Secretary Schafer, Deputy Secretary Conner Conference Call with Reporters: Announcement of a New Farm Bill From Congress - May 9, 2008 | USDA Newsroom
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Secretary Schafer, Deputy Secretary Conner Conference Call with Reporters: Announcement of a New Farm Bill From Congress - May 9, 2008 Release No. 0123.08
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May 9, 2008 - WASHINGTON, D.C.

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MODERATOR: Good afternoon from Washington. I'm Larry Quinn speaking to you from the Broadcast Center of the U.S. Department of Agriculture. Welcome to today's news conference with Secretary of Agriculture Ed Schafer. Joining the Secretary by audio connection from Ohio is Deputy Secretary Chuck Conner. The topic for today's conference is the announcement by Congress yesterday of the new farm bill.

Now it's my pleasure to introduce Secretary of Agriculture Ed Schafer.

SEC. ED SCHAFER: Good afternoon, everybody. Thank you for joining us. We appreciate you dialing in today, and I'm glad to have you. Our lead farm bill negotiator Chuck Conner is also with us; he's joining us via telephone hookup from Ohio actually, out there in the middle of Farm Country. I hope you're not getting beat up too much out there today, Chuck?

DEP. SEC. CHUCK CONNER: Not today. Not today.

SEC. SCHAFER: Okay, all right. We want to talk to you today about the farm bill that Congress is now putting into final form and plans to send to the President very soon. We don't know everything that's in the bill yet, but we have a pretty good idea of what the major provisions are going to be. And while we appreciate the House and Senate's effort to come to an agreement and present a final bill, I have to say we are disappointed with the results.

As I said yesterday, I don't endorse what they have been doing. As Americans are tightening their belts to cope with higher food and energy prices, this bill would increase the bill on taxpayers by nearly $20 billion. Congress claims that the spending increase is only $10 billion, but really that doesn't take into account all the budget gimmicks and shift changes that are still in the bill. These gimmicks shift the timing of payments through reducing their government overall obligations and that continues to be just too expensive.

If the Farm bill put forth by Congress truly spent only $10 billion above the baseline, the Administration would have been willing to consider it so long as it contains real reforms. Unfortunately, this bill does not reform farm programs. In fact in some areas it would take a step backward. It actually increases government spending on sugar, so domestic producers can be assured of nearly double the world's market price.

It also reportedly increases the loan rates for 15 crops and the target prices for 17 crops. This is trade-distorting support that makes our programs vulnerable to challenge from abroad at a time when trade is more important than ever to our farmers. In states like North Dakota, trade accounts for 50 percent of the market for our agriculture products.

It also fails to reform the Beneficial Interest Program. Instead, it would continue to allow producers to lock in large subsidies when prices are low but then wait to sell their crops until prices are high. You know, this just means that producers can collect both government payments and a high market price. In effect, U.S. taxpayers are paying farmers a second time for the same crop.

This bill also fails to adopt the President's proposal to reform the Food Aid program to allow up to one-fourth of the funds to be used to buy food near the crisis area. This would just simply help save lives in some of the most stressed areas in the world. Instead, the bill mandates that a large percentage of our food aid be set aside for non emergency uses, and this would cut off food aid to up to 8 million people, the equivalent of the entire population of Somalia.

Rising food prices and natural factors like drought and flooding are causing severe hunger in developing nations. At a time like this, I just don't see how we can drastically reduce our capability to respond to those in need. The bill that Congress is presenting is incompatible with the realities of the U.S. and the world economies. We are enjoying a time of record strength in the agriculture industry. Net cash farm income is projected to be $97 billion this year. Farm equity is expected to increase by $280 billion. And yet as commodity prices and farm income continue to rise, Congress is proposing to increase, not decrease, government subsidies to farmers.

What's more, the bill fails to set a reasonable income limit for when a producer can graduate from taxpayer support. The Administration proposed limiting the subsidies to farmers who have an Adjusted Gross Income of $200,000 annually, a level that puts them among the top 2 percent of all income earners in the country. We were willing to compromise on an AGI limit of $500,000, but we understand that this bill only limits off-farm income to $500,000 and allows on-farm income of somewhere between $750,000 and $950,000.

And it means a part-time farmer or an absentee landowner who makes up to $500,000 net adjusted gross income in a business other than farming would still be eligible to receive taxpayer funded subsidies. I have to wonder if there's even one farm out there that would be removed from taxpayer supported pay-outs because of this law.

Wasteful and irresponsible spending like this will erode America's support for our farmers and ranchers. Agriculture is the backbone of our nation; it's driving our economy and providing opportunity today like never before. But farming is an unpredictable business, and our farmers and ranchers deserve a good safety net. The proposals the Administration put forward almost 18 months ago would have preserved and strengthened that safety net while also reforming and modernizing our programs to meet the realities of today's world.

What Congress has proposed is not what is needed. Congress has presented a bill that increases subsidies to farmers in a time of record farm income, it has given us a bill that increases taxpayer spending at a time of tighter budgets, and it has given us a bill that restricts our ability to help the hungry in a time of rising food costs.

In short, Congress has failed to present the Administration with a good farm bill, and in doing so it has done a disservice to farmers and ranchers and, importantly, to taxpayers across this great land.

I have visited face to face with the President. He was very clear and very direct. The President will veto this bill when he gets it. And those are the end of my prepared comments today, and now we will be happy to answer any questions that you may have.

MODERATOR: And our first question today comes from Erica Nelson from Inside U.S. Trade. Erica?

REPORTER: Yes, hello. Thank you, Mr. Secretary. I have two questions. Number one, are you working against the conference vote that's coming up next week? And also, do you expect Boehner to whip against that vote or perhaps an override vote if it comes to that?

SEC. SCHAFER: At this point in time, we don't know what's going to happen as far as contacting members and trying to get them on the side of the taxpayers and things like that. But you know, I do know that we have an up-hill battle here to sustain a veto.

REPORTER: Have you spoken with Baynor at all?

SEC. SCHAFER: I have not.

REPORTER: Do you plan to?

MODERATOR: The next question comes from Peter Shinn of Brownfield Network. Peter will be followed by Matt Kay. Peter, go ahead, please.

REPORTER: Can you hear me okay?

SEC. SCHAFER: Yes, sir.

REPORTER: Okay. I guess I would just ask you, you mentioned that you've got an uphill fight to sustain a veto. At the same time, it does seem like Congress has moved substantially in the Administration's direction. Is it the feeling of the President then, based on your conversations that they just didn't go far enough?

SEC. SCHAFER: You know, I guess I would wonder about the term "substantially." You know, they are doubling the expenditures from what we think is appropriate, and that doesn't sound substantial. You know, they've taken some headline efforts and some conversational efforts to put limits in subsidies, but when you drill down on them they don't take anybody out of the equation.

So where have they substantially come in reforms? I don't see where they've come. I think in the last hours, the last few days I think Congress finally got the point to where they were trying to take into consideration what the President and the Administration is looking for here. But you know, in the end they kind of just folded it all back into the bill that they had on the table, and they did not make any kind of substantial change either in the spending area or in the reform area.

REPORTER: If I can just have one follow-up, sir, I would just ask: What about those who say, 'Hey, what they did was put in a safety net for farmers; and although that's not needed now, in three or four years global production -- USDA reports out this morning, show an uptick in global production in coarse grains, wheat and oil seeds -- that we could see lower prices in three or four years and that we'll need that safety net then.'

SEC. SCHAFER: You know, the safety net should be there as a safety net, and the President supports a safety net. We in the Administration have put forth a strong safety net for farmers and ranchers. At a time when we're seeing here record commodity prices, we just don't believe it's the time to raise subsidy levels.

When people can't afford to meet their grocery budgets, why should their tax dollars be going to people that have net farm record income?

So certainly one can make the case that things may change, and one will make that case that things will change. But the reality is, we have a farm bill on the table now that has produced those record incomes that have given good public policy direction. And in fact the safety net programs that were put in place for this new farm bill are worse than the current farm bill. So I don't know how they can say they make any progress.

MODERATOR: Matt Kay of Burns Bureau is next, followed by Larry Dreiling. Matt, go ahead, please.

REPORTER: Yes. Thank you, Mr. Secretary. You say again you've got an uphill climb to overcome in the House, that it might be tough for them to get a veto-proof margin. We're hearing on the other side it may be tough to get a veto-proof margin. You're saying, this is going to be a very close vote on getting that 290 or 291.

And secondly, is there any consideration that you might be aware of that there is thought about a pocket veto on this bill?

SEC. SCHAFER: I think the President was very clear, he's vetoing the bill. You know, there's no need for a pocket veto here. So you know, where we go with the numbers, I do think it's going to be very close, and I think it's going to depend on this.

If the elected representatives that come here to Washington to represent the people in their districts listened to those who want fatter paychecks, bigger supports, more effort in their communities and their operations from a dollar standpoint from the American taxpayers, they're going to vote to override the President.

(However) If they listened to those folks out here who are struggling to make ends meet, who are having trouble buying groceries with the higher food prices, who are looking at saying, 'My taxpayer's dollars are going for what, to increase subsidies in a high cost food arena?' -- If they listen to those folks, then we're going to sustain the veto.

REPORTER: Larry Dreiling has the next question followed by Jerry Hagstrom. Larry Dreiling, High Plains Journal, go ahead.

REPORTER: Good morning, and good morning, Mr. Secretary. Thanks for taking the time for us. I want to ask about what kind of direction would you like to now take this bill, as even though we're going to probably see a veto they are going to come back. What specifically could you compromise on that could make this bill more palatable to the Administration?

SEC. SCHAFER: You know, we have said from day one here, if we're going to see increased spending it's going to come with reform. And everybody has their own definition of "compromise," but the reality is, we need to see reform. And these reform efforts are important; they're important for the taxpayers; they're important for our long-term trade negotiations on a global basis that provide opportunities for the very people are looking at higher subsidies. So we're looking at those reform issues that keep us in balance with the economy of today and don't put us in a worse position on our trade negotiations on a global basis.

So the areas where we'll be working -- whether the compromises are there or not -- but the areas where we'll be working are those areas on the reform side.

REPORTER: Okay. But you didn't give us -- I need a specific answer. What reform issues do you really want to see?

SEC. SCHAFER: We want to see limits on subsidies. We want to see a change in the beneficial interest. Those are the top two. We've got -


SEC. SCHAFER: -- gross income limits or however you want to do it. And Chuck, you've got a handful of others?

DEP. SEC. CONNER: Yeah. No, we've got sugar. We don't want any provisions that extend labor preferences in this bill through Davis Bacon. You know, we've been very clear with Congress on our list of demands. There should be no question about that.

SEC. SCHAFER: And you know, the big issue is, we've got provisions in there that distort trade, and we want to see the reforms move away from that.

MODERATOR: Next question will come from Jerry Hagstrom, and Jerry will be followed by Ian Swanson. Jerry Hagstrom, go ahead, please.

REPORTER: Yes. Governor John Hoeven of North Dakota who is your handpicked successor has put out a statement that he is in favor of the bill and that he believes President Bush should reconsider his plans to veto it and has told you this. What is your reaction to Governor Hoeven's position?

SEC. SCHAFER: The governor called me yesterday. I'm not sure he was my handpicked successor. I thought the voters did that. But that would be nice. That would be a good way to leave a legacy, Jerry. Thank you. But the reality is, he's looking at it from his side of the table; I'm looking at it from our side of the table. You know, a lot of people including the governor say there are many, many things in this farm bill that are appropriate, and we agree. There are many things in the farm bill that the Administration stands for, that wants to see, that are important for our public policy direction in this country.

There are also many people in this arena that are saying, 'There are always going to be things in there that you don't like, and sometimes you just have to swallow hard and take what you can get.' And I think the governor recognizes there are some elements in this bill that maybe aren't the greatest, but in his opinion on the whole it's something that should be signed.

I disagree with him. I think in today's arena in the global marketplace, in the trade arena, in the economies today and with the pressures that taxpayers are facing out there today, now is not the time to spend $20 billion over baseline. Now is not the time to increase subsidies to farmers. Now is not the time to do these things.

I appreciate his comment, his input. We obviously had a nice pleasant conversation about the issue. But we disagree.

MODERATOR: Next question comes from Ian Swanson of the Hill, and following Ian is Mary Clare Jalonick. Ian, go ahead, please.

REPORTER: Hi, Governor Schafer. I wanted to ask about the politics of this. You are obviously a savvy politician. Do you think President Bush's veto could hurt Republicans running for congressional seats in places like Kansas, your home state of North Dakota? How do you think it plays politically?

SEC. SCHAFER: I think that's a possibility. There are always factors on the national scene that affect local races. And it's possible that being politically expedient could have caused the President to sign this bill, but I am very proud of the President standing on his principles, of understanding that this is the right thing to do and be willing to put that on the table. Certainly we're all going to be cheering on from afar and arms length, and in my new position uninvolved in the political arena. But you know, hopefully in local elections people can understand the forces that be, and they are the ones that make the decision in the voting booth. So I do think that it can have some impact.

MODERATOR: Mary Clare Jalonick from Associated Press is next, followed by Heloma Abdulla. Mary Clare, go ahead.

REPORTER: Hi. You've already touched on this a little bit, but if you could just detail the top few ways this bill would fail to help with the global food crisis?

SEC. SCHAFER: The big issue is, we asked for 25 percent of the emergency food aid programs to be delivered locally. That would allow us on a fast basis to get products into the hands of people in emergencies that need help, that need food, that are hungry and scared and everything else. It takes forever in an arena like that to ship our products over here, and I can certainly understand the desire to purchase our products locally here, our commodities, and ship them over. I'm a 'Buy American First' guy myself. But the reality is, we can respond faster, we can respond better, and we can take care of people better in an emergency situation by buying locally in their neighborhoods.

So we think that's important, and Congress won't give it to us. Beyond that, what Congress has in the new bill is saying that we have to set aside 25 percent of the commodities and not use them for emergency aid, or we're not allowed to use them for emergency aid. Again, that ties our hands to be able to respond to emergencies, to make the proper judgmental decisions about when and where, and so it just cuts fast response food aid off to about 8 million people.

REPORTER: Any other ways the bill -

DEP. SEC. CONNER: If I can just add to that as well. I think more fundamentally even, this farm bill just heads in the wrong direction in terms of our international obligations. It's no secret our current farm programs under current law have come under enormous fire for their adverse impact on developing regions of the world and their ability to increase their agricultural production because they can't compete against the farm subsidies of the developed world.

How does this bill respond? This bill responds by increasing trade-distorting supports on 17 out of 25 of the commodities that we provide. This is moving, clearly, in the wrong direction in terms of helping the world sustain themselves through food production.

MODERATOR: Next question comes from Heloma Abdullah, McClatchy Newspapers, Washington Bureau, and she'll be followed by Forrest Laws. Go ahead, please.

REPORTER: Yes. Hi. I wonder if you could elaborate on concerns that you might have about the provision in the bill that would allow the price of (race)horses to depreciate more quickly.

SEC. SCHAFER: I don't know what to say. You know, it seems to me that is a provision that was important to some folks on the Hill. I don't know much about the horse raising industry and high value horses that need to be depreciated. I thought you had them on the farm and rode them around once in awhile to have fun when you were a kid. You know? So I don't know that I even want to make a comment on that. I don't fully understand that whole depreciation issue on the (race)horses.

MODERATOR: Next question comes from Forrest Laws of Farm Press Publications and Forrest will be followed by Missy Ryan. Forrest, go ahead, please.

REPORTER: Thank you, Mr. Secretary. In a press conference yesterday, Senator Lincoln said that she felt that the Administration had been changing its position on the farm bill each time they had come back with a different position, and that they weren't sure that the President was really serious about signing the bill. Could you comment on that, please?

SEC. SCHAFER: Well, you know, I think she's right. You know, we started out at a $200,000 adjusted gross income, and because of some of Blanche's concern with high value crops and rice and corn and some things in her state, we did change our position; we went to $500,000 adjusted gross income. So we did move there. We had started out at $4.5 billion over baseline spending, and because the conversations with a lot of people on the Hill we moved it to $6 billion. We did change our position. And then after that, while we didn't ever commit to the $10 billion, we presented Congress with a pathway to get to $10 billion including putting $20 billion worth of funding sources on the table so that they could carve them out and find $10 billion to use.

So she's right. We did have changing positions; we continue to change our positions toward them in an effort to get a farm bill that all could be successful with here.

MODERATOR: Missy Ryan of Reuters has the next question, followed by Philip Brasher. Missy, go ahead.

REPORTER: Okay. Thanks so much for taking the time today. How do you all see the bill's provisions that are designed to encourage the use of the Bill Emerson Trust? Will that be very effective without replenishment of the trust? And also, is there anything else specifically that you can point to that might present problems in terms of the United States compliance with World Trade rules other than the increase in commodity supports that you mentioned for the 17 out of 20 commodities?

SEC. SCHAFER: Sure. Answering your second question first, the issue that I could point you to is certainly the permanent disaster title in there, $4 or $5 billion new dollars in permanent disaster. As we looked at that, that will be an amber box payment in World Trade negotiations. There are a few things they could have done to change that. For instance, 30 percent loss provision and a three-year average price or loss factor, whatever, 30 percent loss and three years average price would have put it in a green box. You know, Congress didn't want to do that. Why, I don't know.

You know, it seems to me when we're so dependent on trade for agriculture and agriculture advancement that they would be doing everything they can to move this into a non trade-distorting arena. But there is one other example there with that permanent disaster fund.

REPORTER: Okay. And on the Trust?

SEC. SCHAFER: I didn't answer her other part.

MODERATOR: Okay, go ahead.

SEC. SCHAFER: What was the first question?

REPORTER: On the Bill Emerson Trust?

SEC. SCHAFER: You know the Emerson Trust is a very important piece for us. As you know, we just sold $200 million worth of grain for emergency food aid. And the replenishment of it is going to be important because we're facing more and more food aid problems across the world. That is a very effective tool to use, but it's one that is set aside specifically for emergency food aid. And we want to make sure there are no restrictions or efforts to allow us to flexibly use that program.

REPORTER: So you are happy with the provisions on that then in the Farm Bill?

SEC. SCHAFER: You know I don't even know what they finally - I don't even know if it's in there or out of there in the end. We haven't -

DEP. SEC. CONNER: We have not seen the final language on that.


DEP. SEC. CONNER: Missy, if I could just add to the first question you had too, I think it's important to identify two provisions in the bill that really are going to give us major problems with our international trading partners. The first one deals with money that has been set aside for payment to domestic textile mills. This is an outgrowth of what we used to call the Step 2 Cotton Payment Program. That Step 2 Cotton Payment Program was ruled illegal by a WTO court despite a vigorous defense from the U.S. We appealed that ruling; we lost that ruling. You know, it has clearly been ruled illegal.

How do they respond to that? They respond to that by creating yet another payment program I believe to the tune of almost $400 million for domestic textile mills. This is going to be a big problem.

As well I would point out in the sugar title; there is a provision in this bill which says that you have to have 85 percent of the sugar used in this country come from domestic sources. You know, a content requirement if you will.

Now, these are two provisions, Missy, that if other countries tried to do this type of thing to our trade we would be incensed. We would protest with every available means we've got.

Now what do we expect them to do in this circumstance? They are going to be incensed, and we would expect them to protest in every way they can.

REPORTER: Thank you.

MODERATOR: Next question comes from Philip Brasher of Des Moines Register, and Steve Kay should be standing by. Philip?

REPORTER: Yes. Mr. Secretary, I have a couple of questions. One, Congressman Goodlatte indicated this week that the President said that he was going to leave it up to members to vote their districts. This would suggest that the Administration is not going to try to pressure members to sustain a veto, which further suggests the President is primarily interested in making a statement about this bill rather than trying to kill it and make Congress start over. I'd like your response to that.

And second of all, on the WASDE (World Agricultural Supply and Demand Estimates) Report that came out today, are you at all concerned that we may be short corn or soybeans? There are analysts that think this corn crop may not even be as good as you all are projecting because of the wet weather we've had this spring, the delayed slow pace of planting.

SEC. SCHAFER: You know, on the first part of your question, Phil, obviously I've talked to both parties that had this conversation. I would remind us all that Representative Goodlatte also had mentioned when he talked to the President that he didn't say anything about a veto, which was nice, wishful thinking. And you know, we all hear what we want to hear. But I think that Representative Goodlatte is wishfully thinking that we won't be working the effort here to allow our representatives to hear the voice of the people and make the proper decision on their votes.

So that will be our effort because we plan on sustaining the veto. The second effort was on the corn issue with the WASDE. When we looked at that this morning, we have to look at the factors that are on the table today. We looked at the trends of the percentage of planting today versus that final outcome in the middle of planting season, which this year is May 18. As we looked at that, every time no matter what the percentage of completion of planting was ahead of time -- whether it was 2 percent, 12 percent, 25 percent or 50 percent -- they all got up to that 85 percent planting at the middle of the planting season.

So looking at the trends, looking at history, looking at what's there today, we made the judgment that we have to assume this will continue to happen and that we will see the acres that we project.

We're very aware that we have wet conditions in a lot of areas, bad weather especially in corn country. It could be affected, but at this point in time our judgment here were the numbers that we put out.

MODERATOR: Steve Kay of Cattle Buyers Weekly is next. He'll be followed by Carol Dumas. Steve, go ahead.

REPORTER: Mr. Secretary, I have two questions. I'll hold the second one until I've heard your response to the first, if I may. Two quick questions:

If the President's veto holds, what would the Administration like to see next occur? An extension of the current farm bill and possible renegotiations of the proposed bill that is now going to Congress? Reversion to an earlier farm bill? Or something else?

SEC. SCHAFER: You know, the President has stated repeatedly that should we not get a farm bill here at a certain point in time, it's better to extend the current legislation. And we'd probably recommend two years extension on that because the '08 crop is virtually in (the fields). But the issue would be, we'd have to evaluate it. You raise a good question because a lot of the talk we heard on the Hill during these negotiations was, 'Oh, the President will never veto this, we don't have to worry about it, we'll put in whatever we want, and it won't be a problem.'

You know, now the reality is, the President is going to veto this. And if we have enlightened our compatriots over on the Hill that the President is serious about developing public policy that's responsible, maybe we can change the dynamics of the conversation and bring in some elements of which I mentioned earlier.

We have good provisions in this farm bill, important ones in conservation and food nutrition and specialty crops and all kinds of other programs that are good. But we need to get some of these elements in place. Maybe if they get the message the President is serious, they will be able to come back and be willing to provide those provisions.

I'd rather see the new structure of the farm bill today if we can get the provisions that we need from the Administration's standpoint. But Congress hasn't shown a willingness to do that, so we would be looking at an extension of the current law.

REPORTER: My second question, if you'll forgive me, is non farm bill. It relates to South Korea. And as you know, there are protests and near hysteria in South Korea regarding the reentry of U.S. beef into the country. And your counterpart in the last few days and the prime minister both have indicated that Korea might want to renegotiate that break-through agreement that your officials worked so hard long into the night to achieve only a few weeks ago, particularly the issue of if we have another BSE case in the United States they might stop all U.S. imports again.

Would you, Mr. Secretary, consider going to South Korea or going on South Korean television and eating U.S. beef as a way to help the Korean government calm down its consumers?

SEC. SCHAFER: (laughs) I think that's a great idea. You know, I like that idea. There's obviously not a lot of loud noise being placed on this issue in Korea. It reminds me here of trade negotiations, WTO in Seattle you know seven years ago. Certainly under the NAFTA agreements, you know, we had a lot of vocal opposition to it here. But you know, the reality politically is, the President was elected by a huge majority. His party was elected to a strong majority in the Parliament. I think they've got the backing of the people.

And at this point in time we don't see any reason. While there is some noise of people who are concerned, the reality is, I was talking to a person who raises beef that just came back from Korea last night. And he was talking to grocery chains who were saying, 'We can't wait to get American beef on the shelf here.' You know, those are the kinds of market pressures that are going to allow this to go through.

REPORTER: Thank you, Mr. Secretary.

MODERATOR: Next question comes from Carol Dumas of Ag Weekly, followed by Dan Looker. Carol, go ahead.

REPORTER: Yes, thank you. You mostly answered my question about what comes after the veto. But do you have an expected timeline as to when this bill might get to the President and then when the veto might take place?

SEC. SCHAFER: We don't have any idea when we're going to get it. I know the staff is still working on language, and in spite of them being 'done' -- their definition of being done -- there still are a few open items. So we don't know when we're going to get it, but I think that since the President has made clear his direction the turnaround is going to be pretty fast.

REPORTER: Okay. Thank you.

MODERATOR: Next question comes from Dan Looker of Successful Farming, and Dan will be followed by Janet Kubat. Dan?

REPORTER: Thank you, Mr. Secretary. The members of the Agriculture Committees are making one selling point to their urban members of Congress that this bill will increase nutrition spending by more than $10 billion. And I wondered, what argument the Administration might use against that in lobbying against a veto override. And I also wondered if the President opposes the $10 billion increase in nutrition spending.

SEC. SCHAFER: You know, I have two comments to make on that, my comments. The first one is, we need to, instead of getting into scare tactics here to get votes and things, we need to remind people that the Food Stamp Program is a mandatory spending program and not one person is going to lose the mandatory adjustments of cost of living that will come in the end of September, first of October.

So when we look at this, we can't say, 'Oh, my goodness, there isn't going to be enough money in there and people are not going to get their Food Stamps,' which was an argument that was put forth on SCHIP legislation and others. Let's not get people anxious here and worried over something that's not going to happen. So I would urge for the effort to get votes not to scare people here. Food Stamp recipients will receive the money, will receive the proper inflationary increases, and let's just keep that on the table.

The second part that I would say is, it's interesting to me at a time when we have a fairly decent sized percentage of people who are eligible for the Food Stamp program and are not participating, and we're working on outreach efforts to bring them in, etcetera, why would we expand eligibility for the program? You know, is this another SCHIP type of deal where let's just continue to have government get immersed in people's lives? You know, or do we really have a problem here?

If our participation rates are going up and if we still have a large element of folks out there who are eligible and do not participate, why are we making more people eligible? Do we want numbers to go up? Do we want to feel good about taking care of people? Or do we want to actually get Food Stamps into the hands of the people who need them? I'm not sure the direction that was taken in this Farm bill increases the ability for people to get Food Stamps that are eligible already.

MODERATOR: Next question comes from Janet Kubat of Agri-News, and she'll be followed by Alison Winter. Janet?

REPORTER: Mr. Secretary, how will the farm bill specifically increase payments to farmers?

SEC. SCHAFER: I think as we mentioned or as Chuck mentioned, 17 commodity crops get increases. I think we have, let's see, 17 crops that get an increase.

DEP. SEC. CONNER: That's right.

SEC. SCHAFER: What was the other number, Chuck? We had 15 -

DEP. SEC. CONNER: Yes. And 17 of those crops either get an increase in their loan rate or the target price. They've got several crops that - actually, creating a brand new program for them that they've never had before -- and that includes programs like chickpeas and this kind of thing where - again, these are brand new subsidies that the taxpayers have never had facing them before. And we're creating new programs and, as Ed has noted, increasing subsidy rates on 17 of the 25 programs that we support.

REPORTER: But aren't our payments, or aren't our prices now higher than these loan rates or target prices?

SEC. SCHAFER: On the countercyclical payments, yes; not in the direct payments.

REPORTER: Okay. Thank you.

MODERATOR: Next question comes from Alison Winter of Environment and Energy Daily, and she'll be followed by Ellyn Ferguson. Alison, go ahead.

REPORTER: Hi. Thanks. About a year and a half ago, when the whole farm bill process started, there was a lot of talk opposing USDA on the Hill of having a huge energy title, which seemed to sort of peter out over the process. Do you have any particular responses to the energy title in the Conference Report?

SEC. SCHAFER: I think importantly in this legislation something that we champion is the research dollars. The pilot projects and efforts to move us to cellulosic ethanol were important elements of this bill. We need to be recognizing the need to move to biomasses to generate alternative fuels and to provide many alternatives for feedstocks so that we're not distorting prices with just one available feedstock or another.

So there were substantial dollars in this new Farm bill for research and pilot projects. We think that's important work. So as far as that energy title, it was a good one. And hopefully we can figure out a way to make sure we continue on that path-because for energy security in this country and for the revitalization of the farm economy these issues are very important.

MODERATOR: And our final question today comes from Ellyn Ferguson of Gannett. Ellyn?

REPORTER: Hi. How are you? Can you hear me?

SEC. SCHAFER: Yes, we can hear you, Ellyn.

REPORTER: Okay. I just wanted to make sure I heard you clearly at the very beginning of this when you said that it would be an uphill struggle to sustain the veto. And if I heard you correctly, why would that be such a struggle since Congress has only managed to override the President once?

SEC. SCHAFER: I think it is an uphill struggle here because if you look at what happened at the end of this bill when it became clear it wasn't going in a direction the President was going to support, they kind of put something in there for everybody. You know, like take the box and put all the presents in it so everybody gets a chance to take home something from the Farm bill that's important to their district or their constituents. That's hard to vote against; it's hard to vote the proper direction when you've got constituents that are directly affected.

So I think there's enough in here for everybody that they're going to look and say, 'Boy, the agriculture subsidy issue is important for my handful of people over here, or my district there.' And I think the political dynamics make it tough.

MODERATOR: Reporters, thank you for your questions today.

Mr. Secretary, any final thoughts?

SEC. SCHAFER: I appreciate this issue. As I mentioned I think the President stood on principle here. As we saw this bill unfold for 18 months, we have been asking for reasonable expenditure levels, the proper funding of those expenditure levels, and important improvements that would increase our standing in the international trade arena, and would also provide our taxpayers more efficient expenditures of their dollars. Congress clearly did not meet that test.

The President is going to veto the bill. And hopefully that will lead us to good, solid public policy in agriculture that we can put back on the table and make sure we provide the support out there, the preservation and the enhancement of the food, fiber and fuel industry now in this country.

Thank you.

MODERATOR: Secretary of Agriculture Ed Schafer. I'm Larry Quinn bidding you a good afternoon from Washington.