News and Views

Association Perspectives:

U.S. Needs Proper Export

Tools in Place to Move Grain

It’s often said that crop producers need to have and use appropriate risk management tools to market their grain.  The very same can be said about the U.S. Government: It needs to have and use appropriate risk management tools to market U.S. grain.

U.S. wheat industry leaders recently reminded farm bill conferees to remember the importance of trade programs for U.S. agriculture.  In a letter sent by the Wheat Export Trade Education Committee, the chairmen of both U.S. Wheat Associates and the National Association of Wheat Growers explained that American wheat producers export nearly half of all wheat grown in the United States. Without aggressive efforts around the world to promote agricultural products, improve market access and service customers, the dollars included in the commodity title of the farm bill will not be enough to ensure the long-term success and viability of U.S. agriculture.

“The Commodity, Conservation and Nutrition titles are of the utmost importance. However, it behooves us all to look towards the future and recognize that without trade, U.S. agriculture will not achieve the levels of success that our farmers and ranchers deserve. With this in mind we ask you to consider increases in the Foreign Market Development Program and the Market Access Program,” wrote Henry Jo Von Tungeln, chairman of USW and WETEC, and Gary Broyles, NAWG chairman.

Specifically, they asked Congress to support funding of the Foreign Market Development program at no less than $43.25 million annually, and to support funding of the Market Access Program at no less than $200 million annually. “These programs are more vital now than they have ever been. Competition has become more aggressive, worldwide unfair trade practices continue to increase and privatization has greatly increased the number of buyers that need to be serviced around the world,” the chairmen wrote. “This has placed tremendous strain on funding resources that have remained stagnant for more than a decade.”

Another important trade tool is Trade Promotion Authority (TPA). Under this authority, the Executive branch is required to consult regularly with the Congress, and solicit advice from advisory committees and the public, as trade agreements are being negotiated. In return, the Congress agrees not to amend legislation implementing trade agreements, voting up or down on these agreements. The cooperative relationship at the heart of Trade Promotion Authority helps ensure that U.S. trade negotiators will strike agreements that have the support of the Congress and the American people.  TPA is important because it gives the U.S. negotiating leverage to complete trade agreements.

Indeed, a congressional grant of U.S. Trade Promotion Authority—privy to five U.S. presidents before it expired in 1994—will make it easier to strike market-opening agreements on agriculture with our trading partners. President Bush says that “more than 150 regional free trade and customs agreements exist throughout the world; the European Union is party to 31 of them; Mexico is party to 10; the world’s largest economy is party to three. While we’ve been marking time, our competitors have been working, and they’ve been signing agreements. While we have been delaying, they’ve been trading.”

Humanitarian aid is another tool that the U.S. uses to move grain, and at the same time, help others around the world. And U.S. wheat leaders agree that the U.S. needs to do more, not less, to fight hunger.

Today there are 815 million malnourished and hungry people in the world. In order to meet the goal of halving world hunger by 2015, a goal agreed to by countries involved in the 1996 World Food Summit, the U.S. needs to increase its leadership and its commitment to humanitarian food donations, according to U.S. Wheat Associates.

At their spring meeting held recently in Washington, D.C., the USW board, representing wheat growers in 19 states, unanimously urged the Bush administration to take more aggressive action in the world war on hunger. Opposing administration proposals that would cut food aid and eliminate programs, the USW board instead urged the administration to increase food donations, maintain USDA programs, fulfill prior commitments, and listen to humanitarian groups and commodity experts.

USW leaders urged the U.S. to provide a steady level of food aid, every year, on which the international humanitarian community could rely. At a minimum, food donations—which includes wheat and flour—should be at least total 6 million metric tons annually, USW’s board declared. The Bush administration, in its Fiscal Year 2003 budget, proposed an appropriation that would equal about 3.2 to 3.5 million metric tons, which is a substantial decrease from this year and a third of the total amount of food aid provided by the U.S. in FY 1999.

USW also called for the development of a formal advisory group, to advise U.S. agencies on the appropriate specifications needed in food aid donations. “Tonnage is important, but it is equally important that the food meet the needs of the people and countries in need,” observed Tom Mick, chief executive officer of the Washington Wheat Commission.  “The wheat industry and representatives from other commodities need to be formally and actively involved as agencies put donations in place, to ensure that the donations are culturally sensitive and that purchases are correctly specified.” Government agencies also need to seek advice on which—if any—food aid programs are appropriate in each country so as not to interfere with U.S. commercial activities.

“Association Perspectives” represents the views of the North Dakota Grain Growers Association, South Dakota Wheat Inc., and the Minnesota Association of Wheat Growers, which publishes Prairie Grains along with the Minnesota Wheat Research and Promotion Council.