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California Association of Wheat Growers (CAWG)

July 30, 2006

CALIFORNIA HEARINGS ON FARM BILL. The last of four California Department of Food and Agriculture listening sessions to seek public input on the 2007 farm bill is scheduled for August 1 in Room 4202 in the State Capitol. Larry Hunn, President of CAWG and Mike Scriven, Chairman of the California Wheat Commission will outline priority issues for California wheat growers. For a copy of the testimony, call the CAWG office or see the Commission website next week at www.californiawheat.org.

DOHA FALLS APART, ENDING HOPE FOR MARKET ACCESS. WTO negotiations collapsed when other negotiating partners refused to offer significant tariff reductions and other concessions in return for an ambitious domestic support-cutting package offered by the United States last October.

Leaders of the U.S. wheat industry expressed concern over the suspended talks, but offered the industry’s support for the ambitious proposal put forward by the U.S. last fall. “The wheat industry agreed to accept painful changes in their domestic support system on the condition there were major results in other areas, including market access,” said Dale Schuler, NAWG president, in release on the issue put out by NAWG and U.S. Wheat Associates.

“While we are sorry to see the talks delayed, we are very pleased that our U.S. negotiators held their ground when meaningful commitments on market access and other trade-distorting policies were not offered by our trading partners.”

The U.S. offered a cut of 60 percent in trade distorting domestic supports, Amber Box programs and a cut of 50 percent to the previous Blue Box cap. In return, negotiators expected concessions on the issues of market access; tariff levels in some areas, like the European Union; and monopolistic practices of export state trading enterprises (STEs).

It will now be very challenging for a deal to be reached, as Trade Promotion Authority (TPA), the authority of the Administration to negotiate trade deals that must be accepted or rejected without amendments by Congress, expires next July. It is unlikely this authority will be easily extended.

WETEC DISSOLVES, PASSES DUTIES TO NAWG AND USW. The Board of Directors of the Wheat Export Trade Education Committee (WETEC) voted to dissolve the organization and hand off trade policy duties to NAWG and U.S. Wheat Associates (USW).  The action was taken at their annual business meeting in Boise, Idaho.

Back in February, the WETEC Board had approved a motion which called on NAWG and USW to prepare a proposal on how they would handle trade policy duties should WETEC vote to dissolve at the July meeting.  The two organizations formed a committee and presented the requested proposal on April 7.  The proposal assigned Administration-related trade activity to USW, and Congressional trade activity to NAWG, with extensive coordination and resource sharing between the two groups.  Funds that were invested in WETEC are to be divided equally between USW and NAWG for continuance of trade policy work for wheat growers.

The February WETEC motion indicated that if the Board found the proposal acceptable, their intent was to dissolve in July.  At the Boise meeting, the WETEC Board accepted the proposal and voted to cease operations immediately.  The officers of WETEC are taking care of wrapping up the business affairs of the organization.

NAWG has had a long and effective relationship with WETEC Executive Director Barbara Spangler, who has worked tirelessly on behalf of wheat growers in this post.  She carries a long resume of trade experience and institutional memory on her departure, and we wish her well in her future endeavors.

USW and NAWG have already begun picking up the duties in trade policy.  Primary contacts will be Rebecca Coleman at U.S. Wheat Associates and Jennifer Spurgat at NAWG.

CROP INSURANCE CHANGES OPEN FOR PUBLIC COMMENT. USDA’s Federal Crop Insurance Corporation (FCIC) has published in the Federal Register proposed changes to the crop insurance program. A newly developed Combination “Combo” Policy would provide both revenue and yield protection for those crops, and incorporate changes resulting from recommendations by an RMA work group.

Amended provisions would replace the Crop Revenue Coverage, Income Protection, Indexed Income Protection, Actual Production History and Revenue Assurance plans of insurance. The amendments offer producers a choice of revenue protection (against loss of revenue caused by low prices, low yields or a combination of both) or yield protection (for production losses only) within the same basic provisions and applicable crop provisions.

RMA believes this will reduce paper work and the amount of information producers must consider in order to determine the best risk management tool for their operations, and will improve prevented planting and other provisions to better meet the needs of insured producers. Changes will apply for 2009 and succeeding crop years. The proposed rule is available for public comment until September 12. All written comments received by that date will be considered when the rule is made final.

To view the entire proposed rule document, visit:

http://www.rma.usda.gov/regs/2006/combopr.pdf

USDA ANNOUNCES SEED INCENTIVE PAYMENTS FOR HWW. The Farm Service Agency announced this week that the agency will begin issuing seed incentive payments under the 2005 Hard White Wheat Incentive Program (HWWIP).  The incentive rate is $2 per acre with total payments for 2005 totaling approximately $1.2 million.

The HWWIP was authorized in the 2002 Farm Bill. It directs the Secretary of Agriculture to use $20 million in Commodity Credit Corporation funds as an incentive to growers to plant more acres to hard white wheat. This announcement marks the end of the program, which was only authorized through 2005.

For more information about the program, please visit: http://www.fsa.usda.gov/pas/publications/facts/html/hwwheat04.htm

NAWG PRESIDENT TESTIFIES ON THE IMPORTANCE OF CONSERVATION. NAWG President Dale Schuler told Members of Congress Thursday that the conservation title of the Farm Bill is a “critical” part of future farm programs. Testifying before the U.S. House of Representatives Committee on Agriculture’s Subcommittee on Conservation, Credit Rural Development and Research, Schuler said, in part:

"From our nation’s earliest founding, agriculture and wise stewardship were linked together in the minds of the leading thinkers of the day...so what happens in 2007, when the next Farm Bill will likely be written?
 

“NAWG will not be pressing for a radical restructuring of the existing conservation title. We will be looking for opportunities to ensure existing conservation programs are more efficiently coordinated utilizing shared information and data… We will be working to see all conservation programs and, particularly CSP, adequately funded and work to remove priority watersheds and other barriers to participation…”

Schuler also discussed NAWG’s interest in cellulosic ethanol and suggested a dialogue about the potential for growing switchgrass on land enrolled in the Conservation Reserve Program. Witnesses from USDA indicated that this use of CRP land will be allowed by the agency.

To read Schuler’s full testimony, visit: