Remarks by U.S. Secretary of Agriculture Dan Glickman National Farmers Union
98th Anniversary Convention February 28, 2000   Salt Lake City, Utah
                                                               
                                           Release No.  0063.00

Remarks
          As Prepared for Delivery
                               by
           U.S. Secretary of Agriculture Dan Glickman
       National Farmers Union 98th Anniversary Convention
            February 28, 2000   Salt Lake City, Utah
                                
     "Thank you very much, Lee.  It's a pleasure to again join the Farmers
Union as you approach an entire century of advocacy and leadership on behalf
of the most skilled and diligent farmers and ranchers in the world.  

     "Just as it was last year, we meet at a time of stress and hardship for
the men and women of American agriculture.  For about three years now, they've
been battered by rock-bottom prices, shrinking global demand and record
worldwide production, not to mention a slew of natural disasters.

     "During the last two years, Congress and the Administration were
compelled to act $6 billion in emergency aid in 1998, followed by another $9
billion last year.  This certainly helped many farmers.  Plenty of them would
not have otherwise had the cash flow to get through the year.  Nevertheless, I
believe the emergency bills were more of a quick fix than a real solution. 
NFU has called it a band-aid approach.  I'll make another medical analogy and
say that we applied a very expensive tourniquet, when the situation actually
called for a blood transfusion.

     "We need to develop a more permanent assistance package, one that's
ready to kick in when the farm economy heads south.  That's why we've unveiled
a new safety net proposal over and above the current farm programs that offers
a fairer, more efficient and more cost-effective way to protect farmers.  At
its heart is several billion dollars, over the next two crop years, in
countercyclical income assistance.  This assistance is also targeted. 
Targeted to smaller producers who generally have smaller incomes.  Targeted to
those farmers suffering the greatest hardship.  And unlike the last two
emergency bills, targeted to the farmers who have actually grown the crops.  

     "That seems like a pretty common-sense notion that those who are
struggling the most deserve the most help.  But the AMTA formula that we've
been living by for nearly four years, with its fixed payments, has no such
logic.  Thanks to AMTA, recent supplementary farm payments haven't been tied
to need, to size or to current production. 

     "There's more to our plan, of course, than income assistance.  It
includes new direct conservation payments direct, not on a cost-share basis
that reward farmers who undertake efforts to help curb erosion and protect
water supplies from pesticide and nutrient runoff.  The plan also enhances
existing conservation efforts, for example raising the ceiling on the
Conservation Reserve Program to 40 million acres.  

     "On the risk management front, we're looking to make crop insurance more
affordable and more accessible, by extending the premium discount on buy-up
coverage; offering multi-year coverage; making coverage available to more
kinds of farmers and more crops; and expanding our risk management education
program.  We also would like to see Congress pass wholesale crop insurance
reform, consistent with the principles we announced last year.

     "The safety net also includes efforts to create and expand market
opportunities for farmers.  That means promoting the growth and development of
farm cooperatives; exploring alternative uses of crops through a new bioenergy
program; and funding for rural Empowerment Zones and Enterprise Communities.

     "I think this is a strong proposal, but we're also open to new ideas. 
Some people have said they think the plan is insufficient.  Now, it's one
thing to hear that from the National Farmers Union who've been in the trenches
on every issue that's important to agriculture for the last century.  It's
quite another to hear it from some of the very same people who masterminded
the 1996 Farm Bill, which cut holes in the safety net in the first place. 
Amazing how a farm crisis can turn everyone into a prairie populist.

     "I also have to chuckle when I hear people say that the 1996 Farm Bill
is somehow inviolate, that we can't depart from its basic principles.  But who
are we kidding?  We have already amended it dramatically, by pumping 15
billion additional dollars of government assistance into the farm economy over
the last two years.  The last two emergency bills, in fact, were tacit
admissions that the FAIR Act is a little less than fair when the farm economy
takes a turn for the worse.
 
     "There are other steps I'm taking administratively, which don't require
congressional approval.  Like freezing loan rates for wheat, corn, soybeans,
rice and cotton for this crop year.  We're also setting up a program to
provide low-cost financing for on-farm storage facilities, thus giving farmers
the marketing flexibility they need.  

     "It's not part of the safety net per se, but the President also included
in his 2001 budget the dollars necessary for us to continue implementing last
year's mandatory price reporting legislation.

     "And today, I am directing the Agricultural Marketing Service to conduct
a referendum on the pork checkoff program and to pay for it with USDA funds.  

     "As a matter of basic fairness, I believe that producers deserve the
opportunity to vote on this checkoff program.  It is, after all, a mandatory
assessment, akin to a tax, that all producers must pay even if they disagree
with it. 

     "The checkoff derives its legitimacy from the support of producers, and
pork producers have endured dramatic changes in their industry since 1988, the
year the checkoff was established and the last time producers were able to
vote on this issue.  So, in addition to upholding the bedrock democratic
principle of the right to vote, it is appropriate and necessary to determine
whether a majority of pork producers do, in fact, continue to support the
checkoff.   
                                                       
     "I want to spend a minute talking about what I believe is the most
important trade issue facing the agriculture community this year approving
permanent Normal Trade Relations and thus easing China's accession to the
World Trade Organization.

     "We're talking about the world's largest country, home to one out of
every five people on earth, with an economy growing at 7 percent a year.  Yet
last fiscal year, every man, woman and child in China consumed less than 1
dollar's worth of American agricultural goods.  In one year less than a dollar
a person.  We can't afford such limited access to a market this large and this
fertile.  China sells us $70 billion in total goods and services every year;
we sell them $14 billion worth not a very good balance.

     "In joining the WTO, China would agree to eliminate many non-tariff
barriers and to cut tariffs dramatically.  The tariff on frozen beef cuts, for
example, would fall from 45 percent to 12 percent.  Cheese tariffs would drop
from 50 to 12 percent, and oranges from 40 to 12. 

     "Let me emphasize that we are not being complacent in our dealings with
China.  We have to be vigilant about monitoring China's compliance with its
bilateral agricultural commitments, as well as it's actions on human rights,
labor and other issues. 

  "There are some encouraging signs.  Today, China has announced a
purchase of 50,000 tons of American wheat.  That includes 30,000 metric tons
of soft white wheat and 10,000 metric tons each of hard red spring and hard
red winter wheat, all to be shipped from the Pacific Northwest.

  "We hope that there will be many more such purchases to come.  In fact,
if Congress passes NTR and if China does join the WTO, it will mean an
additional $2 billion a year in total U.S. farm exports to China by 2005.  And
that's a very conservative estimate.

  "If we don't go down this road, then other nations will.  It's a dog-
eat-dog global marketplace out there.  If we unilaterally choose not to take
advantage of new overseas opportunities, our friends in Europe, Canada,
Australia and Argentina will eat our lunch.  They will fill the orders we lose
and gain permanent access to the Chinese market.

  "Going back to the safety net, I see our plan as the first word, not the
last.  It is not about rigid funding levels, but about a set of ideas, a new
philosophical compass that can steer us toward a new farm bill in 2002.

  "I think it's time we broke out of some of the farm policy paradigms and
assumptions that have hemmed in our thinking for several years.  I've come up
with 5 broad principles many of them reflected in our safety net proposal that
I think should guide the next generation of farm policy.

  "The first is that farm programs should support farmers, not just
commodities.  In other words, let's base our payments and government
assistance on farm income rather than crop prices.  After all, it's income not
just price that allows farmers to pay the bills, upgrade their equipment and
have a decent standard of living.  The commodity-driven system we've had for
decades helps some people, but it allows many others to slip through the
cracks.  It also seems to have done little to stop the massive consolidation
we've seen in agriculture.  Because when farm support is issued on a crop-
specific or per-bushel or per-pound basis, the larger you are the bigger your
payment.  

  "Second, we need a farm policy that is more comprehensive and national
in scope.  I've always thought it was curious that the '96 Farm Bill was
supposed to encourage planting flexibility, and yet we continue to have a
narrow, seven-crop, regional system that doesn't support or reward farmers for
branching out into new and specialty crops. 
    
  "It wasn't until last summer's drought, which was centered in the
Northeast and mid-Atlantic regions, that certain people like the national
media, for example began to realize that there are actually farmers in these
parts of the country.  In fact, from Maine to Virginia, there are 200,000
farmers.  They too deserve support and protection, and our safety net begins
to provide it. 

  "So what tools do you use to direct more resources to less traditional
growers?  One way is to shake up our risk management programs, to make them
more inclusive, which is my third principle.  Under the federal crop insurance
program, we still do not have the authority to provide affordable protection
for livestock, even though ranchers account for about half of all agricultural
sales and proceeds.  So our safety net plan includes a pilot livestock
insurance program, which I hope we can expand in the future.  Another thing we
want to do is lift the area-wide trigger on our Non-Insured Assistance
Program, making it easier for farmers of uninsurable crops to receive
assistance after a major loss. 

  "Fourth, conservation the preservation of our land and soil must be a
centerpiece of farm policy, not an afterthought.  By creating incentives for
all farmers to be environmentally responsible, we can increase farm income at
the same time that we protect our natural resources.  The land is not
something that can be replaced like a piece of machinery.  We need to respect
it above and beyond its crop-producing capability; we must recognize it for
what it is: our most valuable commodity of all.  Long after this year's crop
is grown, harvested and sold and the next year's and the next year's what
still will remain is the land.  We must hand it to the next generation in as
good a shape as we found it.  And we can do that while still having an
agriculture sector that is productive and profitable.

  "My fifth principle involves integrating rural development into farm
policy.  In today's world, most people in rural America cannot make a decent
living in production agriculture alone.  I wish they could, but the fact is
that many farmers need to supplement their income with off farm opportunities;
often that's the only way for them to stay on the land.  So we need a
diversified rural economy, one where entrepreneurship can flourish, one with
sound physical and information infrastructure.  Rural communities must also
have the solid tax base, the clean streets, the safe neighborhoods, the good
schools, the skilled labor pool everything that would make someone want to
bring their family or business to a community.

  "I think your conference theme of "The Spirit of Rural America" couldn't
be more appropriate.  Preserving the spirit of rural America is what farm
policy should be all about.  We need to make  rural America an economic force
in the modern world, without losing that which makes rural life unique
affordable living, social cohesion, recreational opportunities, natural
beauty, open space and so on.

  "The information age has the potential to make rural America more
economically viable than ever before.  Today, with the right tools with a
modem, a fax and on-line capability you don't have to be in a major population
center to do business with the world.  We just have to make sure that small
towns and rural areas have the same access to those tools that the cities and
suburbs have. 

  "So a new farm policy must go beyond just the wheat program, the rice
program, the cotton program and so on to address the more fundamental
question: how can we help preserve the nation's agrarian tradition by
providing more rural economic opportunity, whether it's in farming, retail,
tourism or Internet start-ups?  

  "Over the last 60 years, agriculture has been dramatically transformed,
and yet farm policy has remained relatively stagnant.  People generally do not
and cannot farm the way they did in the 1930s and 40s, so government's role in
helping them has to change accordingly.

  "The days when most farmers could make ends meet by simply bringing bulk
commodities to market are over.  That's why a new farm policy must highlight
new and different ways for farmers to make money and capture a greater share
of the consumer dollar.  That means promoting farm cooperatives, direct
marketing and farmers markets.  It means encouraging the use of crops in the
production of renewable energy sources.  It means providing greater
opportunities for farmers in value-added, consumer-ready goods, organics and
so on.  It means not just "freedom to farm" but freedom to market.  And it
means government must be there to help ensure that the markets are free and
competitive by actively enforcing our anti-trust and price discrimination
laws.

  "Of course, traditional row crop farming will continue to be the heart
of American agriculture.  And the government will continue to support the
people who grow traditional crops.  But a new century calls for a more
holistic approach to farm policy, one that reflects and embraces the diversity
of American agriculture.     

  "For example, new immigrants from places like Southeast Asia, Africa and
Latin America are finding opportunities in agriculture.  And while many are
settling in Iowa, Nebraska and Kansas, many others are pitching their tent in
places like Virginia, Massachusetts and Washington state.  And they're growing
and exporting specialty crops like apples, blueberries, strawberries and water
spinach.  Shouldn't they have the same opportunity for support as traditional
heartland row crop producers?

  "A new farm policy must continue to celebrate farmers, their
contribution and their unique role in society.  And it must do that by
embracing a more complete vision of the American farmer: farmer as effective
risk manager farmer as conscientious land steward farmer as bold innovator
farmer as resourceful, multi-faceted, flexible businessperson.

  "Looking ahead to the 21st century that's just begun, I believe the
future for agriculture is bright.  Within the next quarter century, we expect
that there will be 8 billion people on earth, many of them with higher incomes
and more varied diets than ever before.  A new farm policy can help American
farmers reap the benefits of this extraordinary opportunity.

  "But that new farm policy must be as fair and inclusive as possible.  It
must go beyond commodity-based programs.  It must be national in scope,
encompassing more regions, more farmers and more crops.  It must be focused
less on historic crop prices and bureaucratic formulas and more on people and
their dreams.  

  "Thank you very much."

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