USDA Provides ‘Solid Facts'

September 24, 2001

National Grain and Feed Association President Kendell W. Keith says USDA's farm policy principles are "particularly useful" because they are based on "solid facts that are difficult, at best, to challenge."

"The National Grain and Feed Association commends Secretary of Agriculture Ann Veneman and the Bush administration for issuing a thought-provoking document on the future needs of agriculture, the food system and rural communities," Keith said in a statement. USDA's briefing book "raises a number of timely issues as Congress considers a new farm bill and legislation that would grant trade promotion authority to the president."

USDA "rightfully faults past farm programs that tried to raise prices through supply controls," Keith added. The report states, "the (acreage-idling) programs were costly to taxpayers and consumers and the unused resources were a drag on overall economic performance…(such policy) was also a signal to our competitors in other countries to expand their (planted acreage)."

The report "correctly cites the Conservation Reserve Program's negative impact on commodity supplies, whether intended or not," said Keith, and also "points to the importance of retargeting conservation programs away from idling productive farmland and toward inventive-based initiatives that enhance environmental stewardship on working farmlands and livestock and poultry operations."

In addition, the report "quantifies the impact that farm programs have on artificially inflating land prices and rents. USDA concludes – correctly in the NGFA's view – that such policies at some stage will erode U.S. competitiveness in global markets, and that the United States must search for alternatives that provide an adequate safety net for producers without interfering with our ability to grow overseas markets."

From the NGFA's viewpoint, the report puts international trade in the proper perspective, Keith said. "It states that the United States is gaining in the export of value-added products but overall is lagging behind the rest of the world in growth in trade."

Success in the next World Trade Organization negotiating round could reverse that trend, Keith said, but that will occur "only if Congress moves quickly to grant the president" TPA. The key to U.S. agricultural growth is to increase the total volume of world trade – "which can only be accomplished by negotiating reductions in trade-distorting domestic subsidies and tariffs worldwide – and for the United States to use its natural advantages to capture its share of growing world consumption of agricultural products."

Keith added, "Some may not like what they read in this report. But USDA has placed a marker that will challenge thinking across the ideological spectrum. Hopefully, this document will spark a healthy and constructive debate on the best policies for agriculture and rural communities."