California Waiver Denied-NCGA Wins Big

In what amounted to the Super Bowl, World Series and NCAA Final Four all-in-one, NCGA technical analysis carried the day. After a two-year odyssey, NCGA, its corn producer members and all ethanol supporters can finally celebrate a long-sought victory: Environmental Protection Agency's (EPA) decision on Tuesday to deny California's request for a waiver from the federal oxygen content requirement for reformulated gasoline. "After more than two years of uncertainty on this issue, NCGA applauds the Bush Administration for reaching the correct decision on the waiver," said Tim Hume, NCGA president-elect, a grower from Walsh, Colo. In announcing the decision, EPA stated: "After an extensive analysis, the Agency concluded that there is significant uncertainty over the change in emissions that would result from a waiver. California has not clearly demonstrated what the impact on smog would be from a waiver of the oxygen mandate. "NCGA supplied EPA with the factual data - in the form of a technical analysis - to help secure a favorable decision," explained Hume. "Specifically, NCGA's data demonstrated that adding ethanol to California's gasoline would improve air quality and protect water resources. EPA's comments on its reasons to deny the waiver indicated the role that such data assumed. Without funding from the state checkoff boards, NCGA's technical data would not have been available to influence the administration's decision." Ethanol production for this year is on schedule to exceed 2 billion gallons. With 600 million gallons of ethanol obligated for clean fuels programs, there is plenty of ethanol available to meet the needs of California motorists. And ethanol production capacity is expected to increase significantly, because the uncertainty surrounding the waiver has dissuaded growers from investing in new ethanol plants and increasing capacity at existing facilities. "EPA's decision -- coupled with congressional initiatives to incorporate a renewable fuels standard in emerging energy policy -- will enable ethanol producers to help meet national energy security goals, facilitate environmental stewardship and promote economic development for rural communities," Hume concluded. For more information, go to www.ncga.com.

NCGA to California: Let's Clear the Air on Gas Prices

Following the U.S. EPA's denial of the California waiver on Tuesday, many ethanol opponents began claiming this action would drive California gas prices higher. Fewer things could be further from the truth and the National Corn Growers Association (NCGA) wants to clear the air on ethanol's effect on gas prices, in California and throughout the nation. For more on this story, go to . CDC's Report Clears StarLink of Human Allergencity; Biotech Critics Dealt Setback The Centers for Disease Control (CDC) this week announced that it found no link between StarLink corn and allergic reactions in humans. Last fall, a number of individuals reported allergic reactions after consuming food products that contained the Cry9C protein. StarLink corn contains Cry9C, which has pesticidal properties, and was implanted in corn to protect against insects. Of the 24 people interviewed by investigators, 17 provided blood samples to CDC for testing. The FDA developed a lab method by which a type of antibody (IgE) would be found, indicating hypersensitivity to the Cry9C protein. The results: "Although the study participants may have experienced allergic reactions, based upon the results of this study alone, we cannot conclude that a reported illness was a Cry9C allergic reaction." And CDC announced that an independent lab analyzed the "same set of coded samples" sent to FDA and "confirmed the results." NCGA concludes that CDC's findings represent a strong reassurance to consumers concerning the safety of StarLink corn. The CDC report indicated that it "did not find any evidence that hypersensitivity to the Cry9C protein was responsible for the self-reported allergic responses that people experienced last fall." NCGA's Tom Slunecka, Director, Industry Affairs, said: "For corn growers, consumer confidence in the safety and nutritional value of the crops we grow is a paramount concern. NCGA now urges the EPA to work on establishing a scientifically justified threshold level that would allow trace amounts of StarLink corn in food products processed for human consumption. While we are farmers and not scientists, we continue to believe that trace amounts of StarLink do not pose a threat to human health, and we look forward to ongoing scientific testing and analysis of this issue." The EPA's Scientific Advisory Panel (SAP) will meet July 17-18 to consider the CDC's findings as it relates to the SAP's ongoing review of StarLink corn. Information on the meeting-including background materials-is available via EPA at www.epa.gov/scipoly/sap . For additional information, go to www.ncga.com.

EU Mission Participants Report Good Talks

The participants in the National Corn Growers Association (NCGA) and the U.S. Grains Council (USGC) joint mission to Europe this week reported being well received as they discussed the status of biotechnology.

Rick Tolman, executive vice president and CEO, said there were four lessons learned on the trip. First, that there is real value in having mainstream corn growers explain the use of biotechnology to U.S. trade officials and to European officials. Second, there is still significant misinformation and misunderstanding in Europe and in other World Trade Organizations (WTO) nations about the safety, regulations and marketing of biotech crops. Third, the consumers have a lack of accurate information about the technology and are therefore still very skeptical. Fourth, the EU officials understand and to some degree support the scientific basis for biotechnology but still must respond to the concerns of the consumers.

A NCGA-USGC delegation of three farmers and three staff members will visit Brussels, Rotterdam, Geneva and Paris to meet with corn co-product importers, European Commission officials, WTO ambassadors, European news media, consumer groups. The group's mission was also to convey the U.S. corn industry's views regarding agricultural biotechnology and to develop a biotechnology plan of action for the U.S. feed grains industry.

Participating in the mission are: Lee Klein, NCGA president and farmer from Battle Creek, Neb.; Fred Yoder, NCGA Biotechnology Working Group chairman and Plain City, Ohio farmer; Len Corzine, NCGA Biotechnology Working Group and farmer from Assumption, Ill.; Rick Tolman, NCGA CEO; David McGuire, USGC director of trade relations and global strategies; and Ellen Dougherty, USGC director of communications. The group returns home this weekend.

NCGA Leaders Prepare to Make a Difference in Corn Board Elections
Potential leaders of the National Corn Growers Association (NCGA) passed another milestone this week. For more details, go to . NCGA Checkoff Dollars Research Renewable Chemicals from Corn The National Corn Growers Association (NCGA) is always on the lookout for ways to increase market potential for the nation's 300,000 corn growers. For more information on this story, go to . NCGA Represented at Grains Symposium The National Corn Growers Association (NCGA) was recently represented at the fifth-annual Distillers Grains Technology Council (DGTC) held in Louisville, KY.

U.S. Trade Representative Brokers Deal for China's Entry into WTO

The United States and China have resolved their remaining disagreements regarding the latter nation's membership in the World Trade Organization (WTO), and it's likely this resolution will facilitate China's accession into WTO by the end of 2001. U.S. Trade Representative Robert Zoellick negotiated the deal with the Chinese trade minister, and it builds on the November 1999 U.S.-China accession agreement. This agreement addresses such issue as domestic support for agriculture and trading rights. An apparent resolution of previously contentious issues-particularly farm subsidies-increases the prospects for favorable congressional action on normal trade relations status for China later this year. It also provides an impetus on the next round of trade liberalization negotiations, to be held in Qatar in November. China must demonstrate that its laws and policies are congruent with WTO free-trade rules and that it has secured the endorsement of other member governments before accession can occur. The agreement between the two nations will allow China to provide government subsidies for its agricultural producers at 8.5 percent of total annual value of agriculture production, and not to increase support of agriculture in the future.

House Appropriations Passes FY 2002 Agriculture Spending Bill

Thursday, the House Appropriations Committee reported out the fiscal year 2002 Agriculture Appropriations bill. This bill funds programs at the USDA important to both consumers and farmers. Among the highlights:

• $15.669 billion in funding for USDA programs and operations ($500 million more than FY01, and $240 million more than the President's request).
• The bill includes full funding of 4.6 percent pay increases for fiscal year 2002, including $119 million for FSA salaries.
• Agricultural credit programs are increased by $765 million over last year. Total loan authorization level is $3.855 billion, which is the same as the President's request.
• Distance Learning and Telemedicine Program total loan authorization is $400 million. Within this amount, $100 million is appropriated, contingent upon enactment of authorizing legislation, for broadband telecommunication loans.
• Risk Management Agency / Federal Crop Insurance Corporation activities to implement last year's Agricultural Risk Protection Act are fully funded. RMA is funded at $75.1 million, an increase of $9.7 million over last year. The Corporation is funded at $3.037 billion, which is an increase of $232.3 million above last year, and which is the same as the President's request.
• Conservation Operations activities are increased by $70.2 million over last year, bringing FY '02 funding to $782.8 million.
• Food Safety and Inspection Service is increased by $25.5 million over last year, for a total of $720.7 million, which is $5.1 million above the President's request.
• Food and Drug Administration is funded at $1.218 billion, which is $120.4 million above last year.
• Food for Peace Program (PL 480) is funded at a program level of $835.2 million, which is the same as last year and the same as the President's request.
• Provides $150 million in market loss assistance for apple producers. The House hopes to schedule a floor vote on this bill late next week. Currently, the Senate has not scheduled a mark-up of this legislation.

Plaintiffs, Other Parties Meet to Discuss Settlement of TMDL Suit

NCGA and several agricultural groups met with their attorneys this week to discuss a possible out-of-court settlement of a lawsuit filed against EPA last summer. NCGA and the other plaintiffs initiated the suit when EPA finalized a TMDL rule that we believed exceeded its statutory authority under the Clean Water Act. This week's meeting is the first at which the plaintiffs have discussed the possibility of a settlement. Since the plaintiffs filed suit against EPA last year, a number of environmental groups have intervened in the case. NCGA's Keira Franz stated that the agriculture groups are directing counsel to negotiate a settlement that is in the best interests of commodity producers.

House Agricultural Committee Postpones Markup; OMB Letter Complicates Prospects

Last week's Corn Commentary reported that the House Agriculture Committee had scheduled a mark-up of the 2001 crop year economic assistance package this week. The markup has been rescheduled for Wednesday, June 20, at 10:00 am. But in a development that could complicate the mark-up, OMB Director Mitch Daniels-in a letter to House Agriculture Chairman Larry Combest (R-TX)-opined that the Administration's support for farmer relief must remain under the $5.5 billion total for 2001. In the letter, Daniels stated: "I will recommend that the President not sign a bill providing more than $5.5 billion in additional assistance for crop year 2001, the maximum amount provided in the budget resolution." Later, he noted that because the $5.5 billion of assistance "would boost real [farm] income to $53.5 billion, $1.2 billion higher than last year. Thus, any perceived need for additional assistance should fit well within the $5.5 billion provided in the budget resolution." He later added: "However, our support is contingent on funding remaining within the $5.5 billion total for 2001." NCGA expects OMB's position will probably set up a rancorous debate during mark-up, as various interest groups jostle to push commodity interests aside and secure a piece of the pie.

Trade Negotiation Legislation Hits House; Bruising Partisan Battle Expected

A bill providing for Trade Promotion Authority (TPA) was introduced this week by House Ways & Means Trade Subcommittee Chairman Philip Crane (R-IL). TPA is the latest label applied to what had been known as fast-track authority, which expired in 1994 during the first Clinton Administration. Essentially, the concept allows the President to negotiate trade deals in a timely fashion so that the benefits of free trade can be maximized for the benefit of U.S. exporters, particularly agriculture. As the TPA concept now stands, the President and Congress would agree on the goals that would be achieved in any trade deal and, and the President would consult with Congress during negotiations. The President also would have to consult and consider input solicited from the private sector, in the sense of how the deal would impact the business community. The idea is to secure political support for the deal that is eventually negotiated. Then, Congress would vote on the deal up or down, without amendment. Such an amendment prevents a deal from being partially accepted and picked apart. Next week, NCGA will participate in a White House ceremony kicking off the Administration's effort to secure TPA. NCGA is a member of a coalition-including many commodity groups-seeking passage of TPA. The battle to pass TPA will be contentious, and it will not be possible without broad bipartisan support. The role of grassroots support by corn growers will be vital to this effort, and NCGA will keep you informed of how and when your involvement will make a difference for TPA.

NCGA Provides Feedback on NESCAUM's Technical Report

NCGA provided a detailed analysis and critique of a technical report drafted by the Northeast States for Coordinated Air Use Management (NESCAUM), a consortium of state agencies. The report detailed NESCAUM's support for the elimination of the federal RFG (reformulated gasoline oxygen requirement). NCGA's Director of Energy & Analysis John McClelland attended a NESCAUM workshop on the report in DC last week, and presented detailed review of the NESCAUM document. "We found NESCAUM's analysis deficient, particularly when viewed against the NCGA technical analysis submitted to the U.S. EPA regarding California's request for a waiver from the RFG oxygen requirement," McClelland said. "We believe our technical analysis is superior, and I forwarded these and other observations to NESCAUM." NCGA's critique of the NESCAUM can be found online at www.ncga.com.

NCGA This Week

• June 17 Bob Sedlacek will be attending a Fiber Utilization meeting in Golden, Colorado.
• June 18 Tim Hume meets at the White House/Agriculture Community Briefing on Trade and TPA (Trade Promotion Authority) with Secretary Ann Veneman, Ambassador Zoellick and senior White House officials.
• June 20 Rene Shunk will be attending the 1,3-Propanediol Department of Energy (Doe)Team Kickoff Meeting, Pasco, Washington (at the Pacific Northwest National Lab)

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