Release No. 0236.01

UNITED STATES DEPARTMENT OF AGRICULTURE

National Association of Farm Broadcasters

with Secretary of Agriculture Ann Veneman

Friday, November 16, 2001

MR. QUINN: She will take questions from the audience.

Madam Secretary, welcome back to the USA.

SECRETARY VENEMAN: Thank you very much, Larry.

“Thank you all very much, and thank you, Larry, for that very kind introduction. I know Larry Quinn is a great friend of the National Association of Farm Broadcasters, and he's a terrific employee of USDA, and we're very, very fortunate to have him here, and we're glad you're out there today, and I first want to just apologize for not being with you in person today.

“It was on our schedule, all the way along, but our schedule also indicated that we would be home from Doha about 24 hours sooner than expected. As I go through and tell you about the negotiations, you will see that while they were successful, it took a little longer to reach that success, and so it just was really impossible today, to come home yesterday and get on a plane and be there today. So we apologize but we're glad we are having the opportunity to join you, at least by video today, and I really want to wish you all the success on a tremendous conference, and I want to give my personal congratulations to Colleen Callahan as your incoming president.

“I know she's your first woman president and I look forward to having a very good relationship with her and your organization as we move forward into the coming year.

“And thank you very much also to Mike Hergert who's done a terrific job as your president this year, and I really appreciated having the opportunity to meet so many of you in person, when you were here earlier this year, at USDA, and also the tremendous response that I've had from so many of you, when I've traveled all around the country this year, meeting with various farm groups.

“A lot you have been there and given us a lot of exposure that we wouldn't otherwise have had. So thank you very much for being there and helping to get out our message on behalf of America's farmers and ranchers.

“If I sound a little incoherent today, it's because I literally had two nights this week, the two nights before last night, without having gone to bed at all, and so I have to say I woke up this morning and I wasn't quite sure where I was, and I still feel quite exhausted.

“So if I sound somewhat incoherent at times today, I hope you will bear with me.

”I really want to start out by talking about the significance of this meeting in Doha, what it meant, and why we are coming home, feeling so glad and happy about what happened there.

“We launched a new round of trade negotiations. Now this is terrific for the world as a whole, at a time when there's an economic slowdown. The world benefits, overall, from trade, and we know, after the failure in Seattle, that it was extremely important to have success in launching a new round.

“I think that if we had not succeeded in launching a new round now, it would have undermined the World Trade Organization, our ability to be participants in that, to use it as a dispute settlement mechanism that we've seen benefit our farmers and ranchers.

“So I think it's just absolutely a great victory, that we were able to come away from Doha with the launch of a round, and it's a great victory for America's farmers and ranchers, because in agriculture, we are going to be able to build upon the success that we achieved in the Uruguay Round, to have even, I believe, a greater opportunity for our farmers and ranchers to participate in a global marketplace.

“I want to just briefly review what we achieved in the Uruguay Round, because I think it's significant and it will be the building block for this next round of trade negotiations.

“We achieved a tremendous market access agreement in the Uruguay Round when we turned all nontariff barriers into their tariff equivalents through a process called tarrification, and those tariffs are going to be brought down over time.

“We need to do more, and hopefully the next round will give us the ability to do that.

“In the Uruguay Round, we negotiated a reduction of export subsidies, and we negotiated the reduction of trade-distorting domestic supports, and we achieved a landmark sanitary and phytosanitary agreement that says that regulations must be based on sound science and cannot be used as disguised barriers to trade.

“So what we have now achieved in the launch of this new round is the agreement to go forward, to get greater market access, to reduce and phase out export subsidies, and to reduce trade-distorting domestic support.

“The real sticking point in the negotiations there, was we started out with a text. It was a text that was presented by the chairman, and so many countries wanted so many different things in that text, it didn't really achieve what they wanted, but as the days progressed we were able to basically isolate the European Union with the so-called Cairns Group of ag-exporting countries, and then even Japan, who's always been the last to come around on any ag trade negotiation, all said that while this text isn't perfect and what everybody wants, it is the best text to go forward.

“The Europeans became isolated, because they didn't like the words `with a view to phasing out export subsidies,’ because they thought that that predetermined the result, and that they were threatened by that and wanted the words `phasing out’ to be eliminated from the text.

“In the end, there were a couple of words that were put in saying `without prejudging the outcome.’ Well, you don't prejudge the outcome of a trade negotiation in any event. So those clarifying words really didn't change the text as we were hoping it would go forward with the words `to phase out export subsidies.’ So, in the end, we have an agreement that really will allow us to negotiate on those three pillars--market access, domestic supports, and, most importantly, export subsidies.

“When we talk about export subsidies, it's important, because you look at the fact that Europe uses 70 times more export subsidies than we in the U.S. do. So this is a significant agreement that will allow us to negotiate the opportunity to level the playing field in this respect.

“Now there are a number of other things that were achieved in this negotiation, in addition to the ag text that we've just talked about. We tightened the environmental standards that could have been anti-trade.

“Now let me explain this. There was negotiated a new section on environmental agreements in this text, and while there has been some concern about that, in fact, we believe it's a great victory also for American agriculture, because at this point in time some of these environmental agreements have been of great concern to American agriculture, whether it's the biosafety protocol or the Montreal protocol, and what this agreement now says is we're going to look at a way to integrate the rules of trade of the WTO with environmental agreements which are not now subject to trade rules, and so we think that's very important.

“The U.S. played a key role in looking at ways to make sure that text was very tight, so it didn't impact any agreements, or impact our ability under any agreements that we weren't party to, and, in the end, we believe that's a very significant achievement in this text as well.

“We also were successful in precluding the Europeans from including what's called the precautionary principle, so to speak. Now that principle they wanted in there to be able to use, we believe, it could have undermined the whole sanitary and phytosanitary agreement, allowing countries to say, well, in the interest of precaution we're going to take this action, undermining the sound science that's contained in the sanitary and phytosanitary agreement, and that we could not live with, and that was not allowed to go into the text.

“So we feel that there was a great achievement in that regard as well.

Also, very significantly, and I hope that you all got our press releases that we were sending out during the course of our time in Doha, but one of the significant achievements was the entry of China and Taiwan into the WTO.

“As we said in our release, that will potentially provide as much as $2.5 billion annually in additional agriculture export sales from the U.S., benefiting grains and meats, produce, cotton, and processed foods.

“So, again, it's very important that China, the largest, by population, the largest country in the world, is now a member of the WTO, and it's not just for our export interests, which are extremely important, because the accession agreement that was negotiated on agriculture was critical, because it did give us so many market openings for agricultural products, that our producers are so efficient at producing in this country. But it also brings China under the rules of the WTO, so that if we have a dispute with China, we're able to take them to the WTO, and get that dispute resolved.

“ I just think it's important, as we talk about the significance of what happened this week, to also talk about why trade is so important to American agriculture. We hear a lot of nay - Sayers about trade, but the fact of the matter is we export so much more than we produce in this country, and we must have access to the international marketplace if we're going to continue to be successful as a producing nation, and if our farmers and ranchers are going to continue to be successful in the marketplace.

“We export about 25 percent of what our farmers produce. Now when you put this in perspective, think about the fact that we export half of the wheat we produce. We export 45 percent of the soybean crop and 40 percent of the cotton crop. So one in every four rows of corn that our farmers produce is put into the international marketplace. One in every two of wheat.

“I mean, it's quite remarkable, when you think about how important the international marketplace is to us.

“So, you know, agriculture is one of those areas where we run a trade surplus, and next year we're estimating that we will export $57 billion worth of food and agriculture products, a very important component of our success, of our farm sector in this country.

“You know, a lot of people forget, and you all have heard me talk a lot, that the U.S. has only 4 percent of the world's consumers. So it's critical that we see the opportunity to access consumers around the world.

“One of the things that a trade agreement can do as well is bring economic growth and prosperity to all parts of the world, and when you look at those parts of the world, the developing world, where as they grow, one of the first things they will buy is more food. That's very significant, because it's the developing world, and those countries that are coming into the emerging middle class, that give us the greatest opportunity for marketing our food and agriculture products in this country.

“In addition to, obviously, what's happened this week in Doha, Qatar, and the emphasis we've been able to place on trade, and the importance of that for our agriculture producers, there have been so many other things that have gone on this year, and certainly we've had the opportunity to discuss those with you.

“Yesterday, the Senate passed its version out of committee of a Farm Bill. That discussion continues to go on, but I can say that that process is far from over at this point.

“We are certainly looking for an outcome that is as consistent as possible with the principles that we put forward in September with our Farm Principles book, which I'm sure that you've all had a chance to read and review yourselves, by now, and we're looking forward to working with both houses of Congress as we come to a final Farm Bill outcome, that will best help our farmers and ranchers around the country.

“One of the issues that's been most on the minds of many in the last few weeks, but, really, it's been an issue that we've dealt with all year, is that of biosecurity. We started out this year coming--or our tenure coming into USDA with this serious threat of foot and mouth disease, spurred on by looking at the pictures all around the world, particularly in the U.K., of an outbreak that was serious, that took a long time to control, and so it caused us to relook at all of our systems, our strategies, and so forth, to make sure that we had the ability to keep the U.S. free from foot and mouth disease, a disease we've not had for 70 years.

“On the heels of that--well, I should say before I go forward, that what we did was we looked at all of our systems to make sure that we had everything in place from a prevention standpoint and that meant reassigning inspectors, we added additional money, we're doubling our dog teams over the next few months, to make sure from a prevention standpoint that we do not have an introduction of a disease like foot and mouth disease.

“At the same time, we're increasing our ability to be prepared. What happens, should we get an outbreak of foot and mouth disease? Are we prepared? We've worked closely with our states, with veterinarians all over the country to be able to identify the disease, and to make sure that we have a response team in place that will be as effective as possible, in quickly isolating and eliminating any disease, should it come into our country.

“Now this whole issue of biosecurity has really come to the forefront since the tragic events of September 11th, and we now are working with the President's Homeland Security Task Force. We formed our own Homeland Security Task Force within the USDA, and we're going to continue to look at all of our animal and plant health inspection systems, to make sure that they are both prepared to respond, but we're doing everything that we can to prevent any kind of either accidental or intentional introduction of something into the food system.

“Our Food Safety Inspection Service, likewise, is very involved in looking at the whole issue of securing the safety of our food supply, and we're working in close cooperation with the Department of Health and Human Services and the Food and Drug Administration, to make sure that we're coordinating policies and watching every aspect of the food supply, to make sure that there is no threat to it.

“So it's been a very, very busy year. It's certainly been a busy week. But I must say that I come to you today, maybe not in person, but in spirit, with a great amount of excitement and enthusiasm for what we were able to achieve this week for America's farmers and ranchers.

“With that, I wish you a successful conference, and I'll be happy to answer some of your questions. Thank you.

MR. QUINN: Madam Secretary, I'm sure we don't have any bashful broadcasters in the room, and as someone comes to the microphone, we're glad to see you back home and safe.

SECRETARY VENEMAN: Thank you.

MR. QUINN: Our first questioner.

QUESTION

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Would the Farm Bills that have been adopted by the House and by the Senate Agriculture Committee in any way make the goals that we seek to achieve in the Qatar trade round more difficult?

“Well, first of all, I think it's important to point out that there are two very different bills right now, one that's come out of the House and off the House floor, and there's one that's come out of the Senate Agriculture Committee, which we are still analyzing and haven't really been able to finish the numbers in terms of, you know, what the level of spending would be, where that would fall in terms of our trade obligations, and so forth.

“But I think it's important to point out there are two very different bills. The Senate has yet to act on anything on the floor, and there is certainly some indication that that could be a process that is unpredictable at this point in terms of what amendments might be added on.

“So it's impossible to really predict. If you look at the House-passed Farm Bill, there are estimates by FAPRI that indicate that that could have about a 40 percent chance of exceeding our current obligations under the WTO.

“And so cognizant of that, there was a provision put in, in the House bill to try to address that. I think that probably, you know, as the Farm Bill process proceeds, we want to make sure--and I think it's been a stated goal of both the House and the Senate that they want to have a Farm Bill that does not contradict what our current obligations are in the WTO.

“As far as what we're going to be doing in--you said the Qatar round. Let me just tell you this is called the Doha Development Agenda, which is something I can explain a bit later. But the fact of the matter is that we have, as part of that agenda, negotiating of course export subsidies and hopefully eliminating or phasing them out, trade-distorting domestic supports, and of course market access being absolutely critical.

“On the domestic support side, one of the things that we've argued, and we've argued in our principles book, is there is certainly no prohibition against supporting our farmers by the WTO, it's the manner in which we do it, and so our goal, certainly in working with the Congress, is to make sure that the support that we give our farmers is the least trade-distorting as it possibly can be so that we don't run up against our commitments and run the risk of violating them.

“So that's really been our goal, is to make sure that the kind of support we give our farmers and ranchers is the kind that is the least trade-distorting, the least market-distorting so that we can--and I think that that's in the best interest, the best long-term interests of our farmers and ranchers because the marketplace is where I know farmers and ranchers want to get the value for their product, and so we need to make sure we have programs that are allowing them to do that.

“Let me just say a word about the Doha Development Agenda, as this has been called. One of the things that was unique about this meeting is that it really brought for the first time the developing countries much more completely into the discussions that were going on, and a lot of what's been talked about is the importance of seeing progress in the developing world. There was a lot of talk about something called capacity building, helping the developing world have greater capacity to participate in trade negotiations, to participate in having the right kind of systems like sanitary and phytosanitary systems so they don't use regulations in an unjustified way. How can we in the developed world help them develop that kind of capacity?

“And as I said before, what's important about the developing world being participants is that to the extent that they can achieve economic development, that only benefits our farmers and ranchers, because the first thing that most middle class consumers buy as they achieve that status is more food products. And we think because of the efficiencies of our farmers and ranchers, we have a great opportunity, given the market access and to really tap into those markets, and that's where I believe the future is.

QUESTION

Can you shed any light for us on the reports that have come out in the last several hours that Cuba has asked the United States Government about emergency purchase of commodities, specifically poultry, rice, soybeans and wheat? And if so, what role if any would USDA play in facilitating this transaction?

“Well, the State Department and the Cuban Government have been exchanging diplomatic notes about the possibility. There was a severe hurricane and Cuba is now looking at purchasing about I think $30 to $40 million in agriculture products. I just got the information. I think it's about $30 million. I just got this, this morning.

“But basically, as you know, in July of 2000 in the Trade Sanctions Reform Act, one of the things that was lifted was the prohibition on selling food and medicine to Cuba. Now, it did not allow sale of such products with the assistance of the U.S. Government in terms of credit guarantees or other kinds of assistance, but it did allow for sales to take place, and this is projected to be a cash sale, and so it would be permitted under that particular provision.

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QUESTION:

Madam Secretary,. And I was just at a meeting in California with Bill Lyons, the Secretary of Agriculture for your home state of California, and he brought up a program that's being put forward called ‘In Fact,’ which is the first letter of the states from California around to the south, including Arizona, New Mexico, Texas and Florida, that those states have 27 percent of the agriculture production, 26 percent of the population in this country, and that they want a piece of this government subsidization as well as everyone else. Now that seems to fit somewhat with the principles of the U.S. that the government--that USDA put forward. So could you respond whether or not you would like to see those crops represented by those states receive a portion of the pie, if you will, in the next farm bill?

“Well, let me say a few things about that. One is that we, the administration, have said that the benefits of our agriculture policy and our programs should be of benefit to as broad a range of farmers as possible, and there are several ways in which this particular group of states, I think, benefit under the things we've talked about in terms of our farm principles. And I might add, this In Fact Group is a group of states that sort of formed an alliance under the auspices of the NASDA organization, the National Association of State Departments of Agriculture, but sort of with their own agenda because of the unique--the unique aspects of the agriculture in some of these states.

“But I think, as I have talked with particularly the fruit and vegetable industry and the specialty crops and so forth, there are several things that they are most concerned about. One is a strong sanitary and phytosanitary system, making sure that infrastructure is intact because, as you know, any kind of pest or disease can devastate aspects of agriculture. Whether it's the Med Fly that we dealt with over and over again in California and Florida, or it's citrus canker that's now in Florida, or it's foot and mouth disease that would hit not only the livestock industries of those states, but you know, possibly all over the country. I mean, those states truly care about making sure that we have the strength of those systems to make sure that our agriculture is not in any way hurt.

“They also care deeply about trade opportunities abroad. Obviously, a lot of the specialty crops don't have the benefit of subsidies, but they've used things like the market access program to get market openings and have assistance to get market openings abroad. And certainly I think in both bills there is an increase in the amount of funding that would go toward those kinds of programs, and I know that's something they strongly support.

“The other issue that's come up particularly in one or two of the proposals, it first came up in Senator Lugar's bill, is the opportunity to use these farm savings accounts, a ‘farmer IRA’, and that's been a kind of tool that has been discussed more and more in this particular farm bill, and is certainly something that the President has talked about a great deal, as being a kind of market-oriented safety net. And if we were to establish something like farm accounts or IRA accounts for farmers, all farmers would benefit from that kind of program, be it the livestock producer or a fruit and vegetable producer or a grain producer.

“So that is another kind of possibility that's being discussed as a way in a fairly market-oriented means to help farmers in a much broader way.

“And so certainly I know that the California producers have been struggling like farmers all over the country, but I think there's a number of things that are being discussed in terms of future farm policy that would address their issues as well as a broad number of farmers all over the country.

MR. : We have time for one more brief question, and then we want to give you time for a final comment. Your question, please.

QUESTION:

Madam Secretary, I will give you the last question. I know you haven't been too hot on it, but they have come up with this compromise now to give states the power to form their own compact or to join in a region. The compact is made up of not only farmers but consumers, government experts, economists of all kinds like [inaudible] colleges, usually 25 or 26 on a council, a very fair way to evaluate what the price of milk should be.

And when Congress commissioned a study of a dairy compact in the northeast they found that the public was for it and contrary to what milk processors said would happen, milk didn't go up a dollar a gallon, about 8 cents a gallon, and it didn't cause any surplus, only addition of about 4 percent during the life of the compact. That's half of the national average.

So farmers think that to give them a voice in pricing their own product because it's a fairly inelastic product. Certain amount of people are going to buy it regardless of the price. And if you can give farmers a profitable price with a compact, it might be a good idea. What do you think about it?

“Well, as I've said many, many times, dairy policy is one of the most contentious issues that we deal with in agriculture. It is very regional. Whether it's the Northeast that has certain ideas, on the Midwest with very, very different ideas, it is--I have often said I wish that the dairy producers from all over the country could come together with the dairy processors and develop a policy that was in the best interest of--and the consumers--and develop a policy that's in the best interest of everyone.

“I haven't actually had the opportunity to review and evaluate the particular program that you're talking about, but again, it would be my hope that as the dairy industry continues to modernize, and obviously it is changing just like all of agriculture, with new technologies, new marketing techniques, new alliances between and among producers and processors. I think we really need to look carefully at the kind of policy that we develop not only for the dairy policy but for all sectors, to make sure that they can really continue to adapt to the changing consumer marketplace, and be a part of a growing industry in this country which I think has been very, very successful and will continue to be so.

MR. : Thank you very much, Secretary Ann Veneman. Do you have any final comments as we wrap up here?

“Well, I just want to thank all of you, Larry, for your always great ability to be a master of ceremonies, so to speak, and all of you for allowing me to be a part of your program. I again want to apologize that I wasn't able to be there in person, but I appreciate the opportunity to join you through a video conference, and again, I congratulate you on a very successful conference and wish you the very best, and will look forward to seeing you when I'm either out in your states or when you're back here in Washington. Thanks a lot.”

MR. QUINN: Thank you very much, Secretary of Agriculture, Ann Veneman. We are adjourned.

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