Secretary Veneman: Good morning Larry, thanks for having me here today I’m pleased to be here with all of you today and it has been and extremely busy time here since the last time I’ve joined the Farm Broadcasters. I think that was just about 3 weeks ago and we are pleased to be able to have these forums on a regular basis. I first want to talk a little bit about some of the things we’re doing in the wake of the September 11 tragedy. We continue to be on our guard. Last week we announced that we are requesting $45 million for the emergency funding package to strengthen essential programs and services. This $45 million would support enhanced security for USDA facilities, design and construction of a satellite facility at the USDA laboratory in Ames, Iowa for our research activities; technical assistance to state, local, federal, and the private sector to improve what we call bio-security education and training to strengthen our response capability to potential food supply threats and improve data collection . As you all know and have seen throughout the year with the response that we had with the threat of foot and mouth disease (FMD) we are committed to doing everything we can to protect our food supply both from the prospective of food safety and to protect our agriculture from pest and diseases. We must stand ready and ensure that we are prepared, that we are coordinated and that we are able to respond should we unfortunately have to face some emergency. I’ve had the opportunity to meet with Gov. Ridge, the new head of the Homeland Security Office in the White House and we continue to have discussions with him about our ongoing efforts as they relate to bio-security and homeland protection. We also continue to provide education and training to states and industry groups to ensure that we are all working together to protect our farmers and our agriculture against potential threats. Earlier this month we provided nearly $2 million in grants to 32 states to bolster emergency animal disease prevention preparedness response and recovery systems. Also today we are announcing the appointment of our new Administrator of the Farm Service Agency--that is Jim Little. Jim has been serving, as many of you may know, as Acting Administrator as we have transitioned since the beginning of the year. He has done an extraordinary job and his leadership has been critical as we work to distribute benefits to our farmers. Jim oversaw the distribution of and payments of $5.5 billion in emergency payments that we got out quickly to our farmers just a few months ago. If you remember we issued the first payments while I was in Lubbock, Texas visiting with farmers and speaking to a forum in Chairman Combest’s district.

“I also want to make a few comments in the trade arena. We continue to work extremely hard with Ambassador Zoellick in resolving trade irritants that hurt our farmers in overseas markets. Yesterday, Ambassador Zoellick announced that the World Trade Organization (WTO) concluded that Mexico's imposition of antidumping duties on imports of high fructose corn syrup (HFCS) from the United States is inconsistent with the requirements of the WTO Antidumping Agreement. This is a big victory for our corn producers and we are extremely pleased that the ruling was in favor of the United States. This is an important win for U.S. farmers and clearly demonstrates the value that the WTO has to U.S. agricultural interests.

“And, it is further evidence that we are continuing to work to help our farmers compete and tear down barriers that hinder free trade. Our farmers are the most competitive – the hardest working – and we must give them the tools to market their products in countries throughout the world.

“I might add that the President just this week returned from China where among other topics of discussion, he brought up the issue of our trade in soybeans. As you know, China is an extremely important market for our soybeans and this Administration has been working aggressively to maintain that market. We are hopeful resolve this issue. will be resolved very soon. It is an important priority for both USDA and USTR.

“So we continue to work hard in the international arena to help U.S. farmers and ranchers. Trade is absolutely critical to agriculture – we need to continue to expand markets and open new doors so we can export the products that we produce here in this country.

“This Administration is working to ensure trade agreements are good for our farmers – and, when other countries engage in unfair practices, we must continue to work aggressively to fix the problems and keep trade moving.

“Through increased trade, there is enormous opportunity and we will see increased profitability and stronger market conditions for our farmers and ranchers.

“Future farm policy – and the farm bill -- continues to be a very important issue that is being actively debated here in Washington. This Administration is firmly committed to completing farm bill reauthorization before next September. We are actively engaged in the discussions and working to ensure that the next farm bill encompasses a range of issues – and good policy – that best helps all our farmers, ranchers and producers – in the years to come. We are committed to adequate funding for a new, five-year farm bill that provides an effective safety net for a broader cross-section of producers and is pro-trade. We need to build consensus and ensure that future farm policy moves farmers forward, readies them to compete in today’s changing world, builds consumer confidence, protects the environment, and ensures we protect our crops and livestock from devastating pests and diseases such as foot and mouth disease.

“However, there are a few items I need to make very clear. First, we have time to work on a farm bill. The current farm bill doesn’t expire until next year. Our strong preference is to use this time to ensure a thoughtful, thorough approach to a new policy that better serves our farmers and ranchers. We should not rush to pass a farm bill. Things have changed. The President is focused on two critical issues: confronting the war on terrorism and protecting the American people. The President cares passionately about our farmers – and he and I – and this Administration – are committed to ensuring we have programs that protect and strengthen the farm economy.

“But we must use the time we have – nearly a year -- to forge good, sound policy. Good policy will drive the budget in order fund needed programs. This Administration will support the level of funding that is required to implement that policy. We have had an extremely good working relationship with the Office of Management and Budget and we will support a farm bill that meets the objectives we’ve outlined.

“Last week Senator Lugar introduced a farm bill that is wide-ranging and addresses extremely important issues to farmers. Senator Lugars’ proposals are consistent with the Administration’s farm policy principles – and deserve a close examination.

“This farm bill proposal, which is the first to be introduced in the Senate, helps a broad range of farmers – big and small; it helps our farmers better compete in the world marketplace; expands our commitment to rural communities that helps farmers throughout America; it provides a significant investment in assisting farmers with environmental stewardship; it invests in important food assistance and nutrition programs to help families in need; and, it calls for long-term investment in farm programs that protect agriculture from pests and diseases and strengthens food safety protections.

“The Lugar bill also offers recommendations regarding commodity programs and offers various risk management programs to help more farmers manage and prepare for emergencies. These are good ideas, but we clearly recognize that there are other ideas and recommendations as it relates to the commodity title of the farm bill.

We are committed to working together with the Congress to find that common ground. We must build consensus. And, we must use the time we have – to ensure good, sound agriculture policy that best helps all our farmers.

“I’ve spoken to several members of Congress who agree we need to take time, a more thoughtful approach to farm policy. Several farm organizations, including representatives from the corn, soybean, cattle and pork industries, have met with USDA officials and understand the need to take the time to build more consensus – and policy -- that is best for our farmers. We should not rush to forge policy based on securing budget numbers, rather we should develop good sound policy that helps all farmers. This Administration will support the level of funding that is required to implement that policy.

“Today, the nation is faced with extremely important – and critical – national security matters. It has been just a little over six weeks since the terrible events of September 11th. The President and our nation are focused on protecting America – and our citizens.

“We are asking for a little time and patience. Let’s use the time we have for a farm bill to develop a policy that helps all our farmers – and does so at a time when our nation can best focus on those important needs.

Thank you and I’ll be happy to answer questions.

1. Jeannette Merritt, AgriAmerica Network, Indianapolis: Madam Secretary, you mentioned the $45 million dollars for emergency funding in light of the attacks that happened in September. Do you believe our food supply is in jeopardy and is the administration looking at any more money or establishing a single agency with oversight on food safety?

Secretary Veneman: “Thank you for your question I think it a very good one. The $45 million that has been requested is initial emergency funding to address the most urgent needs that we see as a result of the events of September 11, and later and that is to primarily strengthen our security to make sure that we have sufficient lab capability at our Ames, Iowa facility to, to ensure that we have our research protected, to ensure we have adequate coordination and response in place which of course we’ve been working on since the threat of FMD confronted us early when I first took office. You know these are all issues that we’ve been dealing with. I think what’s become clear is the need to really address the infrastructure we have in terms of our laboratories particularly those

where some of our critical disease research is done such as Ames, Iowa, Plum Island, New York, and Athens, GA where our poultry research is done. And to ensure we have the proper facilities there to address any kind of emergency situation we might, that we might confront. And we are continually reviewing these programs. Again since FMD we’ve been reviewing them in light of the September 11 events. We are reviewing them. In addition Senator Roberts, you might note just last week, introduced a new bill on Bio-Terrorism. Again we think that’s very consistent with what we’ve been talking about in our “Principals” book--the need to have an infrastructure fund to address these longer term issues of how do we protect our food and agriculture. I think we are doing everything we can. I am certain that our food supply is safe as it can possibly be and we are doing everything we can to strengthen our relationships, our partnerships with states-- vets who deal day to day with producers and with farmers and farm groups to make sure we are properly coordinated. In addition, we have a key role with Gov. Ridge, on food safety issues making sure that he very aware of the issues that we have in regard to our food supply and is very involved in them. As we go through this we will be looking at additional funds and requests to enhance our infrastructure in this area even more. You asked about a single Food Safety Agency. There has been a lot of debate on that over the last several years and I suppose that the debate has increased in awareness in the past few weeks. There are pros and cons. One of the things that I can assure you that we are doing is working very closely with our counterparts at HHS who has authority over the Food and Drug Administration much of our food supply. But we have authority over all meat and poultry inspection. There are good reasons to have meat and poultry inspection within USDA, and those include the fact that we have APHIS and all of the animal health issues, and so many of the food safety issues such as Mad Cow disease or BSE are related with animal health and, and food Safety. So there are good reasons to have our research on animal issues that centered in USDA. There are good reasons that we have that kind of approach in our existing systems but I can assure you that we are working very closely together and will continue to do so.....”

2. Tony Purcell, Texas State Network, Arlington, TX: Thank you Madam Secretary for making this availability today. Here in Texas we are very concerned about animal health especially diseases coming in from overseas FMD, BSE, even Bovine TB. But at the same time we appreciate the necessity of free trade and exporting our beef and our commodities overseas. Are these two goals mutually exclusive or is there some way to resolve the issue concerned with these opposite missions?

Secretary Veneman: Well I think you raise a very interesting question. As you note our expert markets are critical to our agriculture in particular when you look at livestock our livestock exports are certainly a very important part of the health of our livestock sector today. We are exporting more meat probably than ever. We are increasing markets for meat and so our overseas markets continue to be critical. At the same time like you say we need to protect against livestock diseases. And again as I talked about in the previous answer, we have been very vigilant in this regard particularly since the outbreak of FMD but again I think with increasing awareness since the events of September 11 . One of the things we’ve done is work very hard to strengthen the relationships with states to make sure that our emergency preparedness, our ability to keep product out that shouldn’t be coming in, is coordinated with the states as well as any emergency preparedness. In Texas, Commissioner Combs, has been very active in her efforts with us. We have really appreciated the close and cooperative working relationship we’ve had with her, with the state vets all over the country and we believe that kind of partnership needs to continue, needs to be strengthened and as I indicated in my remarks we just did put some additional, made some funds available to do that very thing--to enhance our relationship with the states, to ensure that we can protect against animal diseases. In addition, we put in this $45 million I talked about earlier, about $5 million for additional technical assistance to state, local and federal and in the private sector for these coordinated type of responses.”

3. Melanie Musselman, KFRM, Clay Center, KS: My question also related to food safety. Is there going to be an agriculture representative named at Homeland Security to brief Governor Ridge on agriculture concerns?

Secretary Veneman: “Absolutely and thank you for that question. I think it is central in so many people’s minds. I can tell you that the second day that Gov. Ridge took office, I was over there talking with him about all of the various activities that we have at USDA that pertain to Homeland Security. Each agency that is involved will be detailing people directly to his office and we will be included among those people who have good knowledge of the kinds of issues you all are bringing up today: the safety of our food supply; the safety and the health of our animal and our livestock herds and our production agriculture and I know people in the fruit and vegetable sector have been concerned as well about making sure we do everything we can to protect our food supply. Yes, we’re very involved in the Homeland security effort. Gov. Ridge himself is quite familiar with agriculture having been very active in agriculture issues as Governor of Pennsylvania and as a member of Congress. He was very understanding of the issues we raised and will do everything he can to create the kind of coordinated response that we will need as this country moves forward.”

4. Don Wick, WCCO, Minneapolis: Madam Secretary you’ve written a number of farm groups saying you are committed to adequate funding of a new farm bill. Lugar’s bill comes in around $25 billion other proposals are coming in around $70 billion. Could you define “adequate spending” and would it be closer to $25 billion or $70 billion?

Secretary Veneman: Well first of all I think we have to not mix apples and oranges here. The $73 billion with regard to the House bill is over a 10-year period. The $25 billion associated roughly with what the Lugar bill might cost is over a five-year period. So we need to make sure we don’t mix those two issues up –there’s not a $50 billion difference. There’s only about an $8 (billion) or so. The fact is the administration has made it very clear that the money will be there if it’s good policy. And I think there was recently an interview with OMB director Daniels who made a strong commitment to that fact. I need to point out that I find it very, very important and I am very pleased that we have an OMB Director that’s willing to talk about agricultural policy about the needs of our farmers and ranchers and willing to commit. If we get good policy for our farmers and ranchers he will stand up for us and provide us with the needed amount of money.

5. Cyndi Young, Brownfield Network, Jefferson City, MO: In your opinion, specifically, what is missing from Sen. Lugar’s proposal that you would add or change:

Secretary Veneman: “As we’ve said, Senator Lugar’s proposal is consistent, we believe, with our principals book we put out in September. It has a number of titles where there is considerable agreement among Senators on both sides of the aisle and among many commodity groups as well as other interest groups. That includes everything from conservation issues, to food assistance issues to rural development issues, to providing infrastructure for the kinds of pest and disease issues we’ve talked about from some of the other questioners to I believe it even has an energy title—looking at the opportunities for agriculture and renewable energy and also our research needs. As we go forward and we look at the kind of issues we are confronting today whether its pests and diseases or food safety or homeland security we need the resources to support all that so our farmers and ranchers will have the best available information they possibly can in order to produce our products. I think where there is going to be a lot of discussion and where people are going to want to have a lot of input is about commodity or risk management titles. Now Senator Lugar actually has in his risk management title several things, which I think, are worth considering. It reaches a broader number of farmers, broader types of farmers, it provides risk management tools giving farmers the ability to look at ways to manage their own risk –to make decisions based upon risk and planting as opposed to a looking at what the best government program is going to be. I think these are things—while they don’t have unanimity of support—are certainly being discussed as options that might be considered. There are many other options being considered as well. One of the things that we had said often in our discussion of our farm principles book is that you know—as we look at farm policy, one size really hasn’t fit all. I think one of the things that Senator Lugar’s bill does is that it creates a point of discussion where I know a number of ag groups and commodity groups are looking at this with some interest saying how might we provide the kind of support that agriculture needs but making sure it is the least market distortive as possible, making sure it’s the most trade enhancing as possible, so that we can move forward in this century with better farm policy for the future.”

6. Gary Wergin, WHO, Des Moines: You are now saying we have assurances of adequate funding from the administration – that was the reason frankly, the House moved on the bill to lock in those dollars –you say you’ve met with commodity groups and Sen. Harkin. What has been there feed back to you? Are those assurances of adequate funding enough to slow down the farm bill process and pass something next spring that the administration has a chance to be tied into. In short, are the farm groups and Sen. Harkin buying what you are telling them?

Secretary Veneman: “I believe Sen. Harkin put out a statement yesterday that I just read in a brief press report indicating he appreciated the administration’s view that the House passed bill –well, I think that there would be adequate money to fund a bill that would be fair and equitable to farmers and I think by putting out a statement he indicated his willingness to look at what the administration is saying and move accordingly. I think that what OMB Director has done—I think you are absolutely right that part of the rush on the farm bill a year before it expired was about making sure there were adequate funds and resources. And I think by what Mr. Daniels has committed to he has given us the ability to take a longer look at farm policy; take a little more time, take a more considered approach to determine what’s in the best interests of the broadest number of farmers; to make sure commodity programs provide an adequate safety net while being market oriented; that we look at farm policy that is protecting our farmers; that’s helping beginning farmers, some of the farmers most in need at this point. You hear about people who have trouble getting into agriculture today. So I would say, as I visited with many Senators –and I have over the past few days—most have said that given what Director Daniels has said about the money we believe we should take the time we need to address critical farm policy issues for the future.”

7. Evan Slack, Evan Slack Network, Denver, Colo.—Let’s talk about the big picture Madame Secretary. What about the development of new consumer products and the raw product producer being able to get more of a price from the market place—get better returns—what is your take on the concentration of the meat packing, poultry processing industry?

Secretary Veneman: “That’s a good question. And I hope most of you have read our farm principles book “Food and Agriculture Policy—Taking Stock for a new Century.” If you haven’t it’s on the website. I think one of the issues that your question raises is a very good one and that is that we need to recognize that today we live in an environment where the food chain is driven by the consumer and that more and more the farmer wants to find ways to get value out of that food chain. When I meet with farmers who have found various ways to do this it is very heartening. I had the opportunity just the other day to meet with some of the owner producers involved in U.S. premium beef. That’s as you know a farmer cooperative that came together to look at how to get more value out of the food chain and they are producing a very superior product that goes into certain kinds of packaging and branding. But the farmers and the ranchers have managed to come together to get that value out of the food chain. Another wonderful example is Dakota Pasta Growers where the Durum Wheat Producers came together a few years back to form a cooperative and are now the third largest pasta producer in the country. Again a great success story –we’ve seen dairy producers come together in a partnership to build a cheese plant and there are numerous examples. Agritourism today is –where farmers are inviting the public to come and learn about farming and ranching –and selling their products, that’s another way farmers are finding to get value out of the food chain. Farmers markets—networks are developing all over the country where smaller acreage farmers are able to get value out of the food chain. Through our rural development programs we are working with farmers and farm cooperatives to build processing plants. We’ve put a lot of resources into things like developing new ethanol plants and as you know this administration has been very supportive of renewable fuels. As you know the President made a decision not to grant the waiver for California for the MTBE issue which makes a great market available for ethanol and so some of our rural development funds are going into creating new facilities for our corn farmers to participate in that great marketing opportunity.”

8. Lyle Romine, American Ag Network Fargo, ND: “I’ve heard some of the experts say that things like grains, fruits and vegetables would not be a very efficient way for terrorists to harm Americans because they are grown over such a far-reaching geographic area but in livestock we have huge confinement operations especially for hogs and poultry some pretty feedlots around the country concentrated with cattle. In the process of concentrating our livestock production have we made ourselves more vulnerable to this kind of activity and will those areas take priority over some of the smaller operations?

Secretary Veneman: “Your question is an excellent one and one that we have certainly had a lot of discussion about as we dealt with the threat of foot and mouth disease in this country because things like FMD are such quick spreading diseases –where you have these big feedlots or big dairies or pork operations, any disease that gets in can spread very quickly as you know. And so we are vulnerable. That’s why we took every step we could. We moved personnel we added money we took a lot of steps to improve our public/ private partnerships along with our states and our local governments and our private veterinarians—it is extremely important—we are reaching out right now to veterinarians all over the country to make sure that they can quickly diagnose any kind of animal disease that might be introduced into our livestock populations. That is very important. We’ve seen the importance of this as we’ve dealt with some of these scares on the West Coast with the anthrax issue this week. We need the capability to diagnose and we are working with veterinarians all over the country to make sure that capability is there. I do agree with you that we have very large livestock and animal populations today and that’s why we have to be ever more vigilant to make sure we do everything we possibly can to make sure we don’t get any of these unwanted diseases into our livestock populations.”

9. Michele Rook, WNAX Yankton, SD: I’m very curious to know why the administration waited so long to come out with their objectives for the farm bill, in fact waited until after the House farm bill proposal and if that is any indication that the President may veto a bill that doesn’t meet the objectives that were outlined by the administration.

Secretary Veneman: “We said earlier this year that we were going to come up with a set of principles for looking at farm policy for the future. That we thought we’d have it out by the end of summer, which we did. As you know, the House moved very quickly to complete a farm bill a year before the farm bill expired. Now I complement them for their efforts and working hard to work on a farm bill. At the same time, we were trying to create a principles book that really put in context what the food and agriculture system looks like today—how much it’s changing—how global it is—how much technology is changing it—how much consumer products are now a part of it and I think that it is extremely important. I must say we have gotten a lot of complements on framing the debate about food policy as we have in our book. It was not intended that we were behind the curve it’s just, as you know, we just took office about nine months ago and it was important for us—we were dealing with FMD, we were dealing with getting all of our undersecretaries on board and we produced a product that I think is pretty comprehensive and in order to do that it took some time to do. In addition, we dealt with other issues like Starlink and a few other things so I think under circumstances we have a good product, it came out in a very timely manner and we look forward to working with the Senate as it crafts it’s farm bill and the process in the House is not over. Any farm bill will ultimately be conferenced. And we hope we will have a good amount of input and have the opportunity to work very closely with both members of the House and Senate.”

Closing remarks: “Thank you for being here today. I appreciate your questions, they are very good ones and I think the questions you’ve asked today really clearly demonstrate that all of you are concerned about national security issues as well –the security of our food supply—are we able to protect it--and I will tell you these are absolute top priorities that we have been dealing with throughout this year but particularly since Sept. 11. It’s partly because of these priorities that we’ve been asking for additional time –that many of the Senators want additional time too, to consider a farm bill before the legislation expires next year. So I want to thank all of you for participating today for taking the time to be with us and for your thoughtful questions and comments.