NAWG Weekly Update: September 15, 2016
Wheat Growers Welcome Trade Enforcement Action on Chinese Market Support Programs
The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) welcome the Obama Administration’s new trade enforcement action against China at the World Trade Organization (WTO). The significant investigative effort by the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) followed five years of work by USW, NAWG and other industry partners to demonstrate how China’s domestic support policies hurt U.S. farmers.
This enforcement action challenges the level of China’s trade-distorting market price support programs for wheat as well as for corn and rice. In describing its action, USTR said “the level of support provided through these programs in excess of China’s commitment was nearly $100 billion.”
“This enforcement action shows a welcome willingness to defend farmers against governments that blatantly disregard the rules of the road under their trade agreements,” said NAWG President Gordon Stoner, a wheat grower from Outlook, MT. “It comes at a critical time for farmers who have seen market prices collapse to unsustainable levels in recent years.”
Noted Iowa State University agricultural economist Dr. Dermot Hayes conducted the 2015 and 2016 studies of domestic support effects. In reviewing the 2016 study results, which compared a base case including China’s current support to a new scenario in which the factors represented by China’s policies were removed, Dr. Hayes said farmers there would grow less wheat because domestic prices would fall and input costs would increase.
“Trade agreements cannot meet their promise if other countries ignore the rules, no matter if the agreements are multilateral, bilateral or regional like the Trans-Pacific Partnership,” said Stoner. “That TPP has improved enforcement mechanisms is one more reason we strongly support its passage. Our grower organizations fully support this new trade enforcement action with China, and we will continue to work with our government and industry partners to address other trade distorting issues.”
NAWG Continues to Push for Market Access to Cuba
Yesterday, the National Association of Wheat Growers (NAWG) submitted testimony to the House Committee on Agriculture leadership, Chairman Conaway and Ranking Member Peterson, in regards to the House Committee on Agriculture hearing on American Agriculture Trade with Cuba. The hearing was held to provide interested parties the opportunity to expand on their opinions regarding opening the Cuban market for American farmers, ranchers and businesses. NAWG also signed on to testimony submitted by the U.S. Agriculture Coalition for Cuba, a coalition consisting of a range of agricultural commodity and farm member organizations, of which NAWG is a member.
As a member of the USAAC, NAWG supports the elimination of trade barriers with Cuba, because Cuba represents a large market for American wheat exports, and current financing restrictions complicate trade channels between the U.S. and Cuba. The current financing restrictions require Cuban buyers of U.S. agricultural products to pay cash in advance or finance the transaction through third-country banking institutions.
“These restrictions put U.S. wheat farmers at a global disadvantage as other foreign competitors usurp market shares, offering more favorable credit terms,” said NAWG President Gordon Stoner. “It is important that NAWG continues to work with Congress to fight for American wheat growers’ right to fair market access.”
NAWG’s comments on this issue emphasize that these financing restrictions should be one focus of discussions revolving around the economic value of Cuba as a trading partner and barriers that remain. It is crucial that Congress acts to reject any language that would reverse or hinder the U.S. wheat industry’s ability to compete with other countries currently utilizing Cuba as a trading partner.
NAWG Participates in Field to Market Committee Meetings
NAWG Vice President David Schemm was in D.C. this week to participate in the Field to Market Awards and Recognition Committee. This committee focuses on efforts to recognize growers that are participating in agriculture sustainability “field print” projects using the FieldPrint Calculator. Field to Market, the Alliance for Sustainable Agriculture brings together grower organizations, conservation groups, agricultural input suppliers, cooperatives, food companies and retailers to address agriculture supply chain sustainability issues. NAWG Environmental Policy Advisor Keira Franz participated in the Verification Committee that is focused on developing verification requirement for sustainability claims associated with supply chain sourcing. David Schemm is also on the Board of Directors of Field to Market.
NAWG CEO Discusses Wheat’s Priorities with Congressional Ag Leadership
This week, NAWG CEO Chandler Goule met with House Agriculture Committee Chairman Mike Conaway (R-TX), House Agriculture Committee Ranking Member Collin Peterson (D-MN), and Senate Agriculture Committee Chairman Pat Roberts (R-KS) to discuss the difficult economic conditions in wheat country and NAWG’s policy priorities. NAWG Vice President David Schemm was in town for part of the week and joined Goule for his meeting with Chairman Roberts. They highlighted the historic dip in wheat prices; the fact that loan rates have been triggered resulting in the availability of Loan Deficiency Payments for the first time in years; the announcement of the enforcement action USTR initiated this week against China’s domestic support programs for wheat, corn, and rice; and trade with Cuba. Additionally, Goule briefed the leaders on NAWG’s efforts to develop wheat’s priorities for the next Farm Bill, including an overview of NAWG’s Farm Bill survey, which has already garnered 250 responses.
Congressional Hearings Covering the Ag Economy
On Thursday, September 15, the Senate Agriculture Committee held a hearing with the two nominees for the Commodity Futures Trading Commission (CFTC): Chris Brummer and Brian Quintenz. Though neither nominee has a specific background in agriculture policy, they did receive bipartisan support from committee members throughout the hearing. Their testimony and video of the hearing can be found at the links above.
Next week there will be several other hearings of interest to wheat farmers. The Senate Judiciary Committee, chaired by Senator Charles Grassley (R-IA), will be holding a hearing on Tuesday, September 20, at 10:00 a.m. eastern exploring consolidation and competition in the seed and chemical industries. Witnesses will include senior leadership from DuPont, Dow AgroSciences, Syngenta, Bayer CropScience, and Monsanto as well as the American Antitrust Institute, American Farm Bureau Federation, National Corn Growers Association, and the National Farmers Union. This hearing follows several recent proposed mergers and acquisitions involving these major seed and chemical companies. Agricultural groups were also invited to testify to discuss their perspectives on what the farmer impact could be of such consolidation. Additionally, the Senate Agriculture Committee will be meeting on Wednesday, September 21, at 10:00 a.m. eastern time to hear from USDA Secretary Tom Vilsack about the current state of the farm economy. No other witnesses are slated to testify.
Wheat Growers Participate in Chesapeake Bay Event
NAWG Board Member and Poolesville, MD farmer Eric Spates and US Wheat Chairman and Stevensville, MD farmer Jason Scott participated in an event with USDA Secretary Vilsack and NRCS Chief Jason Weller to discuss the adoption of conservation practices on agricultural operations in the bay. Last week, the USDA Natural Resources Conservation Service (NRCS) released a Chesapeake Bay Progress Report, highlighting the investments in voluntary conservation by the federal government, states and individual farmers. Since 2009, USDA has invested $900 million in targeted conservation in the bay, and that investment in frequently matched by individual farmers through their portion of a cost-share to implement conservation practices. States, like Maryland also offer conservation programs such as the Maryland Cover Crop Program http://mda.maryland.gov/resource_conservation/Pages/cover_crop.aspx to provide conservation assistance to growers. USDA assessments found that 99% of agricultural acres in the bay have at least one conservation practice installed and those buffer strips, cover crops, reduced tillage and nutrient management efforts are having positive impacts on the health of the bay. The water quality, wildlife and underwater ecosystems in the bay are showing improvements in recent years. NAWG supports voluntary conservation efforts in the Bay and across the country and welcomed the opportunity to participate with USDA to highlight conservation efforts of farmers in the Bay.
The USDA report and additional state specific information can be found here: