John Dillard: Policy and Law in Play in 2018

January 22, 2018 01:53 PM
John Dillard

The coming months will be an important time for ag policy and law—but probably more so in terms of activity from the executive branch, state governments and litigation. With the exception of the farm bill, it’s unlikely Congress will pass much legislation of consequence to the ag community. With the upcoming midterm elections, Congress will spend much of the year either running with, against or away from President Donald Trump.

Nevertheless, here are a few things I expect will come into play in 2018:

1. North America Free Trade Agreement (NAFTA). The Trump Administration has made renegotiating a largely successful trade agreement a top priority. The U.S., Canada and Mexico have undergone several rounds of negotiations, and it’s possible we could come out on the other side with an improved, modernized agreement. However, if negotiations break down and we end up walking away, it’s hard to overstate how devastating withdrawal will be for U.S. agriculture because Canada and Mexico are our first and third largest ag export customers.

On the ag front, U.S. negotiators have demanded Canada dismantle its protectionist supply management system for dairy, poultry and eggs, but these programs are politically popular north of the border. Some of our other ideas, such as a five-year sunset period or special protections for some produce growers, are likely a non-starter for our negotiating partners.

It’s unlikely the ag provisions will be make or break for renegotiating NAFTA, but farmers and ranchers could get caught in the crossfire. The negotiating parties are on both ends of the spectrum on potential changes to rules regarding automobiles, a major Trump priority. Another wild card is the Mexican presidential election. Negotiations might hit pause this spring and summer to await the results of the election.

2. The Farm Bill. The farm economy leaves many clamoring for a more robust safety net. However, the overall economy is booming and Congress is in a mood to cut or restrain spending. It’s unlikely Congress will increase funding for farm bill programs, but the ag sector will have a strong argument to try to avert major cuts.

As always, nutrition programs will be the linchpin of farm bill negotiations. There will be efforts to reduce food stamps by paring back eligibility and strengthening work requirements. However, these changes can’t be so drastic to lose the necessary votes in the Senate. We might see renewed efforts to separate nutrition programs from the farm bill, but this will not bear fruit.

3. Trade. In addition to NAFTA, there will be a lot of moving parts on trade. While there might be some opportunities for gain, such as increased access to beef markets, we’re liable to be playing defense for much of the year. For instance, any day the Commerce Department will release reports that will likely recommend imposing tariffs on steel and aluminum imports. This will allow the president to deliver on a promise to crack down on the Chinese. However, it will drive up costs for new equipment. In addition, tariffs often beget tariffs. If we get into a trade war, ag commodities could be subject to retaliatory tariffs.

4. Biotechnology. The Obama Administration attempted to formalize the biotech trait approval process, but it resulted in a barrier for a lot of new products. In November 2017, USDA announced its intent to start over and re-evaluate the process for approving biotech traits. Look for USDA to begin taking steps to establish a system that will balance innovation with ensuring the public can trust the approval process.
In addition, discussion about animals with biotech traits will increase.

5. GMO Labeling. Congress passed the National Bioengineered Disclosure Standard Act in July 2016, which established a national GMO-labeling regime. Many of the tough decisions on the specifics of the law are up to USDA, which is required to have its final rules in place by July 2018, a rather short timeline for such a sweeping rule.

On Jan. 3, USDA submitted a proposed rule to the White House for review. By the time the rule is released for public comment, USDA will be under the gun to address public comments and publish a final rule by the deadline.

Likely controversial topics will include: whether non-transgenically altered biotech traits (CRISPR) will be deemed “bioengineered;” how to accommodate electronic labels (QR codes); and when the rules will go into effect. USDA will likely provide the industry two to three years to comply with the new requirements.

6. Waters of the United States (WOTUS). The 2015 WOTUS rule never went into effect thanks to a stay issued by the Sixth Circuit. EPA and the Army Corps of Engineers have begun the process of rescinding the 2015 rule and are laying the groundwork for a new WOTUS definition that will likely have a less extensive reach than the Obama Administration’s approach. This approach too will likely end up mired in court for years. In the meantime, EPA and the Corps will continue to enforce Clean Water Act violations without a regulatory definition for jurisdictional waters.

7. Cage-Free Lawsuits. State governments, such as in California and Massachusetts, have transformed the egg industry through ballot initiatives championed by animal rights activists. The laws have also impacted the pork and dairy industries. Separate lawsuits have been filed by attorneys general from several farm states to challenge the laws restricting sales of farm products. The lawsuits have been filed with the Supreme Court under a constitutional provision that allows the Court to resolve disputes between states. The suits argue Massachusetts and California’s laws violate the Constitution’s Commerce Clause by restricting out-of-state products. I’m hopeful these cases will gain traction. Otherwise, we will see states with large market power continue to establish de facto national standards.

8. Dicamba. The debut of dicamba-resistant soybeans in 2017 didn’t go as planned—and state governments have put more restrictions on applicators and timing applications. In addition to state regulatory efforts, we can expect to see several class action lawsuits filed against Monsanto for damage caused in 2017.

9. Glyphosate and Prop 65. California’s Proposition 65 requires retailers to display a warning on or near products that contain chemicals “known to the State of California” to cause cancer or birth defects. The well-intentioned rule has run amok over the decades. Per Prop 65, if any one of a number of scientific agencies identifies a product as a carcinogen, California will require a Prop 65 warning to alert consumers. One such agency, the International Agency for Research on Cancer (IARC), has identified glyphosate as “probably carcinogenic.” IARC’s conclusion has been widely questioned and even panned by other agencies. Every other scientific agency that has evaluated glyphosate’s health risks has reached the opposite conclusion. However, California is slated to require warning labels on products that “contain” glyphosate starting in July 2018. California has established a safe harbor to accommodate trace levels on packaged foods, but there’s not a lot of reassurance that plaintiff’s attorneys won’t use the law to shake down food manufacturers.

A number of farm trade organizations and Monsanto have filed suit against California to stop the labeling requirement from taking effect. The suit alleges Prop 65 violates the First Amendment because it would require product labels to bear the false statement that the product is a potential carcinogen. This will likely be a consequential suit. If products containing glyphosate are required to be labeled under Prop 65, food manufacturers might pressure suppliers to shift away from ingredients produced on operations using glyphosate.

10. Neonicotinoids. In May 2017, a federal judge held EPA violated the Endangered Species Act when it failed to consult with U.S. Fish and Wildlife over the potential impact of Clothianidin-treated seeds on endangered animals. Under the judge’s opinion, EPA is required to conduct a consultation on the impact of neonicotinoids on endangered species. The next fight in the case is over pesticide registration while the endangered species consultation is underway. The environmental activists are urging the court to suspend the registration of almost 50 pesticides while the consultation is underway. EPA, meanwhile, is arguing suspension is inappropriate.

The outcome of this dispute could have major implications for the use of a lot of seed treatment.

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Spell Check

bad axe, MI
1/23/2018 06:58 AM

  John you left out one point if we were all so smart why did we let the federal reserve get us 70 trillion in debt. Which took us right out of the export business on corn and soybeans . You as a reporter should have question the federal reserve and asked them one question with 3.8 trillion in US printed currency in circulation her and around the world how could you let use get into 70 trillion in debt . This 70 trillion in debt is going to put us in a depression that will make 1929 look like a church picnic.


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