LIBERALIZED AGRICULTURAL TRADE -- AT THE MULTILATERAL TRADE NEGOTIATIONS, BILATERALLY OR NOT AT ALL!

International Relations/Trade,

U.S. Farm Policy - At a Crossroads? The 2007 Farm Bill and the Doha Round

For only the second time in history a U.S. farm bill and a major trade negotiation are scheduled to conclude at essentially the same time, a little more than a year from now. American agriculture has much at stake in both, not only as to content but also as to how they mesh together. The fundamental purpose of farm legislation is to help producers manage risk, but our track record in doing that efficiently and effectively is at best mixed. Our traditional commodity programs have changed relatively little over the past 75 years, even though U.S. farm operations have changed dramatically. U.S. agriculture in 2005 hardly resembles production agriculture of the 1930s, when these programs began. And there are far more risk management mechanisms available from the private sector today than there were decades ago. Hence, it is time to consider updating our farm safety net, fitting it for 21st century agriculture, while gradually shifting the coverage of risk from the public sector (taxpayers) to the private sector. Our present safety net is complicated, costly to administer, and its benefits tilt heavily toward large producers and toward the producers of only five major commodities (wheat, corn, cotton, rice and soybeans). Those benefits are also rapidly capitalized into land values, often boosting the net worth of absentee landowners while also reducing our international competitiveness and making it extremely difficult for young people to start farming. In addition some aspects of our commodity programs may well be vulnerable to challenge under international rules. This suggests that a considered critique of our domestic policies is in order, and that we should re-design our policies to minimize or eliminate their shortcomings. Alternative risk management concepts, such as whole farm revenue insurance, clearly deserve consideration as this process unfolds. The Doha Round of trade negotiations can and should complement and support whatever domestic policy changes are in order. Domestic demand alone will never again support a vibrant, prosperous American agriculture. Our opportunities for market growth, particularly in commodities, lie outside the borders of the U.S. Those opportunities are primarily in developing countries whose per capita incomes are on the rise. Most of those countries are in Asia, and access to their markets should be our first priority in the Doha Round negotiations. If we succeed in that endeavor, adjustments in our domestic farm programs (many of which will be necessary no matter what happens in the Doha Round) will be much more palatable to U.S. farmers. There is one final piece to this policy puzzle, the opportunity to re-direct Federal financial resources to rural America in a way that can also ameliorate the adjustment in commodity programs that now seems inevitable. That can be done through a variety of programs that are not likely to run afoul of international rules, with benefits that can reach more rural residents than our present programs, and do so in a more equitable way. Included would be environmental programs that are already authorized and regularly oversubscribed; new environmental programs; a variety of energy generation possibilities; opportunities provided by biotechnology; tree planting for carbon fixation; industrial uses of farm products; and both hard and soft infrastructure investments. If we can skillfully couple this third grouping of activities with export market expansion we can have a healthy, viable American agricultural economy while simultaneously eliminating many, if not all, the shortcomings of our present agricultural policies. We will still have a safety net, but one that is re-designed to better serve U.S. farmers. Hopefully these new policies would be transitional in nature. Over time private sector risk management techniques should improve and become available to all farm enterprises in all areas of the country. Once that occurs our already sophisticated U.S. farmers should be able to handle their risk management challenges via private sector mechanisms rather than through taxpayer support.Agricultural and Food Policy,

HEDGING TECHNIQUES FOR AGRICULTURAL PRODUCERS

I am delighted to be here today talking about hedging and how it can be applied to the marketing strategies of agricultural producers in agriculture. It is good to have so much interest developing at the marketing end of agriculture, because it seems do me that too much attention has long been paid to production and too little to marketing. Even in the United States, which has developed perhaps the most sophisticated marketing techniques in the world, farmers are still too production oriented. Futures markets, where hedging techniques can be applied the best, are more than 100 years old in America and yet only a small proportion of America\u27s farmers utilize them

Opportunity for Farmers

I am very pleased to be here in the Missouri Delta, among some of the people who are really making our farming decisions these days. I think one of the most effective economic decisions we have made recently was to turn farmers loose to manage their own farms, and to stop trying to manage them by long-distance from Washington. The wisdom of that decision is on display here in the Missouri Delta

THE DOHA ROUND: COMIN\u27 ALlVE?

May I first pay compliments to the leadership of the Asian Development Bank for hosting this seminar. Asia has a huge stake in the success of the WTO generally, and the Doha Round specifically, but not everyone realizes that. So seminars of this _ nature are terribly important in providing focus to the Doha Round, encouragement to the negotiators, and in building public support for this endeavor. Let\u27s hope we can accomplish those objectives here in Osaka

AMBASSADOR CLAYTON YEUTTER UNITED STATES TRADE REPRESENTATIVE April 20, 1987 The Shimoda Conference Oiso, Japan

I am grateful to the Shimoda Conference for inviting me to address the issue of U.S.-Japanese trade. This is an important event, coming at a time when trade between our two countries is playing a more significant role in our overall relations than ever before. In some ways , individual trade issues are threatening to overshadow our long relationship as friends and allies. This must not be allowed to happen. Japan and the united States have too much at stake to let transitory problems come between us. We are the world\u27s two largest free economies. We work together effectively to maintain peace and stability in Asia. The rest of the globe depends upon us to carry out our duties as world leaders in a responsible manner

Soybeans -- What to Look for in 1975

I have just returned from a tour of our major farm product customers in the Far East -- Japan, Korea, Taiwan and the Philippines. The most impressive thing I found there was the forward-looking spirit of these nations, and their driving determination to continue their economic growth in spite of the world\u27s current energy and inflation problems. All of these nations are vitally interested in American farm products, with soybeans high on their priority lists. All of them are looking past the current recession atmosphere, and planning for the future. All of them have more protein for their diets as a long-range goal. And all of them are doing their best to maintain their livestock and poultry populations despite the short feed supply, as a building base for future livestock expansion

LOOKING FORWARD

A couple of weeks ago, on my Far Eastern tour, I visited a farm in Taiwan. The contrast with Montana could not have been more striking. This was a good-sized farm by Taiwanese standards, about 10 acres. It is farmed by a father and his six sons, and provides most of the support for the 40 people in their families. The agriculture is highly intensive. They alternate rice and vegetables on their land, getting at least two crops of each per year. They were also raising hogs--completely confined from birth to slaughter because land is so precious. There were no weeds in sight; the land is too precious for weeds, too

Improving and strengthening the Trade System

The successful launching of a comprehensive round of negotiations will be the single, most important event in international trade this year. I urge our communique contain a vigorous, unequivocal endorsement for launching a new round with a comprehensive agenda, in September. Delegations in Geneva will go over the text of our communique very carefully, and they will judge our determination by both the tone and substance of our statement. We therefore must clearly set forth our desire to begin the new round, without delay

Address by the Honorable Clayton K. Yeutter Assistant Secretary of Agriculture for International Affairs & Commodity Programs U.S. Department of Agriculture to the 51st Annual Convention of the American Cotton Shippers Association

Thank you very much, Heinz. You know, this program has gone so well this morning, that it is with some trepidation that l even stand up. My compliments to everybody here at the table who has been before this podium today. Hans, I think this is the best organized, best presented program on which I have appeared in many, many months and, I have appeared on a lot of them. I take my hat off to all of you. Beyond that, I want to say to all of you, before I get into the substance of my remarks, that although you have had a very difficult and trying problem on Cotton Contracts in the Far East in the last year or so, I want to say that all of the people who have been back in Washington to deal with us on this issue, Hans and Rudi and many others, have conducted themselves in just superlative fashion at all times