St. Paul, Minn.—CHS Inc. reports that it is currently considering a plea with respect to an investigation by the U.S. Environmental Protection Agency and the Department of Justice. This dates back to a Nov. 21, 2009, incident when a late-night fire destroyed a shop, a warehouse containing some feed, seed, and agronomy products, and part of the office at the Malta, Mont., branch of Milk River Cooperative, a CHS-owned facility. CHS said its local staff worked with local emergency officials to respond in a timely manner in keeping with accepted protocols and in what all parties believed was in the best interests of community health and safety, and to eliminate any environmental impact. There were no injuries, and the fire was extinguished in a short period of time CHS said it promptly notified both the Montana Department of Environmental Quality (DEQ) and the Montana Department of Emergency Services. All remediation work was overseen by West Central Environmental Consultants and completed under the supervision of the Montana DEQ. However, CHS said a follow-up review by EPA determined that while CHS had notified the required state agencies, notification was not made to the National Response Center, which may or may not have been required depending on whether or not there was a release of a reportable quantity of certain listed chemicals. To date, no formal legal action has been commenced, and CHS said it is cooperating with the federal agencies and is exploring the possibility of a settlement in the form of a possible plea agreement. It expects a plea would require a financial penalty, but that it would not be materially adverse.

Washington—Agricultural Retailers Association (ARA) Chairman Billy Pirkle testified before the House Committee on Oversight and Government Reform on July 19, addressing what ARA described as “unnecessary and burdensome regulations” that are the result of recent actions by the U.S. EPA. Pirkle, who also serves as the senior director for Environmental, Health and Safety for Crop Production Services (CPS), cited EPA Region 4’s decision to issue citations to agricultural retail facilities for failing to report when fertilizer was blended at the facility under the Emergency Planning and Community Right-to-Know Act (EPCRA). Pirkle said the EPCRA statute applies to fertilizer manufacturers only, and specifically exempts “fertilizer held for sale by a retailer to the ultimate consumer.” He said that if a retailer had to meet all EPCRA reporting requirements plus the permitting requirements under other environmental laws, it could cost an additional $30,000 per year, plus a $6,000 annual update. “Nearly all agricultural retailers custom blend types of fertilizer at the retail site for farmer customers because farmers do not have the equipment to blend in the field,” he said. “Furthermore, blending fertilizer is a different process than manufacturing fertilizer.” Another key issue Pirkle addressed was the requirement that pesticide applicators obtain a National Pollutant Discharge Elimination System (NPDES) permit under the Clean Water Act (CWA) to conduct any pesticide applications. Pirkle said this is unnecessary since pesticides are already evaluated thoroughly by EPA under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Pirkle noted as well that the Reducing Regulatory Burdens Act (H.R. 872), which has been introduced as part of the House version of the Farm Bill, would exempt FIFRA-compliant pesticide applications from CWA permitting requirements. Other examples of regulatory overreach cited by Pirkle include EPA’s proposed spray drift guidance document that changes the legal standard found in FIFRA to an essentially zero-tolerance spray drift standard; EPA’s proposed guidance document to expand jurisdiction of the CWA without obtaining the necessary statutory changes or going through the formal rule making process; numeric nutrient criteria regulations in Florida, the Mississippi River Basin, and the Chesapeake Bay; dust regulation in the agriculture industry; and Greenhouse Gas regulations and the increased compliance costs to the suppliers of agricultural retailers, which he said would be passed along to the retailer and farmer.

Washington—USDA Secretary Tom Vilsack on July 25 designated 76 additional counties in six states as primary natural disaster areas due to damage and losses caused by drought and excessive heat. During the 2012 crop year, USDA has designated a total of 1,369 counties across 31 states as disaster areas, with 1,234 of those designations due to drought. The additional counties designated on July 25 are in Indiana, Illinois, Kansas, Michigan, Nebraska, and Wisconsin. All qualified farm operators in the designated areas are eligible for low-interest emergency loans. “The President and I are committed to ensuring that agriculture remains a bright spot in our nation’s economy by sustaining the successes of America’s agricultural economy through these difficult times,” Vilsack said. “As USDA officials visit drought-stricken areas to stand with our producers and rural communities, the urgency for Congress to pass a food, farm, and jobs bill is greater than ever. The hardworking Americans who produce our food and fiber, feed for our livestock, and contribute to a home-grown energy policy – they need action now. That is why USDA is taking every possible step to help farmers through this difficult time.” USDA also announced that it will allow additional acres under CRP to be used for emergency haying or grazing. The action will allow lands that are currently classified as abnormally dry but not yet under severe drought to be used for haying and grazing. In addition, USDA is allowing producers to modify current Environmental Quality Incentives Program (EQIP) contracts to allow for grazing, livestock watering, and other conservation activities, and has authorized haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands. Vilsack also reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, and announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums.