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Remarks by Secretary of Agriculture Ann M. Veneman 78^th Agricultural Outlook Forum
Crystal City, Va.
February 21, 2002

Introduction by Deputy Secretary Jim Moseley: It is indeed a pleasure and an honor for me to have the opportunity to introduce our next speaker. Ann Veneman started in agriculture. She came from a farm in Modesto County, California, a peach farm. She participated in youth organizations, the 4H, I believe FFA, she--no? One thing I knew, if I had it wrong, I'd know. [Laughter.]

MR. MOSELEY: "But she did participate in 4H growing up as a youngster. She got a degree in law, and in so doing; she found a love for agricultural trade.

"She joined FAS, and then became Deputy for Farm and Foreign Agricultural Services at USDA in the late '80s. In the early '90s, she became Deputy Secretary of Agriculture, which is very helpful to me because she does understand the budget process at USDA, and tells me when I'm wrong.

"She left Washington, D.C., and went back to her roots in California, became the Secretary of Agriculture for California--and as she would readily point out, if it were a country, the seventh largest agricultural economy in the world, clearly very important, a very important part of the U.S. agricultural economy.

"On January 21 a year ago, she was sworn in as Secretary of Agriculture at USDA.

"Ann Veneman has had a long and distinguished career, and she's doing, continues to do, and will do what she truly loves. That's representing and supporting agriculture. Help me welcome to the podium Secretary of Agriculture Ann Veneman."

[Applause.]

SECRETARY VENEMAN: " Thank you very much, Jim Moseley, for that very kind introduction.

"I just whispered to him that the reason I wasn't in FFA is they wouldn't let women in when I was that age.

[Laughter.]

"Well, good morning to you all. It's a pleasure for me to be able to welcome you to the USDA's 78th Annual Agricultural Outlook Forum. The theme for this year's forum is 'Securing World Markets', which reflects one of the great challenges and opportunities facing American agriculture.

"The forum organizers have done another outstanding job on this year's Agricultural Outlook Conference, and I would especially like to recognize Jerry Bange and Ray Bridge of the World Agricultural Outlook Board and the members of the organizing committee and the assistance of so many other people who have helped put this program together. They're listed in your program, and I hope when you see them that you will thank them personally.

"President Bush sends his best wishes, and I think--or I hope you all will agree with me that he is doing a tremendous job.

[Applause.]

"It's truly been an honor working with the President over the past year, and I can tell you from firsthand experience that he understands both the challenges and the opportunities facing agriculture in America. He is strongly committed to our farmers and ranchers and in fulfilling all of the great potential that lies ahead.

"And our record during the past year has demonstrated that strong commitment through the advancement of sound policies and steering programs and services through what have been some very difficult and critical times.

"Almost exactly to the day one year ago, I addressed the 77th Agricultural Outlook Forum. It was my first major address as Secretary. When we look back, since that time a lot has happened. We've traveled a great deal to reach out and see and hear firsthand the issues important to America's farm and food sector. In fact, I have now traveled to over half the states in the country, several on multiple occasions, not to mention to five different countries to advance our trade agenda.

"In fact, I just got home at 1:30 this morning from California; so if I'm a little off today, please forgive me.

"Of all of our responsibilities, one that I've really enjoyed most is getting out in the heartland and having the opportunity to listen and talk directly to America's farmers and ranchers about the issues that are important to the industry.

"As you may recall, in my speech a year ago I outlined the major priorities of the administration, and I am proud to report today that we have moved forward in many of the critical areas that I discussed that day, and we are meeting our commitments.

"Today I want to review our progress in this short time that we've been in office, a time that's gone very quickly, but in other ways seems like so long ago given all the events and all the challenges and all the issues that together we have faced.

"First, a year ago we pledged to build and assemble a strong team to administer the programs and services that assist so many people in this country--our farmers and ranchers, our consumers, our low-income Americans. For the most part, that team is now in place. Now we wish the Senate would move forward on a few other nominations that are long overdue. But our team is strong. It's talented. It's extremely diverse in background and in talent.

"I'm proud that our sub-Cabinet looks much like the face of America. We have farmers, economists, academia, lawyers, health and nutrition experts, some private sector gurus, and several who have served in government previously. As well, there's a lot of regional, ethnic, and gender diversity in our sub-Cabinet.

"We have also assembled a very strong team of Deputy, Under, and Assistant Secretaries and Administrators of our program areas. I have to tell you I'm proud of every one of them and of the jobs that they are doing.

"But I'd be remiss if I didn't also add my sincere appreciation and thanks to all the dedicated career USDA employees. Through the past year, with all the transition we've been through, all the many issues we've been through, you all have served us superbly. We could not have done it without you or achieved the successes without your commitment. Thank you very much, and I would like to have those career employees that are here from USDA stand up and be recognized.

[Applause.]

SECRETARY VENEMAN: "Thank you all for what you do. In last year's remarks, we pledged to seek opportunities to expand trade. Let's look at what we've been able to accomplish this past year. We've launched a new round of WTO negotiations in Doha. We've worked hard to get passage of Trade Promotion Authority out of the House of Representatives and are on the verge of action being taken in the Senate.

"We have traveled to Canada to move forward on the Free Trade Agreement of the Americas, and we've moved aggressively on new bilateral agreements. And together with Ambassador Zoellick and Secretary Evans, we started to tear down the walls and the barriers that hurt America's farmers and ranchers.

"We are opening new markets in which to compete. We will now see more access to China because of their entry into the WTO, and this summer we'll even see some U.S. table grapes entering the Australian market, something that I just announced yesterday while I was in California.

"We've had to be firm in many cases as well. For example, just last week we announced a series of actions because of the monopolistic practices by the Canadian Wheat Board. And we continue fighting for America's farmers and ranchers in the trade arena. Our administration is doing just that.

"During the past year, we have also worked very hard on our domestic farm programs. Last year I talked with you about the importance of having market-oriented economic safety nets to help America's farmers and ranchers. This included in my mind the need to achieve estate and income tax reform. The President fought hard for tax cuts. He achieved his goal and got a tax cut for every taxpaying American. And he said he would put an end to the--and put death to the death tax, and I'm proud to say that we are well on our way to ending this unfair tax on America's farmers and ranchers.

"In August, the President authorized a $5.5 billion emergency supplemental package to provide producers with assistance. We worked hard to cut down the processing time, and just one day after the President signed that assistance package into law, we began delivering the checks to farmers. And we have attempted to reduce the paperwork farmers and ranchers must fill out to get emergency aid.

"We've also spent a great deal of time on Capitol Hill discussing and debating the next farm bill. We supported the farm bill approach that was put forward by Senators Cochran and Roberts. An important step for us was the release of our stocktaking report on food and agriculture policy. Early last year, I pledged to produce a set of farm policy principles that represented the administration's view of the future of American agriculture. And by the end of the summer, even with most of our sub-Cabinet only on board for a couple of months or just a few months, we released a comprehensive analysis and principles for the future of farm policies. That report, which is entitled "Food and Agriculture Policy: Taking Stock for the 21st Century," has been well received and has helped to shape the debate on food and agriculture policy over the last several months. I hope that it will continue to serve as a guide for years to come.

"The House and the Senate are now reconciling their versions of the new farm bill. There is no disagreement about total funding. We've all agreed that a new farm bill should add $73.5 billion to farm program spending over the next decade. However, a new farm bill should not just be about how much money is spent. It should be about the money being spent in the most productive way. And we're going to work hard and have been working hard with the Congress, but we will work hard with the conferees to ensure that the new farm bill meets common-sense principles.

"We want to make sure that when the bill is passed, the $73.5 billion is spent relatively evenly over the decade so that in the out-years there is sufficient funding to help farmers and ranchers if markets don't improve. We've been through that situation all too often over the past four years. We want a stable farm policy, one that farmers and ranchers and their bankers can count on year in and year out.

"The new farm bill must provide a safety net for farmers without encouraging them to overproduce and thereby depressing prices, which is self-defeating. By setting loan rates too high, we could easily further depress producers' returns from the marketplace.

"And we hope that farm savings accounts which don't disrupt markets can become a new risk management tool, a kind of 401(k) especially for farmers, and that these complement as a new tool in the toolbox the traditional farm programs.

"The new farm bill must also support trade and be consistent with our international obligations. The United States must lead the push for freer and more transparent trade.

"Our farmers and ranchers are the most efficient in the world, and they have much to gain from free trade. Farm and trade policy must go hand in hand and not go in opposite directions.

"But we also need to think of trade from the standpoint of what we stand to lose if we do not continue to seek more and new--new and more open markets. Today we export about a fourth of what we produce in this country by value. What would happen if those markets disappeared because we failed to negotiate new agreements or if we turned inward in our trade policies?

"We've seen in recent years the European Union, Canada, Australia, and Chile start chipping away at our natural markets because of inaction here in America. We need to continue to be aggressive in our trade policies to better our farm and food economy.

"The farm bill also needs to help farmers and ranchers address environmental concerns. Government bureaucracy and regulation needs to be kept to a minimum. More bureaucracy and regulation restricts choice and increases the costs that are placed on producers.

"Good conservation policies should enable producers to make better and more informed decisions and provide flexible program tools to address environmental concerns. As the President and I often say, farmers and ranchers are the best stewards of the land. They are the true environmentalists, and we need to give them the tools to help cultivate and manage working lands.

"You may also recall that last year when I spoke to you, I said that a continuing challenge to agriculture is pest and disease prevention and eradication. We pledged at that time to make strengthening pest and disease programs a priority, saying that these programs are the very infrastructure of production agriculture, and that only through these programs would agriculture continue to thrive and prosper.

"Well, just a few weeks after my speech, those very protection systems were put to the test with the outbreak of foot-and-mouth disease in England. We then watched as it spread to other parts of Europe and to South America. In response, we immediately began working more closely with our states, our federal partners, and industry to ensure stronger protection.

"We prohibited products, increased inspections at our ports of entry, and strengthened our inspection force to the highest levels ever through our budget authority. And when we thought things were beginning to come under control, the events of September 11th brought to the forefront the issue of homeland security--two words that were rarely even used in the pre-September 11th world. But today those words are one of the cornerstones of this administration's priorities.

"As part of our homeland security efforts, assisting the security of U.S. food and agriculture production systems and the safety of our food supply is a critical priority. And I want to thank our Deputy Secretary Jim Moseley for the tremendous job he's doing leading the day-to-day efforts for the Department. Thank you, Jim.

[Applause.]

"Working with Governor Ridge and the Office of Homeland Security, we are doing everything in our power to ensure that our enemies will not be able to use our food supply as a weapon.

"The President has made agriculture an important part of his homeland security plan. In his budget released earlier this month, President Bush asked for $146 million in new spending for homeland security efforts through the U.S. Department of Agriculture. And as part of the Defense Supplemental Appropriations Act, signed just a few weeks ago, he also committed $328 million to that goal.

"These new resources will invest in critical issues: additional inspectors, new computer technologies, X-ray equipment, new dog teams, research and renovations at key laboratories--all to help improve the strong systems that we already have in place.

"These are often the kinds of programs that are overlooked in the budget and farm bill processes, but they are too important and too critical to our industry as a whole to receive second billing.

"While we have good news to report today, we can't afford to let down our guard. We have to continue working hard to make sure that the infrastructure programs remain strong.

"Last year, I also said that our regulatory environment must not be so burdensome that it places undue costs on the farm economy. We pledged to ensure that regulations are based on sound science and common sense and that we will work toward solutions and bring all parties together in the process.

"One example of where we've accomplished this has been our roadless rule in protecting our national forests. We moved the process forward. We forged a solution that made sure that local communities were not left out of this important decision-making while we advanced the important objective of protecting our public lands.

"A sound regulatory process couldn't be more important than in the area of food safety. Last year I said that we must maintain consumer confidence in our food supply. This year we have faced many challenges on this front. We released two annual budgets that have called for record spending for food safety, fully funding our inspection force and investing in critical research to help safeguard our food supply.

"We released a comprehensive 3-year study on BSE, and even though that study, which was conducted by Harvard University, showed that our efforts to date are strong and the risk of a potential outbreak was extremely low, we announced additional measures to continue to strengthen our protection systems.

"And today, just three months following the release of that report, I'm proud to say that we are making good progress on the additional steps that we announced. We are well on the way to more than doubling the testing this year, particularly animals that die on farms.

We've issued a policy paper outlining additional regulatory actions that could be taken to strengthen BSE safeguards and, among other areas, we've increased our budget for BSE surveillance and research.

"Last year in my remarks to you, we also pledged to encourage technology development through research to accelerate our search for innovative uses for farm products. As I said then, energy was a prime example. Last spring President Bush released a comprehensive energy strategy for the nation, the first such strategy on energy to be released in a generation. And I was proud to be a part of the task force that developed that report.

"In fact, it is the first--in fact, it is a strategy that looks to agriculture for energy solutions. We've also provided more research dollars in critical areas. Our 2003 budget requests $2.3 billion for priority research projects, and the defense supplemental appropriations recently approved by the President includes roughly another $100 million for critical research needs.

"We've also established the Biotech Advisory Committee that is closely examining efforts to promote and advance the benefits of biotech, value-added, and innovation in the food and agriculture sector.

"Now, as we look forward to the coming year and the priorities of the Department, implementation of the new farm bill stands at the top of the list. Once Congress passes the new farm bill and it's signed by the President, we need to be ready to move forward with implementation. Our employees must be ready to do a lot of work to get the farm bill implemented quickly so that farmers know what they are eligible for and what they have to do under the new bill.

"This will be a big task, and so we must be ready once the bill is signed to implement the programs as fast as we can, and that requires early planning, which we are doing as I speak.

"In the year ahead, homeland security will remain a top priority. As I already mentioned, the events of September 11th have made us look even more closely at our ability to protect our food supply. We're working with the entire food chain, from production to processing, to transportation, to retailing, and everything in between. We want to make sure that we have the best management practices, a strong system of checks and balances, and that we're able to deal with any circumstance, deliberate or accidental, that might affect our food supply.

"In the year ahead, another priority is creating trade opportunities for our farmers and ranchers. In this country, we grow so much more than we consume, and we have to continue to open new markets, and that means making sure that other countries live up to their trade obligations. That means we need to make sure that phytosanitary and sanitary regulations are based on sound science, not allowing other countries to restrict products, including the products of biotechnology, under the banner of protectionism.

'In this last year, we've seen the European Union, Japan, and China announce certain policy initiatives that are wrong-headed, that would move free and open markets backward, and that would hurt U.S. farmers.

We need to stand strong, and we need to make sure these countries keep trade open and that we eliminate unfair trade practices.

"Even with these differences, we must continue to have constructive dialogue so we can advance our trade agenda, not create more barriers. And Congress needs to grant the President Trade Promotion Authority. Ever since fast-track authority expired in 1994, the United States has had to sit on the sidelines as other countries have shaped trade agreements beneficial to their industry and their people. The agriculture community has been one of the strongest advocates for Trade Promotion Authority, and the President has appreciated that continued support.

"In the year ahead, we must also improve the food assistance safety net. Welfare reform created some gaps, and some people have fallen through the cracks. The President's fiscal year 2003 budget reflects the administration's commitment to filling those cracks by providing a record $41 billion for domestic nutrition assistance programs, important not only in feeding our people but in fueling our agricultural economy as well.

"The budget proposes legislation that would add more than $4 billion to the food stamp program over the next 10 years, to include eligibility for legal immigrants who have resided in the U.S. for at least 5 years, streamline the application process and to revise eligibility requirements for working families.

"Changes in program administration and enhanced funding will ensure that needy households get the assistance they need while helping states reduce payment errors and costs.

"Another area I'd like to focus on this morning is conservation and the environment, where imaginative new thinking is creating exciting prospects for our farmers and for the nation. The farm bill is a good example. With bipartisan support of policymakers representing both farm and urban constituents, the House and Senate have allocated billions of additional dollars over the next several years to help farmers and ranchers address environmental concerns on working farmland. This is a momentous change, with strong implications for the future of farm programs and the farm safety net. This increased funding will provide incentives for farmers and ranchers to adopt conservation practices that reduce soil erosion, practices that reduce fertilizer and manure runoff into our waterways, and practices that enhance wildlife.

"The new funds will be an especially big help to livestock producers who find themselves greatly challenged by the need to boost production and protect the environment at the same time. The funding for the Environmental Quality Incentives Program or EQIP, as it's commonly referred to, will allow more widespread assistance, as well as opportunities, for innovative practices. This will help us all, as non-Federal rural lands comprise over 70 percent of the total surface in the United States and almost all of these lands are under the control of farmers and ranchers.

"The Conservation Reserve Enhancement Program or CREP, as it's referred to, is a revolutionary new voluntary incentive, using State, Federal and non-Government funding to help solve environmental problems. Designed to address specific grassroots environmental issues related to agriculture, CREP combines the CRP or the Conservation Reserve Program with State programs, allowing USDA to work in partnership with State Government and local interests to address local environmental concerns.

"We now have CREP agreements in 20 States and agreements with six more States are under consideration. Within the CRP, we have continuous sign-up, where farmers can enroll land and apply conservation practices like filter strip waterways, windbreaks and riparian buffers on small acreages. This targeted approach helps solve environmental problems without retiring whole farms from production.

"Under CREP and continuous sign-up, we now have enrolled 1.9 million acres of some of the most environmentally sensitive land in 47 States. In my home State of California and in other States, State and local governments, landowners and private citizens are coming together to guide land-use planning decisions and to implement programs that allow farmers and private landowners to voluntarily protect their land from development.

"These state and local efforts will be assisted at the federal level by increased funding for the farmland protection program authorized in both the House and Senate farm bills. Together, these efforts will reduce the conversion of farmland to non-farm uses and preserve open space for the broad enjoyment of all.

"Another successful partnership with federal and state governments and producers has been the boll weevil eradication program. Boll weevils arrived in the United States from Mexico in 1892 and have cost the United States cotton industry an estimated $14 billion. Through the joint efforts of growers and state and the federal governments, the program has been successful in eradicating weevils from Virginia and the Carolinas, Georgia, Florida, South Carolina, Alabama, California, areas of Texas and Arizona, greatly reducing the amount of pesticides that farmers would otherwise have to use, and thereby reducing their input costs.

"While new funding and program design are posed to bring success and conservation efforts to a new level, it is the convergence of environmental needs and advances in technology that places us on the threshold of bold, new economic opportunities for producers.

"Let me use one example to illustrate this convergence. Ag 2020 is a unique industry-government partnership driven by the needs of producers. The partnership is a result of a year-long dialogue between NASA, USDA, the National Corn Growers Association, the Cotton Council, the United Soybean Board, and the National Association of Wheat Growers. Ag 2020 employs remote-sensing technology to assist farmers in key decisions such as timing and location of fertilizer, herbicide and pesticide, and irrigation applications, and the early prediction of yield and harvest quality.

"The application of technologies such as these and the use of Bt cotton are reducing pesticide use, contributing to farming practices that are less harmful to the environment, and of course enhancing economic returns to farmers.

"Another example is a recent EQIP project, where we provide a cost share on a manure injector for a dairy farm. The injector allows for site application of manure under the soil, reducing nutrient runoff, atmosphere loss and odor.

"Through public and private research, we are seeing new products being developed from traditional bulk commodities, new products that enhance the nutritional characteristics of the food we eat and new seeds that are more productive, more tolerant to drought and would reduce the need for pesticides.

"These research developments are helping farmers reduce their costs and farm in more environmentally friendly ways. In addition, new technology is increasing the demand for agricultural products by discovering alternative uses that not only increase returns to producers, but also provide consumers with products that are better for the environment.

"Many of you already know about the success story of ethanol. In 2001, ethanol production reached a record 1.8 billion gallons, up 20 percent from 1999, and utilizing some 600 million bushels of corn. Seventeen new plants are currently under construction which, when finished, will bring annual production capacity to over 2.5 billion gallons.

"The energy bill, which is now pending in the Senate, contains a renewable fuel standard. If this becomes law, ethanol use could triple over the next decade, a dramatic increase in a domestically produced renewable fuel that reduces carbon monoxide and toxic air emissions.

"This administration is committed to the kind of programs that support agriculture as an energy solution.

"Here's another example that you may not have heard about. Cargill-Dow, a new enterprise, has built a bio-refinery in Nebraska that uses dextrose to produce textile fibers and plastics. This truly amazing fabric is now being commercially produced from corn, and has a better dye-holding capacity and other characteristics than traditional synthetic fibers. Cargill-Dow believes we are not too far away from bringing cellulose crops in one door of a bio-refinery and fiber and plastic out the other.

"Science and technology are changing every aspect of our lives. Technology is changing the way food is produced, marketed, distributed in this country and around the world. And medicine and biotechnology are coming together, spurred on by human genome mapping. In the not too distant future, we will be producing new crops and products that will help heal and make people healthier. This, too, will create new opportunities for our farmers.

"As I go around the country, I run into many people who are down on the future of agriculture. Now that's understandable, given the current market situation for some farm products and the economic situation in some of our rural communities around the country. But one of the most enjoyable parts is meeting with students and talking with them about the tremendous opportunities of the future.

"Last month I kicked off a new initiative, "Leaders of Tomorrow," which we hope will make a small difference in the lives of some young people. This effort is in support of President Bush's call for Americans to give back to their country and become even better public citizens. This year, I am speaking at about a dozen major colleges, talking directly to ag students at those schools. In addition, when we travel around the country, I'm adopting a student leader for the day on being a mentor to an FFA or 4-H student, and we're having a lot of fun doing it.

"Last week in Louisiana, two students introduced me to an audience of about 50 farmers. One student conducted a radio interview with me, and an FFA student and 4-H student had lunch in a group that we met with in Texas. So far it's been a truly rewarding experience, and I encourage each of you to reach out this year, as well, and lend a helping hand to those who are in need or could use a mentor.

"I, for one, am excited about the future of U.S. agriculture. While the current climate for agriculture has been hampered by natural disasters and most recently have certainly been clouded by the events of 9/11, a slowing of the U.S. and world economy and continued slow growth and demand for some agriculture products, I do continue to be bullish on American agriculture.

"I believe we're on the doorstep of a new era of resourcefulness and partnership in agriculture. Farmers, ranchers, processors, distributors, policy makers, and many others are actively engaged in making American agriculture and our food system grow and thrive. We're working together to address the age-old and new issues facing producers.

"These issues range from meeting the increasing and changing needs of consumers, developing new products that add value to what we produce, food safety and ensuring that our natural environment is protected, preserved, and enhanced. We have a lot of work to do, but the future does hold enormous promise, and that promise can only be cultivated through a new generation of leaders and an innovative approach to farm and food policy.

"We will continue to pursue policies and thinking that help cultivate the next generation of farmers, ranchers, and food producers to grow our farm economy by producing the best, most efficient and technologically advanced products in the world.

"Thank you very much for having me here today, and best wishes to all of you for a very successful conference.

[Applause.]

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