WASHINGTON, Dec. 3, 2015 - Senators who have been trying to negotiate a compromise bill to block state GMO labeling laws say the issue is dead for this year.

Agriculture interests and food companies have been holding out hope that compromise legislation could be inserted in a must-pass omnibus spending bill that is expected to be released next week. 

“There is no bipartisan support to do anything on GMOs,” Sen. Debbie Stabenow told Agri-Pulse Thursday evening. The Michigan Democrat said the issue would be a “top priority for me in January to get a bipartisan agreement.” 

Industry sources who spoke with Senate Agriculture Chairman Pat Roberts, R-Kan., earlier Thursday were still holding out hope of a last-minute deal, saying he believes it is possible to place federal preemption language in the omnibus.

Stabenow, the top Democrat on the Senate Agriculture Committee, said earlier this week that the negotiations had broken down over resistance to a mandatory disclosure system. An industry source said labeling proponents were demanding that there be a special symbol or wording on food packages that contain biotech ingredients. 

“All along the challenge was bringing the parties together,” said North Dakota Republican John Hoeven, who had been working with Stabenow on the issue. “I had hoped we could do that and get some consensus approach by year end, but at this point it doesn’t look we can do that, but we can continue to work on it.”

Industry officials have been saying that food companies needed to know by the first of the year whether they would have to comply with a Vermont labeling law that takes effect in July. Efforts are under way in other states as well to enact labeling requirements.  

The food industry is launching a smartphone-based ingredient disclosure system that will allow consumers to scan a QR code on package labels to get information about a variety of product attributes, including biotech ingredients, farm production methods and allergens. The information also will be accessible on the web. 

The Hershey Co. is the first company to adopt the SmartLabel and about 30 companies are expected to put information about GMO ingredients in the Smart Label system for about 20,000 products over the next couple of years.

Pro-labeling activists say the SmartLabel doesn’t address consumer demand for wording on the label and can’t be used easily by people without smartphones. 

“Our view is that there should be a disclosure on the package that works for consumers,” said Scott Faber, executive director of the Just Label It coalition.

"Many consumers will look at a two-dimensional bar code and not realize that’s a way to get information about GMOs," he said.

The House this summer approved a preemption bill, 275-175, but it didn’t mandate the electronic disclosure that Stabenow says is necessary for it to pass the Senate. The legislation she was negotiating would go beyond the House bill and require the Agriculture Department to define what breeding methods would be considered genetic engineering for purposes of disclosure. 

House Agriculture Chairman Mike Conaway, R-Texas, said if Congress doesn’t address the issue this month the political pressure will only build next year. 

“Other states will begin to adopt their biotech system and that will help focus the mind on this issue. It’s not going to go away just because we ignore it,” he said. Conaway opposes a mandatory electronic disclosure requirement that Stabenow believes is important. 

Also hanging in the balance this month is a big tax package that could make permanent the expired Section 179 expensing allowance that is widely used for farm equipment purchases. Democrats are pushing to also make permanent a pair of tax credits for children and low-income wage earners, and there have been concerns that the negotiations could fall apart over the cost of the legislation. 

House Majority Leader Kevin McCarthy, R-Calif., said Thursday that the negotiations were “back on track.”

The top Democrat on the Senate Finance Committee, Ron Wyden of Oregon, issued an upbeat assessment of the talks. “There is a growing appetite to find a substantial and balanced deal,” he said. “Congress has an opportunity here to provide greater economic certainty for working families, college students, charities, small business and enterprises on the forefront of innovation.”

The package also could provide for a multiyear phaseout of the production tax credit that subsidizes wind power. The $1-a-gallon tax credit for biodiesel also is under discussion.

Sens. Chuck Grassley, R-Iowa, and Maria Cantwell, D-Wash., are proposing to shift it from a credit that goes to refiners to one that goes to domestic producers. 

“Converting to a production credit would improve the biodiesel incentive in many ways. It would make the biodiesel incentive easier to administer,” Grassley said. “Also, a credit for domestic production would ensure that we’re incentivizing a domestic industry rather than subsidizing imported biofuels. 

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