China policy on DDGS dominates Grains Council board meeting

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, July 30, 2014 - China's recent actions impeding imports of U.S. distiller's dried grains with solubles (DDGS), a co-product of dry-milled ethanol production used as a feed ingredient, dominated guest presentations and group discussions during the U.S Grains Council (USGC) 54th Board of Delegates meeting this week in Omaha, Nebraska. 

A few days before the meeting, China's import inspection agency made clear that it would require U.S. government certification that export cargoes of DDGS do not contain any traces of MIR 162, a biotech trait developed by Syngenta for insect resistance in genetically modified corn that's not yet approved in China. The move reflects similar actions from the Chinese government over the past several months blocking U.S. shipments of corn, ostensibly because of trace amounts of MIR 162.

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Julius Schaaf, chairman of the U.S. Grains Council, wrote to U.S. Agriculture Secretary Tom Vilsack this week asking him to work with his counterpart in China to reverse the decision.

“This action is arbitrary, capricious, a major impediment to trade, and a direct threat to the viability not only of DDGS exports but to the U.S. ethanol industry as a whole,” Schaaf wrote.

Commercialized in 2010, MIR 162 is planted in the U.S., Argentina and Brazil. However, approval has been pending in China for more than four years. “The continuing refusal of China to approve MIR 162 is a significant and costly impediment to trade,” Schaaf said.

China is currently the biggest export market for U.S. agriculture. For DDGS exports to China, Schaaf said the value exceeded $1.6 billion in 2013 and was set to top that this year before the latest action on MIR 162.

The U.S. government recognizes the impossibility of DDGS certification as called for by China, Schaaf said. “A suitable test simply does not exist,” he noted. Additionally, the fact that China issued the request with no notice and no window for adjustment shows that the motive is “overtly protectionist,” he said.

Darci Vetter, chief agricultural negotiator for the Office of the U.S. Trade Representative (USTR), said the U.S. government is working with Chinese officials “at the highest political levels” to address the DDGS problem. She said they are working on technical solutions, so China can better understand the U.S. biotech approval system and eventually work toward more synchronous timelines 

“We're working with China to have more timely and science-based approval process,” she said.

Vetter asked USGC members to share what they hear from their international customers, including changes in export contracts and new questions they get about their products. “Those can be the first signs of what a new barrier might be,” she said. 

Vetter noted during an interview with Agri-Pulse that Chinese law dictates it can only move forward with its approval process after a product is approved in the U.S.

USGC advisory teams on Biotechnology and Trade met during the meeting and outlined their priorities for China, which include the country's immediate approval of MIR 162.

Mike Phillips, executive secretariat of the U.S. Biotech Crop Alliance, a group made up of 15 agricultural organizations, said the alliance is focusing on making biotech a major trade priority for the Obama administration.

Bryan Lohmar, USGC's China Director, said the country is working on a policy overhaul, and that Chinese officials tell him to be patient for agricultural reforms. “I've been told the new government has a sequential order for reforms,” he said, starting with an anti-corruption campaign, then fiscal reform and credit market reform.

Regarding China's attitude toward biotechnology and GMOs overall, Fred Gale, USDA Economic Research Service economist, said China wants to have strict regulation of GMOs, but is also desperate to stay at the forefront of GMO research. “Agriculture officials know they need these products to resist drought, pests and weeds,” Gale said.

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