Policy Updates and Issue News August 2016

August 31, 2016

NOT YOUR USUAL WASHINGTON

Congress returns to Washington Tuesday, September 6 after a two-month-long recess. Funding the federal government for FY ’17 (begins October 1) will be the top priority. It may become one of the few priorities before Congress adjourns again September 30 to campaign for elections November 8. This is an election year for President, a third of the Senate and the entire House of Representatives. In addition, politicians at all levels are campaigning rather independently of a party or legislative body umbrella. Politicians have no appetite for politically hard votes before Election Day.

FOOD AND AGRICULTURE

Dairy Industry Aid

In early August, National Grange President Betsy Huber wrote Secretary of Agriculture Vilsack, urging him to use his existing statutory authority to provide emergency assistance to U.S. dairy farmers by removing surplus supplies. The market glut has been caused by a dramatic drop in dairy exports, increased milk production in Europe and overexpansion of the dairy herd here at home. In late August, Vilsack announced a $20 million purchase of approximately 11 million pounds of cheese. In the meantime, eligible dairy producers received $11.2 million in margin payments authorized by the Farm Bill. More dairy product purchases are possible in coming months.

GMO Label Regulations

Without additional manpower or funds, USDA is nevertheless moving as quickly as it can to produce federal regulations to implement the new law. That’s important because Secretary Vilsack is well-versed in all the negotiations over the last two-and-a-half-years that finally came to agreement on the compromise law. The new team arriving at USDA in January (no matter who wins the White House) will have to be brought to speed and that will take more time.

The USDA announced approval of new Non-GMO labels in August as a result of the recently enacted law. The new label will allow meat, poultry and egg products to use labels such as “contains no GMO ingredients” or “derived from (product) fed no GMO feed”.

Preparing for the Next Farm Bill

Preparation for the 2018 Farm Bill will begin in earnest next year. American agriculture is diverse along geographical and commodity lines; each must strive for what’s best for its own constituency. Yet agriculture tends to unite around around a few overarching issues like factual, scientific and coordinated regulatory policy, fair trade policy, biotechnology and farm labor. Conservation programs and safety net commodity price safety nets are popular but enjoy less consensus on programs specifics. At the individual farmer level however, no issue is more important or a higher priority than crop insurance to cushion the boom, bust and disaster cycles. Interestingly, Benjamin Franklin first raised the insurance concept in 1788 saying, “I have sometimes thought it might be well to establish an office of insurance for farms against the damage that may occur to them from storms, blights, insects, etc. A small sum paid by a number would repair such loses and prevent much poverty and distress.”

HEALTHCARE

Signs of Affordable Care Act Meltdown in Southern and Rural Areas?

The next President will take office just as the latest ObamaCare open enrollment tally comes in. The ACA has struggled for several years to bring young, healthy people into the plan to offset the medical cost of older and sicker customers. Several insurers say they’ve lost enough and are leaving the exchanges. Others are proposing substantial rate increases to make up for higher recent medical costs. The average rate increase for next year is anticipated to be around 9%, although some insurers will charge more in some states.

Four States See Hefty Rate Increases; Five States Reduced to One Insurer; Rural America Hit Hardest

The price increase sticker shock will slam four states. In Tennessee, Blue Cross Blue Shield with 83 percent of enrollees will raise prices 62 percent. Illinois, covered by another BlueCross Blue Shield plan, will increase rates 51 percent to its 82 percent of the state’s market enrollees. Anthem Blue Cross Blue Shield in Kentucky covers 78 percent of enrollees and expects to charge 23 percent more while Humana with 27 percent of Georgia’s enrollees has been approved to hike rates 67 percent.

Five States, (Alabama, Alaska, Oklahoma, South Carolina, Wyoming) and 664 counties will be down to one health insurer in the marketplace next year. Humana and UnitedHealthCare left Alabama, Aetna and UnitedHealthCare exited South Carolina and UnitedHealthCare departed Oklahoma. Of the 664 counties expected to have only one insurer, 70 percent are considered rural.

Medicare Part D Prescription Drug Program Survey Shows Satisfaction

Medicare Today’s 2016 senior satisfaction survey indicates seniors remain satisfied with their Part D coverage. Key senior survey findings include:

• 92 percent reported their plan is convenient to use
• 88 percent are satisfied with their prescription drug coverage
• 86 percent said their plan works well and without hassle
• 84 percent reported it was important to have a variety of plans to compare and choose from
• 80 percent reported their plan is a good value

TELECOMMUNICATIONS

Rural Electric Cooperatives Model Revisited

Electric Cooperatives have powered and empowered economic development in rural America since the Great depression. As rural residents and businesses struggle to gain access to high speed broadband internet connectivity, localities are taking a fresh look at the infrastructure of rural electric cooperatives. The FCC has begun issuing experimental broadband grants to alternative carriers such as like electric companies. The electric companies then use techniques and infrastructure that’s been in place for nearly a century to provide fiber-based internet cables to less-served and remote areas.

Innovators Extend Cable’s Reach

The lack of broadband access prevents farmers and rural businesses in regional internet deserts from using technologies some of their close-to-town competitors have adopted. Telematics is a prime example. If you have no internet, you can’t wirelessly transmit data from the field to the office and vice versa. Farmer/entrepreneurs are working on ways to cross this internet divide. First, they bring a fiber optic line to the farm. Next, an omnidirectional antenna is placed on a tall pole. Then mobile units are placed on farm vehicles to capture signals from the antenna and establish a network among themselves and the office.   One drawback is that these systems are line-of-sight so signals are lost over the horizon or behind obstructions.

Appalachian Main Streets Get Broadband

Broadband service will be coming to 10 small towns in six Appalachian states. The program, “Cool and Connected” , is sponsored by USDA, EPA and the Appalachian Regional Commission. Teams of experts will help the communities develop action plans for using broadband service to create economically vibrant main streets and small town neighborhoods.

Free Market Versus Free-Reign Networks

In August, the Sixth Circuit Court of Appeals upheld state laws in North Carolina and Tennessee that restrict the spread of municipal-owned broadband networks. These internet providers generally have increased competition in broadband markets where commercial networks have been unwilling to go. In many instances, municipal networks have expanded into surrounding rural areas to provide a service that would otherwise be unavailable. However, North Carolina and Tennessee say the laws protect taxpayers and maintain free market fairness. In some regions of the country, public broadband projects proved to be unsuccessful and became a financial burden on taxpayers. While the court decision directly affects only two states, it casts a shadow over numerous other municipal broadband projects nationwide. Rural broadband availability remains a top priority for the National Grange as it strives to help sort out the complex conflicting issues of expansion.