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NAMA News September 20, 2012

Congress fails to act on fiscal issues and the farm bill, affecting Foreign Market Development (FMD) and Market Access Program (MAP) for 2013

Last year, Congress passed a law that triggers automatic spending cuts (sequestration) in January if it fails to pass legislation to reduce the deficit. Congress has yet to take action; therefore, agencies are bracing themselves for 7 to 8 percent reductions in domestic spending and 9 to 10 percent reductions in military spending. Tax provisions will also end at the same time, and this combination of tax increases and spending cuts is being referred to by some lawmakers as the “fiscal cliff.” There may be action to avert this during a lame duck session of Congress that will start the week after the November 6 election. Government agencies are starting to make plans to implement these cuts, and a July memo from the Office of Management and Budget at the White House to heads of agencies states “the sequestration would be highly destructive to national security and domestic priorities, as well as to core government functions.”

The House has passed legislation to continue funding the federal government through March 2013. The Senate is expected to approve the legislation next week, before both chambers are expected to adjourn until November 13.

This abbreviated schedule makes it less likely that farm legislation will pass before the current farm bill expires October 1. The Senate passed a farm bill in June, but action had been stalled in the House until the crop report released in mid-July showed significant losses after a promising start in the spring. The House Agriculture Committee then approved a bill, but it has not been scheduled for a floor vote. There have been lapses in farm bill coverage in the past, and crop-insurance payments have provided drought assistance to program crop producers this year. However, livestock producers do not have access to disaster assistance, and the dairy program will expire in December without further action by Congress.

Although the continuing resolution to keep the government running after October 1 includes appropriations for the Foreign Market Development (FMD) and Market Access Program (MAP), the authority to run the programs granted by the farm bill would not be in place without a new bill or an extension.

New Grain Foods Foundation leader begins work

Christine Cochran, the new executive director of the Grain Foods Foundation (GFF), started work on August 1 and met with the GFF marketing committee on August 2. Cochran spent time in NAMA’s office for part of August and met with NAMA Vice Chairman Greg Schlafer of General Mills.

The grain chain provides helpful perspective in nutrition discussions

The September edition of the Journal of the Academy of Nutrition and Dietetics included an article on the adoption of gluten-free diets by the general population by Dr. Glenn Gaesser, a member of the Grain Foods Foundation scientific advisory committee.

In his article, Dr. Gaesser says, “Despite the health claims for gluten-free eating, there is no published experimental evidence to support such claims for the general population…Indeed, there is some evidence to suggest that a gluten-free diet may adversely affect gut health in those without celiac disease or gluten sensitivity.” Interviews with Dr. Gaesser aired on Washington, DC radio stations and appeared in print publications.

On September 10, a producer of the ABC television show The View notified the National Association of Wheat Growers (NAWG) that the show would air a segment on wheat the next day with Dr. Jeffrey Morrison, a former member of the medical staff of the Atkins center. NAWG and the other members of the grain chain worked on a statement that was read in its entirety by Barbara Walters. The statement stated:

“Humans have been growing and eating wheat for thousands of years, and the assertion that wheat’s nutritional value has been changed is patently untrue. Eliminating wheat foods means eliminating an important source of healthful nutrients that are vital to our bodies functioning properly, like fiber, iron, B vitamins, antioxidants, and folic acid.”

Commodity Prices and Global Food Security

Recent commodity price volatility has generated ongoing concern by international agencies about the effects of high and volatile prices on food security in developing countries. Early this year, the leaders of the world’s 20 largest economies formed an organization called AMIS, the Agricultural Market Information System, which will hold its second meeting at FAO (Food and Agriculture Organization of the UN) Headquarters in Rome, Italy, October 2-4 to discuss coordinating efforts. This meeting will include discussions with the private sector, the plans for the second year of AMIS, and an in-depth examination of the subject of indicators, in particular with regard to market situation, outlook analysis, and early warning.

NAMA staff has been monitoring USDA input to the policy options discussion. The U.S. grain trade has provided advice that it is unwise for governments and multilateral agencies to interfere with market signals. The Russian government’s recent statement that it would not restrict wheat exports in 2012-2013 is seen by some as evidence that the message is having an impact on decision making.

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