U.S. Senator Debbie Stabenow, Chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry today delivered an address on the "State of Michigan Agriculture" during the Michigan Agri-Business Association's 79th Annual Winter Conference. Chairwoman Stabenow's address focused on the future of Michigan agriculture and her efforts to strengthen this vital part of Michigan's economy.
During the State of Michigan Agriculture Address, Stabenow highlighted agriculture's importance to Michigan economy, noting that agriculture is the second-largest sector of Michigan's economy and is a sector that continues to grow. Overall agriculture contributes more than $71 billion to the economy annually and supports one out of every four jobs across the state.
In her speech Senator Stabenow noted key accomplishments during the past year, including the bipartisan recommendations she developed with colleagues to make agriculture programs more cost-effective and crack down on fraud and abuse to reduce the deficit by tens of billions of dollars. She outlined efforts to grow Michigan's agriculture economy through proposals such as her "Grow it Here, Make it Here" initiative to spur domestic bio-based manufacturing. She also discussed the effort to complete a Farm Bill in 2012 to help create an environment in which farmers and small business owners can continue to create jobs.
The Michigan Agri-Business Association's annual Winter Conference, from Monday, Jan. 9, 2012, through Wednesday, Jan. 11, 2012, will shine a spotlight on how agricultural technology is maximizing production, promoting sustainability and feeding a more crowded world. For more information, please visit www.miagbiz.org.
The full text of speech, as prepared for delivery, is below.
State of Michigan Agriculture as Prepared for Delivery
Chairwoman Debbie Stabenow
January 9, 2012
One year ago, I gave my first speech as Chair of the Senate Agriculture Committee right here at the Michigan Agri-Business Association conference. It is wonderful to be back here again with you today.
Now, when I was standing up here last year, I never imagined 2011 would turn out to be such a whirlwind!
We started the year focusing on the Farm Bill, then we needed to address the Deficit Reduction Committee process, and then - on October 31, MF Global, one of the biggest futures commission merchants in the country, went bankrupt after somehow losing $1.2 billion of segregated customer money.
I want to speak about each of these subjects today but let me start with MF Global.
As you know, our Agriculture Committee has broad jurisdiction including oversight of the Commodity Futures Trading Commission. The safety and security of the commodities markets is essential for agriculture as well as other parts of our economy.
So when MF Global went bankrupt, I immediately began to investigate what happened so that consumers could get all of their money back, people responsible for this situation would be held accountable, and consumer protections would be put in place to make sure there is confidence in the system going forward.
First, we had a hearing with Gary Gensler, the Chairman of the Commodity Futures Trading Commission, and Mary Schapiro, the Chair of the Securities and Exchange Commission.
We followed that up with another hearing, with the former CEO and other top executives of MF Global as well as those who had lost funds. I very much appreciate that Roger Hupfer from Freeland Bean and Grain, who lost his money in the bankruptcy, came in to testify about what happened to his company. He gave very important testimony that made it clear why this investigation is important.
Roger and other MF Global customers were not investors. They did not lend the company money. This was their money, which was supposed to be segregated and protected -- kept separate from the firm's own trading.
I'm pleased that the trustee has now returned about 70% of customer money. But as I said in our hearing, I will not be satisfied, and the people who use these markets to hedge their risk will not be satisfied, until they have 100% of their money back.
Today, I want to talk to you about the state of Michigan Agriculture. We have copies in the back of the room of a report we've put together that details just a few of the exciting things happening in Michigan today.
And I am pleased to report that the State of Michigan Agriculture is strong and growing.
We know that agriculture already accounts for one out of every four jobs in Michigan and $71.3 billion every year for our economy.
As Chair, I have the unique opportunity to showcase the strength of Michigan agriculture at the national level. And I am honored to partner with all of you as farmers and agri-businesses across the state to leverage those strengths and seize new opportunities for growth and prosperity.
Michigan Agriculture is strong and growing, not only because of our incredible growers and producers, but because of companies like yours that provide services and products to farmers, in crop protection, crop fertility, grain handlers, farm credit, equipment manufacturing - the list goes on and on and on.
And it's because of all of you that agriculture contributes one in four jobs in Michigan, and that's something I keep in mind every day.
One of the best parts of my job has been the opportunity to meet with many of you and to see the work you're doing every day to keep Michigan agriculture strong.
I had a chance to meet with folks at Star of the West in Frankenmuth; Cooperative Elevator in Pigeon; and Dow AgriSciences in Harbor Beach. I've had a chance to see the incredible work Pfizer is doing on animal health at their headquarters in Kalamazoo.
I've been to Constantine and I've seen the DuPont Pioneer and the Monsanto facilities; I got a chance to meet once again with Cherry growers in Traverse City, Milk producers in Ovid and dairy processors in Grand Rapids.
Roger Victory was kind enough to host me on his farm for a roundtable with Specialty Crop growers and I was pleased to bring Secretary Vilsack to Michigan to meet with farmers and agribusinesses at May Farms in Sparta.
And my top-notch staff, led by a dedicated Michigan native Chris Adamo, have travelled from one end of our great state to the other walking through fields and orchards, viewing conservation efforts and meeting with so many people who are making things happen in agriculture in our state.
Unfortunately, while you have been creating jobs and doing good things here in Michigan, folks back in Washington have been proposing devastating cuts that would jeopardize much of what you are doing.
In February, we got a taste of how difficult it was going to be to pass a Farm Bill when the House Republicans proposed their budget, calling for a devastating $30 billion in cuts to commodities and crop insurance, $18 billion in cuts to conservation, and $127 billion in cuts to nutrition. These cuts passed the House and almost every Republican in the Senate supported them.
Then we had negotiations between Vice President Biden and Congressman Eric Cantor that called for up to $33 billion in cuts to production agriculture.
President Obama's budget plan also called for $33 billion in cuts to agriculture, including cuts to crop insurance - which, by the way, had already been cut.
So that's where we were: from every direction, people have been calling for huge cuts to production agriculture at a time when agriculture is one of the few bright spots in our economy.
And, as I said, agriculture has already done more than its part. Crop insurance and research have both taken big cuts already, so I have been very concerned that agriculture has become an easy target for drastic cuts.
Then in August, Congress passed legislation creating a committee, that most people call the "Super Committee," to find $1.2 trillion in deficit reduction. And in that law, they asked each Committee to submit recommendations to achieve deficit savings from programs in their jurisdiction.
I called my counterpart in the House of Representatives, Chairman Frank Lucas, and we sat down with the ranking members from both of our committees - the top Democrat in the House and the top Republican in the Senate.
And the four of us decided that, rather than having others decide what should happen regarding agriculture policy, we ought to be proposing deficit reduction cuts that make sense for agriculture.
And so we went to work. And it certainly wasn't easy, but at the end, we developed detailed, bipartisan, bicameral recommendations that would cut $23 billion from the deficit with fundamental and fair reforms that recognize and build upon the success of American agriculture. And I'm proud that we were the only committee to do that.
A note on that $23 billion number: Agriculture represents about 2% of the total spending of the federal government. And $23 billion is about 2% of the $1.2 trillion that the Super Committee was supposed to cut. So we felt that was a responsible number.
While I'm disappointed that the Super Committee failed in its task, I am proud that the Agriculture Committees succeeded in our task of coming together, in a bipartisan way, to do our fair share. If every other Committee had done what we did in Agriculture, our budget situation would be in a much better position today.
So now, our next step is to continue the process we started last year on the Farm Bill. We had eight Farm Bill hearings in 2011, including a field hearing in Michigan and one in Kansas.
And I have to say, going to Kansas was an interesting experience - we are blessed with the Great Lakes and so much water here, and it reinforced for me the challenges of agriculture across the country. Now that the Super Committee process is over, we'll be announcing our next Farm Bill hearing in a couple of weeks, as we get back to what's called "regular order" for that process.
And even though we're moving on, the work we did for the Super Committee had very important value. We came together and developed some very positive relationships. I didn't know Chairman Lucas very well before this process, and I have gained tremendous respect for him and his staff, and we really have a terrific working relationship now. So we are certainly not starting from scratch.
I mentioned last year that our approach to the 2012 Farm Bill would be based on principles, not programs. And that the first principle was effective tools for risk management.
Our corn growers in Michigan saw this first-hand in the spring, when their planting was delayed because of wet weather. Some of our growers switched to soybeans or other crops, but for the most part, thankfully, our corn farmers had a pretty good year.
But they certainly know, and you certainly know, that farming is a risky business, and it keeps getting riskier. Today's farmer faces risks from unexpected price volatility, losses from weather and natural disasters, and uncontrollable input costs.
So as we look at the next Farm Bill, we need effective risk management tools for farmers that are simple and easy to use. In my visits around Michigan, and in our field hearing here and at the one we did in Kansas, we heard over and over again that crop insurance is the foundation of the farm safety net.
It's absolutely the most important risk management tool for farmers. So as we worked on the Super Committee recommendations, we made crop insurance the centerpiece of the risk management system. We need to protect crop insurance from cuts, strengthen the program and make it more effective, and expand crop insurance so producers from all regions and all crops can get adequate protection.
We also made a significant agreement to move away from Direct Payments, which have been under serious political attack from all sides.
We also need to take a close look at risk management tools for our milk producers. This is one area where the current policies haven't worked as well as they should. We developed some positive recommendations for the Super Committee, and with dairy as our top agricultural commodity in Michigan, this is an area where I will continue to be very involved.
We spent a lot of time working on the risk management pieces of the Super Committee recommendations. I expect that this will be a major area of debate and work as we write the Farm Bill, It's absolutely critical for production agriculture in this country that we get this right.
Another area where we found agreement, and I think, made great progress building a foundation for the Farm Bill was in conservation. What we've seen in the past is this: anytime someone has had a new idea for conservation, we just added another program. This time, we said, enough of that. Again, we're focused on principles, not programs. So we looked at all the functions that conservation programs are providing. We looked at all the places where there was duplication, or programs working at cross-purposes, or where the programs were too complicated. And then we looked at the principle needs farmers have, and the tools they need, and we streamlined and consolidated programs to fit their needs.
And I'm very happy to say that we were able to consolidate 23 conservation programs down to 13 and we created 5 areas of focus for conservation- while continuing and building on the strength of what those programs were doing. For the first time, we did what everybody always talks about. We reduced complexity, cut paperwork, and increased efficiency and flexibility in these critical conservation programs.
Conservation is so important to Michigan farmers, and I see this everywhere I go. I visited the Gustafson beef cattle farm in Rapid River, in the UP, and saw how they are using the Conservation Stewardship Program and the Environmental Quality Incentives Program, or EQIP, to improve water distribution, increase productivity on their grazing lands, and protect the water in nearby streams.
And EQIP has been absolutely critical to us in the fight against Bovine TB. This is something I've been engaged with since I came to the Senate, and I'm very happy that we've seen so much progress this year. USDA has dedicated an additional $1.5 million through EQIP to help farmers in Michigan better manage feeding operations to prevent the transfer of the disease from wildlife into cattle populations.
Conservation programs are also critical to protecting our Great Lakes and I will continue to champion public-private partnerships in the Farm Bill to protect them.
And of course, I will continue to focus on Michigan's great specialty crops. In the last Farm Bill, as you know, I wrote the specialty corps title that, for the first time in history, focused on the importance of the diversity of crops we grow in Michigan. Thanks to this title, Michigan farmers have gotten help fighting the Stink Bug and other pests, and we've seen additional research into new varieties of crops ranging from dry beans to potatoes and carrots. We also created the Specialty Crop Block Grant Program, which has helped create new opportunities for Michigan cherry and blueberry growers, among others.
Our Super Committee recommendations built on that success. We continued the successful programs from the 2008 Farm Bill, especially the research initiatives that continue to be so important. We are so lucky to have Michigan State University, a national leader in agriculture research and extension. Their efforts have made a big difference in helping our growers increase production, reduce input costs, and increase efficiencies on their farms. I've asked MSU professors to testify before the Committee on multiple occasions and we'll continue to rely on them as we go forward with the Farm Bill.
As you know, food processing is also extremely important for Michigan's agricultural economy. One of my favorite visits was to the American Spoon Production facility in Petoskey, where they make incredible jellies and jams and other products using mostly Michigan-grown fruit. They are just one of the more than 1,500 food processing businesses in Michigan, and I want to see companies like that become an even bigger driver of jobs and economic prosperity in our state.
I've also been very focused on the growth of innovative companies who are part of Michigan's new economy. We make things and grow things in Michigan. And I believe we don't have an economy or a middle-class unless we make things and grow things.
You know, one of the most important agricultural pioneers in Michigan was Henry Ford. He grew up on a farm, built a tractor before he ever built the Model T, and he was absolutely passionate about using agricultural products as raw materials for manufacturing.
He was a big fan of soybeans... So much so that he wore a suit made of soybeans; he would serve meals to reporters made entirely out of soy products; and he even made an all-soybean plastic car.
Thanks to him, farmers in Michigan started planting more soybeans to keep up with Ford's demand. By the 1940s, there were two bushels of soybeans in every single Ford car - it was used in the paint, plastic horn buttons, interior panels, gearshift knobs, and plastic gas petals, among other things.
Today, there are more than 80 companies in Michigan making biobased products - including soaps, cleaning products, insulation, plastics, foam products, and fabrics.
And while we don't build whole cars out of soybeans, our automakers do still use soy products in automobiles. Many of the cars we build today, including the Ford Focus and the Chevy Volt - both made in Michigan - have seats made of soy foam.
Not only are we building the cars here, we're growing the raw materials here to build parts of the interiors.
That's why I introduced the "Grow it Here, Make it Here" initiative to build on that success and provide tax credits to companies that manufacture bio-based products here in the U.S. When we grow things here, and make things here, we keep the jobs here.
And if that weren't enough, we are also making the fuel to drive the cars here as well!
When Secretary Vilsack came to town in August, our corn growers joined us at the NASCAR Pure Michigan 400, where they use E 15 to power their cars. We want to continue that leadership - and those jobs - by supporting the next-generation of ethanol and other biofuels. When we start work on the Farm Bill's energy title, I want to make sure we support our great Michigan companies who are leading the way in energy production.
We have a lot of work to do in the next few months. And it's certainly not going to be easy - not when the House has already voted to cut $187 billion from Farm Bill programs. But I hope that our experience last year - when Democrats and Republicans from the House and Senate Agriculture Committees were the only ones working together in a bipartisan way - will help us get the Farm Bill done.
That's absolutely what we need to do again to pass the 2012 Farm Bill.
Will Rogers once said, "The farmer has to be an optimist or he wouldn't still be a farmer." I think we have a lot to be optimistic about in Michigan agriculture, and that's a result of the great work that all of you are doing. Thank you again. I am honored to have the opportunity to work with you.