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U.S. WANTS TO RETAIN ABILITY TO OFFER EXPORT CREDITS TO "ROGUE" NATIONS
After testifying before a
Senate Agriculture subcommittee on Wednesday, Foreign Agriculture Service Administrator Timothy Galvin told newswire reporters his agency wants to retain the ability to use its export credit programs to promote
agricultural trade with Iran, Libya, Sudan or North Korea.
Currently, the USDA does not employ these programs on the respective countries, but they do not want Congress to completely rule out the option either. Sources suggest this could happen if some Congressmen get their way with the current version of a House bill to reform sanctions on Cuba and other countries the US government considers "rogue" nations. President Clinton eased sanctions on these countries last year by allowing for the exports of US food and medicine on a case-by-case basis, but at the same time preventing the USDA from issuing loans and credits to help facilitate the process.
Meanwhile, Senator Byron Dorgan, D-N.D., one of the main sponsors of the bill to permit US food and medicine sales to Cuba, expects broad support in
the Senate for passage of his legislation along with the $25 billion fiscal 2001 farm budget bill.
However, one of Dorgan's aides admits there is some concern with Senate Leader Trent Lott, R-Miss., who in the past has indicated he would like to see the trade sanctions amendment struck down. In his leadership position, Dorgan's aide suggests Lott is a powerful opponent, but stressed that the 70-plus senators who want to see stronger trade with Cuba, and other "rogue nations", are even more powerful.
FRENCH WHEAT HARVEST SHOWS LOWER TEST WEIGHTS
According to newswire sources, initial indications from the 2000-01 French
winter wheat harvest are suggesting "mixed" quality, with lower test weights. Anecdotal reports suggest the quality breakout on the crop harvested so far shows around 10% to 20% at milling quality,
20% to 30% at feed quality and 40% to 50% at "standard" quality.
One European commodity analyst suggests heavy rains were the catalyst for lower test weights. Initial projections indicate test weight on milling quality wheat are around 76 KG/HA (59.1 LBS/BU). Furthermore, one source cautioned that the French wheat harvest is far from over and overall quality could change.
NATIONAL WHEAT GROWERS TO TESTIFY IN FAVOR OF COUNTER CYCLICAL PAYMENTS
Representatives of the National Association of
Wheat Growers (NAWG) indicate they will add their voice to a call to lawmakers for a new and more dependable form of emergency aid for farmers who suffer from low commodity prices and natural disasters.
Sources suggest the NAWG President is set to testify in front of the House Agriculture Committee sometime this week in favor of some form of counter-cyclical, production-based, payment system be set up for farmers
as an addition to the government safety net programs. Earlier this year, President Clinton proposed that Congress make $6.9 billion in supplemental income payments to farmers and distribute the money according
to a counter-cyclical formula that is based on how a farmer's current income compares with the average income over the last five years.
Despite this recommendation, Congress approved about $7.0 billion of supplemental Agricultural Marketing Act payments based solely on historical crop production information.
USW FIRST TO RECEIVE STATE DEPARTMENT "GO-AHEAD"
U.S. Wheat Associates was informed on Wednesday that the
State Department approved the organization's use of federal funds for market development activities in Libya and Sudan. This is the first approval for a commodity organization since economic sanctions against the
countries were eased by the Clinton administration last year.
For several years, using federal programs for market development activities was forbidden for the sanctioned countries. Recognizing that sanctioned
countries don't automatically buy from us just because the U.S. changes its policy and says they can, and anxious to start re-developing the markets, USW used wheat producer check off funds, provided by state wheat
organizations, to finance development activities. Those activities have led to recent wheat sales.
With this "go-ahead" USW can confidently step up market development activities in previously sanctioned countries.
HE SAID WHAT?
Canadian Agriculture Minister Lyle Vanclief reportedly claimed last week that the Canadian Wheat
Board is "far more open than private exporters" and that if the U.S. seeks to toughen rules regulating state trading enterprises in the next round of WTO talks, "then giant private grain trading
companies like Cargill and Archer Daniels Midland Co. should be subject to the same rules."
"The U.S. should take that deal in a heartbeat, " responds Alan Tracy, USW president.
The Minister doesn't seem to understand that private trading companies compete with each other for U.S. grain. None have the monopoly power of the CWB,
with its stranglehold on Canadian farmer supplies and its ability to dictate prices. No U.S. grain exporter can borrow billions of dollars at government rates. All U.S. grain exporters have to publicly report their
sales.
"There is nothing the U.S. is asking the CWB to do that U.S. grain exporters don't do now," Tracy points out.
WHEAT INDUSTRY ASKS FOR LEVEL GLOBAL PLAYING FIELD
Declaring that "the importance of the USDA export programs for
U.S. wheat cannot be overstated," a representative of the U.S. wheat industry called on Congress to level the global playing field in the development of export markets. Speaking on behalf of wheat growers this
week, Minnesota wheat farmer Bruce Hamnes, chairman of USW, told a Senate subcommittee that "American agriculture cannot compete against foreign governments," and laid out steps that Congress needs to take
in a global marketplace that is "characterized by heavily subsidized and protected competition."
"Flexible, effective, and fully funded export programs are critical to our long-term success," Hamnes told the panel.
Pointing out that as historical support was eliminated under "Freedom to Farm," use of agricultural export programs remained stagnate and in
some cases decreased as "U.S. farmers were sent out into the world market to survive without their traditional 'tools' of support. Well-funded export programs, which are a necessary part of the equation, were
not reinforced," Hamnes said, despite competitors' investiment in market promotion rising twice as fast as U.S. spending. Asking Congress to "correct this oversight," Hamnes called for increased
funding and an "unshakable commitment to provide American agriculture with the proper tools to develop markets and promote agricultural goods."
Adequate funding must be provided to the Foreign Agricultural Service and the Animal Plant Health Inspection Service, Hamnes said. "The dedicated
people in USDA, who depend on you for their funding, and to whom the industry is indebted, make the export programs work."
To "counter unfair trade practices" the wheat industry also asked Congress to direct the Secretary of Agriculture to direct unexpended Export
Enhancement Program (EEP) funds to export market development activities. EEP is a program that helps U.S. farmers challenge unfair trading practices of subsidizing countries, especially the European Union, but by
1996 the U.S. voluntarily stopped administering the EEP for wheat sales, despite the fact that EU subsidies for wheat and wheat flour exports are still used.
Other actions Congress should take, Hamnes said, include passing "Fast Track" negotiating authority, providing responsible oversight of the
WTO negotiating process and, most importantly right now, granting Permanent Normal Trade Relations for China.
"If Congress fails to grant China Permanent Normal Trade Relations in a timely and honorable manner we can expect to see very few, if any, sales
in the future," Hamnes declared. "There is no issue more important to the future of the industry than finalizing this process."
COUNTIES TO RECEIVE DISASTER RELIEF
Ag Secretary Dan Glickman declared on Friday that parts of Iowa, Nebraska and Texas
are now agricultural disaster areas.
Severe storms and drought were the major culprit. Up to 90 counties in these states plus those in Kansas, South Dakota, Wyoming, Colorado and
Missouri were covered by Glickman's declaration.
THE WORLD FALLS BEHIND TARGET TO HALVE HUNGER
By David Brough
ROME, July 24 (Reuters) - According to Reuters, the world is falling behind in its race to halve hunger by 2015, the U.N.'s global food body said in a
report released on Monday.
The Food and Agriculture Organisation (FAO) said that the number of malnourished people remained stubbornly high and the international community was
struggling to cut it to 400 million by 2015.
"Progress towards meeting the World Food Summit's target of halving the number of undernourished persons from the 830 million of 1990/92 by no
later than 2015, has been slow so far, and at the current pace, the target would not be met by 2015," the organisation said.
The international community set the goal at a 1996 World Food Summit in Rome, where FAO is based.
FAO said that despite an expected slowdown, the number of people living in developing countries would rise from 4.42 billion in 1995/97 to 5.76 billion in 2015 to 6.69 billion in 2030. "The numbers undernourished will decline only modestly: from 790 million in 1995/97 to 575 million in 2015 and to 400 million in 2030," the FAO report, "Agriculture: Towards 2015/30", said.
"If these projection came true, it would mean that we might have to wait until 2030 before the numbers undernourished are reduced by half,"
it added. The FAO report said that faster progress could be achieved if governments had the political will to stamp out hunger.
Food consumption levels are expected to be higher in an increasing number of countries.
"Fifteen countries had less than five percent undernourishment in 1995/97," FAO said. "Their number will increase to 26 in 2015 and 42
in 2030." Cereals will remain the main food supply, accounting for about half of daily calorie intakes.
World production of cereals is projected to increase by almost one billion tonnes by 2030, from the current level of 1.84 billion tonnes, the report
said. "This increase even exceeds that of the past three decades," FAO said.
Around half of the increase will be for food, and about 44 percent for animal feed, it said.
Feed use, especially in developing countries, will be the most dynamic element driving the world cereals economy.
Developing countries will become increasingly dependent on cereal imports, FAO said. Their net cereal imports are expected to rise from 107 million
tonnes in 1995/97 to 270 million in 2030.
Traditional exporters such as North America, Western Europe and Australia would need to increase their net exports from 142 million tonnes in 1995/97
to 280 million by 2030.
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