Letters

Hurricane Katrina - Farm Interests' Request for Jones Act Waivers

Via Facsimile (202-456-2461)

The Honorable George W. Bush
President
United States of America
1600 Pennsylvania Ave., NW
Washington, DC 20500

Re: Hurricane Katrina - Farm Interests' Request for Jones Act Waivers

Dear Mr. President:

On September 20th a group of 21 agricultural interests wrote you requesting an unprecedented - and unnecessary - waiver of the Jones Act, stating that it would "ease the burden of the overtaxed U.S. transportation system" resulting from the catastrophic effect of Hurricane Katrina. We urge you to reject this request. U.S.-flag vessels operated by tax-paying American companies and American citizen crews are more than capable of handling domestic waterborne transportation requirements, including those of agricultural interests. There is simply no need for such a waiver.

The Maritime Cabotage Task Force (MCTF) is comprised of more than 400 American companies, associations, shipyards, labor organizations, defense groups, and others that are interested in maintaining America's strong domestic maritime industry. The MCTF and the industry it represents have strongly and publicly supported you in the Hurricane Katrina recovery effort. In addition to the direct support many U.S. maritime interests are providing in the Gulf, the industry (through MCTF), citing the unique and tragic situation in the Gulf, did not oppose your temporary waiver of the Jones Act for certain petroleum products.

The agricultural interests' request is not based on any legitimate justification, and the MCTF strongly opposes such requests. 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. The Jones Act fleet is comprised of more than 35,000 U.S.-flag cargo vessels, including thousands of barges on the Mississippi River system now poised to move America's grain harvest to market. The types of vessels used to transport agricultural products on inland waterways - covered barges - will not be called upon in great numbers to aid the reconstruction effort in New Orleans and the Gulf Coast region, which will depend primarily on deck and open hopper barges. In addition, the MCTF is aware of major U.S. barge companies on the Gulf and East coasts that have readily available the types of 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. These companies, as well as other domestic operators, stand ready, willing, and able to assist agriculture producers move their products to market.

The surplus of grain in the Midwest that is cited as a rationale for the requested waiver is not the result of a lack of qualified United States-flag 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. 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. Nor has the inland waterways system, which handles 75% of U.S. grain exports, "been largely washed away" by the effects of Hurricane Katrina, as the Farm Bureau maintains. 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.

The introduction of foreign vessels and crews into the Jones Act domestic trades as sought by the agricultural groups will only make more difficult the task of returning U.S. seafarers in the impacted region back to work and will increase the burden on those charged with homeland security responsibilities in the region.

Many of the agricultural groups seeking the present waiver have actively opposed the Jones Act since the mid-1990's, notwithstanding its broad support in Congress and by every Administration, including your own, over the last 25 years. They have not been successful in requesting waivers in the past, and should not be rewarded now for having changed the rationale for the waiver from price to the aftermath of a hurricane. The American domestic cargo fleet is the envy of the world, moving cargo in an extraordinarily efficient and cost-effective manner. The Jones Act, of course, is based on the simple premise that domestic commerce in the United States should be transported on American vessels, crewed by Americans, and operating under the laws of the United States.

Under U.S. law, there is only one rationale that permits a waiver of the Jones Act on a case-by-case basis under the Act of December 27, 1950 - 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. 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.

The MCTF appreciates your longstanding support of the domestic U.S.-flag maritime industry and stands ready to help, directly or indirectly, those affected by Hurricane Katrina.

Sincerely,

Philip Grill

Cc: The Honorable Michael Chertoff
U.S. Department of Homeland Security
The Honorable Norman Mineta
U.S. Department of Transportation
The Honorable Michael Johanns
U.S. Department of Agriculture Members of Congress

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