MODERATOR: Good afternoon from Washington. I'm Larry Quinn speaking to you from the Broadcast Center at the U.S. Department of Agriculture. Welcome to today's news conference with Acting Secretary of Agriculture Chuck Conner to discuss the 2007 Farm Bill passed this afternoon by the United States Senate.
Reporters, I would remind you if you have a question that you would like to ask, please let us know that by pressing *1 on your telephone touchpad.
Now it's my pleasure to introduce Acting Secretary of Agriculture Chuck Conner.
SEC. CONNER: Thank you once again, Larry. And thank all of you for joining us on the line today. As you probably know, it's been a busy time here at the Department of Agriculture, and I am really pleased to have this opportunity to talk to you all about the recently passed farm bill.
I am fully aware that farmers and ranchers face enormous uncertainties, and they deserve a safety net, and I am a firm believer in the federal support for agriculture. Yet I believe this farm bill fails to strengthen the safety net, and it increases taxes to generate $15 billion in revenue used to grow the size and scope of our federal government. This is the first time a farm bill has relied on tax increases since 1933. The bill further increases price supports and continues to send farm subsidies to people who are among the wealthiest 2 percent of Americans.
The Senate-passed farm bill does not represent fiscal stewardship and lacks farm program reform. It is important for farmers out there to know that unless there is a substantial change made to this bill, we are indeed no closer to a good farm bill than we were before this Senate passed this bill.
There were some amendments offered to this bill that USDA supported that would have delivered some level of reform, but unfortunately they were not adopted. Some of these amendments even had a majority of senators supporting them.
As you know, we have heard from farmers all across America in over 40 farm bill forums since 2005, and most of you have made it clear that there must be an end to income subsidies for the richest people in our country. Farmers understand that a program that takes tax dollars from middle income America and transfers those tax dollars to the nation's wealthiest few is, simply put, bad policy. This bill completely fails to correct that problem.
There is still time, however, to come together and make reforms needed to get a good farm bill signed into law. The House and the Senate will now come together with their different bills to create a final version that will be sent to the President. Congress has the power to make substantial reform in this bill, and it is simply imperative that they do so. We need a bill that does not raise taxes and does not provide income subsidies to America's richest few. We also need a bill that protects the safety net while providing some real reform.
The House and the Senate, again, have the power to make these changes, and I look forward to working with them to help get a good farm bill out of conference.
With that said, we'll open it up and I'll take a few of your questions.
MODERATOR: Reporters, as we prepare to receive your questions, we remind you to press *1 on your telephone touchpad to indicate you have a question. Our first question today comes from Stewart Doan, Farm Broadcasters. Stewart, go ahead, please.
REPORTER: Thank you, Larry, and good afternoon, Mr. Secretary. In quizzing some senators yesterday after the Dorgan/Grassley amendment vote, I asked them if this was a step forward towards getting a final bill enacted, or maybe a step backward. And I asked them about the administration's living veto threat recommendation out there, and the response I generally got was, "Well, the administration can take administrative actions to tighten some of these things up."
Is that a fair criticism of the administration, that in fact the administration administratively could do a lot of the things that it wants to do or see done in terms of farm subsidy payment reform?
SEC. CONNER: Well, great question, Stewart. And you know, the answer is kind of complex, but let me just boil it down to this. Our current definitions which govern who receives farm program payments attempt to define what we refer to as "actively engaged in farming." And you must be actively engaged in farming in order to get a farm program payment. Our current rules for that definition date back to the 1980s, and one of the changes we suggested in our farm bill recommendations is that we would do a new rulemaking to provide a new definition of "actively engaged in farming" in order to govern better, we believe, who was actually receiving these payments.
You will recall we debated this issue extensively in the 2002 Farm Bill. The outcome of that farm bill was not to take any direct action but to appoint a commission which studied this issue. One of the recommendations of that commission was to revise this definition but not revise it in midstream in the farm bill but to do so as part of the new farm bill. That is exactly what we're doing in following the recommendations of the commission that Congress appointed. And we look forward to doing rulemaking to provide that new definition.
MODERATOR: Our next question today comes from Jerry Hagstrom of Congress Daily followed by Tom Steever. Jerry, would you go ahead, please?
REPORTER: Good afternoon, Mr. Secretary. I have two quick questions. The first is, were you impressed by the size of the Senate vote? It would seem to be one that could deliver an override if necessary if the President chose to veto a bill similar to this.
And secondly, are you maintaining that USDA is enforcing the currently "actively engaged" rules, and can you provide proof to journalists of that?
SEC. CONNER: Let me take your first question first, Jerry. And the minute you came on the line I knew the question you were going to ask, so you are predictable on this one.
Let me just say that the vote in the Senate, we were disappointed in the outcome of that with 79 members voting for it I believe and 14 to 16 voting against it. But I would point out to you, Jerry, as well, that earlier in the week an amendment was offered that was really a fairly dramatic amendment that went way farther than anything proposed by the administration in terms of a wholesale rewrite of our farm program.
You know, that amendment, again for wholesale change, got 37 votes, and we were advised by the authors that there were a number of senators missing who would have voted for it as well. And so you know, the final tally on that was probably 41 or 42 votes for, again, something was wholesale different direction from our current farm programs, far more draconian if you will than anything proposed by the administration at this point.
So I look back at that and find that interesting, but let me just say that we continue to maintain that this bill has a tough road ahead of it. We did not run into any farmers out there calling for higher taxes when we traveled all over the country in our farm bill forums. I've been around farmers my entire life, as well Jerry, and they're about as straight-up people as you can possibly have in this country in terms of honesty and decency. And I think the last thing in the world they want is their farm bill to have a bunch of budget gimmicks in it. This bill has $22 billion of budget gimmicks in it.
So we're going to continue to plow ahead on this. And again, I believe and feel very, very comfortably that our recommendations are on the right track, and I think we still have a chance to work these things out in conference and get a bill that is acceptable to all parties. It's going to require a lot of change and a lot of tough work ahead of us, but I still think it can be done.
MODERATOR: Tom Steever has the next question followed by Chuck Abbott. Tom, go ahead. Tom is with Brownfield Network.
REPORTER: Thank you for taking my question. Again, this goes back to what the vote came out to be, and it does indicate that there is some political will behind this. Is it not going to be harmful to the Republican Party for a presidential veto of this bill?
SEC. CONNER: Well, you know Tom, I'm not in a position to provide political advice to anybody. Let me just address your point this way, and that is, we continue to feel very, very comfortable with our farm bill recommendations and believe they reflected the input that we got at the grassroots level in our 52 farm bill forums where we got over 4,000 comments, and people came to the mike freely whether they were the heads of organizations or whether they were just ordinary farmers out there. And they came and presented their views to us.
We developed our proposals based upon those views. I continue to believe that that's a better farm bill than what has been developed by either the House or the Senate. It's a better safety net; it provides more money to producers when they've had a crop loss. Now admittedly it takes some of that money away when they've had some great years, and I think, I still maintain that's what a farm bill should be about. It should be about a stronger safety net when the producer really needs it.
And then finally, let me just say, Tom, that relative to the AGI situation, I realize this is a controversial situation. A majority of the Senate members voted twice for tougher payment situations out there. Unfortunately it didn't meet the super majority threshold vote, but I will tell you that there's very, very broad support out there in the countryside at the grassroots level. And when you start explaining this to real farmers out there, they say, absolutely I do not want the farm program benefits going to the wealthiest 2 percent of Americans!
It's not a heavy ask. It should be a very simple ask. And we're going to continue to press these points.
MODERATOR: Chuck Abbott of Reuters is next followed by Gary Truitt. Chuck, go ahead, please.
REPORTER: This is similar to the comparison/contrast questions people used to get in high school and college exams. What I'm curious about is what two or three things does this Congress absolutely have to change in conference to produce a farm bill that the President will sign? Then the comparison part is: The administration proposed a form of revenue insurance in its farm bill proposals. Both the House and Senate have adjusted optional revenue assurance programs. What's your impression of the revenue insurance programs that have been offered by Congress? So, two things coming to the same point.
SEC. CONNER: Well, Chuck, I think I've certainly not been hiding the ball in terms of what the administration needs at this point. In fact I've been making this point literally at every opportunity and in some cases I think all over the country. The start for getting this farm bill back on track is obviously it's got to be a farm bill that is not about taxes, not about budget gimmicks -- the physical side of the equation. And again, it is painful for me to think that Congress has proceeded down that track of taxes and basically misrepresenting the true cost of this bill.
On the farm program side, obviously the AGI is a critical reform out there. I've described it again as, "I can't believe this is a tough issue that we're asking Congress to pass." The notion of providing income support payments -- payments derived from middle income tax dollars -- that we're going to take those away from the wealthiest 2 percent of Americans. And that's the top 2 percent of the richest people in America – and obviously we are a very rich country. And so that top 2 percent, those are people that absolutely have fully realized every aspect of the American dream. That's the start: Simply say to those people, No, you know, you're not going to be eligible for government income support payments.
Those two simple – I'll just start with the two because they're fundamental, Chuck. Two simple things: get the fiscal side of this thing right and fair and honest, and secondly take the wealthiest 2 percent of Americans off the taxpayer dole here. And you're on a great path toward getting a farm bill done very, very quickly.
REPORTER: Gary Truitt of Hoosier Ag Today is next and followed by Philip Brasher. Gary?
REPORTER: Mr. Secretary, we have two bills, the House bill and the Senate bill, and they are very different and very divergent in many different ways. And it's going to be quite a challenge to try to bring them together into a conference report. At this point from your point of view and the Administration's point of view, is there one that lands closer to where you think the final product ought to be, or has an approach that is closer to where you want to be, than the other?
SEC. CONNER: You know Gary, let me just say that I think you're aware that we have deep concerns with both bills. Obviously the Senate-passed bill has relied more heavily upon taxes and budget gimmicks than what the House-passed bill has done. But you know, the problems with both bills are fairly significant. I've described the situation of, we really need to take a new track in conference if we're going to finish this bill up and have something that the President's senior advisors can take to him and recommend that he support.
REPORTER: Do you think that's realistic to expect that?
MODERATOR: Philip Brasher of the Des Moines Register is next, followed by Ron Hayes. Philip?
REPORTER: Yes, Secretary. I want to follow up on – it almost sounded like you said that the AGI was the issue, I believe you said to be on the track to having a good bill, if you deal with the AGI issue. Is that more important than the tax revenue, the source of funding for this bill?
And a follow-up on the AGI issue, one of the criticisms of focusing on the AGI issue is that titles simply switch. Forest landowners will switch from crop share to cash rent, which may not actually benefit producers because it puts all the risk on them. Could you address both?
SEC. CONNER: On your first question, Phil, if I could let me just say that if that's the perception I left, that's probably inaccurate. I don't put one ahead of the other in any way. One, we distinguish between the two because one deals with the fiscal side of the equation on taxes and budget gimmicks. And again, as I've described it, this is a little bit of a new situation because we've really never talked about taxes as part of the farm bill before.
The AGI thing, I mention this because obviously that's a key element of the farm reform situation on the farm policy side of the farm bill. Again, without going into all the details, it's not the only one. Obviously we've got the situation with the increasing our level of trade-distorting support at a time when our programs are coming under intense, intense challenge, even today under intense kind of challenges. And this is moving in the wrong direction.
So I don't necessarily put those in priority or order, but just flag those as areas that we know have to be addressed.
MODERATOR: Next question is from Ron Hayes, Radio Oklahoma Network, followed by Sara Wyatt. Ron?
REPORTER: Mr. Secretary, thank you for taking our calls this afternoon. My question has to do with word that we got from some members of Congress talking about the need of a short-term extension maybe to March of the '02 bill to be able to protect the pot of money. And going along with I guess your thoughts on that, but then also, at what point does it get to be almost impossible for USDA to be able to write new rules and regs to be able to administer for this crop year, the 2008 crop year, especially for wheat producers that will be looking at harvest even as this bill is being finished?
SEC. CONNER: Ron, those are great questions. Let me just say relative to the timing of a lot of this situation, we are aware that there are discussions going on about a mid-March extension of the current bill. As has been described to me in a press release coming out of the House Agriculture Committee, that extension would apply to most everything in the farm bill with the exception of the commodity programs under Title I, or some of the commodity programs anyway. Obviously, the thought being that we are still working on a new farm bill. We don't want to extend the current farm bill provisions where you might be in a situation where we'd offer two different commodity support programs for the same crop year.
So as I understand it, they are proposing through mid-March extending all of the other titles, holding up the Title I commodity programs until we have the new farm bill.
On that point, let me just say that finishing up early next year while we certainly want to finish up as quickly as possible, historically we have been passing farm bills in and around this time period. The '96 bill was done in May, in fact the latter part of May. The '90 bill was done in March.
We did that, and I will tell you that through the great work of our Farm Service Agency they were able to administer those programs within that crop year. It's not something we look forward to doing; we wish we had more time. That was one of the reasons we put our recommendations out there so early was so that Congress could get it done early. That has not happened. But I would expect that obviously through the great work of Farm Service Agency to get the job done, and we will have delivered whatever Congress passes.
MODERATOR: Next question comes from Sara Wyant of AgriPulse followed by Uta Henning. Sara?
REPORTER: Hi, Secretary Conner. I'm curious about some comments that Chairman Peterson has made regarding the fact that he thinks he could work a few of these challenges out with President Bush, just kind of sit down and talk them over. He has a few ideas that he hasn't outlined. Have there been discussions between either chairman and yourself and the folks at the White House about the ways to smooth some of this out already that gives him the indication that that might be a pathway? Or can you shed any light on where that might be coming from?
SEC. CONNER: Well, I appreciate the question, Sara. Let me just answer it this way if I could, and that is, I've had numerous communications with Chairman Peterson over the last several weeks. Obviously those communications involve discussion of farm bill conference and what can and can't be done in order to move a bill quickly.
The chairman and I have not gotten into specifics in terms of what can be done because obviously it would have been premature to have done that before the Senate completed its action. But I believe Chairman Peterson is anxious to work with us. He wants a farm bill, he wants it done quickly, and you know I have a good working relationship with him. So I look forward to that opportunity in the conference committee to sit down with the members and to work through these issues.
Sara, we've got a tough road ahead of us as I have described, but I don't think it's insurmountable, and we're prepared to roll up our sleeves and do whatever it takes to get this bill on the right track and get something that the President truly can sign.
MODERATOR: Next question comes from Uta Henning of Inside U.S. Trade followed by Jeff Nally. Uta?
REPORTER: Hi, Mr. Conner. I had a question on your two key points and what needs to change. The first question, when you talk about the budget gimmicks and tax increases, are you in essence saying you want a baseline bill of 280 like CBO has estimated, or can you elaborate on that?
And also, on AGI, how important is it to you that be set at your original level that you proposed, the $250,000 -- or are you just talking about getting down from the $1 million or $750,000 level that is now in the two bills?
SEC. CONNER: Those are good questions, Uta. Let me just talk to you about the baseline if I could. In our farm bill recommendations, Uta, as you recall, we provided an additional $5 billion of spending for the farm bill over the baseline. Now I will tell you, for many programs, Uta, we spent far more than $5 billion. We increased our conservation budget alone by over $7 billion. So we increased spending for those priorities quite considerably. We paid for that two different ways. We paid for it because we did go over the baseline a little bit as I've indicated, $5 billion, but then we did so through reforms, and primarily reforms of our commodity programs, the biggest, one or the most important being the AGI situation, and we applied those dollars then to the other priorities.
And I might note that those other priorities really haven't been objected to by the House or the Senate. They've indicated to us yes, absolutely, we favor more money for conservation; we favor more money for energy -- these kinds of situations.
Unfortunately, they've been unwilling to enact the reforms to pay for those higher spending priorities. We did the reforms in our situation.
In terms of the AGI, let me just say that the $200,000 is to us a – once again, this should be an easy call: This is the wealthiest 2 percent of all Americans. It impacted 38,000 people. The types of limits that Congress is talking about -- I would describe really for all practical purposes -- is lip service. Really don't impact very many people, if any people at all.
We're not looking for lip service here in this situation. We truly do want the wealthiest people in America to stop receiving income subsidies complements of the taxpayers of the United States. We want to use that money for other purposes: like conservation, like energy development, like fruits and vegetables and Rural Development programs.
MODERATOR: The next question comes from Jeff Nally of Cromwell Ag Radio Network followed by Janie Gabbett. Jeff, go ahead, please.
REPORTER: Mr. Secretary, thanks for the opportunity this afternoon. When I hear you repeat over and over of the difficult row to hoe, it appears more than obvious that it's going to be much later in '08 than earlier in terms of farm policy. I wonder if there's not another area to be addressed, and that's what Mr. Peterson is suggesting, of redefining what actually a farmer is in the country, suggesting no longer in the millions but in the reality of 200,000 to 300,000 people. Should that be a part of this plan as you rewrite?
SEC. CONNER: Well, I think, again, I addressed this a little bit earlier, Jeff, when I talked about part of our farm bill recommendations is for us to issue new regulations defining "actively engaged in farming." And you have to be actively engaged in farming under the current law in order to receive a farm program payment. And we're suggesting that that does need to be changed, and that suggestion again is following the recommendation that Congress put forth through the Payment Limit Commission.
So I believe that will be done. But let me just say, Jeff, that that is in no way a substitute for the real reform we've proposed because what we've talked about is -- regardless of your status, how many hours you may spend on a farm in a particular case -- if you are among the wealthiest people out there, regardless of how you acquired that wealth, we don't believe you ought to be getting more income subsidies complements of the U.S. taxpayer.
So while we think Chairman Peterson's suggestion is right, it's not the reform that you've got to have to save money to use on these other priorities.
MODERATOR: Janie Gabbett of Meatingplace Magazine is next, followed by Alison Winter. Janie.
REPORTER: When the bill gets to conference, I'm wondering if the administration will be looking for any changes in the livestock title of the bill. Specifically on the Senate side, there's a prohibition against packers owning livestock from 1 to 14 days before they slaughter. On the House side, there's a provision to allow some state-inspected meat to cross state lines.
SEC. CONNER: Let me just say with the whole competition title, I'm going to ask Under Secretary Mark Keenum who's here in the studio with me to comment on this directly. But we have a number of concerns here with key aspects of that whole competition title. I think there may have been situations on the Senate floor where some were describing this as having been approved by the Department of Justice, and this having been worked out. And I will tell you that is not the case. We do have concerns with certain aspects of that competition title. I'm going to let Dr. Keenum comment on that.
DR. MARK KEENUM: -- impeding commerce and trade with a specific commodity, in this situation livestock, then that's a slippery slope you go down. You can apply that type of restriction to other commodities. That's very concerning to us in the Administration, and I think it's very concerning to a great number of members as well, outside of those members who have a specific interest in the packing arena.
So we're going to be working very closely with the conferees in both House and Senate to address this issue very directly as we go into the conference.
MODERATOR: Our final question today comes from Alison Winter from Greenwire. Alison?
REPORTER: Hi. Thanks for taking my question. Chairman Peterson and some other Members have talked about wanting to add in AGI limits for conservation programs. Is that something you would support in the conference negotiations?
SEC. CONNER: Sorry, Alison. Did you say AGI limits?
REPORTER: Right, but for conservation.
SEC. CONNER: Okay. This, I will tell you in our farm bill recommendations we retained the existing AGI limits in our recommendations for our conservation program. I will just tell you that this was a close call for us in terms of whether or not we applied the $200,000 limit to them. At the end of the day, we made that decision just simply because we thought if there's great conservation benefits provided through these programs that the general public benefits from, and if we can secure those benefits from virtually any American, any size farmer, any person regardless of wealth, that that's probably good for the general public. And so we left that alone.
I stress to you though, Alison, that was a close call for us. It's something we could probably work with the committee in developing an appropriate limit for the conservation title. But that's how we came down in our original recommendation.
MODERATOR: Mr. Secretary, any final thoughts today?
SEC. CONNER: Well, again, I just appreciate everyone joining the call. I want to underscore the fact that we do want to get a farm bill that the President can sign. We want to get that done very, very quickly. We know farmers are waiting out there anxiously to hear the results of this debate, and I really hope that we can move the conference committee now, start talking really about a farm bill that's on a different track than the one that we've been discussing so far, get off this talk about taxes, be straightforward with the producers about what this is actually costing, and enact again what I consider to be some of these pretty simple reforms like the AGI limits. And we're moving this thing forward -- if we take that direction.
I know it's difficult, but I don't think it's something that can't be achieved. I think it can be done and get this bill on its way to the President and have a bill that the President will sign enthusiastically. And that's what I would really like to see the conferees head on that path.
MODERATOR: Acting Secretary of Agriculture Chuck Conner.
I'm Larry Quinn bidding you a good afternoon from Washington.