Thank you very much. Dr. Patricia Berglund from the Northern Crops Institute to be followed by Amy. If you’re here, you’ll be on deck. Thank you. Dr. Berglund.

DR. BERGLUND:

Good afternoon. Thank you for this opportunity to discuss concerns about trade issues with you. I am the Director of the Northern Crops Institute in Fargo, North Dakota. Most of the issues you have heard this afternoon are concerns that we deal with also at the Northern Crops Institute. However, the main issues I wish to address this afternoon are, one, the unfair trading advantage allowed state trading enterprises; and, two, the importance of support for educating our consumer, in this case the international buyer of U.S. agriculture. First of all, I would like to tell you a little bit about the Northern Crops Institute and its role in international trade. The institute is a four-state regional cooperative for promoting new and expanded foreign and domestic markets for crops produced in the region. The four states include Minnesota, North Dakota, South Dakota and Montana. We have offered educational and technical assistance to buyers of northern grown crops since 1983. Our sole purpose for existing is to assist agriculture producers in developing markets for their crops. Because Canada and other state trading enterprises have the ability to impose immense regulations on producers regarding quality issue, it puts them at an advantage. Canada is of special concern to those of us in the northern growing region because of our proximity as neighbors, allies and competitors. The U.S. is second only to China as a destination for Canada’s wheat exports. To quote the publication Grains of Truth about U.S./Canada Wheat Trade compiled by the North Dakota Wheat Commission, "Canada is a dominant player in the global market when it comes to spring wheat and durum." These are two major classes of wheat produced in the four-state growing region represented by the Northern Crops Institute. The Canadian Wheat Board is a government-backed monopoly operating without commercial risk. It handles about 20 percent of the world wheat and barley trade, far greater than any company in the U.S. The non-transparent monopolistic and predatory trading practices of the Canadian Wheat Board and other state trading enterprises need to be a priority in future trade negotiation. As privatization of grain import systems continues, increased numbers of import customers require more information and training. Northern Crops Institute procurement programs highlight information that international buyers must know in order to purchase the quality of crop they desire. Grading standards, purchase contract specifications, the role and function of cash in futures markets, commodity analysis, strategies for minimizing risk, commercial export trading practices and export credit strategies are just a few of the topics covered in these procurement courses. Neal Fisher mentioned that we had met with Libyans recently in a course that the Northern Crops Institute put on in North Africa, both in Tunisia and Morocco trying to inform our buyers of how they can purchase what they need. Importers of commodities must know how to work with a multidimensional, competitive environment of the U.S. in order to purchase from us. In order for international buyers to obtain the quality of crop commodity they require they must -- to meet their buyers or customers’ needs, it is imperative they learn how to specify exact requirements in correct language in the contract. Continued support for organizations such as the Northern Crops Institute, U.S. Wheat Associates, U.S. Grains Council, American Soybean Association and support for programs through USDA/FAS are required in order for the U.S. to continue to compete. The biggest competition for programs at the Northern Crops Institute is the Canadian International Grains Institute, or CIGI, in Winnipeg, Canada. The Canadian Wheat Board funds 40 percent of CIGI’s 2.58 million, that’s U.S. dollars, annual budget. The Canadian Federal Government funds the remainder. An article in the October ’98 Feed Stuffs focused on the similarities of programs at CIGI and the Northern Crops Institute, as well as International Grains Program, or IGP, in Kansas. Here again the Canadian Wheat Board provides an unfair advantage in terms of market development. Its 40 percent funding enables CIGI to offer all expense paid trips and course tuition for international buyers. This is a luxury that cannot be provided on NCI’s regional funding of less than 20 percent of the CIGI budget. There are no federal funds that support organizations such as the Northern Crops Institute. I wish to thank the many organizations in this room for providing funding for Northern Crops Institute program so that we are able to provide educational and technical programs for the buyers of northern grown crops. Organizations such as NCI cannot be fully successful in assisting agriculture producers to market their crops internationally with the unfair trade advantages of competitors such as state trading enterprises as the Canadian Wheat Board. The playing field for international agricultural trade must be leveled. Thank you.

MS. KINNEY:

Thank you, Dr. Berglund.

PANEL MEMBER:

Maybe I should make a comment or two. I was going to make a comment on EEP before. EEP, as you all know, is the export enhancement program which we used back in the early ‘90s. It has been authorized at increasingly lower levels the last few years and not been used. And, you know, my problem is probably the same problem as Secretary Glickman has. When your economists and your specialists all come in and show you that by using EEP you’re really going to -- the most likely thing you’re going to do is to lower the price in this kind of a market. You may move a few more bushels of grain, but you’re not going to really accomplish your primary objective, and that is to effect price positively. Furthermore, as we all know, in the past when we’ve used EEP, that does seem to create an opportunity for our Canadian friends to ship even more wheat south, which leads me to Canada. I was in Ottawa a couple weeks ago, you know, I don’t like the Canadian Wheat Board. It’s a monopoly organization. The problem we have is back in 1932 at the end of the depression, you know, we embarked on one series of agriculture reforms in this country and the Canadians, Australians and other folks did elsewhere. And the Canadians and Australians opted out for one system and we went another way and here we are 50, 60 years later. They love it, at least the majority. It’s something we’ve got to deal with. We can’t necessarily have everybody do exactly the way we do it. Now what we’ve tried to do is to get more transparency, to get more disclosure, to find out what they do and how they do it. And we think if we can do that and prove and show that it is a -- a bad system, then maybe we’ll get more allies in South America and elsewhere to confront and perhaps get them to change that system. I must say I think we’ve made progress with the Canadians. We had a major agreement last year. We’ve had a number of discussions. If you’ve read your newspapers last week, just within the last month our friends at USTR had achieved a major victory with respect to their magazine publications, and just last week we reached a salmon agreement, which almost brought us to the brink of warfare up there outside Vancouver and Seattle last summer, wasn’t it? So we’re making progress with the Canadians. They’re a smaller country than we are. They -- they can’t figure out how they want to relate to us. They don’t like it that their Quebec Nordiques are now in Denver and that Larry Walker is now in Denver. So we’ve got to work the Canadians and we’ve made a lot of progress. I am quite hopeful that as we go into the next round we are going to achieve some significant reform on state trading enterprises. So we’ll see how it goes.