April 1998
News & Views From the Wheat & Barley Growers
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
It was one year ago this month that Grand Forks and East Grand Forks suffered its worst flood ever. Thousands of homes and businesses were damaged or lost. Several downtown businesses went up in flames. There was speculation early on that the many people who left would not come back, and that the two cities would be a shell of their former selves.
But they are rebuilding. Some people and businesses didn't return, but the mass exodus of people didn't materialize. New homes and businesses are being built, and a major flood control plan is in the works. Time, state and federal help, and local perseverance will combine to make Grand Forks and East Grand Forks better and stronger despite the flood.
Scab will prove to be the flood event for Minnesota's wheat and barley industries. The disease has decimated wheat and barley in this state, victimizing farms and our rural economies, with combined losses for Minnesota wheat and barley producers from 1993 through 1997 estimated at close to $2 billion.
But our industries are being rebuilt through research. With the support of the Legislature and the Governor, Minnesota has allocated over $3 million from 1994 through 1999 for scab research at the University of Minnesota. More federal funding has been allocated as well.
What has resulted is a scab research initiative that may be the largest and most comprehensive effort among agricultural experiment stations in the nation, involving 20 principle investigators and in all, 75 people in four departments and three campuses (St. Paul, Crookston, Morris) at the U of M.
Growers, lawmakers, and the U of M itself are more committed than ever to research, thanks to scab. Significant progress is being made and when all is said and done, our state's wheat and barley industries will recover from scab, just like Grand Forks and East Grand Forks are recovering from the flood.
Cliff Keller, Fergus Falls, MN, Chairman, MWRPC
Wheat industry leaders program worthwhile
We in the wheat industry have great challenges before us. Recently, myself and eight other wheat producers from across the U.S.had the opportunity to spend a week in Washington D.C. educating ourselves and relaying our concerns to our elected leaders.
The Wheat Industry Leaders of Tomorrow Program, sponsored by NAWG and Monsanto, began the last full week in October in St. Louis, MO. The program was an intense and wonderful learning opportunity that allowed us to improve our communication skills and overcome the challenges of relating to the public. We raise the safest and most affordable food in the free world. Science is at our doorstep and has made our way of life one of the most challenging and exciting occupations to be involved in.
As we educate our city cousins about how we raise the world's food it astonishes me how much we both need to learn about each other's misconceptions. We also need to let the media onto our farms and help them understand how hard we work to keep our food and environment as safe as we possibly can.
The second, and final part of our training involved a trip to Washington, D.C. This visit provided an opportunity to learn more about our nation's leaders and their role in assuring a way of life that we can maintain for future generations.
During our visit to D.C. much time was spent with members of the Environmental Protection Agency (EPA) learning about the rigorous tests that herbicides go through to actually become registered for sale on the market. Wow, what a process to get new crop protection products. It's no wonder we have the safest food supply in the world. Currently, the EPA under the new Food Quality Protection Act, is reviewing all of the crop protection products that we use and is establishing new tolerance levels for the tools that we have and new products for the future.
This act is putting us at a disadvantage to our trading partners to our Northern and our Southern borders because of more relaxed regulations on product registration and use. These variable rules in other countries not only make more crop protection products available but also more affordable. If NAFTA really is FREE trade I see no reason why we can't take our wheat to them and bring back a truckload of their crop protection products.
Time was also spent discussing the Vice President's Clean Water Action Plan for restoring and protecting our nation's water resources. Agriculture is at the top of the list for contamination of many watersheds. As we use the technology available to us such as soil sampling and site specific farming as well as conservation tillage practices, we should be credited for our general environmental consciousness as well as water protection. I believe that education as well as technical and financial assistance is of the utmost importance rather than enforceable requirements for specific practices.
While in DC we also spent time learning about the Endangered Species Act and other ag issues. We were able to visit with our states' elected leaders and address all of the above mentioned topics. We are fortunate to have understanding and capable leaders representing our state in DC. Congressman Pomeroy and Senators Dorgan and Conrad do an excellent job of recognizing our concerns and finding answers to our problems when possible.
This was a great program and I made some wonderful friends from other wheat states. Regardless of our geographic locations and different growing conditions, we all share many of the same difficulties and challenges that we face here in the Northern Plains. I am positive our bond to agriculture will keep us talking and seeking answers to current and future problems.
I would like to thank NAWG and Monsanto for the opportunity to attend this great program and encourage all other wheat producers to apply in future years.
Robert Ferebee, Halliday, ND, NDGGA Director
Flexibility meaningless without adequate crop protection
While attending the Natl. Assn. of Wheat Growers spring board meeting recently in Washington, D.C., four fellow wheat growers and I filed into a conference room in the Environmental Protection Agency's building. Sometimes we're at odds with this agency, so the mood before we got started kind of felt like the minute before high noon at the O.K. Corral.
But I'm pleased to report that all pistols remained in their holsters, and in fact, we had a good discussion. Among our issues of concern: 1) the need for them to process Section 18 requests to allow special emergency use of crop protectants more quickly; 2) to staff more people on processing new products; and 3) ease some of the regulatory burden.
The EPA is indeed lacking for resources in certain areas. When going to Congress for additional funding what do you suppose is more likely to attract federal dollars, environmental protection or new chemical registration? You guessed it.
The EPA told us that in order to adequately staff the new product registration area so that any new registration would be guaranteed 18-month turnaround for labeling (currently is takes about 3-4 years) would take about an extra $50 million dollars. That would be a tough row to hoe in Congress.
But what if the crop protectant industry chipped in to fund new product registration? Private companies might regain this expense by getting new products to market sooner. Perhaps Congress might even match what private companies contribute. For this to work all of the companies in the industry would need to cooperate.
More crop flexibility under Freedom to Farm doesn't mean diddly if those crops do not have adequate protection measures to be produced successfully. Also important is the fact that there are products used in Europe and Canada that aren't here, because of a difference in international regulations. That gives those producers an unfair competitive advantage. These are key issues that our associations need to work with the crop protection industry and the government to resolve.
Chet Edinger, Mitchell, SD, President, SD Wheat Inc.
No sympathy for European farm whining
Poor Oliver Walston. In the February, 1998 Top Producer magazine, Mr. Walston laments the European subsidy changes that may be in store for his operation. He farms 2,000 acres, mostly wheat. He says he usually produces around 140 bushels/acre, but last year because of less rain managed a "pathetic" 103 bushels/acre. He employs four men, drives a Mercedes, sends three children to private schools, takes several foreign vacations a year, and has a gross income of $1.25 million a year, which works out to about $600 per acre (give him credit for even admitting such extravagance in print).
However, Mr. Walston fears that European Union policy changes in the years ahead may result in subsidy checks tied to environmental improvement, or more exposure in the global marketplace. "I will have to reduce my costs substantially. One day, I probably will have to cut my labor force from four men to two, and make use of custom operators far more than I do today," he is quoted in the article. "I will also have to reduce my standard of living. Maybe not down to the level of a 4,500-acre Kansas farmer, but certainly lower than I have known for the past 25-some years."
Poor, poor Mr. Walston. Excuse me while I go get a Kleenex.
Mr. Walston shouldn't let these frightening possibilities keep him up at night. Rest assured, his government will do all it can to make sure his standard of living is maintained. Under the EU's proposed "Agenda 2000," Europe's version of "Freedom to Farm," he would receive a decoupled, increased support payment of over $170/acre for barley or wheat. Based on crop history with no link to crops grown, this payment would not sunset like ours is scheduled to do.
Plus, he would still have his 100-bushel-plus crop to sell. Mr. Walston's government payment alone is more than we can gross around here growing wheat or barley.
Mr. Walston can count on skilled EU trade negotiators to fight attempts from those nasty North Americans to rachet down subsidies during the next round of 1999 World Trade Organization talks. And in the meantime, think of new strategies to keep the European subsidy moat intact.
Which they have done indeed. You may have heard that the Europeans want to bank the export subsidies they did not use from 1995-97 due to high grain prices, roll them over and use them in the global market later. They have also proposed (perhaps to undermine the 1999 WTO talks) a new trans-Atlantic market, which would remove all obstacles to trade between the U.S. and Europe but conveniently keep the most sensitive trade areas, including agriculture, off the table.
I cannot stress how important this issue is for U.S. and Canadian farmers and lawmakers. We are already outgunned six to one by European subsidies. This cannot continue if we are to be competitive. How shall we counteract European direct farm payments or EU "green payments?" How may we work with the Canadians on this issue? What if the U.S. and Canada jointly created and maintained a "North American Export Enhancement Program," to keep European subsidies in check?
We need to discuss solutions now. Wheat and barley farms in the U.S. and Canada should not be sacrificed just so Mr. Walston doesn't have to trade in his Mercedes.
Gerald Lacey, Campbell, MN, MBGA President
Scab, oversupply major causes of farm crisis
Five straight years of adverse weather conditions coupled with depressed commodity prices has led to what many believe is the worst farm crisis ever in northwest Minnesota.
This farm crisis has nothing in common with the farm financial difficulties of the 1980s, when there was a farm economic problem that stretched nationwide, both ad hoc disaster assistance and crop insurance, and farm debt caused primarily by a decline in farmland values and overextended farm loans.
Now, we have a regional farm economic problem, no ad hoc disaster, and farm debt caused primarily by weather-induced crop losses outside of farmers' control.
Our state and federal lawmakers must be commended for trying to do what they can to address this problem, despite the confines of the political system at both levels. Rep. Collin Peterson has been active on many angles to try to find solutions. Sen. Wellstone has been helpful in the pursuit of more federal funding for scab and operating loans, and Sen. Grams has been active in trying to get federal crop insurance changes and more federal scab funding. At the state level, Commissioner Hugoson, Senators Moe and Stumpf, and Representatives Wenzel, Tunheim, and Finseth have been instrumental in elevating this issue at the State Capitol.
At this writing, a state program to rebate 1997 wheat and barley federal crop insurance policies was in the works. The northwest MN farm crisis may be an issue again in the 1999 Session, when it may be addressed more in depth and include discussions of scab research and property taxes.
Don't hold your breath for immediate federal relief. There may be federal loan guarantees. Rep. Peterson has been trying to get emergency disaster relief in an amendment attached to a federal bill. But he admits that is a long shot, as other lawmakers will be concerned with the precedent such a move would set since federal disaster relief was given up for "federal crop insurance reform" in 1994.
However, this reformed crop insurance has been nothing less than disappointing. Multiple disaster years have crushed our actual production history, and we have urged the Risk Management Agency repeatedly last winter that APH changes are needed for the 1998 crop year. We are thoroughly frustrated with the RMA's inability to respond with policy changes for this crop season. We are encouraged that APH changes or some sort of pilot program will be offered for our area in 1999. At any rate, substantial change to federal crop insurance is needed if farmers in this region are to succeed in the post "Freedom to Farm" era.
Some have been quick to blame Freedom to Farm for the farm crisis. But it should be pointed out that the wheat transition payment from 1996-98 is about $2.13 a bushel. Under the old farm bill, there would have been no deficiency payment in 1996 or 1997, and the 1998 average wheat price thus far would result in a deficiency payment of about 55 cents. So thus far we're still about $1.50 a bushel better for wheat under the new farm bill.
Consider also that many farmers are scaling their wheat acreage back considerably this year because of scab and price. Such wholesale planting adjustments would not have been possible under the acreage limitations of the old farm bill. I am not saying that Freedom to Farm is the Holy Grail of farm policy. But it's also too soon to assess its worth. Scab is the major root of our production problems and crop insurance failings. A larger grain stockpile domestically and abroad is the major root of our price problems. Let's keep these major symptoms in mind, since the right diagnosis of our farm crisis will help to find the right solutions.
Tim Dufault, Crookston, MN, MAWG President