[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

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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.

____________________