We note the recent announcement by USDA that 275,000 tons of wheat will be taken from the Bill Emerson Trust (formerly the Food Security Reserve) to serve as a funding mechanism for commodities that will be provided to deal with the drought in Southern Africa. We certainly support a strong U.S. response to the drought in Southern Africa which has been in the works for some time. And while we always prefer to see wheat donated, especially to countries like these where bread is consumed as a staple, we fully understand that recent humanitarian assessments indicate that a large amount of maize is needed in the poor rural areas of these countries.
While we support the donation, we have very strong concerns about the way USDA is providing America’s food aid in this instance and the confusion over USAID’s position.
The Bill Emerson Trust was established to maintain the continuity of the food aid programs during times of tight supplies and high commodity prices. These conditions do not appear to apply at this time. Rather, this swap of wheat for other commodities appears to have been selected because it was more convenient than using CCC Charter Act Authority to make purchases or redirecting existing PL480 availabilities to meet this need. It appears that OMB did not want to allow the use of the CCC Charter Act which could have been used to directly buy the commodities needed rather than using this convoluted process which also draws down the Trust..
Our producers are concerned about the release of the 275,000 tons (some call it dumping) of wheat into the market at a time when the harvest is just getting under way. While some might argue that this is a modest volume, we cannot overlook its impact in terms of volume or market psychology. We would also point out that there could be further claims on the Trust, and, if handled in the same manner, it would further disrupt the U.S. wheat market.
This week, Administrator Natsios testified that the U.S. government does not need more money for food aid, that there were sufficient funds to cover this aid to Southern Africa. That seems to be a strange assessment, given that USDA evidently has decided that it needs to tender, auction, or in some other manner sell wheat on the domestic market, in clear competition with America’s wheat farmers, in order to be able to fund this assistance.
We urge the department to reconsider its decision to release the wheat from the Emerson Trust. Surely the U.S. government is aware that future needs will require wheat donations. But if the decision to release stands as announced, we strongly urge the Department to proceed expeditiously to replenish the amount, using either the CCC Charter Act Authority or the normal appropriations process.
Sincerely,
Alan T. Tracy
President, U.S. Wheat Associates
Daren Coppock
CEO, National Association of Wheat Growers