Policy Updates and Issue News May 2019

Congress returned to Washington June 3 from a week-long Memorial Day recess.  We held this report to see if the House could pass the disaster bill which it failed to do prior to leaving for recess. They did and we have the details. Spring planting fell behind in the rain and storms of May.  By the end of May, plantings were 32% behind normal.  Late plantings usually favor soybeans over corn the later the season becomes. A new round of trade assistance to producers impacted by retaliatory tariffs was announced amid threats to Mexico.  WOTUS takes a hit in court.  HHS abandons harmful “step therapy” proposal.  Surprise medical bills get Hill attention.

Presidential campaign politics are already heating up a little earlier than normal this year.  That’s partly because of the huge field of Democratic hopefuls this primary season. Candidates have to do everything possible to get noticed even if it’s a little crazy.  Look at the candidates’ web sites for their policy positions on the issues important to you.  You might be surprised….both good and bad.

Disaster Aid

The House overwhelmingly passed the disaster aid bill that had been debated for six months.  The Senate previously passed the $19.1 billion disaster relief bill containing aid for agriculture and rural disaster losses.  The legislation had been stalled in the House by several members objecting that it did not contain “pay-for” provisions nor did it contain $4.4 Billion the President requested for border security.  This delay followed a previous delay of a month on the Senate side because of disagreements over funding for Puerto Rico and border security.  The package includes $5.5 billion in agriculture assistance to cover a wide array of producer loses from hurricanes, tornadoes, floods, fires, snowstorms and other natural disasters dating back to early 2018.  Included were coverage for prevented planted acres, a provision ensuring industrial hemp will be eligible for crop insurance, and funds to help landowners restore culverts, stream banks, levees, forests and other infrastructure.

WOTUS Takes Another Hit

The 2015 Waters of the United States regulation that farmers, ranchers, landowners and many others have fought fiercely to overturn took a recent hit when the US Court for the Southern District of Texas ruled that the federal agencies violated basic requirements of fair process by issuing the rule without first releasing for comment a key report that was the basis for many of their most controversial decisions.  The EPA and Corps of Engineers are currently working on a replacement regulation that better fits congressional intent and definitions established by the Clean Water Act.

“Best if Used By” Labels Cut Food Waste

FDA has endorsed food company efforts to standardize voluntary date labeling to indicate quality and freshness across all food categories.  The current “sell by” date on food packages is an indication of freshness and is not meant to indicate the food should not be eaten after that date.  However, it is confusing to consumers.  Confusion about date labeling accounts for approximately 20 percent of consumer food waste.  Over 85% of consumers surveyed said the streamlined dates were clear and helpful to them.

What Does Local Food Mean?

Apparently consumers haven’t a clue.  According to Neilson researchers, 46% of grocery shoppers say they are aware of the importance of buying local.  But when shoppers are asked to define local food, their perceptions of local food were all over the place.  Most respondents said eggs, baked goods and produce should come from the same general area as the store.  Dairy, deli and meat were considered local if they came from within the state. Consumers said frozen foods, seafood and packaged goods are local if they come from within the U.S.

Final Medicare Rule Abandons “Step Therapy”

The Department of Health and Human Services has withdrawn two proposals that would have been harmful to Medicare Part B and Part D patients. The agency will prohibit the use of step therapy for patients who are stable on their current treatment. Step therapy would have denied the patients with serious illnesses access to newer and more effective drugs until the patient’s current medication failed.  The agency also says it will not weaken safeguards for vulnerable patients covered by the “six protected classes” of serious therapeutic concern (serious treatments such as oral chemotherapy drugs).  This is good news; the National Grange has been deeply involved with both these issues.

Surprise Medical Bills

Patients are reporting dramatic increases in exorbitant prices for medical treatment.  These surprise bills and high charges stem largely from hospitals or emergency medical facilities which are not in the patient’s insurance network. Surprise charges are most often for physicians (53%), followed by laboratory tests (51%), hospitals or medical facilities (43%), imaging (35%), and prescription drugs (29%) according to research by the University of Chicago.  A bipartisan group of senators led by Louisiana Senator Bill Cassidy (a physician) is working on a legislative package to protect patients.  The National Grange is strongly supporting their efforts.

FDA Guidance Needed on Hemp and CBD

The extract of industrial hemp is cannabidiol or CBD oil.  It has been hailed as a cure for just about everything that ails a person.  Production of hemp was legalized in the recent farm bill to be grown as an agricultural crop. The catch is that FDA has not formally approved CBD as a medication or food supplement.  USDA wrote a legal opinion in May that the farm bill language removed hemp from the Controlled Substances Act and prevented states from prohibiting interstate shipment of hemp legally produced under permit.  The catch is that FDA has not formally approved CBD as a medication or food additive nor identified the potential risks and benefits associated with CBD.  Both USDA and FDA are working on clarifying regulations.  In the meantime, the industry will have to deal with a confusing patchwork of state rules.

Mixed Reviews on Rural Broadband Deployment

The good news is that fixed broadband reached an additional 4.3 million rural residents in 2017.  The bad news is that 21.3 million still lack broadband service according to the Federal Communications Commission.  The report states that fixed and mobile services are substitutable for many residents and broadband providers of both services are competing for customers.  Challenges to the accuracy of FCC broadband deployment maps have been raised and the challenge process has not yet concluded.  Higher speed (250Mbps/25Mbps) broadband service to rural Americans increased by 81.5 percent in 2017.  Rural broadband deployment is a top priority for the National Grange.

Congress Must Reauthorize the Satellite Act

The National Grange is urging Congress to reauthorize the Satellite Act that is set to expire at the end of 2019.  Satellite is the only viable technology that allows many rural communities consistent access to programming at a fair price.  The Act preserves the ability of providers to import distant signals to underserved households without the threat of fee disputes or suspension of certain channels without notice.  Many rural communities still depend on satellites for news, sports, entertainment and other programming.

Mexico Threatened with New Tariffs

Keeping up with trade issues these days is like watching the trading board of a stock exchange.  Within days of dropping steel and aluminum tariffs on Canada and Mexico, the President has threatened to reinstate a new 5 percent tariff on all Mexican goods beginning June 10.  The rate will go up 5 percent per month until Mexico complies with his latest effort to force Mexico to clamp down on Central Americans crossing Mexico to get into the U.S.  A new trade war with Mexico would hit American agriculture hard economically with the loss of a major pork, poultry, wheat and dairy export market.  The move raises new fears that new tariffs could jeopardize the chance for Congress to ratify the U.S Mexico-Canada trade agreement.

Trade Aid

In late May, the USDA announced it would make up to $16 billion available in a second trade assistance package  for programs to help producers most impacted by retaliatory tariffs on U.S. agricultural goods and other trade disruptions.  Payments will be made in three tranches, with the second and third tranches evaluated as market conditions and trade prospects dictate.  These Market Facilitation Program (MFP) payments will be based on commodity prices, production, acres and county averages, depending on the specific commodity produced.  More specific details have yet to be announced by USDA.