October 6, 2005

Thank you for the invitation to be here. I'm pleased to have this opportunity to share with you what I'm learning as I travel this great nation conducting Farm Bill Forums. The concerns and ideas shared by farmers and ranchers are having tremendous influence on my view of farm policy.

I would like to extend my gratitude to all the farmers, ranchers and other stakeholders who have traveled many miles and, in some cases, waited hours for their opportunity to speak. Their comments are certainly having an impact.

USDA has conducted forums in 26 states. I have personally hosted forums in 17 states, which translates into 51 hours of listening intently to farmers, ranchers, and other stakeholders. As our listening tour continues, I am confident I will hear more insightful ideas. But today, I am here to offer some observations about what I've heard thus far.

There is significant debate occurring across our country when it comes to the 2007 farm bill. I will be honest with you about the fact that I was uncertain what I would hear when I kicked-off this nationwide listening tour three months ago. I knew only that the President and I felt that it would be vitally important for those affected by farm policy to have a say in the development of new policy.

Today, I can report to you that I have heard some very strong opinions expressed by some very passionate people. These thoughtful comments have caused me to step back and think beyond the boundaries of our current farm policy.

What I will share with you today are my impressions, not the result of any formal analysis of the feedback we have received. My thoughts today should not be considered an outline of farm policy for the next farm bill.

Farm bills are written in Congress and I myself would be months away from any specific proposals. But, this gathering provides me with an opportunity to share my thoughts with those of you who represent so many of our nation's producers.

As I summarize the ideas and concerns I have heard, my hope is that we can work together to meet the challenges before us. I begin by sharing with you that I am so very impressed with the thoughtful consideration that producers are obviously giving to their comments. In fact, I am especially impressed by their honest and frank assessments of the benefits and drawbacks of our current farm policy.

We are beginning to see patterns in the responses. There seems to be consensus among producers and other stakeholders on some policies - and a definite diversity of opinion about others.

We have heard unanimous support for our rural development efforts. Our contributions to everything from new water systems to hospitals are clearly appreciated. President Bush's leadership in rural development is clearly making a difference in the lives of rural residents.

We have also heard tremendous support for another of the President's priorities - conservation. Our cooperative conservation programs provide farmers and ranchers with financial support, while benefiting the whole of society by protecting our natural resources today and for future generations.

We've heard a lot about the importance of competitiveness and opening doors to new and expanded markets for U.S. agricultural products. Farmers and ranchers believe in trade, but they believe it must be fair trade, and I share their view. Producers understand that more than one-quarter of farm cash receipts come from trade.

On the other hand, we are hearing a range of opinions when it comes to our farm support programs. Some predicted that all we would hear is a desire for more of the same. We have heard that, but clearly we have also heard from producers advocating for change.

The responses also vary by region of the country and by program. For example, in the Midwest many are urging stronger payment limits, yet in the south, there is strong opposition to that idea. In Texas yesterday, there was strong support for the 2002 Farm Bill. Yet, low prices throughout much of this farm bill troubled farmers there.

On a broader scale, concerns have been expressed about farm payments being capitalized into increased land values, farm program support being directed toward one third of all producers, and the greatest benefits going to the largest farms.

As I have said before, I believe the 2002 Farm Bill was the right policy for the economic conditions at the time, but I also recognize that times are changing.

Soon, we must decide as a nation whether to embrace a new age of agriculture or continue relying on a policy structure that was conceived 75 years ago, when the face of agriculture was very different from what it is today.

I've heard some very compelling stories from young people who grew up on farms and want to carry-on the wonderful tradition of farming, but are financially unable to do so because of high land values and cash rent.

Devan from Kentucky said, "One of the biggest barriers, I believe, facing a new generation of farmers is the inability to start farming from scratch. Today if anyone wanted to begin farming they either have to marry into a family farm or inherit an existing family-owned farm. It is extremely difficult, if not impossible, to simply start farming."

Dan in California had this to say, "The increasingly high investment costs and relatively low return rates associated with production agriculture are some of the most prominent unintended consequences that discourage future generations from entering production agriculture."

Many have echoed those remarks and raised the issue that when farm support programs are tied to production, they translate into more land being acquired to continually produce more crops in an effort to obtain more support.

When farm policy encourages farms to become bigger and produce more - regardless of market demand - we should not be surprised when prices for our commodities are low.

Keith in Illinois said, "Cheap corn prices destroy our schools, churches and drive people to the city for a job that may or may not be there. The '96 and 2002 Farm Bills did not reduce production as was needed; it reduced producers, code name that's farmers."

It was disheartening to hear some farmers who have worked the land all their lives predict a future for our children and grandchildren when those who work the land cannot afford to own it.

Which leads directly into another message I am consistently hearing. Small and minority farmers are expressing frustration about the lion's share of federal farm support being focused on large operations.

Alfonzo in New Mexico had this to say, "We need to have some kind of clause in our bill that does not give all the money that's appropriated to the farmers to big corporate (farms) and to our part-timers."

In Oklahoma, Hope said, "The biggest farmers out there should not be encouraged to continue getting bigger and bigger while normal medium-sized farm operations cannot afford to even expand in the smallest way because of high land prices."

For the purpose of this illustration, large farms consist of those reporting more than a half million dollars in sales. Medium-size farms are those reporting more than 250-thousand dollars in sales.

The red bars represent percent of payments and the blue bars represent percent of farms. As you can see, the largest three percent of farms received nearly thirty percent of payments. If we put the medium and large farms together, we are talking about less than eight percent of all farms receiving fifty percent of government payments. This brings some clarity to the picture being painted by beginning farmers, as well as some small and minority farmers across the country.

Another message I've heard is one of discontent with the fact that some crops are offered more protection than others by our support programs. David in Wisconsin said, "I grow vegetables for processing... and I rent a large portion of my land. Landlords are reluctant to rent land to process vegetable growers because it will hurt their base calculations in the future."

Andy in Illinois said, "The facts are, the 2002 Farm Bill placed restrictions on farmers who plant fruits and vegetables. The next Farm Bill should... allow farmers the flexibility they need to choose the crops they grow, specifically in planting fruits and vegetables... This change would correct the unforeseen problems that occurred in the 2002 Farm Bill that discouraged producers from diversifying their farming operations..."

This listening tour really highlighted for me the level of debate across the country about the disparities in program support among commodities. So, I asked for data relating to the distribution of support payments and this is what I learned.

Clearly, we do not have uniformity in the level of support offered by current farm policy. The red bar represents crop program spending and the blue bar represents production value. In fiscal year 2005, we spent an estimated 15-point-2 billion dollars on program crops and less than one half of one billion dollars on all other commodities covered by price and income support programs.

Program crops represent a quarter of production value, yet they received virtually all of the funding. Put another way, 92 percent of commodity program spending was paid on five crops--corn, wheat, soybeans, cotton and rice. The farmers who raise other crops - two thirds of all farmers - received little support from current farm programs.

And yet, as I travel the country I have NOT been hearing those two-thirds of farmers - the fruit and vegetable growers, and others - ask for program support. Instead, they are looking to the future and asking for more focus on research and promotion, increased Sanitary and Phytosanitary enforcement, and access to new markets.

As I hear farmers question the fairness of farm programs from one crop to the next, a similar discussion is taking place internationally, from one country to the next.

The WTO's decision against our Step Two program for cotton shook the confidence many felt in the ability of current farm policy to provide a true safety net.

Add to that the potential challenge to our rice program and Canada's investigation into our corn program, and you can understand why I describe the current farm bill as perhaps the most high-risk approach we could take for our nation's farmers and ranchers in the future.

We have a choice. We can sit back and watch as our farm policy is disassembled piece by piece or we can begin a discussion about how to craft farm policy that provides a low-risk, meaningful safety net for our farmers and ranchers. We must choose wisely, remembering that a quarter of farm cash receipts depend on trade.

Additionally, 95 percent of the world's population lives outside of the U.S. With agricultural productivity far outpacing consumption in our country, we cannot afford to turn our backs on world trade standards. If we do indeed want to firmly control the shape of future U.S. farm policy, which I certainly believe we do, then we must be bold.

We must use the WTO to force open markets for U.S. products. Let me be clear that the WTO will not write our next farm bill, but we must show leadership in the area of support program policy to gain market access in other countries.

If we timidly take our seat at the world trade table with a farm program structure that is wed to the past, we can expect a future of playing defense to protect our share of trade and wondering which U.S. farm program will be challenged next.

On the other hand, if we boldly take our seat at the world trade table, then we'll have the opportunity to control the future of our farm policy - instead of having that future dictated to us.

There is absolutely no doubt in my mind that we can show tremendous support of agriculture without trade-distorting subsidies. I am confident that America's farmers and ranchers can compete with any farmer or rancher in the world if given a fair opportunity.

Ladies and gentlemen, we have the chance to provide that opportunity.

We must not let it slip away. Some have expressed concern about giving up what is considered to be the current safety net. I ask you to contemplate the purpose of a safety net, and whether current farm programs truly fulfill that purpose for American agriculture. Consider the concerns our producers have raised, including: The WTO cotton case and other potential program challenges, the inability of young people to enter agriculture, Government payments capitalizing into higher land value and rising cash rent, large farms getting the lion's share of payments, and two thirds of farmers being provided little protection by our farm programs

Now I ask you, is that the best we can do? Certainly it is not. We must become more inclusive and effective in the delivery of support to our farmers and ranchers. I have long-argued that investing in agriculture is a very smart choice for America, and today I feel more strongly than ever about the importance of that investment.

Agriculture is the heartbeat of America. Our farmers and ranchers fulfill the most basic human need by providing the safest and most abundant food supply in the world. It is not an overstatement to say that our producers play a vital role in providing our country with the security we need to be leaders of the free world.

We must recognize that contribution and demonstrate our support for those who are willing to work long hours in the fields and on the ranches of America. But, we must also ask ourselves how we provide that support in a way that is sustainable over time. How do we build into farm policy a future for small farmers and those who want to enter farming? How do we build in support for our rural communities? How do we build in support for $62 billion dollars worth of U.S. exports? We do so by fighting for American's farmers and ranchers.

A true safety net for all of agriculture is much more than subsidies. It is good farm policy that opens real and substantial market access. A true safety net is also good tax policy, trade policy, sanitary and phytosanitary policies, and investment in new markets. I believe in providing a safety net for farmers and ranchers, but it must be inclusive, predictable, and beyond challenge.

The easy choice would be to repackage current farm policy and convince ourselves that the old structure of payments based on production levels will somehow provide adequate support. We could choose to ignore the challenges to that old structure, but doing so would be the same as saying it's okay to jeopardize a quarter of our cash receipts and ignore the current program imbalances.

Farmers may disagree on approaches - we always have - but there is a common desire for a predictable future. We, in Washington, have an obligation to listen and respond. The easy road will not lead us there. We must chart a new course for American agriculture. We must develop policy that delivers sensible support to agriculture in a way that cannot be challenged.

We need only listen to the ideas of those we serve and recognize that there is a reason we have heard unanimous support for our rural development efforts and encouragement to enhance our conservation efforts. There is tremendous wisdom being relayed to us by those beyond the beltway and I'm listening.

I don't yet know how these ideas should best come together to form future farm policy. But, I welcome the opportunity to work with Congress to fashion a farm bill that demonstrates a true commitment to our farmers and ranchers - policy that doesn't put their support programs at risk.

I know that I do not stand alone. I have talked with the leaders of both the House and Senate Agriculture Committees and their commitment to rural America is equally strong. They, too, will travel the country to hear first-hand the wisdom being shared. We will work together to infuse that wisdom into farm policy.

In closing, I return to the time and place where this venture began. I announced USDA's nationwide listening tour at the state FFA convention in Illinois, speaking to young people who have hopes and dreams of carrying on the great traditions of American agriculture.

I was reminded of my days as a member of the FFA while growing-up on a dairy farm in Iowa. In fact, I was reminded of the power of the FFA pledge and I even repeated the opening words of that pledge. I will do so again here today, because the words are relevant to the challenges in front of us. The pledge begins like this;

"I believe in the future of agriculture, with a faith born not of words but of deeds - achievements won by the present and past generations of agriculturists; in the promise of better days through better ways, even as the better things we now enjoy have come to us from the struggles of former years."

Forty-plus years ago, when I first recited that pledge, I saw a real future in agriculture. I still do today, fully aware that agriculture is changing. Our family farm of thirty cows, some sows and chickens, is a rarity today, but belief in the future of agriculture is not.

We have a choice. We can lead our nation and world in agriculture or we can follow behind. I believe in the future of agriculture and I believe we should lead that future.

God Bless You and God Bless America.