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Food Aid: More Important Now Than Ever

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

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The Future of Plant Breeding Depends on Sound Science-Based Policy

By Shelbi Knisley, USW Director of Trade Policy

New breeding technologies are forecast to offer many promises for consumers, producers and the environment. Plant Breeding Innovations (PBI) is a term defined by the International Seed Federation as, “the constantly evolving ideas and practices which enhance the field of plant breeding. Today’s innovations in plant breeding are developed using sophisticated science and technologies including cell biology, gene mapping and marker-assisted breeding.”

Benefits

Unlike GMOs, gene editing technologies such as CRISPR and TALENs represent a breeding method in which precise changes are made to an organism’s genome, changes that many of which may also occur naturally in nature. These technologies do not require insertion of a “foreign” gene into the plant variety being developed.

Gene editing and other PBIs show excellent potential to improve food safety and affordability. Calyxt is a commercial organization that has developed a gene edited soybean offering the health benefits of zero trans-fat and reduced saturated fat oil. The company is also developing a high fiber wheat variety that could help many consumers meet recommended dietary fiber needs. Gene editing can also assist in reducing food waste. Intrexon (now known as Precigen) used this technology to create non-browning lettuce, which would extend its shelf life.

Producers are expected to see economic and environmental benefits from these innovations by using fewer crop protection inputs to grow more food on the same amount of land leading to less environmental impact – something an increasing number of consumers have shown they care about as well.

Global Regulations

Many countries are formulating policies on these new technologies. In mid-May the United State Department of Agriculture (USDA) released revised rules on biotechnology. Under these rules, USDA stated that “gene edited products may be exempt from strict regulation so long as no “plant pest” is present, and the products could be produced through traditional breeding methods.”  Two other regulators, the Food and Drug Administration (FDA) and Environmental Protection Agency (EPA), are expected to release their regulations in the future.

Japan has stated it will not label or regulate genome edited products as genetically engineered products. Some other countries that have put in process methods of regulating these new technologies are Argentina, Australia, Brazil, and Canada, with various ways of monitoring, such as consultative process or trait-based approaches. Alternately, the European Court of Justice ruled in June 2018 that gene editing would be regulated like GMOs.

To ensure that these new breeding techniques can fulfill their potential, wide-ranging benefits, governments should rely on sound science to develop policies. If unproven fears lead to highly regulated policies, the risk of disruption in international trade will be increased unnecessarily.

Collaboration

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) regularly discuss breeding technologies and track how various governments are planning to regulate those products through our joint Wheat Breeding Innovation Committee. Any gene edited wheat varieties are expected to be several years away from commercialization. During that time, USW and NAWG will continue to work hand in hand with all sectors of the wheat value chain to ensure growers have access to technology and that our international customers can continue to count on access to the highest quality wheat in the world.

More information about how USW and NAWG support new plant breeding techniques  through science-based policies can be found here.

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USDA Revises Rules on Biotechnology and Plant Breeding Innovations

By Shelbi Knisley, USW Director of Trade Policy

On May 18, 2020, USDA and its Animal and Plant Health Inspection Agency (APHIS) published revised rules intended to modernize its regulatory system on genetically engineered organisms and other breeding technologies through a science-based system.

USDA said this new rule will help give U.S. farmers access to these critical tools “to help increase agricultural productivity and sustainability, improve the nutritional value and quality of crops, combat pests and diseases, and enhance food safety. This new rule signals to the world that the United States is focused on risk assessments based on science to give proper oversight to these new technologies.

USDA’s Animal and Plant Health Inspections Service has introduced a new regulatory system for evaluating new plant traits derived from transgenic and gene editing technologies. The SECURE Rule was published in The Federal Register May 18.

In particular, the rule seeks to address products that are developed through gene editing, which is of great interest to U.S. wheat producers. Gene edited products may be exempt from  strict regulation so long as no “plant pest” is present, and the products could be produced through traditional breeding methods. While many in the industry are working to determine exactly how much of these exemptions will apply to wheat breeding, the  approach is similar to that taken by other countries such as Argentina, Australia, Brazil, Canada, Chile, Colombia, Israel and Paraguay.

While of smaller interest to U.S. wheat customers, as there have been no genetically modified (GM) traits commercialized in wheat in the United States, the rule also adjusts the existing regulatory structure for GM plants. Those adjustments will make it easier for companies to bring to market GM plants with the same plant and trait combinations that USDA has previously reviewed.

Through its joint Wheat Breeding Innovation Committee (WBIC) with the National Association of Wheat Growers (NAWG), U.S. Wheat Associates (USW) regularly consults with plant breeding companies and members of the grain handling industry. That dialog focuses on ensuring that regulation of new breeding technologies strikes an appropriate balance between preserving access to technology for U.S. farmers and avoiding market disruptions. That committee has established core policy positions regarding regulation of plants produced through gene editing, found here.

USW supports a science-based approach to regulating new technologies. Although there is no transgenic wheat in commercial production, U.S. wheat growers are excited about the potential for many of these new plant breeding innovations to feed a growing world population. This policy positions the U.S. to help encourage other trading partners to use science-based approaches when considering their own regulations on gene editing.

USW and NAWG will continue to work hand in hand with customers, seed developers and technology providers to ensure that domestic and overseas industry participants are informed when new technologies are brought to market. For more information, the USDA Rule can be found here and USDA’s Question and Answers can be found here.

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U.S. Wheat Associates Provides Comments on U.S.-Kenya Trade Negotiations

By Shelbi Knisley, Director of Trade Policy

U.S. Wheat Associates (USW) supports free trade through multilateral, regional and bilateral trade agreements. USW works closely with the USDA Foreign Agricultural Services (FAS) and the Office of the U.S. Trade Representative (USTR) to ensure favorable terms for wheat exports in all trade negotiations.

An opportunity to do that recently allowed USW to provide comments to USTR in support of negotiating a comprehensive Free Trade Agreement (FTA) with Kenya. That is because Kenya imports around 2.0 million metric tons (MMT) of wheat annually. Expanding market opportunities in Kenya would benefit U.S. wheat farmers and provide Kenyan flour millers with better access to quality supplies of milling wheat.

Map of Kenya. A detail from the World Map.

USW believes the negotiations should prioritize market access for U.S. wheat and resolution of sanitary-phytosanitary (SPS) issues and in our comments, we laid out these specific objectives:

  • Achieve an agreement with duty-free treatment and improved SPS and other non-tariff provisions for wheat of U.S. origin.
  • Eliminate Kenyan tariffs on U.S. wheat, which would create an advantage for U.S. wheat exports and help offset the shipping disadvantage currently faced by the United States compared to other suppliers, particularly between the European Union and Black Sea Region. Preferential access to Kenya would help make U.S. wheat shipments more competitive in the region.
  • Eliminate Kenya’s Certificate of Conformity requirement or Kenya should accept Federal Grain Inspection Service (FGIS) certificates and other standard trade documents as fulfilling that requirement, without requiring additional third-party inspections on U.S. wheat prior to shipment.

In February 2020 the U.S.- Kenya Trade and Investment Working Group adopted a phytosanitary protocol for Kenya that would allow U.S. wheat growers in the Pacific Northwest (PNW) access to Kenya’s wheat market for the first time in over a decade. Historically Kenya has maintained a non-scientific SPS barrier against U.S. wheat from this region due to concerns about the potential presence of a plant disease known as flag smut.

Africa is a rapidly growing continent, but one where the United States has had limited opportunities for trade negotiations. A high standard FTA with Kenya has the potential to serve as a model for other African countries to pursue trade agreements with the United States.

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India Invokes WTO “Peace Clause” with Implications for Global Wheat Trade

By Shelbi Knisley, USW Director of Trade Policy

India has invoked the “peace clause” on its domestic agricultural support limits for rice, by notifying the World Trade Organization (WTO) that it has breached its support limits. By claiming its subsidies are part of its public stocks program for food security, invoking the “peace clause” cannot be challenged under the WTO. This is concerning to U.S. producers as many of the same subsidy programs that caused India to exceed its limits on rice are also applied to wheat, which have been shown to distort trade.

The “peace clause” was accepted at the Bali Ministerial in 2013, where WTO members agreed temporarily to not challenge a developing country’s domestic support programs that exceed their agreed-to limits, if the support was in the form of stocks for food security purposes. There are other conditions that must be met, including that the programs must not distort trade.

With all due respect to India’s right to help feed its large impoverished population, it is hard to believe a country that is the largest exporter (making up a quarter of global exports) of rice can claim the “peace clause” for the purpose of food security. India implements minimum support prices (MSP) and input subsidies for many of its crops (including wheat), far exceeding its allowable limits for trade distorting domestic support policies. Policies such as these tend to be some of the most trade distorting programs because they directly encourage additional production. As a result of these hefty subsidy programs, Indian rice and wheat production increases and at times leads to larger stocks and increased exports.

India also has schemes with its wheat subsidies that affect the global wheat market. India is the second largest producer of wheat and, in general, is not considered a large participant in global wheat trade. India has used these market distorting policies to increase wheat production and accumulate stocks overtime.

Based on historical trends, once India’s wheat stocks exceed 20.0 million metric tons (MMT), they become burdensome. Then India struggles with storage capacity and will dump them on the international market at prices assumed to be subsidized by the Government of India (GOI). At such times, India becomes a significant wheat exporter, averaging around 4.0 MMT during the period of exports.

Currently India’s wheat stocks are forecast at a near record 24.0 MMT for 2019/20 (USDA-FAS PS&D), therefore it is expected India will soon need to push those excess wheat supplies onto the market at discounted prices, especially as production is forecast to be the highest on record.

While India should be commended for trying to meet its WTO notification obligations, unfortunately the GOI still uses methodological tricks to disguise its true support levels. With these tricks, India tries to claim a negative support level for wheat production. But as the Office of the U.S. Trade Representative (USTR) demonstrated in a 2018 counter notification, wheat and rice support levels have been out of compliance at levels well beyond what India now admits, leading to over production of these commodities and burdensome stocks.

Those excess stocks have significant implications for U.S. wheat producers. A 2015 study conducted by Iowa State found that India’s wheat subsidies cost U.S. wheat farmers $358 million in lost revenue. As India’s programs continue to grow and distort the global market, USW will continue working to raise awareness of their effects to help ensure fairness in global trade for wheat producers everywhere.

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Seeking Beneficial Cooperation at the Canadian Crops Convention

As an organization that has represented farmers in export markets for 40 years, U.S. Wheat Associates (USW) has a sincere interest in their welfare no matter where they farm. That concern is perhaps most intense for the world’s wheat farmers. For example, USW values its relationship with Canada’s wheat producers. And while we compete wholeheartedly in global markets (by the way, the United States imports more Canadian wheat on average than any other country), we encourage cooperation with them on issues that present constraints to global wheat trade and consumption.

Before the shared constrain of the global COVID-19 pandemic hit its peak, USW Director of Trade Policy Shelbi Knisley attended the Canadian Crops Convention March 3 to 5, 2020, in Vancouver, British Columbia. The convention, hosted by the Canada Grains Council and Canola Council of Canada, brings together a range of participants, largely leaders and staff from industry organizations and agribusinesses associated with the country’s grain value chain. The conference focused around the current international trade situation, increased competitiveness across Canadian commodities, as well as on the changing demands from consumers.

Both Canadian and U.S. grain organizations share a similar view of such new technologies as plant breeding innovations like gene-editing and non-tariff trade barriers including sanitary and phytosanitary (SPS) issues. Those shared interests create opportunity to collaborate on science-based initiatives.

USW also believes the mutually beneficial relationship is set to grow even stronger as last week Canada’s parliament passed the U.S.-Mexico-Canada Agreement (USMCA) implementing text, which removes a significant grain grading barrier for U.S. producers who wish to sell into the Canadian market. The Western Canadian Wheat Growers Association (WCWGA) has, like USW and the National Association of Wheat Growers (NAWG), strongly advocated for the USMCA. In fact, as WCWGA wrote in May 2019: “Specifically, the USMCA agreement supports what the Wheat Growers have been advocating for several years, namely that registered wheat varieties on either side of the border should be recognized in the other country.” USW sincerely thanks Canada’s farmers for their support of this important trade agreement.

Before the conference began Knisley visited the Alliance Grain Terminal (AGT) at the Port of Vancouver, which offered perspective of how investments are being made to keep Canada competitive in the growing global market. The Port of Vancouver is Canada’s largest port and has been growing as demand has increased. There are several grain handling facilities located at the port, with AGT being the third largest. With the growing demand, a new G3 terminal is being built, which is expected to open this year.

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The United States and Kenya Launch Trade Talks, Agree to Lift PNW Wheat Barrier

By Shelbi Knisley, USW Director of Trade Policy

U.S. wheat producers welcomed recent news that Kenya lifted a trade barrier on some U.S. grown wheat and agreed at the same time to initiate talks on a Free Trade Agreement (FTA). An FTA with Kenya could provide more favorable tariff and sanitary-phytosanitary (SPS) provisions for U.S. wheat in a market that annually imports around 2.0 million metric tons (MMT). The U.S. Trade Representative’s announcement to launch this discussion with Kenya is mandated under the renewal of the 2015 African Growth and Opportunity Act (AGOA).

The U.S.- Kenya Trade and Investment Working Group adopted a phytosanitary protocol for Kenya that would allow U.S. wheat growers in the Pacific Northwest (PNW) access to Kenya’s wheat market for the first time in over a decade. Historically Kenya has maintained a non-scientific SPS barrier against U.S. wheat from this region due to concerns about the potential presence of a plant disease known as Flag Smut. Kenya’s ban has also impacted U.S. wheat exports to Uganda, but not because that country bans Flag Smut. Uganda is a land-locked country therefore uses Kenya’s port facilities, which forces them to abide by Kenya’s import requirements.

Kenya’s domestic wheat production only meets around 10 percent of its annual demand. Even as Kenya maintains a 10 percent import tariff on wheat from all origins, they typically remain a price-sensitive buyer. The country sources much of its wheat import volume from nearby suppliers—Russia, Ukraine and the EU—which often has a price and freight advantage over PNW wheat supplies. That combination of obstacles puts the key to expanding U.S. wheat market share in an FTA that would resolve remaining SPS issues and provide a tariff advantage to U.S. wheat. This would allow Kenyan flour millers access to quality U.S. wheat supplies at a lower cost. The United States currently supplies around 5 percent of this market, or about 120,000 MT per year.

U.S. Wheat Associates (USW) believes announcement to launch negotiations with Kenya is a step in the right direction that has the potential to serve as a model for trade negotiations with other African countries to follow.

Learn more about other trade negotiations and issues crucial to overseas demand for U.S. wheat here.

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