**Chapter 9: The Future**

As agricultural policy confronts the end of the 20th century, much remains to be done. Great changes are taking place in agriculture and rural America. Our cities are becoming less a magnet for the nation's population, and migration to rural areas exceeded migration to urban areas between 1970 and 1980 for the first time in more than 100 years. Although policies in agriculture have great impact on the rest of our country, fewer than 10 percent of the people in rural America are members of farm families.

The challenge for agricultural policy makers, including the Senate Committee on Agriculture, Nutrition, and Forestry, is to design federal farm programs and institutions that will facilitate economic progress for the farm sector in the 21st Century. There will be adjustment costs, but with continued stability in the market, and farmer equity gained through well designed farm policy, incomes to farmers should improve. For instance, net farm income in 1998 will be nearly $46 billion, the same as 1997, and above the $44 billion average of the 1990's thus far. Net cash income will run about $54.5 million, also above the 90's average. Cash receipts should stay near $201 billion for 1997. Farm assets will grow 5 percent in 1998 over the $1 trillion benchmark set last year. Debt-to-asset ratios will drop to 14.8 percent, down from 15 percent in 1997. **(Kiplinger Agriculture Letter January 30, 1998)**

United States agriculture can remain competitive in a world of volatile commodity prices because of its ability and willingness to improve its productivity at a more rapid rate than the rest of the world. Exports have traditionally been a bright spot for agriculture. In 1995, U.S. agricultural exports accounted for 13 percent of the world's total agricultural trade. In fiscal year 1998, agricultural exports are expected to be about $56 billion, while imports are expected in the $38 billion range for a net agricultural trade balance of about $18 billion. The trade balance in agricultural exports for the United States has been positive since 1959, a period span of nearly 40 years. Even with turmoil in Asia, an important market, exports will remain a strong component of American agriculture. **(Economic Research Service, USDA, February 1998)**

Near-term areas of change include meat inspection, dairy, research and tobacco. Importantly for consumers, the Department implemented a Hazard Analysis and Critical Control Points (HACCP) program for meat processors. The program implements a procedure to identify potential problems before they arise. Meat processors must submit an action plan to USDA. The HACCP program significantly changes the organoleptic inspection focus of the Department of Agriculture that date back to the reaction to Upton Sinclair's __The Jungle__ in 1906.

An August 1997 frozen ground beef recall by Hudson Foods and other food contamination incidents have renewed public interest in the meat and poultry inspection system. The Secretary of Agriculture asked Congress for legislation giving him direct authority to recall potentially contaminated products, and there have been hearings in the Senate. In 1996, FSIS began to implement HACCP to target invisible, bacterial contaminants. The new pathogen reduction rules generally supplement, rather than replace, existing inspection procedures.

Also under debate is a proposal to permit state-inspected meat plants to ship meat and poultry products across state lines. Plants under state inspection, which must be at least "equal to" (but not necessarily identical to) the federal program, now are only permitted to market their products in-state. Other issues include ongoing disputes with the European Union (EU) over the equivalency of U.S. and EU meat inspection systems and an EU ban on imports of meat from animals treated with growth-promoting hormones.

The 105th Congress has closely monitored USDA implementation of dairy provisions in the 1996 farm bill. The new law requires the USDA to reduce the number of milk marketing orders (which establish minimum farm milk prices in certain regions) from the current 32 to not less than 10 and not more than 14. The USDA will lose its authority to assess producers and processors for the cost of administering milk marketing orders and will have to pay for these costs from its budget if consolidation is not accomplished by April 1999. The USDA released a preliminary report on consolidation in December 1996.

The past year has been marked by volatility in farm milk prices. The base farm price of milk reached a record high in September 1996, and was at a 6-year low in May 1997. Prices in mid-1998 had returned to higher levels. Because of this volatility, some dairy farm groups recommended that USDA place a floor under the basic formula price (BFP), a market-determined price that is used as the base price for all farm milk sold under federal milk marketing orders. The 1996 farm bill also gave the New England states authority to enter into a regional dairy compact, pending a finding by the Secretary of Agriculture of "compelling public interest" within the region. The Secretary found such interest, and New England dairy farmers approved a proposed minimum price of $16.94 per hundredweight (cwt.) for farm milk used for fluid consumption. A legal challenge to the compact was raised by dairy processors, but was denied in late June 1997, thus allowing the $16.94 price floor to become effective on July 1, 1997. The farm bill requires that the compact terminate by 1999, to coincide with the consolidation of marketing orders.

The Senate Agriculture Committee devoted much of 1997 and 1998 to passing a research reauthorization bill. The reauthorization became law in June, with its centerpiece being a Senate provision to create new, mandatory funding for competitive agricultural research grants. This funding increase comes from part of the savings attributed to another provision in the bill that limits federal funding for food stamp program administrative costs. The new mandatory research money will fund the Initiative for Future Agriculture and Food Systems. The initiative would support basic and applied research on plant and animal genetics, food technology and human nutrition, new uses for agricultural commodities, agricultural biotechnology, and natural resource management. Additional provisions of the new law focus on increasing collaboration among states on research and extension projects and making the recipients of federal research and extension dollars more accountable for the relevance, quality, and efficiency of their work.

Finally, tobacco continues to be a source of controversy in Congress and the nation. This controversy was heightened with the intense scrutiny surrounding a proposed tobacco settlement. The tobacco price support program functions through a dual system of farm marketing quotas (which limit the amount of tobacco farmers can sell in order to keep prices high) and loans (which guarantee farmers higher prices by balancing supply with demand at the auction markets). The loan program is under legal mandate to operate at no net cost to taxpayers. This no-net-cost mandate is being achieved. However, tobacco opponents point out that tobacco farmers receive significant federal subsidy dollars through the federal crop insurance program. Amendments to eliminate this subsidy were defeated in both the House and Senate in 1997.

Tobacco farmers were fearful that the proposed tobacco manufacturers' settlement of health liability claims will have a substantial adverse impact on their future income. However, despite competing proposals to compensate growers, omnibus tobacco settlement legislation stalled in Congress, largely for other reasons.

While such issues occupy the day-to-day activity of the Committee, Senators understand that our agricultural production plant must be maintained so that it can continue to provide us with abundant food and fiber. Assuring the American farmer can earn an adequate income, providing food at reasonable prices to consumers, and building markets for our agricultural products abroad remain three inseparable goals. The complexity of the agriculture sector increases the challenge to Congress to develop policies and programs that will add stability to the sector while attempting to attain these goals.

Specific issues confronting the Agriculture Committee well into the 21st Century may include issues that would once have seemed the stuff of science fiction: cloning of plants and animals for food or scientific research, space-based satellite farming, and fraud-proof identifications for food stamp recipients. Whatever the specific issues, the Committee will need to demonstrate its continuing capacity to deal with whatever confronts American agriculture.

Throughout this brief presentation of legislative history, one can readily see the desire and effort of the Agriculture Committee and other federal entities to encourage agricultural and rural income stability, education, services, and economic opportunity comparable to that of other areas. Rural problems have been real and difficult, from depression and world war to embargoes and trade restrictions. Through it all, the Senate Committee on Agriculture, Nutrition and Forestry has responded to those changing conditions. Nearing its 175th anniversary, the Committee seems poised to confront the difficulties that will inevitably arise as agriculture moves into the 21st century.