A group of over 60 agricultural trade groups and companies sent a letter to the leadership of the Senate and House of Representatives urging quick passage of the Korea-U.S. Free Trade Agreement (KORUS). The letter highlighted the fact that our competitors have not been waiting on the sidelines and if the United States continues to wait there will be consequences. The letter said, “Risks for U.S. agriculture – and they are extremely serious – arise if the KORUS FTA is not implemented. If this agreement is rejected, we stand to relinquish our export sales to countries that have implemented their own FTAs with Korea.” Currently, there are 13 such agreements in place or in the works involving some 50 countries around the world. They include major agricultural competitors Chile, Australia, New Zealand, Canada, the European Union (EU), Mexico, Mercosur (Argentina, Brazil, Paraguay and Uruguay) and Peru. An example is pork. Korea’s current 25% tariff would remain in place while the EU’s tariff would be eliminated over time. Iowa State University has estimated the United States would be eliminated from the Korean market in 10 years. Once the FTA is implemented, two-thirds of U.S. agricultural exports become duty-free (wheat, corn, soybeans for crushing, whey for feed use, hides and skins, cotton, cherries, orange juice, etc.). The tariff on beef (40% on muscle cuts, 18-27% on offal) would be eliminated over 15 years. The American Farm Bureau Federation estimates that U.S. agricultural exports to South Korea would increase by $1.8 billion once KORUS is fully implemented. Those signing the letter included: American Farm Bureau Federation, American Meat Institute, American Soybean Association, International Dairy Foods Association, National Association of Wheat Growers, National Cattlemen’s Beef Association, National Chicken Council, National Corn Growers Association, National Meat Association, National Pork Producers Council, National Turkey Federation and United Egg Producers. The White House has encouraged Congress to pass KORUS by July 1.

EPA Extends E15 Approval — The Environmental Protection Agency (EPA) approved the use of higher blends of ethanol (E15) for vehicles model years 2001-2006. This follows EPA’s October 2010 approval of E15 for model years 2007 and newer. It is estimated that 62% of vehicles on the road could use this higher blend. Secretary of Agriculture Tom Vilsack said, “Expanding the use of E15 in America’s vehicle fleet gives consumers the option of purchasing domestically produced renewable transportation fuels and also support of America’s farmers and ranchers.” The National Pork Producers Council (NPPC) strongly opposed the decision by EPA. NPPC said, “…further upward pressure on corn supplies, increasing not only pork producers’ cost of production, but their exposure to regional corn shortages as demand – including from exports and the federal ethanol mandate – reduces supplies. Smaller supplies also would elevate the potential catastrophic risk to producers of any seasonal weather event.”

Market Access Program Targeted — The House Republican Study Committee’s (RSC) “Spending Reduction Act of 2011” targets USDA’s Market Access Program (MAP) for elimination. This successful program is used by non-profit U.S. agricultural trade associations, farmer cooperatives and non-profit state-regional trade groups to promote U.S. agricultural exports through consumer promotions, market research, trade shows and trade servicing. The RSC is also proposing a reduction in non-security spending for fiscal year 2011 to 2008 spending levels, eliminate automatic increases for inflation for future discretionary appropriations, eliminate automatic pay raises for civilian federal employees for five years, cut the federal civilian workforce by 15%, eliminate all remaining stimulus funding and eliminate more than 100 programs. They estimate a savings of $2.5 trillion over 10 years.

House Agricultural Committee Organizes — The House Agriculture Committee officially organized by naming the chairman and ranking members of the subcommittees. They are: Congressmen Glenn Thompson (R-PA), chairman, Conservation, Energy and Forestry, and Tim Holden (D-PA), ranking member; Jeff Fortenberry (R-NE), chairman, Department Operations, Oversight and Credit, and Marcia Fudge (D-OH), ranking member; Mike Conaway, chairman, General Farm Commodities and Risk Management, and Leonard Boswell (D-IA), ranking member; Tom Rooney (R-FL), chairman, Livestock, Dairy and Poultry, and Dennis Cardoza (D-CA), ranking member; Jean Schmidt (R-OH), chairman, Nutrition and Horticulture, and Joe Baca (D-CA), ranking member; and Tim Johnson (R-IL), chairman, Rural Development, Research, Biotechnology and Foreign Agriculture, and Jim Costa (D-CA), ranking member.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.