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Grassley speaks to American Soybean Association

Soybean CropsFrom Press Release

 

U.S. Sen. Chuck Grassley spoke Tuesday to members of the American Soybean Association. The following were his prepared remarks.

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Good afternoon — thank you for inviting me to speak with you today, I always enjoy seeing farmers in our nation’s Capital.

I know it’s hard to justify getting away from the farm, but I assure everyone it’s very important for you to be representing agriculture in Washington.

When people in Washington don’t hear from farmers enough, they start doing ill-advised things like creating the Waters of the U.S. regulation.

On our farm in New Hartford, IA, my son Robin was able to get our crops in on time this year. However, I know some of you have grown tired of the rain which has delayed soybean plantings in Southern Iowa and Missouri.

I have heard reports that parts of Missouri have already received 30 of their average 38 inches of annual rainfall, and parts of Illinois have also received double their annual rainfall to date.

I hope my crops will finish strong this year.  Last year it quit raining in our part of Iowa during late summer which really affected our beans. And then about fifty acres flooded before we could get the field harvested.

That happened while most of the country was harvesting a bumper crop which brought back the $8 soybeans and $3 corn none of us wanted to see again.

The good news is, Congress and the Administration are working together to enable new free trade agreements to be adopted.  These agreements will increase export opportunities for our grain and other agricultural products.

Free trade is very important to our country and to our future economic prosperity.  Anyone who doesn’t believe that is in denial, in my opinion.  We live in a global economy and the U.S. needs to be a leader on the issue of free trade.

We know that 80 percent of the purchasing power in the world is located outside the United States, along with 95 percent of the world’s consumers.

Last year, U.S. exports equaled $2.35 trillion and supported nearly 12 million jobs.  In Iowa alone, 448,000 jobs are dependent on trade, according to the U.S. Chamber of Commerce. And those jobs pay 18 percent higher wages on average because they are tied to trade.

During testimony to the Senate Finance Committee, U.S. Trade Ambassador Froman pointed out that the U.S. is already an open marketplace with tariffs that average just 1.6 percent, some of the lowest in the world.

Yet at the same time, our companies face very high tariffs in other markets.  Some agricultural products face tariffs up to 400 percent, machinery can be up to 50 percent.

According to the Department of Agriculture, fiscal years 2010-2014 represent the strongest five years of agricultural exports in the history of our country.  We exported $675 billion worth of agricultural goods during that period.

To expand on the success of our existing free trade agreements, Congress recently passed Trade Promotion Authority or TPA.  I supported TPA, which after an arduous legislative process, was signed into law by the President on June 29.

TPA serves as a signal to other countries that Congress is serious about taking up free trade agreements.

TPA has two major components.  First, TPA gives the Administration negotiating objectives from Congress.  Essentially, the negotiating objectives serve as the ‘to-do’ list for our negotiators on issues Congress believes should be addressed in trade agreements.

Second, TPA outlines the process for Congress to consider free trade agreements.  Specifically, it states a final agreement cannot be amended and shall receive a single up or down vote in Congress.

That’s important because no other country is going to sign a trade agreement that Congress could change.

With TPA in place, we are hopefully ready to finalize negotiations for the Trans-Pacific Partnership otherwise known as the TPP.

President Obama notified Congress that he intended to enter into TPP negotiations on December 14, 2009.  If anyone tells you the TPP has been rushed, simply point out negotiations started six years ago.

There are currently eleven other countries participating in the TPP negotiations along with the United States.  Collectively, the twelve TPP countries represent nearly 40 percent of global GDP.

Additionally, the middle class is growing faster in Asia than any other area of the world.  Some estimates project the middle class in Asia is going to grow from a half a billion people today, to over three billion in just the next fifteen years.

From a strategic economic perspective– the TPP makes a great deal of sense.

And regarding agriculture, the TPP offers great economic potential.  According to the Department of Agriculture, the United States exported $5.5 billion of soybeans and soybean products to the TPP region in 2014.

Japan, which is our fourth largest export market for soybeans, buys around $1 billion of U.S. soybeans every year.  Even though tariffs can be up to 20 percent.  Corn also faces tariffs as high as 40 percent in some TPP countries.

Beyond tariffs, the TPP also offers us a chance to reduce non-tariff trade barriers like Sanitary and Phyto-Sanitary or SPS regulations.  An example of a SPS measure that prevents trade is how the European Union intentionally drags their feet when approving our biotechnology traits.

The TPA bill Congress just passed specifically mentions that SPS regulations need to be science based.

I have also been a long-time supporter of efforts to diversify our energy supply with clean-burning, homegrown renewable energy, including biodiesel.

Iowa leads the nation in renewable energy production.  It’s the largest producer of alternative fuels.

It has the capacity to produce more than 4 billion gallons of clean-burning ethanol and biodiesel, including 22 million gallons of annual cellulosic ethanol production capacity.

The state of Iowa is proving that our farmers and ranchers can simultaneously produce the food, feed, fuel and fiber that our country needs.

Biofuels are reducing our dependence on finite fossil fuels.  They keep more money at home rather than sending it to Persian Gulf countries that may wish to do us harm.

In 2005 and again in 2007, the federal government made a commitment to homegrown, renewable energy when Congress passed the Renewable Fuel Standard.  The greatly expanded RFS II passed the Senate by a vote of 86-6.

In recent years, I’ve fought off efforts to undermine homegrown renewable energy by Big Oil and Big Food.

Biofuel proponents have dispelled the myths and misinformation campaigns that have been launched to discredit ethanol and biodiesel.

And once again, biofuels are under attack.

This time the attack has come from President Obama’s Environmental Protection Agency.

The EPA’s severe misstep with its proposed Renewable Volume Obligations released in November 2013 has been harmful to biofuel producers, to rural economies, our national security and our environment.

Biofuel producers have responded to the call for more homegrown, renewable energy.  But, the proposed rule released by the EPA undermined that commitment.

I’m glad the EPA decided to scrap its proposal and put forward a new proposal to set the Renewable Volume Obligations for 2014, 2015 and 2016.

Unfortunately, in most respects, the new EPA proposal isn’t much better than the previous proposal.  While it is a positive step for biodiesel, I remain concerned with the biodiesel volumes for 2016 and 2017.

EPA’s new proposal fails to adequately recognize the domestic biodiesel industry’s production capacity and its ability to increase production.

I’m currently circulating a letter among my colleagues in the Senate to express our concerns with the new EPA proposal for biodiesel.  We’re asking EPA to increase the volume obligations in 2016 and 2017 to reflect the capability of the domestic biodiesel industry.

The letter currently has approximately 20 signatures.  With your help and advocacy, we can get the support of even more Senators.

The lapse of renewable energy tax incentives has also created a lot uncertainty and slowed growth in the renewable industry.

That’s why I’m also working to extend the credit for biodiesel and renewable diesel.  The tax incentive helps biodiesel compete with petroleum diesel.

The lapse of the credit serves only to hamper the strides made toward a viable self-sustainable renewable energy and fuel sector.

I’m pleased it appears the Senate Finance Committee, of which I’m a member, will consider a tax extenders package next week.

All indications are that the package will include a straight extension of all expired tax provisions for 2015 and 2016.  This is certainly good news.

Please know that I will continue to fight for homegrown renewable fuels, whether with the EPA over volume obligations, or to reinstate the tax incentive for biodiesel.  I appreciate all your help on these issues.