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Release No. 0414.05 Contact: USDA Press Office (202) 720-4623

# OF 

**NEBRASKA FARM BILL FORUM WITH AGRICULTURE SECRETARY MIKE JOHANNS AND
MODERATORS SUSAN LITTLEFIELD, KZEN FARM NET, KEN RAHJES OF KRVN AND
EMERY KLEVEN OF KOYL AT THE HUSKER HARVEST DAYS IN GRAND ISLAND,
NEBRASKA ON SEPTEMBER 15, 2005**

SECRETARY MIKE JOHANNS: Greg Ibach, I noticed he is in the office right
there. Greg, the director of agriculture. So, Greg, good to have you
here.

Then I also want to say thank you to Tony and Justin. They are from FFA
and 4-H and they helped with the pledge of allegiance. You will see when
we start the forum we will start with an FFA person. We will start with
a 4H person. I was in both organizations growing up. Part of what we're
fleshing out in these Farm Bill forums is how do we create opportunity
for the next generation? So all across the country we've started it with
those two groups represented by a young person.

I also want to say thank you to our friends here at Husker Harvest Days.
I have an unbroken streak of attending Husker Harvest Days for a lot of
years now and I thought, oh, man, this year I'm not going to get here.
So this worked out great. We'll have to figure out a reason next year to
do another forum or something.

\[Laughter.\]

SECRETARY JOHANNS: We have done these across the country. I've talked a
lot about growing up on that dairy farm. One of the things I tell
people, I grew up in a family where there were three sons. And my dad,
John, his idea of building character was to give his sons a pitchfork.
And you know, you would get sent out to the barn or the hog house or
whatever, stand ankle deep in you know what and pitch away.

\[Laughter.\]

SECRETARY JOHANNS: He thought he was building character. Little did he
know he was preparing me for my life in politics; right?

\[Laughter.\]

SECRETARY JOHANNS: I also want to say hello to my friend Senator Adrian
Smith from the Scottsbluff area. The senator sang, was it our first
inauguration? And did a great job. And you did a great job here. If I
had a voice like that, I think I would be singing. You've got a
beautiful voice.

And Senator Stuthman. I did see Senator Stuthman here. Arnie, it's great
to see you. You bet. Yeah, give Arnie a round of applause and Senator
Smith.

\[Applause.\]

SECRETARY JOHANNS: Well, folks, we are here because there's a gentleman
in Washington who really wanted me to get out across the United States
if confirmed by the Senate as the ag Secretary. In fact, the day before
the announcement I sat down with President Bush and he said, "you know,
Mike, I really want you to be the ag Secretary that gets out and talks
to farmers and ranchers." And when we talked about that in the future
after my confirmation and talked about a number of issues that I would
be facing as the ag Secretary, we started to work on this idea of the
Farm Bill forums and, again, he said, "that is a great idea." And so
we've done these all across the United States. I think I've done 13
myself. The Department has done about 19 of them. We will continue to do
those through the better part of this year.

But I bring greetings from a great friend of yours and if this works
right, we will hear from the President of the United States.

PRESIDENT GEORGE BUSH \[Taped\]: Thanks for letting me speak to you at
this Farm Bill Forum. America's farm and ranch families provide a safe
and abundant food supply for our people and for much of the world. You
represent the best values of America, stewardship of the land, hard work
and independence, faith, service, and community.

Mike Johanns understands the importance of America's farmers to our
country, which is why I chose him to lead our Department of Agriculture.
I am proud of his work and he will lead our efforts on the next Farm
Bill. Secretary Johanns and I believe the first step in this process is
to ask each of you how today's Farm Bill is working and how it can be
better. As we look to improve America's farm policy, we will continue to
focus on the following goals:

See, America has about 5 percent of the world's population, which means
95 percent of your potential customers are over seas. So one of our
goals must be to ensure that America's farmers and ranchers have access
to open, global markets.

A second goal is that we want future generations to have plenty of
opportunities to go into agriculture.

Thirdly we need cooperative conservation that encourages good
stewardship of our land and natural habitats.

We also need to act wisely in delivering help to our nation's producers.
We must promote cutting edge, agricultural products and research.

And, finally, we must ensure a good quality of life in rural America.

The Farm Bill is important legislation that meets real needs. The next
Farm Bill should further strengthen the farm economy and preserve this
way of life for farmers and ranchers of the future.

Hearing your advice is an important step toward meeting these goals. I
thank you for all you do for our country. And thank you for listening.

SECRETARY JOHANNS: Great. There is your President. You bet.

\[Applause.\]

SECRETARY JOHANNS: I will share a personal story about my work with the
President, just take a minute, but it kind of told me everything I
needed to know about this man I would be working for. I had only been
Secretary a little while and we were working on a really complicated
issue. I thought it was something that the President should be briefed
about just in terms of the complexity. So we went in, a whole group of
us, sat down and the briefing is going on and the first thing that
struck me, he didn\'t need the briefing. He knew exactly what the issues
were and the ramifications and this and that.

But in the briefing, kind of right in the middle of it, he said, "Wait a
second." He said, "I've got a question." And he turned to me and he
said, "Mike, tell me what's the right thing to do?" And I told him and
he said, "then do that." And that really was the end of the meeting. And
that's the kind of guy I work for. I admire him a great deal. He's doing
a great job for our country.

If I can, the whole goal here with the Farm Bill Forum is not for me to
talk. The more I talk, the less opportunity you have over the next three
hours to offer your opinions. So, the goal here is for you to take the
opportunity to offer your views about the six areas that we've
identified here. I'll go on to tell you, if you've got some general
thoughts about farm policy, I want to hear them. We aren't very
restrictive here.

The one thing I would ask, if you've got a specific issue, I've got a
loan application pending and I can't seem to get an answer as to when
the work will be done. We're concerned about that, we want to help you
with that. We've got a lot of USDA people here and we would love to try
to get you an answer to that kind of question. But today we are kind of
anxious to hear from you about farm policy maybe versus your individual
issue that, again, we want to help you with, but let us do that in a
different way.

Let me just wrap up and say, it is so good to be home. When we landed
last night and I walked into that airport, it just felt so good. I gave
an interview earlier today and I said, "Is it appropriate for me in my
national role now to just end my comments by saying Go Big Red."

\[Laughter.\]

SECRETARY JOHANNS: Thank you.

MODERATOR: And thank you, Mr. Secretary. You should have received, when
you came in, a brochure. And in that brochure lists the six questions
that Mr. Secretary would like you to address when you come up to the
microphone.

I would like to kind of go over some things that I would like you to
think about before you head to the microphones. We've got a microphone
right here, and then a microphone just on the other side of the cameras
right here.

Now, again, just like Mike said, his role is to listen to what you have
to say. And I would like to remind you that we have a lot of people
here, a lot of folks that would like to get their statements heard, so
we have a two-minute limit on the amount of time that you can speak. And
near the microphones we have timers. When they show you the green card,
they holding them up right now, when you see the green card, you have
two minutes to speak. When the yellow card pops up, you have 30 seconds
to finish your thoughts. And when the red card please finish your
thoughts complete, say, thank you very much and we'll move on to the
next person who gets to speak.

When you do come to the microphone, please give us your first name, the
city you are from, and maybe what your role is with agriculture and then
go ahead and make your statement.

Now, if you have another question in regard to something other than the
six comments that are on the sheet, there is a help desk that is through
these doors off to my left. You can go in there and put your questions
down and hopefully we can get the answers that you need.

Nice comments that you've received so far when it comes from people. A
lot of folks very pleased. Everybody I've talked to that has attended
other forums have been very pleased with the fact that this is what
you're doing. You are sitting there, you are listening with a pad of
paper and a pen in your hand and you are continuing to make notes.

SECRETARY JOHANNS: The comments have been great and I think that's
exactly what we expect today, Susan. The Farm Broadcasters, too, all
across the country have really stepped up and helped us with this. Not
only getting the word out, but they've done the moderation on all of
these programs. So, you continue the tradition through your colleagues
that will be helping out there.

So I think we're ready to go.

MODERATOR: All right. We're set. And we are going to start out with a
member of the FFA who will be making the first statement.

MS. ANITA ESTES: Good afternoon, I'm Anita Estes from Seward, Nebraska
and I had the opportunity to serve as the 2004-2005 Nebraska state FFA
president.

I am responding to question number one which asks about the unintended
consequences that sometimes result for young and beginning farmers and
ranchers. And I believe that one of the most important things we can do
to prevent those unintended consequences and to fix those consequences
is to do exactly what Secretary Johanns is doing today, being here and
listening to the people who really know what it's like to be in the
agriculture industry. It's great to see people here who are standing in
the back because that let me know that there are people who care beyond
the amount of chairs that have been set up. And some of those
consequences that we talk about are that young and beginning farmers
oftentimes can't find the funds to rent and purchase ground. Sometimes
they can't find the ground to rent and purchase. And so what I think
needs to happen is that incentives need to be given to those people who
have the ground to rent and have the grounds to sell and whether that
comes through tax incentives or other incentives such as providing a
partnership between the young farmers and the experienced farmers to
help them learn from each other to implement new technology and new
methods as well as pas son the tradition of agriculture that our country
was founded. So these are the things that I believe are important in
being able to continue the quality of agriculture that we have here in
our state.

Thank you.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: We will next have a representative from the 4-H.

MS. MARY JACOBS: Good afternoon. Thank you for giving me this
opportunity to speak today about the upcoming 2007 Farm Bill on behalf
of the 118,000 Nebraska 4-H'ers that I represent. My name is Mary Jacobs
and I'm a senior at North Platt High School. I'm a member of a
third-generation 4-H family. My grandparents receive the Pioneer Farm
Family Award in 1988 representing generations of commitment to Nebraska
agriculture.

Since the early 1900s the federal government has been involved in the
passage of farm legislation intended to help fight hunger, conserve our
natural resource, protect the safety of the nation's food supply and to
ensure open markets for U.S. agricultural products.

To guarantee that the goals established by the USDA are achieved it is
imperative that provisions be made to help younger producers enter
production agriculture or alternative agribusiness careers and the
adequate safety nets are in place to help them succeed. The rising cost
of land, machinery and farm input will certainly make this more
challenging. I would urge you to consider any unintended consequences
that may occur as a result of the subsidy programs in the new bill.

American farmers that produce 18 percent of the world's food supply must
be enlightened with the necessary educational tools to compete in the
competitive marketplace. I believe that this can best be achieved by
making certain that we have the best education and research
opportunities available such as those provided by the Land Grant College
and Cooperative Extension Service of the USDA. Their support of the 4H
program and Rural Youth Development Program will empower youth to become
effective leaders and contributing members of society. These programs
help teach alternative behaviors through a century of learning by doing.
4-H empowers youth through organized clubs, camps, and after-school
programs that help shape positive alternative behavior such as
competence, confidence, character and a connection with the community.
Seven million 4-H young people are a living testament to the success of
this dynamic educational program.

As we look toward the future, I hope that we can continue building this
strong foundation and an investment in our youth.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much.

Now, just one moment before we start with your comments. I want to
remind you that today's forum is being recorded that will allow for them
to get the comments written down. They will be able to go back and
listen to them. Now, if for some reason you do not get the opportunity
to come to the microphone today, we encourage you to send your comments
by e-mail. You can also head to the USDA's web site at
[www.USDA.gov](http://www.usda.gov/). All comments are weighed the same
whether they come via e-mail or here at the forum.

So, Mr. Secretary, if you are ready.

SECRETARY JOHANNS: We are ready.

MODERATOR: All right. We are going to start. I see we have a gentleman
to the microphone.

MR. GREG IBACH: Thank you, Secretary Johanns. First of all, I'm Greg
Ibach. I'm the director of AG here in Nebraska. I'm a cow, calf and corn
producer also from Sumner, Nebraska.

Thank you, Secretary Johanns for providing this opportunity for our
farmers, ranchers, and others to help shape policy that will influence
the future of rural Nebraska. Given the high prices of inputs, some are
questioning what the future may hold.

As I left to come here this morning, I checked prices at our local
co-op. Diesel was listed at \$2.73 and it's difficult to even have a
price quote on fertilizer for next season's crop. The price for corn
yesterday at Overton, my elevator, was \$1.57 a bushel.

Our nation's farmers pride themselves on being among the most efficient
producers in the world. But even the most efficient of us will have
difficulty showing a profit considering these factors. Development of a
new Farm Bill with these conditions as the backdrop will be a challenge.
But it also calls to our attention the need for change.

As a producer and as someone who has had the opportunity to work on
agriculture policy, I believe the 2007 Farm Bill debate must focus on
our most pressing issues. We must review our current programs to
understand their effects intended or unintended. The work of the World
Trade Organization will continue to influence our farm policy direction
as we must trade in a competitive global marketplace.

As I visit with farmers and ranchers, they indicate a desire and
willingness to think outside the box in order to make effective changes.
Our payment structure traditionally has focused on price and specific
commodities. Many producers are discussing ideas that take steps beyond
this traditional farm program structure. The crop insurance program
provides a good starting point.

The Risk Management Agency has made some effort towards creating
programs that assure a level of growth in farm revenue rather than
ensuring only yields. Some industry groups have talked about the
potential for full farm revenue insurance. Perhaps it is time to give
these concepts broader discussion.

The past two Farm Bills have provided producers this flexibility with
regard to planting other non-program crops. However, the direct tie
between payments and specific commodities indirectly discourages the
production of nontraditional crops.

In Nebraska, livestock production provides our farmers an important
local market for their commodities. It is imperative that the 2007 Farm
Bill help livestock producers cope with the increasing regulatory
burdens facing their sector. The 2002 Farm Bill made some strides in
this area, but more work needs to be done.

Again, thank you for returning to Nebraska for this important event.

MODERATOR: And as we continue on, the gentleman here in the middle.

MR. RICHARD HAHN: Mr. Secretary, my name is Richard Hahn, I live in
Omaha, Nebraska. I recently retired as president and CEO of Farmers
National Company after 19 years in that position. I was raised on a farm
in Madison County, Nebraska and I have been involved in agribusiness for
41 years.

Today I speak on behalf of the 25 by 25 Agricultural Energy Alliance. I
serve as a member of that steering committee. This committee is
comprised of agriculture leaders from across the country which include
people from production agriculture, agribusiness and agricultural
organizations.

Our vision is that agriculture could potentially produce 25 percent of
the total energy consumed in the United States by the year 2025 while
continuing to provide, abundant, safe, and affordable food and fiber.
The broad spectrum of energy resources we included in this vision beyond
ethanol and biodiesel is wind, solar, methane generated from livestock
wastes, and biomass.

United States agriculture faces increasing competition from expanding
production capacity of other countries and their lower production costs.
This would supply another market for our crops and could be very
beneficial to our economy. The market would certainly be very welcome
both by our farmers and consumers of energy.

American farmers, ranchers, foresters, and processors can provide
ever-increasing volumes of transportation fuels, (unclear) ethanol and
biodiesel, provide the land for wind generators and location of solar
energy panels, convert animal and food processing waste into methane
generated fuel for engines, provide America with cleaner energy and
lower energy costs.

What are the benefits? Replace dependency on OPEC, provide an additional
market for our crops, provide a use for animal waste, provide
environmental benefits, increase farm income, and provide economic
benefits to revitalize rural communities.

My comments have touched several of the questions you asked to be
addressed at this forum. We believe the 2007 Farm Bill should include a
focal point on renewable energy; the energy title should be
strengthened; the energy conservation and production provision should be
woven into all appropriate titles; a mission statement of your
department should include the production of energy.

We strongly believe American agriculture can power our future. We are
hopeful that the 2007 Farm Bill and the leadership of USDA will embrace
and support the vision being advanced by the 25 by 25 Agricultural
Energy Alliance. We believe 25 percent of the energy from agriculture by
the year 2025 is very aggressive but achievable. We are confident that
your leadership and that of President Bush and the U.S. Congress, the 25
by 25 mission can be achieved.

I passed out some of these brochures. I left them at chairs.

MODERATOR: Thank you so much for your comments. We need to continue on.

MR. HAHN: We also have a pen here too that's available that says 25 by
25. Thank you very much.

MODERATOR: We will go on over to this young lady right here.

GLORIA: I'm Gloria and my husband and I farm irrigated row crops. We
also have a cow/calf operation. I am concerned with question two and
that is our markets. And I want to address the issue of fairness in
trade. We've got a lot of free trade, but very little in the way of
fairness of trade.

I just read in the paper here, I think it was yesterday, about Japan.
USDA is considering importing beef from Japan and they are no closer to
bringing or opening their markets to our beef than they were when we
first discovered BSE. Where is the fairness in that?

The Canadian Wheat Board acts as a monopoly. You cannot just go into
Canada with a load of wheat and sell it on the Canadian market. Again,
where's the fairness in that?

There is a glitch in our CAFTA agreement in which they can bring a
partially refined ethanol into a Central American country, finish
refining it and sell it here without the restrictions that we currently
have from a non-CAFTA nation. So, again, we need fairness in trade, not
just free trade.

Other issues such as the packers' control of captive supply in which
they can own livestock and use that livestock then to help hold down
prices when they get too high. And to sum it up because they're giving
me my signal, if they want to force mandatory labeling upon the
farmer/rancher, why don't they force mandatory country of origin on our
packers right now?

\[Applause.\]

MODERATOR: And, again, just a reminder, I know it was mentioned at the
beginning, I just heard a cell phone ringing a minute ago. If you do
have your cell phones on and you can have them shut off, please do so.
Otherwise, move them to the silence mode so it doesn't disrupt as we
continue with this forum. We will now move on. Right here, sir.

MR. LONNIE WELLS: Thank you. Welcome back, Mr. Secretary. My name is
Lonnie Wells, I am an agricultural marketing consultant and I represent
a number of farmers in central Nebraska. We wanted to forward to you our
concern about some of the fairness issues when it comes to government
payments, LDPs, especially.

This early in the season, as you know, LDPs are the highest and they
benefit the people that farm to the south of us in those southern
states. As harvest moves north traditionally those LDPs get smaller and
smaller. So by the time you get to the Dakotas and Minnesota those
farmers get a lot less than the guys did in Oklahoma, Texas, Missouri,
and those states. So that's an issue that we would like to have
addressed in the other Farm Bill.

We have a great belief that this Farm Bill is not all that bad for
farmers, however, the LDP structure is so volatile with being to the
futures market and now our transportation system that is in an uproar,
the volatility hasn't helped our marketing. Producers that would like to
market in the spring when prices normally are the highest are afraid to
now because if you forward contract grain, the last two out of the three
years in the spring you get \$2.15 to \$2.20 in Nebraska and that
doesn't cut it with irrigated costs out here. And now with our higher
costs, it doesn't cut it with that either.

So if I forward contracted at \$2.25 counting on an LDP in the fall and
then we have a little dryness somewhere in the corn belt and the market
rallies and we have no LDP, we forwarded contracted at a loss and put
ourselves out of business. So some type of taking the volatility out of
those LDPs I think for the producer would be a good idea in the next
Farm Bill.

Thank you.

MODERATOR: Thank you for your comments.

\[Applause.\]

MODERATOR: Moving on, representing WIFE; is that correct? Please step up
to the microphone and make your comments.

MS. NORMA HALL: Secretary Johanns and Governor Heineman, I am Norma Hall
from Elmwood, Nebraska representing Women Involved in Farm Economics,
WIFE. In this brief period of time I would like to address three items
that I believe are important that need to be considered in the 2007 Farm
Bill. Country of origin labeling COOL, payment limitations, and the
person status.

Legislation was passed in the 2002 Farm Bill calling for a mandatory
labeling of origin of product. Congress intended and farm groups
encouraged that food sold in the U.S. be labeled as to the country of
origin. However, an amendment was passed cutting the funding for the
program. COOL has been projected to be too costly. But we believe that
consumers have the right to know where the food they purchase is
produced and processed. Isn't it more important for the consumer to know
where the food comes from, where the shirt is made, or the toy is
produced? WIFE strongly recommends that COOL be included in the 2007
Farm Bill.

As part of the budget reconciliation process Congress may address
payment limitations as a way to cut the budget. WIFE believes a payment
cap needs to be established for conservation practice or for complete
annual payments with no loopholes. WIFE suggests one payment per Social
Security number.

\[Tape break.\]

MS. HALL: Again, WIFE supports COOL, payment limitations and person
status in the 2007 Farm Bill. Thank you.

\[Applause.\]

MODERATOR: For some of the folks that are standing along the sides of
the tents, there are a few seats scattered throughout. I would like to
invite you to come on in, sit down, and maybe make a statement also.

We will move on to the next microphone.

MR. DENNIS SCHUSTER \[s p\]: Thank you. My name is Dennis Schuster. I am
a livestock and grain farmer from Pawnee County, Nebraska.

Mr. Secretary, I appreciate the time that you are spending with us. I
hope that when you rewrite the Farm Bill that the federal crop program
stays the same. That the funding of the federal crop bill does not
change. With the dry years the Nebraskans had in the last five years,
the federal program has helped many a farmer stay in business here in
the state.

Next item, I hope that the CRP program will continue to be funded with
one change that could save a lot of money for the CRP program. That is
when a contract expires after ten years, that you go in there and you've
got to reseed that ground that you established for the last ten years.
And if we could go in there and leave that \-- most generally it is a
lot of times from the same mixture. And we're going in there and have to
destroy it, turn right around and reseed it again and this can save the
federal government anywhere from \$50 to \$100 an acre just in reseeding
costs. It don't sound like much, but you take all the acres, it's a lot.

The next thing, I feel that we should have some kind of payment
limitation on the Farm Bill. I think too much of the money is going into
the wrong hands, not in the family farmer.

Another thing that should be changed is when I take out a government
loan on corn, bean or wheat, with interest, and I pay it back, that this
should not be considered expense by USDA or CCC and paid back in the
general fund to be credited back in. What's happening, it is my
understanding, that this credit is not being paid back to fund the Farm
Bill, it's being paid back in to being credited against the general fund
and not to the Farm Bill.

I never thought, Mr. Secretary, that I would see the day when it took
two bushels of corn to buy a gallon of gas. I mean, this is getting out
of hand for us here in agriculture.

I know, Ma'am.

MODERATOR: Thank you so much, sir. We've got to continue on. I
apologize.

Let's move on to the next comments.

MR. \_\_\_\_\_\_\_\_\_\_\_\_\_: Mr. Secretary, on behalf of Nebraska
Cattlemen, I would like to welcome you back home. I would like to
express my appreciation for the opportunity to stand before you today
and make some comments in regard to the 2007 Farm Bill and the
construction of the language of that Farm Bill. I am a third-generation
cattle feeder and farmer right between the facility here and Grand
Island. We've been in place since 1935.

The Nebraska Cattlemen feel very strongly that there are several
important components to the construction of any Farm Bill legislation.
We do have two specific points I would like to discuss here today and
make comments on. One of those being the Conservation Reserve Program
better known as CRP. The CRP are undoubtedly a very important factor in
the Farm Bill. They are more likely than not to be connected with farm
ground here in the valley county, valley country, however they do play a
very important role in the grazing and ranch environment with the
ability to cut hay.

With that being said, in the past we have seen in drought years, such as
this, that there has been the ability to graze those acres with the
cattle when we are short on feed in the pastures. We of the Nebraska
Cattlemen feel very strongly that is one factor that is very important
and we would like to see contained within the 2007 Farm Bill. That being
said, in the particular year that the grazing takes place, that it would
be done with the reduction of a payment in that calendar year.

The other item that I would like to speak to is the Country of Origin
Labeling or COOL. We feel that the COOL is a very important piece of
legislation. However, the Nebraska Cattlemen seeks a process for the
mandatory Country of Origin Labeling that will benefit the U.S. beef
industry as well as domestic and international consumers. The process of
Country of Origin Labeling as contained in the 2002 Farm Bill would
impose unnecessary costs and labor burdens on producers and does not
represent the NC membership views as an efficient, cost-effective, and
workable mandatory labeling program. We would like to see that the COOL
program take this into consideration when we are developing the language
so that we make it an efficient, but workable program.

Thank you for your time and I welcome you home.

SECRETARY JOHANNS: Thank you.

\[Applause.\]

MODERATOR: Go ahead.

MR. ERNIE MELL \[sp\]: Secretary Johanns, it's good to have you back in
Nebraska and we do appreciate the time you are spending taking these
testimonies as far as the farm program is concerned. I am Ernie Mell
\[sp\] located near North Platte, Nebraska in the west central part of
the state, a member of Lincoln County Farm Bureau, with production
agriculture being my only occupation and I'm very proud of that.

Unpredictable weather conditions and markets, uncertainties involved
with our international trade, the value of the dollar, and variable
input costs have produced turbulent and difficult times for agriculture.

The 2002 Farm Bill in combination with the crop insurance program has
worked reasonably well for Nebraska farmers and ranchers to weather the
financial storms while also providing funds for our nation's
conservation needs which are important. However, one issue that Nebraska
producers have seen as a growing problem with the current program is
that too often our farm policy focus is only on prices. The focus, we
feel, should really be on revenue which takes into account both prices
and yields. It is total revenue above costs that really determines a
producer's positive income potential.

As many Nebraska producers have faced severe drought these past five
years, weaknesses have shown up with the current farm program. The
problem is that it tends to overcompensate when it should not and under
compensate when more assistance is needed. Our current system of
providing income support for producers originates from a rather
hodgepodge of programs within the Farm Bill, crop insurance program and
ad hoc disaster programs.

To address the issue of supporting revenue rather than prices maybe
consideration should be given to adjusting the programs so payments are
triggered when either prices are low or yields are low. A possible
integration of the farm program and some aspects of the crop insurance
program may be worth considering and may also be more WTO-friendly as we
deal with rules governing domestic trade distorting subsidies.

Thank you very much.

\[Applause.\]

MODERATOR: And we will continue on.

MR. GREG SMITH: Welcome back Mr. Secretary. My name is Greg Smith and I
represent Roberts Dairy out of Omaha, Nebraska. We are a full-line
dairy. We produce fluid milk, culture and juice at our Omaha facility.
In addition to our Omaha plant we have processing plants in Iowa City
and Kansas City. We employ over 700 people at all locations and it takes
over 600 DFA dairy farms to supply our plants.

Mr. Secretary, dairy farmers and processors need better tools to manage
price volatility. Dairy farmers and processors are both at the mercy of
huge price swings because they do not have the same basic tools other
commodities have to manage price volatility. You are spending three to
50 cents more on a gallon of milk versus \$25,000 more for a new car in
1980 dollars. Our goal as well as the dairy farmers is to increase dairy
consumption. When you get these huge swings in the price I think
sometimes we force our customers to look for different alternatives.

Grain, wheat and soybean farmers can forward contract with their
customers to guarantee a fair price for a set period of time. Dairy
farmers should have the same ability to do so with all of the customers,
cooperatives and proprietary processors.

Congress allowed a successful voluntary dairy forward contracting
program to expire last year. We would like the administration to push to
reinstate the program for all processors and producers. The next Farm
Bill is the perfect time to create a win/win situation for farmers,
processors and consumers with less regulation and government intrusion
the industry can continue to innovate and expand. U.S. and world
customers will buy more dairy products and U.S. dairy farmers will
produce more milk to meet this growing demand.

Thank you, Mr. Secretary for your time.

\[Applause.\]

MODERATOR: Before we get ready to take a short break, we will take one
more question over here.

MR. STEVE LUCIEN \[sp\]: Secretary Johanns and Governor Heineman, thank
you for being here. My name is Steve Lucien \[sp\]. I'm a farmer in
Franklin County, Nebraska. I just got back last night about midnight
from a D.C. trip. While there I visited with numerous congress people,
senators, and USDA folks. While there, Department Secretary of ag, Chuck
Connor, said that he did not want the next Farm Bill to be another bump
on the head.

There seems to be an ideology of nonsense running around D.C. The
ideology is similar to that of early people that think that the world is
flat. In this case the thoughts are that free trade, not fair trade, is
all of our solutions. The theory, which is only a theory, and I must
stress only a theory, will not work and will never work set in this
current environment. The current environment is this, the world grain
trade is currently monopolized and manipulated by global conglomerates.
These corporations are price setters and price fixers. They are paid to
move off shore and told not to bring the money back. Raw commodity
prices should partly be driven by uncertainties.

Currently there are very few uncertainties when we look at the worldwide
production of ag products. We currently have a global conglomerate in 58
countries of the world and controls up to 80 percent of the world grain
movement. This company can create grain surpluses anywhere in the world
with just the threat of moving grain from one location to another
without even moving a single bushel of grain in some cases, yet causing
prices to plummet.

The United States is still the breadbasket of the world, yet our WTO
advisers never consider setting U.S. prices to a level above the cost of
production. Secretary Johanns, do you know how to make a farmer spend
\$100? You give him \$50 and tell him it's going to rain.

\[Laughter.\]

MR. LUCEIN \[sp\]: It's time to go back to our old strategies of letting
agriculture be the economic engineers of each nation. A farmer's dollar
will go through our economy at least seven times which will enhance
total state and federal tax revenues. The current federal deficit is
currently \$7.983 trillion. This is up, as I recall from a March visit
to D.C., nearly \$800 billion. This is currently \$26,000 of the U.S.
debt to each U.S. citizen.

Mr. Secretary, don't give us another bump on that head. Let agriculture
be the economic driver and uphold our antitrust and monopoly laws. Let
farmers and ranchers help write the next Farm Bill not the grain trade.
Please, don't give us another bump on the head. Thank you very much.

\[Applause.\]

MODERATOR: Thank you for your comments.

Before we head to a quick break, we are going to take about a
five-minute recess. You've had the opportunity to head to numerous
states, Mr. Secretary. Comparing what you're hearing in the upper
Midwest to the southern states, big comparison.

SECRETARY JOHANNS: It is a big comparison. Let me just say, this is
starting out to be a great forum, a lot of ideas. But I will just touch
on one thing and this probably won't surprise a lot of people in the
room. I hadn't been here ten minutes and a farmer came up to me and
said, "Mike, we need payment limits. I can't figure out why you're not
getting the job done on payment limits." And I said to him, "You need to
come south with me and say that."

\[Laughter.\]

SECRETARY JOHANNS: Very different opinion depending upon where you're
farming in the United States just on that one issue. But this is great.
Keep up the comments. We are taking a lot of good notes, a lot of good
ideas.

And I'll also share, I said one thing, but this idea of crop insurance
and the revenue-based approach came up in Illinois. We are starting to
hear a little bit more about that versus the traditional sort of farm
program. So if anybody has ideas on that we would welcome them.

I thought Susan did a great job. How about a round of applause.

\[Applause.\]

MODERATOR: Thank you. We are going to take a five-minute break. So,
please, if you haven't found a seat, find one. We've got more comments.
Folks are lining up. We encourage you to get in line and make your
comments heard.

\[Brief recess taken.\]

\[Music playing.\]

MALE MODERATOR: Ladies and gentlemen, we have about one minute and we'll
get on with the second hour. So if you want to find a seat or get in
line, in about one minute we will begin again.

\[Music playing.\]

MODERATOR: All right, ladies and gentlemen, if we could have your
attention. We want to make sure to give everybody the opportunity that
wants to speak on the Farm Bill to do that.

If we can get the Secretary and the Governor back. We will also be
taking a break in another 55 minutes as well to make sure everyone has
the opportunity.

Ladies and gentlemen we want to get started again. If you will please
find your seats as the Secretary and the Governor \--

\[Tape break.\]

MODERATOR: As we continue on again let me remind you of the, not really
rules, but suggestions. Cell phones are still going off. We all know
everyone is important, but either please shut it off or put it on
silent, or vibrate, or how ever you need to handle that situation. But
that would help us all tremendously as well.

We do have three microphones. We will get to as many people as possible.
So I will keep this very, very short and we will get under way. But I
will say one thing, as I guess they said, they gave me a little bit of
personal privilege. I am one of the newest and my family is one of the
newest members in that state of Nebraska. And both these gentlemen up
here, Mr. Secretary, Governor, have been just tremendous to work with.
As I say sometimes on the radio, Nebraska is by far the most friendliest
state in America and it is so true and we thank you for, as I am
learning the way, the Nebraska way, I come from Kansas so \--

\[Chorus of boos.\]

MODERATOR: We are not talking football, we don't have time for that
because I have the microphone.

\[Laughter.\]

MODERATOR: The last thing I will say is, we don't expect you to be
professional speakers. But we want to make sure that you are right up to
the microphone so everyone can hear. The last thing I will say. We start
again in the middle. Sir.

MR. JIM HANNA: Secretary Johanns, Governor Heineman and other guests, my
name is Jim Hanna. I am a fifth generation cow/calf producer from
Brownlee, Nebraska. I am here today to represent ICON, Independent
Cattlemen of Nebraska. We are the newest and fastest growing
agricultural organization in the state with a member of nearly 700
cattle producers. ICON is affiliated with RCALF USA whose Nebraska
membership has tripled in the last year and numbers nearly 2,800.

I would like to introduce our president, Chris Abbott, from Hyannis, and
our secretary, Bob Rothwell also from Hyannis. Our vision is quite
simple. We intend to promote policy that will ensure our members have
the ability to remain independent business men and women in an
economically and socially sustainable environment. We strongly believe
that the future viability of U.S. agriculture is dependent on the
following: restoration of competitive markets for our products as they
leave the farm gate; enforcement of current regulation and attention to
new regulations that would assure no one industry segment or entity is
able to use undue influence over any other; and emphasis on the welfare
of and promotion of domestic producers and their products.

Our comments today, while not specific to the six questions you have
posed to us, are intended to respond to the broader issues you have
raised. The goal of any farm legislation should be to enhance the
climate for America's farmers and ranchers.

Mr. Secretary, with all due respect, your department and the
administration must understand that discussions of government
subsidization, rural development, and the like are secondary to the more
pressing problem of the lack of profitability we see in agriculture
today. Until we come to grips with creating a business structure in
which the cash generated by the sales of our farm and ranch products is
sufficient to pay for the land, cover the operating debt and the
overhead and provide a modest profit, we will never attract young people
back to the land or reverse the decline of our rural communities. U.S.
consumers have access to the safest, most diverse, and inexpensive food
supply in the world. However, they must understand that the cost to
produce it is constantly on the rise.

With these comments in mind, ICON submits that the following items are
critical for inclusion in the 2007 Farm Bill. First a comprehensive
competition title must be drafted in order to assure that the more
concentrated segments of our industry do not unduly influence the
independent business structure that is the hallmark of our farmers and
ranchers. This title, at a minimum, should address topics such as limits
on meat packers' ability to own and control cattle in excess of 14 days
and enhancing reforms that would end unfair practices in agricultural
contracts.

MODERATOR: Thank you. Your time is up. I apologize. I want to make sure
that \-- we want to get as many people as possible. I want to remind
you, if you have comments and either don't get them done, or have
additional comments, more than the two minutes, please submit them to
USDA.gov. And we will do that. We want to make sure everybody has ample
time. Again, a two-minute limit. That's what we'll continue to go. So on
my right.

MR. LOREN WEMOFF \[s p\]: Thank you. I am Loren Wemoff \[sp\] and I farm
by Humphrey, Nebraska. My concern is I got a son that's a sophomore in
high school and if I want to put him on the farm, this new Farm Bill
will take a part of his life when he gets out of college.

I wrote down some quick numbers. The only ones you need to remember are
at the end. He's a young farmer. He's going to buy a 2001 pick-up for
\$13,000; a '98 tractor for \$42,900; a '95 New Holland combine for
\$43,500; an '85 corn head for \$95; a '94 John Deere flex head for
\$10,500; a Bradley wagon for \$42,000; a brandhogger \[s p\] for \$750;
a Kenworth tractor for \$27,000, that's a '96. The only new item that I
have on the list is a 2005 grain hopper for \$26,500; a '98 Kinsey
12-row planter for \$12,700; a Demco 1,000-gallon sprayer for \$57;
Great Plains 15-foot drill for \$9450; a 48-foot fuel cultivator that
the farm program may tell him he doesn't need for \$61; an '02 Krauss
24-foot disc for \$21,500. And all these items were bought locally or
will be bought locally. They came out of the Midwest Messenger for
prices, so you know where you can find them. That came up to a total of
\$233,315. At 6.5 percent interest his first bill is \$7,000. And these
numbers you have to remember, 7,982 bushels is just his interest. A
20-year loan on that amount is 6,139 bushels; cost of living, which is
40 hours a work week at \$13.46 because that's \$28,000 a year, is
14,737 bushels of corn.

His health insurance costs, which I thank the government, they put an
HSA program in for us, and these are my actual numbers, is 4,252 bushels
right off the top. You take that total numbers and you divide that by
\$1.90 corn that means he's got to have 33,109 bushels of corn to make a
living, or to pay that bill. If you divide that, or put another \$153.00
an acre, that's 80 bushels more or 33,189 bushels. And if you divide
that out, that means he's got to have 286 bushels of corn on a 160-acre
farm average to make that work. It doesn't pencil out.

MODERATOR: Thank you.

MR. WEMOFF: If he does a 320-acre farm, he needs \$183.00. None of those
bushels on your USDA report even come close. And then I'll put in a word
here yet, he doesn't even have the ground. How is he going to start?

Thank you.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: To my left.

MR. DON REEVES: I'm Don Reeves from Central City. Farmer. I've met both
of your in your roles as governor as a member of the Merritt County
Development Corporation. I am quite active in the religious community,
both locally and nationally, but I'm speaking today as president of the
Center for Rural Affairs.

I want to talk first about unintended consequences. Farm program
payments without effective limits result in inflated land values and
block the entrance of new farmers, limiting, in your words, "new
opportunity." So the first point I want to make, the single most
effective thing Congress could do to strengthen family farms is to stop
subsidizing further growth in already larger than average farms by
limiting farm program payments, whatever the mechanism turns out to be.

Second point, even in the most rural farm dependent counties, the
majority of new jobs are non-farm proprietorships. People creating their
own jobs by starting small businesses. This is a strategy that works.
The next Farm Bill should make a major investment in rural development
based on small entrepreneurship.

Third point, we must also invest in agricultural entrepreneurship. The
future opportunities for small and mid-size farms are in market niches
of consumers willing to pay premiums for food with unique attributes and
produced in ways they support. The USDA value-added producer grants
created by the 2002 Farm Bill supports such niche markets. The program
should be renewed with assurance of adequate funding.

Point four, the new Farm Bill must also effectively foster conservation
and good environmental stewardship which have almost universal support.
Conservation policy must address working lands and not focus primarily
on land retirement. We should build on the present conservation security
program because it rewards those who already practice good stewardship
as well as those making improvements.

Finally, the Center for Rural Affairs has other ideas and we look
forward to working with you on the 2007 Farm Bill. But most importantly
I want to end with a question. We would like to know if this
administration will support farm payment limits both in the current
budget reconciliation and in the 2007 Farm Bill and if the
administration will make a major commitment to rural development in the
next Farm Bill?

Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Now to the middle.

MR. JERRY BOND: My name is Jerry Bond from Rabocca \[sp\], Nebraska.
Secretary Johanns and Governor Heineman, it's good to see you again. I
am a third-generation dairy farmer. I believe the USDA Rural Development
plays a great part of our farm program to be able to offer both of their
houses or businesses and the finish will probably now be cut in that
area. Because as a direct benefit upon not only those kids that are here
that are going to school that want to develop and do businesses, it's a
direct benefit to them where they can have the money and the opportunity
to go out and get something established. Benefit our state and keep the
intelligence. Our greatest commodity is our kids here in this state.

The other thing is also trade agreements. Trade agreements that come
across have to be fair. We dealt, Governor Johanns, \[sic\] directly
with you on an Australian trade agreement. Had that came through two
years ago would have wiped out the very industry in the nation. We need
to continually have those fair trade nets. We need to look outside the
box. We need to think of like the call program that we established,
self-funded by the producers is a great benefit. It benefits both the
taxpayers so they don't have to pay an extra amount of money for
subsidies, but it's a direct benefit to producers and we would rather
receive things directly than a government payment program. That's one of
the things that I think we need to do.

There's are certain things that we can tweak, whether it be solids and
things that would help the volatility and the process, very simple,
wouldn't cost anything, just changes in how things are done. Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MR. JIM CRANDALL: Good afternoon, I'm Jim Crandall, associate director
of the Nebraska Cooperative Development Center. Our center is a
nonprofit corporation that is hosted by the University of Nebraska,
Lincoln Extension in the Department of AG Economics and the Center for
Fibril Innovation. Organized in 1999, our center's primary goal is
helping farmers and ranchers start or expand value-added business
opportunities.

Mr. Secretary, in your role as governor of Nebraska as did Governor
Heineman this year, you provided our center with letters of support as
we made application to USDA Rural Development for grants to support our
work. The funding we have received from the Rural Cooperative
Development Grant Program has played a critical role in helping us
provide educational programs and direct technical assistance to
producers. We have matched federal dollars three to one with over \$3.2
million in Nebraska dollars towards rural business development.

Since our inception in 1999, we've worked with over 50 cooperatively
based enterprises in rural Nebraska resulting in numerous full-time and
part-time jobs in our state. In addition the new income stream created
by the cooperatively owned business venture is helping our farm and
ranch families stay in rural Nebraska. Our success is being repeated in
43 other states across our nation.

This past Tuesday you announced the recipients of this year's Rural
Cooperative Development Grants. Cooperative development centers will
leverage those federal dollars to help create rural businesses. I am
here today to encourage you to recommend continuing and expanding the
Rural Cooperative Development Grant Programs that are so vital to the
work that we do. This relatively small program and Cooperative Services
Division of USDA Rural Development is having a large impact in providing
effective assistance in rural areas.

The other area that I want to address as a part of question six is the
Value Added Producer Grant Program. The Nebraska office of USDA Rural
Development has done an excellent job of promoting and making this
program visible for Nebraska producers. This program provides funding
for planning and development as well as working capital for a new
value-added venture. The VAPG program has been very successful for many
producers across the country and certainly here in Nebraska as our
producers have utilized the program heavily.

Rural entrepreneurship is critical to rural revitalization and plays a
huge role in attracting young people back to our rural communities.

Thank you for your time and welcome back home.

MODERATOR: Thank you very much. Now we go back here.

MS. HILARY MIRACLE: Secretary Johanns, Governor Heineman, thank you for
taking time to listen to the producers today. We very much appreciate
that. My name is Hilary Miracle. My husband and I farm with his family.
We are the sixth generation on that farm and we want to keep it there
for our children. So, certainly number one is one of our concerns. And
with that is the (unclear) value prices. It's hard to get involved.

Things we would like to see are some tax incentives. The capital gains
waiver has been mentioned and talked about some. We think that would be
an excellent program, but we would like to see the opportunity for that
to be used in family farming situations, not just from a neighbor or
things like that. Also more innovations and possible mentoring things
such as that for young farmers to young producers so that we can learn
from them and also take the benefit of their knowledge and use it with
our new ideas.

Number four would be the other question I would like to visit with you
about, the conservation and environmental goals. Please realize that
some farmers are already very involved in conservation and for us to be
involved in some of the programs, we would have to tear up some of the
buffer strips and things like that and start over to get those payments.
So if they're already doing it, take that into consideration and allow
us to continue doing that without having to farm it for a year and then
put it back into buffer strip.

I am also a member of the Farm Bureau and the chairman of the Young
Farmers and Ranchers. So whenever you want opinions of young farmers,
let us know, we would love to visit with you.

Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Now here in the middle.

MR. JASON COLES: Secretary Johanns, Governor Heineman, thank you for
coming. It really shows that you do care about rural America. My name is
Jason Coles. I live near Laurel, Nebraska in the northeast corner of the
state and I am part of the Cedar County Farm Bureau.

Government payments accrue to the land both in terms of the price of the
land, but also in terms of higher rental rates. Taking land out of
production via the conservation program also boosts rental rates.
However, rental rates are higher than might otherwise be suggested
strictly by agricultural markets. Renting land and investing the sweat
equity needed to produce the crop in one way may cause new producers
difficulty in getting into business. Average net rent paid to
non-operators/landlords during the 1995 to 1999 were 40 percent higher
than that paid in 1985 to 1989. Yet, net cash receipts were up only 15
percent during that same time period.

Clearly government support has had an impact on land costs and cash
rents which has affected my ability to compete with larger more
established producers in my area. Our current farm program system is
based on production which is tied to the land and maybe consideration
should be given to providing assistance to producers rather than to
production. However, if traditional family farm policy is reformed to
address these unintended consequences, these reforms will have to move
cautiously over a period of time to avoid major impact on the valuation
of land. Farmers that have been engaged in farming for quite some time
have substantial investment in the land and it could wreak havoc with
their balance sheets. And so like I say, I would just appreciate you
taking a look at this and looking at the way farm payments are
distributed.

Thank you.

MODERATOR: Thank you very much. Some of you outside, if you want to come
in, there are some seats to the south. There's a nice breeze blowing
through so you get cooled off a little bit.

Excellent comments. We will continue. I know some of you have been in
line for a long time. So let's go over here to my right.

MR. JOE FRYMAN: Hello and thank you Secretary Johanns and Governor
Heineman for this opportunity to speak today. My name is Joe Fryman. I
am president of the Nebraska state Grange. I am also a dry land corn and
soybean farmer from eastern Nebraska near Blair, operating a family farm
that's been in my family for over 125 years.

Rather than focus on low-commodity prices, especially corn, or high
energy and input costs, I would instead like to offer a rather specific
suggestion relating to loan deficiency payments or LDPs. The following
resolution was adopted at our Nebraska State Grange Annual Convention
last weekend.

"Whereas under the present farm program LDPs are based on actual bushel
produced in the current year and whereas in years of lower production
due to drought, hail, et cetera, a farmer will have fewer bushels to
sell as well as fewer bushels to determine the LD payments on. And
whereas the years of lowest production would be the years one could use
more assistance, therefore be it resolved that the Grange support
efforts to have the LDP figured on average yields for a particular farm
using the average production history or APH according to the federal
crop insurance records rather than the actual production of the current
year. And be it further resolved the producer retain the right to choose
the day when the LDP price would be established."

I feel this could be a win/win situation for the producer and the
taxpayer. By using 100 percent of the federal crop insurance actual
production history yields a producer would have a higher figure to base
LDPs in a poorer production year. While in an above-average production
year, the need for LDPs may not be as necessary due to the greater
number of bushels to sell. This would provide more assistance to
producers in a short crop year. By using APH figures the workload in the
FSA offices should be reduced. Under this proposal the task of bringing
in production evidence, recording and trying to keep straight what
bushels have or have not been used to collect the LDPs would be
lessened. The problems associated with determining when beneficial
interest changes hands would be eliminated as a producer could apply for
the LDP any time during the marketing year, even before the crop was
harvested. I believe that addresses one of the concerns one of the
previous speakers had about them and the south being able to collect
earlier than we in the north.

I do have more to say, but I see my time is up. Thank you.

MODERATOR: Thank you very much.

Let's go back over here.

MR. LYNN CRISP: Secretary Johanns, I appreciate this opportunity today
to speak with you. The following are some of the policy considerations
for the 2007 Farm Bill. My name is Lynn Crisp. I farm by Kenesaw and I'm
a member of the Nebraska Corn Growers Association.

I would like to speak about some unintended consequences and then make a
bold statement about conservation. The policy position should be to
leave current commodity program support in place with the exceptions of
cotton and rice. If it is to be a policy goal to diminish farm program
support, the current commodity programs should be allowed to erode over
time with inflation. Over the course of just three farm bills,
significant support reductions would be realized without the
destabilization and unintended consequences of deep cuts immediately.

Farmers are producers of commodities or achieved goals and should be
compensated because they earn it not because of entitlements or viewed
as welfare recipients. A few years back it was thought to be a good idea
to decouple compensation from production. This is a dangerous idea and
will not be supported long-term by Congress with tax dollars. Taxpayers
want and deserve some measure of productivity for their money.

It is not difficult to argue the point that every producer should have a
conservation plan. Most farmers are conservation minded by nature.
Direct payments should be justified by performance goals and a plan paid
only to producers. Although the payments are tied to the land, a
producer is the only person actively engaged in achieving goals. The
plan must be the creation of the producer and possible scores need to be
well in excess of 100. Scores of 100 or higher should receive full
payment and a 65 would receive a 65 percent payment. Key components
might include conservation objectives as a major component, a list of
enhancements or other objectives available for extra credit or a
component involving a beginning farmer in the operation. Just some novel
ideas about conservation programs.

Thank you.

MODERATOR: Thank you very much.

On to the middle.

MR. JOE SCHRAM \[sp\]: Mr. Secretary, Governor, thank you. Before I say
anything else about agriculture, I would like to have you give a message
to President Bush. Him and I don't always agree on everything, but one
thing about Mr. Bush, when he says he's going to do something, he means
it and he does what he says he's going to do. And I want you to tell him
thank you for that.

I'd like to tell you a little bit about my self. I'm Joe Schram. I am
from northeast Colorado. We farm in southwestern Nebraska up and down
the state line. We raise corn, wheat. We raise sugar beets. We raise
pinto beans, kidney beans, various crops. We started, my wife and I,
grew up in Omaha. We had nothing. We went to work for a larger
commercial cattle feeder back there. He moved us out to western
Nebraska. He gave us a start feeding cattle. That's how we got a start
into agriculture. We saved that money. We decided we turned 30 and we
said, what do we want to do? We want to raise our kids and we don't want
to be gone so much. So we started a farm. It's been very difficult.

Our sons are raised now. Our oldest son and his wife graduated from CSU
with ag degrees. They've come back to join us on the farm. We were
looking for land to rent. We had a fellow that we always bought our seed
corn from that wanted to retire. And he came to us and said, "Joe, would
your son like to rent my land? I want to give it to a young man to get
started." I said, "Yes, we would. We really needed the land." So we made
him an offer of cash rent on the ground. He said, "No, Joe, that's too
high." He said, "I'll take less." He said, "I don't want someone here
with big cash rent. I want somebody that will take care of my property
and take care of my farm."

The reason I'm telling you about our operation is, we three years ago
bought stock in the sugar beet industry in western Nebraska. When you
hear about big sugar, you're hearing about my son and I. That's big
sugar. The thing we're really concerned about in the new Farm Bill is
that we keep limits on how much sugar is produced in the United States.
A lot of big corporations want to take limits off so that cheaper sugar
can come in and ruin our sugar market.

Thank you.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: Young man.

MR. TRAVIS RAINFORTH: Good evening. Thank you for being here Secretary
Johanns, Governor Heineman. My name is Travis Rainforth. I live south of
Grand Island here at Doniphan. I'm 24 years old and I am what would be
considered a beginning farmer. I am looking to get started.

I am not here to complain about anything, I just want to make a
suggestion. I became aware of a program that was called "Land Link
Clearinghouse" and I signed up for this. Explained the operation I was
looking for and they in turn sent me a list of various farms throughout
Nebraska, Iowa, there was a farm down in Mississippi, as a matter of
fact, in Gulf Port, but I don't think it's there anymore.

\[Laughter.\]

MR. RAINFORTH: Anyways, this coming Monday my wife and I are going to
look at a farm in Harlan County. The farmer is looking to partner with
someone who is looking to get started and eventually buy him out. You
know, outside of northeast Nebraska, as I've talked to people in this
area, very few people know about this program. I think, you know, the
Department of Agriculture, we really need to look at promoting programs
like this. Making people aware that these exist, you know, to help young
people get started.

I will leave with this. Last year I tried to rent some ground in this
area and the ground happened to be from a person who was a former state
senator. Governor Heineman, you might be familiar with, or even you
Secretary Johanns, there's a program called "The Nebraska Beginning
Farmer Tax Credit." And after I expressed interest in this land she told
me what she was asking for rent and it was a little more than I could
afford. So I asked her, well, would you be interested in this Nebraska
Tax Farmer Credit. And she replied to me that, "oh, yeah, I remember
that. That's just kind of a joke anyways." I would like to stress to
you, let's take this seriously about getting the beginning farmer
started. Because if we take this approach that it's just a joke again,
we are going to be signing a death warrant of family farms in the next
50 to 100 years.

Once again, thank you for your time.

\[Applause.\]

MODERATOR: Thank you very much.

Over to the left.

MR. GARY DOOR: Welcome back to Nebraska, Secretary Johanns. If you look
around the building and the area today, you are going to notice one
thing is lacking, and that is the young producers. I am going to throw a
few comments out and I like the comments I just heard. Because the young
farmers are our future. In a few years there will be a whole generation
of farmers retiring with very few people to take their place.

Our first of three sons is trying to get started farming and he managed
to get a beginning farmer's loan through FSA. He was frustrated with all
the paperwork because there was so much duplication. And then when he
does have a good year, he's told he doesn't qualify anymore. It's kind
of tough for someone young to get going. You get your loan and you don't
know if you're going to have it tomorrow. You are sent out to the banks
and they more or less give you the run around too. I know they have a
lot of us in northeast Nebraska.

One thing I would suggest is that if they qualify for the guaranteed
loan or the beginning farmer loan it would be for a set number of years,
not just today. It would also be nice if they could get their funds
advanced as needed. When they get one of the beginning farmer loans the
funds are all advanced today and that's the funds for the entire year.
The interest does sound low and reasonable, but when you look at the
amount of money they are borrowing today it isn't really that cheap. He
was told by the bank he's with today, I think I can almost get as cheap
of interest today.

Nebraska has the tax incentive for farmers who rent land to beginning
farmers. I think this should be continued and expanded because the
concentration and consolidation will continue to get worse if existing
farmers don't receive some benefits for taking a chance on the younger
farmers.

I guess I forgot to say, I'm Gary Door, livestock and row crop producer
from Creighton, Nebraska.

Thank you for your time.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: In the middle.

MS. MARGE LAUER: Mr. Secretary, Governor Heineman, thank you very much
for listening. I am Marge Lauer. I am the executive director for CAPA
\[sp\], and that is Nebraska's producer-owned ag development group. We
represent nearly 500 members, which means I could bring you 500 issues.
But I really want to be here today to say and endorse and encourage
additional funding into the ag development programs and funds.

CAPA \[s p\] has been very fortunate in receiving the value-added
agricultural producer grants, grants from the Cooperative Business
Center, from the USDA Department of Ag. And those grants have led to the
development of a very successful ethanol plant and currently we are
looking at extracting leutene \[ph\] from alfalfa, at a fuel injection
system, at specialty crops, at trading specialty products into Mexico
and a couple other projects. The only reason we are able to do that is
because of the funding that we have received.

I am also very proud of our membership in that we have received nearly
\$600,000 through these sources. But that means we matched it with 600
plus from our membership. No one can do it better than the farmer and we
are here to do it ourselves if we have a little help. So I encourage you
to keep that program up and expand it if you can.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much. Let's do a quick reset. We have three
microphones, one by the media stand here. If you would like to get in
line there as well. Comments under two minutes or around two minutes, I
guess. When you get the red, then that's when we say thank you very
much. If you have additional comments, you can send them to USDA submit
them electronically, USDA.gov.

If you have a specific USDA concern or question that does not pertain to
farm policy today, right behind this tent a yellow tent is a help desk
and many of the professionals that serve you in the State of Nebraska
are here to help you with whatever question you may have. So if you have
a particular beef about something that is not dealing with farm policy,
you can address it out there as a specific question.

With that, we will continue on and go to my right.

MS. JEN HERNANDEZ: Thank you, Secretary Johanns and Governor Heineman
and welcome back to Nebraska. My name is Jen Hernandez and I'm with the
Nebraska Appleseed Center for Law in the Public Interest. There are a
lot of important aspects to the Farm Bill, as you know and we've heard
some of them today including payment limitations. I thank you for the
opportunity to share comments on another aspect of the Farm Bill which
is the Federal Food Stamp Program.

As you know the Food Stamp Program is highly efficient and it helps very
hard-working families put nutritious food on the table for their
families. It provides the State of Nebraska the flexibility that we need
to work here in the state. As you prepare to reauthorize the Farm Bill
numerous proposals for changes to the Food Stamp Program are likely to
come up. One example might be a federal food stamp block grant. So I
urge you to protect the integrity of the Food Stamp Program so that it
can continue to respond effectively to the needs of hard-working
Nebraskans.

Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: On my left.

MR. SCOTT JOSIAH: Good afternoon Mr. Secretary and Governor Heineman. My
name is Scott Josiah. I am the Nebraska State Forester and Director of
the Nebraska Forest Service which is part of the University of Nebraska.

My comments today will pertain to Farm Bill policy regarding privately
owned family forests and conservation tree planting. So I speak for the
trees.

Family forest and conservation tree plantings are enormously important.
Forty-two percent of our nation's forest lands are family owned. Across
the central states, as you well know, these forests are well integrated
into the agriculture landscape either naturally or intentionally. They
produce critically important ecosystem services that benefit nearly all
Americans. Family forests filter nearly two-thirds of the nation's
drinking water. Sequester huge amounts of carbon, and provide wildlife
habitat, arrest soil erosion, clean the air, and increase crop yields.
They provide nearly one half the nation's round wood and are engines for
rural economic development.

Concerning family forests in the upcoming 2007 Farm Bill we believe it
needs to:

One, provide financial and technical assistance via programs such as
FLIP that encourages private land owners to sustainably manage their
forest lands.

Foster market-driven conservation by linking conservation with rural
economic development policies and programs. Policies can assure that
working trees and forests and conservation plantings provide ecosystem
services at the same time commercially valuable products that drive
rural economic development.

Support programs that can serve working rural lands such as CRP and EQIP
and preserve an enhance the forestry-related components of these
programs. Support initiatives that develop wood-based bioenergy. Support
enhanced community fire protection on family-owned land to reduce fuel
loads, improve growth and health, and a reduced risk of raw land fire.

I am out of time, but thank you very much for this opportunity to
provide you with forestry-related info on the upcoming Farm Bill. Thank
you.

MODERATOR: Thank you. To the middle.

MR. PAUL KENNEY: Secretary Johanns, Governor Heineman, I would like to
thank you for your help in a group like this building and ethanol plant.
Without your help, USDA and Greg Ibach, that would not be possible. And
I am here with a question more than a statement. How do we retain
control of that \$1.50 corn that Greg referred to? How do we look at
that as energy? How do we have that in our hands instead of passing it
to the global national companies so that sometime there's money made.
And I guess that's more of questions that I have is how do we remain in
control of that.

Thank you.

MODERATOR: Can we get your name, sir?

MR. PAUL KENNEY: Paul Kenney, I farm near Amherst.

MODERATOR: Thank you very much. All right.

MR. STEVE EBKE: Yes, Governor and Mr. Secretary. The Nebraska Corn
Growers thank you for your giving us the opportunity \-- the farmers in
this room \-- the opportunity to make their thoughts known. My name is
Steve Ebke. My wife and I farm near Daykin , Nebraska. My comments today
are going to be directed at questions five and six.

Information from the Kansas City Federal Reserve indicates farm price
supports alone have proven to be only partially effective as rural
development policy. During the 1990s, three out of four farm-based
counties experience sub par economic growth and half lost farm
population. The government farm safety net may have kept some of the
farm operations in business during chronic low prices. However, it has
not been successful in stemming the economic erosion in farm supply
businesses or Main Street store fronts.

Analysis by Iowa State University Center for Agricultural and Rural
Development found that the higher a county's dependence on farm income,
the lower its per capita income growth during the 1990s. An emphasis on
entrepreneurship rather than entitlement will refocus agriculture to
revitalize rural America. Development of markets for value-added
processing and new value chains for identity-preserved agricultural
products would benefit rural America. Farmers must participate as
shareholders in the industry springing from these markets, not just as
vendors. Ownership of the manufacturing plant, not the raw commodities,
will offer far better economic futures for our farmers in their
communities. A trend of farmer-ownership should generate new jobs,
recirculate profits locally and help revive depressed rural communities.

To develop these markets and foster this transition to farmer ownership,
farmer leaders and policymakers should focus on: one, redefining U.S.
agriculture's strategic importance beyond a food-based economy.

Two, intensifying and targeting basic science research to bio-based
products for America's health, environmental, and energy needs.

Three, fostering economically viable, value-added business opportunities
in rural areas.

Four, encouraging dynamic, farmer-owned business models that can
anticipate and take advantage of market opportunities.

Five, increasing government support for entrepreneurship and innovation
in rural areas.

Thank you.

MODERATOR: Thank you. Young man.

MR.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_: Thank you. I'm not so young
anymore, I'm 43. But I am one of the younger farmers in my area. A big
thank you to Secretary Johanns, Governor Heineman, and KRVN and the
other farm broadcasters who have played a part in this. We sure thank
you for the opportunity.

I have a comment on the LDP program. I've heard some good ones so far on
how to possibly simplify it and make it better. I'd like to see also
such say like September 1st, any time after that, be able to take the
LDP on your estimated bushels and if, say you come out and you're short
bushels, you would have to pay that back obviously. But that might be an
option. I don't want to see the LDP that President Bush's proposal was
85 percent of the direct payment yield. Like in southwest Nebraska where
I farm a lot of those were set before I was farming and they are at
120-bushel. That 85 percent of that, you know, is about half of what we
would normally get with the current system. So that would really affect
our bottom line there. So I would like to see that, I guess, not go into
effect. I would like to keep it so we can get it on the bushels we
raise.

For the payment limits, I guess it depends on what side of the limits
you're on, whether you're for them or against them. I farm with my wife.
I don't have any hired help. We farm 2,500 acres of irrigated corn. So a
fairly sizeable task. And with the much reduction in payments we would
be \-- limits we would be probably bumping up against them fairly
quickly. So I don't want to see a big reduction in the payment
limitations, the three-entity rule, I have no problem probably
eliminating that.

Anyway, I would just like to encourage all of you that have youngsters
that want to farm, don't be gloom and doom to them. Encourage them.
Thank you.

MODERATOR: Thank you very much for your comments.

In the middle.

MR. SEAN O'CONNOR: Yes, Mr. Secretary and Governor. I am Sean O'Connor
from Greeley County, dry land farmer up there. I would like to comment
on question number four, on the conservation program. I would like to
encourage you to keep those for several reasons. I guess for myself as a
producer, I have a contract that's coming out in 2007. I think in
2007-08 over half the contracts in Nebraska come out of that program.
I'm also a tenant on one that will come out the very next year. To me
that has been very important because those are the low-producing acres
that we put in them.

In the last five or six years with high inputs, a drought in our area,
they wouldn't have produced enough to return our inputs. So it's been
very nice to have that guaranteed payment coming out of there retaining
control of that ground. And as one of the speakers said earlier, to be
able to graze that in drought years or every third year, that's been
real important. I would encourage you to find a way to keep that in our
program. And as the young lady spoke earlier, with the buffer strips and
other conservation programs, to re-enroll them without making farmers
tear up those practices and farm it, and put more erosion into our
streams and so forth, if we can find a way to keep those in there and
encourage the farmers to update those practices and make them better as
they re-enroll them.

Thank you.

MODERATOR: Thank you very much. Sir.

MR. CHRIS ABBOTT: Secretary Johanns, Governor Heineman, thank you for
being here today. My name is Chris Abbott, I'm a fifth generation
rancher from Hyannis, Nebraska. I was born and raised back in the '50s
and '60s in that area. Back then Grant County was one of the wealthiest
counties in the nation. Today it's seventh poorest.

My comments today are geared towards question number two. The newly
formed organization of Independent Cattlemen of Nebraska firmly believes
that the fate of our family cattle production business lies in our
ability to enhance competition for our products. Vertical integration
and further concentration in agriculture will bring with it diminishing
interest by the next generation and continued degradation of our rural
communities.

Our second concern is that a least cost and logical, mandatory country
of origin law remains a part of the Farm Bill package. Recent free trade
agreements continue to expose the domestic live cattle industry to
greater and greater threats from imports of cattle and beef products.
U.S. producers must be given a tool to differentiate their product. It
is entirely unreasonable to imagine we can compete with foreign cattle
producers who have access to vastly cheaper inputs, less regulation,
and/or significant government subsidies. Our hope is that America's
consumers will recognize the value of supporting our domestic industry
in the safety and wholesomeness we can afford them.

Other COOL issues that need to be addressed include inclusion of
mandatory individual IDs, a method to establish origin, simplification
of the required labels, grandfathering of domestic cattle born prior to
the implementation date, expansion of the program to include all retail
outlets, and restriction of the application of the USDA grade shield to
products only from animals, born, raised, and processed in the United
States.

Congress has once passed the provision for COOL. Consumer groups applaud
it, organizations representing cattle producers across the country are
demanding it. Mr. Secretary, I implore you, we must make COOL viable and
we must implement it now.

In closing, I would like to thank you the USDA and Secretary Johanns for
taking the time to listen to the concerns of AG producers across the
nation. These are critical times in farm and ranch country. The
Independent Cattlemen of Nebraska will continue to advocate for changes
that will assure our children, our communities and our businesses have a
bright and profitable future. Thank you.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: On my left.

MR. PETE BERTHELSEN: Mr. Secretary and Governor, thank you for the
opportunity to be here today. My name is Pete Berthelsen, I'm a land
owner near Elba, Nebraska. I also serve as the director of conservation
programs with Pheasants Forever which has over 15,000 members in
Nebraska, many of which are land owners.

I would like to pass along just a couple of thoughts regarding question
number four which is, how can farm policy best achieve conservation and
environmental goals. And I guess one of the first comments that I would
have is it's not going to be a shock to anybody in this room, but the
ranchers, the farmers, the producers in Nebraska are great
conservationists and doing a great job. The other thing that I would
pass along is that the USDA is doing a great job by achieving these
goals that are listed in this question right here.

You know, the conservation programs that have come about in the last 10,
15, 20 years are doing a great job. One of the things that I would like
to comment about is CRP which is certainly one of the flagships of the
conservation suite that the U.S. Department of Agriculture has. It's
doing a great job. We've proven that we get more in return for that
investment where we pay the land owners. But what I'm worried about is
in Nebraska the 1.2 million acres that we have, the lion's share of
which expire in '07 and '08 about being able to keep those. About being
able to give producers that want to take fragile land and protect it for
our children and our children's children we need to have that
opportunity. And I am really concerned about those acres not only going
away, but maybe not leaving the program, but leaving Nebraska. So
selfishly, but I would like to protect Nebraska here.

I guess the last comment is, I also think that conservation programs
like that should be fully enrolled so that we can bump that up to what
the law allows, 39 plus million acres so that we can get it up to that.
I thank you for listening.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Now to the middle.

MR. PAUL SWANSON: Mr. Secretary, Governor Heineman, my name is Paul
Swanson. I am from Hastings. I farm in Kearney County. I would reiterate
the concern about limiting payments to mega farms. And I would suggest
that since the chairman of the Budget Committee is from Iowa and not the
south, there may be some leverage in order to do that.

Secondly, in terms of world trade, if we participate in world trade,
which we are, for any given commodity, we have to be low-cost producer
in the world. We are not low-cost producer in the world and have no
chance of being low-cost producer in the world. And it should be obvious
because of education, because of the education we feel we support in
counties, we keep our schools, because of irrigation in Nebraska we have
a deficit compared to Iowa and Illinois even. So it seems to me that we
need to be thinking in terms of developing some of the things that have
been mentioned here today with regard to further development of our
foods, and the best market in the world is the United States. That's the
reason everybody wants in here. So we need to sell our product. One way
we can do that is with country of origin labeling. Many consumers want
to buy our product.

Finally, in terms of the conservation security payments, if you've ever
traveled through Iowa, eastbound on Interstate 80 and stopped at the \--

\[Tape break.\]

MR. SWANSON: \[in progress\] \-- soil erosion in Iowa has gone from
1,850 when it was 14 and a half inches thick to 2,000 when it's 5.5
inches thick. Iowa is not unique. That's true all over. We need to
implement the conservation security program at the levels that Congress
has given us.

Thank you.

MODERATOR: Thank you very much. We have about six minutes before we take
another break. You have been a very courteous and quiet audience which
has been very good. But in order to get as many people to speak as
possible, if just we continue with that when the red card comes up,
please close your comments and then we will continue on.

So we will now go to my right.

MR. LOU LAFF \[sp\]: Mr. Secretary and Governor Heineman, I appreciate
you coming out and listening to our problems. This has been addressed on
at least two occasions here this afternoon, so I don't want to be
redundant, but I would like to address the CRP. If my statistics are
right, we've got over 16 million acres in CRP in the United States.
Twenty-two thousand of those acres are down in my country. My name is
Lou Laff \[sp\] and I live down in Johnson County.

My concern is that as this land comes out of the CRP program, in order
to re-enter it, the Department is requiring them to destroy the present
cover which mostly is cool-season grasses and replace it with warm
season grasses. To me, Mr. Secretary, that's ludicrous. It's just
something that we don't simply have to spend \$70 an acre to do. I am an
advocate of the program, it's a great program. It's a win/win deal for
everybody, people in town and people in the country. We need to keep the
program, but we need to be less restrictive on how we re-enter these
farms when they come out of the program.

Thank you.

MODERATOR: Thank you very much.

To my left.

MR. DENNIS KINGENBAUGH \[sp\]: Secretary Johanns and Governor Heineman,
I would like to thank you for this opportunity to address you. My name
is Dennis Kingenbaugh \[sp\] from Smithfield, Nebraska. I raise
irrigated and dry land corn and soybeans and have a cow/calf operation.

Today I would like to give you a couple thoughts on question three and
talk about federal crop insurance. The federal crop insurance program is
the cornerstone of my risk management and sales program. I ask that no
cuts be made to this program, if at all possible, in the next Farm Bill.
However, I feel that there are two concerns that need to be handled to
improve this.

First of all, we must do something to keep a viable safety net in place
in light of multiple years of disaster. Drought is seldom a one-year or
a one-month situation. It goes over years. And so in my particular
situation, I plant dry land soybeans. I can't plant those anymore
because my federal crop insurance won't cover even my input costs. So
some changes need to be made there. And I think this would be especially
important for young farmers because if a young farmer comes in and two
or three years has a bad year, you know, we are signing a death warrant
to this one.

The other thing, my county that I am associated with is Gosper County
and they have had a pilot project where the FSA and federal crop are
using the same computers and have access to the same knowledge. I am
wondering if we could improve this. It looks like in the future you are
looking at a duplication of services. I feel that the FSA is excellent
in looking at settlement sheets and scale tickets and they are the ones
that should be handling the federal crop program. The money that's saved
could be used to hire people so that they're not so overworked and then
it could be passed on to the people that need them who had the
disasters.

Thank you very much.

MODERATOR: Thank you.

To the middle.

\[Applause.\]

MR. JEFF ANDERSON: Mr. Secretary, Jeff Anderson representing Renew
Apparel there in the back. We are manufacturing shirts and caps and mugs
and different things out of Nebraska corn. It all comes from the Cargill
plant in Blair, Nebraska. But my question actually directs back the
other way. We've been trying to do business with various government
agencies and trying to find out who the buyers are. I know there are
initiatives for renewable resources. Our shirts and mugs and everything
that we produce are 100 percent renewable made from 100 percent Nebraska
corn.

What we are trying to do is, I guess, implore or plead that the
government simplify the procurement process for small manufacturers and
also for, I guess, I would assume a lot of the farming products that
could be sold back to the government. I know the programs exist, but
walking through the morass of paperwork and finding the right person is
oftentimes difficult.

That being said, I want to compliment the government on the USDA web
page. That has been of immeasurable help and I think has made great
strides. But I would like to see the whole process simplified for those
of us that don't have a full-time person for dealing with contracts,
that would sure help.

That being said, I have for you, unfortunately not in red, but a white
corn shirt and a white cap made out Nebraska corn. It's 100 percent
renewable and uses 50 percent less greenhouse gas than a polyester shirt
when produced. So thank you.

MODERATOR: Thank you very much.

Quickly, and I know some of you have been waiting, you may have to wait
until the next hour. So once the Secretary comes and sits back down
again, at least he didn\'t run off. So, young lady.

MS. MARY RITTER: My name is Mary Ritter. My husband and I are purebred
Hereford breeders from Callaway, Nebraska's Sand Hills region.

From 1997 to 2004 Nebraska lost more than 6,200 farm and ranch
operations. During a similar time period, 1995 through 2003, American
taxpayers provided \$131 billion in commodity and disaster subsidies. In
2003 alone, commodity certificates were distributed to the two top
recipients totaling \$128 million. I believe USDA and Congress are well
aware of these excesses. But this forum is about our future including
\$1.60 corn and \$2.75 fuel.

My aim today is to encourage you to plan the entire whole picture.
Lobbyists and aides are powerful sources of information and experience.
But how we want to shape agriculture cannot be left to the highest war
chest nor the closest ally.

I was part of a very educational project funded by the Nebraska
Cooperative Development Center which is resulting in a book called,
"Writs of Change" to be published by University of Nebraska Press. And
that experience put me in touch with producers and small businesses
across the state. We could put a realistic cap on farm subsidies. We
could make once-a-year equal payments to all Ag producers. We could
increase technicians to assist in the development and marketing of
non-commodity businesses. There's much we could do if we are willing to
consider it.

I encourage the USDA to fund substantial rural economic development
assistance, animal ID and COOL, conservation plans, local and farmers'
markets, food development and for abuses by the largest farm program
payment recipients to absolutely end.

MODERATOR: Thank you very much.

\[Applause.\]

SECRETARY JOHANNS: Mary, before you go away, do I recognize your name?
Did you write a book?

MS. RITTER: Yes.

SECRETARY JOHANNS: It was a beautiful book and I read it. And I think I
wrote you a letter telling you how much I enjoyed it. Tell me the title
of that book again.

MS. RITTER: Good ad, thanks. [In Benton.]{.underline}

SECRETARY JOHANNS: If you want to read just a really captivating book,
Mary wrote a book, [In Benton]{.underline} and I'm not here to promote
things, Mary, but I will tell you I enjoyed that book immensely. So
thanks for being here.

MODERATOR: Mr. Secretary, as we said, this is the second hour. Now, we
have one more. We will take a five-minute break. Those of us in the
media business know we are already kind of running behind. It was indeed
an honor for us to be a part, Mr. Secretary, Governor Heineman. And
Emory Kleven will be with you in about five minutes. Thank you.

\[Brief recess taken.\]

\[Music playing.\]

\[Tape break.\]

MODERATOR: We invite you to take your seat and move up towards the
front. There has been a few people leave, come on up towards the front
and we will begin the last hour.

\[Pause.\]

MODERATOR: Okay. We are going to begin as we get the Secretary and
Governor back up for the final hour.

Again, for those of you who have been here, we've got three microphones
and we invite you to step up to them. Limit your comments to two
minutes. We do have the stop and go system there. When you see that red,
wrap it up.

I just want to briefly introduce myself and then we'll get back to the
forum. I am Emory Kleven, I am the Farm Director with the Waitt Farm
Network based out of Omaha, Nebraska. I am also the Farm Director for AM
1020 KOYL, we call it KOYL Country 1020. I am also this year's president
of the National Association of Farm Broadcasters. And I was sitting
right next to the Secretary back in early May when he announced that he
was going to be doing forums like this across the country. And indeed
they have turned out spectacular.

So we want to get to the questions again. Three microphones. Limit your
comments to two minutes and you've got those little pamphlets. If you
just came in recently, there's some staff here that have those, if you
do not have one.

Also, if you do not get to comment on the microphone, we do have four
suggestion of comment boxes or suggestions, maybe, two out front and
there's two out back. Write your comments down and stick them in the box
and they will be weighted just as heavily as any verbal comments.

So with that we are ready to go. We will start right here on this
microphone.

MR. ELAVERNAL SIKA \[sp\]: Thank you for being here Governor and
Secretary. My name Elavernal Sika \[sp\], Loup City, Nebraska, cow/calf
operator. I am going to read this off.

Parity, that's the answer, not quicksand. And we have to have a farm
program that's affordable. I don't like deficit spending at the federal
level. Here's what I propose as a solution.

Three hundred and 20 acres of irrigated land or 800 acres of dry land.
The government should be an insurance policy only a safety net. Here's
how we do it. Uniform bookkeeping. I use PCA Records. Actual cost backed
up by a receipt. We subtract 20 percent out of high-cost members of that
group made up of 100 members. The price is set at the average of the
remaining 80 percent. Production to be delivered to the local sale barn
or elevator. And they in turn may sell it to a charity or resell it. We
sell our production to the federal government at that level.

Okay, my definition of a family farmer or cow/calf operator. Any stock
cows or 50 dairy cows or 30 sows, or 60,000 bushel of grain or any of
the above combinations.

I want to cap on the farm programs at \$25,000, off-the-farm income
counts against it. In my township of 17, I'm the only family farmer
left. The government, in my county of Sherman, Nebraska, 90 percent work
for the government, 65 nationally. We can't afford that. We went down
the wrong path for the last 30 years.

Fifty percent of the budget of the federal budget of taxes was funded by
the world corporation. Today's it's less than seven. All these world
corporations have to do is move their mailbox to (unclear). One example
was 40,000 versus \-- or 40 million tax liability versus 17,000. Who is
going to pay our taxes?

We are depending on too many chemicals, fertilizers and sprays and
vaccines. We are headed for a dead end. Less than 1 percent of our water
now is safe to drink. What forced me in the CRP program, property tax.
It's outrageous. The state of Nebraska is one of the worst. I have to
pay \$10.48 on class five and six land.

MODERATOR: Sir, we thank you for your comments. Time is up.

MR. SIKA: Okay. Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Let's go to the middle microphone.

MR. LOUIS DAY: Thank you, gentlemen, for coming. Governor Heineman, I'm
the gentleman that (unclear) at Valentine. I do have clean clothes and a
razor. Who I am. I'm Louis Day. I'm from Valentine, Nebraska and I would
like them three empty chairs right there to represent some of my family
members. One is my dad that died at 62. He lost everything he had in the
'80s. He walked away with an old pickup and an old horse. He never
complained.

Second is my sister who is a consumer. She lives in Minnesota and runs a
restaurant.

Third is my oldest son. What do you tell your 14-year-old son when he
walks up to you and says, "Dad, am I going to have a future in
agriculture?" My honest answer is, "If we don't get some control, some
control of the competition, we will not have a future for my son."

Two minutes isn't very long to wrap up and fight for your son's future.
So I'm going to try to go pretty quick here. I guess the first thing is,
and probably the biggest thing is, when I was coming down here, what did
I see? We're all in the same boat, folks. I didn\'t see one hog outfit
run out of here. There might have been some there? What has happened to
our chickens? What has happened to our corn or to our hogs? You've got
to have a contract for chickens and hogs or you're not in the ballgame.
I don't want that to happen to my beef, sir.

Secretary Johanns, I took instead of fixing up a pickup and a tractor, I
took and put money into hire lawyers to do what I felt was the USDA, the
United States of America's of Agriculture's job. It doesn't please me.

COOL is very important. How many people here can say where their
underwear is made, but they can't say where their beef comes from.

\[Applause.\]

MR. DAY: And I'll take and I'll prove it to you. My sister \-- can I
come back?

\[Laughter.\]

MODERATOR: I guess you can at the end of the line, if you would like.

Let's go over to this microphone.

MR. BOB PHILLY \[sp\]: Secretary, Governor, thanks for coming. I am Bob
Philly, general manager of Crossroads Co-op, also a member of the
Nebraska Green Feed Association and a board member. Also one of the few
agribusinessmen or women that have spoken today.

I agree that production price and revenue is very important not only as
far as the payments, but anything that would do with LDP. But I think we
need to look some way at net revenue. We also need to not forget that
the best thing that we can do is educate our businessmen and women as
well as our producers in marketing and that should definitely be part of
this upcoming Farm Bill.

One thing that we have to remember, there was very many victims of this
hurricane down in the Gulf states and many of those victims are here
today. They are producers. We are facing a harvest, Governor and
Secretary that there is no transportation, very little storage.
Transportation costs have went from \$350 just for the privilege of
getting a car up to \$1500 yesterday. We need to increase the limits as
far as transportation of trucks. Maybe allow doubles for a short period
of time. We need to work together, the agribusiness community and the
producers as well as the federal and state governments to get through
these crises. If we don't do this, we are in trouble.

My time is up, thank you for yours.

\[Applause.\]

MODERATOR: Thank you, sir.

Let's go over here to my left.

MR. DAN KUEBER \[sp\]: Secretary Johanns, Governor Heineman, thank you
for this opportunity. I just wanted to state, I grew up on a farm much
like you did, but as a youngster I was discouraged from agriculture for
much of the same reasons we're hearing. So it goes on and on and that's
sad. My name is Dan Kueber \[sp\]. I am from Roca, Nebraska. I am a home
builder who is providing primarily housing to rural areas.

We need to recognize that the existing housing is aging and becoming
obsolete for use by young rural families. Also, most rural housing is
depreciating with age unlike our urban neighbors whose homes are
appreciating and creating wealth, especially in this current economy.

Adequate housing opportunities for working families and retired elderly
is imperative for the economic health of our rural areas. By these
folks' very presence in their communities they support local businesses,
provide local labor, and keep local schools open. The housing programs
within the Farm Bill are an important economic tool and I urge that they
be maintained.

Thank you.

MODERATOR: Thank you. To the middle microphone.

MR. JIM MILLER: Welcome Mr. Secretary and Governor Heineman. I am Jim
Miller a producer from Belden, Nebraska and represent the Nebraska
Soybean Association.

The CSP is a great program but does not have the staff to implement the
program properly. It sounds like the conservation will be a bigger part
of the next Farm Bill. I would ask you, please, do not discriminate the
producer who has already implemented conservation practices, but rather
reward him. Conservation not only conserves our soil, but it conserves
fuel. As said earlier, do not tear up the buffer strips and the CRP that
we already have implemented and established. Let's leave it there and
conserve rather than foolishly spend.

Direct payments seem to go to the value of the land prices or the rental
rates. LDP seems to help the producer who raises a big crop, but does
not help the person with a short crop. So I don\'t know what the answer
is, but the NSA does support the payment limits as written.

With the current prices of fuel, the initiative 25 by 25 looks like a
great way to add value to agriculture through biodiesel and ethanol. But
I think instead of doing that in a 20-year period, let's try and
implement that in a ten-year period. We need to find more value-added
plants that are producer owned.

Thank you for being here today.

MODERATOR: Thank you. To this microphone.

MR. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_: Mr. Secretary, Governor
Heineman, I am a retired farmer. I still live on the farm that I started
55 years ago. Recently I rented my farm to a young farmer. I am very
concerned about the future of young farmers. It has already been talked
about a number of times. Just recently right across the road from me
there's a half section of land, this farmer is quitting and he also
farms about 15,000 acres. I am told that this farmer has rented his land
to a bigger farmer and he will be farming 100 quarters this coming year.
Do you realize that's 25 sections of land controlled by one man. That is
not good for the country.

If we could somehow maybe subsidize or in some way encourage land owners
to rent to younger farmers, I'm sure it would be well for the country. I
wish we could do something about that. Thank you.

\[Applause.\]

MODERATOR: Thank you for those comments. Over to my left.

MR. WAYNE STOLTENBERG \[sp\]: Mr. Secretary and Governor. My name is
Wayne Stoltenberg \[sp\]. I farm northwest of Grand Island here. I'm a
sixth generation farmer, and the last. And here is why. Low prices, low
prices, do you hear me? Low prices.

I'm going to tell you something, I don\'t know if you know this or not,
but in 1985, and I'm shooting from the hip here from memory, farm
payments to the farmers in '85 were \$2 billion basically. The rest went
to Food Stamps and other things. Last year what was it, Mr. Secretary;
\$24-5-6 billion? We are talking about costs here. You want to lower the
costs, get rid of the LDPs. Get rid of a lot of this other stuff. You
can solve it by payments to the farmer in a fair and equitable way. Let
the market take place, let the market take care of it.

In '85 before Reagan got all this popularity and got everybody to go
behind him and get rid of the farm program as we knew it, all I heard
was, we got to sell overseas. We've got to get all this stuff. You know,
we're only selling two billion bushels of corn. We only raised six to
seven billion bushels of corn at that time anyway. What did we sell this
year, last year, year before? It wasn't many more than two billion
bushels of corn. We had a loan rate, \$2.49. Target price of \$3.03 and
it was geared to inflation. The corn price went up above \$3.03 five
consecutive days you had to bring it out of the loan. None of the corn
taken out on loan at \$2.49 ever, in my knowledge of any producer in my
area, ever got forfeited to the government. It got taken out and got
sold. The loan got repaid and there was no cost to the government.

You know, you can solve a lot of things by getting this loan rate. When
it got dropped down in 1985 and '86, it was everything I could do to
hang on to the one farm or the two farms that I had purchased already
and I struggled and struggled and struggled, but I was able to hang onto
it.

But you've got to do something in the current situation. We need radical
changes. And I don\'t know what was wrong with the old program that we
had back then. You eliminated a lot of paperwork for the ASCS office,
everything was a lot simpler.

That's all I have to say, thank you.

\[Applause.\]

MODERATOR: Thank you for those comments.

To the middle microphone.

MR. DOUG NAGLE: Hi, my name is Doug Nagle and I farm just north of
Lincoln, Nebraska at Davey. I'm a member of the National Grain Producers
Association, Grain Sorghum Producers Association. We thank you for the
opportunity to come and listen here.

Our organization considers the 2002 Farm Bill a most significant piece
of farm legislation written for sorghum producers. I don\'t know if that
goes for everybody here, but for sorghum producers, it's a big deal
because it equalized the sorghum rate with the corn loan rate. We are in
a mode right now where we are just constantly trying to fight for more
acres for a crop that is a more conservative crop. We know for a fact
that it takes less water to raise grain sorghum. And we know that the
inputs are fewer and if anybody here is worried about planting corn next
year, you've got an alternative crop to plant next year, grain sorghum,
as far as economic are concerned. Because four out of the last five
years grain sorghum has been better on my farm. So we've got to keep
that part in the farm program.

Secondly, the appropriations that are concerning grain sorghum, those
are a must. The largest corn company in the United States spends \$200
million a year in order to look for research, new uses, whatever on
corn, and that's not a bad thing. But all the sorghum industry spends
about \$20 million, about 10 percent of that. So we need the
appropriations part of the Farm Bill to keep looking at dietary, keep
looking at feed, keep looking at all these other things that we can do
with milo and not corn.

Now, on a personal note since I'm limited on time here, there is one
other issue that to me we talk about getting young farmers started in
agriculture. We talk about all these barriers they've got to go through.
I'm involved in an area right now where we have the Endangered Species
Act that's probably going to be pulled on us and it concerns a little
tiny beetle and there's only about 500 of them that live about two and a
half miles south of me. Now, that's one.

We know the Platte River is in jeopardy over the whooping crane. We know
out west you've got a flower. I know of a case in Colorado where we've
had a jumping mouse that has caused great economic loss to the
Colorado/Wyoming area. And to me we have got to get control of the
Endangered Species Act and get that revised and revisited one more time
because it can be one more layer of bureaucracy that will put a young
farmer away. Or a young farmer doesn't have the means to fight something
like that. When you are fighting government, it's almost impossible to
overturn something like that. So I would appreciate if you would revisit
that. Thanks for your time.

MODERATOR: Thank you for those comments.

We are going to go over to this microphone right here.

MR. STAN ROSENDAHL \[sp\]: Okay. Thank you. My name is Stan Rosendahl
\[sp\] from Creston and it's good to see you again, Secretary Johanns.
And glad you came back to Nebraska to listen to us.

My comments are to question four with possibly a little different slant
to it. As we look at the new Farm Bill we need to address the issues of
the WTO's problems with AG subsidies. My feeling is we need to move more
to a market-oriented approach that would reward producers for
conservation practices and environmental management approaches. As the
prices producers receive continue to be affected by our ability to
export our products, we must realize that the rest of the world is
looking more at environmental aspects. Being able to reassure our
customers that we are good environmental stewards needs to be
continually reinforced. Much like the Presidential Order for all
government agencies to implement an environmental management system one
possible path would be to take a proactive approach to use this
recognized EMS system in the new Farm Bill. USDA could partner with
producers to implement AG EMSes much like a CSP program to overcome both
subsidy issues and help reassure our customers that we are indeed
showing and documenting continued environmental improvements at the farm
level. AG EMSes could be the U.S. recognized standard much like ISO
14,000s are in the international arena.

While we as producers feel we are good environmental stewards, we are
very poor in telling this and even less ability to document improvement.
Through the use of AG EMSes, we, USDA and U.S. producers could maximize
U.S. competitiveness and help our ability to compete in the global
marketplace along with looking to the future by setting both
conservation and environmental improvements in this new Farm Bill and
future Farm Bills.

Thank you.

MODERATOR: Thank you. Let's go to the middle microphone.

MS. ANN REEF: Mr. Secretary, Governor, thank you for taking the time to
be here and listen to us. My name is Ann Reef and I'm president of the
Growers Council for the Nebraska Wine and Grape Growers Association. We
are a small association that has been started in value added and that is
through grape production.

I'd like to thank you for the programs that currently exist that enhance
and promote value-added agriculture. And without the ability to be out
there on our land producing a crop through value added, we wouldn't be
able to be on the land at all. So I'd like to see the continuation of
support for value added and niche products and represent the Nebraska
Wine Growers and Grape Growers Association.

Thank you.

MODERATOR: Thank you. Let's go over here.

MR. DAY: Thank you again. I guess to reiterate or start where I left
off, I hope, we're all in the same boat. I've seen grass, cattle, and
corn and soybeans coming down here. And on the radio I heard how the
president of the Corn Growers Association hoping that the ethanol deal
will take off. What is the number one use of corn and soybeans? It's
still livestock. If we've lost control of the chicken and the hogs,
what's left? The cattle industry. Sir, what have we been fighting about.
You know, we're losing control of that too. We are getting funneled
through four major producers.

How many of you people sold \$5 corn when it was \$5? I don't think very
many of you because somebody else had control of your product. If we
lose control of our cattle industry, where are you guys going to be at?
Are you going to have \$1.60 corn or are you going to have .60 cent
corn? Them gentlemen work for us. It's up to us to make sure we get
represented. And I'm kind of upset at you and your boss.

What do I tell my 14-year-old boy? Does he need to learn Portuguese?
Because you just give away \-- we got free trades with the countries
that them people are even poorer than us. How many people here could
qualify for Food Stamps, but are too proud to take it in bad years?

In 2000 took and we've had six independent gentlemen take on Tyson to do
\-- there's already laws passed. We got COOL, it's been passed. It's
being stalled through.

MODERATOR: Your time is up, thank you, sir.

MR. DAY: Can I come back?

MODERATOR: You been back twice, we'll let some others comment here.

\[Applause.\]

MODERATOR: Thank you for your comments.

MR. ERLIN SCHMIDT \[sp\]: Hi, I'm Erlin Schmidt from Osceola, Nebraska.
You know, I've got to commend the farmers here today, they've come up
with some really good ideas and had some good things that we can work
with. But the problem as a small farmer, as I see, when I go to work
tomorrow I don't have side pockets on my coat and I don't walk down the
halls of Washington, D.C. All the good ideas in the world don't help
when there's bigger corporations that can pay people to sit down in
Washington and stuff our senators' and congressmen's pockets full of
money to get passed what they want.

\[Applause.\]

MR. SCHMIDT: That's the problem out here. This forum isn't going to do
any good in the end if it doesn't come back to Washington and we can't
sit there and stuff their pockets. It shouldn't come down to that. The
end is just about near for some of these farmers, a \$1.50 corn, that
was back in 1950. I got a truck with 190,000 miles, would you like to
come ride around with that full of dirt, full of rust holes? A combine
down there a quarter of a million dollars on a \$1.50 corn? I raise 700
acres. What are we going to do?

You know, good ideas are great, but we've got to get in the final and
we've got to see the paper and the writing and follow through and quit
listening to big corporations. I don't have a need for a great big
combine that can go five miles an hour with a 36-foot head. And that's
the way the industry is gearing towards. It's not just the government's
problem. We've got an industry that's being very greedy and all they can
see is the big farmers. Industry is going towards the big farmer. They
ain't trying to help the young farmer. So I think that the government
needs to help both, the young farmers and you need to lasso some of
these big industries on top of it.

Thank you.

\[Applause.\]

MODERATOR: Thank you, sir. As we wrap up here, now we've been pertaining
our comments to the six questions on this folder that you picked up. We
will open it up if you have something that goes away from those six
questions. And we've got just a few minutes left, so if you do have
other comments, now is the time to step up to the microphone.

Let's go over here.

MR. DONALD HEIDEMAN \[sp\]: Thank you. Yes, my comment does step away
from those six questions. As we know, in farming, our government can
either slap you on the back or kick you in the butt. And it goes back to
the tax laws. The like-exchange tax law that we have across the country,
it seems to me that it does to a lot of penalties to the small,
beginning farmer. And I guess I have to excuse myself. I did not
introduce myself. I am Donald Heideman \[sp\]. My son and I farm down by
Jansen, Nebraska. And so with that in common, I know here in Nebraska a
lot of taxes are based on real estate values. When we have outside
investors come in from metro areas that sold one acre or 40 acres for
several million dollars, you know, the tax assessor of our county just
does cartwheels in the halls of the courthouse. So it does affect the
small beginning farmer.

Thank you.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: And also mentioning going away from those six question, also,
if you've been up and spoken once and you had a final comment or two you
want to add to what you said earlier, now is the time to do that as we
wrap up.

Over in the middle microphone.

MR. CHRIS EGELKEY \[sp\]: I'm Chris Egelkey from northeast Colorado. I
also run cow (unclear) in southwest Nebraska sometimes. But my biggest
concern was over the payment limitations. It seems to me the farmers
that get hundreds of thousands of dollars in payments they almost have
to go out and buy machinery, you know, in order to not have to pay so
much tax on the payments they receive from the government. And then they
have to rent more land, you know, which they're able to get more for
land rent than some of the smaller farmers could afford or beginning
farmers. You know, one of the most frustrating things in farming is to
try to rent land, you know, good land at affordable rates.

Also, on the packer feeding, I think it's a big problem. You know, we
used to feed cattle, but got to a point where you couldn't hardly get a
buyer out there to bid on the cattle. When the price goes up a little
bit, they wouldn't bid on them. When the price is low, then they would
bid the low price, you know. So we got out of cattle feeding. If there
was incentives to have more cattle on small farms, small feed lots, you
know, it would spread the cattle feeding out and make it so the manure
could be used on smaller farms where it's needed rather than
concentrated on 100,000 head feed lots. Then you can't afford to haul
manure where you need it, you know. I know my farm is a lot more
productive than farms I used to rent that didn\'t have a history of
manure on them, you know. So I think it's really important to try to get
the control of packer feeding and control of cattle.

I guess that's all. Thanks a lot of the opportunity to talk.

MODERATOR: Thank you. Over here.

MR. ALBERT REEVES: Hi. I'm Albert Reeves from Meadow Grove, Nebraska.
This is my son Taylor and my other son Matthew. One thing I'm focusing
on is trying to find a way to get younger kids involved. Taylor is
already working with an FSA loan. He's got a combination hog and cow
project going. And things are working out, it's a little tough and
stuff. But the ambition is if he wants to yet, as he gets older, to farm
more and expand more. But it's really tough in Madison County. If a
piece of land comes up for rent, the rent actually is higher than you
could possibly make a return on. If a farm comes up for sale, it's
higher than you could possibly make an investment into.

One of the things I've heard, I don\'t know if it's a fact or fiction,
if there's a program established that a young or beginning farmer could
approach a retiring farmer who wants to sell his land who would have a
high capital gains to be captured in there, he could get a reduction or
something by working with a young farmer on a contract or a reduced
basis to basically get him a foothold. I mean, get him a chance to try
to get into something that would be productive and bring younger people
into production. Because, you know, with the payment limitations, you
know, being like they are, it's just impossible. And those are some
things, I mean, some youth programs or something.

In his class there in Battle Creek, there's 32 kids, half are boys.
There's three kids that can drive a tractor and probably ten, 12 come
from farms. And some of these kids are from farms that are terrific,
well-managed farms, but the interest isn't there. I mean, we've got a
small group of kids coming up that really want to take agriculture and
have a future and I would just like to throw some light into their
future if I could.

Thank you.

MODERATOR: Thank you. Over here.

MR. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_: I'll direct this to the
governor. There's three approaches in realizing valuations and I would
like for the rest of the people to understand this. Agriculture is being
discriminated. We are on the market approach. Commercial businesses are
on the income approach and costs. Eighty-four to 89 percent of the
valuation of a school district is agriculture. Is that fair?

Thank you.

\[Applause.\]

MODERATOR: Thank you.

MR. LES JOHANSON \[sp\]: I' m Les Johanson \[sp\] from Marquette. I
guess I'm kind of a small producer in these times. I guess I would kind
of like you to maybe consider a problem that is kind of unique with
Nebraska and that's the irrigation when it comes to payments on yields.

In my situation I have two different farms. One wasn't in the program
and when I took over we enrolled it in the program. Well, they say
you've got to go back to a dry land yield. They don't allow anymore
irrigation yields in the program. So I'm stuck with a 75-bushel yield
versus maybe 115, 120.

Another example of this, we purchased a farm here three years ago and
the same situation. It was a dry land farm. Now we put a well on it and
we're stuck with a dry land yield. So I approached our county FSA office
and they said, well, you've got to wait until the program opens up. So I
think maybe this is a point that you can maybe consider to readjust help
for the irrigated acres that have come in. I know you say we're kind of
in budget cuts. Well, when you kind of overlook payment limitations that
people get hundreds of thousands of dollars, but then we're kind of
stuck with a low payment yield because we want to try to improve. So
that's all.

Thank you.

MODERATOR: Thank you. Right there.

MR. DON RUSSELL: I'm Don Russell from Nemaha County and I would like to
address the change that was made in the CCC loan program this year where
they now take a mortgage on 100 percent of your grain that you own
rather than just the bin that you might have under loan. This change has
personally cost me like \$200 in gas and two days in lost hours just
having to go to the FSA office or the Farm Agency Office to have them
sign off on the check so that I can take the check to the bank. I would
just like to see that changed because I don't see that it's preventing
anything along fraud or anything like that. Because a dishonest person
is going to lie when he goes to the farm agency and when you have to
sign the paper that says it's not mortgaged grain. And it's just
penalizing honest farmers like me. So I would like to see that change
made. Thank you.

\[Applause.\]

MODERATOR: Thank you. Over here.

MR. DAY: I want to apologize for getting so loud before, but I've got
one last comment to make. I think I speak for all small farmers out
there, young farmers in general. I don't think there's any small farmer
out there that wants to have to take a second job to start farming the
ground. And that's what either a small farmer that starts out farming
thinking he can do it, ends up going to town and getting a job or vice
versa. And that's what it's really appearing it's going to be. I mean, I
had to pick up a seed dealership just to try and make ends meet it's so
tight. I don\'t know how it's going to turn out this year, I really
don't. So all I ask is you just do the best you can in trying to help
that small farmer out the most you can. Thank you.

\[Applause.\]

MODERATOR: Thank you. Over here.

MR. BURTON BEARD: Burton Beard, I farm in southwest Nebraska. I would
like to thank the Governor and the Secretary for coming out here. My
comment is we always hear about we're supposed to sell our products and
that's our main deal is selling overseas. I was wondering why a company
that wants to test for BSE is not allowed to go ahead and test and sell
their product, why the USDA says, no, you can't do that. Thank you.

MODERATOR: Okay. Thank you.

One more over here.

MR. DON REEVES: Yes, I'm Don Reeves from Central City. I spoke earlier
on behalf of the Center for Rural Affairs. I'm wearing a little bit
different cap. I would raise a couple of perspectives that seem relevant
to the whole discussion, not terribly responsive to any of the six
questions.

I've spent a lot of time looking at the question of world hunger. One of
the other speakers endorsed maintaining our Food Stamp program to reach
all the hungry people in the United States. But worldwide, there are
probably a billion to a billion and a half people who are chronically
hungry. It turns out the majority of these people are actually farmers
or in rural areas. So the perspective I want to add here is that we need
to be careful in designing our own farm program that we don't
disadvantage the farmers, the peasant farmers in the poor countries. And
I think we can say that some of the ways we have run our commodity
program payments, our commodity programs, have put our commodities in
the port cities of poor countries at a price much lower than producers
there can compete with.

So the caution is that we be careful in designing our own commodity
programs that we don't inadvertently undercut peasant farmers in poor
countries. Because in the long frame it is the poor people of the world
who are our long-time future customers.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: Over here to you, sir.

MR. LEO (Unclear): I'm Leo (unclear) from St. Paul. I've lived on the
farm for 82 years, that's since the time Uncle Sam told me to come work
for him. People don't know where their dollar comes from. The dollar has
got to come from the ground and we got to educate the people where that
dollar is coming from. And they get jealous whenever a farmer makes
money. They don't realize when the farmer spends that dollar it grows
and grows, and grows. They don't realize that some money has got to come
from the ground. That's the only way you'll keep it going. And we've got
to educate the people that it's got to come from the ground.

MODERATOR: Thank you, sir.

\[Applause.\]

MODERATOR: I believe we are out of comments. We want to get closing
comments from our two guests here. Again, you can go to the web site,
USDA.gov, put slash Farm Bill and you can get a lot of information
there. We do have the comment boxes, four of them, around the tent here.
And you can also \-- the address is on this folder if you want to write
down your comments and send them to the Secretary.

SECRETARY JOHANNS: Well, I will offer a few closing comments. I want you
to know you have a very, very unique politician here. I offered him the
microphone, he said, no, that's okay, you say a few words. That's pretty
unusual. Yeah, that deserves a round of applause.

\[Applause.\]

SECRETARY JOHANNS: Maybe I should do that.

\[Laughter.\]

SECRETARY JOHANNS: You raised some issues and I just wanted to maybe
visit with you a little bit about those issues before we wrap up here.
First, in terms of the overall forum, really, really an excellent forum.
The comments, some very thoughtful comments, but it's not just some. I
mean, literally everybody. A lot of passion in some comments and I
appreciate that. You never have to apologize about coming up to the
microphone and letting me know what's on your mind. I appreciate it, I
do.

In terms of the overall thought, today I think you heard pretty good
support for the conservation programs. You even heard some folks say we
need to move more toward a market-oriented conservation type approach.
It's not the first time we've heard that. We have heard that in other
parts of the country. Payment limitations, I knew it would come up.
Generally supported throughout the Midwest.

If you did Farm Bill forums across the Midwest, I think it would be
fairly characteristic that farmers themselves would get up and talk
about payment limitations and be very supportive of payment limitations.
Not unanimous, nothing is usually unanimous, but we do get a lot of
support for it here. Very much different, as I said, as you move to
other parts of the country where it's a different approach to farming.
So I classify that kind of in the question we ask about the distribution
of benefits. We thought a lot about that question and we just decided to
put it out there. Do you think the distribution of benefits in farm
programs is fair? We were seeing a lot of editorials criticizing the
distribution of benefits and so we decided, let's ask the question of
producers.

I can tell you ladies and gentlemen that without any hesitation I
believe that that has been the most debated item of all of the six
questions amongst producers themselves. Some argued when we went out to
do these Farm Bill forums we would hear from people just saying, well,
you know, do more of the same. In that area we have not heard that.
Whether it's the frustration of this young farmer that gets up and says,
\$1.52 corn is devastating. Well, think about this, and I offer no
opinion today because we are a ways from even finishing these Farm Bill
forums, much less sitting down and trying to think through this and
offer some thoughts about it. But think about it, you have for decades a
production oriented Farm Bill approach; right? A production oriented.
What do I mean by that? The more you produce the more benefit you get
from the farm program. And I see the heads nodding out there, yes,
that's basically the way the program works.

And so when somebody suggests, is it worthwhile to consider just simply
a more direct approach, an approach based upon conservation? That's not
idle thinking, that is coming up in Farm Bill forums across the country.
And like I said today, I don\'t know, you know, we've got a lot of
forums ahead of us, we've got a lot of opinions to hear yet, and we've
got to think our way through some of these things. But it is kind of all
mixed up together in terms of that benefits question. But, like I said,
I don't think I'm out on a limb too much in saying, that is the most
debated part of what we are doing.

We did not hear a huge amount, although we heard quite a bit, but it
didn\'t dominate the forum, but we heard a lot today about the rural
development programs. And I can tell you that your thoughts here in
Nebraska are very consistent with what we are hearing. There's a lot of
evidence out there now that these programs have done a lot of good in
rural communities. I've had hospital administrators come up and say it
was the rural development loan that allowed us to build a wing onto the
hospital. It was this program that allowed us to build some center in
our community. And so the support for those programs has been virtually
unanimous across the country.

Now, just a couple of issues that you brought up. I figured I would give
you an update just so you know what's going on with the issues.

COOL, you saw the debate today. Somebody gets up raises questions about
mandatory COOL. Somebody gets up and says, we absolutely have to have
mandatory COOL. Keep in mind the current state of the law is mandatory.
You won't have a choice. If you find out that maybe it was something
that quite honestly happened and there were consequences that were
unintended or unforeseen, today the law is that it is mandatory. It has
been delayed until September of next year. I think September 1 of 2006
is the operative date. There will be a point there where the USDA, if it
is a mandatory law, will say to all of you who are in these industries,
you have no choice. Now, some of you will cheer that. Some of you won't
cheer that. But that is the current state of the law.

My observation is that we truly are an international market; 27 percent
of our receipts do come from the export market. It's a pretty big deal.
There is never action without consequence. There is never action without
reaction. It's just the way the world works. It isn't as simple as
saying, well, it will allow our American consumers to know what country,
you know, you know where your underwear came from, or your toys came
from, so you need to know where your beef came from or your pork or
whatever. I will just tell you, that probably will be something we'll be
running into in the world.

Like I said, there is no action without reaction in this world. And some
pieces of the industry may benefit, some may lose. Some industries may
benefit, some may lose. It is a very, very complicated phenomena. Now,
in this state you've labeled \--

\[Tape break.\]

SECRETARY JOHANNS: \-- \[in progress\] \-- the current state of the law
is it is mandatory. And somewhere out there, as your Secretary of
Agriculture, if that's the way it's headed, we will enforce the law. I
told the Senate AG Committee, and that's just the way it is. I don't
have the option when you call me and say, oh, my gosh, Mike, what
happened here? I'm not liking what I'm seeing here. It is mandatory. I
think I know a little bit about the independence of farmers and ranchers
and I would guess our phone will ring. But it is mandatory today.

The other thing in terms of very early on a lady got up and talked about
Japan. Let me give you and update on Japan. If you are in the beef
industry, this is an important update. As you know we've been working
with Japan for some period of time now to get the borders reopened.
Japan and South Korea are the major pieces of our market that are not
yet opened to beef. We've had good success in other parts of the world
in convincing people to really pay attention to the science-based
approach with BSE and reopening their markets. But Japan and South Korea
are two major parts.

I recently met with the new minister of agriculture from Japan and we
literally went through their chart of process that they go through with
their Food Safety Commission and literally they're running out of
process. I mean, we are getting to a point here where I can tell you,
and in fact at their last Food Safety Commission meeting in Japan, one
of the members said, we should have a written report to discuss at the
next meeting. So I really do believe that we are nearing the end of this
process.

Now, I tell you that because I really believe that science is on our
side and that border needs to be reopened. I said that from the very
first day I came in. We in the United States shipped into the United
States historically a small amount of Kobe beef. I don\'t know if you've
ever been to Japan you've probably had Kobe beef. But we closed our
borders to their beef products. And as you know, they have found BSE, I
think they've found their 20th case in Japan. And the issue there for us
is, have they done the proper risk assessment? And without going down
into the weeds on that, we go through the same risk analysis that we
would do with any other country. But here is the very important point.

It would be disastrous if, you know a month from now Japan said, we're
ready to reopen our borders, and called me and said, you know, we're
ready to go. We're ready to receive U.S. beef. How are you doing on that
small amount of Kobe beef that is out there? We're starting to think
maybe over here, well, wait until you get that done. You don't want your
Secretary to come out and say, gosh, I've just gotten the signal,
they're ready to reopen their beef after two years at work, and it
nearly is two years. But I need another six, eight, ten, 12 months to
get through a rulemaking process on this small amount of Kobe beef that
they ship into the United States.

So I am very mindful of the trade issues. I think I know where you're
coming from. I know where you're coming from. We are not letting their
beef in today. And what you've been reading about is the process that we
are trying to put in place because, again, I do believe we are nearing
the end of their process and we are going to see a day where we ship
that product in.

I'll share a quick story with you about beef in Japan and beef in
Taiwan. You will find this interesting. In Japan, a few months back,
they literally got down to a point where the coolers were about empty of
U.S. beef. And so this grocery store announced that they would be doing
rice bowls with U.S. beef. And they even charged more for these rice
bowls with U.S. beef. And they said, this is the end of the stock. You
know what happened in Japan? People stood in line to get our beef. The
consumers are ready for our beef to return to their marketplace. And I
am more than willing to accommodate them.

In Taiwan, they opened their border for a short period of time. Then
there was this last animal out of Texas. When consumers got a hint in
Taiwan that there was the potential that the border would close to U.S.
beef, people rushed to the butcher shops to buy all the American beef
they could get their hands on. The consumers are on our side on this
issue. And I believe once we get those markets restored, we are going to
be able to aggressively return to that marketplace.

Final thought, final thought, this was an excellent Farm Bill forum. We
invite and encourage difference of opinion just like we saw today. This
is a great industry we are a part of. I very sincerely tell you how much
we appreciate your participation. But, you see, I want an ag secretary
20 years from now or 30 years from now to say that about your children
and grandchildren who are in the ag industry. That's why we're here, to
listen to all the pros and cons of what you think about what we're doing
in ag policy and the Farm Bill so we can have some notion of what you're
thinking as we sit down to write the 2007 Farm Bill.

Thank you and God bless you, it's great to be home.

\[Applause.\]