Agriculture shippers want Jones Act waiver

Agriculture shippers want Jones Act waiver    A coalition of 21 agriculture industry groups has asked the White House to temporarily waive the U.S.-flag vessel requirements for transporting bulk grain from the Port of New Orleans and other Mississippi River ports to hog and poultry farmers in the Carolinas.
   “Hurricane Katrina has highlighted the incredible importance of the Mississippi River and the New Orleans export region for U.S. agriculture, which accounts for 60 to 70 percent of U.S. grain and oilseed exports,” said the coalition in a letter Tuesday to President Bush.
   “In addition, overall truck and rail transportation capacity is stretched, and neither mode has the ‘surge’ capacity to accommodate increased volumes of additional traffic to accommodate movements disrupted by Hurricane Katrina,” the coalition said.
   The 1920 Merchant Marine Act, better known as the Jones Act, restricts domestic waterborne trades to U.S.-flag vessels. Waivers to the Jones Act are rarely granted.
   The Bush administration granted a Jones Act waiver Sept. 1, a week after Hurricane Katrina crippled New Orleans and neighboring ports, to help transport gasoline to East Coast ports, while petroleum companies scrambled to restore pipelines. The waiver also covered transportation of petroleum released from the Strategic Petroleum Reserve. The waiver expired at midnight Monday.
   The coalition noted that this year’s corn crop is set at 10.6 billion bushels and the soybean crop at 2.86 billion bushels — the second-largest on record, according to the U.S. Department of Agriculture.
   To better manage these trade volumes from the storm-wrecked Gulf ports, the coalition asked the Bush administration for a Jones Act waiver for the rest of the calendar year. The waiver would cover all agricultural products transported between U.S. ports.
   “Without such action, we are concerned that traditional U.S. grain and oilseed buyers in some regions will look to overseas suppliers — rather than U.S. farmers — to meet their demand needs because of constraints on U.S. domestic transportation movements,” the coalition said.
   A variety of agriculture industry groups and shippers signed the letter, including the Agriculture Retailers Association, American Farm Bureau Federation, American Feed Industry Association, American Soybean Association, CF Industries, John Deere, Louis Dreyfus Corp., National Association of Wheat Growers, National Barley Growers Association, National Chicken Council, National Corn Growers Association, National Grange, National Grain and Feed Association, National Sorghum Producers, National Turkey Federation, North American Export Grain Association, U.S. Apple Association, United Egg Producers, U.S. Dry Bean Council, USA Rice Federation and Western Peanut Growers Association.
   While U.S.-flag domestic carriers cautiously endorsed President Bush’s temporary Jones Act waiver for the transport of gasoline after Hurricane Katrina, they disagree with the agriculture coalition’s need for similar treatment.
   “We are opposed to the waiver request,” said Glen Nekvasil, spokesman for the Maritime Cabotage Task Force, in a phone interview. “We believe the Jones Act fleet is capable of handling domestic waterborne transportation requirements.”
   In a letter Monday to U.S. Homeland Security Secretary Michael Chertoff, Sal Litrico, president of TECO Transport Corp., said the agriculture coalition’s request is “based on erroneous claims that there is a lack of available capacity” to transport corn and oilseeds from New Orleans.
   “We are committed to providing service and adequate capacity and therefore no waiver should be authorized by any government agency for this movement,” Litrico added. He noted that TECO Ocean Shipping already has seven U.S.-flag vessels, ranging from 19,200 deadweight tons to 40,000 deadweight tons, “load-ready” in the Mississippi River within the next two weeks.
   Litrico also warned that the accelerated 48-hour method of review by the U.S. Maritime Administration and Customs and Border Protection should not be changed, or “inadvertent waivers may be granted with an adverse affect to continued employment of the U.S.-flag fleet and seafarers.”
   The agricultural sector’s distain for the Jones Act is nothing new. In the mid-1990s, many agricultural industry groups backed the Jones Act Reform Coalition, which was headed by Rob Quartel, a former member of the Federal Maritime Commission. The Jones Act Reform Coalition called for the end of U.S.-flag vessel constraints in domestic waterborne trades. In March 2004 the National Pork Producers Council at the National Pork Industry Forum in Atlanta said it would continue to challenge the Jones Act.