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California Association of Wheat Growers (CAWG)

January 15, 2007

CALIFORNIA WHEAT ANNUAL VISIT TO WASHINGTON, DC. Representatives from CAWG and the California Wheat Commission will be traveling to Washington, DC to meet with Members of Congress and other government leaders and discuss issues of concern to California wheat growers. CAWG President Larry Hunn, Vice President Ian Anderson, and Executive Director Janice Cooper will spend several days on Capitol Hill discussing the importance of funding for wheat research and working on the new Farm Bill. CWC Chairman Mike Scriven and Executive Director Bonnie Fernandez are representing the Commission and will be meeting with USDA and other agencies to discuss recent advances in research and support for food aid.

EARMARK REFORM COULD STOP ONGOING WHEAT RESEARCH. NAWG and the National Wheat Improvement Committee wrote key Members of Congress urging them to consider how earmark reform in a forthcoming continuing resolution could affect agricultural research.

The 109th Congress adjourned without passing all necessary appropriations bills. To fund government agencies, leadership now plans to pass some kind of continuing resolution without earmarks, as some earmarks have come under scrutiny recently due to potential abuse and conflicts of interest. However, depending upon how “earmark” is defined, many agricultural research programs could lose funding.

The organizations explained the implications of this in their letter:

“Of particular interest to wheat growers and the wheat research community are budget requests …[that] were submitted to the Appropriations Committees in March 2006. If these priorities get caught in an ‘earmark filter,’ critical research would be lost, discontinued or delayed until funding can be restored. This includes research needed to prevent potentially devastating losses in wheat production from the appearance of new, virulent races of cereal rust diseases.”

The letter also explained another potential problem that would be created if the final funding vehicle allocates USDA’s Agricultural Research Service (ARS) funding at the level in the FY2007 House bill, which is the basis for ARS funding in a continuing resolution that expires Feb. 15. This level of funding represents a 6 percent decrease for the agency and is currently causing the agency to operate under cutbacks.

Elimination or disruption of important research could result in loss of crop value or compromise the food chain. NAWG will to work with other members of the ag community to ensure important agricultural research has the resources necessary to maintain the value and safety of our crops. CAWG and the California Wheat Commission will discuss the importance of developing new stripe-resistance varieties with members of Congress during their upcoming visit to Washington, DC.

PETERSON: FARM BILL TO BE COMPLETED BY SEPTEMBER. House Agriculture Committee Chairman Collin Peterson (D-MN) said last week that he wants to complete new farm legislation before the expiration of the 2002 Farm Bill on September 30. In laying out his timeline, Peterson said he wanted the House and Senate to finish their bills by August, so conference can be completed and the new bill can be on the President’s desk before the 2002 Farm Bill expires. Peterson said Sen. Tom Harkin (D-IA), the Senate agriculture chair, is also interested in meeting the Sept. 30 deadline.

Peterson has indicated a number of times that the new farm bill will be similar in many areas to the 2002 Farm Bill and will be driven by renewable fuels considerations. Last week, news reports indicated that Peterson would add another subcommittee to the committee’s five-subcommittee structure and break them out as follows:

• Energy, credit and research
• Rural development, specialty crops and foreign agriculture programs
• Livestock, dairy and poultry
• Horticulture and organic agriculture
• Department operations
• General farm commodities

Peterson has said he intends to have subcommittees start the mark-up of the 2007 bill. It is, as of yet, unclear who will sit on which subcommittee. CAWG and CWC will meet with the new majority staff and various committee members during their visit next week.

PERMANENT DISASTER ASSISTANCE BILL INTRODUCED IN SENATE. A bipartisan group of Senators is supporting a bill introduced Monday that would provide permanent agriculture disaster assistance.

Help would be available for producers in federally-declared disaster counties and contiguous counties who lose more than 35 percent of their crop due to weather conditions. Those producers would be eligible for a payment of 65 percent of the crop price.

 The bill would also require producers to purchase crop insurance in order to be eligible. If a producer’s crop is a noninsurable commodity, that producer would have to participate in the Noninsured Crop Disaster Assistance Program to be eligible.

 The bill was introduced by Sen. Byron Dorgan (D-ND), Sen. Kent Conrad (D-ND), Sen. John Thune (R-SD) and Sen. Mary Landrieu (D-LA). This legislation would eliminate the need to pass special disaster bills to help farmers deal with losses due to weather and other natural disasters. These bills are often delayed for years after the event, and cause considerable hardship to growers.

CANADA ASKS FOR CONSULTATIONS ON U.S., CORN SUBSIDIES. Canada announced last week that is has asked for official World Trade Organization consultations with the United States over both corn subsidies and the overall level of U.S. farm subsidies.

The Canadian government said it was doing this because the United States “has been providing subsidies to its agricultural producers that create unfair market advantages.” The Canadians said they asked for the consultations in order to seek a “level playing field.”

Consultations at the WTO are the first step in the complaint process at the international trade body. If an agreement cannot be reached through the consultation process, Canada would have the option of requesting a WTO dispute settlement panel be appointed.

 DOHA RESUMPTION TALKS CONTINUE TO MOVE THE DIAL. (From U.S. Wheat) U.S. Wheat has learned from industry contacts that the pace of the so called "quiet diplomacy" to encourage resumption of the Doha round of WTO talks is picking up. U.S. trade negotiators were in Brussels last week, and EU negotiators will be in Washington this week. Both sides are maintaining confidentiality, although the unofficial word is that the EU is disappointed that U.S. negotiators have only hinted at flexibility on domestic support rather than making specific new offers. However, most reports note that the US and the EU are coming closer to reaching consensus on a common position on agricultural market access and domestic support. The EU trade commissioner, Peter Mandelson, said agreement between Washington and Brussels is a prerequisite for resuming the negotiations, but could not be imposed on the other 140-plus members. Both USTR Susan Schwab and Mr. Mandelson have reportedly been directed by their respective heads of state “to come up a solution as soon as possible.” Mr. Mandelson noted that, “there is fresh hope for the Doha round and we now have to build on that work.” It has also been reported that both sides are near final agreement on the number and treatment of “sensitive” products and that the U.S. has given up on its demands for a radical overhaul of the EU’s proposal - involving a complicated system of tariff-rate quotas. It is also understood that the EU is developing a proposal on genetically modified products that will satisfy the United States. In return, Brussels will insist on language in the final agreement addressing Geographical Indications.