Contact: USDA Office of Communication (202) 720-4623
SECRETARY ANN M. VENEMAN
TO THE HOUSE BUDGET COMMITTEE
March 6, 2002
"Thank you, Mr. Chairman.
It's an honor for me to be here with you, and the ranking member, Mr. Spratt , and other members of the committee to discuss our 2003 budget for USDA and some of the other important issues that we are dealing with this year.
With me today here is our Deputy Secretary, Jim Moseley, our Budget
Officer, Steve Dewhurst, and our Chief Economist, Keith Collins.
"I truly appreciate our working relationship with this committee and look forward to working with you, Mr. Chairman, and all the members of the committee during this budget process.
I appreciate your accepting my written testimony for the record, and I want to provide a few thoughts on some recent issues that are important to agriculture, particularly that which you highlighted, the farm bill.
"Passage and implementation of a new farm bill is a top priority of USDA and of the Administration.
Both the House and Senate have passed separate and different versions of the new Farm bill, conference has begun, and the Administration is working closely with the conferees during this process.
And we are already working at USDA to ensure an efficient process is underway once a conference bill is agreed upon and signed by the President.
"We, like you, hope that the conference will move quickly in reaching consensus.
But I agree with what Chairman Combest
has said, and I have said it many times before, it is much more important that we get it done right.
Policies that serve the best interests of the farm sector are what are critical, and this Administration is committed to that cause.
"Mr. Chairman, you mentioned the issue of funding for the Farm bill.
The President has said that a farm bill should adhere to the $73.5 billion dollars in additional spending over ten years that was agreed to by the House and
Senate Budget Committees last year.
He has also said that it should be spread evenly over that ten-year period.
Well, there has been some debate recently on what the five-year funding number should be.
The President feels strongly that we shouldn't spend an unreasonable amount of money in the early years, which could shortchange farmers down the road.
"We think a fair and responsible level of additional support for the first five years is around $37
billion dollars or about half of the ten-year total in the budget resolution.
That is much closer to what the House has agreed to spend during the next five years and doesn't cheat our farmers out of assistance over the long term or open the door to spending in excess of the budget resolution.
We would strongly oppose any farm bill that exceeds the generous budget limits we've outlined, and I would again add that the
House-passed farm bill complies with these limits.
"The new farm bill must provide adequate support for farmers without encouraging them to overproduce thereby depressing prices, which, of course, is self-defeating.
By setting loan rates too high, we could easily further reduce producers' returns from the marketplace.
Loan rates are a critical issue and the new farm bill will determine what future rates will be.
Administration has been on record as favoring the loan rates that are in the House measure.
We need to make sure that future loan rates don't cause an undue burden on any particular sector, yet at the same time move us toward a more market-oriented system.
"The House-passed farm bill increases funding for fixed decoupled payments for farmers and continues the current marketing loan program for traditional program crops.
These types of programs provide farmers a consistent, predictable income
safety net while maintaining market-oriented planting flexibility.
The Administration has supported farm savings accounts as a way to give farmers and ranchers an additional risk management tool that complements our traditional farm programs.
Some have misconstrued this to mean these savings accounts would replace commodity programs.
"Quite to the contrary.
They are proposed as an additional resource that could help farmers manage their
The Senate measure includes a very small pilot program on farm savings accounts, but we would like to see the conferees consider a broader approach to this program.
"The President has also said that the new farm bill must support trade and be consistent with our international obligations.
Increased trade is absolutely critical to America's farmers.
You have an Administration and a President that feels strongly that a new farm bill
should not work against our farmers in the international marketplace.
"Both the House and the Senate versions of the farm bill have significant increases for conservation programs.
That kind of commitment is unprecedented.
We need to make sure that conservation programs give farmers and ranchers the ability to better manage their land while giving them the utmost flexibility.
"Creating new opportunities for America's farmers and ranchers in the global marketplace is a
very important priority.
In the past few weeks, several issues have come to the forefront in this regard.
Yesterday, Mexico suspended the recently imposed tax on the use of high fructose corn syrup in soft drinks.
This tax, which was the latest in a string of trade issues related to sugar and high fructose corn syrup threatened U.S. exports of corn and corn sweeteners.
As Ambassador Zoellick said yesterday; we welcome this move by the Fox Administration.
Our concerns about Mexico's unjustified anti-dumping duties on high fructose corn syrup have not been addressed.
And we will continue to work with Mexico to resolve the full range of sweetener issues.
"On another issue, last week we learned that Russia announced plans to suspend U.S. exports of poultry.
The Russian market is a very important
market to America's poultry industry.
We export nearly one-fifth of our poultry production, and nearly forty percent of that goes to Russia.
So we're very concerned about this decision and its potential impact.
The messages have been unclear from Russian government officials as to the reasoning behind this announcement.
However, Ambassador Zoellick
and I have been very clear; we see no reason for this action.
We have personally had discussions with high level officials from the Russian government.
A joint USDA/USTR/FDA team is scheduled to depart for Russia this week to seek a resolution to this critical issue that could cause a serious disruption to this part of the world
"As you know, the President just returned from Japan and China.
In both visits, the President discussed some of the problems we are having with regard to agricultural trade.
The biotechnology regulations proposed by China are of particular concern.
If implemented as currently announced, they could do severe harm to our exports, particularly to our soybean exports, and our farmers rely heavily on this market.
"Ambassador Zoellick and I have dispatched Allen Johnson, Chief Agricultural Trade Negotiator at USTR with a team
from USDA and USTR to China.
They are there right now to try to seek a solution that allows our exports to continue without interruption.
China is now part of the WTO.
That holds great opportunity for America's farmers.
"But China has an obligation to abide by the rules of the WTO.
We need to hold them to those obligations and work to ensure unfair barriers are not put in place that hurt our producers.
We will continue to keep you and other members of the House and Senate briefed on the status of these issues.
Mr. Chairman, let me conclude my opening remarks this afternoon by saying that, today, America's farmers and ranchers face many critical and challenging issues.
We know that the current economic climate in the farm sector has been hampered by large foreign supplies, various natural disasters, a struggling global economy, and a high value of the dollar that have slowed growth and
demand for agricultural products.
We have seen commodity prices decline, and without government support, many in the farm sector could suffer.
The events of September 11 have further caused additional burdens on the agricultural economy.
"However, with all these circumstances and events, there are bright spots in agriculture.
As Keith Collins, our long-time and well-respected chief economist has said; many markets have slowly improved since
But there is much work to be done to provide assistance to our farm sector, and this Administration is committed to doing what needs to be done to strengthen our farm economy.
We hope to do that with a new farm bill, increased vigilence on homeland security and infrastructure protections, securing new trade opportunities, additional conservation and land stewardship programs, and a commitment to enhancing our rural
communities, among other priorities.
"The USDA budget submitted by
the President moves us in the right direction.
Our budget protects farm program spending with an additional $73.5 billion in support as agreed to by both the House and Senate budget resolutions.
It strengthens homeland security and infrastructure protections; that is, investments in animal disease, prevention and eradication, food safety, and the research that supports those activities. Our budget promotes trade opportunities for
farmers and ranchers by providing tools to help our producers export.
It also provides a record level nutrition safety net for families who need assistance.
Our budget promotes good conservation and environmental stewardship so critical to our farmers and ranchers today.
And the budget invests in our rural communities, which often are in need of our help particularly in tough economic
"And our budget finally expands initiatives to make
sure that we can make government work better for the citizens that we serve.
Whether farmers, consumers, or low-income Americans, we want to ensure that the programs are readily available and accessible to the people who come to us for assistance.
We believe that this is a responsible budget.
It funds key priorities and programs at USDA.
"I want to thank you again, and we look forward to working with you during the budget process to advance the
priorities that we have outlined.
I would now be happy to answer the questions from you and members of the committee.