MODERATOR: Good afternoon from Washington. I'm Larry Quinn speaking to you from the Broadcast Center at the U.S. Department of Agriculture. Welcome to today's news conference with Acting Secretary of Agriculture Chuck Conner. Reporters, if you wish to ask a question, please let us know by pressing 1 on your telephone touchpad.
Now it's my pleasure to introduce Acting Secretary of Agriculture Chuck Conner.
SEC. CHUCK CONNER: Thank you very much, Larry. And good afternoon everyone. I appreciate all of you joining us today. I'd like to take this time to share a few thoughts with you on the change here at the Department and to update you on some of the priorities of the Department of Agriculture.
First, I want to say honestly that it has been a real privilege for me to work with Mike Johanns for the past several years here at the Department. I knew him when he was governor, and it was an honor to serve here at his side. He has simply been a remarkable Secretary of Agriculture. He knows the issues, and he cares deeply about the future of American agriculture. He has been willing to make a lot of tough decisions, and he's been a terrific advocate for farmers, ranchers, and all of American agriculture. He will be missed by many here at the Department.
That said however, I won't hesitate for a moment to tell you that I am ready to assume an expanded leadership role here as the acting Secretary. Mike Johanns and I worked as partners on everything from policy decisions to personnel issues. That gives me confidence in reiterating what I said last week, this transition in leadership will be seamless.
It is a great honor for me to serve as acting Secretary of Agriculture. Having grown up on a farm in Indiana, and having been involved in agriculture all of my working life, I very much appreciate the President's confidence in me. And it was gratifying to read of the positive comments from several members of Congress about my appointment as acting Secretary. I don't take their support for granted today. I value the good relationships I have with many in Congress, and I will work to ensure that those confidences continue.
Now I would like to take a moment to provide an update on a few policy priorities. Farm Bill is certainly foremost on the minds of many people. I was involved in every aspect of the formation of the Administration's Farm Bill proposal, from hosting Farm Bill Forums to testifying before Congress. I personally attended virtually every subcommittee and committee markup in the House of Representatives. I can assure you that we are going to continue to work with the Senate to advocate for policies that put the American farmer and rancher on a strong competitive footing while ensuring a very strong income safety net.
I will press the Senate to begin mark-up which Chairman Harkin has signaled he intends to do within a few weeks, perhaps as soon as next week. The President is eager to sign a farm bill this year; I will do everything I can to ensure that a farm bill will be passed that he can be proud of and deliver to his desk that he can sign.
Another issue, food safety, and particularly import safety, is going to continue to get a lot of attention from us. We will be hosting a public comment session here at the Department next week on October 1 in conjunction with our Import Safety Working Group partners. Health and Human Services Secretary Mike Leavitt is doing a terrific job as chair of the working group. I look forward to working with him on a plan to improve our import safety system to meet the challenges posed by changing patterns of trade.
Trade issues in general are going to remain a top priority for this agency. We want American producers to have every opportunity to reach new markets and expand their participation in existing export markets. We know American farmers and ranchers can compete with anyone in the world if given a level playing field. Our job here is to do the leveling. The pending four free trade agreements with Peru, Colombia, Panama, and Korea constitute a huge step in the right direction.
It is critically important to American agriculture that Congress ratify these agreements. We will continue to deliver information to the Hill about the benefits of these agreements as we press for ratification. The bottom line is this: these countries already have broad access to the U.S. market, but the same is not true for the access of our farmers and ranchers to their markets. These agreements turn one-way trade into two-way trade, and that's good for American agriculture.
Taken together, they can generate an estimated $3.2 billion of additional agricultural export sales for American producers each and every year. Our recent experience with the Central American Dominican Republic Free Trade Agreement, otherwise known as CAFTA, shows just how valuable these agreements can be. In 2006 the first year the agreement was in effect, our ag exports to the participating countries grew by 19 percent, and they are up by 22 percent this year. And this rate of growth is substantially greater than in other countries. Actually, 2007 is shaping up to be a very strong year for agricultural exports across the board. We expect total sales to come in at $79 billion, and that would mark the fourth consecutive record year. Every billion dollars, as you know, of ag exports generates another $2.6 billion of economic activity and supports almost 13,000 jobs.
While there is much that can be accomplished with bilateral free trade agreements, a multi-party format, such as the WTO's Doha Development Round of talks, holds the potential for much greater gains. We remain committed to full participation in the Doha Round and will continue to press for a successful conclusion.
There has been some movement since Secretary Johanns and Ambassador Schwab ended their talks with the G4 group this summer. Intense talks on the agricultural text have been going on at the staff level in Geneva for the past three weeks. Just this morning I spoke with some of our technical experts who have been in Geneva. I would characterize their perspective as optimistic while recognizing that much, much work remains before an agreement can be reached. As Ambassador Schwab has said, "The U.S. is willing to show some flexibility in reducing domestic support, but we must see corresponding market access." We will not, ladies and gentlemen, unilaterally disarm.
Beef trade is another area foremost on our minds here at USDA. Secretary Johanns waged a very strong campaign to resume U.S. beef exports with Japan, Korea, China and other markets in accordance with international science-based standards. We will continue to press these countries to conduct trade in accordance with these international science-based standards. In our discussions with China, we are also working to eliminate restrictions they have placed on some of our pork and poultry plants because of disagreements over acceptable levels if pathogens and ractopomine residues. We have engaged in technical discussions with Chinese officials in recent weeks, and that work continues on. Our goal is to reach an agreement on science-based rules for trade.
The Joint Commission on Commerce and Trade which brings together leaders from our two countries will be meeting in China in December. We hope to be able to report to the JCCT meeting that we have resolved our trade differences. Despite our disagreements in this area, I would just point out that we have been seeing strong overall growth in our exports to China this year. They are now our top export market for soy, cotton, hides and skin, and they continue to buy poultry and pork from U.S. producers who are not on their restricted list.
So we are optimistic that an agreement based on sound science and risk assessments will be reached. Ladies and gentlemen, that is a quick update on some of the issues we're paying attention to here at USDA. I will say again how deeply honored I am to have the President's confidence as I assume the duties as acting Secretary.
And with that, I am eager to give you an opportunity to ask me some questions here today.
MODERATOR: I'm Larry Quinn speaking to you from the Broadcast Center at the U.S. Department of Agriculture. We welcome you back to the question and answer session with Acting Secretary of Agriculture Chuck Conner which unfortunately we were unable to bring you due to technical problems. Reporters, if you wish to ask a question please let me know now by pressing *1 on your telephone touchpad, and that will signal that you want to ask a question. And Acting Secretary of Agriculture Chuck Conner is ready to respond to your questions. And Mr. Secretary, the first question comes form Mike Herger from Red River Farm Network. Standing by is Chuck Abbott. Mike, go ahead.
REPORTER: Thank you very much, Larry, and welcome Mr. Conner. I just have a question, you referred earlier to the fact that you were willing to work closely with the Senate. What will you tell or stress to Senator Harkin? What different would you like to see the Senate do than the House did?
SEC. CONNER: I appreciate the question, Mike, and let me just say that our message to the Senate is going to be a pretty simple one. We believe we need a reform-minded Farm Bill, one that certainly makes the tough decisions like the administration did in terms of funding priorities, one that does not result in any kind of new taxes on American businesses or Americans. And at the same time we need it done quickly. We have had our proposals out there since January. We are anxious to get a bill to the President, one that he can sign enthusiastically, and we can get about the business of administering this Farm Bill to the betterment of our producers. So that will be my message to them.
MODERATOR: Our next question comes from Chuck Abbott of Reuters, and standing by should be Dan Looker. Chuck, go ahead, please.
REPORTER: Good afternoon, Mr. Secretary, and I trust we'll be able to say that greeting many years to come, won't we? But that's not my first question. That's not my question.
SEC. CONNER: Thank you for that not being your question, Chuck.
REPORTER: The question is, you want a reform-oriented Farm Bill. What is a reform-oriented Farm Bill? Does that have to include revenue protection? Does it have to include disaster assistance? Does it have to include a $200,000 limit on AGI? I'm going to let you be a little bit more specific about what sort of things need to be done.
SEC. CONNER: Well, I appreciate that opportunity, Chuck. Certainly the adjusted gross income situation is a key part of that. You know, the House has $1 million dollars. We have suggested $200,000 averaged over three years. We continue to believe strongly that if you are part of the slightly over 2 percent of American tax filers out there who enjoy an adjusted gross income of $200,000 or more, we've suggested that you don't need income subsidies from the taxpayers of the United States. I think that is just fundamentally reform out there. But we've also suggested a lot of other things that I think are reform as well. Gap revenue insurance for example. As we traveled the countryside, producers simply told us, Mr. Secretary, the safety net has a lot of holes in it, and we did all that we could to plug a lot of those holes. Gap insurance coverage was a key part of that, so that producers could collect sooner once they had damage as a result of drought.
We also had revenue-based countercyclical payments which trigger off one's revenue, not based off the price that they may get. And again, you have heard us say time and time again the direct example of a producer who may have had a very, very high price and unfortunately no crop to sell under that price. Revenue-based countercyclical payments to me are the absolute best disaster help that you can give our producers out there. These are, again, key, key reforms going forward out there. We've suggested others, again including this pick-your-price situation that we've described where producers have the opportunity to collect much, much greater levels of help during times when prices may simply be low at harvest because the size of the crop is very, very large. They are able to lock in when the loan deficiency payment help from the government that is very, very high, but they're not selling it. They are waiting and they're holding until the price recovers. In effect enabling to collect we believe an excessive amount as a result of this glitch in the Farm Bill we've suggested correcting that and again these are the types of things that we see as being reform.
MODERATOR: Next question comes from Dan Looker of Successful Farmer, and Dan will be followed by Alan Bjerga. Dan, go ahead, please.
REPORTER: Good afternoon, Mr. Secretary. Just to follow up on Chuck's question, the administration supports an income test, $200,000 adjusted gross income test. Do you also support a cap on payments along the lines of the Grassley-Dorgan Bill, the $250,000 cap on commodity payments?
SEC. CONNER: I appreciate the question, Dan, and let me just say that when we developed our Farm Bill proposals we went the direction of the adjusted gross income test again because it just seemed like to us it was inherently fair that there be a graduation point where you have been successful enough that you are no longer eligible for direct income help compliments of the U.S. taxpayers.
At the same time, we've acknowledged there are other payment limit issues out there. We've said we look forward to working with those who advocate tighter limits. We've criticized the House passed bill for removing limits altogether on loan deficiency payments, and therefore we look forward to working with those who would propose tightening down of this situation. Again, this is an area where we could view this as a reform effort going forward.
MODERATOR: Alan Bjerga from Bloomberg News is next, and he'll be followed by Matt Kaye. Alan?
REPORTER: Yes. Alan Bjerga from Bloomberg News. On September 11, then Secretary Johanns said there was a 60 to 90-day timeline for a USDA decision on the possibility of releasing CRP acreage into production with no penalty. I'm wondering if you have any update or any new timeline on that situation.
My second question also deals with the Farm Bill. How late could we go before it starts affecting the timing for direct payments in winter wheat planting?
SEC. CONNER: Those are good questions, Alan. Let me just take the first question first in terms of release of the CRP. This is something we are being briefed on fairly regularly, as recently as last week, based upon some of the latest data in terms of crop that is out there. We've been briefed on this topic. A key part for us as well on the CRP acreage is how much land is out there in the CRP that is already likely to expire and come back into crop production as a result of normal market forces where people are saying, I've been in the CRP but with higher prices today I want the opportunity to go back and plant.
So we're analyzing this constantly. No final decision is made, but just know that we are monitoring this daily and getting briefed fairly regularly on the results of this. And as we come to any conclusions on this we will let you know further on.
REPORTER: Would you still expect something in the next month or two?
MODERATOR: Matt Kaye of Burns Bureau is next, followed by Stewart Doan. Matt?
REPORTER: Yeah, thank you, Larry. And again, congratulations to you, Chuck, in ascending to the position of acting secretary. On the Farm Bill, based on your comments on revenue countercyclical, what is your feeling about some kind of hybrid of a permanent disaster and revenue-based countercyclical if there turns out to be some kind of compromise in the Senate? Is that effective?
And also on the trade front, there's an expectation among some who follow trade very closely in Washington in the lobby community that we may just get Peru and Panama and not Colombia and the Korea agreement until after the next presidential election. What are your thoughts on the possibility of that happening?
SEC. CONNER: If I could take your latter question first, and let me just say, Matt, that we continue to be optimistic and certainly strongly enthusiastic about all of these trade agreements. As I have told folks a number of times just in the last several days, including members of Congress, these free trade agreements are really win/win situations for U.S. agriculture. For the most part these are countries that already have virtually unfettered access to our markets. They were granted duty-free status long ago. They have that access; we do not, for U.S. agricultural exports. Our exports continue to face substantial duties. We can certainly get you the data for each one of those countries in terms of the duties that we face from our agricultural products going into that region. These trade agreements are truly needed in order to level the playing field for U.S. producers, and that is the bottom line, and that's why again we remain not only enthusiastic for the agreements but optimistic that Congress is going to realize that this is a win/win situation and approve these agreements going forward, all of the agreements.
REPORTER: And on the option -
MODERATOR: Stewart Doan of Clear Channel Ag Networks is next, followed by Max Cacas. Stewart, go ahead, please.
REPORTER: Thank you, Larry. Good afternoon, Mr. Secretary. You mentioned in your opening remarks a little while ago that technical negotiators you had talked with in Geneva were optimistic about the state of playing the Doha negotiations. I'm wondering what feedback your negotiators are receiving from some of our other trading partners, specifically Brazil and India, with regards to the U.S. acceptance of the Falconer text on domestic support. Are you getting any feedback from them that indicates they are willing to talk about greater market access for American farmers and like our acceptance of the Falconer text?
SEC. CONNER: I think in my remarks earlier I characterized us as remaining optimistic on this but also expressing that there's a lot of very, very difficult work to do going forward. You have identified some of that work. We continue to believe that there's an opportunity here for a deal, and we have expressed a willingness to be flexible in terms of our own domestic supports which have caught the attention of a lot of folks around the world. But we have also made very, very clear that our reduction in domestic supports in this country will be totally predicated on the amount of market access given to our producers.
We continue to make that case strongly all over the world. We've been making that case strongly the last three weeks in Geneva with our technical experts there, and I believe the rest of the world is hearing this message at this point and they understand that the U.S. is willing to discuss these things, we are prepared to be flexible, but they must be as well.
MODERATOR: Max Cacas of Federal News Radio here in Washington is next followed by Eric Wasson. Max, go ahead.
REPORTER: Yeah. Thank you, Larry. Congratulations, Mr. Secretary. I had a question for you regarding a provision in the House-passed version of the Farm Bill regarding meat inspection. The American Federation of Government Employees is opposed to this provision because they say it's going to affect the ability of USDA meat inspectors to do their job and safeguard the public health. Congressman Pomeroy from North Dakota who authored the provisions says it's nothing of the kind and it's just a means of liberalizing the current rules on inspection to deal with allowing states to sell goods across borders that have been inspected by state inspectors.
What is your position on this provision, sir, and in general do you have any changes in the management of the Department that we can look forward to, or are you planning on keeping things pretty much par for the course and status quo?
SEC. CONNER: I appreciate the questions, Max. Let me just say that with regard to the state inspected meat issue, I will tell you the same thing that I told the House Agriculture Committee during the mark-up process. The administration actually does not have a position directly on the state-inspected meat issue. Having said that though, I told the committee that USDA and our federal inspection team had conducted an audit of all of the state-inspected meat facilities in terms of determining whether or not their standards were equivalent to or greater than the federal standards, if they were federally inspected facilities. And I believe all but one state came back with a clean bill of health, saying that they either met federal standards or exceeded federal standards with their own state inspected meat facility.
And so that was the feedback I gave them, and the House, as you have already indicated, chose to adopt that provision which would allow state-inspected facilities to ship product intrastate.
MODERATOR: Eric Wauson from Inside U.S. Trade has the next question. Standing by should be Cindy Zimmerman. Eric, go ahead.
REPORTER: My question also relates to meat inspection, specifically with regard to Korea. Can you update us with what's going on with the reopening of the Korean market to U.S. beef exports? What specifically is it going to take to have that reopen, and will it happen by the end of September as we heard the Korean government say earlier this year?
SEC. CONNER: Let me just say that this continues to be a source of great frustration for us in terms of our product moving into Korea. We do have some plants that are still shipping to Korea. As you know as well, we have had some plants that have been barred from doing business, but the vast majority of the plants are still cleared to ship into Korea at this point. Our problem with Korea is just simply that we want them to work with us to get to international standards compliance, to get to OIE compliance in terms of the beef products that they allow to come into their country. They are part of the OIE; we believe they should meet international standards with that, which would allow us to ship a far broader list of products than what can currently be shipped there.
And again, we are going to continue to make that case. They are part of the international body. We think our meat should be imported into Korea based upon the standards of that international body, which are science-based standards. They are health-based, they are science-based, and we just believe that our trade with Korea should be on that basis. We're going to continue to make that case. We're going to continue to press them to talk to us about reopening their markets on that basis. There's been some resistance to having those discussions over the protocols up to this point, but we're going to continue to press them.
MODERATOR: Next question comes from Cindy Zimmerman from Southeast Ag Net, and she'll be followed by Mary Clare Jalonik. Go ahead, Cindy.
REPORTER: Thanks, Larry. Mr. Secretary, I'd like you to address two topics which you haven't touched on yet. One is specialty crops. What do you think are the chances that we'll see a Farm Bill out of Congress that has something at least similar to what USDA has proposed for specialty crop producers?
The other topic is renewable fuels. I just got back from spending two weeks in Europe and Japan, meeting with ag officials and also journalists from all over the world. Renewable fuels is definitely the biggest issue that despite the critical OECD report out recently, Europe has a goal of having 10 percent of their fuel use be from renewables by the year 2020. They've admitted they can't reach that with domestic production, and they plan on getting a lot of that from imports. What do you think are the chances that by that time we'll be able to supply them with some of our renewable fuel production?
SEC. CONNER: Let me just take the second part of that question. Obviously we continue to see tremendous growth in this country in terms of renewable fuel production; 25 percent of our corn crop is going to go for renewables this year, and that's a 13.4 billion bushel corn crop, so it's a very, very large crop. A big percentage of it going for renewables. You know this is such an area of growth and income opportunities for our rural areas like we really haven't seen in recent history.
In addition to that, we have said in our Farm Bill recommendations that we are not content with the status quo. As a matter of fact, we believe there needs to be a significant investment made in developing other sources of renewable energy in this country, particularly with a focus on cellulosic based ethanol. And we invested heavily in our Farm Bill recommendations in research and plant construction and just helping producers transition to producing those crops, those cellulosic-based crops, in order to meet these energy needs.
Unfortunately the House picked up some of this in their version of the Farm Bill but not too much of it. And there's a lot of it in there that really is mentioned but not funded in any direct way. And so we hope this will be a priority area of the Senate, because we feel like energy really does represent a strong future for American agriculture. It's one of the key reasons we've got such a great farm income price outlook situation right now. To sustain that we need to continue down this course, invest in it now in order that it's still there in the future for us.
MODERATOR: Mary Clare Jalonik of Associated Press is next, followed by Philip Brasher. Mary Clare?
REPORTER: Hi. This is Mary Clare. I think Secretary Johanns touched on this a couple weeks ago but I just wanted to hear from you. What are your thoughts on the tax package that Max Baucus has proposed for the Senate Farm Bill?
SEC. CONNER: Let me just say that we've seen the outline of a tax situation that Senator Baucus through his Finance Committee efforts has posted on their website at this point, which includes a lot of tax incentives if you will for conservation. I will just tell you that our concern here is not that we are necessarily against a lot of what he is proposing, but we just do not see this solving the funding issue associated with the Farm Bill. Tax credits, tax incentives if you will, do not pay for the priorities that we have identified out there, priorities of specialty crops, priorities of conservation, priorities for renewable fuels. In fact, by all measures I think those tax incentives actually result in less revenues coming into the treasury altogether.
So it's an interesting concept he's proposed, but it doesn't solve the issue of the revenue. And again I think it cries out for a reform-minded Farm Bill that through making some difficult policy choices, some tough policy choices, provides the revenue that you need in order to have a good Farm Bill. That's how you're going to have the funding to ensure that you've got $4 billion of additional help for specialty crops for example.
This was one of the problems we identified with the House-passed bill. They were very generous on specialty crops, and some of our other priorities, but they paid for all of that with a tax increase. And I think that really puts the outcome of those priority changes in real jeopardy because there doesn't appear to be anyone in the Senate who's particularly enthusiastic about raising taxes in order to pay for a Farm Bill.
And so with that, with the lack of reform, you really have to question whether or not we are going to have a Farm Bill focusing on alternative priorities.
MODERATOR: Our next question goes to Philip Brasher from Des Moines Register. Philip, go ahead.
REPORTER: Mr. Secretary, two questions. One, when would you be making a decision about the CRP about possibly opening more of that land for 2008? And number two, in terms of the permanent disaster fund, do you have any concerns that would undermine crop insurance or encourage production on marginal lands?
SEC. CONNER: Phil, I appreciate it, those are two good questions. The first question in terms of the timing on the CRP, we know we don't have an endless amount of time here and we need to be making this decision quickly. We'd anticipate probably within two or three weeks of having an absolute final decision on that at this point to share with you.
And your second question was on the potential adverse consequences of the disaster situation. I think mandatory disaster assistance, if you will, does undermine the crop insurance program. The message to the producers is, "Don't insure" because we have set up a mechanism to literally pay you every year for disaster losses.
We again feel like there's such a much better way of doing this that is better for the producers through revenue insurance, through gap insurance coverage for the producers. We believe these are much more predictable measures. I would add, Phil, and you know this because you've been a watcher of these things for a long time, the Senate is talking about the high end of the equation, talking about setting aside $1 billion a year for disaster assistance. Every time I've ever seen Congress call for disaster assistance it's in the range of $4 to $6 billion as kind of an opening starter on this.
And so this $1 billion dollars they're talking about setting aside, at best would be a small down payment for what they would ask for. So the uncertainties of aid are still there as strong as ever, and we just again feel like the producers want something much more predictable and reliable there, and there's great ways of doing it that are not tremendously costly that we think are just much fairer to the producers.
MODERATOR: Next question will come from Sara Wyant from AgriPulse, and standing by should be Cecilia Parsons. Sara?
REPORTER: Thank you. Congratulations, Mr. Secretary.
SEC. CONNER: Thank you, Sara.
REPORTER: I was just wondering in light of your previous comment about having a seamless transition between Secretary Johanns and Secretary Conner, can you tell me what if any would be the biggest difference in the way that you intend to operate?
SEC. CONNER: That's a good question, Sara. You know I will just tell you that as I said in my remarks earlier, Mike Johanns gave me the good fortune, from the day I walked into this place, of letting me be involved in every decision that came before this department, without fail, every decision policy-wise, every decision personnel-wise. I was sitting there beside him at the table making a joint decision. I will tell you simply, I had no disagreement with any of those decisions, not one in the period of time that we were here.
And so in that regard it is a seamless transition, and in that same way I don't see there being a dramatic shift one way or the other at this point because again I've been involved in each and every one of those decisions and would see no reason to be in effect second-guessing myself by changing course in some way at this point.
MODERATOR: Next question is from Cecilia Parsons of Capital Press. Standing by is Jackie Fatka. Cecilia.
REPORTER: Thank you. I understand the Senate Ag Committee has been urged to double the allocation in the Farm Bill for specialty crops. What kind of funding level do you see for specialty crops in the Farm Bill?
SEC. CONNER: Let me just say, that's a great question, Cecilia, and I understand there was a Dear Colleague letter circulating, with 35 or more members signing on it advocating higher funding for specialty crops. And I don't know the exact level. But as we travel the countryside and heard from producers, we felt like what they were telling us was that they wanted higher priority placed on purchasing fruits and vegetables, that they wanted research dollars, they wanted help with their export promotion program, and they wanted a lot of help in terms of plant, pest diseases and those types of challenges they face.
Based upon that we were able to come up with over $4 billion of help spread over those four priority areas. So that was very favorably received. Again I think the House adopted something similar to that, not totally the same but something similar to that. We question again how they paid for that, but I'm assuming the effort is going to be to have the Senate follow the House and the administration's lead and do something. Hopefully they will do it in a way that results in certainty that the funding be available for those priorities.
MODERATOR: Next question is from Jackie Fatka from Farm Futures Magazine. And standing by should be Chris Clayton. Jackie?
REPORTER: Hello. Thanks for taking my question. I'm just curious if the veto threat for the House Farm Bill still stands, if there's anything in the Senate Farm Bill that has the White House concerned right now with some of the things you've seen circulating up to this point?
SEC. CONNER: Obviously the veto threat against the House-passed Farm Bill has not changed at all. We remain very, very concerned about certain provisions in the House-passed Farm Bill, particularly the ones dealing with the tax revenue measures. I think our concerns are being heard because we're at this point not aware of anyone in the Senate who is talking about a tax increase in order to pay for the Farm Bill at this stage. So I think that message is being heard out there at this stage in the process.
I'm sorry, your second question, Jackie?
REPORTER: If there was anything in the Senate bill that could also raise a veto threat if there's anything specific you've heard circulating so far that has the White House concerned?
SEC. CONNER: In terms of concerns we have, first understand we've really not seen anything tangible coming out of the Senate yet. We've seen as everybody else a lot of different options, papers and a lot of ideas being circulated out there. But there's no Senate bill if you will at this stage in the process.
Some of what we're hearing obviously in terms of potential increases in support levels that would increase our level of trade distorting support are troubling to us. I mean this is not the time for us to be increasing our level of trade-distorting supports when the rest of the world is - we're already under tremendous fire. We've described it as painting a bull's eye on our back. This is not the direction we want to go. Again, we're hearing some of that type of thing. We're hearing as well efforts to tie direct payments directly in some way to the amount a producer produces. If they did that, direct payments may not be - again we don't want to prejudge these things, but they may not be green box payments. They may cause us trade-distorting concerns internationally. This would be a very, very unfortunate path for the new Farm Bill to take as well.
And so there are a number of areas out there that we hope the Senate will step back and carefully evaluate the implications of what they may be considering doing.
On the positive side, let me just say that Senator Harkin's efforts on conservation and rural development and energy are efforts that we fully embrace, and we think he's on the right path there in terms of those priorities. The fact that those priorities do I believe represent where the future profitability for all of American agriculture lies, and we look forward and do work very closely with Senator Harkin on those issues.
MODERATOR: Next question is from Chris Clayton of DTN, and standing by is Taculia Hakaguci. Go ahead, Chris.
REPORTER: Thank you, Mr. Secretary. Kind of following up on some of those comments you just mentioned about trade-distorting supports, you mentioned optimism about getting a WTO deal done. Some of the people last week with these discussions coming out of Geneva, the other trade negotiators, some of the countries, were skeptical the administration could deliver on a deal. They want to follow and see what happens with the Farm Bill. In your opinion right now, would the House bill qualify for what's going on and be acceptable for what's going on with WTO negotiations? Would what you know about the Senate deal qualify, or how do you marry basically what's happening right now between these two different situations?
SEC. CONNER: Well, Chris, let me just say that as I mentioned in my opening remarks the extent of our negotiations at this point in Geneva deal with the fact that we are there expressing a willingness to be flexible on our domestic supports if other countries are willing to be flexible on their market access.
That is the extent if you will of the negotiations at this point is for us to express that flexibility, waiting on other countries really to match that willingness to be flexible in terms of their own trade-distorting activity in terms of market access into those countries.
Now in terms of the Farm Bill, we simply don't know because obviously there is no Doha Agreement, and again we're talking in some very, very broad categories at this point in terms of that agreement. If there was a Farm Bill that would be passed, obviously if that differed in any way from a Doha agreement, changes would have to be made in the Farm Bill as a result of that Doha agreement, and we'd deal with it that way accordingly.
MODERATOR: Next question is from Taculia Haguchi from GG Press. Standing by is Peter Shinn. Taculia.
REPORTER: Thank you. Congratulations, Mr. Secretary. I have a question on the beef trade, that while U.S. is pressing Japan to open the beef market in accordance with the international standard, Japan is reluctant to do so. Instead it is going to limit importation of U.S. beef from animals under 30 months of age. How could you resolve this difference between two countries regarding the beef trade?
SEC. CONNER: Well, the resolution is very easy, and that is we need to move to international standards. International standards that both Japan and the United States have agreed to live by, and those standards would lay out very, very clearly the products that can be imported safely and what needs to be done to those products in order for them to be imported safely and just to be clear on this, the international standards for beef trade into Japan would allow us to ship all our beef products of all ages into that country given our safety measures that we have in place in this country.
So this is not a complicated issue. We just simply need Japan to acknowledge that they are going to live by international standards.
MODERATOR: Next question is from Peter Shinn of Brownfield Network followed by Dan McGovern. Peter, go ahead.
REPORTER: Well, thank you very much, Larry. Congratulations, Mr. Secretary, and I apologize, sir, for my ignorance, and I'll just ask you a quick question about the process. You're Acting Agriculture Secretary. Has President Bush decided to make you actual Agriculture Secretary? Will there be a confirmation hearing for that? If you haven't been actually named then as Ag Secretary, when do you expect that to happen? And do you see yourself as something as a caretaking ag secretary until the Farm Bill makes it through Congress?
SEC. CONNER: Well, I am here as the acting Secretary. I will tell you right now as long as I am in that position we're going to continue to work very, very hard as long as I am in that position. I have not been formally nominated by the President. Therefore, there is obviously no confirmation process scheduled at this point, and I'm not going to speculate at all what the President intends to do in the future.
MODERATOR: Next question is from Dan McGovern of Sustainable Food News. Go ahead, Dan.
REPORTER: Thank you, Mr. Secretary, for taking my call. I've got a question specifically about the organic foods market. There's a lot of upheaval happening right now as far as infighting within the industry, most notably over organic milk. You have certifiers sending 71-page reports over to the USDA's National Organic Program saying that they are way off-base on even giving them a notice of suspension on the Colorado Department of Agriculture. A lot of this, and this goes on and on just in the past two weeks. But a lot of it points to the small staff at the National Organic Program and how overworked they are and the issues that are coming up in an industry that's at double-digit growth.
Do you have any plans for beefing up enforcement of the organic standards in the coming year?
SEC. CONNER: Let me just say that this has been a tremendous growth area in terms of consumption of food in our country. I will tell you as well that from the USDA standpoint we have organics certification standards that are in place that we work with states and private certification agencies to make sure that products being marketed to consumers in this country that have the USDA organic label on them meet those standards.
Now I know there is controversy out there on a number of issues that really fall outside the bounds if you will of what constitutes that organic standard that is necessary in order for the product to have our seal. There's a lot of controversy about that, but we feel we have in place the right system, again working with the states. And we've taken some tough enforcement action in certain situations against this to ensure again that the products that are being marketed out there to the consumers meet that particular label standard that took this agency 10 years to put in place but has been really a highly, highly successful program.
MODERATOR: Next question is from Alison Winter of Green Wire. Standing by Brian Berry. Alison?
REPORTER: Hi. Thanks. Secretary, I wanted to return to the CRP questions again. What would be the reason for allowing farmers to take some more land out of CRP given the record corn production for this year that USDA has already reported? I know you haven't decided that, but in your deliberations?
SEC. CONNER: Let me just say, I mentioned we are monitoring this situation very, very closely. The monitoring I'm referring to are basically projections of crop size coming in this fall and are we going to have adequate supplies of feed grains, of wheat, oilseeds, cotton, these types of things, all that compete for acreage out there and eventually could compete with potential CRP acreage as well in some circumstances.
And so this is what we're monitoring, the harvests that are coming in, to make sure again that we have enough. As our crop report from September has indicated, the corn crop situation is very, very large. But at the same time we also are looking at this and acknowledging on soybeans the marketing year we're just coming out of actually had record carryover stocks for the marketing year that we're just finishing up.
So we're trying to gauge that and again just very carefully look at the situation and make sure the market is working and allocating properly and that we have the ability to keep all this land in the CRP.
MODERATOR: Next question is from Brian Beery of Bureau Politics. Standing by is Derrick Kane. Brian?
REPORTER: Good afternoon, Secretary. I just wanted to ask on Doha and market access issue, could you be a bit more specific about which particular countries, Brazil, India, the EU, that you really want to see more on market access, and which particular products are specially sensitive , do you want to see progress on?
SEC. CONNER: I don't think I will get into the specifics too much at this point in terms of the products. I think the market access that we are looking for, we again just simply said we expect, particular emphasis on advanced developing countries, we expect them to acknowledge that in exchange for us being willing to talk about and discuss reductions in our own domestic support program that they simply have to open up their markets to our producers, what we refer to as market access. And again, not to get into the specifics of each individual commodity, but for many of those countries, in addition to not being willing to talk about market access up until this point, they've been wanting a long, long list of exemptions and specialty products and all of this type of thing, all again for the purpose of not opening up their markets. And we've just simply said that's not acceptable. We're prepared to be flexible, but you've got to be too. And I think that applies to many of those advanced developing countries.
MODERATOR: Our final question, Mr. Secretary, is from Derrick Kane. Derrick?
REPORTER: Mr. Secretary, thank you for taking questions today. I wanted to ask first off if you would plan on attending the upcoming Senate hearings on the Farm Bill just as much as you did the House side.
SEC. CONNER: That's a decision that hasn't been made yet how we're going to handle the Senate. As you know there's nothing scheduled in the Senate at this point, but assuming they will have hearings scheduled we'll be prepared to announce how we're going to handle that in terms of who will be representing the administration. But nothing is scheduled at this point. I'd just make clear though that we'll be very, very engaged in that process.
MODERATOR: Thank you, Reporters, for your questions, and sorry for the earlier technical glitch. But thank you for coming back to do the question and answer session. Any final thoughts, Mr. Secretary?
SEC. CONNER: Again, I noted earlier in my comments what an honor it is, Larry, for me to be serving as your Acting Secretary of Agriculture. I really appreciate the confidence that President Bush has put in me in this position. It is a very, very important time with so much important activity and priorities pending for the agency. We're going to work very, very hard to earn that trust, and we look forward again to just being out there representing the farmers, the ranchers of this country. They are great people, people I grew up with, and I couldn't love them anymore than I do. So it's just an honor for me to be representing them.
MODERATOR: Acting Secretary of Agriculture Chuck Conner. I'm Larry Quinn bidding you a good afternoon from Washington.