REMARKS OF SECRETARY DAN GLICKMAN
NASDA BIANNUAL LEGISLATIVE CONFERENCE
WASHINGTON, D.C. -- MARCH 2, 1998

INTRODUCTION
Good morning. It's good to see so many familiar faces. You know, last year
when I spoke to all of you, I got to crow a bit about record farm incomes and
exports. It was a pretty all-around rosy picture. This year, it's clear we've
hit a few bumps in the road, but the outlook for American agriculture in the
long run remains quite strong. 

But with today's conditions -- the uncertainty in Asia, record world food
production, and the resulting dip in prices -- these factors in combination
with the direction of U.S. farm policy -- away from strict government controls
on what and how much is planted -- one thing's pretty clear: USDA's
partnership with the states, and directly with farmers and ranchers, is going
to be more important than ever to agriculture's success. 

Of course, these challenges occur at a pretty good time. We have the strongest
economy in a generation; the lowest interest rates, inflation and unemployment
in more than 20 years; and now, thanks to President Clinton, the first
balanced budget in a generation. This means more families can buy homes, send
kids to college and start businesses, and more farmers can pay off debt, buy
equipment and otherwise shore up their long-term prospects.

But we all know that if you're a farmer, you've always got one eye on the
horizon, scanning for those dark clouds. We never know when Mother Nature's
going to come out of nowhere and give us a wallop below the belt -- whether
it's a twister in Florida or the dread El Nino. And, we never know when some
of our best export customers may find themselves in economic trouble. We only
know that in agriculture challenges do arise without much advance notice, and
we need to be prepared.

ECONOMIC OUTLOOK
As agriculture's leaders, I'd bet it's fairly easy for most of us in this room
to see that the main way we grow our farm economy here at home is to
aggressively pursue our opportunities around the world. It's a fact of
agriculture and of life that if you don't grow you die. The most rapid growth
in the world today -- in incomes and in populations -- is occurring outside
our borders. We need to reach out to the world. An aggressive export strategy
is the secret to our success.

In 1994, U.S. agricultural exports stood at $44 billion. Even with this year's
record world crop production and the financial crisis in Asia, our exports are
expected to reach $56 billion. That's $12 billion more than just three years
ago, the third highest number ever. This strength amid significant challenges
gives us good reason to be optimistic about agriculture's future. And, I
should point out that a lot of our export strength today is fueled by a $1-billion increase in farm exports to our NAFTA partners, and that's across-the-board sales, benefitting almost all of our agricultural products.

So despite short-term challenges, we've gone in a matter of years from
hovering in the low $40 billions to the high $50 billions on our exports,
which is serious progress by any yardstick. I should also note that the gross
volume of our exports -- the actual tonnage of food and fiber we sell to the
world -- will be up in 1998. 

What does this tell us? Well, especially as we phase down commodity payments,
when prices get weaker, as they are today, we need to sell more to keep farm
incomes strong. And, that means we have a huge stake in what goes on in the
world outside our borders, where 96% of our potential customers reside. While
I think most of us who are agriculture's leaders can see that agriculture's
future is inextricably linked to trade, we need to do a better job of making
sure that the grassroots -- farmers and ranchers -- see this connection, this
future, as well.

Until now, the trade argument has had a fairly academic -- not really
connected to the real world -- aura about it. This has made it easier for
folks to identify with the few who've been pinched by freer trade than the
many who've benefitted in less tangible ways -- say prices that are stronger
when it's not clear how much of that is due to the demand in world markets.

So I think the Asia situation is giving us an important reality check: what
happens halfway around the world has consequences here at home. 

That's why support for the International Monetary Fund is so critical. Their
job is to stamp out serious national and regional fiscal crises to prevent a
global contagion. Remember those first few days when the Dow caught the
jitters? Just imagine if that had gone on and on.  

By pushing countries toward serious financial reforms, an end to cronyism and
freer markets, the IMF is calming the waters and helping maintain U.S.
agriculture's opportunities in Asia. USDA has extended more than $2 billion in
credit guarantees to the region for the purchase of U.S. food and fiber. Those
guarantees would not have been possible without the IMF's reforms that
restored the regions' credit-worthiness. Without them, U.S. agriculture could
have lost another $2 billion in farm exports. So strong U.S. support for the
IMF is critical to agriculture, and it does not cost taxpayers a dime. These
are loan guarantees, backed up by collateral.

I'm glad to see that you are spending the entire day tomorrow on trade. This
is a peculiar challenge to agriculture's leaders. Not only do we have to focus
on the world, and expanding our farmers and ranchers opportunities, but we
also have to focus on our own farmers and ranchers, and make sure that the
message is getting out that trade is the future. 

We cannot hide from the global economy. We either can sit back and let it be
run by our competitors, or we can get out there, compete and shape the
direction of our future. That's been this Administration's strategy from day
one, and our export numbers make it clear that's paying off. But now, as
traditional barriers to U.S. products come down, we need to work to make sure
that more creative hurdles don't take their place. Nowhere is this more
apparent than in the form of bogus science. Not a day goes by when my staff
and I are not doing battle against phony sanitary and phytosanitary barriers
to U.S. agricultural products. I want you to know that in future trade talks,
we will seek not just greater market access and market transparency, but more
sunshine when it comes to countries' regulatory processes, as well.

This is particularly of concern to me in the area of biotechnology. You know,
USDA recently had its annual Outlook conference, and we had a fascinating
discussion on biotechnology. We had a representative from a food retailer in
Europe, talking about labeling. At first, his company opposed it because the
science shows the products are safe. Now, they label because of the public
pressure in Europe. We also had on that panel someone from Pioneer Hi-Bred,
who said that in 1997, 45 million acres of GMO crops were planted. He said
that number would hit 100 million in two years time.

So we have a challenge in the trade arena to see that countries rely on sound
science in making their decisions about the products of biotechnology. But we
must also not ignore the consumer challenge. We need to educate world
consumers about both the safety and the promise of these products.  We are
talking about the ability to increase yields and decrease pesticide use. The
implications for the environment, for world hunger are monumental. I talk
about this all the time, around the world, and the more people hear it, and
the more they hear that our position is based on science, the more accepting
they are. 

FARM SAFETY NET
Of course, while expanding trade is central to American agriculture's future
success, it's not the only piece of the puzzle.

I have a number of legislative proposals that have either been sent to
Congress or are on their way that are aimed at giving farmers greater
financial flexibility in this new market environment: 

-- I've asked to expand our pilot crop revenue insurance efforts into a
permanent, nationwide program that is available for all major row crops.

-- I want limited authority to extend loans (and waive interest during the
extension) to give farmers some breathing room during severe market
disruptions.

-- I want to let farmers use guaranteed operating loans to pay the principal -- not just the interest -- of their real estate payments. This is something
commercial lenders allow, and we should, too. 

-- I want the authority to try some pilot loan programs to explore innovative
ways to improve USDA's ability to deliver credit to farmers.

-- And, I want to restore the notion of redemption to our farm credit policy.
The  96 Farm Bill stripped every producer who's ever had a USDA farm debt
write-down of the ability to get another government farm loan. That's a
stricter standard than private lenders use, and it is wrong.

-- We also have a proposal to put crop insurance on more sound footing, so
producers can have some certainty that adequate funds will be there for these
programs in the future. 

-- I'm also asking that we extend the livestock sector's fair-pricing
protections to poultry as well.

-- And, we are seeking legislation to protect co-ops from pricing
discrimination, too.

We also have to look beyond the farm to other items that factor into the
strength of agriculture.

-- American agriculture is inadequately served by our transportation
infrastructure today. Anyone who saw the grain on the ground across the
Midwest just a few months ago knows this. A good chunk of the cost of our food
and fiber is the cost of transportation. The higher those costs and the less
reliable the service, the less we can compete in world markets. As Congress
reauthorizes transportation legislation this year, the needs of agriculture
must be a top priority.

-- Food safety is another key battleground. Safe food sells, and America today
has the safest in the world. Look at the big food safety scares of last year.
After the  bird flu' scare in Hong Kong, after the  mad cow' crisis in
England, consumers there cut their purchases of those products in half. What
happened here after the Hudson beef recall? Barely a blip. I think that's
consumers telling us they're glad to see us move forward with all our various
food safety efforts -- from new inspections, to research, to enforcement. It's
giving them confidence in the safety of their food, and that confidence is
paying off for U.S. producers.

-- I also believe that farmers need more help from their government in
adopting more sustainable practices. Clearly, this is the direction the
American people want us to go. And, I take every public opportunity I have to
say this: Given real help, it's the direction farmers and ranchers want to go,
too. All we need is for America to put its money where its priorities are --
which is why this Administration from day one has pushed well-funded,
voluntary, incentive-based programs that value our environment and the
critical work of our farmers and ranchers. 

President Clinton's balanced budget proposes a $100 million increase every
year from 1999 to 2002 in the Environmental Quality Incentives Program which
offers producers technical and financial help in adopting sustainable
practices.   

I know that some of you are concerned about the new Food Quality Protection
Act. Let me assure you that I am working with the Environmental Protection
Agency to ensure that farmers' concerns are given serious consideration. 

I should also add that I stood with President Clinton when he announced his
Clean Water Action Plan, and I made one thing crystal clear: agriculture is
part of the solution. I mentioned that through buffer strips, farmers and
ranchers can keep as much as 70% of their runoff from  ever reaching
waterways, and any farmer who wants to do that can get generous help from
USDA. I also sort of stole the show by announcing a new corn variety that --
when fed to chickens and hogs -- well, plainly put, means 50% less phosphorus
comes out the other end. This is a huge clean water event, and it will save
farmers money because this corn's phosphorus eliminates the need for costly
dietary supplements.

As we talk about the big challenges ahead, whether it's the environment, or
producing safer food, or feeding a growing world, or building a stronger U.S.
farm economy, increasingly we turn to research for the innovations that make
this all possible. Last week, I released a study that found that 75% of the
growth in productivity of our farms and ranches is due to the contributions of
publicly funded agricultural research. 75%. 

Unfortunately, we've allowed the funding of that research to stagnate since
the 1970s. That's something I hope to work on with Senator Lugar and others in
Congress in a bipartisan fashion. We have to work within the confines of a
balanced budget, of course. But I think if we set our priorities in ways the
public cares about -- increasing yields, producing more nutritious and safer
food, helping farmers find environmental solutions -- if we do this, we can
find the funds necessary to keep up the brisk pace of agriculture's growth.

CONCLUSION 
So we have our work cut out for us in the year ahead, but that's nothing new.
I'm glad to see that your agenda hones in on all the critical debates. It's
important that folks outside of Washington make their voices heard here, and
make it clear why strong support for production agriculture is critical to the
nation. Thank you all for inviting me here today, and thank you for the work
you do every day on behalf of American agriculture and our nation.

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