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By Shelbi Knisley, Director of Trade Policy

The United Nations (UN) is set for a major discussion on the world’s food system when it hosts the Food System Summit (FSS) in New York City on September 23. The Food and Agriculture Organization (FAO), World Food Program and International Fund for Agricultural Development (IFAD) will jointly host the summit.

On the agenda are discussion and attempts at resolutions on all 17 global health, sustainability, and food systems “Sustainable Development Goals” (SDGs). A pre-summit was held in Italy this summer where much dialog took place on these topics.

The summit features five action tracks in which a variety of groups (such as governments and NGOs) can hold dialog events to express their many different views on how to work towards the UN’s SDGs. The five action tracks are:

  • Ensure access to safe and nutritious food for all;
  • Shift to sustainable consumption patterns;
  • Boost nature-positive production;
  • Advance equitable livelihoods;
  • Build resilience to vulnerabilities, shocks and stress.

Agriculture to Engage

U.S. wheat producers and their flour milling customers should not be overly concerned about the UN discussing sustainability and the food system, but they should remain cautious. These discussions will not likely lead to immediate actions. Yet the event may be cited later to develop FAO guideline documents, which other countries and activist NGOs may then use to develop their own domestic policies and agendas.

Such a result may or may not correlate to sustainable agricultural production. A good example of this is the EU’s recent “Farm to Fork” plan to drastically reduce fertilizer use by 20% and pesticide use by 50% by 2030 without any regard to curbing actual waste or with a specific environmental goal in place. If this idea were to be promoted by the UN or adopted by other countries, the impact on the global food supply and the environment could be devastating.

Therefore, it is important for the U.S. agriculture industry to be actively involved in these discussions at the UN FSS to help guide and influence science-based discussions for the future of agriculture and trade. USDA hosted three dialog events during 2021 in a lead up to the full summit this month.

Science-Based Approaches

The United Nations Food System Summit is highly focused on the food system, which goes from production to consumption. To continuously improve the world’s food system, a science-based approach must be used that allows the use of new technologies such as plant breeding innovations (PBIs) and environmentally safe use of fertilizers and pesticides. By using new technologies in agricultural production, it leads to a more sustainable world that uses less inputs while also producing more food on less land to meet the growing food demands of the world.

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By Shelbi Knisley, USW Director of Trade Policy

The world keeps changing rapidly through new technological advances such as gene editing. Agriculture fortunately benefits from many of these new technologies, helping feed more people on less land into the future.

In addition, diets and consumer preferences are changing around the world. There is increased demand for animal protein (leading to more feed grain demand), for higher quality baked products as incomes increase, a greater desire to understand product sustainability and where and how food is produced.

For centuries farmers have selected desirable traits to improve crops and livestock, including such innovations as shorter wheat plants needed to support the dramatic increase in yield potential resulting from the Green Revolution. Agriculture advances rapidly and keeps up with the changing demands largely because of advancements in production practices and plant breeding technologies through selective breeding, cross breeding, hybrids, marker assisted selection, genetic modification, and now gene editing.

Benefits of Gene Editing

Gene editing is the ability to precisely select genes in an organism’s genome to make targeted changes. This can also occur through conventional breeding – but with much more precise outcomes in less time due to gene editing. There are different types of gene editing technologies, such as CRISPR and TALENS. The advantages of these innovative breeding techniques will help bring more specific advancements in wheat to market more quickly and at a lower development cost, which would allow for a wide range of developers in the field to bring new products to market.

An image showing a wheat variety trial field to illustrate the article on gene editing in agriculture.

Gene editing offers more precise outcomes and less time getting improved wheat varieties to commercialization. For public wheat breeding programs seen in this trial at Colorado State University, gene editing also has the potential to reduce research costs.

According to a study by North Dakota State University (NDSU), the average cost of the process from research and development to market is greater for GMOs than gene editing. The study estimates that the average cost for gene editing is $13.3 million while GMOs averaged $80.7 million.

Like genetically modified organisms (GMOs) and other breeding methods, science and regulators demonstrate the safety of gene editing. Gene editing also holds excellent promise as a technology that supports sustainable food production. Desirable traits such as improving a crop’s ability to tolerate drought, producing more on less land, and improved disease-resistance. Just as GMO technology has done, gene editing can help sustain a long-term reduction in the use of crop protection products and fertilizer.

Gene Editing Research

The gene editing research happening today is looking at edits that would be positive for producers, consumers and the environment. For example, Calyxt has developed high fiber wheat using gene editing. The company hopes to release that trait through a closed-loop system – potentially in the next few years. To help consumers get enough fiber in their diets, this trait would positively improve human health. There is also research to develop a modified gluten wheat variety, which could be helpful to those that have a gluten intolerance.

Gene Editing Around the World

Several signs point to this innovative technology garnering more acceptance around the globe than GMOs have received. The world is beginning to recognize gene editing as a valuable tool, and many countries are currently revising their biotechnology regulations to positively incorporate gene editing technology in agriculture.

To date, the United States, Canada, Australia, and Japan have released guidance or proposed guidance on how to regulate gene edited crops. Those concepts mainly indicate that if there is no plant pest risk or foreign DNA in the final product, the gene edited crop would not be regulated.

In 2018, the Court of Justice of the European Union ruled that gene editing technology was to be treated equally to GMOs, which are essentially banned in the EU. This spring, in a surprising announcement, the EU Commission released a report on gene editing stating that gene editing is different than GMO technology and should not be regulated in the same way. Although this is exciting, it is expected to take some time for the EU to determine its final regulations. However, this report opens the discussion for the EU to consider this new technology and see the benefits of embracing it to meet the needs of the world today, including the EU’s sustainability goals and feeding a growing population.

UK Consultation

Since separating from the EU, the United Kingdom (UK) held its own consultation on gene editing. The results from the consultation are expected to be released this year, but historically the UK has had a more positive view on science-based decisions than the EU. The UK’s Department for Environment Food and Rural Affairs (Defra) stance is that “organisms produced by [gene editing] or by other genetic technologies should not be regulated as GMOs if they could have been produced by traditional breeding methods.” The consultation only impacts England, meaning the other UK countries would have to revise their own biotech regulations. This creates a challenge for some, including Northern Ireland, since it is still treated as part of the EU customs union under the BREXIT agreement.

Should the EU accept the safety of this technology, it can positively influence regulators in other countries. Positions on gene editing in many African and Asian countries are still in the early development phase, but it is believed that China will likely embrace this new technology and regulate gene editing the same as conventionally bred crops.

If the world can take a science-based approach to gene editing, there is the potential for several positive outcomes and advancements for trade, science, sustainability, food production, and agricultural advancement. However, if the EU and other countries continue enforcing anti-science agendas, there could be a negative impact on this promising new technology. With a growing global population to feed, agriculture cannot afford setbacks.

Image is a close up of wheat breeding work to illustrate the article on gene editing in agriculture.

In the wheat breeding program at Oklahoma State University scientists work long days crossing thousands of wheat prodigy using genetic stock from around the world. Gene editing can help breeders develop varieties that produce more and better quality wheat for a growing world.

As technology advances around the world, USW hopes to see it embraced without disrupting trade. Therefore, it is essential to use a science-based approach when developing policies affecting gene editing and other new technologies. USW and the National Association of Wheat Growers (NAWG) share a joint Wheat Breeding Innovation Committee (WBIC) that has informed breeders that it expects to be notified as early as possible of any wheat trait developed through plant breeding innovation technology. In that way, USW can gain input from major importing customers before such a product enters the U.S. commercial market to mitigate and eliminate potential trade barriers. You can access WBIC principles for commercialization here and the position statement here.

Visit these websites for more information about the benefits of gene editing innovations.

https://geneticliteracyproject.org/

https://innovature.com/

https://www.bio.org/ 

https://www.bestfoodfacts.org/category/gene-editing/

https://www.nationalgeographic.com/environment/article/food-technology-gene-editing

 

 

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By Shelbi Knisley, USW Director of Trade Policy

U.S. Wheat Associates (USW) recently joined a coalition of several U.S. agricultural organizations calling on the Biden Administration to work toward reforms to the World Trade Organization (WTO) “that lead to a market opening agenda for agriculture and a better functioning institution.”

USW signed the July 23, 2021, letter to U.S. Trade Representative Katherine Tai and Secretary of Agriculture Tom Vilsack because it believes the WTO’s mission to liberalize global trade has benefitted the wheat farm families the organization represents and the world’s wheat importers. As the coalition stated on liberalized trade, “It helps connect American farming communities to peoples around the globe.”

Since it was formed in 1995, global wheat trade has doubled. The WTO provides a trade dispute mechanism that has identified the need to amend trade-distorting practices such as China’s domestic wheat support and unfilled wheat import tariff rate quota.

However, the letter also pointed out that “When the WTO functions poorly, and other governments get away with treating U.S. agriculture exports unfairly, trust erodes in our government and international institutions. To restore trust, WTO reform is needed.”

Leading issues of discussion at the WTO include challenges on tariff implementation, domestic support, transparency, sustainability, and climate. Following are some of the areas the coalition would like the U.S. officials to address at the WTO Ministerial Conference (MC12) in late November 2021:

  • Public stockholding (PSH) disciplines – PSH programs may serve a laudable food security goal but often lead to excessive domestic stockpiles, as we have seen in India and China. Those stocks lead to lower global prices and may force U.S. farmers to compete with subsidized exports.
  • Special safeguard mechanism (SSM) rules – SSM’s allow developing countries to temporarily impose import tariffs to protect domestic producers from competition, and at times may unfairly tax U.S. exports.
  • Domestic support limits – Domestic support, a subsidy that encourages production, is one of the most discussed topics in Geneva. Some countries want the U.S. and EU (both of whom are within the limits they agreed to) to slash their farm program spending, while the U.S. argues that many advanced developing countries are dramatically exceeding their own limits. The coalition supports negotiating new limits on domestic support if market access is also considered.
  • Export restrictions are policies that may limit the amount of a product being exported from a country in the form of a tax or set quantity. Some countries will impose export restrictions on commodities to control domestic prices. During the COVID pandemic, Russia imposed export restrictions on wheat exports to control domestic wheat prices. Countries are expected to consider a proposal to exempt purchases by humanitarian organizations like the World Food Program from these limits.

Addressing transparency is a leading concern because it has a significant effect on market access and export competition. For example, global wheat production and trade are negatively impacted by India’s domestic support policies for wheat. Resolving such issues would help the market operate more freely and allow more fair and equal trade for all wheat producers.

The world continues to change, and the demand on the agricultural industry to feed more people in more environmentally and socially sustainable ways is increasing. The coalition supports using science-based approaches to embrace innovations and technologies to address these challenges of sustainability and climate. Also, with this, the coalition supports a declaration on sanitary and phytosanitary (SPS) measures, which would establish a committee on SPS measures to focus on harmonized regulation, risk analysis, sustainability, and innovation at the WTO.

USW remains committed to the WTO’s mission and believes that, with positive reforms, the organization can once again become a functioning, trusted institution for equal and fair trade for the people of the world.

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By Shelbi Knisley, Director of Trade Policy

Trade Promotion Authority (TPA) is a key trade negotiation tool. TPA is due to expire in the U.S. in a month, posing serious challenges for ongoing negotiations important to wheat growers.

TPA is commonly called “fast track authority” because of its provisions to speed Congressional approval of trade agreements that were negotiated and agreed to by the administration of a sitting U.S. President. It has been granted to every presidential administration since Franklin D. Roosevelt and is, in effect, a tool to instill confidence in U.S. trading partners. It is crucial to advancing negotiations because under TPA, other countries would be less hesitant to make commitments in a negotiation fearing that a final agreement could be amended by the U.S. Congress.

While there is still time for Congress to extend TPA before the current expiration on July 1, 2021, there has been little discussion of renewal and the Biden Administration has not yet asked Congress to extend the authority. In reality, TPA has already expired because any newly negotiated free trade agreements (FTA) have a 90-day notification requirement. So even if a new agreement were notified today, it would eclipse the existing TPA authority by two months.

Before the current administration took office, the United States was negotiating free trade agreements with Kenya and the United Kingdom (UK) under TPA. Agreements with both countries present opportunities to expand U.S. wheat exports.

UK Trade

Buyers in the UK import mainly hard red spring (HRS) wheat from the U.S., due to prohibitive tariffs on medium and low-protein wheat and large domestic production of soft wheat. The U.S. supplies around 20% of the UK’s wheat imports. An FTA between the U.S. and the UK could give buyers greater access to additional U.S. wheat classes. After the UK officially left the European Union customs union at the start of 2021, it is now able to negotiate its own trade agreements. Due to the strong relationship and opportunity to increase wheat options for UK millers, an FTA between these two large economies should be a major priority.

Kenya Trade

Following the resolution last year of a sanitary/phytosanitary trade issue, there is more opportunity for U.S. wheat to enter the Kenyan market. Allowing favorable trade terms for U.S. wheat into this African country would make U.S. wheat more competitive with European and Black Sea wheat. An FTA with Kenya could serve as a model for future agreements with other African countries, which is important, as the continent is growing both in population and in food demands.

TPA Benefits

Almost all U.S. free trade agreements have been concluded with TPA in place. For example, the previous renewal of TPA enabled the renegotiation of the North American Free Trade Agreement (NAFTA), now known as the U.S.- Mexico- Canada Agreement (USMCA) and the U.S.- Japan Trade Agreement. Both agreements benefited wheat producers and their offshore customers significantly.

There has also been chatter among pro-trade folks in Washington about the potential of the United States rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP). Joining CPTTP would allow U.S. wheat level access to Vietnam in the Asian region and to any other country added to the bloc. Securing TPA would greatly encourage the idea of joining CPTTP and provide an effective consultation process with Congress and, eventually, a streamlined vote.

USW Supports TPA

More than 50% of U.S. wheat production is exported every year so creating new market access, secured through free trade agreements, is critical to U.S. wheat competitiveness. USW highlighted the importance of TPA in comments to the United States International Trade Commission (USITC) in 2020 and continues to support its renewal.

 

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By Shelbi Knisley, USW Director of Trade Policy

The United States donates more wheat than any other agricultural commodity as direct food aid or to help fund assistance to the world’s neediest people. Yet a mix of government agencies, non-governmental organizations (NGOs) and regulations complicate the food aid donation process.

To help navigate these waters, U.S. Wheat Associates (USW) established a Food Aid Working Group (FAWG). FAWG includes farmer board members and state wheat commission staff who want to ensure food aid programs are used effectively and continue their important work overseas. Together with the National Association of Wheat Growers (NAWG), FAWG meets annually to advocate for food aid programs with officials from USDA and its Foreign Agricultural Service, the United States Agency for International Development (USAID), and congressional agricultural committees.

U.S. Food Aid was established years agoVirtual meetings with officials this year focused on two major challenges: a rising trend toward using larger amounts of cash and vouchers in food aid programs; and cargo preference shipping rules that increase the cost of U.S.-sourced wheat and other commodity donations.

These challenges did not exist when food aid programs began under the 1954 Agricultural Trade Development and Assistance Act as a way for the U.S. to share excess commodities to countries with food needs. Food aid programs now include development programs like USDA’s Food for Progress (FFPr) and monetary donations.

Cash Donations Exceed Food

In addition, cash transfers and food vouchers representing 35% of USAID’s Food for Peace (FFP) program donations surpassed in-kind donations of wheat and other commodities in FY 2020. The most-cited argument for this shift is that cash and vouchers are more cost-efficient and easier to handle compared to the high costs of shipping commodities.

This leads to the second challenge FAWG members addressed during these advocacy meetings.

Costly Shipping Rules

Current cargo preference rules require that U.S. flag vessels must ship at least 50% of in-kind U.S. food aid. This cargo preference does increase costs for non-government organizations (NGOs) and U.S. agencies implementing these programs. A 2015 study by the Government Accountability Office (GAO) found that cargo preference requirements for shipping food aid increased costs by about 23%, or $107 million, from 2011 to 2014 The high costs from cargo preference limit the amount of funds these programs can use to purchase commodities.

However, during the last farm bill debate, the Farm Bureau advocated for modernizing the Food for Peace program through cost savings. In its effort, Farm Bureau cited research showing a greater mix of U.S., local, and regionally sourced food would save $300 million per year that could be used to feed more people.


“Food is the moral right of all who are born into the world.” — Dr. Norman Borlaug


Strong Commitment

As the cost of food rises and pushes more individuals into food insecurity across the globe, USW and FAWG members believe we must keep commodities in food aid programs. U.S. growers take pride in the fact that their wheat is assisting some of the world’s most vulnerable individuals. Their commitment to global food assistance and programs that include the full range of options to help countries attain lasting and sustainable food security remains strong.

 

 

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By Shelbi Knisley, USW Director of Trade Policy

As part of its fiscal year 2021 Food for Progress Program, USDA’s Foreign Agricultural Service (USDA-FAS) recently announced an award of 300,000 metric tons of U.S. hard red winter wheat to Sudan. The award is worth an estimated $120 million.

As wheat is a dietary staple in many diets, U.S. wheat has a long history of playing an important role in U.S. food aid programs. U.S. Wheat Associates (USW) and the farmers our organization represents welcome this award and are proud to play a part in helping the Sudanese people.

Food for Progress is an international development program at USDA-FAS that was authorized in the 1985 Farm Bill to help developing countries improve their agricultural industry through the monetization of donated commodities. The donated commodity is most often sold into the local market, with the proceeds funding an agricultural development program or addressing a specific need in that country.

Ethiopia Feed Program

Several Food for Progress programs have used wheat in recent years to help those in need. U.S. wheat was purchased to support Ethiopia’s livestock-feeding industry through the Feed for Enhancement for Ethiopian Development project (FEED). FEED monetized the wheat to supply a challenged local flour mill to secure supplies. The bran byproduct from processing the wheat was sold for livestock feeding in return, benefitting the FEED program.

Water Development in Jordan

Under a different Food for Progress program, wheat was monetized to Jordan for water development projects, including drilling deep wells, water waste treatment facilities, and dams for the purpose of agricultural improvements in Jordan. This area of the world has diminishing water supplies and limited infrastructure, so projects like these help improve agricultural development to countries in need.

To show wheat arriving in Jordan as part of a Food for Progress program in 2017.

The bulk carrier African Sunbird with U.S.-origin hard red winter wheat at the Port of Aqaba, Jordan on Aug. 29, 2017, during the vessel delivery ceremony under the USDA’s Food for Progress Program. Photo by USDA Foreign Agricultural Service.

Although most U.S. food aid is sent under the United States Agency for International Development (USAID)’s emergency feeding programs, the Food for Progress program is unique in that it was established to pair the use of U.S. commodities with funding for agricultural development programs in developing countries. Programs are either government-to-government or through awarded proposals from non-government organizations (NGOs).

NGO Role

Once the government awards a program to an NGO, it implements the development program in one of the countries FAS identifies as priorities each year. The Sudan Food for Progress program is slightly different because it will not impact a specific agricultural development program in country. Instead, the wheat will go to mills then be sold as flour because the country faces a short supply of wheat.

USW values its partnership with USDA-FAS and looks forward to continuous promotion of high-quality U.S. wheat abroad to our valued customers – and to helping improve the lives of the neediest people through the Food for Progress program and other opportunities.

 

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By Shelbi Knisley, USW Director of Trade Policy  

Across the United States, farmers produce more and better quality wheat using fewer natural resources, including land. According to an American Farm Bureau Federation report, in 2018, farmers needed about 8 million fewer acres (3.24 million hectares) to produce the same amount of wheat as in 1990.

The Biden Administration is currently establishing clear policy goals to fight climate change and reward conservation. It is more important than ever to share the success stories of how U.S. wheat farmers employ sustainable practices to protect their land and positively impact the environment.

U.S. wheat farmers are more economical and sustainable today by implementing agronomic practices and investing in technologies, research and development. Technology plays an essential role in making U.S. agriculture sustainable. When wheat breeders use advanced techniques and technologies to produce high-yielding, high-quality wheat varieties, it contributes to preserving the land’s natural resources through water and soil nutrient conservation that work in harmony with local conditions.

In their production, U.S. wheat farmers apply many aspects of the following sustainable tools and practices:

Reduced Tillage

The USDA Economic Research Service reports that reduced tillage has grown in popularity, and farmers implement the practice on nearly 70% of U.S. wheat acres. While at times a necessary tool, traditional plowing and other deep tillage can be concerning. Continuous wheat production with deep tillage contributed to the infamous U.S. “Dust Bowl” of the 1930s. The introduction of reduced-till and no-till practices has helped reduce soil erosion and increase water retention on dryland crops. This practice also reduces fuel use and promotes carbon sequestration. Read more about the sustainability of practicing no-till farming here.

Crop Rotation and Cover Crops

After harvest, most wheat farmers practice crop rotation and switch to a different crop in the same fields. However, more and more farms are planting “cover crops” after harvest. Farmers incorporate this crop into the soil before planting the next crop. Both these practices are beneficial in preserving soil health as well as conserving water. Cover crops add soil nutrients and organic matter and help prevent soil and water runoff. In one study, Desert Durum® wheat farmers who rotate to lettuce crops following their durum harvest reduced water use on average about 30%.

On his family’s Kansas farm, Justin Knopf has invested in soil health through cover crops, no-till and crop rotations.

Water Conservation

Wheat is a naturally water-efficient crop. In much of the United States, wheat is grown during cooler months and has a longer growing season – providing more opportunity for it to capture naturally occurring precipitation. Only about 10% of U.S. wheat acres are irrigated. Even when farmers irrigate their wheat, it often needs less irrigation than many other crops.

California grower Roy Motter uses Desert Durum® as a rotation crop to let the soil rest between vegetable crops and to help control weeds and disease. Growing durum in a rotation with lettuce reduces water use on his farm by 24% to 50%.

Precision Agriculture

Farmers use technologies such as crop yield monitors, soil maps and global positioning systems (GPS), and drones. These technologies allow farmers to apply inputs more precisely, monitor plant health and collect data on soil nutrients and other natural resources. For example, such technology enables farmers to adjust seed, fertilizer and crop protection inputs with near pinpoint accuracy, ensuring the correct rates are applied or seeded in the right location while on the go in their fields. Greater efficiency through precision agriculture practices means greater economic and environmental sustainability.

Oregon soft white wheat grower Bob Johns (right in the photo at the top of the page) and his farming partner Chris Williams (left) say technology from improved breeding to drones help them make better-informed decisions about how inputs and management affect their yields, soil and crop health, and profitability.

U.S. Wheat Associates (USW) supports finding new ways to improve wheat quality and increase production with less impact on the environment. To learn more about how U.S. wheat farmers are adjusting their practices to produce more food and fiber sustainably, visit the “Innovation and Sustainability” section of our website.


Read other stories in this series:

Special Climate and Sustainability Committee Launched on Earth Day
Precision Agriculture Improves Environmental Stewardship While Increasing Yields
U.S. Farmers Always Think About Economic and Environmental Sustainability
Minnesota Farmer Spread the News with His Conservation Practices
U.S. Farmers Embrace Conversation Practices
Farmers Look to New Technologies to Foster Precision Agriculture
Cargill CEO Highlights Farmers Role in Pandemic and Promoting Sustainability

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By Shelbi Knisley, USW Director of Trade Policy

Last week, U.S. Wheat Associates (USW) submitted comments to the United States International Trade Commission (USITC) on the importance of Trade Promotion Authority (TPA) legislation to U.S. wheat producers.

The Office of the U.S. Trade Representative (USTR) describes TPA this way: “Since 1974, Congress has enacted TPA legislation that defines U.S. negotiating objectives and priorities for trade agreements and establishes consultation and notification requirements for the President to follow throughout the negotiation process. At the end of the negotiation and consultation process, Congress gives the agreement an up or down vote, without amendment. TPA reaffirms Congress’s overall constitutional role in the development and oversight of U.S. trade policy.”

TPA is important in securing free trade agreements (FTAs) by establishing a known, reliable process for securing congressional approval of agreements negotiated by the executive branch. TPA has been vital for the growth of U.S. agriculture and future trade agreements, by maintaining competitiveness for U.S. wheat producers in the global market.

U.S. wheat producers have benefitted from several FTAs over the last several decades that were negotiated and approved through the TPA process. For example, the North American Free Trade Agreement (NAFTA) was critical in developing the market for U.S. wheat in Mexico, which is now our number one export destination. USW also supported the updates to NAFTA, found in the U.S.-Mexico-Canada Agreement (USMCA), which will address additional trade issues including an improved sanitary and phytosanitary (SPS) chapter. This is a first-of-its-kind provision for regulating trade in goods developed using agricultural biotechnology and updated methods for resolving technical disputes. These provisions should help avoid future challenges that have the potential to disrupt U.S. wheat exports.

The U.S.-Peru Trade Promotion Agreement FTA is a virtual guarantee that tariffs will remain at zero for U.S. wheat. It entered into force in 2009, the same year as the Peru-Canada agreement. Both allowed immediate duty-free access to Peru’s wheat market. Peru’s overall wheat imports have grown from 1.4 million metric tons (MMT) before the agreement to 2.2 MMT in 2019/20. The U.S. market share is around 20 percent. Argentina and Russia also compete in Peru, which now applies zero duties for all wheat imports.

Grain trade is a high volume, low-margin business. Even relatively small tariff differences can have a detrimental impact on both suppliers and importing industries. Wheat trade can be highly affected by quality, and U.S. wheat tends to be among the highest quality globally. However, quality is not free, and an importer may decide that the value advantage of U.S. wheat is not worth the additional cost of the duty if an alternative origin receives improved market access. Predictable market access and a level playing field are therefore top priorities for USW.

Trade Promotion Authority is a key tool for securing new FTAs. While trade agreements negotiated under TPA do not guarantee success in a market, they have a strong track record of playing an important role in expanding and maintaining access for U.S. wheat producers.

For more details and to read about other FTA’s impacts on U.S. wheat exports, USW comments to USITC can be found here.

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By Shelbi Knisley, USW Director of Trade Policy

Last week U.S. Wheat Associates (USW) submitted comments to the Office of the United States Trade Representative (USTR) for the annual National Trade Estimates (NTE) report.

The NTE report allows U.S. industry organizations to highlight and comment on trade barriers impacting their trade opportunities to the U.S. government. USW highlighted several key U.S. wheat markets where there are many barriers in market access, sanitary and phytosanitary (SPS) issues, export subsidies and domestic support. Two of these barriers are highlighted below.

India

India maintains a trade distorting market price support system that encourages domestic wheat production. This leads to distortion in the international market due to domestic crop size and price. When stocks are too large, India has a history of applying export subsidies to move these excess wheat supplies out of the country. If they were to comply with World Trade Organization (WTO) rules and eliminate these subsidies it would create a more level playing field for U.S. wheat exports and increase U.S. wheat annual value of production by an estimated $516 million per year by 2028/29, according to a study by a Texas A&M University economist.

China

China has long been featured in USW NTE submissions with its violations of domestic support and TRQ policies. This year, both of those sections received substantial updates as China works toward compliance in the WTO case rulings and in implementing the Phase One agreement. When China joined the WTO, it agreed to an annual 9.64 million metric ton (MMT) tariff rate quota (TRQ) with a one percent duty but have always manipulated its administration to prevent proper use. USW is encouraged by the recent changes that have promoted extensive use of the TRQ this year but remains vigilant in monitoring the TRQ administration to ensure full compliance with the WTO ruling. That TRQ administration, coupled with real domestic support reforms, are key to unlocking the long-term potential of China’s wheat market for U.S. farmers and to providing consistent access to U.S. supplies for Chinese millers.

For more details and to read about trade barriers in other countries, USW comments to the USTR can be found here. USTR will use these comments to develop its annual NTE report to be released in early 2021.

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By Shelbi Knisley, USW Director of Trade Policy 

The COVID-19 pandemic is threatening to push an estimated 71 to 140 million people into extreme poverty according to studies by the United Nations and the International Food Policy Research Institute (IFPRI). According to the IFPRI study, “a global health crisis could thus cause a major food crisis—unless steps are taken to provide unprecedented economic emergency relief.”

U.S. wheat farmers, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) have been partners in U.S. international food assistance programs for more than 50 years. They have encouraged strategies that include the full range of options to help countries attain lasting and sustainable food security. And U.S. support of food aid programs is more important now than ever.

The pandemic threatens the people who were already severely suffering from food insecurity, especially in areas of Africa and Asia. The USDA Foreign Agricultural Service (FAS) and United States Agency for International Development (USAID) food assistance programs, sustained by U.S. commodities, are ideally prepared to help these countries in extreme need.

There are three major U.S. food aid programs. USDA administers Food for Progress and McGovern-Dole Food for Education. Food for Progress supports countries in modernizing and strengthening their agricultural industry, while McGovern-Dole supports education and food security in low income and food insecure countries. USAID’s program Food for Peace is under Title II of the Food for Peace Act, which is an emergency feeding program.

Wheat is an important component of these programs. Some years the U.S. government donates enough wheat for feeding programs and monetization to count as a top-ten U.S. wheat export market. In marking year 2019/20, for example, U.S. wheat accounted for more than 900,000 metric tons (MT) of food aid donations through USDA and USAID programs, and represented almost four percent of U.S. commercial shipments. This is a source of pride to U.S. wheat farmers.

Much of this wheat was distributed under USAID’s Food for Peace program. The largest recipients of this program, over about the last 5 years, are Ethiopia and Yemen, which has received soft white wheat as the country continues to suffer under civil war.

In August 2018, the World Food Programme (WFP) and USAID hosted an event in Portland, Ore., to bring attention to the need for food in Yemen and the ongoing U.S. efforts to provide aid. The media event was held across the Willamette River from an export elevator where government-purchased SW wheat was being loaded into an bulk container ship bound for Yemen.

With food insecurity on the rise, driven by the current pandemic, it is even more important to ensure food is being provided to those in need. Not only is food aid important in helping to feed a growing global population but also aids in advancing developing countries’ agricultural industries through the support of U.S. commodities.

USW believes it is important to engage our farmers and staff as much as possible in these important food aid programs. In the fall of 2019 USW organized a food aid trip to Tanzania and Kenya which included members and staff from the rice, sorghum, and wheat industries. Trips such as this allow for U.S. growers to see first-hand how their commodities are contributing to these programs and to share their experiences and the good work the United States is doing for others in need.

Farmers representing USW, NAWG, U.S. Grains Council (USGC), and USA Rice spent 14 days in Kenya and Tanzania in November 2019 to see how donation programs help improve lives. The trip was funded by USDA’s Foreign Agricultural Service export market development programs.

The U.S. agricultural industry, including the wheat farmers USW represents, stand ready to continue providing food and economic opportunity through monetization to the world’s most vulnerable during these uncertain