Transcript of Tele-News Conference With Agriculture Secretary Mike Johanns Regarding release of the Farm Bill Forum Summaries Washington D.C.
March 29, 2006
SECRETARY MIKE JOHANNS: Larry, thank you very much. And to everyone out there, thank you for joining me on the line this afternoon. I am pleased to announce that we have completed our efforts to summarize the comments submitted to us in person at Farm Bill Forums and via the Internet and traditional mail during our formal public comment period on the 2007 farm bill.
We conducted 52 forums in 48 states - all but Mississippi and Louisiana - both of which were appropriately focused on hurricane recovery during our nationwide tour.
I personally conducted more than 20 Farm Bill Forums, and I have to tell you it was a great experience. In fact it would be difficult for me to imagine any better opportunity for a Secretary of Agriculture. I was able to connect face-to-face with producers of all ages in all parts of the country who are involved in different sectors of agriculture.
President Bush encouraged me to pursue this idea of a nationwide listening tour, and I'm grateful for his support and his interest. As many of you know, the President prepared a greeting for those attending the forums, and he stated our purpose in very clear, straightforward terms.
He said, and I'm quoting, "The Farm Bill is important legislation that meets real needs. The next Farm Bill should further strengthen the farm economy and preserve this way of life for farmers and ranchers of the future. Hearing your advice is an important step toward meeting those goals," end of quote.
I can report to you in all sincerity that I don't think any other experience could have highlighted for me in such a very powerful way the diverse architecture of American agriculture. A number of people who attended the forums drove many miles, in some cases waited hours, to tell us in their own words what they like about the current Farm Bill and what they would like to see changed in the next one.
I've talked extensively about the broad array of ideas and opinions expressed at the forums. One thing is certain-- tremendous wisdom was conveyed to us from the fairgrounds, the farm shows, and the arenas of rural America as we conducted these Farm Bill Forums.
In all we received more than 4,000 comments. I want to thank each person who took the time to reflect on current farm policy and to share his or her views. The opinions expressed have become the subject of a national dialog about future farm policy.
Now that dialog is continuing with the field hearings now being conducted by House Agriculture Committee Chairman Bob Goodlatte and his committee who is engaged very personally and directly with stakeholders across the country.
USDA's formal comment period closed at the end of last year, and our staff has been engaged in the monumental task of categorizing and summarizing the comments. Many people have been involved in this effort, and I'm very proud of their work.
As we sorted the comments by subject, we came up with 41 general topics, which became the basis of our 41 summary papers. Each paper contains three parts -- background information that provides unbiased factual information about the topic, a summary of general opinions expressed, and a third part contains specific suggestions conveyed to us.
These documents are strictly summaries of the opinions and suggestions of those who submitted public comment. In fact anyone receiving the summaries will plainly see that differing views are sometimes reflected in the document.
We approach these papers with the goal of ensuring every opinion expressed is represented in a summary paper.
That's important to us because these summaries will serve as a basis for USDA policy review and analysis as we prepare for the 2007 Farm Bill.
The next step is to move into what I would describe as an analysis phase. My expectation is that we will glean from these summary documents a number of themes or ideas that require further analysis. I will ask our economists to perform the analysis in a straightforward, unbiased fashion. I will ask them to submit their analysis of each theme that we select in writing so that we can post it on our website and share it with every stakeholder in America.
I said at the outset of our nationwide tour that I hoped for an honest, open exchange of ideas about future farm policy. Thousands of farmers, ranchers, and other stakeholders responded to that request with very thoughtful, candid comments. My hope is that this analysis will help to narrow the focus of our national conversation about future farm policy.
I have asked our chief economist, Dr. Keith Collins, to take the lead in managing the analysis as we identify ideas or a theme that we'd like to explore further. The first of those themes and the only one we have identified to date is risk management. The public offered a vast array of ideas about how to best manage the risks associated with agriculture. For example, an individual by the name of John from Indiana said, and I'm quoting, "We need to transition away from the countercyclical payments and the LDPs which certainly violate the spirit if not the letter of the WTO commitments we have made," unquote.
Andy in Florida had this to say, and again I'm quoting, "As in any business venture, a sound risk management plan is vital to the operation's long-term success," unquote.
A gentleman by the name of Don from Nebraska said, and again I am quoting, "Weaknesses have shown up with the current farm program. The problem is that it tends to overcompensate when it should not and under-compensate when we need more assistance," unquote.
Those are just a few of the many concerns and ideas expressed by producers relating to risk management. I thought this would be a good first topic for analysis knowing that farm businesses must manage risk effectively to be economically sustainable, just as Andy suggested.
Risks range from production losses due to weather or diseases to shifts in product demand, to surges in production costs. Crop insurance, price and income support programs and ad hoc disaster assistance have been the primary federal financial tools to help producers manage risk.
We have heard repeated concerns about these programs, so it seems only fitting to assess how we might address more effectively the range of risks that producers face today.
We will examine whether farm program support based on revenue or income could be an effective approach. Some have suggested that. I've also asked Keith and his team to explore whether other risk management tools such as different types of farm savings accounts could provide effective risk mitigation for producers.
The analysis will include consideration of how current and alternative risk management tools fit in the context of WTO obligation. As I have said, this will be a very transparent process. We will post the analysis of each policy issue as it is completed just as we are posting these 41 comment summaries today.
As I travel throughout the United States in the coming months, I will welcome the opportunity to discuss and to present the analysis papers that have been posted. I will be eager to hear the reaction of producers to the conclusions of the analysis as we contemplate the most beneficial framework for our future farm policy.
With that, I would be happy to answer any questions that there might be.
MODERATOR: As we begin our question period this afternoon we remind reporters that if you wish to ask a question you should press *1 on your telephone touchpad. And that will alert us that you have a question for us. And we're beginning questions today with Jim Burger, Washington Trade Daily. Jim, go ahead with your question, please.
REPORTER: Yes, thank you. I accidentally cut myself off, so I may have missed a little bit of what you said. But I just wondered, Mr. Secretary, how much was the Doha Round of negotiations a factor? How much did you hear about that during the regional meetings?
SEC. JOHANNS: I don't know that participants necessarily put the Doha title on what they were saying. But we certainly heard about trade. Trade in the countryside gets a pretty good debate going-- no doubt about it. I would always devote a piece of my comments to trade.
So whether it was titled Doha or it was titled trade in general, there certainly was a lot of discussion.
One of the things that I would point out is that trade is important to agriculture; 27 percent of the income for farmers and ranchers comes from trade, and in some states that's higher than that. I talk about productivity; you know our productivity in American agriculture is unbelievable. We are growing productivity about 2 percent a year. Consumption in the U.S. is about one percent or less than that. And then I would talk about the fact that 95 percent of the world's population lives outside our borders. Those are where our customers are at.
So trade was always a topic at the meetings. And it always got a lot of good discussion.
MODERATOR: Our next question will be from Peter Schinn of NAFB. And following Peter will be Jim Phillips. Peter, go ahead, please.
REPORTER: Thank you, Larry; and thank you, Mr. Secretary, for hosting this teleconference and taking the question. To what extent do you already have a general outline of what you plan to propose for the 2007 Farm Bill? What is the timeline for releasing further analysis and for the administration's proposal?
And did you hear any positive comments about the 2002 Farm Bill?
SEC. JOHANNS: Yes. In some parts of the country we heard positive comments. Tended to be focused in program crop areas as you might expect. Lubbock, Texas, perfect example. They were very, very well-prepared, and you know person after person got up and said, we like this Farm Bill; we would like you to reauthorize the Farm Bill.
You know if you look in that area, that's a program crop area. Cotton would be a dominant crop in that area. Some other program crops throughout Texas.
In other parts of the country not nearly as supportive. If you get into wheat country, they don't benefit really from countercyclical LDP. You get into areas where they have drought, you can't LDP a crop that you don't raise. It's kind of what this gentleman in Nebraska was alluding to. There are years where he felt folks were overcompensated, but in years where you really need help this Farm Bill isn't going to do much for you. Why is that? It's based upon a simple philosophy-- produce more, we'll pay more. You know? Produce more and more and we'll pay more and more. But if you can't produce because of drought or you're hailed out or whatever, then you're not going to get the benefits of this Farm Bill.
Specialty crops. We heard a lot from the specialty crop area. They get basically nothing out of the Farm Bill. But the interesting thing is that in terms of value the specialty crops are of equivalent value to the program crops these days.
So it's really somewhat regional, also to a large extent based upon the crops that are raised.
The final thing I would say, and I got to looking into this, 92 percent thereabouts of our subsidies go to five crops. Corn, soybeans, cotton, rice and wheat. So you can see if you're in an area where those five crops are raised, you're likely to see some support. But even in those areas, we still had a pretty good debate. There was in the Midwest you'd hear discussion about payment limits, we need payment limits; but in the South very, very opposed to payment limits. So those issues were regional.
Now in terms of the other questions that you've asked, to what extent is our proposal already decided? It really isn't. I think there's some general themes. I think it would be hard for me to imagine a Farm Bill without strong conservation. Got a lot of support across the country, not unanimous but very, very strong support.
Rural Development got tremendous support. In fact in the 21 forums I did it was unanimous. No one showed up to say, we don't like your Rural Development programs. Very much the opposite.
Renewable fuels. You know the President has put a lot of emphasis on that, so one would have to imagine that as a part of Rural Development or something related to the Farm Bill that we'll be dealing with renewable fuels issues.
So I think I can identify some general themes. But we're still a ways off from specific proposals.
As you can tell, we're really building this based upon the input we received from farmers and ranchers and stakeholders. So the logical next step is to take some of these ideas and see if we can flesh them out some.
MODERATOR: Next question is from Jim Phillips of Progressive Farmer Magazine. Standing by should be Matt Kay. Jim, go ahead, please.
REPORTER: Thank you, Larry. Mr. Secretary, speaking of conservation and considering the administration's proposals to the WTO where you would significantly reduce traditional farm subsidies if others do the same, can you perceive a new Farm Bill that would shift significant dollars from traditional farm programs to conservation spending?
SEC. JOHANNS: Every Farm Bill since we've started dealing with trade in agricultural products dating back to the Uruguay Round has factored in the reality of trade commitments. And you know we have to be mindful that 27 percent of the income does come from trade. But if you slice and dice it a little finer, 70 percent of our cowhides need an export market. Rice, 50 percent of our rice needs an export market. Our row crops, about every third row is sold into the export market.
So this is significant.
So trade issues will be a factor. Whether there will be a wholesale shift into conservation I think is an item of debate.
We do know some things about conservation. It has tremendous support; it's got a wide base of support. It's not just farmers that like it; it is people involved in hunting and fishing and clean water issues. So it's got a lot of stakeholders that support it.
But again I'd have to say today that I'm convinced conservation will be a part of the next Farm Bill. Whether the shift occurs I think is a very open discussion whether you would just wholesale move things into conservation. I can tell you, I haven't reached a decision about that. We heard some suggestions along those lines. We heard some concepts about a working conservation type proposal because one of the criticisms we heard about conservation programs is when you take that land and place it into conservation for a lengthy period of time, the seed dealer is affected by that. The fertilizer dealer is affected by that. The machinery dealer is affected by that because it idles that land.
So these are complicated issues. But at least today I think I'm very safe in saying, conservation will be a part of the next Farm Bill. The nature and extent I think are still open to definition.
MODERATOR: Matt Kay of the Burns Bureau is next with his question. And standing by should be Jackie Fatka. Matt?
SEC. JOHANNS: Yes. Mr. Secretary, thanks so much for taking my question and again for hosting this event today. If you could just clarify a bit, what exactly is the strategy here in doing this economic analysis from the input that you got at these listening sessions? Are you trying to distill a set of basic principles to come up with some new ideas on how to restructure farm policy so that it may be more cost-effective and more targeted to those who most need it, more perhaps green in its texture? Are you trying to find out perhaps what the political balance is on this in terms of who favors the status quo or who favors radical change?
What exactly is the approach that you're taking with this analysis?
SEC. JOHANNS: The analysis is really designed to put some flesh if you will on the bones. What do I mean by that? Well, I'll just use one example because it does get into our first topic. We did have some people show up at Farm Bill Forums and question the wisdom of the current farm policy. And it was everything from this discussion about well, at times when you really need help because you've dried out and lost your crop, this Farm Bill isn't there. And it isn't. It just isn't there.
So people raise the issue about, well is there a revenue-based approach? Do we need better tools relative to the management of risk? Those kinds of things.
But it was pretty scattered. You know, if you search through the 4,000-plus comments the ideas were surfaced by farmers. Somebody would talk about an idea of a maybe a more revenue-based approach to farm policy versus commodity based approach to farm policy. And so what we want to do is to try to take that concept that has kind of varied all over the map but we heard enough about it to say that there was a theme there at least, that people were raising it enough that it caught our attention.
So let's do some work on this. Let's do some analysis, let's do some research, and let's literally put a paper out there that says, this is what we heard. This is how this might work.
Now the whole thing here I hope is that these will be very, very anticipated, people will be anxious to learn what we have learned. Our goal is to present it in a very unbiased way. We're not going to say this is the way we need to be headed. What we are going to say is, we heard enough about this and this is the way this kind of approach might work, and get some dialog going about that.
So that's really the idea here. Let's take this to the next stage. We know we got over 4,000 comments, we've organized those in what I believe is a very professional way, and now let's try to put some flesh on the bones from what we heard out there in the Farm Bill Forums.
MODERATOR: Next question comes from Jackie Fatka of Farm Progress Publications. And standing by should be Chuck Abbott. Jackie?
REPORTER: Hello, Mr. Secretary. Thanks for taking my call. Can you explain a little bit more about the timeline of analysis on when you expect to have it out? And also too if you guys are planning to propose something with whatever you find out from analysis to Congress and what the timeline is for that?
SEC. JOHANNS: Jackie, good question. This is not going to be one single analysis. This is not going to be a situation where you don't hear from us again until late fall and we drop a 95-page paper out there.
This is literally going to be a series of papers that come out. We haven't set a specific-- there will be one every two weeks or one every three or four weeks. But we have set the first topic, and we anticipate there will be additional topics.
Part of what we want to do is, again, to identify what topics are out there that people have expressed a lot of interest in and what can we do to help encourage thoughtful analysis of that topic and what was suggested by farmers and ranchers at these forums.
So that's the whole idea here. You could see the first one come out in the next 30 days, but it will be a number of papers. How many? That's a little bit up in the air, but certainly a half a dozen. And there could be some more than that. We're still developing those additional topics. But I think it's safe to say that between now and the end of the year there will be at least a half a dozen papers out in these areas.
In terms of our own specific proposals, we certainly would not want to be making proposals while this process is going on. That would be getting the cart before the horse. We said we wanted to build our ideas literally from the farmer and rancher on up to Washington, and that's what we're doing here. There will be a point, but I think it literally is later on after the first of the year that our specific proposals will come out.
I've been saying all along, we're months away from specific proposals just simply because we had a notion as to how we wanted to do this. This might be a slower way than some people would prefer, but I feel very confident that it's the right way because literally we're building it from what farmers said to us.
MODERATOR: And our final question today comes from Chuck Abbott from Reuters. Chuck, go ahead, please.
REPORTER: Thank you, Mr. Secretary. I have for you an either/or question since you've told us you won't be proposing anything before the congressional elections could act as a referendum on your proposals. The question is, the economic report by the President essentially suggested blowing up the traditional farm support programs. And its criticism of the current policy suggested that the administration essentially wants to repeat its proposals from 2002.
Perhaps you can tell us whether the administration is heading in that direction of dividing supports based on the size of a farming operation, or you can tell us since money will be tighter for the 2007 Farm Bill than in the past, and the administration's worried about spending, whether it's time to return to acreage set-asides.
SEC. JOHANNS: Boy, those are really, really good questions, Chuck. Let me do my very best to answer the questions that you have raised. You know, I've been around I guess long enough and was involved in the last Farm Bill Forum as the lead governor for both Midwest governors and Western governors to have formulated the notion that the best referendum comes from the people directly affected by the policy, and that's what we tried to do with the forums.
When we started out I'm not sure that we had a specific goal to be in all of the states, but that's pretty well the way it ended up. And the reason is, we were just getting such a very strong reaction. We were getting such great discussion from farmers, and ranchers about farm policy and for me going and participating and listening to farmers for a lot of hours and doing 21 of these myself, I have to tell you it was really enormously worthwhile. And I believe it's the way policy of this complexity should be built.
So that's for me just the best approach. Call it what you will --whether it's referendum or not, I think there's no better way than to offer the microphone to somebody and say, come on up and tell us what's on your mind.
So that's what we did across the United States.
You know in terms of the concept of set-asides, Chuck, I have to tell you I didn't hear any support out there. "Any" is maybe too strong a word; you might be able to dig into those 4,000-plus comments and find somebody that showed up at a Farm Bill Forum here and there or maybe some body that came up and wanted the old days back of set-asides and quotas and this, that and the next thing. I have to suggest however that I heard quite the opposite.
I do believe that people appreciate the flexibility to farm. I believe that they would hate to give that up. I think if anyone were to suggest that we take that away from farmers across the country that that would not be met very positively.
Again I go back to the comments, I go back to the many hours of listening, and I just didn't hear people out there clamoring for that kind of program again. And I would not see the support from farmers for that notion, that idea. I just don't see it out there because I didn't hear it when I was out in the forums, and so that's just the most direct answer I can give you.
I don't think there would be any support for that kind of approach based upon what I heard from farmers.
MODERATOR: Reporters, thank you for being with us and thank you for your questions. Any closing thoughts, Mr. Secretary?
SEC. JOHANNS: Well as I said in my opening comments, this was a great experience, and I'm excited about what we are doing. I was very excited to peruse the comments. We will put these up, and we'll make these available far and wide. Our hope now is that we can kind of move to the next step and start to take a good look at some of the ideas and suggestions that were made by farmers and ranchers across the country.
So we're excited to be a part of this process. We're very anxious to work with Congress on new farm policy.
MODERATOR: Mr. Secretary, I notice we did have a couple more questions if you have time. We'll take a couple more questions. Dan Goldstein from Bloomberg News. Dan, do you have a question?
REPORTER: Yes, I do. Just going back, I know you haven't talked about outlines of what we might expect, but for the past two years the administration obviously has looked upon cutting direct payments to farmers with payment limits and also basically with the WTO proposal from the USTR to slash subsidies.
Are we at this point kind of setting up farmers for what to expect for the 2007 Farm Bill, 2008?
SEC. JOHANNS: I speak to farmers all the time. In fact I spoke to two groups just this morning. It's a very normal part of my day. I'm either traveling to them or they're coming here for attendance at some conference or something. So it's a very normal thing.
I think farmers, you know they're realistic people. They understand budget issues. I spoke to a group from the state of Texas today, and we talked about budget and deficit and all of those things. And every Farm Bill is built upon a budget. The last Farm Bill was built upon the notion that there was a lot of money. And I would debate that point, but I have the benefit of 20/20 hindsight. So I think every Farm Bill is impacted by budget.
And the other thing I would say is, every Farm Bill is impacted by trade issues. You know no Secretary, no one should be out there saying I'm going to adopt policies that jeopardize 27 percent of the income for farmers and ranchers. And that's what you're talking about when you head out to do something that ignores the fact that 27 percent of the income for farmers and ranchers does come from trade, and in some states it's even higher than that.
The other thing I would tell you about the budget proposals, we've put out budget proposals. We did so because we felt strongly, and I continue to feel strongly that you've got to balance the budget. You know, you've got to work toward that goal. And I certainly understand all the things that we've had to deal with in the last years. But I think the President's goal is the right one; let's cut the budget deficit in half. And you don't do that by talking about it. You do it by leading and offering specific proposals.
What we factor into the next Farm Bill is very much open to discussion and debate and trying to figure out how best to approach this. There will be a lot of things that will impact this Farm Bill. Trade will be one, budget will be another one. There's just a whole host of factors, some that I don't even know because they're going to happen between now and the next Farm Bill. But all of these things are items that definitely impact the way lawmakers look at this and the way Congress writes a Farm Bill. And it will certainly impact how we approach our recommendations relative to the next Farm Bill.
MODERATOR: Dan Looker from Successful Farming Magazine. Dan?
REPORTER: Thank you very much. Mr. Secretary, could you just give us a rough idea of when the analysis of the first topic will be posted, the economic analysis? And also in working on that analysis, will some work be done in collaboration with folks at the Land Grant Universities that routinely look at some of these issues, or will it all be done in-house?
SEC. JOHANNS: The answer to that question is yes. My encouragement to Keith Collins is to reach out to Land Grant Universities, reach out to those who have looked into a specific issue. We want to make sure that not only are our economists engaged in this but they are drawing upon whatever expertise we can draw upon. Whether it's up on Capitol Hill or whether it's in a Land Grant University we would certainly encourage that kind of involvement.
In terms of the first topic, I think it's safe to say that sometime in the next 30 days thereabouts -- give me a little room on either side of that -- we should have the first topic out. You know you can kind of do the math. I'm thinking today that there will probably be at least six topics, could be a little bit more than that that we'll be taking a look at. And so these things now need to be delivered in a pretty timely fashion because I do want to avoid a situation where come the end of the year we drop a huge paper on somebody. That's not going to serve what we want to accomplish here.
We want to encourage people to look at what we're doing, how we've looked at things, talk about what we're doing. Like I said, I hope this is the most anticipated document out of the USDA in the countryside in the weeks and months ahead.
REPORTER: Last question from Stewart Doan at Clear Channel Ag Network. Stewart?
REPORTER: Thank you, Larry. And Mr. Secretary, thanks for taking the question.
You highlighted earlier on three comments in particular that you received. And I believe in general they were advocating a different type of safety net going forward. You talked about how Chief Economist Collins and his staff would be analyzing concepts like revenue assurance, etcetera. Is it fair to assume based on what you have said so far today that the current safety net structure that's in place, the department won't be spending any resources, time etcetera, analyzing how that could be an option for the next Farm Bill and fit it into the budget parameters that will be with us next year, and WTO requirements?
SEC. JOHANNS: I don't want to suggest that the current safety net was universally criticized. It was not. In some parts of the country it was universally supported, very much so. Like I said, I did a forum in Lubbock, Texas, and almost without exception everybody who got up was well-prepared. They had their testimony ready to go, and they spoke in a unanimous voice that they like the current Farm Bill.
But you could go to other parts of the country and you could also find that. Again, I think in areas where program crops are raised you're going to see a stronger sense of support. You're going to get a stronger sense of support for the current Farm Bill because about 92 percent of the subsidy payments do go to those five program crops.
In other parts of the country, they are arguing not to become -- you know specialty crops are not arguing to become a program crop. But they are raising issues like funding for research, funding for sanitary, phytosanitary. And this year at our Outlook Forum we did announce that the value of specialty crops is now basically equivalent to the value of program crops. So it's an interesting debate.
But please don't go away from this interview thinking that I've formed the opinion that everybody's against this Farm Bill. That is not the case. There are some parts of the country where we saw very, very strong support for the current Farm Bill. And it's important that I acknowledge that.
Different safety netting approach. You know, it is one of those situations where what we want to do is take all of the information we've received. I can tell you for example that some of it was conflicting based upon the region of the country you are in.
For example, in the Midwest it would not have been completely unusual to have somebody say, I support the current Farm Bill but then say but we need payment limits. Now that's a very, very different kind of Farm Bill than what somebody in the South would probably talk to me about.
The grower, the planter in the South would probably say something more along the lines of, we support the current Farm Bill, but no payment limits.
And so trying to say that there's consensus on these issues today, I think would really, really be stretching it.
What I can say is this. We want to look at all of these issues. It is possible that an additional topic might be to analyze the current safety net and see how it is working. Is it working across agriculture? How does it work in times of drought or hail or whatever calamity is facing farmers out there? Because it is a part of what they deal with. I mean they are really at the mercy of what Mother Nature throws at them.
And of course anybody who has studied the Farm Bill for very long will see that this Farm Bill is based upon production. It is not based upon losing your crop. If you lose your crop, this Farm Bill doesn't really deliver an LDP to you for example.
So these are all of the issues that we're looking at. And like I said, it's possible that a future topic will take a look at the current safety net and try to get some analysis as to this safety net and how it's working.
MODERATOR: Thank you, Mr. Secretary. Secretary of Agriculture Mike Johanns.
I'm Larry Quinn bidding you a good day from Washington.