IN THIS ISSUE:

• Defeat of Feinstein Amendment is Victory for NCGA
• NCGA Testifies on Upper Mississippi Lock and Dam Needs
• NCGA Presents the Facts on Ethanol in California During Workshop
• NCGA Biotech Views Vindicated With Article Retraction
• NCGA Disappointed as Mexico's Congress Takes Another Swing at HFCS Issue
• National, State Staff Meeting Wraps Up in St. Louis
  
  

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Defeat of Feinstein Amendment is Victory for NCGA
NCGA applauds Congress in its 61-36 decision to block Sen. Dianne Feinstein's (D-Calif.) amendment to the Renewable Fuels Standard (RFS) provisions in the Senate's energy bill (S.517), requiring the U.S. Environmental Protection Agency (EPA) to respond within 30 days to an emergency request by a state for a waiver from the ethanol requirement. The Senate's energy bill currently includes provisions that would give the EPA 240 days to consider a waiver.

The RFS provisions outline that starting in 2004, 2 billion gallons of renewable fuel, such as ethanol, would be mandated in the country, increasing to 5 billion gallons by 2012. Additionally, the compromise would grant ethanol companies liability protection.

Sen. Feinstein said on the Senate floor yesterday, "I believe that the renewable fuel provisions in this legislation amount to a wish list for the ethanol industry, and the Senate has to consider the impact of these provisions on the rest of the nation."

NCGA President Tim Hume, a grower from Walsh, Colo., said, "Defeating the Feinstein amendment is an outstanding victory for corn growers. We don't want to be dependent on foreign energy and to delay the ethanol mandate would be like giving the United States the go-ahead to do so."

NCGA's John McClelland, director of Energy & Analysis, said, "This vote was important because it shows that we can withstand any challenges to the RFS provisions. In fact, it demonstrates that we have enough votes to break a filibuster on the RFS provisions. This should confirm that the efforts of those opposed to these provisions are in vain."

NCGA and other key ethanol industry, oil, and agricultural associations, including the Renewable Fuels Association (RFA) and the American Petroleum Institute (API), negotiated the RFS with Senate leaders for weeks. In early March, Senate Majority Leader Tom Daschle (D-S.D.) inserted the RFS into the Senate energy package in place of current language.

NCGA Testifies on Upper Mississippi Lock and Dam Needs
NCGA went before Congress Wednesday, testifying on the importance of upgrading the lock and dam system on the Upper Mississippi and Illinois Rivers. NCGA Production and Stewardship Action Team member Garry Niemeyer, a corn grower from Glenarm, Ill., told the House Transportation and Infrastructure Subcommittee on Water Resources and Environment that longer, newer locks were needed to help farmers stay competitive with other parts of the world, especially Brazil and Argentina. The outdated lock system, built in the 1930s, slows down grain transportation at an increased cost to U.S. producers, making it harder for them to compete overseas.

The Mississippi and Illinois rivers are major routes for the farming industry. An estimated one-third of U.S. grain is exported annually, and 60 percent of that uses the rivers to move shipments to the Gulf of Mexico.

In a study by Mike Evans, formerly a professor with the Kellogg Graduate School of Management at Northwestern University, it is estimated the cost of transporting corn and soybeans would increase by 65 percent due to greater congestion if the locks are not updated. That would be an average increase of 17 cents per bushel by the year 2020 without modernization of the current system.

Infrastructure breakdowns create a ripple effect that is felt throughout the entire rural community. Because of that price increase, corn exports would drop by 68 million bushels per year, or 1.75 percent of the estimated exports of the year 2020.

To find more information on NCGA's battle to update the lock and dam systems, visit these links:
Garry Niemeyer's testimony on Proposals for a Water Resources Development Act 2002

The Evans Study on the Economic Impact of Increased Congestion on the Upper Mississippi

Upper Mississippi/Illinois River Improvements

Evans Study Confirms NCGA River Fear

NCGA Presents the Facts on Ethanol in California During Workshop
The NCGA took its ethanol show on the road last week, presenting a "So You Want To Build An Ethanol Plant" meeting in Sacramento, Calif. NCGA Chairman Lee Klein said years of relationships with agriculture representatives from the Golden State are paying off.

"We've been dealing with some of the ag groups for over four years," Klein, a grower from Battle Creek, Neb., said, "and we're starting to make some friends. Sometimes, it takes a while to build these relationships, but we're seeing them pay off.

"The meeting itself was very positive," he continued. "The group we talked to are very interested in form their own corn growers association and we're building a trust with them. It went very well."

NCGA Director of Production and Marketing Paul Bertels, said the crowd was interested in what the workshop had to offer. "The meeting was well attended," he said. "The group seemed interested in our cause. I would gauge their interest, based on their questions, which revolved around the necessity for ethanol in fuel, the economics of dry mills, can enough ethanol be produced for demand, and what NCGA's message is to California customers.

California ag is under the gun on several fronts," continued Bertels, "specifically water use and air emissions. Ethanol production could help them with some of these concerns. Both groups were also excited about the possibilities behind e-diesel."

NCGA Livestock Programs and Information Manager Tracy Snider also gave a presentation on distillers' dry grain solubles, similar to the one that drew a sellout crowd in Lincoln, Neb., last November. "The group was also very interested in the DDGS presentation," said Bertels. "Some had suggested doing a combined ethanol/DDGS seminar. We stressed to them they shouldn't overlook the importance of co-products, particularly DDGS, as a marketable commodity and if there is an interest in pursuing the grower-owned mills further, we would be happy to come out and put on a full-blown workshop.

Bertels concluded by saying this workshop was the first step in winning support for ethanol in California. "We have to garner their support to join the ethanol fight," he said. "Ethanol is a California agriculture issue, and California agriculture must produce some of their states ethanol demand. Hopefully, this meeting will help them on their way to that objective."

NCGA CEO Rick Tolman recently met with representatives from the California Agriculture Leadership Program and said they were open to the idea of using the corn-derived fuel additive.

"They were interested in our policies on ethanol," he said, "and I had talked to them about our 'So You Want To Build An Ethanol Plant' program. We shared with them what we've learned, the mistakes we've made, the things we've been able to put together...they were quite excited by that."

Tolman said there were some initial questions concerning NCGA "forcing ethanol on California," but he was able to clarify it's not necessarily about ethanol. "I explained to them we were not so much interested in California using ethanol but in an overall renewables program across the U.S., whether it's corn or other products, they really warmed up to that."

NCGA, long a proponent of renewable fuels, and kicked its ethanol program into high gear last year with the creation of the Ethanol Committee, chaired by York, Neb., corn grower Boyd Smith; visits with state and agricultural leaders in October to both California and New York to promote the use of ethanol; and the two highly-successful predecessors of the California version of "So You Want To Build An Ethanol Plant," the first held last June in St. Louis and the second conducted in November in Lincoln, Neb..

NCGA Biotech Views Vindicated With Article Retraction
The NCGA is pleased with the news the editor of the journal Nature released a statement saying an article claiming transgenic corn was discovered in the Mexican state of Oaxaca should not have been published due to insufficient evidence.

NCGA Director of Development Tom Slunecka said this is yet another example of groups finding problems with biotech that don't exist.

"Once again," he said, "groups like NCGA and U.S. Grains Council (USGC) have proven that, by using sound science, biotechnology is not the concern some of these groups claim it to be. Our organizations are believers and supporters of the strict guidelines set up by the government when it comes to regulating biotech. We stand by these guidelines and believe biotech, managed properly, can do tremendous things.

"Nature's comments about the errors in the article only prove what we've said all along," Slunecka continued, "and that is, people are quick to jump to conclusions and make erroneous statements about biotech because they don't have the facts. Using sound science, NCGA and USGC have the facts and stand by them."

In September 2001, a delegate from the Mexico Ministry of Environment publicly stated transgenic corn was discovered in the Mexican state of Oaxaca. This claim was followed in November by the article in Nature, announcing those statements to the world, causing severe backlash against biotech. NCGA has put much time and effort into the ensuring biotechnology is available for use by responsible growers.

NCGA Disappointed as Mexico's Congress Takes Another Swing at HFCS Issue
Despite a setback for U.S. efforts to prevent a tax on high fructose corn syrup (HFCS) in Mexico, the NCGA and other major farm groups continue to urge the U.S. trade representative to seek a commitment from the government of Mexico to take whatever steps are within its power to prevent this tax from going into effect.

The Mexican Congress voted last week 255-198, with two abstentions, to challenge in the country's Supreme Court the executive branch's recent suspension of a 20 percent tax on beverages made with high fructose corn syrup (HFCS). President Vicente Fox was able to get the tax suspended in March for seven months, in hopes of striking a sweetener deal with the United States.

The tax on fructose, which in Mexico is largely made with U.S.-grown corn, was a measure Congress slipped into a fiscal reform package in 11th-hour deal making last year. The tax, imposed Jan. 1, was an attempt to aid Mexico's debt-ridden sugar industry and increase the government's tax collection revenues. Mexico's Congress argued that strict U.S. sugar quotas, which limit total imports to 1.2 million metric tons annually, force the Mexican sugar industry to sell its excess sweetener elsewhere below market prices for a loss of $600 million each year. Mexico conducts nearly 90 percent of its commerce with the United States. The tax will reduce U.S. corn sales by $66 million and will reduce sales of HFCS by U.S. firms by $240 million.

The sweetener dispute centers on different interpretations of the sugar chapter under the North American Free Trade Agreement. In response to U.S. limits on Mexico's tariff-free sugar imports, Mexico imposed heavy antidumping duties in 1997 on fructose imports and then created the special beverage tax this year. At the start of the year, beverage companies began canceling fructose orders to escape the tax, stocking up on sugar instead.

National, State Staff Meeting Wraps Up in St. Louis
The annual NCGA, state corn grower staff meeting drew to a close Thursday after three days of discussion on key corn grower issues and ways state and national staff can work together to better serve corn growers. On Tuesday, staff members were updated on the status of farm bill and renewable fuel standard (RFS) legislation. Wednesday's meeting included a tour of the lock and dam system on the Mississippi River and a tour of Monsanto. Thursday's agenda included several issue-specific breakout sessions on topics such as trade, communications, recruiting and ethanol.

NCGA THIS WEEK

• April 17-18: NCGA CEO Rick Tolman will attend the National AgriMarketing Association (NAMA) Conference in Nashville, Tenn

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