MR. ERDMANN: Members of the panel, it's a great opportunity we have to testify before you. We appreciate you holding this session for us on this very important matter.

My name is Steve Erdman. I'm an agriculture producer. I farm in western Nebraska near the state of Wyoming. I grow Great Northern beans, corn and alfalfa on 700 irrigated acres. I also serve on the board of directors of Farmland Industries.

Farmland Industries is the nation's largest farmer-owned cooperative. Founded in 1929, we are a federated co-op, and our members have over 1,700 cooperative partners and have 600,000 farmer-owned or members. Those members make up the cooperative system. Farmland has major business units such as fertilizer, meats, grain, feeds, petroleum and shipping.

Focused on meeting the needs of tomorrow's consumers, Farmland has adopted business strategies to meet the demand of the global consumer as a cooperative.

The future economic well-being of American agriculture is closely tied to our competitiveness in the expanding global market. The importance of trade to the future of American agriculture has been emphasized in the 1996 farm bill. With a reduction in support of U.S. farm programs, U.S. producers will depend on exports for more than 35 percent of their gross receipts by the year 2003. U.S. trade policy must reflect a strong commitment to the expanding world market.

The importance of trade is underscored by America's shrinking share of the world's population. Americans now comprise only 4 percent of the world's population and are experiencing minimal population growth, while many of the countries that we trade with are experiencing significant population growth. To add to this phenomenon is the growth strength of the middle class in these countries. The power of the emerging middle class worldwide made up of consumers with the ability to ship their consumption patterns have become a critical factor driving consumer markets.

In India, for example, there will be 115 million new members of the middle class by the year 2005. In China, there will be 196 million more new members of the middle class by the same year. These middle class consumers around the world represent a blooming potential for the market of our agricultural products.

The Farmland system has developed a business strategy focused on tapping the potential of emerging world markets. During the past six years, the Farmland system international sales have grown from less than 200 million to over 4.1 billion in just six years. In Mexico, since the passage of the North American Free Trade Agreement, or NAFTA, our trade has increased from less than 50 million in 1992 to over 450 million in 1998.

As you prepare for the upcoming trade round this November in Seattle, Washington, please consider the following items listed below: Elimination of export subsidies, tariffs must be further reduced, state trading enterprises must evolve to full transparency and eventually to free market entities. The rules governing sanctioning and final sanctionary measures must continue to be strongly based on sound science and risk assessment. Assure trade in genetically modified organisms is based on fair, transparent, and scientifically acceptable rules and standards. Negotiations should be comprehensive with the use of expedited actions and timeliness with a single undertaking during the next round of negotiations. And finally, dispute settlement mechanisms must be short and there must be an end to the process. If countries are permitted to disregard dispute settlement findings, producers will have no confidence in a multilateral trading system.

Again, thank you for the opportunity to appear before you today and comments for the upcoming trade talks. American farmers, ranchers and agribusinesses are growing more and more dependent on the international trade for their livelihoods. It is becoming increasingly important for the U.S. government to have a trade policy that is strongly committed to expanding opportunities for the American farmers, ranchers, and businesses. Thank you.