Sen. Lincoln (D-AR), chairman of the Senate Agriculture, Nutrition, and Forestry Committee, and Ranking Member Chambliss (R-GA) held a hearing to discuss EPA’s recent regulatory and enforcement activities that affect US agriculture. EPA Administrator Lisa Jackson was the key witness.
Chairman Lincoln, in a strongly worded opening statement, said that US farmers, who are facing at least a dozen new rules, do not need more regulatory burdens.
“Farmers are the best stewards of our land, but they cannot operate under the uncertainty and unpredictability currently coming out of Washington,” Chairman Lincoln said. She criticized EPA’s top-down control-and-command approach under Jackson’s administration, noting that “a carrot is better than a stick.”
Sen. Lincoln mentioned a number of specific issues, including the proposed pesticide spray drift label language, EPA’s propensity for settling lawsuits without input from agricultural interests, the proposal for more stringent dust regulations and greenhouse gas regulations under the Clean Air Act.
Sen. Lincoln was highly critical of EPA’s new pesticide permitting system, which resulted from the Sixth Circuit Court decision. She said that the permits were burdensome, redundant regulations with no additional environmental benefits and that the FIFRA label is sufficient to regulate pesticide usage. Chairman Lincoln and Sen. Chambliss have introduced legislation (S.3735), which would overturn the Sixth Circuit decision and eliminate the need for NPDES permits.
Sen. Chambliss stated that EPA’s overzealous regulatory and enforcement actions risk hindering growth and job creation in the agricultural industry. He raised additional concerns, including the agency’s ad hoc review of atrazine, numeric water nutrient criteria, concentrated animal feeding operations and dioxins.
Administrator Jackson defended her agency by saying that EPA is not out to “get” agriculture and that listening to farmers is a priority. She cited meetings that she and Agriculture Secretary Vilsack have held jointly with various agricultural and livestock groups (including NCC Chairman Eddie Smith, see 3/26/10 Cotton’s Week). Jackson offered no commitments at the hearing but did respond favorably to Sen. Chambliss’ request that EPA work more closely with the House and Senate agriculture committees in future EPA decisions.
Sen. Roberts (R-KS) spoke at length about the proposal before EPA for a more stringent dust standard under the Clean Air Act. This proposal has caught the attention of many agricultural groups especially in the more arid western states. The proposal to halve the current coarse particulate air quality standard has been proposed by an EPA advisory panel. EPA currently is considering that proposal but has not yet announced a decision. Jackson added that she is willing to reach out to agricultural interests for their input as the agency continues toward a final decision on the proposal.
The second panel of witnesses included Rich Hillman, vice president of the Arkansas Farm Bureau; Jay Vroom, president & CEO of CropLife America; and, Jere White, executive director of the Kansas Corn Growers Assoc.
Ways and Means Approves Currency Reform Bill
The House Committee on Ways and Means approved the Ryan-Murphy Currency Reform for Fair Trade Act of 2009 (H.R. 2378) with bipartisan support after adopting a substitute amendment offered by Committee Chairman Levin (D-MI). The panel’s substitute amendment would clarify that countervailing duties can be imposed to offset the effects of an undervalued currency. Levin said that his substitute made the legislation consistent with World Trade Organization (WTO) rules on export subsidies.
“Today’s passage signals an important advance in U.S. trade policy,” Chairman Levin said.“The measures included in this bill provide the Administration with additional tools for enforcing the rules of trade and are consistent with our WTO obligations.”
The bill would “send a clear signal to China that Congress’ patience is running out, without giving China an excuse to take it out on U.S. companies and their workers,” Ranking Member Camp (R-MI) said. He noted that he supported changes that had been made to the bill to make it compliant with WTO rules.
Originally introduced by Reps. Ryan (D-OH) and Murphy (R-PA), H.R. 2378 would make prolonged currency undervaluation actionable as prohibited foreign export subsidy under US countervailing duty law. The legislation would make it more likely that the Commerce Dept. would impose countervailing duties against Chinese goods on behalf of US businesses. The bill has 151 cosponsors (107 Democrats and 44 Republicans). The substitute would change the law so that Commerce could not dismiss a claim just because non-exporters in a foreign country also receive the same subsidy. However, Commerce would retain the power to make the final decision on whether to impose countervailing duties. The substitute would include “fundamentally undervalued currency” in the “duty test” under which Commerce can impose a countervailing tariff on foreign exports. The bill would allow countervailing duties to be imposed only when Commerce finds that a foreign government’s intervention in the currency market results in a financial contribution resulting in a benefit -- and when the subsidy involves exports.
The bill, as amended, also would direct the Government Accountability Office to report on relief granted to US industries that have been “materially injured” because of undervalued currency. A fact sheet on the bill prepared by the House Ways and Means Committee is at http://www.cotton.org/issues/index.cfm.
The House leadership plans to go forward next week with a vote on the legislation reported by the Committee. The administration has taken no formal position. Treasury spokeswoman Natalie Wyeth said that, "Treasury will carefully examine any proposals put forward by Congress, but we have not taken a position on any proposed legislation." A meeting between President Obama and Chinese Premier Wen Jiabao in New York City focused mostly on the currency issue, and President Obama did not commit to veto the bill.
USDA Announces ’09 ACRE Payments
USDA’s Farm Service Agency Administrator Jonathan Coppess announced the states that have met revenue “triggers” for the ’09 Average Crop Revenue Election (ACRE) program payments for acres of wheat, barley and oats. Payments are revenue-based and determined based on crop production and the National Average Market Price for covered commodities planted on the farm.
"The ACRE program provides financial and risk management advantages to eligible producers," Coppess said. "Producers who enrolled a farm in ACRE will receive 2009 ACRE payments after Oct. 1 of this year on ‘planted or considered planted’ acres of these three crops, if both state and farm revenue criteria are met."
In addition to state ACRE eligibility, enrolled farms in an eligible state must meet revenue trigger requirements for the three crops. Revenue triggers for a commodity must be met on both a state and farm basis. A listing of the states that meet the revenue triggers for the ’09 crops of wheat, barley and oats is available at http://www.fsa.usda.gov/Internet/FSA_File/2009_st_trigger_status.pdf.
States that meet the revenue triggers for other commodities will be determined after the ’09-10 marketing year average price is published by the National Agricultural Statistical Service. The list of states that met the revenue trigger for peanuts was published on Aug. 31, ’10. The scheduled publishing dates for other crops are as follows: corn, grain sorghum, soybeans, dry peas and lentils – Sept. 29, ’10; Upland cotton – Oct. 8, ’10; large chickpeas, small chickpeas, sunflower seed, canola, flaxseed, mustard seed, rapeseed, safflower, crambe and sesame seed – Nov. 30, ’10; and long grain rice, medium and short grain rice – Jan. 31, ’11.
Ag Anxious About Dust Standard Proposal
Farmers are closely monitoring a longstanding and recurring debate over whether to clamp down on “rural fugitive–dust.” EPA is reviewing its airborne pollutant standards, as required every five years under the Clean Air Act. The agency is looking both at its standards for fine airborne particles and larger or coarse particles that include dust.
Farm groups have urged EPA to retain its current standards for dust, arguing that tighter restrictions would be unworkable and that dust isn't a real pollutant. They also want to see a distinction made between rural dust (soil particles) and urban dust which is more likely to contain pollutants harmful to human health.
Supporters of tighter restrictions say that tougher standards are needed to help clear the air of tiny grains that can lodge deep in the lungs and worsen heart and respiratory problems. However, farming and livestock groups and some lawmakers call those risks overstated. They argue that tighter rules could hurt rural areas, which they fear might exceed new limits and be required to implement plans to reduce dust.
In July, nearly two dozen senators from farm states urged EPA Administrator Lisa Jackson in a joint letter to keep in place the current particulate standards, approved in ’06. Tougher standards, their letter warned, would result in "extremely burdensome" dust control measures to bring regions into compliance and "could slow economic development and impose significant cost to farmers and businesses."
The American Lung Assoc. has urged the EPA to adopt stricter limits. The group maintains that the agency could reduce dust by paving gravel roads and encouraging farmers to grow more of their crops using no-till. Janice Nolen, the group's assistant vice president for national policy and advocacy, said the agricultural industry's claims mirror those other industries raised when they faced EPA restrictions.Nolen also said it's not just loose soil that blows around and off farms — the particles also include diesel exhaust from farm machinery, animal waste, and herbicides and insecticides.
The EPA's scientific advisers told the agency this summer that the agency could better protect public health by replacing the existing standard of 150 micrograms of coarse particles per cubic meter with a standard between 65 and 85 micrograms per cubic
meter. The EPA said in a statement that it is "committed to issuing air quality standards for particle pollution that are scientifically sound."
However, agricultural interests contend that there is no scientific evidence supporting a need for tighter regulations on dust, that farm dust is different from the particles released by industry, and that there is no effective and economical way for farmers to reduce dust levels. Tougher rules would unduly penalize agricultural areas, particularly those in more arid regions where dust is a nearly constant presence.
The agency is expected to release a final document next month spelling out its options for revising the standards. The EPA plans to announce any proposed changes in February and likely will approve a final updated rule by Oct. ’11. The agency then would determine which areas of the nation will not meet those new standards.
Farmers Seek Involvement in ESA Consultation Process
A coalition of five grower groups petitioned EPA to establish clear notice and comment procedures for pesticide-endangered species effects determinations and subsequent consultation activities that are consistent with Section 1010 of the 1988 Endangered Species Act (ESA) amendment, which aims to minimize impacts of the consultation process on agriculture.
Federal agencies are required under the ESA to determine whether their actions, such as a pesticide registration, may affect an endangered or threatened species and, if so, consult with the US Fish & Wildlife Service or National Marine Fisheries Service (the Services) to determine whether the action jeopardizes the continued existence of such species. The Services develop a biological opinion (BiOp), and if jeopardy is likely, steps are recommended to avoid jeopardy – which often are use restrictions, in the case of pesticides.
Growers have been highly critical of the consultation process, particularly in the case of recent BiOps which cover endangered Pacific Northwest salmon and steelhead. These BiOps are being prepared pursuant to a lawsuit settlement. The growers say that the current process is not based on the best available data, is too time-consuming, excludes input from affected stakeholders and results in unneeded restrictions on pesticide use that will be harmful to food production while failing to help salmon.
According to the petition, EPA acknowledged Section 1010 when it announced changes to its Endangered Species Protection Program in ’05 and committed to providing an opportunity for stakeholder participation at various points in the ESA process. However, EPA has yet to establish procedures to do so.
The agricultural groups are seeking procedures that include at least a 90-day public comment period when EPA makes a "may affect" determination, when the Services issue a draft BiOp and when EPA proposes final restrictions in response to the BiOp. The coalition has asked EPA to respond to the petition within 45 days.
Sourcing USASummit Set
Sourcing USA Summit, organized by Cotton Council International and Cotton Incorporated, will be held Nov. 9-12 at Terranea in Rancho Palos Verdes, CA.
The Summit is the world’s premiere gathering of the global cotton textile industry leadership and offers an opportunity for participants to discuss current and future business with executives from more than 20 different countries. More information is at www.sourcingusasummit.com.
The Summit’s exporter sponsors include: Jess Smith & Sons Cotton; Calcot, Ltd.; Allenberg Cotton Co.; White Gold Cotton LLC; Plains Cotton Cooperative Assoc.; Cargill Cotton; Staplcotn; Toyoshima; San Joaquin Valley Quality Cotton Growers Assoc.; Toyo Cotton Co.; Omnicotton, Inc.; Cotton Growers Cooperative; Olam; Noble Cotton; ECOM; ACG Cotton Marketing; J.G. Boswell Co.; and Supima.
Allied industry sponsors include: Monsanto; Cotton Market and Risk Management Consulting, Inc.; Wakefield Inspection Services; SFO Commodities/L.O.G.I.C. Advisors; TransGlobal Inspections, LLC; CoBank ACB; ICE Futures U.S.; Cargo Control Group; Rabobank International; Worldwide Responsible Accredited Production (WRAP) and Rieter Textile Systems.
US Mill Cotton Use Steady
According to the Commerce Dept., August (four-week month) total cotton consumption in domestic mills was 142.2 million pounds for a seasonally adjusted annualized rate of 3.67 million bales (480-lb). Last year’s August annualized rate was 3.42 million bales. The July (four-week month) estimate of domestic mill use of cotton was lowered by 50,000 pounds to 134.1 million. The revised seasonally adjusted annualized rate of consumption for July is 3.62 million bales, slightly lower than last year’s July annualized rate of 3.65 million bales.
The Commerce Dept.’s estimate of both upland and extra long staple consumption of cotton by US mills, when adjusted to represent the complete ’09-10 crop year, is approximately 3.46 million bales. USDA’s September estimate of ’09-10 crop year mill use was 3.45 million bales. Commerce’s estimate of exports for the ’09-10 crop year is approximately 12.04 million bales, equal to USDA’s latest export estimate of 12.04 million bales.
The Commerce Dept.’s survey-based estimate of stocks on hand as of July 31, ’10 was 2.95 million bales. USDA’s September estimate of ending stocks for the ’09-10 crop year was 3.00 million bales.
Sales Strong, Shipments Slim
Net export sales for the week ending Sept. 16 were 537,000 bales (480-lb). This brings total ’10-11 sales to approximately 8.4 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 3.5 million bales. Total new crop (’11-12) sales are 556,700 bales.
Shipments for the week were 116,600 bales, bringing total exports to date to 1.3 million bales, compared with the 1.2 million bales at the comparable point in the ’09-10 marketing year.
Effective Sept. 24-30, ’10
Adjusted World Price, SLM 11/16
92.51 cents
*
Fine Count Adjustment ('09 Crop)
0.65 cents
Fine Count Adjustment ('10 Crop)
0.75 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
9
Special Import Quota (480-lb bales)
613,156
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
109.35 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
111.25 cents
Forward US CFR Far East
NA
'09-10 Weighted Marketing-Year Average Farm Price
Year-to-Date (August-July)
62.45 cents
**
**August-July average price used in determination of counter-cyclical payment
