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Release No. 0453.05

**ARKANSAS FARM BILL FORUM**

**With Deputy Secretary Chuck Conner and**

**Moderators Stewart Doan of the Yancey Ag Network and**

**Gary DiGiuseppe Arkansas Radio Network Arkansas State Fair**

**Little Rock Arkansas - October 14, 2005**

MR. GARY UNDERWOOD: \[Singing of the National Anthem.\]

ARKANSAS NATIONAL GUARD: Color Guard.

SENATOR MARK PRYOR: \[In progress\] \-- Democratic colleagues did and I
met with him a number of times and we appreciate him and that wasn't
always easy. And of course supported Chuck in his nomination. Supported
CAFTA, that wasn't an easy vote. Many Democrats didn\'t support CAFTA.
And I tell you; I support the President on the war on terror. So I do
not mind at all supporting President Bush and his administration when I
think they're right. But, also must be candid that when I don't think
they're right, I'm not shy about saying that. And quite frankly I
believe, and I think that I have a lot of people around the state who
would join me in this, I believe that in some ways the administration is
dead wrong on agriculture.

\[Applause.\]

SENATOR PRYOR: I know that there have been stories in the paper and I
know in the trade publications, the various farm publications and Ag
pages and the various newspapers that have talked about how some people
in the administration want to see big changes to our farm programs in
the next Farm Bill. And in fact I heard just not long ago that the
administration says they supported the Farm Bill in 2002, but they want
to see a very radical change this time and the reason they do is because
farm conditions have improved since 2002. And I would just like to see a
show of hands of all the people here who think farm conditions have
improved in Arkansas since 2002. If you think it has, raise your hand.
That's what I'm hearing all over the state of Arkansas.

One thing I hear loud and clear unambiguously, unambiguously around the
state is that they want to continue the 2002 Farm Bill.

\[Applause.\]

SENATOR PRYOR: And I think every person in this room and every farmer
around the state would like to tweak one thing or another in the 2002
Farm Bill. There are things about it that are not easy and things that
they don't like. But given our options right now they would like to see
us continue the 2002 Farm Bill.

In addition to that, I read in yesterday's paper, a lot of you all in
this room read this as well, I read in yesterday's paper where some in
the administration want to see big cuts in farm programs because they're
going to advocate with our trading partners more open markets. How many
times have we heard that? I mean, how many times have we heard that? And
these markets don't open.

And that's one thing that I'm very concerned about because I represent
people in this room and people all over this state because these markets
are not opening to farmers. In fact, there was a \-- at the American Ag
products \-- in fact there was a story, I believe it was in the
Democratic Gazette this morning. If not, I can't remember which paper it
was in, but it said basically that India already has come out and said,
we're not going to open our markets. They're going to have to do a lot
more than that for us to open our markets. So, I would certainly hope
that this administration will not rely on some vague promise out there
about open markets and sell our farmers down the river.

In fact, one thing that I've noticed and we've all noticed and a lot of
people in Arkansas and around the country have anxiety about this is
I've noticed that our manufacturing base is eroding. These jobs are
going overseas. These plants are closing and it's happening before our
very eyes. And I do not want to export our agriculture base. I think
that would be a huge mistake for this country. Do you all agree with
that?

\[Applause.\]

SENATOR PRYOR: One of the great things about America that has made
America great is the fact that we can feed ourselves and we can feed the
world. And food and fiber is extremely important to the future of this
country. So I want to see a very vibrant, very robust agriculture
economy.

Now, we all know, everybody in this room knows that there are a lot of
challenges out there. One of them is high cost of energy; right? Diesel
and natural gas and all these other things that are going up, it puts a
huge strain on your bottom line and I understand that. And I now Senator
Lincoln, if she were here, she would give you a sermon about that
because she's a seventh generation farm family over in Phillips County.
And, by the way, she can't be here right now because she's doing a
Medicare Part D, a prescription drug thing right now somewhere in the
state. She wanted me to pass on her regrets for not being here. But, one
thing, the bottom line is that we just can't escape. And I'll tell you,
this is just a raw fact, and that is that President Bush would not be
president today had it not been for farmers all over this country.

Do you all agree with that? He would not be president today.

\[Applause.\]

SENATOR PRYOR: He has carried rural America in 2000 and 2004. And I
would sincerely hope, if for no other reason, to show his debt of
gratitude to the people who sent him to the White House, he would
remember them when it comes time to look at our agriculture policy in
this country in 2007.

So I want to say this, that I go all over this state all the time and
I've met a lot of these people individually, not just today, but in
other contexts, mostly in their home communities and talking to various
meetings around and I appreciate them being here. They've taken a day
out of their very busy schedules to be here, but we appreciate you being
here too. We really do. And we sincerely hope that what you hear today
you will carry back to Washington and you will tell your boss and your
boss's boss things that you're hearing here in Arkansas because my
suspicion is, you are hearing very similar things all around the
country. It's a very tough time to be an Arkansas farmer; it's a very
tough time to be an American farmer. There are lots of challenges here.
And I've got a great concern. I know all my colleagues in the
delegations, we've got two of them sitting right here on the front row.
We have a lot of concern about what our farmers are going through and we
have a lot of concern about the impact that has on America.

So, thank you for being here, Chuck. We appreciate your public service,
we appreciate your commitment. We've talked before and I've talked to
Secretary Dorr before and I know where you guys personally are on
issues. So we thank you for being here and welcome to Arkansas.

Thank you.

\[Applause.\]

MODERATOR STEWART DOAN: Thank you, Senator Pryor.

Ladies and gentlemen an Arkansas welcome for the Deputy Secretary of
Agriculture, Chuck Conner.

\[Applause.\]

DEPUTY SECRETARY CHUCK CONNER: I really am excited to be here today,
Stewart. Thanks for agreeing to moderate. I think you are doing a tag
team with Gary as well, and we appreciate both of you volunteering to do
this. This is not an easy job; I know.

Senator Pryor, I do appreciate \-- I think that's called an introduction
plus perhaps is the best way to describe that. And I appreciate not only
the introduction, but the words of guidance as well. You are an
important player in this Farm Bill debate and we do want to work with
you and really appreciate your taking the time from your very busy
schedule today to be with us.

Congressman Snyder, Congressman Ross, thank you as well, both of you,
for being here and participating in this as well.

I also want to recognize \-- I believe Dick Bell is in the crowd. Dick I
saw you earlier. Stand up, let's make sure. Your Secretary of
Agriculture, Dick, thanks for being here.

\[Applause.\]

DEPUTY SECRETARY CONNER: Darryl Little, Agency Director, Arkansas State
Plant Board. Darryl, are you in the crowd anywhere? Darryl, please stand
up.

\[Applause.\]

DEPUTY SECRETARY CONNER: Thank you for being here.

I appreciate the Arkansas National Guard for the color guard. Gary
Underwood, thank you, Gary, for the National Anthem. Jordan Craig, your
FFA member, and Haley Rieff for the Pledge of Allegiance. Thank you very
much for our young folks for leading us in that important remembrance.

Jacob Wooley is your state 4-H President and Jessica Hickmott is the FFA
member who will provide our first response today representing the next
generation in the future of American Agriculture which is a big part of
what our entire listening session is about.

I also want to thank our USDA State Farm Bill Forum Committee and the
organizers of the Arkansas State Fair for providing us this opportunity
for the hospitality and hard work. These are not easy sessions to pull
together. Thank you all very, very much for that. This is a great crowd
and I know there was a lot of effort put into that.

I would also like to recognize our Under Secretary in the back who I
wasn't aware was going to be here, but I'm glad he's still in the state,
Tom Dorr, our Under Secretary for Rural Development.

\[Applause.\]

DEPUTY SECRETARY CONNER: Tom has really, and Senator Pryor, I do
appreciate, and I came to see you personally to ask your support for
Tom, and you did. I appreciate that. Because really for the last almost
two months Tom has dedicated his professional career within USDA to
aiding the victims of Hurricane Katrina and Rita. That is the reason he
is down here today, which I will tell you a little bit more about in
just a minute. But we really appreciate having Tom here in this crowd to
hear some of what's going on.

Speaking of Hurricanes Katrina and Rita, before we get into the Farm
Bill part of this, let me just say that we continue to keep those
impacted by this event in our thoughts and prayers because they need it.
Their problems continue. President Bush has really brought to bear all
of the available resources of the federal government to assist in this
process. He has directed Secretary Johanns and me to break down any
walls that we have at USDA and all other federal programs to streamline
assistance in whatever way we can into that region. USDA, I am proud to
say, at all levels of government, both career and political are doing
that. We have provide \$170 million of assistance, 15 million pounds of
food, \$181 million worth of food stamps. We've got 5,000 of our
employees out of the Forest Service on the ground doing first-responder
work. All of these things, again, in response to this devastating
situation.

As well, our Under Secretary Tom Dorr, who I just mentioned, one of the
things that is little known about USDA is that we actually do have a
very large rural housing portfolio. Part of that portfolio we have a
half a million units of housing in rural America. And about 30,000 of
those units are vacant. And as soon as we heard about the desperate
situation in Louisiana, Alabama, Mississippi, we immediately said, you
know, let's make those 30,000 units available to any of these evacuees
on a priority basis. And we have done that. And I believe to date about
7,000 families have actually been placed in some of our rural housing
facilities. And my understanding, Tom, is that even today we had a great
event in that through some private donations seven families from
Louisiana were picked up and brought to the state of Arkansas and will
now be living in USDA rural housing facilities in Hope, Arkansas as well
as DeQueen, Arkansas. Seven families. So your own state is contributing
to this in a partnership with USDA, again, to do what only comes
naturally and that is just to show some humanity during a very, very
difficult time in the life of these people.

I would just note that President Bush has said, it's going to take a
very, very long time and a lot of resources over a long period of time
to bring that region of the country back to where it was.

Thanks again to the people of Arkansas for your contributions. About
8,000 households in Arkansas as well were impacted by this hurricane and
we have done all that we can, I think, to provide Food Stamp benefits
and to make sure that your fellow Arkansas folks are aided in this
process as well.

Speaking of disasters, I think, as I mentioned earlier in my press
conference, the hurricanes brought some rain to Arkansas. But I know
your state was devastated by dry weather earlier in the year. And in
August Secretary Johanns has declared 12 counties as agricultural
disaster areas. Today I took this opportunity to declare the remaining
counties in the state of Arkansas \-- all of your counties \--

\[Applause.\]

DEPUTY SECRETARY CONNER: \-- all of your counties as agricultural
disaster areas. I think you guys \-- many of you have been through this
before, you know, that this makes your producers eligible for very low
interest rate disaster loans through your Farm Service Agency. And,
again, you know, this is in response to drought conditions that I
understand have particularly plagued the crops, some of which are
irrigated, but particularly the livestock and the grazing sectors in
your state. So we hope that that is a big help to the producers and to
all of you.

Now, on to the reason we are here today. Let me just say that it is
wonderful to be in Arkansas. I have been, in my years of working on
agricultural issues, in your state many, many times, whether it's a
Tyson's poultry facility, rice farm with Dick Bell, or others, I've been
here, but it's great to be back.

Let me just tell you that this is our 31st forum in our nationwide Farm
Bill listening tour. It our opportunity to stay connected with
producers. And I don't say that in any kind of partisan, you know, are
we hearing the message kind of way. We are out there listening to
farmers at your level.

I think many, many times we get in the habit of saying, well, this is
what this particular group said, you know, inside Washington to some
congressional committee. Well, that's fine and dandy, and that's
important input. But a lot of folks in rural America don't have the
ability to come to Washington and to give us their input there. And we
felt it was very, very important to come out here and hear you. And we
have now been in 31 different states creating a record. And I will say,
that is a public record of all that we're hearing in these Farm Bill
listening sessions that anyone can go back and review and check out and
see what it is we are hearing in these listening sessions. I will tell
you, the feedback has just been outstanding in these listening sessions.

I want to first say that our listening sessions really came about as a
result of President Bush and his interest in this issue. I want you to
know that he is paying close attention to the feedback that we are
getting from these sessions. He asks the Secretary and me about this
often. In fact, part of our process here, my understanding is, do we
have the tape of the President to play today?

\[Tape break.\]

DEPUTY SECRETARY CONNER: \[In progress\] \-- impacts America's entire
agricultural community. I don't think we would have any disagreement on
that point at all whether rural or farming. That's why we have committed
so much time to traveling the nation literally state by state to hear
your input on this.

We do have a lot of challenges ahead, ladies and gentlemen. Agriculture
is a changing industry and I don't think we would have any disagreement
on that point either. I grew up on a farm in Benton County, Indiana
which is where I am headed tonight for my Perdue University homecoming
and I'm going to be probably spending some time on a combine tomorrow
with my brother. And I will tell you that the little town where I grew
up is a very, very different place than it was when I was there.

Mike Johanns grew up on a small farm in Iowa and I think he would tell
you the same thing. For us it was an enormous privilege to grow up in
rural America. For many of you, you have that privilege. We want to make
sure that our children, ladies and gentlemen, have that same privilege.
And that's not just going to happen. It has to be made to happen in
order for our children to have the same benefits of rural America that
we've had. They deserve the same opportunity.

One of the single most important considerations that we believe in a
Farm Bill and it's reflected in, you know, the very first question that
we have out there is the impact that our Farm Bill and our policies have
on future generations in agriculture. Now, there are warning signs on
the horizon, ladies and gentlemen, before we all stand up and say,
everything's great. Well, the average age, you know, of the farmer in
America, is now 59 years old. Nearly retirement age. And that number is
increasing every year. So, you know, let's think about this and let's
think thoughtfully. Because it's worth of our consideration for that
next generation because I want them to have the same opportunity that
Mike Johanns and I had. And I think you would totally agree with that.
We must ask ourselves, you know, whether or not these are the best
policies for them to succeed. And of course, we know that strong
communities are essential, you know, to any success that we're to have
in farming and rural America as well. It's the vision we have, good
policy to accomplish good things on the farms and in rural America, and
we've received a tremendous amount of input on those very points across
the country.

There seems to be a consensus among producers and stakeholders on some
policies, ladies and gentlemen. There seems to be consensus. But I will
tell you there is a definite huge diversity of opinion on others. For
example, USDA's Rural Development programs, to the best of my knowledge,
I don't believe we have received in all of the hours of comments in 31
different states, three hours in each state, we have not gotten one
negative comment on any USDA Rural Development program. People seem to
be strongly supportive of having new water systems, of having fire
trucks available to serve both the rural town as well as a farm in the
event of a disaster. They like the idea of having a rural hospital to
service their medical needs. All of these things come about as a result
of USDA Rural Development programs contained in the Farm Bill.

We've heard tremendous support for our conservation programs. Just today
I announced that USDA is releasing \$1.7 billion \-- that's billion \--
for 2006 for voluntary conservation programs on the farm that are
enabling producers to do a better job of conserving those natural
resources for the next generation.

I will tell you, a few folks have expressed concern that our
conservation programs compete against grazing activities, but those are
not \-- you know, that is not a tremendous point out there. Our
conservation programs are very, very popular.

When it comes to trade, to perhaps generate some debate here by the
earlier clapping, I will tell you that there has been strong support for
policies that open doors for new and expanded markets of our U.S.
agricultural products. Farmers, you know, from what we are hearing,
recognize that they are very, very productive individuals. As a matter
of fact, they are so productive that they are four times more productive
in terms of their increase in production every year than what the growth
rate is of the U.S. population; four times greater. Now what does that
mean, ladies and gentlemen. That means they're acknowledging out there
that trade exports have to be a part of our future. If not, then
productivity alone means that the person sitting next to you today is
probably not going to be a farmer that's going to be needed five or ten
years from now.

Now, that's not good enough ladies and gentlemen. We've got to focus on
these markets so that you guys have someplace to sell all this
productivity in the future. Productivity on American farms is not going
to stop. You guys do it better and better and better every year. And
that's what makes American agriculture so great. Our challenge in the
government, our challenge in the Farm Bill, we believe, has got to be to
work with you to find the markets for that productivity.

The area, I will tell you, where we are seeing significant differences
of opinion is in the area of the farm programs. For example, I will tell
you in the Midwest producers out there come to the microphone time after
time urging almost demanding payment limits. Now, I know that that's
probably not a message that I am going to get down here today. And will
tell you, you know, as we have been in other regions of the country, the
message is 100 percent opposite of that. There is a strong difference of
opinion here on that issue.

We've heard some very compelling stories of young people who grew up on
farms. They want to carry on their farming tradition. In some cases
they've been educated and trained to return to the farm. They simply
can't because they are financially unable to get the land to farm either
through renting or owning. Some people are calling for policies that
look to the future to invest in things such as renewable fuels. Our
increase in demand may not simply be exports alone. We recognize that.
There can be tremendous potential for demand for your growing
productivity right here on America's farms in our farms with renewable
fuels to supply energy to reduce our energy costs which we all
acknowledge is a big problem.

So we are getting tremendous feedback all along these lines. Based upon
that feedback as Senator Pryor has mentioned, Secretary Johanns gave
some of his initial impressions of the Farm Bill Forum last week at a
speech. And that was after having had 29, I believe, listening sessions
and he had personally sat through well over 20 of those sessions. He
felt it was time to give some of his impressions. He said that the
concerns and ideas of farmers and ranchers are influencing what we are
thinking about farm policy and that is indeed true. You know, we are
hearing great input at the local level, not inside of Washington, and
it's influencing our policies.

The Secretary specifically noted the concerns about farm support
programs and he noted that concerns that one-third of all of our
producers receive the greatest benefits of our farm programs and that
the largest of those farms get those benefits. Now, that's a
controversial statement down here, I know that. He also pointed out
though that we have received a lot of testimony from that one-third of
the producers saying, that's just fine, you know, don't change that; we
like that structure. So we are acknowledging, again, a difference of
opinion.

Ultimately the nation has to decide, the agriculture committees, the
Secretary of Agriculture, me, the President have to decide whether to
continue relying upon this existing policy structure. Most of this
policy structure dates back a long, long time ago or whether we attempt
to make some changes to address some of the concerns that have been
raised out there. And these are tough decisions. We've got a lot of
input that we need to receive yet before making any final conclusions on
what is the right direction. I will note though that clearly we have
heard enough to where I don't think anybody could have sat through all
of these forums and said, you know, there's absolutely nothing in the
Farm Bill that should be changed. The young producers alone, it's
compelling. Ladies and gentlemen we are not solving that problem. And,
you know, our Farm Bill needs to focus on this issue of that next
generation involved in agriculture.

So, I've spoken too much probably. At this point I just want you to know
that I am going to do what is very, very difficult for someone who works
in Washington to do, and that is, I'm going to shut up. This is your
forum from this point on. I am here to listen to your input. I know
Senator Pryor feels the same way as well as our congressional
delegation. We want to hear what you have to say. You may say something
and I may just have to respond, I hope not, because I intend to listen,
let the moderators keep you on schedule, give us your input, create that
record and I do promise you that we are going to go back and we're going
to take all of these comments very, very seriously.

Thank you all again for being here.

\[Applause.\]

MODERATOR: Thank you, Mr. Secretary, for setting the stage for what
we're going to do for the next couple of hours.

Lay down just a few ground rules, then we are going to turn the spot
light on you. As the Secretary said, this is your chance to make your
views known.

Hopefully you are aware that we are really looking for comments today on
six basic questions about farm policy. And the Secretary in his remarks
touched on some of those. I'm going to read them verbatim to you.

Number one, how should farm policy address any unintended consequences
and discourage the next generation of farmers from entering production
agriculture?

Second, how should farm policy be designed to maximize U.S.
competitiveness and our country's ability to effectively compete in
global markets?

Third, how should farm policy be designed to effectively and fairly
distribute assistance to producers?

Fourth, how can farm policy best achieve conservation and environmental
goals?

Fifth, how can federal rural and farm programs provide effective
assistance in rural areas?

And number six, how should agricultural product development, marketing
and research-related issues be addressed in the next Farm Bill?

Those are the questions we want to hear from you on today. We certainly
invite all of you or as many as can to get up and make comments.

I will remind you that each participant will be limited to two minutes
to allow for the maximum number of people to comment today. We have a
red, yellow, and green light system that will help keep track of the
time. So be cognizant of that, if you will.

In the back of the room in the corner we have the USDA help desk and
there are USDA specialists back there who can answer questions unrelated
to the Farm Bill such as an issue of loans, et cetera. If you prefer not
to make comments at the mike or if you run out of time, you're always
welcome to send your comments via U.S. mail or the Internet. USDA.gov is
the web site where you can send those comments. I want to assure you
that the comments received via U.S. mail and Internet will go through
the same analysis, i.e., carry the same weight as comments you make in
front of these microphones to the Secretary today.

This forum is being recorded and transcribed to ensure that all comments
are documented and considered. You heard the Secretary say a little bit
ago that he was referring to some of the comments that had been made at
the previous 30 forums. So all of these are available on the web site.
In fact, I believe you can go to the web site and read the transcript.

If you want to comment, at this time, if you do want to comment, I think
some of our young folks are perhaps going to be the first participants
today, please start making your way to the mikes. We have two mikes.
There's one there and one there. And if you would, please provide your
name, where you are from and if you would like, your involvement in
agriculture in connection to the Farm Bill. And to help us all
understand where you're coming from, it would be very good if you would,
at the outset, talk about which question you want to answer.

At this time we will start with this microphone over here, please state
your name and go right ahead.

MS. JESSICA HICKMOTT: Hi, my name is Jessica Hickmott and I'm the
national officer candidate representing FFA for Arkansas FFA this year
which is in eight days. And I am from Camden, Arkansas.

I'm going to address the first question which is the unintended
consequences that will affect the young farmer. I think this is an
excellent question. Because of the rising age of the young farmer, he
said currently it is 59 this year. So I think this is a really important
issue that we need to address.

As a young person concerned about the future of agriculture, I feel that
one of the most important issues that young people look at is security
in production agriculture. With the recent natural disasters such as the
hurricanes down south combined with those rising energy costs, I feel
that one of the most important things that we are going to look at is
that the fact that the profit margins for farmers this year are going to
be drastically affected by these things. And even though this isn't a
problem every year, we have natural disasters from drought to flooding
that are common occurrences.

With that in mind, I feel that a couple of the most important areas of
the 2007 Farm Bill that young farmers are going to look at are going to
be crop insurance and commodity price support. Due to these price
supports, one of the unintended consequences generated by this Farm Bill
in the past has been the artificially inflated cost of land which could
cause young farmers to be discouraged from going into the farming
business.

Another area of the Farm Bill that young people are going to look at are
going to be the measures taken to secure the farming community after a
natural disaster in case we have agri-terrorism. And they're going to
look at whether or not we're prepared for the costs that are going to be
associated with the new animal ID system and how this is going to affect
those people wanting to go into farming.

Now, even though the security of production agriculture is something
that young people are going to weigh heavily, groups such as the
national FFA organization have a base of over 490,000 young members who
believe in the future of agriculture. And I can assure you that the
future of production agriculture is bright.

Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Now, let's hear from this young man over here.

MR. JACOB WOOLEY: Good morning. My name is Jacob Wooley. I'm the
Arkansas State 4-H president and I'll be addressing the same question
and that's number one.

America has one of the safest, most abundant food supply of anywhere in
the world. And people in this country have relied on the USDA for about
140 years now for the help that they offer.

Now, due to recent budget cuts it's been very hard on the people of
rural America who depend on the help from USDA.

In the USDA family 4-H youth development provides a direct link between
4-H clubs and current research related to family and consumer education,
nutrition, agriculture, and natural resources and leadership
development. Family program initiatives through 4-H include healthy
lifestyles, science engineering and technology, and youth civic
engagement. Through these the youth are receiving the tools to become
competent, capable and contributing individuals in their communities.

The 4-H focuses on teaching us the life skills of decision-making and
responsibility and how to use the knowledge about nutrition and disease
prevention to make healthy lifestyle choices. This in turn helps us
address the national concern for childhood obesity.

Through USDA and the Cooperative Extension Service, local citizens
identify and resolve community problems. We need trained extension staff
and volunteers to support and train our youth and adults while we learn,
grow and work together to bring out positive change in our rural
communities. For a strong rural America to exist there has to be support
for rural community development, youth development, and opportunities
for families to remain in rural America.

On behalf of the 133,000 Arkansas youth touched by 4-H, thank you for
allowing us to have a voice in our future.

MODERATOR: Thank you.

\[Applause.\]

MODERATOR: Mr. Secretary, quite a turn out today of our 4H youngsters
and the FFA youngsters. And I know if we would let them all come in the
room, there would have been no place for the rest of us to sit there are
so many here on the fairgrounds.

DEPUTY SECRETARY CONNER: It's great to have them here.

MODERATOR: I know that is certainly an emphasis in these forums.

Mr. Reed.

MR. STANLEY REED: Mr. Secretary, Senator Pryor, my name is Stanley Reed.
I'm President of Arkansas Farm Bureau. I'm also a cotton producer from
Marianna, Arkansas. I would like to address the global competitive
feature of the questions that Stewart raised. And also touch upon what
can we do to attract more young people back to agriculture.

I firmly believe that in order to attract young people into agriculture
we've got to make agriculture profitable.

\[Applause.\]

MR. REED: That is the best thing we can do to keep young people \--

\[Applause.\]

MR. REED: My son has just joined me back on our cotton farm. He is a
graduate of the University of Arkansas and he is very optimistic about
the future of agriculture. But we have to be able to compete globally
with the sale of our products. I do believe in the Wal-Martization of
agriculture that the low-cost provider will be the one that survives in
the next coming years. We've got to have access to world markets. That
point has already been made. We cannot, however, reduce our domestic
support for agriculture until we see that we have meaningful access to
world markets and reduction of trade barriers around the world.

Now, there's been a lot of talk about what we will do in the WTO, but my
biggest concern is that we lay down and give up all of our leverage in
our farm programs that we have now and we do not get the meaningful
access that we need to be able to get into markets around the world.
China, India, and other countries of the world pay as much as 50 percent
of their disposable income for food. We in America pay about 7 percent
of our disposable income for food. We have very productive, efficient
farmers that are able to compete, but we need all the tools available
and we don't need artificial restrictions on production and efficiency
like payment limitations.

The Farm Bureau has always had a strong history both at the Arkansas
level and the national level opposing any payment limitations. These are
artificial restrictions that are social policies that just do not belong
in a farm program. We need every opportunity to compete or to use every
efficiency that we can so that production agriculture can succeed, it
can be profitable, we can have access to world markets and we can
attract young people back into agriculture if we have profitability
there.

Thank you very much.

\[Applause.\]

MODERATOR: Mr. Vester.

MR. RAY VESTER: Thank you, Mr. Secretary, Senator. I appreciate the
opportunity to speak. I am Ray Vester from Stuttgart, Arkansas, rice
producer from that area. I want to speak towards how the benefits go to
the farmer, the program benefits.

You made the statement earlier that a third of the farmers get the
majority of the benefits. And some people say that's the wealthy group.
I would like to give you a few more statistics. Fifteen percent of the
farmers are responsible for 85 percent of the agricultural production in
the United States. And that's farmers like me, family farms, small
farms, large farms of all sizes. Everything I make comes from my farming
operation. I don't have an off-farm job or a portfolio. Everything also
I make goes back into my farming operation because at this point in time
it takes it all.

Another statistic I would like to give you is the reason I think the
farm program is fine like it is because right now the benefits go to
those who produce. And an example of that is 38 percent of all farmers
produced 92 percent of America's food and fiber; 38 percent produced 92
percent. They receive 87 percent of farm program benefits. A little bit
less proportionately than what they produce.

We have a farm program that is working, it's working well, it's serving
the need of agriculture. Also, you know, I think the name of our Farm
Bill is incorrect. I think it should say "Food Security Act." That's
what we have in this nation. You go back to the first Farm Bills which
happened during the depression era, they were in effect for one main
reason, to guarantee the American public an abundant supply of safe,
inexpensive food. That's what it was for, an abundant supply of safe,
inexpensive food. And I think for 70-some odd years that has worked. We
have the greatest supply of food, the largest supply, the most
inexpensive supply and safest thanks to USDA, FDA, and EPA. We have a
well-managed food system. If we take that from the farmers, if we take
that from this nation, the American people, as you heard earlier, spend
7 percent of their disposable income on food. Pretty inexpensive. Thank
you.

\[Applause.\]

MODERATOR: Mr. Herr \[sp\].

MR. MARVIN HERR \[sp\]: Thank you. Thank you for being here Secretary
Conner and Senator Pryor. My name is Marvin Herr \[sp\] and I'm a farmer
in Jackson County. I farm with my son and my daughter who both were
raised on that farm and they're raising their children there. And I
think we are probably a family farm. But we probably aren't the
stereotypical family farm. We farm almost 8,000 acres.

MODERATOR: Marvin, move a little bit closer to the microphone, please.

MR. HERR \[sp\]: All right. We farm a pretty good-sized farm. The
current Farm Bill seems to provide a safety net when prices are low, it
kind of kicks in and puts a floor under some of our prices. And then
when our prices go up, it disappears. It doesn't cost the taxpayers
anything. It seems to be working. There are some places, as Senator
Pryor said, that probably need a little tweaking. And I think some of
that can be done and I would suggest that Arkansas Congressional
Delegation would be a good place to start, they could give you some good
advice.

But essentially the message I want to carry to you today, you've got a
number of questions and there's no way in the world, you and I could sit
down in my kitchen and we could talk for a half a day and we could
probably get around to most of it. But I think basically the 2002 Farm
Act is working and it provides a good core basis for what we need to do
in 2007.

Thank you, sir.

\[Applause.\]

MODERATOR: Mr. King.

MR. JOHN KING: Mr. Secretary, John King from Phillips County, a rice
producer, cotton producer, corn and soybean producer. We appreciate you
being here and listening closely to what we have to share with you. I'm
also chairman of the USA Rice Council.

In 1962 the United States imposed sanctions on Cuba, the largest market
for U.S. rice at that time. The U.S. had a clear geographic advantage in
supplying that small island. Recent industry estimates suggest that Cuba
imported more than 600,000 tons of rice annually while the U.S. has
recently made some headway in regaining some of this market, its
long-term potential remains threatened by existing sanctions and recent
efforts to tighten restrictions on food to Cuba allowed under existing
legislation.

On July 29, 2005, the U.S. Treasury Department clarified its role
governing U.S. Agriculture trade with Cuba. That clarification can be
viewed as a small, but positive step in helping to restore the
reputation of U.S. agriculture as a reliable supplier. However,
legislation still is needed to remove the current restrictive rule that
unnecessarily and unfairly over regulates U.S. agriculture trade with
Cuba. We need to expand our agriculture trade with Cuba.

Rice prices are still at a level where making it in agriculture means
hopefully being able to break even. Fifty percent of our domestic crop
is exported to markets around the world. A small island 90 miles from
our coast should import all of its rice needs from the U.S. Due to
statutory and regulatory restrictions we only export 25 percent of
Cuba's needs. The rest comes, unfortunately, from our competitors. These
restrictions only hurt U.S. rice farmers and deprive the common Cuban
from enjoying high-quality rice.

I say to you, Mr. Secretary, allow the American farmer to develop export
markets for our products in Cuba, particularly in the face of a
shrinking trade surplus, the possibility of agricultural trade deficits,
and most important for the American farmer to be able to compete in this
ever-increasingly competitive world.

Thank you.

\[Applause.\]

MODERATOR: Mr. Beach \[sp\], you've got two minutes.

MR. RANDY BEACH \[sp\]: Okay. I'm Randy Beach \[sp\] from Mississippi
County, Arkansas. I'm a cotton farmer and rice and soybean as well. And
I have two sons that farm with me and we, just like Marvin said, we are
a family farm.

One of the points I wanted to make as Mr. Reed said earlier is, the way
we can get these young people to stay and be involved in agriculture is
make it profitable and have a safety net provided there so \-- they're
in the most productive years of their lives so we've got to make it
profitable enough for them to want to come and continue to farm and
continue with family farms. That's what we've got.

We think that the 2002 Farm Bill is one of the best Farm Bills we've
ever had and it's working well. It provides a safety net and many
reasons in that that it does. Payment limits for one thing, if you start
to reduce payments limits then you're going to make it impossible for my
two sons to stay on the farm and farm with me because we will not be
able to show a profit, especially with the rising costs of fuel and
fertilizer and other input items. This is the most financially intensive
year that we have ever had and it's going to be a year that we've had
even where we have decent production and even maybe an average crop,
it's not going to be a profitable year. So we have to be able to keep
these payment limits and not lower those payment limits.

Another thing, dismantling of the marketing loan program would be
disastrous to agriculture in Arkansas. We could not survive a
dismantling of the marketing loan program.

Pre-emptive rule is another one that we need to keep. Marketing
certificates is a vital tool for us to continue to participate in the
programs that we have in the 2002 Farm Bill.

Another thing that we've just been involved with lately, I was in one of
the first watersheds in the nation. The Conservation Security Program
has really been working well for us in our area and we would like to see
that continued and to make it available to all producers in the nation.
I know it's getting off kind of slow, but we need to accelerate that and
move it in to all producers of our nation so everyone can take advantage
of that.

MODERATOR: Thank you, Randy.

\[Applause.\]

MODERATOR: Mr. Hoskin.

MR. JERRY HOSKIN: I want to echo and thank you both for being here and
the other Congressmen. My son and I farm around Stuttgart. I'm Jerry
Hoskin and my son is in farming with me and he and I have both been
very, very concerned with this year the way it's beginning to turn out.
And I let him read some of this that I'm going to read to you and he
agreed with me.

The 2002 Farm Bill is working. It's not broken. It doesn't need to be
fixed. Just leave it alone. USDA needs to be an advocate for the
continuation and not its termination. I believe many farmers want to
continue the 2002 Farm Act. I say this very directly and plainly and
with all respect and sincerity.

The 2002 Farm Bill was one of the best pieces of farm legislation
written. The Act combines planning flexibility that allows the producers
to grow for the market place while providing a safety net and it adjusts
based on market conditions.

I also say very directly with all respect and sincerity conditions are
horrible in the farming communities. Regardless of USDA's selected
statistics farmers are in jeopardy financially. Farmers' income are far
behind the rapid and continued escalated pace of fuel and fertilizer and
other costs associate with farming. Weather disasters have crippled many
of the farmers even more. Weather damages will reducing farm income this
year.

A nation with a sound agriculture policy, namely the 2002 Farm Act, and
an abundant, stable food supply helps secure its citizens. For this
nation and its citizens, food security is as compelling a national
resource as energy and military are. For this major reason we think the
2002 Farm Act should continue.

Thank you.

\[Applause.\]

MODERATOR: Mr. Andrews?

MR. JOHN ANDREWS: I'm John Andrews a rice and soybean producer from
Walnut Ridge in Lawrence County. I, like the other ones, want to thank
you for being here. I want to thank Senator Pryor and Senator Lincoln
and all four of our Congressmen, Senator Ross and Senator Snyder here. I
think they're the ones responsible for the 2002 Farm Bill. The Farm Bill
was written by them and the administration got on at the end of it. We
appreciate that and we hope that you would listen to what they say.

Your last question that you named of \-- Stewart did was about research
for new uses for products. Well, the number one problem that we have in
agriculture today is energy, fuel and fertilizer is all tied back to the
cost of oil. We have the technology to produce our own energy. Right
here in Arkansas we can grow all the soybeans that we need and produce
biodiesel to do all this stuff.

What I think we need in the next Farm Bill is we need the administration
to step up and say, we want the Farm Bill to include money to produce
factories to make biodiesel right here in there heartland where beans
are grown. We keep hearing about the money for ANWR \[Alaska National
Wildlife Refuge\]. Secretary of Interior Gail Norton came to Arkansas
Farm Bureau's office to talk to us about drilling in ANWR. I'm not
opposed to drilling in ANWR. I think it would be as lot better suited if
we took \$500 million it's going to cost to do that and build \$500
million worth of biodiesel plants right here in the delta where we can
grow beans from now on and produce our own fuel.

\[Applause.\]

MR. ANDREWS: So I think that is something we need to think about and we
should try to get it included in the next Farm Bill.

Thank you.

\[Applause.\]

MODERATOR: Let's go back over here and, sir, please identify yourself.

MR. JOHN STUCKEY \[sp\]: Good afternoon, Mr. Secretary. I'm John Stuckey
\[sp\]. I'm with Taylor and Stuckey and Patterson Ginn \[sp\],
Incorporated out of Trumann, Arkansas. On behalf of the National Cotton
Council, I would like to touch on a couple points regarding our Farm
Bill.

First let me say that I strongly support our current Farm Bill. It's a
good safety net in times of low prices. Much of the support is not
linked to current production so that allows farmers to make their
decisions based on market prices.. Also, since the support is not tied
to production, the impact on price levels is minimized.

My concern is that there continues to be repeated efforts to impose more
restrictive payment limits. Those pushing for higher limits argue that
doing so would reduce land prices and rent. However, there are economic
studies by the USDA suggesting that the adjustment in land prices would
be less than 10 percent.

Additionally, changes in limitations will likely result in a shift in
production to other crops. The Payment Limit Commission has stated that
limitations affect cotton and rice farmers disproportionately compared
to feed grains, oil seed and wheat farmers.

Finally, changes in eligibility rules force changes in rental contracts
with the possible consequences of forcing landlords to cash rent rather
than crop-shared rent. This change would adversely affect beginning
farmers and small operators who are normally unable to obtain production
financing to pay cash rent.

In closing, I would reiterate that agriculture in Arkansas would be
severely harmed by more restrictive payment limits. Analysis by the
Payment Limit Commission indicated that higher limits on contract
payments other than '96 Farm Bill would have taken more than \$75
million from the Arkansas farmers.

Also, I would like to say that when the President starts talking about
cutting our subsidies, I wish somebody would play him the recording that
we hard earlier at the start of this.

MODERATOR: John, time's up.

MR. STUCKEY: Mr. Secretary, thank you for consideration in my state.

\[Applause.\]

MODERATOR: Mr. Secretary, a little bit ago we heard a man named John
King talk about Cuba and we have a man over here named Brian King,
they're not related, as far as I know, but he just got back from Cuba
about six weeks ago. So Brian.

MR. BRIAN KING: I'm Brian King. I'm in the rice business with Ritter
Green Services in Marked Tree, Arkansas and I'm also an active member of
the USA Rice Federation and I serve as Chairman of the USA Rice
Merchants Association.

My comments today focus primarily on the farm payments being capitalized
into the land values and causing higher rents. Last week Secretary
Johanns indicated that he had heard concerns in some of these sessions
about farm payments being capitalized into the land values and causing
higher rents. Mr. Conner, inflated land values may be a problem in your
home state of Indiana and other areas of the Midwest, but we do not see
a problem like that in our area.

In fact, much of the farmland in our area represents the largest assets
and primary form of equity for farmers.

\[Applause.\]

MR. KING: Nationwide farmland represents about 80 percent of the total
U.S. farm assets. Any action by the USDA to try to reduce land values
will leave a devastating path in rural America, as much of our equity
will disappear and farm and rural communities and businesses they
support. I would suggest urban sprawl, development pressures and
recreational use have and are continuing to have the greatest impact on
land values. Even a USDA Economic Research Service study showed that
farm programs have contributed less than 8 percent to increase land
values.

Thank you for listening and \--

\[Tape break.\]

\[Applause.\]

MODERATOR: Back over here. Sir, please identify yourself and proceed.

MR. ROBER REED: My name is Robert Reed. I live in Denard, Arkansas. I
have a small family farm up there. I'm also a disabled vet, member of
the Libertarian Party and the National Taxpayers Union.

We don't like what's happening. The taxes are too high on our property.
I cut timber, I get taxed because I have a timber tax. Now I've got to
pay tax because it turned into pasture. I get taxed on what I move, I
get taxed on what I grow. It's not fair. There is no other economic part
of the United States that has the technology the farmers have, can do
what we do, supply the fuel that we can supply, the organic materials to
fertilize our crops, the water recovery and the forest restoration and
still get taxed out of business.

My grandchildren will not be able to afford my land in the state of
Arkansas due to inheritance taxes. We need to get rid of inheritance
taxes on all farms.

\[Applause.\]

MR. REED: It's been stated already this morning, we have the technology.
Up north they use ethanol. Ethanol has increased 28 percent in the last
36 months in the northern states. Most states cannot sell gasoline in
the wintertime unless it contains 10 percent ethanol. We grow corn, we
grow soybeans, we grow cotton, all of that has fuel, fabric, and
energy-related byproducts. Nothing will go to waste if we get the
government out of the regulation and let us do the business as farmers.

DEPUTY SECRETARY CONNER: If I could just make one comment. I just can't
let the death tax comment go by without just encouraging you on this
point. I mean, President Bush has time and time again, you know, made
reference to the death tax and saying, you know, death should not be a
taxable event in this country. And it should not be.

\[Applause.\]

DEPUTY SECRETARY CONNER: And the Congress of the United States has an
opportunity here to put an end to this permanently.

MR. REED: Well, we pay taxes all our year, I don't see why my children
need to pay taxes on what we've already paid. It's unfair. For more
information, LP.org.

SENATOR PRYOR: Let me, if I can comment on the death tax and the estate
tax because I've actually been part of a bipartisan group trying to get
that through the Senate. Senator Lincoln and I on the Senate side
support a proposal that would completely eliminate the estate tax or the
death tax for family farmers and for small business.

Realistically, don't kill the messenger here, but realistically, given
Katrina and other budget items that are going on, the vote on this
probably will not happen until next year. We don't know exactly how it's
going to come out.

The most likely scenario in the Senate, I can't speak for the House, but
the most likely scenario in the Senate is you will see a compromise. And
the compromise will probably completely solve the problem for about 95
percent of the people in this room; completely solve the problem. And it
will greatly help the other 5 percent. It may not completely solve it
for everybody, but will make a huge difference pretty much on
everybody's bottom line here.

So I just wanted to give that quick update. Something that Senator
Lincoln and I have been working on and we totally understand where
everybody is coming from on that. But I tell you, that's the sort of the
D.C. update at least from the Senate side that a compromise is most
likely. My sense is it will be probably the first half of next year.

MODERATOR: Senator, thank you for the update on that.

Let's go over here and go to the River Valley, Mr. Fluge \[sp\].

MR. RICHARD FLUGE \[sp\]: Richard Fluge \[sp\] from Hartman, Arkansas. I
am a third-generation farmer and have two sons farming with me. They're
in their forties and I'm feeling younger every day. Whenever you said
that the average is 59 \--

\[Laughter.\]

MR. FLUGE: \-- that makes me real young because I've put in 54 crops in
my lifetime. I want to say that I echo the remarks of the previous
people. The Farm Bill is working fine. As I said, I'm a livestock farmer
and a row crop farmer and it's working both ways for me.

Calvin Price I fought him on the EQIP program for a long time, but you
can teach old dogs new tricks. I am enrolled in that for some
conservation programs.

I just want to say that for these young people to have a place in
farming, we do have to protect the people that are here now. I want my
farm to go to my sons and be able to farm. We can't do that without the
good safety net that we've got and also I thank you for declaring the
rest of the counties of Arkansas disaster area. But we don't just need
disaster loans. We need disaster payments for these crops that have not
had a chance to grow right. And even with the low prices that we've got,
we've got to make yields and we're not going to do it. I can't make
money on 15 bushel to the acre of soybeans at \$5 a bushel. We're going
to have to have some supplement there.

It bothers me when I see the ads \-- I mean, the articles in the paper
where they want to cut 60 percent of the price for the farmers. That
just can't happen. We won't be there for this generation to have it. And
that's the only reason that I'm in farming is because my dad farmed. And
that's the only reason that my sons will be there, if I can sustain it
and carry on to where they can take over. So we need some direct
payments.

The wheat farmers of Arkansas planted 115,000 acres last year compared
to 1.2 million. Because we had wet fall and no one could get it planted.
We need that included in the disaster program. The wheat farmers are
left out. They're squeezed between the 2003 and 4 choice that we had and
maybe the new 2005, but the fall wheat that wasn't planted, right now we
don't have anything. So please take that back and help all the farmers
of Arkansas.

Keep up the 2002 Farm Bill.

\[Applause.\]

MODERATOR: Moderator's privilege here for just a moment. I happen to be
on teleconference with U.S. Trade Rep Rob Portman this morning. He's
back from Geneva. And he made the point, and I know you and the
Secretary have been making the point too, that this is not unilateral
disarmament. There will have to be tangible market access for United
States farm products before any agreement is considered final by the
administration.

DEPUTY SECRETARY CONNER: That is exactly correct. I will just tell you
that if that market access is not given, that proposal will come back
off the table. You know, it is an offer totally contingent upon those
markets becoming available for rice, you know, cotton, soybeans, all of
those commodities in this state, some of which, you know, in the case of
cotton, 60 percent, dependent upon exports. Where would you be without
cotton exports? I mean, I just pose that question to you. You know,
we've got to have these markets. If we don't get them, that proposal is
coming right back and it will go, you know, in somebody's drawer and
never be seen again.

MODERATOR: Over here, please.

MR. TOMMY FOLTZ \[sp\]: My name is Tommy Foltz \[sp\]. I'm from Little
Rock, Arkansas. Thank you, Mr. Secretary, Senator Pryor, Congressmen
Snyder and Ross. You all are probably wondering what I'm doing here at a
Farm Bill discussion because my background is in the energy business.

I'd like to get a little bit more specific on what I do in the energy
business. But at this point I'm just going to have to tell you that I'm
in the biodiesel business. So I wanted to address what the gentleman
said just a little while ago about biodiesel and energy. I think a great
place to start in terms of supporting the biodiesel business is in the
CCC bioenergy program. That program has gone for \$150 million to \$100
million to \$60 million to targeted to be zeroed out in 2007. That
program encourages biodiesel production. It encourages new biodiesel
production which obviously brings up the value of crops.

Obviously with energy prices where they are, we've got biodiesel demand
that far outstrips supply. And if we want to try to level out that
supply and demand some of it will be market-based just pure economics.
But if you want to jumpstart that and want to create a little bit more
energy security so we we're not sending money overseas and we want to
protect the environment, reauthorizing the CCC bioenergy program at a
respectable level would be very helpful.

Thanks.

\[Applause.\]

MODERATOR: Sir.

MR. MARCUS DIVOREK \[sp\]: My name is Marcus Divorek \[sp\]. I'm from
Des Arc. I farm about 2,000 acres of rice and soybeans. I don\'t know
about all these questions, but I was wanting to tell you what's wrong
now and what we need to deal with. Get down to earth, let's not, you
know, put it into \-- this is layman's terms because that's how I know
how to talk.

All right. About the global market, sure we need global markets, but we
need to invest in ourselves just like he said. When we are in a war, you
know, against the terrorists and we've got so many people in our
government that it's big oil men and they're protecting the oil
industry. We need to find another way because if we don't, you know, if
we don't take care of our farmers, we're going to be gone and then where
are you going to get it from? You're going to have to be dependent on
food plus everything else from other countries. We've got to start
investing here, now. Or, you know, we don't need to depend on Saudi
Arabia for our fuel, for our energy. You can depend on me.

I don\'t know, I'm not smart enough to turn it into diesel, but I can
get you the soybeans. I can get you the rice. All we need to do is spend
more money or at least don't take away any, to invest in America's
future not Saudi Arabia or DuBai or wherever they get the oil. I've seen
what all they're building. They're building \-- spending \$200 billion
on cities, probably, you know, wasting money on just big cities because
they're making to much money on \$3.00 gas that they're trying to get us
used to \$3.00 so they can back it down too \$2.00 and we'll feel
grateful. You know, that's just the way it's going.

\[Applause.\]

MR. DIVOREK: And about if you keep pulling money, these rural towns are
going to be ghost towns. Everybody's going to move to the city. That's
not what America is about.

And about the Chicago Board of Trade, there needs to be somebody
looking, you know. We need government officials looking at the Chicago
Board of Trade, looking at rice and looking at Bunge on how they're
moving these markets. There needs to be some regulation on how much
soybeans can fall in a day. Sixty cents, whoa, I should have got it, but
I didn\'t. So I'll wait. Well, it's going to fall another dollar. That's
where a farmer, you must be a gambler. If you're not a gambler, you
can't farm. Because that's what you got to be.

And, anyway, I wrote down the train wreck has already happened. We just
got to take care of everybody behind us. I'm not up here \-- well, yeah,
I'm up here for me, but I'm up here, we've got to take care of all of
us. We've got to take care of our kids. I'm going to tell you, we're in
dire straights.

And I know I'm out of time. I had a lot more to say.

\[Applause.\]

MODERATOR: While it's fresh on your mind, go back over in the corner
there. Get it off your chest.

Mr. Lambe.

MR. JOHN LAMBE: Yes, I'm John Lambe, row crop farmer from southeast
Arkansas. Thank you, Mr. Secretary, for hosting this forum and providing
an opportunity to discuss the next Farm Bill.

Specifically I would like to address my comments to the distribution of
the farm program payments. The 2002 Farm Bill has been successful in
providing stability to the farm sector in times of low prices. As you
know the Farm Bill includes limitations for each element of the program
with payment limits being applied cumulatively to all program crops on
the farm. In addition, we have an adjusted gross income means test that
denies eligibility to participants with substantial non-farm income.
Importantly, no producer is eligible for more benefits than the farm
unit is entitled. It is important that the current payment limits not be
made any more restrictive.

Most farming operations secure financing for annual production costs as
well as incur long-term debt for equipment and land. Changes in
limitations to eligibility make financing even more difficult to obtain.
Proponents of lower limitations argue that big farmers receive the
majority of benefits. However, big farmers receive those payments only
because they are producing more product and incurring greater financial
risks. It is important to remember that per bushel or per pound support
is the same regardless of the size of the farmer.

Proponents of lower limitations argue that farming operations have
become larger in order to capture farm program benefits. While it is
true that the average size of farms has increased over time, more
restrictive payment limits would not alter that trend. In fact, a USDA
ERS study concluded that program benefits have not contributed to
increase in farm size.

Finally, I would like to add that more restrictive payment limits hurt
our international competitiveness by restricting farm size to a level
that is in many cases less than economically efficient. Tighter payment
limits are not in the best interest of United States agriculture.

Thank you.

MODERATOR: Thank you, John.

\[Applause.\]

MODERATOR: Let's stay over here. This will be our last speaker before we
take a short break.

MS. TAMMY PARKER: My name is Tammy Parker. I'm from Lonoke County
\[sp\]. And to say that this Farm Bill hits me where I live is an
understatement. I'm \--

MODERATOR: Adjust that mike a little bit closer to you so we can all
hear you.

MS. PARKER: I don\'t know, I'm pretty loud.

MODERATOR: Let her rip.

MS. PARKER: I'm a partner in a rice farm and have been for a long time.
I've been married to a rice farmer. I work for Extension part-time. That
helps me pay my health insurance. I'm also a 4-H parent. And I've had
the privilege of working with all these kids. They are the future and if
we don't do something they're not going to be able to farm.

It very much hits me on several of those questions. My father-in-law
just died and in the will his greatest thing in the world he wanted was
to be able to pass that farm on in one piece. Well, he did, but you know
what? If we don't do something my husband is not going to be able to do
that. Because his son farms with him too.

Well, right now we're looking at hanging on. That's not the American way
to hang on. The American way is to go for it. And, we are \-- you know,
the American farmer obviously doesn't do it just for the profit, or we
wouldn't be in it because we're crazy. Seriously.

We do this because it's in our heart and soul to provide food and fiber
for Americans. And with any help to the rest of the world that's hungry.
And we would be tickled pink if the markets would open up because we
really don't want a handout from the government. We don't. We want the
prices to go up. And it would be real like the rest of the business
world. You know, the price of fuel went up, the price of everything we
use goes up. So in the real world of business wouldn't that mean that
our grain prices went up? No. That would make sense, you know.

But there needs, you know, I'm very, very pleased with the farm program.
Yeah, it's got mistakes like everything, but we need that. Until, like
you said, if those global markets open up, let the government keep their
money and do something else. But right now we desperately need it
because there's a lot of years that's what we make. You know, we're just
breaking even and breaking even isn't good enough. That's not what we're
about.

Thank you for the opportunity to talk to you.

\[Applause.\]

MODERATOR: Good comments to end on.

Mr. Secretary, I believe all the comments so far have been very well
thought out, meaningful.

We are going to take a short break at this point in time, be back in ten
minutes.

Before we start I want to recognize Congressman Marion Berry who has
rejoined us.

\[Applause.\]

MODERATOR: Marion, please stand and be recognized.

We'll be in break for about ten minutes.

\[Brief recess taken.\]

MODERATOR GARY DiGIUSEPPE: Please take your seats and prepare for the
second half of the Farm Bill Listening Forum.

The first thing I would like to do is thank my good friend and colleague
Stewart Doan for Yancey Ag Network and KSSN here in Little Rock for his
efforts as moderator in the first half of the Farm Bill Forum. I think
he did an excellent job. Would everybody please give him a round of
applause. Stewart did a wonderful job up here.

\[Applause.\]

MODERATOR: By the time I'm done, you may wish he was back.

\[Laughter.\]

MODERATOR: But let me introduce myself. My name is Gary DiGiuseppe. I'm
the Farm Director of the Arkansas Radio Network and of KARN here in
Little Rock. I've been asked to moderate for the second half of the 31st
in a series of Farm Bill Listening Forums being held across this country
by the United States Department of Agriculture.

Before we resume taking questions, let me just once again go through
some of the ground rules. During the next segment of the forum people
will again be asked to direct their responses to one of the six
questions that was put forth by Ag Secretary Johanns when he began this
series. And repeating those six questions, they are:

How should farm policy be designed to maximize U.S. competitiveness and
our country's ability to compete effectively in global markets?

How should farm policy address any unintended consequences and ensure
that such consequences do not discourage new farmers and the next
generation of farmers from entering production agriculture?

How should farm policy be designed to effectively and fairly distribute
assistance to producers?

How can farm policy best achieve conservation and environmental goals?

How can federal rural and farm programs provide effective assistance in
rural areas?

And, how should agricultural product marketing and research-related
issues be addressed in the next Farm Bill?

Each speaker will have two minutes to provide comments. And, again, if
you don't wish to comment publicly in this forum but submit your
comments in written form to USDA, you are welcome to do so and those
comments will get as much weight as if you had delivered them orally
here.

There is a comment desk in the back there by the Coke machine. If you
want to submit written comments on this forum or to the attention of
USDA there, you're welcome to do so. There is also a USDA help desk in
the back and any questions about programs, about what's going on here,
about the Department of Agriculture and how they may assist you, feel
free to talk to the folks at the help desk.

I think we'll go ahead and get things started Secretary Conner. Anything
additional to say before we launch this?

DEPUTY SECRETARY CONNER: No, let's launch into it.

MODERATOR: Deputy Secretary Conner is ready to go. And I believe we'll
start with the gentleman to my left.

MR. STUBBY STUMBAUGH: Thank you, sir. Thank you, Mr. Secretary. We
appreciate you being here. I would like to say that I appreciate your
time, appreciate our congressional delegation for being here. My name is
Stubby Stumbaugh. I am the mayor of Cabot, Arkansas which lies over in
Lonoke Oak County. While we have lots of row crop farmers over there, we
also have fish farmers and livestock farms there as well.

I would certainly urge the administration to not forget those fish
farmers and livestock farms as well and know that the importance of our
row crop farmers is very important. I would like to echo the gentlemen
that came before us that are here right now to talk about biodiesel and
ethanol. And I know that biodiesel is very important and would urge the
administration to fund those programs to continue the research and
continue to produce those things to assist our farmers with the high
cost of fuel. All it does is it creates a supply and demand when you are
producing these other fuels. The cost of oil goes down and that helps
everybody.

So with that being said, I would also like to urge the administration to
not close any of our Farm Service Agency offices in rural America, in
rural Arkansas because we need our farmers \--

\[Applause.\]

MR. STUMBAUGH: \-- we need our farmers on the farm, not traveling hours
to a Farm Service Agency office. And that is would only be more
productive for our farmers.

I would like to say thanks to Senator Pryor because I know he's worked
hard on that. But I also would like to urge the administration to please
stay focused on that because our farmers are very important to our
economy of providing almost one-fourth of our state's economy. And I
thank you very much.

MODERATOR: Thank you very much for your comments, sir.

\[Applause.\]

DEPUTY SECRETARY CONNER: If I could, I do want to address this issue of
the Farm Service Agency offices. Because believe me, ladies and
gentlemen, I know that this is an applause line out there. You know,
just a quick story from me.

You know, I grew up, my father was a full-time farmer, but he worked
part-time in what was the old ASCS office. You know, I spent a lot of my
childhood with him in those offices, you know, going through the maps,
sorting through the acreage, this kind of stuff. I have very fond
memories of those days. So, you understand where I'm coming from on
this.

However, now, setting aside the applause lines in the current Farm
Service Agency we have offices out there where it costs \$2 of
administrative expense to deliver one dollar's worth of benefits. Now,
ladies and gentlemen that's not right. And I appreciate all of the
horror stories of farmers driving halfway across the state.

The simple fact is, we've analyzed situations where offices are within
20 miles, not halfway across the state, 20 miles, and we've said, you
know, if you are a high-cost office and you're within 20 miles of
another office let's look at this office and see what the economics are.
Not that we're going to close it, but let's look at it. And ladies and
gentlemen, if it's one of those offices where it costs \$2 to deliver
one dollar's worth of benefits, we owe it to the taxpayers of this
country to at least review it. And that's what we've proposed. I realize
it's controversial. I realize it's an applause line, but for crying out
loud, give us a chance to at least look at it and see, you know, if
there might be some chance that we could do it better.

Some of these offices are in areas where urban development has made that
county urban counties. They're not even rural anymore. But yet the
office is there. It's not right. Work with us. And I'm looking at
certain members in particular when I'm saying that. Work with us and
let's at least look at it on behalf of the taxpayers of this country.

MODERATOR: Thank you very much, Mr. Secretary.

I did want to mention that according to the guidelines I've been handed,
there will be time reserved at the end of the forum for free discussion
on any issues including those that don't necessarily pertain to the six
questions that were laid out as basis for the forum. So if you've got
something on your mind addressing that sort of an issue, you might want
to wait until the end of the forum. But your views will be heard here by
the Secretary.

You, sir, on the right.

MR. JOHN SHANNON \[sp\]: Mr. Secretary, good afternoon. We are really
glad you're here in Arkansas. My name is John Shannon \[sp\]. I'm the
director of the Arkansas Forestry Commission. I didn\'t want this
session to end without somebody saying the words, forest or trees to
you, Mr. Secretary.

More than half of Arkansas is forested and that's really important to us
for wildlife habitat and hunting and fishing we all enjoy. It's crucial
for us for our drinking water. Our drinking water largely is a forest
product in Arkansas. Okay. The water you drink here at the state fair
grounds, unless it's in a bottle, is a forest product. It's from a
forested watershed out west of Little Rock. And our forests in Arkansas
which are expanding, unlike in many other states, we have more acres now
than we did 20 years ago, it supports a huge vibrant forest products
industry which pays really good wages in Arkansas. So we like the forest
products industry.

The conservation title of the Farm Bill is important to all of that. And
Mr. Secretary, I'd love to come here and ask you for more money, but
I've got to balance the Forestry Commission budget every year, there is
no more money. I know there's no more money. Okay. But, boy if we could
hold the line on that conservation title, it would really be important
to us.

Again, welcome to Arkansas, we are glad you are here, sir.

MODERATOR: Thank you very much, sir.

\[Applause.\]

MODERATOR: I didn\'t mention it and Stewart had said it at the outset,
but, of course, we would like you to give your name, your home town, and
if you would like, what your relation is to agricultural issues.

Okay, sir.

MR. DOW VRENLY \[sp\]: My name is Dow Vrenly \[sp\]. I'm from England,
Arkansas. I farm with my brother, my father and my mother. We produce
cotton, rice, soybeans, and corn.

Mr. Secretary, today I wanted to talk to you about the 2002 Farm Bill
was enacted and has been under constant criticism since it's inception.
The current farm program provides an important safety net for production
agriculture and does so in a fiscally responsible manner.

Spending under the farm law is much less than originally projected.
Countercyclical payments along with direct payments and marketing loan
programs protect farmers from fickle weather and commodity markets while
allowing farmers to respond to market signals and not distort overall
production and prices. Today's farmers face greater risks than the vast
majority of business men. Many factors are beyond the farmers' control,
a strong dollar, unanticipated oversupply in high production years,
depressed prices and destructive natural events that can wipe out an
entire crop.

An effective farm program is essential for providing stability and
production, finance and marketing. Looking forward to the next Farm Bill
is vital that the U.S. maintain a stable, predictable and equitable farm
policy. Such policy supports rural America and permits U.S. consumers
continued access to the safest, most affordable and most secure supply
of food and fiber in the world. I ask that you continue your support for
this important legislation in its current form.

Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Okay. Continuing on, sir, on my left.

MR. TOMMY HOSKIN: Thank you. Thank you, Mr. Secretary, for taking time
to be here today. My name is Tommy Hoskin and I'm a rice and soybean
farmer from the Stuttgart area or as we call it, the rice capital of the
world. About 50 miles from here. I think you've been there.

I'm not sure what \-- my comments probably cover several of those
questions, but for years there's been much said and written about we
need to save the family farm, and I would like to spend my brief time
talking about what a family farm is.

Some years ago I was in a meeting with Senator Pryor's father, David
Pryor, and we were talking about this same issue. Talking about a
previous Farm Bill and I asked Senator Pryor what the definition of a
family farm was. And his reply was, "I have no idea. It just sounds good
when you're making a speech to get up and beat on the podium and say,
we're going to save the family farm." I would suggest that in most cases
a family in the Midwest looks much different than a family farm in
Arkansas and in the south. The crops we grow and the way that they are
grown are much different than most of the crops in the Midwest. Not only
are our input costs much higher, it also requires a lot more labor and
equipment. This is particularly true for rice and cotton.

Our farming operation is a partnership made up of myself and three
family members. This allows us to farm enough acreage to have an
operation that is economical. Our farm also supports three full-time
employees plus some part-time employees. If we divided our farming
operation into three or four smaller units, none of them would be large
enough to survive. They would probably end up as part-time farms.

While I have no problem with part-time farms, we are not going to feed
the world with part-time farms. Farming is no different than any other
business in this country. We've had to get bigger just to survive. But
that doesn't mean we're not family farms.

As we know, 15 percent of the farmers in this country product 85 percent
of the production. So it seems logical that the support would follow
that production. Maybe if we called it what it really is, which is a
food security policy for this country, instead of payments to farmers,
it would be viewed differently.

Most of us have really grown tired of a group such as the Environment
Working Group attacking our farm support programs while they enjoy the
cheapest, safest, and the most abundant food supply in the world.

MODERATOR: Could you sum it up, please?

MR. HOSKIN: In conclusion, Mr. Secretary, the 2002 Farm Bill is working,
it's working the way it was intended to work and once we're able to fund
it the way Congress intended, it will work even better. Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: Something he said, and I want to direct a question to you,
Mr. Secretary, what does a family farm look like these days in Benton
County, Indiana?

DEPUTY SECRETARY CONNER: It's certainly bigger than it was when I was
growing up as a kid in Benton County. You know, the pressures on a corn
and soybean farmer in Benton County are probably no different than rice
and cotton in Arkansas where, you know, to have a viable economic unit
you've got to be a lot bigger operation than my dad would have ever
imagined on his farm.

MODERATOR: Thank you. The speaker on my right, please.

MR. BILL BRISTO: Thank you. My name is Bill Bristo. I am speaking today
as a landowner from Jonesboro and I want to address the question about
unintended consequences and also the question about stewardship. And I
want to specifically talk about the issue of cash rent.

Now, my general philosophy about cash rent is that the landowner and the
farmer ought to be able to negotiate what they want to negotiate and the
market can take care of that. But, as a general rule, in a year like
this, the cash rent is set based on the expectations of a prime year and
a good harvest. And the farmer this year who paid cash rent is going to
be in a lot worse shape than the farmer who was on a crop share.

In addition, requiring cash rent is a significant barrier to young
people getting involved in farming if you've got to make that big loan.
Also some cash renters view the farm when they pay the cash rent as they
can mind the farm. They've got that farm for a year, they can do
whatever they want to. So from a stewardship issue, you've got some
concerns.

Now, here is my basic point and this is a tweak that needs to be put in
the new Farm Bill. For the first time ever in 2002 we introduced the
issue of "means testing." And what we have done by means testing is we
have forced certain landowners to go to cash rent. We also by the
rhetoric about payment limitations we are going to force other
landowners to go to cash rent. And when we do that, the landowner does
well, but it hurts the farmer. And under the Farm Bill there is no
policy reason that we should have these unintended consequences of
forcing people because of off-farm income or limitations to go to cash
rent when everybody would rather do a crop share. And I wish you would
look at that with regard to the writing of the next bill.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much, sir.

MR. GLEN BAUMAN: Mr. Secretary, my name is Glen Bauman. I am from
Stuttgart, Arkansas. I am with the Farmers and Merchants Bank there in
Stuttgart. We are a small Ag bank, country bank. I am also on the
American Bankers Association Agriculture and Rural Credit Committee.

I had something prepared here I was going to, I guess, read, but it
seems like most everybody has pretty well touched on the 2002 Farm Bill.
Of course, we think that's a good bill. We would like to see many of the
provisions left in the new Farm Bill. You know, our farmers in our part
of the country when they come in and see me in the bank they're scared.
You know, we are talking about a new Farm Bill. Well, this year I'm not
sure if some of them are going to make it long enough to be able to see
a new Farm Bill.

The financial statements net worth just keeps going down and down. I see
this year a lot of farmers having to mortgage their farms, mortgage
their houses in order to try and go another year. This scares me because
if next year isn't any better, then what are we going to do then? You
know, they're going to lose it, they're going to lose it all.

You know, the Farm Bill that we are talking about today has a lot to do
with the rural America. And the small towns and businesses up and down
Main Street, they're all dependent upon the farmer. And, of course, I
guess as you know, if the farmer doesn't make it, the small towns and
communities don't make it, and I don't see how we can stand by and let
the people from the city just keep coming in and buying up the ground to
build large houses and duck clubs.

So I guess that's all I have to say. Thanks again for being here.

MODERATOR: Thank you very much for your comments.

\[Applause.\]

MODERATOR: Sir, go ahead, please.

MR. GEORGE DUNKLIN \[sp\]: Yes, sir. Good afternoon, Secretary Conner,
and Congressman Berry. I'm George Dunklin \[sp\] of Arkansas County. I'm
here today to talk about the conservation programs and the importance of
them to the rice industry and of course to our country.

I'm a rice farmer and a duck hunter. Mr. Secretary, I manage our family
farming and hunting operations and have been for some 25 years. I also
serve on the board of Ducks Unlimited and on the DU National
Conservation Committee and I'm a commissioner of the Arkansas (Unclear)
Fish Commission.

My wife and I live on our family farm with our three daughters. Our kids
go to public schools in DeWitt and we go to church in Stuttgart. So we
are involved in both communities very actively.

I say all this to you today to express to you my deep concerns about the
condition of agriculture and the direction that we seem to be headed. I
am very passionate about our community, our state, and our country. I
understand the budget crunch that the administration faces and I just
want to assure you, you know, we'll do in agriculture, we are going to
do our part to be a net contributor to the economy.

The three programs I want to discuss today are the Conservation Security
Program, the CSP, the Conservation Reserve Program, the CRP, and the
Wetlands Reserve Program, the WRP. The CSP would have the biggest impact
on working lands. The program would give incentives to the rice producer
to conserve more of our natural resources. As originally planned, it
would have converted many acres to more conservation practices, it would
have saved millions of tons of top soil, millions of gallons of diesel,
and, you know, billions of gallons of water, you know, from groundwater.
Sadly, the program was never enacted in the full measure as it was
planned in the 2002 Farm Bill.

I would encourage you, sir, that you and the administration and Congress
to address the CSP and enact it as originally planned. I think it's one
of the best programs that could have happened but never did.

The CRP and WRP programs have been incredibly successful all over the
country. The U.S. taxpayers are benefiting from an improved environment
because of it. Cleaner air, less greenhouse gases, reduced soil erosion
and many other environmental sensitive issues. It's replaced grasslands
and restored bottomland hardwoods on very marginal soils. Of course
research has proven that putting these lands and these programs have
resulted in measurable benefits to the wildlife population in many areas
of the country.

This has an economic benefit in diversifying the income to farmers,
landowners and businesses in rural America.

MODERATOR: Could you conclude, please?

MR. DUNKLIN \[sp\]: Yes, sir. In 2007 there are 16 million acres that
the CRP contract is getting ready to expire, six million acres the
following year. I would encourage you, sir, to try to continue these
programs.

We thank you very much for coming here to Arkansas today and listening
to us.

\[Applause.\]

MODERATOR: Thank you for your comments.

The next speaker, please go ahead.

MR. MICKEY DOYLE: My name is Mickey Doyle. I am from \--

MODERATOR: Could you move closer to the microphone, please?

MR. DOYLE: Is this okay? Can you hear me now?

My name is Mickey Doyle. I'm from Newport, Arkansas. I went to
Washington, D.C. on a farm strike in '76. A word they were using up
there back then was called "parity." In 25 years since it's not even
been mentioned.

The problem I have is the farmer is the only guy who buys everything he
needs at retail and he sells at wholesale. When you do have a good year
and have good prices, all the input costs go up. But when the prices go
back down, they remain where they're at. We've got to have a level ball
field so that when you in the spring when you start, you know,
fertilizer is \$400 a ton, you know you're going to get \$7 for your
beans or \$5 for your rice. We've got to cut out the fluctuations.

I'm out. Thank you.

\[Applause.\]

MODERATOR: Thank you very much.

MR. HAL HIDEMAN \[sp}: Hello. Welcome to Arkansas, Secretary Conner. My
name is Hal Hideman \[sp\]. I'm from Poinsett County, Arkansas, and
involved in agricultural entities up there. I guess I'm talking a little
bit different slant on things today.

I certainly support the current Farm Bill. But I am one of these folks
that I'm pretty much resolved that you all are going to do something to
us and change is coming.

If change is coming, I think we need to look at something that will keep
a safety net under the farmer and the bankers out there. You just heard
from a good friend of mine that's in the banking business. And I've
talked to many bankers and they're all concerned about what they're
going to be able to do for the farmers if the Farm Bill changes in a
substantial manner.

I would promote the idea that the current crop insurance program we have
does not work. It is not truly insurance because you can make a profit
out of it. That's truly not an insurance product if you can make a
profit. I think if the government would look at giving us some kind of
workable cost of production crop insurance that would put a safety net
under the farmer, allow us to keep our farm infrastructure in place. If
we change these programs and your fertilizer dealers, your cotton
ginners, if they go out and then five years down the road we say,
whoops, we made a mistake, we need to go back and correct this, hey, the
cat is out of the bag. You can't correct something that the damage is
going to be done to the infrastructure.

A cost of production crop insurance program would allow the farmer to
borrow the money, put it in his crop. If he doesn't make enough money to
pay that crop loan off, then he can file a claim, collect his money, pay
his banker and go again the next year. Everybody ought to have the right
to buy insurance. And I think that we have a broken crop insurance
program and we need to get one that works for the farmer.

The other benefits of this, I think it could very easily be designed to
be WTO compliant. You could structure it on a farm basis instead of a
commodity basis, so the flexibility of planting decisions is there and
it doesn't influence what's going to be done. And I think that you talk
to a lot of bankers out there if they knew that a young farmer coming
into the business could borrow money, and if he didn\'t make it, he
could file a claim, pay that bank loan off and go again the next year,
they could go with him and finance him so it would facilitate the entry
of young farmers into the business.

Thank you very much.

\[Applause.\]

MODERATOR: Thank you very much, sir.

MR. RON ENGLAND: I'm Ron England, from Bentonville, Arkansas, a dairy
producer, livestock producer. And we do still produce milk in Arkansas.

I am 51 years old and I'm not sure whether I'm over average or under
average.

\[Laughter.\]

MR. ENGLAND: But I would like to discuss some of the budget cuts and
restraints. I believe the House bill has put \$7 million in for Johne\'s
research and the Senate bill still has the \$18 million which was in
last year's bill. Johne\'s is definitely a livestock and dairy problem,
not strictly a dairy issue. And we need the \$18 million in there for
that.

The three billion that's going to be cut, we realize that there has to
be budget cuts, but the dairy price support program is the life blood of
the dairy industry and if we were to lose to \$9.90 out of dairy, that
would just be the end of the dairy industry, we feel like, in the United
States. The MILC program was the life blood of the young farmers, the
small farmers that I represent in Arkansas and Oklahoma as a DFA board
member. And we would just like to bring those issues to the forefront
with you.

The Katrina and Rita disasters, there was very little mention in
agriculture costs. Dairy farmers in those areas saw \$40 million in
losses, 30 million of that was DFA producer losses. We sent generators
and feed and things like that to try to keep those producers because of
losing milk production in the southeast.

And at the end of my comments I would like for you to comment on the
surplus EPRA deal that was set up for love canal. I don't think
agriculture was ever intended to be brought into that. But we've been
sucked into it like we have been on lots of other things.

Immigrations legislation, dairy farmers need year-round labor. We don't
need seasonal labor. So the Ag jobs bill, dairy farmers would be very
much in support of Ag jobs bill.

And one last thing is on the MPC \[Milk Protein Concentrate\] and
(unclear) they need to be a part of the tariff \-- in 1994 in the GATT
talks, that wasn't a big issue, but now that the imports have just
skyrocketed, we need that to be a part in the tariff program.

So would you please comment on CERCLA And EPRA. Thank you.

DEPUTY SECRETARY CONNER: Let me just two quick comments to the gentleman
since I think this is the first dairy comments we've gotten. The Bush
administration is supportive of extending the MILC program. And my
understanding is that the Senate Ag Committee will consider a bill this
week, Wednesday \-- I'm sorry, of the week coming \-- and the MILC
extension is included in that. I'm not predicting what the final outcome
will be, but if that happens, that will be a big hurdle that we've
overcome to get that MILC extension done.

On that CERCLA, I don\'t know the legislative history of CERCLA to know
if agriculture was intended to be covered in the original legislation or
not. I will tell you though that we have a very good and strong EPA
administrator in Mr. Johnson. Right now he is a different EPA
administrator than any we've had for quite some time. He is from Indiana
originally, so he's kind of special in my books. But Steve Johnson, you
know, is just a guy that understands rural America and understands
farming. And that's pretty unusual in a position like that. And so I
have great confidence that everything that Steve can possibly do to make
sure that the impact on rural America and on farming and ranching is
minimized because he shares the basic view of the Bush administration
which are, you know, the farmers and ranchers are the best stewards of
the land that you can possibly have. So I feel fairly confident that
that's going to be the way EPA is going to regulate.

MODERATOR: Thank you, Mr. Secretary. I wanted to mention, Ryan, that
just the other day I talked with an expert on Johne\'s disease at the
University of Wisconsin Madison, and he encourages producers to test
their herds for fear, as you said, that the federal money may go away if
it's not being utilized. But he believes that paratuberculosis can be
eradicated just as we've done with brucellosis and other animal
diseases.

Mr. Wyrick.

MR. PHIL WYRICK: Thank you, sir. My name is Phil Wyrick.. I am director
of Arkansas Livestock and Poultry, also a cattle producer. I might also
add to the Johne\'s issue. We have started up a Johne\'s program in
Arkansas just this year with some federal funds.

Mr. Secretary, I don't think anybody mentioned the fact that we raise a
few chickens in Arkansas. We are the number one poultry producer as far
as states go in America. Obviously we are very concerned about this
issue of avian influenza. I think it's important that the USDA continues
to fund states for us to do the surveillance work, which we've done a
lot of that in Arkansas. That's an opportunity for us to lay the facts
out in front of the people and say, look, we've got the safest food
supply, certainly poultry and beef supply and pork supply in the world.
So please continue to help us make and pay for those surveillance work.

The other issue obviously is the animal ID. We have a very thriving
cattle production \-- cow/calf production in the state of Arkansas.
Please continue to be aware that we do not need cutting of federal
funds. When it comes to initiating this program, much of it is going to
lay on our footsteps.

Then as a cattle producer, let me mention this, I know this is tough to
do, but can we cut a little red tape every once in a while when it comes
to drought relief to the cattle producer? I had personally had an
experience and we had some drought relief from 2003 and I just got my
relief check. I can almost raise a heifer calf and her have a baby by
the time I get a check. And it seems like that takes a long time. So if
you can ever help us on a little bit of cutting the red tape, we
certainly appreciate it because we need the help as quickly as possible
when we're in a tough situation like that.

Thank you, sir.

\[Applause.\]

MODERATOR: Thank you very much, Bill.

The gentleman on my left, please.

MR. ALLEN STEWART: Mr. Secretary, thank you for being here. My name is
Allen Stewart. I live on the western side of the state and I produce
cattle and poultry. And I don\'t know if we're into the section where we
can talk about other things.

I used to be one of these people that sat back and said, why do we have
a Farm Bill? Why didn\'t they just go to the sale and take their chances
like we do? Well, let me tell you, after being in Washington a few
times, I begin to realize that it takes a level playing field. And if
you didn\'t have these Farm Bills and these row crop farmers could
produce this grain, we've got to go out and buy \[inaudible\] and feed
for our livestock. And in the poultry we have to buy poultry feed and
the poultry company has to buy it. So the Farm Bill is working. I think
we should support it.

And one of the things that we're going to be faced with in the upcoming
years is that we're facing a problem with nutrient management. And every
one of us in certain watersheds in this state have to have a nutrient
management plan in order to raise poultry and farm. So in order to do
this, you have to have people out here in the NRCS that are qualified
and capable. We've got like 275 or 280 poultry farms in our county. And
each one of those has to have a nutrient management plan. So in the Farm
Bill I think we need to consider keeping people to staff the NRCS and be
able to help us in our county areas in the upcoming years.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much.

Sir.

MR. BOB COOK: Mr. Deputy Secretary, congressional delegation, thank you
all for being here today. I'm Bob Cook and I'm president of the
Stuttgart Banking Division for Bank Corp South. I want to just add some
credibility to some of the comments made here today.

Never have so many spent so much to produce an abundance and realize so
little. That applies to every guy here. I don't care what kind of
production agriculture, livestock, poultry they're in, we are all facing
dilemmas.

We've let the critics of the distribution of program payments have the
floor and present their side of the story. And the interesting thing is,
they talk about the cost of program payments. We never have dialogue
about the net, the bottom lines that these guys realize and how much it
costs to produce, and I guess that's our fault. But I can assure you
that we calculate repayment on our production loans on five-year
production averages on either loan value or contract values and if it
isn't for the program payments, none of these operations cash flow. And
I look at loan applications from farmers from Brinkley, Rison, Pine
Bluff, Des Arc, Carlisle, Lonoke, Stuttgart, Hodges Corners, and De
Witt, and they are all in the same situation. And I just endorse what
everyone else says about the continuation payments.

The only other comment would be that the timing of the payments has
gotten to the point where we cannot rely and project them in cash flow,
and the repayment of those previous payments has also caused a serious
problem for our producers.

Thank you very much.

MODERATOR: Thank you for your comments.

\[Applause.\]

MODERATOR: I wanted to direct another question to the Secretary. This
is, as we've mentioned the 31st of a series of hearings on the Farm Bill
that's been conducted by USDA. Secretary Johanns has presided over some
and Deputy Secretary Conner the others. And I wanted to ask you, what
are they thinking in Alaska?

DEPUTY SECRETARY CONNER: Well, I actually had the Farm Bill forum in
Nebraska, chaired a four-hour session in Nebraska \-- or in Alaska at
that time. And it's surprising, Alaska is a different state than you
might think. In the southern part of the state they have annual crops.
You know, perhaps more vegetables than others, but they have some wheat
and some program payments. A lot of dairy, so issues like the MILC
program extension are important to them. So, Rural Development and
conservation are big up there as well. So it's different but not as
dramatically as you might think.

MODERATOR: Were they surprised that you came up there?

DEPUTY SECRETARY CONNER: I think they were, yeah. Yeah, it was cold that
day too.

MODERATOR: Well, it seems like we're headed to all 50 states, but this
is the 31st here in Arkansas.

Sir.

MR. JERRY LEE BOGART: Good afternoon, Mr. Secretary, and welcome. My
name is Jerry Lee Bogart. I'm a farmer from Stuttgart, Arkansas.

I suggest to you that this debate over the upcoming Farm Bill should be
redirected a bit. I think the day has come that we have to accept the
fact that a domestic farm policy oftentimes now flies in the face of a
foreign policy in the world that we live in today.

The correlation between the two, the net result is national food
security. We only have to look today at question number two where the
global market access and our competitive or lack thereof is concerned.
It's a two-edge sword. Oftentimes we've signed trade agreements that
have freely brought in foreign competitors products into our country,
most often duty free, tariff free and inspection free. Many of the
production models that our competitors adhere to today were outlawed in
this country 25 years ago, where heavy metal fungicides, DDT, and other
components are used regularly in a practice and they are allowed to
bring those products into this country under those circumstances where
our consumers get them and know not what they consume.

I suggest to you sir, that in most of these areas, particularly in rice
where 14 percent of this nation's domestic consumption will be taken up
by foreign products, for high value added cash sales to our consumers
oftentimes under the circumstances that I have just described, if not
most often, if we had those same net cash sales because those products
were prohibited to come into this country, we wouldn't be so reliant
upon the government for our subsidy payments as we are today.

Note that I am not against free trade. I am a free trader. I export rice
into foreign countries but I am also a realist. And I've worked in these
markets and I realize that we cannot continue to fool ourselves into
believing that we cannot be a part of the foreign policy debates that
directly affect us. If I were to put that same food product on the shelf
that my Tai competitor can freely do, and I were discovered to have used
the same components and compounds that our people will consume that
they've produced for us, my crop would be quarantined and I would likely
be arrested for bioterrorism.

Another example I would cite to you, sir, I the World Food Trade
Organization \--

MODERATOR: Jerry Lee, if you would conclude.

MR. BOGART: I will summarize very quickly. I think that we have to look
at national food security and what our domestic farm program contributes
to that and what the value of our subsidies really afford the American
public.

Thank you, sir.

\[Applause.\]

MODERATOR: Thank you very much.

Please.

MS. PRISCILLA HOWELL: My name is Priscilla Howell. I'm from Hope,
Arkansas. My family has always been involved in farming and my heart
goes out to the lady who almost cried. I am very familiar with farming.
We've raised cotton, rice, soybeans, wheat, milo, cattle. I was
originally born and raised in the southeast part of the state in the
Delta.

The farmers have been hard hit by the (unclear) economics in the last
few years. It doesn't take a genius to figure out that if you had four
years out of five years in a disaster and financial analysis basically
tells you if you're short of cash flow then you multiply that times
three times and that's what you have to reduce your term debt to cash
flow. And to me it makes sense that if you're going to help the farmer
it's going to take more than one Farm Bill. And if the farmers are
telling you that the 2002 Farm Bill worked, then maybe we ought to
listen and maybe we ought to strengthen and build on it.

\[Applause.\]

MODERATOR: Thank you very much, ma'am.

We are, by the way, to the point where we can throw the floor open to
any question or any comments to be made to the Secretary on any subject
related to the Farm Bill. You don't have to be specifically tied to the
six questions that were laid out at the start of the series of Farm Bill
Forums.

Who, first? All right. To my left, please.

MR. \_\_\_\_\_\_\_\_\_\_\_\_\_\_: I did speak earlier today, but I just
wanted to call your attention to one thing that you mentioned about the
closing of the FSA offices. I was on the state committee for six years
and what we did in some our counties was we took the CED and shared him
with other county offices. In other words, he would take care of two
counties instead of one. If you did that across the state instead of
closing the office, you would save a lot of money in administration of
the salaries. Because you're going to move a lot of those PT people. And
the ones that's doing the secretary is going to do the work. They're
going to have to be there anyway. So, all you're saving is the rent on
the building most of the time.

And the farmers, we do need that convenience of going to the county next
to us or in our own county there. Because if you get there and then
you're 50 miles driving to that place, you may live on the outside edge
of the one county and have to go way over to the other one that's
joining. And you get there and there's a mistake either on the FSA
client's part or on the farmer's part, then you go back home and you've
got to come back and do that all over again. All the technology in the
world won't solve that problem of not being able to meet eye-to-eye with
that person. So I'm a real advocate of keeping the county offices open.
I'm sorry to disagree with you on that because I just think the farmers
are entitled to that. It's not always just a matter or economics. It's
for the good of the whole countryside and I urge you to look into that
other part.

DEPUTY SECRETARY CONNER: I appreciate that. Thank you.

MR. \_\_\_\_\_\_\_\_\_\_\_\_\_: Thank you.

MODERATOR: Thank you very much.

\[Applause.\]

MODERATOR: And, again, I've been remiss because I've been looking at
them throughout my session as moderator in failing to acknowledge the
continued presence of members of our state's congressional delegation.
We appreciate Congressman Berry, Congressman Ross, Congressman Snyder,
Senator Pryor and all the folks who have come here to hear what farmers
and others have had to say to Secretary Conner today.

Mr. Bell.

MR. BELL: Thank you. I view this as a farmer's meeting so I wanted
everyone to finish before I said anything. I do have a couple of items
to clean up on.

One of those, I would remind you, Mr. Conner, that the current Farm Bill
has its origins in the 1985 Food Security Act. That was the year we
introduced the marketing loan program for cotton and rice, a radical
move that changed the whole structure of farm policy. And we introduced
that for cotton and rice in order to make us competitive in world
markets. It has worked well during that period. As you well know it has
spread to the other crops now and it is really the heart of our
agricultural policy.

I want to endorse the five points that are in the letter that Senator
Saxby sent to the Secretary, Saxby Chambliss about your trade
negotiation position. That I consider your proposal unrealistic. And
that's for someone that's been in this a long, long time. But you do
need to have some guidelines, and I think he laid those down for you.

I would make a point about rice that no one has made yet. I don\'t know
whether you realize it or not, but we haven't increased the loan rate
for rice for 17 years. And the way I look at that, that means we're
committed to a competitive market. Very few people haven't had a raise
in 17 years, and I think that's a very valid point.

The other item I would mention, Mr. Cook from the Stuttgart Bank made
that point, and that is that I have to admit I was an advocate for that
countercyclical payment. I liked the old deficiency payment we had. I
think it provided us with protection we didn\'t have otherwise. But the
schedule we ended up with for the schedule of payments is a disaster.
And I think that's what Mr. Cook was talking about. You don't know when
you're going to get it. You get it after a year that the crops has been
ended.

And in the tweaking, if you want to call it that, because I do think
that the 1985 structure will continue, that I hope that we can address
that issue and make it a much more meaningful countercyclical payment
than we've had in the last couple of years. And if we got to that
position because of the negotiation we did during the Senate and House
Committee and they were trying to balance the budget at that time. But
hopefully we can readdress that.

And, again, I appreciate your being here. Tom Dorr and I had a good
meeting this morning with another group and talked a lot about Rural
Development. But, again, I made the point to him that when you get this
far south, we're going to look at the world differently than you do from
Indiana, Iowa, or Nebraska.

MODERATOR: Thanks, Dick. Thank you.

\[Applause.\]

MODERATOR: Arkansas Secretary of Agriculture, Richard Bell.

We have another speaker, sir.

MR. VENTRAM \[sp\]: Speaker is kind of a stretch for me.

\[Laughter.\]

MR. SCOTT VENTRAM \[sp\]: Mr. Secretary, my name is Scott Ventram from
Harrison, Arkansas. I am a part-time cattleman and a full-time attorney,
an Ag attorney. One hundred percent of my \--

MODERATOR: Could you pull that up to your mouth, please.

MR. VENTRAM: Got a bunch of short Arkansans. I'll bend over. Anyway, my
comment, I would like to add a little bit to what Mr. Pluge \[sp\] said,
the difference between having technology versus people.

I was in my FSA office this morning, there were seven PCs, seven
printers and two employees. We are already a combined county, Boone and
Newton. There is no justification for an LAP producer, a cattle
producer, waiting from 2003 until 2005 to get his check. Before this
administration starting trying centralized payment services and running
it all out of the national finance center, we could make those payments
in 30 to 60-day turnaround time. Technology is not a cross that we need
to throw ourselves on. So when I hear this administration talking about,
let's get rid of some offices and invest more in technology, I have to
be a little bit skeptical. It's no fun to drive 100 miles only to have
nobody there to take care of you or to answer your question when you get
there.

I would ask you gentlemen to consider that as you go into this next Farm
Bill on that debate. I would also strongly encourage you to maintain and
quit trying to dismantle the county committee system, locally elected
accountable producers is the best way to deliver farm program service
fairly and equitably.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much, sir.

Let me again remind folks, this is your forum. This is being recorded
and will be transcribed and will be on record at USDA. In addition, as
we had said earlier, you can submit written comments. There is a desk
back there to do so. You can also go to the government's web site,
USDA.gov and submit comments there.

Our next speaker from Desark, Arkansas.

MR. HARVEY JOE SANNER: Thanks. Good to be here today. Don't start my
time yet. (Unclear).

MODERATOR: And let me remind you to please identify yourself.

MR. HARVEY JOE SANNER: I'm Harvey Joe Sanner. I live in Prairie County,
Arkansas, Desark. I've been a life-long farmer. Now I'm more of a farm
activist and loudmouth, I guess, than I am a farmer. But you were Chuck
when I first knew you and anyway, congratulations on your climb up the
ladder.

You are such a nice guy to be working with such a mean bunch of cats \--

\[Laughter.\]

MR. SANNER: \-- in USDA and the White House. In all seriousness, we've
got real, real troubles. And I'm so thankful that our friend Glen, the
banker, and Bob came to tell you. I'm hearing from bankers, I'm in a
farm activist office every day and I started hearing from bankers and
farmers back in the summer and we are talking about some wholesale
bankruptcies, in my opinion, coming this winter in Arkansas. At a time
when the administration is talking about dismantling offices, cutting
funding for programs, doing away with the programs and the so-called
subsidies and the WTO debates and all that, and I know you say that
won't happen unless other nations do likewise. Like they reduce theirs.
You're still doing it. And I think one thing, you're still making the
case that something is basically wrong with these farm programs, with
these costs and attacks through the budget that the Bush Administration
posed which is totally unfair. It's not our fault they mismanaged the
treasury and got themselves in debt. And farmers shouldn't have to bear
that pain.

The 2002 Farm Bill is a wonderful vehicle and it was very adequate and
it was probably the best we could have got at the time. Right now it's
falling short because what's happened to production costs. Congressman
Berry has already introduced legislation to add more money to the Farm
Bill as has Senator Lincoln. But it's a good platform to do that in,
weigh in, and it's a good delivery system to get the money out here when
it's needed. And it's going to be needed. I can tell you, there are
people in trouble.

And one of the things that's causing the trouble worse than the farm
prices that I lived through in the '70s and the and the '80s and the
'90s is the pessimism from the bankers, and they're getting the
pessimism from the administration and the Ken Cooks of the world and the
New York Times editor and the Wall Street Journal editor and everybody
else that's beating up on these farm programs and not standing up and
defending them. And that's what I would like the administration to do.

We're an open \--

MODERATOR: Would you conclude, please?

MR. SANNER: I thought we could go on now since we are in open mike time,
Gary, but I will conclude.

It is serious business. I had a lot more things I wanted to say. I've
got an answer for all six questions. But I don't have time now, but one
big myth, please, that needs to be dispelled with that somehow that we
can trade our safety net program for market access is a myth. There is
not a commodity being produced in Arkansas that you can sell on the
world market and make a profit at, not one. And I don't think there's
been one in ten years. You've got to export, you can't let surpluses
build up here and kill your domestic market, but to think you can
replace a safety net in a Farm Bill with more market access is a myth.
It will kill us. Strengthen the safety net, don't weaken it.

MODERATOR: Thank you, Harvey Joe.

\[Applause.\]

DEPUTY SECRETARY CONNER: Harvey Joe, I appreciate your staying within
the two minutes. A funny story though. He and I have known each other
for a while. And when I was in Oklahoma at a listening session a couple
of weeks ago, I think the first old rancher that got up to testify, he
kind of stumbled and paused and he says, "Man, in Oklahoma we can't even
say 'howdy' in two minutes." So I appreciate your comments, Harvey Joe.

MODERATOR: Sir.

MR. CRAIG HILBURN: Thank you. Welcome, Mr. Secretary. My name is Craig
Hillburn. I'm director of conservation programs for Ducks Unlimited. I
should say welcome to Arkansas, but on behalf of the waterfowl, welcome
to the lower Mississippi valley. Which from a duck's eye view is why the
ducks come here. They come to the Mississippi valley because of
agriculture. They've come here for decades because of what farmers do
every day on their land to promote not only the food for all of us, to
enjoy, but also the conservation measures that they all do on a daily
basis for waterfowl and other wildlife.

I'm going to speak, you know, specifically about the conservation title
of the Farm Bill. It is hugely important. It's been tremendously
successful in Arkansas as well as all across the country.

Mr. Dunklin mentioned earlier the CRP, Conservation Reserve Program, is
vitally important on the prairies for waterfowl. There are thousands of
acres about to come out of their easements, and it's vitally important
that CRP remain as a vital part of the Farm Bill so that those acres can
be restored or can be retained in CRP. There are thousands of landowners
that want those programs. They want to be able to continue ranching on
the prairies and produce waterfowl.

One of our farmers earlier mentioned, you know, welcome to Stuttgart,
Arkansas, the duck capital of the world. You know, Arkansas winters
probably 30 percent of the mid-continent population of mallards in any
given year. We winter millions of waterfowl in this state and in the
MAV. And that's because of what these guys do in this room and thousands
like them all across the state of Arkansas day in and day out.

Mr. Secretary, I am not a farmer. I am very concerned about the plight
that they're in. But I'm equally and am more concerned about what our
wildlife populations are going to be like if these gentlemen and these
ladies cease to exist on our landscape because they are America's
conservationists.

I would ask that you listen to what they're saying.

Thank you.

MODERATOR: Thank you very much, sir.

\[Applause.\]

MODERATOR: Congressman.

CONGRESSMAN MARION BERRY: Thank you. And thank you, Mr. Secretary for
being here and being in Arkansas today. As I told you earlier, we're a
hardworking and hospitable people and we welcome you.

I am 63 years old. I've been involved in the agriculture industry all my
life. That's the reason I'm involved in politics today is because I love
agriculture.

I am fully convinced and I would challenge anyone to prove me otherwise,
that the success of the American farmer has contributed to the building
of the greatest nation in the history of the world.

\[Applause.\]

CONGRESSMAN BERRY: The last time we faced anything close to the distress
that we are facing today \-- I don't mean a few months from now, but
today \-- was in the great depression. I wasn't around then, but if it
was any worse than this, I'm glad I wasn't. That doesn't mean that this
is going to be any easier to deal with. But at that time we put in place
public policy that provided a safety net for our producers that has
produced the most powerful, the most innovative, the most productive
food and fiber production system that's ever been known in the history
of the world and it has served this country and the world quite well.

For us to be talking about doing something different, making less of a
safety net and using as an excuse, it increases land values, for those
of us that own land, we don't think that's a bad thing. But for us to
use things like that as a reason to not have a sufficient safety net so
that we have adequate production of food and fiber so that our people
know that they have and can depend on a reasonably priced food and
clothing supply is a huge mistake. We are literally taking what we know
works and turning it into something that we don't even have a good
reason to think it might work. It's an experiment at best.

One of the reasons that brings me to mike is this. On Monday, in
Monday's paper in the Democrat Gazette here in Arkansas, Rob Portman was
quoted as saying that he was willing to take a 60 percent cut \--

\[Tape break.\]

CONGRESSMAN BERRY: \[In progress\] \-- in farm subsidies and that in his
words, we might have to accept some pain. Now that would be just fine
with me if he was the one that was going to accept it.

\[Laughter.\]

\[Applause.\]

CONGRESSMAN BERRY: But I know Rob Portman. He is no Richard Bell, and
he's not going to get hurt a frazzling bit for this. So, this
ideological battle that we have been engaged in, as much as it pains me
to admit it, the Democratic party has been engaged in some of it also.
Not near as much as your party, but some.

\[Laughter.\]

CONGRESSMAN BERRY: We have this unholy alliance between the
environmental community and the ideologues on the conservative side that
if we just beat the tar out of the agricultural community for long
enough we will take all of this wonderful productive land and all these
wonderful people that know how to use it and turn it into a national
park or something. I never have figured out what the objective is. But I
can tell you this, we are hanging on by a thread. Our ability to produce
and sustain ourselves and not get into the situation with food and fiber
supply that we're in with petroleum supply right now is very real. It is
today and we need to do something about it right now.

\[Applause.\]

MODERATOR: Thank you very much, Congressman. I let him stay over his two
minutes, but I'm recording this too.

\[Laughter.\]

MODERATOR: Yes, sir.

MR. CHARLES ROGERS: My name is Charles Rogers. I'm from a small
community in south Arkansas, Cleveland County. I'm fortunate enough to
serve as one of the officers in our Arkansas Cattle Association and you
might think I'm going to talk about cattle or poultry. But also I'm a
retired volunteer fireman from our community, 28 years. We have about a
dozen volunteer fire departments in our county. We have no full-time
service. And it's through the efforts of the Rural Development that we
are able to service our community effectively.

The other thing is, I can remember when we would go to a fire, almost
have one under control and run out of water. And in the time we would be
able to go and get additional water and come back, it would be too late.
But by having the pumpers to go with us now and the turnout coats and
the Scotts' air packs and the training, it has been very effective and I
just want to say we appreciate that effort.

Thank you.

\[Applause.\]

MODERATOR: Thank you very much, Charles.

Congressman.

CONGRESSMAN MIKE ROSS: Thank you. My name is Mike Ross. I represent
Arkansas's Fourth Congressional District. I represent a lot of farmers,
all the way from Oklahoma and Texas to Mississippi. And Mr. Deputy
Secretary, we want to thank you for coming to Arkansas today and for
spending the time to hear farmers. I was here to hear them too and I
think we've just about heard from everybody. And I wasn't going to say
anything, but when Marion Berry speaks, I have to too.

\[Laughter.\]

CONGRESSMAN ROSS: No, seriously, let me just raise a couple of issues. I
was on the Ag Committee, helped write the Farm Bill back in 2002. I
personally think it's a good bill. I think the bill has worked. It's
provided a safety net. We've come in below the projections on the amount
of money that we would have spent on the bill and it's worked well. It's
there when we need it and when we don't need it, it's not there.

And the reason I believe this is so important is quite simple. Today we
are spending close to \$3.00 for a gallon of gasoline. I don't have to
tell the folks in this room how much diesel is. It's much more than we
ever dreamed of paying. I've seen it as high as \$3.25, \$3.29 recently.
Now, why has that happened? It's because we've become too dependent on
foreign oil. And if we are not careful, we are going to become way too
dependent on other countries for our food and fiber. And I believe
having a safe and reliable source for food and fiber is every bit as
much critical to our nation's security as oil is. And so let's learn the
lesson we learned from the high cost of gasoline today and the high cost
of diesel fuel. Let's not become 60 percent dependent on other countries
for our food and fiber like we have with oil.

I've got farmers \-- between the drought and the high energy prices,
I've got farmers that last August spent \$20,000 on diesel fuel. This
August, Mr. Secretary, they're spending \$70,000 on diesel fuel. The
energy prices are absolutely driving our farm families in this country
out of business and they need an energy policy that works for them and
that's why every chance I get on the Energy and Commerce Committee I'm
pushing to mandate 10 percent ethanol in all gasoline and 5 percent
biodiesel in all diesel fuel.

\[Applause.\]

CONGRESSMAN ROSS: I ask that you respect the fact that we had a deal in
2002. We were told that we wouldn't make any changes to the plan.
Everybody signed off on it and now there's talk about eliminating the
three entity rule. There's talk about payment limits. I believe all of
those things including the \$3 billion in proposed cuts ought to be off
the table. There should be no room for compromise or negotiation on the
\$3 billion this administration is proposing in cuts. There should be no
cuts to this Farm Bill and to the agriculture program in this country.

You know, at a time when this administration is proposing \$3 billion in
cuts to the farm program, but they're also still proposing \$106 billion
in tax cuts. And so it's about priorities. And I believe priority number
one ought to be keeping the promise we made to America's farm families
with the 2002 Farm Bill.

Finally, let me say this, if we are going to do any fine tuning and
improvement to the Farm Bill in 2007, I hope we will consider this. And
I want to thank you for coming today and announcing that the Ag disaster
declaration has been granted for all 75 counties in Arkansas.

Basically right now, as we stand here, all that means though is these
farmers qualify for another loan. These farmers don't need another loan.
They need help. And now it's up to the members of Congress to go to
Washington as we do every year and pass an Ag disaster payment program.
Now, the reason I raise this is, we're fooling ourselves if we believe
somewhere in America there's not going to be a drought or a flood every
single year. And so when we look at rewriting the Farm Bill or working
or improving the Farm Bill for 2007, I think we should seriously
consider having disaster payments as part of the Farm Bill because we
know there is going to be a disaster somewhere in America every single
year and these folks shouldn't have to wait until Congress can pass
legislation for them to be able to get the help they so desperately
need.

\[Applause.\]

MODERATOR: Congressman, we need to conclude, please.

CONGRESSMAN ROSS: Yeah, I understand. I got two minutes and I was using
two minutes based on two minutes in Washington, not in Arkansas.

Finally, let me just say this, back in 1995 and '96 we took a hit in
Arkansas. We closed a number of FSA offices. In fact, nine of the 13
that closed in 1995 and 1996 were in my congressional district. So
number one, I'm asking you, don't close anymore FSA Office in Arkansas.
And if you do, do it in someone's district besides mine. Thank you very
much.

\[Applause.\]

MODERATOR: Thank you, Congressman.

We have time for one more comment, and, sir, you will be it. Thank you.

MR. GREG COLE: I'm Greg Cole. I am with the Farm Credit System here in
the state of Arkansas. In Arkansas we have about four entities that
represent about \$1.4 billion agricultural loans. And also I was born
and lived the majority of my life in the delta of eastern Arkansas and
my family is involved in a rice farming operation.

A couple things, I could sit here and talk a little bit more about the
\-- I want to echo the observations of our fellow bankers and the
farmers about the extreme financial stress we are under right now with
high input costs, low commodity prices, and definitely there is going to
be a real erosion of equity this winter or this year as well as looking
into next year.

But one point I want to make, I attended the session on Rural
Development this morning and with your colleague. And I know that's a
big \-- your administration has a lot of energy level in that. One thing
I wanted to point out, you know, we in the financial business, we get to
see the big picture of the farmers, the income statement, how much they
make, how much they spend, how much they receive from farm subsidies.
And one thing you see here in our area that for the majority of
(unclear) net income is derived from farm subsidies. And one important
point I don't think has been made, think about where that money comes.
The majority of the net income that goes to the farmer, well, that
farmer doesn't retain that. That goes to churches, schools,
infrastructure, living amenities, you know, in the rural areas. And as
you alluded to, where you grew up and Secretary Johanns, you know, that
feeds a lot of other people. And that's an important point about rural
development. If you curtail farm subsidies, obviously, you know, there's
a shrinking of economic prosperity there, erosion of population and
things. In Arkansas that's a major factor. That's a point that hasn't
been brought out that's really important, and remember that farmers,
obviously they don't, you know, buy a lot of investments with that
money, they put it back with their neighbors and the infrastructure in
the community.

Thank you, Mr. Secretary.

\[Applause.\]

MODERATOR: Thank you very much.

That will conclude the public comment portion of the forum. My
instructions are to ask if any of the other members of the state's
congressional delegation wish to speak.

\[Discussion held off the record.\]

MODERATOR: Thank you very much, Congressman. And with that I'll turn it
back over to Deputy Secretary Conner for concluding remarks. Secretary.

DEPUTY SECRETARY CONNER: All right. Well, thank you very much. It's been
a great forum, lots of great comments from so many folks, and I really
do appreciate it. Know that these are important comments. They are going
to factor heavily into our Farm Bill discussions as we begin to see that
legislation take shape.

I will tell you, I mean, there's no way you can come away from this
forum and not acknowledge that in Arkansas there's a good strong basic
support for the current Farm Bill. And I'm not going to tell you that
differently. I'm not going to try and represent it differently. I think
the most I heard suggested here today was somebody used the term "minor
tweaks." And beyond that, you know, obviously this has been a very
strong and popular bill in this region. And, you know, we fully
acknowledge that.

I did want to talk a little bit because I think mixed in throughout the
comments on the current Farm Bill I think there continues to be the
impression that somehow in our WTO proposal that we have sort of
unilaterally put all of this on the table and said, you know, we're
throwing in the towel on this Farm Bill. And I will just tell you,
again, nothing could be further from the truth.

We have suggested in our WTO negotiations that in the event that other
countries are willing to open up their markets for our product and we
acknowledge that we need those markets, and I mentioned earlier in my
remarks, you know, you can't deny when 60 percent of your demand is
exports as is the case with cotton. Dick, you probably know the answer
to this better than me, it's 40 percent plus on rice, I believe. It's 35
to 40 percent on soybeans. I mean, all of the crops and the livestock
that are big production items in this region completely depend upon the
export market. And the productivity in this region is growing and what
are we going to do with that productivity? You know, that is an open
question. What are you going to do with it if you don't export?

And, you know, the renewables offer some hope and we are growing that
market tremendously. I'm diverging here a little bit, but one of the
gentlemen earlier had talked about somebody had said, you know, we can't
produce enough grain for the ethanol and the renewable fuel production
in this country. That argument was made a couple of years ago in
Washington and I just kind of sat back and said, you know, you guys
don't know what farmers can do if you give them the market. And they
have responded to that, whether it's corn or soybeans or other products,
you know, there's more than enough corn to go around for livestock feed,
for all the other uses that you have for feed, but yet we've increased
the size of the ethanol market four or five times. We're going to double
it again under the energy legislation that Congress has recently passed,
up to seven billion gallons of renewable fuels.

So there's opportunity there, but we've got to continue to focus on
these export markets. Now, when I say "focus on them" again, that does
not mean we are going to unilaterally disarm. You know, if these
countries are not willing to give us market access, everything we have
talked about last week and this week is off the table. We are not
discussing it with them any further. They know that. Ambassador Portman
knows that.

Now, the second part of that that came up several times today as well,
is there seems to be the notion that somehow if our trade negotiations
are successful, and we get this market access, that somehow there's no
Farm Bill. And, again, that's a myth. That doesn't mean there can't be a
safety net in a Farm Bill even stronger than the current one. It might
have to take a slightly different form in order to be WTO compliant, but
that safety net can be as big and strong as anything Congress can afford
at that point. And that's another myth that is out there as well.

So I can't help, there seems to be a lot of those questions and
comments. I wanted to clarify that. Again, I'm hearing your message
though on the current Farm Bill. I'm going to go back and deliver that
message to the Secretary. The President will know that there is, believe
me, strong support for the current Farm Bill in Arkansas.

Just close, I guess, by a couple of other comments as well. Not
everything is different here than it has been in a lot of other places.
A few comments on Rural Development. The gentleman that was the
volunteer fireman, just heartfelt comments from communities throughout
this country for what we are doing in terms of helping out volunteer
fire departments and that's really just sort of the beginning of our
Rural Development efforts that we have out there.

Conservation activities, a lot of concern about CRP. We are going to
extend the existing CRP contracts that are coming up for expiration.
There will be no expiring contracts here in the next couple of years if
producers choose that. We are going to give everybody the opportunity to
stay in those contracts. Then we can turn around and maybe a little
longer term in the Farm Bill debate the direction that we're going on
conservation. But just know that we are not going to get all of these
contracts out of the bill before we have a chance to have a good healthy
Farm Bill discussion. And I think that should be pretty good news for
the folks in the wildlife community, Ducks Unlimited and those other
folks. And those announcements are going out and some of them have
already gone out in that way.

Disaster legislation, I have heard those general comments as well. And,
as well, I don't really need to say anything more about the Farm Service
Agency other than believe me, I hear your comments. I appreciate the
gentleman over here that had the constructive suggestion. That is the
type of dialogue we are trying to encourage here. As I said earlier, we
have not put out a take or leave it kind of proposal. We want a
dialogue, we want to talk to you about what works. But do know, at the
end of the day that we don't support offices that spend \$2 in
administrative expense to get a dollar worth of benefits out to the
farmer. That's not right. We are going to continue to make that point,
but we want to work with everybody to come up with a good plan and a
fair plan. And if you take away nothing else from that part of the
message, please know that today.

So, again, I want to just thank you all for being here. The comments
have been terrific. The Farm Bill is an important piece of legislation.
This will be my sixth Farm Bill. I started out in the 1981 Farm Bill. I
was around for those big changes, Dick, in the '85 bill and those were
good years and that was a good bill we did in 1985 and subsequent years.
We want to have a good Farm Bill this time. I am confident we are going
to have a good Farm Bill. One that has a good solid safety net for the
producers, for you guys, because you deserve it, you deserve it for food
security, you deserve it for the next generation that's coming. We
understand that. We understand that. And that's not the type of change
we are talking about. So, again, I appreciate the comments. You guys
know how to get in touch with me. Secretary Johanns and I literally have
an open-door policy. If you need to talk to one of us, you've got the
opportunity to talk to one of us and we have our doors open for you.
Give us your input and we want to work with you. And thanks all for
coming, again.

\[Applause.\]

MODERATOR: Ladies and gentlemen, Deputy Agriculture Secretary Chuck
Conner.

\[Applause.\]

MODERATOR: That concludes our agricultural Farm Bill hearing at the
state fair and I hope you will go out and enjoy the rest of the fair.
Good afternoon, everybody.