NFGA Regulatory Vice President Jess McCluer Looks at FGIS Programs, Performance

Jess McCluer has been vice president of safety and regulatory affairs at the National Grain and Feed Association (NGFA) in Washington, DC since 2007. Among his duties is staff liaison to the NGFA Grain Grades and Weights Committee.

In that role, McCluer works with members to develop and preserve inspection and weighing practices that facilitate timely, orderly, fair, safe, and economical grain marketing responsive to customer needs. The committee develops NGFA’s policy positions and provides input to Congress and the U.S. Department of Agriculture (USDA) on official grain standards, as well as inspection and weighing practices that are accurate and consistently applied. The committee is the principal advocate to USDA’s Federal Grain Inspection Service (FGIS) on official grain inspection and weighing issues in an effort to facilitate orderly marketing.

U.S. Grain Standards Act

NGFA has worked with our colleagues at the North American Export Grain Association (NAEGA) and its comparable committee to develop several recommendations pursuant to the U.S. Grain Standards Act (USGSA) and believes they will help strengthen and improve the effectiveness of the official inspection and weighing system further, enhance the competitive position of U.S. grains and oilseeds in world markets, and retain the integrity of U.S. inspection results. NGFA will work with Congress during the reauthorization process to craft policies that achieve these positive outcomes.

Some of the proposals include:

• Requiring FGIS to conduct a detailed review of the current geographic boundaries for each officially designated agency.

• Prohibiting the misuse of grain quality factors on phytosanitary certificates.

• Extending the reauthorization to a time period of more than five years but no longer than 10 years.

• Reauthorizing the USDA Grain Inspection Advisory Committee.

Performance

In 2017, Secretary of Agriculture Sonny Perdue separated FGIS from the Packers and Stockyards Administration within the Grain Inspection, Packers and Stockyards Administration (GIPSA) and returned it to the Agricultural Marketing Service to improve customer service and maximize efficiency.

NGFA strongly supported this aspect of Secretary Perdue’s reorganization plan. The merger of FGIS and the Packers and Stockyards Administration into GIPSA during the Clinton administration had always been an odd fit, since the two agencies have distinctly different missions and functions. We believe that FGIS needed change to fulfill its statutory obligation to provide reliable, accurate, timely, impartial, and cost-effective services under the USGSA and other authorities following a period in which it was somewhat adrift.

Perdue’s realignment also provided the impetus for FGIS to improve its cross-agency interaction with other government departments that share roles in facilitating the marketing of U.S. agricultural products, such as USDA’s Animal and Plant Health Inspection Service (APHIS), which is responsible for issuing phytosanitary certificates for U.S. grain export shipments.

Since the reorganization, and with credit to very committed and capable new leadership installed by Secretary Perdue, NGFA has noticed marked improvement in the agency’s program delivery, culture, and service. Further, the relocation to AMS has helped FGIS address problems that have occurred over the last decade involving the overall expense and effectiveness of federally mandated FGIS official grain inspection services by eliminating programmatic redundancies, reducing administrative costs, and providing opportunities for interaction with experienced AMS personnel with a similar mission and focus. We look forward to constructively working with FGIS and its new leadership. We especially would like to thank the dedication of many career staffers within the AMS for their hard work and commitment to addressing important stakeholder issues during the transition.

Grading Standards

On June 28, 2018, AMS published a notice in the Federal Register requesting comments on the current official U.S. grade standards for soybeans, corn, and canola. AMS reported that the purpose of these requests for comments was to ensure that standards and official grading practices remain relevant and effective. While the standards and grading practices for all three commodities are relevant to NGFA and NAEGA interests, the soybean standards attracted the most attention, given the ongoing trade issues with China, and in particular, APHIS’s inappropriate use of FM (a grain quality factor) as an additional declaration on phytosanitary certificates (reserved for informing importers of plant disease or plant pest risks) for U.S. soybean export shipments to China.

Subsequently, NGFA, NAEGA, and several other organizations representing producers, grain processors, and exporters of U.S. soybeans requested that AMS withdraw its request for information on the U.S. soybean standards and to not proceed with further rulemaking on this matter at this time.

FY 2020 Budget

Earlier this year, the Trump administration in its FY 2020 budget request called for additional user fees to replace the appropriated portion of the FGIS budget, approximately $20 million annually, on top of the existing official inspection and weighing fees already paid for by the industry. Users of these official services already pay for the direct costs incurred by FGIS in providing them, plus administrative overhead for these services, which typically comprises 70% of FGIS’ total annual budget. The only portion of FGIS’s budget not funded by user fees is its standardization activities, such as developing the U.S. grain standards and monitoring activities to ensure that grading is done consistently across different market regions. Assessing additional user fees to finance these non-inspection-related functions of FGIS would increase business costs and likely be passed back to farmers in the form of reduced farmgate prices for their commodities given the highly competitive global market in which U.S. agriculture operates. FGIS should not be financed through additional user fees.

NGFA supports the House Ag Appropriations bill, which maintains the $55 million cap on user fees.