Effect of cargo preference on agricultural programs : hearing before the Subcommittee on Foreign Agriculture and Hunger of the Committee on Agriculture, House of Representatives, One Hundred Third Congress, first session, June 17, 1993 PDF
Preview Effect of cargo preference on agricultural programs : hearing before the Subcommittee on Foreign Agriculture and Hunger of the Committee on Agriculture, House of Representatives, One Hundred Third Congress, first session, June 17, 1993
EFFECT OF CARGO PREFERENCE ON AGRICULTURAL PROGRAMS Y 4. AG 8/1:103-23 Effect of Cargo Preference on Agric. . . HEARING BEFORE THE SUBCOMMITTEE ON FOREIGN AGRICULTURE AND HUNGER OF THE COMMITTEE ON AGRICULTURE HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION JUNE 17, 1993 Serial No. 103-23 ' "SQ:-^. May ^4 pQi, Printed for the use of the Committee on Agriculture U.S. GOVERNMENT PRINTING OFFICE 73-343 WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-043938-8 7 EFFECT OF CARGO PREFERENCE ON \f AGRICULTURAL PROGRAMS Y4,AG 8/1:103-23 Effect of Cargo Preference on Agric... HEARING BEFORE THE SUBCOMMITTEE ON FOREIGN AGRICULTURE AND HUNGER OF THE COMMITTEE ON AGRICULTURE HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION JUNE 17, 1993 Serial No. 103-23 rxr- 2 4 no^, Printed for the use of the Committee on Agricultxire U.S. GOVERNMENT PRINTING OFFICE 7»-343 WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-043938-8 COMMITTEE ON AGRICULTURE E (KIKA) DE LA GARZA, Texas, Chairman GEORGE E. BROWN, Jr., California, PAT ROBERTS, Kansas, Vice Chairman RankingMinority Member CHARLIE ROSE, North Carolina BILL EMERSON, Missouri GLENN ENGLISH, Oklahoma STEVE GUNDERSON, Wisconsin DAN GLICKMAN, Kansas TOM LEWIS, Florida CHARLES W. STENHOLM, Texas ROBERT F. (BOB) SMITH, Oregon HAROLD L. VOLKMER, Missouri LARRY COMBEST, Texas TIMOTHY J. PENNY, Minnesota WAYNE ALLARD, Colorado TIM JOHNSON, South Dakota BILL BARRETT, Nebraska BILL SARPALIUS, Texas JIM NUSSLE, Iowa JILL L. LONG, Indiana JOHN A. BOEHNER, Ohio GARYA. CONDIT, California THOMAS W. EWING, Illinois COLLIN C. PETERSON, Minnesota JOHN T. DOOLITTLE, California CALVIN M. DOOLEY, California JACK KINGSTON, Georgia EVAM. CLAYTON, North CaroUna BOB GOODLATTE, Virginia DAVID MINGE, Minnesota JAY DICKEY, Arkansas EARL F. HILLIARD, Alabama RICHARD W. POMBO, California JAY INSLEE, Washington CHARLES T. CANADY, Florida THOMAS J. BARLOW III, Kentucky NICK SMITH, Michigan EARL POMEROY, North Dakota TERRY EVERETT, Alabama TIM HOLDEN, Pennsylvania CYNTHIAA. McKINNEY, Georgia SCOTTY BAESLER, Kentucky KAREN L. THURMAN, Florida SANFORD D. BISHOP, Jr., Georgia BENNIE G. THOMPSON. Mississippi PAT WILLL^MS, Montana BLANCHE M. LAMBERT, Arkansas Professional Staff DiANNE Powell, StaffDirector Vernie Hubert, ChiefCounsel and Legislative Director Gary R. Mitchell, Minority StaffDirector James A. Davis, Press Secretary Subcommittee on Foreign Agriculture and Hunger TIMOTHY J. PENNY, Minnesota, Chairman CHARLIE ROSE, North CaroUna, WAYNE ALLARD, Colorado Vice Chairman TOM LEWIS, Florida THOMAS J. BARLOW III, Kentucky JOHN T. DOOLITTLE, CaUfomia CYNTHL^.A. McKINNEY, Georgia CHARLES T. CANADY, Florida SCOTTY BAESLER, Kentucky KAREN L. THURMAN, Florida EARL POMEROY, North Dakota CHARLES W. STENHOLM, Texas (II) CONTENTS Page Allard, Hon. Wayne, a Representative in Congress from the StateofColorado, prepared statement 3 Penny, Hon. Timothy J., a Representative in Congress from the State of Minnesota, opening statement 1 Witnesses Barrett, Hon. BUI, a Representativein Congress from the StateofNebraska .. 7 Prepared statement 117 Bentley, Hon. Helen Delich, a Representative in Congress from the State ofMaryland 5 Prepared statement 112 Blank,Jonathan, onbehalfofOMI Corp 92 Prepared statement 218 Goldthwait, Christopher E., Acting General Sales Manager and Assistant Administrator; Export Credits, Foreign Agrioiltural Service, U.S. Depart- ment ofAgricultvire 35 Prepared statement 130 Grassley, Hon. Charles E., a U.S. Senatorfromthe StateofIowa 9 Prepared statement 120 McCoy, StevenA., president. NorthAmerican ExportGrainAssociation 76 Prepared statement 192 Mendelowitz, Allan I., Director, International Trade, Finance, and Competi- tiveness, General GovernmentDivision, U.S. GeneralAccountingOffice 61 Prepared statement 164 LetterofAugust 17, 1993 68 Mills, Thomas L., onbehalfofLibertyMaritimeCorp 91 Prepared statement 197 Nussle, Hon. Jim, a Representativein Congressfromthe StateofIowa 16 Prepared statement 128 Quartel, Rob, president, U.S. ShipbuildingConsortium, Inc 94 Preparedstatement 226 Sansone, Wallace T., Vice Commander, Military Sealift Conunand, U.S. Navy 39 Preparedstatement 154 Yim, Joan B., Acting Administrator, Maritime Administration, U.S. Depart- mentofTransportation 37 Prepared statement 135 SuBMnTED Material AmericanFarm Bureau Federation, statement 232 Bateman, Hon. Herbert H., a Representative in Congress from the State ofVirginia, statement 233 (III) EFFECT OF CARGO PREFERENCE ON AGRICULTURAL PROGRAMS THURSDAY, JUNE 17, 1993 House of Representatives, Subcommittee on Foreign Agriculture and Hunger, Committee on Agriculture, Washington, DC. The subcommittee met, pursuant to call, at 9:30 a.m., in room 1302, Longworth House Office Building, Hon. Timothy J. Penny (chairman ofthe subcommittee) presiding. Present: Representatives Rose, Barlow, McKinney, Baesler, Pomeroy, Stenholm, Allard, and Doolittle. Also present: Representative Smith of Oregon, member of the committee. Staff present: Gary R. Mitchell, minority staff director; John E. Hogan, minority counsel; Dale Moore, minority legislative coordina- tor; Glenda L. Temple, clerk; Jane Shey, Anita R. Brown, Joe Dugan, Xavier Equihua, and Lynn Gallagher. OPENING STATEMENT OF HON. TIMOTHY J. PENNY, A REP- RESENTATIVE IN CONGRESS FROM THE STATE OF MIN- NESOTA Mr. Penny. The subcommittee will come to order. I called this hearing on cargo preference to examine the broad policy questions surrounding this issue and to identify specific as- pects of the cargo preference policy and its impacts on exports of agricultural commodities. This is an issue that has faced many hearings and sparked a divisive battle between the agricultural ex- port interests and the U.S. maritime industry. It is not the purpose of this hearing to debate what U.S. mari- time policy should be, since the House ofRepresentatives does have another committee that serves that purpose and has that jurisdic- tion. However, cargo preference does have an impact on the Depart- ment of Agriculture and how export and food assistance programs are administered. As long as cargo preference affects the agricul- tural budget, this subcommittee will maintain vigorous interest in the issue and oversight ofthe matter. Because of the changes in agriculture and the current budget deficit, agriculture has faced reduced expenditures for its farmers. Between 1981 and 1995, farm price supports have and will be cut a total of $37.4 billion. Absorbing cargo preference cost becomes even more controversial as other farm programs are reduced. (1) sonIablelcioenvceertnheasUntiotwehdetShtaetresUSneDeAdsneaedmsartiotsiumbesipdoilziecy.thIathianvdeuspterry- with dollars that could otherwise be used to expand the volume our exports. So it should be no surprise based on my record on these issues in the past that I do have these questions. But we have witnesses on both sides of the issue this morning, so we hope to proceed with a very fair and objective review of the questions involved. And to begin that process we have a panel of three Members, one of whom is already here, and I know that my colleagues on this first panel have differing views on this particular question. And so we will begin by welcoming those who are here at present and allow them to bejoined by the others as they arrive. Also, any prepared statements submitted by the members of the subcommittee will appear at this point in the record. [The prepared statement ofMr. Allard follows:] STATEMENT OF CONGRESSMAN WAYNE ALLARD FOREIGN AGRICULTURE AND HUNGER SUBCOMMITTEE JUNE 17, 1993 THANK YOU MR. CHAIRMAN. HOPE TODAY'S HEARING ON CARGO I PREFERENCE CLARIFIES THE EFFECT THAT CARGO PREFERENCE HAS ON AGRICULTURE AND ALSO ON OUR NATION'S MERCHANT MARINE. AS WE ALL KNOW THE INTENT OF THE 1954 LAW THAT CREATED CARGO PREFERENCE WAS TO HELP SUPPORT THE AMERICAN SHIPPING INDUSTRY FOR NATIONAL DEFENSE PURPOSES. IN LIGHT OF THAT GOAL THE QUESTION FOR THIS COMMITTEE NEEDS TO BE, "HAS CARGO PREFERENCE ON AGRICULTURAL PRODUCTS HELPED MAINTAIN THE VIABILITY OF AMERICAN SHIPPING?" THE ANSWER TO THIS QUESTION HAS TO BE NO. CONGRESS SHOULD ALSO ANSWER THE LARGER QUESTION OF, "HAVE OUR POLICIES OVER THE YEARS BEEN EFFECTIVE IN MAINTAINING A VIABLE MERCHANT MARINE?" I ALSO BELIEVE THE ANSWER TO THIS QUESTION IS NO. FURTHERMORE, WHILE CARGO PREFERENCE HAS NOT HELPED AMERICAN SHIPPING IT HAS HURT AGRICULTURE IN A SIGNIFICANT MANNER. THE AID PACKAGE THAT WE'RE TRYING TO GET OFF TO RUSSIA IS BEING DIMINISHED BECAUSE OF CARGO PREFERENCE. WITHOUT THIS REQUIREMENT WE COULD MOVE MORE FOOD FASTER TO ENSURE A CONTINUED AMERICAN AGRICULTURAL PRESENCE IN THE RUSSIAN MARKET. AFTER LOOKING AT TIIE WITNESS LIST FOR TODAY I'M SURE THAT WE'LL HEAR BOTH SIDES OF THE CARGO PREFERENCE STORY. OUR DISCUSSION SHOULD BE LIVELY, ENERGETIC, AND IN THE END I HOPE EDUCATIONAL. THANK YOU MR. CHAIRMAN.
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