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News from the Minnesota Association of Wheat |
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SANCTIONS DEBATE COMES TO A HEAD Earlier in the week, Nethercutt was successful in
gaining the leaders support for a scaled back version of sanctions reform. The compromise would lift the ban on the sale of food and medicine to Iran, Libya, North Korea, Sudan and Cuba. However, the new plan
would severely limit trade with Cuba and includes new restrictions on travel and business with the island nation. Congressional leaders plan to attach the compromise to the Agriculture Appropriations bill during the
upcoming House/Senate conference. In responding to the action taken in the House, NAWG President Terry Detrick stated, "Sure we are disappointed that the reforms had to be scaled back. However, we have come a
long way in ultimately winning this fight. Sometimes you have to take it one step at a time." Detrick went on to praise Nethercutt for his dedication to this effort. "This victory would not have been
possible without the dedication and hard work of our good friend George Nethercutt. He was the only one who would stand up to unbelievable pressure and fight for what he knew was the right thing to do."
USW/WETEC COMMENTS ON SANCTIONS ACTION "The wheat industry praises George Nethercutt for his tenacious efforts to keep this issue alive, and for moving it forward to the next
stage," said Barbara Spangler, executive director of WETEC, the trade policy and lobbying organization representing the wheat industry on trade issues. "We're excited about the possibilities of an imminent
vote that would allow sales to both the government and private sectors in Cuba. We're disappointed that we still have restrictions on financing and licensing, but these are issues that we will continue to work
on." Chris Shaffer, a Walla Walla Washington wheat grower and outgoing chairman of USW and WETEC, expressed especial pride that the effort to ease sanctions on food and medicine was carried forward by Rep.
Nethercutt. "While sales are not imminent, Cuban wheat purchasing officials, with whom we met recently, indicated that they were anxiously watching this process because they wanted to buy U.S. wheat,"
Shaffer explained. "Nethercutt has long represented our interests and knew the importance of opening the doors that have long been shut to wheat growers." Alan Tracy, president of U.S. Wheat Associates, the
industry's export market development organization, explained that there are still issues to be resolved before wheat purchases can be made. "Before we can get too excited, we have to remember that the full
Congress has to approve this measure. Even then, Cuba and the U.S. has to set up a phytosanitary protocol -- remember, we haven't shipped there for 40 years," Tracy said. "But we think the U.S. has
a good product, that we can meet Cuba's wheat needs, and that they will buy from us." "We've obviously got to see the details to the compromise, but what we've heard so far is a watershed event," Tracy
said. By Dawn Forsyth, The Senate is following the appropriation momentum from the House, and
reviewing the spending bills. The Senate leadership has maintained that the Senate should pass the majority of the spending bills and send them to the President by the end of July.
DEBATE ON 'DEATH TAX' POSTPONED IN SENATE
BIOTECHNOLOGY POLICY AGREED TO BY WHEAT GROUPS This work is the direct result of the efforts of the joint
biotechnology committee of U.S. Wheat Associates and NAWG to keep the wheat groups at the forefront of the issue. The new policy was approved by the NAWG Executive Committee late last week and the U.S. Wheat Board of
Directors at their meeting this week in Seattle, Washington. The overall goal of the wheat industry is, "to meet the needs and wishes of domestic and international wheat customers thereby preserving and expanding
markets for traditional products and creating markets for biotechnologically-derived wheat and wheat products." Also included in the new set of policies is a working definition of
"biotechnologically-derived," and the following position statement: Biotechnological research holds great promise for the future, and the U.S. wheat industry recognizes these advancements. In preparation for
the future commercialization of biotechnologically derived wheat, we take the following positions: 1) The U.S. wheat industry commits itself absolutely to the principle that our customers' needs and preferences
are the most important consideration. We support the ability of our wheat customers to make purchases on the basis of specific traits. 2) We will work with all segments of the industry to develop and assure
that a viable identity preservation system and testing program is instituted prior to commercialization of products of biotechnology. We strongly urge technology providers to obtain international regulatory approval to
insure customer acceptance prior to commercialization. 3) We urge the adoption of a nationally and internationally accepted definition of biotechnologically derived products. We also urge international
harmonization of scientific standards and trade rules. 4) We invite valued and interested customers to join with us in a working partnership to explore the emerging biotechnology industry. For additional
details on these policies, please visit the NAWG web site at
MORE THAN MEETS THE EYE Despite the failure of the Seattle WTO Ministerial to launch a new round of trade negotiations, we have noted a sudden
surge in WTO activity lately that merits your attention. As mandated by Article 20 of the WTO Agriculture Agreement, new negotiations for agricultural trade reform are required to begin in 2000. Consistent with this
mandate, on March 23-24, the WTO agriculture negotiators met and agreed to a timetable for the first phase of negotiations. This agreement obligates WTO members to submit proposals setting out negotiating objectives
from now until the end of this year. In March 2001, the committee will take stock of the proposals submitted. Delegates also agreed to conduct technical work on agricultural subsidies and protection within the framework
of Article 20, and to hold special negotiating sessions in June, September, November 2000 and possibly January 2001. No date has been set for concluding the talks - although the Uruguay Round Agreement on Agriculture
(URAA) peace clause expires in 2003. The U.S. has put forward its agricultural negotiating position in Geneva last week. The proposal is fairly comprehensive, but does not include WTO notifications on U.S. domestic
farm subsidies. According to FAS Administrator Tim Galvin, the U.S. has decided to put off until the end of the year its decision on whether or not to classify the 1998 supplemental Freedom to Farm (AMTA) payments as
trade distorting. In May, I sent a letter to USTR on behalf of U.S. wheat producers providing comments on general U.S. negotiating objectives in the WTO and specifically addressed this issue of the supplemental AMTA
payments. Basically, this letter expanded on the information provided in our earlier submissions. Here are a few of the highlights: We restated the view that the United States should establish as its highest priority,
the total elimination of direct export subsidies. Directly related to the issue of export subsidies, is the issue of state trading enterprises (STEs). We urged the United States to seek to eliminate state trading
export monopolies by negotiating rules that end the state supported export monopoly powers of the Canadian Wheat Board and the Australian Wheat Board, Ltd. In the critical area of domestic supports, we asserted that
the U.S. should seek to eliminate the inequities that persist between U.S. levels of support and those of our competitors, especially the European Union. It is imperative that the United States avoid any effort to apply
a "one size fits all" solution to reductions in trade-distorting domestic supports. The 1996 FAIR Act will expire after the year 2002, and Congress will write a new farm bill no later than that year. Since it
is impossible to predict the outcome of either the next U.S. farm bill or the next round of WTO negotiations, we strongly urged the Administration to maintain the broadest flexibility of action on this politically
sensitive area. U.S. farm programs should be written in Washington, not Geneva. Furthermore, we pointed out that the supplemental AMTA payments made in 1998 and 1999 were provided by the government to offset
unexpected economic and weather related disasters, and are de-coupled from production and trade. As such, we believe they should be notified as "green" or non-trade-distorting to the WTO, and should not be
counted against the AMS cap on amber programs (those requiring discipline) in the U.S. Uruguay Round Agreement commitments. For a copy of the complete letter sent to USTR, contact WETEC at (202) 547-2004. As an
appointed member of the Agricultural Policy Advisory Committee (APAC), I had an opportunity to review the preliminary U.S. position derived from the comments of our industry and others. I am pleased with the level of
detail included in the position paper and the extent to which the U.S. proposal reflected our producers' input. It is a particularly encouraging development in what has been a slow-moving process. But be warned! Once
the U.S. puts forward its negotiating proposal, the behind the scenes maneuvering will intensify as parties - specifically our opponents - attempt to influence how the negotiations will be shaped. So far, two of our
competitors have put forward proposals: Canada has tabled a paper on Market Access and the Cairns Group have put forward a paper on export subsidies. The Europeans can be expected to use the next several months, while
the U.S. is occupied with the upcoming presidential and congressional elections, to attempt to advance their own agenda. We will be especially vigilant during this period. Moreover, I intend to work over the next few
months with WETEC and NAWG to reinforce our leverage in the negotiations. So far, this effort includes congressional proposals to "level the playing field" as well as determining the flexibility of the
so-called "Peace Clause". As was previously noted, the peace clause expires in 2003 and is the only thing that keeps the U.S. from bringing trade action against European export subsidies. We are looking
at whether the peace clause remains valid in the absence of substantive negotiations on agricultural trade reform and whether the U.S. can legitimately pressure the EU and others on their export practices. As you can
see there is more going on in Geneva at the WTO than meets the eye. I look forward to keeping you up to date and hearing your reactions and inputs. My best wishes for a successful and prosperous harvest.
USTR REVEALS STRATEGY FOR WTO As explained by Frazier, the U.S. proposal concentrates on six areas: 1) market access, 2) export competition, 3) domestic support, 4)
special and differential treatment of developing countries, 5) food security, and 6) sector specific initiatives. The market access section calls for the reduction and elimination of tariff level disparities between
member countries, improved implementation of tariff-rate quotas, and disciplines to ensure that the process of trade in new technologies (biotechnology) is "transparent, predictable and timely." The export
competition section includes the two highest priorities for the wheat industry: the elimination of export subsidies and an "end to exclusive export rights to ensure private sector competition in markets controlled
by single desk exports." (Canadian and Australian Wheat Boards) Additionally, the proposal calls for monopoly single desk exporters to report acquisition costs, export pricing and other sales information to the WTO
and the elimination of government funding or guaranteed support, which skews their exposure to risk in the marketplace. This section also reiterates the U.S. position that negotiations on export credit programs should
remain in the OECD and any disciplines would apply to all countries that utilize these programs. The U.S. proposal also calls for greater participation by the 130 developing countries that belong to the WTO.
While the five most developed nations have historically conducted most of the negotiations in the past, future meetings will be structured to be more inclusive. This issue becomes even more important when discussing
food security, the fifth element of the U.S. plan. Following the briefing, NAWG, WETEC and other agriculture groups sent a letter in support of this proposal. The letter stated, "As the world's biggest exporter
of agricultural products, the United States must be a leader in these negotiations." It went on to explain that the opportunity of worldwide agricultural trade is essential to world economic growth and security.
HOUSE HEARING ON PESTICIDE PRICING Witnesses tended to agree that farmers in the U.S. pay more for seed and other inputs than do their competitors abroad. According to the researchers, these higher costs can be traced to the enforcement of U.S. patent
laws, higher regulatory costs in the U.S., foreign black markets and the industry's marketing decisions. According to industry representatives, delays at the EPA reduce the time manufacturers have to market products
before their patents expire. Accordingly, manufacturers must try to recapture the millions of dollars it takes to bring a new product to market in less time than in foreign markets. In Canada, for example, new
pesticides are approved within 18 months of filing. It can, by contrast, take years for U.S. applications to be approved. This point was not lost on Congressman Jerry Moran (R-Kansas) who stressed his belief that U.S.
farmers, because of their relative wealth in comparison to farmers in developing nations, are being asked to cover all research and development costs while farmers the world-over reap the benefits of new products.
When it comes to the price of inputs in the U.S., Congressman Earl Polmeroy (D-North Dakota) pointed out that research conducted by the University of Guelph and North Carolina State University identified an inelastic
demand for farm inputs. Or, in other words, farmers purchase the pesticides and other products they need and are forced to pay the stated price. Of course, at some point the input becomes too expensive and the farmer
doesn't purchase any quantity. According to Polmeroy, the chemical manufacturers continue to price inputs at the highest possible price that maintains demand or "the very last penny possible." Polmeroy
also pointed out the inconsistency of asking farmers to market grain in an open NAFTA market while the input market between the U.S. and Canada remains divided. Polmeroy correctly pointed out that the concerns raised
regarding allowing farmers to purchase chemicals across the border are not based on a concern for public safety, but a "pricing opportunity."
WET CONDITIONS FAVOR DISEASE IN GRAIN CROPS McMullen says increased levels of leaf rust and Septoria spot blotch have been observed on wheat in southeastern and central counties of North Dakota. A few cases of
head blight (scab) have also been observed in both wheat and barley. Grain producers need to determine the health and yield potential of their crops immediately to decide if fungicide application is warranted,
McMullen says. "If the yield potential is high and the crop is not noticeably damaged by standing water, fungicide application may be warranted," she says. The correct timing of fungicide application for
wheat and barley is from head emergence to early flowering. Once the crop is past flowering, fungicides are of no value. Fungicides provide protection against leaf and head diseases for about three weeks
after application. Growers should contact offices of the North Dakota or Minnesota extension services for further localized information. By Gary Moran, Lamey says the Sclerotinia spore producing bodies have been observed at various locations from central Minnesota to north central North Dakota. Several petal tests, which measure infection potential,
have also been positive in these areas. Canola growers could consider applying a fungicide if the crop has good yield potential, it is growing in an area that has had Sclerotinia in recent years, and if the soils have
been wet, says Lamey. Timing is critical for spraying, he says. Quadris should be applied when the crop is at 10 to 25 percent bloom; Ronilan should be applied at 20 to 25 percent bloom. For further local
information, growers should contact their North Dakota or Minnesota extensioin service county office. Gary Moran, |
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