GOVERNMENT AFFAIRS – WEEK OF MAY 26, 2017

FEDERAL ISSUES

The Senate Ag Committee held a hearing, May 25th, focused on the farm economy. Panel members were from the USDA (chief economist), the Federal Reserve, a crop input company, and the rural development dept. from Oregon. The committee members sought specific prioritizing points from the panel as they work toward the next Farm Bill. Like always, crop insurance, export markets, and SNAP were specifically brought out. Chairman Roberts (R-KS) stated and repeated, many times, “Crop insurance is the most valuable tool in the risk management toolbox.” In addition it was pointed out that everyone is to remember that the Farm Bill is for ALL regions and ALL crops.

A robust E-10 market in Mexico also would benefit the U.S. corn industry. In April, the Mexican Association of Sustainable Transportation submitted a proposal to the country’s energy regulators that would raise to 10 percent from 5.8 percent the amount of ethanol that can be in the fuel supply. A decision isn’t expected until November. (An answer to one of Senator Thune’s (R-SD) questions during the hearing.)

Some interesting statistics presented during the hearing: U.S. ag exports account for 20% of ag production (much higher for some products, such as almonds, which are closer to 90%). Each $1 in ag exports generates $1.27 in economic activity and every $1 Billion in exports creates 8000 U.S. jobs.

SNAP: $1 Billion of SNAP generates more than $100 million in farm income and 3300 farm jobs, in addition to $1.8 Billion in overall economic activity.

House Agriculture Chairman Mike Conaway and House Judiciary Chairman Bob Goodlatte want to know why the Justice Department is continuing to prosecute a Clean Water Act suit against a California farmer. In a letter to be sent today to Attorney General Jeff Sessions, the lawmakers argue that the Army Corps of Engineers suit against Duarte Nurseries over agriculture runoff violates the water law’s clear exemptions for “normal” farming activities. The lawmakers are seeking an explanation as to why Sessions’ department is still pursuing the case, which was first filed in 2012 after the farm was fined by the corps for failing to get a permit to discharge material into a wetland when certain fields with low-lying spots were plowed to plant wheat. The farm is currently facing a $2.8 million fine.

STATE ISSUES
Senator Erdman is 100% committed to changing our tax revenue structure in Nebraska. The second session of the 105th Legislature is schedule to convene January 3, 2018. If he doesn’t get anything done on the floor there, he will bring it to the people on the ballot.

With 457 bills carried over to the 2018 session, it will very much be bogged down again.

NEWS ARTICLE OF INTEREST:
REGULATORY LAG CAN STIFLE INNOVATION IN AGRICULTURE, FORUM TOLD
05/24/17 4:40 PM BY JIM WEBSTER

WASHINGTON, May 24, 2017 – The last 10 years have seen “a remarkable rise in cost and the time it takes to approve” new agricultural innovations, at least in part because of added regulatory constraints, Illinois farmer Mark Scholl, chairman of the Farm Foundation board, told a forum on food and agricultural regulations here today.

Scholl, who farms a 4,000-acre cash grain operation that exports directly to Japan, was one of three panelists at a foundation-sponsored discussion at the National Press Club about the implications of President Trump’s executive order to reduce the number of federal regulations.

(The panelists are shown above: From left, Mark Scholl, Rebeckah Adcock, Mike Strain and Foundation President Constance Cullman, who served as moderator.)
In 2000, approval of a new agricultural chemical required about $184 million and took nine years, he said. “Now it’s $284 million and 11 years.”

Introduction of improved crop varieties has encountered similar delays in Scholl’s experience with a seed company focused on commercialization of value-added grains. In the late 1980s, it may have required about seven years to commercialize a new corn variety, he said. “Now, it takes 15, 16 or 17 years to get it out.”

Not only does the long lead time add to the cost, but it hampers innovation, he said.
Scholl cited the example of the Bacillus thuringiensis (Bt) bacterium gene that confers insect resistance in corn. Improvement in Bt genes is not keeping pace with the resistance developed by insect pests, he said. “The bug is outrunning the Bt moving forward. That has brought about the consequence of using more chemistry – the opposite of why we started using genetics.”

“What bothers me the most is the lack of innovation,” he said. Nevertheless, Scholl sees the future of crop agriculture as cause for optimism. With precision agriculture techniques and a U.S. infrastructure “unlike anything else,” agriculture has “the ability to make products we couldn’t do in the past,” he said. “Human capital is much better. People are much smarter. There are lots of talented young people in agriculture today. The capability for change is massive.”

The president’s directive to reduce regulations and control regulatory costs will have a major impact on USDA, said Rebeckah Adcock, senior advisor to Secretary of Agriculture Sonny Perdue, who has been appointed the department’s regulatory reform officer.
The effort is aimed at learning that “there are better ways to do what we have been doing,” she said. “We are beginning in earnest.”

The list of deregulation and streamlining of regulations has begun in a few areas, she said, such as the relaxation of nutrition standards for the National School Lunch Program earlier this year. “But we will see the list grow exponentially over time.”
USDA’s contribution to the spring regulatory agenda to be released by the Office of Management and Budget will showcase a few additional areas of regulatory streamlining, she said, but significantly more can be expected when the semiannual regulatory agenda is finalized in the fall.

The agenda was welcomed by Mike Strain, commissioner of the Louisiana Department of Agriculture and Forestry, this year’s president of the National Association of State Departments of Agriculture (NASDA).

The initiative is an opportunity for “a renewed focus on sound science,” he said. “I’m real excited about this. We must embrace all aspects of sound science.”

Strain said he was thankful that USDA had delayed implementation of an organic livestock and poultry regulation that would have required poultry and egg producers to allow birds greater access to outdoor spaces where, he said, they would be vulnerable to disease. “We are only two years since the largest outbreak of avian influenza in history, and here we are (with the outdoor requirement) doing exactly what we said we shouldn’t do.”

U.S. Motorists Have Driven More than 1 Billion Miles on E15: Growth

U.S. drivers have traveled more than 1 billion miles on E15 — a fuel containing 15% ethanol and 85% conventional gasoline — ethanol industry group Growth Energy said Wednesday, citing its “ongoing analysis of fuel sales and consumption data” reported by major fuel retailers.

Growth added that based on EPA data, the increased availability of E15 could save consumers as much as $72 million by the end of 2017.

“American drivers are taking advantage of the proven performance, environmental benefits, and savings E15 provides,” Growth Energy CEO Emily Skor said in a statement. “That’s why Congress should pass the Consumer and Fuel Retailer Choice Act and give drivers freedom to choose E15 year-round. This common-sense fix to the Reid Vapor Pressure (RVP) law will end confusing restrictions on retailers and allow consumers to choose a fuel that is kinder to the earth, good for their engines, and saves them up to 10 cents per gallon each trip to the pump in the summer.”

Because it does not have an RVP waiver, E15 sales are limited to only flex-fuel vehicles from June 1 through Sept. 15, the heart of the high-demand summer driving season.

The U.S. Senate Environment and Public Works Committee is scheduled to mark up legislation before Congress adjourns in August for its summer recess that would extend the RVP waiver to E15. EPA Administrator Scott Pruitt also has said the agency is reviewing whether it has the authority to provide the waiver administratively.

E15 is currently being sold at about 800 stations in 29 states and the ethanol industry expects that to rise to roughly 2,000 stations by the end of 2017 and to 4,000 stations by the end of 2018. Higher E15 sales are key to the ethanol industry’s effort to increase sales at a time when U.S. gasoline demand is flat or rising modestly.

Growth said EPA approves E15 for use in any vehicle manufactured since 2001, which equates to nine out of 10 cars on the road. Automakers also approve E15 for use in nearly three-quarters of new cars, the group added.
–Jeff Barber, jbarber@opisnet.com

FARMING THE WORLD: CHINA’S EPIC RACE TO AVOID A FOOD CRISIS