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September 23, 2006

Agricultural lobby seeks Jones Act waiver

Apparently emboldened by the temporary post-Katrina Jones Act waiver for tankers, a coalition of 21 agriculture groups including the American Farm Bureau Federation has written President George W. Bush requesting a temporary waiver of the Jones Act for agricultural products.

It says this would provide additional transportation capacity for moving U.S. grains and oilseeds to ports in the Southeastern regions of the nation.

Under the Jones Act, water transportation of goods between U.S. ports must be make use of U.S.-flagged, U.S.-built, U.S.-crewed and U.S.-owned vessels.

The letter from the agricultural groups says that a temporary waiver for agricultural products through the end of 2005 would assist in the post-Katrina recovery effort of ports and waterways "by easing the burden on the already overtaxed U.S. transportation system."

Not surprisingly, the move by the agricultural lobby has drawn a response from the Maritime Cabotage Task Force. With more than 400 members, MCTF is the largest coalition ever assembled to represent the domestic segment of the U.S. merchant marine.

It, too, has written the President, saying the agricultural groups' request to use foreign shipping companies is “unprecedented and unnecessary.”

"There is existing capacity on coastwise-qualified U.S. vessels, on both the rivers and the coasts, to handle the demand for the transportation of agricultural products," wrote Philip Grill, Chairman of the Maritime Cabotage Task Force (MCTF), in a September 22 letter to President Bush. "The agricultural interests' request is not based on any legitimate justification."

Grill said there are "thousands of barges on the Mississippi River system now poised to move America's grain harvest to market" and "oceangoing vessels that are capable of providing service to agricultural interests, including transporting Midwest feed supplies to markets in the U.S. mid-Atlantic and Southeast regions."

Grill emphasized the surplus of grain in the Midwest that was cited by agricultural interests is not the result of a lack of qualified American vessels to transport it.

"As the spokesperson for the American Farm Bureau Federation admits, much of the surplus problem is due to last year's crop still being in storage in the region," he said. "That situation is driven by the economic state of the world export market for U.S. grain, not the inability to move grain within the U.S."

Grill also rejected the allegation that Hurricane Katrina has left the inland waterways unnavigable.

The system which handles 75 percent of U.S. grain exports has not "been largely washed away" as the Farm Bureau maintains, Grill said.

"In fact, today near normal traffic levels are being reported on the lower Mississippi River for both deep draft ships and shallow draft barges, and the storm had little impact on the upper reaches of the Mississippi, Missouri, or Ohio River systems."

Grill further underlined the fact that under U.S. law, there is only one rationale that permits a waiver of the Jones Act, on a case-by-case basis -- specified national defense needs, which, in the case of petroleum products, would include interruptions to the supply of fuel. Such a waiver would require a determination by the U.S. government that no qualified Jones Act vessels were available.

"Such a rationale is notable by its absence in the present case," Grill stressed. "Nor could such a finding of non-availability of U.S.-flag vessels operated by tax-paying American companies and American citizen crews be made in light of the fact that sufficient capacity does indeed exist today to meet the needs of America's farmers."