Issue Report: Grain Inspection Committee Reviews Key Issues

USDA's Grain Inspection Advisory Committee met November 28 and 29, 2007, in Denver, Colorado, to review and discuss current inspection issues. AAGIWA Vice President, Mark Fulmer, Lincoln Inspection Service, serves on the Advisory Committee.

FGIS Online and Kansas City Operations

GIPSA Deputy Administrator David Shipman briefed the group on the agency's effort to modernize its business practices and the centralization of domestic oversight and general FGIS operations in Kansas City. FGIS Online is the term used to describe a variety of technology initiatives at FGIS designed to bring official inspection and weighing to the desktop. The following is a status report of key elements.

FGIS Online - in implementation

• Certificate program - deployment began March 2007. Being used by all FGIS field offices and 2 official agencies. Over 45,000 certificates have been issued using the program.
• Inspection Data Warehouse (IDW) - FGIS expects all official agencies to be participating in this program by the end of January 2008, although this may take place in stages. All FGIS field offices and 2 official agencies are current using CRT to generate IDW records. Over 49,000 records have been transmitted to the IDW.

FGIS Online - in development phase

• Inspection, testing, and weighing - cu-sum, single lot, submitted, and supervision.
• Equipment check testing
• Quality assurance and control
  • Brings data to OSP, interfaces with IDW, ECT, and Licensing
  • Official inspection system includes 876 authorized or licensed grain graders. Of that, 231 are FGIS and 645 are State and Private
  • Monitoring performance of all graders. Each service location will maintain quality assurance programs. Central Kansas City facility will monitor overall performance.
• Licensing - streamlined process to improve efficiency, on-line testing, enhanced record keeping, interfaces with ITW, CRT, and QAQC
• Laboratory information management systems -- expanded functionality, interfacing with other FGIS systems.

FGIS will be centralizing oversight of its programs in Kansas City. Within the Technical Services Division, this will include the (1) Board of Appeals and Grading Services and (2) Equipment Testing Services. Two Field Management Division sections will be based in Kansas City, (1) Quality Assurance and Control Staff and (2) Field Operations and Support Staff. To house its employees, another building will be constructed adjacent to the current Tech Center building and the space currently used at the Beacon facility will no longer be used. The new facility will be called the National Grain Center. In addition to the Technical Services Division and the previously mentioned sections of the Field Management Division, the Grain Center will also house some FGIS Market and Program Analysis Staff, some FGIS Compliance Program staff, and some GIPSA Information Technology staff.

FGIS Customer Survey Results

Marianne Plaus, chief of FGIS' Market and Program Analysis Staff, reported that according to a 2007 survey of inspection customers, the satisfaction level of customers continues to rise compared to previous surveys.

• Timely service -- Those who agreed they received results in a timely manner increased from 90.8 percent in 2000, to 94 percent in 2007.
• Certificate receipt timeliness - those who agreed they received official certificates in a timely manner increased from 88 to 93.5 percent
• Accuracy - Those who agreed that official results are accurate increased from 80.7 to 88.8.
• Consistency - Those who agreed that official results are consistent increased from 79 to 88.6 percent.
• Value - Those who agreed that the service is a good value for the cost increased from 64 to 80 percent.
• Knowledge level - Those who agreed that inspection personnel are knowledgeable increased from 86.8 to 93 percent.
• Satisfaction - Those who agreed that the overall quality of service was satisfactory, increased from 88 to 94 percent

Technical Training Program

John Sharpe, director, FGIS' Technical Services Division, discussed training services the agency offers in light of an Advisory Committee resolution at the previous meeting to look into the possibilities of partnering with a university or other entity to offer short courses training in inspection, grading, and services. He said the agency does provide individualize training upon request and provides grading seminars at a cost of $64 an hour. There are also limited on-line training programs available, including e-learning, grain trainers, and practice exams. Current initiatives underway include plans for a new training area at the new facility, evaluation of new photos for training, reviewing fees, and looking at possible partnerships for enhance distance learning.

Jerry Gibson with Bunge mentioned the success GEAPS has had with the on-line distance learning program it offers in partnership with Purdue University. The Committee approved a resolution recommending "that GIPSA explore the possibility of joining efforts with GEAPS and Purdue, through their distance learning program, to promote education around the U.S. Grain Standards and grain grading procedures."

Phytosanitary Procedures

Bob Lijewski, chief, Standards and Procedures Branch, reviewed the for phytosanitary inspections procedures. He provided an overview of the official system's role in providing phytosanitary inspections, beginning with the original authority to inspect export lots of grain for insects and other pests, such as weed seeds. This authority was expanded and in 2007 APHIS revised its policy to allow official inspection agencies to issue phytosanitary certificates for processed products, in addition to grain, rice, graded commodities and processed commodities.

Due to the increase in volume of grain exported in containers and the APHIS policy change concerning the inspection of processed products, GIPSA/official agencies have experienced a significant increase in requests for phytosanitary inspection service.

• FGIS/official agencies performed about 2,300 phyto inspections on processed products during the month of September and 3,600 in October.
• In addition, FGIS/official agencies are providing inspections for grade and phyto on an average of 20,000 grain containers, 7,000 export railcars and 250 ships per month.

Mechanical Diverter Sampler Issues

Mr. Lijewski also reported on several diverter sampler issues.

• A recent review of D/T sampling systems at export port facilities has uncovered several locations where sampling systems are not fully controlled by official personnel.
• The problems are not widespread and is limited to only a few elevators, however, the potential for tampering with the sampling system operation is significant and must be addressed by FGIS.
• At interior service points, FGIS has found D/T sampling systems that have been altered with the addition of a "plug sensor" switch that shuts off the sampling system.
• FGIS will enforce its authority to maintain complete control of the sampling systems and has proposed several options to correct the situations found at export and domestic locations.

Ethanol/ Distillers Grains Standards Review

Marianne Plaus briefed the Committee on the responses the Agency has received on its request for comments on this basic question: What should GIPSA's role, if any, be in facilitating the marketing of the grains going into ethanol production and the resultant co-products. She said those submitting comments were generally opposed to the idea of (1) a refining co-product definition, (2) testing inputs (bulk grains) and outputs (co-products), and (3) establishing standards for co-products.

Soybeans Standards Review

Ms. Plaus also reported that the agency had asked for comments about the merits of a variety of potential changes in the soybean standards in a notice published in May 2007. The questions focused on foreign material, damage, visual reference images, other factors, basis of determination, and food grade soybeans. She said the American Soybean Association has asked that the limits for foreign material in No. 2 soybeans be reduced by 20 percent, while the grain industry trade associations believe there is no reason to change the current limits. The agency will be collecting three more years of quality data before proposing any definitive changes.

Third-Party Contracting Pilot Program

John Giler, director, Field Management Division, reported on the Third-Party Contracting Pilot Program. He said the program will continue through the 2008 season in the Great Lakes. In general, the agency has found that the services provided by private contractor's do not necessarily cost less that FGIS-provided services. The Agency has also been surprised by the lack of competition from contractors interested in providing official services as part of the pilot program. The overall question boils down to whether there are real efficiencies to be gained through the use of private companies.

The committee debated at some length a resolution asking for a time-line for moving to third-party contracting at export. FGIS officials suggested tempering that approach, saying it was not yet convinced the pilot program had been a success. The Committee ultimately approved the following resolution:

The Committee recommends that GIPSA continue the contracting pilot program, having periodic reviews with industry regarding the progress. The Committee also recommends that FGIS expand the third-party contracting program to additional export ports where it is economically beneficial to industry and FGIS. Any plans for expansion should be presented at the next Advisory Committee meeting.

International Affairs Overview

John Pitchford, director, FGIS Office of International Affairs, reported on a variety of issues, including continuing outreach programs with Mexico and the discontinuing of testing for Starlink in corn. He mentioned that several countries are setting maximum limits for the presence of malathion in wheat. Korea is proposing to implement a pre-harvest 0.5 ppm maximum residue limit (MRL) for malathion on May 1, 2008. Taiwan has already implemented the 0.5 ppm MRL. In the United States, Japan, and European Union, the post-harvest MRL for malathion is 0.8 ppm.

Inspection and Weighing Fees

John Giler provided an overview of the agency's current thinking on grain inspection and weighing fees, noting the fees have not been adjusted for 3.5 years. He made these points:

• Overall, the grain export program is operating with a positive margin.
• Hourly rates (contract and non-contract) are covering expenses and contributing toward the 3-month reserve.
• Tonnage rates are not covering support expenses.
• Grain export fees are not operating as designed to cover specific costs of the program.

Financial Update

Pat Donohue-Galvin, director, GIPSA Budget and Planning Staff, provided the Committee with an update on the Agency's finances. She said the agency centralized all of its administrative functions in 2007 - shifting some programs from FGIS and some from Packers and Stockyards - to form a Management Support Staff. The net result, though, was an increased cost to the grain programs of $472,000.

The following charts providing an overview of current account status.

Prior to adjourning, FGIS announced the next meeting would be held April 21, 2008 in Minneapolis. A complete copy of the resolutions approved by the Committee follow

1. The Committee recommends that GIPSA continue to explore new methods of training and licensing official personnel for inspector licenses.
   
2. The Committee recommends that GIPSA explore the possibility of joining efforts with GEAPS and Purdue, through their distance learning program, to promote education around the U.S. Grain Standards and grain grading procedures.
3. The Committee recommends that GIPSA continue the Farm Gate Survey to determine the quality of U.S. soybeans coming off the farm. In the interest of the soybean industry, GIPSA needs to sample and maintain a database of Farm Gate acquired samples for all factors including protein, oil, linolenic acid, and other factors. The Committee recommends GIPSA partner with other organizations that may be collecting similar data. This survey, at a minimum, needs to be a 5-year baseline with preference to a continuing database.
4. The Committee recommends that GIPSA continue the contracting pilot program, having periodic reviews with industry regarding the progress. The Committee also recommends that FGIS expand the third-party contracting program to additional export ports where it is economically beneficial to industry and FGIS. Any plans for expansion should be presented at the next Advisory Committee meeting.
5. The Committee recommends that GIPSA continue performing the customer survey, and share the findings of the survey with industry, including sharing the actions GIPSA has taken to improve the satisfaction of its customers.
6. The Committee recommends that GIPSA continue to work with APHIS to ensure the Memorandum of Understanding is meeting the needs of industry and that there is a free flow of information and documentation between the two agencies. The Committee also recommends that GIPSA share with APHIS its process for issuing certificates with electronic signatures, helping them establish a similar system to meet industry's needs.
7. The Committee recommends that GIPSA continue to make itself available to help the ethanol industry develop necessary analytical tools.
8. The Committee recommends that GIPSA continue to explore ways to measure wheat functionality and develop, alone or in partnership with a 3rd party, rapid and repeatable test(s) for determining wheat functionality.
9. The Committee recommends expanding Farm Gate Surveys to include separation and identification of all weed seeds occurring in the samples.

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob.petersen@aagiwa.org or by calling (816) 628-1287.

AAGIWA member letter on stowage examinations

TO: AAGIWA Members

SUBJECT: Stowage Examinations

Safety issues related to performing prior-to-loading stowage examinations of rail cars is a continuing concern to many AAGIWA members. There are several FGIS directives or notices that apply to stowage examinations with which you should be familiar.

FGIS Program Notice 06-07, “Conditional Dismissal of Mandatory and Service-on-Request Stowage Examination of Land Carriers and Domestic Barges,” outlines the procedure to follow in dismissing stowage examinations when hazardous conditions are present. As part of an official agency’s management practices, you may wish to include in your safety handbook a definition of “hazardous conditions” that would be applicable when dismissing stowage examinations. Those hazardous conditions could include such factors as lack of adequate lighting (after dark) and inclement weather (wind, rain, snow, ice, etc.). In other words, if you feel there are unsafe conditions present, you may decline to provide stowage examinations. Be sure to appropriately document such steps and to include the following statement on the inspection certificate: “Stowage area not examined.”

In case it is helpful, attached are two examples of the format used by official agencies to document instances of dismissal or withheld services. These examples are provided courtesy of Sioux City Inspection Services and the Champaign-Danville Grain Inspection Service.

If you have further, general concerns about performing stowage examinations, you should visit with your inspection customers to inform them of the safety issues. FGIS Directive 9180.48 prescribes the conditions under which an official agency may waive the stowage examination requirements. That Directive essentially requires that the shipper and receiver of the grain shipment must both agree to waive the stowage examination, that these steps must be documented, and that the appropriate language is included on the inspection certificate.

In addition, customers may not always be aware that they can streamline the loading process for shuttle trains if stowage examinations are not performed. Thus, having a waiver in place can allow the shipper to begin loading more expeditiously.

In closing, one of AAGIWA’s goals is to be helpful and supportive of its members in addressing common issues and problems. We welcome your comments and suggestions.

Sincerely,

Larry Kitchen
President

(314) 540-6217
Larry_Kitchen@sbcglobal.net

20610 NE 157th Street
Kearney, MO 64060

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob.petersen@aagiwa.org or by calling (816) 628-1287.

Issue Report: AAGIWA submits comments to FGIS on “Grain Car Inspection Pole.”

Mr. John C. Giler
Acting Director
Field Management Division
Federal Grain Inspection Service
U.S. Department of Agriculture
1400 Independence Avenue, S.W.
Washington, DC 20250

Dear John:

I write to share with you AAGIWA’s impressions of the “Grain Car Inspection Pole” device which FGIS has developed to potentially aid in conducting stowage examinations of rail cars.

AAGIWA’s Board of Directors met September 10-11 during which time we took the opportunity to look at and experiment with the device. We believe that while device has a number of positive attributes, that ultimately it is so unwieldy as to be unusable. On the positive side, Board members observed that:

1. The device appears well-designed from an engineering perspective.
2. The camera resolution is excellent – the image detail provided is very good.
3. The camera is light weight.

However, despite these positive attributes, the overall concern is that the device is so top heavy as to be very unstable in the best of circumstances and terrain. This instability would appear to make the device not practical for field use. The only approach that would seem workable to us would be is if the camera were permanently attached to some platform that rail cars would pass by.

Having said this, we appreciate FGIS’ interest in addressing concerns we all share with employee safety surrounding the performance of stowage examinations on rail cars. If some such device as FGIS is experimenting with could be developed that would minimize the need for personnel to be atop rail cars, that would hold the potential for significantly reducing the safety issues attendant to providing stowage examinations.

We hope these comments are constructive and would welcome the opportunity to provide input to FGIS on an ongoing basis as it develops equipment ideas and prototypes for use in the inspection process.

Respectfully,

Larry Kitchen
President

Larry_Kitchen@sbcglobal.net
(314) 540-6217

20610 NE 157th Street
Kearney, MO 64060

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob.petersen@aagiwa.org or by calling (816) 628-1287.

September 18, 2007

Issue Report: AAGIWA submits comments to FGIS on ethanol/DDG-related issues.

Ms. Tess Butler
Grain Inspection, Packers and Stockyards Administration
U.S. Department of Agriculture
Room 1647-South
1400 Independence Ave., S.W.
Washington, DC 20250-3604

RE: The Role of USDA in Differentiating Grain Inputs for Ethanol Production and Standardizing Testing of the Co-Products of Ethanol Production

Dear Ms. Butler:

The American Association of Grain Inspection and Weighing Agencies¹ (AAGIWA) submits these comments in response to the advance notice of proposed rulemaking on the above captioned subject published in the Federal Register of July 20, 2007.

GIPSA is asking whether there is a role for the agency with regard to two basic issues:

1. measuring the quality attributes of grain that are of particular significance in ethanol production; and
2. standardizing the testing procedures used for distillers dried grain (DDG)² and establishing appropriate reference methods.

AAGIWA will limit its comments to fairly general observations on the above topics and the overall context. We will leave it to others with more specific expertise to comment on the detailed series of questions posed by GIPSA. We believe the questions posed by GIPSA are very timely, relevant and worthy of public discussion.

Expected Surge in DDG Production

Many analysts believe the production of DDGs will increase significantly in the next several years. Steps that can enhance and facilitate the marketability of this important feedstock can benefit the national economy.

The production of DDGs is likely to increase dramatically over the next several years in direct proportion to the expansion of the U.S. ethanol industry. DDG production, which stood at 12.2 million metric tons (mmt) in 2006/07, may increase to 40.3 mmt in 2014/15 according to estimates by The ProExporter Network®. Thus, the supply of DDGs could increase by more than three-fold over this eight year period.

This sharp increase in DDG production is part of a much bigger picture where ethanol production will increase and may consume one-third of the U.S. corn crop by 2009/2010. Economic conditions will likely compel the livestock sector to substitute DDGs into animal feed rations to the greatest extent possible following prudent nutrition guidelines. These dramatic changes will likely unfold over the next several years.

Measuring the Quality Attributes of Ethanol Inputs

Our impression is that most inbound corn at ethanol plants is examined either officially or unofficially consistent with the U.S. grain standards. We believe the items of importance are typically moisture, damage/broken kernels, foreign material, test weight, mycotoxins, as well as the overall grade. There are of course existing procedures for determining these items and the question really becomes the significance processors attach to emerging traits, such as fermentable starch and the presence of GMOs and those opinions must come from ethanol processors.

As (if) these new factors gain in importance, AAGIWA members, like FGIS, would like to be poised to offer tests that would be of use to the industry. Typically, the developer of new varieties that possess unique characteristics will also develop a testing process (most likely a calibration for existing inspection equipment) for measuring this new characteristic and make this calibration available for general use.

In general, we are aware that corn with high levels of damage will result in decreased ethanol production. We believe most in the ethanol industry are aware of this and the decision on whether to use corn with high damage levels is an economic calculation.

Measuring the Quality Attributes of Ethanol Outputs

With regard to outputs, it appears most industry participants are familiar and comfortable with the AOAC test methods and would prefer that these remain as “recommended,” rather than “required,” methods.

The production and use of DDGs has a fairly long history as an animal feed and over time the feed manufacturing industry has looked to AOAC test methods in measuring DDG attributes.

We have reviewed the recent collaborative report issued by the American Feed Industry Association (AFIA), Renewable Fuels Association (RFA), and National Corn Growers Association (NCGA) titled “Evaluation of Analytical methods of Analysis of Dried Distillers Grains with Solubles.” Based on that report, it appears the feed manufacturing industry has been pro-active in its collaborative work to develop recommendations for testing methods for DDGs and that the industry has a comfort level with this process.

In addition, a working group of the AFIA reviewed the AAFCO definition for DDGs and current AFIA guidelines. The group recommended against changes in the AAFCO definition, but did recommend updates to the AFIA guidelines.

Mycotoxin Testing

We believe there is a broad consensus on the importance of mycotoxin testing in both corn and DDGs. There are a variety of rapid tests available for mycotoxins and, to the extent that the accuracy of these rapid tests can be improved, this would carry a broad benefit to all industry participants.

In conclusion, we believe the expected surge in DDG production in coming years will greatly magnify the need to facilitate the marketability of this important feedstock. We believe it is appropriate for GIPSA to take a forward looking stance in considering whether the agency can play a role in this process. As these changes develop, AAGIWA members wish to be poised to provide testing services of importance to the industry.

Respectfully,

Larry Kitchen
President

¹AAGIWA is the national association representing official grain inspection and weighing agencies. These agencies provide official inspection and weighing services to measure the quality and quantity of grain being bought and sold in the United States.
² The production of ethanol results in the production of a variety of co-products, commonly referred to as distillers grains, that are used for animal feed. The dominate co-product is distillers dried grain (DDG) and the entire spectrum of distillers grains is often expressed in DDG equivalents.

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob.petersen@aagiwa.org or by calling (816) 628-1287.

Issue Report: GIPSA Advisory Committee Reviews Current Issues

The Advisory Committee for USDA’s Grain Inspection, Packers and Stockyards Administration met June 12 – 13, 2007 in Kansas City. Topics included: current FGIS initiatives, service delivery and operations, soybean standards, ethanol, contracting status, and financial report.

GIPSA Administrator James Link opened the meeting and focused much of his remarks on the outsourcing of services through contracting or third party contracting at selected export locations. He said the Administration favored the idea of outsourcing in philosophical terms. He said the current pilot program is still in the information gathering stage. He said it may take one full season, or more than one, before they are comfortable making a decision on the basis of the pilot program’s result.

FGIS Initiatives: GIPSA Deputy Administrator David Shipman, too, commented on the contracting pilot program, noting that FGIS has very detailed rules and procedures that must be followed under the pilot program and said the Agency needs to determine whether there are efficiencies to be gained in contracting out for services. He said the export contractor is responsible for more than simply grading grain, that they must also be able to monitor the quality control systems that are in place. Shipman also provided an update on a variety of other issues:

• FGIS Online – FGIS is implementing a group of new online business applications that will bring inspection and weighing to a person’s desktop. As the new system is implemented in phases, FGIS will be moving away from a variety of stand-alone data systems to one, integrated data system.
• Restructuring of oversight activities – FGIS will be centralizing it equipment performance testing and its monitoring of grading performance in Kansas City at new or renovated space.
• Quality Management Systems – official agencies will be required to develop and maintain quality management systems in accordance with GIPSA “Quality Standards.” The quality standards center on eight basic elements: legal responsibility, quality standard requirements, documentation requirements, management commitment and responsibility, customer focus, resource management, service delivery process, and monitoring, measuring, analysis and improvement. He said conformance to the Quality Standard will result in Official Service Providers demonstrating:
  • consistent quality products and services produced through the use of documented procedures;
  • establishment of management and assessment procedures;
  • implementation of corrective and preventive actions;
  • retention of records and data describing the quality of the product or service, and
  • continuous improvements embraced throughout the organization

Service and Delivery Operations: John Giler, director of GIPSA’s Field Management Division, commented on issues surrounding export container services, phytosanitary certification, and in-transit vessel fumigation.

• With export container volume increasing and expanding, the official system is challenged in several areas: monitoring – 15,000 metric ton rule; registration – for export shipping companies; weighing – 85 additional scales; and locations – 82 active container loading sites.
• Phytosanitary certification services challenges -- official agencies involved in sampling and inspection; local issuance of phytosanitary certification; logistic and timing issues; access to locations; and products for phytosanitary certification.
• In-transit fumigation – GIPSA is taking several steps to address inconsistent efficacy of in-transit fumigation, including implementing short voyage fumigation procedures, employee training sessions, review and improve local procedures, and evaluating application methods and minimum dosage rates.

Standards’ Review: Marianne Plaus, chief, Market and Program Analysis Staff, GIPSA, reported on ongoing reviews of the soybean and sorghum standards.

• Soybean standards – comments are due by July 2, 2007, on GIPSA’s Federal Register notice asking for comments on possible changes to the soybean standards. GIPSA is seeking comments on 17 specific questions covering a number of grading factors and inspection procedures, such as foreign material, damage, and visual reference images. If this review results in changes to the standards, those changes would probably not become effective before the 2010 crop.
• Sorghum Standards – GIPSA expects to issue a final rule any day with the implementation of changes in 2008. While not saying what the final rule would specify, GIPSA had proposed these changes:
  • delete references to tannin from the definitions of the sorghum classes;
  • revise the definition of nongrain sorghum,
  • reduce the grade limits for broken kernels and foreign material (BNFM) and foreign material (FM);
  • insert a total count limit of 10 for other material used to determine sample grade factors; and
  • report test weight in tenths of a pound.

Ethanol Co-Products Standards: Ms. Plaus also reported that GIPSA would soon be issuing an “advance notice of public rulemaking” to seek comments on whether there should be a role for GIPSA in standardizing the testing of inputs and outputs of ethanol co-product processing. She noted that quality characteristics of ethanol co-products (ddgs and related products) can vary widely due to the variety of processes used to produce ethanol. Likely questions would include whether GIPSA should develop reference methods, rapid methods or offer testing within the official system.

Contracting Status and Results: Mr. Giler reported on the experience to-date with third party contacting at export locations. This pilot program is operating in the following locations: California, Milwaukee, Toledo, Chicago/Portage, Milwaukee/Chicago, and Corpus Christi. As for activity at these locations -- California had no export activity, Milwaukee had 25 vessels during the 2006/07 season, and Toledo has had 10 export vessels. In looking at relative costs at Toledo, Giler offered these comparisons:

Financial Report: Pat Donohue-Galvin, director of the Budget and Planning Staff, provided the following overview of agency finances. (in millions of dollars)

The next Advisory Committee meeting is being planned for the first or second week of November at a location to-be-determined.

-- end --

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob@petersenconsultingllc.com or by calling (816) 628-1287.

Issue Report: New Syngenta Corn Variety Sparks Concern

A new biotech corn seed variety released by Syngenta has caused concern from grain companies, producer groups, and others because the variety, while approved for U.S. use, has not been approved at this time for use by Japan, Mexico, or any other foreign markets. The seed variety, Syngenta’s Agrisure™ Rootworm trait (MIR 604) was de-regulated by USDA’s Animal and Plant Health Inspection Service on March 16, 2007, after the agency found no adverse health or environmental concerns. Syngenta had received previous authorizations for the seed variety from the U.S. Food and Drug Administration and U.S. Environmental Protection Agency. The variety has not received full regulatory approval from key foreign markets, causing concern among grain industry and producer groups over the possibility of even a small amount of the unapproved seed finding its way to an export shipment and creating trade issues.

Key Points

• Following approval from U.S. regulatory authorities, Syngenta has released a new biotech corn variety.
• The variety has not received approval from Japan or other foreign markets, sparking grain trade concern that a minute amount of the unapproved variety could find its way to export channels and create trade issues.
• Several railroads have said they will not transport corn containing any amount of the new variety.
• A quick test for the new variety is under development and should be ready by fall. Once GIPSA certifies the test, grain inspection agencies will be able to offer this testing service to customers.

Industry Concerns

The National Corn Growers Association (NCGA), National Grain and Feed Association (NGFA), and the North American Export Grain Association (NAEGA) had all voiced their concern to Syngenta over the new variety and asked that the variety not be released for planting in the United States. NCGA’s biotechnology policy calls on biotech providers to obtain regulatory approval at least by Japan. Meanwhile, NGFA and NAEGA argue that such approvals should be obtained first in the U.S. grain export markets that have functioning, science-based biotech regulatory systems.

The grain trade associations, NGFA and NAEGA, on April 4 urged Syngenta to “. . . reconsider and reverse its plan to commercialize its Agrisure RW™ biotechnology-enhanced corn seed for planting this year because it has not obtained regulatory approval for food and feed use in Japan and other U.S. export markets.” NGFA and NAEGA said “ . . Syngenta’s ‘ill-conceived’ plan risks endangering U.S. corn and corn product exports.” The associations said, “We already are aware that Japanese buyers are developing contingency plans to purchase corn and corn products from non-U.S. origins if Syngenta releases this seed for planting and Japanese government approval is not forthcoming prior to harvest.”

Syngenta Program Calls for Channeling

For its part, Syngenta says it will be implementing a comprehensive grower communication/commitment program. The program is designed to inform all Agrisure™ RW corn hybrid growers of the fact that Agrisure™ RW hybrids do not currently have import approval in Japan and, until that approval is granted, grain produced from Agrisure™ RW hybrids must be directed to domestic uses and away from export channels. New Syngenta Corn Variety Sparks Concern

Other Developments

State governmental agencies, railroads, and biofuel interests have expressed concern or moved to take steps related to the Syngenta hybrid.

• In Minnesota, State Agriculture Department officials initially stopped the distribution and sale of the new biotech hybrid because it didn’t comply with state regulations. However, Syngenta reported on April 26 that Minnesota had lifted its “stop sale” order on the hybrid.
• The Burlington Northern Santa Fe Railway, the Canadian Pacific Railroad, the DM&E Railroad and the IC&E Railroad have all announced they will not accept for transportation any carloads of corn or corn products containing any amount of Syngenta’s Agrisure™ RW corn seed, according to the NGFA. Other carriers currently are considering their policies, NGFA said.
• The Renewable Fuels Association has asked Syngenta to take steps to make sure the corn variety is not sold to ethanol producers which could then find its way into distiller’s dried grains, given the significant export markets that exist for such co-products.

Testing Technology

Syngenta says that currently a PCR test is under development and will be available for testing grain for the presence of Agrisure™ RW. Syngenta said it also believed a lateral flow strip test, although limited in its sensitivity, is desired by some in the grain trade and that the firm is working with independent labs to develop a reliable test and hope that can be achieved soon.

Don Kendall, acting director of the Technical Services Division at USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA), says he is optimistic that a quick test will be available before the fall harvest season. He said GIPSA is working with several test kit manufacturers and Syngenta and that good progress is being made toward a quick test. He said the quick test could be either a lateral flow strip test or an ELISA-type test, although at this stage it appears more likely the quick test will be an ELISA test. Once GIPSA certifies the performance of the quick test, grain inspection agencies will be able to provide this testing service to their customers.

In Sum

AAGIWA asked a grain quality expert with a major grain company to characterize the nature of the firm’s concern with the new biotech seed using a scale of 1 to 10 with 10 being the worst.

“Using that scale, we would rate our concern at 150. Industry experience with StarLink and Herculex have shown that channeling does not work – Herculex essentially shut down U.S. corn gluten feed sales to Europe. Even if a farmer is as careful as possible, his neighbor might be growing the hybrid and with pollen drift the farmer could end up with a product that is not marketable. Our company has had countless meetings on how to deal with this very important issue.”

Further information on issues surrounding the Syngenta biotech corn variety may be found on these websites:

• Grain Elevator and Processing Society (GEAPS), www.GEAPS.org (GEAPS members only)
• National Grain and Feed Association, www.ngfa.org (NGFA members only)
• National Corn Growers Association, www.ncga.com
• North American Export Grain Association, www.naega.org
• Burlington Northern Santa Fe Railway, www.bnsf.com/markets/agricultural/index.html

AAGIWA is the national association representing official grain inspection agencies. Comments or questions on this report may be directed to Bob Petersen at bob@petersenconsultingllc.com or by calling (816) 628-1287.