Tag: department of agriculture

Biden Administration Announces Voluntary Carbon Market Principles

The recent Joint Policy Statement and Principles (Principles) released by the Biden Administration, and related remarks by Secretary of the Treasury Janet L. Yellen, mark a significant milestone in the development of the voluntary carbon market (VCM).

Our views on this announcement and a brief summary of these Principles are set out below.

This is a very encouraging, and intriguing, governmental announcement in respect of an unregulated, international market.

One of the critical aspects of this announcement is the US government’s approach to balancing market promotion with non-regulation. The VCM is notably unregulated, and the intention is for it to remain so. As such, the announcement appears to be striving to foster integrity and growth within the market whilst avoiding the imposition of rigid regulatory frameworks that could stifle growth. There is a clear nod from the government to the market’s voluntary nature, thereby allowing for flexibility and the opportunity for diverse, creative solutions to emerge. However, the VCM has faced challenges that are not unusual for a nascent, evolving market and the government clearly wants to stimulate the market by providing clear guidance that enhances trust and integrity. This delicate equilibrium is essential for the long-term success and scalability of the VCM.

These Principles therefore serve as voluntary (but government-endorsed) guidelines, moving towards establishing a structure that market participants can follow to ensure the credibility and reliability of carbon credits.

The Principles do not reshape the current market. They are based instead, in large part, on existing best practice advocated by private sector and non-governmental organisations and initiatives. We have considered in some detail in a prior article these existing quasi-regulatory bodies and their functions – much of which is echoed in the Principles.

The Principles seek to bolster integrity in three main areas: on the supply side, demand side and the actual market itself.

Supply-side

  • Principle 1 – “Integrity & Standards”: Carbon credits must meet strict integrity standards and be certified through robust, transparent verification processes to ensure additionality, quantifiability and permanence.
  • Principle 2 – “Avoid Harm”: Generating credits should cause no environmental or social harm and promote co-benefits including sustainable development and increased biodiversity, involving relevant stakeholders in the process.

Demand-side

  • Principle 3 – “Buyer Responsibility”: Companies offsetting credits should set net-zero strategies, maintain an inventory of emissions (detailing Scope 1, 2, and 3 emissions) and regularly report.
  • Principle 4 – “Transparency”: Companies offsetting credits should publicly disclose details of purchased and retired credits annually, ensuring information is accessible and comparable.
  • Principle 5 – “Accurate Claims”: Public offsetting claims must accurately reflect the climate impact of credits and only use those meeting high integrity standards, prioritising internal emissions reductions.

Market-side

  • Principle 6 – “Market Integrity”: Stakeholders should seek to improve market functionality, transparency and equity to enhance the market’s overall health and high-integrity.
  • Principle 7 – “Facilitate Participation”: Policymakers and market participants should lower transaction costs and barriers for credit providers, ensuring market certainty and bankability of VCM projects, especially from developing regions.

On the supply side (Principles 1 and 2), inspiration has been drawn from, amongst other sources, the Core Carbon Principles and other standards of the Integrity Council for the Voluntary Carbon Market. On the demand side (Principles 3, 4 and 5), inspiration has been drawn from, amongst other sources, the Claims Code of Practice and other standards of the Voluntary Carbon Market Initiative. On the market side (Principles 6 and 7) the message is more general and is aimed at promoting the integrity of the standards/registries and their participants and focussing on the policymakers. The Principles conclude with a rallying cry for policymakers and buyers to consider ways to enhance market certainty for lenders undertaking long term investments. The current financing landscape of the VCM is an area which we have also considered in some detail in a prior article.

The Principles and comments from Treasury acknowledge that the VCM, in its current state, suffers from some key challenges that inhibit growth at the scale needed to achieve national and international climate goals. The seven Principles outlined above are the government’s initial efforts at assisting to overcome those challenges. They reflect the importance of a functioning carbon reduction infrastructure (both physical and financial) to the government, and a high level of understanding of the carbon abatement ecosystem. And, perhaps most importantly, these statements recognise and encourage the involvement and initiative of all participating stakeholders to take demonstrative steps to establish a market-based approach to carbon reduction. As Secretary Yellen’s statement says, “harnessing the power of markets and private capital is critical.”

While the VCM principles announcement reflects an attempt to improve confidence in voluntary carbon offsets, at the same time the US Department of Agriculture (USDA) signalled its interest in establishing public protocols specifically for third-party verification of offsets deriving from forestry and farming. This action reflects a keen interest on both sides of the political aisle in Congress. Sen. Debbie Stabenow (D-MI), chair of the Senate Agriculture Committee noted that both the VCM principles and the USDA announcement established that, “Voluntary carbon credit markets generate new revenue streams for farmers, foresters, and rural communities, and there is clear enthusiasm across private industry and the public sector to tap into that potential.” Sen. Stabenow further notes that these actions “will strengthen the integrity of these markets and build a foundation for the future.”

The VCM principles and USDA statement can be seen as part of an effort to implement the Growing Climate Solutions Act which was designed to break down barriers for farmers, ranchers, and foresters interested in participating in carbon markets and in embracing so-called climate-smart agricultural practices. The Act was passed by Congress on a bipartisan basis and signed into law by President Biden on December 29, 2022. As the House and Senate consider “farm bills” in the near future, we can expect more action on agricultural offsets.

These announcements clearly underscore the government’s commitment to promoting the VCM without the enforcement of laws or regulations. It is a firm message of support for the VCM, and explicit recognition that development of the VCM is critical to unlocking carbon abatement projects globally. It clarifies that the current administration recognises the VCM as another component of the energy transition required to achieve national and international climate goals, as well as sustainable environmental practices. In particular, these seven Principles provide a framework that can guide the VCM’s growth. Whilst the Principles goldplate (rather than reinvent) existing best practice, this achieves the sensitive balancing act required from a government seeking to promote an unregulated market.

© 2024 Bracewell LLP
For more on the Carbon Market, visit the NLR Environmental Energy Resources section.

USDA Finalizes the Strengthening Organic Enforcement Rule

  • USDA’s Agricultural Marketing Service (AMS) administers the National Organic Program (NOP) as authorized by the Organic Foods Production Act of 1990 (OFPA).  The USDA organic regulations, which were published on December 21, 2000, and became effective on October 21, 2002, govern the production, handling, labeling, and sale of organically produced agricultural products.  On August 5, 2020, in response to mandates in the Agriculture Improvement Act of 2018, as well as pressure from the industry and recommendations from the National Organic Standards Board (NOSB), USDA published a proposed rule called Strengthening Organic Enforcement (SOE) that is aimed at preventing loss of organic integrity—through unintentional mishandling of organic products and intentional fraud meant to deceive—and strengthening trust in the USDA organic label.
  • On January 19, 2023, USDA published the SOE final rule.  The final rule includes clarifications and additional examples in response to comments received on the SOE proposed rule.  Key updates include:
    • Requiring certification of more businesses, like brokers and traders, at critical links in organic supply chains;
    • Requiring NOP Import Certificates for all organic imports;
    • Requiring organic identification on nonretail containers;
    • Increasing authority for more rigorous on-site inspections of certified operations;
    • Requiring uniform qualification and training standards for organic inspectors and certifying agent personnel;
    • Requiring standardized certificates of organic operation;
    • Requiring additional and more frequent reporting of data on certified operations;
    • Creating authority for more robust recordkeeping, traceability practices, and fraud prevention procedures; and
    • Specifying certification requirements for producer groups.
  • The compliance date for the SOE final rule is March 19, 2024, or 12 months after the effective date of March 19, 2023.

Article By Food and Drug Law Practice Group at Keller and Heckman

For more biotech, food, and drug legal news, click here to visit the National Law Review.

© 2023 Keller and Heckman LLP

USDA (U.S. Department of Agriculture) Finalizes Import Regulations for “Mad Cow Disease”

Varnum LLP

 

In November, the USDA announced a final rule that will align the Agency’s import regulations for bovine spongiform encephalopathy (BSE or “mad cow disease”)with international standards. According to a USDA November news release, the final regulation will allow for the safe trade of bovines and bovine product, while still protecting the U.S. from the introduction of BSE.

Michigan Senator Debbie Stabenow praised the new rule by stating, “I applaud USDA’s actions to make sure that American’s beef producers have access to new export markets…This effort is crucial to breaking down other countries’ unfounded trade barriers, and re-opening trade markets that are closed to U.S. beef. American agriculture has long set the gold standard food production. [These] actions will ensure U.S. beef producers can operate on a more level playing field and help grow our agriculture economy.”

 

Article by:

Aaron M. Phelps

Of:

Varnum LLP

Congress Fails to Advance Federal Farm Bill or Disaster Assistance Bill

The National Law Review recently featured an article, Congress Fails to Advance Federal Farm Bill or Disaster Assistance Bill, by Laura L. Riske of Michael Best & Friedrich LLP:

 

Every five years, Congress takes up the Farm Bill which covers food and agriculture policy under the purview of the United States Department of Agriculture.  The current 2008 Farm Bill’s financial support programs are set to expire on September 30, 2012 unless they are re-authorized by Congress.  In recent weeks, passage of a new Farm Bill received extensive attention given both the expiration date and record drought conditions that have plagued the U.S. agriculture industry. Recently, more than half the nation’s counties had federal disaster designations that included most in Wisconsin largely because of the drought.  Unfortunately, neither the expiration deadline nor the severe drought conditions stopped the ongoing partisan gridlock in Washington, and Congress departed for a five-week August recess without having taken the critical votes needed to pass either a new comprehensive compromise farm support bill or a limited disaster assistance relief bill.  This article provides an overview of the legislative action that took place prior to the August recess on three key House and Senate bills including:

•  H.R. 6083 – Federal Agriculture Reform and Risk Management Act of 2012 (“FARRM Bill”);

http://www.gpo.gov/fdsys/pkg/BILLS-112hr6083ih/pdf/BILLS-112hr6083ih.pdf;

•  H.R. 6233 – Agricultural Disaster Assistance Act of 2012 (“ADA Bill”);

http://www.gpo.gov/fdsys/pkg/BILLS-112hr6233eh/pdf/BILLS-112hr6233eh.pdf

•  S. 3240 – Agriculture Reform, Food & Jobs Act of 2012 (“ARFJ Bill”); and

http://www.gpo.gov/fdsys/pkg/BILLS-112s3240pp/pdf/BILLS-112s3240pp.pdf

it provides an update on the outcome of the summer recess and September negotiations.

On July 12, 2012, the U.S. House Agriculture Committee passed their new comprehensive bipartisan five-year FARRM Bill. The cost of the Committee’s FARRM Bill was $491 billion and contained $36.5 billion in savings over 10 years through program cuts and reductions that included $14 billion in cuts to the commodity title, $6 billion in cuts to the conservation title and $16.5 billion in cuts to the nutrition title.  The FARRM Bill eliminated highly criticized direct payments and replaced it with new price and revenue support programs, restored the expired disaster relief program, and cut $16.5 billion from the Supplemental Nutrition Assistance Programs (“SNAP”) or food stamps.

In the House at large, Republican farm state lawmakers and some Democrats criticized the Committee FARRM Bill and indicated the impact of enormous program changes and cuts would be disastrous to those most in need, while some Republican conservatives objected to the high cost and questioned whether the cuts were deep enough.  Given this division, House Republican leaders who control the chamber were reluctant to bring the controversial Committee FARRM Bill to the full floor out of concern it could go down in defeat right before the November elections. Instead, House Republican leadership maneuvered to quell criticism of the stalemate and turned to consider either quick passage of a one-year extension of the 2008 Farm Bill, or a simple stand-alone disaster relief bill.

On July 31, 2012, with resistance from many conservative Republicans over a one year renewal of the current 2008 Farm Bill, and after several Democrats announced their opposition to this measure, House Republican leaders dropped the renewal plan and instead pressed for immediate short-term disaster assistance for drought-stricken farmers and ranchers. House Agriculture Committee Chairman Frank Lucas encouraged his colleagues to support the ADA Bill saying, “My priority remains to get a long-term five-year farm bill on the books and put those policies in place, but the most pressing business before us is to provide disaster assistance to those impacted by the drought conditions who are currently exposed.”

On August 2, 2012, the Republican controlled House passed their scaled-down short-term $383 million ADA Bill to assist farmers whose livestock losses and feed expenses had increased due to the drought conditions.  The ADA Bill would have continued programs that had already expired, those that indemnify livestock and forage programs, provided some assistance to producers of a handful of other crops, and it would have been paid for through the placement of caps on conservation programs in the current farm law.

In turn, Democrats who control the Senate refused to take up the House ADA Bill before their August recess. The Senate Democratic leaders indicated they preferred the House had taken up their sweeping five-year ARFJ Bill that had passed the full Senate on June 21, 2012 with overwhelming bipartisan support.  Senate Democrat leaders were quick to fault House Republican leaders for failing to consider the broader legislation in time.

The $500 billion Senate ARFJ Bill cut spending by approximately $25 billion over 10 years, including $15 billion in cuts to the commodity title, $6 billion to conservation and $4.5 billion to nutrition programs.  The Senate cuts were achieved primarily by replacing direct payments with an agriculture risk coverage program which protects farmers against losses in revenue, boosting crop insurance, and cutting the SNAP or food stamps.

Senate Democrats said they preferred their ARFJ Bill because it financed dozens of price support and crop insurance programs for farmers and food assistance for low-income families, and it provided more robust drought relief to other agricultural sectors. Senate Democrats also objected to the House Republican’s ADA Bill because it had deeper cuts to food stamps and offset costs through conservation fund cuts.

Moments after the House passed the ADA Bill, Senator Debbie Stabenow, Chairwoman of the Senate Agriculture Committee, took to the Senate floor and said she will work informally with House Agriculture legislators over the August recess to try to put together a new measure to present to Congress.

Although Congressional leaders in both chambers had indicated they would continue to work on the issues surrounding the Farm Bill during the summer recess, big questions remained as to whether or not they could muster the votes needed to pass a bill when Congress returned from recess in September, but it seemed more likely that a vote could be delayed until later in the year given that election season was well underway.  Upon return to Congress in early September, Senate and House officials indicated that compromise negotiations over the summer recess were not fruitful.  Then, on Friday, September 21st Congress left town again without consideration of a farm bill which has left the current farm bill to expire on September 30th.  House Speaker John Boehner indicated they would deal with the farm bill after the November elections because he didn’t believe he had the 218 votes needed to pass either an extension or new legislation.  In response, U.S. Agriculture Secretary Tom Vilsack expressed concerns that Congress would not be able to pass a farm bill in the upcoming lame duck session either.  In short, an unsuccessful lame duck session would mean that the measure would have to wait until a new Congress is sworn in, and the new Congress would have to start over again to develop a new farm bill.

We will continue to monitor and report on substantive developments surrounding the Farm Bill as it progresses through the legislative process.  In the interim, below are links that farmers can use to access drought information and assistance:

•  USDA’s Disaster and Drought Assistance programs

•  University of Wisconsin Cooperative Extension:

– Drought Resources

– Farmer-to-Farmer Hay and Forage Marketplace

– Farmer-to-Farmer Tool for Pasture Rental

•  Wisconsin Department of Agriculture, Trade and Consumer Protection

•  Wisconsin Department of Natural Resources

© MICHAEL BEST & FRIEDRICH LLP