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Kohl-Murray Amendment Restoring Emerson Wheat Trust Passes Senate

Apr 04 2003

Murray acts to protect Washington wheat farmers, rural businesses

(WASHINGTON, D.C.) – Last night, by a vote of 66-27, the Senate passed an amendment by Senators Patty Murray (D-Wash.) and Herb Kohl (D-Wisc.) to provide an additional $600 million for emergency humanitarian food needs in Iraq and address improper management of the Bill Emerson Humanitarian Trust. The amendment was adopted as part of an $80 billion Supplemental Appropriations bill to pay for the Iraq War.

The Kohl- Murray amendment addresses concerns over the Administration's food aid policies, including a drastically low estimate of the food assistance needed to feed the Iraqi people, and improper management of the Emerson Humanitarian Trust. The Bill Emerson Humanitarian Trust is a food reserve administered under the authority of the Secretary of Agriculture. This reserve is available to meet emergency humanitarian food needs in developing countries, allowing the United States to respond to unanticipated food crises with U.S. commodities.

"Last night, the Senate rejected the Administration's failed food aid policies," Murray said. "The Senate's action is a major step forward in ensuring that the United States meets its commitments to the Iraqi people in a way that helps – not hurts – America's farmers."

In July and again in September of 2002, the Bush Administration sold wheat from the Emerson Trust to finance famine relief to southern Africa. While Senator Murray supported the Administration's end goal, the process used by the Administration hurt Washington state. Washington wheat growers were hurt because wheat prices suddenly fell, and local elevator companies were harmed when their stores of wheat were dramatically reduced.

On July 11 and again on August 29 2002, Senator Murray wrote to Ann Veneman, Secretary of Agriculture, to urge USDA to make changes to its process to help rural businesses and farmers in Washington state.

Despite the concerns raised by Murray and others, last month the Administration authorized another release of 800,000 metric tons, which has hurt Washington farmers by further depressing wheat prices.

"The Administration's sales of wheat from the Emerson Trust has undermined wheat prices and local businesses," said Murray. "I will continue to stand up for Washington state farmers by helping to improve the way we implement food aid."

The Murray-Kohl amendment:

- Provides an additional $600 million for the Food for Peace program, our nation's primary tool for providing humanitarian food aid.

- Requires the restoration of the 800,000 metric tons of commodities released from the Bill Emerson Humanitarian Trust, which would take the Trust back up to 2.0 million metric tons. The amendment would not require the purchase of wheat.

- Removes the authority of the Secretary of Agriculture to sell wheat (or other commodities) out of the Trust to purchase other commodities, a process known as monetization. The prohibition would remain in effect through the end of the current federal fiscal year (September 30).

A Conference Committee will now reconcile differences between the House and Senate versions of the bill.

Senator Murray outlined her concerns over the Administration's policies earlier in the week in a joint letter with Senator's Cantwell (D-Wash.) and Wyden (D-Oreg.)

The Murray, Cantwell, Wyden letter follows:

April 1, 2003

The Honorable Ann Veneman Secretary of Agriculture U.S. Department of Agriculture Jamie L. Whitten Building 1400 Independence Avenue, SW Washington, D.C. 20250

The Honorable Andrew S. Natsios Administrator, U.S. Agency for Intl Development Ronald Reagan Building Washington, D.C. 20523-1000

Dear Secretary Veneman and Administrator Natsios:

We are writing to express our serious concerns regarding the administration's handling of food aid policy. The administration's liquidation of the Bill Emerson Humanitarian Trust, its failure to request adequate supplemental appropriations funding to meet our humanitarian objectives, and its continuing opposition to using the authority granted by Section 416(b) of the Agricultural Act of 1949 threaten to undermine a food aid system that has helped millions of people overseas and that enjoys broad support among the American people.

Last summer, on two occasions, the administration sold wheat from the Emerson Trust to purchase other commodities for critically-needed food aid for Africa. These actions, combined with an additional sale of wheat from the Commodity Credit Corporation (CCC) in November and December of last year, drove down white wheat prices in the Pacific Northwest and created an opportunity for large companies to prey on local warehouses.

We are concerned that the recent announcement by the administration that it is authorizing the release of up to 800,000 metric tons (200,000 tons for Africa and 600,000 tons for Iraq) from the Emerson Trust is already having an adverse effect on prices. It is our understanding that prices have dropped so much that wheat growers are beginning to collect loan deficiency payments in Washington state.

Not only did the decision raise concerns for our constituents, it also raised concerns about the long-term viability of the Emerson Trust. The administration has made no statement, taken no action, and requested no support from Congress with respect to replenishing the Trust. If the administration's liquidation of the Trust continues at its current pace, it will soon be empty and cease to be an effective tool for emergency humanitarian relief.

This week, the administration sent its request to Congress for supplemental appropriations for the war in Iraq. As part of the package, the administration requested $200 million for food aid. It is our understanding from discussions with the Senate Appropriations Committee and the Senate Agriculture Committee that the actual need may be closer to $600 million.

We are also concerned about the assumptions the administration is making with respect to the timeline for providing food aid to the Iraqi people. The administration appears to be relying extensively on the oil for food program and the use of the existing distribution network within Iraq to distribute aid. It also assumes a relatively short window when the United States would need to provide aid. We hope the administration's positive assumptions are borne out, but we should be prepared for a less positive outcome.

This challenging and diverse set of circumstances would present fewer difficulties if the administration was willing to use all of the food aid tools available to it. Unfortunately, the administration's refusal to use its authority under Section 416(b) threatens to further complicate our vital aid to the Iraqi people and exacerbate economic instability for rural communities and farmers here at home.

We urge the administration to consider the following actions to address these food aid issues.

First, we urge the administration to request additional and adequate funding to meet our food aid commitments.

Second, we urge the administration to use its authority under Section 416(b) and the CCC Charter Act to purchase the types of commodities needed by the people of Iraq. The use of this authority will temper the negative effects on farm prices and rural economies caused by the on-going liquidation of the Emerson Trust.

Third, we urge the administration to issue a report to Congress in the near future outlining the administration's food aid policy. Congress needs to better understand the administration's policy with respect to the Emerson Trust (including whether it intends to replenish the Trust), how the administration will ensure we retain the long-term ability to provide emergency international food aid, and to what extent other food aid programs conducted by USDA and USAID will be a part of our strategy.

Fourth, we urge the administration to promulgate a proposed rule that contains written procedures for the sale of commodities from the Emerson Trust. We believe procedures should increase transparency and seek to reasonably mitigate the effect of sales from the Trust on farm prices and rural businesses.

We look forward to working with you to ensure that our food aid policies continue to meet our humanitarian and diplomatic objectives, as well as the needs of U.S. farmers and rural businesses.

Sincerely,

Patty Murray, Maria Cantwell, Ron Wyden