Remarks by U.S. Secretary of Agriculture Dan Glickman National Farmers Union 98th Anniversary Convention February 28, 2000 Salt Lake City, Utah Release No. 0063.00 Remarks As Prepared for Delivery by U.S. Secretary of Agriculture Dan Glickman National Farmers Union 98th Anniversary Convention February 28, 2000 Salt Lake City, Utah "Thank you very much, Lee. It's a pleasure to again join the Farmers Union as you approach an entire century of advocacy and leadership on behalf of the most skilled and diligent farmers and ranchers in the world. "Just as it was last year, we meet at a time of stress and hardship for the men and women of American agriculture. For about three years now, they've been battered by rock-bottom prices, shrinking global demand and record worldwide production, not to mention a slew of natural disasters. "During the last two years, Congress and the Administration were compelled to act $6 billion in emergency aid in 1998, followed by another $9 billion last year. This certainly helped many farmers. Plenty of them would not have otherwise had the cash flow to get through the year. Nevertheless, I believe the emergency bills were more of a quick fix than a real solution. NFU has called it a band-aid approach. I'll make another medical analogy and say that we applied a very expensive tourniquet, when the situation actually called for a blood transfusion. "We need to develop a more permanent assistance package, one that's ready to kick in when the farm economy heads south. That's why we've unveiled a new safety net proposal over and above the current farm programs that offers a fairer, more efficient and more cost-effective way to protect farmers. At its heart is several billion dollars, over the next two crop years, in countercyclical income assistance. This assistance is also targeted. Targeted to smaller producers who generally have smaller incomes. Targeted to those farmers suffering the greatest hardship. And unlike the last two emergency bills, targeted to the farmers who have actually grown the crops. "That seems like a pretty common-sense notion that those who are struggling the most deserve the most help. But the AMTA formula that we've been living by for nearly four years, with its fixed payments, has no such logic. Thanks to AMTA, recent supplementary farm payments haven't been tied to need, to size or to current production. "There's more to our plan, of course, than income assistance. It includes new direct conservation payments direct, not on a cost-share basis that reward farmers who undertake efforts to help curb erosion and protect water supplies from pesticide and nutrient runoff. The plan also enhances existing conservation efforts, for example raising the ceiling on the Conservation Reserve Program to 40 million acres. "On the risk management front, we're looking to make crop insurance more affordable and more accessible, by extending the premium discount on buy-up coverage; offering multi-year coverage; making coverage available to more kinds of farmers and more crops; and expanding our risk management education program. We also would like to see Congress pass wholesale crop insurance reform, consistent with the principles we announced last year. "The safety net also includes efforts to create and expand market opportunities for farmers. That means promoting the growth and development of farm cooperatives; exploring alternative uses of crops through a new bioenergy program; and funding for rural Empowerment Zones and Enterprise Communities. "I think this is a strong proposal, but we're also open to new ideas. Some people have said they think the plan is insufficient. Now, it's one thing to hear that from the National Farmers Union who've been in the trenches on every issue that's important to agriculture for the last century. It's quite another to hear it from some of the very same people who masterminded the 1996 Farm Bill, which cut holes in the safety net in the first place. Amazing how a farm crisis can turn everyone into a prairie populist. "I also have to chuckle when I hear people say that the 1996 Farm Bill is somehow inviolate, that we can't depart from its basic principles. But who are we kidding? We have already amended it dramatically, by pumping 15 billion additional dollars of government assistance into the farm economy over the last two years. The last two emergency bills, in fact, were tacit admissions that the FAIR Act is a little less than fair when the farm economy takes a turn for the worse. "There are other steps I'm taking administratively, which don't require congressional approval. Like freezing loan rates for wheat, corn, soybeans, rice and cotton for this crop year. We're also setting up a program to provide low-cost financing for on-farm storage facilities, thus giving farmers the marketing flexibility they need. "It's not part of the safety net per se, but the President also included in his 2001 budget the dollars necessary for us to continue implementing last year's mandatory price reporting legislation. "And today, I am directing the Agricultural Marketing Service to conduct a referendum on the pork checkoff program and to pay for it with USDA funds. "As a matter of basic fairness, I believe that producers deserve the opportunity to vote on this checkoff program. It is, after all, a mandatory assessment, akin to a tax, that all producers must pay even if they disagree with it. "The checkoff derives its legitimacy from the support of producers, and pork producers have endured dramatic changes in their industry since 1988, the year the checkoff was established and the last time producers were able to vote on this issue. So, in addition to upholding the bedrock democratic principle of the right to vote, it is appropriate and necessary to determine whether a majority of pork producers do, in fact, continue to support the checkoff. "I want to spend a minute talking about what I believe is the most important trade issue facing the agriculture community this year approving permanent Normal Trade Relations and thus easing China's accession to the World Trade Organization. "We're talking about the world's largest country, home to one out of every five people on earth, with an economy growing at 7 percent a year. Yet last fiscal year, every man, woman and child in China consumed less than 1 dollar's worth of American agricultural goods. In one year less than a dollar a person. We can't afford such limited access to a market this large and this fertile. China sells us $70 billion in total goods and services every year; we sell them $14 billion worth not a very good balance. "In joining the WTO, China would agree to eliminate many non-tariff barriers and to cut tariffs dramatically. The tariff on frozen beef cuts, for example, would fall from 45 percent to 12 percent. Cheese tariffs would drop from 50 to 12 percent, and oranges from 40 to 12. "Let me emphasize that we are not being complacent in our dealings with China. We have to be vigilant about monitoring China's compliance with its bilateral agricultural commitments, as well as it's actions on human rights, labor and other issues. "There are some encouraging signs. Today, China has announced a purchase of 50,000 tons of American wheat. That includes 30,000 metric tons of soft white wheat and 10,000 metric tons each of hard red spring and hard red winter wheat, all to be shipped from the Pacific Northwest. "We hope that there will be many more such purchases to come. In fact, if Congress passes NTR and if China does join the WTO, it will mean an additional $2 billion a year in total U.S. farm exports to China by 2005. And that's a very conservative estimate. "If we don't go down this road, then other nations will. It's a dog- eat-dog global marketplace out there. If we unilaterally choose not to take advantage of new overseas opportunities, our friends in Europe, Canada, Australia and Argentina will eat our lunch. They will fill the orders we lose and gain permanent access to the Chinese market. "Going back to the safety net, I see our plan as the first word, not the last. It is not about rigid funding levels, but about a set of ideas, a new philosophical compass that can steer us toward a new farm bill in 2002. "I think it's time we broke out of some of the farm policy paradigms and assumptions that have hemmed in our thinking for several years. I've come up with 5 broad principles many of them reflected in our safety net proposal that I think should guide the next generation of farm policy. "The first is that farm programs should support farmers, not just commodities. In other words, let's base our payments and government assistance on farm income rather than crop prices. After all, it's income not just price that allows farmers to pay the bills, upgrade their equipment and have a decent standard of living. The commodity-driven system we've had for decades helps some people, but it allows many others to slip through the cracks. It also seems to have done little to stop the massive consolidation we've seen in agriculture. Because when farm support is issued on a crop- specific or per-bushel or per-pound basis, the larger you are the bigger your payment. "Second, we need a farm policy that is more comprehensive and national in scope. I've always thought it was curious that the '96 Farm Bill was supposed to encourage planting flexibility, and yet we continue to have a narrow, seven-crop, regional system that doesn't support or reward farmers for branching out into new and specialty crops. "It wasn't until last summer's drought, which was centered in the Northeast and mid-Atlantic regions, that certain people like the national media, for example began to realize that there are actually farmers in these parts of the country. In fact, from Maine to Virginia, there are 200,000 farmers. They too deserve support and protection, and our safety net begins to provide it. "So what tools do you use to direct more resources to less traditional growers? One way is to shake up our risk management programs, to make them more inclusive, which is my third principle. Under the federal crop insurance program, we still do not have the authority to provide affordable protection for livestock, even though ranchers account for about half of all agricultural sales and proceeds. So our safety net plan includes a pilot livestock insurance program, which I hope we can expand in the future. Another thing we want to do is lift the area-wide trigger on our Non-Insured Assistance Program, making it easier for farmers of uninsurable crops to receive assistance after a major loss. "Fourth, conservation the preservation of our land and soil must be a centerpiece of farm policy, not an afterthought. By creating incentives for all farmers to be environmentally responsible, we can increase farm income at the same time that we protect our natural resources. The land is not something that can be replaced like a piece of machinery. We need to respect it above and beyond its crop-producing capability; we must recognize it for what it is: our most valuable commodity of all. Long after this year's crop is grown, harvested and sold and the next year's and the next year's what still will remain is the land. We must hand it to the next generation in as good a shape as we found it. And we can do that while still having an agriculture sector that is productive and profitable. "My fifth principle involves integrating rural development into farm policy. In today's world, most people in rural America cannot make a decent living in production agriculture alone. I wish they could, but the fact is that many farmers need to supplement their income with off farm opportunities; often that's the only way for them to stay on the land. So we need a diversified rural economy, one where entrepreneurship can flourish, one with sound physical and information infrastructure. Rural communities must also have the solid tax base, the clean streets, the safe neighborhoods, the good schools, the skilled labor pool everything that would make someone want to bring their family or business to a community. "I think your conference theme of "The Spirit of Rural America" couldn't be more appropriate. Preserving the spirit of rural America is what farm policy should be all about. We need to make rural America an economic force in the modern world, without losing that which makes rural life unique affordable living, social cohesion, recreational opportunities, natural beauty, open space and so on. "The information age has the potential to make rural America more economically viable than ever before. Today, with the right tools with a modem, a fax and on-line capability you don't have to be in a major population center to do business with the world. We just have to make sure that small towns and rural areas have the same access to those tools that the cities and suburbs have. "So a new farm policy must go beyond just the wheat program, the rice program, the cotton program and so on to address the more fundamental question: how can we help preserve the nation's agrarian tradition by providing more rural economic opportunity, whether it's in farming, retail, tourism or Internet start-ups? "Over the last 60 years, agriculture has been dramatically transformed, and yet farm policy has remained relatively stagnant. People generally do not and cannot farm the way they did in the 1930s and 40s, so government's role in helping them has to change accordingly. "The days when most farmers could make ends meet by simply bringing bulk commodities to market are over. That's why a new farm policy must highlight new and different ways for farmers to make money and capture a greater share of the consumer dollar. That means promoting farm cooperatives, direct marketing and farmers markets. It means encouraging the use of crops in the production of renewable energy sources. It means providing greater opportunities for farmers in value-added, consumer-ready goods, organics and so on. It means not just "freedom to farm" but freedom to market. And it means government must be there to help ensure that the markets are free and competitive by actively enforcing our anti-trust and price discrimination laws. "Of course, traditional row crop farming will continue to be the heart of American agriculture. And the government will continue to support the people who grow traditional crops. But a new century calls for a more holistic approach to farm policy, one that reflects and embraces the diversity of American agriculture. "For example, new immigrants from places like Southeast Asia, Africa and Latin America are finding opportunities in agriculture. And while many are settling in Iowa, Nebraska and Kansas, many others are pitching their tent in places like Virginia, Massachusetts and Washington state. And they're growing and exporting specialty crops like apples, blueberries, strawberries and water spinach. Shouldn't they have the same opportunity for support as traditional heartland row crop producers? "A new farm policy must continue to celebrate farmers, their contribution and their unique role in society. And it must do that by embracing a more complete vision of the American farmer: farmer as effective risk manager farmer as conscientious land steward farmer as bold innovator farmer as resourceful, multi-faceted, flexible businessperson. "Looking ahead to the 21st century that's just begun, I believe the future for agriculture is bright. Within the next quarter century, we expect that there will be 8 billion people on earth, many of them with higher incomes and more varied diets than ever before. A new farm policy can help American farmers reap the benefits of this extraordinary opportunity. "But that new farm policy must be as fair and inclusive as possible. It must go beyond commodity-based programs. It must be national in scope, encompassing more regions, more farmers and more crops. It must be focused less on historic crop prices and bureaucratic formulas and more on people and their dreams. "Thank you very much." #