Historic, Archive Document Do not assume content reflects current scientific knowledge, policies, or practices. ~*~ e Jre) United Sta Secretary’s Forum Laan, ntof on Farm Income and Agricultural Policy Washington, DC. August 2, 1993 Summary Report United States Department of Peleg Fy EVO EE Celica ely clay ePoTtrehcire.gs) i onUns,nsh i ostuewelxid,dt hr Scetodlaniittsgeaaiscbo itnl D,i ettpahigeeaes r, Ut wSmdheiDosnAa tb irleoOiqfftu fyiA,ir gcerep i oacloliufttl eitCrcunaoralme tm ibvue(elnU iieSmcfDesa,aAt n)ias on ndpsf roo mrha airctbi oit(tma2slm0 u2dn)oir is c7cfa2rat0imim-ili5oin8naa8 lt1 io osftn (a pvtruoision.c g eir)tas( mNop orr toi (ng2afrl0ola2 rm)pm sra 7oth2ioi0onb-n i 7tt8he(e0bd r8 ab ibalas(lisTese,D s D ol)faa. rpr gpaelc yep, r ticono tl,aol lra ,up drnioaogttriaaopnmeas,l. ) (T2o0 2f)i le7 2a0 c-o7m3p2l7a in(tv,o icwer)i toer t(h2e 02Se)c7r2e0t-a1r1y2 7o f (ATgDrDic)u.l tuUreS,D AU. S,i s Dane peaqrutamle netm polfo yAgmreinctu ltouprpeo,r tWuansihtiy ngetmopnl,o yeDr..C ., 20250, or call January 1994 Table of Contents Page EXOCULIVG OUIL Y memecceet Mar rateMe dit Sati te or itcrcerstacsscsacctsccocatasesteslesesvcessececdesestatedhaatacdsscdeecseaseaccie i BES OM AICDa ISTIC aU LNT ILLGU ECA DDONS frcttreasaccesdseetesceds lseouasatdeseceecbrcsesVasdveatcsSetcddecaeocsceens s 1 NEACLOHALIGLON BERN UALS ete c tures cpa vanecaceteersasticalcesrescacstd soneultcsseredcncsstvcresieecebssnccacscestasdiccssyesesces 3 MAIOM TOMES ANG ROCOMMENCATIONS ficcce. cs css-cceccecsenasssces;cscaasencossresesdccsesvecssseclesbsvdescocessceses 5 Summary of Presentations and ea a TIILLGU ItzA L OL martes etter teectocteagreteerantectret rr? ct estcaceors tints sivesrececcssotbancseecesstdesésescdecceceGescesnene 12 PAOU VAL CONCIO MEU ICIO OS HOMIE IISGUI DLS oe reser te -oe cicast e occ ccetare recess detS uscreceessescsstbedodtulececcccsassessnesses 23 [US DEPT OF AGRICULTURE NATIONAL AGRIaCnUnLeTUmRaAaLn iLnIB RARY I CATALOGING PREF. Note: Major themes, recommendations, and summaries were presented without editorial comment or attempts to include opposing viewpoints. Inclusion of any statement does not imply USDA’s agreement to the validity of accuracy of the information. i t asa LZ ae “rhe oye Le 29 ad CS ; es _ : aD a 4 > | Executive Summary Secretary of Agriculture Mike Espy held the first of four forums on August 2, 1993, to solic- it suggestions on ways to improve farm income and increase agricultural exports for U.S. farmers and agribusiness. The purpose of the forum was to gather input about the direction of agricultural policy over the next several years. Each participant was asked to address the following key issues: What is changing in U.S. agriculture; what are the issues that must be dealt with in the next few years; and what adjustments or reforms are needed in domestic farm programs and international agricultural programs now and over the longer term. The forum was divided into two sessions: The morning session was devoted to issues addressing farm income and farm policy; the afternoon session addressed agricultural trade and development policy and export programs. Farmers, farm organizations, food industry executives, consumer and environmental groups, academics and government leaders from around the country were invited to participate. Since only a limited number of panelists could be accommodated, interested parties were encouraged to submit papers with their views. Participants addressing farm income and farm policy issues identified the diversity of conditions on America’s farms. While financial conditions have improved since the mid- 1980’s, rates of return on farm assets are low. The value of farm assets, adjusted for infla- tion, is declining. Investment is low and the number of farmers continues to decline. At the same time, some farms have incomes at or above the average for U.S. households, particu- larly the larger farms. Many participants felt that farmers need and deserve a higher level of income. However, opinions differed, sometimes sharply, about how to accomplish such an increase. Some favored higher loan rates and price supports, while others warned of the problems of inter- fering with market signals and of the repercussions to agriculture-related industries, to trade competitiveness, and to the consumers’ cost of food. Still others wanted to shift some of the basis for support more towards environmental goals. Some favored diversification of rural economies to improve off-farm income opportunities, while others recommended means test- ing to target benefits to full-time family farmers. The growing diversity of the farm sector—different crops, sizes of farms, distribution of resources, sources of income, and constituency groups—means that enhancements in tradi- tional policy mechanisms may not be successful in increasing farm income. Many sugges- tions were made which will require additional analysis to determine the total ramifications. Still others emphasized the need to expand markets through new uses and market develop- ment and to improve production inputs. Improved access to credit, more focused research and education were also mentioned. Education would help new farmers cope and all farmers produce and sell more efficiently. Concerns for integrating environmental goals with farm income and rural development goals were expressed. Federal policies and regulations on the use of agricultural chemicals, sustainable agriculture, and food safety must be crafted to balance the needs of consumers, farmers, and the environment. Suggestions were received about reorganizing the U.S. Department of Agriculture. In addition, areas that needed reform included the Federal food safety system, rural develop- ment policy, and farm credit and crop insurance programs. Farmworkers were also heard from. U.S. farm operators spend over $12 billion annually on wages and benefits for hired workers, representing 10 percent of all production costs. These workers are indispensable for production and income for many farm operators, but the effects of farm policy changes on farm workers are seldom considered. Participants concerned about agricultural trade and development policy and export programs discussed the importance of exports to farm income and to U.S. agriculture and the domestic economy. There is basic agreement that the United States must be more com- petitive in international markets and we must expand exports if U.S. agriculture is to fully utilize its productive capacity. The forum identified five key concepts that will shape policies to expand exports: (1) Increasing global economic interdependence and increased dependence on changing global markets will challenge government and U.S. agriculture. (2) Demand for food and fiber products in world markets will increasingly shift to high- value products as incomes grow. (3) Trade policy and domestic commodity policy must be consistent; commodity policy has to advance competitiveness, not constrain it. (4) Economic and social change occurring in the former Soviet Union and elsewhere hold the promise for a significant expansion in world trade as economies grow. (5) Government can increase trade opportunities through trade negotiations, export assis tance, market development and promotion, food aid and economic development, and research. However, there are limitations to what the government can do, and U.S. agri- culture must seek out trade opportunities in the global marketplace. Participants provided recommendations on the following main topics: Passage of the North American Free Trade Agreement (NAFTA) and the Uruguay Round; restructuring USDA export programs; phytosanitary and food safety issues; international food aid pro- grams; and diversity in the agriculture sector. There was general agreement by the speakers on the importance of the Uruguay Round and NAFTA. All but one of the forum’s speakers highlighted the issue of the Uruguay Round and the NAFTA, and 13 of the 15 speakers supported passage of these market-open- ing agreements. One speaker doubted that NAFTA would help U.S. farmers. Restructuring of USDA’s export programs was another topic frequently discussed. There was consensus that the programs need to be revised to meet changing needs of the world marketplace. Discussed were GSM credit guarantees, the Market Promotion Program, the Export Enhancement Program, and P.L. 480. Some speakers argued that phytosanitary issues will be the trade barriers of the future. Secretary Espy stated three questions he would like answered positively during this administration: How many farmers have we kept on the land? How well have we kept our traditional markets and expanded into new markets? What does it mean for the average con- sumer? The Department has taken several discretionary steps to improve farm income, and has actively worked with Congress to obtain assistance for the Midwest flood disaster and the Southeast drought. In keeping with this Administration’s commitment to making a positive difference in agri- culture, Secretary Mike Espy and Under Secretary Eugene Moos brought together a very diverse group for the purpose of finding ways to improve farm income and increase agricul- tural exports. Opinions differed and there may have been some opinions not represented. If this is the case, perhaps they will be presented at the regional forums. List of Participants Mr. Corky Jones—Farmer, Brownville, Nebraska Morning Session Ms. Denise O’ Brien—Dairy Farmer, Iowa Domestic Perspective Mr. Leroy Stohr—Farmer, Clear Lakes, South Dakota The Honorable Mike Espy, U.S. Secretary of Agriculture The Honorable Gene Moos—Under Secretary of Agriculture Afternoon Session for International Affairs and Commodity Programs international Perspective The Honorable Patrick Leahy, U.S. Senate and Chairman— U.S. Senate Committee on Agriculture, Nutrition and Forestry The Honorable Mike Espy, U.S. Secretary of Agriculture The Honorable E “Kika” de la Garza, U.S. House of The Honorable Michael Kantor—U.S. Trade Representative Representatives and Chairman—U.S. House Committee on Agriculture The Honorable Timothy Penny, U.S. House of Representatives and Chairman—U.S. House Agriculture Dr. David Freshwater, Associate Professor—University of Subcommittee on Foreign Agriculture and Hunger Kentucky The Honorable Cynthia McKinney—U.S. House of Dr. Lynn Daft, Vice-President—Able, Daft and Early Representatives, Committee on Agriculture Mr. Leland Swenson, President—National Farmers Union Mr. Dwayne Andreas, Chairman—Archer Daniels Midland Co. Dr. Donald McDowell, Assistant Professor—North Carolina A & T State University Ms. Ann Veneman, Counsel—Patton, Boggs, & Blow, Former Deputy Secretary of Agriculture Mr. John White, Sr., President of Illinois Farm Bureau— National Farm Bureau Mr. Steve McCoy, President—North American Export Grain Association Mr. Allen Rosenfeld, Acting Codirector—Public Voice for Food and Health Policy Mr. Ken Hobbie, President—U.S. Feed Grains Council Mrs. Elaine Stuhr—Agricultural Women’s Leadership Mr. Richard Douglas, Senior Vice President—Sun Diamond Network Growers of California Mr. Ken Cook, President—Environmental Working Group Ms. Carol Brookins, President—World Perspectives Mr. Leroy Watson, Assistant Legislative Director—The Mr. Charles Sykes, Vice President—CARE National Grange Mr. Joel Villalon—South Texas Grain Mr. Robert Miller, President—Intertribal Agricultural Council Mr. David Garst—Double G Ranch, Iowa Mr. Murray Lull—American Bankers Association Mr. Henry Voss, Director—California Department of Food Ms. Dolores Huerta, Vice President and Cofounder—United and Agriculture Farm Workers of America Gene Moos—Under Secretary of Agriculture for International Mr. Willie Nelson, President—Farm Aid Affairs and Commodity Programs National Association of Conservation Districts—Mrs. Mary L. Submitted Papers Gab, Auxiliary President Agri-International, Inc.—Mr. Walter Stern and Mr. Jeff National Cotton Council—Mr. W. Neely Mallory, President Peterson National Farmers Organization—Mr. Steve Halloran, American Beekeeping Federation, Inc.—Mr. Troy H. Fore, Jr., President Executive Secretary National Grain and Feed Dealers Association—Mr. Todd E. American National CatthkeWomen, Inc.—Ms. Karrie K. Kemp, Director of Legislative Affairs Patterson, Executive Vice President National Grain Trade Council—Mr. Robert R. Petersen, American Sheep Industry Women—Ms. Aggie Helle, Past President President Northwest Horticultural Council—Mr. Christian Schlect, California Walnut Commission—Mr. Turner L. Oyloe, Chief President Executive Officer Rice Millers Association—Mr. David Graves, President and CoBank—Mr. Robert O. Triplett, Executive Vice President Mr. Carl Brothers, Board Member Consultant—Mr. Robert H. Rumler (Chairman Emeritus of U.S. Agricultural Export Development Council—Ms. Helen Holstein-Friesian Association of America) Miller, Executive Coordinator Louisiana Rice Growers Association—Mr. Lenny Hensgens, U.S. General Accounting Office—Mr. John W. Harman, President Director, Food and Agriculture Issues National Agricultural Costs of Production Standards Review Women Involved in Farm Economics (WIFE)—Ms. Joyce Board—Mr. Carl E. Weiler Spicher, National President