This business I'm in is. Sometimes more difficult than other assignments in government. Because I have to deal an averages. The average means that I deal with numbers that don't reflect the real world. On the average for example net farm income went up 1978 above 1977, but those data do not indicate that 1977 for many producers in the United States was a disaster year. And so it's better than it was. We know that production costs. Of corn equate of soybeans and other crops can be measured again we deal with averages and our support program is designed to reflect the cost of production for the average that means half a production costs above the median. And for those they find often times our support guarantees to be totally inaccurate or inadequate. And so these are fishes government reports are published and it tends to raise the hackles of many. And the criticism which comes is manifested in many ways. For the last week or so there have been demonstrations in Washington. We've had more than 3,000 good people show up driving 2000 Vehicles protesting the situation which exists in agriculture across the United States today. I have been meeting with small delegations of this movement from various States and I can tell you that ninety-nine and forty-four 100% of these people are good decent hard-working God-fearing taxpaying citizens of this great land but a few are not and the few who are breaking laws and who disregard the opinions of others are not typical and not representative of Agriculture and not even representative of the group. It's in Washington today, but they tend to get publicity. And that's a bushel he tends to leave a bad impression in the minds of those who do not know the problems of this business would not who are not aware of the real situation, but I want to say that the demonstration which is in Washington for the most part is in keeping with a time-honored tradition that has made this country strong you and I can bring our grievances to our government whenever we think it's appropriate and in the National interest and I would do nothing to limit the right of you me and everyone else who has some things I want to discuss in a public forum. The matter of building a balanced agricultural policy is of course the most difficult horse to ride. On one hand, we have to be aware of the realities of the world in which we live. I'm 50 years old. During my relatively short lifetime. We've invented hybrid Seed corn fertilizer pesticides modern farm machinery in those cases. During my lifetime. The major Farm problem has been how do we live with too much to eat? And so we've had cropped controls soil Bank diverted Acres marketing quotas and a whole host of government programs designed to restrict the production of these key and essential crops because there was no place to sell the crap at any price in the last 15 years or so. The federal government has been moving to take advantage. Of the situation which is developing in this world that we think offers some very exciting opportunities World Trade. And so the government the Department of Agriculture working with private Market development efforts engaged and Market development programs overseas has I think the right to claim credit for some successes. Now the United States is regarded by many countries of the world as being one of the industrial Giants and I guess we are but we are preeminent in the field of Agriculture and the record speaks for itself half the world trade in weight comes from the United States 70% of the world trade in soybeans comes from the United States why we're not the world's largest wheat producer the Soviet Union lays claim to that record. We are not in many cases the world's largest producer many grains. We are indeed the world's largest exporter. And so we have a task of looking at the realities of the commercial world and balancing off the economic expansion. In that area with some of the domestic demands and particularly in the area of price supports. No, I've dealt with the Soviet Union. I've dealt with a Japanese. I have negotiated with the Chinese and with about forty ministers and heads of state around the world and I can assure you that the business judgments of those men and women are no different than yours and mine. They buy the best product possible at the lowest possible price and they're not in the business of giving anything away. And so we look at the realities of the market and have to establish policies that accommodate those demands that exist in the real world, but try said we have boils down to this is that if we are going to be competitive in these markets if we're going to continue to produce for those markets, we have to be aware of the limitations and the dimensions of the effect of price and I know I've talked with many of my friends in the withdrawing business and they say well United States has a half the world we trade in Canada is another 20% and Australia is enough. Fairfield percent in between the for exporting countries were probably 80% of the world trade in weight and why don't we form some kind of an international exporters organization some suggest the real world problem is that weed is not the only crop indeed rice is a bigger crop and wait in the world of food grains and every country in the world can address to adjust and adapt from rice to eat or wheat to Rice depending on Supply and price and so it's not a matter of rice or wheat producers competing with each other. It's a matter of facing up to the realities in the case of rice as a competing food crop in the world of grain trade and so are these matters have to be debated and ought to be debated publicly do we or do we not want to establish systems and processes which enables us to be competitive in the world markets or do we or should we withdraw from the world of trade and become an island unto our In which we buy nothing and after all that is the price we will pay for if we sell nothing. We have no way of paying for those things upon which we have come to depend and those things we have come to take for rent. If we were in my judgment to up for the policy of isolationism and reduce our export of Commodities from agriculture. We would in my judgment be embarking upon a Fool's errand for the economy of the United States and I think the Free World perhaps all the world would be impaired severely if not destroyed completely the results of which of course would be a political catastrophe and so it is are measured careful judgment that expanding Market developing overseas is in everybody's best interest and then we have to develop policies in which accommodate that expanding Market at the same time recognizing the domestic economic concerns of many. We've also pursued the possibility of obtaining International commodity agreements. We are provisional members of an international sugar agreement would simply again recognizes that sugar production Rises and Falls depending on whether it rains in the Philippines or doesn't rain in India and so on we think that it is a way by which we can introduce some disciplines in the International Market Place Boulevard some of the extremes and boom-and-bust pricing which is characterized commodity prices as a general rule. We are now negotiating in Geneva to obtain an international Fleet agreement. I don't know if those discussions will produce an agreement are not at the moment. That doesn't sound very promising. But we're attempting to work out some system by which one we have a big wheat crop in this world, but not only the United States goes to a set of side a reservist program, but that all major wheat producers and exporters would share the burdens that come about when a big crop is produced and from which we as the importing countries could share in times when there is a crop shortage in this world and that producers and consuming countries alike would help to pay for the cost of the storage and management of weed stocks rather than have the United States be the one that is forced to carry the economic burdens. I'll be there big stocks or short supplies and Afraid in wheat 1979 looks like it will be another banner year in this regard. Now, of course, we can't forecast our weather and I know that a bad crop is worse than a good crop and you know that too because if you have no crop to sell it doesn't matter what your price might be. And so we think from an agricultural standpoint from a farmer's part of you. We're better off hoping for a big crop but a poor one, but if needs to be tended to in a business-like way and we think that 1979 export sales of Commodities will establish another new record high we are now winding up the negotiations in Geneva on the multilateral trade talks. Trying to bargain down some of the barriers to trade and we have achieved in my judgment some notable successes. We have achieved a reduction in barriers for about a hundred and fifty us exportable Commodities representing about 3 billion dollars in additional sales primarily to Japan and the European community. And those Commodities are in the area of meats livestock products soybeans and weight, tobacco and fruits and vegetables. We Believe now that we will probably establish another new record high and tonnage and in dollars because of some phenomenal changes taking place in the region of the Western Pacific I just came from China. I was in the People's Republic of China late in October early in the vember before we had the political changes which took place in December of this last year. China is you know is one of the oldest civilizations in this world. They have about 1/4 of the world's population fed on less than 5% of the world's land. They have no flies. no mosquitoes No birds. No mice. They use the world's most ancient but proven methods of tending to their land. The production per acre is about 9 times greater than our own but 80% of their Workforce is engaged in tilling the soil. They produce two crops a year. And 2 compared we produce a little less than 1 the northern provinces of China compared and look like North Dakota and Montana the southern provinces of China are like the Tropics of Cuba and Southern Florida or resemble, Southern, California. And while they are efficient in terms of food production per acre in terms of their own Manpower requirements, they ranked as one of the world's least efficient agricultural systems. They invited me and a team of scientists from the Department of Agriculture to come to discuss with them their plans to modernize their industrial economy any essential to any modernization is a need to modernize their agriculture. We discussed with them the role of us technology in terms of agricultural machinery and North China which produces wheat and barley sunflowers soy beans and some corn can of course be mechanized and there's no reason why they cannot adopt the same advanced technology that has proven been proven in the United States. However, when one gets to the south of China where the fields are 1/3 of an acre or less where the mace major crop is rice Till by hand interplanted by hand transplanted by hand where they have a rolling fields and are not able to level them out. They'll never use the same kind of high-powered Rice Technology that we use and say the state of Arkansas. They will continue to need enormous amounts of Workforce engaged in the production of food, but 80% is too much and so we're going to send a team back to China starting in late February to discuss with them ways of them of helping them build some of their food processing technology and industries, for example, they have no baking industry. They need one and they want us to send serial chemists Engineers scientists to teach them how to run build and manage bakeries. They want us to help them build run and manage modern feed mills China produces more pigs than any country in the world as a matter of fact. They are largely swine and poultry eating people. They have no cattle because they have no grass of any importance. And so they we found their livestock Enterprises to be largely scavenger oriented the chickens hunt and Peck. The pigs are fed on cabbage leaves and waste material. They're trying to build a modern US type swine and poultry industry and we're going to be there with our technicians to help them build this knowing full well, but the first 15 plants at least are going to be largely demonstration Enterprises, but that they will succeed because they have proven to be very successful in the United States and they fully appreciate the magnitude of that very basic decision. But once they build these kinds of modern facilities, they are permanently on the world Feed Market and the United States being preeminent and feed production. I think we'll be competing in those markets and the magnitude of That market potential is almost boggles the mind but to give you some idea if each person in China eight one more pound of chicken one more pound of pork per year that represents the market for a 100 million bushels of feed. And so we will be working with the Chinese in these Enterprises in their own country. And my guess is that China is going to be permanently into the world trade and agriculture that they are going to be in the building a dependence on the outside world as he so long as we're prepared to be a defiant reliable supplier. And that is that Mike and develops. We're going to be putting additional land in the United States into production. We have announced they set aside program for next year. Many have suggested that the set aside program is totally inadequate. We have examined carefully the range and heels which we have had in the last 4 years and it's our judgment but the set aside program as announced represents and I'm out of land to be taken out for which week and we are sure there will be no need now next year might be another matter. We will adjust the set aside programs from year to year in such a way to as to remove land that we are sure we do not need in the production of grains and use the farmer-owned Grand Reserve as a market-oriented device to take from the markets those grain stocks which are in excess of demand because of good year olds and from which we can draw and from which the farmers will enjoy the benefit of price Improvement in the event. We have a short crap either here or somewhere. Nelson the world in conclusion. I'd like to talk briefly about the pending trade bill. Ambassador Strauss and his Representatives have been negotiating for nearly two years with our trading partners in this world attempting to reduce the barriers to trade and major concessions have been obtained and our point of view which not only will reduce the terrorists that are the most visible obstacles to expanding trade but will impose some disciplines and some limits on the manner in which many of our competitors in this world are will be required to discipline their use of export subsidies. I have been under heavy pressure in our country to adopt a policy of subsidized and exports. I resisted this on the grounds that it makes no sense for the treasury of the United States to be pitted in competition with a treasury of Canada or any other country in the knock-down-drag-out price War for the benefit of a country that doesn't need to be subsidized by the time Prayers of the United States and so we have not agreed to engage in an export subsidy war with many of our competitors. But rather we have insisted in the discussions on the multilateral trade negotiations of those who use subsidies must play some limits on the restitution policy, especially as we me. Competition in what we call 3rd Market countries, and so we see major changes being brought about in this very important discussion. This program will be sent to the Congress sometime this summer possibly in June and I would urge you to contact your elected representatives when the time has come after they've had a chance to examine the document with great care and I heard you to read it as well, but I would urge you at that juncture if you can to support the measure because expanding trade in agriculture is in my The only truly viable economic alternative that should be given serious consideration and a new trade bill is going to be a major step in the right direction towards allowing us to open our doors. And to open the toxin negotiations with our friends in this world. I am a firm believer that if we can expand trade if we can expand the cultural exchange if we can expand our diplomatic cultural and business ties that the likelihood of a political confrontation likelihood of any sort of military mistake is much reduced and so it's my great pleasure to be here this afternoon and from here on I'd like to turn the program over to our questions and answers. I know that many of you have From time to time. I thought you'd like to take a shot to the secretary of agriculture Willis. Is your chance to keep a verbal. Thank you very much. I decide my flies doing. There are fewer doctors and lawyers and there are farmers and they haven't seemingly lost their clout. I believe that. We ought to develop a political situation. In which way who farm and we who consume? understand each other and negotiate our differences rather than getting in a big shootout. I served six years in the Congress and I can tell you from experience that if we set up a situation in which it's a Farmers on one side and everybody else on the other side in the matter is brought to the United States House of Representatives. The farmers got 35 votes and everybody else got 400. Now that's no contest. And so we must have lied getting in a situation in which it is the farmers against everybody else because it's a losing proposition from the farmers point of view and unnecessary in the beginning. And so we work very hard to understand consumers. We're asking consumers to understand farmers and the risks and the burdens on the heartache and the joys of go with the business and it's working but it's slow long painstaking really never ending process. I was asked on a national television network broadcast. What it was that brought Farmers to Washington in this tractorcade. And I responded very honestly and openly that many came with Siri as he can on his problems many came out of the Southwest out of Texas and north irrigators and they were caught on the horns of an impossible dilemma depleting water reserves high and rising cost of irrigation. And costs of production that had squeeze them practically out of business. And they had legitimate complaints that many others in farming today. Had made a mistake and the business judgement either paid too much for land. They do much for machinery. And couldn't service the debt and I know it's easy now to sit here and judge mistakes that were made over the years. I've made many myself, but I know that there are many in serious trouble because of debt that cannot be serviced in today's market economy not mentioned. There are some in the group who are in Washington because they like the publicity pretty heady stuff to get on National Television the front pages of the Washington Post. I know a few who are not group. I know one who is reading a book in fact, and he's trying to promote itself. Then I said and there are a few that are driven by plain old-fashioned greed and that's true. I know personally some of the financial circumstances some of those people who are in Washington today. I can tell you they're not poor they're very rich and I don't know what drives him and if it isn't great dive. I can't explain it. I sure understand their situation. And I and I know that that they're not there because of poverty. Well, that's hard to say the terms and dimensions of the discussions in the international Fleet agreement would establish a price car door fridge farm gate price and I sure hate to use the average because of the way it tends to mislead. But an average farm gate price of $3 and $5 in the high end now a bushel of wheat produces 44 lb of bread and so an additional $2 a bushel on weight would be a Nicola Loaf and the cost of the rapper is probably more than that. Well Farmers to buy at retail selling wholesale and pay the freight both ways. There is no economic group in the country that takes a bigger beating at the hands of inflation then Agriculture, and there's no one more vulnerable than farmers. And so we do need all of us to join forces and supporting plans and policies which will reduce the rate of inflation in the farmers will gain more than a than anyone else from an economic point of view as to the proper loan rate. The law says actual set of loan rate on feed grains that is high enough. To maintain a Dependable Supply but not so high. As to stimulate the building up of excess stocks. Now that doesn't give me a Free Willy unlimited Authority last year. We produced 7 billion bushels of corn because we had a record-breaking 100 and bushels per acre. And so no one can argue that we're in danger of running out of corn. And so when we looked at the law. the dimensions of the market forces we established a loan rate accordingly. And I know there are many who believe it's not high enough. We have some who believe it's too high. So it's probably about right and I have I'm required to make the hard choices on popular though. They be now if the searching circumstances change next year, of course, we will again review the loan situation. Joe califano 9 made a deal I did not told him I wasn't going to discuss the health implications of cigarettes and smoking cuz I didn't know nothing about it and that he had to stay out of the price of Ford Field cuz he didn't know anything about that. And we've agreed fact of the matter is in the tobacco industry the total cost of tobacco price supports over the 30 years of the program has been in existence is cumulatively 70 million dollars. Each year the industry generates 6 billion dollars in taxes, and I don't want to measure. Health aspects on the basis of economic concerns. I think we ought to measure the smoking issue directly on its merits and if we decide that we should ban smoking ban cigarettes in the United States then let's do it. And forbid its production and forbid its importation. It doesn't serve anybody that I can imagine very well to reduce the price of tobacco back some suggest that there ought to be a $0.50 federal tax on cigarettes. And so to abandon the price of Port program in my judgment would serve no Health purpose. No economic purpose and is not the proper course of action now Carol Foreman is there because I recommended to the president that she be hired. She was former president of the consumer Federation of America. She can talk to more consumers in one day than you and I can get to in a year. And I've seen her go to Chicago New York and Los Angeles and talk about the problems of the pork producers talk about nitrates and explain to them that this is a very serious matter. But if we don't maintain some preservatives in the processing of pork products, we might all be poisoned by botulism and she's in the position to gain an audience that is doing American agriculture a great service.