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Friday, April 30, 2010

Agricultural Export Programs: Background and Issues

Melissa D. Ho
Analyst in Agricultural Policy

Charles E. Hanrahan
Senior Specialist in Agricultural Policy

Agricultural exports are important both to farmers and to the U.S. economy. According to the U.S. Department of Agriculture's Economic Research Service (ERS), agricultural exports have exceeded imports since the early 1970s. The most recent outlook for FY2010 has U.S. agricultural exports estimated at $100 billion. While the FY2010 forecast is down from the record level seen in FY2008, the forecast is still the second highest on record. U.S. agricultural imports are forecast to reach $77.5 billion in FY2010, which would result in a $22.5 billion trade surplus for agricultural goods. 

The trade title of the 2008 farm bill, the Food, Conservation, and Energy Act of 2008 (Title III of P.L. 110-246), authorized, amended and repealed certain U.S. agricultural export programs. USDA's Foreign Agricultural Service (FAS) administers three main types of agricultural export programs, which are funded through the borrowing authority of the Commodity Credit Corporation (CCC). Annual appropriations acts, however, sometimes amend the spending limits on these mandatory programs. USDA agricultural export programs include: 

• Direct export subsidy programs: The 2008 farm bill reauthorized the Dairy Export Incentive Program (DEIP), which was reactivated in FY2009 due to falling dairy prices, and repealed authority for the Export Enhancement Program (EEP), which has been inactive since FY2002; 

• Export market development programs: FAS administers five market development programs, whose primary aim is to assist U.S. industry efforts to build, maintain, and expand overseas markets for U.S. agricultural products: these are the Market Access Program (MAP); the Foreign Market Development Program (FMDP); the Emerging Markets Program (EMP); the Quality Samples Program (QSP), and the Technical Assistance for Specialty Crops Program (TASC). The 2008 farm bill made organic products eligible for market development programs and increased funds available to address sanitary and phytosanitary barriers to U.S. specialty crops; 

• Export credit guarantee programs: Through the GSM-102 Program and the Facility Guarantee Program, USDA's CCC guarantees loans so that private U.S. financial institutions will extend financing to buyers in emerging markets that want to purchase U.S. agricultural exports. The 2008 farm bill made changes to export credit programs to conform to U.S. commitments in the World Trade Organization (WTO). The 2008 farm bill also repealed two other export guarantee programs. 

The President's FY2011 budget request includes an additional $53.5 million for agricultural export programs for the Administration's National Export Initiative. Important factors affecting U.S. agricultural exports include the recent global recession (2007-2008), which led to a sharp curtailment of global trade, including agricultural commodities; the depreciation in value of the U.S. dollar, which makes U.S. agricultural exports increasingly competitive in a global market; and increasing global economic growth, particularly in developing and emerging countries, which will likely increase demand for U.S. agricultural commodities in the coming year. Issues for Congress include determining the role and effectiveness of public vs. private sector for investing in the development of new markets; the Brazil WTO case against the U.S. cotton subsidies and implications for trade relations; and the U.S. Trade Representative's approach for addressing agricultural trade barriers, primarily related to sanitary and phytosanitary issues.


Date of Report: April 19, 2010
Number of Pages: 21
Order Number: R41202
Price: $29.95

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Wednesday, April 28, 2010

Food Safety: Foodborne Illness and Selected Recalls of FDA-Regulated Foods

Sarah A. Lister
Specialist in Public Health and Epidemiology

Geoffrey S. Becker
Specialist in Agricultural Policy

The 111th Congress is considering legislation to revise the U.S. food safety system, focusing primarily on those laws and programs administered by the Food and Drug Administration (FDA) within the Department of Health and Human Services (HHS). The House has passed a comprehensive bill, H.R. 2749, and the Senate Committee on Health, Education, Labor, and Pensions has reported its comprehensive proposal, S. 510. The ultimate goal of both bills is to reduce the burden of foodborne illness, which is a considerable and persistent public health problem in the United States. However, an understanding of the true burden of illness caused by foodborne hazards, the risks associated with various types of foods, and the types of regulatory and other approaches that can effectively address these problems has been elusive. 

Public health officials monitor and investigate foodborne illnesses in a number of ways. For example, active surveillance is used to track trends in the incidence of several common bacterial and parasitic foodborne illnesses. Outbreaks of foodborne illness are tracked to help improve approaches to investigation and to identify the foods that cause illnesses, among other things. Genetic "fingerprinting" is used to identify infections from a common source, including large multistate outbreaks, and can also help identify the foods that cause illnesses. These systems are administered jointly by various federal agencies, in partnership with state health officials. Collectively, these tools and others can shed light on the burden of foodborne illness in the United States, and ways to decrease it. However, these systems also have two significant shortcomings. First, because they monitor a limited number of known food safety threats, and because foodborne illnesses are substantially underreported, these systems do not, individually or collectively, capture the magnitude of foodborne illness that occurs each year. Second, these systems often detect or track the contaminant that causes illness, rather than the type of food that was contaminated, although it is the latter that government officials actually regulate. 

Consumers and the media often focus on recalls—particularly those that are extensive and/or that involve widely consumed products—as indicators of the safety of the U.S. food supply. In many but certainly not all cases, products subject to a recall may have sickened or killed people or other animals. It is not always clear, however, how useful recall data are as a measure of the burden of foodborne illness or the effectiveness of federal food safety programs. For example, does a relatively high number of recalls signify a failure of the system to keep unsafe products from being consumed? Or is it actually an indication that the safety net is working by finding and getting tainted products off the market? Conversely, is a relatively low number of recalls an indication of the system's effectiveness, or simply of not reporting or finding all defective food products? Because of these questions, caution should be exercised in using recall data as the basis for concluding that certain changes are needed in the nation's food safety systems. 

This report describes several systems to monitor foodborne illnesses, discussing their strengths and the gaps that remain in understanding the burden of foodborne illness in the United States. Next, this report presents recent data on more serious recalls of FDA-regulated foods, also discussing the strengths and gaps associated with the information. Finally, this report describes three recent foodborne outbreaks that led to nationwide recalls of FDA-regulated foods: (1) Salmonella in peanut products, (2) melamine in pet foods and dairy products, and (3) E. coli in spinach. Following each description are discussions of associated policy issues, and, if applicable, how these issues are addressed in food safety legislation pending before the 111th Congress. Descriptions of selected authorities in the Federal Food, Drug, and Cosmetic Act (FFDCA), FDA's principal food safety law, are provided in the Appendix.


Date of Report: April 15, 2010
Number of Pages: 30
Order Number: R40916
Price: $29.95

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Wednesday, April 21, 2010

Actual Farm Bill Spending and Cost Estimates

Jim Monke
Specialist in Agricultural Policy

Renée Johnson
Specialist in Agricultural Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246), enacted into law in June 2008, is the most recent omnibus farm bill and guides most federal farm and food policies. The 112th Congress likely will consider reauthorization of the 2008 farm bill, because much of the current law expires in 2012. The omnibus nature of the farm bill—including diverse constituencies supporting farm subsidies, food stamps, conservation, bioenergy, and international food aid— helps generate interest across Congress to support passage. However, increasingly tight budgetary resources are prompting the chairman of the House Agriculture Committee to initiate hearings starting as early as spring 2010. The Administration already has submitted budget proposals to reduce farm supports, an approach at odds with that of many farm sector advocates who support the status quo. 

When the 2008 farm bill was enacted, the Congressional Budget Office (CBO) estimated its total cost (i.e., baseline plus new funding outlays, using the March 2007 baseline) at $284 billion over five years (FY2008-FY2012) and $604 billion over ten years (FY2008-FY2017). These costs reflected mandatory outlays that do not require appropriations action. Available information reflecting more recent CBO estimates for FY2010-FY2012 and actual expenditures for FY2008- FY2009 indicate that five-year spending on most major farm bill programs will likely be below that estimated by CBO in 2008, while spending for domestic food assistance programs under the 2008 farm bill will almost certainly be much greater than previously estimated. 

For example, when the 2008 farm bill was enacted, CBO estimated that the five-year cost (FY2008-FY2012) for the major farm support programs—commodities, conservation, crop insurance, renewable energy, and exports—would be $83.3 billion, or an average of $16.7 billion per year. More current CBO projections, which include actual spending in FY2008 and FY2009 for these programs, shows that spending for these programs is expected to total $88.7 billion (an average of $17.7 billion per year), or $5.5 billion above the five-year 2008 CBO estimate. Most of the difference between the 2008 estimate and more recent estimates is attributable to higher than expected crop insurance spending ($8.2 billion above estimates in 2008), offset by lower than expected spending for farm commodity and farm conservation programs. Estimated spending for the Supplemental Nutrition Assistance Program or SNAP (food stamps) over the five-year period is significantly higher than originally projected in 2008 ($188.9 billion estimated in 2008, compared to the more current estimate of $314.9 billion), reflecting additional spending because of provisions in the American Recovery and Reinvestment Act (ARRA), higher food costs, and increasing program participation rates due to the recession. 

Similar to the conditions during debate of the 2008 farm bill, the upcoming farm bill debate is likely to be driven in part by relatively large budget deficits and growing demands for fiscal constraint. As Congress moves toward considering reauthorization of the omnibus farm bill, questions about the cost of the farm bill and cost considerations among different farm bill programs will become more prominent. Among the types of questions frequently asked about farm bill spending are: What is the estimated cost of the current 2008 farm bill? How much more or less has actually been spent on the 2008 farm bill than was estimated at the time of enactment? What is the estimated cost of some of the major programs in the 2008 farm bill? This report begins to answer some of these questions and provides updated information on actual expenditures for some programs and baseline projections by CBO for spending under current law.


Date of Report: April 20, 2010
Number of Pages: 12
Order Number: R41195
Price: $29.95

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Tuesday, April 20, 2010

Brazil’s WTO Case Against the U.S. Cotton Program

Randy Schnepf
Specialist in Agricultural Policy

On April 5, 2010, Brazil's Foreign Trade Council (CAMEX) approved a resolution that would postpone until April 22 the implementation of WTO-approved countermeasures by Brazil against U.S. imports in relation to a long-running dispute over U.S. cotton subsidies. Earlier, on March 10, 2010, Brazil had released a list of 102 goods of U.S. origin valued at $561 million that would be subject to import tariffs of up to 100% within 30 days unless a last-minute agreement was reached. Five days later, on March 15, Brazil released a preliminary list of U.S. patents and intellectual property rights it could restrict, barring a joint settlement. In light of the temporary suspension of countermeasures, negotiations between the United States and Brazil on a proposed settlement continue. If preliminary objectives (discussed in the report) are achieved, it may result in the permanent suspension of any countermeasures related to this case. 

This trade dispute had its origins in 2002, when Brazil—a major cotton export competitor— expressed its growing concerns about U.S. cotton subsidies by initiating a World Trade Organization (WTO) dispute settlement case (DS267) against specific provisions of the U.S. cotton program. On September 8, 2004, a WTO dispute settlement panel ruled against the United States on several key issues. It found both (1) prohibited U.S. export subsidies (related to Step 2 program payments and export credit guarantees under the GSM-102 program) and (2) actionable U.S. domestic support measures (i.e., marketing loan benefits and counter-cyclical program payments) that resulted in adverse effects against Brazil's commercial interests. 

The United States appealed the ruling, but on March 3, 2005, a WTO Appellate Body upheld the panel's ruling and provided specific deadlines for removal or modification of the offending U.S. subsidies. Shortly after the March 2005 ruling, the United States made several changes to its cotton programs in an attempt to bring them into compliance with the WTO recommendations. However, Brazil argued that the U.S. response was inadequate, and requested the establishment of a WTO compliance panel in August 2006 to review whether the United States had fully complied with the previous rulings. The compliance panel ruled against the United States in December 2007, and the ruling was upheld on appeal in June 2008. 

On August 31, 2009, a WTO arbitration panel (reviewing Brazil's retaliation proposal of nearly $3 billion) released its decision, generally finding in favor of Brazil's retaliation requests but at levels substantially reduced from those requested by Brazil. However, in a key decision, the panel ruled that Brazil would be entitled to cross-retaliation if the overall retaliation amount exceeded a formula-based variable annual threshold. Cross-retaliation involves countermeasures in sectors outside of the trade in goods, most notably in the area of U.S. copyrights and patents. 

On December 21, 2009, Brazil announced that it was authorized by the WTO to impose trade retaliation against up to $829.3 million in U.S. goods in 2010 (based on 2008 data). The countermeasure included a fixed annual amount of $147.3 million, reflecting the adverse effects from U.S. price-contingent subsidies, and a balance related to the volume of U.S. export credit guarantees, which may vary annually. The WTO also established a threshold value (related to the value of Brazil's consumer goods imports from the United States) for determining the extent of permissible cross-retaliatory countermeasures. The threshold varies annually based on changes in Brazil's total imports from the United States, but is currently estimated at $561 million, yielding a remaining value of $268.3 million ($829.3 million - $561 million) in eligible cross-retaliatory countermeasures.


Date of Report: April 6, 2010
Number of Pages: 41
Order Number: RL32571
Price: $29.95

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Monday, April 19, 2010

Selected Issues Related to an Expansion of theRenewable Fuel Standard (RFS)

Randy Schnepf
Specialist in Agricultural Policy

Brent D. Yacobucci
Specialist in Energy and Environmental Policy

Federal policy has played a key role in the emergence of the U.S. biofuels industry. Policy measures include minimum renewable fuel usage requirements, blending and production tax credits, an import tariff, loans and loan guarantees, and research grants. This report focuses on the mandated minimum usage requirements—referred to as the Renewable Fuel Standard (RFS)— whereby a minimum volume of biofuels is to be used in the national transportation fuel supply. It describes the general nature of the RFS mandate and its implementation, and outlines some emerging issues related to the sustainability of the continued growth in U.S. biofuels production needed to fulfill the expanding RFS mandate, as well as the emergence of potential unintended consequences of this rapid expansion. 

Congress first established an RFS with the enactment of the Energy Policy Act of 2005 (EPAct, P.L. 109-58). This initial RFS (referred to as RFS1) mandated that a minimum of 4 billion gallons be used in 2006, and that this minimum usage volume rise to 7.5 billion gallons by 2012. Two years later, the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) superseded and greatly expanded the biofuels blending mandate. The expanded RFS (referred to as RFS2) required the annual use of 9 billion gallons of biofuels in 2008 and expanded the mandate to 36 billion gallons annually in 2022, of which only 15 billion gallons can be ethanol from corn starch. In addition, EISA carved out specific requirements for "advanced biofuels," biomass-based biodiesel, and cellulosic biofuels. 

The Environmental Protection Agency (EPA) is responsible for establishing and implementing regulations to ensure that the nation's transportation fuel supply contains the mandated biofuels volumes. EPA's initial regulations for administering RFS1 (issued in April 2007) established detailed compliance standards for fuel suppliers, a tracking system based on renewable identification numbers (RINs) with credit verification and trading, special treatment of small refineries, and general waiver provisions. EPA rules for administering RFS2 (issued in February 2010) built upon the earlier RFS1 regulations; however, there are four major distinctions. First, mandated volumes are greatly expanded and the time frame over which the volumes ramp up is extended through at least 2022. Second, the total renewable fuel requirement is divided into four separate, but nested categories—total renewable fuels, advanced biofuels, biomass-based diesel, and cellulosic ethanol—each with its own volume requirement. Third, biofuels qualifying under each category must achieve certain minimum thresholds of lifecycle green house gas (GHG) emission reductions, with certain exceptions applicable to existing facilities. Fourth, all renewable fuel must be made from feedstocks that meet a new definition of renewable biomass, including certain land use restrictions. 

In the long term, the expanded RFS is likely to play a dominant role in the development of the U.S. biofuels sector, but with considerable uncertainty regarding potential spillover effects in other markets and on other important policy goals. Emerging resource constraints related to the rapid expansion of U.S. corn ethanol production have provoked questions about its long-run sustainability and the possibility of unintended consequences in other markets as well as on the environment. Questions also exist about the ability of the U.S. biofuels industry to meet the expanding mandate for biofuels from non-corn sources such as cellulosic biomass materials, whose production capacity has been slow to develop, or biomass-based biodiesel, which remains expensive to produce owing to the relatively high prices of its feedstocks. Finally, considerable uncertainty remains regarding the development of the infrastructure capacity (e.g., trucks, pipelines, pumps, etc.) needed to deliver the expanding biofuels mandate to consumers.


Date of Report: April 6, 2010
Number of Pages: 31
Order Number: R40155
Price: $29.95

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Saturday, April 17, 2010

U.S.-Russia Meat and Poultry Trade Issues

Renée Johnson
Specialist in Agricultural Policy

Geoffrey S. Becker
Specialist in Agricultural Policy

In December 2008, the United States and Russia signed a protocol aimed at resolving various emerging trade issues between the two countries in order to continue U.S. livestock and poultry exports to Russia through the end of 2009. By December 2009, however, Russia had escalated these trade issues in a series of actions that threatened to shut out U.S. livestock and poultry exports. These actions, in part, followed on Russia's statements throughout 2008 and 2009 regarding its concerns about antimicrobial use in U.S. meat production. 

Russia has continued to cite various food safety concerns, including concerns about antimicrobial residues and the use of chlorine rinses on U.S. meat exports, and identified several U.S. poultry and meat processing companies as ineligible to export meat to Russia. In 2008 and again in 2009, Russia announced that it was banning poultry imports from several U.S. establishments due to safety concerns. In addition, throughout 2008 and 2009, Russia refused imports of pork products from several U.S. plants because trace amounts of antibiotics were found in some of the meat tested. As part of these actions, Russian officials signaled that U.S. permits to import poultry and pork under that country's quota system might be restricted. (Russia also banned pork products for most of 2009 from several countries, including the United States, following reports about the H1N1 influenza virus in April 2009.) 

In December 2009, Russia announced that it would implement its previously proposed ban on poultry imports treated with chlorine washes from all exporting countries, effective January 1, 2010. This action was expected to effectively ban all U.S. poultry exports to Russia, since pathogen reduction rinses are commonplace in U.S. poultry production. (A similar European Union (EU) prohibition has kept U.S. chicken out of the EU since 1997.) By late March 2010, trade reports were indicating that a potential resolution of the poultry dispute might be close. The delistings, as of late 2009, of virtually all U.S. pork plants that exported to Russia (purported to be mainly due to concerns about findings of trace amounts of antimicrobials on pork) was reportedly resolved earlier in March. 

Also in December 2009, reports emerged that Russia would reduce its 2010 import quotas for U.S. pork and poultry below 2009 quota levels. Russia's import quotas for U.S. beef, however, would be increased above 2009 levels. Quota allocations for U.S. pork and poultry are expected to be reduced even further in both 2011 and 2012. 

Many U.S. producers believe that Russia's food safety restrictions, including those regarding antimicrobial use, are not science-based, but are instead intended to protect and promote Russia's own growing domestic pork and poultry production. Some further point out that Russia's perceived "zero tolerance" regarding antimicrobial use is the most restrictive among all U.S. trading partners. 

For U.S. poultry and meat producers, the economic stakes of Russian import actions are significant. In 2008, Russia was the single largest export market for U.S. poultry products, with exports valued at more than $820 million (about 18% of total U.S. poultry exports). Russia was also among the leading export markets for U.S. pork and beef products, valued at $330 million and nearly $70 million, respectively. All these export products had also experienced strong growth in the Russian market. Members of Congress with important poultry and meat industry constituents have been monitoring events and ongoing negotiations between the United States and Russia to resolve these disputes.



Date of Report: April 2, 2010
Number of Pages: 13
Order Number: RS22948
Price: $29.95

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Wednesday, April 14, 2010

Agricultural Biotechnology: The U.S.-EU Dispute

Charles E. Hanrahan
Senior Specialist in Agricultural Policy

In May 2003, the United States, Canada, and Argentina initiated a dispute with the European Union concerning the EU's de facto moratorium on biotechnology product approvals, in place since 1998. Although the EU effectively lifted the moratorium in May 2004 by approving a genetically engineered (GE) corn variety (MON810), the three complainants pursued the case, in part because a number of EU member states continue to block already approved biotech products. Industry estimates are that the moratorium costs U.S. corn growers some $300 million in exports to the EU annually. Corn gluten exports from the United States to the EU have been blocked since 2007 because of a zero tolerance policy governing the accidental presence of non-approved U.S. GE corn in such shipments. 

On November 21, 2006, the WTO's Dispute Settlement Body (DSB) adopted the dispute panel's report, which ruled that a moratorium had existed, that bans on EU-approved GE crops in six EU member countries violated WTO rules, and that the EU failed to ensure that its approval procedures were conducted without "undue delay." The EU announced it would not appeal the ruling. The United States and EU agreed on November 21, 2007 (subsequently extended to January 11, 2008), as a deadline for EU implementation of the panel report. On January 11, 2008, the U.S. Trade Representative announced that, while it was reserving its rights to retaliate, it would hold off seeking a compliance ruling while the United States sought to normalize trade in biotechnology products with the EU. 

In the meantime, co-complainants Canada (July 15, 2009) and Argentina (March 18, 2010) have reached "final settlements" in the biotech dispute with the EU. Canada, Argentina, and the EU notified the DSB of their mutually agreed solution under Article 3.6 of the DSU. The parties agreed to establish a bilateral dialogue on agricultural biotech market access issues of mutual interest. 

U.S. agricultural and trade officials continue to criticize the EU for its biotech approval processes. During the second session of the 111th Congress, Members with agricultural interests may debate the issue of whether to continue a dialogue with the EU on re-establishing trade in biotechnology products or to seek retaliation for presumed lack of EU compliance with the panel decision.


Date of Report: April 8, 2010
Number of Pages: 11
Order Number: RS21556
Price: $29.95

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Sunday, April 11, 2010

Environmental Quality Incentives Program (EQIP): Status and Issues

Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

The Environmental Quality Incentives Program (EQIP) is a voluntary program that provides farmers with financial and technical assistance to plan and implement soil and water conservation practices. EQIP is the largest agriculture conservation financial assistance program for working lands. EQIP was first authorized in 1996 and was most recently revised by Section 2501 of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill). It is a mandatory spending program (i.e., not subject to annual appropriations) and is administered by the U.S. Department of Agriculture's (USDA's) Natural Resources Conservation Service (NRCS). Funding is currently authorized to grow to $1.75 billion in FY2012. Eligible land includes cropland, rangeland, pasture, non-industrial private forestland, and other land on which resource concerns related to agricultural production could be addressed through an EQIP contract. 

With the 111th Congress facing tighter budget constraints, EQIP could face similar challenges with a potential reduction in mandatory funding levels and a continuing backlog of unfunded applications. A change in income limitations along with a new waiver created in the 2008 farm bill could also raise issues for the program. EQIP will also continue to face challenges in measuring environmental and program accomplishments.


Date of Report: March 29, 2010
Number of Pages: 13
Order Number: R40197
Price: $29.95

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Saturday, April 3, 2010

Meat and Poultry Inspection: Background and Selected Issues

Geoffrey S. Becker
Specialist in Agricultural Policy

The U.S. Department of Agriculture's (USDA's) Food Safety and Inspection Service (FSIS) must inspect most meat, poultry, and processed egg products for safety, wholesomeness, and labeling. Federal inspectors or their state counterparts are present at all times in virtually all slaughter plants and for at least part of each day in establishments that further process meat and poultry products. Debate has ensued for decades over whether this system, first designed in the early 1900s, has kept pace with changes in the food production and marketing industries. 

Several significant changes in meat and poultry inspection programs were included in the 2008 farm bill (P.L. 110-246), signed into law in June 2008. These include permitting certain stateinspected meat and poultry products to enter interstate commerce, just like USDA-inspected products; bringing catfish under mandatory USDA inspection; requiring an inspected establishment to notify USDA if it believes that an adulterated or misbranded product has entered commerce; and requiring establishments to prepare and maintain written recall plans. USDA's implementation of these provisions is an oversight item for the 111th Congress. Other recent inspection issues could receive continued attention in the 111th Congress, which currently appears to be focused on broader legislation to reform food safety programs—notably those of the U.S. Food and Drug Administration (FDA), which oversees all foods other than meat and poultry. Issues relevant to FSIS programs include the following. 

Is enough being done to address longstanding concerns about naturally occurring microbiological contamination?
In 1996, FSIS added a sweeping new system known as Hazard Analysis and Critical Control Point (HACCP)—essentially plant-specific contamination prevention plans—on top of the traditional "sight-, smell-, and touch-based" inspection system. However, recalls due to pathogen problems continue to occur, and the significant rates of decline in the incidence of some major foodborne pathogens have not been sustained in recent years, according to government data. Past proposals to delineate pathogen performance standards and/or safe tolerance levels could again be offered. 

Should USDA have authority to mandate recalls of meat and poultry products, as advocates have requested?
FSIS now relies on the establishments to recall adulterated products but asserts that this approach, along with other enforcement tools, is sufficient to protect consumers. Those wanting mandatory recall authority also contend that an improved ability to trace animals, meat, and poultry products should be built into the system to make recalls more effective. 

Does FSIS have adequate funding and resources, and/or should industry pay more for inspection?
FSIS inspection is mainly funded through USDA's annual appropriation, with some user fees authorized to cover plant overtime and holiday inspection costs. Congress has denied successive Administrations' proposals for additional user fees. Congress also has used annual appropriations measures to direct FSIS's administration of its programs. Examples include prohibiting implementation of a rule that would allow imports of some Chinese poultry products; prohibiting the use of funds to inspect horses to be used for food for humans; and slowing the agency's implementation of a controversial "risk based inspection system" (RBIS, now being retooled as the "Public Health Based Inspection System") aimed at shifting some existing FSIS resources from processing plants and products that pose relatively lower safety risks to others posing relatively higher risks. 
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Date of Report: March 22, 2010
Number of Pages: 31
Order Number: RL32922
Price: $29.95

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Friday, April 2, 2010

Renewable Energy Programs in the 2008 Farm Bill

Megan Stubbs
Analyst in Agricultural Conservation and Natural Resources Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) extends and expands many of the renewable energy programs originally authorized in the Farm Security and Rural Investment Act of 2002 (P.L. 107-171, 2002 farm bill). The bill also continues the emphasis on the research and development of advanced and cellulosic bioenergy authorized in the 2007 Energy Independence and Security Act (P.L. 110-140). 

Farm bill debate over U.S. biomass-based renewable energy production policy focused mainly on the continuation of subsidies for ethanol blenders, continuation of the import tariff for ethanol, and the impact of corn-based ethanol on agriculture. The enacted bill requires reports on the economic impacts of ethanol production, reflecting concerns that the increasing share of corn production being used for ethanol had contributed to high commodity prices and food price inflation. 

Title VII, the research title of the 2008 farm bill, contains numerous renewable energy related provisions that promote research, development, and demonstration of biomass-based renewable energy and biofuels. The Sun Grant Initiative coordinates and funds research at land grant institutions on biobased energy technologies. The Agricultural Bioenergy Feedstock and Energy Efficiency Research and Extension Initiative provides support for on-farm biomass energy crop production research and demonstration. 

Title IX, the energy title of the farm bill, authorizes mandatory funds (not subject to appropriations) of $1.1 billion, and discretionary funds (subject to appropriations) totaling $1.0 billion, for the FY2008-FY2012 period. Energy grants and loans provided through initiatives such as the Bioenergy Program for Advanced Biofuels promote the development of cellulosic biorefinery capacity. The Repowering Assistance Program supports increasing efficiencies in existing refineries. Programs such as the Rural Energy for America Program (REAP) assist rural communities and businesses in becoming more energy-efficient and self-sufficient, with an emphasis on small operations. The Biomass Crop Assistance Program, the Biorefinery Assistance Program, and the Forest Biomass for Energy Program provide support to develop alternative feedstock resources and the infrastructure to support the production, harvest, storage, and processing of cellulosic biomass feedstocks. Cellulosic feedstocks—for example, switchgrass and woody biomass—are given high priority both in research and funding. 

Title XV of the 2008 farm bill contains tax and trade provisions. It continues current biofuels tax incentives, reducing those for corn-based ethanol but expanding tax credits for cellulosic ethanol. The tariff on ethanol imports is extended. 

Implementation of the farm bill's energy provisions is underway. President Obama, in May 2009, directed the U.S. Department of Agriculture (USDA) and the Department of Energy (DOE) to accelerate implementation of renewable energy programs. Notices and proposed rules have appeared in the Federal Register soliciting applications for the Biorefinery Program, the Rural Energy for America Program, and the Biomass Crop Assistance Program.


Date of Report: March 22, 2010
Number of Pages: 20
Order Number: RL34130
Price:$29.95
Document available electronically as a pdf file or in paper form.
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Russian Energy Policy Toward Neighboring Countries

Steven Woehrel
Specialist in European Affairs

The Russian oil and natural gas industries are key players in the global energy market, particularly in Europe and Eurasia. Another trend has been the concentration of these industries in the hands of the Russian government. This latter phenomenon has been accompanied by an authoritarian political system, in which former intelligence officers play key roles. 

Russian firms have tried to purchase a controlling stake in pipelines, ports, storage facilities, and other key energy assets of European countries. They need these assets to transport energy supplies to lucrative western European markets, as well as to secure greater control over the domestic markets of the countries of the region. In several cases where assets were sold to non-Russian firms, Russian firms cut off energy supplies to the facilities. Russia has also tried to build new pipelines to circumvent infrastructure that it does not control. Another objective Russia has pursued has been to eliminate the energy subsidies former Soviet republics have received since the fall of the Soviet Union, including by raising the price these countries pay for natural gas to world market prices. 

It is not completely clear whether the pursuit of Russian foreign policy objectives is the primary explanation for the actions of its energy firms. Few would disagree in principle that the elimination of subsidies to post-Soviet countries is a sound business decision, even if questions have been raised about the timing of such moves. Even the pursuit of multiple pipelines can be portrayed as a business decision. On the other hand, many countries of the region are concerned that Russia may use their energy dependency to interfere in their domestic affairs or to force them to make foreign policy concessions. Countries of the region also fear that by controlling energy infrastructure in their countries, Russian energy firms are able to manipulate the internal political situation by favoring certain local businessmen and politicians. However, the current global economic crisis has hurt Russia's energy firms and Russia's international clout, as energy prices have tumbled. 

Bush Administration officials repeatedly criticized what they viewed as Russian efforts to use its energy supplies as a political weapon. The Obama Administration, like its predecessor, has urged European countries to reduce their dependence on Russian energy, but has said the United States is trying to cooperate with Moscow on the issue. The United States has strongly advocated the building of multiple pipelines from Central Asia and Azerbaijan to Europe. Members of Congress have expressed concern about the impact on European countries of their dependence on Russian energy. In the 111th Congress, committees have held hearings that have touched on the issue. Congress has also passed resolutions that refer to worrisome aspects of Russian energy policy.


Date of Report: March 22, 2010
Number of Pages: 25
Order Number: RL34261
Price:$29.95

Document available electronically as a pdf file or in paper form.
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