From the January/February 2020 GRAIN JOURNAL.
The National Grain and Feed Association (NGFA) for 2020-21 has identified a host of major policy and program priorities, which were reviewed by its executive committee in early January and will be reviewed with and officially affirmed by its board of directors during NGFA’s 124th Annual Convention, to be conducted March 8-10 in Austin, TX (see p. 34). The following is what’s on NGFA’s radar:
NGFA’s focus will turn to providing information to the Office of the U.S. Trade Representative (USTR) concerning successfully implementing the two major trade agreements that will take effect this spring – the U.S.-Mexico-Canada Agreement (USMCA) and the China Phase One trade accord.
• USMCA: NGFA mobilized its membership and state/regional affiliate associations to help secure the overwhelmingly bipartisan ratification of the USMCA accord by Congress. Mexico’s legislature approved USMCA in 2018, and the Canadian Parliament is expected to approve the accord this spring. The agreement takes effect 90 days after all three countries approve it.
Of particular benefit to the U.S. grain, feed, and processing industry, USMCA would reduce non-tariff trade barriers among the three countries significantly. It includes a concept proposed by NGFA and the North American Export Grain Association (NAEGA) that obligates parties to provide notice and begin the process of resolving sanitary and phytosanitary issues associated with agricultural imports within five calendar days, as well as improved dispute-settlement procedures.
The accord also contains comprehensive agricultural biotechnology provisions that should enhance coordinated regulatory policies toward all forms of biotech, including emerging gene-editing techniques, and development of low-level presence policies to facilitate trade in situations where a biotech trait has been approved by the exporting country but not yet by the importing nation.
• China: The Phase One trade agreement with China, signed on Jan. 15 at a White House ceremony attended by NGFA Chairman Eric Wilkey, contains very significant commitments, time deadlines, and enforcement metrics designed to provide more predictable trade between the two countries, as well as commitments to purchase major volumes of U.S. agricultural products by the end of 2021.
NGFA will be working with its member companies to monitor China’s compliance with the agreement, including its highly significant provisions to eliminate non-tariff trade barriers (such as non-science or non-risk-based sanitary and phytosanitary actions); reforming its biotechnology regulatory safety approval process so that it’s more transparent, predictable, efficient, and science- and risk-based; and ending on-site audits and implementing a facility registration process for companies exporting feed, pet food, and feed ingredients to China.
Among NGFA’s highest priorities are to secure removal of the additional declaration for foreign material on phytosanitary certificates on U.S. soybean shipments to China and to amend the U.S. Grain Standards Act to prohibit future misuse of grain quality factors on Animal and Plant Health Inspection Service (APHIS) phytosanitary certificates reserved solely for conveying plant health/pest risk information.
As part of Phase Two negotiations with China concerning its structural support of state-trading enterprises, NGFA will seek to restore normalized trade between U.S. exporters and Chinese importers and end managed government-to-government trade.
• Japan: With a phase one U.S.-Japan trade accord consummated in 2019, the NGFA is turning its attention to an anticipated second round of negotiations focusing on continued opening of Japan’s market to U.S. agricultural products and the resolution of non-tariff trade barriers, such as sanitary and phytosanitary issues and improved biotechnology provisions similar to those included in USMCA. Under the phase one agreement, Japan cut tariffs and markups on many U.S. agricultural products, notably beef, pork, wheat, and barley, so that exports of these U.S. products to Japan will not be disadvantaged in comparison to competitor countries that are part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Japan-European Union Economic Partnership Agreement.
• United Kingdom: With the upcoming exit of the United Kingdom (UK) from the European Union, the NGFA will be advising USTR on elements to include in a potential trade agreement with the UK, including incorporating the more science- and risk-based approaches contained in USMCA and the U.S.-China Phase One agreement.
In January 2020, NGFA announced its partnership with essDOCS, a company that enables paperless trade, to implement digitization of barge trading documents, such as bills of lading, so that they may be transmitted electronically – a huge cost savings to the industry. NGFA will finalize the formation in 2020 of a non-profit National Grain and Feed Digital Solutions entity as the governing body to oversee successful implementation of the Barge Digital Transformation Project and administration of the new platform to improve bills of lading.
As always, NGFA will devote considerable time and effort in 2020 addressing rail policy issues. The association will continue to pursue and prioritize initiatives at the Surface Transportation Board (STB) to:
1. Reform the process for challenging unreasonable freight rail rates.
2. Require rail carriers to amend their demurrage and accessorial practices and charges to be commercially fair, commercially achievable, and reciprocal.
NGFA also will examine opportunities to petition the STB to reopen its proceeding to develop rules or guidelines on the common-carrier obligation of railroads to provide service upon reasonable request.
Here are other major priorities on which the NGFA will be spending considerable time and effort in the coming year:
NGFA will continue to advocate transparency – both domestically and internationally – for genome editing techniques being utilized in crop production, as well as international regulatory consistency to reduce potential trade disruptions associated with such traits.
NGFA also will continue to urge the U.S. Food and Drug Administration (FDA) to retain and encourage use of its voluntary consultation process for genome-edited crops with continued public disclosure of letters of no concern.
The NGFA will be urging that necessary funding be provided to the U.S. Army Corps of Engineers to conduct “preconstruction engineering and design” that is a prerequisite before construction on seven new 1,200-foot lock chambers can begin on the Upper Mississippi and Illinois Waterway System.
NGFA also will continue to advocate, as part of the next Water Resources Development Act, that the cost-share funding for lock-and-dam projects be changed to 75% federal and 25% user fee funding (versus 50:50 currently), as well as for continued full use of the Harbor Maintenance Trust Fund for port dredging.
The Commodity Futures Trading Commission (CFTC) is expected to publish its latest proposed speculative position limit rule in early 2020. As a result of input from NGFA and others, this much-improved version is expected to include an expanded list of enumerated bona fide hedging strategies compared to current CFTC rules, as well as a carve-out for grain and oilseed futures from CFTC look-back reviews of hedge exemptions for these long-used risk-management strategies. NGFA will continue advocating for reasonable and timely review procedures by the commission of non-enumerated hedging strategies (e.g., anticipatory merchandising hedges) when the proposed rule is published.
NGFA representatives also will continue frequent engagement with the Chicago Mercantile Exchange (CME) to provide input on potential changes, as the CME Group undertakes a review of its CBOT soft wheat contract in 2020.
Workplace Safety and Health
This continues to be a huge priority for NGFA. Through the NGFA-Occupational Safety and Health Administration (OSHA) Alliance, the association and other safety partners will host the third annual Stand Up for Grain Safety Week April 13-17, 2020 to emphasize grain facility hazard recognition and safety best practices.
NGFA experts also will conduct Regional Safety and Regulatory Compliance Seminars in partnership with state/regional affiliate associations throughout 2020 and continue expanding the NGFA suite of safety videos and safety tip sheets for employee training on ngfa.org/safety.
Foreign Animal Diseases
NGFA will continue work with other industry stakeholders and regulatory agencies to address the potential introduction of foreign animal diseases, including the African swine flu (ASF) virus, into the United States via grain and feed products. The association advocates a science- and risk-based approach and prudent research to address information gaps concerning the potential role, if any, that feed and grain products may play in transmitting such viruses.
In 2020, NGFA plans to develop enhanced facility biosecurity plans and best practices and work with the government to develop risk-based response plans to facilitate safe and appropriate movement of feed and pork products, as well as disposal of animals, in the event ASF enters the United States.
Food Safety Modernization Act (FSMA) Implementation
In 2020, NGFA will continue to develop and advocate its positions regarding FSMA implementation to FDA on:
1. A proposed rule that would require that food/feed testing in certain situations be performed by laboratories accredited by FDA.
2. An anticipated proposed rule that would require additional traceability records for food/feed that is designated as “high-risk.”
NGFA is working with FDA to secure the grain elevator exemption from FSMA’s human and animal food rules pertaining to compliance with current good manufacturing practices, hazard analysis, preventive controls, and recordkeeping for grain-handling facilities located on the same property as a feed mill or processing plant. In addition, NGFA continues to urge FDA to broaden the exemption from FSMA-related preventive-control requirements to encompass lentils, kidney beans, pinto beans, lima beans, coffee beans, cocoa beans, peas, peanuts, and tree nuts (which FDA currently defines as “fruits and vegetables”).
Finally, NGFA aims to complete negotiations with Class I railroads and the truck sector about shared responsibilities – including providing last-load-hauled information to shippers and receivers – to facilitate compliance with FDA’s final rule on sanitary food transportation issued under FSMA.
The NGFA will seek enactment of amendments to the U.S. Warehouse Act to further ensure the integrity of its Reserve Fund, so that licensing and examination fees paid by federally licensed warehouse operators are used solely to offset costs associated with such services.
Read more about NGFA’s priority issues and member services at ngfa.org.
Randy Gordon is president and CEO of the National Grain and Feed Association, Arlington, VA, 202-289-0873.