ARA: Ag Retail Earns Policy Victories, Prepares for Next Challenges

The legislative, regulatory and judicial landscape is vastly different from what the agricultural retail industry experienced decades ago. In the past eight years, federal regulators completed hundreds of major rules that impacted many sectors, including agriculture. Each of these rules imposes new costs greater than $100 million.

In the past year, the worst offenders of excessive, unlawful regulations were the Environmental Protection Agency (EPA) and Department of Labor's Occupational Safety and Health Administration (OSHA). Congressional partisan gridlock leads to more stalemates than accomplishments. This legislative dysfunction led to federal agencies like EPA and OSHA filling in the policy vacuum. They continue to attempt to expand federal regulations well beyond Congressional intent and do not follow the proper rulemaking process.

For example, OSHA issued an enforcement memorandum seeking to expand the scope of the Process Safety Management (PSM) regulations to include agricultural retailers, contrary to more than 20 years of regulatory precedent of the "retail exemption." This exemption used a long-standing definition of retail facility to mean one that derived more than 50% of its income from direct sales to end users.

ARA, in partnership with The Fertilizer Institute (TFI), spent hundreds of thousands of dollars litigating this unlawful action.

Furthermore, in the past few years, actions of the EPA's Office of Pesticide Programs have threatened the effectiveness and quantity of crop protection products that are available. This has occurred because of the agency's systemic failure to use a proper risk assessment process.

Several important pesticides such as flubendiamide, sulfoxaflor and chlorpyrifos were on the EPA's target list for removal from the marketplace.

These continuous regulatory challenges and roadblocks led to frustration and lack of certainty.

Despite the full force of these powerful federal agencies coming to bear down on agricultural retailers and their farmer-customers, we at ARA stepped up our efforts in 2016 to fight these types of illegal agency actions with industry coalition partners, and we experienced some major wins for our members.

Court Upholds OSHA PSM Retail Exemption

In July 2015, OSHA issued an enforcement memo that revised guidance regarding the PSM retail exemption. The change would have impacted more than 3,800 agricultural retail facilities that store and handle anhydrous ammonia fertilizer. ARA secured help from key allies in Congress to include language in the annual federal spending bills to prohibit OSHA from using any funds to enforce the retail exemption memo. This important provision was extended in the Consolidated Appropriations Act of 2016.

In response to this language, OSHA announced it would not take any enforcement action until Oct. 1, 2016.

In a case brought against OSHA by ARA and TFI, on Sept. 23, 2016, the U.S. Court of Appeals for the District of Columbia ruled that OSHA violated the Occupational Safety and Health (OSH) Act. The agency then appealed the three-judge panel decision to the full D.C. Circuit, which also rejected OSHA's actions.

In applauding the court decision, ARA president and CEO Daren Coppock says, "This administration has broadly and unjustly avoided proper procedure to construct and reinterpret myriad of federal regulations without public input. The court's decision in this case affirms the importance of regulatory agencies following proper notice and comment rulemaking procedure."

Following the election of Donald Trump in November, the agricultural retail industry is unlikely to see OSHA attempt further expansions of the PSM regulations.

Protecting Availability of Crop Protection Products

In 2016, ARA was actively involved in initiatives to help maintain essential crop protection products as available tools for the industry.

Several products subject to cancellation, such as sulfoxaflor and flubendiamide, were targets of anti-chemical groups that filed lawsuits against EPA. There was also the Anderson treated seed lawsuit, which could have use of neonicotinoid products in seed treatment.

In the flubendiamide case, the EPA's Environmental Appeals Board upheld the cancellation of flubendiamide, a Bayer CropScience insecticide sold under the trade name Belt, but it allowed existing stocks to be sold by retailers and distributors.

In overturning the EPA's existing stocks decision, the appeals board cited ARA's Amicus Brief that pointed out long-standing precedent to allow existing stock sales and noted the financial hardship placed on retailers. ARA previously sent a letter to the EPA that commented on the existing stocks provision.

In the Anderson v. EPA seed treatment case, ARA joined CropLife America and several other organizations that would have been impacted by the court decision. In this case, the plaintiffs, comprised mainly of beekeepers, had asked a California court to order EPA to regulate seeds treated with pesticides as if the seeds were the pesticides themselves.

If the plaintiffs were successful, then the decision would have resulted in unnecessary duplication of EPA's science-based regulatory review of active ingredients used in the treatment of products. In November, the court ruled in favor of the EPA and the industry coalition finding that the 2013 Bee Guidance document on which the plaintiffs had relied was neither an "agency action" nor "final" under the Administrative Procedure Act (APA) and the claims were not reviewable by the court. This important decision protects the ability of agricultural retailers to continue to use seed treatment technologies on behalf of their farmer-customers.

ARA will continue to proactively weigh in with EPA on several other crop protection products such as atrazine, chlorpyrifos and others that are under attack by the agency. The Trump administration and EPA administrator should quickly help reset the process and help preserve risk-based regulation of pesticides based on sound science and a predictable registration and regulatory review process.

Precision Ag Day Event

More than 50 officials from the EPA's Office of Pesticide Programs and state agencies attended a Spray Drift Field Day hosted by the Association of Equipment Manufacturers and the Agricultural Retailers Association on June 15, 2016. The event, held at the University of Maryland Wye Research and Education Center about an hour from Capitol Hill in Queenstown, Md., introduced regulators to various drift reduction and precision agriculture technologies from several manufacturers. The event was designed to show the EPA and state officials the full spectrum of capabilities of modern precision agricultural equipment.

The National Agricultural Aviation Association also participated in the event. An area company demonstrated a helicopter applicator and the practices and technologies that aerial applicators are using to minimize drift. The field day featured spray drift reduction demonstrations from John Deere, Case IH, GVM, AGCO, TeeJet, Helicopter Applicators Inc. and Hardi.

Biotechnology / National GMO Labeling

In early August, President Barack Obama signed legislation that will protect family farmers and small businesses from the severe impacts of disparaging state labeling laws. The legislation aimed to provide consumers with a nationwide transparent food disclosure system for genetically engineered ingredients.

The bill, which includes federal preemption of GMO state labeling, passed in the Senate and House with broad bipartisan support.

ARA will be working with industry partners and USDA on implementing these new labeling requirements.

Draining the Regulatory Swamp

The regulatory process today is the product of decisions made over decades, often without any effort to integrate those decisions into a coherent system. All stakeholders have a right to fair, open and transparent rulemaking that respects the proper role of the states and the intent of Congress.

For decades, there have been executive orders issued from both Republican and Democrat administrations, which highlight the importance of an open, transparent and fair regulatory process. During the campaign, President Trump vowed to "drain the swamp" in a reference to the growing power and influence of the federal bureaucracy and regulations. During his first months in office, Trump has issued several executive orders (EO 13771, 13777) designed to lower regulatory burdens on the American people by implementing and enforcing regulatory reform.

Now is the time for Congress to reclaim its constitutional legislative authority by ensuring that agencies implement congressional intent, not the intent of the agency. There is a narrow opportunity in 2017 for the President and the 115th Congress to pass and implement much-needed regulatory improvement and reform. That bipartisan, bicameral effort should start with modernizing the APA, which includes rulemaking procedures that have remained virtually unchanged for more than 70 years.

The Regulatory Accountability Act (RAA) led by Rep. Bob Goodlatte (R-Va.) and Sen. Rob Portman (R-Ohio) in the Senate is strongly supported by ARA, American Farm Bureau Federation, U.S. Chamber of Commerce and more than 600 national and state organizations.

Federal regulations should be narrowly tailored, supported by credible and accurate data and evidence and impose the least burden possible while following congressional intent. The RAA is designed to update the APA by improving transparency and accountability and streamlining the regulatory process.

This legislation will give agricultural retailers and their farm and ranch customers a large voice in the process. Specific RAA provisions include requesting public stakeholder participation earlier in the process; requiring agencies to choose the lowest cost option that achieves the goal or demonstrate that a more costly option is necessary to protect public health, safety or welfare; allowing for on-the-record administrative hearings for high-impact regulations so that interested parties can challenge agency assumptions and the reliance on poor quality data; and placing restrictions on agencies' use of interim final regulations.

Other essential reforms include requiring federal agencies to explain how proposed regulations impact small business owners, employees and customers; prohibiting any new rules with significant economic impact from taking effect until they have been fully litigated with no impact on existing regulations; and requiring federal agencies to publish mandatory transparency reports. Federal agencies should also be prohibited from using social media to sway public opinion in favor of pending agency proposals. More openness is needed in the "sue and settle" process by agencies providing early notice of intended settlements and an opportunity-in limited circumstances-to participate.

ARA's request to Congress is as follows: Support the Regulatory Accountability Act of 2017 - H.R. 5, H.R. 45; support the Sunshine for Regulatory Decrees and Settlements Act - H.R. 469, S. 119; and support the Small Business Regulatory Flexibility Improvements Act of 2017 - H.R. 33.

EPA NPDES Pesticide General Permit

In 2009, the U.S. 6th Circuit Court of Appeals drastically expanded the enforcement reach of the Clean Water Act into pesticide policy in National Cotton Council, et al., v. EPA, et al. The court ruling invalidated decades of precedent and an EPA regulation that had exempted pesticide applications made into, over or near water from the numerous requirements of CWA's National Pollutant Discharge Elimination System (NPDES) permits.

The court ruled that such applications require compliance with NPDES discharge permits whenever they occur "into, over or near" one of the many types of "waters of the U.S.," though the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) already regulates pesticide use. FIFRA requires, through years of extensive testing, demonstration that registered pesticides can be safely applied according to product labels in a manner that poses no unreasonable risk to humans or the environment.

Rep. Gibbs re-introduced the Reducing Regulatory Burdens Act (H.R. 935) to end NPDES Pesticide General Permit (PGP) requirements for applications already determined by EPA to present no unreasonable risk to humans or the environment.

Sens. Mike Crapo (R-Idaho) and Claire McCaskill (D-Mo.) have reintroduced its companion, the Sensible Environmental Protection Act (S. 340). In the 114th Congress, a version of Rep. Gibbs' bipartisan bill passed by an overwhelming margin in the House. It marked the third time that eliminating NPDES PGP requirements received House bipartisan support. In the same Congress, the Crapo-McCaskill proposal passed the Senate Environment and Public Works Committee by a voice vote.

ARA is lobbying Congress to support bipartisan legislation (H.R. 935 / S. 340) to exempt pesticide applications from NPDES PGP requirements for the use of EPA FIFRA-approved pesticide products.

EPA Risk Management Program

In 2016, the EPA proposed significant new regulatory requirements to its Risk Management Program (RMP) rule. Those include expanded public access to chemical facility information, a prescriptive third-party auditing regime and consideration and documentation of any potential inherently safety technology and design changes to every RMP process for selected facilities.

During the public comment period, EPA received thousands of comments from impacted stakeholders such as ag retailers and state and local officials. The comments shared concerns about the substantial proposed changes to RMP requirements that impose significant costs on facilities and state and local governments but provide minimal benefits.

EPA published the final RMP rule on Jan. 13, with the new rule taking effect on March 21. The new rule impacts approximately 3,800 agricultural retail facilities. Rep. Markwayne Mullin (R-Okla.) has introduced a Congressional Review Act Joint Resolution of Disapproval (H.J. Res. 59) and encouraged the agency to work with stakeholders to ensure that the regulatory framework is effective in increasing safety and security, not being detrimental to them.

The current RMP framework works in a sector that already prioritizes safety above all else and that the Bureau of Labor Statistics proves is among the safest in the nation.

As President Ronald Reagan frequently said, the nine most terrifying words in the English language are: "I'm from the government, and I'm here to help."

Water Resources Development Act Reauthorization

Attention to U.S. waterways infrastructure is necessary to compete in a global marketplace. ARA is part of a broad coalition that supports additional resources for the Inland Waterways Trust Fund (IWTF) and Harbor Maintenance Trust Fund to ensure the construction of major rehabilitation projects on the nation's waterways.

In late 2016, Congress approved a new Water Resources Development Act (WRDA). The bill authorizes projects at American harbors, locks, dams and reservoirs. Additional resources are authorized to help ensure the U.S. Army Corps of Engineers can maintain the nation's water infrastructure. ARA strongly supports this necessary infrastructure investment.

During 2016's presidential campaign, then-candidate Donald Trump said, "We will have so much winning if I get elected that you may get bored with winning."

After the past eight years of regulatory onslaught, we can only hope that the key wins that ARA and the industry experienced in 2016 can continue into 2017 during the Trump administration.