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Keith Good: EPA’s New Proposal ‘Does Not Expand Clean Water Act’

Mike Christensen
By Mike Christensen March 26, 2014

EPA Water Issues

DTN writer Todd Neeley reported yesterday that, “Though U.S. agriculture groups have feared an expected expansion of the Clean Water Act for nearly three years, some 53 conservation practices would for the first time be exempt and previous agriculture exemptions from the law would stay in place in a newly proposed rule announced Tuesday by EPA.

“EPA Administrator Gina McCarthy told reporters that critics of the proposal may be pleasantly surprised by what they find in the rule, which will trigger a 90-day comment period once published in the Federal Register in the next few weeks. McCarthy said she believes the new rule will improve the Clean Water Act and reward farmers and other landowners for long-standing conservation practices.” (The proposal can be viewed here).

Mr. Neeley explained that, “U.S. Supreme Court rulings in 2001 and 2006 brought into question which waters EPA could regulate. The court ruled EPA needs to prove a ‘significant nexus’ or connection to jurisdictional waters by tributaries and other waters in order to regulate those waters.

“Farm groups have feared that the proposed rule would give EPA authority to regulate tributaries, streams and other intermittent water bodies on U.S. farms. McCarthy said the rule will require a body of impounded water such as a pond to have a link, or nexus to a stream or river.”

Yesterday’s DTN article noted: “‘To be considered jurisdictional you must have a significant nexus. We have to show that a pond or wetland significantly affects other jurisdictional waters. This does not expand the Clean Water Act. It does not protect any new types of waters not covered by the Clean Water Act. This is simply not the case,’ McCarthy said.

“‘This rule will not regulate ground water or tile systems. It keeps intact exemptions and it expands exemptions. These practices will be familiar to farmers.'”

Mr. Neeley pointed out that, “For those practices on the farm not exempted from the Clean Water Act, farmers still must seek permits to conduct certain work that leads to the release of fill and dredge into waters of the U.S.”

Juliet Eilperin and Darryl Fears reported yesterday at The Washington Post Online that, “The question of which isolated streams and wetlands qualify for protection under the Clean Water Act has been in dispute for a decade. The Supreme Court has issued two decisions, and the George W. Bush administration issued guidance in 2003 and 2008 limiting the scope of the act. The Obama administration delayed issuing a rule on the matter during its first term in part because of fierce objections from business interests.”

The Post article stated that, “Jo-Ellen Darcy, the assistant secretary of the Army civil works, which worked with the EPA in writing the proposal, also sought to reassure opponents, asserting that they worked with the Agriculture Department in its development.

“‘In the last three years, this has been an unprecedented undertaking for the two agencies,’ Darcy said. She said some farming practices over that time actually helped improve water quality, and those were taken into consideration.”

Alicia Mundy reported yesterday at The Wall Street Journal Online that, “Paul Schlegel, American Farm Bureau Federation environmental and energy policy director, questioned whether the EPA has the authority to impose the rules. ‘The EPA is pushing the limits of what it can do,’ he said.”

The Journal article stated that, “Lawmakers have indicated they would attempt to stop the EPA’s effort. Sen. David Vitter (R., La.), the top Republican on the Senate Environment and Public Works Committee, said the EPA was undertaking ‘one of the most significant private-property grabs in U.S. history’ that would ‘give the federal government outright permitting authority over virtually any wet area in the country.’

“Sen. Mary Landrieu (D., La.), the new chairman of the Energy Committee, also criticized the proposal. ‘I will work with colleagues on both sides of the aisle to find a legislative solution to reverse this unfair, unwise and unnecessary decision,’ she said in a statement.”

Senate Ag Committee Ranking Member Thad Cochran (R., Miss.) indicated yesterday that, “‘Over the past five years the EPA has demonstrated a willingness to expand its regulatory reach, ignore common sense and, at times, exceed any rational reading of the law.  Its actions have increased the regulatory burdens and costs on farmers, ranchers, businesses and other job creators,’ Cochran said.  ‘Stakeholders in Mississippi and elsewhere should take a very close look at this latest EPA regulatory effort.'”

Rep. Sanford D. Bishop, Jr. (D., Ga.) noted yesterday that, “I believe that regulations should be put to three basic tests: (1) be based on a cost-benefit analysis; (2) be based in sound science; (3) and be based on plain common sense. In this light, I have concerns as to the impact the EPA’s new proposed regulations of streams and waterways under the Clean Water Act will have on America’s farming communities, businesses, and others whose livelihoods depend on available water resources.”

Rep. Randy Neugebauer (R., Tex.) noted in part yesterday that, “‘This is a power-grab, plain and simple,’ Neugebauer said.  ‘The EPA’s role is to ensure the federal government and states are working together efficiently to reduce pollution in our nation’s waterways.  This rule goes far beyond that.  EPA is giving itself permission to regulate anything from runoff ditches to stock ponds.'”

Chandler Goule, the senior vice president of programs at National Farmers Union (NFU) noted yesterday that, “Today’s ag-friendly announcement clearly indicates that NFU and other agricultural stakeholders made their voices heard, and EPA took notice. I encourage EPA to continue to rebuild trust with the agricultural community by withdrawing its proposal to reduce the Renewable Fuel Standard targets.”

An update yesterday from the National Cattlemen’s Beef Association (NCBA) stated that, “‘This is a step too far, even by an agency and an administration notorious for over-regulation,’ said NCBA President Bob McCan, Victoria, Texas cattleman.”

Farm Bill- Policy

Yesterday, Kevin Concannon, USDA Under Secretary for Food, Nutrition, and Consumer Services, testified at the House Appropriations Agriculture Subcommittee.

Subcommittee Chairman Robert Aderholt (R., Ala.) stated at the hearing:  “Let me start out with LIHEAP and SNAP.  We’ve all seen the news articles citing that seven states or more will be circumventing the intent of Congress to close the loopholes between LIHEAP and SNAP.  My first question would be is the department reviewing state actions in response to the farm bill to see how LIHEAP funds are being used in connection with SNAP for those 16 states that use the heat and eat practice?”

Mr. Concannon noted that, “With the passage of the farm bill, one of the earliest communications that I sent out to states specifically referenced the LIHEAP provision in the farm bill, or in the Agriculture Act of 2014.  We repeated basically the language that Congress passed in the bill.  It basically said states, if they were to rely upon the LIHEAP provision, would need to spend at least $20 per person per year.  We did not urge states to do so, we didn’t urge states to not take advantage of that.

“States subsequently, governors–I worked for governors for 30 years directly in three states–governors made decisions, Democratic governors and at least one Republican governor elected to put aside or to engage at least $20 and put it in LIHEAP funds to enable people to qualify for the benefit.  I’ve seen the same reports in the news that the chair refers to.  Those are within, as far as we can read, the authority of the bill.

“We sent that information out to states.  We didn’t urge them to in any way misuse it.  We said you must comply with this law.  They have to be–so far as I can tell, those states that are intending to put $20 or more in their LIHEAP benefits in those households are complying with the law as it’s written.”

Later in the hearing, Rep. Rosa DeLauro (D., Conn.) referenced a Politico article from Friday, which stated that, “But a March 14 memo sent by Republican leadership contends that any speculation that these states can negate the total $8 billion reduction over 10 years they fought to have included in the 2014 farm bill is just plain wrong.”  To listen to Rep. DeLauro’s remarks on this issue, just click here (MP3- 1:45).

Also at the hearing yesterday, Rep. DeLauro briefly addressed crop insurance issues and noted that; “I wish we could have a hearing just on the crop insurance program.”

Dr. Catherine E. Woteki, USDA Under Secretary for Research, Education and Economics will appear before the House Appropriations Agriculture Subcommittee today, while Secretary of Agriculture Tom Vislack will testify this morning at theSenate Appropriations Subcommittee on Agriculture.

In other policy news, Will Coggin indicated in a column posted yesterday at The Wall Street Journal Online that, “Six states–Missouri, Alabama, Iowa, Oklahoma, Kentucky and Nebraska–sued California in federal court last month. If they are successful, the U.S. Constitution will be vindicated, and Californians may be spared having to pay through the nose for an omelet.

“The controversy is all about eggs. A California ballot initiative, Proposition 2, passed in 2008 and mandated that by 2015 all California egg producers must shift to larger cages or ‘cage-free’ housing for its chickens…[I]n 2010, the legislature in Sacramento decreed that no out-of-state business could sell eggs in California unless the hens also were raised in larger cages, or cage-free.”

Mr. Coggin stated that, “The 2010 law will likely be overturned in the courts, but that still leaves a crippling mandate on the books for in-state farmers. The European experience is informative: When the European Union listened to animal rights radicals and banned hen cages in 2012, the resulting market chaos led to supply shortages and price shocks. French farmers dumped their eggs in the street in protest. Golden State farmers may soon do the same.”

Agricultural Economy

The USDA’s Economic Research Service (ERS) noted yesterday that, “The food, food-at-home, and food-away-from-home CPIs [Consumer Price Index] are expected to increase 2.5 to 3.5 percent over 2013 levels. This forecast is based on an assumption of normal weather conditions; however, severe weather events could potentially drive up food prices beyond the current forecasts. In particular, the ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy, and egg prices.”

ERS research economist Richard Volpe recently discussed factors that impact food prices on C-SPAN.  And this one-minute FarmPolicy.com video provides a quick overview of recent food price information from the Bureau of Labor Statistics.

Bloomberg writer Ranjeetha Pakiam reported today that, “Wheat advanced for the second time in three days on concern that dry weather may hurt crops coming out of dormancy in the U.S., the world’s biggest exporter.”

The article added that, “‘Wheat is coming out of dormancy so it’s a crucial time for crop development at the moment,’ Graydon Chong, an analyst at Rabobank International in Sydney, said by phone. ‘The hard red winter-wheat areas particularly Kansas, Texas, Oklahoma, continue to struggle. There’s quite a large portion of the hard red winter-wheat crop rated poor to very poor and that’s going to put pressure on the U.S. domestic prices.'”

For additional background on recent growing conditions for wheat, see this one-minute FarmPolicy.com recap from yesterday.

With respect to the corn belt, a news release yesterday from Purdue University stated that, “Indiana farmers getting ready for spring planting can get a good idea of what they most likely will have to work with in April just by looking across their fields now.

“Wet or dry conditions they see are unlikely to change much over the month, said State Climatologist Dev Niyogi, based at Purdue University… . ‘Our best indication of the trend at this stage is persistence in weather patterns we have been experiencing,’ Niyogi said. ‘We do not see anything drastically changing in the short term. We will be where we are.'”

Meanwhile, DTN Ag Policy Editor Chris Clayton reported yesterday that, “Farmers will plant 6% more soybean acres this spring while corn acreage will drop 2.4%, according to forecasts released Tuesday by Informa Economics.

“Informa and other analyst groups are releasing their acreage forecasts ahead of USDA’s Prospective Plantings report that will come out Monday at 11 a.m. CDT. USDA will also release its quarterly Grain Stocks report.”

In other commodity news, Alexandra Wexler reported yesterday at The Wall Street Journal Online that, “Cotton prices surged to the highest level in more than two years Tuesday as investors focused on limited supplies of the fiber.”

The Journal article stated that, “The gains reflect the market’s worries about cotton supplies from the U.S., the world’s largest exporter of the fiber. The current crop is the smallest in four years and not enough to meet demand. That has reduced cotton stockpiles to the lowest level in decades, shrinking the cushion of fiber in case severe weather or other catastrophes damages the next crop.”

In livestock developments, a news release yesterday from Rabobank noted that, “Rabobank has published a new report on the impact of the Porcine Epidemic Diarrhea Virus (PEDv) on the North American herd, forecasting significant impacts on production and slaughter through 2015, and identifying the opportunity for U.S. poultry to step into the market gap.

“In the report, published by the bank’s Food & Agribusiness Research (FAR) and Advisory team, Rabobank says that PEDv thus far has impacted about 60 percent of the U.S. breeding herd, 28 percent of the Mexican herd, and is beginning to develop in Canada. If PEDv spreads in Canada and Mexico at the pace seen in the U.S., Rabobank says that North American hog slaughter could decline by nearly 18.5 million hogs over 2014 and 2015, or 12.5 percent relative to 2013 levels. Overall U.S. pork production is anticipated to decline 6 to 7 percent in 2014, the most in more than 30 years.”

Isabella Steger reported yesterday at The Wall Street Journal Online that, “Pork prices have suffered an unusually large and long slide in China, as supplies surge following Beijing’s moves to encourage large-scale farms [related graph].”

The article explained that, “While bad news for the industry, the price drop is a boon for buyers in China who are paying less for their favorite meat. It is also contributing to a slowdown in inflation: Food accounts for one-third of the consumer-price index, with pork the single biggest contributor. January’s index was up 2.5% from a year earlier.”

Biotech

Reuters writer Tom Polansek reported yesterday that, “Syngenta AG said on Tuesday that grain prices have played a role in China’s rejection of U.S. corn shipments containing an unauthorized, genetically modified trait developed by the company.

“China, the world’s third-biggest corn buyer, has turned away since November more than 900,000 tonnes of U.S. corn containing Syngenta’s Agrisure Viptera trait.

“‘There’s unquestionably a global trade issue at play here relating to contracts and prices,’ said David Morgan, Syngenta’s regional director of North America.”

Mr. Polansek noted that, “Beijing started cracking down on shipments containing the trait late last year, even though Viptera corn had been mixed in with other varieties since China increased imports of U.S. corn in 2011.

“The rejections have fueled speculation among grain traders that China was strictly enforcing its ban as a way to exit contracts for pricey corn and to prevent imports into a well-supplied market. U.S. corn futures soared to $8 a bushel last summer and dropped almost 50 percent by November.”

AP writer Henry C. Jackson reported yesterday that, “The scientist credited with agriculture’s so-called ‘Green Revolution’ has a permanent home in the U.S. Capitol.

“Lawmakers unveiled a statue of Norman Borlaug on Tuesday in a ceremony on what would have been his 100th birthday.”

The article added that, “The Iowa native and University of Minnesota graduate is credited with saving as many as 1 billion people from hunger by creating a type of wheat that was disease-resistant and high-yielding. His work won him the 1970 Nobel Prize, the Presidential Medal of Freedom and the Congressional Gold Medal.”

Biofuels

Timothy Cama reported yesterday at The Hill’s Energy Blog that, “A coalition of biofuel advocacy organizations sent a letter Monday to the top tax lawmakers in the Senate urging them to renew expired tax credits that helped their industry.

“The credits, which incentivized advanced biofuel production and infrastructure, expired Dec. 31, along with a slew of popular tax breaks.”

Immigration

Steven Dennis reported yesterday at Roll Call Online that, “The Congressional Budget Office said Tuesday that the immigration overhaul being pushed by House Democrats — and nearly identical to the version that passed out of committee in the Senate — would slice the deficit by about $900 billion over 20 years.”

Mike Christensen
By Mike Christensen March 26, 2014