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must discuss the thousands of farmers in the Midwest struggling to survive and keep the
family farms given the economic crisis that currently exists in America’s heartland.

During the meeting, one of the task force members discussed the merits of the “do-
nothing” option given the inconclusive nature of the reports. While that may be a
suggestion to consider, it should be known that the "do-nothing” option does not mean
that nothing is being done. Many efforts are on going to reduce nitrogen loss from
agricultural fields. There are many examples I could give from Missouri but will just
mention an effort that our association is working on with our Department of Natural
Resources & EPA and private industry. We are putting water monitors at the edge of
farm fields, in small streams, and in the rivers of watersheds across the state. We are
pulling water samples and analyzing for nutrient levels in addition to pesticides and
sediment. We are working with individual farmers and collecting land use information
from farmers in these watersheds in order to correlate land use and water quality analysis -
data. From this effort, we will be able to better determine farming practices that are
economical, reduce the amount of contaminates in runoff, and thereby improve water
quality.

We strongly oppose any actions on most of the alternatives analyzed in these reports
such as adding 24 million acres of wetlands and riparian areas and creating a 500%
nitrogen tax. We would recommend, however, that action be taken to further the
research into methods to reduce “excess” nitrogen application by producers. Soil
nitrogen testing procedures, com leaf tissue testing, and precision farming techniques
need to be perfected and information on these techniques disseminated to producers.
Farm-scale studies on methods to most effectively reduce nitrogen entry into steams
need to continue and be expanded. Data from these studies need to be obtained and
analyzed. Also, I am aware that EPA is currently working on developing nutrient
criteria. Once these are developed, we would recommend that the focus concerning
nutrient loss reduction be maintained at the state level. States should have more
involvement in the issue other than just being involved in the process through
membership on the task force. We would also recommend that the task force be
expanded. The current task force is made up of representatives from the state and
federal government. We would encourage you to consider adding representatives from
the agricultural industry. This would provide more information to the process so that the
real issues can be addressed and meaningful progress can be made.

We thank you for the opportunity to comment.

lp Klee

Steven K. Taylor
Program Director
Missouri Corn Growers Association



H MISSOURI CORN GROWERS ASSOCIATION

WORKING TO INCREASE THE PROFITABILITY OF CORN PRODUCTION

3118 Emerald Lane @ Jefferson City, Missouri 65109
Phone (573) 893-4181 @ Fax (573) 893-4612 © E-mail mcga@mocorn.org

July 16, 1999

Gulf of Mexico Hypoxia Working Group
National Centers for Coastal Ocean Science
WS 13446 SSMC4

1305 East —- West Highway

Silver Spring, MD 20910

Dear Working Group Members:

On behalf of the Missouri Com Growers Association, I am submitting the following
comments in reference to the six scientific reports regarding the hypoxia situation in the
Gulf of Mexico. MCGA is a not-for-profit organization that represents the corn growers
of Missouri. Our goals include protecting and improving profitability for the thousands
of corn growers in the state and assisting growers in utilizing the most environmentally
safe farming practices.

Our association has several concerns regarding the scientific reports and the hypoxia
assessment process as a whole. I have read the reports and I attended the meeting held
June 30 - July 1, 1999 in Memphis, Tennessee where the authors of the reports
presented their findings. I think it is very important to clearly point out the conclusions
of several of the reports. The goal of report number two was to determine the economic
consequences of hypoxia. Report number two concluded, “The economic assessment
based on fisheries data failed to detect effects attributable to hypoxia”. Early in this
debate, the issue seemed to be framed around the economics of the gulf region versus the
economics of the Midwest. This report shows that no negative economic consequences
or impacts from hypoxia could be detected at this time.

The mission of report number four was to report the effects of reducing nutrient loads to
surface waters and the Gulf of Mexico. Much of report number four seemed to
prematurely focus on the mission of group number 5 which was methods to reduce
nutrient loads. However, regarding the question of effects on water quality in surface
waters and in the Gulf, report four concluded that “There is not yet a complete
understanding of the physical, chemical, and biological processes that influence water
quality responses in the northern Gulf of Mexico.” Therefore, group four could not say
definitively that nutrients are the cause of hypoxia but only that “dissolved oxygen and
chlorophyll concentrations appear to be responsive to reductions in nutrient loadings.”
Report number four fails to adequately mention other university research that has been
conducted that shows freshwater flow into the gulf is a primary factor in hypoxia

A grassroots organization directed by its members, dedicated to increasing the profitability of com production by developing and expanding
corn markets, collecting and distributing information, building coalitions with organizations and industries, and participation in the
governmental and legislative process.


development. This research shows that the level of nutrient in the freshwater is not the
determining factor in hypoxia development but rather freshwater sits on top of the denser
seawater and stratification prevents normal exchanges of gases between the seawater and
the air.

Even with less than definitive conclusions regarding nutrient’s effect on dissolved
oxygen, the charge of report number five was to identify and evaluate methods to reduce
nutrient loads to surface water, groundwater, and the Gulf of Mexico. Among the
conclusions of group number 5 was that there should be a 20% reduction in fertilizer
nitrogen application and that 24 million acres of riparian zones and wetlands should be
restored or created. The authors of this report do not provide sufficient discussion in the
report as to how these figures were determined. Given the caveats of the previous
reports, how is it determined that there needs to be a 20% reduction in nitrogen
application? It appears that the authors just feel that a 20% reduction is “do-able” and is
areasonable contribution to alleviating the “problem”. The report did not provide any
details as to how to determine excess or “insurance rate” application and appropriate
rates.

Report number six was charged with evaluating the social and economic costs and
benefits of the methods identified in topic five and to provide an assessment of various
incentive programs. Report six recognizes that report number two determined that “the
direct measurable dollar benefits to Gulf fisheries of reducing nitrogen loads from the
Mississippi River basin are very limited at best.” However, the authors still “assume
that measures to reduce nitrogen losses to the Gulf will ultimately prove beneficial.”
There is no logical basis to make this assumption. At the very least, it would be just as
logical to assume they would not ultimately prove beneficial. The economic benefits of
nutrient reduction seem to be treated like a predestined outcome that is in desperate need
of justification. There obviously is a conflict between the predetermined outcome and
the facts as they have been determined by the reports themselves.

The recommendations given in report number six are hard to understand. They are
contrary to other research, contrary to observed real-world effects, and sometimes just
fail to make simple common sense. The report suggests that commodity prices and
aggregate producer net retums increase at increasing levels of nitrogen loss reductions.
This is because reduced production results from reduced fertilizer inputs and therefore
commodity prices increase. To be blunt, this is nonsense. Reductions of U.S. grain
production at these levels will not necessarily have this kind of effect on grain prices.
Grain prices in the U.S. are determined by global grain supply and demand. We have
serious doubts about the accuracy of the models and the analysis that the researchers
used to make this determination.

It appears that the researchers primarily utilized the U.S. Mathematical Programming
Model (USMBP) in making these determinations. We would suggest that other models
and modeling efforts be employed as well. For example, the Food and Agricultural
Policy Research Institute at Iowa State University and the University of Missouri-
Columbia is recognized nationally and internationally for their expertise concerning
projections of the U.S. and international commodity markets. FAPRI’s reports are
utilized by members of Congress and the Administration for determining agricultural



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policy. The January 1999 FAPRI agricultural outlook states that over the next ten years
the U.S. is expected to produce 1.16 million bushels more corn by the year 2009
compared to 1999. Yet, FAPRI projects the price of com to trend up from $1.94 per Bu.
in 1999 to $2.50 per Bu. in the year 2009. Therefore, FAPRI projects higher prices with
more U.S. production while the authors of report number six assumes that higher prices
will result from less U.S. production. This demonstrates that there is more to
determining the U.S. grain price then simply correlating it to U.S. grain production. The
determination of crop prices involves complex calculations that integrate world supply
and demand factors.

Regarding the economic impacts to individual producers, there are tremendous economic
risks to an individual producer if nitrogen is limited beyond what may be determined as
“excess.” It appears that a major assumption is that the 20% reduction only comes from
excess nitrogen. This is a risky assumption because the technology and programs to
reduce excess nitrogen does not adequately exist at this time. If reductions come from
nitrogen usage that is not in excess, there will be significant economic losses to those
agriculture producers. Major reductions in yield would be experienced. The report itself
stated that nitrogen could return tenfold its costs when nitrogen is not in excess.

To summarize our concerns with report number six, the authors do not adequately report
the negative effects the recommendations would have to U.S. agriculture and the risks
these recommendations convey to individual producers. Less U.S. grain production will
not necessarily provide for higher world grain prices. Less U.S. grain production will
provide less overall product for sale and less economic activity in the U.S. as a result.
Promoting a policy of reducing “excess” nutrients should be done through research and
information/education programs. The use of nutrient regulations or nutrient taxes would
be devastating for U.S. producers.

As a general comment, there were several aspects of the meeting in Memphis that I
found disturbing. I was concerned with the lack of understanding and expertise by some
of the research teams. I already discussed the concerns of not incorporating existing
expertise and research. Also during the meeting, the lead researcher for the team in
charge of identifying and evaluating agricultural practices to reduce nutrient loads stated
he “would not know a chisel plow from a moldboard plow.” Hopefully, others on the
team did know the difference because I would consider this a benchmark indicator of
knowledge of the farming practices that the team was charged with evaluating.

I was also disturbed by what I considered a bias by the researchers against agricultural
interests. During the meeting, researchers seemed intent upon providing various reasons
other than economics to justify recommendations such as wildlife enhancement, wetland
restoration, nutrient reductions because it was “the right thing to do and we need to get
on with it.” This editorializing is inappropriate and clouds the issue. The issue is the
effect of nutrients on the Gulf. If we want to debate society’s desire to reduce the
agricultural industry in order to increase wildlife habitat and wetland, then let’s be up-
front and clear that this is the issue up for debate. There was even emotion brought to
the issue. One researcher painted a verbal picture of a worm on the bottom of the Gulf
of Mexico that could not breathe and said, “ if you can’t breathe, nothing else matters.”
If we are going to have an emotional spin rather than a scientific discussion, then we