Washington Insider--Monday

By DTN's Washington Insider

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

Japan Details Cuts to Farm Product Tariffs via TPP

Japan released a list of farm products subject to tariff cuts under the Trans-Pacific Partnership as Prime Minister Shinzo Abe's government convened a TPP Policy Headquarters meeting to explore strategies to cushion the TPP's impact on the farm industry. Of 834 foreign farm products Japan imports, tariffs on about half of them would be abolished or reduced immediately after the TPP takes effect, while the rest would be phased in. Tariffs will be eliminated or reduced on a range of products, including grapes, oranges, sausage, margarine, red beans and honey. Cabinet ministers agreed to prepare measures to help create new export markets, create new industries and raise productivity, and support farmers. Ministers decided that Japanese farmers who produce rice, wheat, barley, beef, pork, dairy products and sugar need to improve competitiveness and would get government support.

Finance and Economy Minister Akira Amari said the government would compile farmer support measures by the end of the year, but he did not say whether a supplementary budget would be compiled.

Japan retained its current high tariffs on rice, wheat, barley and sugar, and was able to keep its beef and dairy tariffs. TPP member nations agreed to accommodate Japanese farm goods exports, the announcement said, noting that the U.S. and other TPP members agreed to abolish beef tariffs 15 years after the TPP takes effect, and rice tariffs five years after the pact goes into effect.

While the rice tariff, now at 780%, will be retained, the tariff-exempt import quota for the U.S. was set at 50,000 tons during the first three years after the TPP takes effect. It will increase to 70,000 tons by the 13th year after the TPP is in force. Current tariffs will remain on wheat, while new import quotas for the U.S., Canada and Australia will be set at 192,000 tons initially. It will increase to 253,000 tons after seven years, the announcement said. Tariffs on macaroni and spaghetti will be trimmed by 60% by the ninth year.

The U.S. beef industry anticipates the largest TPP gains in Japan, where $1.6 billion of U.S. product was shipped last year with a 38.5% tariff. That would be cut to 9% over 15 years. Japan also is the top destination for U.S. pork with $1.9 billion in sales in 2014, and 65% of tariffs on pork will be eliminated in 11 years or less and nearly 80% will be eliminated in 16 years or less. Japan included a safeguard measure that would allow temporary duty increases when imports rise above certain levels.

***

Columbus Day Holiday Affects USDA Data Releases This Week

Monday's Columbus Day holiday pushes back some of the usual USDA data, including the Crop Progress update that will come on Tuesday along with Grain Inspections and the weekly export update arrives on Friday via the Weekly Export Sales report. A look at global livestock conditions will also be released.

With the production data out of the way, traders will now shift to the acreage dump from the Farm Service Agency since that data came into play with the acreage cuts made for corn and soybeans in the October reports.

Harvest weather in the Midwest still looks open and traders will also be monitoring yield reports that come in. Plus, they may start to focus more on the planting conditions for winter wheat in the Southern Plains.

***

Washington Insider: Scientific Basis for Dietary Guidelines Under Fire

Last week, U.S. Ag Secretary Tom Vilsack and HHS Secretary Sylvia Burwell appeared before the House Ag Committee to review the development of the 2015 Dietary Guidelines for Americans. The Washington Post reported the program had been criticized earlier because some members of the advisory committee pushed to include "sustainability" as a guideline recommendation.

This time, the criticism focused on the quality of the evidence supporting the guidelines. Representatives complained bitterly that the credibility of the national advice has been eroded by shifting recommendations. This is something of a body blow for USDA and HHS because they have invested heavily over the years in reputations as promoters of objective scientific inquiry.

The questions and opinions came fast and furious, the Post said, and concerned salt, saturated fats, eggs and meats. Committee members expressed strong skepticism toward the secretaries and their research.

An example was Ranking Democrat Rep. Collin Peterson, D-Minn., who said his concern is guidelines that have pushed people away from eggs and butter and milk and so forth and then were found to be wrong. "Why are we going off on these tangents if we have a [scientific] process that is so heavily vetted?"

"Uncertainty in the process leads to concern about whether the [Dietary Guidelines] recommendations will maintain the scientific integrity necessary," committee chair Michael Conaway, R-Tex., told the secretaries.

The Post reported the responses by Burwell and Vilsack, who asserted the guidelines reflected the best available science. But, evidence changes, they noted, and is not always clear-cut.

They are correct about that, but that alone doesn't make the case for the guidelines much clearer, observers suggest. The new guides, now in process, will be updated later this year, but are coming under increasingly heavy scrutiny because of doubts about shifting scientific underpinnings.

Part of this pressure is coming from a group of academics and other scientists, called the Nutrition Coalition. It is calling for a process review and for stronger science in the guidelines. The coalition is funded by Houston-based philanthropists Laura and John D. Arnold, but is not supported by any industry groups, the Post said. Three of the group members are former members of the Dietary Guidelines Advisory Committee, and another is former chair of the American Heart Association's nutrition committee.

Glenn Thompson R-Pa., raised the possibility that the guidelines, which the government has published since 1980, might be rated a failure, given the nation's high rates of obesity, diabetes and other chronic health problems. The guidelines have come out for decades, but "are Americans healthier or less healthy since the guidelines have been published?" he asked Burwell and Vilsack. "In some ways, haven't these guidelines somewhat failed? They don't seem like they are accomplishing their objective."

Burwell seemed to acknowledge the nation's continuing health problems and answered with a question about what American health would have been like without the guidelines. "We are on the wrong trajectory, but would the trajectory have been worse?" she said.

Vilsack repeatedly emphasized the difficulty of making recommendations when the science sometimes provides only "hunches," not proof about the best diet. He noted, too, that the legislation creating the Dietary Guidelines calls for guidelines based on the "preponderance" of the evidence, not evidence "beyond a reasonable doubt."

"This is really about well-informed opinion," Vilsack told the Committee. "I wish there were scientific facts. But the reality is stuff changes, right? Stuff changes. The key here is taking a look at the preponderance, the greater weight of the evidence, and trying to make a judgement."

Perhaps the agencies should get the food experts and advocates out of this process and say a lot less with more facts and their in-house expertise behind it. If, as Vilsack told the committee, he wishes for facts but suggests there are none, perhaps the process should be revised until some facts can be found, Washington Insider believes.

---

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com

(GH/SK)

Copyright 2015 DTN/The Progressive Farmer. All rights reserved.