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California Association of Wheat Growers (CAWG)

July 31, 2005

HOUSE PASSES DR-CAFTA. The U.S. House passed the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) by a vote of 217-215 earlier this week. The Agreement, which recently passed the Senate by a vote of 54-45, was completed more than a year ago between the U.S. and Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. A related agreement was agreed upon by the U.S. and the Dominican Republic.

Once DR-CAFTA is ratified by each country, tariffs on wheat imports will be immediately locked in at zero for all six countries. Wheat flour tariffs in the six countries range from 6 to 14 percent; they will be phased out over 12 years in the five Central American countries and over 15 years in the Dominican Republic. Between 2002 and 2004, U.S. wheat suppliers annually shipped on average more than 1.2 million metric tons valued at over $200 million to the DR-CAFTA countries.

Representative Bill Thomas, who chairs the House Ways and Means Committee, noted in a press release issued after the vote “Many of the crops grown by Central Valley and Central Coast farmers will immediately have duty-free access to Central American markets.  Choice cuts of beef will be able to enter Central American markets duty-free immediately, and tariffs on all other cuts of beef will be phased out.  Walnuts, almonds, pistachios, cherries, raisins, grapes, and cotton will all have high tariffs eliminated. Many other crops, including oranges, broccoli, and cauliflower, will have tariffs completely eliminated in future years. 

"While the economic benefits of DR-CAFTA to the United States are undeniable, this agreement does much more than encourage free and open trade between the U.S. and these six democratic nations," said Chairman Thomas. "Tonight we are letting our neighbors know that we stand alongside them as they work to expand their economies and strengthen their democracies."

To see how your Representative voted please visit <http://clerk.house.gov/evs/2005/roll443.xml>.

GRAIN STANDARDS ACT PASSES HOUSE COMMITTEE. The House Committee on Agriculture approved a bill to reauthorize the U.S. Grains Standards Act. The Grains Standards Act, originally passed by Congress in 1916, requires an official national inspection and weighing program for grains. The Act is scheduled to expire in September of this year.

The bill that passed from Committee on Wednesday will allow the Grain Inspection, Packers and Stockyard Administration (GIPSA) to continue to establish marketing and inspection standards for grains and oilseeds. The bill also authorizes the use of outside agencies to perform official inspections of export grain, and allows the Secretary of Agriculture to collect fees to cover the cost of inspection and weighing services.

Senator Saxby Chambliss (R-GA), Chairman of the Senate Committee on Agriculture, is expected to introduce a Senate version of the bill. The Senate version of the bill will also include language to authorize the use of private companies to perform official inspections.

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 on this issue to both the House and Senate agriculture committees earlier this year.

HOUSE PASSES HIGHWAY BILL CONFERENCE REPORT. On Friday morning, the House passed the conference report on The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users (SAFETEA-LU), HR 3. This bill will provide $286.45 billion in funding over six years (2004-2009) for federal highways and transit programs, as well as highway safety and motor carrier safety programs. The last Highway Bill expired in 2003. Since then, Congress has had to pass 11 temporary extensions to keep funding construction projects. The Senate is expected to pass the conference report before leaving for its August recess.

CSP CONTRACTS AWARDED, COMMENT PERIOD EXTENDED. USDA announced that it will offer 12,700 Conservation Security Program (CSP) contracts totaling $1 billion in “long-term commitment to conservation” over the next ten years. These contracts cover about 9 million acres of private land in 220 watersheds nationwide.

Some wheat states that received either a high number of contracts or high-value contracts included:

·       California, with 386 applications approved at a value of about $6.1 million
·       Kansas, with 765 applications approved at a value of about $9.2 million
·       Montana, with 370 contracts approved at a value of about $7.2 million
·       Nebraska, with 794 contracts approved at a value of $4.7 million
·       Oregon, with 597 contacts approved at a value of $6.3 million
·       Washington, with 224 contracts approved at a value of $7.5 million

Environmental enhancement activities under the CSP include improving soil and water quality, wildlife habitat management, nutrient and pest management, air quality management and on-farm energy management.  NRCS also extended the comment period on the interim final rule for CSP to Sept. 9.

AGRICULTURE APPROPRIATIONS BILL DELAYED UNTIL SEPTEMBER. The Senate has postponed the vote on the FY06 Agriculture Appropriations bill until after the August month-long recess. The bill is expected to be considered sometime in September after Labor Day. While the House has passed all eleven of their FY06 appropriations bills, the Senate has only considered 5 of their 12 bills. The industry continues to support for full funding for MAP at $200 million and FMD at $34.5 million. The Senate Appropriations Committee approved these amounts in June, and the House of Representatives approved the full amounts when they passed the bill in June as well.

CAWG, CWC SCHEDULED TO MEET. CAWG has scheduled its next board meeting for August 23 at 1pm in our offices. The California Wheat Commission will meet the following day at 10am at the California Farm Bureau Federation building in Sacramento. As usual, all interested growers/members are invited.