Crop Insurance Update: FCIC Finalizes Changes to Federal Crop Insurance

Written by M. Sean High - Staff Attorney

On August 12, 2016, the United States Department of Agriculture (USDA) Federal Crop Insurance Corporation (FCIC) published notice in the Federal Register (81 FR 53657) of a final rule changing the Code of Federal Regulation’s General Administrative Regulation—Subpart V—Submission of Policies, Provisions of Policies, Rates of Premium, and Non-Reinsured Supplemental Policies (7 CFR part 400, subpart V). 

According to FCIC, the final rule provides greater clarity of “existing regulations [and] lessen[s] the burden on submitters of crop insurance policies, provisions of policies, or rates of premium under section 508(h) of the [Federal Crop Insurance] Act (Act).” FCIC stated that the final rule also supplies “guidance on the submission and payment for concept proposals under section 522 of the Act” and furnishes “provisions for submission and approval of index-based weather plans of insurance as authorized by section 523(i) of the Act,” Finally, FCIC declared that the final rule “incorporate[s] changes that are consistent with those made in the Common Crop Insurance Policy Basic Provisions.”  

According to FCIC, the final rule’s changes to 7 CFR part 400, subpart V are the result of a notice of proposed rulemaking published in the Federal Register on February 25, 2015, which provided the public with a 60 day comment period (80 FR 10008—10022).  FCIC stated that the agency received 80 comments on the proposed rule from 10 commenters including: “insurance providers, insurance organizations, grower organizations, crop insurance product developers, and a business council.”

The effective date for the final rule is August 12, 2016.   

Crop Insurance Update: FCIC Finalizes 2014 Farm Bill Crop Insurance Provisions

Written by M. Sean High—Staff Attorney

On June 30, 2016, the United States Department of Agriculture (USDA) Federal Crop Insurance Corporation (FCIC) published notice in the Federal Register of a final rule completing “changes to the General Administrative Regulations—Ineligibility for Programs under the Federal Crop Insurance Act, the Catastrophic Risk Protection Endorsement, the Area Risk Protection Insurance Regulations, and the Common Crop Insurance Regulations, Basic Provisions” (81 FR 42453).

According to a press release issued by USDA’s Risk Management Agency (RMA), the published final rule “completes provisions such as enterprise units for irrigated and non-irrigated crops, adjustment in actual production history to establish insurable yields, crop production on native sod, beginning farmer and rancher provisions, coverage levels by practice, and the authority to correct errors.” RMA stated that the changes issued under the final rule were the result of the 2014 Farm Bill which mandated that USDA “make some changes that would strengthen the safety net [the agency] provide[s] for America’s farmers and ranchers.”

According to the Federal Register, USDA received 364 comments from 74 commenters (including academics, farmers, trade associations and others) regarding an interim rule published July 1, 2014.  As a result of these comments, USDA stated that RMA made changes to the final rule dealing with native sod so as to provide clarity regarding “an exception that allows producers to break up to five acres of native sod and not receive reduced premium subsidy on coverage of native sod acreage.” According to RMA, “[a]ll other provisions of the final rule remain unchanged.

The final rule became effective on June 30, 2016.

Crop Insurance Update: USDA Offers Crop Insurance Protection for Farmers Transitioning to Certified Organic Production

Written by M. Sean High – Staff Attorney

On February 18, 2016, the United States Department of Agriculture (USDA) issued a press release announcing that the department was expanding crop insurance to allow farmers transitioning to certified organic production the ability “to purchase insurance coverage that better reflects their product's actual value.”

In announcing the crop insurance expansion for farmers transitioning to certified organic production, Agricultural Secretary Tom Vilsack stated, “[c]onsumer demand for organic products continues to increase and the industry has experienced remarkable growth, representing more than $39 billion in U.S. retail sales." Secretary Vilsack further stated that the growth in organic products "creates opportunities for farmers and businesses across the country” and that “[e]xpanding the safety net for farmers wanting to enter the organic market ensures they have the tools and resources they need to meet this growing demand while protecting their operation."

According to the press release, while organic products may offer farmers the potential for higher profits, transitioning from conventional to certified organic production could take up to three years.  To assist farmers in bridging this gap between conventional and certified organic production, starting with the 2016 crop year, USDA will now permit transitioning producers the opportunity to utilize the Contract Price Addendum (CPA).

Through CPA, farmers will have the ability to insure certain transitional organic crops at either the contract price or the published USDA Risk Management Agency (RMA) price election.  According to RMA, this choice will allow for “a Federal crop insurance guarantee that is more reflective of the actual value of [a] certified organic crop or crop which is transitioning to organic.”

Importantly, if a farmer decides to select contract pricing: 1) that decision must be made by the sales closing date and 2) a copy of the contract must be provided to the farmer’s crop insurance agent by the acreage reporting date.  Accordingly, CPA coverage will continue while the crop insurance policy remains active.

Additional information regarding organic agricultural risk management is available at RMA’s organic crop website located at http://www.rma.usda.gov/news/currentissues/organics/. 

HPAI Update: New HPAI Indemnity Payment Rule becomes Effective

Written by M. Sean High – Staff Attorney

On February 9, 2016, the United States Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) published in the Federal Register an interim rule amending the regulations governing the payment of indemnity claims for highly pathogenic avian influenza (HPAI) (81 FR 6745).  The new regulations became effective upon the interim rule’s February 9, 2016 publication in the Federal Register.

The February 9, 2016 interim rule amends the previous HPAI indemnity regulations in three ways: 1) APHIS is allowed to split indemnity payments between poultry/egg owners and contractors; 2) existing policy is clarified through language providing for indemnity payments for eggs destroyed as a result of HPAI; and 3) poultry/egg owners and contractors of large facilities must each provide statements that prior to the detection of HPAI in their facility, they had in place, and were following, a biosecurity plan.

By way of authority, APHIS administers HPAI indemnity payments under 9 CFR 53.  Prior to the February 9, 2016 interim rule, 9 CFR 53 allowed indemnity payments for the costs of purchase, destruction, and disposal of animals and materials required to be destroyed due to HPAI contamination or exposure, but did not specify that an indemnity payment could be divided between a poultry/egg owner and a contractor.

Relatedly, a similar problem previously existed regarding Low Pathogenic Avian Influenza (LPAI).  In 2002, after an LPAI outbreak in Virginia, 9 CFR 56, which governs APHIS LPAI indemnity payments, was amended to allow indemnity payments to both animal owners and contractors (9 CFR 56.8).

Now, because of the February 9, 2016 interim rule, the formula used in 9 CFR 56.8 for dividing LPAI indemnity payments between animal owners and contractors has been incorporated to apply to HPAI (9 CFR 53.11).  As a result, APHIS may now pay a contractor indemnity for their losses associated with HPAI.  Accordingly, after indemnity is paid to a contractor (based on the 9 CFR 53.11 formula), the poultry/egg owner is then eligible to receive the remaining indemnity balance.

Prior to the February 9, 2016 interim rule, as a matter of policy, APHIS included eggs under the general term “materials” for purposes of indemnity payments.  Seeking to provide clarity on the matter, 9 CFR 53 now specifically makes reference to eggs and provides direction for the appraisal value of eggs destroyed due to HPAI (9 CFR 53.3(e)).

Finally, the February 9, 2016 interim rule now requires that for indemnity payment eligibility, both poultry/egg owners and contractors must provide APHIS with a statement that at the time HPAI was detected in their facility, they had in place, and were following, a biosecurity plan.  As a result, barring an exemption, indemnity claims will be denied without these statements (9 CFR 53.10(g)).

Under 9 CFR 53.10(g), only large poultry operations must comply with the biosecurity requirement.  Accordingly, poultry facilities are exempted from issuing the biosecurity statements if the operation is: 1) a commercial table egg facility with fewer than 75,000 birds; 2) a facility that raises for release upland game birds and has fewer than 25,000 upland game birds annually; 3) a facility that raises for release water fowl and has fewer than 25,000 water fowl birds annually; 4) a broiler facility that raises fewer than 100,000 broilers annually; or 5) a meat turkey facility that raises fewer than 30,000 turkeys annually. 

APHIS has stated that the purpose of the February 9, 2016 interim rule was “to solidify policies surrounding the payment of indemnity and further strengthen biosecurity adherence at poultry operations.” The comment period on the interim rule ends April 11, 2016.  

Agricultural Law Weekly Review: February 5, 2016

Written by M. Sean High – Staff Attorney

The following information is an update of recent, local, state, national, and international legal developments relevant to agriculture:

Litigation: PA Federal Judges Certifies Class Action against Egg Producers

On February 2, 2016, United States District Judge Gene E.K. Pratter of the United States District Court for the Eastern District of Pennsylvania granted a motion to certify a class action in a case involving an alleged conspiracy by the nation’s leading egg producers to inflate prices by limiting the supply of eggs (Case No. 08-md-2002).  Appointed as class representatives are T.K. Ribbing’s Family Restaurant, LLC; John A. Lisciandro d/b/a Lisciandro’s Restaurant; Eby-Brown Company; and Karetas Foods, Inc.

Labeling: FDA Bans Importation of GE Salmon

On January 29, 2016, the United States Food and Drug Administration (FDA) announced that the department will “not allow the introduction or delivery for introduction into interstate commerce of any food that contains genetically engineered salmon, until FDA publishes final labeling guidelines for informing consumers of such content (Import Alert 99-40).” The alert did not provide a timetable for the completion of the final labeling guidelines.

Biotechnology: New Monsanto Biotech Soybean Now Available

On February 3, 2016, Monsanto announced that the company had received import approval from China for Roundup Ready 2 Xtend soybeans. The Roundup Ready 2 Xtend soybeans are genetically modified to be tolerant to both glyphosate and dicamba herbicides, and as a result China’s import approval, will now be made “available in the United States and Canada in time for the 2016 season.”

International: China Seeks to Modernize Farm Policy

On February 4, 2016, the International Center for Trade and Sustainable Development reported that China appears to be shifting its agricultural industry towards a modern, market-base system.  Specifically, according to the report, there appears to be a movement towards “the reform of the maize purchasing and storage system, [to] reflect market supply and demand in corn prices.” Additionally, the report stated that “[w]hile the timing and specifics of the new approach remain unclear…Beijing was believed to favour making compensation payments to farmers when prices fell short of a target price, instead of purchasing stocks to support prices when these fell below a pre-established floor.”

Research: USDA Awards over $30 Million for Research Projects

On February 3, 2016, the United States Department of Agriculture (USDA) announced that the department had awarded “$30.1 million in competitive grants to fund 80 research projects to improve food safety, reduce antibiotic resistance in food, and increase the resilience of plants in the face of climate change.”  According to USDA Secretary Tom Vilsack, the research funding was necessary because “[i]n the face of diminishing land and water resources and increasingly variable climatic conditions, food production must increase to meet the demands of [a] world population projected to pass 9 billion by 2050.”

Agricultural Law Weekly Review: January 15, 2016

Written by M. Sean High – Staff Attorney

A weekly update of recent local, state, national, and international legal developments relevant to agriculture.

·         Food Policy: 2015-2020 Dietary Guidelines for Americans Released

o   On January 7, 2015, the federal government released the 2015-2020 Dietary Guidelines for Americans, 8th Edition.  Published every five years, the Federal Dietary Guidelines are intended to “inform the development of Federal food, nutrition, and health policies and programs” and are the result of a joint effort between the U.S. Department of Agriculture (USDA) and the U.S. Department of Health and Human Services (HHS).

·         Food Policy: Advocacy group sues Federal government over 2015-2020 Dietary Guidelines                                Recommendation

o   On January 6, 2016, the Physicians Committee for Responsible Medicine brought suit in the U.S. District Court for the Northern District of California (Case No. 3:16-cv-00069) against USDA Secretary Tom Vilsack and HHS Secretary Sylvia Mathews Burwell (available to subscribers at www.pacer.gov).  The complaint alleged that the Dietary Guidelines Advisory Committee’s (DGAC) decision to recommend that the 2015-2020 Dietary Guidelines for Americans, 8^th Edition should not include previous advice to limit the consumption of dietary cholesterol to 300 milligrams per day was a result of improper influence from: 1) research funded by USDA’s egg promotion program; and 2) DGAC members’ institutions receiving funding from the egg industry.

·         GMO Labeling: Campbell Soup Company Releases Statement Backing Mandatory GMO                                        Labeling

o   On January 7, 2016, Campbell Soup Company (Campbell) issued a press release announcing the company’s “support for the enactment of federal legislation to establish a single mandatory labeling standard for foods derived from genetically modified organisms (GMOs).” According to the press release, Campbell will no longer participate in efforts to oppose mandatory national GMO labeling, but will continue “to oppose…state-by-state labeling laws, which it believes are incomplete, impractical and create unnecessary confusion for consumers.”  

·         Food Safety: Stockholder Files Federal Class Action Against Chipotle over Food Safety

o   On January 8, 2016, Chipotle stockholder Susie Ong brought a class action suit against the company in the United States District Court Southern District of New York (Case No. 1:16-cv-00141).  According to the complaint, Chipotle “made false and/or misleading statements and/or failed to disclose that: (i) Chipotle’s quality controls were not in compliance with applicable consumer and workplace safety regulations; (ii) Chipotle’s quality controls were inadequate to safeguard consumer and employee health; and (iii) as a result of the foregoing, Chipotle’s public statements were materially false and misleading at all relevant times.” The complaint alleged that as a result of these actions, and a subsequent market decline in the value of Chipotle securities, Susie Ong and her fellow class members suffered “significant losses and damages.”

·         Voluntary Standards: USDA AMS Withdraws Standards for Grass-Fed and Naturally-Raised                                          Meat

o   On January 12, 2016, the Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA) issued notice in the Federal Register that the agency was withdrawing the U.S. Standards for Livestock and Meat Marketing Claims (81 FR 1386).  Specifically, AMS is withdrawing the standards for grass-fed and naturally raised meat products because of conflicts between USDA’s-verified production/marketing and the food labeling pre-approvals currently required from either the USDA Food Safety Inspection Service or the Food and Drug Administration.    

·         Water Regulation: Congress Votes to Overturn WOTUS Rule

o   On January 13, 2016, the U.S. House of Representatives passed a joint resolution (by a vote of 253-166) which if enacted, would overturn the Environmental Protection Agency’s controversial Waters of the U.S./Clean Water Rule (S.J.RES.22).  The resolution currently awaits presidential action.

·         Biofuel Standards: Groups File Challenge to EPA’s Authority Regarding Biofuel Mandates

o   On January 8, 2016, in the U.S. Court of Appeals for the District of Columbia Circuit, seven advocacy groups (Americans for Clean Energy, the American Coalition for Ethanol, the Biotechnology Innovation Organization, Growth Energy, the National Corn Growers Association, the National Sorghum Producers and the Renewable Fuels Association) filed a challenge to the Environmental Protection Agency’s decision to waive the biofuel volume mandates established by Congress (Case No. 16-1005).  Filed in the U.S. Court of Appeals for the District of Columbia Circuit, the case is available to subscribers at www.pacer.gov.

·         Ag-Gag: North Carolina Ag-Gag Law Challenged in Federal Court

o   On January 13, 2016, six advocacy groups (People for the Ethical Treatment of Animals, the Center for Food Safety, Animal Legal Defense Fund, Farm Sanctuary, Food & Water Watch, and the Government Accountability Project) filed suit challenging the constitutionality of North Carolina’s recently enacted “ag-gag” law (Case No. 16-cv-25).  Filed in the U.S. District Court for the Middle District of North Carolina Greensboro Division, the case is available to subscribers at www.pacer.gov.

·         International Food Regulation: European Panel Determines UV-Treated Milk Safe               

o   On January 11, 2016, following a request by the European Commission, the European Food Safety Authority (EFSA) issued an opinion that, in certain applications, ultraviolet radiation can safely extend the shelf life of milk.

Food Policy Update: Federal 2015-2020 Dietary Guidelines Endorse Lean Meats, Lean Poultry, and Eggs

Written by M. Sean High - Staff Attorney

On January 7, 2016, the Federal Government released the 2015-2020 Dietary Guidelines for Americans, 8th Edition.  Published every five years for public health officials, the Federal Dietary Guidelines are produced in a joint effort between the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Agriculture (USDA).  

According to the 2015-202 Dietary Guidelines for Americans:

The main purpose of the Dietary Guidelines is to inform the development of Federal food, nutrition, and health policies and programs. The primary audiences are policymakers, as well as nutrition and health professionals, not the general public. The Dietary Guidelines is a critical tool for professionals to help Americans make healthy choices in their daily lives to help prevent chronic disease and enjoy a healthy diet. It serves as the evidence-based foundation for nutrition education materials that are developed by the Federal Government for the public.

While the Dietary Guidelines are not legally binding regulations, they are extremely influential in determining what food is made available through Federal food programs such as the school lunch program.  Just as important, the Dietary Guidelines can have a significant effect on consumer perceptions and often sway food purchasing decisions.  

Of significance to the agricultural industry, the 2015-2020 Dietary Guidelines for Americans stated that “[f]or those who eat animal products, the recommendation for the protein foods subgroup of meats, poultry, and eggs can be met by consuming a variety of lean meats, lean poultry, and eggs.”

On January 7, 2016, the National Cattleman’s Beef Association issued a press release praising “HHS Secretary Sylvia Burwell and USDA Secretary Tom Vilsack for ensuring the final recommendations were based on the latest nutrition evidence available.”  The press release quoted Texas cattle producer and physician Dr. Richard Thorpe who expressed his appreciation that the guidelines were based on the latest nutrition science.  Dr. Thorpe stated that “[n]umerous studies have shown positive benefits of lean beef in the diet, and I commonly encourage my patients to include beef in their diet to help them maintain a healthy weight and get the nutrients they need to be physically active.”

USDA Requires Permitting of Genetically Engineered Wheat

Written by M. Sean High – Staff Attorney

On December 11, 2015, the United States Department of Agriculture Animal and Plant Health Inspection Service (USDA-APHIS) announced that beginning January 1, 2016, all field trials of regulated genetically engineered (GE) wheat must be conducted under USDA’s permitting process.  Prior to the announcement, field trials of GE wheat had been conducted under USDA’s less stringent notification process.  USDA-APHIS stated that “recent unauthorized releases of GE wheat and findings have led USDA-APHIS to the conclusion that U.S. agriculture would benefit from the increased oversight provided by the Permit process.”

Accordingto USDA-APHIS, during 2013-2014, two separate incidents of unauthorized GE wheat were discovered in Oregon and Montana.  The Oregon GE wheat field trial had never been authorized at the discovered site and authorization for the discovered Montana GE wheat field trial site had expired 10 years prior.  USDA-APHIS voiced concern that these detections “had great potential to disrupt wheat markets globally” and that some U.S. trading partners have imposed “risk mitigation measures to imports of U.S. wheat in response to [the Oregon] incident.”

USDA-APHIS stated that “[u]sing permits for field trials of GE wheat provides an additional level of safeguarding based on, and consistent with the technology of wheat.” Furthermore, the agency exclaimed that “[b]ringing GE wheat under permit enables APHIS to create and enforce permit conditions that minimize the likelihood that the regulated GE wheat will spread or persist in the environment.” Importantly, USDA-APHIS noted that through the more stringent permitting process, international trading partners will be reassured “that the U.S. is committed to being the world’s reliable supplier of grain.”   

US Urges China to Lift Poultry Import Ban

Written by Tyler R. Etter

U.S. Agriculture Secretary Tom Vilsack attended a United States and China Joint Commission on Commerce and Trade to raise the issue of China’s ongoing ban on imports of US poultry. The ban was enacted in response to the outbreak of highly pathogenic avian influenza. The meeting ran from November 21 to 23.

Since no new cases of HPAI have been detected since June 17, Vilsack hoped for China to lower the restrictions on the importation of poultry. Rather than a nationwide ban, Vilsack hoped for restrictions to only be maintained from states or regions where actual infection had occurred. Vilsack commented on the proposal, saying that “International rules suggest a regional approach would be appropriate.”

Before the Joint Commission took place, Vilsack stated that he did not expect the ban to be lifted during the course of the Commission. At the time of this writing, the Commission meeting has concluded, but no information has been released regarding the status of China’s import ban.

U.S. Senators Seek HPAI Protections

Written by M. Sean High

On November 5, 2015, ten U.S. senators issued a letter to U.S. Department of Agriculture (USDA) Secretary Tom Vilsack regarding USDA’s development of its Fall 2015 Highly Pathogenic Avian Influenza (HPAI) Preparedness and Response Plan.  The ten senators signing onto the letter were: Thad Cochran (R-MS), Jeff Sessions (R-AL), David Vitter (R-LA), John Boozman (R-AR), Tom Cotton (R-AR), Richard Shelby (R-AL), Johnny Isakson (R-GA), Roger Wicker (R-MS), Bill Cassidy (R-LA), and David Purdue (R-GA).

According to the senators’ letter, three matters are of particular importance and should be addressed in the regulatory development process being conducted by USDA through its Animal and Plant Health Inspection Service (APHIS).

First, the senators stated that current APHIS regulations “do not allow for the splitting of indemnity payments between owners and growers.” As a result, the senators argue that many contract growers are left “vulnerable in the event of [an HPAI] outbreak.” In an effort to provide protection for these contract growers, the senators “request[ed] that [APHIS] allocate any future indemnity equitably so that producers can maintain access to financing in the short-term and the future.”

Second, the senators stated that current APIHS regulations only permit indemnity for losses associated with bird mortality and not for losses associated with disruptions in the supply chain.  Specifically, the senators stated that “[e]ven if the birds in a particular facility do not contract HPAI, that producer could be affected by a hatchery outbreak.” Accordingly, the senators requested that APHIS consider providing producers with “downtime compensation.”  

Third, the senators stated that “it is important for growers to have expanded financial flexibility” to avoid the possibility of HPAI induced foreclosures.  To accomplish this goal, the senators requested that USDA “direct the Farm Service Agency to begin developing guidelines for its direct and guaranteed loan programs that would enable existing loans to be restructured to provide flexibility for borrowers severely affected by HPAI.”   

Crop Insurance Update: Sign-up Deadline Looms for Rainfall Index Program

Written by M. Sean High

Pennsylvania beekeepers and pasture, rangeland and forage producers are reminded that November 15, 2015 is the sign-up deadline to be eligible for crop insurance under the Rainfall Index (RI) program.  Under RI, eligible apiculture, forage, and livestock producers are offered the ability to receive crop insurance protection for acreage devoted to grazing or hay production.    

RI is a group risk insurance policy that places enrolled acreage into designated areas known as “grids.” Using National Oceanic and Atmospheric Administration data, RI calculates each grid’s rainfall level and compares that level to normal/historical rainfall levels.  If a particular grid’s rainfall level falls below an established level, participating producers within the grid receive loss payments.  It is important to note that RI coverage is based upon the rainfall level of the entire grid and not upon the rainfall level or crop production of any individual producer within the grid.

Participation in RI is limited to perennial pastures, rangeland, and forage land only.  As a result, annual crops are not eligible for the program.

 

Additionally, land that is not suitable for grazing or hay production is not eligible for RI coverage.  Nevertheless, qualified farmers do have the ability to exclude their unsuitable land from RI and still receive coverage for their remaining eligible land.

More information regarding RI is available at: http://www.rma.usda.gov/policies/pasturerangeforage/ 

Crop Insurance Update: USDA Allows More Farmers to Exclude Bad Years

Written by M. Sean High

On October 20, 2015, the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced an expansion of the federal government’s crop insurance program. According to RMA, “[p] roducers of buckwheat, cabbage, extra-long staple cotton, processing beans, dry beans, flax, green peas, millet, mustard, pumpkins, silage sorghum, sugar beets, sweet corn in select counties will have the option to elect APH [Actual Production History] Yield Exclusion for the 2016 crop year.”

APH Yield Exclusion is a federal crop insurance option that gives farmers the ability “in exceptionally bad years (such as a year in which a natural disaster or other extreme weather occurs)” to exclude low crop yields from their production history for the purpose of calculating insurance coverage.  Under APH Yield Exclusion, crop years are eligible for exclusion “when the average per planted acreage yield for the county was at least 50 percent below the simple average for the previous 10 consecutive crop years.”

Because crop insurance coverage calculations are based on production history, lower actual yields could result in reduced insurance guarantees and smaller indemnity payments. Through APH Yield Exclusion, USDA seeks to avoid this problem by allowing eligible farmers the ability to exclude bad years from coverage calculations and thus receive greater levels of crop insurance protection. 

To receive APH Yield Exclusion, farmers must choose the option by the sales closing date of their insurance policy.  Once selected, APH Yield Exclusion will automatically continue until a farmer submits a request to end the coverage.  Furthermore, when the option is selected, “it will automatically exclude all eligible crops years from your actual production history database, unless [the farmer] specifically opt [s] out of the exclusion for a specific crop year.”    

More information regarding USDA’s APH Yield Exclusion program is available at:  http://www.rma.usda.gov/news/currentissues/aphye/    

USDA Reaches Agreement with China To Expand Pork Imports

Written by Katharine Richter

On October 30, 2015, the United States Department of Agriculture (USDA) announced China will soon resume imports from 14 U.S. pork plants and warehouses.  Last year China suspended shipments from the 14 U.S. pork manufacturers because the hogs used in these facilities were fed ractopamine, an additive which helps promote lean muscle growth in hogs.  China prohibits the import of hogs that have been fed this additive and bans facilities from importing to China when traces of ractopamine are detected.

According to an email Brownfield News received from the USDA, the agreement reached was “to resume pork export opportunities for 6 processing and 8 cold storage facilities.  U.S. facilities participating in one of USDA’s Ractopamine control programs, either the “Never Fed Beta Agonist” program or the Ractopamine- free program, will resume exports shortly.”  These programs are administered by the USDA and used to verify that livestock has never been fed ractopamine. 

According to the USDA e-mail, “U.S. pork exports to China were valued at more than $474 million in 2014.  China is the world’s top consumer of pork and China imports more pork than another other country.”  The lifting of the restrictions on the 14 companies is expected to help increase U.S. pork exports and cause a significant sales boost.

Crop Insurance Update: USDA Grows Crop Insurance Supplemental Coverage Option

Written by M. Sean High

On October 20, 2015, the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced an expansion of the federal government’s crop insurance program. According to RMA, beginning with the 2016 crop year, the crop insurance program’s Supplemental Coverage Option (SCO) will now be made available in select counties “for buckwheat, sweet corn, extra-long staple cotton, cucumbers, processing beans, dry beans, flax, silage sorghum, green peas, various hybrid seeds, millet, mustard, peanuts, popcorn, pumpkins, sesame, sunflowers, and sugar beets.” The inclusion of these newly eligible crops is in addition to the thirty-three crops previously approved for SCO protection for the 2016 crop year.

SCO is a crop insurance option that is intended to provide agricultural producers with an extra layer of risk management protection by providing coverage for a portion of an underlying crop insurance policy deductible.  When available, SCO may be purchased as an endorsement to a crop insurance policy for Yield Protection, Revenue Protection, Revenue Protection with the Harvest Price Exclusion, or Actual Production History.  

Accordingto UDSA, “[t]the amount of SCO coverage depends on the liability, coverage level, and approved yields for your underlying policy.”  Importantly, USDA notes that “SCO differs from the underlying policy in how a loss payment is triggered.  The underlying policy pays a loss on an individual basis and an indemnity is triggered when you have an individual loss in yield or revenue.  SCO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue.”

Interested agricultural producers must select SCO “by the sales closing date… [of] the underlying crop insurance policy” and may only purchase the additional coverage from the same company providing the underlying crop insurance policy.  Significantly, if selected as part of a federal crop insurance policy, “[t]he Federal Government [will pay] 65 percent of the premium cost for SCO.”

Additional information regarding SCO can be found at: http://www.rma.usda.gov/news/currentissues/sco/index.html 

APHIS Deregulates Genetically Engineered Monsanto Corn

Written by Katharine Richter

On October 27, 2015, the United States Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) issued a notice in the federal register of its decision to deregulate a genetically engineered corn created by Monsanto Company.  The corn is engineered to protect against rootworm and for resistance to the herbicide glyphosate. 

Under 7 CFR part 340, APHIS is authorized to regulate genetically modified products that are plant pests or there is reason to believe they may be plant pests and are considered “regulated articles.”  Significantly, 7 CFR § 340.6(a), allows for the submission of a petition to APHIS which can have the product removed from regulated status. 

Accordingly, Monsanto sent in a petition for the deregulation of corn variety they designated as MON 87411.  Based on Monsanto field studies and laboratory analyses, Monsanto concluded MON 87411 should not be considered a plant pest under § 340.  APHIS conducted a plant pest risk assessment (PPRA) and environmental assessment (EA), and based upon its findings concluded the new corn strain was unlikely “to pose a plant pest risk to agriculture and other plants in the United States,” and “deregulation is not likely to have a significant impact on the human environment."

USDA AMS Launches Investigation Into Egg Board Dealings

Written by Katharine Richter

On October 20, 2015, Senator Mike Lee (R-UT), the chairman of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, “sent a letter to Agriculture Secretary Tom Vilsack…calling for an investigation into the American Egg Board (AEB).”  The allegation levied against the board involves an anti-competitive campaign aimed at eliminating a non-egg mayonnaise from Whole Food’s shelves. The United States Department of Agriculture (USDA) Agriculture Marketing Services (AMS) is currently investigating whether federal laws or administrative regulations have been violated. 

The AEB is part of the USDA AMS “check-off” program, which was created in 1937 and is designed to “promote and provide research and information for a particular agricultural commodity.”  According to Senator Lee’s letter to Vilsack, information obtained under the Freedom of Information Act has led to acquiring 600 pages of correspondence which suggest that the AEB staff and USDA officials may have used their power and resources to target Hampton Creek, a producer of vegan mayonnaise.  The aim was to “reduce marketplace demand” for the product because of concerns of the impact on the egg industry.

According to Senator Lee’s letter, the AEB may have violated a law which states that funds received may not be for political purposes.  Further, the USDA AMS issues guidelines that “forbid any advertising considered disparaging or those that depict other commodities in a negative or unpleasant light via either over or subjective video, photography, or statements.”

According to agri-pulse, the USDA review “involves a substantial amount of material and while AMS expects to complete the review in an expeditious manner, a complete review will take some time.”  

USDA to Invest $30 Million to Protect Wetlands

Written by Tyler R. Etter

On October 15, 2015, Ag Secretary Tom Vilsack announced that the United States Department of Agriculture (USDA) will invest $30 million across six states to aid in the protection and restoration of wetlands. The funding stems from the Westland Reserve Enhancement Partnership (WREP) that is authorized by the 2014 Farm Bill.

WREP, which is administered by the Natural Resources Conservation Service (NRCS), allows local governments, NGOs, and American Indian tribes to collaborate with NRCS through cooperative and partnership agreements. These partnerships work with tribal and private landowners to enroll eligible land into easements to protect, restore, and enhance wetlands on the property.

The states chosen for the funding for 2015-2016 are Iowa, Kentucky, Mississippi, Missouri, Nebraska, and Tennessee. Information on the individual projects to be funded can be found on the USDA news release linked above. The investment adds to the over $330 million the USDA announced for the 2015 fiscal year dedicated to the protection and restoration of agricultural working lands, grasslands, and wetlands.

USDA Motion to Dismiss Granted In Organic Case

Written by Katharine Richter

On October 9, the United States District Court of Northern California ruled in favor of the United States Department of Agriculture (USDA) motion to dismiss a complaint brought against them by the Center for Food Safety (CFA) and other consumer groups.  The groups had claimed the USDA did not issue a proper notice and comment period regarding a new review process for certified organic foods.

The complainants originally filed on September 16, 2013.  The USDA was seeking to revise which “substances may be used in food certified as ‘organic’ under the Organic Foods Production Act (OFPA).”  Under the act, there is a 15 member board called the National Organic Standards Board (NOSB), which determines what substances can be used in products and considered “organic” for labeling purposes.  USDA proposed a new framework that would alter the review process from requiring a two-third vote for renewal of allowable substances. to now requiring all members of the group to remove the substances from the allowable substance list. 

The Court found the plaintiffs lacked standing because they had failed to show the new review procedures would cause them any concrete harm.  The complainants will have 21 days to file an amended complaint.

Lawsuit Against USDA Compost Policy Allowed to Continue

Written by Tyler R. Etter

On September 29, 2015, a California federal court denied the USDA’s motion to dismiss the lawsuit
brought by the Center for Food Safety, Center for Environmental Health, and Beyond Pesticides. The
lawsuit is challenging a USDA guidance that recognized the presence of synthetic pesticides in compost
used for organic food productions.

The plaintiffs asserted that the USDA guidance effectively allows certified organic producers to use
compost materials treated with synthetic pesticides, amending existing organic food regulations. They
also argued that the guidance violates the produces for public notice and comment, as the guidance was
issued without an opportunity for public input. The USDA argued the requirement did not apply, as the
guidance was not a legislative rule. Magistrate Judge Jacqueline Scott Corley found merit in the
plaintiffs’ arguments, specifically within the context of the premium paid by consumers and farmers to
ensure that organic produce avoids synthetic pesticides.

Prior to the release of the guidance, synthetic substances were expressly prohibited from compost used
in organic food production. Ralph Bloemers, attorney for the Crag Law Center, stated that the guidance
“radically changes organic requirements...” and that the USDA “made the change without the required
rulemaking process.”

Proponents of the lawsuit are calling the denial of the motion to dismiss a major victory for public input
in the organic policy process, and believe that the USDA must facilitate public input to ensure the
integrity of the process.

First Avian Influenza Vaccine Granted Conditional License

Written by Tyler R. Etter

On September 21, 2015, an Ames, Iowa vaccine producer, Harrisvaccines, announced that the United States Department of Agriculture (USDA) granted a conditional license to the producer’s Avian Influenza vaccine. This vaccine is the first Highly Pathogenic Avian Influenza (HPAI) vaccine to receive a conditional license since the outbreak began last spring.

The vaccine utilizes SirraVax technology, which will allow for rapid updates to current and future strains of HPAI. This technology is a critical step for the implementation of any vaccine strategy. It is important to note that the USDA must first grant its authorization before the vaccine can be distributed to producers. The USDA is currently seeking to create a stockpile of vaccines in the event of an outbreak this fall.

Although many producers will welcome a vaccine if offered, there are concerns by broiler producers about the impacts on export markets if a vaccine is used. However, the CEO of Harrisvaccines, Frank Harris, believes the vaccine will be an essential tool for eradication efforts that may alleviate the concerns of foreign trading partners.

A conditional license is usually granted in the event of an emergency or to address an unmet need. Such a product must show a reasonable expectation of efficacy, safety, and potency. Further testing is ongoing. Harrisvaccines has received USDA licensure in the past for Porcine Epidemic Diarrhea Vaccine, RNA (June 2014), Swine Influenza Vaccine, RNA (September 2012), and Autogenous Vaccine, RNA for Rotavirus C (January 2013).