MR. ZYLSTRA: Good afternoon. I'm Stan Zylstra, a farmer from Pella, Iowa, where I raise hogs and beef cattle as well as corn and soybeans. I also serve as chairman of the board of Land O'Lakes, Incorporated, which is a national farmer-owned cooperative based in Minnesota with extensive business activity in Iowa. I'm pleased to appear before you today to testify on the topic of agriculture trade priorities for the upcoming World Trade Organization negotiations.

At our cooperative annual meeting in February, the members of Land O'Lakes endorsed the resolution on international trade. In that resolution we support the negotiating process as a strategy to gain greater access to export markets for U.S. farm products.

As the first step to the next round of WTO agriculture negotiations, members of the Land O'Lakes support passage of fast-track authority to our negotiators. Land O'Lakes also supports admitting China to the World Trade Organization. China is the world's most populous country, has one of the most rapidly growing economies, and is a major participant in world trade. China needs to be part of the process now in order for her to have input in developing the consistent enforceable -- and enforceable set of trade rules.

We commend the U.S. trade representative, USDA, and the negotiating team for the agreement reached with China this spring. When fully implemented, the agreement will result in greatly expanded market opportunities to pork, dairy products, fertilizer, grains and other agricultural products, but most of the benefits of the agreement will not be realized until China is admitted to the WTO.

As we look ahead to the next round of WTO negotiations, Land O'Lakes is committed to participating in the process and to reaching a successful agreement for U.S. farmers in our food and agriculture industry. Our primary focus is to open new markets for livestock, dairy products, in addition to increasing exports of corn, soybeans, and other crops.

Our recommendations are in full agreement with the priorities of the National Pork Producers Council, National Milk Producers Federation, and the U.S. Dairy and Export Council, and we are active members of these organizations. Specifically we support the following priorities: Elimination of export subsidies, reduced internal agricultural subsidies around the globe, reduced import tariffs on agricultural products, and elimination of nontariff barriers to trade.

Export subsidies create artificial rules and false economies. They cause gross instability in the fundamentals of production, economics, and are obstacles to planning and operating an efficient production system.

The bottomline is that no matter how efficient Iowa farmers are, we can't compete with the foreign treasuries of nations that highly subsidize their agriculture exports. Import tariffs must be eliminated or drastically reduced in order for U.S. farmers to have full access to free markets. A reduction will help to level the playing field and provide equitable access to valuable markets. Nontariff trade barriers seem to be rising in importance. These should not be an issue since the Uruguay Round Agreement included a sanitary and phytosanitary agreement that provided a process for harmonizing world standards and for basing decisions on sound science.

The new agreements must be more forceful in ensuring that world standards for food safety are adopted, and that they are adhered to by all participants.

The U.S. has already reduced internal agricultural subsidies a great deal. It is now time for our trade partners to match our efforts and to improve the performance and efficiency of the world food system.

In summary, the members of Land O'Lakes believe that U.S. farmers should have the opportunity to produce and market products in a spirit of the free markets and based on equitable standards for all participants concerned.

I sincerely thank you for offering this opportunity to share our view. Thank you.