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California Association of Wheat Growers (CAWG)

March 15, 2007

WEEKLY WHEAT BULLETIN AVAILABLE FROM CWC. Please see the current Weekly Wheat Bulletin for an update on treating stripe rust. The Wheat Bulletin may be accessed on the California Wheat Commission website: www.californiawheat.org.

BUDGET MARKUP GIVES MORE MONEY FOR AG, BUT WITH A CATCH.  An additional $15 billion above the Congressional Budget Office baseline will be available for spending in the 2007 Farm Bill, according to a FY2008 budget resolution passed by the Senate Budget Committee this week. The catch? That money will have to be offset.

The money provided by the resolution would be put into a “reserve fund” for the Farm Bill. However, money in these types of reserve funds is typically available to committees for use only under certain conditions. The conditions for the $15 billion are unclear at this point, but one would likely be an available offset, either with decreased spending or increased revenue from somewhere else in the agriculture or general budgets.

This development is further indication of how tight the 2007 Farm Bill budget is likely to be. With adjustments needed in Title I and additional funding desired by many for conservation, renewable fuels and specialty crop provisions, Senate Agriculture Chairman Tom Harkin (D-Iowa) reportedly had asked for $20 billion over the baseline.

NAWG and other ag groups have been advocating for an increased budget allocation, which most observers argue is the most important factor determining the details of the next farm bill.

The Committee passed the resolution by a 12-11, party-line vote. It will be considered by the Senate next week. The House will also begin work on its version of the budget resolution next week.

For more information about the Senate budget resolution, please visit:
http://budget.senate.gov/democratic/

AG DISASTER ASSISTANCE INCLUDED IN SUPPLEMENTAL. The House Appropriations Committee approved Iraq war supplemental appropriations language Thursday that includes $3.7 billion in general agricultural disaster assistance covering 2005, 2006 or 2007 disasters.

NAWG was one of the first agricultural organizations to begin pushing for this type of assistance for producers who have faced floods, fires, freezes and droughts over the past two growing seasons. More than 80 percent of U.S. counties were designated as disaster areas in 2005 and 60 percent were declared in 2006.

House floor consideration of the supplemental spending bill is expected during the week of March 19. It is expected to pass the House, though on a party-line vote. The supplemental faces a more uncertain future in the Senate and in gaining White House approval due to political controversy surrounding funding for the war in Iraq.

The supplemental primarily includes about $95 billion for funding for the wars in Iraq and Afghanistan. It also includes a number of homeland security and Gulf coast rehabilitation projects. The legislation, because it is outside the normal budget process, will not be subject offsets.

THAEMERT TO TESTIFY AT HOUSE FARM BILL HEARING. NAWG President John Thaemert has been invited to testify about the needs of wheat growers in the 2007 Farm Bill before a House committee later this month.

The hearing, before the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management, will be held March 28 in Washington, D.C.

Thaemert will outline what worked and what didn’t for wheat growers in the 2002 Farm Bill. He will also outline NAWG’s recommendations for the bill’s 2007 rewrite. NAWG is recommending an increased direct payment of $1.19 and an increased target price of $5.29.

After the hearing, Thaemert’s testimony will be available online at www.wheatworld.org.

WHEAT INDUSTRY SUPPORTS COLOMBIA/PERU FTAS. NAWG and U.S. Wheat Associates released a statement this week supporting the Colombia and Peru Free Trade Agreements, currently waiting to be sent to the Hill for action.

“Free trade agreements are very important for our industry and we look forward to working with Congress to finalize the Colombia and Peru agreements,” said Daren Coppock, NAWG CEO, in the release. “Colombia and Peru are crucial destinations for U.S. wheat exports and valuable trading partners.”

The U.S. wheat industry has strongly supported both FTAs. U.S. growers have been losing wheat market share in Colombia and Peru to Argentina and Canada for several years, with declining sales of 50 percent in just the last year. USW believes the FTAs will help to level the competitive playing field by ensuring U.S. wheat immediate duty free access to these markets upon implementation. Once the agreements are fully ratified, USW expects these two markets to purchase about $400 million of U.S. wheat annually, up from the current pace of about $200 million per year.

A team of four wheat producers from Idaho, Minnesota, Nebraska and Washington state representing the U.S. Wheat Associates (USW) Board of Directors is currently on a two-week tour of Latin America to meet with important buyers, millers and traders. The team’s first stop in Colombia reinforced the importance of the U.S./Colombia Free Trade Agreement (FTA), which is also awaiting action in Colombia.

AG GROUPS OUTLINE FOOD AID PRIORITIES IN LETTERS TO CONGRESS. NAWG and a group of other agricultural organizations sent letters to the Hill this week outlining priorities for food aid during the 2007 Farm Bill discussions. The letters read, in part:

“As you proceed with your Farm Bill discussions, we bring to your attention the U.S. P.L. 480 Title I, P.L. 480 Title II, McGovern-Dole Food for Education, Food for Progress, and the Bill Emerson Humanitarian Trust food aid programs.