Inside This Issue
1 China Issues Official
Biosafety Certificates
2 Arbitration Decisions
3 Upcoming Events
3 NGFA Recommends Major
Revisions to FDA Proposed
Rules
7 President Signs
Appropriations, Tax
Extenders Bills
8 Updates on Two Ag
Biotech Court Cases
11 NGFA, Orgs Tell EPA More
Worked Needed for a
Sustainable NSPS Proposal
13 Lift on Cuba Trade
Embargo Could Lift Exports
15 New Senate Ag
Committee Announced
16 Save the Date: Elevator
Design Conference
Volume 66, No. 25 | December 23, 2014
ngfa.org/newsletter | [email protected] | 202.289.0873
China Issues Official Biosafety
Certificates for Import of Biotech Traits
By Randy Gordon, President
Three corporate owners of biotechnology-enhanced traits indicated this week
they have received official “Biosafety Certificates if Agricultural GM) (Import)”
from China’s Ministry of Agriculture for biotech-enhanced crop traits for import as
food, feed and for further processing.
Covered by the Chinese action are Syngenta’s Agrisure Viptera® MIR162 corn
trait, Bayer CropScience’s LibertyLink® 55 soybean trait, and stacked biotech
traits involving DuPont Pioneer’s Plenish® soybean. The Plenish trait previously
had been approved for import into China.
Syngenta said China’s approval of its Viptera MIR162 corn trait covers corn grain
and processing coproducts, such as distillers dried grains with solubles (DDGs)
for food and feed use. Viptera MIR162 was approved for cultivation in the United
States in 2010, and an import approval dossier was submitted to Chinese
government authorities in March 2010. According to Syngenta, the trait now has
been approved for import into Australia, Belarus, the European Union, Indonesia,
Japan, Kazakhstan, Mexico, New Zealand, Philippines, Russia, South Africa,
South Korea, Taiwan and Vietnam, in addition to China. Meanwhile, in addition to
the United States, Agrisure Viptera MIR162 also is approved for cultivation in
Argentina, Brazil, Canada, Colombia, Paraguay and Uruguay, according to the
company.
To apply for a Chinese Safety Certificate, Syngenta is directing exporters to
obtain a China Safety Certificate Request Form available on its website at
www.syngentastewardship.com/. The form may be accessed by clicking on the
“Grain Marketing” link on the right-hand side of the webpage. Then click on the
“China Safety Certificate Request Form.” Once the application is completed,
it is to be sent via email to [email protected], or faxed to
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PAGE 2 NGFA NEWSLETTER
1-800-858-8664. Syngenta said those with questions may call the company at
877-476-2676.
Meanwhile, Bayer CropScience received a biosafety import certificate from China
for its LL55 Liberty Link soybean, which is a sister trait of its LL27 trait. Bayer
CropScience had been waiting for more than seven years for China to approve
the trait, and had declined to commercialize it until that occurred. The company
said a commercial launch of the new LL55 varieties now is planned for 2015.
The DowPioneer Plenish™ high-oleic soybean trait was approved in 2010 for
cultivation in the United States, after previously receiving cultivation approvals in
Canada and Mexico. The trait, which currently is produced under stewarded
contract arrangements involving growers and local soybean processors, is not
approved yet for import by the European Union.
Chinese officials had provided notification shortly before the 25th session of the
U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting
convened last week in Chicago to each of the technology owners that the
biosafety certificates would be issued. At the conclusion of the JCCT, Secretary
of Agriculture Tom Vilsack announced the two countries had agreed to begin a
vice-ministerial-level Strategic Agricultural Innovation Dialogue in early 2015 with
multiple Chinese ministries that he said “will showcase U.S. innovation and
create new economic opportunities in a wide range of agricultural industries,
while addressing food security, climate change and environmental protection.”
A statement issued by the U.S. government following the JCCT meeting noted
China had “made commitments” that should promote significant increases in U.S.
exports of soybeans, corn and dairy products. “Specifically, China announced
that it would approve the importation of new biotechnology varieties of U.S.
soybeans and corn (a precursor to the biosafety safety certificates referenced
previously) – current annual U.S. exports of soybeans and corn to China total
$14 billion and $3.5 billion, respectively – and also that it would pursue a regular
dialogue with the United States focused on the benefits of the increased use of
innovative technologies in agriculture, both for the United States and China.
China also agreed to strong IP (intellectual property) protections for products that
use trademarks or common names, like “parmesan” or “feta” cheese, which in
recent years have begun to demonstrate a potential for rapid export growth vis-à-
vis China.”
Established in 1983, the JCCT is the primary forum used by the United States
and China to address bilateral trade and investment issues, and to promote
commercial opportunities between the two countries.
Arbitration Decisions
This week’s decisions:
Arbitration Case Number 2662
Barry Nowatzke and Nowatzke
Farms (Michigan City, ID) v.
Cargill, Inc. (Minneapolis, MN)
– 10/16/2014
Arbitration Case Number 2679
Cargill, Incorporated
(Minneapolis, MN) v. Searcy
Farms, Inc. (Danville, ID) –
10/16/2014 - $116,764.14
These and all NGFA Arbitration
Committee decisions and default
judgments are accessible at
ngfa.org/decisions.
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PAGE 3 NGFA NEWSLETTER
Upcoming Events
Jan. 13 How to Prepare for an OSHA
Inspection
With Nebraska Grain and
Feed Association
Location TBD
Jan. 15 How to Prepare for an OSHA
Inspection
With Kansas Grain and Feed
Association
Salina, Kansas
Registration form
Jan. 27 How to Prepare for an OSHA
Inspection
With Montana Grain Elevator
Association
Great Falls, Mont.
Registration form
Mar. 15-17 Annual Convention
San Antonio, Texas
Hyatt Regency
Registration open
May 4-5 Trade Rules Seminar
Hilton St. Louis Airport
St. Louis, Mo.
Registration open
July 28-30 NGFA/Grain Journal Elevator
Design Conference
Kansas City, Mo.
Sheraton at Crown Center
Registration opens March
Aug 4-5 Ag Transportation Summit
Chicago, Ill.
Westin O’Hare
Registration opens March
For a full listing of events, go to
ngfa.org/events
NGFA Recommends Major Revisions
to FDA Proposed FSMA Rules
By Dave Fairfield, Vice President of Feed Services
The NGFA on Dec. 15 submitted extensive comments to the U.S. Food
and Drug Administration (FDA) recommending the agency make major
changes to three reproposed rules that would establish safety
requirements for human food, animal feed and pet food.
Overview
FDA previously had amended and reissued for additional public comment
key portions of the three originally proposed rules implementing major
sections of the Food Safety Modernization Act (FSMA). FDA reissued the
proposed rules on Sept. 19 because public comments received on its
initial proposals from the NGFA and other stakeholders led the agency to
make significant changes to certain key provisions.
The proposed rules are very significant to NGFA-member companies
involved in supplying commodities or ingredients for or manufacturing and
distributing human food, animal feed, pet food and feed ingredients, as
well as those involved in the storage of raw agricultural commodities,
such as grains and oilseeds. In addition, the proposed requirements
would affect companies engaged in importing foreign food/feed products,
including grains and oilseeds.
The NGFA’s Feed Legislative and Regulatory Affairs Committee
spearheaded the development of NGFA’s statements. In doing so, the
committee received broad input through an extensive review process that
involved several other NGFA committees. In addition, the NGFA actively
was involved with a coalition of other animal feed- and pet food-related
trade associations to evaluate the proposed rules and, to the degree
possible, gain alignment on comments to FDA on major issues.
Below highlights portions of NGFA’s statements, for more detailed
information see the full comments:
Supplemental Notice of Proposed Rule Making – Current Good
Manufacturing Practice and Hazard Analysis and Risk-Based
Preventive Controls for Food and Animals (74 pages)
Proposed Rule – Current Good Manufacturing Practice and
Hazard Analysis and Risk-Based Preventive Controls for Human
Food (28 pages)
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PAGE 4 NGFA NEWSLETTER
Supplemental Notice of Proposed Rule Making – Foreign Supplier
Verification Programs for Importers of Food for Humans and Animals
(13 pages)
Comment Highlights
FDA’s three proposed rules would establish requirements for current good
manufacturing practice (CGMP) and preventive controls for animal feed and
pet food, CGMP and preventive controls for human food, and foreign supplier
verification programs for food/feed products imported into the United States.
The proposed rules contain several common regulatory concepts, which FDA
intends to use to form the cornerstones of the new FSMA-mandated food
safety requirements.
The NGFA’s statements conveyed the following positions urging FDA to issue
final regulations that:
Provide a Clear Exemption for Low-Risk Storage and
Packing Activities of Raw Agricultural Commodities Other
than Fruits and Vegetables: The NGFA strongly supported
FDA’s revisions to its proposed rules that would clearly exempt
from its requirements facilities that are solely engaged in storing
raw agricultural commodities other than fruits and vegetables,
such as grain elevators.
However, the NGFA also stressed that FDA’s revised proposals
failed to provide a clear exemption for facilities engaged in
packing of raw agricultural commodities other than fruits and
vegetables that are intended for further distribution or processing.
The NGFA’s statement urged the agency’s final regulations to do
so, since packing activities often are inherent to the distribution
process associated with grains and oilseeds, and represent a
negligible risk to public health.
Establish Realistic and Practical CGMP Requirements for
Animal Feed and Pet Food: The NGFA urged FDA to make
many significant changes to its proposed rule, which would make
the final requirements realistic and practical for the full range and
scope of facilities that will need to comply with the regulation. In
addition, the NGFA stressed that unless such revisions are made,
the final regulation would add unnecessary requirements that
would cause industry to expend millions of dollars towards
complying with regulatory obligations that are not needed to
ensure the safety of animal feed and pet food.
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PAGE 5 NGFA NEWSLETTER
Allow Hazards to be Controlled in a Manner Commensurate
with Risk: The NGFA generally supported revisions to the
proposed rules that would provide for a preventive control
framework whereby facilities have the flexibility to make
appropriate decisions pertaining to the level of management
necessary to control a given hazard. However, the NGFA
recommended that FDA make several additional revisions to its
proposed requirements that would provide more flexibility to
facilities to control hazards in a manner that is effective and
efficient for their individual operations.
Provide Facilities and Importers Sufficient Flexibility when
Verifying the Safety of Food/Feed received from Foreign and
Domestic Suppliers: The NGFA urged FDA to not
overemphasize the role of supplier audits when issuing its final
regulations. The NGFA said requiring mandatory supplier audits
would be much too prescriptive, since audits only offer a
“snapshot” of a supplier’s food/feed safety performance at a given
time.
In addition, the NGFA emphasized that FDA’s regulations must
appropriately recognize the complex and comingled nature in
which raw agricultural commodities and other bulk ingredients
move through the supply chain. As such, the NGFA said FDA’s
final requirements pertaining to supplier programs must not
impose untenable traceability standards and appropriately reflect
the risk posed by the food, feed or raw agricultural commodity.
Contain Revised Requirements to Reduce Compliance
Costs: The NGFA’s statement emphasized that its own analysis
conducted to evaluate the economic impact of FDA’s proposed
regulations found the agency’s estimated cost of compliance to
be vastly underestimated.
FDA’s preliminary regulatory impact analysis for the proposed
rule estimated an annualized compliance cost of $93.45 million
for the entire animal feed and pet food industries, which equates
to an annual cost ranging from $13,200 to $18,300 per affected
facility. However, NGFA’s economic analysis, which focused
exclusively on the cost to animal feed facilities, resulted in an
estimated annualized cost of $430.33 million to $722.65 million,
or an annual cost per facility ranging from $56,385 to $127,715.
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PAGE 6 NGFA NEWSLETTER
The NGFA’s economic analysis also quantifiably demonstrated
how compliance costs for the proposed rule would be
dramatically reduced if the agency incorporated NGFA’s
recommendations into its final regulation.
Further, NGFA urged FDA to produce empirical evidence of the
benefits associated with the requirements before issuing a final
rule. NGFA stated its belief that such empirical evidence would
prove the costs of the proposed rule far exceed the anticipated
benefits. In addition, the NGFA said a more limited regulation
would accomplish FSMA’s goals more effectively, while imposing
a significantly lower economic burden upon the regulated
industry.
Stagger Compliance Dates for CGMP and Preventive Control
Requirements: The NGFA strongly recommended that FDA
provide a sufficient time period following publication of its final
regulations to allow affected facilities to come into compliance
with the rule’s requirement.
Further, since the CGMP regulation will establish new baseline
requirements for all affected animal feed and pet food facilities –
many of which that have not previously been subject to such
requirements – the NGFA stated it is necessary and appropriate
for FDA to provide facilities with adequate time to first come into
compliance with the CGMP regulation before being expected to
comply with the preventive controls regulation. As such, the
NGFA recommended that FDA provide facilities one additional
year after being required to comply with FDA’s final CGMP
requirements before being required to comply with the agency’s
final preventive controls regulation.
Timeline for Finalizing Regulations
FDA is under court order to issue both its final CGMP and preventive controls
rules for human food and animal feed/pet food by Aug. 30, and its final rule
for foreign supplier verification programs by Oct. 31. The NGFA believes it is
unlikely that the agency will publish its final rule much before the prescribed
deadlines.
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PAGE 7 NGFA NEWSLETTER
President Signs Appropriations,
Tax Extenders Bills
By Max Fisher, Director of Economics and Government Relations
Last week was busy for lawmakers with the president signing two bills into
law with several provisions important to agriculture – both from a policy and
tax perspective.
First, President Obama signed an appropriations bill on Dec. 16 that will fund
the Department of Homeland Security (DHS) through Feb. 27 and the rest of
the federal government through Sept. 30. Republican leaders chose to set a
shorter timeframe for DHS funding to allow the upcoming Republican-led
Congress to weigh in on the president’s immigration executive orders. Then
on Dec. 19, the President signed the tax extenders bill, which will reinstate
several tax benefits for the 2014 tax year.
The appropriations law also addresses the Environmental Protection
Agency’s contentious Waters of the United States proposed rule by ensuring
various farming practices and structures will be exempt from permitting
requirements, and by making it expressly understood that landowners can
undertake farming and conservation practices even if the U.S. Army Corps of
Engineers believes they could harm rivers and streams. In addition, the
appropriations law prohibits the U.S. Fish and Wildlife Service from listing two
species of sage grouse under the Endangered Species Act. Further, the law
instructs the secretary of agriculture to bring the country of origin labeling law
into compliance with international trade rules.
It also addresses the restart provision of the trucking hours of service rule.
Effective Dec. 16 and lasting at least until Sept. 30 or until a study on the
operational, safety, health and fatigue impacts of restart provisions has been
completed, truck drivers will not be required to include two consecutive nights
from 1 a.m. to 5 a.m. during their 34-hour mandatory weekly break.
Included in the 2014 tax extenders package is a 50 percent bonus
depreciation for new capital assets and Section 179 expensing, which allows
small business immediately to deduct up to $500,000 in equipment expense.
Further, the tax extenders package renewed the $1 per gallon blenders’ tax
credit for biodiesel and renewable diesel.
Finally, for years, NGFA has advocated for improvements to the U.S. inland
waterways system and ports. Also included in the tax extenders package is a
9-cent increase in the barge fuel tax along with federal match that NGFA and
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PAGE 8 NGFA NEWSLETTER
other industry members had advocated to help pay for waterway
infrastructure repairs and improvements.
In a recent statement, NGFA said, “the increase, which takes effect April 1,
2015, is expected to generate approximately $40 million in additional
revenues annually that will be deposited into the Inland Waterways Trust
Fund for the benefit of priority navigation project construction and major
rehabilitation.”
Major Developments in Ag Biotech Court
Cases Syngenta Lawsuit Against Bunge Dismissed; Mass Multi-state MIR162 Litigation Assigned to Kansas Court, 20 States Join
By Charlie Delacruz, Vice President, General Counsel and Secretary
Two separate major actions related to agricultural biotechnology were
significantly addressed this month in federal court.
Syngenta Seeds v. Bunge North America Inc.
On Dec. 12, the Syngenta Seeds and Bunge North America Inc. filed with the
federal district court in Iowa a stipulation that Syngenta had agreed to dismiss
all of its claims against Bunge, including specifically the sole claim that
remained following the court of appeals’ decision to remand that claim to the
lower court after denying all of Syngenta’s other claims.
Syngenta’s marketing of a strain of genetically modified corn seed – Agrisure
Viptera MIR162 – beginning in the fall of 2010 was the core of this case.
Because the variety was not approved in China, which maintained a zero-
tolerance on imports of corn from seed with unapproved genetically modified
traits, Bunge declined to accept corn grown from Viptera MIR162 seed.
Syngenta sued, alleging that Bunge breached obligations under the U.S.
Warehouse Act (USWA) and its warehouse licensing agreement with the
federal government. Syngenta also claimed false advertising by Bunge in
violation of the Lanham Act. The trial court ruled in favor of Bunge on all three
claims, and Syngenta appealed to the U.S. Court of Appeals for the Eighth
Circuit.
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PAGE 9 NGFA NEWSLETTER
In its prior decisions in August and October 2014, the court of appeals noted
that pursuant to China’s zero-tolerance policy, Chinese officials could prohibit
an entire shipment of corn from entering its market if the shipment contained
even traces of corn a genetically modified trait it had not approved for import.
The court also noted that in the course of Bunge’s business – including the
purchase, storage, processing and transport of agricultural products for
foreign markets – Bunge had purchase contracts with farmers containing
provisions authorizing Bunge to refuse products containing genetic
modifications for which import approval had not been obtained in foreign
export markets.
In its the claim under USWA, Syngenta argued that Bunge’s obligation under
that law to treat depositors of agricultural products in a fair and reasonable
manner entitled Syngenta to sue Bunge for damages related to its lost market
share, profits and goodwill that allegedly resulted from Bunge’s refusal to
accept Viptera corn. The appellate court agreed with the lower court in
rejecting Syngenta’s assertion, ruling that nothing in the law expressly or
implicitly authorized Syngenta’s cause of action in this case.
Similarly, the court of appeals upheld the lower court’s dismissal of
Syngenta’s claim that it was entitled to damages as a third-party beneficiary
of the licensing agreement between Bunge and the federal government
related to Bunge’s status as a federally licensed warehouse operator. The
court stated it found no indication in the licensing agreement of intent to
benefit a seed producer.
The trial court also had granted summary judgment in favor of Bunge on
Syngenta’s claim of false advertising under the Lanham Act. In its review of
the claim, the court of appeals noted that until very recently, there had been a
split among the different judicial circuits regarding the approach to assess
claims under the Lanham Act. The trial court decided this case under the
then-controlling approach in this circuit. However, the U.S. Supreme Court
subsequently resolved the split among the different circuits in an unrelated
decision, which established a “zone-of-interests” test and “proximate
causality” requirement for cases involving the Lanham Act. For this reason,
the appellate court remanded Syngenta’s claim under the Lanham Act for the
trial court to make an initial determination on Syngenta’s standing to bring the
claim under the new approach established by the Supreme Court.
Latest Development: Pursuant to the court of appeals’ order, the district
court on Dec. 6, had scheduled the remaining claim for trial to commence in
February 2016. However, when on Dec. 12 the parties filed with the court the
stipulation that Syngenta had agreed to dismiss with prejudice all remaining
claims and causes of action asserted in the matter – including the Lanham
Act claim – this litigation consequently concluded.
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PAGE 10 NGFA NEWSLETTER
Syngenta AG MIR162 Corn Litigation
On Dec. 11, the U.S. Judicial Panel on Multidistrict Litigation (MDL Panel)
ordered the consolidation and transfer of lawsuits filed nationwide against
Syngenta for its decision to commercialize corn seeds containing a genetically
modified trait, known as Agrisure Vipter MIR162, despite lacking import
approval by the Chinese government. The cases were transferred to Judge
John Lungstrum of the federal district court of Kansas for coordinated and
consolidated pretrial proceedings.
(Note: The MDL Panel is a judiciary authority created by an Act of Congress in
1968. The panel’s role is to 1) determine whether civil actions pending in
different federal districts involve one or more common questions of fact such
that the actions should be transferred to one federal district for coordinated or
consolidated pretrial proceedings; and 2) select the judge or judges and court
assigned to conduct such proceedings. The panel consists of seven sitting
federal judges, who are appointed by the Chief Justice of the U.S. Supreme
Court.)
Plaintiffs in the cases are corn growers and exporters who allegedly suffered
economic losses from the introduction of MIR162 into the marketplace and
China’s refusal to accept it. At the time of the Dec. 11 order, the MDL Panel
was notified of 168 potentially related actions in various districts. That list
subsequently has grown to more than 360 separate actions. Significantly, by
Dec. 18, it was widely reported that 20 separate states had joined the ongoing
litigation against Syngenta.
The massive consolidation thus far includes individual cases filed in various
federal courts across the country including courts in Alabama, Arkansas,
Georgia, Kansas, Kentucky, Illinois, Indiana, Iowa, Louisiana, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, North Carolina, Ohio, South
Carolina, South Dakota and Tennessee. The 20 states named in complaints
thus far joining the litigation against Syngenta are Alabama, Arkansas,
Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota,
Oklahoma, South Dakota, Tennessee and Wisconsin.
In its decision, the MDL Panel concluded that the actions involve common
questions of fact regarding Syngenta’s decision to commercialize MIR162
without Chinese approval to import corn with that trait. The panel also
determined that centralization would serve the convenience of the parties and
witnesses and promote the just and efficient conduct of the litigation. As with
past litigation involving allegedly improper dissemination of genetically
modified crops, the panel determined that centralization of the cases will
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PAGE 11 NGFA NEWSLETTER
eliminate duplicative discovery, avoid inconsistent pretrial rulings (particularly
on class certification) and conserve the resources of the parties, counsel and
the courts. In its decision, the panel specifically referred to how it had
similarly handled prior agricultural biotechnology-related litigation involving
Starlink corn in 2001, genetically modified rice in 2008 and genetically
modified wheat plant material in 2013.
Given the nature of the nationwide litigation, these steps by the MDL Panel
were expected, and no party opposed the consolidation and centralization of
these cases. However, the defendants – all from the different states – had
suggested alternative locations for the transfer to occur in Minnesota,
Missouri, Iowa or Illinois. In its decision, the MDL Panel noted that the district
court in Kansas was particularly appropriate and accessible, and that
Lungstrum was “well-versed” in the “nuances” of complex, multidistrict
litigation. The docket of cases ultimately to be addressed by Lungstrum is
expected to grow significantly.
NGFA, Agribusinesses Tell EPA More Work
is Needed to Justify NSPS Proposal
By Jess McCluer, Director of Safety and Regulatory Affairs
In comments submitted Dec. 22, NGFA and five other national
agribusinesses said the Environmental Protection Agency (EPA) needs to do
more work to justify its proposal concerning the New Source Performance
Standard (NSPS) for grain elevators.
The comments were in response to an EPA NSPS rulemaking proposal,
which would apply to facilities that commence construction, modification or
reconstruction after July 9, 2014.
Under EPA's NSPS for grain elevators, any commercial grain elevator
constructed after 1978 with a permanent storage capacity exceeding 2.5
million bushels is required to comply with stricter air permitting and emission
standards. The requirement also applies to any facility that has been
modified since 1978 to expand its permanent storage capacity to more than
2.5 million bushels. Also subject to the NSPS are grain storage elevators with
a permanent storage capacity exceeding 1 million bushels that are located at
wheat flour mills, wet or dry corn mills (manufacturing products for human
consumption), rice mills or soybean oil extraction plants. Grain-handling
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PAGE 12 NGFA NEWSLETTER
facilities located at feed mills, pet food manufacturing plants, cereal
manufacturers, breweries and livestock feedlots are not covered by the
current or proposed new NSPS.
According to its official notice, EPA is considering ways to "reduce the testing,
monitoring, recordkeeping, and reporting burden, while making the proposed
requirements less ambiguous and more straightforward for determining
compliance.” EPA also proposed a new subpart DDa, and various additions
that address changes in grain storage technology that have emerged since
1984, including so-called temporary storage facilities (TSF). The EPA last
comprehensively reviewed the NSPS for grain elevators in 1984, at a time
when the industry did not use TSFs.
In their comments, NGFA and other organizations commended the EPA for its
decision to rescind a Nov. 21, 2007, letter of interpretation under which it had
equated temporary storage structures with permanent storage facilities when
it determined whether elevators were subject to costly permitting
requirements under the Clean Air Act. EPA in its proposed rule notes that it
was rescinding that interpretation since it is "now aware that (temporary
storage structures) typically handle the grain less time throughout the year
than other types of permanent storage facilities, and may require different
treatment."
However, the organizations also said, “more work is needed by the EPA to
develop a sustainable proposal. Therefore, the EPA should withdraw the
present proposal, with the effect of removing July 9, 2014, as the dividing line
between ‘new’ and ‘existing’ facilities, and then repropose once it has
established an adequate record.”
In their comments, the organizations state:
EPA Lacks Authority: EPA lacks authority to retain a NSPS to
govern particulate matter emissions from future construction
events at grain elevators – i.e., from “affected facilities” on which
construction, modification or reconstruction commences after July
9, 2014. EPA’s proposal package lacks a rational basis for
concluding that such events present a significant risk to human
health and welfare on a national scale.
• Exorbitant Cost: Economic analysis estimates a
disproportionately large incremental cost for the proposed control
technologies and compliance assurance mechanisms relative to
the incremental amount of achievable particle emission reduction.
The organizations estimate the annual cost of particle emission
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PAGE 13 NGFA NEWSLETTER
reduction is $51,175 per ton and the cost per affected grain
elevator is $48,073 per year, which is much more expensive
when compared with EPA’s estimates. Thus, the organizations
state, “it is clear that the incremental costs, especially those
related to the treatment of TSFs are ‘exorbitant’ in relation to the
benefits.”
• Questionable Applicability: Although the Clean Air Act requires
EPA to conduct a comprehensive review of a given NSPS, EPA
has carried many applicability provisions from Subpart DD into
the proposed subpart DDa without questioning the merit. The
organizations therefore recommend the EPA: 1) exclude “grain
storage elevators, i.e., elevators at certain grain processing
plants; 2) raise the current applicability triggers from 1.0/2.5
million bushels of permanent storage capacity to at least 3.5/8.8
million bushels; and 3) continue to exclude TSFs from the
calculation of permanent storage.
• Compliance Burden: The proposal significantly would increase
the burden of performance testing, parameter monitoring,
notifications, reporting and recordkeeping. For example, in the
proposed rule, EPA estimates the capital cost of its proposed
requirement to install a Bag Leak Detection System (BLDS) to be
$24,000. However, in addition to the initial capital cost of a BLDS,
there would be substantial costs involved to install and perform
maintenance on a BLDS.
Lifting Cuba Trade Embargo Potentially
Opens $3 Billion for U.S. Agriculture
By Max Fisher, Director of Economics and Government Relations
While not all are pleased with the recent White House announcement that the
United States would seek to normalize relations with Cuba, the agriculture
industry is ripe to benefit from a potential increase in exports.
According to the U.S. Department of Agriculture (USDA), improved trade
relations could be worth $3 billion to the nation's farmers. The United States
now exports about $350 million a year in farm products, including rice, corn,
soybeans and frozen chicken parts. (A 2000 law relaxed restrictions on food
and medical exports.)
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PAGE 14 NGFA NEWSLETTER
In fact, as shown in the table below, USDA estimates Cuba has been one of
the larger import markets in calendar year 2014.
In addition, over the last 13 years, Cuba has imported significant amounts of
corn, wheat, rice, soybean meal, soybeans and soybean oil from various
suppliers. During this period, Cuba’s imports of corn trended upward;
meanwhile its imports of other grains, oilseeds and products have been
relatively steady.
As shown in the table on the following page, the U.S. share of Cuban imports
has declined substantially for all U.S. grains, oilseeds and products. It has
been several years since the last time the United States exported any rice,
soybean oil or wheat to Cuba. (Note: differences in import volumes may exist
between the tables because the table below is based on U.S. marketing
years, whereas the table above is based on calendar years.)
Cuba's Worldwide Import Rank by Volume in Calendar Year 2014
Calendar
Year Corn Rice Soybeans
Soybean
Meal
Soybean
Oil Wheat
2014 24 23 25 33 20 47
Source: Foreign Agricultural Service, Production, Supply and Distribution Online
Cuban Imports from All Destinations (1,000 Metric Tons)
Calendar
Year Corn Rice Soybeans
Soybean
Meal
Soybean
Oil Wheat
2002 292 538 104 115 53 1,054
2003 279 371 108 130 85 819
2004 469 639 160 195 95 727
2005 546 736 160 149 79 836
2006 501 594 96 167 91 751
2007 646 574 162 234 48 660
2008 811 652 118 268 85 902
2009 708 463 141 249 79 871
2010 736 468 126 265 88 765
2011 838 642 132 263 81 834
2012 746 469 134 280 85 773
2013 911 369 125 215 76 794
2014 900 450 150 250 85 754
Source: Foreign Agricultural Service, Production, Supply and Distribution Online
Return to contents December 23, 2014
PAGE 15 NGFA NEWSLETTER
New Senate Ag Committee Line-Up
Announced
In January, four newly elected Republican senators will join the Senate
Agriculture Committee while the Democratic line-up remains virtually
unchanged.
The newly elected Republican senators are: Iowa’s Joni Ernst, who replaces
retiring Democrat Tom Harkin; Ben Sasse, Nebraska; David Perdue, Georgia;
and Thom Tillis; North Carolina.
Ernst's appointment gives Iowa two seats on the committee, since Republican
Chuck Grassley will keep his place.
Republicans, who will have an 11-9 majority, will tackle issues such as
reauthorizing child nutrition programs and the Commodity Futures Trading
Commission.
While, both parties have finalized committee assignments, Republicans have not
formally announced chairmanships of committees or subcommittees. However,
Pat Roberts of Kansas is in line to be chairman of Agriculture, while Mississippi's
Thad Cochran, Agriculture's current ranking member, will take over the
chairmanship of Appropriations.
Cuban Imports from United States (1,000 Metric Tons)
U.S.
Marketing
Year Corn Rice Soybeans
Soybean
Meal
Soybean
Oil Wheat
2001/02 200 72 57 97 27 127
2002/03 287 119 95 182 65 101
2003/04 494 113 119 122 43 351
2004/05 438 100 129 74 25 452
2005/06 558 186 149 168 64 345
2006/07 566 60 182 169 14 263
2007/18 742 21 112 156 17 500
2008/19 712 0 124 137 20 339
2009/10 603 0 148 98 35 119
2010/11 427 0 121 9 5 28
2011/12 423 0 100 34 0 0
2012/13 285 0 91 148 0 0
2013/14 137 0 48 143 0 0
Source: Foreign Agricultural Service, Export Sales Query System
Return to contents December 23, 2014
PAGE 16 NGFA NEWSLETTER
The Agriculture Committee’s Democratic lineup virtually will stay the same
except for the loss of Harkin and John Walsh of Montana. The committee's
current chairwoman, Debbie Stabenow, Michigan, will become ranking
member.
Committee assignments are expected to be approved formally in January. For
additional information, see a full list of the Republican membership and the
Democratic membership on every Senate committee.
Save the Date: Elevator Design Conference
is July 28-30
By Jess McCluer, Director of Safety and Regulatory Affairs
NGFA and Grain Journal magazine again will co-sponsor an Elevator Design
Conference July 28-30 at the Sheraton Kansas City Crown Center in Kansas
City, Mo.
The day-and-a-half conference will feature sessions on:
• Finding good employees,
• Retrofitting design considerations,
• Permitting,
• Energy savings,
• Improving operations with automation,
• Safety and preventive maintenance,
• Workers compensation,
• Monitoring equipment,
• Increasing facility air and dust flow,
• Receiving and reclaiming systems,
• Contractor management, and
• Updates on combustible dust and hazard communication.
The conference, which is being planned by a steering committee consisting of
representatives from several NGFA committees and the Grain Elevator and
Processing Society, will feature 12 45-minute and one 1.5-hour sessions all day
July 29 and the morning of July 30.
There will be an opening reception the evening of July 28 and a trade show will
be open throughout.
Additional details and registration will be available in early 2015.
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