Associated Press May 30, 2001
Overly optimistic projections of grain exports are being used as a basis to shape policy for federal farm programs and the Mississippi River, according to a study by a University of Iowa professor.
Wheat and corn exports are in reality are declining, but widely used projections show they are increasing. Soybean exports are on the rise, but more slowly than projections indicate, said Phillip Baumel, an economics professor at Iowa.
Baumel, whose study was commissioned by the Minneapolis-based Institute for Agriculture and Trade Policy, said the projections cause concern because the U.S. Army Corps of Engineers is basing its 50-year Mississippi river corn and soybean traffic forecasts on them.
Baumel said he found that export projections from the U.S. Department of Agriculture and the Food and Agricultural Policy Research Institute differed from actual trend lines.
Supporters of the river improvements are criticizing Baumel and the institute.
"Phil Baumel is anti-river improvement, and he has lent his research to groups in their fight against this," said Paul Bertels, a marketing director for the National Corn Growers Association.
Bertels also said that the institute is anti-trade and anti-biotechnology and promotes ideas that are out of sync with mainstream agriculture.
Improvements are projected to cost $1.2 billion over 10 to 15 years, Burrack said. Half of the money would be taken from the Inland Waterway Users Fund, collected at a rate of 20 cents per gallon of diesel used for water traffic.
Mark Muller, a spokesman for the Institute for Agriculture and Trade Policy, said the institute tries to help farmers stay in business.
"We're going to spend $1 billion and not provide any benefits for farmers. It will help the middle people, the transporters," Muller said. "It might help corn one cent a bushel. At $1.22 a bushel, that won't help keep farmers in business. Let's find a way to get corn up to $2.50 or $3 a bushel."
Baumel said he isn't criticizing the Agriculture Department of FAPRI as both say their 10-year baseline projections are to be used for policy analysis, not forecasts.
"Yet the practical reality is that they have been used as forecasts in the proposed Upper Mississippi River Navigation Project and by other analysts in the formulation of U.S. farm policy," Baumel said.
The models used to develop 10-year projections need to be updated, he said.:
