First up to speak to you this morning, the gentleman that we are very pleased that took time out of his Washington schedule to join us in Iowa and the person that is directly responsible for taking our message to the WTO, we're very, very honored to have him with us here today, and that is Secretary of Agriculture Dan Glickman.

SECRETARY GLICKMAN: Thank you, Patty, very much. I'd like to thank my friend Mike Blouin. He and I served in the U.S. Congress together in the 19th Century. That was back when he still had his hair, and it's a pleasure to be here with Governor Vilsack who is already doing a great job for Iowa and Iowa agriculture, and my former colleagues in the Congress Chuck Grassley and Leonard Boswell who also do an outstanding job.

This is the ninth in a series of forums that the USDA has put on along with the United States Trade Representative, and we have our ambassador for agriculture from the USTR Peter Scher who will speak to you in a moment. But the purpose of these is to basically listen to farmers and ranchers around the country about what you think that this country ought to be doing as we enter this next round of trade negotiations which will begin in Seattle in the fall and how we should trade policy and what we ought to be doing for agriculture. This is a listening session which means we listen and you talk. But I would like to make a few points since I've come here, and I appreciate Secretary Judge and her involvement and her allowing me to do this.

First of all I wanted to emphasize the enormous impact trade has on the lives of U.S. farmers and ranchers. When farm exports are strong, by and large the farm economy is strong. And it's not a coincidence that the farm economy is slumping badly at precisely the time that nearly half of our overseas markets have been mired in a recession.

Number two is that agriculture is much more export-dependent than our economy as a whole, and it will only become more so in the upcoming years. Domestic demand is not growing fast enough to keep up with our agriculture productivity. And for agriculture to survive, we must have access to the global markets. That's especially true in this part of the country as well as where I come from as well, just down the road in Kansas. All of the states represented here, for example, are big producers of soybeans which happen to be our most marketable commodity overseas in 1998 with over $6 billion in cash receipts.

Number three, we are doing everything we can to take advantage of the foreign trade opportunities that are available to us, but the fact is, as you well know, there are many barriers which keep our agriculture goods out of foreign markets, and you will be shortly hearing from Tim Galvin, our foreign agriculture director, who will have a little slide show talking about where those opportunities, where those impediments are.

Some of our competitors spend far more subsidies and maintain much higher tariffs than we do. Our average tariff in agriculture products is about 8 percent, and a lot of our competitors have tariffs between 5 and 10 times the amount that we do. In fact, most of the world has much higher tariffs than we do. Clearly the playing field is tilted sharply to our disadvantage in many areas. We have nothing to fear and everything to gain as we prepare for the upcoming talks since we already have the world's most open market.

Number four, we want to eliminate tariffs through negotiations, but we also have to protect ourselves. That's why effective next week the Administration is imposing a tariff-rate quota on land, a move designed to enhance the competitiveness of our domestic land industry in the face of a recent surge in exports.

We've stood strong this year in disputes with the European union over bananas and beef hormones. Just today there was a decision on the amount of compensation on the beef hormone issue which perhaps Ambassador Scher may want to address. But we've also extended cash bonuses with exporters of frozen poultry and several dairy products to combat the export subsidies and unfair trade practices of competitor nations.

Earlier this year we negotiated a sound agriculture agreement with China which will be an important precursor to conventional Chinese membership of the WTO. And we've also revamped our policy on trade sanctions. (Inaudible) Senator Grassley, Congressman Boswell, and Senator Harkin and others in your delegation which will lift bans on exports on food to Iran, Libya, and the Sudan. We estimate that this reform could mean as much as a million more tons of both wheat and corn exports.

The bottom line is that we are fighting for the increase of American agriculture on a number of fronts in an international trade arena, and the meeting in Seattle later this year and the next round of negotiations are just one part of a multi- pronged agriculture trade strategy.

Let me close with just one thought, because, you know, you'd have to be away from the planet earth if you didn't know what was happening in farm country. Notwithstanding our interest in trade, trade is not the only leg of our safety net. It's an important part of our safety net because over the long term, if we can't sell to the rest of the world, then we will create untold surpluses in our country. The 1996 Farm Bill was written in the belief that world demand for agriculture products will go up continuously and there probably wouldn't be the cycles that we've always faced before. The 1996 Farm Bill, while it had some very good parts, does not provide an adequate safety net when the world's supplies are high and the demand is down. And this is the fourth year of record worldwide grain production. This is most unusual to have four years in a row of record production, and at the same time as we've had soft international demand largely because of recession overseas, particularly in Asia and Latin America. And as I said, the Farm Bill does not deal with that issue in a way that provides for countercyclical relief when times are bad. In my judgment, that Farm Bill will have to be modified to deal with those particular problems that we're facing today. In the short term, however, we will need an assistance package that I hope the Congress and Administration can work in a bipartisan way in order to provide the kind of resources that are necessary to keep farmers alive during times of very, very weak prices. In the longer term, we have to do a much better job of protecting farm income, particularly during down markets. So it will require us to look structurally at the 1996 Farm Bill recognizing that it was not written on Mount Sinai, it is not the Holy Grail, and it can be modified without necessarily throwing the whole thing out because there are some very good provisions on conservation and research and other items in there that are very, very good. And farmers by and large like the flexibility provisions in that bill.

So the purpose today is not necessarily to go over what structural changes over the long term; it is to recognize that agriculture, is in many parts of this country, in very deep trouble. There will need to be some short-term relief and it cannot be done on the cheap. And working with Congress and the Administration on a bipartisan basis, I am confident that we will be able to get that done this year.

In the longer term, however, I do believe that there needs to be some structural changes in the basic farm policy as well as a much more focused view on issues like concentration and other things affecting prices. But over the very long term, the answer is to ensure that America's farmers and ranchers have access to the world markets and those world markets are fair. And the golden rule applies, and that is we are treated overseas the same way that we treat others, and if we, in fact, go down that road towards the golden rule, I think that farmers and ranchers will have a much better future than they have had in the past. I look forward to your views and thoughts in the dialogue that we are going through here as well as the dialogue that we have gone through during other sessions. Thank you all very much, and thank you, Secretary Judge, for inviting us here.