SAN ANTONIO — The National Grain and Feed Association supports agricultural biotechnology and other scientific and technological innovations that contribute to increased production of safe and high-quality food and feed for consumers throughout the world. But the organization also supports the right of customers to exercise choice when buying agricultural commodities and products, said Gary Beachner of Beachner Grain, Inc., Parsons, Kas., and chairman of the National Grain and Feed Association.
Presenting the chairman’s report at the N.G.F.A.’s annual convention on March 16, Mr. Beachner said his organization, as well as the American Soybean Association, National Corn Growers Association, Biotechnology Industry Organization (BIO), American Seed Trade Association and the North American Export Grain Association, established the U.S. Biotech Crops Alliance. The group has worked for more than two years “to chart a better course when it comes to commercializing new biotech-enhanced crops,” said Mr. Beachner.
“The goal had been to develop industry standards or best practices to which the value chain would commit in an effort to prevent the kind of export market-related disruptions we’ve seen with certain biotech traits in the past few years,” Mr. Beachner said.
The alliance also was concerned with developing approaches to deal with situations where a bioengineered trait inadvertently mingles with other food or feed and alters the latter’s nutritional or compositional characteristics.
In February, though, BIO notified the rest of the group that “its members could not, as a collective group, agree to the concept of developing a process for determining and assessing responsibility for actual economic damage that occurs if a biotech trait becomes present at levels that cause market disruptions,” Mr. Beachner explained.
As a result, the N.G.F.A. and the other members of the crops alliance decided to recalibrate and elicit the opinions of different biotech company developers in order to discern if it is possible to chart a more productive path forward, said Mr. Beachner.
“N.G.F.A. believes we need to change the dangerous mindset that exists among too many biotechnology companies and farmer-customers who believe that market access for U.S. grains and oilseeds in the zero-tolerance marketplace in which we operate is of secondary importance compared with their desire to commercialize and have access to new traits,” Mr. Beachner said. “N.G.F.A. understands the need to strike a proper balance between these two competing goals.”
Mr. Beachner in his address also noted that the N.G.F.A. Risk Management Committee has been working on changing an aspect of the Commodity Futures Trading Commission’s implementation of the Dodd-Frank Law. He said the N.G.F.A. had concerns about the C.F.T.C.’s effort to establish speculative position limits for a range of markets, including agricultural commodities.
“Our biggest concern is that C.F.T.C.’s proposed rule would redefine what constitutes a bona fide hedge in a way that would greatly limit commonly used hedging transactions previously considered appropriate in our industry,” Mr. Beachner said.
As examples, he cited pre-hedging purchases of farmer grain outside of futures exchange trading hours, presetting futures carrying charges to manage spread risk, such as before harvest, and anticipatory hedges placed prior to export tenders.“N.G.F.A. is striving to preserve the status quo so that our businesses can continue to use traditional hedging activities to lay off market risk,” he said. “We’re pleased the C.F.T.C. reopened consideration of its original proposed spec limit rule, and hope a partial rewrite will resolve the problem.”