Lack of farm bill nixes funds used to create, expand, maintain markets
By MITCH LIES
The expiration of the 2008 Farm Bill and the inability of Congress to pass a new one has put at risk U.S. Wheat Associates' foreign trade programs and, conceivably, the future of the international marketing organization.
The Foreign Market Development program is one of several market development programs that expired Sept. 30 when the 2008 Farm Bill expired. Another potential casualty is USDA's Market Access Program, which will expire Dec. 31. Those programs account for the bulk of $12.6 million in federal funding for U.S. Wheat Associates in fiscal 2012.
Growers also chipped in $5 million last year through 19 state wheat commissions.
Without the federal funds, the organization could fold, said Steve Mercer, director of communications for U.S. Wheat Associates.
"If nothing changes, we would for all intents and purposes be out of business," Mercer said. "Most of our overseas employees are paid out of (Foreign Market Development) program funds."
U.S. Wheat Associates uses USDA funds to help create, expand and maintain foreign markets through 15 international offices and two U.S. offices. The organization's programs are considered essential to a U.S. wheat industry that exports half of what it produces.
"The (Foreign Market Development) programs are vital to our industry, and the export half of wheat that we grow in this country," said Melissa Kessler, communications director for the National Association of Wheat Growers.
"If our work ends," Mercer said, "you've got to believe that Canada, Australia, Russia, Europe and other places that have wheat to sell are going to get in there and start talking to these folks.
"There won't be (market share) losses immediately," Mercer said. "But it won't take very long for it to happen."
The longer it takes Congress to pass a farm bill, the more it hurts the organization, Mercer said.
U.S. Wheat executives have already started cutting expenses, he said. They plan to delay cutting staff as long as possible.
"We'll do everything we can to avoid laying people off," he said.
Blake Rowe, CEO of the Oregon Wheat Growers League and the Oregon Wheat Commission, said he believes it is vital to keep the existing employees.
"The risk is you will lose some of the people who have those customer relations and established connections to people who buy our wheat," he said, "and that is not good."
During its annual meeting in Houston this week, U.S. Wheat Associates is working on contingency plans for addressing future financial possibilities, Mercer said.
"I think we'll look at reserves first, but even if we used all of them, we would be out of funds by April or May," he said.
NAWG, which is also meeting in Houston this week, is pushing for Congress to pass a farm bill during the "lame duck" session, which starts in mid-November, Kessler said.
"We are very interested in getting a farm bill done this year for many reasons," Kessler said. "There is a lot on their plate, but we think the farm bill should be at the top of that list for Congress when they come back."