Ag industry looks for ways to survive

Cooperation, compromise essential, Plains Ginners told COOPERATE and compromise: Speakers at the recent Plains Ginners Association annual meeting challenged the entire agricultural industry to adopt those words as their battle cry as diverse segments of the industry look for ways out of a deepening economic disaster.

Agriculture faces one of the worst economic recessions since the Great Depression, said U.S. Rep. Charles Stenholm, D-Texas.

"The most critical problem in agriculture now is price," Stenholm told ginners at the Lubbock meeting. "Prices are the lowest they have been in a decade and, considering inflation, are lower than they were during the Depression. All agricultural entities have to come together, put their best foot forward and be willing to compromise," he said.

"Remember, we speak in a minority voice. So it has never been more important for the entire agricultural industry to work together."

Stenholm said farmers can't afford to take more money out of their own pockets to become more efficient. "We have to find ways to get more consumer dollars into producers' pockets. Corporate America has to cooperate to help farmers. And government must stand shoulder to shoulder with producers."

Stenholm said Freedom to Farm has not been the agricultural savior proponents expected.

"Freedom to Farm was supposed to be the last farm bill," he said. "And there is still a great deal of satisfaction with the premise (allowing markets to determine acreage and moving government farther away from farm controls)." But an attitude also exists of "keep the money coming."

And government has. "More than $44 billion has been apportioned since Freedom to Farm was enacted," Stenholm said. "And without those funds, agriculture would face an even more serious disaster than it does today."

He said Congress faces some tough choices in 2001, some of which will affect the health of agriculture. How to manage the budget surplus will take center stage, he said.

"Some (legislators) project surpluses as far as the eye can see," he said. "But we can't spend it until it's in the bank."

Stenholm, one of a group of moderate Democrats who call themselves Blue Dog Democrats, says they prefer to pay down the national debt and provide a safety net for Social Security before enacting huge tax cuts. And he said surplus may be needed for agriculture.

"We have to be willing to spend the money necessary for agriculture," he said. "We have to know where funds will come from for AMPTA and disaster payments."

Stenholm said he favors changes in the death tax laws. "Eliminate taxes on anything up to a $4 million estate. Then tax anything more than $4 million 20 percent."

Stenholm said voting for big tax cuts may feel good, but "it puts off hard choices. It is your money, but it's also your debt."

He said the recently passed multi-peril crop insurance bill offers improvements. "But I'm not certain we have the best answers yet. We need to use the current farm law as a basis for new legislation as we find ways to improve the safety net for agriculture."

Stenholm said farmers should expect to see more pressure for targeted payments. "Targets will be a big issue as we see more farms consolidate. Consumers ask why farmers get so much money. They don't understand the complexity of modern agriculture."

He said some form of targeting likely will be inevitable. "We have to find a system that works," he said.

Stenholm said cooperation between various agricultural commodity associations and other industry groups will be essential to maintain sound farm programs. But he also encouraged agriculture to look for other alliances as well. "It's apparent that agriculture cannot produce food and fiber without gas. And it's equally apparent that the gas industry can't produce without food and fiber. They are both minority voices in Congress, so they should work together."

Stenholm said he has changed his position on ethanol. "I now support it. It makes sense, and I recommend that the oil industry support it as well."

Phil Burnett, executive director of the National Cotton Council, called on all agricultural organizations, including various segments of the cotton industry, to work together to bring farmers out of a severe recession.

"Step 2, Cotton Seed Assistance, and other programs did not just happen," Burnett said. "We had to push for them. We must have strong organizations to push these issues through. And we have a lot of other issues."

He said the drought that has blasted much of the Cotton Belt all summer "needs immediate attention. We are trying to assess the scope of the disaster," he said.

"We're also looking at a beet armyworm disaster in some areas of the belt, especially west Texas. We have to get better crop protection materials to help control this pest. And we have to save products that are essential," he said.

"We have a tremendous challenge to maintain the materials we need and to assure that we get new ones. We have problems within the Environmental Protection Agency."

Burnett said preserving biotech is another key issue for cotton and the entire agriculture industry.

"We have to find ways to convince consumers that biotechnology offers them a world of benefits. This technology provides enormous benefits to producers and consumers, but we need to show consumers that they benefit as well."

International markets pose another challenge, he said. "We must find ways to get into foreign markets. NAFTA, for example, has worked well for cotton."

He sees encouraging signs for the cotton industry. "The economic indicators for cotton are positive for the first time in two years," he said. "The Asian economy is back, and the U.S. economy is sound."

BURNETT SAID the National Cotton Council also is assessing how E-commerce will change the way agriculture does business. "We are finding ways to take advantage of this technology," he said.

Tom Sell, deputy staff director for U.S. Rep. Larry Combest, R-Texas, said the next farm legislation will be developed with "a smaller baseline of legislators with agricultural constituents. Still, we have an obligation to craft farm policy that supplies a safety net for farmers."

He said the Freedom to Farm act will not be the final piece of farm legislation. "Congressman Combest would not have supported the law if he had thought it was the last farm bill."

He said a bill being worked up by the House Committee on Agriculture would legislate that EPA use sound science to approve or remove pesticides from the market.

Sell also emphasized the need for all segments of the agricultural industry to "come together" and present a unified front in Washington.

Myrl Mitchell, president of both the Plains Ginners Association and the National Ginners Association, echoed the sentiment. He said changes in the crop insurance program, AMPTA payments, disaster relief, the Cotton Seed Assistance Program, and Step 2 payments all came about because "organizations worked for us to get help.

"I can't imagine anyone not supporting their regional and national organizations. It's critical."

John Abernathy, dean of the Texas Tech University College of Agriculture Sciences and Natural Resources, put the efforts in perspective.

"Agriculture is a $70 billion industry in Texas," he said, "counting all the multiplier effects. We have to remind people how important agriculture is to our economy."

In the High Plains, the ag contribution makes up even a bigger piece of the economic pie. "Just 40 High Plains counties account for 33 percent of the state's agricultural economy," he said. "That's $22 billion. The Southern High Plains adds $10 billion. That's significant.

"Agriculture greatly dwarfs any other economic entity in the region. Lubbock is the center of the biggest cotton patch in the world, and 60 percent of the state's cotton is raised in the area. Farming is critical to the region's economic stability, and we have to continue to build on that for the future. Consequently, we have to work together to maintain stability."

"Communication is key," said Jim Butler, deputy vice chancellor for Agriculture and Life Sciences at Texas A&M. "Solutions to problems such as air quality lie in research," he said. "We will be involved and will provide information on topics that affect Texas A&M and Texas agriculture."

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