WASHINGTON, April 22, 2015--A bill that the House Agriculture Committee is developing to reauthorize grain inspections will include a safeguard against trade disruptions during labor disputes.
Rep. Rick Crawford, the chairman of the General Farm Commodities and Risk Management Subcommittee, said the full committee will likely vote on the measure next week. The bill would not allow for the use of private inspectors during labor disputes, the Arkansas Republican told reporters after a hearing Wednesday. Inspections at the Port of Vancouver in Washington were shut down last summer when state inspectors, who work under authority of the U.S. Agriculture Department, declined to work during labor demonstrations.
Washington state officials said they were concerned about the inspectors’ safety, and USDA declined to step in, citing the same reason.
“These disruptions bring chaos to the marketplace and threaten customer relationships that have taken years to build: farmers, local businesses and consumers around the world pay the price,” said the president of the South Carolina Farm Bureau Federation, David Winkles, during the hearing.
Winkles testified that a contingency plan must be in place to ensure that official grain inspection activities still occur regardless of service disruptions. “We need to have a reliable third party inspection and grading program for emergency situations to assure both seller and buyer that every contract can be expected to be fulfilled in a timely manner,” he said.
The Grain Standards Act (GSA), which authorizes USDA’s use of state agencies to conduct grain inspections, is up for renewal this year for the first time in a decade.
The current GSA provides a mechanism for USDA to step in and provide inspection services in the event of a disruption. However, the dispute in Washington “devolved into a political situation in which the Secretary of Agriculture declined to use his discretionary authority to maintain inspections,” Crawford said.
“While inspection services were eventually restored, it is incumbent on the Committee to take appropriate action to provide safeguards against a repeat of that unfortunate decision,” he added.
The National Association of Wheat Growers said in a letter to the House Agriculture Committee chairman that USDA’s Federal Grain Inspection Service (FGIS) should be required to step in when these situations occur or use inspectors from other states to do the work. “This restored service must be conducted either by FGIS or by another delegated State authority, and not by a private entity,” the letter said.
Nick Friant, Chairman of the National Grain and Feed Association’s (NGFA) Grain Grades and Weights Committee, said FGIS should be able to license individuals employed by independent third parties to perform official inspection services at export elevators through the existing licensing provisions in the GSA. While some label this attempt as “privatization,” Friant said, “that emphatically is not what NGFA and NAEGA [North American Export Grain Association] are proposing.”
David Cox, the president of the American Federation of Government Employees, insisted that federal USDA employees “should not be replaced with industry-paid contractors,” during the hearing. “Privatization of FGIS would undermine America’s guarantee of impartial and honest, government-backed trading which is relied upon by world buyers,” Cox said.
Crawford noted that the South Carolina Department of Agriculture, which is a delegated state authority, offered to step in during the labor dispute last year, but USDA blocked the effort. The new safeguard will likely include a provision that addresses the use of third party inspection from other states that are able and willing to provide the service.
FGIS directly inspects about two-thirds of exported grain, including shipments through Louisiana and Texas, and delegates the work to state agencies in five states: Alabama, South Carolina, Virginia, Washington and Wisconsin, according to the Congressional Research Service. Private companies are allowed to inspect domestically traded grain under oversight by FGIS. Federal grain inspections could continue beyond Sept. 30, if Congress doesn’t extend the expiring law, but USDA could lose funding for the state inspection services, according to CRS.
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