[Congressional Record Volume 146, Number 38 (Thursday, March 30, 2000)]
[Extensions of Remarks]
[Pages E464-E467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   NATIONAL WESTERN AGRICULTURE FORUM

                                 ______
                                 

                           HON. BOB SCHAFFER

                              of colorado

                    in the house of representatives

                        Thursday, March 30, 2000

  Mr. SCHAFFER. Mr. Speaker, prior to the start of the second session 
of this 106th Congress I held a widely attended agriculture forum at 
the 94th Annual National Western Stock Show in Denver, Colorado. The 
forum featured twelve experts who presented their views on three of the 
most challenging issues facing agriculture--biotechnology, 
international trade and federal farm policies.
  I will now summarize the remarks of the panelists and commend to our 
colleagues the opinions shared at the Colorado forum.
  The first panel addressed biotechnology. Mr. Roger Bill Mitchell, 
President of the Colorado Farm Bureau, began by addressing the 
overriding concern of the biotechnology panel; consumer awareness. 
``Consumer acceptance is the key to biotechnology's success. Currently, 
the public is mislead by propaganda . . . if the benefits of biotech 
were put forth then the public would support the technology,'' he said. 
``It is up to the farmer and rancher--us--to market biotech products 
and to educate the public. We have to respond to the markets. Even when 
the consumer is wrong, he's right.''
  Dr. Cecil Stushnoff, Director of Horticulture at Colorado State 
University said the term ``genetic engineering'' evokes suspicion and 
fear. ``A gap of knowledge generates fear of the unknown. The public 
should be informed that biotechnology could help in stopping viruses, 
killing insects, serving as vaccines, and preventing disease,'' he 
said.
  Dr. Stushnoff said the public should also be advised of the risks to 
human health and to the environment. ``The only way to ensure public 
support is to assess each product on a case-by-case basis. More 
research in this field is needed to answer consumer questions. 
Biotechnology has enormous potential.'' Dr. Stushnoff also warned of 
foreign nations that, as a matter of national policy, have promoted 
campaigns of hysteria regarding genetically

[[Page E465]]

modified organisms (GMOs). Here again, it seems education is the key.
  Mr. James Geist, Executive Director of the Colorado Corn Growers, 
said genetic modification is an age-old practice which has 
traditionally been limited by a lack of technology. ``Modern technology 
helps to determine accuracy of genetic modification,'' he said. ``The 
media has embraced the topic to get `shock appeal' and have blown out 
of proportion the realities of biotechnology. The current hysteria is 
not reasonable and could be curbed by informing consumers about the 
truth, reality and functionality of genetically modified goods.'' Mr. 
Geist also emphasized GMOs as a viable solution to meeting the growing 
demand for food. ``With the current population growth, we must use 
GMOs.''
  Mr. Jim Rubingh, Director of Markets for the Colorado Department of 
Agriculture continued with Mr. Geist's concerns about global 
population. ``By the year 2050 the human population will have to 
produce as much food as the world has produced in the last 12,000 
years. Biotechnology allows for inexpensive, nutritious, and plentiful 
food production. Although there are risks, biotechnology can also save 
lives.'' Mr. Rubingh believes a unified, regulatory system needs to be 
established by Congress to ensure genetic varieties are not abused.
  Mr. Speaker, our second panel addressed trade. Mr. Tim Larsen, an 
International Marketing Specialist with the Colorado Department of 
Agriculture, provided examples of how the agriculture industry is 
suffering. ``The U.S. farmers are doing a good job. They are just not 
getting the global price they deserve.'' Mr. Larsen went on to say, 
``The North American Free Trade Agreement (NAFTA) has proved good in 
Colorado. From agricultural entities, only 19 trade claims, nationwide, 
have been filed against NAFTA, none have been filed from Colorado. 
However, Colorado does need a level playing field to compete 
globally.''
  Dr. Alan Foutz, Vice-President of the Colorado Farm Bureau, said the 
problem is a lack of export markets to sell our excess products. 
``America should not abandon NAFTA and GATT,'' he said. ``The U.S. 
government must address the crisis facing agriculture imposed by high 
tariffs and other trade barriers. It is essential for the 
administration to work with foreign governments to open up markets. 
Future trade relationships with China are important, simply because 
China is a larger market. We must sell our surplus to foreign 
markets,'' he said. Reauthorizing Fast Track is important. He urged 
Congress to avoid adding environmental and labor riders on the 
reauthorization bill.
  Dr. Foutz also reminded Congress that regulatory expenses are also 
barriers to trade. ``I don't want the government to bail me out. Allow 
me to sell to foreign markets easier that it is today.''
  Mr. Larry Palser, President of the Colorado Wheat Administrative 
Committee, said farmers need Congressional help to compete with other 
countries. ``More markets must open and sanctions must be removed,'' he 
said. Mr. Palser urged Congress to phase out export trade subsidies, 
but should not reduce tariffs until the other country in question 
complies with terms of fair trade. ``America lost $7 billion to 
sanctions,'' Palser stated.
  The Colorado Wheat Administrative Committee supports Most Favored 
Nation Trade Status for China. ``The European Union must be forced to 
reduce export subsidies,'' he said. Mr. Palser's remarks are hereby 
submitted for the Record.

  Statement by Larry Palser, President, Colorado Wheat Administrative 
         Committee, to Forum on Agriculture in the 21st Century

       Thank you for this opportunity to discuss some of the 
     important trade issues that are vital to the economic 
     stability of Colorado wheat producers. As you know, Colorado 
     is a major producer of wheat and a large exporter. When we 
     are unable to trade wheat overseas the economy of Colorado is 
     hurt.
       We know that worldwide demand for high quality wheat is 
     increasing, but competition is also increasing. For Colorado 
     wheat producers to successfully compete for sales around the 
     world we need your help and the help of all of your 
     colleagues in Congress. Colorado wheat producers can compete 
     with any other farmers, but we cannot succeed in a world 
     market place where we are forced to compete against foreign 
     governments. There are a number of issues that I wish to call 
     to your attention that need to be addressed for Colorado 
     wheat producers to successfully compete in the export market 
     in the new millennium.
       Continuing to open export markets by expanding and 
     improving our trade agreements is essential. The recent World 
     Trade Ministerial in Seattle was to have set the agenda for 
     continuing to strengthen member countries commitments to 
     opening world markets and to begin the work on renegotiating 
     the agricultural agreement. While we are very disappointed at 
     the lack of a positive outcome in Seattle, our trading 
     partners must be held to the agreement to move forward with 
     the agriculture negotiations as agreed to in the built-in-
     agenda of the Uruguay Round.
       The new round of negotiations of the WTO will be one of the 
     best avenues to achieve meaningful reforms. The new round of 
     negotiations must move forward as soon as possible. A broad 
     set of wheat industry concerns was developed as a set of 
     recommendations for our negotiators and others involved in 
     the WTO negotiations.
       I would like to share with you the following key WTO issues 
     for wheat: the elimination of all direct export subsidies 
     within three years; elimination of monopolistic state trading 
     enterprises to provide discipline to price discriminating 
     practices, which distort world markets; the elimination of 
     inequities that persist between the U.S. levels of domestic 
     support and those of our competitors; and expansion of market 
     access (U.S. agricultural tariffs should not be further 
     reduced until such time as other countries make significant 
     tariff reductions and tariff peak disciplines).
       Sanctions reform is a priority legislative issue. A lot of 
     very good work has been done on sanctions reform over the 
     past several years. On November 17, 1999, a letter with 220 
     signatures of your House colleagues was delivered to Speaker 
     Hastert asking for ``meaningful reform of food and medicine 
     sanctions policy in the 106th Congress.'' The letter gave 
     three reasons why Congress should act to end these sanctions. 
     They are: (#1) Unilateral food and medicine sanctions do not 
     work because our allies freely supply the same products to 
     sanctioned states; (#2) Denying access to food and medicine 
     is an abhorrent foreign policy tool; and (#3) Unilateral 
     sanctions punish American farmers and depress American 
     commodity prices by denying access to significant 
     international markets.
       We in the Colorado wheat industry are in full agreement 
     with your colleagues on these reasons. Sanctioned markets 
     currently buy $7 billion of agriculture commodities each year 
     from our competitors. USDA estimates that rural communities 
     lose $1.2 billion in economic activity annually because of 
     unilateral sanctions. I ask you on behalf of all wheat 
     growers to make removal of these sanctions a prime objective 
     when you go back to Washington, D.C. in a few days.
       Permanent Normal Trade Relations (NTR) for China is another 
     priority issue. The bi-lateral agreement that China signed in 
     April of 1999 is fully implementable. The next step is for 
     China to begin to purchase wheat. This is a very important 
     agreement because it resolves the phytosanitary argument that 
     impeded U.S. wheat sales to China for years. China has now 
     agreed that there is no threat from TCK.
       The really big issue facing China is entrance into the WTO 
     and Congressional approval of permanent NTR. This is 
     necessary if the U.S. is to achieve the benefits negotiated 
     in the U.S.-China WTO agreement. Without permanent NTR, China 
     is not bound to comply with the agreement. Other
       Trigger mechanism legislation is also a priority. The U.S. 
     wheat industry has worked with Senator Baucus on a bill that 
     would require the Secretary of Agriculture to take action if 
     the European Union (EU) does not reduce and subsequently 
     eliminate agricultural export subsidies. This legislation 
     would require increased funding for the Export Enhancement 
     Program (EEP), the Foreign Market Development (FMD) program 
     and the Market Access Program (MAP). These programs are all 
     important to U.S. agriculture's competitiveness in the world 
     market place. S. 1651 is called trigger legislation as it 
     would be triggered it the EU fails to lower its subsidies. I 
     respectfully ask you to work with us to introduce similar 
     legislation in the House.
       There has also been talk of rejuvenating EEP, however, this 
     does not appear likely in the near term. Each year any unused 
     allocated EEP funds are lost from USDA's budget. A bill was 
     introduced at the end of Congress by Senator Patty Murray of 
     Washington State that would provide authority to the 
     Secretary of Agriculture under certain conditions to use 
     unexpended EEP funds for FMD and MAP. The Murray bill 
     authorized MAP at $200 million, while making the current $90 
     million level a minimum rather than a maximum amount. It also 
     establishes the FMD program at a minimum of $35 million 
     annually. We believe this is an important bill needed to 
     capture these much needed funds in programs we know are 
     successful.
       Congressman Schaffer, these are a few of the trade issues 
     that are important to the wheat industry that we ask for your 
     support and help with. The Colorado wheat industry looks 
     forward to working with you.
       Mr. Vernon Sharp, President of the Colorado Cattleman's 
     Association agreed with Mr. Palser. ``We must increase access 
     to international markets, eliminate unfair trade policies and 
     reemphasize domestic trade policies through country-of-origin 
     statutes and mandatory price reports. Stop using agriculture 
     products as a bargaining chip,'' Sharp said. ``Trade barriers 
     must be based on scientific research. We can't allow 
     ourselves to become dependent on a foreign food supply like 
     we are on oil,'' he said.
       Our final panel, Mr. Speaker, addressed federal farm 
     policies. Mr. Peter Sperry, Budget Policy Analyst with The 
     Heritage Foundation, states that one cannot plan strategy 
     around changing government policies. ``Government policy is 
     misdirected and

[[Page E466]]

     fails to hit the targeted goal.'' Mr. Sperry asked, ``Should 
     the federal government be in agriculture at all?'' He 
     continued by emphasizing the enormous price tag for federal 
     farm programs.
       ``The cyclical nature of the cattle industry makes if 
     difficult for the federal government to maintain a fair 
     support program. Let people keep the money they make.
       ``Farmers have difficulty planning rational policy in the 
     face of federal meddling. The federal government should get 
     out of agriculture. Be careful what you ask for, because you 
     just might get it. If the agriculture community says `stay 
     with subsidies,' that's what we'll get.
       State Conservationist, Steve Black, countered saying there 
     was a definite role for the government. ``Government can 
     provide agriculture assistance. The best assistance is 
     generated from voluntary incentive-based programs such as 
     conservation on private lands, abundant food, clean water, 
     decreased greenhouse gasses, wildlife habitat, open space and 
     wetlands habitat,'' he said. ``Seventy percent of land is 
     managed by private farms and ranches. Good national resource 
     management is important.'' Black said 88% of the nation's 
     water runs off from private land.
       ``Farmers do a better job of preventing wind erosion and 
     promoting carbon sequestration and wetlands preservation. 
     When public money goes into agriculture, it's well spend.''
       Mr. Lynn Shook, a state board member of the Colorado Farm 
     Bureau brought the discussion back to less federal 
     involvement. ``Federal farm subsidies shouldn't be allowed. 
     The farmer should get a fair price first. The 1996 Farm Bill 
     had too many regulations,'' he said. ``Farmers need help to 
     increase trade markets.'' Mr. Shook went on to say farming is 
     risky. ``The U.S. government needs to provide a real crop 
     insurance program,'' he said. Mr. Shook's full testimony 
     follows.

                  Statement on Farm Policy--Lynn Shook

       My name is Lynn Shook. I grow wheat and sunflowers near 
     Akron, Colorado. I am a member of the Colorado Farm Bureau 
     Board of Directors. I would like to thank Rep. Schaffer for 
     the opportunity to discuss future farm policy. I would also 
     like to thank him for representing farmers and ranchers like 
     myself in Washington, D.C. In order to fully discuss current 
     and future farm policy I think it is important to look back 
     on how the current farm bill was created and passed.
       The ``Freedom to Farm'' concept embodied in the 1996 farm 
     bill has come under much criticism as the cause of the 
     current economic problems in agriculture. People seem to have 
     lost perspective on what the 1996 bill did and did not do and 
     the circumstances surrounding passage of the legislation.
       By 1995, producers had become increasing disenchanted with 
     the acreage controls and the lack of planting flexibility 
     that had evolved out of the 1977, 1981, 1985 and 1990 farm 
     bills.
       Planted acreage was restricted most years with acreage 
     reduction programs (ARPs) while the rest of the world kept 
     planting more acres. Base acreages had been locked in for 
     most crops since 1985. The world was changing, but U.S. 
     agriculture was locked into past planting patterns.
       After the experience of the early and mid 1980s, producers 
     were also well aware that we could not use the farmer-owned 
     grained reserve to store our way to prosperity. The reserve 
     was restricted in size and price influence in the 1990 farm 
     bill, and elimination seemed to be the next logical step in 
     1995.
       While these changes were going on with agriculture, a new 
     farm bill was also faced with substantial federal budget 
     pressures. As the farm bill debate began in 1995, President 
     Clinton's budget proposal for fiscal year 1996, the budget 
     year beginning on October 1, 1995, showed yearly budget 
     deficits at $200 billion for the next five years. The 
     Congressional Budget Office (CBO), the budget estimating arm 
     of Congress, had a similar forecast.
       The federal budget deficit had been a political issue for 
     20 years. The new Republican controlled Congress was 
     determined to bring the issue to a head and resolve it. As 
     1995 progressed, President Clinton began overtures to the 
     Republicans to find a budget compromise that would lead to a 
     balanced budget.
       The Republicans and the President were also talking about 
     regulatory reform, tax relief and foreign market development, 
     all issues important to farmers and ranchers.
       Given producer concerns about planting flexibility, stocks, 
     policies and the political winds of balanced budget efforts 
     and other policy changes, a status quo policy based on 
     extension of the 1990 farm bill became less and less 
     achievable as the 1995 farm bill debate dragged into late 
     1995 and into 1996.
       The Republicans in Congress promised that regulatory, tax 
     and market development changes would be forthcoming, but a 
     farm bill had to be passed to fit within a budget deal that 
     was on a fast track for action in 1996.
       Budget pressures on a farm bill were nothing new. The 1990 
     farm bill was passed and then immediately changed by the 1990 
     budget deal to fit within its budget restraints.
       Agriculture was faced with a choice between greater program 
     flexibility and fixed payment rates, agricultural market 
     transition assistance (AMTA) payments, or trying to swim 
     against the budget policy stream and less program 
     flexibility.
       The 1996 farm bill has also been criticized for lower loan 
     rates for the major crops. That did not happen. Loan rates 
     began moving down in 1986 with the implementation of the 1985 
     farm bill. That was continued in the 1990 farm bill. The 1996 
     farm bill did not mandate lower loan rates. It gave the 
     Secretary of Agriculture the authority to lower loan rates. 
     It did put in place loan caps to prevent the Secretary from 
     raising loan rates.
       Farmers and ranchers accepted the changes in farm policy, 
     but Congress and the President did not delivery on regulatory 
     reform, tax relief and market development. The regulatory 
     burden on farmers and ranchers has gone up, not down. From 
     the FQPA to wetlands to labor regulations, farmers and 
     ranchers are more heavily regulated than ever before.
       Farmers and ranchers received some tax relief in 1997 and 
     1998, but it was minor compared to the total impact of estate 
     taxes and capital gains taxes.
       Farmers and ranchers have received virtually no help on 
     trade issues. Congress and the Administration have not 
     delivered on trade negotiating authority, have not increased 
     funding for USDA market development programs and have not 
     worked out problems with existing trade agreements. Only 
     recently has the Administration begun dealing with trade 
     issues with Canada and removing trade sanctions with major 
     potential trading partners like Iran.
       The recently announced Farm Bureau AgRecovery plan outlines 
     what we believe needs to be done in the short run and lays 
     out where farm program policy must focus in the long run.
       First, direct federal assistance will continue to be needed 
     in the short and intermediate terms. We will not dig out of 
     the current hole in a year or two.
       Second, development of markets at home and abroad must be a 
     high priority. Farmers and ranchers must be able to produce 
     and sell. Direct federal assistance can help in the short 
     run, but we must produce for markets to be profitable in the 
     long run.
       Third, agricultural production is a high-risk business. 
     Crop insurance reform has been a constant refrain throughout 
     the 1990s. The 1994 reforms were supposed to be the mother of 
     all reforms. We tinkered again in 1998 and are now making 
     further changes in 1999 to take effect for 2000 to 2004.
       To effectively deal with risk management, we must focus 
     more on risk management and less on just crop insurance. Risk 
     management education is also important.
       Farm and ranch risk management accounts (FARRM) supported 
     by Farm Bureau is a step toward alternative ways of managing 
     risks.
       Revenue insurance may be a way to cover both crops and 
     livestock. This may also be an approach to help producers 
     without impacting land prices.
       Fourth, Congress and the Administration must finally face 
     up to the regulatory straight jacket they have placed on 
     agriculture. Politicians love to talk about prices and what 
     they believe they can do to increase prices. They hate to 
     talk about the cost of government regulations.
       U.S. farmers and ranchers operate in a global food economy. 
     Every regulatory cost impacts their ability to compete. Farm 
     Bureau has called for a regulatory impact payment of $5 
     billion per year as the first step in shifting the cost of 
     the regulatory process run amok back to Congress and the 
     President.
       The AgRecovery plan does not address the issue of counter-
     cyclical income assistance. This idea has been given 
     increased attention in the last few months and needs further 
     attention as an intermediate and long-term policy direction. 
     AMTA payments under freedom to farm are fixed payment 
     regardless of income. The target price system focused 
     exclusively on price and did not take into consideration the 
     interaction between prices and production.
       A program for counter-cyclical income assistance may be a 
     complement to a more effective risk management program to 
     help buffer against production and price risks.
       New opportunities in conservation programs, including water 
     quality, should also be explored.
       The AgRecovery plan also speaks volumes about what we don't 
     want in future farm program policy. We do not want to lose 
     the planting flexibility provided by the 1996 legislation. We 
     do not want increases in price supports that would make us 
     non-competitive in world markets. We do not want to further 
     build carryover supplies by recreating the farmer-owned 
     reserve. We do not want to cut acreage to qualify for farm 
     program participation. That would reduce the net benefit of 
     the programs and encourage producers in other countries to 
     increase output.
       We must learn from the good and the bad of the last 20 
     years of farm program policy and build for a brighter future.
       The President of the Colorado Association of Wheat Growers, 
     Dusty Tallman, indicated the farm crisis is not going away. 
     He said Freedom to Farm was good, but had some minor 
     problems. ``The Endangered Species Act has helped to create 
     the farm crisis,'' he said. ``The farm crisis is not going 
     away. We need to work to improve farm programs, reform taxes, 
     cut regulation and reform the Loan Deficiency Program.'' Mr. 
     Tallman also submitted his testimony in writing which I now 
     submit for the Record.

[[Page E467]]

 Statement by Dusty Tallman, President, Colorado Association of Wheat 
          Growers to Forum on Agriculture in the 21st Century

       On behalf of Colorado's wheat growers I wish to thank you 
     for your continued support--in good times as well as bad. We 
     especially appreciate your leadership and commitment.
       While it may sound like a broken record, the farm crisis 
     continues to impact the lives of wheat growers every day. 
     USDA figures show that Colorado wheat prices are averaging 
     only $2.20 per bushel so far this marketing year. Wheat 
     prices are now at 45 percent of the high achieved in the 
     1995-96 market year. Wheat prices this last summer hit a 22-
     year record low. That's worse than anything we say in the 
     early 1980's--the era that saw numerous farm foreclosures and 
     massive farm aid. And wheat prices have actually dropped 
     another 22 cents per bushel since last summer.
       After three years of low prices, the farm crisis is not 
     going away. USDA's best analysts have predicted that wheat 
     prices will not improve without some sort of adverse weather 
     problem somewhere in the world. USDA will update its price 
     projections at this year's Outlook Forum in late February. 
     However, current estimates predict another 18 months of low 
     wheat prices.
       In the face of continued financial stress, some have 
     started to blame the 1996 Farm Bill. While the Bill did not 
     prevent this disaster, it is not fair to claim that it caused 
     it. Colorado wheat growers support the concept of ``Freedom 
     to Farm.'' We like having greater flexibility and the risk 
     associated with it. Today's crisis would have been much more 
     devastating had we been forced to abide by the old, top-down 
     management of previous farm bills.
       However, while we do not want ``Freedom to Farm'' repealed, 
     there is clearly a need to improve federal farm policy before 
     more farmers are forced off their land. The 1996 Farm Bill 
     lacks a reliable farm safety net. With no floor, wheat prices 
     continue to drop.
       The Colorado Association of Wheat Growers (CAWG) believes 
     that we must add a country-cyclical economic assistance 
     payment to the farm bill. For two years, we have relied on 
     emergency spending to provide the assistance we need. This ad 
     hoc system should be replaced with a statutory payment 
     triggered by low prices.
       The National Association of Wheat Growers (NAWG) is 
     currently developing an outline for just such a payment. The 
     plan will be finalized at the NAWG annual convention in 
     February and presented during the House Agriculture 
     Committee's field hearings this spring and summer.
       There are also other things you and your colleagues can do 
     today to help wheat growers. We continue to await 
     congressional action on tax reform, Permanent Normal Trade 
     Relations with China; crop insurance reform and sanction 
     reform.
       I am pleased to be with you today and pledge the support of 
     CAWG to help you find real solutions.
       Overall, Mr. Speaker, it was a good forum. The information 
     derived must be used to ensure agriculture is not forgotten.
       As the House prepares to reauthorize the 1996 Farm Bill the 
     conclusion of the Colorado agriculture forum should be 
     considered by our colleagues.

     

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