Jefferson Policy Journal

Last week I wrote about Canada’s 270% tariff on certain U.S. dairy products. During the week, many of you saw Prime Minister Justin Trudeau attempting to blame the entire tariff issue on President Trump. He said his job was to stand up for Canadians, as he should. The media, of course, completely bought his story and portrayed our president as being wrong and harming the relationship between Canada and the United States.
As a result, I reviewed a report prepared by our U.S. embassies and the U.S. Commercial Service of the U.S. Department of Commerce. I suspect no one in the media or even in the agriculture media has bothered to examine what an official U.S. document states about Canada’s tariffs and trade barriers. I will list just a few.
On August 14, 2017, a summary was published entitled Canada – Import Tariffs. The Department of Commerce Commercial Service states that Canada has been good in eliminating tariffs on many industrial and agricultural products; however, it points out that “…tariff-rate quotas (TRQs) remain in place for dairy and poultry.”
A TRQ is a trade policy tool used to protect a domestically-produced commodity or product from competitive imports. The document states what we already know — dairy products exported to Canada “…are subject to high tariffs (e.g., 245% for cheese, 298% for butter).”
Another Canadian trick involves restrictions on U.S. grain exports. Canada’s tariff policies do not allow U.S. wheat and barley exporters to receive a premium grade to allow the grain products to be used for human use, but can only be used for feed use. Apparently, the Canadian Grain and Seeds Act requires this restriction.
These barriers assigned to U.S. grain products creates price discounting for high quality U.S. grain. Of course, Mr. Trudeau never discussed this problem.
Wine, beer and other spirits face interesting barriers which Mr. Trudeau did not discuss. The Commerce report states, “Most Canadian provinces restrict the sale of wine, beer, and spirits through province-run liquor control boards which are the sole authorized sellers of wine, beer, and spirits in those provinces.” British Columbia, for example, only allows British Columbia wines to be sold on its grocery store shelves. Any imported U.S. wine must be sold within a special store within a grocery store and have a separate cash register. Ontario, another Canadian province, declared in 2016 that wine sales in its grocery stores would be restricted to selling Ontario Vintners Quality Alliance wines. The Commerce Department report said this requirement may allow for discrimination against imported wines.
Even Canadian consumers seem to be fed up with the Canadian government’s tariffs, which drive up the cost for Canadian consumers. Canada has a personal duty exemption when its residents come across the border into the U.S. to purchase products. If a Canadian spends more than 24 hours outside of Canada, he or she may bring back duty free $200 (Canadian) worth of goods. If the Canadian citizen spends more than 48 hours in the U.S. he or she may bring back up to $800 worth of goods. However, if a Canadian citizen is in the U.S. for less than 24 hours, there is no duty exemption for what is purchased.
On May 11, 2018, The Globe and Mail, a Canadian newspaper, published a story on a Canadian Senate report which blamed the Canadian Finance department for keeping Canada’s tariffs in place. The newspaper report claimed Canada’s tariffs on mainly agricultural products generated at least $3.6 billion (Canadian) in revenues in 2010-2011. The newspaper column also declares “Canadian consumers have been subsidizing the dairy industry since the 1970’s through supply management, a complex system that relies on high tariffs to ensure rich and stable revenues to dairy farmers…”
The Globe and Mailstates “…there is a 299-per-cent tariff on butter, a 246-per-cent tariff on cheese, and a 241-per-cent tariff on milk.” These tariffs apply once a TRQ is met.
Canadian consumers complain bitterly about the prices they must pay in their home country compared to what they pay when traveling in the United States. By some estimates, over 3.5 million Canadians drive into U.S. border states every month. It is estimated by The Globe and Mail Canadians make more than 40 million trips into the U.S. annually. An economist for a Canadian consulting firm estimates that Canadian cross border shopping takes more than $20 billion from the Canadian economy because of Canada’s high tariffs.
Again, as I stated last week, our president is attempting to level the playing field. It would be refreshing to see some of our media stand up for the facts and the president.
(This article first ran in Farm Futures on June 19, 2018)
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A New York Supreme Court struck down portions of a General Permit which would regulate large concentrated animal feeding operations (CAFOs).
The New York Department of Environmental Conservation (DEC) issued a General Permit under its own water statute and the Clean Water Act (CWA). New York’s DEC regulates CAFOs in the state through regulations, permits, inspections, and enforcement actions. EPA and the State of New York can issue specific CWA permits, or through a General Permit, and the General Permit imposes pollution control requirements that require a CAFO to comply with a set of standards for farm operations.
CAFO pollution control requirements generally comply with Natural Resource Conservation Service (NRCS) standards developed within USDA. NRCS has state specific policies and standards for developing land application effluent guidelines for large CAFOs. In New York DEC has adopted NRCS’ standards that identify Best Management Practices (BMPs) which relate to nutrient management, waste storage facilities, anaerobic digestion processes, waste transfer, vegetative treatment areas, treatment of dead animals and composting.
According to the Court’s decision, DEC has incorporated 10 NRCS standards into its General Permit. In addition, a General Permit requires a CAFO operator to prepare a comprehensive nutrient management plan (CNMP) and an annual nutrient management plan (ANMP).
After DEC published its initial draft for the General Permit, EPA sent DEC a letter in March 2016. EPA said the permit did not address 9 minimum measures relating to adequate storage of manure, litter, processed wastewater, diversion of clean water, appropriate testing of manure, and the handling of processed wastewater and soil.
On March, 10, 2017, EPA sent another letter to DEC suggesting some minor changes such as including a Frequently Asked Question document; on May 25, 2017, EPA again sent a letter declaring its “earlier concerns had been satisfied.”
Remember: a new President was elected at the end of 2016.
Environmental groups such as Earthjustice, Waterkeeper Alliance, Riverkeeper, Courtland-Onondaga Federation of Kettle Lake Associations, Sierra Club, and Theodore Gordon Flyfishers, Inc., sued DEC, claiming the state agency and its General Permit failed to meet key requirements of the CWA and its regulations. Specifically, the environmental organizations claimed DEC was not required to review and approve the nutrient management plans before granting coverage to a CAFO. Second, it was alleged DEC did not provide opportunity for public review and comment on whether a nutrient management plan was sufficiently compliant with the CWA.
Finally, the environmentalists charged that DEC “…does not require Comprehensive Management Plans (CMPs) and animal nutrient management plans (AMPs) to set forth enforceable, site-specific restrictions covering the full range of a CAFO’s operations that are at high risk for polluting water.”
CAFOs, by their very nature, are no discharge or zero discharge facilities. The environmental groups seek to use the public review issue as a way of controlling how a CAFO handles its manure on its own land.
The Court found EPA’s May 25, 2017 letter from Sec. Pruitt’s EPA office to be worthless, or as the Court said “…the letter has no persuasive force.” The Court found that DEC could not grant a General Permit without allowing the public an opportunity for notice and comment.
The DEC had claimed certain portions of the annual management nutrient plan included confidential information from the farm and therefore should not be made public. DEC felt there was a state policy with confidentiality with certain management data from a farm. The Court dismissed that argument.
The Court found the CNMP did not contain the CWA requirements for agency oversight, disclosure and public participation. The Court made the same finding regarding the AMP and said its structure was not in compliance with federal regulations and would be required to be made available for public review.
The DEC did win several portions of the case which related to the fact that CAFOs do not need to develop and implement site-specific effluent limitations.
Environmental groups claim that NRCS standards are not really standards but merely considerations or methodologies. The Court, in reviewing NRCS standards, said that they are relevant standards and contain numerous specific and enforceable requirements.
The Court also supported DEC regarding nutrient application where New York requires “…a lengthy set of detailed protocols governing the amount (rate), source, placement (method of application), and timing of plant nutrients and soil amendments.”
The environmentalists attempted to obtain legal fees for their supposed victory and the Court said no because both parties in this case had prevailed on certain issues.
This case is an indication of how General Permits issued by other states will be challenged by environmental groups.
(This article first ran in the May 9, 2018 issue of Farm Futures.)
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