Remarks by U.S. Secretary of Agriculture Dan Glickman Purdue University West
Lafayette, in -- April 29, 1999 As Prepared for Delivery
                                                               
                                                               
                                                               
                                            Release No. 0187.99

Remarks
          As Prepared for Delivery
                               by
           U.S. Secretary of Agriculture Dan Glickman
                       Purdue University
             West Lafayette, in -- April 29, 1999 

     "Thank you very much, Vic, for that kind introduction.  And thank you
for the expertise that you're lending to USDA, as Chairman of our Advisory
Board on Research, Extension, Education and Economics.

     "It's a great honor to be at one of the most prestigious land-grant
universities.  Touring your new Food Science Center and getting a glimpse of
some of your biotech research just confirmed what I already knew -- that this
is a school with a rich tradition of accomplishment and innovation in the
field of agriculture.  That's one of the reasons I'm here.  The other reason
is that I wanted to visit the home of the 1999 NCAA Women's Basketball
Champions...even if the Boilermakers are a Big Ten rival of my alma mater, the
University of Michigan. 

     "I'm proud that USDA and Purdue have built such strong partnerships on
everything from soil erosion to plant genetics to food safety.  And it's good
to know that we share personnel too.

     "In fact, if you browse through the faculty directory here, it almost
seems like the Department of Agriculture is some kind of farm team for Purdue
University.  Purdue is home to one of my predecessors, former Secretary and
now professor emeritus Earl Butz...as well as Don Paarlberg, who served as a
senior adviser to the Secretary of Agriculture before I was old enough to
shave.

     "I also want to single out Jill Long-Thompson, who is with me today. 
Jill was a strong leader for  Indiana in the House of Representatives, and now
she's doing an outstanding job as USDA's Under Secretary for Rural
Development.  

     "I work closely with both of your Senators, Evan Bayh and Dick Lugar. 
Senator Lugar is a good friend, and he has served this state and championed
this university so effectively for so many years.  And as Chairman of the
Senate Agriculture Committee, he is a friend to farmers -- and an advocate for
their interests -- nationwide.

     "Those of you emerging from Purdue's agriculture program will be
tomorrow's leaders in farm production, agribusiness and science.  You will be
the ones to steer the ship at a time of staggering change in the structure and
composition of the farm economy, but also the national economy and the global
economy.  So this seemed an ideal place to have a forward-looking discussion
about the place agriculture may occupy in American life in the 21st century. 
All of us involved in agriculture   students, faculty, researchers, farmers,
community leaders, and those of us in government   must work together to deal
with the monumental changes taking place in agriculture and we must make our
decisions and set our priorities accordingly.

     "It can be a little difficult to have this kind of objective,
intellectual dialogue when we're in the middle of serious farm problems. 
Falling prices and natural disasters demand stopgaps, quick fixes and
emergency responses.  It's hard to talk about the long-term when there are
many producers staring every day at the prospect that they may not have a
long-term at all...at least not in farming. 

     "Nevertheless, we can't let our focus become all trees and no forest. 
Eventually, farm prices and income will rebound and exports will improve. 
Without minimizing or neglecting the very real hardship being experienced in
farm country, we have to look toward the future.  We have to ask   and begin
to answer -- the questions: What might American agriculture look like in the
21st century?  And perhaps more importantly: What do we want it to look like? 
Because we can't just sit idly by and let change happen to us.

Role of Government

     "The role of government in the farm economy is changing dramatically,
particularly as it relates to the operation of farm programs.  We will spend
$15 billion this year in direct payments to farmers, the highest of any fiscal
year on record.  But notwithstanding that, with the passage of the 1996 Farm
Bill, we are in the process of minimizing the government role, of stripping
USDA of many of its authorities to intervene in the market on farmers' behalf
and deal with issues of supply and demand.  So we have to rely on different
tools.  

     "The '96 Farm Bill, however, didn't provide a clear roadmap for federal
farm policy in the future.  It offered no hard guidelines.  In fact, the part
of the bill covering farm programs is called "The Agricultural Market
Transition Act."  So there's got to be a transition...but to what we don't
really know.

     "On some level, there will always be farm programs.  But we have to
start thinking in terms of partnerships rather than supports.  We can be
catalysts, helping farmers and ranchers compete, without artificially
guaranteeing them a certain level of income.  Government can no longer assume
complete production and marketing risks, but we can point producers toward the
tools that will help them manage those risks.  We can and should find sensible
ways to strengthen the farm safety net, with a strong crop insurance program
and other risk management tools.  But policymakers, particularly in
Washington, have to get away from this focus on micro program changes, and
instead explore ways to empower farmers to thrive in a modern world.

     "For example, the National Commission on Small Farms, which I appointed
two years ago, has come back to me with a number of recommendations that put
USDA in an empowering rather than an enabling role.  It suggested a Beginning
Farmer Development Program, which would establish training and assistance
centers for beginning farmers; a small farm research initiative; and an
entrepreneurial development initiative for small farmers.

Producing For The Market

     "We also have to help farmers learn to thrive in a consumer-driven
environment.  What we have had in the past -- although I think it's changing
now -- is a kind of "if we grow it, they will come" mentality.  The Big Three
automakers found out what happens when you defy the consumer.  They used to
forcefeed cars to a closed-mouth public, and they got left in the dust by
Japanese and German competitors.  But they learned their lesson, and now they
tailor their production to the needs and demands of their consumers.  

     "Many farmers are doing this.  But to be successful, agriculture must
always stay ahead of the consumer curve.  And it just so happens that, when it
comes to food, we're living in a time when consumer tastes and preferences are
becoming more and more sharply defined.  Who would have thought forty years
ago that grocery shoppers would be asking for turkey bacon, veggie burgers or
tofu ice cream?  Americans and people around the world are more knowledgeable
about food and nutrition and more discriminating about what they put in their
mouths.  In addition to the traditional foods that most consumers buy, many
people are now looking for leaner beef, organic foods, free-range chicken or
foods that are "natural". 

     "There is a heightened consciousness about food labeling.  People want
to know where their food comes from and what goes into it.  They're worried
about their cholesterol levels and their recommended daily allowance of folic
acid.  These are the kinds of consumer dynamics that farmers must learn to
read and respond to or else ignore them at their own peril.  And there are
even more consumer dynamics to consider when it comes to our overseas
customers, who represent the greatest potential growth market for American
agriculture. 

     "Farmers and ranchers must develop market antennae.  As Barry
Flinchbaugh of Kansas State University and the chair of the Commission on 21st
Century Production Agriculture put it: producers must learn to manage markets
in the same way that they used to manage farm programs.  The days of farmers
simply growing crops and raising livestock without meeting specific market
needs are over.  

     "All of us have to be partners and facilitators in this process.  We in
government have to help farmers make the transition, instead of simply
reauthorizing and refunding the same old programs year after year.  And the
land-grant colleges have a pivotal role as well.  Just as government can't be
a captive of the past, neither can you.  Agriculture can't be taught the way
it was in the past.  You in this room and at land-grants around the country
have to adapt your extension and outreach programs for this modern, market-
driven farm economy.  And your research priorities must reflect these new
realities as well.

Concentration

     "It so happens that watershed changes in farm policy are happening at a
time of increased concern about structural and technological changes in
agriculture.  So farmers, without the kind of support they've traditionally
enjoyed from their government, are preparing to compete in a world of
transition and a climate of uncertainty.  This is especially true of small and
medium-sized operators.

     "One of the things that we see in agriculture   and, really, in every
other sector of the economy   is a trend toward fewer and larger operations. 
This has been a long time in the making.  In 1900, there were 5.7 million
farms averaging 147 acres apiece.  By 1950, it was about 5.4 million farms
with an average acreage of 216.  The trend has dramatically accelerated in the
second half of the century.  By 1998, the number of farms had been cut by more
than half to 2.19 million, while the average acreage doubled to 435. 

     "Consolidation can sometimes lead to some increased efficiency in an
economic system.  But now what we're seeing goes beyond just farm
consolidation.  Now, at every link along the food production chain, there are
concentrated markets, clusters and alliances, relationships both formal and
informal, that may present serious challenges to the small and medium-sized
producer trying to move goods to market.  

     "This is especially true when it comes to livestock processing.  In the
beef industry, four meat-packing plants now control 80% of the steer and
heifer slaughter market.  We're also seeing a profound restructuring of the
hog industry.  I know people in Indiana are well aware of that.  Since 1967
the number of hog operations has fallen by 90%.  Large operators of more than
2,000 hogs represent just under 6% of producers, but account for almost two-
thirds of inventory.  As more farmers raise more hogs under contract with
fewer processors, the very nature of the industry relationships are changing.

     "And while contracting is often a good deal for the small farmer or
rancher, concentration can force producers into accepting lopsided contractual
terms, simply because there's no ability 
to shop around for the best deal.  Most poultry production now operates under
contract, and the farmers are now almost extensions of the processors   in
some ways employees of those firms. 

     "That is not the role we want farmers to play.  I don't think we want to
live under a system of  agricultural Darwinism, with survival of the fittest
becoming survival of the biggest.  We don't want to get to the point where
farmers lose control of their economic destiny and are reduced to serfs in a
kind of feudal agricultural system.

     "So how do we cope with these forces? 

     "One thing we're doing at USDA and the Justice Department is keeping a
watchful eye on some of these major mergers and, within the framework of our
authorities, vigilantly monitoring for anti-competitive behavior.  Just a few
weeks ago, USDA filed a complaint against Excel Corporation, alleging that the
company violated the Packers and Stockyards Act by engaging in unfair pricing
practices affecting about 1200 producers.  That case is now in litigation, and
it is my belief that more cases will be filed under the Packers and Stockyards
Act in the months to come.

     "On the grass roots level, there are things family farmers can do --
things USDA can help them do   to stay competitive in a top-heavy farm
economy.  

     "If the larger agricultural interests can form clusters and alliances,
so too can smaller producers -- in the form of cooperatives.  A single small
producer, up against some of the mightiest players in the economy, may stand
little chance of exercising meaningful bargaining clout.  But by forming
cooperatives, by banding together, they give themselves more leverage in the
marketplace.  In addition to using co-ops to bargain for better prices, many
have used them as entrepreneurial tools, to help them build their own
processing and manufacturing facilities and position themselves as strong
competitors in their industry.

     "To help co-ops, USDA offers a variety of tools, worth up to $200
million a year, including everything from an initial feasibility study to the
implementation of a business plan.  

     "Let me give you just one example.  Last year, we helped the Hermitage
Tomato Cooperative Association in Arkansas with a $3 million guaranteed loan,
which gave them some working capital and allowed them to purchase land and
equipment.  Before the loan, the members were barely staying afloat, marketing
their tomatoes at auctions and through two other firms.  But with some help
from USDA, last year the co-op generated nearly $4 million in sales supplying
tomatoes to the fast-food industry.  They've gone from 75 to 116 employees,
and they are making plans for a second processing facility that would add
another 100 jobs.

     "I would like to see even more opportunities for cooperatives in the
future.  In some countries, like Ireland for example, co-ops can become
publicly traded entities; by issuing stock, they can increase their capital
base and enhance their ability to compete.  Our laws, however, don't make it
easy to do this in the United States.  And our tax laws do not encourage
genuine innovation in farm cooperatives.

     "There are also ways for producers to enhance their income in this era
of rapid consolidation.  Let me talk for a minute about direct marketing and
farmers markets.  We have been very aggressive at USDA in promoting farmers
markets.  They used to be just a quaint thing you'd stumble across on a
country drive.  Now they're everywhere.  When we began collecting data on
farmers markets in 1994, there were only about 1,700 of them in the country. 
Today, we estimate that there are nearly 3,000.

     "Farmers markets are a win-win.  Farmers increase their income through
direct access to their consumers.  And consumers get access to locally-grown,
farm-fresh produce.  There is the added benefit that it strengthens the
relationship between grower and consumer.  Too often, there is a measure of
cultural estrangement in this country between the people who produce our food
and the people who eat it.  Farmers markets bring the two together.  Farmers
gain a better understanding of what their consumers like.  And consumers gain
an enhanced appreciation for the labor that puts food on their tables.  And
social benefits aside, farmers markets and other direct marketing schemes have
proven to be very profitable as well.

     "There are also niche markets to explore, for example the rapidly
growing demand for organic products, a real opportunity for farmers of all
sizes but particularly the mid-sized producer.  Right now, we're in the
process of coming up with uniform national standards on what, exactly,
constitutes an organic product.  We believe the standards will improve
consumer confidence in organic products and open new opportunities, both
domestic and international, for our producers.  This is not some goofy fringe
market.  It is becoming very much a part of the agricultural mainstream, and
it holds out the potential for enormous profit, as it grows to an estimated
$6.6 billion market in the next year.

     "So there are a lot of ways we can help producers become a part of the
new agricultural era.  But we can't just do the same things we've done in the
past.  We have to constantly come up with innovative, creative solutions.

Science/Biotechnology

     "We can't talk about agricultural challenges for the 21st century
without some discussion of science, and specifically biotechnology.

     "Science and technical progress are certainly to be celebrated.  For
hundreds of years, the physical and life sciences have helped make agriculture
safer, more efficient and more productive.  It has increased yields and
reduced production costs.  Science is everywhere in our shopping carts -- from
frozen dinners to low-fat cheeses to seedless grapes.  Our new science-based
food inspection system at USDA, to give just one example, is improving our
ability to protect consumers from deadly pathogens.  

     "And now, nearly a half century after Watson and Crick discovered the
double helix and unearthed the mystery of the structure of the DNA molecule,
we are able not only to read the genetic code we can manipulate it and
reprogram it as well.

     "Biotechnology can be an indispensable tool as we try to serve global
agricultural demand in a sustainable manner.  The world is growing, and it's
growing in developing nations, which have experienced the greatest food
insecurity.  We have more and more people to feed more and more fiber to
produce...and a limited amount of arable land to put into production...at a
time when water is becoming a more and more precious and scarce commodity. 
Biotechnology can help us generate higher yields, while lessening the strain
on our natural resources.  It can also help farmers produce a new generation
of specialty products, which the market may demand in the future.

     "I remember visiting the wheat research center in Mexico where some of
the research was done on the wheat gene Norin 10, which helped developing
countries like India and Pakistan increase their wheat harvests by 60 percent. 
At the center, there is an inscription on the wall that reads: "A single gene
has saved 100 million lives."  

     "That's a powerful notion.  Nevertheless, those of us in government, the
private sector, the academic community and the farm community can't be afraid
to ask the difficult questions.  We cannot be science's blind servant.  We
have to understand its ethical, safety and environmental implications.  Our
testing has to be rigorous.  We have to be as vigilant as ever.  And we have
to make sure that those involved in determining the safety of genetically-
engineered products are staying at arm's length from the people who stand to
profit from them.  At USDA, for example, we took our food safety division out
from under the umbrella of our marketing programs, an important step that has
avoided even the appearance of impropriety in this area.  

     "We also can't force these new genetically engineered food products down
consumers' throats.  While people around the world have embraced
biotechnology's twin, information technology, the fact is that they're still
quite cautious about biotech.  My belief is that farmers and consumers will
eventually come to see the economic and health benefits of these products. 
But dismissing the skepticism that's out there is not only arrogant, it's also
a bad business strategy.  My confidence in biotech -- or industry's confidence
in biotech -- is ultimately irrelevant.  Only when consumers have confidence -
- and when they express that confidence at the grocery-store checkout line --
will we be able to see the return on the enormous public and private
investments we've made in biotechnology. 

     "This is an important challenge for those of you in the research
community.  Innovations may be born in the laboratory, but they find success
in the marketplace.  So it's not enough to celebrate science for science's
sake.  Technological progress must always be accompanied by public information
and consumer education efforts that address concerns and allay fears. 
Scientists should always remember that there's another kind of research --
market research -- without which all the patents and all the ingenuity in the
world add up to very little.  When it's all said and done, the public opinion
poll is just as powerful a research tool as the test tube.

     "Just yesterday, two of the largest grocery chains in the United Kingdom
said that they will work to eliminate GMO ingredients, just another sign that
the biotech issue remains a highly explosive one.  I think these grocery
chains need a little bit of educating, but I don't think we can just sit here
and berate them.  We've got to work with them, so they understand -- and
consumers understand -- what the benefits are.

     "Also, we have to be careful about ratcheting up the expectations on
some of these technologies.  There is no one silver bullet that will allow us
to meet all of tomorrow's agricultural and food security challenges.  We have
a way in this country of latching on to solutions, pursuing them to the
exclusion of others, and then watching them sometimes backfire.  

     "We did it in the late 70s when we embraced nuclear power as the primary
solution to our energy needs.  Then, Three Mile Island happened.  Now, nuclear
power is till a part of our energy grid, but it's not the only part.  Just in
the past few years, we looked at the growth of emerging markets and decided
that trade was the panacea.  Before we knew it, Asian financial markets
collapsed, setting off a chain reaction that has led to recession in just
about half of the world.  

     "So, yes, let's be enthusiastic about these technologies and pursue
them.  But let's not put all of our eggs in the biotech basket.  Just as the
securities industry tells us to diversify our investment portfolios, so must
our agricultural science portfolio be rich and diverse.

Vibrant Rural Communities

     "Before I close, I want to talk for a second about the importance of
rural America and its changing fabric and infrastructure.  

     "To preserve the family farming tradition in the 21st century, the truth
is that, for many, there will have to be additional avenues of economic
opportunity in rural America.  It's unfortunate, for some producers, that they
have to pursue off-farm income.  But ironically enough, that may be the only
way to keep many of them on the land.  If people can supplement their
livelihood doing something else, then farming will at least remain viable as a
part-time vocation, even for those who can't make it producing crops or
livestock alone.  So we need a diversified rural economy that has all the
tools, the infrastructure and the technology to give people various ways to
make a living.  
 
     "That's why USDA has a whole agency, led by Jill Long-Thompson, devoted
exclusively to rural development.  We extend loans and grants that invest in
rural businesses, rural utilities and rural housing.  Over 50 rural areas have
been targeted for tax incentives and other economic development support as
part of President Clinton's Empowerment Zone/Enterprise Community initiative.  

     "Rural areas have a lot to offer, and we're beginning to see people move
to the country in search of a different kind of lifestyle.  Rural counties
have actually grown by about 3 million in the 1990s.  I was just reading an
article the other day about a woman who was raised in the suburbs, had tried
the city life, but now was settling in a community of 900 people in New
Hampshire.  She likes the more affordable real estate, the recreational
opportunities, as well as the informality and familiarity of rural life.  And
information technology now makes it possible for people like her to live in
the country and still connect with professional and social networks that they
might be leaving behind.

     "With apologies to the creators of Cheers, rural America really is the
place where "everybody knows your name."  Rural America may be a place of
rugged individualism, but it's also a place of social cohesion.  We don't see
many barn-raisings anymore, but it is that spirit of volunteerism   of
pitching in on behalf of the entire community -- that still prevails in small
towns around the country.  People who live in rural areas are vested in their
community.  They know their neighbors; they watch each other's children; they
treat each other as extended family.  And by living these kinds of values,
rural towns send a message to   and set an example for   communities around
the country.

     "Just watching the news over the last week, I can't help but think --
and I don't want to overgeneralize here -- that it's that sense of intimacy
and cohesion that was missing at Columbine High School in Littleton, Colorado. 
When you have a high school of some 1800 students, it's easy to see how kids
who are maladjusted or socially outcast, who are having trouble coping with
adolescent pressures, simply get lost and fall through the cracks of the
system.  But in the close-knit environment of a rural community or small town,
where everybody knows everybody else, it's easier to identify social problems
before they erupt into violence.

     "If we're going to preserve and cultivate rural America's unique
qualities, we have to keep it economically viable.  First and foremost, that
means keeping production agriculture as economically viable as possible.  But
beyond that, if we're going to attract new residents and new business
investment to rural areas, the infrastructure and the economic base have to be
there.  No one is going to locate in a town where the sewer facilities are
inadequate or the water isn't safe to drink.  But still a quarter of a million
rural households live without clean, safe drinking water.  Another 2 million
live in substandard housing.  

     "In addition to clean water and decent housing, rural communities have
to have a trained  workforce, good schools, first-rate medical care, child
care options, adequate telephone and electricity service and Internet
connectivity -- everything that would make someone want to bring their family
or business to a community.  And even as we develop and diversify rural
America, we also have to preserve the open spaces and natural resources that
make rural life unique and draw people there in the first place.

Conclusion

     "Shakespeare wrote: "What's past is prologue."  There is certainly some
truth in that statement, but I would offer this caveat.  When it comes to
agriculture, our approach to the future should certainly be shaped by the
experience of the past.  But we cannot and should not approach the future by
trying to recapture the past. 

     "We have to start with a recognition that America is no longer a
predominately agrarian society.  It's naive and just plain unconstructive to
wax nostalgic about some kind of pre-industrial Jeffersonian model.

     "In 1900, farmers represented 38% of the labor force.  By 1950, the
number of farms had decreased only by a few hundred thousand, but farmers
dropped to only 12% of the labor force.  By 1990, there were barely 2 million
farms, and farmers made up 2.6 % of the workforce.
Sixty years of aggressive farm programs have not been able to reverse this
trend.

     "But as we approach the new millennium, the family farm still remains a
central building block of American society.  And while it has changed in
definition, size and structure, there are still enormous opportunities for
family farm agriculture and farm prosperity in the year 2000 and beyond.  

     "But seizing those opportunities is going to require a different
approach from all of us.  

     "Farmers will have to become more entrepreneurial, more market-oriented. 
They will have to recognize that this isn't their father's farm economy.  They
will have to be better educated and more technologically sophisticated than
ever before.  

     "We in government have to adjust our programs.  We can't wring our hands
about the authorities we once had; we must work tirelessly to forge a new farm
policy paradigm, one that puts government in the role of partner.  

     "And universities like Purdue have a critical role as well.  You
understand that you can't teach agriculture the way you did in 1950.   The
research you conduct, the courses you offer, and the skills you impart must
conform to the needs of a farm economy in transition...and an American and
global economy in transition.

     "The challenges are enormous...but so are the opportunities.  I'll close
with a story about a former president of a major American corporation, who
went to a high school to give a commencement speech.  At the end of the
speech, the chief executive looked at these kids and said: "I have one piece
of advice for you.  And that advice is, you've got to jump when opportunity
knocks."

     "And a kid in the front row said: "That's great for you.  You're
president of one of the biggest companies in the world.  That's easy for you
to say.  But, tell me, how do you know when opportunity knocks?" 

     "And the man said: "You don't.  And that's why you have to keep jumping
all the time."

     "If we work together -- if we all keep jumping -- we can seize those
opportunities and preserve for our farmers and ranchers and our rural
communities their share of the American Dream in the 21st century.  

     "Thank you very much."

                                #