Ohio Farm Bill Forum with Agriculture Secretary Mike Johanns and
Moderator Andy Vance with WRFD Radio Farm Science Review
London, Ohio - September 20, 2005
BREAK IN TRANSCRIPT
SECRETARY JOHANNS: Thank you very much. It's great to be in Ohio and thank you everyone for your warm welcome. Maybe especially warm, huh?
SECRETARY JOHANNS: It is great to be here. These Farm Bill forums have been quite a hit all across the country. We have turned out great crowds like we have today. We spend three hours, and as you can see from the way we will do this forum, this is really your opportunity. I figured out right from the very first forum that the more I talked, the less opportunity you have to talk. And so the whole goal here today is for me to say a few words and get things started. But then what you are going to see from me is I'm just going to sit back take notes and listen to what you have to say. I'll make some notes of comments that you've made, and hopefully at the end of the forum we will have five, ten minutes and I'll do a wrap-up kind of the topics identified by what you have brought up. But, again, the whole idea here is to build a forum that says to you, step up to the microphone and offer your thoughts.
This Farm Bill lasts through 2007, the crop year of 2007. We will wrap up these forums pretty much by the end of the year. The House and the Senate will probably do some hearings, I think, across the country, next year and we'll be working with the legislative process to put a Farm Bill in place so ideally it is passed typically should be passed in that last year of the Farm Bill. So the first part of 2007 is kind of what we're thinking about at this point.
The administration does intend to be very significantly involved in that debate. I've been asked, do you think you will submit your own piece of legislation? That is possible. We have not made a final decision on that, but that is one possibility.
So, ladies and gentlemen, again, let me reiterate today, today is your forum. It is really an opportunity for you to get to the microphone and offer your thoughts about what's working relative to farm policy, what you would like to see differently. And I'm just going to be here all ears anxious to hear your input.
Let me, if I might, wrap up by saying thank you to Andy Vance from WRFD Radio. We appreciate you being the moderator. He's the guy that's going to have to tell you when two minutes are up, and two minutes goes pretty fast. So, Andy will be the time enforcer too.
MODERATOR: I do very little when I'm on the air in two minutes, Secretary Johanns.
SECRETARY JOHANNS: I do also want to acknowledge, you all know Fred Dailey, the Ohio director of agriculture. Fred, it's so good to see you. How about a round of applause for Fred?
SECRETARY JOHANNS: And to those, the color guard, the folks who led us in the Pledge of Allegiance, the young lady who sang the National Anthem, they just all did a great job and I appreciate it.
You will see today, I should mention one last thing, we start every Farm Bill Forum with a young person from FFA and a young person from 4-H to talk about the future of agriculture. Because we should be building policy that allows for young people to get involved in agriculture.
When I was growing up on that dairy farm in northern Iowa, I was a member of both, of 4-H first and then FFA. And so I have a tremendous amount of fondness for both organizations. So we will start the forum with those folks and let them offer their thoughts.
So I think with that, that's what I've got to say and I'll turn it back to the moderator and offer an opportunity for him to say a few words about the forum and where we're going from here and whatever else. So, ready?
BREAK IN TRANSCRIPT
SECRETARY JOHANNS: How about a round of applause for the moderator? I thought he did a great job.
SECRETARY JOHANNS: You know, a couple of other comments, if I might. Director Dailey, thank you for being here right to the end. I think that is enormously impressive and thank you for making me -- am I now the director of agriculture here?
SECRETARY JOHANNS: Did I miss something? Oh, honorary, okay. He said to me as he was handing it to me, now don't go pounding any herds around here, or something.
And Dean Moser, gosh, this -- ladies and gentlemen I've done 15 of these, the Department has done, I think, over 20, this is the only time we have had a dean, not only present, but he stayed to the very end. And I think that speaks volumes about his commitment to you and to agriculture.
SECRETARY JOHANNS: And I also want to acknowledge these folks in the blue jackets that are here. There was a time in my life where I had one of those jackets. And so wherever I see the FFA it's encouraging to me because you do represent our future. And those involved in 4-H too, and the other great programs for young people relative to agriculture. So thanks a lot for being here.
And these are ambassadors, in the red shirts, as I understand it, from Ohio State University. And I'm guessing ambassadors put the best foot forward, right, for the university system. And you guys did a great job of it. So we are real proud of you. You bet.
Well, a couple of things. I promised you I would kind of take a note or two here and I did. But I also identified some things that I wanted to visit with you about quickly and then I'll send you out so you can enjoy the rest of the day.
The first thing I wanted to mention is that we do get a lot of discussion at these forums relative to trade issues. And any time you bring up trade these days you're bound to encourage a lot of discussion. But I'll share some things with you about trade that I think are important to keep in mind.
The president has said on a number of occasions that it's not just about free trade, it is also about fair trade. It's about that leveling of the playing field that we talk about so much and that you hear people talk about. And therein lies the key. I heard people from Farm Bureau get up and it's consistent with what I've heard from other state Farm Bureau organizations. Hey, our goal is to be independent. Our preference would be to move toward a direction of being independent from government programs and sell our products in the marketplace. I share that goal. The reality is today that there are many parts of the world, however, where tariffs are so high that the playing field isn't level. And when you pay that additional tariff for your products, the difficulty that you run into is you've just priced yourself out of the marketplace in that country. That's what the WTO process is about is trying to get reform in agriculture on a worldwide basis to level that playing field.
If you think about trade, 27 percent of the gross receipts from agriculture come from the foreign marketplace. So it's a significant piece of agriculture, 27 percent. In given commodities it is even more. For example, in a state like Ohio, if you did not have the foreign marketplace it would be a very bad deal. It would be devastating to agriculture here. Because you need to ship that corn, those soybeans into the foreign market.
If you ever had any question about the significance of trade you should look at the impact of backing up transportation in the Mississippi through the New Orleans port for a couple of weeks here and see how that has rippled across very, very quickly into the interior of the country. Compare the prices of commodities before Katrina and after. Compare the prices of fuel and diesel fuel before and after, and, again, you begin to understand that those who are advocating for a more closed position relative to trade are risking America's farmers and ranches in my personal opinion. So trade issues are important, but, again, we are devoting a tremendous amount of time to this WTO process because we believe that trade needs to be reformed on a worldwide basis.
We have relatively low tariffs in this country. We are a pretty open marketplace. By comparison, in Europe they have very high tariffs. And you can see our sales into the European Union countries are going in the wrong direction. We want to encourage trade and competition.
Many people spoke to the issue of renewable fuels. I'll put it in that classification. Oftentimes in corn country we hear about ethanol. And I come from a state where we really, really promoted ethanol. We passed some state legislation to encourage ethanol development.
Twenty-five years ago I was a young lawyer, I had just gotten out of law school, and a client came to me and talked about ethanol. And I said, "What the heck is that?" And he said, "Well, you actually produce it from corn." And I said, "Well, what do you do with it then?" And he said, "Well, you burn it into fuel." And I said, "Well, that's a great idea. Is there much of that being done today?" And he said, "No, not really." He said, "We are going to be pioneering in this effort." Fast forward 25 years, 12 percent of the United States corn crop is now produced into ethanol. And I got very involved in ethanol when I was a governor, and I also chaired the Governors Ethanol Coalition.
But I will also tell you that the Energy Bill that was passed, and we applaud Congress for passing it, we needed that bill a lot of years ago, but it did get passed, so let me just leave it there. We are happy it's in place now. But it raised the renewable fuel standard. You thought I was going to say something really critical, didn't you? And then I would have trouble when I went back to Washington tomorrow. No, I'm going to be careful. We applaud them for passing that bill.
But they raised the renewable fuel standard to 7.5 billion gallons in a pretty quick period of time here. We are now producing about four billion gallons, so you can see the impact on states like Ohio. And, again, it's alternative fuels. It's not just ethanol, it's biomass, it's biodiesel. Believe me, I've always believed here that this was a great opportunity. I think with this energy bill we've got some really exciting opportunities in this area.
Diversifying the use of our Ag products, some call it value-added agriculture, whatever title you put on it, but making that product more available for consumer use, who would have thought that 12 percent of our corn crop would be so widely used that you could drive to any gas station in America, practically any gas station, pull up to the pump and fill your car's gas tank with a 90/10 blend of ethanol. That's rather remarkable, if you think about it.
So I know you are working on that here. I would encourage that and applaud you for your efforts.
This forum was consistent with what we've heard at every forum. To our Rural Development partners out there, thank you so very much for being such great advocates. The Rural Development programs have been unanimous in terms of support. Whether it is the new ambulance -- and we announced some Rural Development grants here in Ohio today -- or whether it's utilities or wastewater or water treatment or whatever it is, they are making a difference in rural America, and we could not be more excited about that. So far we haven't had anybody be critical of the Rural Development programs.
Conservation, a lot of support for conservation. Conservation was grown in the last Farm Bill, as you know, and it just gets a lot of good support pretty well around the country. Did hear a little bit of discussion in North Dakota that our conservation programs sometimes compete with the cow/calf people who are looking for range land to graze cattle on. And so you would hear some of that out there, but that's not been a lot of discussion. By and away, far and away, 95 percent of the discussion on conservation has been very positive.
The last thing I wanted to just visit with you quickly about, the most interesting piece of the Farm Bill Forums so far. We talked a lot at the USDA about what kinds of things do we want to encourage discussion on. And as you can see, we really have an open mike. But we put these six questions out and one question that gets to the issue, is there a fair distribution of farm program benefits? And I think we knew that was going to encourage a lot of discussion. And believe me, this Farm Bill Forum is pretty indicative. Has it ever encouraged a lot of discussion.
I was back at Husker Harvest Days just a few days ago in Nebraska, last Thursday, and I wasn't inside Husker Harvest Days more than five minutes when a farmer came up to me and said, "Mike, you need to get payment limits. We can't understand why you haven't gotten payment limits done yet." Well, I've only been there nine months. Now, I will tell you, I've heard significant support for payment limit throughout the Midwest. But I said to him, I said, "You need to come south with me. Because there isn't very much support for payment limitations in the south, just a different kind of agriculture and a different approach."
I'll offer a couple of statistics that you can ruminate on here if you would. And I don't have them in front of me, so I'm drawing them from memory and I may actually have them reversed. So, give me that leeway. I think these numbers are on the web site for the USDA, however.
If I remember correctly, two-thirds of U.S. agricultural production is not subsidized. And three-fourths of U.S. farmers are not subsidized under the farm program. Now, give me the leeway of telling you I'm pulling that from memory and I may have actually reversed that. But reverse it or not, we're pretty close there. And the point is that the vast majority of American agriculture is not subsidized. It is the fruits and vegetable person that gets up here, they're not a program crop. They don't have a safety net, they don't have a floor, they don't have a subsidy. They certainly encourage research, and they certainly encourage a lot of other things that they believe are very helpful to their program. But pretty much, they're in the free market. They are operating in a very free market sort of orientation. But that's true, again, for the majority of crops, the majority of production, the majority of farmers in the United States.
So I guess maybe it's obvious that when you ask a question, is the distribution of the benefits strike you as fair, you're going to get a pretty significant debate upon that depending upon what part of the country you are in.
When we did one of these in California, where they have a lot of fruits and vegetable production, we heard about that. Just yesterday I had a farmer from California ask me this question. He said, "You come from the Midwest." I said, "Yes, I do. I grew up in the Midwest, I was the governor of a Midwest state." He said, "Explain to me, Mr. Secretary, how it is fair to have programs for corn and soybeans, but not for what we raise in California." And I thought that was a very, very interesting observation. I don't know what the answer to that is quite honestly because I'm not even sure that the majority of people in that situation are advocating to be program crops. But it is an interesting issue. It is a little bit like what this gentleman is raising in terms of where do we go from here in terms of Ag policy.
And then the last thing that has been very interesting, and you heard it today, many people getting up and saying, you know, pay very close attention here, because we think what we are seeing is the capitalization of these dollars into land prices and to cash rent. If in fact that is the case, these folks are going to have a very difficult time entering into agriculture, a very, very difficult time.
Now, I haven't verified this, but in the area where I grew up somebody told me recently that a piece of land sold for $8,000 an acre. And that isn't based upon development potential, that I'm aware of anyway. That, again, is just a very interesting thing to contemplate, but we've heard it in just about every Farm Bill Forum that we have done.
Last thought, these are all the reasons we do the Farm Bill Forums. Some people said to me, you know, Mike, why are you doing this? You're going to go out and you're just going to hear from people and they're going to say, well, do some more, do much more of what you're doing. It's been a very different discussion than that. Good support for conservation, Rural Development, a lot of discussion about subsidy programs, a lot of discussion about how we lay the platform for these young people. They have been a great opportunity for all of us at the USDA to get a notion of what's on your mind. And I could not be more appreciative for that. So, those are just general observations. No conclusions. We've got a lot of forums yet to do.
Thank you for participating, stay in touch with us on the USDA web site or write us a letter. Let us know what's on your mind as this continues to roll out.
Thank you, God bless you.
[Whereupon, the Ohio Farm Bill Forum was concluded.]