MR. KING: Good morning. I am Carl King. I'm a farmer, retired - semiretarded and retired both - and president of the Texas Corn Growers for some 26 years. I formed it and I'm also chairman of the board of American Corn Growers.

I thank you for the opportunity in being here today to say something to this group that's called a listening session. We don't have a lot of time for hand-wringing, finger-pointing, more studies, analysis, or assigning of blame. Everyone knows the current farm economy is in a disastrous situation. The question is what are we going to do about it.

Texas Corn Growers and American Corn Growers take no pride in saying, we told you so. We carefully analyzed and then actively opposed the trilogy of policy instruments that are killing American farmers, the Freedom to Farm Bill, the NAFTA, and the GATT, now called the WTO.

It will take quite a bit of work to unravel all of the trouble these three documents have created, work that we have to tackle but that will take longer than we have. Reluctantly, I have to say that we need money from the Federal Treasury to flow out to rural America, and I mean soon, to make it possible to save the banks, schools, and other businesses that teeter on the brink of disaster as a result of this crisis of the farmers.

At the same time we recognize that society wants some assurance that when they hand over a large amount of money, that there are expectations. The first is that we're paying attention to other issues that the public is concerned about, like health and diet issues and the environment. Their second concern is that we are headed towards a long-term effective solution to the economic crisis. Nobody wants to try a Band-Aid approach. The American Corn Growers of Texas both share these concerns.

On the first issue, farm organizations like ours need to speak up about health and environmental concerns. We have been and will continue to be active leaders in this country to address key environmental issues such as the dead zone in the Gulf of Mexico and climate change that Clinton is pushing for right now.

The American Corn Growers has also been in the forefront on issues related to genetic manipulation of seeds and corporate monopolies. We share with the public grave concerns about who's controlling our food supply, and we're working to address these in cooperation with many consumers and environmental groups.

On the a second issue, a need for long-term solution, it is clear we need an entirely new approach. The combination of the Farm Bill, NAFTA, and GATT is killing rural America. The long-term solution is straightforward. We need non-recourse loans set at the costs of production with provisions for balancing supply and demand over the long-term. Yes, this will require a farmer-owned reserve, but it will cut government costs dramatically. We only have to look at the highly successful policies that are in place for sugar and peanut farmers to see what this would look like. I'm talking about their domestic bill, which is separate from all the other commodity groups.

However, to get these kind of policies means we have to radically change the current trade agreements. NAFTA can be eliminated with only six months notice. We should start that process today. The rules of the World Trade Organization, formerly GATT, or General Agreement on Tariffs and Trade, will take a lot more work. The American Corn Growers are clear what we want and don't want. We don't want the current WTO rules. We do want good rules of trade, like a real ban on export dumping, which has been mentioned already this morning.

If the global grain companies are banned from dumping grain, the world price will rise. The rise in price will help farmers everywhere, both the U.S. and overseas. We need a policy that pushes farm prices above the cost of production. As it now stands, the current Farm Bill, NAFTA, and WTO drive prices to record low levels, putting all of us at risk.

The current WTO and NAFTA agreements exclude the adjustment of tariffs for the purpose of countering manipulation of currency value. As a result, Mexico, Canada, and other countries have taken advantage of this loophole and devalued their currency to gain an unfair competitive advantage over the U.S. The end result is that U.S. farm commodities are more expensive in these countries, and the exports of these countries both to the United States or other nations have an unfair price advantage over U.S.-produced goods due to these currency value manipulations.

While Congress and the Clinton Administration has cut farm commodity prices in other countries in direct response to the Uruguay Round, a number of other countries have either failed to live up to their commitments or have asked to be excused from these commitments. Hungary, for example, has failed to live up to promises made to be excused from commitments made during the previous round of trade negotiation.

Both NAFTA and the WTO agreement have led to much greater volume of imported foods in the United States, while the budget for food safety inspections at the border have been frozen or cut. The end result is a huge increase in uninspected imports, leading to a sharp increase in food safety incidents. Without proper country of origin labeling, all farmers, U.S. and overseas alike, suffer from a loss of public confidence while these food safety scandals occur.

Falling wages, manipulation of currency values, and weak enforcement of labor and environmental laws has led to shifts in the production of a number of fresh fruit and vegetable crops to Mexico, with vine-ripe tomatoes being the hardest hit. We will soon lose this entire industry unless changes are made in both NAFTA and WTO rules.

I cut mine down, hopefully to save a little time. Because you was running so far behind, I was afraid you were going to leave me plumb out of the program. So I wanted to rush through it, then.

MR. GALVIN: We wouldn't have left you out, I assure you.

MR. KING: Okay.

MR. GALVIN: We appreciate your efforts to keep it short.

Could we talk a little bit about NAFTA as it relates to corn, and why it is you suggest that we maybe walk away from the NAFTA agreement on corn? You know, if you look at the figures for corn exports to Mexico, we hit a record back in '96, something like 1.3 billion dollars in total feed grain exports to Mexico. That number has come off a bit since, but more due to price declines than volume declines. And if you'll look at the schedule under the NAFTA, we're basically guaranteed increased access here out over the next seven or eight years when Mexico has to continue to lower its tariffs on corn.

So it looks like it's got us on a steady path toward basically wide open access to Mexico when it comes to corn. So I'm just curious if you could --

MR. KING: Well, Tim, I agree with what you're saying, that Mexico has come a long way from what they -- the previous several years ago. But the problem you're going to run into there, is even though they have access to our corn, for example, with a low loan rate like this that Congress has set in this '95 Farm Bill, which is killing us; you get too low a loan rate, you've got less than two dollars for corn. Nobody can live with that. Then to me, the guys are not going to be raising it.

In other words, they're not going to be out there to raise that corn. They're going to put it in CRP's, just like they're doing now. CRP hs been a very successful program, and its the only diversion program we've got. I've pleaded for years in Congress and testified many, many times on raising the loan rate at least to the cost of production and to -- you know, let's have some supply management. Some Congressmen like to call it inventory control. I don't care what they call it. We need to raise it just as much as we can, otherwise, why raise it?

So it may be the fact that it gets so cheap that they can't afford to raise it over there. Mexico can holler all they want to, you know, but it would be nice to have a customer. But we want -- we as farmers want to make a profit for a change. We're tired of going broke.

MR. GALVIN: All right. No. I understand that and I understand your concerns about domestic farm policy and the changes in the '96 Farm Bill. But I'm just not clear as to how that situation would be fixed by us pulling out of the NAFTA --

MR. KING: Well, it wouldn't. I wouldn't. I hear what you're saying, and really doesn't relate to what we're talking about here. We're talking about trade and domestic farm policy. And, of course, we don't have either one that's worth a darn. That's our problem.

But as far as the trade is concerned, if you don't have that price up there where we can get a better price, the rest of the world is waiting to raise their price. They're waiting on the U.S. and always have. You know, we got down to less than $2 corn, and right now wheat is right at $2. And it's just terrible. There's no way a guy can make 100 bushels -- and can't make any money. And that's a heck of a yield.

MR. GALVIN: I understand. Any other questions? Thanks, Carl. Appreciate it.

MR. KING: Okay. Thank you.