NGFA Newsletter

Volume 51, Number 8, May 6, 1999

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Contents

	Glickman Favors National LDP Rate Plan NGFA Develops Options for Addressing GMO Issues in Contracts Senate Ag Committee Conducts Hearing on Ag Trade Options Emergency Spending Bill Pending Monsanto, AgrEvo Respond to NGFA Questions on GMOs FDA Issues Toxicity Report on Fumonisin Court Delays Deadline for Filing Risk Management Plans for Propane House Bill Would Permit States to Raise Truck Weight Limits Jones Act Reform Bill to be Introduced

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

Glickman Favors National LDP Rate Plan

…But Proposed Change Being Held Up by White House Office of Management and Budget…

The NGFA has learned that Secretary of Agriculture Dan Glickman has decided to implement a national loan deficiency payment (LDP) rate plan.

But a scheduled announcement of the plan this week -- and a congressional hearing on the matter slated for today at which the NGFA was to testify -- were both delayed because the proposed change still is being scrutinized by the White House Office of Management and Budget. OMB reportedly has raised concerns about whether the national LDP rate plan, as currently envisioned by USDA, is too far removed from local cash market values and therefore could pressure local cash grain prices in certain areas or result in additional forfeitures to the Commodity Credit Corporation in other regions. OMB also reportedly has requested additional economic analysis of the proposed change before it grants its approval.

USDA's Plan: It is important to stress that the details of the USDA-envisioned national LDP rate still may change as a result of further analysis by USDA and OMB. But the following is the NGFA's understanding of the basic elements of the plan approved by Glickman:

• Step 1: USDA would determine daily prices for each commodity at each of the terminal markets from which posted county prices currently are derived.

• Step 2: The daily price at each of these terminal markets then would be adjusted by subtracting: 1) the differential that applies to each respective terminal; and 2) any temporary adjustments (such as transportation-related variations) that exist in the area where the terminal is located. The resulting figure would represent the posted county price for each terminal.

• Step 3: The terminal PCPs then would be subtracted from the county loan rate in the areas where the terminals are located to arrive at an LDP rate for each terminal.

• Step 4: The LDP rates for each of the terminals then would be averaged, after deleting the high and low figures (olympic average) to arrive at the national LDP rate for that given day.

The new LDP rate concept would apply to the 1999 crops only, not to remaining 1998 crops. A single national LDP rate would be determined for each 1999-crop commodity, and would apply for that commodity in every state and county for that given day. Every producer electing to receive an LDP would receive the national LDP rate in effect on that day. Unlike the current system, there would be no comparison to the local county loan rate to determine the LDP rate. In addition, every producer choosing to repay a loan would have the loan repayment rate adjusted by the LDP rate applicable on the date the loan is repaid.

Again, the specific methods used to calculate a national LDP rate may change before a final decision is made and announced. For instance, one concept still believed to be under consideration is calculating such a rate based upon a weighted average -- rather than a simple olympic average -- of terminal markets.

Other Aspects: The delay in announcing an LDP rate decision for 1999 crops also had the effect of delaying the release of other administrative changes to the LDP program that already have received final approval within USDA's Farm Service Agency. Believed to be among those changes is a streamlined LDP payment process that will allow producers to self-certify their LDP quantities, rather than requiring that they submit settlement sheets or load summaries to the FSA county office. The self-certification form reportedly will include a provision reminding the producer that false statements represent perjury and will be subject to prosecution by federal district attorneys. USDA also plans to spot check a percentage of producer certifications to verify their accuracy. Another change will involve the issuance of a single LDP form -- a modified version of the CCC-666-LDP that will incorporate some of the features of the field-direct form (CCC-777) used in 1998.

NGFA Releases Testimony on National LDP Rate Approach: In response to a request from USDA, the House Agriculture Committee's Subcommittee on General Farm Commodities, Resource Conservation and Credit agreed -- for the fourth time -- to delay a scheduled hearing on USDA's LDP policy.

But in a May 6 letter to Subcommittee Chairman Bill Barrett, R-Neb., NGFA President Kendell Keith released a copy of the NGFA's prepared testimony containing the recommendations made by the association to USDA in February on ways to improve its existing LDP program, as well as several observations on the potential impact of a national LDP rate approach. Copies of the NGFA's testimony also were shared with USDA and OMB.

The NGFA's testimony acknowledged that a national LDP rate approach has some appeal because of its simplicity and the uniformity with which it could be applied. And the NGFA acknowledged it would solve one of the major problems that emerged in 1998 -- producers altering their normal grain marketing and delivery patterns in response to aberrant LDP rates between certain states and counties.

But the NGFA cautioned that a national LDP rate based upon disparate terminal markets has inherent downside risks, and likely will have certain unintended effects in certain regions and markets. Specifically, the NGFA said the system envisioned by USDA:

• would result in LDP rates that are not as reflective of local cash market values as the current PCP/differential-based approach. A national LDP rate that is too low compared to local market values could encourage additional loan forfeitures. Conversely, an LDP rate that is too high could result in increased grain movements -- and depress local cash prices -- in response to on non-market factors.

• could actually result in lower LDP payments in states and regions (such as the Dakotas) where USDA analysis has shown county loan rates are too high relative to local cash values.

• could limit USDA's flexibility to adjust local PCPs to avert loan forfeitures. Under a national LDP rate approach, USDA could confront a situation in which it would be reluctant to make an LDP rate adjustment to rectify a local or regional forfeiture situation since such an adjustment could affect the entire nation. Or, to avoid forfeitures, it could set the national LDP rate at a level that is excessive.

The NGFA's testimony also urged Congress to consider amending the 1996 farm law to address the problems resulting from the application of USDA's so-called "beneficial interest" requirements on cash grain contracting. And the NGFA used the opportunity to strongly oppose proposals to reinstitute a farm storage facility loan program or other government-subsidized farm storage building program.

Obtaining the NGFA's Testimony: The NGFA's testimony is available by accessing the NGFA's web site at: http://www.ngfa.org. Click on the "What's New" icon. Type all letters in lower case.

NGFA Develops Options for Addressing GMO Issues in Contracts

In response to inquiries from numerous member companies, particularly country elevators, on how to contractually address situations resulting from the European Union's failure to approve certain varieties of genetically modified corn [See NGFA Newsletter, April 21, 1999], the NGFA has developed several options that member companies may wish to consider.

In presenting these alternatives, the NGFA is not making any formal recommendation on which, if any, version is preferable. Each company should make its own decision -- after consultation with its legal counsel -- based upon whether it believes it would be prudent to add contingent protection to their contracts to avoid future disputes over the marketability of crops produced from new genetically modified seed varieties not yet approved by the EU.

The following are some alternatives to consider:

The contractual language in this alternative is intended to provide the buyer with the ability to monitor the varieties being delivered and to expressly reserve the right to apply market discounts, if any, which may exist at delivery.

"Disclosure of Varieties and Applicable Discounts for Certain Varieties: The seller has an affirmative obligation to disclose to the buyer the variety of any commodity delivered under this contract. The seller acknowledges that the marketability of a commodity delivered under this contract could be impaired because of restrictions on the sale of commodities produced from certain varieties (e.g., crops produced from genetically modified seeds) from time to time in various domestic and world markets. In such a case, the seller delivering commodity under this contract is subject to the then-prevailing market discounts at the facility where the commodity is delivered."

The language in the following option is intended to bar the delivery of non-approved varieties of agricultural commodities on a firm's contracts. Note that this language is broad and could apply to corn and other commodities. It also is intended to cover actions by other countries beyond the EU.

"Seller's Variety Warranty: The Seller agrees and acknowledges that commodities grown from certain genetically modified seed shall not be deliverable under this contract. Specifically, Seller shall not deliver, and Buyer has the right to reject delivery of, a commodity containing transgenic gene/traits which have not been approved for sale in the European Union or another export market. Seller represents to Buyer that any commodity derived from genetically modified seed varieties and delivered under this contract has been grown and handled in accordance with any and all requirements and/or recommendations for that commodity. If the Seller is the grower of the commodity being delivered under this contract, Seller represents that the sale of the commodity is not in violation of any agreement or license the Seller has with any seed company or other party."

The language in the following alternative would apply only to contracts involving corn grown during the 1999 crop year, and would apply only to varieties not approved in the EU on the date of delivery. The specific GMO varieties have not been identified because of the difficulty of developing a comprehensive list. However, a firm may decide to list the specific varieties by adding an additional sentence.

"Certain Corn Varieties Not Deliverable: The parties agree that varieties of corn grown during the 1999 crop year from genetically modified seed (also referred to as transgenic gene/traits) that have not been approved by the European Union as of the date of delivery are not deliverable under this contract."

Again, each of these alternatives are not recommendations, but rather just three examples of ways to address the new market risks that may arise because of the EU's policy. Some firms may decide to address these issues for the 1999 crop year, while others may want to consider how they will address the issue in future crop years. Failure to address the issues up front could result in misunderstandings and unproductive disputes. In any event, a firm should consider both the business and legal ramifications of these and other alternatives. As always, consult competent legal counsel before making decisions on such matters. When doing so, be especially alert to the impact of any applicable state law on changes made to your firm's contracts.

In addition, any amendment to contracts already entered into between a buyer and seller to address GMO-related issues generally will require the express consent of both parties. This is the case under general contract law and also under NGFA Grain Trade Rule 41.

Resolving Disputes: NGFA-member firms reviewing or modifying their contracts to address GMO issues also may want to consider adding express provisions to ensure NGFA arbitration of any disputes that may arise. The following language is one way to reference NGFA arbitration in contracts:

"NGFA^® Arbitration of Disputes: The parties to this contract agree that the sole remedy for resolution of any and all disagreements or disputes arising under or related to this contract shall be through arbitration proceedings before the National Grain and Feed Association (NGFA) pursuant to the NGFA® Arbitration Rules. The decision and award determined through such arbitration shall be final and binding upon the Buyer and Seller. Judgment upon the arbitration award may be entered and enforced in any court having jurisdiction thereof. (Copies of the NGFA® Arbitration Rules are available from the National Grain and Feed Association, 1201 New York Ave., N.W., Suite 830, Washington, DC 20005; Website: http://www.ngfa.org)."

Firms also wishing to reference the NGFA Trade Rules in contracts with non-members may access sample contract language from the NGFA's website at: http://www.ngfa.org; or call the NGFA and a copy will be faxed or mailed.

These and other issues will be discussed at the NGFA Trading, Trade Rules and Dispute Resolution Seminar in Kansas City, Mo., on May 25 and 26. See the yellow flyer enclosed with this NGFA Newsletter for details on how to register.

On Capitol Hill

byDavid L. Lindsay
Director of Legilsative Affairs

Senate Ag Committee Conducts Hearing on Ag Trade Options

The Senate Agriculture Committee on May 6 focused on the Commodity Futures Trading Commission's agricultural trade options pilot program as part of its broad review of the agency's reauthorization. [See the enclosed Committee Action for a summary of the NGFA's written statement submitted for the record.]

Committee Chairman Sen. Richard Lugar, R-Ind., expressed disappointment with the CFTC's current pilot project, noting that no company or entity has registered to be an agricultural trade option merchant. He also implied that agricultural trade options, properly administered, would provide producers with more risk-management choices. A question from the committee's ranking Democrat, Sen. Tom Harkin, D-Iowa, on which organizations supported restructuring the CFTC's pilot project elicited a copy of an April 19 letter signed by a diverse array of producer groups -- including the American Soybean Association, the National Cattlemen's Beef Association, the National Corn Growers Association and the National Farmer's Union -- stating that they supported a review of the CFTC pilot project regulations and urged that "serious consideration be given….to stimulate participation in the program, while ensuring an adequate level of regulatory oversight…."

CFTC Commissioner David Spears announced the CFTC's staff was developing recommendations on ways to improve the pilot project to make it more viable. He said aspects of the program that may be changed include regulations requiring merchant registration, disclosure and physical delivery (the CFTC's current rules prohibit cash settlement), as well as the $10 million net worth requirement for each party to a transaction before they are exempt from the CFTC's regulation.

Two industry representatives -- Dan Dye, vice president, North American Grain for Cargill Inc., and Jerry Slocum, president, North Mississippi Grain Co., Coldwater, Miss., testified on the benefits agricultural trade options could provide as an additional risk-management tool. But the National Introducing Brokers Association urged the CFTC to regulate agricultural trade options as stringently as futures and options markets, alleging that country elevators do not have the sophistication, resources or time to properly market such options to producers. [See "Verbatim" box alongside.] The brokers' group also predicted that agricultural trade options could cause elevator failures and closings, thereby resulting in greater concentration of the grain industry.

The Senate Agriculture Committee plans to conduct additional hearings on CFTC reauthorization later this month. Meanwhile, the House Agriculture Committee's Risk Management, Research and Specialty Crops Subcommittee has scheduled a May 21 hearing on the agency's reauthorization.

Erickson Confirmation Hearing: The Senate Agriculture Committee also considered the nomination of Thomas J. Erickson to fill the vacancy on the CFTC. Erickson, former legislative assistant for Sen. Tom Daschle, D-S.D., has served since June 1997 as the CFTC's director of the Office of Legislative and Intergovernmental Affairs. The committee is expected to recommend Erickson's nomination to the Senate floor in the near future.

Emergency Spending Bill Pending

The House and Senate already were embroiled in controversy over differences in their respective versions of a supplemental appropriations bill for the remainder of fiscal 1999. But now, the war in Kosovo has added a new wrinkle.

The House emergency spending bill (H.R. 1141) costs $1.3 billion and contains funding for Central American hurricane relief, aid to Jordan and $152 million in farmer loan guarantees. The Senate version costs considerably more because it includes emergency loans for the steel industry and other "distressed" economic sectors. A conference committee was to have resolved differences between the two bills and send a single version to the two chambers for final approval long ago. But the congressional leadership has put the legislation on the back burner so that Congress can consider emergency military spending to finance the United States' participation in NATO's military action against Serbia.

Verbatim

"Many elevators are already trading futures and options illegally….Elevators very often charge commissions and fees more than double what the typical farmer/producer would pay to an Introducing Broker. Farmers/producers allow them to do this because the cost of these transactions is never specifically disclosed. The profits/losses and the fees are taken out of the farmer's grain check before the farmer ever sees his check. Through trade options, elevators are seeking legal approval for these transactions….

"Visualize the following potential scenario. A young man who barely made it through high school works at his local elevator, driving trucks and applying fertilizer and other inputs. The elevator gets busy, so he starts weighing trucks, and is soon selling trade option products to producers. Does he even know the difference between a forward contract and a basis contract? Will he properly explain how a trade option works so that the farmer/producer understands?…"

—Scott W. Stewart, National Introducing Brokers Association, McHenry, Ill., in written testimony on agricultural trade options before the Senate Committee on Agriculture, Nutrition and Forestry, May 5, 1999.

Newsletter

by Randall c. Gordon

Vice President, Communications/Government Relations

Monsanto, AgrEvo Respond to NGFA Questions on GMOs

The NGFA this week received the following responses from Monsanto International and AgrEvo USA Co. to its questions on genetically modified corn. Responses from Pioneer Hi-Bred International were received and printed in the April 21 edition of the NGFA Newsletter.

In addition, the NGFA has posted on its web site an updated list developed by the National Corn Growers Association of European Union-approved and EU-nonapproved GMO corn varieties . The NCGA list may be obtained by accessing the NGFA's web site at: http://www.ngfa.org. Click on the "What's New" icon. When prompted, the "user's name" is: ngfa. The "password" is: soybean. Type all letters in lower case.

1. NGFA: What information programs has your company implemented to advise producers concerning the marketing of GMO corn varieties not approved for import by the European Union? In what forms and through what mechanisms is this information being conveyed by your company to your producer-customers?

Monsanto: Upon purchase, growers signed a technology agreement, which includes a harvest advisory specifying that if all export approvals are not in place prior to harvest, grain from EU-unapproved products must be sold for use in domestic markets only. Print and broadcast advertising also includes the harvest advisory. Seed bag tags carry this message as well.

A letter in March and a telegram in April to Monsanto and DEKALB customers provided updates on the regulatory situation of these products and grower marketing options. Our key points were that to successfully channel, grain from EU-unapproved corn needs to be marketed domestically by feeding the grain on-farm or by directing the harvested grain away from export channels.

Monsanto is committed to locating outlets where growers can market this grain, and is continuing to contact elevators and feed mills to confirm their status as domestic-use outlets. Two hotlines -- 1-800-833-5252 for the DEKALB brand and 1-800-768-6387 for all other seed brands with Monsanto technology -- provide grower assistance identifying local domestic-use outlets for EU-unapproved grain.

AgrEvo USA: For the past three seasons, AgrEvo has been working with producers and seed companies (AgrEvo does not sell seed directly to growers) to keep them informed of the company's product registrations. Seed companies selling AgrEvo products have been made aware of the export status of each product. Certified letters were sent to affected growers in 1997 and 1998 informing them of the export status of various AgrEvo products. In addition, AgrEvo has asked growers to direct grain from non-EU approved events to domestic feed and non-food industrial uses. AgrEvo paid in-full or in-part for the seed company mailings.

In the fall of 1998, AgrEvo gained access to a domestic use database of feed elevators, large feed lots, and other outlets for growers to market non-EU-approved grain. Each grower that purchased an EU-unapproved product was sent a letter and the names/locations of possible sites to sell their grain domestically. Again, in early April 1999, AgrEvo mailed notices to growers reminding them which events are not approved for export to Europe and provided them with a list of potential domestic use elevators, feedlots, and other outlets. The availability of these sources must be confirmed by the grower at the time of harvest.

2. NGFA: Please provide the common brand names which EU-unapproved corn varieties are being marketed?

Monsanto: The following products are fully approved for use and consumption in the United States, but do not yet have EU approval:

Monsanto and DEKALB products include:

• Roundup Ready^® corn

• Roundup Ready + YieldGard^® stacked

• DEKALB Bt-Xtra™

• DEKALB GR™

AgrEvo USA: More than 90 percent of the LibertyLink and warranted seed corn available for planting in 1999 is approved for export to the European Union. Approved brands include LibertyLink (T25 event) marketed by Pioneer Hi-Bred and Cargill Inc. AgrEvo-warranted hybrids, which are NK Bt with YieldGard (Bt11 event), are all approved for export to the EU.

Currently, unapproved events include StarLink Bt hybrids, and some LibertyLink seed (T14 events) sold by some regional seed companies. Less than 1 percent of the total LibertyLink seed available in 1999 is not approved for export, and all LibertyLink seed for sale in 2000 will be approved for export to the EU. Also not approved for export are three Pioneer hybrids with YieldGard and LibertyLink marketed as stacked traits -- hybrid numbers 38B22, 34T14 and 33Y11.

3. NGFA: What kind of agreement does your company have with farmer-customers of your GMO corn varieties concerning marketing? What do these contractual requirements stipulate? How are these agreements being implemented? What specific actions and activities is your company taking to address the potential need to keep such GMO corn varieties in domestic-use channels?

Monsanto: U.S. growers of these products have agreed to act as good stewards. Upon purchase, growers of Monsanto/DEKALB products signed a technology agreement, which specified that corn products unapproved in the EU must be sold for use in domestic markets.

To address the need to keep this grain out of export channels, we are communicating with customers via direct mail, the media, advertising and two grower hotlines, 1-800-833-5252 and 1-800-768-6387, as indicated in our response to question 1.

AgrEvo USA: AgrEvo does not sell seed directly to growers, so our seed partners are required to execute the domestic-use program. AgrEvo provides its seed partners with grower agreements that must be read and signed by any grower who purchases a hybrid that isn't approved for export to Europe. The agreement calls attention to the fact that regulatory approval for the product is pending in the EU. It notes that the grower must be prepared to keep the harvested grain out of European grain export channels by feeding it on-farm or using it in domestic feed markets only.

AgrEvo has provided its seed partners' growers with a personalized reminder letter about the situation. The letter also includes a listing of potential feed outlets as possible markets for the grain.

Given that roughly 80 percent of the corn crop is never exported in any form, we work with growers to identify domestic outlets for their grain.

4. NGFA: The NGFA has received several questions from members about scientific tests that may be available to determine whether a particular GMO corn is an EU-approved or EU-unapproved variety. Please provide any information you have on: 1) The availability of tests and the varieties of your company's GMO commodities to which such tests apply; 2) How long it takes to conduct such tests; 3) The cost (per-test) of such tests; 4) The accuracy and precision of such tests and the repeatability of their results. What is the detection level for these tests? And 5) Any other information related to the commercial availability, applicability and practicality of such tests.

Monsanto: Currently, there are not convenient commercial tests to identify every biotech product on the market. In most cases, sophisticated laboratory testing is required to identify these traits specifically. However, the right thing to do is simply locate a domestic-use marketing option.

AgrEvo USA: Response is similar to that provided by Pioneer Hi-Bred International. [See NGFA Newsletter, April 21, 1999.]

Tech Talk by Thomas C. O'Connor Director of Technical Services

FDA Issues Toxicity Report on Fumonisin

The Food and Drug Administration's National Center for Toxicological Research on April 21 issued a draft report on a research project that found fumonisin can cause increased kidney tumors in male rats and increased liver tumors in female mice.

FDA researchers also found that the lowest doses of fumonisin, which exceed levels normally detected in U.S. corn, did not increase the cancer incidence in either species.

Fumonisins are a toxin produced mainly by the mold Fusarium moniliforme, which is a common natural contaminant of corn grown throughout the world. The levels of fumonisin accumulating in corn are affected by various factors, including adverse weather conditions (very hot and dry periods followed by moist or rainy periods) and insect damage to corn in the field.

Conference on Fumonisin Planned for June 28-30: FDA, the U.S. Department of Agriculture, the National Institute of Environmental Health Sciences and the International Life Sciences Institute have scheduled a June 28-30 conference on fumonisin at the Doubletree Hotel in Arlington, Va. Topics include: 1) the chemistry, toxicity and action mechanism of fumonisin; 2) critical data gaps and additional research needs; and 3) tools for fumonisin management and control. For more information, contact Heather Steele at the International Life Sciences Institute at (202) 659-0074, or electronically at hhsteele@ilsi.org.

FDA Considering Advisory Levels: Although FDA believes that fumonisin presents a negligible public health risk, it is considering establishing advisory levels later this fall for fumonisins in corn intended for use in human food and animal feed.

Court Delays Deadline for Filing Risk Management Plans for Propane

…EPA Expected to Raise Propane Threshold to 67,000 Pounds

A U.S. appellate court on April 27 granted a stay of the Environmental Protection Agency's Risk Management Plan rule as its applies to facilities having more than 10,000 pounds of propane in a process, pending further review by the court.

The U.S. Court of Appeals for the District of Columbia Circuit, which issued the ruling, is scheduling the case for oral arguments this fall.

EPA responded by issuing a statement that said facilities will not be required to file Risk Management Plans for their propane processes while the court stay is in effect. The agency noted that if a process at a facility includes propane, as well as other listed chemicals that exceed the threshold quantities that trigger the requirement for a risk management plan, the facility still must report that process and consider the impact of the propane on hazard analysis and accident prevention. EPA defines a "process" as one or more tanks that are interconnected together, in which a release from one could result in the release from neighboring tanks. The agency also said that the stay does not affect compliance with the so-called General Duty provisions of Section 112(r) of the Clean Air Act, which requires facilities "to identify hazards which may result from an accidental release of propane using appropriate hazard-assessment techniques, to design and maintain a safe facility taking such steps as are necessary to prevent releases and to minimize the consequences of accidental releases which do occur."

EPA to Propose Increase in Propane Threshold Level: In a related matter, EPA has told the NGFA that it intends to propose increasing the threshold quantity for flammable hydrocarbons, such as propane, that would trigger the requirement to have a Risk Management Plan. Specifically, EPA said it planned to propose increasing the threshold to apply to such substances stored in separate tanks that are no larger than 18,000 gallons, which is equivalent to 67,000 pounds of propane. Currently, the threshold quantity is 10,000 pounds. Importantly, fuel stored in multiple tanks that are interconnected or co-located and have an aggregate quantity of more than 67,000 pounds would not be eligible for the exemption, the agency said.

Congressional Activity: Sen. Jim Inhofe, R-Okla., on April 26 introduced legislation (S. 880) that would amend the Clean Air Act to remove flammable fuels (such as propane) from the list of substances subject to reporting and other activities required under the Risk Management Program. The bill is awaiting consideration by the Senate Environmental and Public Works Committee. Sens. Conrad Burns, R-Mont., and John Warner, R-Va., are cosponsors of the bill. In addition, Rep. Roy Blunt, R-Mo., on March 25 introduced legislation (H.R.1301) that would amend the Clean Air Act to prohibit the listing of liquefied petroleum gas (such as propane) in the Risk Management Program. The bill, which has 74 cosponsors, is awaiting consideration by the House Commerce Committee's Subcommittee on Health and Environment.

Tech Tidbits

There were these other recent developments of interest to grain, feed and processing facility operations:

USDA Reclassifies Karnal Bunt Areas: Effective April 28, the U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) removed the restricted and surveillance area categories of areas currently regulated for Karnal bunt, and replaced them with a single classification. The change releases certain areas of Arizona, Californian, New Mexico and Texas from their designations as restricted areas for seed. This eliminates the requirement for testing and treatment of seed grown in these areas, and removes the prohibition on planting wheat, durum wheat and triticale in fields associated with Karnal bunt.

The agency also announced it has begun approaching U.S. trading partners to discuss the appropriateness of using the bunted kernel standard -- as opposed to the teliospore standard -- to certify that grain for international shipments is free of Karnal bunt. APHIS has used the bunted kernel standard for domestic testing since 1997.

GIPSA Establishes Visual Color Line for Hard White Wheat: The U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration (GIPSA) reinstated color classification criteria for hard white wheat, starting May 1. The agency said its goal was to establish a color line that is manageable, sets a color target for plant breeders and enhances U.S. competitiveness in international markets. GIPSA has distributed comparative color reference prints for use by official inspection personnel. Samples that are as white or whiter than the color depicted will be classified as hard white wheat. Samples that are darker will be classified as either hard red winter or hard red spring wheat, based upon kernel morphology, GIPSA said. Further information on this matter can be obtained by contacting: Eurvin Williams, chairman of GIPSA's Board of Appeal and Review, at (816) 891-0418.

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

House Bill Would Permit States to Raise Truck Weight Limits

Reps. Merrill Cook, R-Utah, and Collin Peterson, D-Minn., on May 6 introduced a bill that would permit a state to increase truck weight limits without further special congressional approval.

Cook is a member of the House Transportation and Infrastructure's Ground Transportation Subcommittee, which has jurisdiction over both rail and truck transportation issues.

Dubbed the "Safe and Efficient Transportation Act," the bill (which had not been assigned a bill number as of press time) would limit the overall gross weight to 97,000 pounds "for a vehicle combination of six or more axles (for a combination of a truck tractor and no more than one trailer or semitrailer), including all enforcement tolerances."

The bill's provision stipulating that heavier trucks have a sixth axle is designed require the additional weight to be distributed more evenly, and to enable such vehicles to comply with federal rules that limit vehicle weight per axle on bridges.

Congress froze the nationwide weight limit at 80,000 pounds in 1991 after considering legislation on authorizing longer-combination vehicles. However, more than a dozen states allow vehicles greater than 80,000 pounds under "grandfather" provisions. Supporters of the bill say it would "significantly reduce the cost and increase the efficiency of trucking many agriculture commodities and products."

Jones Act Reform Bill to be Introduced

The NGFA has learned that Sen. Sam Brownback, R-Kan., plans on May 7 to introduce legislation that would amend the nation's outdated maritime laws, collectively referred to as the Jones Act.

The bill, which Brownback also sponsored in the 105^th Congress, would improve domestic transportation options by allowing certain foreign-built cargo vessels to transport bulk cargo (including grains and grain products) between U.S. ports if the vessels are U.S. owned, flagged and crewed. The NGFA urges its members to contact their senators and request that they support the Brownback bill, which is being called the "Freedom to Transport Act."