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AheadRace eLearning Module # 03 - Regulation and Compliance in US Agriculture

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* Recognize the scope of agriculture-related regulations in the U.S.
* Locate agriculture information links, law and other resources
* Explain agricultural compliance considerations

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AheadRace eLearning Module # 03 - Regulation and Compliance in US Agriculture

  1. 1. Regulation and Compliance in US Agriculture e-Learning Module Start
  2. 2. Learning Objectives After completing this course, you will: ✓ Recognize the scope of agriculture-related regulations in the US ✓ Locate agriculture information links, law and other resources ✓ Explain agricultural compliance considerations Back Next
  3. 3. Topics 1 Scope of the Regulations in the US 2 Agriculture Information Links, Law and Other Resources 3 Agricultural Compliance Considerations Back Next
  4. 4. Agricultural Regulation in the US Today, agricultural regulation in the US is defined by a sprawling bureaucracy spanning the US Department of Agriculture [USDA] (broad scope here), the Environmental Protection Agency [EPA] (detailed by EPA Statute, farm activity, including if and how you can use your own water!), the Department of Labor (every aspect of employment, including Occupational Health and Safety [OSHA] and the employment of migrant and “temporary” seasonal workers). And even these non- citizen employees are regulated by the Migrant Worker Protection Act (MSPA), the Fair Labor Standards Act (FLSA), Field Sanitation Act rules, and the Immigration and Nationality Act (INA- specifically H-2A Visas) outlined here. Did you know? A century and a half ago, half of the US population was employed in the agricultural sector. Back Next
  5. 5. Role of USDA Back Next The USDA spent $154B in FY 2016, and almost two thirds of the spending went to “aid to individuals and businesses” but their budget has grown by 45% since 2000 with an actual shrinkage in the farm population. At the USDA alone, the Code of Federal Regulations includes over eleven thousand pages of rules to enforce, covering everything from specialty food promotion to farmers’ markets. The department operates about 268 subsidy programs and employs 90,100 workers in about 7,000 offices across the country. The blog Downsizing Government details these subsidy programs.
  6. 6. Regulation Areas Back Next The primary areas of Federal regulatory control in agriculture generally involve rules and regulations deemed to support producer prices, exports and import protection Many of these rules treat this as a strategic industry and include five classes. Marketing Orders Price Support Program. Income Support Program Import Controls and Trade Barriers Export Subsidies Click each button to know more
  7. 7. The Agricultural Marketing Service exists for the purposes of "enforcing product quality standards, regulating the flow of product to the market, standardizing packages and containers, creating reserve pools for storable commodities, and authorizing production and marketing research and advertising." Marketing Orders X
  8. 8. These Price Support programs keep commodity market prices artificially high by guaranteeing that the government will purchase any amount of a specified class of product such as cheese, butter or nonfat dry milk from processors at a set minimum price. Price Support Program X
  9. 9. The producer support programs such as the Income Loss Contract program, artificially support non-economic producers when price controls fail. At the minimum, these programs encourage overproduction, which puts downward pressure on prices. Again, reformist farm bills were intended to reduce subsidies to protected sectors like dairy but were restored by a series of supplemental subsidy bills that get pushed by lobbyists. For the dairy industry, the supplemental "market loss" subsidies ultimately were legislated into the more permanent MILC program in 2002. Income Support Program X
  10. 10. These regulations represent another set of rules that benefit large volume farm producers at the expense of consumers and lower cost producers overseas. The Harmonized Tariff Schedule of the United States includes 364 pages of tariff listings for agricultural imports. In general, domestic prices are kept artificially high by marketing orders and price support programs, while low cost imports are prevented from capitalizing on this price umbrella using these tariff schemes. Import Controls and Trade Barriers X
  11. 11. Various product groups such as dairy and wheat are seen as politically important to certain areas such as the Midwest where low production costs convey a comparative advantage to US producers. Accordingly, the government promotes continued over production in excess of domestic demand in order to generate export income by employing “Export Incentive Programs.” For example, the Dairy Export Incentive program was introduced in 1985 to provide cash subsidies to U.S. dairy producers who sell in foreign markets. These incentives stimulate exports of low marginal cost excess production even though the U.S. clearing price is artificially high. Export Subsidies X
  12. 12. Topics 1 Scope of the Regulations in the US 2 Agriculture Information Links, Law and Other Resources 3 Agricultural Compliance Considerations Back Next
  13. 13. Resources Back Next The scope of US agricultural regulation is so broad that a silver lining is that there are extensive resources available to farmers and these suggest programs that can be participated in and the compliance and reporting rules that govern that participation. The Agriculture Research Service (ARS) and other global ag research centers are focused on the topics of regional differences in crop selection, worker health and safety, and best agricultural practices. In the US, these centers largely conduct research on the subject of occupational disease and injury prevention, but also promote agricultural health and safety through educational outreach programs. For farmers, this is a roadmap in the US - the programs available conform to the required standard setting that allow farmers to comply with OSHA, USDA and EPA regulations, seek to ensure food safety, and enable participation in Federal and State ag product marketing programs. • Federal sources • State, territorial and tribal sources • National associations • Land grant universities and other sources
  14. 14. Agricultural Law Research and Information Back Next In 1987, the National Agricultural Law Center was established by an Act of Congress to be an independent and national agricultural law research and information facility that is directly connected to the national agricultural information network. As a result of the expanding scope of agricultural law and its convergence with related areas, the Center also includes food law in the scope of its coverage. Recognizing the importance of agricultural education through the Cooperative Extension Service, the NALC also serves as the lead institution for the eXtension Agricultural and Food Law Community of Practice.
  15. 15. ERS Back Next The USDA’s Economic Research Service (ERS) is particularly focused on farm management and practices, identifying five key categories of interest. • Biotechnology: Driven by farmers' expectations of higher crop yields and/or lower production costs, and management time savings, U.S. farmers have been compelled by seed companies to adopt genetically engineered (GE) crop varieties for corn, soybeans, and cotton (at 93% of planted acreage). • Chemical Inputs: ERS evaluates the influence of rising energy costs and crop prices on fertilizer prices, nutrient supply, and consumption.. Changing relative prices of inputs, trends in the extent and location of crop production, use of biotechnology, adoption of organic systems, pest invasions, and climate change all contribute to changes in pesticide use. • Crop & Livestock Practices: ERS analyzes trends in the adoption of a range of crop and livestock production practices and their effectiveness in reducing costs, increasing farming profitability, minimizing losses to the environment, and conserving natural resources. • Irrigation & Water Use: Corporations are now assigning input values to water supplies which is leading to shortages at point of use and increased costs, especially for livestock production. The EPA and USDA are imposing conservation and environmental policy goals on the US farm population, forcing more efficient irrigation systems and better water management practices. • Risk Management: Uncertainty in prices, yields, government policies, and foreign markets means that risk management increasingly plays an important role in many farm business decisions.
  16. 16. NOP Taking a look at the fastest growing segment of the US agricultural industry, organics are growing as a consumer choice instead of GE/GMO products, higher purity standards, application of technology to crop cultivation and water management practices, and risk management by employing lot labeling and high level quality control and tracking tools. The framework of the National Organic Program (NOP) provides the rules and regulations for the production, handling, labeling, and enforcement of all USDA organic products. NOP is the key to getting organic products to the market with the correct, accepted certifications. Certified organic refers to agricultural products that have been grown and processed according to uniform standards that have been verified by the USDA in its rulemaking. Accordingly, in the case of organic production, the regulations, governing laws, educational resources and information on best practices is emerging and organic farmers readily share information on new market development. Back Next
  17. 17. Topics 1 Scope of the Regulations in the US 2 Agriculture Information Links, Law and Other Resources 3 Agricultural Compliance Considerations Back Next
  18. 18. Agricultural Compliance Considerations Engaging in agricultural trade involves global considerations of jurisdiction, precedent and monitoring applicable rules as core compliance considerations – the bigger the operator, the broader the product mix, the more complex compliance becomes. A look at NALC compliance citations show that agricultural issues are governed by a wide range of national and international bodies including the World Trade Organization. Rather than get mired in complexity, producers are well served to focus on three key areas: Back Next Training and Education of Your Workforce: Require key staff to complete OSHA Compliance Certifications (10 and 30 hour programs) plus the equipment operator certification programs provided by Original Equipment Manufacturers (OEMs) when they sell and service their advanced equipment platforms. Facility Quality Certification and Inspection: Engage in a current standards reporting, operate in compliance with the Worker Protection Standards (WPS) and OSHA regulatory standards, develop an Emergency Action Plan (EAP), and prepare for a local, state, or federal compliance audit. Product Registration, Independent Quality Validation and Labeling: Products requiring use of pesticides need to be in compliance with new 2015 WPS rules for decontamination starting in 2017. By product class conforming to specific statutes, products should be registered, independently tested for quality and grade, and validated to be in compliance with customer specifications. Then, in conjunction with desired packaging and marketing efforts, labeling should enhance the appeal of the product to the ultimate consumer. 1 2 3
  19. 19. USDA Data Direct to consumer marketing has proven to yield higher margins for producers, especially for specialty and prepared products. USDA data shows very strong development of new channels such as farm to school, local food hubs and farmer’s markets since 2007. The “Farm to Plate” movement is also strongly embraced by organic producers and various restaurants seeking to attract clientele who demand to “know where their meal comes from” Back Next Source: USDA data at www.republic.co
  20. 20. USDA Data The USDA Food Safety and Inspection Service (FSIS) provides information to producers and agricultural businesses to help them maintain compliance with federally defined regulations for their establishments. FSIS provides compliance guidelines for various fields, food safety assessments, specified risk materials, information of food borne diseases, guidance for product recalls, labeling and other areas of compliance interest. Some private companies such as AgriculturalCompliance.com offer turnkey ag compliance programs. Back Next
  21. 21. Congratulations For completing the e-Learning Module Regulation and Compliance in US Agriculture