Written by:
M. Sean High—Staff Attorney
Audry Thompson—Research Assistant
The following information is an update of recent
local, state, national, and international legal developments relevant to
agriculture:
Checkoff
Programs: Court Dismisses Challenge Regarding Use of Pork Checkoff Funds
On August 23, 2019, the U.S. Court of Appeals,
District of Columbia Circuit dismissed a lawsuit alleging that the government improperly
used funds collected under the pork checkoff program (Humane
Society of the United States v. Perdue, No. 18-5188). Under the Pork Promotion, Research, and
Consumer Information Act, the government may collect “assessments” from
producers for the purpose of "strengthen[ing] the position of the pork
industry in the marketplace." Known
as “checkoffs,” these assessments are paid by producers to the National Pork
Board (Board) who in turn uses the funds for pork “promotion, research, and
consumer information plans and projects."
In 2006, the Board used checkoff funds to purchase four
trademarks—relating to the advertising phrase: “Pork: The Other White
Meat”—from the private lobbying organization the National Pork Producers
Council (NPPC). Under the terms of the
agreement, the Board agreed to pay NPPC $3 million per year for twenty years
with an option to cancel. In 2011, the
Board discontinued use of three of the four trademarks but continued to pay
NPPC the full $3 million per year fee.
Subsequently, in 2012, pork producer Harvey Dillenburg, the Humane
Society of the United States, and Iowa Citizens for Community Improvement,
filed suit alleging that the Board’s contract with NPPC impermissibly diverted
checkoff funds for NPPC’s lobbying activity.
The court determined that the plaintiffs provided “no evidence that the
Board's alleged misuse of checkoff funds caused them to suffer an injury in
fact,” and as a result, dismissed the case “for lack of standing.”
WOTUS:
Georgia Court Returns 2015 WOTUS Rule to Federal Agencies
On August 21, 2019, the U.S. District Court for the
Southern District of Georgia remanded the 2015 “Waters of the United States”
(WOTUS) rule back to the U.S. Environmental Protection Agency and the U.S. Army
Corps of Engineers (the Agencies) for further proceedings (Georgia v. Wheeler, No. 2:15-cv-00079). Additionally, the court left in place a
preliminary injunction against the 2015 WOTUS rule in Alabama, Florida,
Georgia, Kansas, Kentucky, South Carolina, Utah, and West Virginia pending
those proceedings. Currently,
the 2015 WOTUS rule is in effect in 22 states (plus the District of Columbia
and the U.S. territories), not in effect in 27 states, and under federal court
consideration in New Mexico. According
to the court, the 2015 WOTUS rule impermissibly extended the authority granted
to the Agencies “beyond the limits of the [Clean Water Act], and thus is not a
permissible construction of the phrase ‘waters of the United States’ within the
statute.” Additionally, the court held “that
the Agencies’ promulgation of the WOTUS Rule violates the [Administrative Procedure
Act’s] procedural requirements.” The
court stated that it chose not to vacate the WOTUS rule because “administrative
efforts are already underway to repeal and replace the WOTUS Rule with a new
rule that abides by both statutes” and that such an order could “cause
disruptive consequences to the ongoing administrative process.” For more information on the 2015 WOTUS rule
and EPA’s proposed rule to revise the rule’s definition of WOTUS, see the
January 9, 2019 Agricultural Law in the Spotlight article entitled: U.S.
EPA and Army Corps of Engineers Issue Proposed Revised Definition of “Waters of
the United States.”
Agricultural Finance: President Signs
Legislation to Permit More Chapter 12 Bankruptcies
On August 23, 2019, President Donald Trump signed
legislation increasing the Chapter 12 Bankruptcy operation debt cap limit from
$3,237,000 to $10,000,000 (H.R.
2336 (116)). Under Chapter
12,
qualifying “family farmers” experiencing financial difficulties are provided
with the ability to establish plans to repay parts or all of their debts.
Through increasing the debt cap limit, the legislation, known as the Family
Farmer Relief Act of 2019, allows more farmers to qualify for Chapter 12
Bankruptcy. According to American Farm
Bureau Federation President Zippy Duvall, the change to the bankruptcy code
“will help family farmers reorganize after falling on hard times.” Duvall further stated that “[w]hile this is a
sobering reflection of the current state of the agricultural economy, we are
grateful to Congress, the President and his administration for their
prioritization of reforming our current bankruptcy laws.”
International
Trade: President Trump Announces Trade Agreement with Japan
On August 25, 2019, U.S. President Donald Trump and
Prime Minister of Japan Shinzō Abe announced
that a trade agreement has been reached in principle between the two
nations. Known as the Japan-U.S.
agreement, the trade deal involves agriculture, industrial trade, and digital
trade and reduces both tariff and non-tariff barriers to the Japanese market. Currently, Japan is the third largest market
for U.S. agricultural products importing $14 billion of such goods
annually. Under the new agreement, it is
anticipated that Japan will import an additional $7 billion of U.S.
agricultural products. The two leaders
stated that a finalized agreement will be signed in September 2019 around the
time of the upcoming United
Nations General Assembly meeting in New York City.
International Trade: USDA Details Trade
Damage Estimate Calculations
On August 23, 2019, U.S. Secretary of Agriculture
Sonny Perdue announced
a publication by the U.S. Department of Agriculture (USDA) Office of the Chief
Economist detailing
the methods used by USDA to calculate economic losses
from trade disruptions, which were then applied to compensate farmers in the Market Facilitation
Program and Food
Purchase and Distribution Program. USDA determined
the “economic loss” of a particular county by the “gross trade damages”
suffered, which were defined as “the total amount of expected export sales lost
to the retaliatory partner due to the additional tariffs.” These losses were
estimated by subtracting the “bilateral trade with the tariff” from the
“baseline,” or trade without the tariff. These “estimated gross trade
damages” were then “divided by the average volume of production” during
2015-2017, as reported by the National Agricultural Statistics Service, to form
the specific commodity rates which were then used to determine the county rates
used for payments. USDA asserts that this same approach has been used in the
adjudication of trade dispute cases in the World Trade Organization.
Food Policy: USDA Announces Clarifications
to SNAP Requirements
On August 21, 2019, USDA’s Food and Nutrition Service
(FNS) announced
two new rule clarifications intended to “enable states to leverage modern
technologies in their efforts to deliver Supplemental Nutrition Assistance
Program (SNAP) benefits.” Based on the success of several pilot projects,
FNS will no longer require states to obtain Federal approval to provide
third-party identity
authentication services as an option for SNAP applicants
to verify their identity. Additionally, FNS specified that “third-party payroll
sources, such as The
Work Number, can be used” to certify income and
employment information supplied by households. The clarifications specify
that, when adopting these procedures, states are still accountable for
“complying with federal laws and protecting applicant rights.”
Pesticides: EPA Opens Public Comment
Period for Pesticide Use on Hemp
On August 21, 2019, U.S. Environmental Protection
Agency (EPA) Administrator Andrew Wheeler announced
the opening of a 30-day
public comment period on ten applications from Agro Logistic Systems,
Inc., Marrone Bio Innovations, and Hawthorne Hydroponics LLC to include hemp as
a site on the labeling of currently registered pesticide products. EPA
has already “established tolerance exemptions” for “residues in or on all raw
agricultural . . . commodities” from the active ingredients in these pesticides
and deemed them safe “under any reasonably foreseeable circumstances.”
Because the agency does not perceive the “patterns of use” of the pesticides to
change with use on hemp, EPA is not formally required to provide a
notice-and-comment period for the applications.
Although the agency does not plan to continue such notification for
future similar applications, EPA acknowledges the potential public interest in
these early applications and is providing the notice-and-comment period to
“enhance transparency.” EPA predicts it will arrive at a decision
regarding the pesticide use “on hemp before the end of 2019 to help growers
make informed purchasing choices for the upcoming growing season.”
Crop
Insurance: USDA Offers Hemp Crop Insurance Coverage for 2020
On August 27, 2019, the U.S. Department of
Agriculture’s Risk Management Agency announced
that qualifying industrial hemp growers will be eligible for crop insurance
coverage for the 2020 crop year. Issued
under the Whole-Farm Revenue Protection program, the insurance will cover “hemp
grown for fiber, flower or seeds” and will be offered “to producers who are in
areas covered by USDA-approved hemp plans or who are part of approved state or
university research pilot programs.”
Interested individuals can find more information regarding crop
insurance coverage for industrial hemp at the Hemp and Farm Bill Programs webpage on farmers.gov.
From
National Ag Law Experts:
“Family
Law Issues with Agriculture: Estate and Succession Planning”,
Cari Rincker, Rincker Law Blog – Rincker Law PLLC (August 23, 2019)
“Court
Determines Meaning of ‘Oil and Gas’ in Century-Old Pipeline Easement”,
Tiffany Dowell Lashmet, Texas Agriculture Law Blog – Texas A&M AgriLife
Extension (August 12, 2019)
Federal
Actions and Notices:
Environmental Protection Agency
Executive Office for Immigration Review
Food Safety and Inspection Service
Pennsylvania
Actions and Notices:
Department of Environmental Protection
State Conservation Commission
Pennsylvania
Department of Agriculture:
Penn
State Research:
“Foodborne
pathogen sheltered by harmless bacteria that support biofilm formation”
– Penn State News
AgLaw HotLinks:
“USDA
said states can't block hemp drivers. So what happened in South Dakota?”
– Duluth News Tribune
“USDA
invests in energy efficiency to help farmers” – Morning AgClips
“’Mozzarella’
Protected for Global Cheese Use” – Food Navigator
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