114th Congress – What to Expect in Ag and Food

As the 114th Congress begins in earnest, there is rough sledding ahead this winter over the gulf between the governing philosophies of the President and the new Congress.

Not to belabor the obvious, but early indications are that Republican victories have altered the President’s willingness to deal only very modestly, if at all. With just two years to go in his final term, President Obama seems determined to push his agenda on a number of fronts. Nevertheless, Americans tend to be eternal optimists, so many are hoping the Administration and Congress will be able to compromise on at least some important issues. Exactly what is open for negotiation remains to be seen.

In my post-election blog, I asked, “What now?” and answered my own question with, “quite a lot.” We can’t entirely predict which cards the President will ultimately choose to play. We’ve already seen him out of the gates early on immigration and Cuba policy, both of which are of great interest to agriculture.

There are a few fig leaves being exchanged. At the other end of Pennsylvania Avenue, Senate Majority Leader Mitch McConnell (R-KY) doesn’t appear to be too bent out of shape yet. He is keeping his composure, says he doesn’t take politics personally, and may be interested in sharing Kentucky Bourbon with the President. Would Joe Biden be there for the Bourbon Summit like he was for the Beer Summit?

My colleagues and I were sitting around last week handicapping the year ahead with our esteemed colleague, former Secretary of Agriculture Jack Block, who served under President Reagan and has seen a few turnovers in this town. With his own tone of optimism, he advised, in essence, “Pay attention, stay alert, do your work, because when things are moving, you never know when something might actually pass that the President will sign. Strange things do happen.”

OFW is taking a close look at the prospects for action across a broad range of issues that affect agriculture and food, areas where there has traditionally been bipartisanship, but also ones that may be affected by other reforms. There are a number of issues that have the potential to move. Here are a few:

Trade

Trade is at the top of the agenda on almost everyone’s list, and appears to be within the realm of the possible despite some significant obstacles. The impact of a U.S.-Asia Trans-Pacific Partnership (TPP) trade deal, a U.S.-Europe Transatlantic Trade and Investment Partnership (TTIP) deal, and/or Fast Track Trade Promotion Authority, which would make it easier for the Executive Branch to negotiate trade agreements, would be enormous in terms of opening markets for the entire food and Ag value chain.

We can expect the Generalized System of Preferences, which cuts tariffs on goods from developing countries, maybe (hopefully) a Miscellaneous Tariff Bill which would cut duties on agricultural goods not made in the U.S., and almost certainly the reauthorization of the African Growth and Opportunity Act (AGOA) later this year. Expect the Administration and Congressional Democrats to push for more Trade Adjustment Assistance for workers adversely affected by trade as a pre-condition to move these initiatives forward. The World Trade Organization (WTO) will consider the U.S. appeal of an adverse country of origin labeling (COOL) ruling. That appeal will require the USDA to submit recommendations, and this could be met with Congressional action to bring the U.S. into international compliance. If so, the Ag world will be at the table as it was during the omnibus process which resulted in favorable language for producers.

Nutrition/Dietary Guidelines

The “independent” Dietary Guidelines Advisory Committee (DGAC) is expected to release its report to the Secretaries of Agriculture and Health and Human Services this month. The DGAC report is widely expected to contain some controversial nutritional recommendations and, for the first time, recommendations regarding the sustainability of the food supply. As many OFW clients know, the DGAC guidance has enormous implications across a broad spectrum of federal programs, from our military to school lunch nutrition standards, to menu and nutrition labeling.

We expect robust debates surrounding added sugars, so-called “high-dose caffeine” beverages, meat, whole grain labeling, sodium, and the mandate for fruits, vegetables and whole grains in the school lunch program.

Environment

One of the elephants in the room inside the Ag community, and I am not talking Republicans, is the role of climate change, or put another way, the environmental impact and sustainability of foods. Notwithstanding language in the recent omnibus suggesting to the DGAC that sustainability is outside the scope of its mandate, no other issue looms larger in the policy sifter within this Administration than the environmental impact of any given policy. What is the carbon footprint of your Chicken Caesar Salad? You should know…and some believe it should be listed on the food label.

Expect sustainability to be one of the bases for the dietary recommendations in the DGAC report. Even if USDA and HHS decide to dial back the Advisory Committee’s ambitions on sustainability, it’s no stretch to say that some in the Administration support the views of the DGAC.

Also, environmentally speaking, we can expect the EPA to continue to look for administrative ways to stretch the Clean Water Act and the Clean Air Act, putting agricultural production in the cross hairs. If you find a policy that seems immune to the environmental agenda, you can be pretty sure they are working on it.

Food Safety Modernization Act

FDA will issue several of the key regulations implementing FSMA this year, including final rules on preventive controls, fresh produce safety, and foreign supplier verification. As FDA begins rolling out final rules and enforcing them, Congressional oversight will assume greater importance. In addition, if the FSMA final rules are promulgated as, or close to, currently written, several segments of the food industry are likely to seek Congressional action on technical amendments to FSMA.

Tax Reform

There is little doubt that tax reform will at least be attempted by Republicans. While there are too many hurdles that will keep a comprehensive measure from satisfying the President, the Ag world will be looking to extend tax credits for farmers and, if some form of a reform bill does reach the President’s desk, we can expect many players to work to make some of those provisions more permanent.

GMO Labeling

Following Vermont’s passage of a GMO labeling requirement and several close votes on ballot initiatives, we expect the debate over the need for requiring manufacturers to disclose when their foods contain genetically modified ingredients to intensify in Congress this year. This is one of the biggest policy battles playing out for agricultural producers, food manufacturers and, of course, the biotech community.

Expect Republicans to support Rep. Mike Pompeo’s (R-KS) bipartisan Safe and Affordable Food Labeling Act, which would prevent states from setting their own standards and guarantee the authority to label GMOs remains squarely with FDA. The competing bill, sponsored by Rep. Peter DeFazio (D-OR), would mandate the labeling of all foods containing genetically modified ingredients, a problematic and costly prospect that would have enormous implications for the agriculture supply chain even as the science has consistently shown no material difference between GMOs and their conventional counterparts. Moreover, the DeFazio bill doesn’t have federal preemption, so GMO detractors would likely continue the push for a state-by-state patchwork of labeling laws that would severely hamper interstate commerce. A number of Democrats joined Republicans in rallying around Pompeo’s bill at a Dec. 10 hearing of the House Energy and Commerce Health Subcommittee. While both bills died at the end of the last Congress, they are widely expected to be reintroduced in the 114th.

The worldwide debate over GMOs also rages on. Biotechnology is a vital tool that the world will need to meet the challenge of global food security, international development goals, the eradication of hunger and extreme poverty, and ironically the environmentalists’ interest in greener agriculture. While there could be compromise in the area of food labeling, further progress seems unlikely until the scientific facts and public perceptions of GMOs are reconciled.

Feed the Future

The President’s Feed the Future initiative, looking to improve global food security in Africa by boosting agricultural productivity and alleviating extreme poverty and hunger, should be reauthorized with bipartisan support this year. This will provide a moment of bipartisan comity.

Budget and Appropriations

On top of everything else, budget and appropriations likely completed “in regular order,” as they say around Washington will mean that for the first time in a long time, the President will propose and the Congress will pass spending bills. Appropriations will follow authorizations of government operations. The process will be open to amendment and that means everything is on the table, including agricultural entitlements. There will be a reconciliation process when the House and Senate meet to work out differences.

Right off the bat we expect that the numbers that will be given to the Ag Committee will suggest that cuts are coming. We anticipate a lot of shuffling ahead of this to lessen the impact on one program or the other, but there will not be easy solutions.

Budget positioning will be crucial to our clients as cuts will be needed to conform to the top line. We expect food stamps (SNAP) and crop insurance to be targeted along with several other programs that the committee will look at in order to fit under the caps.

Happy New Year. 2015 has strong potential to break the pattern of the past several years in many respects. We’re off to an aggressive start and we can expect it to continue as both the President and Republicans forge ahead and try to demonstrate they can lead.

Follow Blog Via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.