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Trump bailed on a trade deal, and now a bunch of US businesses may suffer

CNBC | Posted on November 14, 2017

American farmers and small business owners are among the U.S. industries that will be worst hit once a new Trans Pacific Partnership deal is implemented, said one expert. Over the weekend, TPP member countries made progress on a deal without Washington.One of the defining actions of President Donald Trump's tenure in the White House so far is his decision to withdraw the U.S. from a 12-nation trade pact that would have had wide-ranging implications for the global economy.Now that deal — the Trans-Pacific Partnership — looks like it's going to be settled without the U.S.. That may mean American farmers and small business owners will soon regret Washington's exit."The U.S. business community that's going to get hit the hardest when TPP happens is going to be agriculture and small and medium-sized enterprises," said Steve Okun, senior advisor at international trade consultancy McLarty Associates and a former deputy general counsel at the U.S. transportation department.Progress on the agreement, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, hit a milestone over the weekend as the 11 remaining members agreed on core elements for a new framework without the U.S.Once the new deal is implemented, American farmers could be left at a disadvantage: The agreement seeks lower tariffs for goods traded among members, the bulk of which are Asia-Pacific nations. That means non-member countries, such as the U.S., will still face high rates when shipping to Asia-Pacific.

 


Anti-Farmer Legislation Rings Hollow

Farm Policy Facts | Posted on November 14, 2017

The “Sugar Policy Modernization Act” would prohibit sugar growers from receiving nonrecourse loans available to other crops – loans that are repaid with interest and are the main component of U.S. sugar policy.  The bill would also mandate that the USDA keep America’s sugar market flooded with imports to artificially depress prices for multinational food companies. “A better name would be the ‘Sugar Farmer Bankruptcy Bill’ because that’s exactly what it’s designed to do,” explained Galen Lee, a sugarbeet farmer from Idaho.It’s a devastating bill for rural communities from coast to coast all by itself, but Shaheen wasn’t finished.A day later, she teamed with Senator Jeff Flake (R-AZ) to introduce legislation designed to deny farmers access to insurance policies that provide some revenue stability amid price declines and low yields.These policies are vital to farmers who forward contract crops and to farmers forced to purchase feed for livestock following the loss of their own crops.  And they are extremely popular, covering more than 9 out of 10 acres of U.S. corn and soybean in the crop insurance system.  Revenue coverage is also used on 87% of wheat policies and 81% of cotton.In other words, if you farm, chances are good the lawmakers took a swipe at your livelihood last week.  And their rationale for doing so was to save taxpayers money, which is nonsense.First, sugar policy has operated without taxpayer cost for the entire 2014 Farm Bill – well below Congressional Budget Office (CBO) estimates.  Simply put, it has a $0 price tag and has cost taxpayers less than expected.Meanwhile, farmers help fund crop insurance with money from their own pockets – and they have to pay a lot more for revenue coverage.  Under this cost-share structure, crop insurance’s 10-year cost projection by CBO is down nearly $10 billion since 2013.No, these bills are not about taxpayers.  The proposals are anti-farmer, plain and simple, and they embody the harmful rhetoric used by long-time agriculture critics like Heritage.


USDA delays organic livestock rules for the third time

Meatingplace (free registration required) | Posted on November 14, 2017

USDA’s Agricultural Marketing Service (AMS) is delaying the effective date of the Organic Livestock and Poultry Practices final rule, published in the Federal Register on Jan. 19, 2017, until May 14, 2018. This is the third effective date delay of the rule, which amends the organic livestock and poultry production requirements of the USDA organic regulations by adding new provisions for livestock handling and transport for slaughter and avian living conditions; and expands and clarifies existing requirements covering livestock care and production practices and livestock living conditions.


Icahn Subpoenaed US Attorney Wants Information on Energy Investor's Involvement With RFS

DTN | Posted on November 9, 2017

Though no longer an adviser to President Donald Trump, billionaire energy investor Carl Icahn may now be the subject of a federal investigation related to his involvement with the Renewable Fuel Standard. The U.S. Attorney's office for the Southern District of New York has subpoenaed Icahn's company, Icahn Enterprises LP, for information on Icahn's work with the president on the RFS, according to a filing with the U.S. Securities Exchange Commission on Nov. 3."The U.S. Attorney's office for the Southern District of New York recently contacted Icahn Enterprises L.P. seeking production of information pertaining to our and Mr. Icahn's activities relating to the Renewable Fuels Standard and Mr. Icahn's role as an adviser to the president," the SEC filing said.


Farm Bill Won't Come up in House in '17

DTN | Posted on November 9, 2017

Tax reform and federal budget issues in the final two months of the year will keep the House Agriculture Committee from advancing a farm bill until early next year.


USDA Chief Scientist Statement on WHO Guidelines on Antibiotics

USDA | Posted on November 9, 2017

The World Health Organization (WHO) has released recommendations regarding the use of antibiotics in agriculture. Dr. Chavonda Jacobs-Young, USDA Acting Chief Scientist, today issued the following statement: “The WHO guidelines are not in alignment with U.S. policy and are not supported by sound science. The recommendations erroneously conflate disease prevention with growth promotion in animals."“The WHO previously requested that the standards for on-farm antibiotic use in animals be updated through a transparent, consensus, science-based process of CODEX. However, before the first meeting of the CODEX was held, the WHO released these guidelines, which according to language in the guidelines are based on ‘low-quality evidence,’ and in some cases, ‘very low-quality evidence.'"“Under current Food and Drug Administration (FDA) policy, medically important antibiotics should not be used for growth promotion in animals. In the U.S., the FDA allows for the use of antimicrobial drugs in treating, controlling, and preventing disease in food-producing animals under the professional oversight of licensed veterinarians. While the WHO guidelines acknowledge the role of veterinarians, they would also impose unnecessary and unrealistic constraints on their professional judgement."


US ag equipment manufacturers eye Cuba before rules change

KTIC Radio | Posted on November 9, 2017

U.S. manufacturers appear to be racing the clock before the Trump administration tightens economic relations between the U.S. and Cuba. Over the last week, both John Deere and Caterpillar announced agreements with the Cuban government that might let the two Illinois-based companies sell farm tractors and other heavy equipment on the island. The occasion for this rush of activity was the annual Havana International Fair, Cuba’s largest commercial fair. Focus of the event is the Mariel Special Development Zone, a container ship facility near Havana and center of Cuba’s import/export businesses.In June, President Donald Trump announced that he was “cancelling the last administration’s completely one-sided deal with Cuba.” He did not give specifics, but administration officials said details would follow within 90 days. Those details have not been made public yet. With that in mind, Deere announced it would send 5000 Series tractors (between 75-115 horsepower) to Cuba this month. “This equipment is for testing and appraisal to ensure it will work with specific Cuban agricultural conditions and farming practices,” said Deere spokesman Ken Golden. A report in Manufacturer News quotes Golden as saying Deere would send “several hundred tractors and associated implements” over a four-year period.


FDA Announces Withdrawal of Draft Guidance for Industry Regarding Animal Drug Compounding

FDA | Posted on November 9, 2017

The U.S. Food and Drug Administration is withdrawing draft Guidance for Industry (GFI) #230, “Compounding Animal Drugs from Bulk Drug Substances” in order to clarify that the agency does not plan to finalize the current draft, but instead intends to issue a new draft for public comment next year. The draft guidance issued in May 2015 proposed conditions under which the FDA generally would not intend to take action against the compounding of animal drugs from bulk drug substances, with the goal of making such animal drugs available for patient care without jeopardizing the safety of animals and humans or compromising the animal drug approval process.Current law does not permit compounding of animal drugs from bulk drug substances, but the FDA recognizes that there are circumstances where there is no approved drug that can be used or modified through compounding to treat a particular animal with a particular condition. In those limited situations, an animal drug compounded from bulk drug substances may be an appropriate treatment option.After reviewing the comments submitted to the docket, the FDA decided not to finalize the current draft guidance, and will instead develop and issue a new draft guidance. In developing the new draft, the FDA will carefully consider the issues that are specific to compounding of animal drugs, including the significance of using compounded drugs as a treatment option in various veterinary settings and animal species.


FDA Pesticide Analysis Shows Residue Levels Remain Low

Quality Assurance & Food Safety | Posted on November 8, 2017

According to a new FDA report, 98% of domestic and 90% of imported foods tested in FY 2015 were compliant with federal pesticide residue limits. The report covers fiscal year 2015 (Oct. 1, 2014 through Sept. 30, 2015), during which the levels of pesticide chemical residues in or on food generally remained well below established federal tolerances, or EPA limits, the report states. Additionally, no pesticide chemical residues were found in 49.8% of the domestic and 56.8% of the imported human food samples analyzed. The agency found pesticide chemical residues in violation of federal tolerances (residue levels above the tolerance or residues for which no tolerance has been established) in less than 2.0% (15 out of 835) of domestic samples and less than 10% (444 out of 4737) of import samples.FDA also tested food intended for animals. No pesticide chemical residues were found in 51.6% of the 215 domestic animal food samples nor in 57.9% of the 202 imported animal food samples. Less than 3.0% (12 samples) of the animal food samples were found to contain violative pesticide chemical residues.


H.R. 1 - Farmers, Self-Employment Tax and Business Arrangement Structures

Agriculture Law and Taxation Blog | Posted on November 8, 2017

H.R. 1, the House tax bill, was publicly released last week.  Of course, it’s getting a lot of attention for the rate changes for individuals and corporations and flow-through entities.  However, there is an aspect that is getting relatively little focus – how the self-employment tax rules would change and impact leasing and entity structuring.  Most farmers don’t like to pay self-employment tax, and utilize planning strategies to achieve that end.  Such a strategy might include entity structuring, tailoring lease arrangements to avoid involvement in the activity under the lease, and equipment rentals, just to name a few.  However, an examination of the text of the recently released tax bill, H.R. 1, reveals that self-employment tax planning strategy for farmers will change substantially if the bill becomes law.  If enacted, many farmers would see an increase in their overall tax bill while others would get a tax break.  In addition, existing business structures put in place to minimize the overall tax burden would likely need to be modified to achieve that same result.


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