Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.US Corn, Soybeans Would be Worth More if China Biotech Approvals were Quicker
U.S. corn production would have increased between 890,000 metric tons and 1 mmt annually over the past five years to 2015/16 if the timing of Chinese approvals of biotech corn events “had been consistent with a functional regulatory system," according to a new analysis of China's biotech crop approvals by Informa Economics IEG. Most of this increased production would have found its way into export markets.
It also forecasts that the value of U.S. corn production would be $360 million to $1 billion higher than present levels from 2017/18 to 2021/22 if the approval process is more in line with other markets.
Similarly, the value of U.S. soybeans would be significantly higher going forward – approximately $175-$415 million per year – with an additional 760,000 mt to 1.7 mmt being produced annually. “This would mostly be exported, with a portion being crushed domestically and a marginal amount being added to inventories,” the Informa report states.
Other producing countries will also benefit from the absence of delays in China’s GE crop approval process, according to the study. Brazil’s production of corn would be around 1 million to 1.3 mmt higher, and while the majority of this increased output would be used for domestic feed, it is expected that a “still-significant” portion will be directed to export markets.
For soybeans, Argentina’s production would be approximately 600,000 mt to 1.1 mmt higher than current levels over the next five years, with $155 million to $290 million added to the port price for exports per year.
Finally, a “more efficient” GE crop approval process would result in an increase of 1 mmt to 2 mmt of Chinese soybean imports over the next five years, the vast majority crushed and increasing the supply of soybean meal for the livestock industry and oil for consumers.
Corn imports are forecast to rise by a more modest 120,000 mt per year.
Groups Sue EPA over Specific Small Refiner RFS Waivers
Farm and commodity groups have filed suit against EPA over three specific waivers of Renewable Fuel Standard (RFS) obligations the agency has granted via the small refiner waiver provision.
Waivers granted to CVR Refining's operation in Wynnewood, Oklahoma, and HollyFrontier refineries at Cheyenne, Wyoming, and Woods Cross, Utah, are the focus of the suit. Those refineries have collectively saved $170 million in compliance costs, according to the court filing by the Renewable Fuels Association, National Corn Growers Association, American Coalition for Ethanol and the National Farmers Union.
The groups said they are not challenging EPA's authority to grant the waivers which are aimed at small refiners that can show economic hardship due to complying with the RFS. Rather, the groups are challenging the three specific waivers.
"EPA should be forced to explain why an otherwise profitable refinery faces disproportionate hardship from compliance with the RFS," the groups said in a release. “EPA is trying to undermine the RFS program under the cover of night,” said Bob Dinneen, CEO and President of RFA. “And there is a reason it has been done in secret – it is because EPA is acting in contravention of the statute and its own regulations, methodically destroying the demand for renewable fuels,” continued Dinneen. “With the little information we have been able to piece together through secondary sources, it is clear that EPA has been extending these exemptions to refineries that did not qualify for them.”
The Advanced Biofuels Association May 1 filed a court challenge on the use of the small refiner waivers.
Washington Insider: Worries About US Ag Competitiveness
This week, The Hill is carrying an OpEd by well-known expert, Mark Keenum, chairman of the Foundation for Food and Agriculture Research board of directors and president of Mississippi State University. Keenum previously worked with former Sen. Thad Cochran, R-Miss., and was an undersecretary of USDA.
His concerns go well beyond the current debate over programs and rules, and focus on the long-run competitiveness of the U.S. sector—and the need for a farm bill that can offer “innovative research programs to help our farmers, lessen government dependence and tackle coming environmental challenges at the same time maintaining a competitive advantage in a global market.”
He discusses a stark fact — that the impressive gains that positioned the U.S. as the global leader in agricultural production and trade have begun to slow and global competition is on the rise. While the latest statistics paint a rosy picture of America’s economy, “U.S. farmers and agribusiness are in danger of being outperformed at a time when farm income is down significantly.”
He cites recent analysis that concluded that since 2000, American public investment in agricultural research and development has flat-lined—to the point that America’s share of global public R&D in agriculture is about half of what it was in the 1960s. Countries like China, Brazil and India now spend $2.33 on agricultural research for every dollar the U.S. spends. “And the European Union just announced it will nearly triple their budget for agricultural research to help their farmers better compete in global markets,” he says.
Keenum argues that the United States “cannot afford to continue to fall behind. Rather it should be leading the charge to develop new markets to bolster farm income and feed a growing population.” U.S. leadership is especially needed now when pests and disease are spreading as quickly as ever, threatening our farmers’ livelihoods.
Luckily, new actors and pathways are emerging, he says. Traditional businesses are stepping up to support R&D that builds on the publicly funded research that produced much of the technology and products that historically gave U.S. farmers an edge. While increases in private investment bode well for U.S. agriculture, the private sector cannot and should not meet the innovation challenge alone.
Congress, recognizing the funding and innovation our private sector can bring to agriculture, is supporting a collaborative model to catalyze all relevant players to meet the challenge. “In 2014, the bipartisan farm bill that created my organization, the Foundation for Food and Agriculture Research," he says. "This new model funds innovation in agriculture by using limited tax dollars to generate new sources of private capital for public agricultural research to benefit U.S. farmers and our economy,” Keenum said.
Modeled after other successful public-private partnership institutions, FFAR uses a dollar-for-dollar matching model to help tackle some of the most urgent challenges in U.S. agriculture, bridging the gap between diverse partners to fund bold innovation. FFAR also has the flexibility to collaborate with international partners to facilitate research that benefits both U.S. and foreign producers, such as to address plant and animal diseases before they enter the country.
The largest FFAR grant to date supports research to increase crop yields by engineering plants to photosynthesize more efficiently. Computer models identified many opportunities for improvement, already resulting in productivity increases of up to 40 percent in model crops. When applied to commodity crops, these technologies will be transformational for farmers to maximize production without the need for additional inputs.
The farm bill presents a key opportunity for Congress to support the resources and innovation needed to meet the challenges ahead and to further support the tremendous contribution American farmers make to our economy, our national security and our global competitiveness.
The kind of bipartisan, innovative thinking Congress showed when it created FFAR is vital for sustaining and building on 150 years of unparalleled productivity, Keenum thinks. “Our economy needs it. Our farmers deserve it. And our future agricultural leadership depends on it.”
Concerns about declines in the pace of growth of U.S. ag productivity have been picking up steam in recent years and, as Keenum says, led to support for federal investment under the 2014 bill. However, in today’s toxic political environment and endless battles over federal budgets and spending, there is growing concern about future public willingness to continue to invest in areas like ag productivity that require long-term investment commitments. So, this is a debate producers should watch very closely as it proceeds, Washington Insider believes.
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