Food and agriculture remain an administrative focus as we move into 2011. Here are several key issues likely to affect the industry over the coming year.

Food Safety

As of this writing, there is no food-safety legislation awaiting President Obama’s signature. While both the House and Senate have passed some form of food-safety legislation, procedural errors mean the waiting game continues. Most recently, the Senate again passed a version of the food-safety bill in the form of a substitute to a House-originated bill. The House is now expected to vote on and pass this substitute bill, making it likely that food-safety legislation will pass before the 2010 congressional session ends.

If the bill passes, the exemption for “small farmers” will likely be included. The proposed legislation covers only foods that fall under the U.S. Food and Drug Administration’s jurisdiction. As livestock falls under USDA’s authority, there may not be direct effects on livestock producers; however, FDA regulates many processed meats and thus they would be affected, and of course, pork has significant amounts of processed meats. 

If the legislation does not pass before the close of 2010, the process would likely fall back to square one. With a Republican-led House, it’s unlikely that future legislation would mirror this last bill, especially with so much focus on national spending. Still, food safety remains a key issue to watch as we head into 2011.

One other food-safety issue on the horizon is the possibility of new E. coli rules from USDA in 2011. For years, only one type of E. coli has been considered an adulterant by the agency, but there’s a push from food-safety advocates, with support from the current administration, to broaden that definition.

OSHA Inspections

The U.S. Labor Department’s Occupational Safety and Health Administration announced its 2011 annual inspection plan, which will target “high-hazard industries,” including livestock and poultry farms, trucking, farm product warehouses and storage, and the food industry. OSHA relied upon injury and illness data from 2008 to compile its list. As part of this targeted inspection program, OSHA will randomly select employers with 40 or more employees for a comprehensive, “wall-to-wall” inspection. Targeted inspections allow OSHA to direct its resources to industries and workplaces where the highest injury and illness rates occur. These are programmed inspections, as opposed to non-programmed inspections, which OSHA can conduct at any facility, and they are typically in response to an incident.

If you have 40 or more employees, take special care to ensure that you are in compliance with OSHA standards and have the necessary verification paperwork in place. What’s more, be prepared to make it available should an inspector show up at your business.  

Obesity and Nutrition

From the recently signed Child Nutrition legislation to the upcoming revised Dietary Guidelines, obesity and nutrition remain a focus of the Obama administration, as well as that of state and local governments. We will likely see continued debate about meat’s role in a healthy diet, leading to potential shifts in domestic demand. 

Sodium intake and high-sodium foods, which include many processed meats, are receiving increased attention. Some areas have proposed limiting sodium in food sold at foodservice and retail establishments. Currently, such initiatives are voluntary, with many food companies reducing sodium content. However, some think the voluntary movement will not go far enough and that legislation is the only answer. In the short term, other issues will likely have more impact on the livestock industry in 2011, but be aware of this focus.

Antibiotics and Animal Welfare

Expect the debate on antibiotic use in livestock to continue into 2011. FDA announced its position on non-therapeutic use of antibiotics, urging food-animal producers to limit, if not stop, using antibiotics for purposes such as improved animal growth or feed conversion. Legislation was introduced in 2010 that would have banned such use in food animals; however, it stalled in Congress. 

In December, FDA released its first estimates of antibiotics sold annually in the United States for use in food-animal production and pegged it at 29 million pounds in 2009. Because this is FDA’s first estimate, it’s hard to put this number in context, but it has captured the attention of many. After the report was released, Rep. Louise Slaughter (D-N.Y.) said she would reintroduce the Preservation of Antibiotics for Medical Treatment Act once Congress returns in 2011. 

In light of the House’s changing political makeup, this bill has a low likelihood for success, but the issue appears to have the Obama administration’s support. If legislation does not take hold, we may see further regulatory movement from FDA in this area.

Animal-rights groups could tag on to the antibiotic-use numbers for traction and argue that conditions in concentrated-animal-feeding operations lead to increased antibiotic use. These groups support regulations on animal housing and rearing, arguing changes will lead to improved animal health. 

Animal welfare will remain an issue confronting the livestock industry, with the main battleground likely at the state level. We may see more states negotiating with organizations like the Humane Society of the United States, as Ohio did in 2010, in an attempt to prevent the time, expense and potential damage of ballot measures or even litigation related to farm-animal welfare.

Farm Bill

The year ahead will be key for developments related to the 2012 Farm Bill. Outgoing House Agricultural Committee chair Collin Peterson (D-Minn.) advocated writing a bill in 2011. As a result, we saw field hearings and debates take place in 2010. However, with new House leadership there is little chance we will see a farm bill develop in 2011. 

Frank Lucas (R-Okla.), incoming agriculture committee chair, said his goal is to have a bill to the president by mid-2012. With so many new congressmen arriving in Washington, D.C., this year, and turnover on the House Agricultural Committee, there’s significant education to be done before a farm bill can be drafted. Signs are that Lucas hopes to write a smaller — perhaps much smaller — farm bill than previously seen.

What this means for crop-support programs and the ripple effects on the livestock industry is unknown, although it’s likely that we’re going to see crop insurance written in as part of the farm bill for the first time. Lucas is a proponent for direct-payment programs, believing they have the least impact on trade. Concerns related to farm-program payments and compliance with World Trade Organization rules will be important issues going into the 2012 Farm Bill debate.

Fewer political changes occurred on the Senate Agricultural Committee side, although there is a new chair — Sen. Debbie Stabenow (D-Mich.). In the past she actively supported many of the same types of programs that are supported by the current administration — support for smaller farmers, direct and local sales, and rural initiatives. With her leadership role we may see more of these types of programs written into the 2012 Farm Bill.

GIPSA

Rep. Lucas expressed concern regarding the proposed GIPSA rules, indicating that he believed USDA went beyond what Congress intended. Congressional oversight remains an option, and USDA may be ordered to conduct a comprehensive economic analysis of the proposed rules.

In the meantime, USDA is reviewing more than 60,000 comments submitted in response to the proposed rule. In a mid-December call with industry stakeholders, meant to provide reassurance that USDA was not going to rush this process, Ag Secretary Tom Vilsack said that USDA would earnestly review the proposed rules, especially in light of differences between small and large producers as highlighted in the recent USDA/Department of Justice competition workshops. Vilsack said that in addition to reviewing comments, USDA will conduct a cost-benefit analysis before any redrafting occurs. It is unlikely that we will see a final rule released before mid-2011.

Editor’s Note: Kristin Eads, Steven Toeniskoetter and Jennifer Williams Zwagerman are lawyers with the international law firm, Faegre &  Benson.They are part of the food, agriculture and biofuels industry focus group and represent major food and agriculture companies. They can be reached at keads@faegre.comjwzwagerman@faegre.com and  stoeniskoetter@faegre.com.