Good morning, everybody.
I want to welcome the Chairman to Iowa and thank him for holding this field hearing today on the next farm bill. I also want to recognize all the witnesses and thank them for appearing before us today.
I=m proud to be the Senate=s only working family farmer, but it is a little disappointing to be the only one. As a family farmer with a grandson who wants to farm, I have a unique interest in agriculture policy. If we don=t empower the next generation to get involved, Iowa will suffer economically and socially.
My goal is to encourage our children and grandchildren to work in agriculture. So the question I ask is how can the farm bill empower the Anext generation@ to participate in agriculture?
In my opinion, the farm bill, which has been traditionally been construed as a Afarm safety net,@ should also provide new opportunities for competition and limit concentration and
consolidation.
I want to get right into the issues, so let me start with the most controversial topic I will raise this morningBthat is trying to put a 250,000 dollar hard cap on farm payments.
I want to be clear I support farm programs. But I have yet to be convinced that 72 percent of farm program payments are supposed to go to only 10 percent of our nation’s farmers.
I have been trying to fight large scale subsidies for more than 30 years. If you look into the Congressional Record from the late 70s, you will see that then Congressman Grassley was arguing for a $50,000 limitation.
More than 72 percent of payments go to only 10 percent of our farmers. That imbalance is drawing more and more scrutiny from Americans from both rural and urban areas. People across the country recognize the importance of family farmers to our nation, and we need to provide an adequate safety net for those farmers. But, if we continue on this track we're going have problems getting a farm bill passed in the future.
The Washington Post has been running articles over the past couple of weeks examining the abuses related to farm programs administered by USDA. The article references individuals who do no farming at all receiving over $1.3 billion in subsidies since 2000.
Federal farm program payments to large-scale operations are also in part influencing land prices in Iowa. Those prices make it almost impossible for the next generation to buy land. Instead land investors from outside of Iowa are snatching up prime land.
During the next farm bill I will continue to address placing a hard cap on farm payments.
While payment limits is the front burner issue for me at the moment, I also want to talk about other topics this morning because I know we have many interests represented here today.
Not only do I serve on the Agriculture Committee, I serve as the Finance Committee chairman with jurisdiction over taxes and international trade.
It’s hard to overemphasize the importance of trade for U.S. farmers. About one-third of U.S. acres are planted for export. Agricultural exports account for approximately one-fourth of U.S. farm cash receipts.
But we can do better. High tariffs imposed by other countries greatly restrict market access abroad for U.S. agricultural products. The average allowed global tariff on agricultural products is around 62 percent. In contrast, the average agricultural tariff of the United States is just 12 percent.
The current situation clearly puts U.S. farmers at a disadvantage.
The best opportunity we have to put U.S. farmers on a more level playing field is through the Doha Round of the World Trade Organization. Through the successful conclusion of these negotiations, American farmers will have improved access to the markets of the other 148 member countries of the WTO.
But some major breaks must be made in these talks, and soon, or the WTO negotiations will come to a halt.
The bottom line is that these negotiations must result in major tariff reductions. Any new WTO agreement that doesn’t provide significant new market access opportunities for U.S. farm products must be rejected. A “Doha light” agreement is out of the question. I wouldn’t let such an agreement come before the Finance Committee for a vote.
It’s also important that we continue to open markets at the bilateral level.
Since the passage of Trade Promotion Authority in 2002, Congress has passed implementing bills for trade agreements with eleven countries. These trade agreements, when taken together, mean real gains for U.S. farmers. I’ll be working to see that two new trade agreements, with Peru and Colombia, are implemented during the coming months.
I know today we are primarily examining the Commodity section and touching on Conservation, but energy and rural development issues will be vital for our economy in Iowa and for the rest of the country.
Many family farms have at least one spouse who works off the farm to get by.
There will be an increased need for innovative ways of providing public services to sparse populations, as well as new ways of integrating agriculture into changing rural economies.
Rural development programs should help small communities work together to bring forth new opportunities and solidify existing businesses. Entrepreneurship is widely recognized as a key to rural revitalization.
Just a real quick note, My Entrenet developed at the University of Northern Iowa provides a holistic approach that integrates advanced technologies to link geographically isolated entrepreneurs that only helps the entire community.
We need to make sure that loans and loan guarantees for renewable energy sources are available in the next farm bill.
We have already witnessed the development of a tremendous revenue stream and employment base due to the establishment of biomass, ethanol, and bio-diesel plants in Iowa due to legislation passed through my Finance Committee. Any additional support will further solidify the future of renewable fuels.
There are many inherent virtues in producing our own domestic energy from renewable resources. It’s good for our environment. It’s good for our national and economic security.
It’ll provide an economic boost for our rural economies. And perhaps most importantly, it will ensure a stable, secure, domestic supply of affordable energy.
Already, our farmers and ranchers are working hard to use their resources to produce electricity from wind, biomass and other agricultural wastes.
In addition, corn, soybeans and other crops are being used to produce transportation fuels like ethanol and biodiesel.
There is real recognition that if rural communities are doing well then the surrounding farmers do even better.
I look forward to hearing the testimony from the witnesses and look forward to working for Iowa’s future in the next farm bill.
Thank you.