WASHINGTON, July 31, 2019 – The National Grain and Feed Association (NGFA) recommended several policy improvements that would “create a more reliable, competitive and cost-effective official grain inspection and weighing system” during a July 31 Senate Agriculture Committee hearing on the reauthorization of the U.S. Grain Standards Act (USGSA).
“The grain storage, handling and export industry specializes in the logistics of purchasing
the commodities a farmer grows and finding a market for it here at home or in global markets,” said Bruce Sutherland, president of Michigan Agriculture Commodities in Lansing Mich., who testified on NGFA’s behalf. “…[O]ur legislative recommendations to amend the USGSA will strengthen the Official inspection and weighing system, foster the competitive position of U.S. grains and oilseeds in world markets, and maintain the integrity of Official inspection results.”
Sutherland is a member of the NGFA Board of Directors and serves as a recently appointed member of the Federal Grain Inspection Service’s (FGIS) Grain Inspection Advisory Committee. NGFA’s recommendations were developed in collaboration with the North American Export Grain Association (NAEGA), with which it is co-located and has a strategic alliance.
FGIS and its delegated and designated state and private agencies are relied upon to provide “competent, state-of-the-art and reliable” inspection services, which are paid for by the industry, to facilitate marketing of U.S. grains and oilseeds. Official grain inspection and weighing generally is mandatory for most U.S. export shipments, while the use of such services is voluntary in the domestic market.
Reforms enacted by Congress in 2015 “served as a springboard” for a series of improvements to FGIS and the Official inspection system, Sutherland said. He also credited Secretary of Agriculture Sonny Perdue’s decision as part of his 2017 reorganization of the U.S. Department of Agriculture (USDA) to return FGIS to the Agricultural Marketing Service, where it had resided prior to 1994, as well as the installation of fresh, capable new leadership at the agency for bringing about positive changes.
As lawmakers consider reauthorizing the USGSA, the NGFA offered several recommendations for improvement:
- FGIS should expressly prohibit the inappropriate and misleading practice of using grain standard quality factors as an indicator of plant health risk on phytosanitary certificates issued by USDA’s Animal and Plant Health Inspection Service (APHIS). “APHIS inappropriately and unwisely in our view acquiesced in late December 2017 to Chinese officials’ requests that foreign material (FM) content – a grain quality factor – be used as a proxy for weed seed content in U.S. soybean export shipments,” Sutherland noted. The resulting market uncertainty led to a sharp reduction in U.S. soybean exports to China months before the advent of tariffs.
- Delegated states should be required to notify users of Official inspection or weighing services at least 72 hours in advance of any intent to discontinue service. Such agencies already are required to provide such notification to USDA. “We strongly believe affected facilities need and deserve the same courtesy and consideration as currently provided to USDA so they can make appropriate logistical and other alternative arrangements to continue to serve customers whenever possible – including farmers and upstream and downstream customers,” he said.
- FGIS should conduct a detailed review of the current geographic boundaries for each officially designated agency operating in the domestic market. FGIS designates a single agency to provide official inspection services in each geographic territory. The agency has not conducted a comprehensive review of these boundaries since it was established in 1976.
- FGIS user fees paid by those obtaining inspection and weighing services should be directed solely for that purpose, not for developing the U.S. grain standards or for compliance and enforcement activities, which have broad societal benefits to producers and consumers. “Users of these Official services already pay for the direct costs incurred by FGIS in providing them, plus administrative overhead for those services, which typically comprises 70 percent of FGIS’s total annual budget,” Sutherland said.
- Extending the reauthorization period for the USGSA to somewhere between five and 10 years, versus the current five-year schedule – at Congress’s discretion, “given the extremely positive changes brought about by Congress in revising the USGSA in 2015, combined with the highly successful reorganization and realignment of FGIS into AMS.”
- FGIS should be required to report to Congress and the public the number of and specific type(s) of waivers from official inspection and weighing service being requested and granted, the number of non-use of service exceptions requested and granted, and the number of specific testing services requested, while preserving confidential business information.
- The FGIS Grain Inspection Advisory Committee should be reauthorized. The advisory committee provides counsel to the FGIS administrator on the implementation of the USGSA and is comprised of members who represent the interests of grain producers, exporters and handlers.
NGFA concluded that “reauthorizing the Grain Standards Act on time – or even a bit early – would provide continued certainty to grain handlers, farmers and our global customers.” View NGFA’s full written testimony here. NAEGA also testified at the hearing, and its testimony can be viewed here.
The NGFA, established in 1896, consists of more than 1,100 grain, feed, processing, exporting and other grain-related companies that operate more than 7,000 facilities and handle more than 70 percent of all U.S. grains and oilseeds. Its membership includes grain elevators; feed and feed ingredient manufacturers; biofuels companies; grain and oilseed processors and millers; exporters; livestock and poultry integrators; and associated firms that provide goods and services to the nation’s grain, feed and processing industry. The NGFA also consists of 33 affiliated State and Regional Grain and Feed Associations, and is co-located and has a strategic alliance with North American Export Grain Association, and a strategic alliance with Pet Food Institute.