Source: National Corn Growers Association news release
The president of National Corn Growers Association today asked the Trump administration to grant exemptions on bulk shipments for America’s commodity groups as it considers implementing fees against Chinese vessels to level the playing field between U.S. and Chinese shipbuilders.
The request came through comments submitted by Illinois farmer and NCGA President Kenneth Hartman Jr. to the Office of the United States Trade Representative, which is part of the administration.
“Corn farmers are currently facing numerous challenges in the farm economy, including rising input costs, volatility in commodity prices, and stagnant market access opportunities,” Hartman said. “Adding further financial strain through higher transportation costs could result in more instability for our members, particularly those who depend on global export markets to remain competitive.”
The restrictions are an outgrowth of the Trump administration’s efforts to address a report showing China has given its shipbuilding and maritime industry an unfair advantage through financial support, barriers for foreign firms, intellectual property theft, procurement policies and forced technology transfers.
To address the issue, the Office of the United States Trade Representative issued a proposal that would impose steep restrictions on Chinese operators and U.S. carriers using Chinese-made ships. The restrictions could include fees of up to $1 million per U.S. port call servicing Chinese operators and fees up to $1.5 million per entry for all Chinese-built vessels, scaled based on the percentage of an operator’s fleet built in China.
The proposed fees are expected to increase the cost of transporting bulk grain, which includes corn. According to a Market Intel by the American Farm Bureau Federation, these exporters could face an additional $372 million to $930 million in annual transportation costs. These costs could translate to an additional $.34 to $.64 per bushel of corn, which is almost always passed down to the farmer.
Additional shipping costs couldn’t come at a worse time for corn growers.
“Corn farmers are currently facing numerous challenges in the farm economy, including rising input costs, volatility in commodity prices, and stagnant market access opportunities,” Hartman noted. “Adding further financial strain through higher transportation costs could result in more instability for our members, particularly those who depend on global export markets to remain competitive.”
While NCGA supports initiatives to strengthen American manufacturing and shipbuilding capabilities, Hartman said, an exemption for bulk grain shipments would allow the U.S. to address the problems caused by the Chinese government without hurting America’s farmers.
