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California Association of Wheat Growers (CAWG)

August 31, 2006

REPRESENTATIVE MIKE THOMPSON (D-CA) MAKES WHEAT TOUR. Congressman Mike Thompson (D-CA) spent several hours last Monday with representatives from the California wheat industry, including growers, shippers, and research scientists. At each of the three stops, Congressman Thompson observed unique aspects of the industry and heard about Yolo County’s leadership role in marketing and research for this important statewide industry.

The tour began at the California Wheat Commission office in Woodland, which also houses the state’s laboratory. This lab performs advanced tests on wheat samples from around the state and nation for interested buyers from around the world. Test results help buyers optimize their yields and improve their end products, which include bread, pasta and tortillas.

The next stop was the Adams Grain facility in Woodland, which handles grain shipments from growers throughout Northern California. President Mike Adams joined growers and Consul General Alejandra Bologna in discussing the importance of maintaining and expanding export markets.

The final stop on the tour was the Plant Sciences Department at UC Davis, where Dr. Jorge Dubcovsky leads a team of international scientists in research to improve the disease resistance and nutritional quality of wheat varieties. Their efforts will help California wheat growers overcome the challenge of stripe rust and other wheat diseases and proved new and improved varieties for planting.

 “On behalf of the California wheat growers, we want to thank Congressman Thompson for his interest and support,” said Mike Scriven, chairman of the CWC. “He made several insightful comments regarding the importance of promoting the link between quality wheat and healthy consumer products. We look forward to working with him to better make those connections.”

CWC WINS UC DISCOVERY GRANT; EXPANDS SUPPORT FOR VARIETAL RESEACH. The University of California awarded a four-year research grant to the California Wheat Commission. The objective of the project is to develop wheat varieties resistant to stripe rust. Molecular markers closely linked to five stripe rust resistant genes will be used to accelerate the incorporation of these resistant genes into the best California wheat varieties. The Principal Investigator will be Dr. Jorge Dubcovsky, Department of Plant Sciences, UC Davis. The Commission will provide $60,000 in research funding for each of the four years; this amount will be matched equally by the University.

DISASTER PACKAGE OFFERS NO RELIEF TO WHEAT GROWERS. A disaster relief package announced last week by Secretary of Agriculture Mike Johanns will provide no relief to wheat growers because it relies on a Farm Bill program that hasn’t benefited them since its inception.

Johanns announced $780 million for disaster relief, $700 million of which will go to producers in the form of advanced counter cyclical payments. The problem: counter cyclical payments don’t work during times of drought because lack of production drives prices up. The counter cyclical payment is triggered when crop prices drop. Shortages of wheat caused by drought and other disasters have caused prices to go above the counter cyclical trigger. Wheat growers have received almost no counter cyclical money since the 2002 Farm Bill was enacted.

Shortly after the announcement, NAWG released a press statement with President Dale Schuler’s comments.

“We are very pleased that the Secretary of Agriculture has visited a disaster-hit area, but we are very disappointed with the details of the Secretary’s announcement,” he said. “Wheat growers across the country are facing the worst droughts in decades. A much broader, more comprehensive package is needed - now.”

Many Members of Congress spoke out after the package was announced, declaring it a good start but saying much more assistance is clearly needed.

Disaster and economic loss assistance remains NAWG’s top priority. NAWG staff and members will take part in a disaster assistance fly-in scheduled for Sept. 12 and 13. Although CAWG will not participate in this NAWG event, we are arranging meetings with our Congressional delegation and communicating with them regarding this important issue. California growers experienced a combination of drought, too much rain, and widespread stripe rust during this crop year.

FTA UPDATE: PERU CHANGES, COLUMBIA FTA TO CONGRESS. (From U.S. Wheat Associates)

 Peru

Recently, Peru’s newly elected president, Alan Garcia, declared his intentions to renegotiate the U.S./Peru Free Trade Agreement already ratified by the Peruvian congress in an effort to “... change our point of view and restate the concepts…we need to think about a different accord, one for the poor, one that looks within, complying with a national agenda.”

However, the next day, Garcia’s office issued a toned down statement announcing the appointment of well-known Peruvian economist Hernando de Soto, head of the Lima-based Institute for Liberty and Democracy, to “help achieve the ratification of the already signed and successfully negotiated free trade agreement with the United States.”

The FTA has undergone a mock mark-up in the U.S. Congress and will be presented for ratification once Congress resumes.

Colombia

President George W. Bush formally notified Congress in mid-August that he will sign a free trade agreement with Colombia under the “fast track” legislative process by late November, after the elections. According to the Washington Trade Daily, Congressional leaders have indicated a vote on the Colombia FTA is more likely to come next year. Other cabinet secretaries in the administration have been traveling to Colombia and have committed to work closely with the U.S. Congress to make sure the agreement is approved.

USDA TO DONATE 25,000 MT OF WHEAT TO LEBANON. USDA announced this week that it will donate 25,000 metric tons of hard red winter wheat to Lebanon in the wake of the recent violence in that country. USDA received a request for the wheat from the Lebanese government on Aug. 16 and immediately took steps to fulfill it. The donation will arrive in Beirut in mid-September and is part of a coordinated U.S. government response that also includes the Department of State and the U.S. Agency for International Development (USAID).

The wheat will be used for a variety of projects related to food security and agricultural development in Lebanon. The donation is being made under the USDA’s Food for Progress program, administered by the Foreign Agricultural Service, which provides for donations of agricultural commodities to needy countries to encourage economic or agricultural reforms that foster free enterprise. This fiscal year, USDA expects to donate around 560,000 tons of U.S. commodities to 28 countries under Food for Progress.

Food aid programs provide farmers an important channel for selling U.S. wheat and other commodities. Roughly half of all U.S. wheat is exported; ten percent of wheat exports are shipped through food aid programs operated by USDA and USAID. Bonnie Fernandez, executive director of the California Wheat Commission, chairs the national Food Aid Working Group for the U.S. wheat industry.