Note: As prepared for delivery

Thank you Bob, for that kind introduction. It's great to be with all of you this afternoon.

As you know there is a lot going on in Washington, DC, but with so many producers together here in the same place, I'd like to take a moment to talk about what we need from you back home ... and that is to make sure you add completing the census of agriculture to your to-do list for this year.

I'm guessing those forms are sitting on your desk or kitchen table at home, right now, waiting for you to get to them.

Now, I remember my father filling out the census when I was growing up on our farm in Benton County, Indiana, and-to be honest-never being very happy about doing it. But he always filled it out, because he knew that the census is a crucial tool that gives farmers a voice in farm policy.

In fact it is the only source of uniform, comprehensive agricultural data for every county in the nation.

So it really is a critical tool, and I encourage everyone to take part in it this year.

Now back in Washington, we are quite focused on getting a good farm bill passed by Congress and signed by the President...in short order.

I know you, like me, are becoming more restless with each passing day that we don't have a farm bill completed.

Congress will be back in town in a week or so to begin the conference process and reconcile the differences between the bill passed by the House and the one passed by the Senate.

We have already traveled a long road to get to where we are today.

And with all that has gone into this process, it would be great to be able to tell you that we are just a few short steps away from wrapping up a final package that we can deliver to the President for his signature.

Unfortunately, that's not where we are.

I've been around this track a few times. In fact, this is the sixth farm bill I've worked on. So I'm well aware that farm bills are never easy pieces of legislation to pass and that sometimes the toughest decisions are left to the last moment. That may be the case this year as well.

Right now, we have some fundamental differences with Congress over the two versions of the farm bill it has put together. The bills passed by the House and the Senate, as they stand today, are not on the road to a successful passage.

Our concerns are with what is in these farm bills and-just as importantly-with what is missing from them.

First and foremost, we are concerned about the fact that both versions of the farm bill call for tax increases to fund new and expanded programs.

The President has been quite clear about his position on raising taxes. He is against them.

Ladies and gentleman, in virtually every major piece of legislation that Congress tried to enact last year, attempts were made to increase taxes. This included some very popular topics such as energy legislation and legislation dealing with children's health insurance. The President successfully kept this from happening in every circumstance.

My guess is that most of you in this room would commend the President's fortitude. Most of you, like me, would not favor growing the size of the Federal government.

Now we come to the farm bill and I guess we should not be surprised that Congress' first thought is to raise taxes again. But the answer from the President will be the same as it was with all the other legislation last year. This is a non-starter when it comes to quickly getting a farm bill signed into law.

We simply don't believe other sectors of our economy should be asked to pay additional taxes for programs in the farm bill-especially when the current versions of the bill fail to reform farm payments even to nonfarmers living on Park Avenue.

We don't believe that our very limited farm program dollars give us the luxury to send farm income support payments to absolutely anyone-even those people with a lot of wealth and those who may not have even seen the land from which they are collecting payments.

Ladies and gentlemen, this is something we have to stop. We need to reinvest that money into programs from which real farmers benefit - like research and market development and conservation programs.

The Senate version of the farm bill would increase overall spending by $37 billion through a series of budget gimmicks and tax increases. In our opinion, this is not acceptable farm policy.

The Administration's farm bill proposals delivered $5 billion of additional help, and we did so without raising any new taxes, and with an honest budget accounting system.

Unfortunately, both versions of the farm bill rely on budget gimmicks to increase the size of certain programs.

Ladies and gentlemen, if you tried to use the type of accounting used for the farm bill on your own farms and ranches...simply put, your bankers would own the farm.

What they do is simply shift liabilities-or accelerate payments-from one year to another getting what in effect is a budget savings on paper, but without actually reducing the taxpayer dollars being spent.

We are also concerned about the trade-distorting effects of increasing target prices and loan rates-as both bills would do.

At a time when we have record exports, record farm income, good prices, we don't need to paint a bull's eye on our farmers' backs.

A good coach does not pull out a trick play when the game is won and victory is at hand.

And we are troubled by what's missing from these bills ... real reform of our farm programs in the areas where producers-in the Farm Bill Forums we held around the country-told us it is needed the most.

Neither the House nor the Senate has gone far enough toward imposing a meaningful income limit on participation in farm programs.

Nor have they gone very far toward reforming the way beneficial interest is applied in marketing loan transactions.

Ladies and gentlemen, this Administration strongly supports significant investment in agriculture and we understand that farmers face significant risk every day, but a farm bill that fails to address these issues erodes support and puts our agricultural policy on shaky ground for the future.

And it is one that I and the President's other senior advisors on agriculture will recommend he veto if it is presented to him.

I do not say this lightly. In fact, it causes me great pain because I know how important passage of this bill is to farmers and agribusinesses across the country.

We want to vigorously defend agriculture support, but farm program benefits going to Park Ave., New York, makes that much more difficult than it should be.

We still have the opportunity to sit down and work together-as we have done so many times in the past-and come up with a reform-minded bill that is fair to taxpayers yet builds an even stronger safety net for our producers.

To get the job done, we simply need to bring courage and common sense to the bargaining table.

Ladies and gentlemen, we are coming off another year to celebrate in agriculture and despite a stalled farm bill things are so good there is plenty of reason to be optimistic about what lies ahead as well.

Last year, corn, soybean and wheat prices all hit record highs. Prices for other commodities were strong as well. And the revenues they generated flowed down to the bottom line for producers.

Our agricultural exports set a record for the fourth straight year-coming in at $82 billion in sales.

What largely drove these gains was the strong demand for energy crops here in the U.S. and the strong demand from foreign buyers for a wide range of our agricultural goods-everything from wheat to beef and from dairy products to processed fruits and vegetables.

Both of those factors are going to be in play again this year.

The new energy bill that President Bush signed into law last month is an exciting development that builds an even stronger floor under demand for energy crops.

Not only does it set a very ambitious long-term renewable fuel goal for the nation-to boost our production to 36 billion gallons by 2022-15 years from now-but also it gives us a very challenging standard for this calendar year-nine billion gallons of renewable fuel.

Most of that is going to be ethanol made from corn, so tremendous opportunity lies ahead of us in this area. Some people are even calling the Energy Bill "the Best Farm Bill in Decades." I tend to agree with them.

Beyond our borders, the rapid economic growth in developing nations and the rising incomes that this growth is creating are continuing to stimulate new demand for our agricultural products.

Those 1 billion new middle class consumers we have been expecting to emerge in developing countries over the next decade are already showing up and making their presence felt in China, Mexico and other major markets. They are buying more prepared foods, more dairy products and more beef, pork and poultry.

This worldwide dynamic of rising demand is one of the big reasons we are now forecasting that total U.S agricultural exports this year will reach $91 billion, up $9 billion over last year's very strong performance.

Market forces are the main engine of this growth, but, as we all know, there is a great deal that government can do to help or hinder the flow of goods.

At USDA, we believe one of our most critical missions is removing barriers to trade and securing a level playing field for U.S. producers who want to participate in foreign markets.

We appreciate the Farm Bureau's strong support for our initiatives in this area and the vision we share on the importance of free and fair market access.

We took a great step forward last month when President Bush signed the Peru Free Trade Agreement after the Senate approved it by a strong bipartisan vote of 77-18.

This agreement alone-and I'm going by Farm Bureau calculations here since you've done the homework on this-could generate more than $700 million in new sales for American agriculture each year.

The next chapter of the story should be passage of the free trade agreements with Korea, Panama and Colombia.

Taken together, these four agreements-and I'm going by your estimates again-have the potential to open up more than $3 billion in new export sales for America's farmers and ranchers.

Ladies and gentlemen, I know how much optimism, skill and energy you bring to the work that you do. And I know that with the support of a strong safety net at home and an open gate to level playing fields abroad, America's farmers and ranchers will continue to set the pace for the rest of the world.

To conclude, let me just say that I am a great proponent of the Farm Bureau. My father was a lifelong member---a membership maintained by my mother. My earliest childhood memories involve going to Farm Bureau pet and hobby while my parents attended the meetings.

Some of you know the stories about how Farm Bureau impacted my early professional days. It is difficult for me to bring a stern message about the farm bill to this group. But my parents and all those Farm Bureau members who had such an impact on my early life were pretty straight shooters.

I cannot sugar coat this message about the farm bill to you. It would not be accurate and it would not be right if I did.

I believe we can still get this done. Each one of you will be a key player in making this happen and I look forward to working with you once again to see a successful conclusion to this bill.

Thank you all for having me here today.