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August 6, 1992
PRESIDENT BUSH ON AGRICULTURE
"The quantity and variety of goods that fill our Nation's
grocery stores are unparalleled -- a shining testament to
the ingenuity and productivity of the American farmer."
President George Bush
November 20, 1991
"Today, the trade practices of the European Community hurt
American farmers.... I am not going to put our farmers at an
unfair disadvantage. Sooner or later, the EC must stop
hiding behind its own iron curtain of protectionism.
Meanwhile, we will remain leaner, tougher and more
competitive."
President George Bush
January 13, 1992
Summary
o President Bush is committed to ensuring that our farmers and
ranchers can compete in the world marketplace. The
President has worked hard to provide greater flexibility for
our farmers, promoting new uses for agricultural products,
opening markets for farm exports, and helping to mitigate
undue burdens of regulations.
o Under the Bush Administration, nominal farm income has
reached a record high, and farm debt has fallen by one-
third. At the same time, farmers are now receiving more and
more of their revenues from markets, instead of the federal
government.
o In November 1990, President Bush signed into law the market-
oriented 1990 Farm Bill. The President vigorously pursued
this bill which builds on the successes of the 1985 Reagan
legislation. This program will keep American farmers
competitive in world markets, assist farmers in their
efforts to conserve soil and water and stabilize farm income
and the U.S. food supply.
Agricuture -- page 2
Increasing Farm Income
o Under President Bush, farm income is at record levels.
Government support through farm programs, the reduction in
the debt load of farmers, increased international markets
due to aggressive market opening and export programs, and
President Bush's position on reducing interest rates all
contributed to the expansion in farm income.
-- After adjusting for inflation, it is estimated that net
farm income for the period 1989-92 will be 14 percent
above the previous four year period. Agriculture sales
and gross cash receipts have increased $16 billion
since President Bush took office -- to $167 billion.
At the same time, government payments to farmers have
fallen as farmers have received more money from private
markets.
-- In 1984, farm debt was $194 billion; by 1991 it had
fallen to $123 billion (forecast). Lower interest
rates combined with declining farm debt have
significantly improved the financial position of
farmers.
-- Farmers' equity has grown by $45 billion in the three
years from 1988 to 1991. As farmers continue to cut
debt and increase assets, about 60 percent of the
equity decline which took place in the first half of
the 1980s will be regained by the end of 1992.
Maintaining Farm Program Support
o President Bush's major domestic farm policy challenge during
his first term was the 1990 Farm Bill. The President led
the effort to maintain support for America's farmers while
achieving the Congressionally mandated reduction in
agricultural subsidies and government costs.
-- To offset the effects of lower government expenditures,
the Bush Administration advocated the concept of
"planting flexibility," which lowered the restraints on
cropping choices.
-- Greater flexibility has made U.S. agriculture more
competitive in global markets.
-- In 1992, farmers used their new freedom to plant over 8
million acres to alternative crops.
Agriculture -- page 3
-- The market-oriented Farm Bill provisions are raising
farm productivity and efficiency and helping farmers
earn more in the marketplace, thereby reducing their
reliance on government payouts. At the same time,
vital support continues.
Reducing the Burden of Agricultural Regulation
o In his State of the Union address in January, President Bush
vowed to eliminate unnecessary regulations that impede
economic growth and accelerate implementation of those that
promote growth.
o On March 19, the Bush Administration announced a package of
agricultural regulatory changes totaling $1 billion in
economic benefits. These initiatives range from ways to
reduce compliance costs for nutritional labeling of meat and
poultry products to streamlining the application procedures
for FmHA farmer loan programs to speeding up a new loan
program for beginning farmers.
o The President's directive to get the government off the
backs of farmers continues to succeed. In recent weeks,
rule changes have reduced the number of trips that are
necessary to local USDA offices. Other changes include
flexibility in enrolling wetlands in the Conservation
Reserve Program and making the Export Enhancement Program
and Export Credit Guarantee Programs easier for exporters to
use.
o The President recognizes that unduly burdensome regulations
are a brake on economic progress for U.S. farmers.
Significant headway is being made to dismantle such rules to
put money back into farmer's pockets instead of wasting it
on unnecessary compliance costs.
Promoting Agricultural Trade
o President Bush is committed to breaking down trade barriers
and opening new markets around the world. Agricultural
exports are up, topping $37 billion in 1991, and are
expected to reach $41 billion with an $18 billion surplus in
agriculture trade this year alone.
o The President has successfully negotiated expanded markets,
such as agreements on beef and citrus exports to Japan and
similar dropping of barriers in other growing Asian markets.
Agriculture -- page 4
o The President has worked to reduce the unfair agricultural
subsidies of our competitors through the GATT negotiation
process, and other diplomatic and economic efforts.
-- The U.S. oilseeds case against the EC has twice been
judged by the GATT in our favor; however, the EC has so
far refused to change their unfair policies toward U.S.
oilseed producers. While we continue to negotiate with
the EC within the framework of the GATT, we are
prepared to use all our trade remedies should the EC
not bring its policies in line with GATT requirements.
o The President has extended agricultural credits guarantees
to Russia and other nations of the former Soviet Union to
meet their needs in this critical time. The U.S. has made
available $4.85 billion in credit guarantees for the
purchase of U.S. agricultural goods to the former Soviet
republics and up to $165 million in food aid. This will
help increase farm income and retain important markets.
GATT Uruguay Round:
o President Bush has led the world in pushing for global
reform to open markets in the Uruguay Round negotiations of
the GATT. Foreign markets absorb 20-25 percent of U.S.
agricultural sales. A successful agreement could expand
farm exports by $4 to $5 billion by the year 2000. This
would add $5 billion in farm cash receipts, reduce federal
outlays by $2 to $3 billion, add 40,000 to 60,000 new U.S.
jobs in the food and agriculture sector, and require only a
few changes in U.S. domestic support programs.
o Agricultural reforms in the Uruguay Round would mark an
historic departure from the costly protectionist measures
that have restrained agricultural trade growth, largely
outside GATT disciplines. These reforms would have
significant benefits for farmers, taxpayers, and consumers
in the United States and the rest of the world. They will
help to level the playing field for U.S. farm exports and
will provide fair import safeguards for U.S. farmers.
o President Bush, supported by other GATT members, has
demanded that any final GATT agreement include a commitment
by all parties, including the EC, to significantly reduce
trade barriers and to require their farmers to compete
fairly in the world market.
Agriculture -- page 5
-- The Bush Administration has aggressively focused and
spent $850 million so far this year on the Export
Enhancement Program (EEP). This program is
specifically designed to counter the EC's massive
export subsidies and maintain pressure to negotiate a
settlement.
-- This commitment demonstrates that the Bush
Administration is determined not to reduce these
subsidies unilaterally, and put U.S. farmers at a
tremendous disadvantage to subsidized competitors.
o The EC's recent reform of its Common Agricultural Policy
could promote further progress on the GATT. CAP reform
alone, however, does not resolve the problem of the EC's
unwillingness to reduce export subsidies. The EC must take
further steps to join the rest of the world in reducing
subsidies and opening its markets to competitive trade.
North American Free-Trade Agreement (NAFTA):
o President Bush has been at the forefront of negotiating a
fair free-trade agreement with Mexico. With nearly 90
million consumers and an expanding economy, Mexico will
provide a vital and expanding market for U.S. agricultural
products. NAFTA offers a total market of 360 million
people.
o U.S. agricultural exports to Mexico have almost tripled
since 1986 to a record $3 billion in 1991. The U.S. is
currently the largest supplier of agricultural products to
Mexico. Under a NAFTA even more can be done since Mexico's
remaining trade barriers are still higher than those of the
U.S. (Mexican tariffs on U.S. products average about 11
percent while the U.S. tariffs are only about 4 percent.)
o President Bush firmly supports the development of a strong
NAFTA agreement which will secure further export
opportunities for agricultural products to Mexico. A NAFTA
will provide adequate transition provisions for U.S.
producers. This will include import safeguards and long
term phase-in periods for sensitive crops to avoid severe
impacts on any commodity or industry.
o At the same time, the Administration will ensure that health
and safety standards are not relaxed on food imports. The
U.S. will maintain the right to exclude any products that do
not meet U.S. health or safety requirements and will Agriculture -- page 6
continue to enforce those requirements. President Bush
seeks a commitment to work together with Mexico to enhance
environmental, health, and safety standards regarding
products and to promote their enforcement.
Trade Agreements in Asia:
o The largest region for U.S. agricultural export market is
Asia, accounting for 44 percent of farm exports in fiscal
year 1990-91. In that year, U.S. sales of agricultural
products to Japan (our largest single market for farm
products) totalled $7.7 billion; sales to Taiwan were $1.7
billion. However, there are still many trade restrictions
facing the U.S. agricultural industry. President Bush has
actively pursued trade agreements to open Asian markets.
-- A 1990 agreement was negotiated with South Korea which
will completely open its beef markets to the U.S. by
1997. Currently, South Korea is the third largest
market for U.S. beef.
-- An agreement with Japan led to a complete lifting of
quotas on beef imports on April 1, 1991. The U.S. has
increased its beef exports to Japan from $557 million
in 1987 to $889 million in 1991.
-- A 1990 agreement with Japan on processed wood products
will increase exports by $1 billion.
Promoting New Uses for Farm Products
o The Administration is supporting a growing effort to expand
nontraditional markets for farm and forestry products.
Markets for fuels, lubricants, biodegradable materials,
inks, and pharmaceuticals offer tremendous potential for
American agriculture. Expanded markets will increase farm
income, create economic opportunity in Rural America, help
achieve a cleaner healthier environment, and reduce our
reliance on foreign oil.
-- Funding for activities in these areas has increased
substantially. The President has requested that
Congress more than double funding for the Alternative
Agricultural Research and Commercialization Center
(AARC) in FY 1993 from $4.5 million to $10 million.
AARC's mission is to facilitate the movement of new
technology and nontraditional products from the
laboratory and testing phases into the marketplace.
Agriculture -- page 7
-- USDA's Agriculture Research Service (ARS) is increasing
its effort in the area of new uses. Funding requested
for FY 1993 is $5 million higher than FY 1992.
-- Products and materials made from crops are generally
environmentally friendly and safe to handle.
Disposable packaging made from starch is biodegradable
and nontoxic and thereby providing one solution to the
increasing solid waste disposal problems.
o The Clean Air Act Amendments of 1990, proposed and signed
into law by the President, provides expanded market
opportunities for biofuels, both ethanol and biodiesel.
Biodiesel is a clean burning substitute for diesel fuel and
can be made from oilseeds and animal byproducts.
-- USDA is currently working with EPA and DOE to ensure
that ethanol will enjoy the market opportunities
available to it under the Clean Air Act.
-- USDA's Economic Research Service (ERS) estimates that
increasing ethanol production to 5 billion gallons will
create 100,000 jobs, many of them in rural areas.
-- An expanding market for ethanol will also reduce
emissions of carbon monoxide and other harmful air
pollutants. Growing crops for fuel will also reduce
the amount of new carbon released into the atmosphere
helping to stabilize levels of carbon in the air.
o The President's National Energy Strategy also calls for an
expanded market for biofuels to increase our domestic energy
production and reduce our dependence on foreign oil.
o Funding for activities within USDA to encourage the
development of ethanol and biodiesel markets has increased
substantially. Funding requested for FY 1993 is almost
three times that appropriated in FY 1992.
-- ERS has identified new cost-saving technologies that
can lower the cost of producing ethanol by as much as
20 to 30 percent and increase market opportunities even
more. USDA's Office of Energy, ARS and other agencies
are working to develop these new technologies and make
them available to the private sector.
Agriculture -- page 8
Agriculture and the Environment
o Recognizing that farmers are the first environmentalists and
have been working for generations to protect and preserve
their lands to maintain productivity, the President has
oriented farm policy toward the goal of assisting farmers in
their efforts.
o The Administration has been working with farmers to provide
them with information regarding best management practices
and new technology to assist them in reducing inputs and
complying with State and local environmental laws. The
Administration has sought to ensure that zeal for
environmental protection does not transfer into laws so
restrictive as to put people out of business.
o The President supports the Wetlands Reserve Program (WRP),
the Conservation Reserve Program (CRP), and the Water
Quality Incentives Program which are all voluntary programs
available to producers to assist in the protection of their
lands.
o The Administration supports greater planting flexibility as
a means to divert from monocultural practices and
opportunities for exploration and experimentation with new
crops to achieve the best management practices for the land.
o The President believes that it is possible to protect
important wetlands and at the same time have a balanced,
sensible approach to protection that takes into account the
property rights of farmers.
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