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Cash Market Moves             06/29 12:10

   Bipartisan Bill Introduced to Protect Integrity of US Grain Inspections

   The Senate Agriculture Committee on June 24 advanced a bill to reauthorize 
the U.S. Grain Standards Reauthorization Act (USGSRA).

Mary Kennedy
DTN Basis Analyst

   The Senate Agriculture Committee on June 24 advanced a bill, via a voice 
vote, reauthorizing the U.S. Grain Standards Reauthorization Act (USGSRA) for 
another five years. The bill was widely supported by agricultural groups and 
exporters who depend on the reauthorization to provide structure for the entire 
grain inspection system. The existing authorization law, which passed in 2015 
and included provisions to ensure uninterrupted export inspections, is set to 
expire on Sept. 30.

   The Federal Grain Inspection Service (FGIS) was created by Congress in 1976 
to manage the national grain inspection system, which was initially established 
in 1916, and to institute a national grain weighing program. Today FGIS 
facilitates the marketing of U.S. grain and related products by establishing 
standards for quality assessments, regulating handling practice for quality 
assessments, regulating handling practices, and managing a network of Federal, 
State and private laboratories that provide impartial official inspection and 
weighing services. FGIS and the official agencies that comprise the official 
system provide services under both the U.S. Grain Standards Act (USGSA) and the 
Agricultural Marketing Act (AMA) on a fee basis for both export and domestic 
grain shipments.

   "The entire federal grain inspection system needs the certainty, 
predictability and transparency that the bipartisan U.S. Grain Standards 
Reauthorization Act of 2020 provides," said U.S. Senate Committee on 
Agriculture, Nutrition, and Forestry, Chairman Pat Roberts, R-Kansas. "The 
Senate Agriculture Committee has never let this reauthorization lapse, and as 
is customary in our Committee, we have listened before putting pen to paper. I 
appreciate our stakeholders' input while crafting this bill. It will serve them 
well and help maintain our country's reputation as a reliable exporter of 
quality grain."

   Ranking Member Debbie Stabenow, D-Michigan added, "As our farmers face 
unprecedented uncertainty and trade instability, it is vital that we maintain 
the integrity of our grain inspection system. This bipartisan bill protects the 
interests of American farmers and ensures our credibility as a reliable 
producer of high-quality crops."

   Currently, under the United States Grain Standards Act (USGSA) and the 
Agricultural Marketing Act of 1946 (AMA), FGIS:

   -- Establishes and maintains official U.S. grain standards for barley, 
canola, corn, flaxseed, oats, rye, sorghum, soybeans, sunflower seed, 
triticale, wheat, mixed grain, rice and pulses.

   -- Inspects and weighs grain and related products for domestic and export 
trade.

   -- Establishes methods and procedures, and approves equipment for the 
official inspection and weighing of grain.

   -- Supervises the official grain inspection and weighing system. The 
official system is a network of FGIS field offices, and State and private grain 
inspection and weighing agencies across the nation that are authorized by FGIS 
to provide official inspection and weighing services.

   -- Provides international services and outreach programs and protects the 
integrity of the official inspection system and the market at large to ensure 
markets for grain and related products are fair and transparent.

   FGIS and the official agencies that comprise the official system provide 
services under both the USGSA and the AMA on a fee basis for both export and 
domestic grain shipments.

   The National Grain and Feed Association (NGFA) and North American Export 
Grain Association (NAEGA) in a press release said they strongly support 
legislation that would reauthorize and improve the current U.S. Grain Standards 
Act. Both groups noted that they support reauthorizing all expiring provisions 
of the current law for another five years, including: the ability for Congress 
to appropriate funding for standardization and compliance activities that have 
broad societal benefits, including to farmers and consumers; authorization for 
the USDA Grain Inspection Advisory Committee to operate, and the current 
statutory limitation on the amount of money FGIS can spend on administrative 
costs not associated with direct inspection and weighing activities.

   NGFA noted that USGSRA 2020 also includes a number of improvements advocated 
by them and NAEGA, saying they will promote increased data and information 
sharing to benefit the system and its users, including:

   -- Requiring delegated state agencies to notify users of official inspection 
or weighing services at least 72 hours in advance of any intent to discontinue 
such services.

   -- Ensuring FGIS user fees are directed solely to inspection and weighing 
services.

   -- Reporting requests for waivers, exceptions and other specific services 
received and granted by FGIS.

   -- Directing FGIS to complete a comprehensive review of the current 
boundaries for the officially designated grain inspection agencies in the 
domestic marketplace.

   NGFA and NAEGA also highlighted their concerns about ongoing non-tariff 
trade barriers that have restricted exports of U.S. grains and oilseeds, noting 
that the reauthorization bill retains the provision that prohibits the "use of 
false or misleading grade designations" for U.S. grain exports.

   U.S. Wheat Associates (USW) chairman and Paulding, Ohio, wheat farmer Doug 
Goyings said, "Our exports markets are critical to U.S. wheat farmers' bottom 
lines as they see 50% of U.S. wheat exported each year. The grain inspection 
system is one of our key advantages over our competitors that has helped wheat 
and other U.S. commodities grow export markets. Our overseas customers value 
the independent system in place through the Grain Standards Act."

   National Association of Wheat Growers (NAWG) President and Cass City, 
Michigan, farmer Dave Milligan added, "To avoid any disruption in inspection 
services and keep the flow of grain moving, NAWG encourages Congress to act 
quickly to reauthorize the Grain Standards Act before expiration in September."

   Various exporters I spoke to in the Pacific Northwest said that the industry 
fully supports reauthorizing this bill. I was reminded of the International 
Longshore and Warehouse Union (ILWU)lockout that began early in 2013 and lasted 
18 months. During that time, when Washington's governor stopped providing 
police escorts for state grain inspectors to cross ILWU picket lines in 
Vancouver, state FGIS Inspectors refused to cross the picket lines. That 
refusal left those terminals without any official grain grading and weighing, 
thus stalling outgoing shipments. One exporter told me that because of that, 
the industry was unable to negotiate because they couldn't even operate.

   "Requiring service is fully justified and necessary," noted another 
exporter. "The lack of this type of language in the USGSA crippled the grain 
industry during the 18-month strike."

   Here is a link to the USGSRA legislation, summary, and section-by-section: 
https://www.agriculture.senate.gov/hearings/business-meeting-06-24-2020

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn




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