ACGA Cautions Congress on Privatizing U. S. Export Grain Inspection

WASHINGTON -- August 3, 2005 - The American Corn Growers Association (ACGA) is urging the U.S. House of Representatives to reconsider a provision in the reauthorization of the U.S. Grain Standards Act that provides new authority to the Secretary of Agriculture to use private entities to perform official U.S. grain export inspections.

“The future competitiveness of U.S. corn and other grains in world trade hinges on the credibility of the U.S. export inspection system,” said Dan McGuire, CEO of the American Corn Growers Foundation (ACGF). “Even with today’s extremely low corn prices, U.S. corn export estimates for 2004/2005 were reduced to only 1.825 billion bushels, down 72 million bushels from 2003/2004, in the July 12 th U. S. Department of Agriculture (USDA) supply and demand report.” McGuire is the director of the ACGA-ACGF Farmer Choice - Customer First program.

“The last thing the U.S. export system needs is another level of uncertainty for U.S. global customers,” added McGuire. “It is important that professional federal grain inspection experts, not private entities, do the official on-sight sampling, inspecting, weighing and certification of export cargoes if the U.S. is to maintain its reputation as having an unbiased, neutral and credible inspection service. Inspecting the quality and safety of grain exports is the regulatory role of government.”

McGuire explained his concerns that many foreign buyers will simply refuse export certification from anyone less than the federal government and take their business to U.S. competitors. “It is an issue of accountability and who is standing behind the official certificate that represents the quality of the grain. Any appearance of a conflict of interest with a privatized inspection system will undermine years of farmer-funded U.S. grain export promotion and foreign market development work.”

Larry Mitchell, Chief Executive of the ACGA pointed out that we already have enough other issues eroding U. S. corn exports. “European biotech giant Syngenta’s unapproved Bt 10 biotech corn variety has been detected in six U.S. corn export cargoes in Japan since the news broke in March that the variety had accidentally been sold.”

Mitchell added, “The credibility and quality questions that are being raised as a result of Bt 10 are the very kind of credibility issues all U.S. exports could face if USDA hands over official export grain inspection to private entities.” Mitchell went on to say, “In fact, the privatization of grain inspections will have a much more damaging effect, because it will cast a shadow of doubt over the integrity of the whole US grain system. American corn producers do not need this additional disadvantage in the marketplace.”

“Privatization of grain inspections will make the U.S. less competitive in world corn trade, not more competitive as privatization proponents suggest,” Mitchell said, “and the result will be that, again, we will hear the same old song calling for farmers to accept lower grain prices to “compete” in world trade. This is an unacceptable strategy that has failed repeatedly.”

The American Corn Growers Association represents 14,000 members in 35 states. See www.acga.org