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News from the Minnesota Association of Wheat |
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CONGRESS APPROVES CHINA TRADE BILL
WHEAT COMMISSION PLEASED WITH FAVORABLE VOTE ON PNTR FOR
CHINA Bismarck, N.D. - North Dakota Wheat Commission Chairman Alan Lee says yesterday's U.S. House of
Representatives' vote to extend permanent normal trade relations (PNTR) status to China removes a major obstacle to increasing U.S. wheat sales to the world's largest wheat consuming nation. Although the bill has yet
to pass the Senate and be signed into law by President Clinton, the House vote was viewed to be the most difficult. PNTR for China is needed if the United States is to reap any benefits from China's WTO accession
agreement, which will allow 7.3 million metric tons of annual wheat imports at a 1 percent tariff. The quota will increase to 9.3 million metric tons by 2004. NDWC Administrator Neal Fisher was one of more than
50 wheat growers and wheat organization leaders from across the country to fly to Washington, D.C., last week to educate lawmakers on the importance of PNTR to wheat exports. Teams of wheat representatives
met with every member of Congress. Fisher says the information they provided was justification enough for some previously undecided congressmen to become supporters of China PNTR. The wheat commission is hoping to
soon conduct some special programs in China to increase awareness amongst flour millers of the end-use quality benefits of U.S. hard red spring wheat. U.S. Wheat Associates Vice President for Overseas Operations
Paul Dickerson reports strong potential for improved sales of the strong gluten wheat to China, since the country's domestic wheat crop is generally lacking in quality. Dickerson recently met with Chinese flour
mills and government agencies in a whirlwind tour of four Chinese cities. Spring wheat sales to China were restricted until last year by a decades-old ban on shipments of wheat from U.S. Pacific Northwest ports due to
concerns over TCK wheat fungus. China lifted the restriction in 1999 as part of its bid to join the World Trade Organization. Being able to sell U.S. spring wheat to China through PNW ports versus a Gulf
origination shaves $6 to $10 per ton ($.16 to $.27 per bushel) off freight costs. China's first significant purchase of U.S. wheat originating from PNW ports took place in late February. The trial shipment,
which includes 10,000 tons of hard red spring wheat, is actually being shipped this week.
USW CONGRATULATES THE HOUSE OF REPRESENTATIVES AND WHEAT PRODUCERS ON CHINA PNTR VOTE
Dawn Forsythe "What China offers is available nowhere else in the world: a major and continuing impact on U.S. wheat exports," explained Alan Tracy, president of U.S. Wheat Associates. "By today's
vote, a majority in the House have given China their support but, more importantly, have supported America's wheat producers. For that, we are most grateful." Tracy also offered congratulations to
"sister" wheat organizations. The National Association of Wheat Growers, the Wheat Export Trade Education Committee, and state wheat organizations gave a "superbly successful" effort to
organize wheat growers who converged on Capitol Hill to educate the legislators on what PNTR would mean for wheat exports. "Spring is a difficult time to ask wheat producers to leave their farming chores.
Right now it is planting season for some and time to harvest for others, Tracy said. "But NAWG, WETEC, state organizations and wheat producers knew what had to be done, and they did it." U.S.Wheat
Associates, the industry's export market development organization, has maintained an office in Beijing for the last 20 years and works actively to develop the export market there. Matt Weimar, USW vice president for
China, was in Washington D.C. last week with a team of Chinese agronomists. "Working with the Chinese for all these years, I can't help but see the potential for our struggling U.S. wheat growers," Weimar
pointed out. "China consumes more than 100 million metric tons of wheat every year --which is three times as much wheat as we use in the U.S. Why would the U.S. Congress even consider turning its back on
that kind of market?" Even as the vote was being taken, an important shipload of wheat destined for China was being loaded in Portland, Oregon. It should begin its 21-day voyage this weekend. The wheat industry
achieved a breakthrough in April 1999 when China lifted a decades-old restriction on imports of U.S. wheat from areas where a wheat fungus (Tilletia controversa Kuhn, or TCK) is known to occur. With that resolved,
China's first significant purchase of wheat originating from the Pacific Northwest in over two decades was made by China's National Cereals, Oils and Foodstuffs Corporation (COFCO), the official government buyer. It
is a "trial shipment," the first under the phytosanitary agreement, ending a trade dispute lasting more than 25 years, and it will provide Chinese millers the opportunity to judge the characteristics and
qualities of three classes of U.S wheat. The purchase is for 30,000 tons of soft white wheat, 10,000 tons of hard red spring wheat and 10,000 tons of hard red winter wheat. As recently as five years ago, China was the
world's largest wheat importer. The country's imports have declined significantly during the last few years but many in the trade expect China's wheat imports to pick up again in the next year or two. China has agreed
to permit larger imports of wheat and other agricultural products when they join the World Trade Organization. The China market for U.S. wheat has changed dramatically over the last ten years. Throughout the
early 1990s, China imported from one to five and a half million metric tons of U.S. wheat each year. More recently, Chinese wheat imports from the U.S. have declined significantly, to 195,000 metric tons in the
most recent marketing year. China's imports, generally, have also declined significantly, from over 12 million metric tons in 1995 to about one million in 1998. With PNTR approval, the opportunity for the
U.S. wheat industry is immense. Under the U.S. - China agreement, China agreed to import more wheat under a tariff rate quota (TRQ). The TRQ for wheat would be 7.3 million metric tons upon succession to the
WTO and would increase to 9.3 million metric tons by 2004. The tariff for that 7.3 tons (and then the 9.3 million tons) will be 1%, lower than most other Asian countries. If the U.S. could get 40% of those sales, we
would increase the total U.S. wheat annual exports by 10%.
CHINA'S WHEAT CROP CONDITION REPORTS
Furthermore, local Chinese crop observers indicate winter wheat continues to reproduce and fill through the northern winter grain producing areas, while crops in the south are filling and
maturing. Meanwhile, this spring's delayed seasonal rains have stressed unirrigated crops, which will probably negatively affect wheat yields. Furthermore, wheat and barely in eastern China are in the
heading, flowering and filling stages of development. Sources suggest forecast rains in the coming week should help improve grain quality in southern areas and boost yield potential in the north. In
addition, observers indicate spring wheat planting is nearing completion in the northeastern sections of the nation, where soil moisture is termed "adequate".
WHAT'S GOOD FOR CHINA IS GOOD FOR CUBA
(In a letter to the New York Times, May 26, 2000) WASHINGTON -- Now that the House has approved legislation extending permanent normal trading privileges to China, it must decide whether it has the courage of its
convictions on another issue: lifting sanctions on Cuba. The vote on trade with China was the culmination of months of debate weighing the merits of trading with China against thorny issues like human rights,
religious persecution and national security. In the end, the House Republican leadership persuaded a majority that trade with China actually helps the United States resolve these other issues. Yet, the leadership is
using significantly different arguments to thwart legislation that would eliminate unilateral sanctions on the sales of food and medicine elsewhere in the world. The current agriculture spending bill includes an
amendment I wrote that would lift all food and medicine sanctions on Cuba, Iran, Libya, North Korea and Sudan. The United States stands alone in prohibiting sales of the most basic humanitarian goods to these countries,
leading to $1 billion in lost economic activity in rural America. Our farmers suffer from lost sales, but these sanctioned countries freely purchase an estimated $7 billion of agricultural commodities from our allies
around the world. Last year, 220 members of Congress signed a letter to Speaker Dennis Hastert, urging him to expedite the consideration of this amendment. The letter noted that that unilateral sanctions of food and
medicine do not work. Because sanctioned states can easily buy the same supplies from our allies, American farmers are the only ones punished; they are denied access to significant international markets. Moreover,
denying innocent civilians access to food and medicine, if only in principle, is an abhorrent foreign policy tool. The logic is straightforward: support American farmers and American values by allowing the export of
food and medicine to currently sanctioned countries. The amendment merely allows sanctioned states to buy food and medicine on a commercial basis, nothing more. If a normal trading relationship with China is a home run
for America, then lifting these sanctions is the equivalent of a grand slam. What, then, could be the problem? Despite the clear parallels with arguments it made in favor of the China deal, the Republican leadership
is opposed to the amendment's inclusion of Cuba and seems intent on blocking even the sale of food to the world's smallest Communist regime. This week, Trent Lott, the Senate majority leader, defended the position.
"It's very easy to see the distinction" between trade with China and Cuba, he said, adding: "And if you all can't see it, I don't know. Maybe you're just blind to it." In reflecting on the
arguments in the China debate, I don't see the difference. Those who promoted normal trading relations with China said that trade promotes democratization. Change in Communist regimes is slow, but eventually democratic
norms take hold. Dialogue and engagement with the United States are central to this transition, as is exposure to our processes. If this is true for China, then why not for Cuba? Advocates of China trade note that
trade talks are not the appropriate venue for resolving differences on human rights or security. These issues can be pursued in parallel discussions. If this is true for China, why not for Cuba? In his closing
arguments in the China trade debate, Speaker Hastert asked the House to weigh the significance of the Chinese market, noting the intense interest of our global competitors. "The question is, who will be there when
the door opens?" he asked. This week's vote demonstrates that America will be in China. Then why not Cuba? George R. Nethercutt Jr. is a Republican Congressman from Washington State.
Copyright 2000 The New York Times Company
SANCTIONS ACTION ON HOLD Republican leadership of the House has pulled the entire Agriculture Appropriations bill from floor consideration until after the
Memorial Day recess. They realized that they did not have the votes to pass the Rule(without the Nethercutt sanctions language), so the whole bill was pulled. This is good news! It means that the bill will
either go back to the Rules Committee for re-writing, perhaps allowing for an amendment to add the Nethercutt food and medicine sanctions language back into the bill, OR the leadership may continue trying to convince
Republican members to vote as a block in favor of the current Rule. Rep. Nethercutt's office feels that this development puts them in an excellent position to move forward with the food and medicine sanctions reform
language after the recess. Mr. Nethercutt's position now is that we need to let the House work its will on the sanctions provision - this package deserves to be voted on, and if the opposition wants to offer an
amendment to strike, Nethercutt feels they should be allowed to offer it. But sanction supporters should be able to debate this fairly. Action is expected to resume when Congress returns from Memorial Day
recess on June 6. All of your hard work has paid off. The leadership (Mr. Tom DeLay) has once again been stopped from killing sanction reform. The momentum is in our favor on this issue and Members are very well
educated now on how important this provision is. 1 - We have three exceptional victories this week PNTR for China
TAIWAN PLEDGES TO PURCHASE 1.5 TO 1.7 MILLION TONS OF US WHEAT Dawn Forsythe The
commitment was documented in a letter of intent that was signed by Wei-kong Chen, Executive Director of the association and by Nelson Denlinger, vice president, U.S. Wheat Associates, at an elegant ceremony today at the
U.S. Capitol. Last year, the U.S. garnered a 92% market share of Taiwan's wheat imports, 903,100 metric tons (MT) out of estimated total imports of 981,000 MT. Taiwan's purchases exceeded commitments made by the
Taiwan Flour Millers Association in the 1998 letter of intent in which they pledged to purchase 750,000 to 850,000 tons in 1999. "We look forward to building on this relationship," Denlinger told the Taiwan
delegation. "Last year Taiwan exceeded their commitment, and we sincerely hope you turn that into a habit." Taiwan's commitment to purchase U.S. agricultural products was praised by a number of U.S.
Congressmen attending the ceremony, including Senate Minority Leader Tom Daschle (D-SD), Senate Agriculture Committee Chairman Richard Lugar (R-IN), Senators Max Baucus (D-MT), Kent Conrad (D-ND), Conrad Burns(R-MT),
and Rep. Collin Peterson (D-MN). The Republic of China (ROC) on Taiwan used to send "procurement missions" to the United States on a regular basis but, with liberalization of trade policies in the ROC, those
missions were discontinued. Instead, an Agricultural Goodwill Mission arrived in the U.S. this week "to demonstrate the ROC's continuing goodwill and willingness to purchase US wheat," according to Mr. Chen. A
similar mission to the U.S. in 1999 had to be postponed because of Taiwan's devastating earthquake in September. Denlinger and Chen sign the Letter of Intent for Taiwan's wheat sales. Witnessing the ceremony at
(left to right) are Taiwan diplomat Stephen Chen, Senators Max Baucus and Richard Lugar, Representative Don Manzullo, and others. US WHEAT ASSOCIATES
WEB SITES, BOOK CAN AID WEED IDENTIFICATION The Extension Service has
several web-based guides to identify weed seedlings, notes Schwartau. Go to the Extension Service home page at www.extension.umn.edu/ and at the search line, enter "weed seedlings." This will provide several
links to images of weeds in seedling stages, when they are often harder to identify but easier to control. A web site at Another site Schwartau recommends is
Those who prefer to use a book for weed identification can check "Weeds of the North Central States." This book has a keying
system to help identify plants based on characteristics such as flower color and leaf shape, as well as sketches of plants. The book is available in many bookstores, including those at the University of Minnesota.
Source: Chuck Schwartau, (651) 385-3100
APHID CONTROL
APPLY FUNGICIDES Check out the following for more informationApplying Fungicides More Effectively to Control Scabhttp://www.ext.nodak.edu/extpubs/ageng/machine/ae1148w.htm
NATIONAL ASSOCIATION OF WHEAT GROWERS
REPORT FROM WASHINGTON NAWG on the GO AG GROUPS SEND ENVIRONMENTAL MESSAGE TO SENATE
This week NAWG joined corn and soybean farmers (as well as the American Farm Bureau) in sending a joint letter to Senate leaders in support of provisions included in the FY2001 Agricultural Appropriations bill that
would prevent the Army Corps of Engineers from playing politics with water infrastructure projects. While science and research have historically guided the Corps decisions, others within the Clinton Administration have
begun pressuring the Corps into supporting the Administration's broader environmental agenda. Documents and internal communications from high placed White House officials, which recently came to light through a
congressional investigation, have shown how Corps decisions regarding salmon recovery in the Pacific Northwest have been routinely overridden for political considerations. The appropriations language, included in
section 3102 of the bill, would prohibit the "restructure, reorganize, abolish, transfer, consolidate, or otherwise alter or modify the organizational or management oversight structure; existing delegations; or
functions or activities, applicable to the Army Corps of Engineers." NAWG JOINS CEREMONY ON GRAIN PURCHASE On Wednesday, NAWG CEO Jack Eberspacher and WETEC Executive Director Barbara Spangler
participated in a signing ceremony between the Agriculture Trade Goodwill Mission from the Republic of China on Taiwan and U.S. Grain Exporters. Wheat representatives were personally invited to attend the event by the
Taiwanese government The ceremony highlighted Taiwan's intent to purchase 15.5 million metric tons of grain valued at $2.33 billion. 1.5 - 1.7 million metric tons of wheat will be included in the purchase.
Traditionally, Taiwan's domestic wheat production is negligible with Taiwan relying entirely on imports for its food wheat requirements in the last fifty years. In 1999 Taiwan imported 970,557 MT of wheat, a 1- percent
increase over 1998 wheat imports. U.S. exports accounted for 850,000 MT of total wheat imported by Taiwan. NAWG SUPPORTS FQPA BILL In answering some misconceptions that have been spread by our opponents,
NAWG and other agricultural organizations wrote to House Members this week regarding the "Regulatory Openness and Fairness Act." The Act would continue the Food Quality Protection Act's (FQPA) strong safety
standards and ensure that EPA decisions are based upon sound and reliable science data and not "hypothetical or invalid assumptions." In thanking those members who have joined as cosponsors, the letter
reiterates that this legislation meets the needs of children, the public, farmers and pest management. WHEAT BREEDER REMEMBERED This past Sunday, Dr. Warren Kronstad, an Oregon State University (OSU) wheat
breeder past away. Kronstad will be remembered for his contributions to the northwest wheat industry, and his service internationally in the cause of food production and hunger relief. He trained over 1000 graduate
students, including students from over 27 countries and as many as 80 percent of the top breeders throughout the country have direct connections to the OSU program under Kronstad. His achievements during his 3-year
career at OSU were capped by the release of Stephens soft white wheat, a variety which has been a leader in Pacific Northwest acreage for nearly 20 years. Kronstad also possessed the unique gift of being able to master
the extremely technical scientific issues in plant breeding, but also being able to communicate with growers and bringing the technical science directly to the field in ways farmers could use and understand. For those
wishing to make memorial donations in lieu of flowers, donations should be made to Benton Hospice Services, PO Box Corvallis, Oregon 97339. Another option is a donation to the Kronstad Fellowship program of the Oregon
Wheat Foundation, which supports graduate student assistantships in the OSU breeding program at 115 SE 8th, Pendleton, Oregon 97801. THIS WEEK on CAPITOL HILL TMDL LEGISLATION INTRODUCED IN THE HOUSE A
bipartisan group of 28 co-sponsors led by House Agriculture Committee Chairman Larry Combest (R-Texas) and Ranking Member Charlie Stenholm (D-Texas) have introduced legislation similar to that recently introduced in the
Senate by Senators Mike Crapo (R-Idaho) and Bob Smith (R-New Hampshire) to address action by the Environmental Protection Agency (EPA) on TMDLs. The bill, H.R. 4502 or the "Water Pollution Program Improvement
Act," would require the National Academy of Sciences (NAS) to assess TMDLs and what alternatives are available to address point and non-point sources. Additionally, the act would require that EPA Administrator
refrain from making any regulations regarding point and non-point source pollution control until NAS has completed its assessment. Many agricultural organizations such as NAWG have been outspoken on EPA taking over
regulatory control on this issue and the evidence it is using to support such action. This concern is being echoed in both Chambers of Congress. In a recent release from the House Ag Committee, both Combest and
Stenholm addressed such concerns. "Instead of allowing states to develop programs specific to their local needs, the EPA is using faulty data and assumptions to override the authority Congress explicitly left to
the states," stated Combest. He continued, "Its disregard for congressional intent has the potential to cost farmers, ranchers, and timber workers millions of dollars without actually helping the
environment." In agreement with Combest, Stenholm remarked, "Very serious concerns have been raised about whether some of these proposals exceed the authority Congress has given EPA under the Clean Water
Act. In addition, considering how tight federal conservation funds have become, and in light of the overwhelming workload facing our conservation agencies, I think it is critical that we make certain our chosen approach
is supported by sound, cost-effective science." NAWG will continue to monitor the progression of these two bills in the House and Senate. CROP INSURANCE/ASSISTANCE PACKAGE UPDATE On Thursday, both the
House and the Senate passed the conference report to the crop insurance reform bill. The report included an agricultural assistance package totaling $7.1 billion. Congressional approval of the crop insurance measure
marked a significant milestone in NAWG's legislative agenda for the year. The bill would make significant changes to the current federal multiperil crop insurance program as well as other government risk management
programs. Most important to NAWG is the dramatic increase in government subsidies of insurance premiums. Under the new plan, the government would pay a much larger share of the cost of insuring crops. The amounts are
indicated in the following table.
Level of Current New Government
Under the new plan, farmers would be given more options when it comes to double insurance and prevented planting. The double insurance provision allows producers which have lost their first crop to choose between 1)
collecting the full insurable loss and not plant a second crop; 2) collect the full insurable loss and plant an uninsured second crop; or 3) collect 35 percent of the insurable loss and plant an insured second crop. The
prevented planting provision allows producers who have been prevented from planting their first crop to choose between 1) collecting the entire pp payment and not plant a second crop; or 2) collect 35 percent of the pp
payment and plant an insurable second crop. Specific to wheat producers, the bill would settle the current lawsuit over durum CRC coverage ($40 million) and provide expanded coverage for continuously cropped wheat.
NAWG is particularly pleased that the assistance portion of the bill includes an "AMTA-style" market loss payment equal to the 1999 payment ($.637 cents per contract bushel for wheat), a payment equivalent to
an LDP on grazed-out wheat acres (for the coming crop year) and an additional $20 million for the Market Access Promotion (MAP) program. Other measures also incorporated into the conference report include the
"Plant Protection Act," a measure introduced by Senator Larry Craig (R-Idaho) to combat the spread of noxious weeds, and legislation to expand research in biomass energy. Following passage of the bill, NAWG
President Terry Detrick stated, "We couldn't be more pleased with the work of the conference committee. NAWG extends its sincere appreciation to Senators Lugar, Harkin, Roberts, Kerrey, Conrad and their colleagues
and Congressmen Combest, Stenholm and their colleagues for their hard work." Detrick continued, "Chairmen Lugar and Combest should be proud of this bill and how they conducted the conference. This has truly
been a bipartisan effort from the very start and these two great leaders have worked diligently to address our concerns in a manner that has built consensus." Additionally, Detrick sent personalized letters
expressing NAWG's thanks to many of the conference participants. RAILROAD COMPETITIVENESS BILL INTRODUCED The Pomeroy bill would extend existing antitrust laws to railroads, who
are currently exempt from such restrictions. In addition, it also clarifies the authority of the Surface Transportation Board. In his letter, Detrick pointed out that "NAWG believes that the protection provided
by the Act to railroad customers is long overdue," and urged other House members to cosponsor the bill. MEMORIAL DAY RECESS BEGINS TRADE NEWS from WETEC HOUSE PASSES CHINA PNTR Speaker of the House Dennis Hastert (R-Illinois) and Ways and
Means Ranking Member Charles Rangel (D-New York) closed out the debate with impassioned pleas to vote for this legislation. They stated that is was necessary to engage China in order to give our farmers and workers
access to this vast market and further the causes of human rights and democracy. This victory came one week after the U.S. wheat industry participated in an agricultural fly-in to press legislators to support PNTR
for China. Wheat growers visited every House member's office to highlight the benefits of the agreement for American farmers and ranchers. Thirty-four members of the House Committee on Agriculture voted in favor of the
measure while seventeen voted against. The bill will now move to the Senate where proponents are confident it will pass easily despite the potential for continued rancorous debate. There have been rumblings in the
Senate over the addition of the Levin-Bereuter language in the House passed version of the bill. The Senate would prefer a "clean" bill, but this would force a conference committee and another vote in the
House on the final version. The wheat industry supports the Senate taking up the bill, with the language passed in the House, as soon as possible after the Memorial Day recess. UPDATE ON SANCTIONS REFORM Despite our efforts, the House Rules Committee, in an emergency, late-night session drafted a rule that would have striped the provision when the bill came to the floor. Armed
with the coalition letter and a number of key allies, Congressman George Nethercutt (R-Washington), the author of the sanctions reform provision, launched an attach on the rule. Nethercutt's victory became self evident
by mid-day on Thursday. Faced with a sure defeat, House leaders pulled back on the rule and did not bring the appropriations bill to the floor. Accordingly, debate on the appropriations bill and its sanctions reform
provision have been postponed until after the Memorial Day congressional recess. House leaders will have until June 5 to decide on how to address the matter. NAWG remains committed to preserving the Nethercutt
provision and will use the weeklong recess to rally support among other House members. It is hoped that when the Rules Committee again takes up the matter that it will grant a fairer rule. Those state wheat
organizations signing the letter include: California Association of Wheat Growers, Colorado Association of Wheat Growers, Idaho Grain Producers Association, Illinois Wheat Association, Kansas Association of Wheat
Growers, Montana Grain Growers Association, Nebraska Wheat Growers Association, North Carolina Small Grain Growers Association, North Dakota Grain Growers Association, Oregon Wheat Growers League, South Dakota Wheat,
Inc., Texas Wheat Producers Association, and Washington Association of Wheat Growers. FUTURE CALENDAR OF EVENTS MONDAY - May 29 October 15-17, 2000 January 29 - February 3, 2001 Published weekly by |
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