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A comprehensive news, research, and information resource for the nation’s agricultural community.

Provided as a partnership of the National Agricultural Law Center, the nation’s leading source of agricultural and food law research and information, and the American Agricultural Law Association, the only national professional organization focusing on the legal needs of the agricultural community.

Administration moving on trade agenda

In his State of the Union address in January, President Obama stated it is the goal of the administration to double American exports within five years. Today, the president is expected to sign an executive order that aims to help start the process of meeting that goal.

The executive order will create an Export Promotion Cabinet comprised of officials from the Departments of Agriculture, Commerce, State, Treasury, and other "federal agencies involved in trade [,]" reports Sewell Chan and Javier C. Hernandez in the New York Times online.

In addition to the new cabinet, the Times reports that the president will also name "an advisory committee on international trade, called the President's Export Council [.]" This council will be led by the chief executives of Boeing and Xerox. "The effort is intended, the administration official said, to improve financing for businesses that want to increase exports, enforce existing trade agreements and help create jobs while making American goods more competitive abroad."

Of course, the Times correctly points out that the president's plan is not without detractors, and Congress, which controls trade policy, has a mixed record in moving trade initiatives. While the Central American Free Trade Agreement was passed by Congress during the Bush Administration, other agreements the Bush Administration negotiated, like with South Korea, Colombia, and Panama, stalled in Congress.

We shall see if President Obama's trade agenda is received with open arms, or hostility.

To read the New York Times article click here.

Posted: 03/11/10

Senate Jobs Bill Contains Agriculture Provisions

Yesterday, the Senate passed a roughly $140 billion jobs bill aimed at stimulating job growth in the struggling economy, as well as covering other areas of concern in this time of economic recession. Also included in the bill were provisions that America's agricultural producers might find helpful.

As Sally Schuff writes for Feedstuffs online, the Senate bill included a $1.5 billion agricultural disaster package and a one-year extension of the biodiesel tax credit that is retroactive to January 1, 2010. According to Schuff, the Senate bill will now proceed to the House "as part of the tax extenders legislation." Agricultural leaders in Congress are hoping the bill will move quickly through the House so the legislation can be enacted and farmers can receive the help they need.

Here's how the disaster money breaks down: $1 billion for crop losses suffered in 2009; $75 million in disaster moneys for poultry; $50 million for livestock; $20 million for aquaculture, "and relief for cotton handlers." There is also $300 million included for specialty crop producers. The bill also includes a one-year extension of the tax credit for short line railroads, "and a one-year tax credit for a new markets program [.]"

Hoosier Ag Today online reports that to be eligible for the disaster payments, those suffering losses must be in a county declare a "primary" disaster area by the US Department of Agriculture. The biodiesel tax incentive will allow biodiesel producers to continue with their current work, or in some cases, even expand production.

As Gail Russell Chaddock reports for the Christian Science Monitor, the $140 billion legislation passed the Senate 62 to 36. In addition to the previously mentioned provisions, the bill also extends unemployment insurance, provides support for state Medicaid programs, and "blocks mandated cuts in reimbursement for doctors service Medicare patients.

The House of Representatives passed a version of the tax extenders legislation back in December, 2009. Since the two bodies of Congress used different offsets to help pay for their legislation, it looks like a conference on the package is inevitable.

How long it will take to proceed to such a conference, let alone conduct one, remains to be seen.

To read the Feedstuffs online article click here.
To read the Christian Science Monitor article click here.
To read the Hoosier Ag Today article click here.

Posted: 03/11/10

Rice Farmer Awarded $1 Million

The Associated Press is reporting out of Little Rock, AR today that a Woodruff County Circuit Court jury "has ordered Bayer CropScience LP to pay a rice farmer me than $1 million in a lawsuit over [an] experimental rice variety."

According to the article, the decision awards $532,643 in compensatory damages and $500,000 in punitive damages to rice farmer Lenny Joe Kyle. The jury found that Kyle's crop was damaged when Bayer CropScience's "experimental variety of genetically modified rice was mixed with the rice supply.

While the US Department of Agriculture maintains no risk was created by the mixing, both Japan and the European Union restricted U.S. rice. Naturally, this lead to a drop in rice prices and a decline in US rice exports.

For their part, Bayer CropScience released a statement saying the company disagrees with the decision and is considering its legal options at this point. The company also maintains they did nothing wrong.

To read the AP report, click here.

Posted: 03/10/10

California and Oregon nurseries sue to overturn a South Carolina regulation

The Natural Resource Report online is running a news release from the Oregon Association of Nurseries (OAN) that reports that the California Association of Nurseries and Garden Centers (CANGC) and the OAN filed a lawsuit Monday in U.S. District Court in Columbia, South Carolina "seeking to overturn a new regulation aimed squarely at blocking California and Oregon nursery growers from shipping their plants to that state."

While the US Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) has regulations in place to deal with Phytopthora ramorum, or Sudden Oak Death, to protect against the spread of the disease, last year South Carolina passed a bill that prevents California and Oregon growers from shipping to South Carolina unless the growers comply with additional requirements for inspections, documentation, and notice. According to the news release, these state regulations go further than the federal rules. Thus, the two organizations are seeking an injunction to invalidate the regulation.

The organizations believe the South Carolina statute is in violation of the Supremacy Clause of the U.S. Constitution, as well as the US Plant Protection Act, "which gives the federal government the exclusive power to protect plants sold in interstate commerce." The organizations also believe they have legal precedent on their side since, in 2004, the CANGC "successfully sued the State of Kentucky under similar circumstances."

As Dana Tims reports for the Oregonian online, "potentially millions of dollars are riding on the lawsuit since most of the plant material grown in the two states is exported to markets in the south, east and Midwest. " This is in part why the challenge is being brought--if South Carolina's actions are allowed to stand what is to prevent other states from doing the same?

Indeed, John Aguirre, executive director of the OAN is quoted in the Tims story as stating, "For us, the problem is much bigger than just South Carolina . . . If other state think this will go unchallenged, there's every likelihood that they will start doing just what South Carolina has done . . ."

Since the organizations feel the regulation is clearly in violation of the Constitution, federal law, and the legal precedent is on their side, they are hoping for a quick ruling from the US District Court in their favor.

To read the OAN news release on the Natural Resource Report online, click here.
To read the Oregonian story click here.

Posted: 03/10/10

Animal Rights Legislation Introduced in House

The "Prevention of Farm Animal Cruelty Act," H.R. 4733, was introduced last week by United States Representatives Diane Watson and Elton Gallegly, both of California.The bill requires that all meat purchased by the federal government for the various federal feeding programs, like free and reduced-price school lunches, only come from sources where the animals are raised free from abuse and cruel treatment.

As John Maday reports for Drovers online, the bill aims to achieve this goal by implementing "federal standards regulating housing and animal treatment on operations that supply food to" the government.

Maday writes that such a law would effect virtually every livestock operation in the nation because the US Department of Agriculture purchases meat products from packers and processors, not directly from farmers. "Without full traceability of every product back to its farm or ranch of origin, packers would need to require compliance from all their suppliers to continue selling meat or dairy products to the government."

Farm Futures online reports that the legislation would require that animals be raised with enough room "to stand up, lie down, turn around and stretch their limbs." Such standards are similar to the requirements the Humane Society of the United States has been successful at implementing at the state level, like in California where Proposition 2 implemented such language through a ballot initiative.

Given all that is going on in Congress at the moment, and the fact that this is an election year, it may be difficult for the California lawmakers to move their legislation. Nonetheless, it is out in the public domain for debate.

To read the Farm Futures online article on the bill, click here.
To read Maday's article in Drovers online, click here.
To check out H.R. 4733, click here.

Posted: 03/09/10

Brazil announces cotton retaliation trade sanctions

On Monday, Brazil announced it was imposing trade sanctions on several American goods as part of a retaliatory effort authorized by the World Trade Organization (WTO) last year. As the Associated Press reports in the Washington Post online, last year the WTO "authorized Brazil to set $829.3 million in annual penalties against the United States for anticompetitive subsidies." Brazil says it will keep imposing the sanctions as long as the violating subsidies continue.

The subsidies in question are direct payments made to cotton producers "to protect them against fluctuations in global prices," as well as a loan guarantee program "for international buyers of US cotton," reports the Financial Times. The AP reports Brazil argues that these subsidies allow the United States "to remain the world's second-largest cotton producer by paying some $3 billion to American farmers each year." Brazil is the fifth-largest exporter of cotton.

The Dow Jones reports in the Wall Street Journal online that the sanctions total $591 million. These increased tariffs go in effect in 30 days, following a period of negotiations between the nations to see if the tariffs can be avoided. The plan is for them to stay in effect for one year, again, "pending alterations in U.S. subsidy practices."

Brazilian Foreign Trade Secretary Lytha Spindola stated to Dow Jones that,

"The Brazilian government doesn't believe that trade retaliation is the most appropriate means to achieve fairer international commerce . . . But after eight years of litigation, and in the absence of more concrete options for resolving the dispute, all that's left for Brazil is to make good on its rights as authorized by the WTO, if even only to safeguard the credibility of the system of conflict resolution."

102 imports are affected by the sanctions, from Heinz ketchup, to Ford automobiles. "Among the heaviest penalized imports were U.S. wheat sales, which will see tariff increases to 30% from 10% currently."

The Brazilian government is not quite done with retaliatory efforts either. The country is still seeking to impose the remaining $238 million in retaliations against the U.S., "hoping to punish industries such as those involving intellectual property rights and services." The list of items targeted in this effort is expected to be announced by March 23, 2010.

James Politi and Jonathan Wheatley write in the Financial Times online that the move by Brazil could launch a potential trade war with the US. The Dow-Jones reports that in 2009 Brazil did $35.6 billion in trade with the U.S. According to the Financial Times article, US Commerce Secretary Gary Locke and Michael Froman, deputy national security adviser for international economic affairs, are due to arrive in Brazil today--presumably to continue negotiations with Brazil over the subsidies and the tariffs.

The Financial Times reports,

"Under the Brazilian plan, duties would rise most steeply on cotton products. Many that are currently taxed at between 6 per cent and 35 per cent would be taxed at 100 per cent. The tariffs on beauty products would double, from 18 per cent to 36 per cent. Duties on household goods such as cookers, refrigerators, television sets and video cameras would also double, from 20 per cent to 40 per cent. Duties on cars would rise from 35 per cent to 50 per cent."

For their part, the Financial Times reports that the US trade representative in Washington said they are "disappointed" in Brazil's decision to implement the counter-measures, but both sides remain hopeful a compromise can be negotiated.

U.S. Agricultural leaders were not quiet following the Brazil announcement. U.S. Senate Committee on Agriculture, Nutrition and Forestry Chairman Blanche Lincoln (AR) and Ranking Member Saxby Chambliss (GA) issue a joint statement on the retaliation efforts, calling them "unfortunate," while maintaining their commitment to settling the dispute, but expressing disappointment in how the negotiations are going, '"We cannot negotiate with a partner that is unwilling to voice what it wants." The senators also expressed their belief that US cotton programs are not '"having a significant impact on world cotton prices."'

The statement also includes a bit of a warning from the senators, "'[w]hile Brazil has chosen to exercise its rights, its future actions will determine the degree to which the administration and the Congress are willing to move forward together in resolving the dispute and other in the World Trade Organization,' said Lincoln and Chambliss."

To read the AP piece in the Washington Post click here.
To read the Dow Jones piece in the Wall Street Journal click here.
To read the Financial Times article click here.
To read the statement from Lincoln and Chambliss click here.

Posted: 03/09/10