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California Association of Wheat Growers (CAWG)

March 31, 2005

WASHINGTON, D.C. TRIP SUCCESSFUL. The CAWG delegation visited a record number of Congressional offices during their recent trip to Washington, D.C. CAWG President Larry Hunn, Treasurer Ian Anderson and Executive Director Janice Cooper met with seven Members of Congress from California, plus 15 House and Senate staff.  In addition to the meetings, the group delivered NAWG awards and CAWG issue papers to eight additional offices. CAWG took the opportunity to personally thank Representatives Wally Herger and Bob Filner for their help on the Mexico issue over the years. The CAWG group also attended Senator Feinstein’s weekly constituent breakfast. At each meeting, the growers discussed the urgent need to reinstate the assessment collection MOU, expressed support for farm program and food aid funding, and urged Congressional support for the Central American Free Trade Agreement (CAFTA).

California Wheat Commission Executive Director Bonnie Fernandez arranged meetings at USDA with Undersecretary Bill Hawks to request help on resolving Mexico’s long-standing trade ban on California wheat and with Deputy Undersecretary Floyd Gaibler regarding the assessment issue.

HOUSE AND SENATE PASS BUDGET RESOLUTIONS.  The House and Senate both passed their versions of the Fiscal Year 2006 Budget Resolution. The Senate Budget resolution passed by a vote of 51-49, and contained $17 billion in mandatory spending cuts, including $2.8 billion in cuts to the agriculture.  The House adopted its version by a vote of 218-214 with $69 billion in mandatory cuts, including $5.3 billion in agriculture. A conference committee made up of Members of both the House and Senate Budget Committees will now have to meet to reconcile differences in the two bills.  Then both chambers will vote on a final conference report. 

Senate Agriculture Committee Chairman, Saxby Chambliss (R- GA), engaged Senate Budget Committee Chairman, Judd Gregg (R-NH), in a colloquy on the Senate floor asking Gregg to keep the agriculture cuts at $2.8 billion in conference and not raise the number towards the House number of $5.3 billion.  Chairman Gregg stated that he will work hard to keep the lower Senate number for agriculture.

House Committee on Agriculture Chairman, Bob Goodlatte, and Chairman Chambliss both said when a final proposal is signed into law, they will try to make the necessary cuts without changing the farm policy set forth in the 2002 Farm Bill. However, both Chairmen did say that they would examine all programs when looking for the cuts, including farm subsidies, nutrition and food stamps and conservation.

NAWG will continue to work with both the Chairmen of the Agriculture Committees and the Budget Committees as these proposals move forward in order to minimize the effects that agriculture budget cuts could have on America’s wheat farmers.

NAWG MEETS WITH USDA SECRETARY. The NAWG officers and several state wheat presidents met with USDA Secretary Mike Johanns in Washington this week, along with Undersecretary J.B. Penn, Chief of Staff Dale Moore, and USDA White House liaison Drew DeBerry.  The meeting immediately followed Johanns’ presentation to the annual Agriculture Day luncheon at the National Press Club, and allowed NAWG leadership a chance to personally raise issues of interest and concern with the leader of the Department of Agriculture.

NAWG’s agenda included discussions of the federal budget climate and impacts on U.S. farm programs.  In particular, NAWG questioned the timing of proposed budget cuts to agriculture, suggesting that the United States should wait until a WTO agreement is completed before making any cuts.  Otherwise, we risk unilateral disarmament, weakening the position of our negotiators, going into the closing rounds of the WTO agriculture negotiations.  Impacts of the budget proposal on county office staffing and state land-grant colleges were mentioned as well.

Also on the agenda were sanctions against Cuba food sales.  A recent policy clarification from the Treasury Department’s Office of Foreign Asset Control (OFAC) redefined payment terms for contracts, and allowed only a 30-day grace period for existing contracts.  Because of the nature of grain contracts, often signed for delivery periods months distant, this clarification cuts across existing contracts.  The action creates an inconsistency in U.S. foreign policy, as the United States frequently works to ensure that the rule of law and contract sanctity is upheld in foreign countries, and by this action, OFAC has violated contract sanctity of existing U.S. export contracts.  The clarification will cause U.S. exporters to have to renegotiate the payment terms for existing contracts, increase transaction costs, and make Cuban purchase of U.S. goods more difficult.  This is the first time a U.S. change in sanctions policy has violated existing export grain contracts since the Russian embargo of the 1980s.  According to U.S. Wheat Associates, there are outstanding wheat contracts for sales amounting to over 400,000 metric tons, worth around $65 million. 

Implementation of the Conservation Security Program (CSP) was also discussed, and in particular the future direction of the program given its funding constraints, limited availability, and qualification criteria.  Johanns commented that conservation programs are very popular and will have a major role in the next farm bill, and in his earlier Agriculture Day Luncheon comments, held up CSP as great model to allow those who are the best stewards – farmers and ranchers – to build on conservation gains.  The program is intended to “reward the best and motivate the rest” to improve the nation’s resource conservation.

NRCS SEEKS COMMENTS ON EQIP. The Natural Resources Conservation Service (NRCS) has published a notice that they will review and update national priorities for the Environmental Quality Incentives Program (EQIP) based upon information from state and national listening sessions as well as written comments.  A national listening session is scheduled for May 5, 2005 in Washington DC.

When last revised in May,2003, NRCS established the following national priorities: (1) Reduction of non-point source pollution such as nutrients, sediment, pesticides or excess salinity in impaired watersheds, (2) Reduction of emissions, such as particulate matter, nitrogen oxides (NO2), volatile organic compounds and ozone precursors and depleters that contribute to air quality impairment, (3) Reduction in soil erosion and sedimentation, and (4) promotion of at-risk species habitat conservation.

The NRCS integrates consideration of national priorities in four key program components: (1) The allocation of financial resources to States, (2) The allocation of financial resources within States, (3) The selection of conservation practices and the establishment of cost-share and incentive payment levels and (4) The application ranking process.

 Written comments may be sent to the Financial Assistance Programs Division, Natural Resources Conservation Service, EQIP Comments, Room 5231 South Office Building, 14th & Independence Avenue SW  Washington DC 20250 or by e-mail to david.webster@usda.gov; Subject: EQIP Comments.  Comments must be received in writing by June 5, 2005

SAVE THE DATE: All CAWG members are invited to attend the annual meeting on Wednesday, April 27^th  at 1521 I Street in Sacramento. We will discuss CAWG’s recent trip to Washington, DC and set priorities for the coming fiscal year.