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California Association of Wheat Growers (CAWG)

October 31, 2005

NAWG HELPS TO DEFEAT PAYMENT LIMITATIONS. The Senate rejected an amendment that would have seriously and disproportionately affected wheat growers, when by a vote of 46-53 it rejected a Grassley-Dorgan amendment on payment limitations.

“This is a terrible time to be whacking away at the remains of our farm safety net,” said NAWG President Sherman Reese.  “This fall, farmers are facing debilitating cost increases for fuel and fertilizer, and unlike other businesses, we can’t pass on these costs through surcharges.  In fact, everybody else’s fuel surcharges are passed on to us.”

NAWG has historically opposed lower payment limitations out of a belief that the marketplace, not the government, should dictate the size and structure of farm businesses.   NAWG supported the payment limit levels established in the 2002 bill, but opposes further reductions from those levels.

NAWG and other farm groups played a key role in defeat of the amendment.  Delegations from the Kansas Association of Wheat Growers and Colorado Association of Wheat Growers, along with NAWG Past President Mark Gage and NAWG staff, worked the Capitol to defeat the amendment.  The state representatives were also in town to make the case for emergency energy assistance.  NAWG will have state delegations in Washington next week from North Dakota and Minnesota to work on this issue and advocate for crop disaster assistance for areas impacted by weather problems.  NAWG and its member states plan to continue an aggressive effort over the coming weeks to press the case on energy and disaster aid.

The payment limit amendment would have placed an aggregate limit of $125,000 on all commodity program payments, with a spouse qualifying for a separate limit, but the Direct Payment would have borne the brunt of the reductions.  Direct Payments – where wheat producers receive the bulk of their support in comparison to other crops – would have been reduced by 50%, while the payment limits on marketing loans would have remained at $75,000.  The amendment would have reduced eligibility caps for farm program payments, eliminated the “three-entity” rule, and reallocated those funds to conservation programs and Direct Payments; but since the Direct Payment limit had been reduced, those who lost the payments would have no way of recovering them.

Both California senators voted against the amendment (and in support of wheat growers.) We appreciate their support.

NAWG OFFICERS IN DC ON ENERGY ASSISTANCE. NAWG officers Sherman Reese and Dale Schuler, President and First Vice President respectively, were in Washington, D.C. this week meeting with Members of Congress and staff on the need for emergency energy assistance for farmers. Reese and Schuler met with Congressman Collin Peterson, Congresswoman Jo Ann Emerson, and staff in the offices of Congressman Greg Walden, Congressman Denny Rehberg, Senator Conrad Burns, Senator Max Baucus, Senator Norm Coleman, Senator Pat Roberts and the Senate Finance Committee. 

They expressed wheat growers’ concerns about skyrocketing prices for two of their critical high-volume inputs in the wake of Gulf Coast hurricanes and other energy market pressures - fertilizer costs have gone up by double digits, and for the first time since the Great Depression, a gallon of diesel fuel is more expensive than a bushel of wheat.

They explained that farmers, unlike any other participants in the food chain, have no ability to pass along these costs in the form of surcharges.  In fact, farmers end up paying increased fuel costs to get goods delivered to their farms, and pay fuel surcharges to get their goods to market – in short, they pay everybody else’s fuel surcharges in addition to their own increased costs.  For this reason, farmers are uniquely in need of help.

 Many Members and staff were positive about the potential for an assistance package, and all expressed their concerns about the current situation. In addition to the meetings on the Hill, Reese also met with officers of several other commodity groups and discussed the impacts of high energy and fertilizer prices.

Many wheat farmers are scheduled to be in DC in the next two weeks to push for an emergency energy assistance package, and NAWG will continue to work with Members in both the House and Senate on this important issue.

COMMITTEE REVIEWS STATUS OF TRADE NEGOTIATIONS. The House Committee on Agriculture held a hearing this week to review the agricultural negotiations in the Doha Development Round. In October, U.S. Trade Representative Rob Portman submitted a comprehensive trade proposal to the World Trade Organization (WTO) to jumpstart the negotiations in Geneva.  The Sixth WTO Ministerial Conference will convene in Hong Kong December 13-18.  WTO Ministerial Conferences are the highest-decision making authority and this Ministerial is designed to settle a range of issues in the negotiations so that a final agreement on the Doha Development Agenda can be reached by next year.

Chairman Goodlatte previously sent a letter to U.S. Trade Representative Rob Portman outlining identifying four principles which would guide support for any final agreement including: 1) improvements in real market access, 2) greater harmonization in trade-distorting domestic support, 3) elimination of export subsidies, and 4) greater certainty and predictability regarding WTO litigation. The Chairman noted that without adoption of these principles in any trade agreement, USTR may have trouble garnering Congressional support for such an agreement.

The Committee heard testimony from Agriculture Secretary Mike Johanns and Ambassador Rob Portman as well as a variety of industry representatives. The wheat industry was represented by Chris Schaffer, a Washington state grower who has taken a leadership role in trade issues on behalf of the industry. 

GMO BAN MAY BE DETERMINED BY DECEMBER. The European Commission may determine what will come of eight proposals calling for the lift on bans of genetically modified corns and rapeseeds. The European Food Safety Authority, after conducting thorough testing, has deemed the crops safe for cultivation, import, and processing. However, Germany, Austria, Luxembourg, France, and Greece are still maintaining the GMO ban even after the Safety Authority issued the safe determination. EU law requires that member states, which want to maintain the ban, provide new scientific evidence justifying the ban of GMOs.

CAWG BOARD TO MEET IN DECEMBER. The CAWG board will meet in Sacramento on December 7, 2005 and all members are invited to attend. We will be discussing our 2006 priorities in preparation for our annual trip to Washington, DC in March. As this weeks vote on payment limitations shows, Congress is not waiting for the 2007 Farm Bill to consider issues of critical importance to wheat growers. Your participation is welcome and needed. For more information, call the CAWG office.