NGFA Newsletter

Volume 51, Number 2, January 28, 1999

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Contents

	Senate Ag Committee to Conduct `Comprehensive Hearings' on U.S. Ag Lugar Introduces Ag Trade Bill; Daschle Offers `Safety Net' Bill Born to Leave CFTC NGFA Task Force Develops Draft Recommendations on USDA Loan Repayment Procedures   New Congress Prepares to Address Rail Issues   Industry Coalition Develops Phosphine `Principles' to Propose to EPA David Lindsay Joins NGFA Staff as Director of Legislative Affairs

On Capitol Hill by Randall c. Gordon Vice President, Communications/Government Relations

Senate Ag Committee to Conduct `Comprehensive Hearings' on U.S. Ag

The Senate Agriculture Committee plans to conduct "comprehensive hearings" this year on all aspects of U.S. agriculture, focusing on trade and ways to improve crop insurance, risk management and "income security for farmers."

"The first legislation I introduced this year was an agriculture trade bill that would increase market access for U.S. agricultural commodities, livestock and value-added products," said Senate Agriculture Committee Chairman Richard G. Lugar, R-Ind., during a Jan. 26 hearing focusing on economic concentration in agriculture and agribusiness.

Lugar said the committee also will explore the impact of a "deflationary commodity price cycle" on agriculture, as well as research, education and "other productive steps" that can be taken to improve agriculture viability and rural America. "

Meanwhile, all eight Senate Agriculture Committee Democrats, in a Jan. 22 letter to Lugar, said they "hope(d)" there would be hearings "dealing with a range of farm economic issues and that we will be able to work together to craft effective legislative responses to these pressing problems" that they said had "created the worst economic downturn in the farm sector in well over a decade." The Democratic senators urged the committee to obtain testimony about: 1) crop and livestock market conditions; 2) the outlook for commodity markets and prices for the next few years; 3) the prospects for resolving trade issues; 4) the financial conditions of agricultural producers; and 5) proposals for responding to the "economic hardships" in the agriculture sector.

"Hearings on numerous issues relating to crop insurance, risk management and disaster assistance are especially important," they wrote. They also said the committee should devote "at least one hearing" to the impact of the "severe problems in the farm economy" on the rural and national economy. And they recommended that issues concerning mandatory reporting of livestock and meat prices, as well as the country-of-origin of meat products, also receive the committee's attention. Signing the letter were: Sens. Max Baucus, D-Mont., Kent Conrad, D-N.D., Tom Daschle, D-S.D., Tim Johnson, D-S.D., Tom Harkin, D-Iowa, Robert Kerrey, D-Neb., Patrick Leahy, D-Vt., and Blanche Lincoln, D-Ark.

Pork Producers Call for Investigation of Contracts, Mandatory Price Reporting: In its testimony at the Senate Agriculture Committee hearing, the National Pork Producers Council (NPPC) called for mandatory price reporting and a study by the congressional General Accounting Office of the U.S. Department of Agriculture's authority to investigate contractual relationships in the pork industry.

"Pork producers believe the time has come to demand real transparency in the marketplace," testified NPPC President Donna Reifschneider. "We feel this is the only way for independent producers to regain and maintain their rightful position as a profit center of this industry."

The NPPC urged Congress to pass legislation that would require: 1) mandatory packer-to-producer price reporting; 2) a mandatory swine marketing contract reporting program; 3) mandatory monthly retail price reporting; 4) monthly, rather than quarterly, hogs and pigs inventory reporting; 5) uniform carcass measurement and value pricing; and 6) mandatory reporting of swine production building construction. The NPPC said that pork producers lost $2.5 billion in equity in 1998 and are expected to lose "at least another $1 billion in 1999" before prices recover to cost-of-production-or-better levels later this fall.

Packers Oppose Mandatory Price Reporting, Country-of-Origin Labeling: In response, the American Meat Institute (AMI), the association representing packers and processors of beef, pork, lamb, veal and turkey, strongly opposed mandatory price reporting or country-of-origin labeling of meat products. "…[N]o one has specified what is wrong with our current price reporting system, or what aspect of it needs to be `fixed,'" AMI said. "Country-of-origin labeling will deal a devastating blow to our international trade and trigger actions against the United States within the World Trade Organization," although it said it would support a study on the implications of such labeling.

Instead, AMI said the focus should be on expansion of trade opportunities, including enactment of fast-track trade negotiating authority, and the use of available risk-management tools, such as producer/packer alliances and production contracts. "Mandatory (price) reporting or additional import labeling requirements will not stop the direction this industry is going, and they will not slow down the speed with which we're moving," AMI said. "These initiatives cannot change the fundamentals of supply and demand or negate the price effects of livestock cycles. What they can -- and will -- do is add costs for everyone, and limit opportunities for many…likely hasten(ing) consolidation in the meat industry."

USDA Attributes Consolidation to Consumer Demand: Meanwhile, the U.S. Department of Agriculture attributed much of the trend toward contracting and vertical integration in U.S. agriculture to the benefit derived from meeting changes in consumer demand. "Contracting and vertical integration bring farm production closer to the consumer, helping to ensure production meets specific consumer needs without interruptions," testified USDA Chief Economist Keith Collins.

Collins noted that increased consolidation and coordination is accompanied by potential benefits (higher quality products available at lower consumer prices and more efficient use of production resources) and costs (related to environmental quality, economic viability of small farms and firms, and effects on rural communities dependent upon agriculture). Collins emphasized that consolidation "does not necessarily mean concentration" of agricultural production, marketing or processing. But "if consolidation results in concentration, potential costs include the exercise of market power in unduly discriminatory or predatory ways," he said.

Collins noted that control of grain storage capacity has implications for: 1) export facilities; 2) control of delivery points for Chicago, Kansas City and Minneapolis futures market contracts; 3) country elevators; and 4) control of overseas grain handling facilities. He said that control of commercial storage space is relatively unconcentrated, with the four largest firms accounting for 27 percent of total federally licensed storage capacity. But he said an analysis of delivery points for the Chicago Board of Trade's wheat, corn and soybean futures market contracts shows that the top four companies account for more than 85 percent of delivery space, although he noted the relatively low cost of entry for competitors for delivery of grain to barges on the Illinois River System.

Collins devoted only one paragraph of his 10 pages of written testimony to the announced acquisition of Continental Grain Co.'s grain merchandising business by Cargill Inc. "USDA is concerned that the acquisition might reduce competition in local and regional markets where Cargill and Continental currently compete…," he said. "To the extent producers have no other buyers available within their feasible delivery range, the reduction in competition would lead to a single buyer, potentially causing harm to producers."

Cargill Testifies Continental Acquisition Complements -- Not Overlaps -- Existing System: In its testimony, Cargill Inc. said grain-based agriculture is being transformed from a commodities to a product- and service-oriented business by three major factors: 1) a domestic-oriented, rather than export-led, marketplace; 2) smaller buyers; and 3) relationship-based (versus transaction-based) farmer-customers. Its acquisition of Continental Grain Co.'s grain marketing assets "makes sense for U.S. farmers because it: 1) responds to the forces of change reshaping grain handling in ways that will extend farmers' reach to new markets; 2) enables the combined business to serve more effectively the customer-focused product and service marketplace emerging domestically and globally; and 3) extends to more farmers the agronomic, risk-management and marketing services" offered by the company, said Frank Sims, president of North American Grain for Cargill Inc., Minneapolis, Minn.

Sims said the combination of Cargill's 243 and Continental's 83 U.S. grain facilities would total 6 percent of total commercial warehouse space, and would handle about 10 to 13 percent of U.S. grain that is marketed. The acquisition also will not negatively affect export competition, he said, because of the competitive bidding for U.S. grains in domestic and export markets, as well as the "substantial" excess export handling capacity that currently exists.

Sims also responded to questions on the impact of the acquisition on the futures delivery system by saying that as many as 10 elevator companies will have facilities that could be designated regular for delivery for CBOT corn and soybean futures under its new Illinois River-based delivery system. "This new system also uses a shipping certificate system that allows access not just to warehouse space at those facilities, but also to throughput capacity," he said. "This adds significantly to potential deliverable supplies and market liquidity at very low cost, and makes new entrants to the delivery market more feasible." However, Sims said Cargill still believes the CBOT's new delivery system is export-oriented, and is again recommending that the exchange consider adding one or two additional delivery points that reflect domestic market flows. "Maintaining Toledo as a delivery point or adding Minneapolis and another Eastern market location are possibilities we think would improve the new system," he said.

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Lugar Introduces Ag Trade Bill; Daschle Offers `Safety Net' Bill

On the first day that senators could introduce bills in the new 106^th Congress, Senate Agriculture Committee Chairman Richard G. Lugar, R-Ind., introduced a bill that would remove sanctions on U.S. agricultural and food exports.

"Trade will be at the top of the Agriculture Committee agenda this year," Lugar said. "Right now, sanctions are costing us markets and have a more profound effect on our own country than the targeted country."

Lugar's bill would require that agricultural products be exempted from unilateral economic sanctions. The president would retain emergency authority to override the exemption, but would have to justify the decision to Congress. The bill also would establish a congressional oversight group on agriculture trade issues to consult and advise the U.S. trade representative for future World Trade Organization and other multilateral and bilateral trade negotiations. It also would require the Office of the U.S. Trade Representative to identify countries that engage in unfair trade practices against U.S. agricultural commodities, livestock and value-added products.

The bill also would authorize USDA to reallocate unobligated Export Enhancement Program funds to the P.L. 480 food assistance program, the Food for Progress program or one of the Section 416 commodity donation programs.

Daschle Introduces `Safety Net' Farm Bill: Meanwhile, Senate Minority Leader Thomas Daschle, D-S.D., introduced legislation that, among other things, would urge reform of crop insurance, require meat packers to report prices and require country-of-origin labeling of beef, pork and lamb. Daschle's bill, which he dubbed the "Agricultural Safety Net and Market Competitiveness Act," also would limit the use of USDA's "quality grade stamp" to domestically produced meat, would require meat packers to file with USDA and make public the contracts they offer to producers, and mandate establishment of a federal task force to investigate alleged anti-competitive practices by "meat packing companies and other sectors of the agriculture industry."

The bill also would require the U.S. trade representative to consult with the Senate Agriculture Committee before signing any trade agreement with agriculture-related provisions.

Daschle also has reintroduced legislation -- rejected in the previous Congress -- that would remove the current ceiling on marketing assistance loan rates and authorize USDA to extend the terms of such loans from nine to 15 months.

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Born to Leave CFTC

Brooksley E. Born, chairman of the Commodity Futures Trading Commission, let it be known Jan. 19 that she will not seek reappointment and will leave the commission when her current term expires in April.

Born, who was sworn in as the seventh chairman of the CFTC in August 1996, said she had decided to return to private law practice. Prior to joining the CFTC, Born was a partner at the Washington, D.C., law firm of Arnold & Porter, where she had practiced since 1965. During the past year, she had publicly disagreed with Treasury Secretary Robert E. Rubin and Alan Greenspan, chairman of the Board of Governors of the Federal Reserve System, over the regulatory treatment of over-the-counter derivatives. She also had supported restrictive rules on agricultural trade options as part of a pilot project designed to test the feasibility of such options as an additional risk-management tool for producers.

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Country/Terminal Corner by Randall c. Gordon Vice President, Communications/Government Relations

NGFA Task Force Develops Draft Recommendations on USDA Loan Repayment Procedures

A task force from the NGFA's Country Elevator Committee has developed draft recommendations to revise the U.S. Department of Agriculture's current system for determining marketing assistance loan repayment rates under the 1996 farm law.

The draft recommendations currently are being reviewed by the full Country Elevator Committee, and are scheduled to be submitted on Feb. 5 to USDA. NGFA members wishing to provide input on this important issue prior to that date are encouraged to contact Randy Gordon at the NGFA's office at (202) 289-0873, or by e-mail at rgordon@ngfa.org. Copies of the 21-page draft document are available to members only under the "What's New" section on the NGFA's web site at http://www.ngfa.org. Copies also are available by contacting the NGFA at (202) 289-0873.

NGFA Task Force Recommendations: After evaluating nine different options identified by the industry or believed to be under consideration at USDA, the NGFA Country Elevator Committee task force recommended that USDA retain and improve upon its current posted county price and differential-based method for determining marketing loan repayment rates.

In arriving at its recommendation, the task force developed the following criteria: 1) Marketing loan repayment procedures should be market-based, and reflect, to the maximum degree possible, local cash market values; 2) The procedures should be neutral in influencing producers' marketing or storage decisions; 3) The procedures should not distort normal grain flows; and 4) The procedures should be responsive to fluctuations in market values.

The task force recommended the following specific changes to improve USDA's current procedures:

Revise Differentials to More Accurately Reflect Current Market Conditions: The NGFA task force recommended that USDA update its current differentials to reflect current market prices. USDA uses "differentials" that are based on the yearly average differences between local cash prices and assigned terminal prices to determine the posted county price. Further, the task force recommended that county Farm Service Agency offices be consistent in the questions they pose to local cash grain markets that are relied upon when setting differentials.

Reevaluate Terminal Markets: In setting the posted county price, the NGFA task force recommended that USDA thoroughly reexamine the 19 major export and domestic grain terminal markets that it applies to each county and commercial warehouse having a Uniform Grain and Rice Storage Agreement to determine if they relate to the respective local cash markets to which they are being applied.

Adjust Loan Repayment Rate Daily: To most accurately reflect local market values, the task force recommended that the loan repayment rate should continue to be determined and announced on a daily basis, rather than shifting to a weekly or monthly rate. This also would avoid surges in the volume of loan repayments (as occurred over the Columbus Day weekend in 1998) that taxed the loan repayment processing capabilities of warehouse operators and county FSA offices.

Base Loan Deficiency Payment Rate on County Where Produced: The task force recommended that the loan deficiency payment rate (LDP) applicable to each producer be based on the county where the grain is produced (where the farm records are maintained), not where the commodity is delivered or stored. This policy change would provide an additional safeguard that would reduce the chance that the loan repayment rate would distort producer marketing decisions or alter grain flows. In effect, this change would protect against USDA inadvertently encouraging producers to market or deliver grain in response to aberrations in loan repayment rates.

The task force said it recognized that USDA may need to continue to base marketing loan gain payments (applicable to producers who obtain a marketing assistance loan) on the county where the grain is delivered, since it may be to CCC's benefit to have stocks in a more advantageous delivery location if the producer forfeits the commodity.

Apply a Reasonable Factor to Reduce Intra- or Interstate Differences in PCPs: As another safeguard against aberrations in PCPs, the task force suggested that USDA apply a reasonable percentage or monetary factor that would limit the differences in loan repayment rates between bordering counties within a state, as well as between bordering states.

Eliminate State Borders in Setting PCPs: The task force recommended that USDA also eliminate state borders when determining PCPs.

Change Policy on Beneficial Interest and Allow 30-Day Grace Period in Selecting Loan Deficiency Payment (LDP) Rate: The task force strongly recommended that USDA revise its current policy and rules governing whether a producer has retained "beneficial interest" (e.g., title) to the commodity. Currently, USDA requires that "beneficial interest" be retained by the producer continuously until the date the LDP is requested or the marketing loan gain is received. The task force said it believed USDA's beneficial interest policy should be irrelevant to the producer's eligibility to obtain a marketing loan gain or loan deficiency payment (LDP). USDA's current policy has undermined producers' ability to access certain legal, revenue-enhancing risk-management tools available in the cash grain marketplace until after they obtain a marketing loan gain, loan deficiency payment or relinquish their rights to the loan program altogether. FSA's beneficial interest policy also precludes producers from having a grace period to determine their loan repayment rate. The task force believed that FSA's current policy on beneficial interest is contrary to USDA's overarching policy goal of improving the producer safety net by encouraging increased use of risk-management tools, and is contrary to the best interests of farmer-customers.

The task force believed that the producer's eligibility to obtain a marketing loan gain or loan deficiency payment should be based not on whether the producer still retains "beneficial interest," but rather on whether the producer has: 1) signed a production flexibility contract and is eligible for price support as required under the 1996 farm law; and 2) provided acceptable production evidence for the commodity and for the crop year for which a marketing loan gain or LDP is requested -- irrespective of whether the producer retains "beneficial interest" in the commodity at the precise time a marketing loan gain or LDP is obtained.

Allowing producers to enter into certain forms of cash grain contracts (such as delayed price, price later, deferred payment and other hybrid cash contracts) earlier in the crop year could improve their revenues and strengthen the producer safety net during the time that grain is under loan or until an LDP is requested, the task force reasoned.

Further, the NGFA believes that USDA should adopt a separate policy that provides producers with a 30-day grace period to select their LDP rate after presenting acceptable delivery or sales evidence to the county FSA office.

Revise County Loan Rates: The task force commended USDA for undertaking a serious reevaluation of county loan rates for grains and soybeans, and recommended that such adjustments be made for the 1999 crop year. Current county loan rates for these commodities are believed to be based upon stale, 1995-crop cash grain market prices, which result in local loan rates that do not reflect current market conditions. Further, these stale data result in situations in which loan repayment rates may be artificially high or low compared to adjacent counties or states.

Consistent Implementation: Once procedural changes are made, the task force recommended that USDA implement them consistently between states and counties, and not alter the procedures during the course of the 1999 crop year.

Other Alternatives Evaluated: The task force thoroughly evaluated eight other options. Two believed to be under active consideration within USDA, and the reasons the task force chose not to recommended them, are:

Uniform National PCP: Under this concept, USDA would set a uniform national posted county price (PCP) based upon a weighted average of PCPs from the top eight producing states for each commodity. The applicable loan repayment rate [in the form of either a marketing loan gain or LDP] would be determined by subtracting the national PCP from the county loan rate. Among the reasons this concept was rejected was that it could result in significant loan forfeitures in areas where the national repayment rate was artificially high, or require USDA to lower loan rates in those areas to avoid forfeitures. It also would not reflect local cash values, which could artificially inflate land values.

Uniform National Loan Repayment Rate: Under this proposal, USDA would set a uniform national LDP rate based upon a weighted average of PCPs from the top eight producing states. The national LDP rate then would be based on the highest possible LDP rate in the counties of the top-producing states selected for each commodity. This concept was rejected because it could be prohibitively costly since payments would be set at artificially high levels, which could tempt Congress to consider reimposing measures, such as acreage-idling, to reduce budget exposure. This proposal also could result in loan forfeitures in fringe areas, the task force reasoned.

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Rails, Rivers and Roads by David C. Barrett Jr., Counsel for Public Affairs

New Congress Prepares to Address Rail Issues

While President Clinton's impeachment trial has dominated its early agenda, the stage is being set for the new 106^th Congress to address rail transportation issues.

Here's how:

STB Reauthorization Bill Introduced; Rail Hearings Planned: Senate Commerce, Science and Transportation Committee Chairman John McCain, R-Ariz., on Jan. 19 introduced legislation (S. 98) that would reauthorize the Surface Transportation Board. Co-sponsors of the bill were Senate Majority Leader Trent Lott, R-Miss., and Sen. Ernest Hollings, D-S.C., the ranking minority member of the committee.

McCain's bill would provide a four-year reauthorization of the STB. In addition, it would change the law to require Senate confirmation of the STB chairman. While current law requires Senate confirmation of each of the STB's three members, it permits the president to change the chairmanship at will. McCain's bill also would recommend that the Appropriations Committee authorize expenditures to finance the STB amounting to $16 million for fiscal 1999, $17 million for fiscal 2000, $17.555 million for fiscal 2001 and $18.129 for fiscal 2002.

It is expected that additional rail legislation will be introduced within the next several weeks. In a Jan. 20 letter to McCain, Sen. Kay Bailey Hutchinson, R-Texas, chairman of the Senate Commerce Committee's Subcommittee on Surface Transportation and Merchant Marine, said she intended to "introduce legislation that reauthorizes the (STB) and also gives it much-needed congressional guidance regarding merger, service and emergency matters." Hutchison wrote that she hoped to conduct the first hearing on these issues before the end of February. She also said she would prefer to have these issues addressed as part of the STB reauthorization bill, rather than as a separate piece of legislation.

She was referring to McCain's statement, made when introducing his bill, that he preferred not to "hold the STB's reauthorization hostage and believe(d) we should consider dual-track measures -- this reauthorization on the one hand and proposals for statutory changes on another." Said McCain: "…[R]ail service and rail shipper issues warrant serious consideration. These matters…will continue as important oversight issues under the committee's jurisdiction. I strongly believe, however, specific rail service and rail shipper problems and cases are best resolved by the (STB). That is why Congress must provide the (STB) with the resources and legal authority necessary for it to continue to carry out its statutory duties fully and fairly, and on a timely basis." McCain's bill and his introductory statement are posted on the NGFA's web site at http://www.ngfa.org.

In addition, the four principal co-sponsors -- Sens. Byron Dorgan, D-N.D., John D. Rockefeller IV, D-W.Va., Conrad Burns, R-Mont., and Pat Roberts, R-Kan., -- of legislation in the last Congress that would address certain rail competition and rate issues, are expected to introduce a "shipper-protection" bill this session.

Clinton Officially Nominates Two STB Members: President Clinton on Jan. 6 officially nominated William Clyburn Jr., a Democrat from South Carolina, and Wayne O. Burkes, a Republican from Mississippi to seats on the three-member STB. While both nominees are required to receive Senate confirmation, Clyburn began service at the agency on Dec. 28 through a recess appointment made by Clinton. [See NGFA Newsletter, Jan. 13.] If confirmed by the Senate, Clyburn's term would expire on Dec. 31, 2000, and Burkes' term would expire on Dec. 31, 2002.

While STB Chairman Linda Morgan's term expired on Dec. 31, she has not been renominated yet by Clinton. She can continue to serve as a member of the STB until a successor is nominated and confirmed, or until Dec. 31, 1999. The NGFA has sent a letter to Clinton urging Morgan's renomination and her retention as STB chairman.

New House Subcommittee Will Address Rail Issues: House Transportation and Infrastructure Committee Chairman Bud Shuster, R-Pa., has merged the Surface Transportation Subcommittee (i.e., highways and trucking) and the Railroads Subcommittee into a new Subcommittee on Ground Transportation.

The new subcommittee is chaired by Rep. Thomas E. Petri, R-Wis. Other key Republican members include: Reps. Howard Coble of North Carolina, John Thune of South Dakota, Jerry Moran of Kansas and Ray LaHood of Illinois. Committee member Marion Berry, D-Ark., a second-term member who previously served on the House Agriculture Committee, also is expected to take a keen interest in agricultural transportation issues.

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Industry Coalition Develops Phosphine `Principles' to Propose to EPA

A broad industry coalition, whose members include the NGFA, has developed a series of core principles that it believes the Environmental Protection Agency should use to guide its decisions on risk-mitigation (safety) measures to require when reregistering aluminum and magnesium phosphide, the two compounds used to produce the fumigant phosphine gas.

The industry coalition was formed to develop a unified strategy to address EPA's Dec. 23 proposal that would impose stringent new controls that would effectively preclude the use of phosphine under many, if not most, circumstances, including in storage and during transit. In addition to the NGFA, coalition members include producer groups, exporters, millers, processors, applicators, food companies, registrants of the two chemicals and other groups. Coalition members have asserted that aluminum and magnesium phosphide can, and are, being used safely when current label directions are followed.

The coalition stated that risk-mitigation measures for aluminum and magnesium phosphide should be evaluated based upon whether they are: 1) based upon sound science and reliable information; 2) clearly demonstrated to be necessary to protect human health; 3) economically and operationally reasonable; and 4) permit the continued routine use of these products in accordance with the label.

Core Principles. The core principles developed by the coalition group include the following:

"The risk-mitigation measures should adequately protect the safety and health of applicators, nearby workers and the public. The existing safety record of aluminum and magnesium phosphide has been excellent, with the current label requirement serving to provide needed safety to all. The current label requirements were developed by EPA in the late 1980s and have provided industry with the means to safely produce high quality produce at reasonable costs. We share the goal of making that record even better by improving methods to ensure that the label requirements are known and followed, and that applicators are adequately trained.

"The risk-mitigation measures must be based upon clear and convincing evidence of risk. In this regard, safety measures must be based upon sound science and an accurate analysis of risk rather than anecdotal information concerning risk incidents, in particular anecdotal evidence in which the cause-and-effect relationship is not well established. The (measures) should avoid raising undue public alarm over unsubstantiated or negligible health risks and limit the use of information related to misuse or illegal use of these important fumigants. Misuse should be addressed through label warnings, safety recommendations and directions for use.

"The risk-mitigation measures must be based upon a clear understanding of how these chemicals are used by various industry segments and with appropriate registrant input.

"The risk-mitigation measures must ensure the continued ability of U.S. agriculture to provide and protect the high quality of U.S. agricultural products from insect infestation. The(y) must recognize that there is no economically viable and effective alternative to aluminum and magnesium phosphide. Methyl bromide, the only other remaining fumigant, is scheduled to be phased out within a few years under provisions of the Clean Air Act and already is not commonly used on agricultural products. In addition, protectants, such as malathion and ethyl chlorpyrifos, are under (Food Quality Protection Act) review. If use of these protectants is restricted or canceled, the importance of phosphine will intensify. Thus, we will aggressively oppose establishing rules that would effectively preclude the use of these phosphine-based chemicals.

"The risk-mitigation measures must recognize the necessity of U.S. agriculture having access to cost-effective fumigants to produce, handle, store, transport and maintain agricultural products that are safe and wholesome and to do it in a sanitary manner. The availability of cost-effective fumigants is a necessity to achieve this since other pesticides do not permit quick, efficient or effective targeting of damaging pests to our agricultural products. The (measures) also must preserve the ability of the United States to meet contractual obligations established by foreign customers."

EPA Urged to Conduct Phosphine `Stakeholder' Meeting in Indianapolis. In a related matter, the NGFA and several State and Regional Grain and Feed Associations have recommended that EPA conduct an additional "stakeholder" meeting in Indianapolis, Ind., on its proposed new safety requirements for aluminum and magnesium phosphide.

In a Jan. 25 letter, the groups told EPA there was a compelling need to schedule another meeting on the agency's proposal given its gravity. EPA already has announced plans to conduct such meetings in Kansas City, Mo., and Sacramento, Calif., in May or June. The NGFA and affiliated associations also urged EPA to provide at least 30 days for stakeholders to review any changes to the agency's risk-mitigation measures prior to the start of the meetings.

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David Lindsay Joins NGFA Staff as Director of Legislative Affairs

NGFA President Kendell W. Keith announced today that David C. Lindsay will be joining the association's staff as director of legislative services.

Lindsay currently serves as legislative assistant to Rep. Charles T. Canady, R-Fla. In that capacity, he oversees all agricultural policy issues for the congressman. He also has focused extensively on such legislation as the Food Quality Protection Act, crop insurance, implementation of the 1996 farm law and specialty crops. He also serves as Rep. Canady's liaison with the Office of the U.S. Trade Representative, industry and congressional staff on international trade issues, including legislation to renew fast-track trade negotiating authority, negotiation of a Free Trade Area of the Americas, and implementation of the Uruguay Round of the General Agreements on Tariffs and Trade. He also works on energy and environmental policy issues.

Lindsay has more than five years of experience on Capitol Hill, having also worked on the staffs of former Reps E. Clay Shaw Jr., and Tillie K. Fowler.

With the NGFA, Lindsay will be responsible for working on legislative issues, and will serve as the staff liaison to the NGFA's International Trade/Agricultural Policy Committee. "We are extremely fortunate to find someone of David's intellect, knowledge and breadth of experience on a wide range of legislative issues important to our members," said Keith. "He is a highly motivated, achievement-oriented professional who will make an excellent addition to our staff ."

Lindsay, who will start his duties at the NGFA on approximately Feb. 10, succeeds Scott R. Hedderich, who departed late last year to become industry relations manager for Pioneer Hi-Bred International Inc. in Des Moines, Iowa.

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NGFA Annual Meeting Materials to Be Mailed in Mid-February

Materials announcing the annual meeting of the NGFA will be mailed by mid-February, at least 30 days prior to the March 23^rd annual meeting date as required under the NGFA Bylaws. This year's annual meeting will include several important proposed amendments to, and ratifications of, the NGFA Trade Rules, Arbitration Rules and Rail Arbitration Rules, as well as the election of officers and directors. Make plans now to attend the 103^rd annual convention, scheduled for March 20-23 at the Sheraton Palace Hotel in San Francisco! Complete program and registration information is available by contacting the NGFA at (202) 289-0873, or by accessing the NGFA's web site at http://www.ngfa.org.

Important Reminder: Remember that Feb. 20 is the deadline for making your convention hotel reservation at the NGFA-member rate. After that date, the hotel will accept reservations only based upon availability at the prevailing daily rate, which may be significantly higher.

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