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

242 Pages·1994·7.5 MB·English

by  United States. Congress. House. Committee on Agriculture. Subcommittee on Foreign Agriculture and Hunger

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.