer said. "I am a third-generation farmer, my son is the fourth and I would like to see a fifth. This will leave a huge impact on the future of farming in our state."

In his Humane Nation blog, HSUS CEO Wayne Pacelle says the amendment could -- in a worst case scenario -- prevent the state from restricting foreign ownership of so-called "factory" farms and create a host of other problems. The Missouri Farmers Care PAC has raised more than $420,000, with the bulk of it, $375,000, coming in the form of a check from HSUS.

Observers note that the "foreign ownership argument" could hit home with farmers, since it is one that Missouri Farm Bureau has used to tighten restrictions on foreign ownership. The organization claims the blog is "yet another example of misinformation." The organization has longstanding policy that supports the state's prohibition on foreign ownership of Missouri farmland and is attempting to repeal a recent change in Missouri law that allowed up to 1% of farmland to be foreign-owned. The theme of protecting small farmers is seen as playing, once again, to urban voters.

It is not clear what the outcome of the debate will be in the upcoming vote, but producers are deeply worried about the ability of social policy advocate groups to gain traction in urban areas even in states with strong agricultural establishments. Certainly the large Missouri cities mean a different electorate than the one that supported the "right to farm" amendment in North Dakota. Whether the urban political muscle in Missouri will mean a second important victory for farm regulation remains to be seen, but the contest should be watched closely in the next few days as the votes are counted, Washington Insider believes.

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