NGFA Newsletter

Volume 51, Number 17, August 26, 1999

 

Contents

 

 

EPA's Proposed Phosphine Fumigation Restrictions Would Cost from $341 Million to $1.135 Billion Annually

 

by Randall C. Gordon, v.p. communications/gov't relations

 

The NGFA has released the results of an economic analysis that shows the Environmental Protection Agency’s proposed regulations that would preclude the use of phosphine fumigation at most grain-handling facilities would impose costs and lost economic benefits on the grain-handling industry alone totaling a minimum of $341 million and ranging up to $1.135 billion annually .

 

The economic analysis conducted by the NGFA found that EPA’s proposal to restrict the use of aluminum and magnesium phosphide – which produce the fumigant phosphine gas -- would be most detrimental to U.S. wheat producers, resulting in economic losses ranging from 39 to 183 percent of their average net market return. For all grain producers, the cost would range from 3.4 to 12 percent of average net market returns, based upon the last three years' returns.

 

In addition, the inability to use these chemicals could jeopardize up to $3.45 billion in average annual export grain sales, the NGFA study said. The NGFA noted that for the period 1997-99, approximately 25 percent of U.S. export grain was fumigated with phosphine. More than 93 percent of this fumigation was required contractually by the foreign buyer, regardless of infestation levels.

 

The NGFA submitted the results of the economic analysis to EPA Administrator Carol Browner, Secretary of Agriculture Dan Glickman and Jack Lew, director of the White House Office of Management and Budget. In a letter accompanying the study, the NGFA said the results of the economic analysis reiterate the need for EPA to totally overhaul its proposed restrictions on the use of aluminum and magnesium phosphide. The NGFA also called on the federal government to conduct an economic impact analysis of its own on EPA’s proposal.

 

EPA on Dec. 23 proposed stringent new "risk-mitigation measures" that would prohibit the use of aluminum and magnesium phosphide at grain-handling facilities located within a 500-foot radius of a residential area. EPA also proposed to require prenotification of residents and businesses within a 750-foot radius of a facility where such fumigation is to occur. An earlier NGFA survey found 94 percent of its members’ facilities would be precluded from using the fumigant under EPA’s proposed restrictions. EPA also proposed to reduce the permitted exposure limit to 0.03 parts per million during the application, fumigation and aeration with aluminum and magnesium phosphide – a 10-fold reduction in the current 0.3 p.p.m. safety standard permitted on the label for these chemicals. This operational restriction likely would impose additional costs that were not the subject of the NGFA’s economic analysis.

 

In addition, the economic analysis did not quantify the economic cost that would be sustained by those who use aluminum and magnesium phosphide to fumigate rice, edible beans, barley, sunflower seed, oats and processed commodities. "The study presents data that are useful indicators of average fumigation intensity, but should only be considered an indication of the average economic impact over time because it likely underestimates the economic impact in years where weather conditions are favorable to insect activity," the NGFA study said.

 

EPA has said it is examining the more than 600 written comments submitted in response to its proposed phosphine restrictions, and is considering issuing a revised proposal prior to conducting a series of "stakeholder" meetings late this year. Once a final rule is issued, registrants of aluminum and magnesium phosphide are scheduled to have eight months to incorporate any new restrictions into the label use directions for these chemicals.

 

Two Scenarios Analyzed: The NGFA’s study analyzed two scenarios most likely to occur if EPA’s restrictions on aluminum and magnesium phosphide are implemented as proposed.

 

  • Scenario One: The first scenario assumed no grain could be effectively and economically fumigated at 94 percent of grain-handling and processing facilities (based on the NGFA’s previous survey results), or in conveyances (such as barges and railcars) that are at rest or in-transit.

 

Under this scenario, the total annual economic loss would be at least $1.135 billion annually, the NGFA said. This would amount to 183 percent of the average net market returns for wheat producers, and 12 percent of the average net market returns for producers of all grains.

 

Among the assumptions used to derive this figure were: 1) a 5-cent-per-bushel discount on the quantity of grain currently being fumigated with aluminum and magnesium phosphide to account for additional insect infestation that would result if facilities were unable to use these chemicals. This discount level is equivalent to the U.S. Department of Agriculture’s 1999 price discount for infested grain pledged as collateral for marketing assistance loans under the farm program; 2) a slippage in the numerical grade for 20 percent of normally fumigated corn and sorghum from U.S. No. 2 to sample grade because of insect damage, with a 15-cent-per-bushel discount applied (equivalent to USDA’s 1999 discount for sample grade) to this quantity; and 3) the lost economic value when infested wheat is used for feed instead of being milled for flour for human consumption, which would equate to $1.15 per bushel.

 

But the NGFA said the $1.135 billion estimate under this scenario is conservative, because it does not include the economic impact of EPA’s proposed 0.03 p.p.m. exposure limit on phosphine. Nor does it take into account the price-depressing effects of: 1) increased farmer selling at harvest to avoid insect infestation risks associated with on-farm storage; 2) the additional quantity of infested grain on the market, as well as the lower test weight and higher levels of spoilage and foreign material associated with infested grain; and 3) inventory shrink that results from insect consumption of grain.

 
  • Scenario Two: The second scenario studied by the NGFA assumed that the 94 percent of facilities no longer able to fumigate with phosphine under EPA’s restrictions would respond by having their grain treated by the 6 percent of facilities that would not be precluded from doing so. This assumes that these latter facilities would become phosphine fumigation service providers for facilities no longer able to perform such fumigation.

 

Under this scenario, the NGFA study found that the economic impact would amount to at least $341 million annually. This would amount to 39 percent of the average net market returns for wheat producers, and 3.4 percent of the average net market returns for producers of all grains.

 

This economic assumption was based upon a phosphine fumigation facility being located within a 20- to 30-mile radius of facilities no longer able to perform such fumigation. But the NGFA said this figure likely underestimates the true economic impact of EPA’s proposal because it does not include: 1) additional capital expenditures needed to provide sufficient and properly located space to provide fumigation; 2) labor, energy, transportation and other expenses incurred at facilities that would be put in the position of shipping grain to and receiving grain from other locations for fumigation; 3) reduced grain quality, such as breakage, resulting from increased handling of grain shipped to facilities for fumigation; and 4) price-depressing effects resulting from increased producer selling of grain at harvest to avoid infestation risks from on-farm storage. Nor does it include the economic impact of EPA’s proposed 0.03 p.p.m. exposure limit on phosphine.

 

The NGFA in March submitted a statement to EPA strongly opposing the agency’s proposed restrictions that would preclude the use of aluminum and magnesium phosphide as a fumigant at most facilities. As an alternative, the NGFA suggested that EPA propose prudent safety measures that focused on applicator training; notification of on-site workers before fumigation occurs; the use of appropriate respiratory protection when fumigators may be exposed to levels of phosphine gas exceeding the current exposure limit of 0.3 p.p.m.; stationing of trained observers at the space being fumigated; and providing appropriate safety directions to employees who enter, work in or unload a fumigated structure, vehicle or container.

 

 

CFTC Issues Revised Proposed Rule on Agricultural Trade Options

by Kendell W. Keith, president

 

The Commodity Futures Trading Commission announced on Aug. 25 that it intends to revise its regulations pertaining to the pilot program for agricultural trade options.

 

In the preamble to its proposed changes, the CFTC noted that, "No one has applied for registration as an (agricultural trade option merchant) since the interim rules went into effect in June 1998." Further, the CFTC said that the intent of its changes was "to allow more flexibility in the types of options that can be offered, to streamline the reporting and disclosure requirements, and generally to bring the rules more into line with practices in the cash markets."

 

The proposed changes, which are scheduled to be published in the Federal Register soon, will be subject to a 30-day comment period. The NGFA plans to publish a more detailed report on the proposal in the next edition of the NGFA Newsletter that will compare how the CFTC’s new proposal would revise its existing regulations, which were published in April 1998.

 

In brief, the most significant provisions include the following:

 

  • Registration: The CFTC’s current rules require agricultural trade option merchants (ATOMs) to register, including individuals involved in marketing agricultural trade options to customers. The CFTC’s proposal still would require such registration, with filings to be administered by the National Futures Association. However, the CFTC proposes to limit the registration process to the company and to "principals (individuals) who exercise direct control over the ATOM’s business affairs." In addition, the CFTC proposed to delete the mandatory six-hour training course for agricultural trade option sales agents.

 

However, the proposed registration requirement would continue to subject all agricultural trade option contracts to CFTC reparation procedures as a dispute-settlement mechanism. Further, this requirement could not be eliminated by mutual consent of contracting parties at the time of initial contracting. The CFTC’s proposed rules clarify this point by adding a new provision stating, "An agricultural trade option merchant may not require a customer to waive the right to seek reparations under section 14 of the (Commodity Exchange) Act and part 12 of this chapter by an agreement or understanding to submit a claim or grievance to a specified settlement procedure prior to the time a claim or grievance arises." In addition, the CFTC proposed rule obligates the ATOM to "notify a customer of its intent to submit a claim or grievance to arbitration under a pre-existing agreement, (and) must advise the customer in writing that the customer within 45 days may elect to seek reparations under Section 14 of the (Commodity Exchange) Act and part 12 of this chapter." [Emphasis added.]

While proposing to continue registration under these terms, the CFTC said it was willing to "consider deleting the registration requirement in favor of a simple notification filing stating one’s intent to enter into the trade option business if that alternative is preferred by those whom the regulations are intended to protect."

 
  • Physical Delivery/Cash Settlement: Significantly, the proposed rule would eliminate entirely the existing requirement that agricultural trade options be settled only by physical delivery. Under the new proposed rules, the general disclosure statement would be required to advise potential purchasers that trade options are required to have a business purpose (presumably to discourage the use of such options for speculative and other non-business purposes). The disclosure statement also would be required to specify the acceptable forms of acceptable settlement under the contract, such as physical delivery, cash settlement, offset, etc.

 

  • Risk-Disclosure Statement: The CFTC’s current rules require both a general summary disclosure statement and a transaction-specific statement. The new proposal would eliminate the transaction-specific statement. But it would require the general disclosure statement to contain more information, including the "appropriateness of option contracts," costs and fees associated with the contract, and an explanation of terms that typically should be included in an agricultural trade option contract.

  • Other Provisions: The new CFTC-proposed regulations would:

 

• continue to prohibit producer writing of covered call options, except to the extent that simultaneous purchase of an equivalent number of puts for identical expiration dates also are entered;

 

• eliminate specifying the exact terms of an agricultural trade option contract, but put into the disclosure statement an advisory to the purchaser what the contract should contain;

 

• retain the minimum net worth exemption level at $10 million for each party to the contract;

 

• continue to require extensive internal controls (essentially unchanged from original rule);

 

• continue to require an annual financial statement audited by a certified public accountant;

 

• require monthly reconciliation of records by the ATOM;

 

• require reporting of customer account information within two business days of settlement, as well as written, verbal or electronic notice of the expiration date of each option expiring in the next month;

 

• retain the original rule’s recordkeeping requirements;

 

• require that annual reports (rather than the quarterly reporting of current rules) be submitted to the CFTC (by commodity and put, call or combined option): 1) total number of new contracts entered; 2) total quantity of commodity underlying new contracts entered into during the reporting period; 3) total contracts outstanding at the end of the reporting period; 4) total number of options exercised during the reporting period; and 5) total quantity of commodity underlying the options exercised during the reporting period.

 

 

CCC Says Requests for Wheat for Food Aid Exceeds Available Stocks

by Randall C. Gordon, v.p., communications/gov't relations

 

 

 

Requests from foreign countries for U.S. food aid currently exceed the available wheat inventory of USDA’s Commodity Credit Corporation, making additional swap invitations for CCC-owned wheat likely.

 

That was the assessment provided today by CCC officials in the aftermath of a swap invitation catalog (Swap No. 13) issued on Aug. 11 that listed more than 9.2 million bushels of CCC-owned wheat available to fill a request from the Philippines for more than 1.8 million bushels of U.S. No. 2 Northern Spring and Dark Northern Spring wheat for delivery between Sept. 6-21.

 

CCC officials told the NGFA today that USDA’s Foreign Agricultural Service has submitted more requests for CCC-owned wheat for humanitarian food assistance [commonly referred to as Section 416(b) aid] than currently is available in CCC’s "uncommitted" inventory. CCC currently is not using wheat inventory designated as Food Security Commodity Reserve for such food assistance because of certain restrictions placed on the use of the reserve. One such restriction is that the secretary of agriculture must determine there is a shortage of domestic wheat. Currently, approximately 93.3 million bushels of grain – all of which is wheat – are designated as part of the reserve. The designation of wheat in the Food Security Commodity Reserve continues to be based primarily on storage rates offered by the storing warehouse operator, CCC officials said.

 

CCC officials said that continued food assistance requests submitted from the Foreign Agricultural Service would continue to be met through purchases or swap invitations of uncommitted wheat inventories. CCC officials also confirmed that sales of forfeited loan wheat continues. CCC is allowing storing warehouse operators to purchase forfeited wheat loan collateral during a 10-business-day period that the warehouse receipts remain in the Farm Service Agency county office after forfeiture. After the 10-day period, the receipts are forwarded to the Kansas City Commodity Office, which records the wheat into CCC’s inventory and designates it for potential use as food assistance.

 

 

USDA Issues Rules for Emergency, Temporary Storage for 1999

 

The U.S. Department of Agriculture’s Farm Service Agency on Aug. 20 issued a notice to the industry (WCD-7) concerning the rules that will govern the use of emergency and temporary storage to accommodate 1999-crop harvest.

 

CCC-owned wheat, corn and other feed grains, as well as such grains pledged as collateral by producers for marketing assistance loans, may be stored in emergency or temporary space after the warehouse operator receives approval from CCC. Grain stored in such space is considered to be part of the commingled inventory, and the warehouse operator is liable for the quantity and quality of such grain.

 

  • Emergency Storage: Warehouse operators seeking to use emergency storage (such as ground piles) are required to receive the approval of the appropriate licensing authority for the use of such space. USDA already has granted such permission to federally licensed warehouses. Grain stored in emergency space is required to be removed by Jan. 1, 2000.

 

Prior to using such space, warehouse operators are to provide written justification to CCC that there is a need for emergency storage in the local area. Once approved by CCC, warehouse operators are required to: 1) meet the same security, net worth, bonding and insurance requirements for the grain stored in emergency space that apply to grain stored in conventional storage space; 2) make the grain accessible for examination; 3) maintain a separate inventory record of all grain stored in emergency space, and account for such grain in the daily position record.

 
  • Temporary Storage: CCC also announced it will continue to authorize the use of temporary storage. Once approved by CCC, the space may be used by the warehouse operator until May 1, 2000, with extensions allowed if a reexamination of the temporary space finds that it is adequate and the quality of the grain is being maintained in storable condition. Requests for extensions are to be provided 30 days before expiration of the original authorization.

 

To qualify as temporary storage, the space is required to: 1) be operated in conjunction with a conventional licensed or UGRSA-approved warehouse; 2) have an asphalt or concrete floor and rigid, self-supporting sidewalls (although a waiver of this requirement may be considered on a case-by-case basis); and 3) be equipped with aeration and an acceptable cover. The warehouse operator is required to meet the net asset and bonding requirements of the pertinent licensing authority on the temporary space; maintain a separate record of such grain in the daily position record; and insure the grain if required.

 

Receiving Approval: Once approved by the relevant licensing authority, warehouse operators are to send a written justification for their use of emergency or temporary space to: Barbara Gilmore, Warehouse Contract Division – Grain Contract Branch, Kansas City Commodity Office, P.O. Box 419205, Kansas City, Mo., 64141-6205.

 

 

OSHA Sends Draft Ergonomics Rule to OMB; Congress Moves to Delay

by Thomas C. O'Connor, director of technical services

 

The Occupational Safety and Health Administration on July 2 submitted its proposed ergonomics standard to the Office of Management and Budget for review. But there are efforts underway in Congress to block the issuance of the proposal.

 

Generally, OMB has 90 days to complete its review, at the conclusion of which it can either return it to OSHA for additional revision or allow its publication in the Federal Register for public comment. OSHA maintains that the standard is needed because work-related muskuloskeletal disorders represent approximately 34 percent of all lost- workday injuries and illnesses, and account for more than $20 billion annually in workers’ compensation costs. Opponents challenge the scientific justification for the rule and cite the 17 percent decline in the last three years in the number of muskulskeletal disorders reported by the Department of Labor’s own Bureau of Labor Statistics.

 

Based upon a draft of the proposed rule issued by OSHA in February 1999, an employer covered by the rule would be required to implement and maintain measures to reduce carpal tunnel syndrome, neck and back strains and other work-related muskuloskeletal disorders if a single injury of this nature was reported in its workplace. Importantly, workplaces covered by the rule include those in manufacturing and manual-handling operations and any workplace where a work-related muskuloskeletal disorder has occurred. As such, OSHA’s draft proposed rule likely would cover most grain elevators, feed mills and processing plants. The draft proposed standard would exclude maritime, construction and agricultural activities.

 

Types of Injuries Covered by the Rule: Under the draft proposed rule, a work-related muskuloskeletal disorder would be limited to injuries that are recordable on the OSHA 200 log and occurred in a job where such hazards are present and likely to cause or contribute to the disorder, and where a significant part of the injured employee’s regular job duties involves exposure to these work-related hazards. Jobs that could be covered under OSHA’s draft rule include those that involve physical demands (such as force, repetition, duration and local contact stress), workstation layout and space (such as work heights, seating, work reaches and floor surfaces), equipment used and objects handled (such as size, shape, weight and vibration of equipment), environmental conditions (such as cold, heat or glare) and issues related to work organization (such as work rates and task variability).

 

Basic Program Requirements: Workplaces with manufacturing and manual handling operations would be required to ensure that employees have a means for reporting suspected work-related muskuloskeletal disorders, obtain responses and be involved in the development and implementation of the ergonomics program. Employers would be required to identify suspected work-related muskuloskeletal disorders and hazards in manufacturing and manual-handling operations, as well as jobs where such injuries exist. Employers also would be required to provide information about work-related muskuloskeletal disorders and associated work-related hazards to all employees in such jobs, as well as to conduct hazard identification and provide information to employees periodically. If neither a work-related muskuloskeletal disorder hazard exists nor a work-related injury of this kind has occurred for three years, employers would only have to maintain existing controls and training related to those controls.

 

Full Program Requirements: In workplaces where a work-related muskuloskeletal disorder occurs (including manufacturing and manual handling) or a known work-related hazard exists, the draft proposed standard would require that the ergonomics program include: 1) a job hazard analysis and hazard-control program; 2) employee training at least every three years about the ergonomics program and work-related muskuloskeletal disorder hazards; 3) furnishing prompt and effective medical treatment whenever an employee has a work-related muskuloskeletal disorder, including prompt access to health care professionals for effective evaluation, treatment and follow-up; and 4) an evaluation of the ergonomics program every three years to ensure that it complies with the standard.

 

Congressional Activity: Meanwhile, Sen. Kit Bond, R-Mo., and Rep. Roy Blunt, R-Mo., have introduced legislation that would prohibit OSHA from promulgating a final standard or guideline on ergonomics until the National Academy of Science completes its ongoing study in 2001 on the relationship between ergonomic injuries and the workplace. The Senate bill (S. 1070), introduced on May 18, now has 40 cosponsors and has been referred to the Senate Committee on Health, Education, Labor and Pensions for consideration. The House bill (H.R. 987), introduced on March 4, was approved by the House on Aug. 3. President Clinton has threatened to veto legislation that would delay OSHA’s ergonomic standard.

 

 

CSX, Norfolk Southern Outline Plans for Handling Fall Grain Harvest

by David C. Barrett Jr., counsel for public affairs

 

The CSX Transportation Co. and the Norfolk Southern Railway outlined plans for handling the fall 1999 grain harvest during the Aug. 19 meeting of the Conrail Transaction Council.

 

  • CSX: CSX representatives said that grain movements have increased earlier than usual in the eastern corn belt, and that it is planning for the peak fall shipments from the coal, grain, intermodal and automobile sectors. The CSX estimated a 9.5 percent increase in Fall loadings compared to what they termed their base period of June 5-July 2.

 

CSX said it is taking delivery of bigger locomotives, and estimated that 80 percent of its unit-train shipments will be 90-car instead of 65-car movements.

 

Concerning the integration of Conrail into its system, CSX officials said the dwell time in its Toledo, Ohio, rail yard remains high as a result of implementation of a new operating plan. They also said the carrier’s problems in Indianapolis, Ind., are not resolved yet.

 
  • Norfolk Southern: Norfolk Southern representatives said the carrier is leasing more locomotives to handle both grain and coal trains. They reported that 324 units have been secured, with 248 leased units added to the fleet since June 1. They said they anticipated 105 unit trains would be in service during the harvest peak; the railroad currently is operating 78 unit trains, 20 fewer than in July.

 

Meanwhile, Norfolk Southern officials said overall improvements in integrating Conrail have occurred, but conceded that problem areas remain and that managing the former Conrail territory was more complex than the old Norfolk Southern system.

 

They said the Norfolk Southern was having problems linking locomotives to trains in its computer system. They identified the following yards as key problem areas: Allentown, Pa., Harrisburg, Pa., Bellevue, Ohio, and Buffalo, N.Y. They said the carrier had experienced more traffic than expected through Bellevue, Ohio, and had rerouted significant volumes of traffic to its Columbus, Ohio yard.

 

The Norfolk Southern officials said they still have a group in Pittsburgh, Pa., manually reviewing waybills, which is likely to continue for the next 30 days. They also said the Norfolk Southern has more than 500 engineers and conductors in training for the Northern region. In addition, 100 more conductors are being recruited, they said.

 

NGFA’s Report to Conrail Transaction Council: In its report to the Conrail Transaction Council, the NGFA provided observations from members concerning general service issues and specific concerns.

 

Among the general service issues conveyed by the NGFA were these:

 

  • Comments from NGFA-member rail users indicate that service on the CSX has improved significantly for unit-train shipments. Spot problems continue to be reported and service still is perceived as substandard by smaller shippers/receivers.

 

  • Norfolk Southern initially showed improvement from widespread problems in June and July, but reports are that service once again is declining.

 

Specific concerns submitted by member companies and conveyed by the NGFA included the following:

 

  • Most concerned with smaller unit sizes. For example: "Our turn times on Conrail private runs between these stations were 20 to 30 days. Under the new systems, they are at 40-plus days. We are running 30-40 percent more cars to get caught up."

 

  • "The CSX has to get more concerned with the smaller size units.…It knew when it took over its portion of Conrail that it was getting an area that was singles, three and 15-car houses. Now they must handle them."

 

  • "Norfolk Southern continues to suffer from a multitude of service issues….Enola yard is a major congestion point, with anywhere from four- to 10-day delays….[C]lassification problems in this yard, which appear to be caused by personnel trying to get cars out of yard regardless of destination."

 

  • "Billing instructions on both loaded and empty cars are being overridden in the Norfolk Southern computer system, creating major snarls in car utilization and placement."

 

  • "There is growing concern that Norfolk Southern may pull away resources from ag to other commodity groups during fall harvest….[W]e would hate to see NS’ focus on ag come back to the forefront as a result of multiple feed mill or processor shutdowns as opposed to an ongoing proactive approach to make sure trains get to destination in a timely fashion."

 

Next Meeting Set for Sept. 23 – Member Input Encouraged: The next meeting of the Conrail Transaction Council is scheduled for Sept. 23. The NGFA again welcomes written input from member rail users concerning service-related issues prior to the meeting. Please e-mail your observations to David Barrett at dbarrett@ngfa.org or fax them to his attention at (202) 289-5388 on or before Sept. 21.

 

Emergency Ag Appropriations Bill on Deck when Congress Returns

by David C. Lindsay, director of legislative affiars

 

When Congress reconvenes on Sept. 8, one of the issues waiting to be resolved will be the fiscal year 2000 agricultural appropriations bill, the Senate version of which contains $7.65 billion in emergency farm relief.

 

The upcoming House-Senate conference committee to resolve differences in their respective appropriations bills takes on added importance because the House version (H.R. 1906) does not currently contain emergency farm spending. While there is consensus that some form of emergency aid to producers will be forthcoming, the position taken by the House conferees on this matter largelywill determine the outcome.

 

The Senate version of the appropriations bill (S. 1233) would authorize the expenditure of:

 

  • $5.54 billion in market loss payments (effectively doubling producer AMTA payments for 1999).

 

  • $475 million in direct payments to soybean and "minor" oilseed producers for 1999 crops.

 

  • $400 million in additional crop insurance premium subsidies for year 2000 crops.

 

  • $325 million in payments to livestock and dairy producers.

 

  • $134 million for specialty crops.

 

The Senate bill also would double the payment limit for marketing loan gains and loan deficiency payments – to $150,000 – for the 1999 crop year.

 

Meanwhile, several House members have begun sketching out what they hope will be the House’s position on emergency farm spending. Rep. Jo Ann H. Emerson, R-Mo, has introduced a bill (H.R. 2743) to authorize emergency spending that contains much of what was included in the Senate bill. House Agriculture Committee ranking member Rep. Charles W. Stenholm, D-Texas, has introduced his own relief bill (H.R. 2792), but it goes in a different direction. Stenholm's bill would send direct payments to producers if the "national gross revenue" of an eligible crop (wheat, oilseeds, feed grains, cotton, and rice) for that year declines to less than 95 percent of the five-year "national gross revenue" for that crop. These data would be determined by the U.S. Department of Agriculture, and the amount of payment to each producer would depend upon the actual or failed production rate of the crop in question.

 

In another development, House Agriculture Committee Chairman Larry Combest, R-Texas, has indicated a strong desire to conduct hearings on the state of the farm economy to determine precisely what is needed in terms of emergency spending. Under Combest’s plan, his committee and the House Appropriations Committee then would go into the conference meeting with the Senate with a unified plan. The dates for such hearings have not been set.

 

Conferees: The Senate has appointed its members to the joint House-Senate conference committee. They are: Sens. Thad Cochran, R-Miss.; Sen. Christopher (Kit) Bond, R-Mo.; Arlen Specter, R-Pa..; Slade Gorton, R-Wash.; Mitch McConnell, R-Ky.; Conrad Burns, R-Mont.; Ted Stevens, R-Alaska; Herbert H. Kohl, D-Wis.; Tom Harkin, D-Iowa.; Byron Dorgan, D-N.D.; Dianne Feinstein, D-Calif.; Richard Durbin, D-Ill.; and Robert C. Byrd, D-W.Va. The House has not named its conferees yet.

 

House Expected to Pass Combest’s Crop Insurance Reform Bill

 

The House is expected to approve the crop insurance reform bill (H.R. 2559) introduced by House Agriculture Committee Chairman Larry Combest, R-Texas. The bill would:

 

  • increase government premium subsidies at all levels to encourage more producer participation.

 

  • provide enhanced coverage for multi-year disasters.

 

  • authorize a pilot program for livestock price insurance.

 

Meanwhile, there are three main bills vying for support in the Senate Agriculture Committee – one authored by Sens. Pat Roberts, R-Kan., and Robert Kerrey, D-Neb.; one by Sen. Thad Cochran, R-Miss.; and a third by Agriculture Committee Chairman Sen. Richard G. Lugar, R-Ind. Each bill takes a different approach; at this stage, it is uncertain how the committee will resolve the disparate approaches.

 

The following is a breakdown of the bills:

 

  • Roberts/Kerrey Bill (S. 529): 1) Inverts the current subsidy structure to encourage more producer participation at the higher coverage levels; and 2) provides for livestock price insurance.

 

  • Cochran Bill (S. 1108): 1) Increases premium subsidies; 2) grants additional premium discounts to producers who use sound management techniques; and 3) increases catastrophic coverage.

 

  • Lugar Bill (not introduced yet): 1) Provides additional fixed AMTA payments to producers if they utilize at least two of eight specific risk-management practices; 2) provides an insurance premium discount for producers not enrolled in the farm program; and 3) examines the possibility of covering livestock through whole farm insurance.

 

Fletcher Wins ‘Membership-Madness’ Prize!

…Month-Long Effort Meets Goal of 20 New Members…

by Todd E. Kemp, director of marketing

 

As the dust settled at the culmination of the NGFA’s month-long Membership Madness promotion, John Fletcher, vice president, Fletcher Grain Co., Marshall, Mo., emerged as the winner of the major prize package.

 

In so doing, he received two free nights at any Marriott hotel (courtesy of Marriott Corp.) and complimentary airfare for two (courtesy of The CIT Group). Fletcher’s name was selected in a random drawing for which all new-member sponsors during Membership Madness were eligible.

 

In total, 20 new members were recruited during this focused membership recruiting effort, which began July 15 and concluded Aug. 16. Since the last NGFA Newsletter, new members that were recruited and their sponsors are:

 

  • American Steel Foundries, Chicago, Ill. (Lynn Hiser, A.E. Staley Mfg. Co.)

 

  • Ganaraska Systems, Port Hope, Ontario, Canada (Sponsor TBD)

 

  • Crosby, Guenzel, Davis, Kessner & Kuester, Lincoln, Neb.

   (Diana Klemme, Grain Service Corp.)

 

  • WaveNet, Mississagua, Ontario, Canada (Sponsor TBD)

 

  • Greimann Brothers Inc., Chapin, Iowa. (John Campbell, Ag Processing)

 

  • Delta Technology Corp., Houston, Texas (Bob Majkrzak, Red River     Commodities)

 

Thanks to all membership recruiters who helped reach the Membership Madness goal of 20 new members. Special thanks to Marriott Corp. and The CIT Group for sponsoring our prize.

 

Welcome AFICPD!

 

The NGFA issues a hearty and heart-felt welcome to its newest Affiliate member, the Association of Feed Ingredient and Cottonseed Products Dealers Inc. (AFICPD). Headquartered in Little Rock, Ark., AFICPD-member companies primarily are traders and brokers of cottonseed products and other feed ingredients. A number of AFICPD members also are members of the NGFA.

 

NGFA Counsel for Public Affairs David C. Barrett Jr. recently addressed the AFICPD annual convention, discussing the NGFA’s Trade Rules and Arbitration System, as well as other member benefits. The AFICPD membership subsequently voted to affiliate with the NGFA. We’re delighted to establish a close relationship with AFICPD and all its member companies – a relationship that will benefit all parties through information-sharing and cooperative efforts on issues of mutual interest.

 

 

 

 
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1201 New York Ave., N.W., Suite 830, Washington, D.C. 20005-3917
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