Food & Ag Policy Briefing: Wojciechowski wins over MEPs, US tariff fall out, JBS under the spotlight
Also, class action filed against hemp company over misleading CBD content
A much-improved performance by Janusz Wojciechowski saw Poland’s EU agriculture Commissioner-designate convince members of the European Parliament’s AGRI committee that he is the right person for the job, following a second hearing last week.
Wojciechowski had a near-disastrous first hearing for the role, frustrating some MEPs with his “vague” and “evasive” responses in some cases, and was called back to provide more specific plans for the next five years and beyond.
He was sent a series of follow-up questions to provide greater clarity and the extra preparation appears to have done the trick by ensuring he delivered responses that provided much greater depth on topics such as the fairer distribution of Common Agricultural Policy direct payments, and more support for environmental and climate change measures.
The fact he also spoke in Polish this time allowed Wojciechowski to better express his proposals, commentators observed.
Among the other issues touched upon in the hearing, the Polish politician said he hoped for a negotiated solution to the forthcoming U.S. tariffs that are expected be applied to EU products later this week (see below), but if this is not an option he would push to enhance the EU’s ability to assist impacted farmers – referencing the response to the Russian agri-food trade embargo as an example.
Wojciechowski added that the EU must focus on incentivising farmers and not banning practices, which means striking a balance between environmental action and the economic feasibility of the farming sector. This, he said, will be done through meetings between the European Parliament, Council and the new Commission when they begin to negotiate the final text of the next CAP.
On October 23, a plenary vote will be held to approve the next European Commissioners. MEPs must approve the entire group, meaning they do not vote on individual nominees. If all goes according to plan, they can start their new jobs on November 1.
Meanwhile, the United States is set to proceed with 25% import duties on a range of high value EU agri-food products on Friday (October 18).
As you would expect, EU member states most affected have demanded a rethink from the United States with Italian producers of specialty cheeses threatening demonstrations outside of US military bases and the Spanish government stating it will employ counter measures should the new tariffs be applied.
According to analysis by IEG Policy’s sister website IEG Vu, the 25% duty could disrupt around a fifth of the EU’s total dairy export trade and is almost certainly the reason why U.S. importers of Italian Parmesan cheese have tripled their usual purchases in the past week.
U.S. Senators Bob Menendez (D-N.J.) and Marco Rubio (R-Fla.) sent a letter to Secretary of Treasury Steven Mnuchin last week (October 8) asking for a formal review of the Brazilian meat-processing conglomerate JBS S.A. and requested the Committee on Foreign Investment in the United States (CFIUS) review the company’s transactions.
They claim there is evidence of “illicit financial activities”, which may have been used to buy up food companies in the United States, including bribing public officials to obtain funds used to fuel the buying spree. The letter also linked the company with Venezuela President Nicolás Maduro and the Chinese government.
“Given its admitted criminal conduct to secure loans that were used for investment in the United States and the group’s business relationships with Venezuela’s Maduro regime, as well as its growing reliance on financing from entities aligned with the Chinese government, we ask that CFIUS conduct a review of JBS S.A.’s acquisition of U.S. companies,” wrote Menendez and Rubio.
“The growing trend of foreign investment in our food system demands increased attention and scrutiny in order to safeguard our nation’s food supply.”
The Brazilian company’s US subsidiary, JBS USA, purchased Swift Foods Co. in 2007, then it acquired beef processing from Smithfield Foods in 2008, the majority of poultry processing from Pilgrim’s Pride in 2009, and Cargill’s pork processing in 2015.
As the world’s largest meat processor, the acquisitions “have serious implications for the security, safety, and resiliency of our food system,” the senators wrote.
JBS has also been at the center of more than one bribery scandal in Brazil, and in 2018 was again investigated for allegedly paying off slaughterhouse inspectors.
In an October 9 statement sent to IEG Policy, JBS S.A. said it is aware of the letter to Mnuchin. "The company has fully cooperated with all relevant authorities in a transparent manner regarding past events in Brazil. The company will continue to cooperate and respond to any subsequent inquiries," it said.
CBD class action
Meanwhile, a class action has been filed in the U.S. against a hemp oil company, alleging that it has misled consumers over the true amount of cannabidiol (CBD) in its products, while also claiming that the lack of regulation from the FDA is allowing some companies to take advantage of a loophole.
Hemp Bombs sells its products as “Certified Pure CBD Oil” and “some of the most potent and most concentrated CBD Oil you can find.” The company says the oil comes in 125 milligrams (mg), 300 mg, 600 mg. But attorneys for the plaintiff found the products contained less CBD than advertised, with tests conducted finding the products contained only 2.6% to 35.8% of the claimed CBD content.
Attorneys for the plaintiff also cited the lack of federal regulation of products containing CBD in the lawsuit. “Because the FDA does not regulate CBD, it is possible to buy a product that is more or less potent than advertised, or even a product that contains small amounts of THC,” the lawsuit said.
It quoted former FDA Commissioner Scott Gottlieb who said many of the compound’s benefits are “fanciful” and a recent update that found FDA tests of chemical contents of the cannabinoid compounds did not contain the levels of CBD they claimed.
Since hemp became legal in the 2018 Farm Bill, FDA has been crafting a regulatory pathway for CBD in foods and supplements, which have already proliferated on the market.
While some in Congress are urging FDA to quickly adopt a policy of formal enforcement discretion in the interim, the agency says it needs more studies on the safety of these products to move ahead, and one FDA official said the onus was on industry to supply regulators with that data.