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California Association of Wheat Growers (CAWG)

May 31, 2005

BEEF CHECKOFF RULED CONSTITUTIONAL. Last week, the United States Supreme Court issued a 6-3 ruling reaffirming the constitutionality of the beef checkoff program. The ruling overturned court decisions by the U.S. Court of Appeals for the 8th Circuit and the U.S. District Court for South Dakota, which ruled the measure unconstitutional.

“I am extremely pleased that the U.S. Supreme Court overturned the lower courts' decisions and ruled in favor of the Beef Checkoff Program,” said Agriculture Secretary Mike Johanns. “This is certainly a win for the many producers who recognize the power of pooled resources.  As this administration has always contended, USDA regards such programs, when properly administered, as effective tools for market enhancement.”

As a result of this decision, the Beef Checkoff Program will continue without interruption.  USDA is reviewing this decision to determine its implications for other first amendment challenges to checkoff programs.  This decision is also allowing other issues with assessments, including some with state wheat commission programs, to be resolved quickly by USDA.

The uncertainty surrounding this issue has been cited by USDA officials as the major reason for not moving forward to implement the commodity assessment collection authority approved by Congress last fall. The California Wheat Commission has lost considerable revenue due to USDA’s refusal to implement the higher assessment rate approved by California wheat growers. CAWG and CWC are working with the national wheat organizations and other state wheat commissions and associations to resolve this issue. It is critical that this issue be solved in the next few weeks.

 HOUSE AND SENATE AG COMMITTEES REVIEW GRAIN STANDARDS ACT.  Both the House and Senate Agriculture Committees held hearings to review the Grains Standards Act last week. The Grains Standards Act, originally passed by Congress in 1916, requires an official national inspection and weighing program for grains.  The Act provides for the establishment of official standards that are used to measure and describe the properties of grains for export.

The Act is scheduled to expire in September of this year, and Senator Chambliss, Chairman of the Senate Agriculture Committee, has stated he will introduce legislation to reauthorize the Act after the Memorial Day recess. The hearings gave Congress a chance to hear from interested parties about issues that should be considered during the reauthorization process.

NAWG, along with the National Corn Growers Association, the National Grain Sorghum Producers, the American Soybean Association and the American Farm Bureau Federation provided testimony to the Committees. For more information about the hearings, or to read the testimony please visit http://agriculture.senate.gov/  and http://agriculture.house.gov/hearings/statements.html

On a related issue, two companies have been selected to conduct grain inspections in California, replacing the California Department of Food and Agriculture. Farwell Southwest Grain Inspection is handling the Imperial Valley and California Agri-Inspection Company, Ltd. is covering the rest of the state.

SENATE PANEL APPROVES COMPREHENSIVE ENERGY PLAN. The Senate Energy and Natural Resources Committee approved comprehensive, bi-partisan energy legislation that includes major initiatives to increase natural gas availability, increase electricity grid reliability and efficiency, encourage conservation and appliance efficiency and bold measures to encourage the development of renewable energy.

The centerpiece of the renewable fuel title is a renewable fuel standard that calls for oil refiners to mix up to 8 billion gallons of renewable fuel into gasoline production by 2012.  The House passed energy bill calls for a 5 billion gallon standard by 2012.

Included in the renewable fuel title is a loan guarantee program designed to encourage the commercial development of production facilities that will utilize agriculture residues such as wheat straw as their primary feedstock in producing ethanol and other valuable by-products.  This has been an important NAWG priority to provide value added opportunities for growers.  It is also an important step in a much larger effort to begin developing a grown-in-America agriculture based biorefinery industry in the United States.

While some were concerned that the renewable fuels standard and the renewable title was too ambitious to get out of Committee, the measure was reported out by a vote of 21-1. The measure is expected to be taken up by the full Senate sometime in June; many delicate issues must be resolved before final passage is assured.

 CAFTA UPDATE (News from WETEC). As the debate continues in the U.S. Congress over the pending free trade agreement with the Dominican Republic and five Central American nations, the other countries involved are also focused on the agreement.  At present, El Salvador, Honduras and Guatemala have passed the agreement, and the Dominican Republic and Nicaragua have begun consideration of CAFTA within their respective Congresses. Costa Rica’s President is pressing for some fiscal reform before CAFTA is considered, but it is also expected to pass by a healthy majority.

 In the United States, the House Agriculture Committee and the U.S. Chamber of Commerce both held rallies in support of the agreement last week. Secretary of Agriculture Mike Johanns has been very visible on the issue and has continually urged agricultural groups to get more active at the grass roots level.

 The Senate Finance Committee and the House Ways and Means Committee are expected to hold the “non markup” markup in the weeks following the Memorial Day Recess.

 CAWG has sent letters to all members of the California Congressional Delegation urging them to support the agreement. This issue was also discussed with each of the 20+ offices visited during the March trip to Washington, DC.