Testimony of

Mr. Mike Clark

Vice President

Illinois Corn Growers Association

On the behalf of

American Soybean Association

National Association of Wheat Growers

National Corn Growers Association

Before the

Senate Committee on Agriculture,

Nutrition and Forestry

February 1, 2000

Mr. Chairman, members of the committee. I am Mike Clark, and I currently serve as Vice President of the Illinois Corn Growers Association. I raise corn, soybeans and wheat near Homer, Illinois, and Vedersburg, Indiana.

It is my honor to appear before you this morning on the behalf of the American Soybean Association, National Association of Wheat Growers and National Corn Growers Association. Together, these three national organizations represent a significant amount of U.S. agricultural production and the vast majority of grain producers.

I would first like to thank the Committee for holding this hearing. As a farmer, my operation is directly impacted by the work of the Grain Inspection, Packers and Stockyards Administration (GIPSA) and the grain standards it enforces.

As we enter the new century, we should take the time to review how our government operates and ask ourselves: Is there a better way? This certainly applies to GIPSA and the standards it enforces. Indeed, many of the grain standards are nearly a century old themselves, having been created by the Grain Standards Act of 1916.

While GIPSA is to be commended for its efforts in modernizing its operation, little has been done to bring grain standards into the twenty-first century. As you well know, U.S. producers must export a significant portion of their crop each year to remain solvent. This requires us to compete on a world market against well-positioned competitors. Across the globe, world grain buyers have grown more sophisticated in their buying requirements. Yet, we continue to rely on standards that largely only describe external characteristics.

Current U.S. grain standards measure only volume and outward appearance. Very few inspection standards exist to give grain buyers the information they really want: the end-use characteristics of the crop. Farm groups, this committee and the agency need to engage in open dialogue to determine if these needs are to be meet by the public or private sector.

Take for example how we measure protein in wheat. While wheat is graded by the amount of protein it contains, no standards are available to measure the quality of the protein or the gluten content. Tests and standards need to be developed to identify the inherent traits that bring about the highest end-use value and help identify and preserve true wheat quality.

Millers and bakers want to know how the wheat they purchase will grind into flour; how it will bake into bread; and how it will effect the quality of their product. Without making changes which reflect end-use quality, U.S. grain producers will be left flat-footed on the world market, unable to capture the true value of their product.

To its credit, GIPSA has made some advances in this area. However, much remains to be done. We need to harness the continued advances being made in technology to bring about a reliable and quick test that will predict the intrinsic qualities desired by the end-user. In addition, we must retain the flexibility to adapt such standards as new technologies are developed.

These issues are made even more complex when we consider the growth of biotechnology. For example, consider for a moment how biotechnology is currently effecting the corn industry.

Biotechnology is clearly the single largest driver of change for the corn industry, as such it will be important for all segments of the industry - producer, processor and regulator - to define their new and different role in this era. The rate of change spurred by biotechnology is so rapid that we cannot rely upon the time-tested practice of defining policies based upon the experience of the past, but rather by anticipating the needs of the future. We are still defining our regulatory expectations of GIPSA and other government agencies in that future. We do anticipate that in the future the opportunities for corn farmers to extract additional value from the crop will arise from being able to move up and down the value chain. This means we will need to better know and identify the intrinsic qualities of an increasingly segmented corn market - a market place where farmers, handlers, processors and customers will be tracking, testing and identity preserving individual load lots of grain as it moves through the value chain.

In this new arena, standardization of tests and testing equipment will be vital. GIPSA can play an important role in making sure that tests for intrinsic qualities are timely, repeatable, verifiable and of a nature that can be used by commerce in our country elevator system. To extract value from a new era of biotechnology, we will need standardized tests that confirm that value.

Likewise, the soybean industry is actively considering the development of testing and analytical procedures for a variety of traits derived through both commercial breeding and biotechnology. These traits include high content levels of oleic and stearate fatty acids, low linolenic acid content, low phytate content, and high sucrose content. Soybean growers are working with other industry partners to develop standards for these characteristics for recommendation to GIPSA.

The impact of biotechnology on the grain trade and in turn our expectations of GIPSA is currently evolving. We are still exploring our expectations of contracts, grades and standards in the future. While we cannot say today with certainty our expectations for GIPSA in the future, we look forward to dialogue with the agency and this committee to clarify that role.

Meanwhile, we must continue to monitor and improve GIPSA's everyday operations and the grain standards we currently have. It is vitally important that, in addition to the current user fee system, GIPSA continue to be funded by both appropriated federal funds. The standardization and development of tests, as well as other related GIPSA activities, benefit society at large and should be funded by society rather than through user fees.

Just this year, GIPSA developed standards for a new class of wheat: hard white. It is to be commended for working with wheat producers and commissions from across the country to develop reliable, workable standards that will help guide the development of this class of wheat across the mid-west.

While not all producer groups are in agreement, the National Association of Wheat Growers commends GIPSA and its partners at the Foreign Agricultural Service for their efforts in advancing USDA's grain cleaning initiative. Just last week, representatives from several state wheat commissions joined grain exporters, foreign grain buyers and grain millers from around the globe in providing comment on the need to improve our grain cleaning capabilities for grain sold through the Gulf of Mexico.

As I mentioned earlier, our customers around the world continue to demand clean, high quality grain. The implementation of the USDA wheat cleaning initiative would be a solid first step towards regaining our competitiveness in the world grain market.

Again, Mr. Chairman, let me thank you and the Committee for the opportunity to appear before you today. I appreciate your timely evaluation of these concerns and welcome any questions you might have.