Environmentalists, Glyphosate and Butterflies

By John G. Dillard

The Natural Resource Defense Council (NRDC) has petitioned EPA to restrict the use of glyphosate herbicide to protect the dwindling population of the monarch butterfly. The petition states that the rapid adoption of glyphosate-resistant (Roundup Ready®) corn and soybeans in the Midwest has depleted the milkweed “community,” which serves as the exclusive food source for monarch butterfly larvae along the route of its annual migration from Canada to Mexico.

NRDC petitioned EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). FIFRA requires EPA to register each pesticide used in the U.S. and set parameters for the pesticide’s use, such as target species, labeling requirements, and restrictions on use. Each pesticide must undergo a re-registration process every 15 years. The current glyphosate re-registration process will be completed in 2015; however, NRDC has requested EPA take action to restrict the use of glyphosate prior to the scheduled completion of the re-registration process.

Under FIFRA, EPA can register a pesticide only if it first determines that the pesticide “will perform its intended function without unreasonable adverse effects on the environment.” FIFRA defines an unreasonable adverse effect on the environment to include “any unreasonable risk to . . . the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide.” In its petition, NRDC argues that the loss of milkweed communities brought about by increased glyphosate use has brought about unreasonable adverse effects on the environment because it has decreased monarch butterfly habitat.

Read the rest of this post on John Dillard’s AgWeb.com blog – Ag in the Courtroom.

FDA Proposes Major Changes to the “Nutrition Facts” Label – Price Tag $2 Billion 1

By Bruce Silverglade

Two billion dollars – That is what FDA estimates the food industry will spend to comply with proposed changes to the iconic “Nutrition Facts” label.  That’s about all we know for sure.  The agency says the new information will provide $20-$30 billion in benefits to consumers by the year 2035, primarily by lowering risk of diet-related diseases and associated health care costs.  Similar predictions were made when FDA finalized its original regulations for nutrition labeling in 1994, but they didn’t materialize.

FDA surveys showed many consumers did not understand the new information.  Some thought they should strive to consume 100% of the Daily Value of each of the nutrients listed on the label.  The 1994 launch of the Nutrition Facts label triggered an onslaught of new “low fat” foods.  While these products met FDA’s new requirement for “low fat” claims, many of the products were not lower in calories.  Some consumers thought they could eat the whole box!  Obesity increased.

To be effective, consumers have to actually read the Nutrition Facts label, comprehend the information, change their purchasing decisions based on the information, develop new eating patterns, engage in physical activity, and avoid other lifestyle choices that would negate the improvements they make to their diets.  No study has shown that the Nutrition Facts labels do that.

Hopefully, as the saying goes, the second time is the charm.

FDA’s proposed rule to update the Nutrition Facts label, along with other proposed rules on changes to serving sizes, were released today and will publish in the Federal Register on March 3rd.

So how exactly is FDA proposing to change the Nutrition Facts label? A picture tells a thousand words.  Here are some before and after versions provided by the agency.  The two versions may look similar, but there are actually some major differences:

Highlights include:

Changes in Required Nutrients

  • “Added Sugars” (amount, not %DV) would be required to be declared.  This may be the most controversial change in FDA’s proposal.
  •  “Calories from Fat” would no longer be required.
  • “Fiber” as listed on the label would be redefined to exclude purified, processed fibers, such as maltodextrin and inulin.
  • Insoluble fiber may be declared voluntarily (but disclosure becomes mandatory if a claim is made).
  • Vitamins and minerals – FDA is proposing to require declaration of Vitamin D and Potassium because of concern that Americans are not consuming enough of these micronutrients.  Declaration of vitamins A and C would become optional.  FDA would also require the amount, as well as the %DV, for vitamins and minerals.

Changes in Format

  • The size of the “Calories” and “Servings Per Container” declarations would increase substantially to emphasize this information.
  • %DV’s would move from the right hand to the left hand side of the box, also to give this information greater prominence.
  • The footnote about DV’s would be shortened.  As of this time, the agency has not said exactly how.

Changes in Daily Values

  • The DV for Sodium would decrease slightly from 2,400 mg to 2,300 mg.
  • The DV for fiber would be updated to 28 g.

RACC’s and Serving Sizes

  • FDA would update 17% of the reference amounts customarily consumed (RACCs) to reflect more recent consumption data; most would increase.  This would likely mean larger serving sizes for many food products.  For example, the RACC for ice cream would increase from ½ cup to 1 cup.
  • 27 new RACCs would be created for food products that previously did not have one.
  • Certain larger packages would have to be labeled both per serving and per package.  For example, a 24-ounce bottle of soda, a 19-ounce can of soup and a pint of ice cream would have to be labeled in a dual column format—per serving and per package—if the package contains at least two times the serving size and less than or equal to four times the serving size.
  • For a package more than four times the RACC, the dual column listing would not be required.

The proposed rule does not include some changes that FDA reportedly had been considering.

  • FDA is not proposing to establish a DV for added or total sugars;
  • FDA is not proposing to amend its nutrient content claim or health claim regulations to take into account a food’s “added sugars” content;
  • FDA is not proposing any change to the 0.5 gram threshold for declaring “Trans Fat” and is not proposing a Daily Value for trans fat; and
  • FDA is not proposing any regulations on the use of front-of-pack nutrition rating symbolsSuch labeling, including grocery store shelf-markers, will remain subject to FDA’s 2009 enforcement policy on the matter.

There will be a 90-day comment period, which industry members should take full advantage of, given the $2 billion price tag.

A Consumer Group Files Suit to Vacate FDA’s GRAS Notification Program

By Mark L. Itzkoff

In a formal challenge to FDA’s GRAS Notification Program, a consumer group called the Center for Food Safety (CFS) filed a lawsuit on Thursday alleging that FDA’s operation of the program under a proposed rule since 1997 and its failure to promulgate a final rule governing the program is a violation of the Administrative Procedures Act (APA).  The suit asks the court to vacate the proposed rule creating the GRAS Notification Program and “reinstat[e] the GRAS rule previously in force” (i.e., the GRAS affirmation rule) until FDA properly promulgates a GRAS notification final rule.

The lawsuit is the latest in a number of attacks on the GRAS Notification System over the past year.  As we noted in earlier posts (see here, here, and here), the GRAS notification system has been the subject of recent criticism by The Pew Charitable Trusts and the Natural Resources Defense Council (NRDC).  While the earlier criticisms questioned the validity of GRAS determinations in general or raised issues regarding the adequacy of specific GRAS notifications, the CFS suit is the first attempt to invalidate the GRAS Notification Program entirely.  Also, while this may seem to be a coordinated attack on the GRAS system by consumer groups, it is just as likely a case of different consumer groups jockeying for position (and for public attention and funding) on a hot issue.

In the lawsuit, CFS notes that the current GRAS Notification Program was proposed by FDA over 15 years ago.   Substances Generally Recognized as Safe, 62 Fed. Reg. 18938 (April 17, 1997)(GRAS Proposal).  The agency continues to operate the program under that proposed rule, and no final rule has been issued.  CFS had filed comments on the proposed rule under its previous name, International Center for Technology Assessment (ICTA), and claims that its procedural due process rights were violated “by FDA’s decision to implement a rule without following the notice-and-comment rulemaking procedures mandated by the APA.”  However, while FDA continues to operate under the proposed rule, the agency did reopen the comment period and discuss possible changes in the program in 2010.

The lawsuit also claims that under the current system, “several substances … have achieved GRAS status” that may pose serious risks to consumers, including Volatile Oil of Mustard, Olestra and mycoprotein (“Quorn”).  CFS claims that FDA’s alleged failure to comply with the APA has exposed the public, including CFS, to “risky products” without proper FDA oversight.

On the surface, the new lawsuit appears to be similar to the lawsuit filed by CFS in 2012, Center for Food Safety v. Hamburg, No. C 12-4529 PJH, 2013 WL 1741816 (N.D. Cal. Apr. 22, 2013), asking the federal courts to compel FDA to issue regulations implementing the Food Safety Modernization Act (FSMA).  In response to that suit, the federal court ordered FDA to comply with a specific timeline and issue the regulations by the dates specified in that timeline.

However, the new lawsuit is based on a significantly different statutory requirement that may result in a different decision.  FSMA required that FDA issue implementing regulations by certain statutory deadlines.  In essence, CFS simply asked the court to enforce those statutory deadlines.  By contrast, federal law does not require that FDA establish a GRAS Notification Program, much less establish any deadline for promulgating the regulations governing that program.

Finally, we note that CFS claims that FDA is unlawfully “exempting substances that are [GRAS] from regulation as food additives …” This is a mischaracterization of the agency’s response to GRAS Notices.  GRAS substances are exempt from FDA premarket scrutiny under the provisions of the Federal Food, Drug and Cosmetic Act because they meet certain statutory criteria, see 21 USC §321(s) and §342(a)(2)(C)(1).  Unlike food additive approval, GRAS status does not require FDA action.

For this reason, FDA does not issue exemptions under the GRAS Notification Program.  Rather, the agency “evaluate[s] whether the submitted notice provides a sufficient basis for a GRAS determination and whether information in the notice or otherwise available to FDA raises issues that lead the agency to question whether use of the substance is GRAS”  GRAS Proposal, 62 Fed. Reg. at 18938.

Regardless of the outcome of this case, GRAS status and some sort of FDA program for recognizing GRAS status are not going away.  That is because, as noted above, the GRAS exemption from the definition of “food additive” is written into FDA’s governing statute.  It would require legislation to change that.

FNS Seeks Comments on Proposed Rule Establishing Stronger Requirements for Local School Wellness Policies; Rule Also Proposes to Limit Marketing of Foods in Schools

By Roger R. Szemraj

The Food and Nutrition Service (FNS) today published its proposed rule regarding Local School Wellness Policy under the Healthy, Hunger-Free Kids Act of 2010 (the proposed rule) in the Federal Register.    The proposed rule is a result of Section 204 of the Healthy, Hunger-Free Kids Act of 2010, which added a new section 9A to the Richard B. Russell National School Lunch Act (the NSLA) to require that each local educational agency participating in a program authorized by this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall establish a local school wellness policy for all schools under the jurisdiction of the local educational agency.

The proposed rule would:

  • Establish the framework for the content of the local school wellness policies;
  • Ensure stakeholder participation in the development of such policies;
  • Require periodic assessment of compliance and reporting on the progress toward achieving the goals of the local school wellness policy;
  • Require local educational agencies, as part of the local school wellness policy, to implement policies for the marketing of foods and beverages on the school campus during the school day consistent with nutrition standards for Smart Snacks; and
  • Require each local educational agency to make information about local school wellness policy implementation for all participating schools available to the public on a periodic basis.

The goal of the proposed rule is to ensure local educational agencies establish and implement local school wellness policies that meet minimum standards designed to support a school environment that promotes sound nutrition and student health, reduces childhood obesity, and provides transparency to the public on school wellness policy content and implementation.

While comments are welcome regarding all aspects of the proposed rule, the notice asks for comments on certain subjects in particular, including:

  • That Local Education Agencies (LEAs) include in their local wellness plans policies that allow marketing of only those foods and beverages that may be sold on the school campus during the school day, i.e., those foods and beverages that meet the requirements set forth in the Smart Snacks interim rule (or the more restrictive standards adopted by the LEA, if applicable);
  • The definition of food marketing, which commonly includes oral, written, or graphic statements made for the purpose of promoting the sale of a food or beverage product made by the producer, manufacturer, seller, or any other entity with a commercial interest in the product;
  • Whether the annual frequency of the progress reporting would serve to ensure local school wellness policies and school-based activities are communicated to parents and the community without being overly burdensome to LEAs;
  • Whether the 3-year frequency of the assessment of local school wellness policies would serve to ensure these policies are kept up-to-date without being overly burdensome to LEAs;
  • The specific areas that should be included in the components of an effective assessment of compliance by schools and determining progress toward benchmarks, objectives and goals;
  • Record and reporting requirement costs for local school wellness policies;
  • Information collection requirements imposed by the proposed rule; and
  • Any current Tribal laws that would be in conflict with the proposed rule.

Comments on the proposed rule are due on or before April 28, 2014, and can be submitted in two ways:

Julie Brewer, Chief

Policy and Program Development Branch

Child Nutrition Division

Food and Nutrition Service

Department of Agriculture

P.O. Box 66740

Saint Louis, MO, 63166-6740

Comments regarding the information collection requirements should be sent to:

Office of Information and Regulatory Affairs,

Office of Management and Budget

Attention: Desk Officer for FNS

Washington, DC 20503.

A copy of these comments regarding information collection requirements should also be sent to:

Lynn Rodgers, Chief

Program Monitoring Branch

Child Nutrition Programs

3101 Park Center Drive

Alexandria, VA 22302

Wide-Reaching FDA Proposed Rule on Sanitary Transportation Could Have Greatest Impact on Food Carriers

By Brett T. Schwemer

On February 5, 2014, the Food and Drug Administration (FDA) published in the Federal Register its proposed rule on “Sanitary Transportation of Human and Animal Food.”  The proposed rule would require shippers, carriers, and receivers that transport food by motor or rail vehicles to use certain sanitary transportation practices to ensure the safety of the food they transport.

As the seventh and final major rule mandated by the Food Safety Modernization Act (FSMA), the rule would likely have the most impact in terms of the shear number of businesses that would be covered.  The rule would apply to the transportation of all human and animal food, regardless of whether the transportation would be across state lines.  Unlike the other proposed rules under FSMA, the transportation rule would also not be limited to “registered” facilities under the Bioterrorism Act, and would apply to businesses that are regulated by both FDA and the USDA Food Safety and Inspection Service.  Although certain businesses (e.g., businesses with less than $500,000 total sales) and transportation activities (e.g., transportation of live animals) would be exempt from the rule and the rule would provide a process for seeking a waiver of regulatory requirements, most companies involved in the transportation of food would likely be covered—estimated by FDA to be over 83,000 businesses.

If finalized, the proposed rule would require shippers, carriers and receivers of food to meet certain performance based requirements.  Among other things, all three entities would be required to maintain vehicles and transportation equipment in a sanitary condition and in a manner that prevents pest harborage, make vehicles and equipment suitable for cleaning, and design and equip vehicles and equipment to ensure appropriate temperature control.  All three entities would also be required to take effective measures to ensure that foods are not contaminated from other foods or non-foods during transportation, and to ensure foods are transported under proper temperature conditions.  Shippers and receivers would also be required to provide handwashing facilities for vehicle operators loading and unloading food not completely enclosed, and to carry out loading and unloading operations under proper temperature conditions.

Shippers and carriers of food would have to comply with additional recordkeeping and information exchange requirements.  Among other things, shippers would have to provide written specifications to carriers regarding: (1) appropriate sanitary conditions for vehicles and transportation equipment, and (2) proper temperature conditions for food that supports microbial growth in absence of temperature control.  They would also have to maintain these records.  Carriers, in turn, would have to:

  • Demonstrate to the shipper, and upon request, to the receiver, that it has maintained temperature conditions consistent with the shipper’s specifications (the shipper may assume the duty to notify the receiver if there is an agreement in writing with the carrier; the carrier would have to maintain this written agreement and provide it to the receiver if requested);
  • Identify to the shipper the three previous cargoes transported in bulk vehicles and the most recent cleaning of the vehicle, unless otherwise agreed in writing with the shipper that other procedures would be adequate for the intended transportation operation (the agreement would have to be maintained by the carrier and shipper);
  • Develop, implement and maintain written procedures that: (1) specify how vehicles and equipment will be cleaned, sanitized (if necessary) and inspected to ensure sanitary conditions, (2) describe how the carrier will maintain temperature conditions in compliance with the shipper’s specifications, and (3) how it will provide information to the shipper regarding the three previous cargoes and most recent cleaning of a bulk vehicle; and
  • Provide training to transportation personnel on potential food safety issues and sanitary practices and maintain training documentation

Most of the proposed requirements should not have a significant impact on shippers and receivers of food as most are heavily regulated by FDA, FSIS and/or state governments, and have already adopted good manufacturing practice (GMP) procedures and policies that largely comport with FDA’s proposed rule. However, some of the proposed requirements, particularly the recordkeeping, information-exchange and training requirements, would be new to carriers of food and could present challenges.  Although transportation companies have long adhered to good sanitary practices in the transportation of food, many companies may not be familiar with developing and maintaining the type of detailed written procedures and records, or providing the type of training, that the proposed rule would require.  To that extent, if the proposed rule is finalized, transportation companies may wish to seek the assistance of FDA experts in meeting the regulatory requirements.  Moreover, if there are transportation operations that are unlikely to result in the shipment of foods under unsafe conditions, regulatory experts may also assist transportation companies in seeking a waiver from all, or specific, regulatory requirements.

Comments on the proposed rule are due by May 21, 2014.

Nutrition Labeling – The Second Time Around

By Bruce Silverglade

The Nutrition Labeling and Education Act (NLEA) was enacted in 1990 and the familiar “Nutrition Facts” panel became mandatory in 1994.  Now, twenty years later, the Food and Drug Administration (FDA) says the list of nutrients, serving sizes, and Daily Values on the label need to be updated.  Expect the announcement this week, with lots of fanfare – the First Lady herself is expected to make the formal announcement as part of an anniversary celebration of the White House’s “Let’s Move” anti-obesity campaign.

As a young lawyer, I worked hard to push for enactment of the NLEA during my previous career with Center for Science in the Public Interest.  Expectations where high.  Representative Henry Waxman, then Chairman of the House Health Subcommittee, sponsored the bill.  I remember sitting in a three-walled cubicle with Rep. Waxman’s legislative assistants Bill Corr, now Deputy Secretary of the Department of Health and Human Services (HHS), and Bill Schulz, now General Counsel of HHS, to craft the legislation.

We wanted the nutrient content of foods to be expressed both 1) in terms of a customary serving of the food; and 2) in terms that would enable the public to understand whether a serving of the food had relatively high or low amounts of each nutrient listed.

After the usual legislative wordsmithing, section (2)(b)(1)(A) of the NLEA required information be conveyed “in a manner that enables the public to . . . understand its relative significance in the context of a total daily diet.”  This vague legislative language led FDA to concoct what became known as Daily Values for most nutrients that were required to be listed on the label.  FDA used its new Daily Values to set criteria for health and nutrient content claims for foods.

Looking back, requirements for mandatory nutrition labeling did not provide all of the benefits that were anticipated.  It is true that as many as 65 percent of consumers say they read Nutrition Facts labels and about 30 percent say that they have changed their purchasing decisions based on what they have read.    Many foods were reformulated and thousands of new “low fat” foods appeared on the market.  Unfortunately, some consumers thought they could eat the whole box of a “low fat” food and obesity worsened.  Subsequent surveys show that most consumers do not understand the term “Daily Value.” In response, some retailers have instituted shelf-marking schemes to communicate nutritional value at the point of purchase.  While some of these scoring systems are based on criteria acceptable to FDA, such as Wal-Mart’s “Great for You” seal, others are based on proprietary nutrition criteria not necessarily endorsed by FDA.

The Nutrition Facts panel has become ubiquitous in American society.  But what has been the actual impact on the average American’s diet?  The results are unclear.  The nutrition label is a tool that consumers can use to help meet the nutritional recommendations of the Dietary Guidelines, but actually changing diets requires more than just information.  The U.S. was the first country to enact legislation requiring mandatory nutrition labeling.  Hopefully, lessons have been learned.  Stay tuned to OFW Law’s Ag/FDA Blog for the details of FDA’s proposed regulation.

Clearly, food companies should closely analyze FDA’s proposal to change nutrition labeling requirements, not only to ascertain the impact on their product lines, but also to help ensure that the details of the new proposed rules achieve their intended purpose without merely placing new regulatory burdens on the industry.  Expect at least a 60 day comment period with the possibility of an extension.

Important Dates for FY 2015 House and Senate Appropriations Committees Announced

By Roger R. Szemraj

Even though the President has yet to submit his FY 2015 Budget Proposal, including his detailed requests for all agencies of the U.S. Department of Agriculture and the Food and Drug Administration, the House and Senate Appropriations Committees have announced important dates for the submission of public statements to the Committees.  These statements will become part of the formal hearing record for the FY 2015 cycle, and should be used to express your views about what should – or should not – be funded for fiscal year 2015, which runs from October 1, 2014, through September 30, 2015.  The President’s FY 2015 budget request is expected to be submitted to Congress during the first two weeks of March.

Each subcommittee has its own requirements regarding the maximum length of any submission, and what information must be included.  All USDA programs but for the Forest Service are funded by the House and Senate Appropriations Subcommittees on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies.  The Forest Service is funded by the House and Senate Appropriations Subcommittees on Interior, Environment, and Related Agencies.

Following are the dates, and links to the public testimony submission instructions:

The House Interior Subcommittee has not yet provided submission instructions.

Additionally, House subcommittees have also set dates for the submission of House Member requests for funding and language requests for the FY 2015 bills.  Those dates are:

Should you need assistance with the preparation and submission of these statements, OFW Law can assist you.  Please feel free to contact me with your questions.

Deadlines for FSMA Final Rules Pushed Back

By Robert A. Hahn

The court-ordered deadlines by which FDA is required to issue final rules under the Food Safety Modernization Act (FSMA) have been pushed back pursuant to a consent decree between FDA and two consumer groups.

The two consumer groups, the Center for Food Safety and the Center for Environmental Health, had sued FDA (Center for Food Safety v. Hamburg) for failure to meet the statutory deadlines in FSMA for seven rulemakings.  The U.S. District Court for the Northern District of California decided for the plaintiffs and set deadlines for those rulemakings, and FDA appealed.  The parties have now reached a settlement agreement, which the court is expected to approve.  Pursuant to the settlement, the new deadlines will be as follows:

Final Rule

Deadline

Preventive controls for human food

August 30, 2015

Preventive controls for animal food

August 30, 2015

Produce safety standards

October 31, 2015

Foreign Supplier Verification Program

October 31, 2015

Accreditation of third-party auditors

October 31, 2015

Sanitary transportation of food

March 31, 2016

Intentional adulteration/food defense

May 31, 2016

FDA agrees “in good faith” to issue the final rules by the above deadlines.  If, however, FDA believes that good cause exists to seek further extensions, any of the deadlines may be extended by written agreement of the parties and notice to the court.  If the parties are unable to agree on an extension, FDA may seek an extension by filing a motion with the court.  FDA would have the burden to prove “good cause and/or exceptional circumstances warranting the delay, and address the effect of the delay on the public health and safety.”

The consent decree also provides that the comment period deadlines previously set by the court “are no longer operative.”  Thus, if FDA wishes to, it may grant extensions of the comment periods that remain open (or reopen comment periods that have closed), as long as FDA meets the deadlines for issuing the final rules.  The remaining comment period deadlines are: March 31, 2014 for preventive controls for animal food and intentional adulteration/food defense; and May 31, 2014 for sanitary transportation of food.  In addition, FDA has indicated it plans to re-propose parts of the produce safety standards and preventive controls for human food rules this summer, at which time it will provide an opportunity to comment on the re-proposed provisions.

Farm Bill Redefines Dairy and Trade Activities

By Nathan Fretz

On February 7, the President signed the Agricultural Act of 2014 (the “Farm Bill”) into law.  Over a series of blog posts, we will focus on various provisions within the Farm Bill, with a particular focus on some of the provisions that may not have received the level of media attention as others, yet are important nonetheless.  Today’s post focuses on the changes to the dairy safety net, which has certainly received media attention, and the creation of the position of Under Secretary for Trade and Foreign Agricultural Affairs within USDA, which has not.

New Dairy Safety Net

The Farm Bill brought a sea-change in the safety net for dairy producers.  Gone are the Milk Income Loss Contract (MILC) Program (which will be repealed once the new dairy program is implemented), Dairy Product Price Support Program, and Dairy Export Incentive Program, and in their place, the Farm Bill establishes the Margin Protection Program (MPP) for dairy producers and the Dairy Product Donation Program.  The changes in the dairy safety net parallel the broader movement in agriculture programs over the past several farm bills towards risk management programs in which producers must choose coverage levels and make premium payments.

The Margin Protection Program will provide payments to dairy producers during times in which dairy margins, defined as the difference between the all-milk price and the average feed cost, fall below the coverage level chosen by a producer for a consecutive two-month period.  The payment amount will be based on the producer’s production history, the difference between the actual dairy margin and the margin level at which the producer chooses to be covered (ranging from $4.00 to $8.00), and the coverage percentage that the producer chooses to cover (from 25% to 90% of the producer’s production history).

Importantly, the Farm Bill sets a producer’s production history for the five years of the program as the highest level of production that the dairy operation had during 2011, 2012 or 2013, plus a small, annual allowance for the normal increase in the national average milk production.  Thus, if a producer decides to increase the size of his or her dairy herd, the additional milk production would not be covered under the program.  Finally, it is worth noting that the stabilization program, which was frequently highlighted during the dairy debate over the past several years, was not included in the MPP.

The Dairy Product Donation Program (DPDP) is designed to supplement the MPP when margins are at extremely low levels.  When dairy producer margins fall to $4.00 or less for two consecutive months, the Secretary must immediately purchase dairy products at market prices, until the date that is the soonest of the following:  1) the program has been in effect for three consecutive months; 2) margins rise above $4.00 for the immediately preceding month; or 3) world prices for dairy products are such that the statute requires the Secretary to terminate the program.

The Secretary must distribute the dairy products purchased under the program to low-income groups through the use of public and private nonprofit organizations.  One essential aspect of the program prohibits the Secretary from either storing the dairy products or selling them back into the commercial market.  No longer will USDA fill caves with dairy products, as done under past dairy purchase programs, because under the donation program the products must be delivered immediately to the appropriate organizations for distribution.

On its face, the Dairy Product Donation Program may seem similar to the now-repealed Dairy Product Price Support Program; however, in practice, the two operate very differently.  Most importantly, the DPDP gives the Secretary discretion as to which dairy products to purchase.  In fact, the Secretary is required to consult with public and private nonprofit organizations that are organized to provide food to low-income individuals to determine the types and quantities of dairy products to purchase – in other words, the Secretary is directed to determine which products people need and want, and then purchase them.  With this consultation, the Secretary, in theory, will be able to make purchases more quickly, without requiring processors to meet unwieldy product specifications, and the donations will have a more immediate, focused impact.  This purchasing discretion will bring far more products into the program that under the old price support program, and dairy processing companies be aware of the consultations between the Secretary and the public and private nonprofit institutions regarding which products to purchase.

As with any new program, the Margin Protection Program and the Dairy Product Donation Program come with both opportunities and questions.  How many dairy producers will participate in the margin program, and at what coverage levels?  What, if any, impact will the program have on the volume of milk produced over the next five years?  Will the program help to end the devastating price volatility in the dairy market?  Will the Dairy Product Donation Program work in tandem with the margin program to prevent long periods of low margins?  Or, if there is a prolonged period of low margins, what will be the cost of the MPP to the government?  Finally, will there be a market impact – and if so, to what degree – as a consequence of moving from the detailed specifications and limited products of the old price support program to the much more flexible, product-inclusive donation program?  These are just a few of the many questions that warrant attention as the rules for the new programs are promulgated and the programs are implemented.

California Potentially Joining the Federal Milk Marketing Order System

No discussion of dairy and the Farm Bill can be complete without mentioning the possibility of changes for the nation’s largest milk producing state, California.  Section 1410(d) of the bill authorizes the Secretary to begin the hearing process to issue an order, subject to a vote of California dairy producers, to designate California as a Federal milk marketing order.

New Under Secretary for Trade

Over the past 50 years, trade in agricultural products has grown tremendously, becoming not only an engine for growth of the agricultural economy, but for the U.S. economy in general.  The agricultural trade surplus is a bright-spot in the country’s balance of trade, providing growth opportunities for fruits and vegetables, dairy, meat and poultry, grains, wine and other agricultural products.  USDA’s Economic Research Service recently released its agricultural projections for the next decade, and emphasized that low- and middle-income countries will drive growth in consumption of meat, grains, and oilseeds (access the full report here).

In a move that emphasizes the critical importance of trade to the agriculture industry, the Farm Bill directs the Secretary to establish the position of Under Secretary for Trade and Foreign Agricultural Affairs.  The position would be created as part of a reorganization of the international trade functions within USDA.  The farm bill provision provides that the Secretary, in proposing the reorganization and creating the Under Secretary position, consider how the Under Secretary “would serve as a multi-agency coordinator of sanitary and phytosanitary issues and nontariff trade barriers” in agricultural trade (sec. 3208(b)(2)(B)).

As the bill language implies, many of today’s agricultural trade issues require multiple agencies – frequently including agencies outside of USDA – to work together to reach resolution.  Given the all-too frequent and negative impact that nontariff trade barriers and phytosanitary issues have on U.S. agriculture exports, it is essential that the Department have a central trade authority that can react quickly with input from across multiple agencies to resolve disputes.

While the Under Secretary for Trade position is critical, determining the position’s authority will be challenging.  For instance, the Animal and Plant Health Inspection Service and Agricultural Marketing Service, which currently fall under the Under Secretary for Marketing and Regulatory Programs, and the Food Safety and Inspection Service, currently under the Under Secretary for Food Safety, all have critical functions working every day to ensure the efficient and safe trade in agricultural products.  Will the trade functions of these agencies be moved from their current agencies and placed under the new Under Secretary for Trade?  Or, will the trade offices remain housed in their current agencies, but be subject to the new Under Secretary for the purpose of coordinating trade functions?  As the reorganization unfolds, it will be essential to monitor whether and how agency jurisdictions are affected.

The Secretary has 180 days from the date of the farm bill’s enactment to send a report to Congress with a detailed proposal for reorganizing the trade functions at USDA and creating the new Under Secretary for Trade and Foreign Agricultural Affairs.  It is incumbent on the food and agriculture industry to weigh-in on that proposal to ensure that USDA is organized to effectuate safe, predictable, and efficient trade on a daily basis, while also having the ability to respond quickly and authoritatively when challenges arise.

Nathan Fretz joined OFW Law on Monday, February 3. Prior to joining OFW Law, Nathan was counsel for the House Agriculture Committee.  He previously worked at the U.S. Department of Agriculture’s Food Safety and Inspection Service.

OFW Law Celebrates National FFA Week

By John G. Dillard

OFW Law is proud to represent and advise clients that are on the cutting edge of the food and agricultural industry. Our clients include the input suppliers, farmers and ranchers, food and meat processors, support services, and trade associations that strive to meet our world’s growing nutritional demands. We recognize that agricultural education and participation in the National Future Farmers of America Organization (FFA) played a critical role in the development of many of our clients and their employees. OFW Law also recognizes the critical role that agricultural education plays in developing the future leaders of the food and agricultural industry. Therefore, OFW Law joins the chorus of praises for FFA members and advisors during this year’s National FFA Week.

FFA is the primary driving force behind the vitality of agricultural education at the middle school and high school level in the United States. Today’s FFA advisors and agriculture teachers provide an integrated curriculum that teaches students practical skills in applied biology and chemistry, mechanics, and leadership. FFA’s activities and career development events expose students to a variety of occupational skills related to production agriculture, environmental and natural resources conservation, agribusiness, policy and communications. With nearly 580,000 FFA members spread across the 50 states and U.S. territories, the future for American agriculture looks bright.

FFA is also personal to the several OFW Law staff that are alums of the organization. For instance, prior to embarking on his long political career, Senior Policy Advisor and former U.S. Congressman Charlie Stenholm was an FFA member and then an agricultural education teacher in Texas. John Block, Senior Policy Advisor and former USDA Secretary served as an Illinois State FFA officer and once proudly addressed the attendees of the National FFA Convention in the same blue corduroy FFA jacket that he wore in his high school days.

I was lucky enough to be a part of this great organization. I served as president of the Amelia County High School (VA) chapter and participated in several of the exciting competitions and projects that FFA offers.

I was also proud to join my home chapter on Monday to kick off their FFA week as a guest speaker for the wide variety of agriculture-related classes offered at the school. I spoke about the challenges facing agriculture, the work that OFW Law does in the food and agriculture industry, and the opportunities available for young people interested in this field. I had a chance to meet and interact with several of the students as well as the chapter’s leaders, and learn about their future plans in the agricultural field.

OFW Law attorney John Dillard with his former FFA Advisors, Margaret Jones and Benjy Morris.

OFW Law attorney John Dillard with his former FFA Advisors, Margaret Jones and Benjy Morris.

While we face many challenges in meeting our planet’s future nutritional needs, we take comfort in knowing that the National FFA Organization is educating and energizing our nation’s future leaders in food and fiber production. Accordingly, OFW Law salutes FFA members and their dedicated advisors during National FFA Week!