WASHINGTON, Dec. 2, 2015 - December is shaping up to be one of the biggest months in memory for U.S. agriculture. But there also could be plenty of disappointments as lawmakers rush to cut deals on a host of issues, ranging from critical tax benefits to biotech labeling.
The first big win came Tuesday when congressional negotiators released a compromise, long-term highway bill, which among other things would reverse a $3 billion cut to crop insurers by reducing Federal Reserve dividends to big banks. The crop insurance cut had been included in the two-year budget agreement enacted in November.
Other legislation in the works could have even more far-reaching implications. Congressional Republicans are negotiating with Democrats on a tax package that could make both the expanded Section 179 expensing allowance and the 50-percent bonus depreciation provision permanent. Both tax incentives, which are heavily used by farmers, expired last year. Democrats, meanwhile, are pushing for the tax package to include measures such as an expansion of the Earned-Income Tax Credit.
“It’s a no-brainer for me, but we’re not there yet,” Ohio Rep. Pat Tiberi, a Republican member of the House Ways and Means Committee, said of the permanent Section 179 extension. He said the Section 179 allowance “in particular is very bipartisan, supported on Main Street throughout everybody’s congressional district.”
Under the deal being negotiated, the production tax credit for wind would be phased out after five years, says Senate GOP Conference Chairman John Thune of South Dakota.
Failure to reach a deal would likely mean another short-term extension of the expired tax benefits.
The biotech labeling issue also is headed down to the wire. The industry is eager to see legislation preempting state GMO labeling laws included in the fiscal 2016 omnibus spending bill expected to be unveiled next week.
But Sen. Debbie Stabenow of Michigan, who has been leading the negotiations on a bipartisan way to preempt state GMO labeling laws, tells Agri-Pulse that she has reached an impasse on the issue because of resistance to mandating that companies disclose biotech ingredients through electronic means, such as the QR codes that smartphones can read.
“I don’t see any way that there will be a bipartisan compromise,” said Stabenow, the top Democrat on the Senate Agriculture Committee. At another point, she said, "I don’t see a path forward to get the bipartisan consensus that is needed right now, regrettably.”
“So far, there’s not a willingness to set a requirement for national disclosure of any kind,” Stabenow said “Folks want it to be all voluntary.”
Industry sources are privately more optimistic, with one even suggesting there could be a deal yet this week. Another source said the industry has refused to accept a requirement that there be a symbol or wording next to the bar code calling attention to the GMO content. “There is a lot of room for discussion on this whole disclosure piece,” the source said.
Food companies, meanwhile, can’t wait beyond the omnibus, the source said, because they need to know by the first of the year whether they will be required to comply with a Vermont labeling law that takes effect in July.
The Grocery Manufacturers Association this morning is announcing the launch of an electronic disclosure initiative that has been in the works for months and will serve as the method of reporting various attributes of a product, including the presence of genetically engineered ingredients.
House Agriculture Chairman Mike Conaway, R-Texas, said Stabenow will take the blame if the negotiations fail. “She’ll own the hammer that is dropped on all of America with respect to this issue,” Conaway tells Agri-Pulse.
He and his committee’s top Democrat, Collin Peterson of Minnesota, both insist that the electronic disclosure should be voluntary. “I’m unconvinced that it ought to be mandatory,” Conaway said. “That makes it looks like a safety issue and that is not the case.” Peterson’s argument is that it’s premature to make disclosure mandatory because there isn’t agreement on what crop breeding techniques constitute genetic engineering.
Scott Faber, who heads up the Just Label It coalition that advocates mandatory GMO labeling, said “it’s ludicrous to imagine that the authors of the omnibus would airdrop something this controversial into this must-pass spending bill.”
Several other issues also are going down to the wire as congressional leaders prepare to bring out the 2016 omnibus: reauthorization of child nutrition programs, repeal of the mandatory country-of-origin-labeling law for meat, and reauthorization of the Commodity Futures Trading Commission. All three could be in the omnibus, lawmakers say, but the child nutrition measure appears to be the closest to being wrapped up.
The key issue with repealing mandatory COOL is whether there would still be a definition for U.S.-produced meat that voluntary labeling programs would have to use.
Stabenow has insisted on retaining the current definition -- livestock that has been, born, raised and slaughtered in the United States. The meat industry has been just as insistent that the definition be dropped. The World Trade Organization is due to rule Dec. 7 on how much in retaliatory tariffs Canada and Mexico can impose on U.S. products if the law isn’t repealed.
“I do think we need to do something on COOL,” Stabenow said. “I’m open to doing that. I do think there is a sense of urgency coming in terms of retaliation… It’s more realistic that we could resolve COOL than it is GMO labeling before the end of the year.”
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