POLICY BACKGROUNDERS

Sparking Action to Ignite Change

Farm Bureau Policy Season Underway

Each year, Wisconsin Farm Bureau Federation and American Farm Bureau Federation engage members in the policy development process to guide the organization for the upcoming year. This grassroots process allows county Farm Bureau members to voice their ideas, concerns and experiences. Each year, AFBF and WFBF create issue backgrounders for areas where policy additions or changes may be needed. On the following pages, you can review these issues backgrounders and consider what you will share during your district or county policy development meeting. These documents are for informational purposes only and do not suggest a policy stance.

WFBF Issue Backgrounders

indicator of potential contamination, at a higher rate than other counties in Wisconsin. In Grant and Lafayette counties there is not a well test baseline. The goal of the SWIGG study is to determine the quality of the water in a sample of wells. If contamination exists, the study will provide counties and the state with detailed information about how to protect public health and help to ensure that every resident has safe drinking water. The first phase of the study includes a broad, multi-phased sampling of wells in Grant, Iowa and Lafayette counties for nitrates and bacteria to assess whether well water contamination exists and how widespread it is. Next, researchers will look at the geology around sampled wells and how wells are constructed to determine what might be influencing how contaminants enter well water. For wells that are contaminated, researchers will take additional samples to Water Studies determine the source of that contamination.

The Driftless Area Water Study was created based on To view this issue backgrounder in full, visit wfbf.com/policy/ the water study being conducted in Grant, Lafayette and policy-development. Iowa counties called the Southwest Wisconsin Groundwater and Geology Discussion Questions study. The counties that make up Should there be statewide well the DAWS are Vernon, Crawford testing or should these efforts and Richland. remain regional? Southwest Wisconsin Is there a well sampling standard that should be followed Groundwater and Geology Study or multi-phase testing criteria

Southwest Wisconsin has fractured established for future well bedrock that can allow contaminants testing studies? from the surface to easily get into Should well testing be a state groundwater and contaminate drinking regulation? If so, how often? If water. These contaminants can cause not, how should well testing data illnesses in people and animals that be gathered? consume contaminated water. When well testing samples are

Wells sampled in Grant, Iowa and analyzed, is there a single entity Lafayette counties tested positive Figure 1. Generalized bedrock geology in southwest where the well data is compiled for coliform bacteria (Figure 1), an Wisconsin. and housed?

Coronavirus

Wisconsin's experience with COVID-19 started on Feb. 5. A Dane County resident was the first to test positive for COVID-19.

On March 27, Congress passed the Coronavirus Aid, Relief and Economic Security Act which provided more than $2 trillion in economic relief to those affected by the coronavirus outbreak. The bill directed more than $48 billion to agricultural programs including $14 billion to the Commodity Credit Corporation for reimbursement of the net realized losses that were not previously reimbursed. The CARES Act also established the $150 billion Coronavirus Relief Fund. Wisconsin received $1.9 billion of this funding to be distributed by Gov. Tony Evers. On May 20, Gov. Evers announced the state would direct $50 million in federal COVID-19 aid to Wisconsin farmers struggling with the economic fallout of the pandemic through the Wisconsin Farm Support Program. To date, the U.S. Congress has passed four relief packages totaling more than $2.4 trillion. At the time of writing this, there is a Phase 4 COVID-19 relief package being negotiated by Congress. To view this issue backgrounder in full, visit wfbf.com/policy/policy-development.

Discussion Questions

Does WFBF's policy adequately address issues that have been raised during the COVID-19 pandemic?

COVID-19 and the resulting shut down of businesses, restaurants and schools exposed the vulnerabilities of the supply chain. What can we learn and how do we build a better, more flexible supply chain?

There are business owners who are announcing they are not reopening, closing markets for farmers. Who should connect farmers and processors so there is minimal disruption for businesses, restaurants and schools?

Perfluoroalkyl and Polyfluoroalkyl Substances

Perfluoroalkyl and polyfluoroalkyl substances are a group of substances that contain several categories and classes of durable chemicals and materials with properties that include oil, water, temperature, chemical and fire resistance, as well as electrical insulating properties. Each PFAS compound has unique physical and chemical properties.

Different classes of PFAS are used in manufacturing of products including carpet protectant and non-stick cookware but also are used in products such as surgical gowns and drapes, electronic devices such as cell phones and semi-conductors, commercial aircraft and low-emission vehicles.

A ban of PFAS will eliminate products that enable activities of modern society. It is the role of the U.S. Environmental Protection Agency to review PFAS compounds and the best available science to determine how PFAS compounds should be regulated.

Gov. Evers Executive Order #40 directed the Department of Natural Resources to create the PFAS Coordinating Council also known as the Wisconsin PFAS Action Council or WisPAC and, in partnership with state agencies, developed a PFAS Action Plan.

Two advisory groups were established to provide a forum for public engagement in the plan development process including: A citizen/public policy advisory group and a local government advisory group. Both groups met in March of 2020. The plan was to have recommendations collected at these advisory group meetings compiled and forwarded as proposals for WisPAC to consider for inclusion in the PFAS Action Plan.

The DNR held stakeholder meetings on this rule revision on Feb. 6, and another on March 23. The information from these meetings is available at the bottom of the NR 140 web page. It is unclear when these meetings will resume.

WFBF does not specifically address PFAS in the 2020 Policy Book; however, there are existing policies that indirectly reflect WFBF's position on environmental issues as well as pollution abatement.

To view this issue backgrounder in full, visit wfbf.com/policy/ policy-development.

Discussion Questions

How does the presence of PFASs in the environment affect production agriculture? Water? Soil? Air?

Currently, EPA establishes tolerable levels of PFAS based on available scientific research and data. Should these tolerable levels be determined at the federal level or should they be developed at the state level?

Should WFBF support using proven, scientific practices when creating laws that govern the containment of PFAS?

Should WFBF support government agencies using proven, scientific data when developing policies concerning the application of urban sludge?

Should WFBF support indemnifying farmers or farm owners for the cost of any damages or cleanup resulting from the presence of PFAS that are the result of others?

Minimum Negotiated Cattle Trade

American Farm Bureau Federation supports robust markets that have the best chance of delivering the highest value to producers for cattle. Increased government mandates and regulations risk injecting regulations on farmers where they do not exist and depressing future prices.

AFBF is working to ensure there is no market manipulation and livestock farmers receive fair compensation.

Current Policy Efforts and the Cattle Markets

Some legislators and others have made proposals that would increase federal government mandates and regulations into cattle markets in hopes of preventing price manipulation. It is uncertain to what degree manipulation would be prevented. However, mandates hold no guarantee of higher returns for producers. It also is certain that they would interject additional federal government regulation into markets. AFBF delegates oppose a mandatory minimum for negotiated (spot market) cattle slaughter. Mandates on negotiated cash trade limit the use of alternative marketing agreements (AMAs). While more negotiated trade would further bolster price discovery, a minimum negotiated trade threshold means the federal government must monitor and maintain the minimum, inviting further government regulation upon the industry. Furthermore, this additional regulation likely won't solve the problems it is purported to solve and would likely result in negative consequences for the industry.

Price discovery is not the same as price determination and does not necessarily mean it will result in higher prices. COVID-19 and its impact on our country's economy is an unprecedented external shock to the overall food system and supply chain. No amount of negotiated trade would provide relief from these supply chain challenges.

Research by academic faculty at various land grant institutions on the costs and benefits of AMAs and impacts of mandatory minimum negotiated trading volumes show that limiting AMAs usage by the beef industry will decrease efficiency and potentially beef product quality, and increase processing and marketing costs.

The USDA GIPSA RTI Livestock and Meat Marketing Study (LMMS), a six-volume, peer-reviewed report, which represents the work of 30 researchers and nearly three years of effort, indicates that there are limited benefits to a mandatory minimum level of negotiated transactions. According to the study, a mandatory minimum level of negotiated transactions could create considerable costs producers and consumers due to lost efficiency and product quality.

A recent white paper by Colorado State University's Dr. Koontz indicates a mandatory policy of 50 percent minimum negotiated cash transactions would result in a $2.5 billion loss to the industry in the first year, and an overall loss of $16 billion over 10 years.

We can and should promote a more robust price discovery system, but not at the expense of a producer's ability to utilize value-based, consumer-driven marketing arrangements. AFBF's producer members realize that producers know the best course of action for their individual operations and that there is no easy, uniform solution.

To view this issue backgrounder in full, visit fb.org/marketintel/examining-cattle-transactions-in-the-u.s.

Mandatory Country of Origin Labeling (MCOOL)

AFBF has supported country of origin labeling for a variety of agricultural products. AFBF supported the U.S. Trade Representative's efforts to defend U.S. law in the World Trade Organization case brought by Canada and Mexico. As a result of the negative decision, U.S. Congress acted to remove beef and pork from the MCOOL program and preserved it for other agricultural products. Background

MCOOL provisions were enacted in the 2002 Farm Bill, but the final implementation rule took effect on March 16, 2009. The rule required most grocers to inform consumers about the country of origin of fresh produce, fish, shellfish, various nuts, ginseng and ground and muscle cuts of beef, pork, lamb, chicken and goat.

Despite prior consultations, the U.S., Canada and Mexico were unable to resolve their differences, resulting in Canada and Mexico requesting the establishment of a WTO dispute settlement panel in October 2009.

In Nov. 2011, the WTO DS panel concluded that features of U.S. MCOOL discriminated against foreign livestock and inconsistent with the U.S.'s WTO obligations. The U.S., Canada and Mexico appealed the panel's finding. Ultimately, the U.S. was left with a compliance deadline of May 23, 2013. USDA issued a revised MCOOL rule requiring that labels show where each production step (born, raised, slaughtered) occurred and prohibited the commingling of muscle-cut meat from different origins.

Canada, Mexico and a WTO compliance panel still found MCOOL to be discriminatory against foreign cattle and hogs. A U.S. appeal of the report proved unsuccessful, leading to arbitration proceedings. In Dec. 2015, the arbitration panel granted a retaliation level for Canada at US$781 million and for Mexico at US$228 million. On Dec. 18, 2015, the Consolidated Appropriations Act, 2016 repealed MCOOL for ground and muscle cuts of beef and pork. After the repeal, USDA halted

MCOOL enforcement for beef and pork. Finally, on March 2, 2016, USDA amended the MCOOL regulations to reflect the repeal of the MCOOL law for ground and muscle cuts of beef and pork.

The Meat of the Problem

The MCOOL law prohibited USDA from using a mandatory animal identification system, but the original 2002 version stated that the Agriculture secretary "may require that any person that prepares, stores, handles or distributes a covered commodity for retail sale maintain a verifiable recordkeeping audit trail that will permit the secretary to verify compliance." Verification immediately became one of the most contentious issues, in part because of the potential complications and costs of tracking animals and their products from birth through retail sale.

The meat labeling requirements in MCOOL proved to be among the most controversial of rulemakings because of the steps that U.S. feeding operations and packing plants had to adopt to segregate, hold and slaughter foreign-origin livestock.

The WTO panel found that the MCOOL's legitimacy

was undermined because a large amount of beef and pork was exempt, putting imported livestock at a competitive disadvantage to domestic livestock for no reason. The panel noted between 57.7 percent and 66.7 percent of beef and 83.5 percent and 84.1 percent of pork did not provide origin information to consumers.

MCOOL had several exemptions that resulted in a significant share of beef and pork that did not convey origin information. Chiefly, MCOOL exempted items from labeling requirements if they were an ingredient in a processed food; covered only retailers that annually purchase at least $230,000 of perishable agricultural commodities; and exempted dining establishments and similar facilities that prepare and sell foods to the public from these labeling requirements.

Economic Impact of MCOOL

A requirement of the 2014 Farm Bill was to quantify the market impacts of MCOOL. The report, released in 2015, found no evidence of meat demand increases for MCOOL covered products, but found considerable evidence of increased compliance costs that ultimately cost the meat industry and consumers billions.

To view this issue backgrounder in full, visit fb.org/marketintel/cattle-and-hog-marketdisruptions-renew-interest-inmcool.