Biofuel Groups Maintain Hot Spending Amid Ethanol Debate (via CQ)

Ethanol groups maintained their strong lobbying presence in the year’s first quarter, a pivotal time for them as the EPA considers a rule to allow the year-round sale of E15, a gasoline variety mixed with 15 percent ethanol.

The use of E15 between June and September is banned under the Renewable Fuel Standard that sets minimum levels of plant-derived products to be used in transportation fuels. But biofuels advocacy groups and corn-state members of Congress have urged the EPA to lift that barrier, and the public comment period on an EPA proposal to do so closed Monday.

While factions of the oil and natural gas industries have warned they will sue over the proposal, putting the EPA rule into force would mark a long-held goal of the ethanol community.

“With year-round E15, EPA has the opportunity to give American farmers and producers the ability to grow greater demand and expand market access for their homegrown fuel,” Emily Skor, CEO of Growth Energy, an ethanol trade organization, said at a March field hearing EPA held in Ypsilanti, Mich.

Lobbying reports filed with the Senate show an uptick in spending from key biofuels groups, including Sioux Falls, S.D.-headquartered ethanol firm POET LLC, and the trade groups Renewable Fuels Association and Growth Energy.

POET spent significantly more compared to the final quarter of 2018, jumping from $170,000 to $360,000. Growth Energy also reported a spike in lobbying costs, increasing from $410,000 to $440,000 between quarters. The National Corn Growers Association spent $110,000 in the first quarter of 2019, versus $100,000 the period before. And the Renewable Fuels Association, which has yet to disclose its latest in-house lobbying costs, spent $60,000 from January through March on an outside lobbying firm, compared to $20,000 the previous quarter.

Frank Macchiarola, of the American Petroleum Institute, said on an April 25 call that API would sue if the rule is finalized. EPA has said it would finish the rule-making process by June, in time for E15 to be sold over the summer.

Critics of the Renewable Fuel Standard say it is harmful to the environment, creates a false market and hurts vehicles not designed to run on ethanol-blended fuels.

“EPA should focus on protecting consumers from mis-fueling,” said Nicole Vasilaros of the National Marine Manufacturers Association, which opposed the proposal. “It’s bad for the environment and it’s bad for the country.”

RFS backers say the program is vital to lower greenhouse gas emissions. But the environmental legacy of the policy is questionable: It has consistently missed its statutory targets to cut greenhouse gas emissions, according to a General Accountability Office report published in 2016.

At least one biofuel group decreased in-house lobbying. The National Corn Growers Association spent $110,000 in the first quarter, down from $130,000 in the previous period.

USDA Notice Regarding Importation of Hemp Seeds

The passing of the Agriculture Improvement Act of 2018 (2018 Farm Bill, Section 10113) removed hemp and hemp seeds from the Drug Enforcement Administration’s (DEA) schedule of Controlled Substances. This action removed hemp and hemp seeds from DEA authority for products containing THC levels not greater than 0.3 percent. Therefore, DEA no longer has authority to require hemp seed permits for import purposes.

 

U.S. producers and hemp seed exporters have requested assistance from USDA to provide an avenue for hemp seed exports to the United States. The U.S. Department of Agriculture (USDA) regulates the importation of all seeds for planting to ensure safe agricultural trade. Under this authority, USDA is providing an alternative way for the safe importation of hemp seeds into the United States.

 

Importation of Hemp Seed from Canada

 

Hemp seeds can be imported into the United States from Canada if accompanied by either: 1) a phytosanitary certification from Canada’s national plant protection organization to verify the origin of the seed and confirm that no plant pests are detected; or 2) a Federal Seed Analysis Certificate (SAC, PPQ Form 925) for hemp seeds grown in Canada.

 

Importation of Hemp Seed from Countries other than Canada

 

Hemp seeds may be imported into the United States from countries other than Canada if accompanied by a phytosanitary certificate from the exporting country’s national plant protection organization to verify the origin of the seed and confirm that no plant pests are detected.

 

Hemp seed shipments may be inspected upon arrival at the first port of entry by Customs and Border Protection (CBP) to ensure USDA regulations are met, including certification and freedom from plant pests.

 

Questions or requests for information regarding hemp can be sent to farmbill.hemp@usda.gov.

 

More information about industrial hemp production is available at http://www.ams.usda.gov/rules-regulations/farmbill-hemp.

Trade Jitters, Hemp Concerns Top Appropriations Hearing (via CQ)

Senate appropriators had trade woes and the promise of industrial hemp on their minds Thursday as they sought assurances from Agriculture Secretary Sonny Perdue of better times for farmers in their states.

Perdue testified before the Senate Agriculture Appropriations Subcommittee on the president’s $15.7 billion request for discretionary funding for the Agriculture Department. The request is more than $4.2 billion lower than the enacted level for fiscal 2019 and includes cuts to research, rural housing, international humanitarian food programs and other areas popular with lawmakers.

Subcommittee members asked about the proposed reductions, but indicated they are likely to ignore the proposals as they have with previous Trump administration budget requests.

Chairman John Hoeven, R-N.D., said he’ll instead push to increase funding for the department to implement the 2018 farm bill (PL 115-334), a priority for farm state lawmakers. Perdue said he would welcome a bump up in the $15 million the farm bill provided.

The farm bill removed hemp from the Controlled Substances Act and opened the door to expanded production of the versatile plant, which is part of the cannabis family that lacks the high of marijuana. A number of states authorized limited production under research provisions of the 2014 farm bill. Hemp seems to have captured the interest of farmers looking for a new cash crop.

Jeff Merkley, an Oregon Democrat and subcommittee ranking member, and Jon Tester, a Montana Democrat, pressed Perdue to expedite the release of regulations for states to follow. He disappointed them with a proposed timetable that aims for release of hemp rules in time for the 2020 crop year rather than 2019

Perdue also said he was unaware of complaints Tester said he has received from Montana farmers that the Drug Enforcement Administration is blocking the importation of Canadian hemp seeds they need for planting. The agency told CQ that it no longer has oversight of hemp because of the farm bill.

Trade Worries

But trade was a recurring theme from both Republicans and Democrats, who have called on the Trump administration to lift steel and aluminum tariffs, particularly on North American Free Trade Agreement (NAFTA) partners Mexico and Canada.

“We’re advocating to the president that he can accomplish his goals in revitalizing the steel industry and aluminum industry in the U.S. through a quota system that is combined with a tariff when they exceed that quota,” Perdue said in a question from Wisconsin Democrat Tammy Baldwin. “Hopefully, he will come to see that is an effective tool to continue to support our domestic steel industry as well.”

Baldwin asked about the status of national security Section 232 steel and aluminum tariffs the United States imposed on the trading partners in 2018. Leaders in Canada and Mexico say their legislatures will not vote to approve the proposed United States-Mexico-Canada trade agreement to replace NAFTA unless the tariffs are lifted.

Congressional lawmakers whose constituents have been affected by retaliatory duties Canada and Mexico have placed on U.S. goods want the U.S. tariffs and retaliatory tariffs ended before they are willing to vote on the agreement. Baldwin said that Mexico’s retaliatory tariffs have cut Wisconsin cheese exports at a time when dairy farmers are struggling with several years of low market prices.

Perdue, a booster of Trump’s policies in general, is considered a pragmatist on trade. He is credited along with others political leaders of convincing Trump in April 2018 to remain in NAFTA until a replacement trade pact is in place. The proposed agreement would replace NAFTA if it is approved by national legislatures in the three countries.

Hoeven asked when U.S.-China talks could wrap up and agricultural exports to China rebound. China has made purchases of soybeans since the trade talks started, but the volume is still below what it was before Beijing cut its purchases in retaliation for U.S. tariffs on Chinese exports valued at $250 billion.

“While we’re negotiating, what about additional sales?” asked Hoeven, who added that farmers are concerned about low prices and lost sales.

“I’m cautiously optimistic, but with China it’s never over until it’s over,” Perdue said. “If we can consummate a deal with China it will be extremely good for U.S. agriculture as well as the U.S. economy.”

Perdue said talks also include non-tariff issues that are important to agriculture such as standardized protocols for inspections of farm goods.

Hoeven suggested that if talks are not resolved soon, “that they continue purchases as a sign of good faith while the negotiations are going on.”