OXFORD FARMING CONFERENCE

                                              Release No. 0005.98

Remarks
                              OF 
                     SECRETARY DAN GLICKMAN
                   OXFORD FARMING CONFERENCE
               OXFORD, ENGLAND -- JANUARY 7, 1998

INTRODUCTION
     Good afternoon. Thank you Chairman Coward for that introduction and for the invitation to join
you here today. With me is Terry Medley, the Director of the U.S. Animal and Plant Health Inspection
Service; Dick Barnes, our agricultural counselor here in the UK; and Paul Drazek, my special assistant for
trade. Also, on this trip is Peter Scher, U.S. ambassador at large for agriculture. He will join me when I meet
later on with Commissioner Fischler. 

     You know, before I became Secretary of Agriculture, I spent 18 years in the U.S. House of
Representatives working on the Agriculture Committee and representing the people of the great wheat and
cattle state of Kansas. I got my first tractor ride the first time I ran for office, and I've spent plenty of time
on the farm with farmers ever since. But more than 20 years later, I still get a kick out of being asked to
come talk to farmers about agriculture. It sort of reminds me of a joke about dairy cows: two dairy cows are
grazing along the side of the road. A milk truck drives by. On the side of it is a sign with capital letters and
exclamation points:  Pasteurized! Homogenized! Vitamin-enriched! Good for you!' The one dairy cow turns
to the other dairy cow and says,  kind of makes you feel inadequate, doesn't it?' That's sort of how I feel up
here right now.

     On my last trip to the UK, I was able to visit Bax Farm in Kent and sit down with Oliver
Doubleday, the owner there, and other farmers in the area. I want to thank them again for their hospitality. 
This time, I have the pleasure of visiting Oxford University. I'm glad to be here, particularly for this
prestigious conference and at such a timely moment both in U.S./European agricultural trade relations and
given current events around the world.

     I've been asked to talk about how American agriculture is faring almost two years into our dramatic
shift toward a more market-oriented U.S. farm policy. I hope this discussion can provide some useful
insight as Europe makes decisions about the future of its own Common Agricultural Policy. Your decision,
like ours in 1996, is critical to the evolution of world trade. The United States and EU countries are great
agricultural and trading nations. Our actions will set the tone for world trade and global relations in a new
millennium. We must lead by example.

U.S. FARM BILL: STATUS REPORT
     Almost two years into America's new farm policy, it is being met with rave reviews throughout
most of agriculture and the balanced-budget minded ranks of government. Of course, recent market events
are causing us to keep a close eye on the economic situation on the farm to ensure that our safety net is
adequate. But in general, a freer-market approach is seen by farmers and policy makers as a win-win
scenario: government eliminates costly programs that micro-manage supply and demand and instead pay
initially generous but gradually declining market transition payments aimed at easing farmers into a freer
agricultural marketplace by the year 2002. 

     Of course, we have been fortunate these past two years that prices and exports have been strong.
One can easily imagine that fixed payments -- that are not linked to what crop is produced or what price is
received -- alongside strong markets make for a popular program out in the countryside. But recent events
indicate that world agriculture markets may not stay quite so strong this year. We're keeping a close eye on
where this puts farmers without the old programs. President Clinton is committed to a sturdy safety net, so
long as it does not interfere with the markets. The United States will not go back to the days of government
micro-managing agricultural production. We have made the commitment to freer markets, and we will hold
firm. 

     Because government no longer has a hand on supply and demand, farmers have every incentive to
be market-savvy entrepreneurs -- good business people as well as good farmers. In exchange for phasing
down traditional government price supports, American farmers are free to plant as they see fit, rather than
as the government tells them to. This, as one Iowa corn farmer put it, is  farming like our grandfathers knew
we should' -- entrepreneurial farming for world demand.

     It's a smart time to make this change. In the coming century, we expect to see tremendous
population growth and little expansion of available acreage for farming. World food demand will be strong.
Our challenge will be to unleash the full potential of the global marketplace, and see the world economy
remain solid and incomes continue to rise worldwide -- building strong markets for our farmers, and a more
peaceful and prosperous world for all our people. 

     I have to give President Clinton a lot of credit for where we are in the United States today. He
pursued an economic policy -- from a balanced federal budget to more open trade -- that at first put his
presidency at great risk. When he started down this path, he received tremendous criticism. Now, he is
recognized as one of America's great economic leaders, the architect of a U.S. economy that's the strongest
we've seen since World War II -- an economy with the lowest unemployment and inflation since the 1970s
and the highest job creation.

AGENDA 2000
     If I can assume that my invitation here begs the question: What is my advice to Europeans in
reforming the CAP given the United States' experience with our own reforms -- my answer would be
simple: Look ahead, be principled and be bold. There is an old saying: one cannot cross a chasm in two
small leaps. Now is a critical time for nations to make a giant leap toward greater market orientation and a
more open, free and fair global marketplace. 
                                                                                                
     I expect that the UK will take advantage of its Presidency of the European Union to push forward
on reforms to the Common Agricultural Policy. I've also seen the reports detailing the price tag involved in
staying the course of costly government farm programs at a time when there is such a strong desire to see
the EU expand eastward. The United States' own fiscal pressures to achieve a balanced budget provided our
backdrop for abandoning the old, inefficient way of doing things. 

     On a more philosophical level, the United States also recognized that our commitment in the World
Trade Organization to more free and fair global agricultural trade meant that we could no longer justify
government programs that amounted to massive interventions in the marketplace.

     I applaud Agenda 2000's focus on economic efficiency and global competitiveness. The more
market orientation it brings to Europe, the better it will serve Europe and the global trading environment.
But I would caution against small, timid steps. True market orientation require us to boldly move toward the
elimination of agricultural price supports, production and export subsidies and all farm income supports
linked to production. For the global economy to reach its full potential, governments need to get out of the
business of manipulating the marketplace, and give farmers the freedom to respond directly to world food
demand. 

     That is not to say that government should not help farmers in crisis. Clearly, the risks inherent in
agriculture -- whether it's a powerful El Nino or a weak market -- should not be borne solely by those who
produce our food. The United States model simply says that instead of manhandling markets to help
farmers, the focus should be on giving farmers the tools they need to manage risk and look out for their own
long-term interests. For example, our  government and private sector now offer revenue insurance. Much
like our farmers can buy protection against a catastrophic weather event, more and more can now buy
insurance against catastrophic prices, as well. 

     Nevertheless, the real keep to strong future farm incomes -- in America and around the world -- is
not expensive government programs but helping farmers and ranchers take full advantage of a world of
opportunity. Future farm incomes will be inextricably linked to the integrity, size and strength of the global
economy.

SHARED STAKE IN THE WORLD'S ECONOMY
     As we step into a new century, we are crossing into a world in which economic relations are
replacing military relations as the primary means by which countries deal with one another. The more we
grow our economies in tandem, the more peaceful and universally prosperous our world will be, and the
stronger customers we will have. Nowhere is this more true than in agriculture.

     As much as any farm policy; as much as any agricultural trade dispute no matter how high the
stakes; as much as any on-farm issue -- the overall strength of the global economy is of equal if not greater
importance to the world agricultural economy. When economic times are good, countries open their borders.
When times gets rough, the drawbridge comes back up. Fortunately, we're not seeing that right now, which
is a very good sign.

     If we look back to the world economic slump of the early  80s, we see a deepening recession as
country after country abandoned the international ship and dumped their products on global markets --
hedging their national interests against the world's -- not recognizing that those interests are now one and
the same. 

     Actually, the model for not closing borders was Mexico. Their peso crisis came after they agreed to
the North American Free Trade Agreement, so Mexico could not simply prop up trade barriers. Instead, it
kept its markets open, restructured its economy and recovered at a stunning pace. 

     As the world financial leadership steps in to help steady faltering economies in Asia, help again has
come with demands that countries modernize their financial systems to shore up their long-term economic
stability. Help also came out of recognition that we all stood to lose should these countries bottom out
financially. Their economic health is closely linked to our own -- thus the anxiety over the 'Asian contagion'
as repercussions are felt in Russia, Latin America and elsewhere. By helping keep these economies on-track,
we are steadying the international boat and ensuring stability for our own countries as well. This is an
important message to make sure all the people of our countries understand. We have a stake in the world.

     I remain of the mind that what is happening in Asia will be short-lived as long as the international
community maintains its resolve and effected countries make serious steps to modernize their economies
and adapt to a new world. But there is a critical lesson to be learned here: we must be smart about our trade
relations. 

     The whole point of the World Trade Organization was to put behind us politicized trade battles that
disrupt economic growth and international relations; to put behind us tit-for-tat trade spats that had nothing
to do with the quality and safety of our products; and to put in front of us a new world in which a
community of nations rises together, economically and peacefully. 

     By staying the course toward freer trade, Asian nations today are acting as a positive example of
countries facing a pivotal moment and acting responsibly for their own country and the world. 

EU/US AG TRADE RELATIONS
     Unfortunately, our own trading relationship -- that of the United States and the European Union --
is not so uplifting an example of what may lie ahead. I will meet with Mr. Fischler later on. We have a habit
of speaking frankly to one another. But it's my hope that we can tone down the rhetoric and see that cooler
heads prevail on a number of critical trade matters. We must find a way to work out our differences more
quickly, fairly and amicably. Otherwise, the increasing politicization of our agricultural trade relationship
risks major damage to our shared long-term trade agenda and to our agriculture. 

     From the U.S. perspective, the issue of food safety is a prime example. After the BSE outbreak
here, along with several high-profile E. coli outbreaks in both our countries, food safety is emerging as a
major worldwide priority -- with significant public health and economic implications. 

     Quite naturally, consumers want assurances that their food is safe. I consider it one of the most
important roles of government to provide people with that peace of mind. That is why the United States is
moving forward with a revolutionary, science-based approach to food safety that -- in the case of meat and
poultry -- requires every plant to engage in regular, thorough safety practices aimed not just at catching
contamination, but preventing it in the first place.

     Recognizing that our people deserve one high standard of safety, we also required our trading
partners to adopt equivalently high standards. And, we moved quickly to certify their equivalency, so trade
would not be disrupted. 

     Unfortunately, we do not always feel that our good faith efforts are reciprocated on this side of the
Atlantic. A classic example is the pending EU ban on specified risk materials -- tallow that is used in U.S.
pharmaceutical, cosmetic and agricultural products. The ban is based on the assumption that the United
States may have BSE which may get into tallow which may harm a person. Each of these assumptions is
vigorously disputed by the scientific facts -- including those of the European Commission's own scientists.
Yet the ban may still go into effect.

     I was heartened recently to see British consumers recognize that things are getting out of hand.
When the government banned bone-in beef -- which is largely imported -- there was a rush to butcher shops
to stock up before the ban went into effect. Consumers were on the news saying,  'they've gone too far.' 

     These kinds of actions leave a strong perception in the United States that here in the European
Union legitimate public food safety concerns are being manipulated for political purposes. As traditional
trade barriers begin to disappear, we owe it to consumers to see that food safety does not become the new
trade battleground. We owe it to agriculture, as well. Take meat and poultry. The amount of trade we do
between the United States and the European Union pales in comparison to the amount we export to the
world. What happens if we publicly defame one another's food without the science to back up our claims?
One country might get a temporary edge over the other, but we both lose in world markets as the world
turns elsewhere for its food. Without question, legitimate public health concerns deserve our utmost
attention, but exploitation of consumer food safety concerns deserve an equal measure of disdain.

     There are high points in our relationship as well. I am pleased to note that we are achieving a more
science-based resolution of our differences on the biotechnology front. I'd like to see the approval process
move more quickly, but the conclusions reached so far by the European Union have been positive and based
on sound science. I hope that sound science also governs EU labeling decisions. Mandatory labeling implies
a potential health or environmental risk. In the absence of that scientifically proven risk, labels only serve to
mislead consumers.

     I know that some here in Europe differ with me on this issue. I welcome a constructive, public
debate. I just hope that we can frame it around educating consumers on the scientific facts both about
biotechnology and how we are to achieve what must be a sustainable future for world agriculture. I believe
that given all the information, people around the world can come to a responsible decision about the future
of our world. The fact is, biotechnology is our greatest hope for dramatically increasing agricultural
production in an environmentally sustainable way. It can help us produce more crops from the same land
base, crops with more nutrition, crops that require less water and pesticides. As long as science proves these
products safe -- which it has time and time again -- we cannot in good conscience turn our backs on them.

GLOBAL CHALLENGES AHEAD
     Going into the 1999 WTO talks, the United States will push to see all the countries of the world
take greater strides toward realizing the full potential of a free and fair world trading system. We want to
see every country play by the same set of rules. That is why the United States has been so insistent that
China demonstrate its willingness to abide by WTO rules before it joins our trading bloc. If one country
does not honor the rules, other countries will retaliate, and the whole system breaks down. If we are
committed to a new world of global economic health and stability, then our actions today must shape that
world. 

     From recent events in Asia, to the decision Europe will soon make on its domestic farm policies, to
the choices we will all make in the 1999 trade talks, these are critical times for agriculture and our world.
History will look back from the vantage point of time and judge the wisdom of our decisions. We must look
forward with a shared vision and be smart about our choices. I believe that the tenor of U.S.-European
relations will be a crucial barometer of how close the promise of the new global economy will come to its
reality in the next century. As world leaders, our nations should make the commitment to strong, good faith
relations. It is the commitment to a stronger, more peaceful and prosperous world.

     Thank you.

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