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Wednesday, December 22, 2010

The Federal Food Safety System: A Primer

Renée Johnson
Specialist in Agricultural Policy

Numerous federal, state, and local agencies share responsibilities for regulating the safety of the U.S. food supply, which many experts say is among the safest in the world. Nevertheless, critics view this system as lacking the organization, regulatory tools, and resources to adequately combat foodborne illness—as evidenced by a series of widely publicized food safety problems, including concerns about adulterated food and food ingredient imports, and illnesses linked to various types of fresh produce, to peanut products, and to some meat and poultry products.

A number of comprehensive food safety proposals aimed at addressing perceived shortcomings in the U.S. food safety system were introduced but not enacted by the 110
th Congress. These included measures to reform the Food and Drug Administration’s (FDA’s) oversight of food and other imports, to create a new independent food safety agency, and to impose a variety of new requirements on food manufacturers, handlers, and producers (including farms), such as mandated risk-based safety plans, recordkeeping for product tracing purposes, more rigorous registration requirements, and performance standards. The adequacy of inspection resources also has been at issue, and appropriators have been ramping up funding for the major agencies, particularly FDA.

Bills with similarly broad goals (such as H.R. 759, which was revised and reintroduced in June 2009 as H.R. 2749; H.R. 875; H.R. 1332; and S. 510) re-emerged in the 111
th Congress. On the one hand, food safety reform is a relatively complex, controversial matter competing for attention with a long list of domestic priorities. On the other hand, there has been a growing consensus that changes are needed.

Lawmakers took the first step toward new legislation on June 10, 2009, when the House Energy and Commerce Subcommittee on Health approved an amended version of H.R. 2749. The full committee approved the bill, with additional changes, on June 17, 2009, and the full House passed a further-modified H.R. 2749 on July 30, 2009. The Senate also has reported a comprehensive bill (S. 510).

The Senate Health, Education, Labor, and Pensions Committee amended and approved S. 510, and later reported it in December 2009. In mid-July 2010, potential amendments to the bill were being discussed, aimed at addressing issues of continued interest to various Senators. In August 2010, a group of Senate leaders released a manager’s amendment to S. 510. However, Senate floor action continued to be held up by objections about the projected cost of the bill, as well as continued attempts to further amend it. In November 2010, the Senate resumed consideration of its bill and a second substitute amendment to S. 510 (S.Amdt. 4715) was offered. This substitute amendment to S. 510 passed the Senate on November 30, 2010. Following passage of the Senate bill, however, it was reported that the House may block the Senate bill using a procedure known as “blue-slipping,” because the bill contains fees that might be subject to certain tax origination provisions. (For more details see CRS Report R40443, Food Safety in the 111
th Congress: H.R. 2749 and S. 510.)


Date of Report: December 15, 2010
Number of Pages: 14
Order Number: RS22600
Price: $29.95

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The Pigford Cases: USDA Settlement of Discrimination Suits by Black Farmers

Tadlock Cowan
Analyst in Natural Resources and Rural Development

Jody Feder
Legislative Attorney


On April 14, 1999, Judge Paul L. Friedman of the U.S. District Court for the District of Columbia approved a settlement agreement and consent decree in Pigford v. Glickman, a class action discrimination suit between the U.S. Department of Agriculture (USDA) and black farmers. The suit claimed that the agency had discriminated against black farmers on the basis of race and failed to investigate or properly respond to complaints from 1983 to 1997. The deadline for submitting a claim as a class member was September 12, 2000. As of November 2010, 15,642 (69%) of the 22,721 eligible class members had final adjudications approved.

Many voiced concern over the structure of the settlement agreement, the large number of applicants who filed late, and reported deficiencies in representation by class counsel. A provision in the 2008 farm bill (P.L. 110-246) permitted any claimant who had submitted a late-filing request under Pigford and who had not previously obtained a determination on the merits of his or her claim to petition in federal court to obtain such a determination. A maximum of $100 million in mandatory spending was made available for payment of these claims, and the multiple claims that were subsequently filed were consolidated into a single case, In re Black Farmers Discrimination Litigation (commonly referred to as Pigford II).

On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these Pigford II claims. However, because only $100 million was made available in the 2008 farm bill, the Pigford II settlement was contingent upon congressional approval of an additional $1.15 billion in funding. After a series of failed attempts to appropriate funds for the settlement agreement, the Senate passed the Claims Resolution Act of 2010 (H.R. 4783) to provide the $1.15 billion appropriation by unanimous consent on November 19, 2010. The Senate bill was then passed by the House on November 30 and signed by the President on December 8 (P.L. 111-291).

Like the original Pigford case, the Pigford II settlement provides both a fast-track settlement process and higher payments to potential claimants who go through a more rigorous review and documentation process. A moratorium on foreclosures of most claimants’ farms will remain in place until after claimants have gone through the claims process. The process for adjudicating the individual claims has not been finalized, and it is unclear when payments to successful claimants will be made.

This report highlights some of the events that led up to the original Pigford class action suit and the subsequent Pigford II settlement. The report also outlines the structure of both the original consent decree in Pigford and the settlement agreement in Pigford II. In addition, the report discusses the number of claims reviewed, denied, and awarded under Pigford, as well as some of the issues raised by various parties under both lawsuits. It will be updated periodically.



Date of Report: December 10, 2010
Number of Pages: 13
Order Number: RS20430
Price: $29.95

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Monday, December 20, 2010

Farm Safety Net Programs: Issues for the Next Farm Bill


Dennis A. Shields
Specialist in Agricultural Policy

Jim Monke
Specialist in Agricultural Policy

Randy Schnepf
Specialist in Agricultural Policy


Roughly every five years, Congress debates and revises omnibus legislation governing federal farm policy. Commodity provisions in the 2008 farm bill (P.L. 110-246) expire in 2012, and Congress is currently reviewing U.S. farm policy. The collection of federal farm programs, which make payments to farmers and landlords, is often referred to by the broader farming community as the “farm safety net.” Some programs such as “counter-cyclical payments” (which rise when crop prices decline) contain elements of a safety net—which is usually intended to protect recipients against economic risks. Other farm program payments, such as direct (fixed) payments, are made irrespective of market prices.

As provided under the 2008 farm bill and other legislation, farm safety net programs can be divided into three main categories. Commodity programs provide income support and attempt to address farm price or revenue risks for selected field crops. Risk management (primarily crop insurance) provides protection from declines in yield or revenue for a much broader set of commodities, including many field and specialty crops and some livestock. Supplemental disaster assistance is available for most agricultural commodities (crops and livestock) when weatherrelated production losses are not covered by other programs.

Many policymakers and farmers consider federal support of farm businesses necessary for their financial survival, given the unpredictable nature of agricultural production and markets. In contrast, many environmental groups and budget hawks argue that farm subsidies encourage overproduction on environmentally fragile land and are a market-distorting use of tax dollars.

Historically, federal programs have primarily benefitted farmers (and landowners) of the major crops, such as wheat, corn, cotton, and sugar, with policy constructed over many decades by modifying or adding programs. As a result, programs sometimes overlap or work at cross purposes, generating criticism that they are not well integrated, cost too much, or do not provide adequate risk protection. Additional potential issues for Congress in the next farm bill debate include the extent of the current commodity coverage, program complexity and its impact on participation and effectiveness, and the effect of biofuel subsidies on agriculture.

The current federal budget situation is likely to prevent any increase in overall spending on a 2012 farm bill. Thus, the level of funding in the Congressional Budget Office (CBO) baseline budget for agricultural programs will be of paramount importance. Combined outlays for farm safety net programs have averaged $15.7 billion per year during FY2003 to FY2010, with a high of $20.5 billion in FY2006 and a low of $12.2 billion in FY2008. CBO’s projected annual average for FY2011-FY2020 is $14.8 billion. With crop prices relatively high, counter-cyclical support has declined in recent years while crop insurance outlays (which are directly related to crop prices) have increased sharply. The pool of money for any changes to the farm safety net will likely come from the existing baseline for the commodity programs and the crop insurance program.

A constraint affecting future U.S. policy choices is the broad set of rules of the World Trade Organization (WTO), which the United States, as a founding member, has agreed to abide by. Farm bill proposals, if implemented, will affect U.S. commitments, mainly through cost, program design, implementation, and market effects. Under the WTO Agreement on Agriculture, the United States is committed to spending no more than $19.1 billion per year on “amber box” support (programs considered to be the most trade distorting). The WTO compatibility of any new proposal, such as a whole-farm safety net program, would depend on how its provisions mesh with WTO criteria for loss triggers, payment levels, and production and trade effects
.


Date of Report: December 7, 2010
Number of Pages: 29
Order Number: R41317
Price: $29.95

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Potential Trade Implications of Restrictions on Antimicrobial Use in Animal Production



Renée Johnson
Specialist in Agricultural Policy

Exports of U.S. livestock and poultry products are important both to farmers and to the U.S. economy. In 2009, U.S. livestock and poultry exports were valued at more than $10 billion, accounting for about 12% of total global meat trade (estimated at nearly $87 billion in 2009).

Growing concerns about antimicrobial resistance have caused some U.S. trading partners and competitors to implement restrictions and prohibitions on the use of certain antimicrobials for subtherapeutic or nontherapeutic purposes in animal production. Although antibiotic use in animals has not been a significant factor affecting U.S. trade in meat products to date, evidence suggests that country restrictions on the use of these drugs could become an issue in the future and could affect U.S. export markets for livestock and poultry products.

At issue is whether increased restrictions and prohibitions on the use of certain drugs in animal feed in some countries, including the European Union (EU), New Zealand, and South Korea, could affect or may already be affecting international trade in livestock and poultry products from countries, such as the United States, that do not actively restrict the use of these drugs for growth promotion in animal production.

In the United States, legislation has been introduced that seeks to restrict the use of certain antimicrobial drugs for subtherapeutic or nontherapeutic purposes in food-producing animals. In the 111
th Congress, the leading bill was the Preservation of Antibiotics for Medical Treatment Act of 2009 (H.R. 1549; S. 619). Most U.S. livestock and poultry producers are opposed to such restrictions because of concerns about animal welfare and food safety, as well as concerns about possible increases in production costs, among other reasons.

Presently, it is not possible to precisely predict or to provide a quantitative assessment of the potential trade implications of future restrictions on antimicrobial use in food animal production. Given the number of market variables that would need to be evaluated, along with other trade issues facing U.S. meat exporters in global markets, it is difficult to precisely predict trade implications of possible future restrictions on antimicrobials in animal feed in selected countries. However, it is possible to examine the range of possible outcomes from two scenarios involving potential trade implications for U.S. livestock and poultry exports from tightened restrictions or prohibitions on the use of antimicrobial drugs in animal feed for growth promotion: 
  • Scenario 1: Tightened restrictions or prohibitions in key U.S. export markets, without corresponding changes in the United States on the use of antimicrobials in animal feed for growth promotion. 
  • Scenario 2: Tightened restrictions or prohibitions in key U.S. export markets, with corresponding prohibitions in the United States on the use of antimicrobials in animal feed for growth promotion. 
This report discusses the possible outcomes under these scenarios in terms of changes in U.S. livestock and poultry exports and changes in U.S. market share in global meat markets.


Date of Report: December 8, 2010
Number of Pages: 20
Order Number: R41047
Price: $29.95

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Previewing the Next Farm Bill: Unfunded and Early-Expiring Provisions


Jim Monke
Specialist in Agricultural Policy

The Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) authorizes most federal farm and food policies. It also provides the mandatory funding for many farm bill programs, including the farm commodity programs and some nutrition, conservation, research, bioenergy, and rural development programs. Funding to write the next farm bill will be based on the baseline projection of the cost of these farm bill programs by the Congressional Budget Office (CBO), and on varying budgetary assumptions about whether programs will continue.

Some farm bill programs have baseline beyond the end of the 2008 farm bill, while others do not. Thirty-seven programs that received mandatory funds during the 2008 farm bill are not assumed to continue from a budgetary perspective because they do not have a budgetary baseline beyond FY2012. If policymakers want to continue these programs in the next farm bill, they will need to pay for the programs with other offsets. Depending on the approach used to estimate a cost to extend the 37 programs for five years, $9 billion or $10 billion of offsets from other sources may be needed. This is about 4% of the $283 billion five-year total cost of the 2008 farm bill when it was enacted, or 11% of the approximately $100 billion five-year cost if the nutrition title is excluded. Finding this level of offsets may be a difficult task in a tight budget environment, especially when many observers believe that the next farm bill might be written within the confines of the existing baseline.

The 37 provisions without baseline beyond FY2012 are spread among 12 of the 2008 farm bill’s 15 titles. The title with the most such provisions is the energy title (8), followed by conservation (5), nutrition (5), and horticulture and organic agriculture (5). Just three provisions—the agricultural disaster assistance program, the Wetlands Reserve Program, and the Biomass Crop Assistance Program, each with uncertainty about its future cost—account for nearly 75% of the $9 billion or $10 billion total.

The 2008 farm bill’s authorizations generally expire at the end of FY2012, or with the 2012 crop year for the farm commodity programs. Separate from the funding issue, six farm bill provisions have an expiration date before the end of FY2012. These include the new supplemental agricultural disaster assistance program, and the suspension of term limits that allows some farmers to continue receiving guaranteed farm operating loans. Some tax provisions that are outside the jurisdiction of the agriculture committees were included in the farm bill and also expire early, including a conservation tax deduction and the tariff on imported ethanol.



Date of Report: December 7, 2010
Number of Pages: 15
Order Number: R41433
Price: $29.95

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