Here’s why it matters which government agency regulates fake meat

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Will the primary regulator of cell-cultured products (fake meat) be the Food and Drug Administration or the U.S. Department of Agriculture?
The answer could make a big difference to the future of agriculture. The ‘sustainable’ meat folks believe they will have an easier time controlling the future of fake meat at FDA than they would working with the red meat fans at USDA. They believe USDA is part of the problem in not shutting down the pork, beef and poultry industries because of its in-humaneness.
This is a flank attack on the meat industry by the enviros and PETA types.
Power grab?
FDA, and surprisingly members of President Trump’s White House staff, are supporting a regulatory power grab by the bureaucrats at the FDA.
Major ag organizations recently sent a letter to President Trump, which included the following statement: “At a recent public meeting held by the FDA (which excluded USDA) and at which FDA indicated it plans to assert itself as the primary regulator of cell-cultured (fake meat) products…” The letter was signed by major agricultural organizations such as the National Pork Producers, American Farm Bureau and the North American Meat Institute.
As background, consider this: The White House in June released a new government reorganization plan which suggested all food safety functions be housed in a single agency within the USDA. USDA’s Food Safety and Inspection Service already reviews new technologies, and it is argued that cell-based protein (fake meat) production fits into USDA’s mission, not FDA’s.
Memphis Meats, a cell-based protein company, believes that its products must be subject to the same USDA inspection system to ensure such products are safe for human consumption. Memphis Meats wants to ensure its products are marketed and labeled in the same manner as other meat products.
An August 10, 2018 letter from the Director of Office of Management and Budget (OMB) to Chairman of the House Ag Committee, Mike Conaway, was unclear in assuring that USDA would be in charge of the regulatory framework for fake meat. In a “mealy mouth” statement, Director Mick Mulvany stated, “You can be assured that all of the administration’s food safety expertise that has been gleaned through the exercise of current authorities granted to the Department of Agriculture and the Food and Drug Administration will be brought to bear on our consideration of proper regulatory framework for these products.”
Bill Gates is a fan
Cell-cultured meat (fake meat) is backed by individuals such as Bill Gates. Environmental groups are getting into the act because these organizations have long opposed traditional meat production. These groups see fake meat as sustainable food, but have indicated, “We’ve had the experience of watching the environmental impacts of some food products and we really can’t afford to create more unsustainable food systems that take us in another wrong direction.”
A spokesperson for Friends of the Earth claims “People have been clear that they want real, truly sustainable organic food, as opposed to venture capitalist hype which would lead us down the wrong path.”
USDA Secretary Sonny Perdue has indicated in earlier statements that fake meat should be regulated by the Food Safety Inspection Service (FSIS). FDA earlier this summer has announced it plans to be the agency overseeing fake meat. Who will win?
Recently a large number of agriculture trade representatives met with OMB, the National Economic Council and representatives from the White House Counsel’s office. It has been reported to me that this meeting was openly hostile and combative, with White House staff supporting FDA’s right to regulate fake meat.
It appears both the White House staff and FDA personnel do not understand the Federal Meat Inspection Act, which has significant scientific expertise and assures the safety of all meat and poultry products. FDA and its friends in the sustainable food movement want fake meat regulated by those who have little or no understanding of agriculture.
Congressmen Bob Aderholt, Mike Conaway, Colin Peterson and Sanford Bishop have told the White House that FDA should keep its hands off of regulating fake meat and USDA should continue its role in ensuring safety and accurate labeling of anything called meat (of course, using the word ‘meat’ is also under debate). FDA, according to its fulltime equivalent employee chart, appears to have 1,001 employees in its Food Safety Center. USDA, on the other hand, indicates in its FSIS that 9,600 individuals work to protect meat food safety.
Based on these numbers, who can do the better job protecting consumers?
(This article first ran in the September 6, 2018 edition of Farm Futures.)     
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Steps Virginia Must Take to Tax Internet Sales

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Virginia cannot meet new Supreme Court standards for interstate sales tax collection without changing its laws. Source: Tax Foundation


Conformity to recent federal income tax changes is not the only challenge (or opportunity, depending on your point of view) facing the 2019 Virginia General Assembly.  It may also be asked to amend Virginia’s sales and use tax rules, so the tax can be demanded from out-of-state sellers.
A recent review from the Tax Foundation provides concrete advice on the steps Virginia should take to bring its rules in line with recent direction from the U.S. Supreme Court, which reviewed and blessed South Dakota’s approach in the Wayfair decision.  It also points to several states ready to roll or almost in compliance, including North Carolina.  Each state is discussed in the report.
The Wayfair ruling reversed two previous decisions that states could not force businesses with no physical presence inside their border to collect and remit the tax.  The tax advantage for online sales has been fought by traditional retailers for decades.
The first and most difficult recommendation is Virginia should adopt the uniform sales tax definitions and rules of the interstate Streamlined Sales and Use Tax Agreement (SSUTA), a step South Dakota has already taken that played a key role in the majority’s opinion.
Joining SSUTA is something the Virginia legislature has refused to do as recently as 2016.  As part of that, Virginia would need to develop a simple on-line method for retailers in other states to report and remit the taxes they owe to Richmond.
A good description of the challenge is provided in the fiscal impact statement for the failed 2016 bill, which lists several provisions in Virginia that differ from the SSUTA and would have to change.  It also reports that the major hurdle in the past, Virginia local government insistence on applying tax at the point of sale instead of the point of delivery, has been addressed and perhaps removed by SSUTA.  Inside Virginia point of sale could remain the rule.
One option mentioned by the Tax Foundation not previously proposed in Virginia:  Allow remote sellers to register with SSUTA directly and recognize payments to Virginia through that mechanism as compliant with state law.
Secretary of Finance Aubrey Layne has estimated a possible $250 million windfall for the state, which would be split between the state and localities.   One state legislator is already pushing to earmark all the revenue to school construction.
After years of politicians promising to keep the internet “tax free,” moving to expand the tax on remote sales may be resisted by some people. But the internet hasn’t been tax free for some time, with large retailers including Amazon collecting tax and internet service itself subject to a sales tax now in this state – one of the few instances where Virginia taxes a pure service.

Virginia has not adopted SSUTA but has played an advisory role in its development.


Small retailers complain with good reason that it will be impossible to comply with the thousands of sales tax collectors and rule variations around the U.S.  But as the Tax Foundation points out, that is not much of a problem in Virginia.
Despite having 174 tax jurisdictions, “the state provides central collection and local sales taxes must adhere to the state sales tax base.”  Central collection means the Virginia Department of Taxation has authority over sales taxes and conducts any audits, not individual cities and counties.
The Tax Foundation, citing the court rule, also recommended a threshold level of activity before the tax is triggered. In South Dakota’s case that is $100,000 in sales or 200 annual transactions.  That leaves truly small retailers out of the tax collector’s net.
Many of these issues gore somebody’s ox, so a serious effort to adopt the SSUTA definitions should begin well before the Assembly convenes in January.  Without adoption of SSUTA Virginia will likely remain unable to force internet sellers outside its border to impose and remit this tax.  Frankly if it refuses to compromise some of its rules and improve its level of uniformity, sellers shouldn’t have to comply.
(This article first ran in Bacons Rebellion on September 4, 2018)

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Economic Impact: Consumer confidence is running high

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Consumer confidence was higher in August than it has been since October 2000.
The Conference Board’s index, which is published monthly, reflects consumers’ perception of business health, employment and income for the current month as well as six months into the future.
Since it is indexed to 1985, the August 2018 value of 133.4 means consumers feel about 33 percent better about today’s economic conditions than they did in 1985.
As a point of reference, the unemployment rate averaged 7.2 percent in 1985 and was decreasing over the year. Inflation, which started the decade of the 1980s with double digits, retreated to 3.5 percent in 1985 and slowed further in 1986.
In 1985, President Ronald Reagan started his second term in office, the Food and Drug Administration approved a blood test for AIDS, 21-year-old Whitney Houston released her debut album, and Microsoft Corp. released its first version of Windows 1.0.
The previous recession ended in November 1982 and the economy continued to grow until entering another recession in July 1990.
The Consumer Confidence index is widely watched because it is one of the first economic indicators available each month.
It is also important because consumer spending makes up about 70 percent of gross domestic product.

Historically, however, consumer spending and confidence only show a tight correlation around recessions — confidence drops off rapidly as the economy deteriorates and the unemployment rate rises.
In contrast, when economic performance starts to improve, confidence shoots up and consumer spending increases, especially on high-dollar items that consumers delayed purchasing for fear that their jobs might get cut.
Now, back to the present. Consumer optimism also improved in August with an increase in the percentage of consumers anticipating improved business conditions.
With the unemployment rate continuing to decline and many consumers benefiting from the federal tax cuts, consumer optimism is yet one more signal of favorable conditions for continued growth.
There are no apparent imbalances or bubbles that will precipitate a recession anytime soon, which points toward increasing consumer confidence in the months ahead.

(This column first ran in the Richmond Times Dispatch on September 3, 2018)
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Could Monsanto’s $289 million court loss hurt agriculture?

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The August 17th Wall Street Journal published an editorial describing how plaintiffs’ lawyers used junk science to persuade a California jury that a school groundskeeper was ‘exposed’ to glyphosate, and it caused his cancer.
This case and loss will have a huge potential impact on agriculture, if upheld.
Related: Monsanto fined $289 million in Roundup suit
The Journal stated “…the problem…is that there’s overwhelming scientific evidence that glyphosate does not cause cancer.” The Journal editorial went on to quote the Journal of National Cancer Institute study which investigated 45,000 licensed pesticide applicators exposed to glyphosate and found “no evidence of an association between glyphosate use and risk of any solid tumors or lymphoid malignancies including non-Hodgkin lymphoma.”
The WSJ editorial even refers to U.S. EPA as concluding glyphosate is safe. One expert claims “There is no known biological mechanism by which glyphosate could cause cancer…”
Related: Taking a global view of pesticides
If this is true and did not get presented to the jury, something is wrong with Monsanto’s legal team.
The World Health Organization’s International Agency for Research on Cancer (IARC) suggests otherwise. IARC surprised many in the scientific community when it concluded glyphosate is “probably carcinogenic.” Subsequent investigations revealed that contrary data had been repeatedly ignored and omitted by IARC.
IARC is the same group that has claimed very hot beverages can cause cancer, among other things. And now this junk science is getting traction in court. Monsanto, now being purchased by Bayer, faces 5,000 similar suits.
Apparently, the same researcher for IARC also works for plaintiff’s law firm, and even testified as an expert witness in the California jury case.
The plaintiff in the California case is a former school groundskeeper who routinely used Roundup. The lesions which were shown to the jury covered 80% of his body, and he indicated even wearing clothes causes pain. Other stories from the plaintiff’s side of the case indicate Monsanto suppressed evidence which suggested risk associated with the world’s most widely used herbicide that most know by its name, Roundup.
The WSJ did not comment that there was internal correspondence introduced at trial which indicated Monsanto was aware its herbicide was carcinogenic and that Monsanto “…has continuously sought to influence the scientific literature to prevent its internal concerns from reaching the public sphere and to bolster its defenses in products liability actions.”
Plaintiff’s attorney claimed in his argument that “Monsanto has specifically gone out of its way to bully and to fight independent researchers.” Plaintiff’s counsel also presented to the jury, according to one report, internal Monsanto emails which he argued demonstrated “…how the agrichemical company rejected critical research and expert warnings over the years while pursuing and helping to write favorable analyses of their products. They fought science.”
Plaintiff’s counsel used the well-paid activist scientist Christopher Portier. He chaired the IARC evaluation of glyphosate, which has been attacked as deficient. He is now a senior scientist with the Environmental Defense Fund (EDF) and works as an expert witness for law firms who have thousands of clients claiming glyphosate has caused their cancers.
As most readers know, Monsanto began marketing Roundup in 1974. It was a major breakthrough for agriculture and could kill almost every weed without harming humans or the environment. Roundup products are registered in 130 countries and have been approved for use on more than 100 crops. More than 800 scientific studies and reviews and regulatory authorities around the world support the fact that glyphosate does not cause cancer.
Knowing all that, how could Monsanto lose this case?
In a statement released after the trial verdict, Monsanto said glyphosate did not cause the plaintiff’s cancer. The jury believed otherwise and gave the plaintiff $39.2 million to compensate for his injuries and $250 million to punish Monsanto for its conduct. Monsanto will likely appeal or ask the judge to vacate the jury’s decision.
Monsanto was represented by one of the largest Chicago law firms, and its lead trial lawyer has been singled out as one of the best trial lawyers in the United Sates. He is an expert in patent law and white collar defense cases. Agriculture issues do not seem to be part of his practice.
Plaintiff’s lawyer, on the other hand, was a 36-year-old, small town attorney from Orange, Virginia. Background on plaintiff’s attorney indicates he has a practice which focuses on pesticide litigation. Appears he may know and understand agriculture.
There might be a lesson here?
(This article first ran in the August 21, 2018 issue of Farm Futures.)
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Texas Tolling Far From Dead

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(Editor’s note:  transportation ideas from other states can be a help to Virginia as we try to figure out how to develop a system to lessen congestion and enhance economic growth.  What is going on in Texas is interesting and instructive.)
Despite a 2017 legislative prohibition on Texas DOT putting any tax money into toll road or express toll lane (ETL) projects, such projects continue to make headway in the Lone Star state. Some of this is due to projects authorized before the anti-toll legislation. Others are being launched by toll agencies and regional mobility authorities (RMAs) that abstain from using any TxDOT money. And in several other cases (so far), state officials have been willing to interpret the law to permit certain strongly supported projects to proceed.
Here is a sampling of toll projects approved or under way as of summer 2018:

  • The Hidalgo County RMA will develop the Hidalgo County Loop as a toll road, and construction is proceeding on the portion called the 365 Toll Road.
  • Harris County Toll Road Authority (Houston) is developing a reversible ETL for the rebuilt US 290 and will extend the Katy ETLs to Fort Bend County.
  • The Montgomery County Toll Road Authority is selling toll revenue bonds to extend the SH 249 toll road into that county.
  • The Central Texas RMA has received state permission for the SH 130/US 290 flyover project, with TxDOT contributing $41 million in toll revenue from its toll roads in the Austin metro area.
  • Construction begins this fall on the final segments (52 miles) of the tolled Grand Parkway (SH 99) outer beltway in Houston.
  • In Dallas/Ft. Worth, construction is nearly completed on the $847 million Midtown Express, which includes ETLs in both directions.
  • In Austin, the new SH 360 toll road opened in May, and the $743 million US 183 toll road project is now 50 percent completed.

Compromises were reached in recent month enabling two important projects, strongly desired by the public and local officials, to go forward. The largest of these is the $1.8 billion LBJ East project in Dallas. The agreement with the state will allow the reconstruction and widening of the LBJ, but instead of ending up with two ETLs each way, there will only be a reconstructed version of the existing one ETL each way (though the overall widening may permit a second ETL each way if the anti-toll legislation is repealed or modified by a future legislature). And the much-needed widening of a very congested stretch of the SH 130 toll road in Austin was approved in late April, on condition that only toll dollars will be used.
Other projects with strong local support are still seeking a way forward. Austin’s CTRMA wants to extend its SH 183A toll road six miles northward and is moving forward with the environmental review in hopes of getting TxDOT approval to connect to the state system. In Cameron County, the local RMA is trying to figure out how to finance a $500 million project for a new causeway to South Padre Island, planned as a toll road. And negotiations are under way in Fort Worth to get the OK for segment 3C of the North Tarrant Express, which will add six miles of I-35W to this successful P3 project, hopefully as an extension of the existing P3 concession agreement.
Finally, the Austin business community is working hard to build support for the planned $8 billion project to expand congested I-35 through downtown, which is planned largely as express toll lanes. Attorney General Ken Paxton has offered a legal opinion that TxDOT should be able to account separately for tax money and toll money, which could offer a way around the apparent ban on tolled projects involving TxDOT. Based in part on Paxton’s opinion, State Sen. Kirk Watson has called on Gov. Abbott to allow such projects to proceed. “It is my hope that he’ll green-light Central Texas projects, such as the US 183 express lanes and completion of the I-35 Capitol Express,” Watson told the Austin American Statesman in May.
Fundamentally, what is going on in Texas is a state law enacted by opponents of tolling, ETLs, and P3 concessions that is preventing the implementation of projects with strong local support, not merely in Austin, Dallas/Ft. Worth, and Houston but also in smaller jurisdictions such as Cameron, Hidalgo, and Montgomery Counties. It’s bizarre to see self-styled populist legislators thwarting the will of commuters, businesses, and officials who are trying hard to cope with Texas’s unrelenting growth, using proven tools.
(This article first ran in the August issue of Surface Transportation Innovations.)
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